1. Big Surprise..not really. In 2003, global use of coal increased 6.9 percent over 2002 levels. Oil consumption, by comparison, increased a "mere" 2.1 percent. Prices jumped 80 percent to $50 a ton. US production measured nearly one billion tons, with 04 production estimates up another 3.7 percent to 1.2 billion tones. China's 2004 production is estimated to jump 10 percent to nearly 2 billion tons. The only thing missing is the usual doomsday chorus from the miserable claque of hydrocarbon depletionist-heat death carolers, tolling their Calvinist Christian curve shaped bells and bell-shaped curves, announcing the approaching, or surpassed, peak of coal production; the impending decline of coal reserves; the beginning of the coal wars.
So where are they? Why aren't our little anti-Santas out there, telling everybody that the one thing that for sure won't be in next years' stockings are lumps of coal?
2. It's electric....really. Coal accounts for 50 percent of US electricity generation, and accounts for it pretty cheaply. A current prices, coal costs $3 per million BTU while gas is $7 per million and oil cost $8 per million. Oil use for electricity generation reached 30 percent in 1979, declining almost steadily to 3 percent in 2003. That decline has been more than matched by the increase in use, and the increase in generating capacity, of natural gas fed units. In 2003, natural gas was used to generate 629 billion kilowatt hours, approximately 15 percent of the US total.
While natural gas usage grew 169 percent overall between 1970 and 2003, all of that growth occurred after 1990. Between 1970 and 1990, natural gas generation showed zero growth. Growth, consumption, supply, demands are, under capitalism, always functions of production. Production is a function of investment, and investment is always a product itself of profit.
Between 1960 and 1970, US electricity demand grew at 7 percent, doubling both the rate of growth of the overall economy, and its own size. US generating capacity also doubled, adding some 17 million kilowatts per year, to 336 million kilowatts. Despite, or rather due to, the increase in oil prices and the general slowing of overall economic growth in the 1970s, electrical generating capacity added another 23 million kw per year. In the 1980s, OPEC and Volcker finally got through to those fixed asset fetishists in the generating industry. Capacity growth was brought into a 1:1 correspondence with the overall (lack) of economic growth. Happy days weren't here again, and that was the good news the executive branch of finance capital wanted to hear.
Electrical generating is always to the story of too much too late, capital spending, and too much, too soon, capacity expansion. Between 1980 and 1999, capacity expansion grew a modest 10 million kw per year, but after 1995, capital spending began to accelerate at rates greater than both output replacement and economy wide capital expenditures. Utility expenditures in 1999 exceeded 1998 levels by 24 percent; expenditures in 2001 expenditures exceeded 2000 by 35 percent. Between 2000 and 2003, the US added 186 million kw of generating capacity, a rate of growth 3-4 times that of the economy as a whole, and 4 times the consumption rate of growth.
It's a gas... Utilities, whether power generation or goods circulating (transportation), are compelled to size capacity to peak demand. In electricity generating, capacity is summer capacity designed to meet the peak demand during the summer months. Between 2000 and 2003, summer capacity increased 125 million kilowatts. Eighty percent of that increase consists of natural gas fed, or dual-fired (gas, with oil backup) installations. In fact, ninety percent of all new capacity is gas or dual-fired.
Capacity margin is defined as the difference between total generating capability and actual or estimated peak load. The industry tracks peak loads separately for summer and winter months with summer loads 12-15 percent greater. During the prior slow growth period, summer capacity margins were reduced from approximately 30 percent in 1982 to 7 percent in 1999.
In 2001, capacity margins had increased to 12.2 percent, and by 2002 orders for future generating equipment collapsed. New generating installations were being discounted up to 50 percent in distress sales. Overproduction, the alpha and omega of capitalism was laying these plans of continuous, accelerating, expansion to rest, as it had with the telecommunications, semi-conductor, steel, and petroleum industries.
Increases in natural gas prices were not in fact the product of accelerated rates of consumption. The price increases were mechanism for devaluation of fixed assets, the overproduction of which were both product and producer of declining rates of profits.
Three quarters of electrical generating costs are fuel costs. Natural gas unit costs ($/BTU) are about twice that of coal in electricity generation. Operating costs are theoretically recovered through extended efficiency and reduced maintenance of the generating units themselves. But those are costs retrieved over time. The real meaning to overproduction, to reduced rates of profit, is that time is running out.
S. Artesian 11-27-04
Address all comments to: sartesian@earthlink.net
Saturday, November 27, 2004
Tuesday, November 16, 2004
Imperialism Reconsidered Reposted
Donde Estan Las Super Ganancias?
1. The problem with death is that it makes it hard to develop a position. Others do that for you, and generally do a poor job, since they are adapting a work cut-short rather than developing a work in progress. The body gets put in a crypt, or a mausoleum, or an urn, and the words get carved into tone. In both cases, the breathing has stopped. The metabolic process ends. Ambiguity, critical, essential contradiction is replaced by canon.
Lenin's theoretical positions are infused with exactly this sort of ambiguity, vital imprecision, that manifests itself in programmatically awkward formulations. While such imprecision and awkwardness appears in remarkable contrast to Lenin's tactical clarity, his political decisiveness, the ambiguity is essential to the of the tactical decisions as it allows Lenin to "catch up with history," once history, that is to say the class struggle, has taken matters into its own hands and out of arms of theory. So we get Lenin's position that 'class consciousness' can only be brought to the workers from 'outside,' a position overwhelmed by the revolution of 1905, demolished in the organization and functioning of the soviets, and transformed by Lenin himself in the demand for "All Power to the Soviets." We get Lenin's characterization of the anticipated Russian revolution as "democratic dictatorship of the proletariat and peasantry," a construction of such internal contradiction, such compressed disorder that it can barely be uttered without stumbling over the words. Still, the very awkwardness of the construction facilitates its own abandonment when the Russian revolution manifests itself as the task, the necessity of the Russian working class. And just as revolution poses, resolves, reposes the links of class and history, production and power, the same demand, "All Power to the Soviets" resolves the ambiguity in Lenin's formulation and transforms the workers'struggle into part of the permanent revolution.
Written in 1916, Lenin's Imperialism: The Highest Stage of Capitalism sought to develop a general picture of capitalism at the start of the 20th century for both political and polemical reasons. Almost everything Lenin wrote was written for and as the fusion of the political and polemical. In this case, the political reason was to assess the mechanisms for capital's accumulation, expansion, and concentration which drove the system as a whole into world war. The polemical reason was the refutation of Kautsky's writings on imperialism.
Lenin had correctly assessed Kautsky's formulations as an index of and to the Second International's accommodation to capitalism, and the socialists' surrender to capital's first world war. Something, some things, had obviously changed during the life of the Second International. These things prefigured the war and the International's capitulation to the war. Lenin knew that the actions of the particular national capitalism's so furiously engaged in executing their own and each
other's soldiers, were in fact actions required by the needs of international capital as a system, maintaining itself as a whole only through the sums of the destruction of its parts.
Where Lenin clearly identified the changes in the manifestations of accumulation and reproduction, he ambiguously identified these changes in the mechanisms for appropriation with the requirements of appropriation itself. Lenin imprecisely records the manifestation of capital's development and maturation as fundamental shifts in capital's accumulation process itself.
The resolutions of Lenin's ambiguity regarding party and class and the social content of the Russian Revolution benefited from a revolution ascendant. The ambiguities, imprecisions, and contradictions in his Imperialism: The Highest Stage of Capitalism, had no such luck. Despite the victory in Russia, the revolution as the overthrow and replacement for the totality of capitalism is contained, rolled-back, and defeated, beginning with its very triumph in isolation. Then the imprecise characterizations Lenin makes during this ebb and flow become, on his death, a living part of the retreat of the revolution itself. The very notions of "super profits," "bribery of the working class," in part or whole, the distinction between the export of capital and the export of commodities, imprecise, confused, awkward and mistaken, are taken over and substituted for the analyses of the social relations of production. These notions reflect the failure of the revolution to apprehend capital as a whole, misidentifying changes in the technical composition of capital as changes in capitalist appropriation, and therefore, as changes in the relations of classes. With the death of Lenin, the polemic becomes gospel, the imprecision becomes dogma, the ambiguity is replaced with ideology.
2. When Lenin traces the concentration and accumulation of capital in the metropolitan centers of capital, he is looking back to the emergence of capital from its "long recession" of 1872-1892. Lenin links the concentration of capital in cartels, trusts, and banks, into the emergence of finance capital, a "liquid" form of property, requiring export to colonies to find successful employment as self-expanding value. Lenin then identifies this export of capital to "backward" countries as the "typical," signal, characteristic of modern capitalism.
It is the export of capital replacing the export of commodities that distinguishes mature imperial capitalism from emerging market capitalism. The truly typical features of Lenin's assertion regarding the export of capital are imprecision,
confusion, and ambiguity. While Lenin notes the growth in capital invested abroad by metropolitan Europe, he fails to compare that capital value to the value of commodity exports. He distinguishes between the capital exported to America and the capital exported to Asia, Africa, and Australia, but he does not distinguish Canada, or the US, or Australia from Jamaica or Argentina. He misexplains the reason for the export of capital, stating: "The necessity for exporting capital arises from the fact that in a few countries capitalism has become 'over-ripe' and (owing to the backward state of agriculture and the impoverished state of the masses) capital cannot find 'profitable' investment."
Developed capitalism by nature and definition has to develop agriculture to the degree where it can sustain industrial production in order to separate the population from the means of subsistence and to sustain the entire population. The expansion of commerce, the production of commodities, requires a coincident capitalization of agriculture. The metropolitan capitalist countries exporting capital are the countries with a developed agriculture. And finally, Lenin contradicts himself in his ninth chapter when he provides a table of the increased
export trade of Germany coincident with its increased exports if capital.
The distinction between the export of capital and the export of commodities is at one and the same time valuable and inconsequential. It represents capital's attempt to escape its earthly chains as actual articles of production and use, and ascend to heaven as pure, ethereal, detached value. And the export of capital proves the impossibility of this afterlife as capital is forced to reproduce its earthly self in these Edens by repeating the purchase and exchange of the means of production and wage-labor.
The distinction between the export of capital and the export of commodities is a temporal distinction, indicative of a phase in capital's metamorphosis from value to expanded value. The distinction is not a change in that metamorphosis of capital itself. The only purpose for the export of capital is to increase profit and increased profit can only be realized in the increased circulation of commodities.
3. So what of the current conditions of capital, the current valuations of the export of capital and the valuations of the export of commodities? If Lenin found the study of capital at the close of the 19th and opening of the 20th centuries valuable, a similar review of US capital exports at the close of the 20th and opening of the 21st centuries might be helpful.
Between 1992 and 2001, the US direct investment abroad (USDIA, also known as FDI) grew from 502 billion dollars to 1,382 billion dollars on a historical-cost basis
(US Bureau of Economic Analysis, July 2002). This growth was coincident with rates of internal US capital investment and rate of profit higher than that of any period after 1969. The increase in FDI was part and parcel of capital finding profitable investment in a mature capitalism, with a highly capitalized and efficient agricultural sector.
The export of capital also coincided with increased US exports. Between 1992 and 1997, US FDI expanded 75 percent while exports of goods and services grew 50 percent. Between 1998 and 2001, exports grew only 6.8 percent while FDI grew 38 percent. This discrepancy is exactly the expected result of the overproduction, the overinvestment in the means of production, depressing the rate of profit and reducing profitable exchange. Indeed, the market value of US FDI declined 11 percent between 2000 and 2001. The actual amounts of capital exported as FDI fell from 120.3 billion dollars in 2000 to 88.2 billion in 2001.
Equally important is the destination of these FDI capital exports. On an historical cost basis, 52.5 percent of US FDI is based in the advanced countries of Europe, 10 percent in Canada, 19.5 percent in Latin America,and 15.6 percent in Asia and Pacific (including Japan and Australia). In all these areas, US FDI, US capital exports, have accompanied increased exports of goods and services. In fact, the largest trading partners of the US are also the focus for the greatest capital exports and precisely because of the increased trade capital exports have been able to find profitable employment.
4. The enduring characteristic of capital is the conflict between its compulsion for self-expansion and its need to preserve the dominance of private property. Conflict, compulsion and need, are masked in the income capital derives from its processes of production and circulation. The mask itself is dropped when the relation of income to property, the rate of return of investment falls. Capital is driven to offset this declining rate by any and all means.
Common to some investigations into capital's methods for offset, investigations as apparently different as Lenin's from Rosa Luxemburg's, is a notion of external sources of wealth yielding an almost pure profit without expense. In Lenin's analysis this external source, the export of capital to "backward" areas, is absorbed into capital and appears as a super rate of profit. For Lenin, super profits rescue capital from the overproduction of capital. For Luxemburg, the aggrandizement of non-capitalist wealth sustains capitalist accumulation. For capital itself however, there is no such thing as super profits, and non-capitalist wealth, by definition, cannot augment the expansion of capital values unless it
enters into an exchange with wage-labor.
In 2001, the ratio of direct income receipts to US FDI (the rate of return on direct investment) measured 8.04 percent. The rate of return for investment in Canada was 8.46 percent; for Western Europe 7.67 percent; for Latin America 6.94 percent; for Asia and Pacific 9.79 percent. Does this sound like super profits?
Calculating the average rates of return for the period 1997-2001 produces the following: for all US FDI 9.5 percent; for Canada 9.9 percent; for Western Europe as a whole 9.4 percent; for the UK 6.9 percent; for South America 6.3 percent; for Brazil in particular 5.8 percent; for Mexico 12.0 percent; for Central America as a whole 8.7 percent; for Japan 9.3 percent; for Australia 8.1 percent; for China 11.7 percent; for Korea 11.4 percent. Does any of this sound like super profits?
In Mexico, where US FDI achieved a rate of return 30 percent above the total average, the rate of return has declined every year between 1997 and 2001, falling from 15.8 percent in 1997 to 8.45 percent in 2001. Does this sound like super profits?
5. For the period 1994 to 2001 "indirect income," income generated from stocks, bonds (portfolio income), and other financial instruments exceeded US direct investment income. If, for the capitalist, the commodity's transfiguration from an article, and a cost, of production, into an expanded value, is a religious experience, a miracle, then portfolio income is the Assumption. Portfolio income is value shedding all its earthly imperfect forms, dispensing with its messy intermediate states, and springing forth full grown from its own forehead as value begetting value.
In 2001 US holdings of foreign securities measured $2.39 trillion. Where Lenin saw the decline in the importance of the stock market as indicative of the rise of finance capital, US investment capital itself has raised the importance of foreign stock markets. Stocks accounted from $1.83 trillion of the total. Sixty percent of that stock portfolio is concentrated in Western Europe, ten percent in Japan, 6 percent in Canada. Argentina, Brazil, and Mexico together account for less than 4 percent of the stock portfolio.
Bond holdings are distributed somewhat more evenly with Western Europe, Canada,
Japan, and Australia accounting for sixty percent of the portfolio. Argentina, Brazil, and Mexico account for fifteen percent of the bond portfolio.
For that year, 2001, the entire portfolio of stocks and bonds generated income of $67.4 billion or approximately 2.5 percent. Bond income returned 7.8 percent on the portfolio value. Western Europe accounts for approximately half of the total income. Latin America and other Western Hemisphere areas yield approximately 15 percent of the portfolio income, but this yield is skewed by the overweighted presence in the portfolio of securities from the Caribbean banking centers and Panama. None of this amount in yield, nor the total return, amounts to super-profits, particularly when the total return on 10 year US treasury bills was 11.5 percent for the same period.
Indirect income is also generated by interest claims against unaffiliated foreign companies on money loaned, or loans guaranteed, by US banks and other entities (usually non-bank financial corporations). In 2001, US banks earned approximately $43 billion in this category. The total amount of the bank claims measured $1.07 trillion with 85 percent concentrated in the industrial countries and the Caribbean banking centers.
In truth, these figures conceal as much as they reveal as a portion of the US claims are centered in London, where the funds are subsequently re-loaned to developing
countries through European financial centers. While this process shifts risk to the other metropolitan countries (particularly Japan and Germany), it does not affect the total income derived.
Non-bank claims generated an additional $46 billion in income. The total amount outstanding was $860 billion, 75 percent of which is concentrated in the industrial countries and the Caribbean banking centers.
As a whole then, this "indirect income," the direct income of finance capital, generated a rate of return of 3.5 percent, a rate of return significantly less that the rate of return on direct investment in total or in the specific areas of petroleum, manufacturing, wholesale trade.
6. After the Asian and Russian financial collapses of 1997-98, US banks reduced their overall exposure to "emerging market" debt. This "risk revaluation" process had in fact begun at the beginning of that 90s. Ten years of economic depression in Latin America had brought several US banks, most notably Citibank, to the edge of collapse.
In 1999 US banks reduced their claims on Africa by 5 percent; on Asia by 21 percent; on Eastern Europe by 42 percent. US bank claims on Latin America increased by 12 percent during the same period, with the increased exposure concentrated in Mexico and Argentina. Latin America and the Caribbean account for 60 percent of all US claims on emerging market countries. Claims on emerging markets however represent only 5 percent of US bank assets, while US claims on developed and banking center countries are approximately 12 percent of assets. Indeed, US banks' exposures were so minimal that losses from the 1997-1998 crises were charged against ordinary income rather than capital reserves.
Between 1997 and 1999, Japan's share of claims against Asian counterparties declined from 30 to 23 percent. European banks increased their share to 50 percent, while US claims remained at a mere 7 percent. In Latin America, the US share of claims, 25 percent, was only half that of the European banks.
In 2002, the Bank for International Settlements (BIS) reported claims against emerging market countries represented only 18 percent of all bank claims on foreign counterparts.
The export of capital is clearly not an export of capital simply to the emerging market countries. Rather the export of capital to these countries is a manifestation of the export of capital on a world scale, an activity of capital that reproduces in detail, scale, convergence and divergence, the patterns of trade, production, and profit that have defined capital as an international system for three centuries.
The issue is not the significance or insignificance of the volume of claims, nor the income generated from the claims against the emerging market countries. The significance is in the "integration" of the emerging market countries into the international organization of capital, as internal components of the mechanism for accumulation. Then profits, high or low, are generated exactly as profits are generated everywhere and anywhere. Then wage rates, high or low, are established in any single manifestation of the totality, by the same logic, the same conflict, the same contradiction, as wage-rates are established everywhere. Then the social struggles generated in any single market, any single country, are part and whole of the struggles generated throughout the markets as a whole.
Just as capital integrates all forms of exchange, gives value to local, individual exchange by establishing the measure of value in its own products, then all the conflicts, needs, requirements for the welfare of the entire population, the growth of industry, the sustained development of agriculture become the tasks of the antithesis to capital, the overthrow of wage-labor.
7. It is in Lenin's introduction, written in 1920, and the chapter "The Parasitism and Decay of Capitalism," where he makes his often quoted remarks about the bribing of a sector of the working classes of the metropolitan countries, those "clipping coupons," and the rentier state. Lenin's analysis, unsupported and self-contradictory, has been used to rationalize the failure of the workers' revolution to advance beyond Russia and into the advanced countries; to proclaim the migration of revolutionary focus to developing countries; to announce the replacement of workers by peasants, guerrillas, youth, students, information managers, national
self-determination, etc. in the revolutionary process.
Super profits don't exist. Neither does the rentier state. The source of profits for the developed and developing markets alike is in the production and circulation of commodities. If US equity ownership in foreign companies is combined with its direct foreign investment, the combined value is approximately $3 trillion, exceeding the value of all debt claims, and generating profits approximately 50 percent greater than the income from bonds and bank claims. In 2001, 67 percent of the US's $1 trillion in exports was concentrated in capital goods and industrial supplies. Half of US imports were in these categories. Capital goods are neither imported nor
exported for purposes of coupon clipping.
The individual capitalist rushes to market, intent on realizing his or her individual profit, and when the money materializes, claims it as his own or her own. But Marx knew better and the markets recognize no individual. Instead, the markets ration, distribute, the total profit. And what the capitalist holds in his or her hand, is a part of the universe of values. Whether the capitalist is large or small, whether the capitalism developed or developing, the distribution of profit by the market, by which a general rate of profit is established and through which more technically developed, more "capital intensive" industries are sustained, is the process by which capital makes whole the sum of its parts. When profit materializes it is through the appropriation of surplus value as a whole, not from the
individual wage rates in the individual enterprise.
The establishment of a general rate of profit, and we have seen exactly that in the examination of the returns on US foreign direct investment and indirect investment,
abolishes the notion of super profits, and with that, demolishes the claims of the "bribing" of layers or sections of the working class.
The disparities in wage rates, which preceded finance capital, are
historical developments. Every industrial capital formation appropriates its surplus value on the basis of different wage-rates within the entire process of production and circulation. Does this mean that workers receiving a higher wages benefit from workers receiving lower wage rates? Do railroad locomotive engineers benefit from the lower wage rates of track workers and mechanics? To pose the question in those terms is a failure to grasp that the realization of profits is a function of the system as a whole, and that nothing in profits high or low, wages high or low, transcends the fundamental social relation of production that defines capital.
The significance of the emerging markets, the profits derived through direct investment and financial claims is not in their mass and rate, superior or inferior, not in their existence as "external" suppliers of wealth outside the arena of capitalist reproduction, not in their role as "safety valves" for capitalist overproduction, nor as a mythical source of bribes and subsidies to layers of the working classes in metropolitan countries. Rather, the significance exists, and exists entirely, in capital's integration of the emerging markets into the network of exchange, capital's ntroduction of its fundamental social relation into every locality, capital's creation of the most advanced production and class of producers alongside the backward agricultural systems, where the universal problem of capital,
overproduction beyond the capacity of private property to sustain itself, is made more acute by the overall lack of development.
reposted 11/16/04
sartesian@earthlink.net
1. The problem with death is that it makes it hard to develop a position. Others do that for you, and generally do a poor job, since they are adapting a work cut-short rather than developing a work in progress. The body gets put in a crypt, or a mausoleum, or an urn, and the words get carved into tone. In both cases, the breathing has stopped. The metabolic process ends. Ambiguity, critical, essential contradiction is replaced by canon.
Lenin's theoretical positions are infused with exactly this sort of ambiguity, vital imprecision, that manifests itself in programmatically awkward formulations. While such imprecision and awkwardness appears in remarkable contrast to Lenin's tactical clarity, his political decisiveness, the ambiguity is essential to the of the tactical decisions as it allows Lenin to "catch up with history," once history, that is to say the class struggle, has taken matters into its own hands and out of arms of theory. So we get Lenin's position that 'class consciousness' can only be brought to the workers from 'outside,' a position overwhelmed by the revolution of 1905, demolished in the organization and functioning of the soviets, and transformed by Lenin himself in the demand for "All Power to the Soviets." We get Lenin's characterization of the anticipated Russian revolution as "democratic dictatorship of the proletariat and peasantry," a construction of such internal contradiction, such compressed disorder that it can barely be uttered without stumbling over the words. Still, the very awkwardness of the construction facilitates its own abandonment when the Russian revolution manifests itself as the task, the necessity of the Russian working class. And just as revolution poses, resolves, reposes the links of class and history, production and power, the same demand, "All Power to the Soviets" resolves the ambiguity in Lenin's formulation and transforms the workers'struggle into part of the permanent revolution.
Written in 1916, Lenin's Imperialism: The Highest Stage of Capitalism sought to develop a general picture of capitalism at the start of the 20th century for both political and polemical reasons. Almost everything Lenin wrote was written for and as the fusion of the political and polemical. In this case, the political reason was to assess the mechanisms for capital's accumulation, expansion, and concentration which drove the system as a whole into world war. The polemical reason was the refutation of Kautsky's writings on imperialism.
Lenin had correctly assessed Kautsky's formulations as an index of and to the Second International's accommodation to capitalism, and the socialists' surrender to capital's first world war. Something, some things, had obviously changed during the life of the Second International. These things prefigured the war and the International's capitulation to the war. Lenin knew that the actions of the particular national capitalism's so furiously engaged in executing their own and each
other's soldiers, were in fact actions required by the needs of international capital as a system, maintaining itself as a whole only through the sums of the destruction of its parts.
Where Lenin clearly identified the changes in the manifestations of accumulation and reproduction, he ambiguously identified these changes in the mechanisms for appropriation with the requirements of appropriation itself. Lenin imprecisely records the manifestation of capital's development and maturation as fundamental shifts in capital's accumulation process itself.
The resolutions of Lenin's ambiguity regarding party and class and the social content of the Russian Revolution benefited from a revolution ascendant. The ambiguities, imprecisions, and contradictions in his Imperialism: The Highest Stage of Capitalism, had no such luck. Despite the victory in Russia, the revolution as the overthrow and replacement for the totality of capitalism is contained, rolled-back, and defeated, beginning with its very triumph in isolation. Then the imprecise characterizations Lenin makes during this ebb and flow become, on his death, a living part of the retreat of the revolution itself. The very notions of "super profits," "bribery of the working class," in part or whole, the distinction between the export of capital and the export of commodities, imprecise, confused, awkward and mistaken, are taken over and substituted for the analyses of the social relations of production. These notions reflect the failure of the revolution to apprehend capital as a whole, misidentifying changes in the technical composition of capital as changes in capitalist appropriation, and therefore, as changes in the relations of classes. With the death of Lenin, the polemic becomes gospel, the imprecision becomes dogma, the ambiguity is replaced with ideology.
2. When Lenin traces the concentration and accumulation of capital in the metropolitan centers of capital, he is looking back to the emergence of capital from its "long recession" of 1872-1892. Lenin links the concentration of capital in cartels, trusts, and banks, into the emergence of finance capital, a "liquid" form of property, requiring export to colonies to find successful employment as self-expanding value. Lenin then identifies this export of capital to "backward" countries as the "typical," signal, characteristic of modern capitalism.
It is the export of capital replacing the export of commodities that distinguishes mature imperial capitalism from emerging market capitalism. The truly typical features of Lenin's assertion regarding the export of capital are imprecision,
confusion, and ambiguity. While Lenin notes the growth in capital invested abroad by metropolitan Europe, he fails to compare that capital value to the value of commodity exports. He distinguishes between the capital exported to America and the capital exported to Asia, Africa, and Australia, but he does not distinguish Canada, or the US, or Australia from Jamaica or Argentina. He misexplains the reason for the export of capital, stating: "The necessity for exporting capital arises from the fact that in a few countries capitalism has become 'over-ripe' and (owing to the backward state of agriculture and the impoverished state of the masses) capital cannot find 'profitable' investment."
Developed capitalism by nature and definition has to develop agriculture to the degree where it can sustain industrial production in order to separate the population from the means of subsistence and to sustain the entire population. The expansion of commerce, the production of commodities, requires a coincident capitalization of agriculture. The metropolitan capitalist countries exporting capital are the countries with a developed agriculture. And finally, Lenin contradicts himself in his ninth chapter when he provides a table of the increased
export trade of Germany coincident with its increased exports if capital.
The distinction between the export of capital and the export of commodities is at one and the same time valuable and inconsequential. It represents capital's attempt to escape its earthly chains as actual articles of production and use, and ascend to heaven as pure, ethereal, detached value. And the export of capital proves the impossibility of this afterlife as capital is forced to reproduce its earthly self in these Edens by repeating the purchase and exchange of the means of production and wage-labor.
The distinction between the export of capital and the export of commodities is a temporal distinction, indicative of a phase in capital's metamorphosis from value to expanded value. The distinction is not a change in that metamorphosis of capital itself. The only purpose for the export of capital is to increase profit and increased profit can only be realized in the increased circulation of commodities.
3. So what of the current conditions of capital, the current valuations of the export of capital and the valuations of the export of commodities? If Lenin found the study of capital at the close of the 19th and opening of the 20th centuries valuable, a similar review of US capital exports at the close of the 20th and opening of the 21st centuries might be helpful.
Between 1992 and 2001, the US direct investment abroad (USDIA, also known as FDI) grew from 502 billion dollars to 1,382 billion dollars on a historical-cost basis
(US Bureau of Economic Analysis, July 2002). This growth was coincident with rates of internal US capital investment and rate of profit higher than that of any period after 1969. The increase in FDI was part and parcel of capital finding profitable investment in a mature capitalism, with a highly capitalized and efficient agricultural sector.
The export of capital also coincided with increased US exports. Between 1992 and 1997, US FDI expanded 75 percent while exports of goods and services grew 50 percent. Between 1998 and 2001, exports grew only 6.8 percent while FDI grew 38 percent. This discrepancy is exactly the expected result of the overproduction, the overinvestment in the means of production, depressing the rate of profit and reducing profitable exchange. Indeed, the market value of US FDI declined 11 percent between 2000 and 2001. The actual amounts of capital exported as FDI fell from 120.3 billion dollars in 2000 to 88.2 billion in 2001.
Equally important is the destination of these FDI capital exports. On an historical cost basis, 52.5 percent of US FDI is based in the advanced countries of Europe, 10 percent in Canada, 19.5 percent in Latin America,and 15.6 percent in Asia and Pacific (including Japan and Australia). In all these areas, US FDI, US capital exports, have accompanied increased exports of goods and services. In fact, the largest trading partners of the US are also the focus for the greatest capital exports and precisely because of the increased trade capital exports have been able to find profitable employment.
4. The enduring characteristic of capital is the conflict between its compulsion for self-expansion and its need to preserve the dominance of private property. Conflict, compulsion and need, are masked in the income capital derives from its processes of production and circulation. The mask itself is dropped when the relation of income to property, the rate of return of investment falls. Capital is driven to offset this declining rate by any and all means.
Common to some investigations into capital's methods for offset, investigations as apparently different as Lenin's from Rosa Luxemburg's, is a notion of external sources of wealth yielding an almost pure profit without expense. In Lenin's analysis this external source, the export of capital to "backward" areas, is absorbed into capital and appears as a super rate of profit. For Lenin, super profits rescue capital from the overproduction of capital. For Luxemburg, the aggrandizement of non-capitalist wealth sustains capitalist accumulation. For capital itself however, there is no such thing as super profits, and non-capitalist wealth, by definition, cannot augment the expansion of capital values unless it
enters into an exchange with wage-labor.
In 2001, the ratio of direct income receipts to US FDI (the rate of return on direct investment) measured 8.04 percent. The rate of return for investment in Canada was 8.46 percent; for Western Europe 7.67 percent; for Latin America 6.94 percent; for Asia and Pacific 9.79 percent. Does this sound like super profits?
Calculating the average rates of return for the period 1997-2001 produces the following: for all US FDI 9.5 percent; for Canada 9.9 percent; for Western Europe as a whole 9.4 percent; for the UK 6.9 percent; for South America 6.3 percent; for Brazil in particular 5.8 percent; for Mexico 12.0 percent; for Central America as a whole 8.7 percent; for Japan 9.3 percent; for Australia 8.1 percent; for China 11.7 percent; for Korea 11.4 percent. Does any of this sound like super profits?
In Mexico, where US FDI achieved a rate of return 30 percent above the total average, the rate of return has declined every year between 1997 and 2001, falling from 15.8 percent in 1997 to 8.45 percent in 2001. Does this sound like super profits?
5. For the period 1994 to 2001 "indirect income," income generated from stocks, bonds (portfolio income), and other financial instruments exceeded US direct investment income. If, for the capitalist, the commodity's transfiguration from an article, and a cost, of production, into an expanded value, is a religious experience, a miracle, then portfolio income is the Assumption. Portfolio income is value shedding all its earthly imperfect forms, dispensing with its messy intermediate states, and springing forth full grown from its own forehead as value begetting value.
In 2001 US holdings of foreign securities measured $2.39 trillion. Where Lenin saw the decline in the importance of the stock market as indicative of the rise of finance capital, US investment capital itself has raised the importance of foreign stock markets. Stocks accounted from $1.83 trillion of the total. Sixty percent of that stock portfolio is concentrated in Western Europe, ten percent in Japan, 6 percent in Canada. Argentina, Brazil, and Mexico together account for less than 4 percent of the stock portfolio.
Bond holdings are distributed somewhat more evenly with Western Europe, Canada,
Japan, and Australia accounting for sixty percent of the portfolio. Argentina, Brazil, and Mexico account for fifteen percent of the bond portfolio.
For that year, 2001, the entire portfolio of stocks and bonds generated income of $67.4 billion or approximately 2.5 percent. Bond income returned 7.8 percent on the portfolio value. Western Europe accounts for approximately half of the total income. Latin America and other Western Hemisphere areas yield approximately 15 percent of the portfolio income, but this yield is skewed by the overweighted presence in the portfolio of securities from the Caribbean banking centers and Panama. None of this amount in yield, nor the total return, amounts to super-profits, particularly when the total return on 10 year US treasury bills was 11.5 percent for the same period.
Indirect income is also generated by interest claims against unaffiliated foreign companies on money loaned, or loans guaranteed, by US banks and other entities (usually non-bank financial corporations). In 2001, US banks earned approximately $43 billion in this category. The total amount of the bank claims measured $1.07 trillion with 85 percent concentrated in the industrial countries and the Caribbean banking centers.
In truth, these figures conceal as much as they reveal as a portion of the US claims are centered in London, where the funds are subsequently re-loaned to developing
countries through European financial centers. While this process shifts risk to the other metropolitan countries (particularly Japan and Germany), it does not affect the total income derived.
Non-bank claims generated an additional $46 billion in income. The total amount outstanding was $860 billion, 75 percent of which is concentrated in the industrial countries and the Caribbean banking centers.
As a whole then, this "indirect income," the direct income of finance capital, generated a rate of return of 3.5 percent, a rate of return significantly less that the rate of return on direct investment in total or in the specific areas of petroleum, manufacturing, wholesale trade.
6. After the Asian and Russian financial collapses of 1997-98, US banks reduced their overall exposure to "emerging market" debt. This "risk revaluation" process had in fact begun at the beginning of that 90s. Ten years of economic depression in Latin America had brought several US banks, most notably Citibank, to the edge of collapse.
In 1999 US banks reduced their claims on Africa by 5 percent; on Asia by 21 percent; on Eastern Europe by 42 percent. US bank claims on Latin America increased by 12 percent during the same period, with the increased exposure concentrated in Mexico and Argentina. Latin America and the Caribbean account for 60 percent of all US claims on emerging market countries. Claims on emerging markets however represent only 5 percent of US bank assets, while US claims on developed and banking center countries are approximately 12 percent of assets. Indeed, US banks' exposures were so minimal that losses from the 1997-1998 crises were charged against ordinary income rather than capital reserves.
Between 1997 and 1999, Japan's share of claims against Asian counterparties declined from 30 to 23 percent. European banks increased their share to 50 percent, while US claims remained at a mere 7 percent. In Latin America, the US share of claims, 25 percent, was only half that of the European banks.
In 2002, the Bank for International Settlements (BIS) reported claims against emerging market countries represented only 18 percent of all bank claims on foreign counterparts.
The export of capital is clearly not an export of capital simply to the emerging market countries. Rather the export of capital to these countries is a manifestation of the export of capital on a world scale, an activity of capital that reproduces in detail, scale, convergence and divergence, the patterns of trade, production, and profit that have defined capital as an international system for three centuries.
The issue is not the significance or insignificance of the volume of claims, nor the income generated from the claims against the emerging market countries. The significance is in the "integration" of the emerging market countries into the international organization of capital, as internal components of the mechanism for accumulation. Then profits, high or low, are generated exactly as profits are generated everywhere and anywhere. Then wage rates, high or low, are established in any single manifestation of the totality, by the same logic, the same conflict, the same contradiction, as wage-rates are established everywhere. Then the social struggles generated in any single market, any single country, are part and whole of the struggles generated throughout the markets as a whole.
Just as capital integrates all forms of exchange, gives value to local, individual exchange by establishing the measure of value in its own products, then all the conflicts, needs, requirements for the welfare of the entire population, the growth of industry, the sustained development of agriculture become the tasks of the antithesis to capital, the overthrow of wage-labor.
7. It is in Lenin's introduction, written in 1920, and the chapter "The Parasitism and Decay of Capitalism," where he makes his often quoted remarks about the bribing of a sector of the working classes of the metropolitan countries, those "clipping coupons," and the rentier state. Lenin's analysis, unsupported and self-contradictory, has been used to rationalize the failure of the workers' revolution to advance beyond Russia and into the advanced countries; to proclaim the migration of revolutionary focus to developing countries; to announce the replacement of workers by peasants, guerrillas, youth, students, information managers, national
self-determination, etc. in the revolutionary process.
Super profits don't exist. Neither does the rentier state. The source of profits for the developed and developing markets alike is in the production and circulation of commodities. If US equity ownership in foreign companies is combined with its direct foreign investment, the combined value is approximately $3 trillion, exceeding the value of all debt claims, and generating profits approximately 50 percent greater than the income from bonds and bank claims. In 2001, 67 percent of the US's $1 trillion in exports was concentrated in capital goods and industrial supplies. Half of US imports were in these categories. Capital goods are neither imported nor
exported for purposes of coupon clipping.
The individual capitalist rushes to market, intent on realizing his or her individual profit, and when the money materializes, claims it as his own or her own. But Marx knew better and the markets recognize no individual. Instead, the markets ration, distribute, the total profit. And what the capitalist holds in his or her hand, is a part of the universe of values. Whether the capitalist is large or small, whether the capitalism developed or developing, the distribution of profit by the market, by which a general rate of profit is established and through which more technically developed, more "capital intensive" industries are sustained, is the process by which capital makes whole the sum of its parts. When profit materializes it is through the appropriation of surplus value as a whole, not from the
individual wage rates in the individual enterprise.
The establishment of a general rate of profit, and we have seen exactly that in the examination of the returns on US foreign direct investment and indirect investment,
abolishes the notion of super profits, and with that, demolishes the claims of the "bribing" of layers or sections of the working class.
The disparities in wage rates, which preceded finance capital, are
historical developments. Every industrial capital formation appropriates its surplus value on the basis of different wage-rates within the entire process of production and circulation. Does this mean that workers receiving a higher wages benefit from workers receiving lower wage rates? Do railroad locomotive engineers benefit from the lower wage rates of track workers and mechanics? To pose the question in those terms is a failure to grasp that the realization of profits is a function of the system as a whole, and that nothing in profits high or low, wages high or low, transcends the fundamental social relation of production that defines capital.
The significance of the emerging markets, the profits derived through direct investment and financial claims is not in their mass and rate, superior or inferior, not in their existence as "external" suppliers of wealth outside the arena of capitalist reproduction, not in their role as "safety valves" for capitalist overproduction, nor as a mythical source of bribes and subsidies to layers of the working classes in metropolitan countries. Rather, the significance exists, and exists entirely, in capital's integration of the emerging markets into the network of exchange, capital's ntroduction of its fundamental social relation into every locality, capital's creation of the most advanced production and class of producers alongside the backward agricultural systems, where the universal problem of capital,
overproduction beyond the capacity of private property to sustain itself, is made more acute by the overall lack of development.
reposted 11/16/04
sartesian@earthlink.net
Sunday, October 31, 2004
Deja Vu All Over Again
1. In his opening chapter of Capital, where he describes the contradiction and interpenetration that makes up the commodity, Marx essentially, and successfully, reduces the complex organism of capital, to its single cell and that single cell to its genetic components. In the existence of commodity as both object and value, there resides the class organization of production; the ownership of the conditions of labor as private property and the existence of labor as labor power, as an unencumbered, detached commodity, useful only in its need for exchange. From this single cell flows the genealogy of capital; the ongoing conflict between the means of production and the relations of production; the recurring, necessary, overproduction; the problems of reproduction; the essential attacks on wage rates and living standards; the ultimate destruction of the means of production themselves.
That at every moment in its development capital has relied, sustained, restored "backward" modes of exploitation, where labor is enslaved, indentured, encumbered by land-debt is above all the exact manifestation of the conflict at the core of capital, between private property and expanded production. The great plasticity of the capitalist markets easily absorbs the products of those modes as if they were commodities produced by free labor, while condemning these pre-existing modes to temporary, peripheral, roles in the continued development of capital itself.
At every equal moment, and against the alliance of property owners, capital has disturbed, disrupted, initiated the impulse to the transformation of those same exact modes. The as if nature of the pre-existing modes then confronts the modern conditions of labor, the development of the class of wage-laborers. The reproduction of capital involves the reproduction of all the anomalies, deviations, deformations surrounding the emergence of capitalist property and wage labor. It could not be otherwise.
2. Those members of the hydrocarbon depletion cult can point to the victory of the Boston Red Sox in the misnamed World Series as one more sign, one more ominous omen, that the universe as we know it is about to end. This combination of ecstasy and obliteration, long a staple of religious sects, secret societies, and trance parties, has its origins in nothing other than the sanctions against sexual pleasure, where the ecstasy of orgasm triggers torrents of guilt and the wish for punishment.
Ecstasy and obliteration have their part to play in capitalist reproduction, but they play those parts as moments in that reproduction; temporary manifestations, designed for and destined to be eclipsed by the conditions of profit.
There is little evidence of hydrocarbon depletion. Reserves of coal have hardly vanished; the truth about natural gas is that supplies have barely been explored, much less developed; that oil reserves and production are economic, not geological, categories, driven by terms of profit.
In fact, the overproduction of oil is the driving force in the world markets. A declining rate of return in the petroleum industry has always prefigured the OPEC price interventions, and this one, since 1999, is no exception.
Now overproduction has nothing to do with need. The aggrandizing of wage-labor, the expropriation of value and its realization as profit, turns the object of production into a mere host. And here, oil plays host to capital's core contradiction. The means of production have overgrown their ability to return enough profit quickly to sustain the reproduction of capital. Private property, the preservation of such property, stands arrayed against any and all terms of development. And so the price of oil lashes the general economy forward into more intense overproduction as every capitalist enterprise presses harder upon wage-labor in order to reduce cost and increase yields, and then the price of oil brings the process to a screeching halt, depleting these enterprises, redistributing their momentary profit recoveries to the oil companies.
The oil majors themselves are awash in cash and, confirming the current overproduction, are distributing some of that cash to their shareholders through dividends and stock buybacks, rather than increasing exploration and development budgets. The seven major Western oil companies are expected to generate free cash of some 73 billion dollars. ExxonMobil already has a cash reserve of $20 billion, this after buying back $7 billion dollars worth of shares. The CFO of Total is on record as stating that giving cash back to shareholders is a better use of funds than investing in capital intensive projects that may not reap adequate returns.
In the masked world of commodity production, history is banished by inevitability, society by nature, and the useful objects themselves by the conditions of profit. If the commodity itself is but an object transformed into a host, then the ideologies and ideologists of shortage, scarcity, depletion, entropy are but hosts for this transfer of profit, and for obscuring the social, class, origins of the current predicament. Despite professions of radicalism, inevitability and always the scarcity theorists are driven to conclude that class is nothing, geology is everything. All that can be accomplished is, at best, a reduced rate of descent into those pre-existing modes of production capital has maintained throughout its existence.
3. Class is everything, however. It is the essential component of commodity production, of the expropriation of labor power, its transformation into value, the value's realization of profit. It, class, is the as if facilitating all exchanges in the world market. In deconstructing the commodity at the core of capitalist production, Marx exploded political economy--the ideological obfuscation of capital's fundamental social relation of production; the masking of capital's inherent conflict between means and relations of production, between private property and social development; the necessity of overproduction. Most importantly, Marx identifies that particular agent of change, that specific social formation that can emancipate itself from the overproduction, the attacks on living standards only by emancipating production itself from private ownership.
A program of transformation then becomes the concluding volume of Capital, a volume that emerges with all the deformations, approximations, deviations of the conditions surrounding its emergence, a volume edited through and by the class struggle itself.
In the current predicament, the outcome of the US elections are immaterial. Certainly the campaign of Ralph Nader is worthy of critical support: support in that no element of Nader's program can be realized without changing the class basis of the institutions of government; critical that nowhere in Nader's program or Nader's organization is there any recognition of that need.
The strands of revolutionary development-- weak, fragile as they are-- pass through manifestations such as the Million Worker March and those actions putting forth a class-based political party.
S Artesian
10/31/04
sartesian@earthlink.net
That at every moment in its development capital has relied, sustained, restored "backward" modes of exploitation, where labor is enslaved, indentured, encumbered by land-debt is above all the exact manifestation of the conflict at the core of capital, between private property and expanded production. The great plasticity of the capitalist markets easily absorbs the products of those modes as if they were commodities produced by free labor, while condemning these pre-existing modes to temporary, peripheral, roles in the continued development of capital itself.
At every equal moment, and against the alliance of property owners, capital has disturbed, disrupted, initiated the impulse to the transformation of those same exact modes. The as if nature of the pre-existing modes then confronts the modern conditions of labor, the development of the class of wage-laborers. The reproduction of capital involves the reproduction of all the anomalies, deviations, deformations surrounding the emergence of capitalist property and wage labor. It could not be otherwise.
2. Those members of the hydrocarbon depletion cult can point to the victory of the Boston Red Sox in the misnamed World Series as one more sign, one more ominous omen, that the universe as we know it is about to end. This combination of ecstasy and obliteration, long a staple of religious sects, secret societies, and trance parties, has its origins in nothing other than the sanctions against sexual pleasure, where the ecstasy of orgasm triggers torrents of guilt and the wish for punishment.
Ecstasy and obliteration have their part to play in capitalist reproduction, but they play those parts as moments in that reproduction; temporary manifestations, designed for and destined to be eclipsed by the conditions of profit.
There is little evidence of hydrocarbon depletion. Reserves of coal have hardly vanished; the truth about natural gas is that supplies have barely been explored, much less developed; that oil reserves and production are economic, not geological, categories, driven by terms of profit.
In fact, the overproduction of oil is the driving force in the world markets. A declining rate of return in the petroleum industry has always prefigured the OPEC price interventions, and this one, since 1999, is no exception.
Now overproduction has nothing to do with need. The aggrandizing of wage-labor, the expropriation of value and its realization as profit, turns the object of production into a mere host. And here, oil plays host to capital's core contradiction. The means of production have overgrown their ability to return enough profit quickly to sustain the reproduction of capital. Private property, the preservation of such property, stands arrayed against any and all terms of development. And so the price of oil lashes the general economy forward into more intense overproduction as every capitalist enterprise presses harder upon wage-labor in order to reduce cost and increase yields, and then the price of oil brings the process to a screeching halt, depleting these enterprises, redistributing their momentary profit recoveries to the oil companies.
The oil majors themselves are awash in cash and, confirming the current overproduction, are distributing some of that cash to their shareholders through dividends and stock buybacks, rather than increasing exploration and development budgets. The seven major Western oil companies are expected to generate free cash of some 73 billion dollars. ExxonMobil already has a cash reserve of $20 billion, this after buying back $7 billion dollars worth of shares. The CFO of Total is on record as stating that giving cash back to shareholders is a better use of funds than investing in capital intensive projects that may not reap adequate returns.
In the masked world of commodity production, history is banished by inevitability, society by nature, and the useful objects themselves by the conditions of profit. If the commodity itself is but an object transformed into a host, then the ideologies and ideologists of shortage, scarcity, depletion, entropy are but hosts for this transfer of profit, and for obscuring the social, class, origins of the current predicament. Despite professions of radicalism, inevitability and always the scarcity theorists are driven to conclude that class is nothing, geology is everything. All that can be accomplished is, at best, a reduced rate of descent into those pre-existing modes of production capital has maintained throughout its existence.
3. Class is everything, however. It is the essential component of commodity production, of the expropriation of labor power, its transformation into value, the value's realization of profit. It, class, is the as if facilitating all exchanges in the world market. In deconstructing the commodity at the core of capitalist production, Marx exploded political economy--the ideological obfuscation of capital's fundamental social relation of production; the masking of capital's inherent conflict between means and relations of production, between private property and social development; the necessity of overproduction. Most importantly, Marx identifies that particular agent of change, that specific social formation that can emancipate itself from the overproduction, the attacks on living standards only by emancipating production itself from private ownership.
A program of transformation then becomes the concluding volume of Capital, a volume that emerges with all the deformations, approximations, deviations of the conditions surrounding its emergence, a volume edited through and by the class struggle itself.
In the current predicament, the outcome of the US elections are immaterial. Certainly the campaign of Ralph Nader is worthy of critical support: support in that no element of Nader's program can be realized without changing the class basis of the institutions of government; critical that nowhere in Nader's program or Nader's organization is there any recognition of that need.
The strands of revolutionary development-- weak, fragile as they are-- pass through manifestations such as the Million Worker March and those actions putting forth a class-based political party.
S Artesian
10/31/04
sartesian@earthlink.net
Saturday, October 09, 2004
Slippery Sisters
1.If the bourgeoisie were an imaginative bunch, they would imagine themselves to be nostalgic, fondly focusing forever backwards on the golden era, that market and marketable Eden, when private property, growing profits, and expanding reproduction of all of capital existed all at once, co-joined head and toe. Memory persists for the bourgeoisie, but it persists as delusion, as shared madness, the collective hallucination of the class of private proprietors. History doesn't exist for the bourgeoisie, since capital is the end, the goal, of all history. Memory exists for the purpose of denying current conditions. Just like propaganda. Like advertising.
So, whether looking backward twenty years to the regime of that pitchman for the soap trade and death squad capitalism, or backward ten years to that of the spokesman for globally positioned, krispy-kremed, digitally enhanced overproduction, the bourgeoisie are engaged in product placement-- as if there were happy days to be had, good times to roll by purchasing this or that commodity.
Everything the bourgeoisie have ever produced, marketed, dreamed, hustled -- from pharmaceuticals to philosophy to science is the result of fear and greed.
2. If after 30 years of dismissal and disregard, the Mal(en)thusiastic peak oil theorists now find themselves in hot demand, sought ought by Wall Street journalists, government ministers, on-line dating services, primitive communists and anti-communists alike, it's not because the pseudo-science of "peak production" has become more accurate, it's not because the prospects for a permanent non-nuclear winter have replaced global warming as the number one apocalyptic theory. It's because fear is the hand maiden to greed. The sounds of these two hands, fear and greed, clapping, is the snap of fifty dollar bills being added to the bankrolls of the petroleum majors. Grant's new tomb is a 42 gallon drum.
The Malenthusiasts have altered their theory, putting a little smiley face of their hydrocarbon die-off symphony, changing it from the end of petroleum dirge, to an up-tempo, apocalypso limbo. "How low can you go?" is the sub-text of their new music, proclaiming not an end to oil, but an end to cheap oil. Suddenly or not so suddenly, cold hard physical science has given way to economic categories of price and cost. Big surprise. Or not. Fear and greed.
3. Market economics and pseudo-science reach mutual accommodation, more or less, in references to capacity constraint, demand growth, and accelerating consumption. Oil, like bourgeois politics, can then pretend to be all things all at once-- abundant and scarce, cheap and dear, more important and less essential, post-peak and pre-dawn.
But "the economy," global and national, is not growing dramatically; petroleum "productivity," dollar output per BTU is not declining; transportation demand is not soaring.
For the past three years, US real private non-residential fixed investment, the real bell-weather, non bell-shaped curve measuring the success of capital's self-expansion, its reproduction, has been below its 2000 peak. Annual spending on industrial equipment has declined each year since 2000. In 2003, the spending was 14 percent below the 2000 mark. Spending on transportation equipment, and petroleum provides 95 percent of the energy consumed in transportation, was 25 percent below the 2000 mark. Total net new non-residential fixed investment for 2003 was only 40 percent of its 2000 measure.
Capacity utilization rates for industry remain below the 2001 level. While industrial output for 2002 and 2003 measured approximately 12 percent above the 1997 mark, once high-technology production is removed for the analysis, industrial output is actually below the 1997 level.
Between 2000 and 2003, overall US energy consumption declined 1 percent. Per capita energy consumption, however, has declined 4 percent, and consumption per dollar of GDP has fallen 5 percent. In three years, total petroleum consumption has increased by 3.5 percent, hardly a spectacular rate of growth.
The global economy likewise has not surpassed rates of growth recorded prior to 1997. World trade did grow between 2002 and 2003, but almost 70 percent of that growth was an accounting adjustment for the decline of the US dollar. Real trade grew at 4.5 percent, below the rate of increase recorded in the 1990s, while manufacturing grew only 2.5 percent. None of this growth has exceeded pre-existing capacity in transport or production.
China? China is not so much an economic miracle as it is the force fed goose, about to explode from an enlarged liver.
4. Hubbert the king based his analysis on a single, critical assumption-- that all oil production would follow the pattern of a single oil field. The critical assumption has been taken over, uncritically, by the little Hubbertist knaves. But the history of production has not followed this single field pattern. Indeed, even the US, with its steadily declining production has not shown the same steady decline in proven reserves and proved recoverable amounts. Between 1977 and 2002 US cumulative production increased 68.2 billion barrels, 56 percent, to 189.6 billion barrels. Proven reserves, which measured 33.6 billion barrels in 1977 declined only 25 percent to 24.0 billion barrels in 2002. Proven ultimate recovery increased in this period from 155.0 billion barrels to 213.6 billion. Proven reserves actually increased between 1998 and 2002. The disparity between cumulative production and remaining reserves is itself a product of replacement at the drill-bit-- where production has led to more accurate estimates of remaining reserves. This is the pattern that is being repeated right now in Russia, Colombia, Mexico, Nigeria, Sao Tome.
5. However great the utility of oil, its necessity to production and circulation, oil is not the universal solvent, nor the ultimate source of value, neither the aqua regia nor aqua vitae, of capital. Labor time, more precisely, the expropriation of labor time is all that and more, the royal river transporting all the bourgeoisie's goods to market. The bourgeoisie's rate of success in realizing that expropriation becomes manifest in the mass and rate of profit; in the dedication of profit to reproducing the expropriation of labor-time through the application of greater technical inputs-- into expanding production.
1997 stands as the critical year in that process of reproduction, that success and failure in the reproduction of capital, as 1997 saw the collapse of the newly-emerging economies of Asia, a collapse triggered by overproduction; a collapse pre-figured in the overproduction of the semi-conductor industry; overproduction made manifest in the destruction of the former Soviet Union; overproduction reproduced in the collapse of oil prices a year later.
All that has occurred since 1997 has been the manifestation of this overproduction, this failure of reproduction. Today the future is upon us and it looks just like Afghanistan, Iraq, Jenin. It is a future of where the reproduction of capital consists of the destruction of the prospects for any future at all.
S Artesian
9 October 2004
address all comments to:
sartesian@earthlink.net
So, whether looking backward twenty years to the regime of that pitchman for the soap trade and death squad capitalism, or backward ten years to that of the spokesman for globally positioned, krispy-kremed, digitally enhanced overproduction, the bourgeoisie are engaged in product placement-- as if there were happy days to be had, good times to roll by purchasing this or that commodity.
Everything the bourgeoisie have ever produced, marketed, dreamed, hustled -- from pharmaceuticals to philosophy to science is the result of fear and greed.
2. If after 30 years of dismissal and disregard, the Mal(en)thusiastic peak oil theorists now find themselves in hot demand, sought ought by Wall Street journalists, government ministers, on-line dating services, primitive communists and anti-communists alike, it's not because the pseudo-science of "peak production" has become more accurate, it's not because the prospects for a permanent non-nuclear winter have replaced global warming as the number one apocalyptic theory. It's because fear is the hand maiden to greed. The sounds of these two hands, fear and greed, clapping, is the snap of fifty dollar bills being added to the bankrolls of the petroleum majors. Grant's new tomb is a 42 gallon drum.
The Malenthusiasts have altered their theory, putting a little smiley face of their hydrocarbon die-off symphony, changing it from the end of petroleum dirge, to an up-tempo, apocalypso limbo. "How low can you go?" is the sub-text of their new music, proclaiming not an end to oil, but an end to cheap oil. Suddenly or not so suddenly, cold hard physical science has given way to economic categories of price and cost. Big surprise. Or not. Fear and greed.
3. Market economics and pseudo-science reach mutual accommodation, more or less, in references to capacity constraint, demand growth, and accelerating consumption. Oil, like bourgeois politics, can then pretend to be all things all at once-- abundant and scarce, cheap and dear, more important and less essential, post-peak and pre-dawn.
But "the economy," global and national, is not growing dramatically; petroleum "productivity," dollar output per BTU is not declining; transportation demand is not soaring.
For the past three years, US real private non-residential fixed investment, the real bell-weather, non bell-shaped curve measuring the success of capital's self-expansion, its reproduction, has been below its 2000 peak. Annual spending on industrial equipment has declined each year since 2000. In 2003, the spending was 14 percent below the 2000 mark. Spending on transportation equipment, and petroleum provides 95 percent of the energy consumed in transportation, was 25 percent below the 2000 mark. Total net new non-residential fixed investment for 2003 was only 40 percent of its 2000 measure.
Capacity utilization rates for industry remain below the 2001 level. While industrial output for 2002 and 2003 measured approximately 12 percent above the 1997 mark, once high-technology production is removed for the analysis, industrial output is actually below the 1997 level.
Between 2000 and 2003, overall US energy consumption declined 1 percent. Per capita energy consumption, however, has declined 4 percent, and consumption per dollar of GDP has fallen 5 percent. In three years, total petroleum consumption has increased by 3.5 percent, hardly a spectacular rate of growth.
The global economy likewise has not surpassed rates of growth recorded prior to 1997. World trade did grow between 2002 and 2003, but almost 70 percent of that growth was an accounting adjustment for the decline of the US dollar. Real trade grew at 4.5 percent, below the rate of increase recorded in the 1990s, while manufacturing grew only 2.5 percent. None of this growth has exceeded pre-existing capacity in transport or production.
China? China is not so much an economic miracle as it is the force fed goose, about to explode from an enlarged liver.
4. Hubbert the king based his analysis on a single, critical assumption-- that all oil production would follow the pattern of a single oil field. The critical assumption has been taken over, uncritically, by the little Hubbertist knaves. But the history of production has not followed this single field pattern. Indeed, even the US, with its steadily declining production has not shown the same steady decline in proven reserves and proved recoverable amounts. Between 1977 and 2002 US cumulative production increased 68.2 billion barrels, 56 percent, to 189.6 billion barrels. Proven reserves, which measured 33.6 billion barrels in 1977 declined only 25 percent to 24.0 billion barrels in 2002. Proven ultimate recovery increased in this period from 155.0 billion barrels to 213.6 billion. Proven reserves actually increased between 1998 and 2002. The disparity between cumulative production and remaining reserves is itself a product of replacement at the drill-bit-- where production has led to more accurate estimates of remaining reserves. This is the pattern that is being repeated right now in Russia, Colombia, Mexico, Nigeria, Sao Tome.
5. However great the utility of oil, its necessity to production and circulation, oil is not the universal solvent, nor the ultimate source of value, neither the aqua regia nor aqua vitae, of capital. Labor time, more precisely, the expropriation of labor time is all that and more, the royal river transporting all the bourgeoisie's goods to market. The bourgeoisie's rate of success in realizing that expropriation becomes manifest in the mass and rate of profit; in the dedication of profit to reproducing the expropriation of labor-time through the application of greater technical inputs-- into expanding production.
1997 stands as the critical year in that process of reproduction, that success and failure in the reproduction of capital, as 1997 saw the collapse of the newly-emerging economies of Asia, a collapse triggered by overproduction; a collapse pre-figured in the overproduction of the semi-conductor industry; overproduction made manifest in the destruction of the former Soviet Union; overproduction reproduced in the collapse of oil prices a year later.
All that has occurred since 1997 has been the manifestation of this overproduction, this failure of reproduction. Today the future is upon us and it looks just like Afghanistan, Iraq, Jenin. It is a future of where the reproduction of capital consists of the destruction of the prospects for any future at all.
S Artesian
9 October 2004
address all comments to:
sartesian@earthlink.net
Sunday, September 19, 2004
A B C
A: Whether our masters quarrel with each other or agree together, our bondage is equally ruinous. The governor has centurions to execute his will; the procurator, slaves; and both of them add insults to violence. Nothing is any longer safe from their greed and lust. In war it is at least a braver man who takes the spoil; as things stand with us, it is most cowards and shirkers that seize our homes, kidnap our children, and conscript our men.
--Tacitus
The karaoke President, interrupting his three week viewing immersion into the complete Girls Gone Wild video series, decided to sound presidential. With the help of aides, staff, and Bartlett's Quotations, he lip-synched his way from Madison Square Garden to Madison, Ohio almost getting it right, and almost is close enough for government work. Linking himself, as a compassionate, courageous leader in war times, to a war, World War 2, President, Bush told his audience, "The only thing we have to fear is ourselves. " The audience cheered. The world cringed. Everybody had gotten the malappropriated message.
Continuing on, Bush connected his understanding of politics to that of a another war President, the civil war President, and said "You can't fool all of the people all of the time, but you can fool enough of them, and disenfranchise enough of those you don't fool, every four years to get five votes from the Supreme Court and call that a mandate." And the ex-party of Lincoln howled its approval, recognizing, embracing , and parading its shape-shift, its transformation into the party of 10, 20, 30 million John Wilkes Boothes.
And then he said, giving credit and no bid contracts where credit is due, praising his very own Botha; pointing to his favorite kleptocrat; directing the spotlight to a man who was Lay, Gramm, Black, Goebbels, and Savimbi all in one: "The buck stops over there, at my man Dick's account in the Caymans."
Somewhere, the candidate of the Democrats, lip-synching to the lip syncher, said something and only something, that might have sounded like "Me Too!," but only if anybody had been listening.
And there you had it: the real difference between the two, the sitting and the would be. There you had it, the real difference between all those who had ever sat, save the one who confronted the slaveholders' rebellion, those who would sit.
The real difference between the Republicans and the Democrats? Just this-- whenever the bourgeois order is entering a recession, the bourgeoisie elect a Republican; whenever the bourgeois order is exiting a recession, or trying to exit a recession, then a Democrat is elected.
Not really political parties, the Democrats and Republicans, are auction houses. The recognition and execution of capital's class interest is not determined by or in the electoral process. The electoral process itself is anti-thetical to the social confrontation of that class's interest.
A real political party begins by defining its class needs in oppositon to those of the current rulers. Real political struggle begins when that opposition recognizes in its own need an overthrow and replacement of the current rulers organization of property, of production.
The prospects for a real political party and struggle are not with the Greens, nor with Naders. Despite the horrible name, the prospects begin with the Million Worker March in Washington, DC.
B. This journey has only served to confirm this belief, that the division of America into unstable and illusory nations is a complete fiction. We are one single mestizo race with remarkable ethnographical similarities, from Mexico down to the Magellan Straits.
--Ernesto Guevara de la Serna
The nation emerges from empire ascendant or in decline, whether industrial capitalist or feudal-mercantile, as the result of a social revoluton interrupted; of a social republic thwarted; of social property defeated. This was the case 200 years ago in France where the nation is secured first with the defeat of the Commune and then necessarily by the defeat of the left-Jacobins; 130 years ago in the US where "national," bourgeois, unity is forged first in the defeat of radical Reconstruction and then reinforced in the simultaneous triumph of Jim Crow at home and the defeats of the Philippine and Cuban social revolutions away; 80 years ago when the Soviet Union purchases its national existence with the defeat of revolutions in Europe and Asia; 30 years ago where the social, class, content of the battles against Portugal's empire is lost in the proclamations of a nation of Angola, Mozambique, Guinea-Bissau.
Today? Today, there's Argentina, and Brazil who have authenticated their national self-determination" by deploying troops to support the US invasion and occupation of Haiti.
And tomorrow? Tomorrow there's Venezuela, where the bourgeoisie of the advanced countries see in a "national struggle," perhaps their last chance to derail the social revolution of the workers, the landless, of the poor against private property.
National self-determination is nothing but an impulse to a unified market that capitalism unleashes but is unable to fulfill. The existing barriers, pre-existing, archaic relations of land and labor, represent an obstacle to the reproduction of capital-- but those exact same relations are the private property of capital. Patriotism is the last refuge of a scoundrel. National self-determination is the last refuge of private property.
C. Feet don't fail me now.
--George Clinton "One Nation Under a Groove"
S. Artesian
September 19 2004
sartesian@earthlink.net
see also: http://www.blackshipsarego.blogspot.com
--Tacitus
The karaoke President, interrupting his three week viewing immersion into the complete Girls Gone Wild video series, decided to sound presidential. With the help of aides, staff, and Bartlett's Quotations, he lip-synched his way from Madison Square Garden to Madison, Ohio almost getting it right, and almost is close enough for government work. Linking himself, as a compassionate, courageous leader in war times, to a war, World War 2, President, Bush told his audience, "The only thing we have to fear is ourselves. " The audience cheered. The world cringed. Everybody had gotten the malappropriated message.
Continuing on, Bush connected his understanding of politics to that of a another war President, the civil war President, and said "You can't fool all of the people all of the time, but you can fool enough of them, and disenfranchise enough of those you don't fool, every four years to get five votes from the Supreme Court and call that a mandate." And the ex-party of Lincoln howled its approval, recognizing, embracing , and parading its shape-shift, its transformation into the party of 10, 20, 30 million John Wilkes Boothes.
And then he said, giving credit and no bid contracts where credit is due, praising his very own Botha; pointing to his favorite kleptocrat; directing the spotlight to a man who was Lay, Gramm, Black, Goebbels, and Savimbi all in one: "The buck stops over there, at my man Dick's account in the Caymans."
Somewhere, the candidate of the Democrats, lip-synching to the lip syncher, said something and only something, that might have sounded like "Me Too!," but only if anybody had been listening.
And there you had it: the real difference between the two, the sitting and the would be. There you had it, the real difference between all those who had ever sat, save the one who confronted the slaveholders' rebellion, those who would sit.
The real difference between the Republicans and the Democrats? Just this-- whenever the bourgeois order is entering a recession, the bourgeoisie elect a Republican; whenever the bourgeois order is exiting a recession, or trying to exit a recession, then a Democrat is elected.
Not really political parties, the Democrats and Republicans, are auction houses. The recognition and execution of capital's class interest is not determined by or in the electoral process. The electoral process itself is anti-thetical to the social confrontation of that class's interest.
A real political party begins by defining its class needs in oppositon to those of the current rulers. Real political struggle begins when that opposition recognizes in its own need an overthrow and replacement of the current rulers organization of property, of production.
The prospects for a real political party and struggle are not with the Greens, nor with Naders. Despite the horrible name, the prospects begin with the Million Worker March in Washington, DC.
B. This journey has only served to confirm this belief, that the division of America into unstable and illusory nations is a complete fiction. We are one single mestizo race with remarkable ethnographical similarities, from Mexico down to the Magellan Straits.
--Ernesto Guevara de la Serna
The nation emerges from empire ascendant or in decline, whether industrial capitalist or feudal-mercantile, as the result of a social revoluton interrupted; of a social republic thwarted; of social property defeated. This was the case 200 years ago in France where the nation is secured first with the defeat of the Commune and then necessarily by the defeat of the left-Jacobins; 130 years ago in the US where "national," bourgeois, unity is forged first in the defeat of radical Reconstruction and then reinforced in the simultaneous triumph of Jim Crow at home and the defeats of the Philippine and Cuban social revolutions away; 80 years ago when the Soviet Union purchases its national existence with the defeat of revolutions in Europe and Asia; 30 years ago where the social, class, content of the battles against Portugal's empire is lost in the proclamations of a nation of Angola, Mozambique, Guinea-Bissau.
Today? Today, there's Argentina, and Brazil who have authenticated their national self-determination" by deploying troops to support the US invasion and occupation of Haiti.
And tomorrow? Tomorrow there's Venezuela, where the bourgeoisie of the advanced countries see in a "national struggle," perhaps their last chance to derail the social revolution of the workers, the landless, of the poor against private property.
National self-determination is nothing but an impulse to a unified market that capitalism unleashes but is unable to fulfill. The existing barriers, pre-existing, archaic relations of land and labor, represent an obstacle to the reproduction of capital-- but those exact same relations are the private property of capital. Patriotism is the last refuge of a scoundrel. National self-determination is the last refuge of private property.
C. Feet don't fail me now.
--George Clinton "One Nation Under a Groove"
S. Artesian
September 19 2004
sartesian@earthlink.net
see also: http://www.blackshipsarego.blogspot.com
Monday, September 06, 2004
Over, Under, Sideways, Down
At its core, capital is formed ( informed, deformed, reformed), and finally torn apart, by the conflict between the means of production organized as private property, and the force of labor organized socially, as a class. In its very need to reproduce this separation, capital cycles itself through expansion and contraction, accumulation and destruction, profit and loss.
When the bourgeoisie construct their ruling ideas, their ideology, it is at a moment when that class of laborers is still incomplete, diffuse; when people obscures class, ruling and laboring; when property represents the possibility of, and limits to, justice and wealth; when fear and greed masquerade as freedom. But when the bourgeoisie consolidate that power, this distortion becomes denial, the compulsory disavowal of the reality of the separation, the reality of class.
Denial always requires substitution. In place of the real separation between social labor and private property, capital creates the distinction between private and public, a distinction that is first and foremost, a marketing vehicle, where the purchase of private "freedom" only exists in the underwriting of social repression. If in the accumulation of capital, there is no more clear manifestation of overproduction than scarcity, and the fear of scarcity, then in the preservation of private property there is more clear manifestation of "free markets" than the no-bid contract; no more clear demonstration of democracy than electoral intimidation; no greater truth than lies, and no greater peace than war without end, AMEN.
All dressed up in red, white, and blue every two, four, six years, is the naked need of the class representing the naked needs of the economy of destruction. The electoral process is initiated, engaged, endured, tolerated as one more manifestation, outlet, for overproduction; as another exercise in the elimination of competitors; another junk-bond financed takeover. The vision of capital is global all right, and that vision is Afghanistan.
The modern electoral process is in fact the product of class struggle delayed; class struggle deferred; class conflict denied. The political party of the workers is not built or strengthened by its slate of candidates in election years, but in how it maintains itself outside that process and against that designated time, just precisely as the political party of the bourgeoisie builds and maintains itself, in reality, outside that process, against that time.
So voting, campaigning Green or Nader or Workers World is worse than useless. It is stupid. What happens outside those campaigns, outside those conventions, outside those candidates is where struggle begins.
What was called the New Left, but what was really the offspring of the civil rights struggles and the black liberation movements, had it almost right. What mattered wasn't the vote, but the struggle; what mattered about the struggle was the organization; what mattered about the organization was direct confrontation with the ruling forces.
S. Artesian
090604
address all comments to sartesian@earthlink.net
When the bourgeoisie construct their ruling ideas, their ideology, it is at a moment when that class of laborers is still incomplete, diffuse; when people obscures class, ruling and laboring; when property represents the possibility of, and limits to, justice and wealth; when fear and greed masquerade as freedom. But when the bourgeoisie consolidate that power, this distortion becomes denial, the compulsory disavowal of the reality of the separation, the reality of class.
Denial always requires substitution. In place of the real separation between social labor and private property, capital creates the distinction between private and public, a distinction that is first and foremost, a marketing vehicle, where the purchase of private "freedom" only exists in the underwriting of social repression. If in the accumulation of capital, there is no more clear manifestation of overproduction than scarcity, and the fear of scarcity, then in the preservation of private property there is more clear manifestation of "free markets" than the no-bid contract; no more clear demonstration of democracy than electoral intimidation; no greater truth than lies, and no greater peace than war without end, AMEN.
All dressed up in red, white, and blue every two, four, six years, is the naked need of the class representing the naked needs of the economy of destruction. The electoral process is initiated, engaged, endured, tolerated as one more manifestation, outlet, for overproduction; as another exercise in the elimination of competitors; another junk-bond financed takeover. The vision of capital is global all right, and that vision is Afghanistan.
The modern electoral process is in fact the product of class struggle delayed; class struggle deferred; class conflict denied. The political party of the workers is not built or strengthened by its slate of candidates in election years, but in how it maintains itself outside that process and against that designated time, just precisely as the political party of the bourgeoisie builds and maintains itself, in reality, outside that process, against that time.
So voting, campaigning Green or Nader or Workers World is worse than useless. It is stupid. What happens outside those campaigns, outside those conventions, outside those candidates is where struggle begins.
What was called the New Left, but what was really the offspring of the civil rights struggles and the black liberation movements, had it almost right. What mattered wasn't the vote, but the struggle; what mattered about the struggle was the organization; what mattered about the organization was direct confrontation with the ruling forces.
S. Artesian
090604
address all comments to sartesian@earthlink.net
Sunday, August 15, 2004
Hook, Line, and Purse-Seine
About the time the Marvelettes were singing "Too Many Fish In The Sea," the Eastern Pacific Ocean (EPO) tuna fishing fleet carrying capacity (tons of capture to fill holds) measured 36,631 metric tons and the total catch weighed 167,456 metric tons, a ratio of 4.6: 1, catch-tons to carrying capacity tons. By the time Marvin Gaye was releasing his sea-change album Trouble Man, fleet carrying capacity had increased to 61,246 mt and the catch to 226, 185 mt. In 1976 when the Sex Pistols released the second greatest song in rock and roll history, "Anarchy in the UK," the catch peaked at 394,275 mt with the fleet carrying capacity at about 162,000 mt, a ratio of 2.4:1. Carrying capacity continued to increase, to almost 168,000 mt in 1981, but the catch did not, declining to 322,000 mt. At that point the carrying capacity entered a downward spiral.
By 1992, fleet carrying capacity was little more than half the 1981 peak, and the catch ratio was above 3:1. The EPO fleet began another round of expansion, with catches increasing to 610,000 mt in 1999, a ratio 4:1. Capacity continued to increase, to 185,000 mt in 2001 while catches again declined, and the catch recovery ratio has again dropped below the critical 3:1 ratio. And those in the groove with the sound of young America might be able to hear the Four Tops singing "It's The Same Old Song," and Jimmy Ruffin's "I've Passed This Way Before."
There's more to the songs than the singers, and there's more to the catch than overfishing. In the history of rise and fall of catch ratios is the story of overcapitalization and overproduction as opposed to simple scarcity and depletion of a natural resource.
Conservation measures for EPO yellowfin tuna fisheries were agreed upon in the late 1960s. However, as the conservation measures yielded greater stocks of yellowfin, ship capacities increased to reduce unit costs, garner greater portions of the quota, and take advantage of the increased catch rates. Average weight of the catch was 12 kg per fish.
The competition drove portions of the total fleet to fish away from most frequented areas, targeting smaller, less mature fish. Lower yields, reduced catches per hour, caused progressively earlier closings of the fisheries. Pressures from the fish production corporations led to the collapse of the conservation measures. By 1982 the catch was half its peak. By 1983, average weight of the individual fish was 6 kg.
As conservation quotas took hold in the 1960s and 70s, fish stocks recovered. Then greed trumped, as it does at least half the time, fear. Capitalization of the industry increased. Greater capitalization is blind to everything but the need for greater profit. Unit costs of production dropped with the increased capacity of the fleet, but the total costs of reproduction could only be sustained with increased supplies and higher prices, both of which were undermined in the very process of production. That was then.
This is now. In June 2004 the World Bank issued a dire warning about the state of the world's fisheries, including estimates that a quarter of the world's major marine fisheries are over-fished and 40 percent are fished to capacity; that the cumulative weight of the fish ( biomass) surviving in the coastal waters of Asia is only 8-12 percent of the biomass at the beginning of the 20th century; the prevalence of cod, tuna, and groupers has fallen 90 percent in the past 50 years.
Whether or not the condition is that desperate, there is no doubt that catch rates have declined, and individual catch weights are low. Still, during the mid 1990s fish capture weights remained fairly steady. Increases in fish production has occurred in aquaculture, marine and inland fish farming which now accounts for 30 percent of the total.
Shrimp accounts for 19 percent of the international trade in fish production and shrimp fisheries seem to be withstanding the pressure.
Still the pressure on the world's fisheries is real and it is the result of simultaneous over-capitalization and underdevelopment. International trade absorbs 38 percent of world fish production and the developing countries provide 50 percent of all exports. Low income food-deficit countries (LIFDC) account for 19 percent of exports. Net receipts (exports minus imports) for developing countries expanded from $4 billion in 1981 to $17.7 billion in 2001.
Most of the international trade is production from boats of advanced countries fishing in waters of the developing countries (thus making clear who really benefits from increased exports). Yet the World Bank reports a quadrupling of the number of people fishing. The Bank reports: "The extra numbers are comprised mostly of small, non-industrial fishers in developing countries, seeking food, or to supplement their incomes."
The populations of developing countries have partaken only modestly in the increase in fish production, particularly since the Asian financial crises of 1997-1998. Calories per capita per day from fish in developing and LIFD countries has been flat since 1997, and remains at 80 percent of the world average.
As the capitalist expansion in Asia drove some economies forward, it disrupted and destroyed the pre-existing petty market economies of village, agriculture, and exchange. Subsistence production, simple exchange, becomes an impossibility. Immiseration of the previous relations of exchange forces some of the population into the cities.. and others to the sea, not for subsistence, but for subsistence exchange; not from poverty, but from simultaneous capitalist integration and marginalization.
In 1998, the number of large ships, weighing more than 100 gross tons and longer than 24 meters, in the world fishing fleet numbered 19,992. In the 1950s, ships this size were built at the rate of 500 per year. In the 1980s that rate was 2500 per year. Currently the rate of construction is 300 per year. Still, the capacity utilization rate of these ships is less than 1, and this over-capitalization determines the overproduction.
S. Artesian
address all comments to: sartesian@earthlink.net
By 1992, fleet carrying capacity was little more than half the 1981 peak, and the catch ratio was above 3:1. The EPO fleet began another round of expansion, with catches increasing to 610,000 mt in 1999, a ratio 4:1. Capacity continued to increase, to 185,000 mt in 2001 while catches again declined, and the catch recovery ratio has again dropped below the critical 3:1 ratio. And those in the groove with the sound of young America might be able to hear the Four Tops singing "It's The Same Old Song," and Jimmy Ruffin's "I've Passed This Way Before."
There's more to the songs than the singers, and there's more to the catch than overfishing. In the history of rise and fall of catch ratios is the story of overcapitalization and overproduction as opposed to simple scarcity and depletion of a natural resource.
Conservation measures for EPO yellowfin tuna fisheries were agreed upon in the late 1960s. However, as the conservation measures yielded greater stocks of yellowfin, ship capacities increased to reduce unit costs, garner greater portions of the quota, and take advantage of the increased catch rates. Average weight of the catch was 12 kg per fish.
The competition drove portions of the total fleet to fish away from most frequented areas, targeting smaller, less mature fish. Lower yields, reduced catches per hour, caused progressively earlier closings of the fisheries. Pressures from the fish production corporations led to the collapse of the conservation measures. By 1982 the catch was half its peak. By 1983, average weight of the individual fish was 6 kg.
As conservation quotas took hold in the 1960s and 70s, fish stocks recovered. Then greed trumped, as it does at least half the time, fear. Capitalization of the industry increased. Greater capitalization is blind to everything but the need for greater profit. Unit costs of production dropped with the increased capacity of the fleet, but the total costs of reproduction could only be sustained with increased supplies and higher prices, both of which were undermined in the very process of production. That was then.
This is now. In June 2004 the World Bank issued a dire warning about the state of the world's fisheries, including estimates that a quarter of the world's major marine fisheries are over-fished and 40 percent are fished to capacity; that the cumulative weight of the fish ( biomass) surviving in the coastal waters of Asia is only 8-12 percent of the biomass at the beginning of the 20th century; the prevalence of cod, tuna, and groupers has fallen 90 percent in the past 50 years.
Whether or not the condition is that desperate, there is no doubt that catch rates have declined, and individual catch weights are low. Still, during the mid 1990s fish capture weights remained fairly steady. Increases in fish production has occurred in aquaculture, marine and inland fish farming which now accounts for 30 percent of the total.
Shrimp accounts for 19 percent of the international trade in fish production and shrimp fisheries seem to be withstanding the pressure.
Still the pressure on the world's fisheries is real and it is the result of simultaneous over-capitalization and underdevelopment. International trade absorbs 38 percent of world fish production and the developing countries provide 50 percent of all exports. Low income food-deficit countries (LIFDC) account for 19 percent of exports. Net receipts (exports minus imports) for developing countries expanded from $4 billion in 1981 to $17.7 billion in 2001.
Most of the international trade is production from boats of advanced countries fishing in waters of the developing countries (thus making clear who really benefits from increased exports). Yet the World Bank reports a quadrupling of the number of people fishing. The Bank reports: "The extra numbers are comprised mostly of small, non-industrial fishers in developing countries, seeking food, or to supplement their incomes."
The populations of developing countries have partaken only modestly in the increase in fish production, particularly since the Asian financial crises of 1997-1998. Calories per capita per day from fish in developing and LIFD countries has been flat since 1997, and remains at 80 percent of the world average.
As the capitalist expansion in Asia drove some economies forward, it disrupted and destroyed the pre-existing petty market economies of village, agriculture, and exchange. Subsistence production, simple exchange, becomes an impossibility. Immiseration of the previous relations of exchange forces some of the population into the cities.. and others to the sea, not for subsistence, but for subsistence exchange; not from poverty, but from simultaneous capitalist integration and marginalization.
In 1998, the number of large ships, weighing more than 100 gross tons and longer than 24 meters, in the world fishing fleet numbered 19,992. In the 1950s, ships this size were built at the rate of 500 per year. In the 1980s that rate was 2500 per year. Currently the rate of construction is 300 per year. Still, the capacity utilization rate of these ships is less than 1, and this over-capitalization determines the overproduction.
S. Artesian
address all comments to: sartesian@earthlink.net
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