Ernest Mandel, transnational socialism, global keynesianism

Ernest Mandel was mentioned in the recent wsn debate on global Keynesianism
etc. Keynesian analysis is traditionally organized around the concept of a
disequilibrium between aggregate supply and aggregate demand. Here are some
quotes from Mandel (Marxist-Trotsk(ist?)(yite?)) which show that his
analysis is also placing the disequilibrium between aggregate supply and
aggregate demand somewhere near the center of the analysis. Transnational
socialism and global Keynesianism have thus an important commonality,
differences in rhetoric notwithstanding. This commonality is not negated by
the fact that all kinds of scoundrels may have used or abused Keynesian
economics.


The quotations are from:
Mandel, E. (1978) The Second Slump: A Marxist Analysis of Recession in the
Seventies. London, UK: NLB, 1978 [revised and translated from the 1977
German edition]


Mandel observes that, in Marxism, "(t)wo great 'schools' have arisen. One
claims that the crises are caused by the under-consumption of the masses
..., the other that they are caused by over-accumulation ... This debate is
but a variant of the old debate between those who explained the crises by
'insufficient aggregate demand' and those who explained them by
'disproportionality'." (Mandel 1978: 165) Mandel goes on criticizing both
schools: "both commit the error of arbitrarily dividing what is organically
linked..."(p. 165) and argues that we must "combine" both views. In support
he quotes Marx, namely: "the conditions of direct exploitation and those of
realizing it are not identical ... The first are only limited to the
PRODUCTIVE POWER OF SOCIETY, the latter by the proportional relation of the
various branches of production and the CONSUMER POWER OF SOCIETY." (Marx,
Capital, vol. 3, p. 244, as quoted by Mandel 1978: 165-166, my emphasis)
Similarly, Mandel states that: "The capitalist mode of production ... is
both a system oriented towards the PRODUCTION of a growing mass of
surplus-value ... and a system in which the real appropriation of this
surplus-value is dependent on the possibility of ACTUALLY SELLING
commodities ..."(p. 166, my emphasis) Mandel goes on discussing
over-accumulation, under-consumption, anarchy of production, falling rate of
profit, and states that: "Whatever the deeper meanderings of the analysis,
the first phenomenon that must be grasped is this sharp break in the
UNSTABLE EQUILIBRIUM BETWEEN SUPPLY AND DEMAND of commodities..."(p. 169)

These general theoretical remarks are accompanied by more concrete
historical analysis of the world system and its slump in the 1970's. Mandel
points to the inadequacy of demand in the world system as a major problem.
Here are some examples:

(a) "Contraction of world trade ... became inevitable once this recession
had spread to all the imperialist countries, since they still constitute the
predominant sector of the world market (of 'worldwide available PURCHASING
POWER')." (p. 19, my emphasis)[refers to 1970's]

(b) "Neo-Keynesian recovery techniques" [sc. 1975-76]: "Because of enormous
injection of additional PURCHASING POWER into the economic circuit, the
recession was effectively halted after about a year or a year and a half.
After this a recovery began." (p.62, my emphasis)

(c ) "DEMAND for consumer goods on the domestic market was no longer rising
after it acted to 'DETONATE' the recovery." (p. 96, my emphasis) [refers to
G-7 countries 1975-77]

(d) Third World demand: "... the semi-colonial countries continue to occupy
a marginal position in the world market ..." (p. 137) "This is the
fundamental reason why the restructuring of the world market now under way
will not be able to stimulate a new accelerated expansion of the
international capitalist economy. (p. 138) "To take the example of the EEC
countries, their exports to Brazil, India and Pakistan stagnated or declined
throughout 1975, 1976, and 1977. These three countries, inhabited by a total
of nearly 800 million people, PURCHASE fewer commodities from the nine
Common Market countries than does Austria alone, with its less than 8
million inhabitants!" (p. 138, my emphasis)

(e) "Nothing illustrates the capitalist character of the market economy and
its unjust and inhuman consequences better than this spectacle of half of
humanity afflicted by hunger not because of lack of food products, but
because MONEY DEMAND cannot keep up with physical demand." (p. 146, my
emphasis)