Capital Death Research Articles

Глобализация vs национальное государство – попятное движение?

In early 21st century, in various parts of Europe and America there have been attempts of backsliding from free movement of people and capitals inherent to globalization era, and restoration of full sovereignty of a nation state. Presenting features of this trend are different: nationalist forces’ coming to power in Eastern Europe, Brexit, election of D. Trump as U. S. President, the populists’ victory in parliamentary elections in Italy. The Populism of diverse colors becomes a driving force of such attempts. The tendency mentioned above is based on a widespread dissatisfaction with the neo-liberal character of globalization coming from domination of international monopolies and oligopolies in this process, which neglect the variety of local conditions and prioritize their own vested interests. The supremacy of the market element gives important advantages to the strongest, the most mobile and faster developing participant of the process, not taking whichever national and social interests in consideration. At the same time, free cross-border displacement of human flows creates conditions for erosion of the European Christian identity, facilitates the appearance of hotbeds of the Islamic terrorism. Within the boundaries of the European Union, a protest against the bureaucratic character of integration processes regulation merges into the discontent with consequences of neo-liberal globalization. The abovementioned crisis trends make us address the experience of the past. The political crises of the contemporary history, which caused wars and revolutions, were often construed as harbingers of an inevitable collapse of the existing development model (suffice it to recall the forecasts of Karl Marx and his followers). However, not the death of capitalism was a result of historical evolution, but its reformation and the emergence of social welfare state. The crisis affiliated to globalization may have similar effect. There are quite a number of proposals aimed at the EU reforming. Efforts to improve or сounteract at least the most vivid flaws of globalization processes are not excluded. This brings up the question about a subject or subjects of such attempts. The populist movement claims an actor’s role. Yet there are doubts that it is able to play this role. At the same time, the civil society now takes on greater and greater importance in the sequence of events. Quite possibly, not only a national civil society could seriously contribute to reforming of globalization processes, but a gradually shaping global civil society using modern communication media as well. The experience tells us also that, first of all, consideration for and harmonization of national interests should become a direction of reforming, which means not only a complicated system of agreements between nation states and their associations, but gradual and far-reaching improvement of global governance institutions. However, the global civil society is hardly homogenious, and given the vast variety, heterogeneity and contradictions of national interests, the task of harmonization appears to be extremely difficult.

Capital death in the world market.

We study the gross domestic product (GDP) per capita together with the market capitalization (MCAP) per capita as two indicators of the effect of globalization. We find that g, the GDP per capita, as a function of m, the MCAP per capita, follows a power law with average exponent close to 1/3. In addition, the Zipf ranking approach confirms that the m for countries with initially lower values of m tends to grow more rapidly than for countries with initially larger values of m. If the trends over the past 20 years continue to hold in the future, then the Zipf ranking approach leads to the prediction that in about 50 years, all countries participating in globalization will have comparable values of their MCAP per capita. We call this economic state "capital death," in analogy to the physics state of "heat death" predicted by thermodynamic arguments.

THE MARXIAN OPTIMAL GROWTH MODEL, REPRODUCTION SCHEME, AND GENERAL LAW OF CAPITALIST ACCUMULATION

As Professor Okishio proved the existence of exploitation mathematically, the birth, growth and death of capitalism should also be proved mathematically, and for this purpose we formulated the so-called Marxian optimal growth model. This is not a model in value-term because peoples' direct interest is not value itself but utility and firms' interest is not value but profit. However, a very important finding of this article is that such a non-value-term model can be translated into a value-term model, and we introduce a value-term reproduction scheme from the Marxian optimal growth model. In this form, we confirm that our model fulfills the conditions of simple reproduction and extended reproduction. However, a more important fact we found is that this optimal path shows (1) rising organic composition of capital, (2) falling rate of profit, and (3) falling ratio of output of the first sector. The second fact contradicts the Okishio Theorem, and the third contradicts Lenin.

Organic Composition of Capital, Falling Rate of Profit and ‘Preferential Growth of the First Sector’ in the Marxian Optimal Growth Model

Marxist economics claims that capitalism has some long-term tendencies. Because such kinds of trends have a very close relation with the decline or death of capitalism, they must be analyzed by models that also express its decline. For this purpose, we apply the Marxian Optimal Growth Model, which was constructed by Yamashita & Ohnishi (2002). Even if this appearance is neoclassical but includes many Marxist conclusions. In this paper, firstly we introduce its basic model structure. Secondly, we decompose the total value of the two sectors into C, V, and S. Thirdly, we calculate the final values of C, V, and S that they approach in the long run, and by applying them we project the long-term trend of organic composition of capital, rate of profit and ratio of output between the two sectors. Our conclusions are: (1) the organic composition of capital rises, (2) the profit rate falls, and (3) the ratio of output of the first sector falls. The second conclusion is in opposition to the Okishio Theorem, and the third is in opposition to Lenin.

THE CULTURAL CONTRADICTIONS OF SOCIALISM

While no one has yet announced the death of capitalism, reports of its imminent demise have been as numerous as they have been exaggerated. Such reports have usually been bolstered by thoughtful analyses of the fundamental contradictions of capitalism, which was expected to come sliding—if not crashing—down under the weight of its own inconsistencies. Leaving aside Karl Marx's own predictions, twentieth-century analysts as diverse as Joseph Schumpeter, Daniel Bell, and Jurgen Habermas have asserted that the contradictions of capitalism could only mean that its days were numbered. Alas, all that has been established by these analyses is that predictive failure is no impediment to market success: either the consumer's demand for such theories of capitalism's failures is naturally robust, or supply continues to generate its own demand.

Bowman's New World and the Council on Foreign Relations

Bowman's New World and the Council on Foreign Relations