Down with the Dogs! Up With the Fleas!

Angelus Novus, a close associate of Michael Heinrich, and participant on Louis Proyect's Marxmail list, and the Libcom list, read "Oh You Kid," and he didn't like it.  Wrote the avenging Angelus on Proyect's list:

A pretty underwhelming response.

Heinrich basically does the math to prove that Marx's calculations don't actually support giving his speculations the status of a "law", and Sartesian's response is basically that the math that Marx intended to prove his assertion is not relevant, what matters is the unproven assertion it was intended to prove (!).

I have to say, though, that the various responses to Heinrich are providing a fascinating insight into the religious mentality of a lot of Marxists, conferring sacred text status on manuscripts whose author regarded them as unfinished and unsuitable for publication!

Well look, I've been called worse than underwhelming, and by better people, so no big deal, but the religious thing is not going to go unanswered.

So first things first:  See the evidence for the tendency of the rate of profit to decline is not in the text or rituals of a sect, or in the secret recipes of wizards, demons, or butlers.  The evidence is in the actual historical movement of capitalism.  Those who agree with Marx's analysis of the tendency of the rate of profit to decline don't base the agreement on the irrefutability of Marx's mathematical presentation. They, we, base it on the historical evidence.  Me?  I like to take it back to 1968-1970, and then bring it forward to right here/right now, accounting as best I can for the twist and turns of OPEC, Pinochet, Volcker, Thatcher,  the petroleum sector,  the semiconductor industry, the S&L crisis, the "lost decade" in Latin America, the multiple attacks on the working class of Mexico, the "Clinton" boom, and its end, the Bush wars, the profusion of asset-backed debt instruments, on the basis of changes in the rate of profit and the relation of those changes to increases in capital investment.  Maybe that's just me.  Maybe not.

Others have done work on this current and previous eras.  Shane Mage performed an analysis of the tendency of the rate of profit to decline for the post-WW2 period in the US.  Andrew Kliman, Michael Roberts (and others)  have explored the movement of rates of profit.  All these explorations are based on actual calculations of the rate of profit and the relation of those changes to accumulation of the means of production of capital.

If those of us who have done that work decide that historical evidence is  worth more than Marx's mathematical "proof,"  or Heinrich's refutation of that proof, that's hardly a demonstration of religious faith.  It's an expression of.....materialism, historical materialism.  The real content of history is concrete, and may, or may not be, representable as mathematical symbols.  There is a difference between "proof" (or "disproof") and truth.   See Gödel for further information.


This gets us to Heinrich's section on "The Crisis Theory Without the Tendency of the Rate of Profit to Fall."  Heinrich opens us with this gem:

 Since many Marxists regarded the "law of the tendency of the rate of profit to fall" as the foundation of Marx's theory of crisis, they vehemently defended it against every critique.

To the perceptive reader this should be enough to warn us off any further reading.  The assumptions that Heinrich makes on behalf of those "many Marxists" are:1) that Marx provided a "crisis theory" of capitalism  2) that the basis for that theory was the falling rate of profit  3) that the many defended this foundation theory vehemently and against every critique.  Heinrich provides zero historical evidence for these assertions.  Some Marxists I'm sure do think Marx provided a crisis theory, complete and in total in Capital.  Some certainly think the law of the tendency of the rate of profit to fall is the foundation of that theory.  And I'm sure some vehemently defend it against every critique.

However, the historical evidence is that what Marx meant by crisis, what Marx thought the causes of crisis were,  and the tendency of the rate of profit to fall were not regarded as identical, nor as different aspects of a single identity, nor interchangeable categories for "many Marxists."   Indeed, the historical evidence is that "crisis" and its causes were not well developed in Marx's work, and were not well understood by "many Marxists."

The historical evidence is that the emergence of the rate of profit as a determining limit to capital reproduction gains credence, not as the foundation of a crisis theory, but as part of the reclaiming of Marx's labor theory of value, both of which re-emerge at the end of the post WW2 "golden era," when in fact the rate of profit had declined from a level that has yet to be surpassed.  How about that?  as Mel Allen used to say.  How about that?

Look, the connecting thread in Marx's work that unites his various comments on capitalist crisis is that of overproduction, which "many Marxists" have confused, misunderstood, and even defended vehemently or not, with "underconsumption."


At this point, it's time to bring in that usual suspect, Engels.  Engels, according to Heinrich, heavily revised Marx's original material-- a "sea of notes and constantly interrupted thoughts"-- to make a third chapter on the law, condensing it, rearranging it, "creating the impression of an already largely completed theory of crisis."  Now maybe it's just me, but when I read volume 3, I knew that Engels had revised the material; that the material was almost not presentable in its original state; that rearrangements were made; and that this in no way shape or form represented Marx's complete "crisis theory."  Maybe it's just me, but I think it's clear Marx was not presenting a fully developed theory regarding the ultimate or penultimate crisis of capitalism, since there can be no such thing without the overthrow of capitalism, its abolition by the proletarian revolution, without the action of classes.   I think that implicit in Marx's unfinished explorations of the tendency of the rate of profit to fall is not its role as the death-knell for capitalism, but its functioning as critical, necessary, to the process of counteracting the overproduction of the means of production as capital.  

Heinrich then argues:

..it quickly becomes clear that Marx's considerations do not yield any unified theory of crisis, but contain rather disparate thoughts on crisis theory.  The most general formulation of capitalism's tendency is completely independent of the "law of the tendential fall in the rate of profit." rather its starting point is the immediate purpose of capitalist production, surplus value or rather profit.

If I were a generous soul, I would say that Heinrich is being intentionally hilarious here.  He's pulling our leg and winking his eye and nodding his head in a demonstration of gymnastic prowess last seen when Spiro Agnew proclaimed his innocence, acknowledged his guilt and pleaded "no contest" all at once.

I'm not. And he isn't.  We have disparate thoughts on crisis theory from unfinished notes and manuscripts, which Heinrich presents to us in general formulation, stating that the starting point is the immediate purpose of capitalist production, surplus value or rather profit. And this differs from Engels' work to develop volume 3 how?  Perhaps in that Engels was Marx's closest friend and collaborator?

And that bit that about the "starting point [of capitalist crisis] is the immediate purpose of capitalist production, surplus value or rather profit"?  Exactly how does Marx present the starting point of the tendency of the rate of profit to decline if not directly from the immediate purpose of capitalist production, the expropriation of surplus value and its realization as profit?  Remember all that stuff about the barrier to capitalist production being...capitalist production?

Heinrich then turns to volume 3 and quotes from "Development of the Laws Internal Contradictions," the very part of the manuscript that is a "sea of notes and constantly interrupted thoughts,"[adding his own italics]:

The conditions for the immediate exploitation and for the realization of that exploitation are not identical.  Not only are they separate in time and space, they are also separate in theory.   The former is restricted only by the society's productive forces, the latter by the proportionality between the different branches of production and by society's power of consumption. And this is determined neither by the absolute power of production nor by the absolute power of consumption but rather by the power of consumption within a given framework of antagonistic conditions of distribution, which reduce the consumption of the vast majority of society to a minimum level.

This is indeed interesting and Marx is giving credence to the notion that restricted consumption does present a barrier to capital, despite Heinrich's attempt to disassociate this from "underconsumptionist" theory.

However, the antagonistic conditions of distribution in the capitalist framework are reflections of the social relation between capital and wage labor.  In fact, consumption as consumption does not occur in capitalist society.  Consumption occurs as derivative to and a function of exchange.  The realization of the surplus value in any and all commodities requires exchange, expanding exchange, with wage-labor.  

The consumption of a commodity as a use-value is only possible through the realization of its exchange value, through continuous reproduction of the classes and class relations, bourgeoisie and worker, capital and laborer.  The market for the commodity is the commodity.

In the Grundrisse, Marx writes:

With capital, the consumption of the commodity is itself not final; it falls within the production process; it itself appears as a moment of production, i.e. of value-positing [Wertsetzen].

Consumption to realize value must be value-positing.  And how is value posited?  Only through the dispossession of the laborer; only though compelling labor to present itself as a commodity for exchange in the market for a value equivalent to its, or its cost of, reproduction.  

As capital develops, expands, accumulates to create the commodities as commodities, to appropriate more surplus labor time, to extrude that surplus-labor time as surplus value, proportionately more labor most be expelled from production.  Now haven't  derived the mathematical formula yet, but it seems to me that limits to the social power of consumption, that antagonistic condition of distribution, and  the negative impact that limitation has on the realization of value, on the turnover of capital, derives from the changing organic composition of capital.  And as Marx repeatedly points out, circulation, the turnover of capital is a critical factor in establishing the rate of profit.

Heinrich then takes us to the post-1870 period.  First he mischaracterizes that period as a "stagnation lasting for years..."  The period from about 1872-1895 is anything but a period of stagnation.  It is period of expansion, bankruptcy, recovery, repeated contraction-- but overall capital accumulation grows and grows rapidly worldwide.  In the US the period is not a "long depression."  It is a "long deflation" where changes in production processes, increases in the value composition , drove down prices, and depleted profits, and created brief and weak recoveries. 

I've always said that Marx should have spent more time writing about the long deflation and less time on his calculus.  Who knows what we might have learned?    According to Heinrich, Marx "clearly recognized the need for a fundamental revision of the hitherto existing manuscripts."   The manuscript that Marx had in mind for a complete revision was the first volume of Capital.  That's interesting, since discussions of the rate of profit do not figure in volume 1. 

The problem here is that Heinrich in arguing and rightly so, that Marx did not produce a fully developed "theory of capitalist crisis" is, in effect, setting up a straw man, or straw men.  The, avenging Angelus repackages this with his accusations of "religious orthodoxy" against those who can point to, demonstrate, the importance of rates of profit to the direction of capital.  The problem is that to defeat the straw man, Heinrich has to transform Marxism from a critical inquiry into capitalism, its actual means and methods of reproduction, and to a critical inquiry of texts.