Saturday, May 25, 2013

Don't Do Nothin' 'til You Hear From Me

I'm going away (before you get too excited, it's only temporary) and while I'm taking my access to digital resources with me, don't know if I'll be away from the sea, the wine, and the sunscreen long enough to want to write something.  If truth be told, I can be more shallow and superficial than the next guy, and sometimes being more shallow and superficial is almost good enough  (see here).

So if sometime somewhere you happen to be strolling down a sun-drenched promenade where palm trees don't look homesick, out of place, and lost, and you spy a mature gentleman tucked behind his sunglasses and a bottle of wine, trying his best, but usually failing, to likewise not appear out of place, most probably it's not me... this world being filled with mature gentlemen in sunglasses and sunblock trying and failing to not appear out of place.  But it might take the chance and inquire.  Part of being shallow and superficial is never failing to buy the wine for all.

In the meantime, I'll leave you with this, one of my favorite passages from my favorite manuscript by my favorite critic of capitalism:

Thus in a crisis–a general depreciation of prices– there occurs up to a certain moment a general devaluation or destruction of capital. The devaluation, like the depreciation, can be absolute and not merely relative, because value expresses not merely a relation between one commodity and the other, as does price, but rather the relation between the price of the commodity and the labour objectified in it, or between one amount of objectified labour of the same quality and another. If these amounts are not equal, then devaluation takes place, which is not outweighed by appreciation on the other side, for the other side expresses a fixed amount of objectified labour which remain unchanged by exchange. In general crises, this devaluation extends even to living labour capacity itself. In consequence of what has been indicated above, the destruction of value and capital which takes place in a crisis coincides with– or means the same thing as– a general growth of the productive forces, which however, takes place not by means of a real increases of the productive force of labour (the extent to which this happens in consequence of crises is beside the point here, but by means of a decrease of the existing value of raw materials, machines, labour capacity……In the same way, on the other hand, a sudden general increases in the forces of production would relatively devalue all present values which labor objectifies at the lower stage of the productive forces, and hence would destroy present capital as well as present labouring capacity. The other side of the crisis resolves itself into a real decrease in production, in living labour– in order to restore the correct relation between necessary and surplus labour, on which, in the last analysis, everything rests. (Marx, Grundrisse, Notebook IV,  p446 Penguin 1973)[bold underlining provided by me, italics provided by KM]
Among other things, besides prefiguring Marx's discussion of, and the importance of, fixed capital to rates of profitability and the "growing over" of capitalist expansion to capitalist contraction, I think this section goes a long, long way to validating Kliman's arguments concerning the proper valuation of the means of production when calculating that profitability. 

"...the correct relation between necessary and surplus labour, on which, in the last analysis everything rests..."  Indeed.  Too much is at one and the same time too much and never enough. 

May 25, 2013

Monday, May 20, 2013

More Last Words on Michael Heinrich...

...and not from me, at least not so much.   Michael Roberts, in his blog has taken a run at Heinrich's re-formation, or reform-ation, of Marx's analysis of capital and the tendency of the rate of profit to decline. 

I recommend Roberts' article not only for his countering of Heinrich's speculations but equally for the comments the article has elicited from readers.  The comments not only extend the critique of Heinrich but sustain the quality of the critique over some 20 individual responses.

Almost enough to make someone an optimist-- that someone not being me. 

May 20, 2013

Sunday, May 19, 2013

Of Profit Rates and Paper, as opposed to Paper Rates and Profit

I strongly recommend Alan Freeman's paper "The Profit Rate In the Presence of the Financial Markets" available here.

It was, for me personally, great fun to read (fun? that's my idea of fun? I need to get out more).  Alan Freeman argues that by accounting for finance as capital, as integral to the cost and the price of value production  (1) there has been no sustained recovery in the rate of profit since (pick one) 1970, 1973, 1980, 1986, etc. {although I do think there was a temporary uptick, which did not exceed previous highs, in the 1994-1998 period} (2) a clear and insightful exploration of “fictitious capital” and (3) in the last paragraph on page 18 regarding rent—that rent is part of, essential to, the equalization of profit rates—the same conclusion I reached after studying the impact of the oil price spikes (and collapses) in the recent decades (see: section 3.4).

I wrestled long and hard with Marx’s analysis of rent, and couldn’t quite integrate it until I linked it to the equalization process. It's nice to read something that makes me feel a little bit less alone in my conclusion, and being a little less alone really is my idea of fun.

May 19, 2013

Monday, May 13, 2013

A Minimal Program

It's not often that I read the articles on the New York Times Op-Ed page.  And I can't remember ever recommending any such article to anyone for any reason.  But today, May 13, 2013,  I read and I recommend "How Austerity Kills" by David Stuckler and Sanjay Basau. 

I don't think I can summarize the evidence, the findings or conclusions in the article.   That would be like summarizing the findings of an investigation into conditions at Auschwitz-- and I'm not kidding.  Stuckler's and Basau's piece deserves to read, absorbed, understood in its entirety

But here are my conclusions:  Clearly, small "c" communists are not even advancing a minimal program when, where, and if, they advocate exit from the EU and even renouncing debts.  The minimal program is one that proposes international workers solidarity through the immediate dissolution of the European Union,  the liquidation of the European Central Bank, the abolition of the European Commission, termination of all economic agreements with the IMF, and expulsion of EU and IMF officials.

And it's a dead cinch certainty that the later it takes small "c" communists to announce such a minimalist program, the sooner some fascist-sentimentalist slug/goon would-be (Louis) Bonapartist/Peron wannabee (Berlusconi?  The Northern League?)will as a program for "national salvation" that will squarely target  class struggle as the primary obstacle to "national"-- that is to say corporate--unity.


May 13, 2013

Sunday, May 12, 2013

Now Back to our Subject: Pardon the Extrusion, 2

I.  Now back to our subject. Marx, concludes his Notebook VI of the Grundrisse with an extended discussion of circulation,  the impact of fixed assets, machinery, on the turnover of capital,  the impact of fixed capital on the labor process, and the impact of circulation time on the reproduction of capital.  Writes our friend Karl:
The circulation of capital is the change of forms by means of which value passes through different phases.  The time which this process lasts or costs to bring about belongs among the production costs of circulation, of the division of labor of production based on exchange. (Grundrisse, Penguin Books, 1973, p. 626).
Pretty straightforward, right?  The physical commodity, for the capitalist owner,  is but the bearer of the surplus value appropriated in production.  It represents cost plus- value -which was, at one time, money without the plus.  Now the commodity has to circulate, prove itself exchangeable, in order to perform the magic of its transubstantiation, in its simultaneous disappearing and realization act, materializing as mo' money.  This transformation is both physical and "beyond" physical.  It is social.  The transformation requires some time.  Time isn't always money.  But the appropriation of  labor time cannot be sustained without its conversion into money. Money is the alienation of time.

The process by which any single capitalist realizes the expanded value in commodity production requires that capital as a social organization expand; that the markets "officiate" at the process of transubstantiation for all, or most, or a really good portion of the commodity/supplicants.

The economic metamorphosis requires social time and space. The movement of value through different phases is  accompanied by the movement of the commodities through space.

The longer the circulation time, the slower the turnover of capital, then the more encumbered is the original production process as its rate of realization, its rate of return drags upon the need for uninterrupted production to maximize the efficiency of, and circulate the overhanging costs of the increased fixed assets. 

Marx has identified fixed capital as that portion of the constant capital "whose" value is transferred to the commodities only incrementally, over numerous cycles of production.  To complete the transference of the value in the fixed assets requires, more or less, the complete extinguishing of its use value-- its inability to function any longer as capital, actually.  This is a pretty serviceable distinction, and one that doesn't require much elaboration, covering as it does structures, equipment, software, rolling stock.......rolling stock?   Yes, for those of us who take pleasure in the little ironies that accompany, like pilot fish accompany the shark, the big ironies of capitalism in which we take no pleasure, it is precisely in the means of circulation, the means of communication and transportation, that fixed capital finds its home always away from home.

Now back to Marx.  He continues:
Hence to the extent that circulation time determines the total mass of production time in a given period of time, and to the extent that the repetition of the production process, its renewal in a given period depends on the circulation time, to that extent is it itself a moment of production, or rather appears as a limit of production. This is the nature of capital, of production founded on capital that circulation time becomes a determinant moment for labour time, for the creation of value. The independence of labor time is thereby negated and the production process is itself posited as determined by exchange so that immediate production is socially linked to it and dependent on this link--not only as a material moment but also as an economic moment, a determinant, characteristic form.  (Grundrisse, p. 628, 629)
Sometimes, when I think about just how great the passages from the Grundrisse (and the other manuscripts written between 1857 and 1864) are, I almost conclude that just listening to, reading, linking, reproducing those passages should be..well, should be enough to shake capitalism to its core; should be enough to make it clear, that Marx is never just describing, analyzing the metabolism of capital, but is always analyzing the metabolic process of capital that are at one and the same time the limitations to and ultimately the abolition of capital.

Then again, if  that it were the case, the that it being that just reading, quoting those passages from Marx which lift the veils covering and displaying the secret to the commodity were enough, it could only be the case when and if capitalist commodity production had already been abolished.

While you ponder that conundrum, back to our subject.  So what's Marx going on about here?  First and foremost, Marx is moving from analyzing the limitations and restrictions upon the expansion of any particular capital in isolation to the limitations and restrictions on all capitals based on their existence as particular capitals.  Circulation time of any and all individual capitals becomes a determinant, an economic determinant, in that immediate production gets socially linked, and becomes socially dependent upon the circulation time of all capitals.

Increasing the relative exploitation of wage-labor, reducing necessary labor time in order to maximize surplus labor time, displaces living labor through the substitution of fixed assets, machinery, which transfer their value only incrementally and over long periods of time, so that the rate of turnover for the capital as a whole, declines.

The differentials in production times are carried forward into and inform the differentials in circulation time which encumbers the profitability of capital as a whole.  To mitigate this dissonance, this inherent, essential, disequilibrium  in capitalist production, capital focuses on reducing the cost and time of circulation, the physical and economic and temporal distance to be spanned,  through improvement in transportation, communication, and........the miracle of capitalist transubstantiation which we know as credit. 

This, circulation, turnover,is about the tendency, the moments, when capital confronts itself as not yet capitalized; as expanded value not yet realized.

This is about the vesting of capital in the means of communication and transportation and of credit; the vesting of capital as the means of communication and transportation and credit,  and thereby reproducing the limitation to accumulation directly within these modes, these phases of value.  And that limitation is simply, complexly, immanently, always that the more capital accumulates and exchanges itself with wage-labor, the proportionately less of itself is exchanged with wage-labor.

II.  Now back to our subject.  The rapid growth of railroads in the US begins prior to the Civil War.  By 1860, there the over 30,000 miles of track, with 20,000 miles having been built since 1850.  Impressive, for then, of  course, but not for what was about to come:  by 1899 main line mileage amounted to 190,000, reaching a peak of 254,000 miles in 1916.

Railroads were by necessity organized by and around continuous, almost compulsory, overbuilding. The expansion of "free soil farming" into and beyond the former Northwest Territories, and the improved productivity of the soil which appeared, almost as gift simply by the act of expansion created an expanding, and diffusing agricultural platform for the movement of commodities between city and countryside.  Population densities in the US were so low that two simultaneous, seemingly contradictory "strategies" were required for the "lacing" together of countryside and city, for the establishment of the domestic market, and of the domestic market as the gateway to the world market: capital costs, the costs of the materials of the railroad itself-- rails, ties, etc-- had to be controlled through utilizing what would have been considered inferior, unsuitable materials in Europe and capital had to be extended to bring the rail service to as many individual outposts, and individuals, as possible.

Financing schemes were exactly that for US railroads during the 19th century, with the terms "financing" and "schemes" pretty much interchangeable.  Alongside that was the use of "strap rail," or wooden rail with only the area of contact with the rolling stock wheels, the "ball" or "head" of the rail covered with iron.  A dollar saved is a derailment waiting to happen, but delay, postponement, deference were essential to improving turnover. 

During US Civil War, the federal government transformed and  accelerated the land grant program.  First grants were awarded directly to the railroads, not to the states, or the territories.  California, the area of the greatest population density was the prize and railroads there were awarded almost 12 million acres.  Grant totaling 200 million acres were made to US railroads between 1850 and 1871.  Grants were usually made in a checkerboard pattern, alternating along either side of the railroad's proposed route.   The land grants were secured by US government issue bonds that acted as a lien against the railroad's property, including its track, rolling stock etc.

Secondly none of the land in these grants, or the land circumscribed by the areas granted were subject to the terms of the Homestead Act, the theory being that so eloquently expressed in the film Field of Dreams: "If you build it, they will come" and if they come, you can raise the prices on the seats, or the land.

The expansion of credit and credit schemes were not a case of "fictitious capital" being employed with no corresponding "hard assets" underlying the "paper values."  On the contrary, the problem was to no small degree that the hard assets were "outproduced" and outproducing the ability of the social development of the capitalist economy to provide an adequate rate of return.  To this dilemma, capital admitted only one "panacea"-- further expansion.  What it did not admit was that further expansion required and produced contraction, collapse, retrenchment, bankruptcy-- all of which is only capital consolidating itself.

Growth in "hard assets" grew alongside the credit system designed to both circulate the value of those assets and to bridge the delay imposed on the turnover, the reproduction of that capital, by the differentials in the capital costs concentrated  in railroad development, and the diffusion of capital,  capital costs, across capitalist farm production in the rural US.

The land grant program attempted, with no little success, to reconcile the differences in intensity, a frequency of capital costs by capitalizing land, imputing to land the value that could be derived from labor set in motion by land organized as a commodity, as an instrument and social relation of production for exchange.  The distinguishing characteristic of capital's relation to land is not ground rent, differential and/or absolute.  The distinction is in the "alienation" of land; its organization as an exchangeable commodity, or more correctly, as if it were an exchangeable commodity.

The French Revolution had its assignats; the US bourgeoisie, its land grants.  

Indexes of railroad output, inputs, productivity and traffic earnings for the period 1870-1890, as reported in Historical Statistics of the United States, Millennial Edition, Volume 4 (Cambridge University Press, 2006, Series Df) show output increasing approximately by a factor of 5, capital (track and equipment) increasing 3.5 times, and total revenues up 2.5 times.  Eventually the faster you go, the more the slowdown catches up to you.

III.  So much for history.  Now back to our subject: circulation, turnover, fixed assets, or as we know it, history.   So, the great trek westward, or mid-westward, the movement of goods people, requires greater speed than what can be provided by river, canal, and wagon.  Turnover time, trip time, time-to-market are a cost to production time.  Therefore, greater capital investment reducing per unit  (ton-miles) charges, yielding  reduced trip time, reduced time-to-market, are socially necessary for capital even if not, economically supportable.  Part of the economic support comes through and from the devaluation of the other means of circulation: boat, barge, and wagon. Part comes from efficiencies generated in the new mode, reducing costs, while expanding the service network.   This part of the solution reproduces, in structural form, what was heretofore imagined as a purely cyclical movement of capitalist enterprises, over-expansion and declining profits.

We know how this works: Great expansions, altering the relation between living labor and the conditions of living labor, that is to say the objectified labor accumulated as value-appropriating machinery, become great slowdowns leading to great consolidations.

For US manufacturing as a whole, the great consolidation compressed into the period from 1895 to 1904.  During that time approximately 1800 manufacturing firms were consolidated into 157 corporations.  The consolidation period concentrated tremendous market power, and market share.  Forty of these post-merger corporations controlled 70 percent of the market share for their respective industries. (see Naomi R. Lamoreaux The Great Merger Movement in American Business, 1895-1904, Cambridge University Press 1985)

The consolidation period also inaugurates the great population shift in the US from rural to urban based.    Population in urban areas quadruples between 1870 and 1910, and finally overtakes the number in rural areas around the start of WW 1.

Railroads had built the fields of dreams; they, the people had come; and the fields were no longer fields but urban production centers where stations and small switching yards were inadequate. The shift to terminals and production yards, represented increased capital investment in car handling versus haul distance. Road-owned main line trackage peaked in 1916 at approximately 254,000 miles.  The rate of growth of main line trackage between 1901 and 1916 was about 30 percent.  Yard trackage doubled during the same period.  Freight cars in service expanded by 50 percent, dictating the increase in yard track availability.

Those "things," (relations) necessary for capital reproduction as a whole, increased circulation of commodities, reduced costs of circulation of commodities, more rapid turnover of the "vehicles" carrying the incremental values transferred by the fixed value, were exactly the requirements for the railroads engaged in meeting the needs of that reproduction as a whole. The railroads in satisfying their "social"  "economic" function  undermine their very own business purpose.   Operating ratios, the portion of operating revenues consumed by operating expenses, increased from 64.86 percent in 1901 to 72.91 percent in 1914 for the US railroads.  By 1919, the ratio was above 85 percent.  The network was now extensive and intensive.  And it cost too much.  The increment of profit declined.

"The facts of make an alteration in the evolvement of an organic life system is fatal. A coding sequence cannot be revised once it has been established."
"Why not?"
"Because by the second day of incubation, any cells that have undergone reversion mutation give rise to revertant colonies, like rats leaving a sinking ship; then the ship sinks."
"What about EMS-3 recombination?"
"We've already tried it-- ethyl methane sulfinate as an alkylating agent and a potent mutagen; it created a virus so lethal the subject was dead before it even left the table."
"Then a repressor protein, that would block the operating cells...."
"Wouldn't obstruct replication; but it does give rise to an error in replication so that the newly formed DNA strand carries with it a mutation, and you've got a virus again...but this, all of this is academic.  You were made as well as we could make you."
"But not to last."
"The light that burns twice as bright burns for half as long-- and you have burned so very, very brightly, Roy.  Look at you:  you're the Prodigal Son; you're quite a prize!"
"I've things."
"Also extraordinary things; revel in your time."
"Nothing the god of biomechanics wouldn't let you into heaven for?"                                  Blade Runner, 1982, directed by Ridley Scott

V. Now, back to our subject.  Between 1890 and 1980, the number of operating railroad companies declined from 1013 to 64 corporations.  Revenue ton-miles per mile of railroad increased from 487,000 to 5.75 million.  Employment declined 70 percent between 1924 and 1980.  The operating ratio for railroads exceeded 93 percent.  Between 1970 and 1979 the average rate of return for the industry was around 2 percent.  Prior to 1980 almost 21 percent of main line trackage was held in receivership or railroads nearing bankruptcy.

The critical "event" was the 1970 bankruptcy of the Penn Central Railroad.  The collapse of the PC threatened the entire industry, and the entire economy of the US with paralysis.  The railroad was kept alive in receivership as the US government applied eighth and quarter measures to the problem-- for example, relieving the PC and other railroads of the financial burden of long-haul passenger service.  But eighth and quarter measures are just that and by 1973 the trustees of the bankrupt PC threatened to end all operations if government subsidies were not provided.  The Association of American Railroads submitted a plan to Congress to transform the PC (and other roads) into a government funded corporation.  That plan known as the Regional Rail Reorganization Act ("3R")  became law in 1974.

The 3R Act created the United States Railway Association which, essentially, became the banker and the administrator for the bankrupt properties, charged with developing the plan for the actual Consolidated Rail Corporation.  Most importantly, the USRA superseded the authority of the ICC in determining the advisability of,  and providing authority for the bankrupt railroads to abandon unprofitable lines.  "Deregulation" well precedes the rise of  so-called "neo-liberalism" and is at origin a government subsidized program.

The USRA developed its plan for a Consolidated Rail Corporation, which was designed so that only lines with current or potential profitability would form part of the system.  Other lines and services, such as commuter operations were to be transferred, sold, ceded to states or local authorities or other operators or...abandoned.   This plan enacted into law as the Railroad Revitalization and Regulatory Reform Act ("4R") of 1976 established the Consolidated Rail Corporation as of April 1, 1976, known in the industry as "C" (for conveyance) day.

Now you don't hear railroad management refer very much to either the 3R or the 4R bills, but you can't step them from talking about the Staggers Act of 1980.  Railroad management in general regards the Staggers Act with a reverence, and hype, equal to that of the NRA when referring to the 2nd amendment to the US Constitution.  You would think the Staggers Act had been written by Jesus Christ or Adam Smith or both, using Staggers as a host.  The fact that this divinely inspired piece of deregulatory genius was drafted, nominally, by a Democrat member of Congress, and signed into law by a Democratic president is simply one of those awkward moments in the ideology of liberalism, neo-liberalism, conservatism, "Keynesianism" that tells us how unimportant ideology is to the real actions and directions of capital and to the real dictates of cash flow.  Behind every pose of every enlightened, humanitarian Democrat, there's the issue of cash flow.  Behind every raving Tea Party Ayn Randist free marketeer, there's the same issue of cash flow.  The struggle between the two, and of everyone in between those two, is nothing but another market mechanism for parceling out the readies.

Anyway, what the Staggers Act did, in fact all it did, was to  recognize the accumulated overbuilding of railroads throughout the Northeast and Midwest which the OPEC price spikes had made so painfully clear to the most casual observers, even those as casual and unobservant as elected politicians.  The law curtailed the former Interstate Commerce Commission's (now Surface Transportation Board) regulatory oversight of shipper-railroad contracts, rates and pricing,  the elimination of service, and the abandonment of lines that did not provide current profitability and which were determined, by the railroads, to offer little opportunity for future profitability.

The Great Expansion had morphed into the Great Slowdown leading to the Great Consolidation giving way to the Great Bankruptcy which would reappear as the Great Divestment; the Great Liquidation; the Great Spin-off. 

(A word on "class":  Railroads can be designated by "Class"-- 1, 2, or 3, and that designation is determined by annual revenues.  Class 1 railroads have annual revenues equal to or greater than approximately $380 million; Class 2 railroads have revenues greater than $20 million but less than the Class 1 threshold; Class 3 railroads --the actual short-lines--  less than $20 million.  The AAR utilizes the Class 1 distinction, but designates other railroads not by class but as "regional" "local" or "switching/terminal" railroads)

Despite its legendary status as the "4Rs and an S" Act, the Railroad Resuscitation Resurrection Redemption and Salvation Act, the Staggers Act did not accomplish miracles immediately.  Between 1980 and 1982,  the Great Double Dip Recession drove revenue ton-miles on the Class 1 railroads down some 13 percent.  Between 1980 and 1986, total freight traffic decline 6 percent, but....... but the railroads were able to divest,  abandon, and spin off lines, and employees, to secondary railroads-- the "short-line" roads.  As the major railroads use the divestment to "rationalize" their operating plants,  the short-line spin-offs used the great divestment to negotiate work-rule changes to "rationalize" labor costs among the work force.

Between 1986 and 1996, the Class 1s reduced their main line track by about 25 percent, and today main line road mileage is about  160,000 miles.  The number of Class 1s has declined, due to merger/bankruptcy to seven operating freight railroads in the US.  Employment has declined from about 450,000 in 1980 to about 158,000 in 2012.  The number of freight cars owned by the Class 1s has fallen from over 1 million to less than 400,000 today.

"Productivity" measures for the Class 1s soared as a consequence.   In 1978, railroads produced, or serviced, 1.8 million revenue ton-miles per employee.  In 2004, the figure was 10.5 million revenue ton-miles per employee.   Revenue ton-miles per locomotive grew 250 percent while revenue ton-miles per freight car expanded 450 percent.

These are not "fictitious gains" or "paper gains"-- nor can they be attributed solely to the spin-off of labor and assets to the short-lines.  Real capital investments, reducing the asset base, offset the customary drag of accumulated capital on profitability.  Real rationalization of traffic and traffic management reduced circulation times of railroad assets themselves.  This is usually attributed by our  Staggerists to the divine, but invisible hand of the Harley's  act, taking hold in 1986.

Those of us with less religious inclination might find the resurrection in a couple of more earthy events, one being the Powder River Basin coal fields, the other being containerization.  The coming online of both allowed for the accelerated growth of "unit consist" trains-- trains made up a single type of freight vehicle, carrying the loads of a single shipper.  ICC regulations had restricted the ability of railroads to offer unit consist service to shippers; prohibiting discounting rates to the shipper in return for the improved efficiency, and in intermodal (container and trailer) service, prohibiting the reserving of "spots" at the intermodal facility for the loading/unloading of containers for a single shipper.

The Staggers Act did ease those restrictions, but the economy made the business big business. With coal being what coal is-- 43 percent of railroad business, and with container service being the fastest growing sector of rail freight, dedicated unit consist train service has expanded to 37 percent of freight traffic.

The advantages to railroads was immediate and sustained.  Switching costs decline when the train is loaded at one location and moved intact to its final location.  Terminal "dwell" (the elapsed time a freight car spends in yards before being "delivered" to the consignee declines.  Car handling costs decrease, terminal congestion declines, faster turnaround of locomotives and equipment is realized by, in, and with the reduction in the proportion of the labor required to animate the operation.

The resulting productivity gains for US railroads provided for increased profits and reduced rates to shippers.  Ton-mile rates averaged 6.9 cents in 1981; 2.7 cents in 2001 and then......And then, the gains due to the rationalization of plant, the reduction in labor, the spin-offs, the better asset management, the unit trains played themselves out, that is to say the increases in productivity could not be sustained at a rate necessary to offset not only the increased capital investment in productivity improvements, but the accumulated and accumulating maintenance costs of the rationalized plant, the improved asset management, the increased costs of fuel that countered improved tonnage capacity of high tractive effort locomotives.

In 2007, the ton-mile rate had increased to 3.1 cents, and in 2011 it measured 3.7 cents per ton-mile.

None of this, of course, amounts to "decay" of capital.  None of this amounts to a "permanent" or "final" crisis of capital.  None of this portends doom for railroads What this does reflect is that continuous interpenetration, identity, and conflict between "improved productivity" and the devaluation of accumulated capital.  Before the Staggers Act "great recovery," as part of the Staggers Act great recovery came the devaluation of massive accumulations of fixed assets.  In its attempt to augment profitability through the reduction of labor and the expansion of improved techniques, capital in effect devalues previous accumulations of fixed capital.  Capital accomplishes this devaluation at different rates, and in different modes.  Some devaluation is accomplished as the value of  the"older" assets cannot be recovered before its use value is extinguished as the prices necessary for that recuperation are higher than the market prices resulting from the application of improved technologies.

Some devaluation is accomplished as the turnover time for the mass of capital value employed in production (or in circulation) lengthens; or is hampered by the inherent unevenness and disequilibrium of capitalism.

General devaluation occurs when the application of the improved technologies, the accelerated intensification of the exploitation of labor is no longer accelerating-- but has become the new standard, the new average, the new general rate of profit.  At a certain point, capital again has to find a way to reduce trackage by 30 or 40 percent; find a way to reduce its labor costs by an even greater amount.  That is a general devaluation.

VI.  Two political-economists explains the tendency of the rate of profit to decline:
In a competitive industry economic profits would be zero in the long run. This implies that all productivity gains in the long run would be passed on to the consumers in the form of lower prices and higher quality products.  However, if an industry starts out in disequilibrium with insufficient revenues then movement toward a competition-like equilibrium would require the industry to retain a fraction of the productivity gains.         "The Distribution of the Post-Staggers Act Railroad Productivity Gains,  B. Kelly Eakin, Philip E. Schoech, Christensen Associates, Madison, Wi.,  (Dec 2010)                              

VII.  Now back to our subject.  In the beginning, circulation and circulation time appear to be distinct, independent, of labor-time, of the socially necessary labor-time for reproduction.  When we examine the means of circulation, the appearance disappears as the mechanisms are determined, informed, subject to the very same exchange between capital and wage-labor, the very same measure of socially necessary labor-time of reproduction, due to their very existence as capital.  In the end, as in the beginning, it is the alteration of the proportion between necessary labor-time and surplus labor-time, which is manifested in capital because it is capital as the proportion between objectified labor and living labor; it is the alteration in the relation between the labor accumulated in the commodities that are  the means of production and wage-labor; it is the conflict between labor and the conditions that determines capital.

S. Artesian
May 12, 2013


Of Possible Interest

Just received this from a friend:

I've just stumbled across this slide show on the current state of the MEGA II project which I thought might interest you:
It gives a very good summary of where the project has got to.
The long version:
Now back to our subject.....

Wednesday, May 08, 2013

Filling the Space While Working Towards the Reproduction of Time

I wouldn't want to make a living following Louis Proyect from "intervention" to his next "intervention" to his next performance piece pointing out what a simpleton he is, but it sure is diverting when working on things a bit complicated to read the simpleton's simple-minded blog and point out how much of a simpleton he really is.

After woofing at a university professor who had the good sense to tell our Arnold Twerpenegger to get to the point, if he had one,  Proyect then had to explain to his readers othat he wasn't serious; that anyone who thought he really meant to do physical harm to said professor was "insane" even though he, Proyect, had indicated that he would do something to make the professor regret ever having encountered said twerp.   Now, right, I'm sure many people regret having encountered Proyect without Louie ever raising anything that could possibly be construed as a threat.  I am not one of those people as I have derived some bit of mirth and entertainment from this self-styled faux Norman Mailer, faux Howard Stern, faux doofus hipster's  blatherings.

Then, because Louie had woofed at the professor, and was being roundly rounded on for having so woofed, he had to prove what a shock jock he is by publishing this: Guest speakers at the 2013 Socialist Rapist Conference where he wrote, quoting from and riffing on the "official guide":

Paul Le Blanc
Paul Le Blanc is an author and activist flying in from the United States for Marxism 2013. His many books include “Lenin and the Revolutionary Party”, and “Black Liberation and the American Dream”. He will speak on “The history and future of Lenininism” [Is that anything like Troskyismism?]

Gilbert Achcar
His many publications include “The Arabs and the Holocaust”.  His new book “The People Want: a Radical Exploration of the Arab Uprising” is out this year.
Plus Alan Freeman and Radhika Desai who seem to live for these things.

and then  this:Response to Gilbert Achcar statement 

where he wrote

(My [meaning Proyect's] comments are in italics.)
On 5/8/13 2:42 AM, Gilbert Achcar wrote:

Gilbert Achcar

The campaign against the SWP is taking a regrettable turn. It now includes attempts at intimidating those participating in Marxism 2013, including myself, into withdrawing from the conference. The SWP is being described as a “socialist rapist party” and taking part in the conference as an “apology of rapism”.

You can call the SWP whatever you want but the fact is that a key leader of the party was protected from the consequences of the most brutal act of violence against women.

Whatever one thinks of the crisis in the SWP and the behaviour of its leadership, such terms applied to a whole party ­– the largest on the British radical left – and to the open forum that the party organizes each year are outrageous. They reveal the regrettable persistence of a certain mindset on the left, a mindset the origin of which is known all too well and for which anathemas and excommunication are substitutes for political fight.

Nobody advocates “anathema and excommunication”, as if that term applied. Instead, it is a reaction by some leading figures on the left to refrain from accepting invitations to speak at their Summer Carnival of Marxism because of the failure of the SWP leadership to clean up its act. “Anathema and excommunication” would instead describe what happened to the Trotskyist movement for most of the 30s through the 50s when it was routinely blocked from joining social movements, trade unions, etc. by a hegemonic Communist Party.

I do not recall any such attitude towards innumerable left parties the leaderships of which are guilty of much worse than what the SWP is accused of. To give but one example, I have accepted in the past invitations by the French Communist Party to their annual FĂȘte de l’HumanitĂ©, as do regularly countless intellectual and activists who are deeply critical of that party. Had I regarded participating in such open forums as an endorsement of the party’s political, organisational or ethical record, which I deem to be incomparably worse than that of the SWP in all respects, I would have never accepted. Instead, I regarded my participation as an opportunity to engage with the public who attend such events, be they party members or non-members, and defend my own views, which differ from those of the party. No one ever blamed me for that.

This is a bogus analogy. The CP in France was not responsible for repression in the USSR. By the 1960s the CP’s in capitalist countries had evolved into social democratic type formations whose connection to the Moscow Trials, etc. mostly consisted of a refusal to disavow their own history. If the French CP, on the other hand, was as tiny as the SWP and had 9 rape investigations on its record, that might be another story.

I do firmly believe that the crisis in the SWP is a worrying symptom of a deeply-rooted problem pertaining to a vitiated conception and form of organisation. Regrettably, a few of the SWP’s opponents worldwide are taking this same vitiated tradition to extremes in the way they practice SWP-bashing. It is high time for the radical left to get rid entirely of that tradition if it is ever to regenerate.

8 May 2013

Sorry, Gilbert, the “tradition” we need to get rid of is thuggery on the left. When a minority faction in the SWP was formed to clean house, its members were shouted down and threatened with violence. Meanwhile, Alex Callinicos–author of 27 books–speculated that “lynch mobs” might arise if the minority refused to abide by the rules shoved down its throat by an anti-democratic majority. If that is the kind of gathering you want to attend, be my guest.  [END]

Priceless, no?  Proyect woofs at a professor at  conference and then he decides to prove that he's no goon, the real goons are elsewhere at other conferences, like the British SWP's May Pole Dance of Marxism. 

Full disclosure:  I don't care for the British SWP, never have, never will.Took the time during the great SWP rape controversy to point how ignorant and arrogant the British SWP leadership and membership were to think a "disputes committee" was somehow competent, appropriate, and empowered to investigate a matter of felonious assault, instead of immediately and permanently suspending the accused from all party activity and then advising both individuals to obtain competent legal advice. 

Point being.... I have no idea if  "comrade X" raped "comrade Y" and neither does Proyect.  I do know how a Marxist party, should, must act when such an accusation is raised.

BUT... to call the Socialist Workers Party the "Socialist Rapist Party" as if the organization were an organization of socialist rapists is something worthy of --not Howard Stern-- but the real shock jock of shock jocks... Rush Limbaugh (and maybe Rupert Murdoch's stooges at The New York Post, Fox News etc.).  

Achar makes a valid point in his response:  Nobody ever squaked, when the historians and academics appeared with and for and at CP sponsored conferences. Certainly not Proyect.  No, Louis thinks making that point  is a "bogus analogy" because the "CP in France wasn't responsible for the repression in the USSR."  Well, guess what, the members of the SWP are not responsible for the actions of comrade X toward comrade Y.    Moreover, the French CP directly supported the repression in the USSR.   The French CP directly supported the physical liquidation of militants adhering to other organizations, or no organizations, in France and elsewhere.  Call me a fussbudget,  but I think that qualifies as the "most brutal act of violence."

The French CP was directly responsible for the repression and liquidation of revolutionists in Vietnam during the time of the popular front in France.  The French CP ordered its Vietnamese cohorts to arrest, and cause to be arrested, Vietnamese small c communists.

The Vietnamese CP again at the behest of its French "elder brothers" suppressed the workers revolution at the close of WW 2, "welcoming" more or less the return of imperialism.  The Vietnamese Stalinists proclaimed that theirs was a bourgeois revolution-- with them, btw, acting the role of the bourgeoisie and murdering workers, breaking strikes, liquidating peasant organizations etc. etc.

Proyect, who ranks Ho Chi Minh as "a great revolutionist," thinks that by the 1960s, the CP had evolved into a social-democratic type party.  Really?  Indeed.  And does Proyect know the role the official social democratic party of France played in breaking the strikes of dockworkers and other workers in the 1940s and 1950s?  Does Proyect know that the "official" social democratic party of France made itself the willing, and well-compensated, instrument of the US CIA in its great struggle against the "communist menace"?   This guy's ignorance would fill volumes.  And cost lives. 

So here's the thing... when you start selling woof tickets, you never know who just might step up and buy one, or more than one, or maybe buy them all.  Then you, the woofer, unless you are ready to take responsibility for what you said, how you said it, and what it means-- for its consequences-- wind up being the woofee, and you wind up having to eat the whole batch.

You'll be able to recognize Proyect at his next intervention.  He'll be the guy channeling Rush Limbaugh.

Now back to our subject-- circulation, circulation time, fixed assets and the reproduction of capital.