Andrew Kliman (Marxist-Humanist) slams underconsumption theorists at Monthly Review
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Andrew Kliman (Marxist-Humanist Initiative) criticising underconsumption theories of capitalist crisis
Quote:The cover-story article in the March 2013 issue of Monthly Review is Fred Magdoff and John Bellamy Foster’s (2013) “Class War and Labor’s Declining Share.” They claim that that there has been “a long-term decline in the relative power of the working class, with capital increasingly gaining the upper hand,” and that this shift in power relations has produced a long-term “decline in the share of the economy going to labor.” The same claims were made in a 2008 article of theirs (Foster and Magdoff 2008). Although the new article does not mention the earlier one or my criticisms of its misuse of statistics (Kliman 2012, pp. 152–
, it seems to be an effort to defend Foster and Magdoff’s claims against these criticisms and perhaps against others that have been lodged.More importantly, the new article seems to be an effort to defend their underconsumptionist theory of capitalist economic crisis. According to the “Monthly Review school,” crisis tendencies stemming from underconsumption are an ever-present feature of capitalism.
Wikipedia has more info on underconsumption
http://en.wikipedia.org/wiki/Underconsumption
From Socialist Standard April 1959
and from Socialist Standard September 2010
Over at RevLeft it is being suggested Monthly Review have a thing for this sort of thing with Ernest Mandel criticising Baran and Sweezy (founder of Monthly Review).
The Socialist Standard has for a long time argued against underconsumptionist theories of crisis.Andrew Kliman's book on the great recession The Failure of Capitalist Production is well worth a read, as is his earlier Reclaiming Marx's Capital
This economic debate is also taking place within SPEW as reported by Weekly Workerhttp://www.cpgb.org.uk/home/weekly-worker/969/socialist-partycwi-rudeness-and-revolution The Scottish protagonist of the underconsumptionist theory prevalent within SPEW being argued in various posts here http://69.195.124.91/~brucieba/
I'm not sure that SPEW can be accused of "underconsumptionism"(that crises are caused by a relative decline in working-class consumption) just because they reject a crude version of the falling-rate-of-profit theory of capitalist economic crises. SPEW leader, Peter Taaffe, states their position in this reply to a letter:http://www.socialismtoday.org/157/profits.htmlThere is an argument going on about whether or not profit's share of new production has gone up (and therefore that labour's share has gone down). Kliman's argument is that labour's share has not gone down, so a reduced working class consumption cannot be an explanation for the crisis. As far as I can see Taaffe doesn't enter into this argument. His point is that the mass of profits has gone up (which could of course happen without labour's share going down). He also makes a similar point to us when he says that they are counter-tendencies to the fall in the rate of profit so that this would only manifest itself over a long period.SPEW's view of how to get out of a crisis is based on this view that the money is there but that the capitalists just won't spend it productively. So, it must be taken from them by the government and invested (the same as Keynes said):
Quote:Exact a 50% levy on the hoarded billions of the super-rich to invest in public services such as health, care and education and in manufacturing of socially useful products and services.I can't believe that the SPEW leaders really believe this would work, but it's an attractive bait with which to catch the trade union leaders and activists they are targetting (and who are tempted by underconsumption theories of crisis). After all, they are Leninists who believe that the mass of workers can only understand populist slogans (only the vanguard can understand and discuss economic theory).
ALB wrote:Kliman's argument is that labour's share has not gone down, so a reduced working class consumption cannot be an explanation for the crisis.If I remember right Kliman's research does show a decline in wages, but only after the crisis. Just to be clear…
As I remember it Kliman's data showed stagnant or only slightly rising real wages but an increase in 'social wages' in spending of health, benefits, education, etc. So an indirect share for labour but one that would not for the most part increase working class consumption. Kliman seems to be agitated by the political implications of underconsumption, particularly that of its modern incarnation in the Monthly Review tradition on the grounds that if crises are caused by a fall in consumption then politically a revived Keynesianism can be justified. But underconsumptionists in that tradition such as Paul Sweezy, at least in their earlier work, used underconsumptionism to justify a revolutionary (state capitalist) position. In fact underconsumptionist arguments were widespread in the era of classical Marxism, including the SPGB up to c.1930s. Proponents of the fall of the rate of profit like to point out its apparently more revolutionary logic – because of the tendency of the rate of profit to fall there is no alternative to economic stagnation short of massive and disruptive destruction of capital and/or anti-capitalist revolution.The data from those arguing for the pre-eminence of the fall of the rate of profit are valuable and interesting but not conclusive, centred as they are on the US rather than the global economy. But its modern incarnation avoids the collapsist fatalism of its earlier advocates like Henryk Grossman. Kliman in particular has drawn some positive conlcusions about the need for widespread consciounsess and understanding of a non-capitalist alternative.An interesting set of data on the fall of the rate of profit is that of Michael Roberts http://thenextrecession.wordpress.com/ whose data suggest a cycle of rising and declining organic composition of capital that (at least in the US) correlates with declining and rising profitability rather than an inexorable and constant rise. He is rather of obsessed with economic cycles though and his graphs can be a bit like reading economic astrology.Underconsumptionism is flawed (after all the 150 years prior to the 1970s saw consistently rising real wages in the US but still with regular crises, including the Great Depression) but there is a problematic outcome of neoliberalism for the advanced economies as sustained attacks on the share of labour and financial deregulation created debt fuelled consumption and attendant bubbles in those economies upon which a large part of global production depends. Whilst the recent crisis wasn't caused by relative underconsumption a decline in real wages and financial de-regulation/innovation were important parts of the background to its emergence in overproduction in the US housing market.The SPGB critique of underconsumptionism post WWII was as much an exercise in self-criticism as an attack on arguments outside of it. The SPGB emphasised the need for working class consciousness as a prerequiste for socialism which prevented its early underconsumptionism from adopting fatalistic ideas of inevitable collapse. Expectations of the imminent end of capitalism in the first half of the 20thC gave way, for a time, to a rising share for labour in real wages, health, education and housing but crises continued unabated and labour's rising share was not sustained. There was no evidence of for the validity of underconsumptionism or of a definite decline in the rate of profit prevailing against its counteracting tendencies. The most that could be said with certainty was that crises were inherent to capitalism and that they were related to the anarchy of production and the tendency for production to overshoot demand which may or may not lead to a general crisis of profitability.
Kliman et al. have made there paper critising Heinrich here:http://www.marxisthumanistinitiative.org/economic-crisis/the-unmaking-of-marxs-capital-heinrichs-attempt-to-eliminate-marxs-crisis-theory.html
Just ordered a review copy of his latest book Can Income Redistribution Rescue Capitalism? Obviously not. but that's not going to stop trade unions and assorted leftists from propagating the myth that it can and futilely campaigning for this. More details here:http://www.marxisthumanistinitiative.org/philosophy-organization/sept-16-discusion-new-mhi-pamphlet-on-monthly-review-school.html
An invitation to give a talk at HO should indeed be issued ASAP.Nothing too elaborate, a Q and A session perhapsContact details for the relevant committee. Can you provide his UK dates, DJP?e-mail: akliman@pace.edu snail-mail: Andrew KlimanDepartment of EconomicsPace UniversityPleasantville, NY 10570 USA phone: (914) 773-3968to call USA, the following dial code is required.00 1 from UK
DJP wrote:He's coming to the UK soon to debate with SPEW; we should try and nab him too.Do we know when and where yet? This could be an interesting debate as, if they believe their own election promises (which of course in private they may not), SPEW should logically be defending the proposition that it is possible to redistribute income within capitalism so as to benefit the wage and salary working class,
ALB wrote:Do we know when and where yet? This could be an interesting debate as, if they believe their own election promises (which of course in private they may not), SPEW should logically be defending the proposition that it is possible to redistribute income within capitalism so as to benefit the wage and salary working class,Not as far as I know, I don't think it's been decided yet. AK has a blog here: http://akliman.squarespace.com/ or I would have thought it would be publicised through MHI.Yes Kliman will be speaking against SPEW who do take the position you have suggested.
The new split of News and Letters named Marxist-Humanist Initiative is announcing a conference taking place New York on September 16 ,2013.based on this pamphlet. Probably, this will conflict with their view on Rosa Luxembourg, and Dunayeskaya view in regard to the crisis of 1930 when she said that capitalism collapsed and was replaced by state capitalism
Militant have just published a pamphlet-length reply to Kliman here:http://www.socialistparty.org.uk/articles/17458/20-09-2013/the-causes-of-capitalist-crisis-reply-to-andrew-klimanIt's hilarious in parts, just trotting out moth-eaten Trotskyist dogmas about "degenerate workers state", "transitional programme", "nationalise the monopolies", "vanguard party", etc.. At one point Kliman is accused of being like us::
Quote:Kliman scathingly dismisses the idea of a fighting transitional programme for workers, which is clearly spelt out in the last chapter of his book entitled 'What is to be Undone'.He writes: "The notion that socialism will come about by means of a party that captures state power and nationalizes the means of production is fundamentally misguided". [The Failure of Capitalist Production (TFoCP), p204] Bruce Wallace is at present a member of a party and an international organisation which defends the notion that the working class through its own party will need to fight for the idea of taking power through the nationalisation of the big monopolies – the means of production – on a national and an international scale.This is a precondition for taking economic and state power out of the hands of capitalism and putting it into the hands of the working class, laying the basis for the democratic socialist planning of society.What is Kliman's alternative to this? : "We can have a modern society that operates without the laws of capitalist production being in control". [TFoCP, p206] Just how this can be achieved, remains a mystery.Kliman merely suggests: "There needs to be a new relation of theory to practice, so that regular people are not just the muscle that brings down the old power, but become fully equipped, theoretically and intellectually, to govern society themselves."Nothing short of this can prevent power from being handed over to an elite." This is followed by the sentence: "It seems very utopian". [TFoCP, p206] You can say that again! This is not a fighting programme and perspectives in the Marxist sense but is akin to astronomy where events will develop almost automatically. 'Educate' the working class in the 'fundamentals' and, like rotten fruit, capitalism will collapse of its own accord and socialism will be born!Insofar that this means anything, it is that the working class must be 'theoretically' educated – presumably by Kliman and Bruce Wallace – to prepare them for socialism.This sounds familiar. It echoes the arguments of the Socialist Party of Great Britain (SPGB) – not our party, the Socialist Party of England and Wales, but the tiny organisation – that seeks the road to socialism, which by definition must be long and protracted, through abstractly 'educating' working people on the realities of money and demanding its immediate abolition, and the same with classes, the law of value, etc.Thanks for the compliment.Other gems are:
Quote:He unapologetically shares a 'state capitalist' analysis with the Socialist Workers Party (SWP) in Britain, although he is not a member of their 'international', the International Socialist Tendency (IST).In fact, he dedicates his book to one of the SWP's theoreticians, the late Chris Harman, who shared his approach to the rate of profit issue.Bruce Wallace may try to pretend that this has no bearing on his economic analysis. But it is the experience of ourselves and many workers in Britain with the SWP and others who adhere to a state capitalist analysis of the former Soviet Union – it was a state capitalist regime not a degenerated workers' state, they argue – that it leads them to a mistaken approach on virtually all political questions both of an historical and contemporary character.You wouldn't think that Militant was in an electoral alliance with the SWP in TUSC.They defend the old USSR as "progressive":
Quote:We have explained on many occasions that the collapse of Stalinism not only ended the rule of the monstrous bureaucracy that dominated these societies; it also led to the collapse of the planned economy, which in the past was relatively progressive compared to capitalism.(…) For Kliman, like his SWP cousins, the collapse of Stalinism did not represent an historic defeat for the working class.Kliman is criticised for arguing (we do too) that for Marx there was no "transitional society" between capitalism and communism (= socialism):
Quote:In passing, he criticises the transitional method and programme elaborated by the Bolsheviks and developed by Trotsky.In the American online journal marxisthumanistinitiative.org, he attacks various political opponents, who "ignore the fact that the Critique of the Gotha Programme [by Marx] states – twice – that the first phase of communist society emerges from capitalist society – one is transformed into the other, directly."There is nothing in between, not in Marx's statement.They answer Kliman's criticism of their current reformist programme:
Quote:We have argued in a transitional manner for an increase in government expenditure in order to boost housing, education, workers' share of income, etc. We have also demanded nationalisation of the banks and the finance sector. Yet Kliman opposes this. He writes: "Some leftist economists called for state control or nationalization of the financial system, rather than just regulation, of the financial system… But there cannot be socialism in one country. What results when you try to have socialism in one country is state-capitalism, a state-run system that is still embedded in the global capitalist economy, and which is still locked into a competitive battle with capitals elsewhere in the world. A state-run bank is still a bank." [TFoCP, pp194-5]To be fair, the only point Militant seem to score is when they say Kliman is a "one club golfer" when he argues that the falling rate of profit is the cause of all crises.
You couldn't make it up. Because Kliman credits Chris Harman SPEW conclude that he must be a bad sort: "There is a very simple aphorism in judging individuals and political groupings: 'Show me who your friends are and I'll show you who you are.' " Although Kliman himself (influenced by Harman) does something similar in reverse with regard to Monthly Review when he rejects the monopoly-financial capital theory (associated with Sweezy & Magdoff and now Bellamy Foster and others) as underconsumptionist because they tend to towards a modified Keynesianism as a way of capitalism breaking free from stagnation. “…underconsumptionist theory … holds that the ultimate reason for capitalist crises and slumps is that working people are paid too little. This implies, conversely, that crises and slumps can be averted by giving them a bigger slice of the pie.”(p.197) He is rightly clear that this cannot achieve socialism. But then so are they. Bellamy Foster and Fred Magdoff in The Great Financial Crisis (2009), conclude that a new New Deal would inevitably fail because it "would likely soon succumb to its own and capitalism's contradictions". Nonetheless they think that a radical reform movement is a good idea because "if such a movement were tried and yet failed (we think inevitably) to remove the injustices and irrationalities of the system, there would be no need to go back to square one. Rather the population would be fully justified in such a case in pushing forward and concluding that the entire political-economic structure should be replaced, brick by brick, with another that would meet their genuined needs and be under democratic control: a system of social use rather than private gain."(p.23) Obviously this is a bonkers political strategy unwittingly similar to that of SPEW and their ilk (although it does show that Keynesian radical reform is not their ultimate end in sight). Kliman's rejection of these convoluted strategies was a really positive outcome from his 2011 book:He arguesThat resistance within capitalism but also thought needs to be given to an alternative system: “..people need to know not just what to be against, but what to be for…”(p.204)That we have to look beyond mere “political and legal changes” to “changes in the actual relations of production”(p.205)That capitalism “…is a network of relationships. These relationships will remain governed by the laws of capitalist production unless and until those laws are broken, and that will require a thorough transformation of the relations of production. … The most important law is the determination of value by labor-time. It compels an enterprise, whoever owns or “controls” it, to minimize costs in order to remain competitive and therefore to lay off inefficient or unnecessary workers, speed up production, have unsafe working conditions, produce for profit instead of producing for need, and so on.”(p.205)That “…developing socialism within capitalism… cannot be done. …The economic laws of the larger system will not allow it. If you buy from the capitalist world “outside,” you also have to sell to it in order to get the money you need to buy from it, and you will not sell anything if your prices are high because your costs of production are high.”(p.205-206)That what is require is not leaders but popular consciousness: “…the core issue is not one of “taking power,” but of what happens after… There needs to be a new relation of theory to practice, so that regular people are not just the muscle that brings down the old power, but become fully equipped, theoretically and intellectually, to govern society themselves. Nothing short of this can prevent power from being handed over to an elite. It seems very utopian, but there really is no alternative.”(p.206)That “…we have to work out how we can have a modern society that operates without the laws of capitalist production being in control.” But “There must first be new relations of production; only then will these things be possible. This too seems utopian, but again, there is really no alternative.”(p.206)For SPEW to reject all this because it sounds like the SPGB really is an unintended compliment worth having.
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