[A-List] accumulation/financialisation - a query
omahkohkiaayo at peoplepc.com
Mon Jan 16 10:23:38 MST 2006
Back on 2 Nov Louis Proyect forwarded a post from Jim Craven called 'What were Capitalism's original
In reply, Michael Hudson wrote:
Boy, are you optimistic. The economy's largest sectors -- real estate, oil and gas, and mining haven't declared any profits for half a century. (If they did, they'd have to pay taxes.) They operate as a public charity. What real estate is after is capital gains, not profits. The profits are paid out to the bankers. The rest of the economy likewise has been financialized.
And as for increasing productive capacity, capital gains (and what profits there are) are made by downsizing and
Welcome to post-industrial finance capitalism.
Response Jim C:
Yes, I have also read Lenin, Hobson, Bukharin and Hilferding. Right now for example, over 50% 0f the "profits" of the big banks are coming from late charges and other "administrative charges." There are many reasons why finance capital increasingly integrates with and assumes hegemony over industrial, agricultural and other elements of overall capital and why interest and related forms/shares of surplus value become pronounced: e.g. a) strategic overview and information not available to individual industrial/agricultural capitals; b) individual capital accumulation and expanded reproduction increasingly reliant on external funds rather than retained earnings; c) more rapid turnover time between production/capture of surplus share and its realization...; d) the infamous surplus absorption problem--Baran and Sweezy--etc; e) surplus realization crises and pushing private/public/corporate debt increasingly imperative to handle underconsumption/overproduction/surplus realization crises;
Yes, surplus value is the difference between the "value" of labor power (wages/benefits) and the value of the output created by the exercise of that labor power--labor. And as there are contradictions between elements of capital--lender vs borower, buyer of inputs vs seller of output produced by inputs, seller v seller, buyer v buyer,
producer vs user of physical "capital" (industrial vs agricultural) etc--so there arfe shifting divisions of overall surplus value into rent, interest, profit, "capital gains" etc. And yes of course surplus value originates in production not circulation (buying cheap and selling dear cancelled out when seller becomes a buyer) but it is divided up between elements and forms of overall capital whose relative strengths are shifting.
The model I use (I simply used profit as shorthand in this discussion and previously) is based on the fact that in over 32 years of teaching economics I have not seen any text answer the WHY question: WHY are producers assumed to be maximizers--or at least satisficers--of "total profits" with GIVEN resources/constraints without reference to the metaphysics and tautologies of "Homo Oeconomicus"?. Here we get into systemic imperatives:
If I jog alone every day, and each day I cut down my time over a given distance, that, for me is progress. But as soon as I am in a race with another competitior, my fast may be his/her slow and simply not enough. Capitalists MUST try to MAXIMIZE REAL AFTER-TAX RISK-ADJUSTED SURPLUSES (reducing total costs relative to total revenues, increasing total revenues relative to given total costs, escaping/shifting tax burdens, socializing costs of increasing privatized returns, use of market power and asymmetric information and political access etc) and/or capture larger shares of surplus value expropriated by other capitals, because, if one does not while a competitor does, the competitor has enhanced retained earnings and/or creditworthiness necessary for accumulation and expanded reproduction of capital--and for their shares of the fund for the expanded reproduction of capitalism as a whole and as the only type of system in which capitalists can survive and thrive.
Accumulation and expanded reproduction of capital (and the capital-labor relation) is a necessary but not sufficient condition of MAXIMIZATION OF PRODUCTIVITY AND EMBODIED SURPLUSES [produced but not yet realized until accounts receivable are cleared] and MAXIMIZATION OF PRODUCTIVITY (reducing/socializing/shifting total costs of obtaining/realizing given total revenues) is necessary but not sufficient condition for EFFECTIVE COMPETITION (enhanced market/industry/revenue/surplus shares and derivative name and power) which is a necessary but not sufficient condition for ongoing REALIZATION OF MAXIMUM SURPLUSES--SHARES AND VOLUMES.
Forms and shares of total surplus value change as do the dominant forms and methods of monopoly capital, but the central imperatives of production/realization of surplus for accumulation and power and accumulation and power for production/capture/realization of surplus remain no matter what the terms and categories change in name.
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