The Anti-Samuelson. Volume Two - Microeconomics: basic problems of the capitalist economy

475 Pages·1977·11.98 MB·English

by  Marc Linder

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52 Library of Congress Cataloging in Publication Data
1981 c-nd Linder, Marc.
00 y-n Anti-Samuelson.
5 b
901 #cc- Bibliography.
mdp.3 s_use I1.n clSuadmeuse lisnodne,x* Paul Anthony, 1915- Economics.
7/ es I. Sensat, Julius, 1947- joint author. II. Title.
02 cc HB119.S25L5 330 * 76-20796
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net/ org/ IISSBBNN 00--991166335544--1176--24 ((vv.. 22)) pbk.
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Contents
10 Money 1
11 Banks and Credit 33
12 Central Banks and Fiscal Policy 53
13 Supply and Demand—An
Empirical Approach 87
14 The Failure of Supply and De­
mand as Applied to Agriculture 101
15 Marginal-Utility Theory 117
16 Price Theory 147
17 Monopoly Theory 169
18 Marginal Productivity Theory 181
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2 19 The Theory of Ground Rent 201
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1981 c-nd 20 Wages 211
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39 e# 22 Theories of Profit 241
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7/ es IMPERIALISM AND THE WORLD MARKET
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net/ org/ Introduction to Chapters 23-27 249
dle. ust. 23 The World Market and World
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dl. at Money: Theoretical and
//h w.h
p: w Historical Outline 257
htt /w
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/ p: 24 World-Trade Theories 299
GMT / htt 25 The Development of Imperialist
19:57 atives Trade Policy 323
2012-04-16 cial-NoDeriv 26 CaAnrsidpse esc Itns teorfn athtieo nWalo rldC uMrraernkceyt 339
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a) mm 27 "Underdevelopment 389
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Chapter 10: Money (S's Chapter 15)
This chapter in S is intended as a link between the income
analysis of Chapters 10-14 and the anticyclical measures of
the Fed in the subsequent chapters. It repeats and embel­
lishes previous material on price and money amidst a selec­
tion of statistics with no theoretical bridge to the text. In
order to provide an introduction to what is rather difficult
4 theoretical material we have decided to begin with S's re­
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0 n
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m s_ Although S has not defined price for us (all we know is
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net/ org/ to measure it and tell us how it has changed over the years
dle. ust. in the U.S. Then we are told that "some definitions will be
han hitr useful. By inflation we mean a time [? !] of generally rising
//hdl. w.hat prices for goods and factors of production—rising prices for
http: /ww bread, cars, haircuts; rising wages, rents, etc. By deflation
/
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MT htt (270). Even though we just "discovered" that inflation re­
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Nothing good can be said for a rapid rise of prices such as took
place in Germany in 1920-1923 and more recently in China and
Hungary. Production and even [!] the social order are then dis­
organized. The total wealth of large groups of the population is
wiped out as money becomes worthless. Debtors ruthlessly
pursue creditors in order to pay off their obligations in value­
less money. Speculators profiteer [273J.
S contradicts himself here. First we are told that "nothing
good" can be said about the matter, and then we are in­
formed that large groups were wiped out. Thus small
groups who benefited from this operation must have found
the whole business "good." An economist with a semioffi­
cial position in Germany, who was the author of a standard
history of that inflation, wrote:
There is no doubt that the paper inflation would not have as­
sumed such vast proportions if it had not been favoured in
many ways from the people who drew a large profit from it. It
4 is clear from the discussions held in 1922 and 1923 in the
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01981 nc-nd c"lEacsosneso musice dC othuenicr ili nofflu tehnec eR oenic hth" et hGaot vreerpnrmeseenntt attoiv iems poefd teh othsee
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9 # the stabilization of the German exchange, which they accepted
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m s_
7/ es many and it was evident that the consequences of the inflation
2 c
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net/ org/ on the whole the inflation generally favoured the entrepreneurs
dle. ust. and the owners of the material means of productions, espe­
//hdl.han w.hathitr cciaaullsye ds trae nlogwtheerniningg otfh eth peo rseitailo nws aogfe sin; dtuhsattr iiat l dceacpiimtaalitsetds; othr adt ei­t
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htt /w stroyed altogether the old middle class of investors. . . .*
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MT htt Let us look at some of the methods used to exploit the pro­
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a) mm And because the inflation from 1921 to 1923 was so severe
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the capitalists were supposed to pay $70 million in taxes in
the first quarter of 1923, (from 1921 income); by this time
that sum was worth only $1,333 million. Moreover, the
capitalists did not immediately hand over the taxes de­
ducted from the workers' wages: they held them for two
weeks, during which time they used the money to buy
means of production, and sold their newly produced com­
modities at their reproduction price, which, because of the
inflation, was of course higher than the production price.
Handing over the money to the state in depreciated form,
they kept the difference.
Next we come to the effect of inflation on total produc­
tion. S asserts that "an increase in prices is usually as­
sociated with high employment. In mild inflation . . . out­
put is near capacity. Private investment is brisk. . . . In de­
flation . . . the growing unemployment of labor and capital
causes the community's total well-being to be less . .
(272). On an empirical level, contemporary stagflation of
4 course, gives the lie to this. S, however, fails to provide the
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19815 c-nd mpainssieindg btyh, eoorre triactahl erli nakcsc.o m"Mpailndie"s ,i n"fwlaetilol-nlu bisr icoaftteend awchcoemels­
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mdp. s_us realize superprofits by buying labor power below its value;
27/ ces as a result there is in the short run increased capital forma­
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net/ org/ tion and also increased or relatively higher employment.
dle. ust. S would have us believe that the contemporary prefer­
han hitr ence for inflation over deflation is the result of some sort of
//hdl. w.hat marginal-utility calculus poll that found inflation to be "the
p: w lesser of the two evils" because the "losses to fixed income
htt /w
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MT htt community" (272). To the extent that inflation is planned, it
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a) mm given utilization of between 70 and 75 percent, and a GNP
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purchasing power, the total value of output represented by
underutilization exceeds that of total GNP at the end of the
boom of the 1920s (1929 GNP-103 billion dollars). It is
necessary to place this development in a theoretical context.
Permanent underutilization (only the Korean and Vietnam
wars were able to nudge the percentage even to 90) means
permanent capital overproduction; it is no longer only dur­
ing the periodic crisis and depression phases that capital is
idled and depreciated: since World War II the conditions of
surplus-value expansion have been so altered that a large
part of the total social product is maneuvered into invest­
ment and government consumption and there made idle,
which from the point of view of capital expansion is tan­
tamount to capital destruction.
This development is closely related to "planned" infla­
tion. To begin with, a significant part of capitalized surplus
value is neatly tucked away under the rubric "rapid early
depreciation allowances"; the ability to do this rests upon
the monopoly situation of the largest capitals. Since prices
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52 must compensate for these "costs," the consumers bear the
1981 c-nd brunt. For nonmilitary capital this means that the
0 n
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5 b
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m s_
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net/ org/ with, monopoly pricing refers to wholesale prices—that is,
handle. hitrust. transactions among capitalists [either within Department I
p://hdl. ww.hat omra blleyt wcaerernie dI aonnd w IiIt]h; spuacphe rc ommomneoyd ibtyu te rxacthhaenrg bey isin ncroet ansionrg­
htt //w bank money in the form of deposits [increased credit]. This
/ p:
MT htt in part explains- the large increase in commercial bank de­
G / posits. There is also a limit to this credit-deposit creation.
19:57 atives Deposits can be created to the extent that moneyless, recip­
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a) on mmer when deposits exceed the needs of moneyless transactions;
Iow Co if loan capital as money capital exceeds the needs of the
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turnover of total capital, then a part of it can no longer
function as industrial capital. But loan capital is interest-
bearing capital: if its mas is increased without a corre­
sponding increase in the mass of surplus value, then the
portion of surplus value going to the industrial capitalist
[entrepreneurial profit] decreases relative to the portion ap­
propriated by the money capitalists, or the share appropri­
ated by each lender is diminished [equaling a declining rate
of interest]. In the former case there is of course a limit to
the drop in the rate of entrepreneurial profit below which
industrial capital will not employ any more loan capital;
similarly, in the latter case, there is an interest rate limit
below which the money capitalists will not lend. A resolu­
tion of the conflict between loan and real capital as ex­
pressed in the inflation of the former is sought in the an­
nulment of part of the deposits or in the equal devaluation
of all deposits.)2
On the other hand, rising monopoly prices do not neces­
sarily result in an increased supply in retail business; for if
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1981 c-nd monopoly prices, then the volume of retail sales remains
00 y-n the same, while the physical volume decreases; thus infla­
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7/m ess_ industrial sphere.
2 c
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net/ org/ there are three possibilities% (1) stable prices, with money
dle. ust. and real wages rising; (2) rising prices, with real wages lag­
//hdl.han w.hathitr gminogn eyb ewhiangde s manodn eryi siwnga greesa;l (w3)a gfeasll. inTgh ep trhicireds, pwositshib islittayb lies
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MT htt in an "ideal frictionless society" (274); in the appendix to
G / Chapter 18, S implies that this "friction" is in reality
19:57 atives monopoly: "If business generally can set its prices so as to
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political unrest came during periods of stable or gently ris­
ing prices. Capitalism itself developed during the centuries
when Spanish New World gold was raising prices" (274).
This is how M. Dobb describes the time:
To the extent that money-wages failed to rise as the commodity
price-level rose, all employers and owners of capital were ab­
normally enriched at the expense of the standard of life of the
labouring class; the price revolution generated that "profit in­
flation" of which Lord Keynes has spoken as being responsible
for those "golden years" when "modern Capitalism was bom"
and as "the fountain and origin of British Foreign Invest­
ment." ... In France and Britain real wages continued to fall
throughout the sixteenth century and remained throughout the
seventeenth century below the level at which they had stood in
1500. . . . Real wages in 1600 in England were less than a half
what they had been a century before.3
Are these the halcyon days the American worker is de­
4 stined to bring about through wage moderation and profit
2
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01981 nc-nd iinnfgl aatinodn ?m Aissl etahdisin lga stto h"idsteofriincael" eixnaflmatpiolen sahso wa sg,e nite irsa lc orinsfeu isn­
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3 e economists. The rise in prices set off by the discovery of
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m s_ gold in gold-currency economies is clearly an anarchic pro­
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net/ org/ exchange. The inflation that "plagues" capitalism today is
dle. ust. not to the same degree an anarchic process, inasmuch as
han hitr various manipulations can lead through the sphere of circu­
dl. at
//h w.h lation to a subsequent redistribution of income between
http: /ww bourgeoisie and proletariat. On the other hand, the histori­
/
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MT htt pended on more than the discovery of gold. If that had
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ditioned factors (the expulsion of Moors, colonization, pes­
tilence) also made the labor market "tight," and thus by
1620, wages were higher than they had been in 1500.4
This excursion into the past makes clear that inflation un­
like, for example, Marx's theory of money, is not an
abstract theory. Insofar as inflation is a differentiated and
"class-conscious" process, it is in large measure determined
by concrete and, viewed from the level of abstraction, say,
in Capital, historically accidental phenomena. Unless the
term inflation is to become a formal classification bereft of
all meaning, it appears necessary to deny that inflation has
anything to do with (1) a decrease in the value of gold, (2)
an increase in the value of commodities, or (3) a deviation
of market prices from value as determined by supply and
demand; for as a concept existing on a level much closer to
concrete reality than, say, value, inflation must be ex­
plained in terms of concrete phenomena, and it "just so
happens" that today none of these three factors has any­
4 thing to do with rising prices: (1) productivity in the gold
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01981 nc-nd itnridesu;s t(r2y) hparos dnuoctt ivaditvya ninc etdh ef absutelrk tohfa nc otmhamt oidn itoyt-hperro dinudciunsg­
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3 e tween supply and effective demand that characterized
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m s_ World War II and the postwar periods has been closed by
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2 c the usual overproduction. Now we know some of the
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net/ org/ things inflation is not.
dle. ust. The distinguishing characteristic of inflation is not so
han hitr much the flooding of the conduits with paper money as the
//hdl. w.hat depreciation of that paper vis-a-vis gold. This is not to say
http: /ww that flooding does not also take place; in wartime, for
/
/ p: example, "civilian production" drops: "the excess purchas­
GMT / htt ing power can be used to bid up the prices of goods and
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