Date: 23 Dec 96 04:16:22 EST
Subject: M-G: defense of marxism vs. sect feud


dear dave,

Thanks for your quick comebacker of 12/21 . 
Let us pick up on your quiery as to  the existence of 
state capitalism as compared to the dominant marketeer
variety.

 In the the state cap societies, production is not as regulated by the
market  in the competitive struggle for profits.
In priv cap , the capital market exists  & capital chases the highest 
profits. Capital moves from less profitable to more profitable
sectors of the economy the the priv. caps regulate their  economy
by mainly this fashion though  in the west the state also plays
its role as partial regulator too. Priv. cap economy is unplanned
for the most part  and regulation  of production is reliant onthe
"free" commodity market as prices fluctuate in response to supply
 and demand. 
But even with the priv. caps, there is no total "ideal","free' market due to the
 huge weight of monopolies and the state intervention in the economy in
the west as well.
Your point though is clear about the key importance of this market
mechanisms key importance with the priv. cap exploiters.

True , most of these key conditions which allow the priv. cap 
societies to exploit are far less operative in the state cap societies
but there is a market operative with the state caps operations 
though hardly a "free" one and the state caps must adjust prices from 
time to time , they are not fixed in accoradnce to supply and demand.
But also there is the huge black market which is "free" from state 
interference most of the time, but, true this is a small percentage
of the overall state cap regime
In the state cap societies, granted most l capital fromation is in the
hands of the state

BUT the great paradox of the state cap societies is even though the
state blocks the spontaneous regulation of the market , it is forced to
introduce a similar process itself!
Given the fact that  the state cap market is not "free", prices are fixed
bureaucratically at incresing economic costs as they  discount their
law of value, and for enterprises not independent fo the state, the
state takes the responsibility for allocating capital  that an adequate 
rate of surplus value must still be realized.
Instead of allowing the process to proceed  spontaneously by 
the market hegemonic  mechanism   and free inersectoral movements
of the capital, the state caps "plan" devisies subsititute mechanisms
in order to consciously (Dave, you say" less effieciently"!) what the market
itself does in private capiatlism.

The state cap planners do NOT have carte blanche  to allocate capital
by whim and free choice . THe state cap countries exist in a dominant 
capitalist  world where dog eat dog competition  predominates not just
>from priv. cap imperialist rivals but form other state cap societies too!
All these capitals are thererfore , are under huge pressure  to achieve 
an OVERALL rate of surplus value  which has to at least equal that of 
their strongest competitors! Falure to achieve this rate of surplus value
leads/led to  the enormous crisis and was the  overriding  reason for the
collapse of a major portion of the eastern state cap societies in 1989-91.

If you look at some of the stats on the decline in profit rates for Russian 
and Bloc partners industry, especially from 1965 onward, you will see
how this economic crisis  really paved the wayfor the end-game events
for the state caps in 1989-91. (Well , seems today many a former state cap
 have most easily and comfortably become priv.cap boosters and 
continue to do quite well for themselves still robbing  and exploiting
working people , now wearing a private cap set of  political/economic clothes!)

 For more of the  stats on the state caps crisis-see
F. Kushnirsky, Soviet Economic Planning, Boulder-Westview Publ.  1983.

I will cease this counter-punching  for tonite  and  answer your other  points
tomorrow nite.

Neil







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