Food, Machinery, and Chemicals

1. In Marx's encounter with political economy, criticism itself, and the elements of criticism-- conflict, opposition, antagonism-- moves from thought and knowledge to the activity of human being in their relations with other human beings.  Philosophy gives way to history.  History is a product of social beings, and therefore shifts from a contemplation of abstractions, like progress, like freedom, to the concrete determinations of necessity; from the abstraction of thought to the concrete of conditions; from the abstraction of right to the concrete of labor.

Marx develops this transformation through and by the examination of the value relation.  In the critique, the inversion at the heart of this veiled relationship is exposed.  The subject initially apprehended as the material, concrete substance of capital, the commodity, is revealed and displayed to be essentially immaterial,  indeterminate, but determined; universal to but derivative from the specific condition of its creation.  The abstract facet, the "slippery soul," lacking weight but not gravity; absent height but not status; without corporeality but with substance, the value relation, the organization of labor as value-producing, as a value in exchange, is exposed as the real material of political economy; the real material of capital.  It, the value relation, is both the code and the messenger for human beings reproducing themselves as social being.  It is the fused, antagonistic, compressed, opposite, identity of labor and the condition of labor as wage-labor. 

We move from wealth as the production of material objects, to wealth as the condition of that production, the appropriation of value.  We get to, although in a completely degraded, immiserated form, wealth as the disposition over time.

II.  Every once in awhile, someone notices that a  recovery looks so much like a recession as to appear indistinguishable.  Every time this every once in awhile, when this happens, it's news. The Wall Street Journal, that paper of intelligent reporting and ignorant editorializing, on November 15 headlined an article  "Eurozone rebound feels like a recession."

No matter how many times it has happened before, it's always supposed to be news, and everyone is supposed to be surprised that the recovery looks so much like the recession, because...because good times are supposed to be better than bad times; because expansion is different than contraction; because... well, just because.

There are differences, all right, between good times and bad, between recovery and recession, between expansion and contraction, but they look so much alike because they share the same womb; recovery and recession, contraction and expansion are the "hostile brothers,"  the opposite identical twins of capitalist accumulation.

The response of the US bourgeoisie to this period known as the Great Recession has been the drastic curtailment of production hours.  Between 2007 and 2009, production hours in US industry declined 22 percent.  Between 2009 and 2011, there was no significant increase in production hours.  There was, however, an increase in the total value of the output from US industry, which brought that measure above its previous peak in 2008.  

III. The US Department of Commerce overseer of the US Census Bureau and the Bureau of Economic Analysis, produces an Annual Survey of Manufactures.  The survey provides data for approximately 70 different categories-- everything from total payroll to taxes and licensing fee, and using several of those categories, it is possible to develop a calculus, and approximation,  for rates of extraction of surplus value, and the conversion of surplus value into a rate of profit.  We can utilize the data to provide numbers in the formula that says:  big C (total value of shipments) = c (cost of materials, plus consumption of machinery) + v (value of labor power, wages)  + s (surplus value, the value absorbed in the production process beyond that that replaces the wage).

The ASM categories are not precise matches for Marx's, hence the calculus and the approximation.  We (that means you and me, partners in this excursion) have to make an estimate for fringe benefits for production workers, based on data provided for total cost of fringe benefits provided to all employees.  The data provided for overall rates of fringe benefits suggest 33 percent is a reasonable "add-on" accounting for the costs of the fringe.

We utilize depreciation amounts for the value of the means of production consumed.  We utilize total cost of materials utilized in production for the value of the raw and processed materials required, and we use total value of shipments (which includes revenues from sales of scrap, waste, etc) for our big C capital.  Because the ASM data includes production worker hours, we can even calculate all these inputs, and outputs, on an hourly basis.

Since it's history that we're talking about, since it's history we are always talking about, what matters most is the trend. So...we look at the period starting in 2007 ending in 2011 (the most recent year of published data), and we select six major categories of US industry, which together account for about 62 percent of the value of output from all industry.  Those six categories are the "building blocks" of capital accumulation, F, M, C-- food, machinery, chemical:  1) food   2) machinery manufacturing    3) transportation equipment  4) computer and electronics  5) chemical 6) and the Big Papi of US capitalism, the petroleum industry, which is represented in the "Petroleum and Coal manufacturing classification.

All errors to transcription, computation are mine. Errors in analysis will be attributed to some other likely party, as soon as I can find one.   Meanwhile the data look like this:

Column1	Column2	Column3	Column4	Column5	Column6	Column7
2007-2011	Food Machinery Chemicals			(and Petroleum)
NAICS
Industry	C/hr $	c/h $	v/hr $	s/h $	s/v	s/C
Manufa	282.23	163.52	24.89	93.82	3.77	0.33
31-33	307.53	186.92	25.69	94.92	3.67	0.31
	300.1	172.72	26.34	101.04	3.84	0.34
	337.13	191.21	27.39	110.66	4.04	0.33
2011	369.85	225.77	28.06	116.02	4.13	0.31
Petroleum	3986.01	3270.88	42.39	672.74	15.87	0.17
324	5080.59	4497.95	42.51	540.13	12.71	0.11
	3368.38	2905.31	44.09	418.98	9.5	0.12
	4412.23	3840.33	46.09	525.81	11.4	0.12
2011	5889.97	5101.1	48.31	740.56	15.33	0.13
Food	258.03	158.06	20.23	79.74	3.94	0.31
311	285.85	181.93	20.51	83.41	4.07	0.29
	285.67	172.91	21.13	91.63	4.34	0.32
	298.22	185.47	21.87	90.88	4.15	0.3
2011	327.02	211.7	22.1	93.22	4.22	0.28
Machinery	232.69	127.42	25.77	79.5	3.08	0.34
333	244.26	135.29	26.97	82	3.04	0.34
	250.64	137.3	27.56	85.78	3.11	0.34
	274.63	148.63	28.66	97.8	3.41	0.36
2011	294.65	160.34	29.78	104.53	3.51	0.35
Transp Eq	336.91	214.73	32.8	89.38	2.72	0.26
336	326.58	217.37	33.54	75.67	2.26	0.23
	343.08	208.73	34.34	100.01	2.91	0.29
	403.83	246.57	35.57	121.69	3.42	0.3
2011	416.78	261.62	35.97	119.19	3.31	0.29
Computer	371.01	162.91	25.83	182.27	7.06	0.49
334	396.32	172.5	29.12	194.4	6.67	0.49
	416.93	181.62	30.39	204.92	6.74	0.49
	440.61	190.16	33	217.45	6.59	0.49
2011	445.75	188.89	33.63	223.23	6.64	0.5
Chem	760.22	399.59	32.47	328.16	10.11	0.43
325	813.15	446.56	33.7	332.89	9.88	0.41
	754.02	381.47	34.92	337.63	9.67	0.45
	841.3	448.72	35.95	356.63	9.92	0.42
2011	925.45	506.19	37.16	382.1	10.28	0.41

First some words on method.  I like simple math because, let's face it, if capitalism were that complicated,  the bourgeoisie would never have been successful at it.  Greenspan would have been flipping asset-backed burgers at Freddy Mac's.  It's volume and velocity which make capitalism appear complicated and demand all that processing power.

Anyway "s/h,"  surplus value per hour, column 5:  the result of Big C capital, column 2, less the sum of column 3 and column 4 (c+v);

Column 6 "s/v" is the ratio column 5 to column 4 (column 4 includes wages and fringe benefits);

Column 7, ratio of surplus value to Big C, the ratio of column 5 to column 2.  Clear?

There is a small  decline in output per hour for industry as a whole in 2009.  There is a steep decline in output per hour for the petroleum and chemical sectors, but modest increases for machinery, transportation equipment, and computers. In all categories of FMC, we see substantial recoveries in "s" per hour between 2007 and 2011.

From the information in this table, it would be difficult if not impossible not only to gauge the intensity of the "Great Recession," but also its breadth in both time and place.  Indeed the recession and recovery seem almost, but not quite, indistinguishable, and aberrations from the "smooth course" of capitalist "development."   That's because a bit of critical information is absent from the ratios of output, costs, and surplus.   That critical input is "production worker hours."

In 2011 production worker hours were:
12% below the 2007 mark in the chemical classification;
30% below the 2007 mark in the computer and electronics classification;
25% below the 2007 mark in the transportation equipment classification;
18% below the 2007 mark in the machinery manufacturing classification;
5% below the 2007 mark in the food manufacturing classification;
7.5% below the 2007 mark in the petroleum/coal classification.

More capital has been exchanged with less labor power, in less time. The portion of the working time that is required for the workers to reproduce a value equivalent to their own wage is reduced; that is to say it recovers to the ratio achieved prior to, and right at the beginning of the contraction.  The recovery is achieved in reduction of the proportion of living labor appropriated in production.  The recovery indeed looks just like the contraction, because it is just like the contraction.

If wealth is the disposition over time, capitalist wealth is the disposition over alienated labor time, and the recovery in capitalist accumulation is the dissolution of wealth, the expansion of poverty as capital cannot exploit the labor-power profitably.  Living labor-time is, more than less, expelled from the production process in order that the living labor time remaining in the valorization reproduces itself more rapidly.

If we break these value  relations into production minutes, we find in 2011 that for every hour of production in the chemical sector,  32.8 minutes are represented by cost of materials and machinery,  the pre-existing value that is preserved and passed along in production; 2.4 minutes represents the cost of labor (or it takes 2.4 minutes for the worker to produce a value equivalent to his/her hourly wage) and 24.8 minutes represents the surplus labor time, the surplus value.

In the transportation sector, the proportions are 37.7 minutes in "pass-through" value, 5.1 minutes to reproduce the wage, and 17.2 minutes in surplus value.

For machinery manufacturing, we get 32.6 minutes for the pre-existing value, 6.1 minutes to reproduce the wage, and 21.3 minutes of surplus value.

In the food production sector, 38.8 minutes for c , 4 minutes for wages, 17.2 minutes for surplus value.

For computer and electronics manufacturing, 25.4 minutes for c, 4.6 minutes for v, and 30 minutes for s. 

For petroleum........don't even ask, it's flat out ridiculous, or actually not, its precisely proportionate to the tremendous investment in fixed assets, the "overweight"  in the petroleum sector; massive amount of pre-existing value deployed to accelerate the pace of production, to reduce production times.

Given the minimal times involved for the worker to produce a value equivalent to his/her wages, it is also clear just how difficult it is to push s/C,  a proxy here for the rate of profit,  higher   The increment of accumulation runs into the barrier of all previous accumulation.

Absent a generally applicable technological breakthrough that can dramatically reduce the cost of the components of the production  process, the rate of  valorization stagnates, and stagnation is an achievement.

Writing in Capital, Volume 1, Marx notes "The constant tendency of capital is to force the cost of labour back towards this zero" (Part 7, Chapter 24, Section 4).  With reproduction times of 1 minute, 2 minutes, 4 minutes, or 6 minutes per hour, capital has pretty much forced that cost, relative, to the mass of value animated, to zero.  What else can capital do? Lots of things, and none of them good.

For one, as Marx wrote, "...there also comes a time in every industrial cycle, when a forcible reduction of wages beneath the value of labour power is attempted for the purposes of cheapening commodities."

The cheapening of commodities is not exactly the purpose-- appropriating a greater portion of the total available surplus value by hook or crook is.  As intense and extensive as the attacks on the living standards of workers have been, we are at the very beginning of that time in this cycle.  The "recovery" such that it is, will be worse than the recession.

S.Artesian
November 19, 2013

Volume 1, Chapters 1-5, Really Condensed Version

1.  For all the complexity in and of those awe and fear inspiring first chapters of Capital,  Marx really isn't trying to complicate matters.  He's engaged in a radical distillation, almost but not quite a simplification,  of the moments of value expression; of the commodity as the condition of social labor.

Marx is not engaged in creating an abstract model of capitalism; Capital is no thought experiment.  The method, the examination of capital as it comes into being is more of a decomposition, a pulling apart, both rending and rendering the tissues of accumulation, by "pushing" the commodity through the iterations of the forms of value-- forms that can only be expressed in and to the universe of commodities; a universe where value and the expansion of value are the organizing principles of social reproduction; a universe such as ours.

Much has been made by many of Marx's method of abstraction, some of it has been made by Marx himself.  However, the "abstraction," such that it is, exists in and only because of its concrete expression in the conditions of production.  If the production of commodities as useful objects is a complex product, developed and refined through the applications of research, technique, energy, the production of the commodity as value is but a single process, the appropriation of human labor power in its acute, clarified  manifestation as time.  Abstract labor is the concrete of capital.

From this fusion, this "two-fold" configuration of labor, Marx draws two definitions, two practical measures of wealth:  "An increase in the quantity of use-values is an increase of material wealth," and  (in his Economic Manuscripts) "wealth is the disposition over time."

2.  The question, or one of the questions, Marx uses as scalpel in his exploration is:  How is it that the use value of an object can be expressed as the value in exchange with all other objects?  What generates, not simply equivalence, but transformation of use into exchange, of each into the other? One answer Marx gives is that all the commodities share a common trait, a common quality, which provides a platform for measurement, ratios, exchange-- human labor.

It's not just human labor that endows these objects with the powers of exchange.  It's the condition of that labor itself, as deprived, dispossessed; as useless other than as a means of exchange; useless other than as value exchanged for the commodities necessary to its subsistence, the conditions of its own reproduction as a commodity.   

This leads Marx, as opposed to political economists, to identify the real task of critique-- to expose "Why labour is represented by the value of its product and labour time by the magnitude of that value."

Marx gets there from here where he states:  "Every product of labour is, in all states of society, a use-value; but it is only at a definite historical epoch in a society's development that such a product becomes a commodity, viz., at the epoch when the labour spent on the production of a useful article become expressed as one of the objective qualities of that article, i.e. as its value."

Then the production of useful articles, material wealth, is subjugated to the need for the accumulation of value, time claimed, time sold, time absorbed.   The aggrandizement of labor-time pulls the expansion of material wealth along in its wake, yet the wealth is always produced in an inadequacy of time, in the diminishing of time, in its loss. 

The material objects carry the accumulation of value through the only process by which that value can be expressed-- in exchanges with other commodities.   Value eats time.."the appropriation of ever more and more wealth in the abstract becomes the sole motive of his operations."

We move from the commodity as the condition of living labor to labor-commodity as the determinant of value.  We get the means of production organized as capital, appropriating labor-time's capacity for surplus as a "self-expansion," as valorisation, as accumulation of nothing other than the alienated essence of time, money.  We've reached M-C-M'.  We are ready to begin.

S. Artesian
October 15, 2013

Smooth...And By the Numbers 4: Christmas in July, Snowballs in Hell

"Hold on baby" --Freddie Scott

1.  This past July, the EU parliament voted to repeal the law capping bonuses and other payouts to its poor, exploited, downtrodden, huddled masses of investment bankers.  The deciding votes securing the repeal were cast by two representatives from Greece, both of whom just happened to be members of the Communist Party of Greece, the Kommounistikó Kómma Elládas (KKE).   Said the sponsor of the original legislating that had capped the bonuses, "The Stalinists were half the problem."

And there in three words is the short-version of almost 100 years of class struggle.  The Stalinists have been and continue to be half the problem.

Of course, the truth, as certain thinkers and revolutionists have pointed, is the whole.  The whole problem is capitalism which has been able to reward itself bonus after bonus thanks to the timely support of the Stalinists.

So it was Merry Christmas in July.  It was goody time for the bankers.  And for everyone else?-- there was an overproduced lump of coking coal in those stockings, made in Bangladesh, hung-up over the fireplace. 

2.  However,  and there is always the "however" when it comes to capitalism, if Christmas came early, so did the New Year, washing in, and up, on the waves of overcapacity that dog the steps of "growth" everywhere-- in Europe, North America, the emerging markets, the BRICS.

Shortly after the Greek Stalinists voted to uncap those bonuses, the Stalinists of the State Council of China announced:

We will strictly prohibit providing new credit supply or direct financing in any form to illegal construction projects with overcapacity so as to avoid reckless investment exacerbating the problem of excess production capacity.

Meaning, of course.........we've supplied credit and direct financing in excess for years, funding overcapacity and exacerbating the conflict of industrial development with low agricultural productivity.  It's too late to do anything about it now, so we'll issue this statement.  

The statement itself was punctuated by the actions of China's 3rd largest shipbuilding corporation, China Rongsheng Heavy Industry Group, which, effectively bankrupt, appealed for government financing, laid off 40% of its workforce, and simply neglecting to pay the wages of those not laid off.   Merry Christmas, and Happy New Year.

3.  Meanwhile, North American automakers were decking the halls, although many fewer halls than before.  After closing 27 factories, reducing employment levels by 30%, lowering payment rates for overtime by initiating payments after 40 hrs per week, rather than 8 hrs per day, and tiering the wage structure so that new hires make about 50% less than those hired before 2008, profitability was the gift under this smaller tree.  Sales for 2013 are  running at 15.8 million units, down a bit from the 2005 record of 17.5 million units, but with 27 fewer factories and the reduced wage bill, the less than record sales are no price to pay.  It's goody time.

It's not so goody time for Detroit, however,  once upon a time the center of US auto manufacturing.  The "emergency manager" of the city-- a non-elected appointee of the governor-- pushed Detroit into Chapter 9 bankruptcy for the specific purpose of voiding the city's outstanding obligations to  retirees, past, present, and future.

Of course, once the pension fund is designated as an unsecured claimant, available revenues can and will be diverted to securing payments to those holding the municipal debt.  God bless our brave bondholders!  United the Asset Managers Stand!  Give me liquidation, and give them death!

When questioned about reports of his meeting with 2 Greek representatives of the EU parliament who were members of the KKE, the emergency manager had no comment.

Well, you know what they say about meat and poison, bankruptcy and windfall, vultures and carrion, vermin and plagues....


4.  US bankers, knowing never to leave well enough alone, have decided that the time is ripe to jump back into the asset-backed securities market, buoyed by the fact that defaults on credit card and auto loans have stabilized.  Our brave asset managers issued $332 billion in ABS in the first half of 2013.  Sure that was just a fraction of the 2007 sum of $1.2 trillion in ABS, but $332 billion in this six months, and another $332 billion in that six months........well, it adds up, doesn't it?  Pretty soon, there's serious money involved.

However,  back in Europe, ABS offerings were a levels even below that of 2009, which underscored the pleas of poverty coming from bankers addressed to the EU parliament.

Meanwhile, Wolfgang Schäuble welcomed the early Christmas with a speech to businessmen in Athens, where he initiated them into the fine points of  a German Christmas.  Gazing out at the freshly scrubbed faces of these captains of industry,  Herr Schäuble advised them "not to expect any debt forgiveness from Berlin." Frohe Weihnachten

«Πες μας κάτι που δεν ξέρουμε», σκέφτηκε το κοινό του, σε αρμονία.   
"Sagen Sie uns, was wir nicht wissen", dachte sein Publikum, im Einklang. 
"Tell us something we don't know," thought his audience, in unison. 

Indeed.  Since the bailout will cost the EU almost e240 billion, expect no debt forgiveness from Berlin. Ευτυχισμένο το Νέο Έτος. Glückliches neues Jahr.  Happy New Year.

Barely a month later, Jolly Old Wolfgang, reprising his role as Weihnachtsmann, made the mistake of admitting that Greece would need another bailout in 2014, precipitating consternation among the German electorate.  He thus became the first man in history to jeopardize the re-election of his party's leader by letting  a dead cat out of the body bag, and not getting it to bounce.

5.  It was Christmas in July.  Signs of recovery were detected in Europe by holding a mirror under the nose of the comatose body and observing the condensation.  

It was New Year's in August.  Eurozone property prices hit a 7 year low.

It was Christmas in July.  For the first time since 2007, the advanced countries, Japan, North America and the European Union contributed more to the growth in the global economy than that emerging market economies plus the BRICS.

The emerging markets, the "global South," and the BRICS were getting the North American version  of a German Christmas, courtesy of the US Federal Reserve, that withered arm holding the invisible hand of the alleged fictitious capital belonging to the so-called decrepit, hollowed-out, unproductive, archaic, obsolete, no longer central, etc.etc.etc. US capitalism.  

And how did the Fed inflict this misery on the vibrant, emerging, newly industrialized, emerging market countries?  Did it cancel its currency swap lines with other central banks?  Nope.  Did it raise its Fed funds rate?  Nope.  Did it tighten the rules of collateral in the repo markets?  Nope.  All the Fed did was indicate that it was closely monitoring the US economy for signs that the economy was strong enough to allow the Fed to reduce its purchases of US Treasury debt and FNMA/FMAC mortgage backed securities.

Testifying before the joint economic committee of the US Congress on 22 May, Bernanke said this:

The second policy tool now in use is large-scale purchases of longer-term Treasury securities and agency mortgage-backed securities (MBS). These purchases put downward pressure on longer-term interest rates, including mortgage rates. For some months, the FOMC has been buying longer-term Treasury securities at a pace of $45 billion per month and agency MBS at a pace of $40 billion per month. The Committee has said that it will continue its securities purchases until the outlook for the labor market has improved substantially in a context of price stability. The Committee also has stated that in determining the size, pace, and composition of its asset purchases, it will take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

At its most recent meeting, the Committee made clear that it is prepared to increase or reduce the pace of its asset purchases to ensure that the stance of monetary policy remains appropriate as the outlook for the labor market or inflation changes. Accordingly, in considering whether a recalibration of the pace of its purchases is warranted, the Committee will continue to assess the degree of progress made toward its objectives in light of incoming information. The Committee also reiterated, consistent with its forward guidance regarding the federal funds rate, that it expects a highly accommodative stance of monetary policy to remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.

And then on July 17,  in the semi-annual report to Congress on the condition of the economy, Big Ben stated:

The Committee's decisions regarding the asset purchase program (and the overall stance of monetary policy) depend on our assessment of the economic outlook and of the cumulative progress toward our objectives. Of course, economic forecasts must be revised when new information arrives and are thus necessarily provisional. As I noted, the economic outcomes that Committee participants saw as most likely in their June projections involved continuing gains in labor markets, supported by moderate growth that picks up over the next several quarters as the restraint from fiscal policy diminishes. Committee participants also saw inflation moving back toward our 2 percent objective over time. If the incoming data were to be broadly consistent with these projections, we anticipated that it would be appropriate to begin to moderate the monthly pace of purchases later this year. And if the subsequent data continued to confirm this pattern of ongoing economic improvement and normalizing inflation, we expected to continue to reduce the pace of purchases in measured steps through the first half of next year, ending them around midyear. At that point, if the economy had evolved along the lines we anticipated, the recovery would have gained further momentum, unemployment would be in the vicinity of 7 percent, and inflation would be moving toward our 2 percent objective. Such outcomes would be fully consistent with the goals of the asset purchase program that we established in September.

I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course. On the one hand, if economic conditions were to improve faster than expected, and inflation appeared to be rising decisively back toward our objective, the pace of asset purchases could be reduced somewhat more quickly. On the other hand, if the outlook for employment were to become relatively less favorable, if inflation did not appear to be moving back toward 2 percent, or if financial conditions--which have tightened recently--were judged to be insufficiently accommodative to allow us to attain our mandated objectives, the current pace of purchases could be maintained for longer. Indeed, if needed, the Committee would be prepared to employ all of its tools, including an increase the pace of purchases for a time, to promote a return to maximum employment in a context of price stability.

That was it.  Done, complete, finito.  Apparently, that was enough to reverse the currency flows of the last 5 years.  The currencies of the 20 largest emerging market economies all tumbled in synch in relation to the US dollar, conjuring painful memories of the "Asian Tigers" crash of the 90s.  

Brazil's airline rousted the government for aid, and in dollar denominations.  None of that unreal real currency for them.  And why in dollars?  Because 57% of its operating costs are denominated in dollars. 

Fuel purchases, equipment leases, equipment servicing contracts across the globe are denominated in dollars.  Purchases of aircraft, computer servers, work stations, pharmaceuticals are denominated in dollars, so when the money flowing from the "decrepit" advanced capitalist countries, when the "fictitious capital" from the fictitious capital asset management funds reverses course, the EM currencies bolstered by the flow decline.  Revenue follows currency, and the depreciation of the EM currencies amounts to a transfer of profits to the advanced capitalist enterprises.   

This is not a case of "unequal exchange," or rather, it is no more a case of unequal exchange than any of the other of capital's exchanges within any market, global or domestic, where the more advanced capitals claim a portion of the value proportional to their size and at the expense of smaller, less efficient capitals.  

This is no more, and no less, a case of "unequal exchange" than that which occurs between industry and agriculture, where the increased value of the machinery required for and engaged in farm production lowers the value, and the price, of the farm products.

This is no more unequal exchange than any exchange in capital in that exchange is never just exchanges of commodities, but always exchanges of commodities as vectors, vehicles, representatives of capitals claiming profits with exchange being the mechanism of distribution.  

So is that all it takes, one bearded central banker in Washington, DC cautiously suggesting a "tapering" in the quantities of debt instruments to be added monthly to the bank's balance sheet to reverse five years of money flow?    

Of course not.  No alteration in central bank asset purchases is ever made in isolation, and no decision by asset managers is ever made independent of the specifics of accumulation-- specifically independent from the rate of return, or "yield" that the asset managers think they can appropriate in the emerging, or developing markets.

In this instance, it is not just an impediment to continued accumulation that confronts the emerging markets if the Fed begins tapering.  It is the already existing accumulation that impedes rate, ratio, relation, increment of profit, that allows, actually compels, the private asset managers of the advanced capitalist countries, who control $54 trillion, 90% of the world's stock of reserve currencies,  to change course.  

The impediment is overproduction and it is acutely manifested in China.  China accounts for 15% of Brazil's exports.  China's significance as a market-maker for both exports and imports is critical for the other emerging market economies.  And China is where the overproduction of fixed assets has outstripped the ability of capital to sustain profitability, and support the credit markets.  It is not the overproduction of "fictitious capital"--  in property values, credit instruments, in special investment vehicles that threatens China's accumulated productive apparatus.  It is the  accumulated value of this apparatus that depresses profitability and  undermines all values.

After 2008,  China's government, its ruling class in formation, announced, and has attempted to execute, a policy of  internal development, turning to "domestic consumption" rather than fixed asset accumulation for export production.  The policy has failed.  Domestic consumption is a smaller portion of the Chinese economy today than it was in 2007.   The limits of that domestic market have been, and are, the low level of agricultural productivity in China, which is a product of the small average plot size, and which binds 40% of the population to rural life.  

Without the transformation of this agricultural base, China cannot truly create a domestic market capable of valorizing, profitably reproducing industrial output.  China cannot transform this organization of agriculture without uprooting hundreds of millions, without dispossessing these producers who are in essence small property holders, and it cannot uproot these millions without threatening every aspect of its social organization of labor; without threatening the FDI enterprises; without threatening the privately owned corporations; without threatening the state owned factories, mines, and transport networks which rely on exploitation no less severe than that of the private sector.

China remains, in a very real sense, the world's largest maquiladora.  FDI enterprises in China account for over one quarter of all value added  in the country's industrial production; and that portion climbs to 66% in the high technology industries.  The FDI enterprises account for 90% of China's high technology exports (see Peter Nolan's Is China Buying the World? Polity Press 2012). 

China has no more control over direction of capital accumulation and devaluation than any other "asset manager"-- and considerably less than some.

So it was Christmas in July all right.

However, the bourgeoisie have themselves a snowball's chance in hell at a Happy New Year 2014. 

S.Artesian