And after every meeting, after every agreement, the bourgeoisie found themselves right back where they started from: gripped, controlled, hounded by declining profits. Money, it turns out, is everything, or at least the image of everything. And for capital, image is everything.
Money, in its loss, represents the overproduction of capital; it represents, in its powerlessness, the overproduction of the means of production that eviscerates [1. verb trans.--disembowel. 2. verb trans.-- bring out the innermost secrets. 3. verb trans.--elicit the essence of., OED] the rate of profit, that obstructs capital's ability to maintain its own reproduction. It represents in its weakness the inability of private property to maintain the production for value. It represents the conflict at the heart of capital, between the means of production and the property relations that encapsulate them. Money represents all there is to the bourgeois order-- and all there is is weakness, decline, devaluation.
2. (What it was) Overproduction of capital never signifies anything but overproduction of the means of production... Marx, Capital Vol. 3
Picking through the rubble of its 2001 recession, the U.S. bourgeoisie found life after dotcom digital death in the five pointed star of reduced factory employment, war, dollar devaluation, increased oil prices, and reduced capital spending. If expanded reproduction is the lifeblood of capital, then the US bourgeoisie decided that it was time to drink the blood, to intensify accumulation through increased, and unreplaced, capital consumption.
Annual real investment in manufacturing fixed assets had peaked in 1998 at $198.3 billion, and ended 2000 at the $198.1 billion mark. By 2003 the amount had fallen to $147 billion. That same year manufacturing profits began a spectacular recovery. By 2004, manufacturing profits where 12% above their 2000 peak according to the US Bureau of Economic Analysis. On a year-over-year basis, profits in 2005 increased 50 percent. In 2006, they grew another 24.4 percent.
Net capital investment did not increase to the amounts of the prior decade. Increased capital consumption limited net capital spending to amounts half, and three-quarters of the net amount invested in 2000. In fact the amount spent annually has remained below the 2000 mark for every year following. However, replacement and expansion of fixed assets, even on a restricted basis is essential to capitalism. Reduced net investment is accompanied by increasing gross investment, and so capital reproduces itself, it expands, on a reduced, but increasingly costly, basis.
The rate at which profits accumulated exceeded the rate at which capital investments were made, but as the capital investments continued the rate of growth of the rate of return on that investment slowed. Slowing from a growth in rates from 15.2% in 2004 to 20.6% 2005, the rates in 2006 and 2007 were 23.1% and 22.5% respectively. The more it expanded, even/particularly on the reduced basis, the more investment required in equipment and materials, the more capital overproduced itself and reduced the rate of growth of the return on its expenditures.
For capital, rate, speed, velocity time is everything. A deceleration in, not just the rate of return, but the growth in that rate, means that more and more time is being consumed between the extraction of value and its realization as profit.
And with money the mirror, the lens, the image of capital, it is in the money markets, in the exchanges of paper, that the merest slow down in the ability of money to turn its tricks of disappearing and reappearing bigger and stronger, is magnified, leveraged, into paralysis, freeze, collapse.
3. (What it's not)
What it's not is a problem of "underconsumption." Consumption only exists as a "derivative" of capitalism's need to simultaneously aggrandize and expel wage-labor from the process of production. Consumption exists only as an index to capital's achieving expanded reproduction, sufficient profitability, and its success at exploiting wage-labor at an intensity sufficient to overcome the declining rate of return inherent in this reproduction, this profitability, this exploitation.
What it's not is a problem of "fictitious capital." Fraud, swindle, charlatanism are ever-present in the circuits and cycles of capital, and while these fine qualities are necessary for the conduct of capital's daily business, these fine qualities are not sufficient. Fraud, swindle, charlatanism do not create, nor can they substitute for, the social relation that determines both capital's ecstasy and its despair. Like every other bit of the circulation process, like every other market exchange, the dishonest exchanges are a zero-sum game. Nothing is created in exchanges real or fraudulent.
4. (What it will be).
Confronted with the overproduction which is, in fact, it's essence, capital can do no more and no less than to debase the values it has spawned, attempt to destroy the means of production, and demand an increase the exploitation of wage-labor. The difficulty capital encounters in actualizing this process is not the encounters with various other and competing capitals, but with the human component of its mode of production. Class struggle is the only obstacle to a world of increased misery.
October 18, 2008
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