Zombie Capitalism Global Crisis and the Relevance of Marx

See, for example, the arguments of Hodgson, Steedman, Himmelweit, Glyn, Brenner, and Dumenil and Levy.

This point was made by Robin Murray in a reply to an attempt by Glyn to use a "corn model" to disprove the falling rate of profit (see Robin Murray, "Productivity, the Organic Composition and the Rate of Profit", Bulletin of the Conference of Socialist Economists, 6, 1973). It has since been amplified by the temporal single-system school of Marxist economists.

Robert Brenner, after rejecting Marx's theory of the tendency for the rate of profit to fall on the basis of Okishio's argument, then puts forward an account of his own which rests precisely on the way in which capitalists who have invested a lot in fixed capital in the past see their prices undercut and their profits threatened by capitalists who have invested more recently with cheaper or technologically more advanced fixed capital. Having accepted Okishio's position on one page, Brenner provides his own refutation of Okishio a few pages later-and does not realise he has done so. See Robert Brenner, Economics of Global Turbulence, pp14-15 and 28-31.

Marx, Capital, Volume Three, p23 1.

Exceptional cases will be when completely new lines of production emerge with low organic compositions of capital but with a level of production and investment capable of absorbing a lot of accumulated surplus value. But these exceptions will soon be gripped by the tendency for their organic compositions to rise.

Marx, Capital, Volume Three, p241.

Marx's argument is contained in Volume Three of Capital, pp239-240 and p252. Ever since Marx's time there have been debates between various schools of Marxists who see the crisis as originating in the rate of profit or in the disproportion between different sectors of production and the rate of profit. In these passages Marx sees the tendency of the rate of profit to fall as clashing with the pursuit of the capital's selfexpansion, so producing disproportionalities and a periodic lag of effective demand behind global output. Confusion arises because Marx did not finish Volume Three of Capital, leaving behind a sometimes fragmentary manuscript which Engels tried to put into some order. It is then all too easy for people to quote from one page without relating it to what appears on other pages.

Rudolf Hilferding, Finance Capital (London, Routledge, 1981), pp93 and 257.

Otto Bauer was responding to an argument about the breakdown of capital from Rosa Luxemburg (discussed further on) which was very different to that of Henryk Grossman.

Henryk Grossman, The Law of Accumulation and the Breakdown of the Capitalist System, (London, Pluto, 1992), p76. See also Rick Kuhn, Henryk Grossman and the Recovery of Marxism (Champaign, IL: University of Illinois Press, 2006), pp224-234. Grossman based his argument, in part, on a passage in Volume Three of Capital (p247), where Marx writes that, "a portion of the capital would lie completely or partially idle (because it would have to crowd out some of the active capital before it could expand its own value), and the other portion would produce values at a lower rate of profit, owing to the pressure of unemployed or but partly employed capital... The fall in the rate of profit would then be accompanied by an absolute decrease in the mass of profit, since the mass of employed labour power could not be increased and the rate of surplus value raised under the conditions we had assumed, so that the mass of surplus value could not be increased either."

Henryk Grossman, The Law of Accumulation and the Breakdown of the

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Capitalist System, (London, Pluto, 1992) p191.

54 See Rick Kuhn, Henryk Grossman and the Recovery of Marxism, pp138-148.

5 5 Henryk Grossman, The Law of Accumulation and the Breakdown of the Capitalist System, (London, Pluto, 1992) p76. Also Rick Kuhn, Henryk Grossman and the Recovery of Marxism, p85.

56 See, for instance, Marx, Capital, Volume Three, p241 .

57 Marx, Capital, Volume One, p360.

58 As above, p356.

59 As above.

60 For a very good presentation of this argument, see "Marx's Theory of Value", in Michael Kidron, Capitalism and Theory (London, Pluto, 1974), pp74-75.

61 K Marx and F Engels, The German Ideology, in Marx and Engels, Collected Works, Volume 5, p52.

62 See John Bellamy Foster, Marx's Ecology (New York, Monthly Review, 2000); Paul Burkett, Marx and Nature: A Red and Green Perspective (London, Palgrave, 1999).

63 Marx, Capital, Volume One, pl 77.

64 Marx, Capital, Volume Three, p792.

65 As above, p793.

66 Marx, Capital, Volume One, pp506-508.

67 Marx, Capital, Volume Three, p793.

68 F Engels, The Dialectics of Nature, in Marx and Engels, Collected Works, Volume 25, p461.

69 As above, p462.

70 As above, p463.

71 Marx, Capital, Volume One, p233.

72 Marx and Engels, Communist Manifesto, available at http://w.marxists.org/ archive/marx/works/1 848/communistmanifesto/chOl .htm

73 There were a few exceptions in the 20th century, most notably Joseph Schumpeter in his Capitalism, Socialism and Democracy (London, Allen & Unwin, 1943), but they nearly always owed a debt to Marx for their approach, even while trying to adjust his findings to justify capitalism rather than damn it.

74 For this reason, Marx does not only describe the law of value as functioning in an abstract model of commodity production in Chapter One of Volume One of Capital, but also as it functions at a more concrete level through the interplay of capitals in the chapter "Distribution Relations and Production Relations" in Volume Three of Capital (pp857-859).

Chapter Four: Beyond Marx: Monopoly, War and the State

1 Quoted in D M Gordon, "Up and Down the Long Roller Coaster", in Bruce Steinberg and others (eds), US Capitalism in Crisis, p23.

2 See "Figure 2: Net Returns on Capital in the UK, 1855-1914", in A J Arnold and Sean McCartney, "National Income Accounting and Sectoral Rates of Return on UK Risk-Bearing Capital, 1855-1914", November 2003, available at http://business-school.exeter.ac.uk/accountinglpapers/0302a.pdf

3 See the accounts in Gareth Stedman Jones, Outcast London (Harmondsworth, Penguin, 1991).

4 Frederick Engels, "Preface to the English Edition" ( 1 886) in Marx, Capital, Volume One, available at http://w.marxists.org/archive/marx/works/ 1 867-cl/p6.htm

5 For details and sources, see my book Explaining the Crisis, p52.

6 See, for Germany, G Bry, Wages in Germany 1 871-1945 (Princeton, 1960),

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56 Graph available at http://w.econlib.org/library/Encl/

60 Ellen Meiksins Wood, "Logics of Power", p25. Even David Harvey, who

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Chapter Five: State Spending and the System

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this question can be in danger of turning into pure scholasticism, since in any case the costs of training add to the investment costs of a firm. At the same time, insofar as training is generalised across the system as a whole, it increases average labour productivity and so serves to reduce the value in terms of socially necessary labour of each unit of output-and in doing so reduces the gains accruing to the individual capitalist from undertaking the training.

36 The "free rider" problem: see, for instance, Mary O'Mahony, "Employment, Education and Human Capital", in R Floud and P Johnson, The Cambridge Economic History of Modern Britain, Volume Three (Cambridge University Press, 2004).

37 Assuming the labour they train is going to end up as productive labour.

38 See Richard Johnson, "Notes on the Schooling of the English Working Class 1780-1850", in Roger Dale and others (eds), Schooling and Capitalism (London, Routledge & Kegan Paul, 1976), pp44-54. See also Steven Shapin and Barry Barnes, "Science, Education and Control", in the same volume, pp55-66.

39 For a full account of developments in the major industrial countries of the time, see Chris McGuffie, Working in Metal (London, Merlin, 1985).

Chapter Six: The Great Slump

1 Charles Kindleberger, The World in Depression 1 929-39 (London, Allen Lane, 1973), pl 17. See also Albrecht Ritschl and Ulrich Woitek, "What Did Cause the Great Depression?", Institute for Empirical Research in Economics, University of Zurich Working Paper 50, 2000, p13.

2 See the estimates for GNP in Angus Maddison, "Historical Statistics for the World Economy: 1-2003 AD", available at: http://w.ggdc.net/maddison/ Historical\_Statistics/horizontal-file\_03-2007.xls

3 For a much more detailed account of the spread of the crisis, with sources, see my Explaining the Crisis, pp55-62.

4 See figures given in Fritz Sternberg, The Coming Crisis (London, Victor Gollancz, 1947), p23; Lewis Corey, The Decline of American Capitalism (London, Bodley Head, 1935), p27. Available at http://w.marxists.org/archive/corey/1934/decline/ch05.html

5 Quoted in R Skidelsky, John Maynard Keynes, Volume 2 (London, Macmillan, 1994), p341.

6 Quoted in W Smaldone, Rudolf Hilferding, p105.

7 See, for instance, Randall E Parker, Economics of the Great Depression, p14.

8 See the summary of the Austrian view by Randall E Parker, Economics of the Great Depression, pp 9-10. See also F A Hayek, Pure Theory of Capital (London, Routledge and Keegan Paul, 1941), p408, and Profit, Interest and Investment (London, Routledge, 1939) pp33, 47-49, and 173. For a very good contemporary exposition of Hayek's position see John Strachey, The Nature of Capitalist Crisis (London, Victor Gollancz, 1935), pp56-82.

9 Figures given by Corey in The Decline of American Capitalism. Robert Brenner and Mark Glick, "The Regulation Approach: Theory and History", New Left Review, 1:188 (1991), argue that wages rose sharply in the years before the Crash, but the graph they provide from S Lebergott, Manpower in Economic Growth (New York, McGraw-Hill, 1964) only suggests a rise of about the same level as Corey's figures.

10 Michael A Bernstein, The Great Depression (Cambridge University Press, 1987), p187. He adds that for the population as a whole it rose 13 percent, and for the top 1 percent of the non-farm population the figure was 63 percent.

1 1 Robert J Gordon, "The 1920s and the 1990s in Mutual Reflection", paper

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