[Marxism] Marx before Minsky

[Michael Perelman]

Artesian's comment is very good.  One hint of an answer comes from Marx, who wrote 
something like -- at some point some trivial factor (he uses the metaphor of a feather) can 
upset the balance on a scale.

Of course, the financialization was aided by people here & abroad.

On Sun, Feb 01, 2009 at 04:37:21PM +0100, S. Artesian wrote:
> Michael,
> 
> If this process started around 1972, and I certainly agree that the rate of 
> profit for the US peaked in 69-70, and launched the bourgeoisie on their 
> great offensive, then what possibly could have delayed its "reckoning"  for 
> 36 years?
> 
> The problem here is that, despite the overall trend of capital, the trend 
> itself is punctuated by interruptions, cycles within cycles of contraction 
> and expansion.    Overall rates of growth after 1973 do not match the rates 
> of growth in the 1945-1969 period, certainly.  However, the 1973-79 rate is 
> greater than the post 1981 rate, and the 1992-2001 rate exceeds the 
> 1981-1991 rate.
> 
> In addition there are real increases in capital investment, fixed asset 
> accumulation in the 1992-2001 rate which are coincident over the long run 
> with increased financialization.
> 
> To say capital increasingly reproduced itself along fictitious lines, says 
> something, but it doesn't say why the fiction itself falls apart in 2007 as 
> opposed to 1990-- it also does not answer why so much more "fictitious" 
> capital  -- and I use quotes because ALL capital becomes fictitious when it 
> cannot reproduce itself profitably enough-- could be supported.
> 
> Some answer-- that this fictitious expansion was supported on the backs of 
> the NIE workers in Asia-- China, India, Taiwan, Thailand for example -- with 
> the exchange of real goods for "paper," but that basically is a mercantilist 
> description and not a Marxist investigation-- as it takes no notice of 
> related-party trading between "home" country corporations and subsidiaries 
> located in those NIEs; it takes no notice of who actually owns the revenue 
> streams involved in that trade.
> 
> A friend of mine, pretty well known for his work on fictitious capital, 
> argues that capitalism has "been running on empty for forty years."  Well, 
> that's a helluva run on empty.  If it's been empty for forty years who can 
> we account for the differences in the RPMs?
> 
> ----- Original Message ----- 
> From: "michael perelman" <michael at ecst.csuchico.edu>
> To: <sartesian at earthlink.net>
> Sent: Saturday, January 31, 2009 11:49 PM
> Subject: [Marxism] Marx before Minsky
> 
> 
> > Previously, I made the case that the financial meltdown was basically a
> > delayed response to the severe neglect of investment in plant,
> > equipment, and infrastructure. I also explained the cause of this neglect.
> >
> > http://radicalnotes.com/content/view/73/39/
> >
> 
> 
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-- 
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com