Summary
A discussion of Andrew Kilman’s new book, “The Failure of Capitalist Production,” during which the following highly significant points were made. Neo-liberalism does not restore the rate of profit. There is no positive solution to the current crisis outside of a total economic transformation (socialism) where production would no longer be based on the law of value. Anything short of this can be at best transitional, or actually damaging, or just plain silly and useless........
Andrew Kilman’s book is meant to give the underlying systemic causes for the Great Recession, not the stories of the collapse of this bank or that regulation. He did, however, say that there are plenty of good accounts, from the right, left and even that of Austrians, which are good on some parts.
There is a typical picture of the economic history of the last 70-80 years that leftists will generally have. In this picture the Second World War wipes out the economic problems of the Great Depression. The combination of the Depression and the war [Far more the latter] destroys enough capital value in the United States and abroad to (a) restore the profit rate in the US and (b) make US capitalism the undisputed hegemon. The result of this is the long boom experienced in the United States until the 1970s.
What happens next is the first and most significant point of difference that Kilman has with most other accounts. He, having looked at the data, does not find that anything called neo-liberalism or any other such thing was able to reverse the decline in the profit rate. His graphs show it as having essentially become flat. Most leftist accounts also show a decline in wages as having a role to play in the restoration of profitability. While wages did decline total compensation did not, so corporations were not increasing their profitability in that way.
A declining or flat rate of profit translates into a diminished rate of accumulation. This results in lower overall economic growth. This generally leads to higher accumulation of debt. Government policy can only lead to a greater buildup of debt. The “can is kicked down the road,” debt is covered up with more debt. The result of this is a greater frequency and intensity of financial crisis.
What is significant about this account is that the problem is not one of distribution but is one of the capitalist system of production as such. Accounts that show the rate of profit as having recovered under neo-liberalism then introduce some concept like financialization in order to explain why the recovered rate of profit did not become an increased rate of accumulation and growth. The solution, then, seems simple enough – regulate away the financialization and new jobs and factories will appear.
Kilman has no such easy answer. The data points outside the capitalist system. What must ultimately be overthrown is the law of value and the competition between economic units. It is this process that decreases the rate of profit and sets in motion the chain of events already discussed, at the end of which we find ourselves.
Kilman also dismisses emulation of China as silly (I was personally surprised, when reading his book, that someone actually suggested this) – do we really want, or could we even have, cheap, alienated, sweatshop labor as the backbone of our economic development? Along with this he dismisses Richard Wolff’s demand that workers be placed on boards of companies and that banks be nationalized to pursue public policy objectives. So long as capitalism exists it will force these units to act ultimately on the basis of profit and cost cutting.
Socialism, then, is given as the only way forward. Socialism is also clearly defined – unantagonistic, uncompetitive social production. Stated positively – production based on a social plan of some sort. Profitability could also be restored by a Great Depression-like crisis.[Say what? The Depression by itself did NOT restore profitability, WWII did!]
In the discussion it also emerged that people already struggle for their existence. Occuply, Arab Spring, the indignados – the fight is being fought (class struggle exists). Marxists should be a part of it, but should not seek to dogmatically command it. The discussion seems to settle with that idea as a position, somewhere between pure spontaneity and vanguardism.
Kilman was, however, surprised that his position was not understood as very clearly revolutionary by one of the questioners. It was a funny moment.