- Capitalism and Alternatives -

Short points...

Posted by: Red Deathy ( Socialist party, Uk ) on June 30, 1999 at 21:10:30:

In Reply to: You know I just have to posted by Gee on June 30, 1999 at 16:23:13:

: (for companies read owners and other stakeholders)

No, read companies, themselves.

: Growth of what? Total assets? Capital? Profits? Not necesarily. To compete for capital investment a company does well if it has a high return on investment. A huge company may make huge profits of say 10% above costs, but if a smaller company makes a 20% return then it is the better investment (all other factors being equal). A company does not have to grow in any other way to achieve this, infact shrinking is often a better strategy.

No, they need to have more profits, otherwise they are run out of the race by other firms, and money will go to teh firms with the biggest profits, and who are making the biggest returns, shrinking mean a short term windfall (hence asset stripping), but overall, the market pushes firms to ever increase their sales and thus profits.

: Indeed I would be more disposed to the notion that what a fair proportion of 'companies' really want is survival and anything else is a bonus.

Survival means growth, standing still is death.

:safety from competition.

I'd agree with that, but best safety is in growth.

: R&D is increasing outsourced and shared (dare I say co operate?) between companis enganged in joint ventures and cellular networks. Big companies dont have such an advantage as many assume.

That comes from the increasing cost of R&D.

: There can be no standing still, but 'growth' as such is not the overiding factor.

No, but it means that when teh market is saturated, production cannot be cut back, because you'd go out of business, be competed to death. Hence why capitalism cannot *avoid* over-production, and why its not an accidental misapplication of resources.

: In other words 'effective demand' reflects what you are willing to give up in order to pay - also known as opportunity cost. Remember I am not laying down a moral judgement here, or saying anything is 'ok' or not.

Indeed, but many people are not willing to give up homes, and other 'essential' commodities in order to buy. And some people just don't have the money, and would never get it.

:Supplying the best return on capital does not always mean producing more, it can also mean costing less, focussing on niches and staying competetive without growing.

Costing less means eitehr paying workers less, or improving tech, etc. But you always have to push to the limit of effective demand, otherwise someone else will. If you find a niche, fine, add an extra option in. But a niche could disapear when banks call in loans, when workers wages start falling, etc.

:Companies which are protected fro the free market can overproduuce

No, the *market* causes their overproduction, because they *must* outdo one another.

: Cutting costs in not necessarily an excercise in increasing sales,

Indeed, but it is one option when faced with overproduction crisis, and another example of how the damage is usually passed on to the workers.

: Cutting wages only works when there are many people seeking work and when prices drop. The idea that increased productivity means job losses (famously espoused by the sabotuers) is refuted

I didn't say that, increased profitability might mean more workers, and increased tech might just mean deskilling for many. The aim is not just to increase productivity, but to increase productivity and regain a wider Rate of Profit off it- so any increase cannot be met with a concurrant increase in wages, the ratio of wages to output must decrease.

:the idea is a flawed static pot idea, it says that is 10 men used to produce what one man can now produce then 9 shall be laid off, what actually happened is more that 10 men produce 10 times as much - hence wealth and abundance grows.

Except that would case overproduction, and say, 5 men are producing commodities as can't be sold.

:If it did then the global economy would have sunk soon after the industrial revolution.

No, because it always recovers, its cyclical, plus there have been other manoeuvres (I mentioned war), in the 1880's britain exported one tenth of its population. And there are emerging industries, and protectionism. There was also colonial expansion, which allowed for Significant amounts of increased Value.

: Idea f seeks to explain the above, but does not account for growth in other markets wich make diversifying viable (there being more than enough room)

Yes, sometimes new markets emerge, and the crisis ends, although I left out a poit- during a crisis banks will become scared, and will call in debts, and be reluctant to fund new ventures. that creates a further problem.

: War simply turns the clock back, it does no favors - it destroys capital.

In growth terms, yes, it is good, especially if your side wins, because it creates room for expansion, if *your* assets haven't been destroyed.

: Global output has grown immensely from the 1700s onward. Every decade people cry "crisis" and it doesnt happen

It does happen, but it doesn't mean the end of capitalism, it just means its hit a periodic hitch in the cycle, the trend of growth is upwards, but with periodic slumps that badly hurt the working class, '68, '73, '82, '90(ish)- the 1930's. Capitalism picks up afterwards, but the dmage is socialised first.

: The declining rate of profit, when it effects an industry does so because consumers have gone elsewhere

No, because the rate of profit is the rate of added value, and as an industry progresses, less value is added.

: And includes the intelligence required in organising labor and other factors, or said production would not occur (i know you perceive this, its more for the 'sweat=value' brigade)

But once organisation has been invented/done, its value drops.

: Or representing the intelligent productivity of others

Thats teh dead labour, labour allready done else place, repositories.

: In order to buy machines its necessary to spare them a 'wage' which serves machine making workers well.

Indeed, but for me, that means I'm paying for anotehr capitalists profits. Further, as the production of machines has become more mechanised, and mechanisation filters back all the way through teh production system, less value is being added overall, and less value is being realised on the market.

: Doesnt necessarily follow, a machine can make an item more profitable per unit.

No, because although more can be put out, less labour is added by humans. Machines don't add value, they simply transform themselves, and donate value.

:If machines are damnable then by the same principle all tools are, even hands!

The point was not to damn machines, but rather to source the point of unemployment. Its doesn't reside with lazy workers, but with market conditions. Machines are marvellous, and make work easier, except workers don't experience them as such, since they are a de facto threat to their livelihoods.

: I thought they were unskilled and invisible to the labor market, they couldnt make a difference unless they were active. And what is 'scab' labor - you mean people who dont submit to the exclusive monopolisation of labor by a union.

I mean people hired to help break a strike. And they can be hired for unskilled work, and as things progress, it means more skilled folks have a harder time finding emplyement...

Nothing you've said disprooves what i offered as general trends (some of it confirms it). Mostly your points have arisen out of the generality of the post, more than any inherent flaws in the argument.

Capitalism remains crisi prone, and its the workers as cop for it.

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