Over-saturation of capital
and the recent black august in Southeast Asia

We are convinced that the capitalist depression is very acute, the most serious that capitalism has known since its birth, and the current financial crisis indicates that it hasn’t yet come out of it. We said that the consequences of the crises are each time humanly more painful, as historically bigger is in each of them, the mass of spare capital that doesn’t find a productive application. This being because the surplus-value obtained out of a given exploited population (whose growth diminishes each time because of the increasing OCC) becomes too small. That, each time bigger, mass of spare capital produces the phenomenon of "over-saturation of capital", an expression coined by Henrik Grossmann in a correct logical extension of the concept of "absolute over-accumulation” used by Marx in The Capital:

I have shown how the course of capital accumulation is punctuated by an absolute over-accumulation which is released, from time to time, in the form of periodic crises and which is progressively intensified through the fluctuations of the economic cycle from one crisis to the next. At an advanced stage of accumulation it reaches a state of “capital over-saturation” where the over-accumulated capital faces a shortage of investment possibilities and finds it more difficult to surmount this “saturation”. The capitalist mechanism approaches its final catastrophe with the inexorability of a natural process. The superfluous and idle capital can ward off the complete collapse of profitability only through the export of capital or through “employment” on the stock exchange. (Henrik Grossmann: "The law of accumulation and collapse of the capitalist system" Chapter 3. point B, III, C)

This dynamic that H, Grossmann illustrates in his mentioned work through profuse historic examples and figures dating from the XVII century, has just been confirmed in the sudden stagnation unleashed from last august with the "domino" effect over Malaysia, South Korea, Philippines and Thailand, which ended dragging Japan and threatens to abort the incipient and weak reanimation of the world economy.

Grossmann says that "to provisionally preserve themselves of the total collapse of their profitability" the over-accumulated capitals in the principal countries of the imperialist chain emigrate to the suburbs of the system. But this behaviour is not explained by the profitability of individual or private capitals, but it is a problem of the survival of the system as a whole.

In fact, given the organic composition of a mass of functioning capital, the more the population, that from outside of the system, falls under its domain, that is to say, is transformed in a salaried population,, the bigger will the capital mass be and longer the time that the bourgeoisie will go on accumulating without reaching the point of over-saturation. That is what happened in the so called "Asiatic tigers" during the last thirty years, where a big part of the population of these countries abandoned the small agrarian and urban mercantile production to live of a salary working for the imperialist surplus capital invested there. It constitutes a categorical proof of the universal tendency of late capitalism to move away as much as possible the horizon of its definitive crisis.

Already in 1977, South Korea, Taiwan, Hong Kong, Singapore, Thailand, Indonesia, Malaysia and The Philippines exported pure industrial goods worth 61.000 millions dollars, as much as France. This figure was a 560 % higher than that of 1970. In 1975, the regional distribution of the exports of manufactured goods from the "Third world" was the following:In fact, given the organic composition of a mass of functioning capital, the more the population, that from outside of the system, falls under its domain, that is to say, is transformed in a salaried population,, the bigger will the capital mass be and longer the time that the bourgeoisie will go on accumulating without reaching the point of over-saturation. That is what happened in the so called "Asiatic tigers" during the last thirty years, where a big part of the population of these countries abandoned the small agrarian and urban mercantile production to live of a salary working for the imperialist surplus capital invested there. It constitutes a categorical proof of the universal tendency of late capitalism to move away as much as possible the horizon of its definitive crisis.

Exports of manufactured goods by regions      

( in % of 1975)

            Southern Asia

9,81

East Asia

60,13

Latin America

21,95

Middle East and               .           Northern      Africa                                                                       

5,06

Sub-Saharan Africa

3,04

Even though the exploitation rate nowadays in East Asia is one of the highest in the world, the mass of surplus capital that came to this region was so enormous that in a small period of time reached an absolute over-accumulation. Thus suddenly interrupting the process of expanded reproduction. Only in 1996 the mass of surplus capital from the main imperialist countries invested in the economy of so called "Asian tigers" was 93.000 million dollars, that were added to the 47.000 invested in 1994 and 70.000 in 1995. These facts totally confirm the growing difficulties of the bourgeoisie in its late stage to overcome the present levels of capital over-saturation.

"In these economies more money came in that could be invested in a profitable way at a reasonable risk" (Alan Greenspan, President of the USA Federal Reserve "El Pais": 8/2/98).

October 1998

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