Link I am not really sure who your questions are directed towards. All I can say is that all arguments about the falling rate of profit, the organic composition of capital and the cycles of accumulation have to be understood in terms of the system as a whole. Thus you can find that waste production will keep the wheels turning for some capitalists (at best recycling the surplus value created elsewhere). Arms production is a classic example. Its product cannot re-enter the reproduction process either as Dept I or Dept II but it undeniably makes a profit for those companies and states who sell arms to other states. It is certainly not " a province of accumulation".

I have read this a few times but honestly I really do not understand the last paragraph.

The problem is one of valorisation (verwertung) which implies not just that things are sold but are sold with added value, "Realisation" as a translation does not carry this connotation so clearly (see the Penguin Classics Volume 1 of Capital). The question though that the pure overproductionists cannot answer is why at one point in time is it possible for valorisation to carry on so happily and then at another the process starts to slow down. This can only be because as accumulation proceeds the organic composition of capital rises and thus the rate of profit falls. This can lead to new investment by some capitalists who can then sell above value but such new investment only increases the ration of dead to living labour and restricts the possibility of increasing the rate of profit further down the line. And the tendency for profit rates to equalise across the economy leads eventually to a general slowdown. Trying to claw back surplus value via wage cuts and producing more commodities in an attempt to sell each with a greater value component are the twin roots of overproduction - but only a value analysis can explain how it comes about. I have nothing to add to the paraphrase of Chapter 15 of Capital Volume 3 above.

As an aside there is some controversy about the geographical question of the absorption of the entire planet into the world market. Marx and Engels thought it had occured in about 1850 but Bukharin later argued that a "world economy" only formed in the late 19C (his explanation for imperialism). Pannekoek in later life came round to the theories of Luxemburg but concluded in the 1940s that there were still huge areas outside the capitalist world market (he cited China and India) so considered that capitalism could happily expand for some time yet.

Overproductionism (and its twin underconsumptionism) are both epiphenomena. Capitalism's distinctness as a mode of production is precisely that, a mode of production. If the problem was simply markets Capital would have been as slim a volume as the History of Swiss Naval Victories. Or as Marx said in the introduction "if things and their essence were the same what need would there be for science?". The secret to to the special crises of capitalism lies in its unique mode of production. The market is not unique to capitalism (although its role is mightily enhanced by the dynamism of such a productive system). And when we look at value relations under capitalism we are well aware that the law of the tendency of the rate of profit is "the most important law" for explaining not just capitalism's periodic crises but also capitalism's extraordinary dynamism. The markets expand and contract according to the ability to invest but the propensity to invest only comes from the recognition that it is worth it ie, the rate of profit makes it worthwhile. This explains the cycles that capitalism operates in, explains the historical process of the centralisation and concentration of capital which in turn explain the tendency to monopoly which leads to the operation of the state to keep the system going as well as the transfer of rivalry from that of the firm to that of the nation-state. This is the science. The other "interpretations" don't even get close to that.

Look at the fate of those who have tried to deny the analysis of value relations as the basis of capitalism's complex story. The ICC originally argued that 1914 was the end of all expansion (the first version of their Decadence of Capital pamphlet wove elaborate statistics to try to prove this). For them the crisis which opened at the end of the 60s (which was more political than economic initially but then merged with the economic crisis after 1971) was the final crisis. This led to the perspective which they maintained until c 1990 that the way to revolution was open. Collapse of that perspective led to the post-modernist adoption that all was chaos and decomposition (the only germ of truth in that is that the 4 decade long crisis is deepening as it approaches its 5th decade). Unclear whether the class war is over or what. Unclear whether we are still trying to create the conditions for a new international. Those that have split have ended up in even worse places (like C McL) because they still refuse to accept value analysis.

The reference to Rosa Luxemburg putting herself outside Marxism was simply to say she was telling lies when she reinterpreted Marx's discussion of the "outlying fields of production" as really meaning "the outlying fields of consumption". I don't think it was intended to mean that Luxemburg had abandoned Marxism in every sense and whatever errors she made (as we all do) she was a defender of the working class to the end of her days. That is the class line.

But theory is important. Our whole framework as an ICT rests on our understanding of how capitalism functions. It was the basis for our formation and it has served us well. We predicted the bursting of the speculative bubble in 2007 because of it. Our Platform is underpinned by it. Difficult then to see how anyone rejecting our analysis of how capitalism functions (and fails to function) could be comfortable in the ICT.

We don't talk of the problem of valorisation without talking about markets but you still have to explain why the markets expand happily at one time and then suddenly cannot. That is the totality of the question and it is underpinned by the law of value.

I do not see how the debate has moved on at all since we have always agreed with your statement. "While you still insist that it is the fall in the rate of profit that explains why overproduction occurs at one time and not another, you do also appear to affirm that the problem of valorisation includes the problem of markets."

Capital is a market oriented system which depends on it for the sale of its commodities. Marx asked in the preface to Capital Vol 1 that "if things and their essence are the same what need is their for science?" And our question has always been the same. The market is a given, a constant, in the system so why is it that at one time it expands furiously and at another it contracts? As we have said this is a phenomenon which needs explaining and it has to be found in the shift in value relations such as that brought about by the law of the tendency of the rate of profit to fall.

And let's also be clear Rosa Luxemburg did not talk about "saturated markets". She talked about eh absence of the "third buyers" from outside the system. It was a gloss put on it by the ICC. If the third buyers were now gone by 1914 then the condition of the system was one of permanent saturation of markets and a great deal of effort was expended to try to show that this was the case (an effort that was later abandoned). Without an understanding of how the cycle of accumulation operates it is impossible to explain why capitalism expands dramatically at one point and then contracts rapidly at another. The ICC in the past simply denied there were cycles which was one reason why their perspectives constantly insisted on proletarian revolution/upsurge being on the agenda. If the proletariat was only "demystified" of support for leftist reformism then the road to revolution would be open. This took them from a basis in Marxism to some form of idealism.

On Rosa Luxemburg's lie - yes I meant she lied to herself but as she is dead I am sure she took no offence. To a living person it would have been unhelpful but we have no gods however much we value their contribution in other ways.

That said, I’m not sure you really do agree with my statement since in the same post you refer to markets as “a given, a constant”, which seems to contradict the idea that they are inherently problematic for capital?

This is the nub of the discussion. Markets are not "inherently problematic" but only problematic at certain points - cue: when the value relations have shifted in the course of cycle or the rate of profit is insufficient for the given mass of capital. We then get the contradiction that too many commodities are produced to be valorised (and yet needs remain unsatisfied as the creators of new surplus value have only a restricted power of consumption).

Agreed re the spiral since the cycle of accumulation brings about an ever increasing centralisation and concentration of capital which tends to monopoly, state capitalism and imperialism. It has always underpinned our analysis of why capitalism's decadence begins from the early years of the last century. It also explains why each cycle (including the one we are now living through) has different characteristics.

For sake of disclosure, I had been engaging with comrade Link in the dispute on Luxemburg's theory on the former forum of the ICC. Just one point that I want to repeat here (if I can still correctly remember it), namely from my exegisis of the militarism chapter in her book, – a long complex argument, which gets misinterpreted often (even in the ICT's text from 1976):

If you look closely at Luxemburg's model (of spending on armaments), her result is that the total value of the social product actually decreases (the "GDP" falls, if you will), and it is the surplus-value that increases (absolutely). It is only logical that the total value decreases in her model, because, as the ICT indeed pointed out, militarist spending on arms is unproductive. But how can Luxemburg then use her model as proof for her argument? The conceptual point here (and in general important for the concept of "accumulation") is, that the capitalist class is not interested in increasing the total value of the social product; it is rather interested in increasing the surplus value. Luxemburg wrote:

The social product is smaller and less capital is now employed – but then, the object of capitalist production is not simply to employ as much capital as possible, but to produce as much surplus value as possible.

In Luxemburg's model, the surplus-value increased (and therefore militarism is sort to speak "productive" for accumulation).

The way this happens for Luxemburg is twofold (and quite specific); in one part, by a conditional increase of the exploitation (really switch to a super-exploitation) of the whole (not just in arms industries) working class through inflation/tax, which decreases their wages below the value of their labour-power. The second part, is just taxes on non-capitalist source (peasants/artisans). These two sources are not unlimited, and so once these conditions or methods expire, militarist spending is no longer a way to accomplish accumulation.

I'm far from considering the hitherto silence from others here as an indicating their agreement with the Luxemburgist understanding/definition of the concept of "accumulation" as an extension of surplus value, that I posted above (perhaps only Marky would agree, since he wrote in his first post about it being "an ever-expanding mass of surplus value"). I consider the definition is controversial. It will be clear why this definition leads to some pretty outlandish conclusions, if I further spell out its practical meaning with an example. I already mentioned how fast GDP growth would have looked, if there was full capitalisation of the surplus value, making up one-third (33,3%) of total value of the social product: GDP would double within 3 years even without compound growth. It would increase 10 fold within 30 years. GDP would increase 40 fold within 120 years (this is close to, in fact a bit greater, than real GDP growth from 1900 up to 2020). The outlandish conclusion though is, that according to Luxemburg's definition, this isn't actual accumulation, because each year (for 120 years) the added/invested surplus value was the same (absolute) figure, namely 33,3% of GDP in 1900, ie $1,3 trillion (world GDP being estimated at $4 trillion in 1900). Each year, total value would increase by the same $1,3 trillion (almost like in the movie Groundhog Day). The condition for this to hold, is that this figure is invested only in additional means of production (not in additional workers). Yet surplus value could still increase (and so accumulation in Luxemburg's sense take place), even without additional workers, though, namely through a reduction of the value of labor-power, that is a rise in the rate of exploiation, so a further condition for the scenario to hold (of no accumulation for 120 years), is that there be no technological improvement (in production of wage goods). Absent this latter condition, the value of variable capital would fall, surplus value rise correspondingly, and so there is accumulation (in Luxemburg's sense), but without there have being an increase of workers (I think this is also an important conceptual point in itself), or an increase of the figure of annual invested surplus value (and there would be no change in total value/GDP I think).

Also, to take more normal conditions: if we allow invested surplus value to also go into additional workers (eg increasing the workforce 5 fold, over 120 years), and if technological improvement occurs, reducing the value of labor-power (eg also 5 fold), then it is as if all surplus value (during 1900-2020) had been invested only in additional means of production, for the figure of the value of variable capital has remained the same (from what it was in 1900). By the way, one can even imagine the value of variable capital fell (if eg the workforce increased merely 3 fold, and value of labor-power fell 5 fold). The conceptual point here is, that the mere same figure (of the value of) variable capital in the scheme (in 1900 as in 2020) doesn't need to correspond with the same number of workers (body count or hours), so there can be accumulation in Luxemburg's sense (increase of surplus-value), even if the figure of variable capital shows no increase (or even fell), that is, it is as if surplus-value has not been invested in hiring additional variable capital.

Another point that Luxemburg could be making here (in ch. 25) when she wrote that Marx's "diagram does not permit of any other interpretation than that of production for production’s sake", seems so simple that I might have overlooked it (and perhaps even the ICC). Her point is I think that even when we accept the idea that "cap­italists can simply exchange their products among themselves" (to quote from an ICC text), this does not consitute accumulation, for there is no extension of surplus value. At the moment when the capitalists managed to re-invest all the surplus-value by purchasing new means of production (/raw materials) from each other, they have not invested any of their surplus value in the purchase of more of the commodity labor-power (the only commodity that produces value), simply because capitalists (in either department) don't produce the commodity labor-power. (We still assume the condition that the value of labor-power hasn't fallen).

The arguments (eg made by comrade Link) along the lines that only capitalists can buy means of production, etc. turn against Luxemburg's critics, for precisely when we accept that all the products (containing surplus value) have been bought by the capitalists themselves, ie when the market creates its own demand so to speak, the question arises more prominently, what money do the capitalists have left to buy more of the crucial commodity labor-power (if they already had to spent all their money to realise the surplus-value-containing products from each other)? And without that purchase of the commodity labor-power, there is no accumulation (defined by Luxemburg as extension of surplus value).

On an old thread comrade Cleishbotham made the correct point, that competition is the effect of the LTRPF (not its result, as apparently Mattick thought, – I take the comrade's word about Mattick's views), and the LTRPF, in its turn, is a result of the increase of the composition of capital, which, finally, in its turn we often assume (and it's this assumption I like to focus on) can only be the result of productivity growth.

Marx (ch. 15, vol III) seems to imply, that an increase of the composition of capital can be the result also of something else (and so doesn't require the assumption of productivity growth/investment in new machinery):

When would over-production of capital be absolute? ... As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working-time supplied by this population, nor the relative surplus working-time, could be expanded any further (this last would not be feasible at any rate in the case when the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore, when the increased capital produced just as much, or even less, surplus-value than it did before its increase, there would be absolute over-production of capital; i.e., the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC. In both cases there would be a steep and sudden fall in the general rate of profit, but this time due to a change in the composition of capital not caused by the development of the productive forces, but rather by a rise in the money-value of the variable capital (because of increased wages) and the corresponding reduction in the proportion of surplus-labour to necessary labour.

^ If variable capital rises in terms of money (but not in terms of actual labour hours), and so surplus value stays the same, then indeed the general rate of profit (s/c+v) falls. Since v has apparently become greater, the CC (that is c/v, with v having grown, and c remaining the same) is altered, by which, at first sight, I was tempted to guess Marx means, CC has decreased. But surely we know that a fall in the profit rate is due to rather an increase of the CC. So I try to seek a more plausible meaning: as v has risen (in terms of money), perhaps Marx implies no additional actual v will be hired, or the number of wage workers even decreases, that is anyway, certainly v has not risen. One must actually assume that Marx means v has fallen, as this is the only thing here that can cause an increase of the CC (which in turn causes a fall in the general rate of profit). If v (actual labour power employed) has fallen, there is less creation of surplus value, As said, the rate of profit still will decline, and this will cause competition to break out. What counts with regard to the concept of accumulation is, that the mass of surplus value has not merely not been extended, but even declined.

My point is, that all of this happened without the assumption of productivity growth (ie without a change in the value of c)!

The comrade had stressed the point, that competition is not the cause, but the effect of the LTRPF. I suggest the reason apparently (I take the comrade's word on it) people like Mattick believed the LTRPF to be a mere result of competition, was their assumption that the LTRPF can be nothing else than the result of productivity growth (which is indeed the result of competition). As I here tried to show, for Marx the LTRPF can (at least also) occur as a result of a rise in wages (ie without productivity growth, and so without competition).

Marx's reference to the increase of wages, which I take as a decrease of variable capital (in terms of hours), to define what a cessation of accumulation means, might seem like either a simple tautology, or a totally problematic claim. It might not seem historically realistic. And there lurks the assumption of a rise in the value of labor-power (whereas one would think it would decline via the path of extending relative surplus value).

I did the above exegesis, just to address the possible objection, that the assumptions of Luxemburg (and of myself, for the purpose of understanding her theory) are too unrealistic:

- They (Marx and Luxemburg) share the assumption of no productivity growth.

- They share the assumption of no competition.

- Luxemburg (or my interpretation of her) assumes the condition that the value of the individual commodity labour-power which is hired in additional fashion (by the investment of surplus value), remains constant, while Marx's assumption was similar if not even more unrealistic, namely it rises. (or its rise to an extent greater than what could be compensated for by the new value created by additional workers – this is just my intuitive attempt to derive a determination from Marx's line on a "reduction in the proportion of surplus-labour to necessary labour").

(to clarify the last sentence in my previous post:

As the LTRPF is a result of an increase of the CC, and there is no competition (no systemic inner capitalist logic), a capitalist, from the individual perspective, has no necessity to buy additional labour-power. His extension of surplus value would be just from personal greed or fortuitous. I know (unfortunately) no way yet other than to view the issue of accumulation, ie the extension of surplus value, from the social level, as an abstract issue. )