[Again, all figures from, or derived from US Census Bureau's Quarterly Financial Report and the Bureau's Annual Survey of Manufacturers]
1. Say hello to a not so little old non-friend, the petroleum industry. Prior to the Great Recession, US petroleum producers accounted for, on average, about 20% of the total net property, plant, and equipment in the manufacturing sector. The size of this investment is also characterized by the reduced value of living labor that engages, reproduces, expands this property plant and equipment.
The ratio of annual wages of production workers to the net PPE is approximately 1 to 4.5, $1 in wages for every $4.5 in net PPE, for the manufacturing sector as a whole. The ratio measures about 1:69 in the petroleum sector (and coal manufacturing, as the industries are not separated in the NIPA tables).
Similarly, an examination the relation of production worker wages to total value of shipments shows that the petroleum sector ratio of 1:160, $1 of wages for every $160 of product shipped, far "outperforms" the manufacturing rate of 1:17.
Profitability, however, does not follow easily in the wake of this "super-productivity." The size of the petroleum industry's investment creates a chronic (not permanent, not continuous, but chronic, an immanent condition, sometimes expressed in acute phases, sometimes expressed in its very remission) oscillation between two of capital's dynamics-- (1)that profits accrue proportionate to the size of the capitals employed and (2) the greater the mass of accumulated value in the means of production in relation to the living labor required to engage that mass, the greater the tendency for the rate of profit to decline.
Achieving (1) is not always sufficient to offset (2). The offset is essential to accumulation itself. The offset requires the transfer of portions of the total realized surplus value, the total social profit, to the petroleum industry. The mechanism for this transfer is price, or more exactly, the differential between price and value.
So for 2012, the petroleum sector's operating profits amounted to 14.1% of operating expenses. However, the petroleum sector's operating profits amounted to 38% of the operating profits realized in the manufacturing sector. Good for petroleum? But not so good for the sector as a whole which experienced an overall decline in both the mass and rate of its profits.
The cost of product for the upstream (extraction) petroleum manufacturers has averaged around $10 per barrel of oil equivalent. The price of product that the upstream manufacturers obtain in markets is usually between $91 and $100 per barrel of oil equivalent. This disparity is the market distributive process at work. Only through the distribution and redistribution of value does capital tend to create an average rate of profit which offsets the declining rate in certain sectors by imposing that decline as a limit, a barrier, to the reproduction of all other sectors.
2. These processes, reproduction/disproportion/distribution, have taken their acute forms in the oil price spikes of 1999, 2001, 2003. Of particular significance, however, is the US petroleum sector's performance in 2007 and 2008, years of the great oil price blowout culminating in....the Great Recession. In both years, the sector's profits accounted for 25% of total manufacturing profits, in synch, in proportion (almost) to its 20% portion of net property, plant and equipment. However in both 2007 and 2008, the ratio of operating income to operating costs in the sector was significantly below that ratio for manufacturing as a whole.
In 2007, the petroleum sector's ratio of operating income to operating expense measured 6.2%, while for manufacturing sector registered an 8.8% ratio. In 2008, the petroleum sector registered a 4.2% ratio, while the manufacturing sector achieved a 7% ratio. Capital is incapable of maintaining balance, proportion among the conflicting tendencies it itself spawns in the pursuit of value, in the need to accumulate, in the need to aggrandize greater ratios of surplus value. .
S. Artesian
Saturday, August 24, 2013
Thursday, August 22, 2013
Smooth...And By the Numbers 2
1. You can tell how bad things are by what registers as good news. So just the other day (14 August), we get this bit of good news from the Eurostat press office:
-0.7% and -0.2% respectively compared with the second quarter of 2012
Flash estimate for the second quarter of 2013Euro area and EU27 GDP both up 0.3%
-0.7% and -0.2% respectively compared with the second quarter of 2012
Dry your eyes my little European Union friend. Jubilation in the European Land. Francois get ready, Angela rock steady, As Wolfgang strikes up the band.
Zero point three percent growth and the 18 month recession is over. Just like that. Acabado, finito, gatavas, críochnaithe, Ολοκληρώθηκε, fertig, lest, завършен, done and dusted, färdiga befejezett, gotov, hotový, færdig, готов, afgewerkt, valmis, päättynyt, terminé, pabeigts, gotowy, finisat, končano. Zero point three percent growth compared to the previous quarter. Compared to the previous year, well, the churlish might think the Great Recession is a little ways away from being acabado.
But 0.3% is close enough to growth for government work because the GDP in the first quarter 2013 was 1.1 % below the 2012's first quarter. So things must be getting better, because it's not as bad as it was and as we expected it to be. It's getting less worse more slowly. That's good news.
Pointing out that EU GDP is still about 2% below its 2008 measure-- that's just being, well, churlish. And don't even think about mentioning GDP per capita, you malcontent you.
In the United States, an economy, and with a ruling class, less encumbered than the Europeans by the notion that an economy is anything other than an ATM for a very select clientele, the good news was exactly that-- the ATM was spitting out money for a very select clientele only. The Dow Jones Industrial Average was above 15,000 (operative word-- was). Fracking shale was doing for oil production what fracking shale had done for natural gas production. Petroleum imports were down, refinery profits were up.
Earnings growth, expected to expand some 27 percent in the second half of the year, was being revised downward to 15 percent, but compared to Europe?
However, there were signs, indications that the churlish pointed to..like the 3 month moving average of the rate of growth of exports had moved from 10% during 2012 to 0% in 2013 for the US....and for Germany and China and India and Brazil and Mexico...
...while the generous pointed to the same moving averages for the same period moving from -8% to +8% for Japan and from +10% to -4% to +7% for Great Britain.
Good news, bad news, generous, churlish, optimistic, pessimistic, bulls, bears... it's all the same; that is to say all this good and bad, best of times worst of times is nothing but taking a position in the markets. It's the long and the short of it. It's buying and selling.
2. The determinant of capital, that relation of the labor process to the valorization process is based in the relation of necessary labor time to surplus labor time. The determinant is manifested by labor organized as value-producing, as wage-labor, which has no use other than when engaged by the means of production organized as commodities.
The determinant is oblivious to news good and bad; knowing nothing more than the need for the reproduction of itself; which is to say the accumulation of the means of production as a mass of expanded values which is the condition of labor, the condition of labor organized as a commodity, as value-producing. The circle is complete, even as it breaks apart.
3. Last time around, in the not-so-Great Recession of 2001-2003, the US bourgeoisie confronted, they though, too much. Too much capital, too many fixed assets, too many works, too high wages. So they took a short course in accelerated disaccumulation.
[All figures below either taken directly or developed from the US Census Bureau's Quarterly Financial Report and/or Annual Surveys of Manufacturers]
In the 1Q of 2001, the value of of the net property and equipment (PPE) in manufacturing peaked at $1.177 trillion. By the 4Q 2003, the PPE value had decline to $1.123 trillion. This was not a paper devaluation, a "moral depreciation," but rather involved real consumption of capital; real restraint of capital expenditure; and real decline in the fixed asset replacement rate.
Further, this decline in value was not due to a divergence between the technical composition of capital and its value composition, where the mass of the means of production employed continued to expand, while the value of the means of production declined due to improved efficiency, reduced costs of new fixed assets. We're talking about recession remember. We're talking about capitalism remember. The "thing"-- actually the relation-- to keep in mind is that for capital, value and physical capability are fused, as use and exchange are fused in an antagonistic identity, and are indissoluble. A generalized contraction of capital, generalized overproduction is exactly that antagonistic identity.
The reaccumulation after the recession ended in 2003 was painfully slow, even under the whips of the devalued dollar, the oil price spikes, and the invasion of Iraq. The old 2001 peak in net PPE was not exceeded until the 4Q 2006, after capital spending had to be resumed to replace the capital already consumed, and this itself correlates so neatly with a downturn in the rate of profitability for US manufacturing.
The accumulation of fixed assets continued through the 4Q 2008, one year after the onset of the recession itself. The "lag," this asynchronous aspect to capitalists response to the condition of capital is another expression of capital's tendency to becoming the immanent barrier to the further accumulation of capital-- with the further accumulation of capital being the expression of generalized overproduction.
Anyway, as asynchronous as the processes of accumulation appear to be, sooner or later they all converge, and converge these did once Lehman Brothers was denied admission to the Fed's emergency medical insurance program.
The devaluation of fixed assets in this iteration of generalized overproduction, in this "Great Recession" has been less severe, and of shorter duration than that of the 2001-2003 recession. In that not so great recession the devaluation amounted to 6% of the estimated value or $69 billion. In the Great Recession, the devaluation, 2008 peak to 2010 trough, has been $45 billion; and while it took almost six year, 1Q 2001- 4Q 2006, for fixed asset accumulation to recover completely the value lost, it has taken only two years, 4Q 2008-4Q 2010 during this current period.
What has made the Great Recession "great," is its severity, persistence, expansiveness.. and the ability of the US bourgeoisie to shift almost the entire burden, the entire costs, the entire "loss" of value unto the living component of capitalist reproduction, labor.
Production workers' wages declined 17%, 2007 peak to 2009 trough. Production worker wages in 2011 were still 11% below the 2007 peak. The peak to trough (2000-2003) decline in the previous cycle was 9 percent. Most significantly, that 2000 peak for production workers wages in the US has never been exceeded. As a result the rate of growth of value added to production has declined. Between 1990 and 2000, that growth was 46.5% or about 4% annually. Between 2000 and 2011 that growth measures 16% or about 1.2% annually
What characterizes the contraction in the US is what has characterized the recovery in the US and accounts for the tenuous and shallow nature of the recovery-- the rapid recovery and expansion of fixed assets; or... the failure to devalue enough capital quickly.
What characterizes the contraction in the US is the continuity of that contraction with the overall trend since 2000, the convergence of capitalist recovery and capitalist contraction. In every sense, capital is still grappling with the changes brought about by the applications of advanced technology in the 1992-2001 period; to the changes this has brought to the relations of necessary to surplus labor-time; to the expulsion of labor from the valorization process; to relations between the value components of capital.
S.Artesian
Next: Smooth...And By the Numbers 3.
But 0.3% is close enough to growth for government work because the GDP in the first quarter 2013 was 1.1 % below the 2012's first quarter. So things must be getting better, because it's not as bad as it was and as we expected it to be. It's getting less worse more slowly. That's good news.
Pointing out that EU GDP is still about 2% below its 2008 measure-- that's just being, well, churlish. And don't even think about mentioning GDP per capita, you malcontent you.
In the United States, an economy, and with a ruling class, less encumbered than the Europeans by the notion that an economy is anything other than an ATM for a very select clientele, the good news was exactly that-- the ATM was spitting out money for a very select clientele only. The Dow Jones Industrial Average was above 15,000 (operative word-- was). Fracking shale was doing for oil production what fracking shale had done for natural gas production. Petroleum imports were down, refinery profits were up.
Earnings growth, expected to expand some 27 percent in the second half of the year, was being revised downward to 15 percent, but compared to Europe?
However, there were signs, indications that the churlish pointed to..like the 3 month moving average of the rate of growth of exports had moved from 10% during 2012 to 0% in 2013 for the US....and for Germany and China and India and Brazil and Mexico...
...while the generous pointed to the same moving averages for the same period moving from -8% to +8% for Japan and from +10% to -4% to +7% for Great Britain.
Good news, bad news, generous, churlish, optimistic, pessimistic, bulls, bears... it's all the same; that is to say all this good and bad, best of times worst of times is nothing but taking a position in the markets. It's the long and the short of it. It's buying and selling.
2. The determinant of capital, that relation of the labor process to the valorization process is based in the relation of necessary labor time to surplus labor time. The determinant is manifested by labor organized as value-producing, as wage-labor, which has no use other than when engaged by the means of production organized as commodities.
The determinant is oblivious to news good and bad; knowing nothing more than the need for the reproduction of itself; which is to say the accumulation of the means of production as a mass of expanded values which is the condition of labor, the condition of labor organized as a commodity, as value-producing. The circle is complete, even as it breaks apart.
3. Last time around, in the not-so-Great Recession of 2001-2003, the US bourgeoisie confronted, they though, too much. Too much capital, too many fixed assets, too many works, too high wages. So they took a short course in accelerated disaccumulation.
[All figures below either taken directly or developed from the US Census Bureau's Quarterly Financial Report and/or Annual Surveys of Manufacturers]
In the 1Q of 2001, the value of of the net property and equipment (PPE) in manufacturing peaked at $1.177 trillion. By the 4Q 2003, the PPE value had decline to $1.123 trillion. This was not a paper devaluation, a "moral depreciation," but rather involved real consumption of capital; real restraint of capital expenditure; and real decline in the fixed asset replacement rate.
Further, this decline in value was not due to a divergence between the technical composition of capital and its value composition, where the mass of the means of production employed continued to expand, while the value of the means of production declined due to improved efficiency, reduced costs of new fixed assets. We're talking about recession remember. We're talking about capitalism remember. The "thing"-- actually the relation-- to keep in mind is that for capital, value and physical capability are fused, as use and exchange are fused in an antagonistic identity, and are indissoluble. A generalized contraction of capital, generalized overproduction is exactly that antagonistic identity.
The reaccumulation after the recession ended in 2003 was painfully slow, even under the whips of the devalued dollar, the oil price spikes, and the invasion of Iraq. The old 2001 peak in net PPE was not exceeded until the 4Q 2006, after capital spending had to be resumed to replace the capital already consumed, and this itself correlates so neatly with a downturn in the rate of profitability for US manufacturing.
The accumulation of fixed assets continued through the 4Q 2008, one year after the onset of the recession itself. The "lag," this asynchronous aspect to capitalists response to the condition of capital is another expression of capital's tendency to becoming the immanent barrier to the further accumulation of capital-- with the further accumulation of capital being the expression of generalized overproduction.
Anyway, as asynchronous as the processes of accumulation appear to be, sooner or later they all converge, and converge these did once Lehman Brothers was denied admission to the Fed's emergency medical insurance program.
The devaluation of fixed assets in this iteration of generalized overproduction, in this "Great Recession" has been less severe, and of shorter duration than that of the 2001-2003 recession. In that not so great recession the devaluation amounted to 6% of the estimated value or $69 billion. In the Great Recession, the devaluation, 2008 peak to 2010 trough, has been $45 billion; and while it took almost six year, 1Q 2001- 4Q 2006, for fixed asset accumulation to recover completely the value lost, it has taken only two years, 4Q 2008-4Q 2010 during this current period.
What has made the Great Recession "great," is its severity, persistence, expansiveness.. and the ability of the US bourgeoisie to shift almost the entire burden, the entire costs, the entire "loss" of value unto the living component of capitalist reproduction, labor.
Production workers' wages declined 17%, 2007 peak to 2009 trough. Production worker wages in 2011 were still 11% below the 2007 peak. The peak to trough (2000-2003) decline in the previous cycle was 9 percent. Most significantly, that 2000 peak for production workers wages in the US has never been exceeded. As a result the rate of growth of value added to production has declined. Between 1990 and 2000, that growth was 46.5% or about 4% annually. Between 2000 and 2011 that growth measures 16% or about 1.2% annually
What characterizes the contraction in the US is what has characterized the recovery in the US and accounts for the tenuous and shallow nature of the recovery-- the rapid recovery and expansion of fixed assets; or... the failure to devalue enough capital quickly.
What characterizes the contraction in the US is the continuity of that contraction with the overall trend since 2000, the convergence of capitalist recovery and capitalist contraction. In every sense, capital is still grappling with the changes brought about by the applications of advanced technology in the 1992-2001 period; to the changes this has brought to the relations of necessary to surplus labor-time; to the expulsion of labor from the valorization process; to relations between the value components of capital.
S.Artesian
Next: Smooth...And By the Numbers 3.
Friday, August 16, 2013
Interlude: Radio Nowhere
It all, and mall, makes me wonder. I feel it myself, this urge, to put every thing in its place, in a row like ducks, assigning ordinal numbers. Putting things in order, order being a market position, putting things
in order being a marketing strategy-- this better than that; this even
better; and this being best, or close to, until a new product, a new
advert emerges.
First, second, third... we get caught up in it. Who doesn't have a list of the "top ten greatest rock and roll tunes" playing pretty much 24 hours a day in his or her head? Whoever you are, I feel sorry for you if you don't. Maybe you feel sorry for me because I do.
But I do. Listen, when Indeep released "Last Night a DJ Saved my Life" (1981 Sound of New York Records), it may have been the worst song with the greatest tag line ever. See? There I go again. Number 1. Number zero. And with a bullet. Nevertheless, look me straight in the eye and tell me you never felt that way? That all that was standing between you and the bottomless pit of despair brought on by hormones, high school, pimples, parents, siblings, relatives of all sorts, drill sergeants, jobs, lack of jobs, girlfriends, boyfriends, lack of either/both, lack of money-- pick one or more--wasn't something on the radio, something beamed out that did the screaming, or the whispering, or the jumping (up, or out the window) for you. And since you could count on it being played once more in an hour, and the filler songs weren't too terrible, you decided to give it, and yourself, another hour and a half.
Maybe you did that everyday for years. I know I did. Maybe you still do that. I know I do. Now of course, I'm my own DJ, with my own list.
That's where the marketing hits home. You, or I have a need. Capital puts it in a package. I get my hands on some money, by any one of a number of ways which, in the end, all come down to ...some sort of labor, either my own or somebody else's. I exchange the money for my need in a package. That, basically, is the "surface loop" of capital's circulation, that's M-C-M'. The magnitudes of M, and C, and M' are determined in the production process, through accumulation as a whole, through the iterations of these exchanges.
Capital needs to expand? The VP of Sales wants more money? Time to poke deeper into needs, time to reproduce, materialize those needs faster, and in bigger quantity. And when that doesn't do the trick? Time to fragment the market for needs. Create niche markets. Every individual a DJ. Every phone a radio station.
So my list goes like this, and I'll leave the numbers out-- except for the song I consider to be the single greatest ever, forever, never to be duplicated again in the history and future of rock and roll:
"River Deep, Mountain High" --Tina Turner
After that....well after that I suppose some would say or could say, "who cares?" I do.
So there's: "You're Gonna Miss Me"-- 13th Floor Elevators; "Since I Lost My Baby"-- Temptations; "I Never Loved a Man the Way I Love You"--Aretha; "I Can't Explain"--The Who; "Willie and the Hand Jive"--Johnny Otis; "One Nation Under A Groove"--Funkadelics; "Heard It Through The Grapevine"-- Marvin Gaye; "Say You"-- Monitors; "Tallahassee Lassie"-- Freddie 'Boom Boom' Cannon; "Are You Lonely For Me Baby"--Freddie Scott; "Jumpin' Jack Flash"-- Rolling Stones (pains me to admit it-- that I like the music of the group I hate, but hell, that's rock and roll); "We Got the Beat"--Go-Gos; "God Save the Queen"--Sex Pistols; "Just Like Romeo and Juliet"--Reflections.
What? That's more than ten? Who's counting?
S.Artesian
First, second, third... we get caught up in it. Who doesn't have a list of the "top ten greatest rock and roll tunes" playing pretty much 24 hours a day in his or her head? Whoever you are, I feel sorry for you if you don't. Maybe you feel sorry for me because I do.
But I do. Listen, when Indeep released "Last Night a DJ Saved my Life" (1981 Sound of New York Records), it may have been the worst song with the greatest tag line ever. See? There I go again. Number 1. Number zero. And with a bullet. Nevertheless, look me straight in the eye and tell me you never felt that way? That all that was standing between you and the bottomless pit of despair brought on by hormones, high school, pimples, parents, siblings, relatives of all sorts, drill sergeants, jobs, lack of jobs, girlfriends, boyfriends, lack of either/both, lack of money-- pick one or more--wasn't something on the radio, something beamed out that did the screaming, or the whispering, or the jumping (up, or out the window) for you. And since you could count on it being played once more in an hour, and the filler songs weren't too terrible, you decided to give it, and yourself, another hour and a half.
Maybe you did that everyday for years. I know I did. Maybe you still do that. I know I do. Now of course, I'm my own DJ, with my own list.
That's where the marketing hits home. You, or I have a need. Capital puts it in a package. I get my hands on some money, by any one of a number of ways which, in the end, all come down to ...some sort of labor, either my own or somebody else's. I exchange the money for my need in a package. That, basically, is the "surface loop" of capital's circulation, that's M-C-M'. The magnitudes of M, and C, and M' are determined in the production process, through accumulation as a whole, through the iterations of these exchanges.
Capital needs to expand? The VP of Sales wants more money? Time to poke deeper into needs, time to reproduce, materialize those needs faster, and in bigger quantity. And when that doesn't do the trick? Time to fragment the market for needs. Create niche markets. Every individual a DJ. Every phone a radio station.
So my list goes like this, and I'll leave the numbers out-- except for the song I consider to be the single greatest ever, forever, never to be duplicated again in the history and future of rock and roll:
"River Deep, Mountain High" --Tina Turner
After that....well after that I suppose some would say or could say, "who cares?" I do.
So there's: "You're Gonna Miss Me"-- 13th Floor Elevators; "Since I Lost My Baby"-- Temptations; "I Never Loved a Man the Way I Love You"--Aretha; "I Can't Explain"--The Who; "Willie and the Hand Jive"--Johnny Otis; "One Nation Under A Groove"--Funkadelics; "Heard It Through The Grapevine"-- Marvin Gaye; "Say You"-- Monitors; "Tallahassee Lassie"-- Freddie 'Boom Boom' Cannon; "Are You Lonely For Me Baby"--Freddie Scott; "Jumpin' Jack Flash"-- Rolling Stones (pains me to admit it-- that I like the music of the group I hate, but hell, that's rock and roll); "We Got the Beat"--Go-Gos; "God Save the Queen"--Sex Pistols; "Just Like Romeo and Juliet"--Reflections.
What? That's more than ten? Who's counting?
S.Artesian
Sunday, August 11, 2013
Smooth.....And By The Numbers, Part 1
1. When Marx speaks of "monopoly," he is speaking of the monopoly of capital, the monopoly by capital of the means of production. He is speaking of the organization of those means as private property of the capitalists. His critique of capital applies to that monopoly. Whether there is one capital or 101 capitals is immaterial to Marx's critique as it is immaterial to the inherent dynamics of capital accumulation.
There is, and is always, the monopoly by capital. There is almost never monopoly capital. And where and when there is, it isn't for long, and it doesn't matter. Competition is the external expression of capital's internal compulsion to expropriate surplus value; to accumulate, accumulate, accumulate; to exchange as much as itself with labor-power for as little as possible.
Monopoly by capital, producing concentration and centralization of capitals can no more supersede or suspend the dynamics, forces of its own reproduction, its own laws of value than a human can jump over his or her own head while firmly grasping both ankles.
2. The "vulnerability" of capital, the limit to its reproduction, is not that capital becomes incapable of "expanding the means of production;" that it can no longer amplify the productivity of human labor. "Historical limits" are not time-clocks, or "sell-by" dates. Historical limits are the boundaries of a specific social organization of labor. Historical limits are posited, absorbed, repeated, reproduced throughout capital's existence.
These limits do not suddenly appear when capital has "fulfilled its purpose, its so-called historic mission" because indeed capital has only had a single purpose, the expansion of value through the expropriation of surplus value. It's only historical mission has been the reproduction of capital. "Progress" is an ideological obfuscation of value, and has no meaning to capital apart from value.
Because capital does not lose its need for self-expansion, the limit to that expansion must be in its origin-- in the accumulation of the means of production as expanded value; as the condition of labor in opposition to labor itself. The historical limits of capital move through its history, erupting at the moments, during the periods when the very expansion of the means of production as capital has impaired their continued valorization. The labor process and the valorization process, the labor process as the valorization process becomes the mode of destruction.
"Progress," "stages," "development" have no meaning apart from this conflict between the labor process and the valorization process, a conflict where each recognizes itself in the other as loss..
Capital is at the very least not necessarily more "progressive" or more "productive" than the modes it demolishes.
Value is more destructive, of that there is no doubt.
3. It's the real accumulation of real assets that provokes, excites the conflict between means and relations of production, between production and valorization, not the proliferation of securities; not some explosion of speculative debt instruments; not asset-backed securities. The movements in these markets are derived, derivative, from the revalorization of accumulated capital. Assets, after all, maintain their value only to the extent that they give their value up incrementally, transfer it, in the valorization process; in the expansion of production. Assets maintain value only to the extent that profitability outpaces devaluation.
The original, the mother, the grand-daddy of all asset-backed securities is.....the bank.
4. "Things" are beginning to look up for capital, according to the reports in the bourgeoisie's favorite journals. Industrial production is recovering, even in Europe, although overproduction in the auto industry has hardly been remedied.
"Getting better" can mean the rate of deceleration has slowed; it can mean the rate of deceleration has gone to zero; it can mean some sectors see some improvement; it can mean some countries have seen some improvement.
It can also mean the attacks on wages, on living standards, on employment, liquidating the savings and assets of the once and now again poor have produced a revenue stream, a cash flow, just capable of re-floating, just for the moment, the good ship Lollipop.
It can mean that 2014 is going to be a very important year; when the debt embodied in commercial real estate mortgage backed securities cannot be repaid, not refinanced. It can mean that the decline in commodity prices, providing a bit of boost to industrial production, becomes a collapse in prices. It can mean the expansion of oil and gas production which has driven energy prices down becomes yet another threat to the rate of return on production and investment for the major petroleum companies... and we know what happens after that.
It can mean that 2014 is the year when the overproduced chickens come to their underwater homes to roost.
It can mean, The Shirelles to the contrary notwithstanding, that the darkest hour is just after the hint of dawn.
S. Artesian
There is, and is always, the monopoly by capital. There is almost never monopoly capital. And where and when there is, it isn't for long, and it doesn't matter. Competition is the external expression of capital's internal compulsion to expropriate surplus value; to accumulate, accumulate, accumulate; to exchange as much as itself with labor-power for as little as possible.
Monopoly by capital, producing concentration and centralization of capitals can no more supersede or suspend the dynamics, forces of its own reproduction, its own laws of value than a human can jump over his or her own head while firmly grasping both ankles.
2. The "vulnerability" of capital, the limit to its reproduction, is not that capital becomes incapable of "expanding the means of production;" that it can no longer amplify the productivity of human labor. "Historical limits" are not time-clocks, or "sell-by" dates. Historical limits are the boundaries of a specific social organization of labor. Historical limits are posited, absorbed, repeated, reproduced throughout capital's existence.
These limits do not suddenly appear when capital has "fulfilled its purpose, its so-called historic mission" because indeed capital has only had a single purpose, the expansion of value through the expropriation of surplus value. It's only historical mission has been the reproduction of capital. "Progress" is an ideological obfuscation of value, and has no meaning to capital apart from value.
Because capital does not lose its need for self-expansion, the limit to that expansion must be in its origin-- in the accumulation of the means of production as expanded value; as the condition of labor in opposition to labor itself. The historical limits of capital move through its history, erupting at the moments, during the periods when the very expansion of the means of production as capital has impaired their continued valorization. The labor process and the valorization process, the labor process as the valorization process becomes the mode of destruction.
"Progress," "stages," "development" have no meaning apart from this conflict between the labor process and the valorization process, a conflict where each recognizes itself in the other as loss..
Capital is at the very least not necessarily more "progressive" or more "productive" than the modes it demolishes.
Value is more destructive, of that there is no doubt.
3. It's the real accumulation of real assets that provokes, excites the conflict between means and relations of production, between production and valorization, not the proliferation of securities; not some explosion of speculative debt instruments; not asset-backed securities. The movements in these markets are derived, derivative, from the revalorization of accumulated capital. Assets, after all, maintain their value only to the extent that they give their value up incrementally, transfer it, in the valorization process; in the expansion of production. Assets maintain value only to the extent that profitability outpaces devaluation.
The original, the mother, the grand-daddy of all asset-backed securities is.....the bank.
4. "Things" are beginning to look up for capital, according to the reports in the bourgeoisie's favorite journals. Industrial production is recovering, even in Europe, although overproduction in the auto industry has hardly been remedied.
"Getting better" can mean the rate of deceleration has slowed; it can mean the rate of deceleration has gone to zero; it can mean some sectors see some improvement; it can mean some countries have seen some improvement.
It can also mean the attacks on wages, on living standards, on employment, liquidating the savings and assets of the once and now again poor have produced a revenue stream, a cash flow, just capable of re-floating, just for the moment, the good ship Lollipop.
It can mean that 2014 is going to be a very important year; when the debt embodied in commercial real estate mortgage backed securities cannot be repaid, not refinanced. It can mean that the decline in commodity prices, providing a bit of boost to industrial production, becomes a collapse in prices. It can mean the expansion of oil and gas production which has driven energy prices down becomes yet another threat to the rate of return on production and investment for the major petroleum companies... and we know what happens after that.
It can mean that 2014 is the year when the overproduced chickens come to their underwater homes to roost.
It can mean, The Shirelles to the contrary notwithstanding, that the darkest hour is just after the hint of dawn.
S. Artesian
Wednesday, July 24, 2013
Full Disclosure, Self-Criticism (from a confidential source)
From a message to a friend:
To be honest, I'm not all that happy with "Overproduction, Overcapitalization 2." The point I'm trying to make, or trying to account for in the piece is the actual price increases that accompany increased capital formation, the growth of fixed assets, and the increased capital expenditures that precede and accompany periods of downturns.
To me, this is not just a question of speculation-- but the purpose speculation serves in distributing the profits. Certainly there's speculation: the Financial Times estimated that 70% of all price moves in the commodity markets are the results of computerized trading programs responding to other computerized trading programs-- but such programs are triggered by, and conform with, certain changes in the size of the capitals dedicated to mining, petroleum, etc.
So that's what I want to get at. I think the price increases are "deliberate" but inherent, planned but determined, by the changes in capital formation-- not by speculators, "monopolists" etc.
I think this might help explain the transition after the end of the "long deflation" in/around 1898 and the movement to syndicates, trusts, where/when prices move much differently than they do in the 1873-1898 period.
Wish I weren't so lazy, and so bored,by "economics." I might actually be able to tolerate doing the research such a thesis requires.
If I knew of anyone interested, I'd hire him/her to sort it out.
(author's name withheld by request by the author, S.Artesian)
To be honest, I'm not all that happy with "Overproduction, Overcapitalization 2." The point I'm trying to make, or trying to account for in the piece is the actual price increases that accompany increased capital formation, the growth of fixed assets, and the increased capital expenditures that precede and accompany periods of downturns.
To me, this is not just a question of speculation-- but the purpose speculation serves in distributing the profits. Certainly there's speculation: the Financial Times estimated that 70% of all price moves in the commodity markets are the results of computerized trading programs responding to other computerized trading programs-- but such programs are triggered by, and conform with, certain changes in the size of the capitals dedicated to mining, petroleum, etc.
So that's what I want to get at. I think the price increases are "deliberate" but inherent, planned but determined, by the changes in capital formation-- not by speculators, "monopolists" etc.
I think this might help explain the transition after the end of the "long deflation" in/around 1898 and the movement to syndicates, trusts, where/when prices move much differently than they do in the 1873-1898 period.
Wish I weren't so lazy, and so bored,by "economics." I might actually be able to tolerate doing the research such a thesis requires.
If I knew of anyone interested, I'd hire him/her to sort it out.
(author's name withheld by request by the author, S.Artesian)
Saturday, July 20, 2013
Overproduction, Overcapitalization 2
1. Slip
The journals of the bourgeoisie--digital, analog, virtual, print--have spewed tons of ink and blizzards of one and zeros--marveling, worrying, cheering, bemoaning the latest fad in political economy: the "super-cycle" in commodity prices.
The bourgeoisie and their hack political economists reserve the commodity label for those raw materials and foodstuff generally produced in bulk and which form the components for the further fabrication of the means of production and the means of subsistence. We get energy commodities, agricultural commodities, timber commodities, metal and mineral commodities. We get everything from live cattle to dead pork; aluminum to zinc.
Clearly, the dramatic rise in the prices of these commodities since 2005, and the rapid recovery of prices since the Great Recession of 2008-2009, is enough to register as a "super-cycle," or at least the beginning of the "upswing" of a super-cycle...to them.
More than that, the spike and recovery in commodity prices is cited by some as evidence that the Great Recession is indeed just a financial crisis, although a big one, and that the real economy was, is, and will be once always and again reaching new highs; that there is no overproduction of capital as these price increases are the true indicator of long-term "effective demand;" that profitability will increase and the increase will be sustained by the upward movement of these prices.
So what about it? What about super-cycles and commodities. Is/are there 36 year cycles, 42 year cycles, 84 year cycles? Are commodities like cicadas, sinking into the ground only to emerge after a number of years, climbing into the tree-tops, looking to meet, mate, reproduce and die? Are commodities like that body in the lake, sinking then rising, sinking again, only to rise again, each time a little more bloated, a little more putrid?
My answer is clear unequivocal and brief: Wrong question. Wrong questions.
The "right" questions are, whatever the duration of a so-called cycle, whenever the prices rise and/or fall what does the rise and fall accomplish? What does it tell us about the moments of capitalist reproduction?
My problem, and not that my problems are a big deal, with the super-cycle theories of commodity prices is just that-- at core, these are price theories. In (many of) these theories price is regarded as both measure and determinant, for demand, consumption, expansion.
For Marx, prices is significant in its function,as a function, as a mode of distribution driven by the determinant of accumulation.
2. Trip
The determinants of capitalist accumulation are, more or less, in a condition of dynamic disequilibrium. Capital does not "aim" at equilibrium. Capital has no aim, no purpose, no goal at all, other than the accumulation of more capital. It's like a shark, or rather like Hooper's description of the shark in Jaws:
To do that, accumulate, to be that, accumulation, it spawns destabilization, disproportion, devaluation. To create its property, it dispossesses. Its property is the dispossession of labor. To accumulate value, it over-value and then devalue all previously accumulated value, incrementally, and over time. "Equilibrium," balance, proportion occur....as accidents, never as necessity.
In its evolution, capital demands that profits, which are the social realization of a portion of all the surplus value funneled into the markets, be distributed among the particular capitals in proportion to the size of the capital deployed and regardless of the internal relations of the components (variable and constant) that form the capital. Size matters, bigger is better, or at least demands to be treated better.
In its apportioning of profit, capital approaches the creation of average rate of profit. The apportionment process itself however demands that every particular capitalist must strive to accrue a profit greater than the average-- to swim faster, eat more, make more than the average. You are average only when eating or being eaten. Value, in its realization and not as chum, must devalue other capitals-- eat their lunch, eat them for lunch.
OK, enough with the shark analogy. Forgive me for having watched Jaws again last night.
In this process of accumulation, commodities do not simply and solely exchange with other commodities as equals. They exchange as the capitals-- as mechanisms and modes for realizing this compulsion, apportioning profit through price.
Between 1960 and 1969, world commodity prices indexes (as archived in the World Bank Commodity Price Data Sheets), unadjusted for inflation, experienced a period of stability. Energy prices declined about 15 percent. Agricultural prices were virtually unchanged; metal and mineral prices were flat in the first half of the decade, increasing 30 percent in the second half.
It is after the OPEC oil price spikes of 1973 that the commodity price indexes turn upward. The price of oil is the whip that drives the prices of other commodities forward. Between 1970 and 1979, the index for energy commodity prices increased seventeen fold; agriculture commodity prices were up 250 percent; metals and minerals about 225 percent. Sound super? Sounds super.
However, between 1980 and 2000, the indexes declined 25 percent for energy; 35 percent for agricultural commodities; 13 percent for metals and minerals.
Next comes the big uptick between 2005 and 2012, when the energy price index doubles, the agricultural and metals indices triple, recuperating all the ground lost in 2009 and 2010.
Which gets us to... exactly where? Well, it might get us right back to 1973, or 2003 when the price increases in oil push and pull the other commodity prices ahead and behind it; when the price of oil directs profit to the largest capitals where the rate of profitability had deteriorated.
And maybe it gets us right where we are today: with the commodity prices already past their peak and on the downhill side of the curve, the cycle; where the over-capitalization has engendered overproduction to the point that the transfer of profit sets the terms for general devaluation.
3. Stumble
If, near the close of one "super-cycle," that of the post-war recovery, the word that capital whispered across the pillow to those who embraced it was "plastics," that word at the close or the start or something in between of this "super-cycle" was/is/has been "metals."
On December 4, 2010, the Financial Times headlined an article "Global Resources Spending Soars."
On June 5, 2013, the article featured in the Financial Times was headlined "Poor Returns Face Mining Groups."
Not to be left behind by its British cousin, the Wall Street Journal headlined "Losses Mount in Resource Markets." Included in the article is this comment by a portfolio manager at Pacific Investment Management Co. who manages $27 billion in commodity investments for the firm, "I think the super-cycle is dead." Can't get any more definitive than that, can it? Except to say, "what super-cycle?"
In the world of attention-deficit disorder capitalism, in this network and era of short-term, flipping, optioned, get in and get out-- in this network and era just like every other network and era of capital, seven years is as good as it gets. Then things get itchy, and for capitalism, it's an itch it can never scratch.
When our "super" cycle began in 2005, capital spending by mining and resource companies accelerated. In 2008, that amount (not including oil and gas) was a record $110 billion, which was one more indicator to political economists just how "healthy" the "real" economy was. In fact the "real" economy was so healthy capital spending and commodity prices recovered rapidly from their declines in 2009.
Capital spending peaked in the 4th quarter 2012, with the total for the year (again not including oil and gas) weighing in at $140 billion globally.
Prices for metals were already on the way down in 2012, and have continued downward in 2013. Aluminum prices on the London Metals Exchange (LME) have declined 25% since 2011. Copper prices are down 20 percent. Steel prices, not exactly a "resource" but the driver of iron ore prices, have declined 35 percent since 2011.
The very same force that drove the commodity prices up, capital accumulation, now drives the prices down. The commodity, the commodities, remember are but vehicles for capturing a portion of profit. With the expansion of capital spending, the expansion of the value of the means of production, the commodities act as representatives of that capital. Accumulation then manifests itself as the accumulation of the commodities as profit claiming vectors.
The larger capital claims larger profit. The mechanism for this claim is price, or price increases, or as we might know it today --"economic rents" when commodities command prices extraordinarily higher than their value as commodities.
Inventories of metals which were relatively high at the close of the 2001-2003 recession were drawn down in the recovery as capital spending for production 3-5 years in the future forged ahead. Inventories of copper, for example, declined from about one million metric tons in 2002 to 200,000 metric tons in 2008. In 2013, copper production expanded at the highest rate in its history. Inventories reached 600,000 metric tons.
Trading volumes increase. Turnover, circulation of claims to the commodities, exceed the circulation of the commodities themselves.
The inventories of the metals held in warehouses connect to the LME expanded more than fivefold between 2008 and 2013. Aluminum stocks grew from less than one million metric tons to more than five million; Zinc stocks grew from less than 100,000 tons to more than one million tons.
At a certain point, the over-capitalization is transformed into over-production. Each/both predetermines the failure of expanded reproduction. The general devaluation of capital ensues.
4. Fall
Five years into this process, we are still just at the beginning. 2014 is going to be one helluva year. Count on it.
S.Artesian
July 23, 2013
The journals of the bourgeoisie--digital, analog, virtual, print--have spewed tons of ink and blizzards of one and zeros--marveling, worrying, cheering, bemoaning the latest fad in political economy: the "super-cycle" in commodity prices.
The bourgeoisie and their hack political economists reserve the commodity label for those raw materials and foodstuff generally produced in bulk and which form the components for the further fabrication of the means of production and the means of subsistence. We get energy commodities, agricultural commodities, timber commodities, metal and mineral commodities. We get everything from live cattle to dead pork; aluminum to zinc.
Clearly, the dramatic rise in the prices of these commodities since 2005, and the rapid recovery of prices since the Great Recession of 2008-2009, is enough to register as a "super-cycle," or at least the beginning of the "upswing" of a super-cycle...to them.
More than that, the spike and recovery in commodity prices is cited by some as evidence that the Great Recession is indeed just a financial crisis, although a big one, and that the real economy was, is, and will be once always and again reaching new highs; that there is no overproduction of capital as these price increases are the true indicator of long-term "effective demand;" that profitability will increase and the increase will be sustained by the upward movement of these prices.
So what about it? What about super-cycles and commodities. Is/are there 36 year cycles, 42 year cycles, 84 year cycles? Are commodities like cicadas, sinking into the ground only to emerge after a number of years, climbing into the tree-tops, looking to meet, mate, reproduce and die? Are commodities like that body in the lake, sinking then rising, sinking again, only to rise again, each time a little more bloated, a little more putrid?
My answer is clear unequivocal and brief: Wrong question. Wrong questions.
The "right" questions are, whatever the duration of a so-called cycle, whenever the prices rise and/or fall what does the rise and fall accomplish? What does it tell us about the moments of capitalist reproduction?
My problem, and not that my problems are a big deal, with the super-cycle theories of commodity prices is just that-- at core, these are price theories. In (many of) these theories price is regarded as both measure and determinant, for demand, consumption, expansion.
For Marx, prices is significant in its function,as a function, as a mode of distribution driven by the determinant of accumulation.
2. Trip
The determinants of capitalist accumulation are, more or less, in a condition of dynamic disequilibrium. Capital does not "aim" at equilibrium. Capital has no aim, no purpose, no goal at all, other than the accumulation of more capital. It's like a shark, or rather like Hooper's description of the shark in Jaws:
What we are dealing with here is a perfect engine, an eating machine. It's really a miracle of evolution. All this machine does is swim and eat and make little sharks, and that's all.It even eats the little sharks it makes, and the little sharks other sharks make.
To do that, accumulate, to be that, accumulation, it spawns destabilization, disproportion, devaluation. To create its property, it dispossesses. Its property is the dispossession of labor. To accumulate value, it over-value and then devalue all previously accumulated value, incrementally, and over time. "Equilibrium," balance, proportion occur....as accidents, never as necessity.
In its evolution, capital demands that profits, which are the social realization of a portion of all the surplus value funneled into the markets, be distributed among the particular capitals in proportion to the size of the capital deployed and regardless of the internal relations of the components (variable and constant) that form the capital. Size matters, bigger is better, or at least demands to be treated better.
In its apportioning of profit, capital approaches the creation of average rate of profit. The apportionment process itself however demands that every particular capitalist must strive to accrue a profit greater than the average-- to swim faster, eat more, make more than the average. You are average only when eating or being eaten. Value, in its realization and not as chum, must devalue other capitals-- eat their lunch, eat them for lunch.
OK, enough with the shark analogy. Forgive me for having watched Jaws again last night.
In this process of accumulation, commodities do not simply and solely exchange with other commodities as equals. They exchange as the capitals-- as mechanisms and modes for realizing this compulsion, apportioning profit through price.
Between 1960 and 1969, world commodity prices indexes (as archived in the World Bank Commodity Price Data Sheets), unadjusted for inflation, experienced a period of stability. Energy prices declined about 15 percent. Agricultural prices were virtually unchanged; metal and mineral prices were flat in the first half of the decade, increasing 30 percent in the second half.
It is after the OPEC oil price spikes of 1973 that the commodity price indexes turn upward. The price of oil is the whip that drives the prices of other commodities forward. Between 1970 and 1979, the index for energy commodity prices increased seventeen fold; agriculture commodity prices were up 250 percent; metals and minerals about 225 percent. Sound super? Sounds super.
However, between 1980 and 2000, the indexes declined 25 percent for energy; 35 percent for agricultural commodities; 13 percent for metals and minerals.
Next comes the big uptick between 2005 and 2012, when the energy price index doubles, the agricultural and metals indices triple, recuperating all the ground lost in 2009 and 2010.
Which gets us to... exactly where? Well, it might get us right back to 1973, or 2003 when the price increases in oil push and pull the other commodity prices ahead and behind it; when the price of oil directs profit to the largest capitals where the rate of profitability had deteriorated.
And maybe it gets us right where we are today: with the commodity prices already past their peak and on the downhill side of the curve, the cycle; where the over-capitalization has engendered overproduction to the point that the transfer of profit sets the terms for general devaluation.
3. Stumble
If, near the close of one "super-cycle," that of the post-war recovery, the word that capital whispered across the pillow to those who embraced it was "plastics," that word at the close or the start or something in between of this "super-cycle" was/is/has been "metals."
On December 4, 2010, the Financial Times headlined an article "Global Resources Spending Soars."
On June 5, 2013, the article featured in the Financial Times was headlined "Poor Returns Face Mining Groups."
Not to be left behind by its British cousin, the Wall Street Journal headlined "Losses Mount in Resource Markets." Included in the article is this comment by a portfolio manager at Pacific Investment Management Co. who manages $27 billion in commodity investments for the firm, "I think the super-cycle is dead." Can't get any more definitive than that, can it? Except to say, "what super-cycle?"
In the world of attention-deficit disorder capitalism, in this network and era of short-term, flipping, optioned, get in and get out-- in this network and era just like every other network and era of capital, seven years is as good as it gets. Then things get itchy, and for capitalism, it's an itch it can never scratch.
When our "super" cycle began in 2005, capital spending by mining and resource companies accelerated. In 2008, that amount (not including oil and gas) was a record $110 billion, which was one more indicator to political economists just how "healthy" the "real" economy was. In fact the "real" economy was so healthy capital spending and commodity prices recovered rapidly from their declines in 2009.
Capital spending peaked in the 4th quarter 2012, with the total for the year (again not including oil and gas) weighing in at $140 billion globally.
Prices for metals were already on the way down in 2012, and have continued downward in 2013. Aluminum prices on the London Metals Exchange (LME) have declined 25% since 2011. Copper prices are down 20 percent. Steel prices, not exactly a "resource" but the driver of iron ore prices, have declined 35 percent since 2011.
The very same force that drove the commodity prices up, capital accumulation, now drives the prices down. The commodity, the commodities, remember are but vehicles for capturing a portion of profit. With the expansion of capital spending, the expansion of the value of the means of production, the commodities act as representatives of that capital. Accumulation then manifests itself as the accumulation of the commodities as profit claiming vectors.
The larger capital claims larger profit. The mechanism for this claim is price, or price increases, or as we might know it today --"economic rents" when commodities command prices extraordinarily higher than their value as commodities.
Inventories of metals which were relatively high at the close of the 2001-2003 recession were drawn down in the recovery as capital spending for production 3-5 years in the future forged ahead. Inventories of copper, for example, declined from about one million metric tons in 2002 to 200,000 metric tons in 2008. In 2013, copper production expanded at the highest rate in its history. Inventories reached 600,000 metric tons.
Trading volumes increase. Turnover, circulation of claims to the commodities, exceed the circulation of the commodities themselves.
The inventories of the metals held in warehouses connect to the LME expanded more than fivefold between 2008 and 2013. Aluminum stocks grew from less than one million metric tons to more than five million; Zinc stocks grew from less than 100,000 tons to more than one million tons.
At a certain point, the over-capitalization is transformed into over-production. Each/both predetermines the failure of expanded reproduction. The general devaluation of capital ensues.
4. Fall
Five years into this process, we are still just at the beginning. 2014 is going to be one helluva year. Count on it.
S.Artesian
July 23, 2013
Monday, July 15, 2013
This Just IN
(NY) Rumors are flying, and furiously, that Rupert Murdoch's News Corporation could announce that it might consider hiring George Zimmerman to host a proposed new show on its possibly soon to be launched children's network. Speculation is that on the show, tentatively entitled "Guns and Dolls," George will explain the benefits of bullying, stalking, and killing all those with darker skins except maybe for Clarence Thomas (George isn't sure about that, but he's willing to listen).
"We're in the entertainment business," said a person familiar with the rumored discussion of a possible show that might feature Zimmerman.
In a separate but related item, the Bush...error... the Obama Administration announced today that it has hired the six jurors who acquitted Zimmerman as a special board of review and clearance to oversee the US government's "targeted killing" program. An unidentified highly placed source stated that as its first assignment the new board will review the applicability of pre-emptive "stand your ground" targeted killings when the government feels threatened by those who might leak embarrassing security documents and wear hoodies.
S.Artesian
July 15, 2013
"We're in the entertainment business," said a person familiar with the rumored discussion of a possible show that might feature Zimmerman.
In a separate but related item, the Bush...error... the Obama Administration announced today that it has hired the six jurors who acquitted Zimmerman as a special board of review and clearance to oversee the US government's "targeted killing" program. An unidentified highly placed source stated that as its first assignment the new board will review the applicability of pre-emptive "stand your ground" targeted killings when the government feels threatened by those who might leak embarrassing security documents and wear hoodies.
S.Artesian
July 15, 2013
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