One Thing Popa Marx Got Dead Wrong!....A Late Night Musing on the Rate of Profit in the US.........

Just started reading a book I bought a few years back that has just sat on the shelf.  "Wobblies & Zapatistas". Wishing I had picked it up sooner...The first chapter already has me worked up!

The book is interesting so far, but there is a major error in the application of Marxian theory in the first chapter.  When discussing "globalization" in the lens of the Zapatista movement, the book cites the rising Organic Composition of Capital in the 1970's leading to a falling rate of profit for U.S. capitalists and thus the need for expansion.  The result, of course, is NAFTA, and all the ramifications for the Mexican people*

What has not been adequately explained (at least to my mind) is that the profit rate did NOT fall during this period.  It is beyond the scope of what I am going to undertake for a blog entry to find data to prove this but I would direct my reader to a lot of Rick Wolff's semi-recent work for evidence.

This common misconception that globalization was caused by the American capitalist looking for ways to increase a falling profit rate (due to a raising OCC) is just a simple case of finding results where the theory predicts they should be.  The OCC rose, resulting in globalization, read Marx, the profit rate must have been falling???  I think Marx got this one really wrong!  Globalization is a rusult of too much profit, not a falling rate, and the necessity to stick all of this surplus somewhere.

What is at stake in this argument?  A valid question dear reader....please help me with it.


*As an aside, an interesting something cited in this book that I have never come across in my own NAFTA work (albeit years ago now).  The Mexican government removed a line from their constitution allowing land to be held communally by a village at the request of the U.S. government as a precondition to NAFTA.  Perhaps more on this another night.

THe World Economy

It is not entirely fair, or for that matter accurate to simplify a globally integrated economy down to simple imperialism, therefore the following is very small part of what we are currently facing:

Global integration makes a lot of sense in the lens of capitalist growth. The traditional theory of imperialism holds, namely that domestic capital in advanced countries has fully saturated home markets and needs to find both new markets and/or cheaper sources of raw materials to increase profitability.

What is unique about the current period (and would be unique to any period of capitalist development) is the level of technology in the "home" nations.
Higher levels of technology by definition require larger capital investments, and ever increasing freedom/complexity of financial markets in order to facilitate these investments (and to get profit out of the colony).

As we are at the highest level of technology thus far in human advancement, modern imperialism requires the highest level of capital investment and most advanced financial markets the world has ever seen to be successful. All of this is fairly obvious and mundane.

Where this point becomes more interesting (to me at least) is that with greater levels of capital investment, (higher levels of development) it is easy to argue that greater levels of military security should also be a priority. This will come as no surprise to the portions of the world who live under perpetual occupation of the American military.

The two large contradictions here are that, 1. The very capitalists who rely on their home state for unprecedented military security are more often than not advocates of a shrinking the state at home (as the larger the state the more of their domestic profits are necessary to sustain it). And 2. The very same high level of technology that precipitates the need for military security in colonies (or subjugated nations, or whatever the popular thing is to call the countries we are fucking over today is), allows for easy destruction of large capital investments by small groups of unhappy, or aware citizens of these nations (ie "terrorism"). Technology facilitates the easier destruction of technology.

As per the development of any system, modern global capital holds within itself contradictions that have the potential to be its undoing.