Abstract
This chapter provides a reflection on the notions of ‘necessity’ and ‘contingency’ within the method of systematic dialectics. The main methodological idea is that something that ‘was’ contingent, may become necessary, thus emphasizing systematic dialectics as an organic method. The development of the general price level will serve as an illustrating case for this thesis. The main idea is that ‘creeping inflation’ is necessary to capital — which seems paradoxical in view of the fact that in the 1920s we witnessed in leading capitalist countries a prolonged period of deflation; and in the 1970s a period of galloping inflation (that is, not ‘creeping’ inflation).1
An early draft of this chapter was discussed at the March 2001 Workshop on Dialectics and Political Economy at York University, Toronto. I thank Robert Albritton for inviting me, and him and the other participants for their stimulating commentary. I am particularly grateful to Tony Smith for a ‘second round’ critique. I also thank Nicola Taylor, as well as my colleges of the Amsterdam Research Group in Methodology and History of Economics, especially Mark Blaug and Robert Went, for very useful comments.
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Notes and References
Extended accounts of the method of Systematic Dialectics, with somewhat varying emphasis by different authors, are, for example, Reuten, G. and Williams, M., Value-Form and the State: The Tendencies of Accumulation and the Determination of Economic Policy in Capitalist Society (London/New York: Routledge, 1989), pp. 11–36;
Smith, T., The Logic of Marx’s ‘Capital’: Replies to Hegelian Criticisms (Albany, NY: State University of New York Press, 1990, pp. 3–18);
Smith, T., ‘Marx’s Capital and Hegelian Dialectical Logic’, in F. Moseley (ed.), Marx’s Method in ‘Capital’: A Reexamination (Atlantic Highlands, NJ: Humanities Press, 1993); Arthur, C. J., ‘Systematic Dialectic’, Science & Society, vol. 62, no. 3 (1998); Reuten, G., ‘The Interconnection of Systematic Dialectics and Historical Materialism’, Historical Materialism, vol. 7 (2001).
Quoted from Arthur, C. J., ‘Introduction’, in C. J. Arthur (ed.), Marx’s ‘Capital’: A Student Edition (London: Lawrence & Wishart, 1992), p. x; cf. Marx, Grundrisse, Introduction (New York; Vintage, 1973).
France, Germany, Great Britain, Japan, USA. WWI = First World War; WWII = Second World War; details about countries and periodisation are provided later on. ‘Creeping inflation’ is roughly identified with a price level change of 0–5% and ‘galloping inflation’ by one of >5%. (For the purposes of this chapter I neglect hyperinflation). A rate of inflation below 5% per year was indicated by Samuelson in 1948, and Samuelson and Solow in 1960, as moderate: ‘such a mild steady inflation need not cause too much concern’ (Samuelson, quoted by Leeson, R. in ‘The Eclipse of the Goal of Zero Inflation’, History of Political Economy, vol. 29 no. 3 (1997) p. 455).
Maddison, A., Monitoring the World Economy 1820–1992 (Paris: OECD, 1995).
See, for example, Eichengreen, B., Globalizing Capital: A History of the International Monetary System (Princeton, NJ: Princeton University Press, 1996) pp. 145–6.
For an overview of current theories, see Albritton, R., Itoh, M., Westra, R. and Zuege, A. (eds), Phases of Capitalist Development: Booms, Crises and Globalizations (London/New York: Palgrave Macmillan, 2001). See also the survey and synthesis of the stages theories of regulation, long wave and social structure of accumulation in
Went, R., The Enigma of Globalisation (London: Routledge, 2002) chs 4–6.
Kindleberger, C. P., A Financial History of Western Europe (London/Boston/Sydney: George Allen & Unwin, 1987 [1984]), ch. 11. Although Kindleberger (pp. 206–7) is not super clear on this, there was up to the end of the nineteenth century perhaps more corporate financing of industry in France than in Britain.
The former opposition is at the level of ‘capital in general’, the second at the level of the ‘externalization of capital’, as Arthur has called it (Arthur, C. J., ‘Capital in General and Marx’s Capital’, in M. Campbell and G. Reuten (eds), The Culmination of Capital: Essays on Volume III of Marx’s ‘Capital’ (London/New York: Palgrave/Macmillan, 2001).
More details are in my paper mentioned is the previous note; complements of it are in Reuten, G., ‘Destructive Creativity’, in R. Bellofiore (ed.), Marxian Economics — A Reappraisal, vol. 2 (London: Macmillan, 1998).
This, I believe, was also the key point of Aglietta’s path-breaking work Régulation et Crises du Capitalisme (Calmann-Lévy, 1976); my question has a different focus, and the answer will be different. For the purposes of this paper I step over the precise difference between general price decrease and price deflation (and increase and inflation) rightly emphasized by both Aglietta and De Vroey. See Aglietta, M., Régulation et Crises du Capitalisme, trans. D. Fernbach (A Theory of Capitalist Regulation: The US Experience) (London: NLB, 1979); De Vroey, M. ‘Inflation: A Non-monetarist Monetary Interpretation’, Cambridge Journal of Economics (1984).
Keynes, J. M., The General Theory of Employment Interest and Money (London: Macmillan, 1936).
See, however, Mandel, E., Der Spätkapitalismus (Suhrkamp, 1972) trans. J. De Bres (Late Capitalism) (London: New Left Books, 1975) ch. 13, where he distances himself from the state finance view of inflation.
In the context of the discussion in this chapter, an important example has been to take ‘commodity money’ and a commodity standard as necessary. This mistake has been discussed extensively from within the Systematic Dialectical method by Michael Williams, especially concerning Marxian theories (Williams, M., ‘Money and Labour-Power: Marx after Hegel or Smith plus Sraffa’, Cambridge Journal of Economics (1998); and ‘Why Marx Neither Has Nor Needs a “Commodity Theory of Money”’, Review of Political Economy (2000)). Note that, for Martha Campbell, Marx’s commodity money starting point in Capital, vol. I is a methodical device which nevertheless allows him to end up with credit money in Capital, vol. III. However, this does not affect Williams’ systemic argument. Within systematic dialectics, it would be odd to introduce a contingency early in the presentation. Apart from that, it is doubtful if Marx took a commodity (any) standard of money as being contingent. See Campbell, ‘Money in the Circulation of Capital’ in C. J. Arthur and G. Reuten (eds), The Circulation of Capital: Essays on Volume Two of Marx’s ‘Capital’ (London/New York: Macmillan/St. Martins Press, 1998); and ‘The Credit System’, in Campbell and Reuten, The Culmination of Capital.
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Reuten, G. (2003). On ‘Becoming Necessary’ in an Organic Systematic Dialectic: The Case of Creeping Inflation. In: Albritton, R., Simoulidis, J. (eds) New Dialectics and Political Economy. Palgrave Macmillan, London. https://doi.org/10.1057/9780230500914_3
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