Ain't That Peculiar

When that putty faced hack, the living Dorian Gray of US finance capital at the Federal Reserve Board spoke of "irrational exuberance," he thought he was referring to a specific phenomenon in the US financial markets and not a congenital defect. The man who gave entire new meanings to the word "equivocation," who has made a career of presenting ignorance as erudition, never knew how close he came to the truth, how he close he came to half the truth, which is as close as even the brightest bourgeois can get, and Greenspan, believe me, is not the brightest.

But irrational exuberance is only half the truth. Unrelieved despair is the other. And the two halves do not make the whole. The whole truth is the organization of despair in exuberance, exuberance in despair, fear in greed, greed in fear, concentrated wealth in general poverty, private prosperity in social misery.

The source of both, of the whole, is the expropriation of surplus labor; the transformation of wage-labor into profit. This process begins, can only begin, with the separation of labor from the instruments of production, can only be maintained through reproducing that separation in the continuous expulsion of labor from the production process, and thus reproduces itself only in part by undermining the reproduction of the whole.

Between 1950 and 2000, US manufacturing output expanded 600 percent, while manufacturing employment declined. As a portion of GDP, manufacturing declined by half between 1960 and 2000.

The current exuberant recovery of the US economy compresses that trend into a 4 year time frame. Manufacturing employment has declined some three million while output has increased.

Trucks and semiconductors, the bellwethers of the US economy, define the parameters of the expansion. Intel has invested more than $10 billion in 300mm semiconductor fabrication plants. Without increasing manufacturing employment, the 300mm fab plants yield 5 times the chips of the 200mm plants.

Navistar, capitalizing, and I do mean capitalizing, on UAW give backs has introduced a two tier wage and benefit system while reducing labor inputs. The average elapsed time for truck production has declined by 40 percent in 2 years. Said the CFO "If we had not been able to squeeze out the labor, we would have had to go someplace else." The someplace else is where labor is also being squeezed out.

The exuberance begins in the accelerated extraction of surplus value in each particular, private enterprise of the economy. The despair begins in the decelerating realization of that surplus value as profit for the enterprises of the economy as a whole. The spiking of oil prices is both the beginning and end of exuberance and despair-- an index to the difficulties in the transformation of surplus value into profit, and the reproduction of capital as a whole.

Two and three years ago, capital suffered from a paralyzing overabundance of trucks, semiconductors, steel-- leading to the shuttering of fab plants, bankruptcy of steel manufactures. Today there is a "shortage" of steel, a booming market for trucks, and semiconductor plant utilization rates at new highs.

Profit losses after the 2001 collapse erased the profits booked from 1998 forward. The five year annual return of the S&P 500 stands at -.2 percent.

Tomorrow? Tomorrow's calling.

S. Artesian
May 16, 2004