The Long Wave Uptrend
The actual crucial conditions for the start of a new long wave uptrend are that:
- The rate of surplus value has risen due to the creation of a relative surplus population, resulting from the introduction of labour-saving technologies (intensive accumulation)
- The increased mass of surplus value, and cheapening of fixed and circulating constant capital causes the rate of profit to have risen
- The higher rate of profit, and lower rate of growth (due to intensive rather than extensive accumulation), during the period of stagnation, creates an excess supply of loanable money-capital, which reduces interest rates, and promotes speculative bubbles.
- The new technologies introduced to reduce production costs, form the basis of new, high-profit consumer industries. Once these reach a critical mass, they create the conditions for the valorisation of existing industries, and so for a period of synchronised growth in demand
- On the basis of high annual rates of profit, sustained and growing aggregate demand, and the availability of cheap money-capital, productive-capital begins to accumulate at a faster pace
- Increased demand for raw materials causes prices to rise, as existing sources of supply are inadequate, so vast new tracts of land are opened up for agriculture, mining etc. and, in order to do so, and to raise their productivity, to that of existing areas, large scale infrastructure spending on roads, rails, ports and so on must be undertaken
These inevitably are established on the basis of the latest technology. For example, canals in the late 18th century, railways in the mid 19th century, roads and telephones at the start of the 20th century, motorways and high speed rail, as well as aircraft etc. in the mid 20th century, and the Internet, mobile telephony, satellite communications etc. at the start of the 21st century.
Another problem of trying to fit current events into the long wave framework, I think, also arises with Paul's explanation of the periodicity of wars and revolutions, and this is significant for his explanation of a prolonged fourth wave, or stalled fifth wave, which he doesn't seem too decided on as a definition of where we are. Rather than applying an empiricist approach to that question, I prefer to apply a logical and materialist approach. In other words, can we make a logical argument, based on material conditions, as to why, at the start of a new long wave upswing, there should be wars and revolutions. My answer is no. A condition for the upswing is that, in the previous period, workers have been heavily defeated, their organisations depleted, their confidence and morale undermined, and at the start of the new upswing, a large surplus population exists. So, when things look better, workers may begin to have confidence restored; those in employment may see real wages improve; but only after a time do they begin to rebuild their unions and other organisations etc. If there is an increase in their activity, it is channelled into Economism and distributional struggles, and a rapidly expanding capital, with high levels of surplus value, productivity and profit can easily accommodate that.
The 1950's, for example, was a period when the Tories experienced a prolonged period in government, and a similar pattern can be seen in Europe, and the US. It's not these periods of initial rapid growth that create the conditions for revolutions, but the point at which the upswing falters. It is when, to use the scenario discussed earlier, curplus value cannot be expanded further, by extending the working-day, or increasing the number of workers employed; it is when the methods of distributional struggle that worked for 25 years, are no longer sufficient to raise wages and conditions, when capital is more inclined to resist, but when the workers are still strong, and morale is high that revolutions are likely, or at least likely to succeed.
A successful revolution was more likely in 1871, at the time of the Paris Commune, as the 1843-1873 uptrend came to an end, than it was in 1848, when that trend commenced. It was more likely in 1917, and in the years after.
And the same is true of wars, including the US Civil War, fought to establish a centralised state, and the 1914-18 war in Europe, continued in 1939-1945, for the same reason of establishing a centralised European state, as the rational basis for capital to operate within the continent. Even in terms of the old colonialist causes of war, for control of markets, the real pressure to do so comes at the point that profits are squeezed, not at the point, at the start of an uptrend when profits are high, and capital can simply buy the access it requires.
I don't think that Paul's fourth wave from the late 1940's to 2008 works. It certainly does not work with a simultaneous fifth wave starting in the 1990's. Bill Jeffries, of the former Permanent Revolution group, which came out of Workers Power, which Paul formerly belonged to, has argued that the new uptrend began around 1990, and cites the fall of the Eastern Bloc as a sign of its commencement. I have argued that is wrong too.
I have pointed to the sharp rise in primary product prices from 1999, the sharp upward break in global trade, the rise in global GDP, and fixed capital formation from that point as clear indications that the new uptrend began in 1999. For reasons I've set out elsewhere, I can see why supporters of the long wave theory, faced with 2008, and its aftermath are reluctant to accept that we are in such an uptrend, but we are. The task is to explain what happened after 2008. The fact that rather than being in some period of long depression or secular stagnation, we are once again seeing a strong and synchronised up-tick in global growth makes that task easier. But, I will deal with it in relation to Chapter 4.
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