From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Nov 02 2004 - 04:30:15 EST
Rakesh Aside from this, you are theorizing unproductive expense not in the classical Malthusian manner of solving a realization problem or in the Kaleckian/Trigg manner of an autonomous increase in effective demand but as a diversion from accumulation and thus a stabilizer of the OCC. Paul C Unproductive expenditure has both effects. It augments the level of monetary profits, but investment has the same effect. Investment however raises the capital labour ratio which unproductive expenditure does not. Rakesh No time now to quote Marx on the decline in the rate of profit actually serves to increase the rate of accumulation. See Marx quoting Richard Jones on this in the third volume of Capital. Samuel Hollander makes a lot of this possibility. Paul C Can you elaborate on what you mean here? > >Paul >I am at a disadvantage in not having seen Andrew's paper, but >it looks to me as if he is merely drawing peoples attention to >some old results from the 30's that are perhaps not as well known >as they should be. But I don't think it is true that a crisis of overproduction was brought about by less than robust autonomous increases in luxury spending. That would have made for interesting workers' banners in the Great Depression: Capitalists of the World Unite and Luxuriate?! -------------- Paul C I am really not sure about this. I can not remember enough about the trend in unproductive expenditure in the 20s. One very obvious factor was the effect of the disarmament treaties of the early 20s in reducing military expenditure during that decade when compared with the period prior to World War 1 and after World War 2. The arms race that was developing between the USA on one side and Britain and Japan on the other in the period 1918 to 1921 was brought to an abrupt halt in 1922. I am not sure just what proportion of total surplus value had been going on armaments prior to 1914 but I would guess it would have been quite significant. For centres of heavy industry in Britain like the Clyde and Tyneside, warship production would have been major sources of employment which were then withdrawn for 15 years or so. I assume that there would have been similar effects on the Japanese shipbuilding industry. For the US, shipbuilding may have been a less significant industry. The restrictions on armaments expenditure in Germany imposed by Versailles inevitably had a serious effect on employment in heavy industry there. The re-employment brought about by re-armament in the 30s certainly helped the popularity of the National Socialist government there. I don't know enough about the trend of French armaments expenditure in the 20s to know if it would have had an impact on their economy. Your joke about 'Capitalists of the World Unite and Luxuriate?' trivialises what was a very real political issue at the time. Increased unproductive expenditures - not so much by individual capitalists but by the state, were certainly a very live issue in the politics of the time. They have remained so until recent times, one has only to think about the employment provided by Regan's arms drive in the 80s and its effect in winning support for the Republicans.
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