1. The destruction of assets is no more an index to the weakness of capitalism than the accumulation of assets is an index to its strength. Capitalism is necessarily nothing about assets and necessarily everything about value. Exchange value, capital's value, exists necessarily as private property. Capital is everything about the reproduction of value and the preservation of private property.
The strengths and weaknesses of capitalism are not going to be found in the myriad of measures, tables, charts, graphs issued by governments, corporations, economists and pored over by governments, corporations, economists, consultants, traders, hedgers, speculators. That world of numbers constructed by the ideologists of capital is flat; and the "universe" supporting that world begins and ends with the whimper, not the big bang.
The strength of capital exists in its maintenance of its social relation of production; in its organization, and continued organization of labor as wage-labor; in the preservation of labor as destitute, detached, deprived, useless, labor.
The devaluation of assets, given its public, ceremonial, spectacular form in the events of September 11, is the preservation of private property, and in equally spectacular form demonstrates the deprivation, destitution, expulsion of labor essential to every moment of capital's existence.
The essential expulsion of labor is given its spectacular form in ongoing attacks on immigrant laborers.
The devaluation of assets is matched, paralleled, accompanied by the breaking down and up of the alliances, the pacts, the institutions for mediation of the particular interests in trade, production, of capitalism-- the failures of the WTO, the rejections and defiance of IMF/WB loan conditions-- in another public, ceremonial presentation, of the preservation of private property. The lack of "consensus," "hegemony," "convergence" are no more the end to capital, than consensus, hegemony, convergence were the beginning of capital.
2. Expanded reproduction, increased accumulated assets, accumulated as asset values, were the measure of the growth of the 1992-2000 period; expanded reproduction, the accumulated asset values, had exhausted capital's ability to turn the trick of accelerating profits.
Reduced reproduction, restricted investment are the measure of the 2001-2005 period. Or at least part of the measure. The other part is, of course, the redistribution of profits through the pricing of oil.
In the period 1996-2000, private fixed non-residential investment grew by 50 percent. For the 2000-2005 period, the growth measured 4 percent. The measures and relations between investment and growth become at once and simultaneously more complex and revealing when focused on manufacturing investment. That, annual amounts invested in manufacturing in the US had actually peaked in 1996. By 2000, the annual investment in manufacturing was 28 percent below the 1996 level. The amount invested in 2005 was 40% below the 2000 level, and 57 percent below the 1996 peak.
Growth in the value of the net stock of privately produced fixed assets was significantly reduced. Between 1992 and 1997, the average annual rate of growth of this net stock was 4.5 percent. The rate accelerated to 6 percent between 1997 and 2000, falling to 3 percent for the years following 2000. Annual investment amounts to 2000 were consistently 40-50 percent above the amount required to replace the consumption of fixed capital. The over-replacement rate has since fallen to 25 percent .
What had been restored were profits, and more than profits, profitability, rates of profit, rates of return on investment. Corporate profits, fed by the restrictions on investment, the 20 percent reduction in manufacturing employment, inflated by the pricing mechanism of oil, recovered in 2002 from a 2 year decline. In 2004, after-tax corporate profits were 50 percent above the 1999 mark. Profitability, measuring corporate profits against the current costs of net stocks of private non-residential equipment, software, and structures, rated 6.26 percent in 1997, 4.83 percent in 2000, 4.54 percent in 2001 before recovering to 6.7 percent in 2004. After the 20 percent gain profits in 2005, the profitability rate had climbed to 7.69 percent.
In that rate is compressed the predicament of the bourgeoisie's economy-- asset rich, profit poor; cash rich, profitability restored, reproduction encumbered. The great recovery in profitability in 2005 is in fact just one more index of ongoing overproduction and an immediate future of reduced profitability. Profit restored, growth slowed is capital preserved, but preserved inadequately as overproduction increases when reproduction is constrained.
3.The strength of capital is maintained in the midst of its many predicaments, as the decomposition of all its previous "achievements," "harmonies," "alliances," is nothing but the recomposition of profits, the preservation of property, the ongoing expropriation of wage labor.
All those measures of capital's weakness-- the decline of the dollar, the rising price of oil, the supposed "peak" in oil production and exploration, the trade conflicts between "North" and "South," the very notion of a "South," the supposed "defiance" of a supposed "Washington Consensus," the "national salvation" governments of Bolivia, Argentina, and South Africa, the mythic flight from US securities-- were/are in fact elements of capital's reproduction, restoration, preservation. The obvious, painful, corollary is that the political embrace of these supposed alternatives to capital by the left opponents of capital, makes those opponents critical, essential, necessary to the maintenance and restoration of private property against the workers' struggles.
S. Artesian September 23, 2006
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