I've now read the book for the 3rd time. He demonstrates, clearly, cleanly, transparently that"
1. The "predicament" of capital does not begin in
the 1980s with the "neoliberals" capturing political power.
2. The predicament is first made manifest in the early 1970s
and is based on a drop in the rate of profit.
3. While the attacks on the working class and the poor are
real enough, as has been the asset stripping, liquidationism, and shoveling
buckets of money into the personal pockets of corporate executives,
stockholders etc.
"financialization" is not the cause of the current predicament. Financialization is, at
its worst, like all speculation, simply a distributive mechanism.
4. While I don't agree with Kliman that pension contributions, given the
manipulation thereof by corporations for their own gain, and in addition the
approximately $800 billion shortfall in state and local govt. pensions amount
to real compensation to workers, I am more than willing to accept Kliman's
point that the real impact of "neo-liberalism" has been to slow the rate of growth of workers
compensation from its previous rates, despite the increases in "total compensation."
5. I also maintain that Kliman provides in chart 8.3 evidence for a decline in the real wage 1972-1994, a recovery 1994--2000
(or 2002), that never reaches the level of the 1970 wage, some oscillation
around this "penultimate" high before its downturn.
Now for where I think the weaknesses are:
1. The weaknesses are actually in the area of recovery of
wages, 1994--2000 (and again after 2003).
Rather than examining what drives each of these period of recoveries,
the recoveries are more or less dismissed, subsumed under the umbrella of the persistent
trend of the rate of profit to decline.
2. Ignoring those recoveries is a bit too close, for my
liking, to an argument akin to "permanent crisis" a la the ICP,
Goldner etc.etc. Yes, Kliman
explicitly rejects such a notion, but the fact that he does not try to account
for the upturns, other than to dismiss, more or less the 1990s as a
"dot.com" bubble comes too close to the other side of that coin of
"permanent crisis"-- "fictitious capital."
3. For example, table
4.4, page 55, growth rate of industrial production US, shows an uptick, beginning around
1992 or so, falling, then beginning a sustain rise for 1995-2001, reaching a
20+ year high. Chart 4.5, page 56, growth of industrial capacity US, similarly shows
the growth in US industrial capacity, annual percentage change, spiking up through the period 1993-1999, achieving annual rates of growth that are the highest since the
metric was initiated.
4. I think that growth is extremely important. I think we need to be able to account for
that, in the midst of a persistent fall in the rate of profit. But, basically, what Kliman offers as an explanation
is simply "the investment boom that accompanied the dot-com bubble."
-- which is not adequate.
5. Such growth was not the product of a bubble, and was the
product of increasing profitability, and increasing wages, driven by
applications of new technologies to production.
6. Which brings us to the next point, --Kliman "explains away" the increased profitability, particularly the spikes after 1981, by moral depreciation
[as distinguished from oral depreciation].
Kliman quotes Marx: "It
[fixed capital] loses exchange-value, either because machines of the same sort
are being produced more cheaply than it was, or because better machines are
entering into competition with it."
The increased moral depreciation is attributed to the increased portion of business spending devoted to computers, peripherals, software, information and communication technologies. Rather than check the growth of "moral depreciation"
against the determinants of cheaper production or better production,
somehow this moral depreciation, which is nothing other than real domination of
capital over the labor process, is utilized to dismiss the reality of the
profit boost provided by such improvements when applied to communication,
transport, production, warehousing etc. etc.
7. If in fact digital technologies are being applied on an
increased and accelerating scale to the accumulation process then we should
keep in mind Moore's law { number of transistors on a integrated circuit will
double every two years; basically processing power will double}; that the
density of the transistors will increase at [i]minimum cost[/i]; Kryder's law
{same conclusion for storage capacity of hard drives}; Butler's law of
photonics that says the costs of data transmission will be halved every 9
months. All these processes have been
confirmed over decades.
8. Consequently, the widespread application of these
technologies, and the software revisions needed to take advantage of these
increased capabilities will lead exactly to what Marx called increased rates of
moral depreciation. This increased moral
depreciation does not mean that the profits driven by these accelerated
processes are illusory, or a "one-off." It does mean these processes will lead to a
massive overproduction beyond the ability of the means of production as capital
to exploit labor at a sufficient intensity to offset the very decline in the
rate of profit brought about by the processes themselves. And that too is what happened; that is what
produced the dot-com bubble. The dot-com
bubble did not produce the increased investment nor the increased rate of
"moral"-- real-- depreciation, the real overproduction and self-devaluation of capital.
9. Corporations do not depreciate their capital, do not
replace it unless they must replace those components to reduce costs, maintain
parity with competitors, achieve an "edge" in prices, the
"social necessary" prices of production. Software, digital equipment and technologies
depreciate much more quickly than automobiles because of the greater impact
these technologies have on the costs of production than the depreciation of say
automobiles [which Kliman uses as a point of contrast]. The increased depreciation was product of the
"revolutionizing" of the production processes. Increasing rates of moral depreciation are precisely what we should expect from applications of new, and accelerating, technologies.
10. The fact that
Kliman offers no explanation for this is, IMO, a critical weakness, in that is
exactly that technological alteration that makes the current contraction so
much stronger, persistent, intractable than the previous ones within the
persistent downward trend. Capital remain inherently cyclical within its persistent trends.
11. The book itself is, however, of critical strength in that it properly locates the predicament of capital in the profitability of value production itself.
S. Artesian
October 9 2012
