From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Sep 09 2006 - 16:03:20 EDT
Jerry wrote: The material form which constant fixed capital takes often serves as an obstacle to the "mutation" of that form of capital into another form. I would agree with that, there is no perfect mobility of capital and labor, and there can be both entry and exit barriers. Indeed you could argue that this contributes to economic crises. All I was really trying to argue here is, that the sphere of production is only one avenue for the accumulation of capital, and if the mass of assets external to that sphere becomes very large, this becomes highly significant for the accumulation process as a whole. I think to an extent conventional macroeconomic statistics do not make this very explicit, insofar as total net income from rents and interest, and pure property income, is not as clearly itemised in social accounts as it could be. And in Marxist theories it is often ignored, insofar as "accumulation" is thought to have something to do with production. But anyway I'm taking a break from OPE-L after this as my thoughts are running ahead of myself, causing stupid errors. As regards imports of fuel supplies into the US, of course they do exist more or less permanently as a "stock" of continually replenished reserves, and in that sense they are a physical capital asset too. I was just trying to look at the question of to what extent the net additions to the value of the physical capital stock in the US are due to domestic value-adding production, and to what extent they could be due to net imports from other countries (trading "real wealth" for paper dollars, as Henry Liu suggests). The impression I had was, that the net gain in value terms to the total physical capital stock from imports into the US is proportionally not as great as you might think, once you factor in the exports of goods - even though the physical quantities of goods involved could be very large. Just checking the figures again, ---------------------------- NET GAIN BY VALUE FROM FOREIGN TRADE IN GOODS, USA 2005 (Imports less exports by type of good, rounded billions of dollars, US Census) foods/feeds/bevs +$9.1 billion industrial supplies +$290.8 billion capital goods +$16.5 billion vehicles and parts +$140.9 billion consumer goods +$291.5 billion other goods +$18.6 billion Total net gain by value from foreign trade in goods +$767.5 billion --------------------- FOR SOME COMPARISONS: nominal increase in US GDP 2004-2005 = +$743.3 billion (BEA) Nominal increase in sales of goods included in GDP = +$172.8 billion (BEA) Nominal increase in value-adfde by private goods-producing industries =+$139.6 (BEA) nominal increase in US total private fixed investment 2004-2005 = +$205.6 billion (BEA) nominal increase in US total fixed assets 2004-2005 = +$2.1 trillion (BEA) real increase in total US privately owned physical assets 2004-2005= +$3.2 trillion (Budget data) real increase in the value of total US land 2004-2005= +$2.2 trillion (Budget data) real increase in the value of total US durable consumer goods 2004-2005= +$100 billion (Budget data) Nominal increase in the value of total US durable consumer goods 2004-2005= +$171.2 billion (BEA) real increase in the value of plant/eqpt/inventories 2004-2005= about +$300 billion (Budget data) real increase in the value of residential structures 2004-2005 = about +$700 billion (Budget data) nominal increase in the value of residential structures 2004-2005 = +$1.1 trillion billion (BEA) Well, what can I say. The net gain from imported goods 2004-2005 does seem to be large after all, it is larger than the nominal increase in US GDP! There are discrepancies between US Budget and BEA data. But, basically, I would say reported total values for physical assets within the USA are increasing *far beyond* what is can be attributed to gains in domestic output and fixed investment and net imports. It is as though the whole society is revaluing itself upwards, or in any case, there's a major case of "physical asset inflation" happening, especially real estate of all types (not just housing, also business structures and land). Generally I think we can arrive at better theories by looking at the readily available facts, which can help us understand the real proportions and dimensions of different problems. This is not really a true "empiricist" stance though, since I acknowledge that there is always a difference possible between systematically gathered observations and the objective phenomenon they seek to represent. Nevertheless a bit of factual inquiry can often put theoretical issues in better perspective, so that we don't make mountains out of molehills or vice versa. If my life had gone differently, I would have explored the issue more systematically... all I can offer here is a quick sketch of what I am talking about, in a Colin Clarkish sort of way. Jurriaan
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