Rakesh...my comments are in caps as usual
-----Original Message-----
From: Rakesh Narpat Bhandari <rakeshb@Stanford.EDU>
To: ope-l@galaxy.csuchico.edu <ope-l@galaxy.csuchico.edu>
Date: 18 February 2001 04:30
Subject: [OPE-L:4950] Re: arms, roads and fictitious capital
>re 4948
>
>Paul B,
>
>I think you are right, and I am wrong.
>
>I was thinking of the idea of fictitious capital; it is conceivable
>that the capitalist/creditor class could come to think that a govt
>which has to and is willing to finance its expenditures through debt
>financing expands the possibilities for capital accumulation. Of
>course an arms mfg could come to this conclusion and so could the
>govt's creditor. And I think it is this conclusion which has to be
>resisted.
>
>But let me go to the beginning.
>
>If an arms mfg sells directly to another capitalist, we agree that
>this can be classified as a dept III (NO WE DON'T -- WHERE DID YOU GET DEPT
III FROM? SWEEZY? LETS STICK WITH MARX'S IIB... THERE ARE GOOD REASONS FOR
THIS.. IT WILL STOP US PUTTING ISSUES LIKE ARMS INTO DEPT I, AND RECOGNISE
THAT ARMS PRODUCTION IS A 'LUXURIOUS NECESSITY' FOR THE BOURGEOISIE WHICH
HAS ECONOMIC EFFECTS EXACTLY LIKE LUXURIES... A 'III' IS AVOIDING THE ISSUE
WHICH I RAISED WHEN GERRY ASKED ABOUT 'SECURITY GUARDS'... THAT IS THE
PRODUCTION OIF ABSOLUTE OR RELATIVE SURPLUS VALUE)) activity in which value
and surplus value has been produced by the arms mfg, though the outlay by
the purchaser has been expended as revenue( MARX IS VERY CAREFUL WITH THE
TERM REVENUE... HE LINKS IT TO FINAL CONSUMPTION GOODS PRODUCED WITHOUT
SALE AS THE PURPOSE.(EG tsv 1).. BE CAREFUL HOW YOU USE IT... HERE YOU ARE
USING THE TERM DIFFERENTLY, IE AS MONEY SPENT BY THE GOVERNMENT AS A
CUSTOMER IN A SALE) for the arms will play no role in the future absorption
of surplus labor. The arms are
>"unreproductive" goods. Got you right? ( CLEARLY... THE NATURE OF THESE
'USE VALUES' IS DESTRUCTIVE PER SE)
>
>It then makes no sense for me to say that if the state taxes or
>borrows from from the private capitalist purchaser and then buys the
>weapon itself that the arms no longer embody value and surplus value.
>As you ask: why should a change in the agent who purchases affect the
>process of the expansion of capital?
>
>I think you are right, but here is what bothers me (though of course
>this is probably what you have been saying all along).
>
>Let's say the govt has purchased a better roads system from private
>contractors, instead of arms.
>
>Would you still agree that the surplus value which the state has
>seized through taxation or borrowing in order to make purchases from
>private capitalists no longer serves as capital? (WHY SHOULD I 'STILL'
AGREE ANYTHING LIKE THIS? I NEVER HAVE, HERE THE USE VALUE IS ENTIRELY
DIFFERENT... ONE OF THE PROBLEMS WITH USING MARX;;S METHOD FOR MANY SEEMS TO
BE THE RELATION BETWEEN USE VALE AND VALE. ONE CANNOT DISCOUNT THE
FORMER.... OF COURSE THESE ROADS A VITAL LOGISTICAL NECESSITIES FOR
ACCUMULATION)
>
> Even if a better roads system facilitates the circulation of
>commodities, the capital which was taken from the private sector to
>finance its construction has been destroyed. (NOT AT ALL, THE ROADS ARE
PART OF SOCIETY'S CONSTANT CAPITAL WHICH IS PASSED INTO THE VALUE OF THE
ACTIVITIES THAT USE THEM... THE STATE ACTS FOR THE BOURGEOISIE COLLECTIVELY)
If the state has
>borrowed to have private contractors make these roads or canals or
>bridges, it still will not pay back the loan (plus interest) out of
>the surplus value which results from any capitalistically productive
>investment which was undertaken on the basis of that loan.( IT WILL, THE
CAPITALISTS THAT USE UO THIS CONSTANT CAPITAL AS PART OF THEIR EXPANSION
PLANS WILL REPAY THE VALUE OF THAT INVESTMENT PAID ON THEIR BEHALF THROUGH
FUTURE TAXES AND LEVIES... AGAIN THE STATE IS A COMMON PURSE FOR SUCH
ACTIVITIES THAT CANNOT WELL BE DONE BY INDIVIDUAL CAPITALS)
>
>The roads are productive in a real sense but not capitalistically
>productive. The loan and the interest thus have to paid by seizing
>surplus value produced in the private economy, as Mattick Sr argued
>long ago.(CLEARLY THIS CONCLUSION DOES NOT FOLLOW FROM MY COMMENTS ABOVE,
AND UNLESS YOU PROVIDE A SOURCE FROM MATTICK I CANNOT SAY MORE)
>
>In such cases I would say that state spending constitutes the
>destruction or consumption of capital. ( CLEARLY STATE SPENDING MAY BE
EITHER, BUT EACH CASE MUST BE EXAMINED...AND ON ROADS I CANNOT AGREE) Money
loaned to the state
>through private purchase of bonds then only seems to function as
>capital.( SORRY THIS IS BEYOND ME... I HAVE PROBABLY BEEN TRYING TO LIVE ON
THIN AIR RECENTLY)
>
>And here is the difference--this is why arms production for the govt
>can't simply be classified as a dept III activity. (WHAT DEPARTMENT!!!??)
>
> If the capitalist had bought arms directly ( THIS CAPITALIST IS JUST A
HUNTER?)
, it would have been obvious that this was akin to a luxury expenditure; he
should not
expect a return from them ( AH SO NOW HE IS A MERCHANT INTENDING TO SELL THE
ARMS HE HAS BOUGHT?) on the hope that he can use them (AH SO NOW HE IS AN
INDUSTRIAL CAPITALIST USING ARMS HE HAS BOUGHT TO MAKE MORE ARMS... UNUSUAL
THIS) for the production of commodity output in which surplus labor would be
embodied. But if the capitalist makes a loan (NOW HE IS BANKER! HE'S VERY
BUSY THIS FRIEND OF YOURS) to the government which then buys weapons or
roads, he does think he has used the money as capital. But that capital has
in fact been consumed and destroyed. (WELL IF THIS IS TRUE IT WILL TEACH HIM
NOT TO TRY TO DO SO MUCH AT THE SAME TIME!)
>
>So as Mattick Sr (1967), Duncan (1986) and Carchedi (1991) have
>argued--and in Duncan's words-- the capitalized value represented by
>a govt bond represents fictitious capital because it appears to its
>owner to be a capital value but in fact represents no real part of
>the social productive capital. (THIS IS ANOTHER TOPIC..BUT TRY NOT TO
MUDDLE YOUR CIRCUITS OF CAPITAL..... BESY WISHES PAUL.B.)
>
> Yours, Rakesh
>
>
>
>
>>Rakesh,
>>
>>I respond below IN CAPS SIMPLY TO DISTINGUISH THE EXCHANGE...
>>
>>-----Original Message-----
>>From: rakeshb <rakeshb@stanford.edu>
>>To: ope-l@galaxy.csuchico.edu <ope-l@galaxy.csuchico.edu>
>>Date: 16 February 2001 23:45
>>Subject: [OPE-L:4923] Re: Re: Re: Re: faux frais, armaments, and security
>>guardservices
>>
>>
>>>Paul B writes:
>>>
>>>Rakesh, you are not denying that profits are made by the armaments
>>capitalist, ie that surplus value is extorted from their employees. Why
then
>>are these workers not productive of capital?
>>>
But this argument then denies that the armaments capitalist extorts
surplus value ( profits) from the workers. So you contradict yourself. How
>>can the State spending both realise profit as you state 'So a debt has
been
>>>incurred equal to the sum of costs + profits in the arm mfg's sale to the
>>>government', but at the same time NOT produce SV ?
>>>
>>>Paul B,
>>>
>>>But profit and surplus value are not the same. The commercial and banking
>>>capitalists make the former without the producing the latter, yet the
>>private property of these capitalists does serve them as capital. The
>>question
>>then is whether purchases by the state represent a similar kind of
>>deduction
>>from surplus value. (SAYS RAKESH)
>>>
>>I THOUGHT THIS MIGHT COME UP: ARE YOU SAYING BANKERS ARE THE SAME AS
>>ARMAMENTS MANUFACTURERS ? ARE ARMS MONEY? IF SO I'M NOT SURE THAT WE ARE
>>GOING TO MAKE PROGRESS.
>>
>>SECONDLY, THAT THE STATE DIRECTLY CONVERTS CAPITAL INTO REVENUE WHEN IT
>>DIRECTLY EMPLOYS ITS OWN ADMINISTRATORS, ARMY, ETC. IS DIFFERENT FROM ITS
>>RELATION IN THE MARKET TO MANUFACTURERS.
>>
>>HERE, AS IT SPENDS, IT REALISES THE VALUE AND SURPLUS VALUE IN THE
>>ARMAMENTS. YOU ARE NOW SUGGESTING THAT THE ARMAMENTS WORKERS ARE NOT
>>CREATING SURPLUS VALUE, BUT SIMPLY CONSUMING IT. IE THEY ARE UNPRODUCTIVE.
>>BUT HOW CAN THIS BE IF THEIR EMPLOYERS EMPLOY THEM TO SELL THEIR
COMMODITIES
>>ON THE MARKET TO OBTAIN MORE CAPITAL?
>>
>>IF YOU CONTINUE TO FOCUS ON THE AGENT WHO PURCHASES RATHER THAN THE
PROCESS
>>OF THE EXPANSION OF CAPITAL WE SHALL BE RELYING ON THE NATURE OF THE
>>CONSUMER, OR THE SOURCE OF THEIR REVENUE, AS THE BASIS OF THE DEFINITION
OF
>>PRODUCTIVE LABOUR. THIS SEEMS OFF THE MARK TO ME.
>>
>>OF COURSE IF YOU WANT TO START A TREND TO 'OBLITERATING' THE NOTION OF
>>SURPLUS VALUE ALTOGETHER IN ALL OR PART OF THE OPERATIONS OF EVERY
SUPPLIER
>>TO THE STATE, DENYING THAT THESE SUPPLIERS ARE CAPITALISTS ( BECAUSE THE
>>STATE USES SURPLUS VALUE TO BUY THINGS,) THEN WE WILL SOON BE LEFT WITH
>>PROFIT AND PROFIT ALONE IN A HUGE EXPANSE OF THE ECONOMY.
>>
>>
>>
>> In your quote Mattick is not saying what you say. nb where I have
>>>highlighted the text which is consistent with what I have said
>>>
>>>Highlights did not come through.
>>>
>>>Yours, Rakesh
>>
>>>Try format: /rich text, /and the colours might come out. Paul
>>>
>
>
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