Upload
anonymous-pu2x9kv
View
218
Download
0
Embed Size (px)
Citation preview
8/13/2019 The Fall in the Average Rate of Profit
1/42
The Fall in the Average Rate of Profit - the Crisis and
its Consequences
From Prometeo 1 Series VII, July 2009 In our last
issue we published an article rom Prometeo, the
theoretical !ournal o "atta#lia $omunista %P$Int& on the
cost o the crisis so ar or to the wor'in# class( )ere
we present a second article rom that issue on the same
theme o the economic crisis, this time on the
prospecti*e or the capitalist crisis whose underlyin#
cause is not inancial speculation but the permanent
problem or capitalism o the declinin# rate o proit(
$apitalist relations o production are based on a
undamental law the creation o surplus *alue throu#h
the realisation o proit( +he uneual relationship
between capital and labour #oes beyond capital simply
ma'in# a proit but in*ol*es the e-tortion o the ma-imum
proit possible( In this conte-t the ma-imisation o
proit is only achie*able throu#h e-tended reproduction
based on increasin# the e-ploitation o labour power and
thereby increasin# the rate o surplus *alue( +he process
o accumulation, the concentration o the means o
production and the centralisation o capital all low
rom this as a natural conseuence(
In the early period o capitalist de*elopment theob!ecti*e o e-tortin# the ma-imum proit was achie*ed by
len#thenin# the wor'in# day as ar as was humanly
possible( .bsolute surplus *alue was the main source or
the ma-imisation o proit( +he wor'in# day reached 1/
hours in "ritain and other ma!or industrialised
countries( In this type o accumulation the composition
o capital did not si#niicantly chan#e, leadin# not only
8/13/2019 The Fall in the Average Rate of Profit
2/42
to an increase in the mass o proits but also in the
rate o proit(
"ut the inite limits o the wor'in# day which, e*en i
ta'en to e-tremes cannot #o beyond 2 a day, orced
capitalists aimin# as always to ma-imise proit down
the road o reducin# the necessary labour time throu#h
the e*erincreasin# use o relati*e surplus *alue(
+his allowed capital to urther increase the social
producti*ity o labour, the rate o e-ploitation and the
mass o proit(
)owe*er, as technolo#ically ad*anced machinery replaced
labour power the or#anic composition o capital rose,
thus settin# in motion the conditions or a all in the
rate o proit( +he increase in dead capital in relation
to li*in#, or constant to *ariable capital in other
words a #reater increase in capital tied up in machinery
and raw materials compared with the number o wor'ers
in*ol*ed in production leads to an increase in the
e-traction o surplus *alue and a hu#e #rowth in the mass
o proits, but also to a reduction in the rate o
proit(
I the rate o proit is the relationship between
realised surplus *alue and the mass o total capital
employed, the more the number o wor'ers is reduced in
relation to constant capital the more the basis or
e-tractin# surplus *alue is reduced( ore precisely, the
mass o total capital in*ested per unit o producti*e
labour increases as does the surplus *alue produced by
any indi*idual wor'ers in the process o accumulation(
+he mass o proit increases but the rate o proit
declines on the basis o the increase in the or#anic
8/13/2019 The Fall in the Average Rate of Profit
3/42
composition o capital( .s is well'nown, the ormula s3$
represents the rate o proit where s is the uantity o
surplus *alue e-torted(
+his is calculated by multiplyin# the surplus *alue
created by a sin#le wor'er by the number o labourers
employed(
$ is the total social capital, i(e( the sum o constant
and *ariable capital( It ollows rom this that
increasin# the latter in relation to the ormer, i(e(
reducin# the number o labourers in relation to the
increase in capital employed, creates the conditions or
a all in the rate( In mathematical terms, i the
numerator diminishes in relation to the denominator, the
numerical result is lower( +he relationship between s and
$ is the e-pression o the or#anic composition o capital
whose increase pro*o'es the all in the rate o proit(
+he or#anic composition o capital is calculated by
comparin# constant capital with *ariable and by
e-pressin# the i#ure or their reciprocal relationship
in percenta#es o the total capital( For e-ample, i the
uantitati*e relationship between constant and *ariable
capital was 40320 the or#anic composition would be 005(
I we increase the irst i#ure %constant capital& and
lower the second %*ariable capital& to 90310 the or#aniccomposition would rise to 9005(
+he more the or#anic composition rises, the more it
brin#s into play the law o the tendency or the a*era#e
rate o proit to all( .part rom short periods,
capitalism cannot escape rom this law which is immanent
to its relations o production(
8/13/2019 The Fall in the Average Rate of Profit
4/42
Its operation is shown in the speciics o its
undamental contradictions, a course which leads to
capitalism6s decline as a mode o production and which
brin#s with it a series o de*astatin# economic and
social conseuences(
+he more the rate o proit declines the harder it is or
capital to ind ways to e-press its *alorisation( +he
more the process o *alorisation slows, the more the rate
o increase o socially produced wealth proportionally
decreases( +his is despite the enormous increase in
producti*ity and in the e-ploitation o the labour orce(
+hus it is really the increase in the social producti*ity
o labour, the #rowth in e-ploitation the relati*e
surplus *alue which is at the root o the law( .s ar-
says in the +hird Volume o Capital%at the be#innin# o
$hapter 17&8
+he pro#ressi*e tendency o the #eneral rate o proit
to all is, thereore, !ust an expression peculiar to the
capitalist mode of production o the pro#ressi*e
de*elopment o the social producti*ity o labour( +his
does not mean to say that the rate o proit may not all
temporarily or other reasons( "ut proceedin# rom the
nature o the capitalist mode o production, it is
thereby pro*ed to be a lo#ical necessity that in its
de*elopment the #eneral a*era#e rate o surplus*alue
must e-press itsel in a allin# #eneral rate o proit(:
.s e*idence or this we can see that the rate o #rowth
o world production has been pro#ressi*ely declinin# due
to the hi#h or#anic composition o capital in the
economy( In the decade 19;040 the rate o increase o
international producti*e capacity was
8/13/2019 The Fall in the Average Rate of Profit
5/42
In the decade 19902000 it reached a miserable 1(095( +he
subprime crisis then did the rest, imposin# a recession
on world production which declined substantially below
=ero( I we consider the #rowth o world production per
capita or the same period the i#ures are e*en worse(
From 7(;/5 in the decade 19;040, it went to 0(/95 in the
ne-t decade, inishin# up at 0(195 in the decade 1990
2000( +he decline in the increase in world production
isn6t due to the act that needs ha*e been satisied
better or that demand or #oods and ser*ices ha*e
autonomously contracted( +his decline is due to the
diiculty o *alorisin# capital which, discoura#ed by
decreasin# proit mar#ins, is in*ested less and less in
real production as it responds to the siren call o
speculation( In the same period, albeit with dierences
rom one area to another, plant utilisation ne*er went
abo*e ;/5 whilst speculation attracted more and more
capital which pre*iously went to producti*e in*estment(
Just how the two phenomenon are related can be seen in
the act that where the process o ma-imisin# proit
becomes diicult capital turns to see' e-tra or super
proits or an additional #ain( +his adds nothin# to the
uantity o #oods and ser*ices produced but it allows bi#
capitals to acuire surplus *alue produced elsewhere( .t
the same time it a*ours the birth o hu#e monopolies in
the real producti*e sector where the monopolistic price
can be used to compensate or the losses arisin# rom the
all in the rate o proit( It also promotes hu#e
inancial holdin#s dedicated to speculation which
continue until the bubble bursts and reduces their
proits and inancial #ains to =ero(
First there was the >nron, $irio and Parmalat cases, then
the inancial crisis lin'ed to subprime mort#a#es
8/13/2019 The Fall in the Average Rate of Profit
6/42
e-ploded and the entire capitalist system entered the
most deep and de*astatin# crisis since the 1970s( ?e ha*e
to add, howe*er, that the inancial bubble burst in a
real economy which was already in deep crisis and this
was the cause and the sprin# which unleashed e*erythin#(
@eneral >lectric and @eneral otors are two prime
e-amples( +he two bi##est corporations in the world ha*e
had recourse to inancialisation to deal with their
proits crisis( In the space o orty years they went
rom proit rates o 205 to
8/13/2019 The Fall in the Average Rate of Profit
7/42
o*ercome without destroyin# the *ery ictitious capital
which contributed to its creation( Aecently, since the
end o the 1990s, stoc' mar'et crises ha*e ollowed one
another at an e-traordinary rate(
Followin# the burstin# o the Aussian and .sian
speculati*e bubbles, the BS Stoc' >-chan#e has produced
the #reatest destruction o ictitious capital in
capitalism6s history, e*en surpassin# that o 1929(
"etween January 2000 and Cctober 2002 the Dow Jones ell
rom 11;22 to ;24/ points, amountin# to a 745 loss in its
share capital( +he E.SD., or stoc' mar'et or hi#h tech
irms, ell 405( C*er the same period %arch 2000 to the
third uarter o 2002& the conseuence o the two stoc'
mar'et e-plosions amounted to a net loss o G4,00
billion( +he present crisis has done the rest( Eot only
has it made ma!or BS inancial institutions #o to the
wall, it has orced state inter*ention to a*oid a #lobal
ailure o the whole credit system and the real economy
itsel( In the inal analysis these speculati*e bubbles
are created by the inancialisation o the crisis as
capital increasin#ly turns to increasin# its inancial
re*enue and searchin# or e-tra proit in order to re*i*e
continuously declinin# proit rates and sol*e the
economic crisis( Its ine*itable end only poses the same
crisis situation a#ain but at a hi#her and more critical
le*el( It ne*er escapes rom the *icious circle which is
typical o capitalism in all sta#es o its e-istence but
which in its period o decay is de*astatin#( +he most
ob*ious e-ample is today, where the economic and
inancial world ace an unprecedented crisis which ma'es
the crises o the early 2000s and e*en that o the 1970s
loo' pale by comparison(
8/13/2019 The Fall in the Average Rate of Profit
8/42
. low rate o proit not only slows the process o
*alorisation down, it also ma'es it diicult or new
capital to be created( . capital o hi#h or#anic
composition, with its reduced rate o proit, is orced
to accumulate more rapidly( +he increased *elocity o
accumulation produces a #rowin# mass o proit but at the
same time lowers the rate o proit and the rate o its
*alorisation( >-actly the same dynamic e-plains how in
periods o accentuated crisis, distin#uished by #reater
intensity o o*erproduction o capital unable to ind
adeuate proit mar#ins, capital see's a *ariety o ways
out, such as economic concentration, inancial
centralisation and speculation( .s ar- said when
reerrin# to the contradictions inherent in the law at
the be#innin# o $hapter 1< o CapitalVolume +hree,
Cn the other hand, the rate o sele-pansion o the
total capital, or the rate o proit, bein# the #oad o
capitalist production %!ust as sele-pansion o capital
is its only purpose&, its all chec's the ormation o
new independent capitals and thus appears as a threat to
the de*elopment o the capitalist production process( It
breeds o*erproduction, speculation, crises, and
surpluscapital alon#side surpluspopulation(:
.nd the e*idence or this can be seen in the increasin#ly
central role o inance capital, the stoc' e-chan#e,
ban's, in*estment unds and inancial holdin#s(
Ee*er in the history o the all in the a*era#e rate o
proit has inancial capital assumed such a dominant role
within capitalist producti*e relations( .nd ne*er beore
has the stru##le between ma!or international currencies
or supremacy in the money mar'ets, that instrument or
reappropriatin# capital, been so *iolent(
8/13/2019 The Fall in the Average Rate of Profit
9/42
.nother eect o the proits crisis is sharpened
competition or trade, both domestically and
internationally( +he more the mechanism or accumulation
and *alorisation o capital lac's o-y#en the harsher the
competition between capitals( +he race or #reater labour
producti*ity, intensiied e-ploitation throu#h the
increase in relati*e surplus *alue, e-acerbates the
competition between capitals a competition which is in
turn the product o the proits crisis and produces, as
its irst conseuence, a historic attac' on the li*in#
and wor'in# conditions as well as the wa#es o the
wor'in# class(
$hronolo#ically the e*idence is star'( I we compare the
times o these attac's with the steepest all in proits
it shows that the economic and social dynamic is the
restriction o on proit mar#ins( It all started in the
mid 19;0s when the rate o proit touched its historic
low le*el o less than
8/13/2019 The Fall in the Average Rate of Profit
10/42
Increasin#ly the relationship between capital and wa#e
labour is one in*ol*in# more le-ibility and !ob
insecurity to an e-tent uneualled in recent history( +he
proits crisis means that, in addition to reducin# labour
costs, the capitalists also ha*e to ensure that the
labour orce is only employed when the *alorisation o
capital demands it and then that wor'ers are
automatically laid o when no lon#er needed( $apital
cannot allow itsel the luxuryo maintainin# a wor'orce
which it is not able to e-ploit at a rate compatible with
its own *alorisation needs( Eeoliberalism and
#lobalisation are the real osprin# o the proits
crisis(
Cnce e-tolled by leadin# bour#eois economists or their
extraordinary advantages, they are now bein# discarded as
no-ious to the healthy de*elopment o capitalism in
a*our o state inter*ention(
Het the se*ere limits to the process o *alorisation
within the *arious national capitals has imposed on bi#
capital the need to o*ercome all possible barriers to the
circulation o capital, commodities and the procurement
o strate#ic primary products and labour power at the
lowest possible price( +he e-port o inance capital, the
delocalisation o production, the intensi*e e-ploitation
o the wor'orce at *ery low cost, these are all the
ine*itable corollaries o the slow pace o *alorisation
typical o the ad*anced capitalist countries with a hi#h
or#anic composition o capital( I all these ob!ecti*es
are realisable on the le*el o normal: imperialist
competition, ine, otherwise the orce actor inter*enes
to resol*e thin#s( ?ar has become the daily means by
which imperialism see's to obtain desperately neededeconomic and inancial ad*anta#es( Is there anythin# new
8/13/2019 The Fall in the Average Rate of Profit
11/42
under the capitalist sun here $ertainly not, but in the
present phase o capitalism, warmon#erin#, li'e any other
orm o imperialist beha*iour, is directly proportional
to the #ra*ity o the economic crisis( +he tendency or
the rate o proit to all doesn6t create new
contradictions or unusual orms o beha*iour on the world
mar'et, but its does ma'e them worse, pushin# them to
e-tremes as serious and desperate as the crisis which
produced them(
From the all o the So*iet >mpire to today, whilst the
?estern bour#eoisie ha*e been crowin# about its *ictory
and announcin# a new period o peace and prosperity, the
abyss o international crises and imperialist war has
opened up with an intensity and *iolence not seen in
recent years( In all areas rom economic to political
actors, both in domestic and international terms, in the
relationship between capital and labour and in the resort
to arms the situation has #ot worse( +hus
interbour#eois tensions ha*e multiplied and intensiied
in an or#y o decadence where increased e-ploitation o
the proletariat, increased po*erty in #eneral, are the
only constants in a capitalism tryin# to put to#ether the
conditions or its own sur*i*al(
The Decline of the Average Rate of Profit in Figures
In bour#eois literature it is diicult to ind clear
data on the all in the a*era#e rate o proit( +he
e-planation is ob*ious( Eo bour#eois economist, howe*er
aware and earul o the law and its disastrous
conseuences, can openly coness to in*esti#atin# the
relationship between the mass o proit and the total
capital employed to obtain it( Eot so much because they
don6t want to use ar-ist economic cate#ories, althou#h
8/13/2019 The Fall in the Average Rate of Profit
12/42
they always re!ect them, but more simply because they
i#nore the problem when they put the mass o proit at
the centre o the issue and not its rate( >*en so, on the
basis o the 'nown acts, they do issue warnin#s about
declinin# returns on industrial in*estment and the lac'
o *alorisation o in*ested capital( Publicly they
pretend that the e-planation lies outside the relations
o production, as i it were a uestion merely o the
mar'et or the sale o #oods or, at most, o a dysunction
in the producti*e process and thus that a read!ustment o
these actors would resol*e the problem( >*en so, when
the capitalist mana#ers attempt to deal with the worryin#
conseuences o the all in the rate o proit they are
orced to deal with the cause o the problem and not its
economic eects, thus brin#in# into play a *ast series
o countermeasures( . mar-ist analysis is a lot simpler
and more eecti*e because it is stripped o any
constraints or mystiications it is based on the dynamic
o the real acts centred round the anta#onistic and
contradictory aspects o capitalism(
In order to loo' at both the law o the decline in the
rate o proit, and the countertendencies it pro*o'es,
we6ll loo' at the e-ample o the postwar BS economy( +he
choice is orced on us because the i#ures relatin# to
proit in the BS economy are the best 'nown and best
researched( .ccordin# to the French Institute o Eational
.ccountability %IES>>& the a*era#e rate o proit o the
BS economy rom 19
8/13/2019 The Fall in the Average Rate of Profit
13/42
a all o 215 rom the pea' o 199;, a all which carried
on until 200;(
In percenta#e terms what has happened is that in theirst period we went rom an a*era#e rate o proit o
22275 to 11125( In the second it went bac' up to 145
only to all once a#ain in the third to 15( +he i#ures
tell us that, on the basis o chan#es in the or#anic
composition o capital, the rate o proit has to all in
the lon# run( In the short term howe*er, due to
e-ceptional circumstances as a result o the operation o
certain countertendencies, the rate o proit can #row or
else its decline can be clearly slowed down(
See Fi#ure 1 top o p(148 +he rate o proit in the post
war BS economy
+he apparently contradictory aspect deri*es rom the act
that in the irst period %the golden age& when the rate
went rom 225 to 125, the BS economy #rew enormously at a
rate ne*er reached a#ain in succeedin# decades(
+he a*era#e rate o annual increase in @DP was around
8/13/2019 The Fall in the Average Rate of Profit
14/42
e-planation or the all in the rate o proit is the
rise in the or#anic composition o capital, itsel dri*en
by the e-traction o relati*e surplus *alue(
In the space o thirty years the latter increased by 15,
#oin# rom 7(
8/13/2019 The Fall in the Average Rate of Profit
15/42
the BS economy a competiti*e ed#e in commodity prices and
thereore on the balance o its current account(
+he second was the hi#h interest rate policy promoted by
the BS Federal Aeser*e with the aim o recyclin# the
enormous mass o petrodollars which had shited rom the
industrialised countries towards the oil producin#
countries ater the irst, e-traordinary, increases in
the price o crude oil(
+a'en to#ether, these two actions ensured that the dollar
would continue as the main tradin# currency in all the
world mar'ets %925 o all trade was in dollars& and that
resh sources o capital would low towards the asthmatic
BS economy to be in*ested partly at home but mainly
abroad( ?ith an increasin#ly de*alued dollar in relation
to competin# currencies, yet still retainin# the dominant
international e-chan#e medium, the BS was able to reco*er
its competiti*e ad*anta#e than's to the conseuent
relati*e lowerin# o the price o BS #oods(
See Fi#ure 2 below8 Aeal )ourly ?a#es in the BS.
+he third actor, and certainly the most important, was
the reduction in labour costs( Kower ta-es on irms,
lower money costs and, abo*e all, sta#nation o real
wa#es which did not increase at all throu#hout the entire
period( Indeed wa#es declined thereby contributin# to a
reco*ery in the industrial and manuacturin# rate o
proit to 205( In the buildin# sector thin#s were e*en
better or the capitalists( "etween 19;4 and 1997 real
wa#es in this sector ha*e been reduced by 1(15 a year,
allowin# in*ested capital to obtain a rate o proit o
8/13/2019 The Fall in the Average Rate of Profit
16/42
o class stru##le which allowed capital to restore proit
mar#ins relati*ely easily( ?here wor'in# class response
to the attac's o a crisisridden capitalist system is
wea', or e*en none-istent, it becomes more practicable
or the capitalists to impose the policies o the
countertendencies with the aim o restorin# si#niicant
proit mar#ins(
+hese policies include the inamous calls or sacriices
which are still in orce today( Cri#inatin# in the BS.,
they ha*e spread to the rest o the ?estern world with
the compliance o the unions and the Ket( +he e-port o
inancial capital and the shit to #lobalised production
did the rest(
Despite the consistent reco*ery in the rate o proit in
the 1940s and 1990s the latest crisis has brou#ht the BS
economy bac' to the same precarious situation as at the
end o the period o e-pansion(
"y 1994 a series o problems, which the artiicial
re*i*al o the 1990s had concealed, came to a head( +he
#ambit which had be#un with Aea#anomics in the 1940s went
into crisis( It was based on the drainin# o world
sa*in#s to the BS. by means o hi#h interest rates and
the dominant role o the dollar, but it also in*ol*ed
abandonin# some traditional sectors o the economy and aconseuent reduction in competiti*eness( oreo*er, the
crisis encompassed orei#n in*estments, the
delocalisation o production and the hi#h tech sector on
which most o the strate#y was based( +he increasin#
indebtedness o the state, o irms, o amilies tryin#
to buy houses and the means o daily e-istence, produced
a real tra#edy whilst the rate o proit ine-orably
declined( +he more proits declined the more the recourse
8/13/2019 The Fall in the Average Rate of Profit
17/42
to parasitism, and increased inancialisation o the
crisis( .nd so the speculati*e bubble e-panded
e-ponentially, creatin# the conditions or the e-plosion
in .u#ust 200;( +he worst aspect o all this is that,
once a#ain, the international proletariat is bein# as'ed
to pay the price( ?hen the speculati*e bubble which
swelled to pro*ide cheap credit or companies and
amilies as well as the entire economic system burst,
billions o dollars were wiped out in a ew days in the
ictitious stoc' mar'et en*ironment( +his created a
crisis or the whole system o inance, a crisis which
re*ealed the limitations o the entire capitalist system,
includin# a real economy which was already massi*ely
wea'ened, and which was now thrown into the abyss( +he
housin# mar'et collapsed li'e a house o cards, then all
the most important producti*e sectors, includin# hi#h
tech, be#an to show si#ns o collapse( Pre*ious
in*estments in constant capital and sotware had already
reduced producti*ity( Cn a*era#e, beore this urther
all in producti*ity, plants were wor'in# at around /05
o capacity( In addition the 7(
8/13/2019 The Fall in the Average Rate of Profit
18/42
annum or the period 20007 beore #oin# down to minus /5
today(
+he o*erall result is a colossal reduction in net
proits( +he mass o proit o electronics irms ell
rom G
8/13/2019 The Fall in the Average Rate of Profit
19/42
solution: or the #reat powers in pursuit o their
economic and strate#ic interests(
See Fi#ure 7 abo*e8 Proit Aates or @ermany, the BS. and
Japan
+he operation o the law o the all in the rate o
proit in the BS. is paralleled, e*en i the timin# is
sli#htly dierent, in all the ma!or >uropean countries
%"ritain, France and @ermany& and this has opened up a
period characterised by si- actors(
1( .n economic attac' on the labour orce which in
terms o len#th and intensity has no eual in the
recent history o international capitalism( +he
intensiied e-ploitation o labour power throu#h
increased producti*ity brou#ht about by reducin# the
time and cost o production o commodities has not
produced #reater wealth or shorter hours or
wor'ers, rather it has done the opposite( In a
capitalism o hi#h or#anic composition and low rate
o proit an increase in labour producti*ity implies
lower wa#es, a lon#er wor'in# day, the dismantlin#
o the welare state and increased !ob insecurity,
as a result o the increased ri*alry between
capitals pushed into the *orte- o competition by
the proits crisis(2( +he e-port o inancial capital, the dispersal o
production, the tireless search or labour mar'ets
where the cost o labour power is massi*ely lower
than domestic rates, all these ha*e become a
condition or the sur*i*al o capitalism in crisis(
>ntire areas ha*e been ta'en by storm by capitals in
search o a hi#her return rom low cost labour
mar'ets( >astern >urope has become one o those
8/13/2019 The Fall in the Average Rate of Profit
20/42
areas to which France, @ermany and Italy ha*e
e-ported a #ood part o their manuacturin#
industry( South >ast .sia has pro*ided the same
unction or Japan and lately also or $hina( +he BS
colossus, thou#h with eet o clay these days, has
shited to .sia and .rica in order to compete with
$hina as well as to those areas o South .merica
which still remain submissi*e to the imperialist
role o ?ashin#ton(
7( Aecourse to inancialisation throu#h super or e-tra
proits, a systematic recourse to speculation and
parasitic acti*ities, the creation o ictitious
capital, #i*e a sense not only o the diiculty o
*alorisin# capital but e*en o the decadence o the
entire international capitalist system(
( +he present crisis has urthermore made it clear
that we are not !ust dealin# with a crisis o neo
liberalism but o the entire economic system which
has reached the inal phase o the third cycle o
accumulation( +he same bour#eois economists who were
only yesterday e-pressin# ears about the role o
the State in the economy as the worst o all e*ils
in*o'e it today as the only road to sal*ation( +hey
ha*e or#otten that it is not the orm o the
mana#ement o producti*e relations which can wipe
out the system6s contradictions but, on the
contrary, it is the crisis o the system which rom
time to time re*eals the limits o whate*er type o
mana#ement is in operation, whether it be liberal,
neoliberal, statist or a mi-ture o them, dependin#
on the pre*ious historical course pursued by
capitalism(
5. +he need to do e*erythin# possible to see' out
mar'ets in primary products, abo*e all in oil and
8/13/2019 The Fall in the Average Rate of Profit
21/42
natural #as( .ter the BSSA collapsed we witnessed a
process o imperialist recomposition which is still
#oin# on where entire continents, strate#ic areas
and re#ions with ener#y sources ha*e become the
lashpoints or conrontations between the #reat
international predators( From $entral .sia to Katin
.merica, rom the iddle >ast to .#hanistan, rom
the Ei#er Delta to Ira ener#y problems with no hope
o solution are de*elopin# in this imperialist re
ali#nment( .t the same time, o course, there is
also a *i#orous stru##le or he#emony o*er
international currencies( .t irst, in the irst
decade o this century, the dollar rei#ned supreme(
Cil was uoted and sold in dollars( +oday Aussia
sells mainly in roubles, Iran and Vene=uela also
ta'e euros and many @ul countries are tryin# to put
to#ether a bas'et o currencies which would
#enerally replace the dollar as the #lobal oil
currency( For se*eral years there has been a #rowin#
opposition rom other currencies to the dollars
droit de seigneur: on the world oil mar'et( Bntil
1999 925 o international trade too' place in
dollars( +oday it is only 05 with 05 in euros and
the remainin# 205 in the yen and renminbi(
/( +he war actor, e*er present in imperialism, is
ta'in# on a particularly acute character( Eo mar'et,
whether in inancial, commercial, orei#n e-chan#e
or primary products, is ree o worryin# tensions i
not the actual sound o war( Death, destruction, and
barbarism are the social and economic constants o
the capitalist crisis( +he sot power: o
newlyelected president Cbama comes as no surprise(
Cbama will close @uantanamo but how many other
prisons o this type will remain in the BS. and
8/13/2019 The Fall in the Average Rate of Profit
22/42
around the world under the control o the $I. and
the BS military )e oers his hand to Iran but
proposes a renewed sanctions policy i the +ehran
re#ime doesn6t abandon its nuclear policy and
prepare to accept oil a#reements with BS. plc( +he
BS will only lea*e Ira i the "a#hdad #o*ernment
becomes capable o controllin# the military
situation and can produce and e-port oil in the same
way as beore the war, #uaranteein# to the BS a
pri*ile#ed partnership in terms o both supply and
price( Ctherwise .merican troops will remain in
place and at the best estimate this will be a
permanent #arrison o 0,000 men(
For the .#hanPa'istan a-is thin#s are clearer( +he new
administration not only has no intention o sotenin# its
stance, it has set aside tens o billions o dollars or
the socalled war on terror in perect continuity with
the "ush administration( +he aim is not to miss the last
train to #et the ener#y resources o $entral .sia as the
BS openly competes with Aussia and $hina( .t the moment
this is only a war o pipelines but it could, i only
re#ionally, chan#e into a real war as in @eor#ia, Eorth
Cssetia and $hechenya, etc( .dd to this the renewed
eort, as usual ollowin# the "ush line in .rica %$had,
Sudan and Ei#eria&, to combat the deep $hinese
penetration, particularly o*er oil resources( ?hate*er is
happenin# in these countries in terms o #o*ernmental
crises, ci*il wars, clashes between armed #roups %each
supported by an imperialist interest& is a reproo to the
BS @o*ernment which, despite its chan#ed appearance, is
orced to pursue the same old imperialist policy, perhaps
less ob*iously, undoubtedly with a less brutal
8/13/2019 The Fall in the Average Rate of Profit
23/42
appearance, but always operatin# in e-actly the same
conte-t(
The Temporary Effect of the Counter-tendencies to the
Falling Rate of Profit
.n analysis o the .merican economy rom the 2nd ?orld
?ar until today re*eals two aspects8 the irst bein# that
o*er the lon# term the law o the tendential all in the
rate o proit is continuous( +he second is that the
e-tent o the tendency depends on a series o counter
tendencies which, at best, are only eecti*e in the
short or medium term( +hey can momentarily interrupt the
all in the rate or slowdown the *elocity o the all,
but since this is an inte#ral part o the process o
*alorisation o capital itsel, they can ne*er re*erse
the line o march o the law itsel(
?hile capital on the one hand brin#s into bein# the
conditions or the all in the a*era#e rate o proit, on
the other it see's to contain the conseuences by a
series o initiati*es ta'en to de*alue constant and
*ariable capital(
+hus producti*ity is increased without aectin#, or
hardly aectin#, the hi#h or#anic composition o capital
which is the basis o the all in the rate o proit( In
normal conditions producti*ity rises in line with the
relati*e increase in constant capital compared to
*ariable( "ut more technolo#y si#niies more in*estment
in constant capital which replaces a more or less
consistent share o the labour orce( In other words, the
*ariable capital diminishes more uic'ly than the rate o
increase in constant capital( In this conte-t
producti*ity increases i the cost o the commodities
8/13/2019 The Fall in the Average Rate of Profit
24/42
8/13/2019 The Fall in the Average Rate of Profit
25/42
For twenty years the international proletariat has
e-perienced a constant onslau#ht *ia the dismantlin# o
the social state in other words the lowerin# o
indirect and deerred wa#es, albeit in a *ariety o ways
and at dierent times(
First in line are 'ey components such as health, pensions
and public inance or schools and uni*ersities( Aeducin#
unemployment and welare insurance costs, mainly the
state6s contribution but also that o employers
deerrin# the retirement a#e, all these ha*e been
beneicial or capital( .s or businesses, the #radual
reduction o sic' lea*e and the elimination o certain
conditions rom the rubric o oicial illnesses, count
as a sa*in# on indirect wa#es, a#ain to the ad*anta#e o
capital( In Italy the employers are tryin# to #et the
irst three days o illness e-cluded rom wor'ers6
entitlement to sic' pay(
Cne o the most odious practices is the blac'mail o
immi#rant wor'ers and anyone on short term contracts(
+here is a #rowin#, notso*eiled practice, o
threatenin# anyone who complains about the loutin# o
health and saety re#ulations with the nonrenewal o
their contract(
.s or pensions, the attempt to deer the retirement a#ehas lar#ely succeeded, thus reducin# turno*er o the
wor'orce and reein# businesses rom the need to draw up
lon# term contracts, which would cost too much, and
instead to draw up new, short term contracts based on
lower wa#e rates and more le-ible wor'in#( +his is not
to mention reduction in brea's and rest periods so that
there is no disruption to the rhythm o e-ploitation( In
some cases lunch brea's ha*e been literally hal*ed and
8/13/2019 The Fall in the Average Rate of Profit
26/42
time allowed or physiolo#ical needs drastically reduced(
In metal en#ineerin# %*ehicles& a a*ourite practice is
the speedup %more pieces, more halinished ones, more
commodities produced in the same unit o time& without,
ob*iously, a correspondin# wa#e increase( +his is an
e-ample o the use o relati*e surplus *alue which does
not alter the or#anic composition o capital and which,
thereore, unctions as an eecti*e countertendency(
+he main way o de*aluin# *ariable capital, howe*er, is
by a direct attac' on wa#es, on the mass o wa#es as a
whole in relation to the number o wor'ers( >ither the
o*erall amount o real wa#es #oes down while the number
o wor'ers remains the same, or else the increase in the
wa#e bill is relati*ely lower than the increase in the
number o employees i e*er this actually happens,
because usually the opposite occurs rather, that is,
the number o wor'ers diminishes absolutely as a result
o the necessity to restructure which, in periods o
crisis such as this one, imply redundancies and
unemployment(
+he precise measures capital adopts to obtain this result
are *ery simple( +hey all in*ol*e drastic cuts in real
wa#es, usually with the help o the unions, in line with
the ti#ht mar#ins o the system and the pressure o
international competition( +he hu#e plethora o shortterm
contracts, o temporary wor', o newly drawnup
contracts, all ha*e the common denominator o hei#htenin#
insecurity or those who do the wor'( . labour orce that
is only a*ailable durin# the economic #ood times when it
can be proitably e-ploited and con*ersely, which can be
#ot rid o in economic downturns, is an optimum method o
containin# wa#e increases and lowerin# the costs oproduction( "y law e*ery new contract, whate*er the
8/13/2019 The Fall in the Average Rate of Profit
27/42
speciic details, is based on a wa#e reduction o up to
05 or the same amount o wor' in the same enterprise(
+he stubborn *icious circle into which the proletariat
has allen ollows scientiically calculated rhythms(
Cnce the old wor'ers who had !ob security ha*e reached
retirement a#e and the old contracts ha*e come to an end,
almost e*ery youn# wor'er enters the production process
or a determinate %precarious& amount o time and at a
lower, much lower, wa#e than pre*iously( +he new way o
mana#in# the relation between capital and labour, imposed
by the e*ernarrowin# mar#ins o proit realised by
enterprises, has the immediate eect o de*aluin#
*ariable capital without impactin# on the increased
or#anic composition o capital( Practices such as this
ha*e been in orce or two decades, be#innin# with Japan,
the BS. and "ritain in the 1940s, then, at the be#innin#
o the Eineties, in >urope as well, co*erin# e*ery sector
o real production and the main branches o the ser*ice
sector(
Cne o the innumerable e-amples, rom the automobile
sector, is that o @eneral otors( C*er orty years the
bi##est car producer in the world went rom a rate o
proit o 205 to
8/13/2019 The Fall in the Average Rate of Profit
28/42
+hrou#hout the Si-ties and Se*enties the Detroit company
built its producti*e capacity on a *ery hi#h or#anic
composition o capital %more in*estment in constant
capital than in *ariable, more machinery than labour
power&, thus depressin# the proitability o its capital(
Its rate o proit is as can be seen(
+his is what persuaded the company directors to withdraw
a certain portion o capital rom production and switch
to speculation with the result, in the short term, o
recuperatin# in the inancial sphere what they had lost
rom real production( So lon# as the #ame o creatin#
ictitious capital continued thin#s went well, but as
soon as the speculati*e bubble burst e*erythin#
collapsed( +he stoc' mar'et losses were added to the
losses rom production, puttin# the colossus o .merican
industry on the brin' o ruin and possibly urther(
Sales ha*e allen by
8/13/2019 The Fall in the Average Rate of Profit
29/42
rather to puttin# the e-ploitation o labour power %which
the crisis has called into uestion& bac' on its eet(
"ut the crisis is not only about statistics(
"ehind the i#ures lie the destinies o millions o
wor'ers and their amilies and the dreadul prospect o
bein# out o wor', without unemployment beneit, without
a house and acin# a uture o lon# term po*erty( +he
irst step ta'en by @ was to immediately shut down i*e
plants in the BS. and our in >urope( +he same .merican
analysts ear that i @ ails completely, drawin# the
enormous networ' o irms dependent on @ into the drama,
then a million !obs would be lost( .nd i the other two
ma!ors in the automobile sector, $hrysler and Ford, were
to #o the same way then almost three million would be
unemployed( C*er the past year unemployment has risen by
se*en million, two million o them in the early months o
2009( C*erall it6s estimated that unemployment, includin#
the socalled hidden unemployed, has already reached 1/
million( +he number o wor'ers %in part e-& without
medical insurance has #one rom 0 to ; million( +his is
a social catastrophe which is due to #et worse by the end
o the year( +here hasn6t been a cyclone or any other
natural disaster to cause such disturbance, but only
capitalism pushed to the ed#e o ruin by its insoluble
contradictions(
It is the same scenario in the rest o the .merican and
international economy, rom $hina to Aussia, rom Japan
to >urope( In Italy the i#ures are lower only because
the epicentre o the crisis is beyond the ocean and
because the proportions are dierent, but e*en here the
causes and mechanisms o the depression are the same(
Fiat6s sales ha*e collapsed by 05, its inancial arm has
8/13/2019 The Fall in the Average Rate of Profit
30/42
lost all it could lose on the stoc' mar'et and the *alue
o its shares has allen to an historic low( ?ithout
State inter*ention %at least urope( In Italy the
i#ures are lower only because the epicentre o the
crisis is beyond the ocean and because the proportions
are dierent, but e*en here the causes and mechanisms o
the depression are the same( Fiat6s sales ha*e collapsed
by 05, its inancial arm has lost all it could lose on
the stoc' mar'et and the *alue o its shares has allen
to an historic low(
?ithout state inter*ention %at least
8/13/2019 The Fall in the Average Rate of Profit
31/42
$apital, with the responsible: collaboration o the
unions, see's irst o all to delay new wa#e a#reements
or as lon# as possible( .t times it is not only a
uestion o months, but o years, beore the parties
mana#e to reach an a#reement( ?hen they do, capital tries
to impose yet more sacriices centred round deerrin#
wa#e rises or else a wa#e rise is conceded but on the
assumption that any increase will be within, or rather
well reduced, by inlation and ar below any increase in
producti*ity(
+he other route capital ta'es to reco*er proit mar#ins
is that o len#thenin# the wor'in# day( >*en thou#h it
carries on increasin# relati*e surplus *alue, by
increasin# the producti*ity o labour throu#h
technolo#ical inno*ation, this only increases the mass o
proit whilst, howe*er, lowerin# the rate( $apital is
thus also obli#ed to return to the pursuit o absolute
surplus *alue, obtained by prolon#in# the wor'in# day( It
is li'e an historical parado-, as i capitalism had #one
bac' two centuries, e-cept that it is the reality o
modern capitalism which is imposin# this situation(
.t the present sta#e it is no lon#er enou#h to respond to
the allin# rate o proit by increasin# the mass o
capital( $apital also must attempt to add absolute
surplus *alue to the relati*e surplus *alue, in a sort o
ceaseless eort which ne*er succeeds in o*ercomin# the
insoluble contradictions that the process o *alorisation
continually poses to its bein#( Eow that it has at its
disposal an increasin#ly eeble proletariat, di*ided
politically as much as it is economically, with no !ob
security and easily blac'mailed, almost e*erywhere
capital is be#innin# to impose a lon#er wor'in# daywithout any increase in wa#es( ?e are !ust at the
8/13/2019 The Fall in the Average Rate of Profit
32/42
be#innin#, but these 'ind o practices, e*en i they are
unoicial or presented as ma'eshit responses to
speciic crisis situations, ha*e already come into
operation( +he French e-periment with the 7< hour wee',
which in any case is only nominal since it is hardly e*er
put into practice, was obtained at the e-pense o !ob
security and the relinuishin# o all opposition to its
implementation( In the same *ein, the @erman
metalwor'ers6 union %I@etall& has a#reed that in certain
instances the wor'in# day can be prolon#ed or 10 12
hours in e-chan#e or curtailment o layos( In Japan
this has been the practice or about three decades e*en
thou#h it has ne*er been made oicial either by the
unions or the bosses( . wor'er in a Japanese actory,
abo*e all in those acin# international competition, can
wor' up to 10 or 12 hours a day, with only two Sundays
o per month, or no e-tra pay or else or a derisory,
almost =ero amount( .mon#st inormation technolo#y
wor'ers in the BS. today 715 wor' or more than
8/13/2019 The Fall in the Average Rate of Profit
33/42
o neutralisin# stri'es, in practice o bannin# them, in
order to sae#uard the interests o society as a whole,
and ends up ormulatin# the *irtual stri'e one where
the wor'ers can announce they are on stri'e without,
howe*er, abstainin# rom wor' althou#h they would
relinuish their payment or the day as i they really
had not been at wor'( Parado-ical $ertainly( "ut there
is no limit to the antasies o capital in crisis(
+he allin# rate o proit e*en imposes the need to
contain the depreciation o constant capital( )ere the
most si#niicant aspect concerns the relation between
constant capital and its material *olume, e*en thou#h the
rate o e-ploitation remains the same( In normal
conditions the increase in constant capital is aster
than the increase in *ariable, determinin# the all in
the rate o proit( )owe*er i, than's to a hi#her
producti*ity o labour, the *alue o constant capital,
e*en thou#h it e-pands, #rows proportionally less than
o*erall mass o means o production put into operation by
the same uantity o labour power, the all in the rate
can be slowed down and, in some cases and or a limited
period, annulled( +his is what has happened in the
e-traordinary case o the microprocessor re*olution:,
where a hi#her rate o increase in producti*ity has been
achie*ed because the increase in constant capital was
proportionally lower than the mass o means o production
operatin# in the producti*e system( oreo*er, the
opportunity created by this technolo#ical re*olution to
di*ersiy production at the same time as usin# the same
constant capital, ma'es or its depreciation which in
turn aects the rate o proit( .n e-ample arose in the
automobile ield a ew years a#o with the collaboration
8/13/2019 The Fall in the Average Rate of Profit
34/42
between Fiat and Ford( +he two #roups a#reed to produce
the Ma and the Panda in Poland(
. sin#le buildin#, wa#es well below the domestic le*el
and, than's to di*ersiied production, the same machinery
was able to produce the chassis o both cars, sa*in# at
least 05 on the assembly costs(
Still on the sub!ect o depreciation o constant capital,
there is the attempt to reor#anise stoc's o raw
materials and partly wor'ed up #oods( .ter orcin# the
withdrawal o !ob security on *ariable capital, on the
basis o use the labour then throw it away:, or rather
by utilisin# labour power only at the 'ey moments o
production, a similar system has been brou#ht in to
reduce the costs o a part o constant capital( +he
introduction o just in time, that is the orderin# o
parts and raw materials only !ust at the moment they will
be used in production, has transormed stora#e and
maintenance costs as well as reducin# the ris' o stoc'
deterioratin#( Such inno*ations are certainly rational
and wor' to reduce the costs o production, but they are
the osprin# o a compellin# necessity8 the need to
contain the dama#e done by allin# proits, in this case
by a depreciatin# uota o constant capital the
circulatin# part( +his 'ind o reor#anisation o one o
the actors o production is on a par with the mo*es to
increase labour le-ibility with its resultin# !ob
insecurity( For capital, raw materials and labour power
are simply commodities that ha*e to be employed in the
production process at the minimum possible cost and in
order to remain competiti*e and 'eep up proitability
only at the times when they are instrumental in
*alorisation(
8/13/2019 The Fall in the Average Rate of Profit
35/42
Aeducin# the cost o raw materials can also help to lower
the *alue o constant capital( In the present epoch,
where the domination o inance capital has reached its
ape-, the power relationship between the imperialist
centres and the socalled periphery allows the irst to
impose absolutely uneual conditions on the second when
it comes to the supply and payment or raw materials(
.n e-ample o this is the politics o debt( Far rom
wa*in# the la# o neoliberalism, o ree competition in
a ree mar'et, the stron#er and more a##ressi*e the
imperialists are the more they succeed in achie*in# their
ob!ecti*e o inlictin# commercial blac'mail on the
debtor countries( Primarily the blac'mail consists o
rene#otiatin# the terms o trade with these countries
which are rich in raw materials but up to their nec's in
debt( +hey can either obtain new terms or the debt or
prolon# the repayment period, so lon# as they submit to a
new series o conditions(
First amon#st them is the demand to clean up the public
inances, an ine*itable precursor to the pri*atisation o
national assets( Pri*atisation allows the bi#
international companies to ta'e o*er or #et a sta'e in
'ey industries so that they ha*e absolute control o*er
the e-traction and distribution o strate#ic raw
materials without any #o*ernment intererence(
In the second place, the terms o the credit a#reements
usually #i*e the creditors priority o*er supply with a
correspondin# reduction in purchase price( In other
cases, when imperialism #ains a monopoly o*er demand the
eect is the same( ?hen the pressure o blac'mail is not
enou#h it is outri#ht orce which determines access to
the mar'et and the price le*els o raw materials( It is
8/13/2019 The Fall in the Average Rate of Profit
36/42
no accident that .merican imperialism, with its *oracious
networ' o national and international companies, with or
without the support o the IF and the BE, has brou#ht
the raw materials mar'ets o $entral and South .merica
down to their lowest le*el( +he BS has unleashed a
continuous series o wars or oil and there is nothin# to
su##est that this will not continue, in direct proportion
to the sharpenin# o the national and international
crisis, e*en i the Cbama administration presents itsel
as dierent rom the pre*ious one, without, howe*er,
re!ectin# its imperial: ob!ecti*es(
?e can sum this all up easily by concludin# that
imperialist a##ression towards international mar'ets is
directly proportional to the dama#e caused by the allin#
rate o proit( +he lower the proits, the #reater the
necessity to resort, by means o blac'mail or orce, to a
series o countermeasures which allow capitalism a
hi#her or#anic composition and enable it to continue
sur*i*in# its own contradictions( +hus the price is paid
by the periphery and capitalism6s wea'est competitors
and, abo*e all, by the respecti*e national and
international proletariat(
+here are countless e-amples or anyone, e*en the most
unobser*ant, to note( +here isn6t a strate#ically
important area without an armed BS presence, whether it
be the @ul, the iddle >ast, central .sia( oreo*er,
e*en i at the moment it is at a lower le*el, >urope,
Aussia and $hina also play a bellicose role( ?ars o*er
oil and or the control o raw materials ha*e been #oin#
on or years without any solution(
+he present crisis cannot do anythin# else but e-acerbate
the contradictions at the heart o the capitalist social
8/13/2019 The Fall in the Average Rate of Profit
37/42
and producti*e system( .s it is, social production is
allin#( @DP i#ures or the BS., >urope and Japan are
well below =ero( >ntire sectors o production are on the
brin' o collapse( +he credit system is writhin#( +he
underclass is pre*ented rom consumin#( +he international
proletariat is sub!ected to attac's by capital on e*ery
possible ront wor', hi#her e-ploitation, #rowin#
pauperisation while speculation and parasitism continue
to #row in parallel, despite all the appeals to inancial
morality, as i this de*astatin# crisis o capitalism was
reducible to the absence o re#ulations and the need or
ethical: beha*iour( +his crisis demonstrates how ar
capitalism is decadent and how its #i#antic
contradictions are #enerated rom within the system o
production itsel and its internal mechanisms or the
*alorisation o capital, and which, as a result o the
allin# rate o proit, are ma'in# the social and
political system it has #enerated e*en more a##ressi*e,
not to say, erocious(
Delocalisation of Production and Export of Financial
Capital
.s always, low proit rates ha*e imposed a relati*e
o*erproduction o capital on the system o production( In
turn, the o*erproduction o capital presupposes an e-cess
o commodities( +his absolutely does not mean that too
many #oods ha*e been produced and that there is an e-cess
o producti*e capacity in relation to social needs, or
e*en that too much wealth has been produced in the orm
o capital( .ll it means is that, within the narrow and
contradictory relations o capitalist production, low
proit rates lead to a #rowin# mass o capital which
cannot be in*ested producti*ely( +his increases the stoc'o unsold commodities as a result o the low le*el o
8/13/2019 The Fall in the Average Rate of Profit
38/42
demand which cannot absorb them at the e-istin# price and
the suppliers o raw materials, the actories, reduce
production or else are orced to close down alto#ether(
It ollows that one way out o the crisis #enerated by
the allin# rate o proit, besides speculation, is to
mo*e production abroad where the cost o raw materials,
o inrastructure and, abo*e all, labour power, are
distinctly less( In the present epoch the e-port o
capital with its accompanyin# delocalisation o
production has de*eloped in #eometric seuence( From the
serious crisis o the Se*enties until today all the
hi#hly industrialised countries ha*e been throwin#
e*erythin# at indin# economic =ones where the cost o
labour power is as low as possible, where trade union
protection is minimal or none-istent(
+he more delocalisation succeeds in indin# these
conditions, the more eicacious is the antidote to the
allin# rate o proit(
>*ery ad*anced capitalist state, dependin# on its
imperialist wei#ht, see's out its own =one, its own
sphere o inluence, in the search or an impo*erished
proletariat that is obli#ed to accept whate*er wa#e is
oered by the orei#n companies( +his is one aspect o
#lobalisation( For a capital which is suocatin# romlac' o proits, the tearin# down o customs barriers,
the ree circulation o capital and commodities, the
possibility o decentralisin# production to where*er it
li'es and to ha*e at its disposal, without any union
constraints, an international proletariat whose cost is
at least 10 1< times lower than at home, this is manna
which noone can turn down(
8/13/2019 The Fall in the Average Rate of Profit
39/42
.part rom imperialist #iants, li'e the BS. which has
colonised the south o the .merican continent and parts
o .sia, includin# $hina, or Japan which has ta'en the
rest o .sia and $hina %05 o $hinese e-ports are
labelled made in the BS.: or made in Japan:&, old
>urope is no less in*ol*ed( France continues to e-ploit
its e-colonies o the a#hreb and centralwest .rica(
@ermany has positioned itsel in the e-so*iet republics
and little old Italy has mana#ed to decentralise
production beyond the .driatic, to Aomania, "ul#aria and
Poland but also to "ra=il and .r#entina(
.s usual, this is not new( For more than a century
decentralisation o production has ta'en place in the
our corners o the world( )owe*er, rom the 2nd ?orld
?ar until today, and with particular intensity o*er the
last twenty years, the necessity to reestablish
tolerable proit mar#ins has made the race or low cost
labour mar'ets a uestion o lie and death or economies
with a hi#h or#anic composition o capital(
+hose who deny that the tendency or the rate o proit
to all is a problem or modern capitalism, who ar#ue
that all these maniestations o countertendencies are
absolutely nothin# new and that, on the contrary, we are
witnessin# a new phase o economic e-pansion as
e-empliied by $hina, should remember that the Asian
economic miracleis partly the result o this capitalist
contradiction( $hina6s e-traordinary economic
de*elopment, which has allowed "ei!in# to tal' o an
a*era#e rate o #rowth o 105 o*er the last iteen
years, is based on three actors( +he relentless
decentralisin# o production, accompanied by new
technolo#y, on the part o countries in crisis as aresult o the low rate o proit, such as the BS., Japan,
8/13/2019 The Fall in the Average Rate of Profit
40/42
South Morea and, in part, western >urope( +he arri*al o
enormous amounts o inance capital rom the same
countries, or the simple reason that in $hina they had,
and still ha*e, at their disposal a proletariat with
e-tremely low wa#es, up to 40905 lower a wor'in# day
which can #o up to 1 hours lon# and no union co*er,
either or health and saety or or !ob security(
It is sele*ident that in the lon# term de*elopment at
this rate in $hina will come to a halt, as it did
pre*iously or the EI$ %newly industrialised countries&
in the Si-ties and Se*enties, not because capitalist
pro#ress has reached its ape-, but because $hinese
capitalism will be orced to suer the same conseuences
as the hi#hly industrialised countries are today
e-periencin#( @rowth in these countries cannot be euated
with capitalism in its phase o e-pansion when there were
new areas o de*elopment and economic #rowth to open up(
Cn the contrary, these countertendency: e-periences all
entirely within the decadent phase which alicts
international capital as a result o the tendency or the
rate o proit to all(
)ow to #et out o this Cnly by the re*i*al o the class
stru##le under the #uidance o the re*olutionary party,
which does not limit itsel to economic demands, whetherdeensi*e or otherwise, e*en i these are the point o
departure( Aather, the party will also be#in to challen#e
the mechanisms that capital uses to sae#uard its
economic and political interests( +o mo*e a#ainst capital
means irst o all challen#in# the conditions o
e-istence or capitalist relations o production8
producti*e relations which are responsible or
increasin#ly intense e-ploitation, or millions o
8/13/2019 The Fall in the Average Rate of Profit
41/42
wor'ers suerin# mortiyin# unemployment, or the
de*astatin# economic crisis which accompanies its mode o
creatin# wealth, which leads to warare as a means o
continuin# the process o accumulation and e-tortion o
surplus *alue which is at the basis o its e-istence(
Ctherwise the wor'in# class will *acillate as it tries to
reconcile itsel with the irreconcilable, with capital,
which is opposed to the present and uture interests o
the proletariat(
Fabio Damen
%1&Ser#io archionne, $hie >-ecuti*e o Fiat(
%2& auri=io Sacconi, inister o Kabour, )ealth and
Social Policy( +he drat bill presented to parliament on
29(2(09, amon#st other thin#s, aims to pre*ent stri'es in
essential ser*ices: and includes the reuirement or
public transport wor'ers to abandon the ri#ht to stri'e
in a*our o the *irtual stri'e:(
.cademic economists and le#al e-perts in Italy ha*e been
toyin# with the concept o the *irtual stri'e: or a
decade or so( In the academic discussion the employers
are supposed to sacriice the income they would ha*e lost
i a real withdrawal o labour had #one ahead %by ma'in#
a donation to charity, or e-ample&( Eeedless to say, the
reallie, Sacconi *ersion o the *irtual, does not
in*ol*e any loss or the employers(
Printerriendly *ersion
Share+his
2009112N
8/13/2019 The Fall in the Average Rate of Profit
42/42
>-ploitation and accumulation
Revolutionary Perspectives "#$
Quarterly Journal of the Communist Worers! "rganisation
Why not subscribe to get the articles #hilst they are
still current and help the struggle for a society free
from exploitation, #ar and misery$ %ee side panel for
details& ' ())*')+')
http://www.leftcom.org/en/basics/exploitation-and-accumulationhttp://www.leftcom.org/en/basics/exploitation-and-accumulationhttp://www.leftcom.org/en/basics/exploitation-and-accumulation