Dictionary of Revolutionary Marxism

—   Inu - Inz   —


INVENTION
The invention of new machines and new production techniques is something which is furthered by the sociopolitical advancement of society. Invention was much fostered with the advent of capitalism, was additionally fostered with the advent of capitalist-imperialism, and will be fostered to an even greater degree under socialism and communism when workers and technicians come to understand that their new ideas benefit both themselves and the people in general, and not just a handful of capitalists!

“Competition becomes transformed into monopoly. The result is immense progress in the socialization of production. In particular, the process of technical invention and improvement becomes socialized.
         “This is something quite different from the old free competition between manufacturers, scattered and out of touch with one another, and producing for an unknown market.” —Lenin, “Imperialism, the Highest Stage of Capitalism”, LCW 22:205.

INVERSION   [In contemporary corporate finance]
A method of avoiding taxes on corporate profits by buying up another company in a lower-tax country, moving the headquarters of the combined company to that other country, and thus “officially” becoming a foreign corporation. U.S. corporations with huge foreign profits presently do not need to pay U.S. taxes on those profits until they “repatriate” the money (i.e., send it back to the corporate headquarters in the U.S.). Inversion allows them to avoid those and other taxes permanently.
        As of late September 2014, at least 75 major corporations (including the fast food giant, Burger King) have already pulled this inversion scam and cheated the U.S. government out of billions of dollars in corporate taxes. Congress has recently been debating whether to change the law to make this sort of tax cheating more difficult, though many in Congress (who more directly represent these cheating corportions) favor just lowering corporate taxes even further so that companies have no need to pull this scam in the first place. (The U.S. corporate tax rate has already been lowered to an official 35%; however, the plethora of tax loopholes means that most corporations pay a much lower rate, many of them less than 10% and each year many corportions already pay no taxes whatsoever.)
        See also:
CORPORATE TAXES,   TAX LOOPHOLES

“INVERTED SPECTRUM”
This is a puzzle or sort of a thought experiment championed by those influenced by philosophical
idealism (as most of us have been to some degree in this society!). It is often presented along these lines:

How do I know that others see what I call red when they look at something that is red? Sure, they also call it red, but how do I know it looks the same to them as red looks to me? Couldn’t they be having the same subjective experience as I have when I look at blue things, for example? And couldn’t they have the subjective experience of seeing “redness” when they look at what we both call blue things?

In Chapter 23 of his book I Am A Strange Loop (NY: Basic Books, 2007), pages 333-338, Douglas Hofstadter discusses this riddle at length and utterly demolishes it. (If this riddle really bothers you, I suggest you go there for the full antidote! I’ll just refer to a few of his points here.)
        Hofstadter notes that those who are impressed by this inverted spectrum argument make the unacknowledged assumption that “our experiences of redness and blueness are totally disconnected from physics”. The feeling of a color, they think, is some sort of individual invention which two different people could “invent” in two entirely different ways. Actually, if two different people have senses which are more or less equally capable of discriminating light of a certain color, and whose brains have neural networks which signal when this specific color of light is detected, then there is every reason to believe that the subjective experience of the two people is also equivalent. Why would evolution have developed two wildly diverse subjective neural networks on top of what is necessary to recognize and register the presence of a given color in an object? Moreover, if the two people had developed these additional unnecessary subjective neural networks (to reflect this differing subjective “redness” or “blueness”), this would be discoverable by the close inspection of the two different brains. No such differences in brains have been discovered, and no neurophysiologists really believe that they ever will be.
        Hofstadter goes on to note that any presumed difference in subjective feeling associated with the same color would therefore have to be entirely unrelated to any physical structure of the brain or its neural networks. In other words, the differences would have to be entirely in the realm of mind as opposed to physical brains. Thus, this notion of the possibility of “inverted spectrums” (and of generalizations of the idea encompassed under the name of “qualia”) must of necessity imply a dualistic theory of mind and brain (matter). And dualism, from the materialist perspective, and since it denies that matter is the necessary basis for all mental phenomena, is merely a variety of philosophical idealism.

INVESTMENT
1. [From the point of view of capitalists and well-off people in bourgeois society:] The outlay of money with the goal of “making” (later receiving back) more money or profit.
2. [From the strict point of view of Marxist political economy:] “The conversion of money into productive capital.” [Marx, Capital, vol. III, ch. 6, sect. 2, (International, p. 111; Penguin, p. 207, which has “transformation” instead of “conversion”).]
        See also entries below.

INVESTMENT BANK
See:
BANK

INVESTMENT — Capitalist
As noted in an entry above, “the conversion of money into
productive capital” (Marx). That is, the use of profits from previous capitalist exploitation (i.e., surplus value) to buy new factories, machinery, raw materials, etc., and to hire more workers to make productive use of those things, in order to produce more commodities for sale and thus gather yet more surplus value and profits in the process of doing so.

INVESTMENT — Falling Corporate Rate Of
Capitalist corporations have the option of reinvesting their profits (by building new factories and increasing production, etc.), or by distributing those profits to shareholders in the form of dividends, or else by just building up piles of cash on hand. During boom times, when further profits can easily be made by building new factories and expanding production, corporations naturally put a much greater proportion of their profits to that use. But during an overproduction crisis, when corporations cannot even sell all that they can already produce, their strong tendency is to avoid new productive investment, and to expand their dividends to shareholders or to build up their excess cash in company bank accounts and/or engage in financial speculations.
        In the graph at the right, we see how the ratio of corporate reinvestment of profits to the dividend distributions has declined in a major way since the beginnings of the current U.S. and world capitalist overproduction crisis in the early 1970s. The continuing decline is especially pronounced over the past decade or two, which includes the period of the
“Great Recession”. Bourgeois publications such as the Economist claim that this low and still falling rate of reinvestment is due to extraneous factors, such as incorrect “incentives” given to corporate managers. But the real explanation is much simpler: It makes no sense to build new factories when you can’t fully make use of all those you already have.
        See also entries below.

INVESTMENT — Weak (Bourgeois “Explanations” For)
How do bourgeois economists explain the very weak and falling rates of capitalist investment at the present time? Of course they rarely recognize or admit that capitalism has any inherent flaw that leads to this result (and to outright financial and economic crises)! So they must cook up all kinds of other strange theories. See the following summation of one recent paper by bourgeois economists for an example of this.

“We document that the use of factors such as software, intellectual property, brand, and innovative business processes, collectively known as ‘intangible capital’ can explain much of the weakness in physical capital investment since 2000. Moreover, intangibles have distinct economic features compared to physical capital. For example, they are scalable (e.g., software) though some also have legal protections (e.g., patents or copyrights). These characteristics may have enabled the rise in industry concentration over the last two decades. Indeed, we show that the rise in intangibles is driven by industry leaders and coincides with increases in their market share and hence, rising industry concentration. Moreover, intangibles are associated with at least two drivers of rising concentration: market power and productivity gains. Productivity gains derived from intangibles are strongest in the Consumer sector, while market power derived from intangibles is strongest in the Healthcare sector. These shifts have important policy implications, since intangible capital is less interest-sensitive and less collateralizable than physical capital, potentially weakening traditional transmission mechanisms. However, these shifts also create opportunities for policy innovation around new market mechanisms for intangible capital.” —Nicolas Crouzet & Janice C. Eberly, “Understanding Weak Capital Investment: the Role of Market Concentration and Intangibles”, NBER Working Paper No. 25869, May 2019.
         [It is of course true that “market concentration” (otherwise known as monopoly or oligopoly) can intensify slowdowns in the rate of new capital investment. The more monopoly in a capitalist economy, the more moribund it is. However, in this recent “globalist” era there has actually been more competition—at least internationally—and not less. And some of the weakest industries have been the traditional ones such as steel and automobiles, where overproduction is most glaring. Thus the claim that software and other “intangible capital” are a major cause of the investment slowdown is way off base. The real cause is the traditional explanation that Marx established a century and a half ago: it makes no sense to expand production further when there is no sufficient market for what is already being produced. —S.H.]

INVESTMENT STRIKE
A refusal to invest in productive capital (factories, machinery, etc.) by the capitalists who have plenty of money available to do so. Since investment is the means by which capitalists expand their wealth and power, why would they ever slow down or halt their further investment? Two explanations for why this can sometimes happen are:
        1) For temporary political reasons, such as to force the collapse of a
social-democratic or other reformist government which the capitalists perceive as being insufficiently supportive of their interests;
        2) And much more commonly and importantly, because of a serious overproduction crisis in which large numbers of capitalists do not see any profitable investment opportunities because they already have many factories which are partially or completely idle.

“Rising income inequality since the 1980s in the United States has generated a substantial increase in saving by the top of the income distribution, which we call the saving glut of the rich. The saving glut of the rich has been as large as the global saving glut, and it has not been associated with an increase in investment. Instead, the saving glut of the rich has been linked to the substantial dissaving and large accumulation of debt by the non-rich. Analysis using variation across states shows that the rise in top income shares can explain almost all of the accumulation of household debt held as a financial asset by the household sector. Since the Great Recession, the saving glut of the rich has been financing government deficits to a greater degree.” —Atif R. Mian, Ludwig Straub, and Amir Sufi (bourgeois economists), in the summary of their article “The Saving Glut of the Rich and the Rise in Household Debt”, NBER Working Paper No. 26941, April 2020.
         [The authors seem to be saying both that the growing inequality in American society (resulting from who-knows-what!?) causes the “savings glut” of the rich, and that this in turn causes the growing debt of the “non-rich” (formerly known as “the poor”). These claims are not correct; correlation is not cause and effect! The savings glut of the rich results from the major long-developing capitalist overproduction crisis which means that it no longer makes any sense for the capitalists to invest in order to substantially increase production, since they can’t find markets for all the commodities produced in their existing factories. Similarly, the growing debt of the working class and poor is not the result of the mere fact that the rich don’t know what to do with all their savings; even during capitalist booms, before any overproduction crisis begins to develop, the working class is still quite impoverished, certainly in comparison with the bourgeoisie.
         However the open acknowledgement by bourgeois economists that there actually is a savings glut of the rich says something important about just how extreme the overproduction crisis is becoming. According to long-established bourgeois theory (“Say’s Law”) generalized gluts of either commodities or opportunities for investment in production should be “impossible”! When even bourgeois theorists recognize that the rich are “failing to invest” in production, then the financial/economic situation is indeed getting very serious. —S.H.]

“INVISIBLE HAND”
The absurd idea that the public interest is best served if everyone looks out only for their own private interests, and that the “public good” is somehow mysteriously generated out of all that private selfishness by some “invisible hand”!

“But it is only for the sake of profit that any man employs a capital in the support of industry...
         “As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.” —Adam Smith, The Wealth of Nations (1776), Book IV, Chapter II, (Modern Library, 1937), p. 423.




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