From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Nov 04 2003 - 10:50:04 EST
Philip Dunn wrote: Hi Paul > > I was not thinking of bank charges. The idea is that the spread of interest > rates generates sales revenue for the bank. > > The following comes from 'Concepts, Sources and Methods' > http://www.statistics.gov.uk/downloads/theme_economy/Concepts_Sources_&_Methods.pdfome> > "The output of financial institutions has always presented diffculties of > measurement. Each successive revision of the system of economic accounts has > come up with a different proposal for measurement. Neither national > accountants nor economists seem entirely clear what it is that banks and > financial intermediaries produce. SNS93 is no exception. It has proposed a > measure called _financial intermediation services indirectly measured_ (FISIM). > Under this proposal the _value added_ of financial institutions is seen as > intermediation -- that is bringing together borrowers and lenders. Neither > borrowers not lenders themselves are deemed to add value." > > There is more in the PDF -section 2.16 > > Phil It seems to me that there is a fundamental ambiguity in the concept of 'adding value', here. Any activity that uses up labour will in a sense 'add value' since in talking of adding value we are perfoming a projection operation from the branch of economic activity to the fraction of social labour it absorbs. But adding value in this sense is just an alternative way of saying 'cost effort'. Whether an activity is productive or not, depends on whether it contributes to increasing the social surplus product, which is a different question. -- Paul Cockshott Dept Computing Science University of Glasgow 0141 330 3125
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