04-21-2010, 12:03 PM
Hidden within what is an entirely theoretical definition or explanation of "overproduction", as an application of what was postulated by Marx 150 years ago, there is an EXACT description of what just happened... far, far better than the postmortems of television economists and G20 bureaucrats with the advantages of hindsight and real data. If I expand the section I emphasized, it reads like this:
"Hence overaccumulation has very important geographical and geopolitical implications in the uneven development of capitalism, as attempts are made to transfer the costs and burden of devaluation to different regions and nations or to push overaccumulated capital into the buildings (especially commercial real estate), infrastructure and other features of the "built environment" as a last-ditch speculative venture. Moreover, the implications of overaccumulation for balance in different sectors of the economy--between branches of production (mining, agriculture, manufacturing, finance, etc.), between consumers and producers, and between capital goods (the means of production) and consumer goods (whether luxuries or necessities)--can become ominous. Indeed, because the rhythm of overaccumulation varies across the economy, severe imbalances between the different sectors and "departments" of production (sometimes termed "disproportionalities" or "disarticulations") emerge and introduce threatening bottlenecks in the production and realisation of value, which further exacerbate the crisis. These processes enhance the control and speculative functions of finance.
The argument, simply, is that as overaccumulation begins to set in, as structural bottlenecks emerge, and as profit rates fall in the productive sectors of an economy, capitalists begin to shift their investable funds out of reinvestment in plant, equipment and labour power, and instead seek refuge in financial assets. To fulfil their new role as not only store of value but as investment outlet for overaccumulated capital, those financial assets must be increasingly capable of generating their own self-expansion, and also be protected (at least temporarily) against devaluation in the form of both financial crashes and inflation. Such emerging needs mean that financiers, who are after all competing against other profit-seeking capitalists for resources, induce a shift in the function of finance away from merely accommodating the circulation of capital through production, and increasingly towards both speculative and control functions. The speculative function attracts further flows of productive capital, and the control function expands to ensure the protection and the reproduction of financial markets..."
Dead Social Science?
Of course, the larger issue is what does it imply for the future? My "teaser" will underline that this is indeed what happened and why. Then, we can take a stab at what's coming.