Mid-term

Received this response to the Mid-term exam, from power-lifter/class-struggle militant Broletariat  :

"The falling cost of energy in the US as a result of the shale revolution was supposed to encourage the relocation of operations from both domestic and foreign companies.  For example numerous energy intensive firms, such as petrochemical companies, were expected to build new plants in the US as a result of changing economics."

Overproduction from too much Capital invested into shale resulted in the falling cost of energy. Therefore more investment into yet more efficient means of production was expected. Cheaper labour locally doesn't hurt either (changing economics).

"At the same time, technological breakthroughs encourage even old economy companies such as carmakers to expand or shift production to the US to take advantage of the latest trends."

Sounds like yet more investment which will inevitably result in overproduction to me. Also cheaper labour prices in US seems to be masked as the 'latest trend'.

  "Quantitative easing was supposed to encourage manufacturers to expand capital expenditures given the low cost of capital."

Interest rates are low because the rate of profit is low to encourage more investment to lead to more overproduction down the road.

Overproduction is an episodic moment, as opposed to  a chronic condition, in capital accumulation.

Overproduction is always threatening valorization. Movement of Capital everywhere is always trying to dodge overproduction by investing in more production typically, or by destroying the means of production exceptionally (perhaps not though, my conception of destroying the means of production is pretty single-mindedly aware of world wars as an example of such destruction).

Overproduction is the overproduction of use values beyond the effective demand of society. 

The overproduction of use-values merely implies the overproduction of the means of production as capital. Capital is unconcerned with the use-values it may produce, indeed, Capital is unconcerned with even the exchange-values it may produce, so long as these exchange-values will enable a favourable rate of profit. The root problem of overproduction is the overproduction of the means of production as Capital, which you have very well emphasized. Because there are too many means of production, the value invested into them cannot be realized except by choking wages or kicking the problem down the road by investing in more means of production if at all possible.

Overproduction of capital is separate from overproduction of commodities.  It has a different origin, and different resolution.

I think this was answered sufficiently above. The origins and resolutions are the same.

Overproduction occurs when capital runs up against the limits to population growth.

This sounds like an echo of Rosa Luxemburg's saturated market theses. Needless to say, production is always an act of consumption as well, so population growth is not the limit. Capital itself is its own limit to growth.

Overproduction cannot reach "criticality" until capitalism has penetrated the entire globe. 

I think this is patently false as multiple instances of crisis have occurred before the penetration of capitalism into the whole world.

 

I'm sorry Arty but I liked my format for answering the questions better than giving a single essay for my answers in section B. Fail me if you must :(\

No failure,  Brol'-- extra-credit in fact for structuring the responses in the manner you thought best explained the issue.  One thing:  be careful with this:

 Needless to say, production is always an act of consumption as well, so population growth is not the limit. Capital itself is its own limit to growth.

Same argument-- "production is always an act of consumption" has been used in an attempt to refute the possibilities of generalized overproduction under capitalism.    Production always conditions consumption, but is not necessarily coterminous, proportional, coincident with, nor the purpose of, capitalist production.   

Excellent answers,  and a gratifying moment for teachers everywhere.

S.Artesian 
February 14, 2016