Capitalism's Fatal Flaw, and the Way Forward: State-Capitalism, Techno-Depreciation..., and the Profit-Rate Fall. GLOBAL STRATEGIC HYPOTHESES.

State-Capitalism,

Techno-Depreciation

Fixed Capital,

and the

Profit-Rate

Fall.

GLOBAL STRATEGIC HYPOTHESES.

Dear Reader,

We hold that the reality of Marx’s “Law of the Tendency of the Rate of Profit to Fall” – driven, empirically, by techno-depreciation of incompletely amortized fixed capital value, subtracted from gross profits, due to the continued and accelerating growth of the social forces of production, has shaped the total history of the ‘descendence-phase’ of the global capitalist system, ever since circa 1870.

This proposition is the premise of our ‘Marx-Orwell-Seldon Theory’ [MOST] of ‘descendence-phase’ capitalist history.

But how does this “law” – and, especially, how does its techno-depreciation driver – impact, e.g., Lenino-Stalinoid state-capitalist nation-states? Does their – nationalized and national – “rate of profit” fall too during this ‘descendence-phase’?

At first glance, one might think that such national state-capitalisms, of which today’s China is likely the “purest” example so far, would be impervious to Marx’s “law”, and to its techno-depreciation driver.

Facing the sudden world-market-competitive incompetence of some of its industrial fixed capital, the industrial capital-owning national-state “pure-bureaucratic capitalist ruling-class” dictatorship would simply command the scrapping of that technological obsolescent fixed capital, and order its replacement by new, competent fixed capital plant and machinery, financing its purchase or construction out of its taxpayers’ “contributions”, and/or out of previous “net earnings surplus” from its past overseas exports-sales.

Before further analysis of such propositions, we should make clear here that the model that we are using, that defines state-capitalism as we see it, is our ‘national super-corporation’, or ‘national meta-corporation’ model, in which any previous non-state-owned corporation units/individual capital units have been «aufheben» ‘meta-unit-ized’ into a single, national, state-bureaucracy-“owned”, state-capital ‘meta-unit’, made up out of the heterogeneous multiplicity of former, non-state-owned, mere corporations, together with whatever new state-owned corporations the national state has formed, if any.

The crucial thing about such an idealized, extreme form of state-capitalism, as well as about real-world, approximate instantiations thereof, which are never as “purely” state-capitalist, and what keeps them capitalist, is that they compete in the world market, both to sell commodities to other nations’ economic entities, and to buy vital resource commodities and other commodities from, other nations’ economic entities, not just engaging commodity commerce domestically only.

We are not modeling some kind of perfect state of, unrealistic, autarky.

Now, for the purposes of this blog-entry, keeping our analysis at the generalized level of the logic of our ‘world-market-trading national supercorporation’ hypothesis, without referencing historical data on the social reproduction processes of Stalinist Russia, or of, e.g., today’s Xi-ist China, Un-ist North Korea, and Castro-ist Cuba, it is clear that techno-depreciation is a real threat to the reproduction of such ‘national super-corporation’ largely state-capitalist regimes.

For such super-corps, a substantial loss of value to the fixed capital of a key unit of their for-export commodity production, with the need to replace the obsoleted fixed capital, before its wear-and-tear depreciation, with a new purchase of new, competent fixed capital, would have a substantial opportunity cost. Funds that could otherwise have gone to R&D of more-advanced fixed capital, or to new industries, or even to ameliorate the living-standards of restive wage-workers, would have to be diverted to that new, replacement purchase.

If loans from foreign banks needed to be used, to finance the replacement fixed capital purchases, and if the scrapped equipment was also purchased via loans from foreign banks, then debt service payments would be due now on two, not on just one, foreign loan(s), including on the older loan for which the, scrapped, fixed capital is no longer earning any repayment wherewithal at al.

And the number of foreign bank loans demanding debt service payments would increment with every new incident of technodepreciation, rising together with the number of loans demanding payment on scrapped fixed capital purchases that are no longer earning anything toward repayment of those debt-service-paymnts-demanding loans.

With technological ‘meta-evolutions’ accelerating – fusion “atomic power” supplanting ‘molecular power’; AI-brained android robot workers partially-replacing human wagéd/-salaried-workers; “quantum computing”, asteroid mining, etc. – the temporal spacing between such major [not to mention more minor] techno-depreciation incidents might be shrinking, i.e., their frequency may be rising.

Not only would any default on repayment of any of those foreign bank loans likely lead to loss of access to any further foreign bank loans in the future, cratering the “credit rating” of that ‘national supercorporation’ worldwide.

In addition, this growing number of loans’ aggregate debt-burden would adversely impact such a supercorp’s international balance of payments, and likely tank such a supercorp’s credit-worthiness, and irrupt the perceived riskiness of extending any further loans to that supercorp, in the view of typical foreign banks.

The “pure state-bureaucratic ruling class” dictatorships of such supercorps might impose draconian income tax and other tax increases on the standards of living of their national wage/salary working classes.

But this would likely risk revolts that would overthrow those state-capitalist dictatorships, and likely institute some regimes of ‘political-economic democracy’ in their place.

Such supercorps’ dictators might have an easier time in imposing ‘techno-depreciation risk management’ insurance premiums, or ‘techno-depreciation expectance insurance taxes’, on their state-owned and remaining non-state-owned corporations, than would the leaders of other, more “mixed-capitalist” nation-states.

The supercorps’ dictators could thereby accumulate a ‘techno-depreciation emergency fund’ from their ‘at-risk-for-techno-depreciation’ internal economic entities, while those entities’ means of production were still intact to help earn foreign-exchange profits from which to pay those premiums or taxes.

Such ‘emergency funds’ could help with at least partial self-financing of purchases of replacement, competent new means of production.

However, it is doubtful that such measures could long suffice to avert a kind of ‘national supercorps’ bankruptcies’, with resulting isolation from access to international financing for any commodity purchases at all, not only for means of production purchases; i.e., to withstand the tsunami of growth of ‘the global social forces of human-societal expanded self-re-production’ that is in the offing in these latter days, perhaps the final days, of the ‘decendence phase’ of the global, world market, capitalist system.

For more information regarding these Seldonian insights, and to read and/or download, free of charge, PDFs and/or JPGs of Foundation books, other texts, and images, please see:

www.dialectics.info

and

https://independent.academia.edu/KarlSeldon

For partially pictographical, ‘poster-ized’ visualizations of many of these Seldonian insights -- specimens of ‘dialectical art’ – as well as dialectically-illustrated books published by the F.E.D. Press, see –