From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Fri Sep 08 2006 - 12:24:44 EDT
Paul wrote: One must surely distinguish between financial claims and real capital stocks. The former are information, the latter are values. Reply: Well I did already refer to financial assets... I would say the distinction is not between real and unreal capital, but between physical (tangible) capital assets and non-physical (intangible) capital assets. It is very difficult to estimate any meaningful national "stock value" for net financial assets, but arguably it is larger than the stock of physical assets. Of course, in part the financial assets refer to claims on physical assets. Financial claims I think are not just information, but tradeable values (though not labor-values in Marx's sense, because these apply to product-values - at most financial claims can be *expressions or representations* of product-values. At a certain level of abstraction, Marx conceives of capital as existing either in the form of money-capital (financial assets), commodity capital (products, either goods or marketable supplies of services) and production capital (means of production). But in reality this is a simplication, and the boundaries are in reality not so clear. For example, purely financial assets may have the status of either money-capital or commodity-capital. Residential buildings may be either owner-occupied durable consumer goods, or capital assets (objects of investment for profit). Part of the capital tied up in production may function only as financial asset, and so on. I suppose Marx was talking about the capitalist mode of production as the unity of production and circulation of commodities, but capitalist society as whole contains far more capital assets, both physical and financial, and point is, these assets - which may have distinct circuits of exchange - have an impact on the process of economic reproduction as a whole. With the aid of credit and legal enforcement, capital can mutate fairly smoothly from one form into another form, and it is the distribution of total capital between these different forms that shapes the pattern of economic reproduction. Typically a falling average profit rate in production causes capital to exit from the sphere of production, but obviously this exit does not mean at all that it ceases to accumulate (at a lower or higher profit rate as the case might be). It merely assumes another form. Within large corporate entities, the profit accounting may become less meaningful macroeconomically speaking since profit from the same outputs is extracted by different companies in the corporate group. We could argue (as Grossman does) that ultimately the amount of gross profit contained in new output must grow sufficiently to back all the financial claims that are staked on it, but it is also true that: (1) with the aid of credit you can displace the payments for current activity in space and time, and thus the trade in financial assets can attain a degree of independence from the sphere of production, (2) there exist a lot of capital assets, both physical and financial - external to the sphere of production - as I illustrated - with circuits which may become largely separated from the sphere of production. Marx never dealt systematically with the profits involved here, referring only vaguely to "profits upon alienation" (in the juridical sense), meaning these profits do not represent a net addition to new value or total wealth, but a transfer of value. Basically the wealthier a society is, the more assets it has accumulated which exist *external* to the sphere of production. About half of the value of net output in the US economy is nowadays classified as services, and as a corollary more or less the same applies to intermediate consumption. Some services are simply products (straightword commodity production) or a direct input into the production of goods; with other services (e.g. personal services), however, the moment of production and consumption coincides, or they are financial services, and this again impacts on the process of economic reproduction. The Marxian analysis of the services economy is not well-developed yet (see however Christian Girschner's book in German), but basically I would say the overall, longrun tendency of capitalism is to transform the results of human labor more and more into mass-reproducible commodity products. Typically, as the long term trend, first services are split out in the division of labour as separate, independent activities, then services are transformed into more or less standardised "service products" produced by workers who can be easily replaced (the labor is effectively deskilled or become less specialized), and finally a tangible mass-reproducible good replaces/substitutes for the service. This reflects, in part, the transformation of capitalistically unproductive labour into capitalistically productive labour, i.e. the modification of the division of labour in conformity with the requirements of organising the valorisation of capital more efficiently, imposing the specifically capitalist mode of production on the labour involved. However, the possibility of this transition occurring itself depends technically greatly on the specific nature of the use-value involved, and possibly also on power and property relations or ethnic peculiarities - in some cases the complete process occurs, in some cases only in part - because it is technically not possible (yet) to substitute a mass-reproducible commodity. An example I sometimes use is pop music. Initially, you have bands and singers performing live in pubs, and so on. Then you have mass-produced studio recordings (a more profitable activity) and mass concerts. Finally, you have people downloading songs for their Ipods. In the process, a transition occurs from a shared live experience, to a service, to a privately consumed marketable product, a commodity. Since, dialectically speaking, form and content "interprenetrate", however, the very fact that the song becomes a marketable product, privately consumed, also begins to affect the content of the song. Some time ago I provided a statistical summary of the US division of labor here: http://en.wikipedia.org/wiki/Division_of_labor#US_2002_estimates_for_the_division_of_labour The picture you get from that is obviously very different from the capitalist society Marx knew. You don't simply have a sector which produces consumer goods, a sector which produces means of production, and a luxury goods/arms sector. As regards armaments production and the military, SIPRI nowadays publishes (German-produced) data on this: PERSONS IN US MILITARY INDUSTRY 1990-2003 Year Employment in arms production Total armed forces personnel 1990 3115000 2181000 1991 3045000 2115000 1992 2840000 1919000 1993 2620000 1815000 1994 2460000 1715000 1995 2315000 1620000 1996 2210000 1575000 1997 2215000 1539000 1998 2180000 1505000 1999 2240000 1486000 2000 2425000 1483000 2001 2510000 1487000 2002 2600000 1506000 2003 2700000 1496000 as far as I know, "Employment in arms production" refers specifically here to producing commissioned military hardware, not ancillary goods (uniforms, certain vehicles, buildings etc.) but I could be wrong about that. After the falling of the Berlin Wall in 1989 and the easing of geopolitical tensions, both the number of US military personnel and the US weapons industry went into decline (the weapons industry oriented more and more to export, and also shifted production to an extent overseas). With the Bush administration, however, there is however again a significant upswing. The staff of the Dept of Defense itself has remained fairly stable at about 650,000 employees. http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf . But as regards arms production, the general law of motion of capital applies: fewer workers employing bigger, more efficient machines can produce much more military hardware in the same amount of time. See for example http://www.time.com/time/photoessays/2006/ammunition_plant/ It shows how 2,000+ workers can assemble 6 million bullets per day. Jurriaan
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