From: Paul Zarembka (zarembka@BUFFALO.EDU)
Date: Thu Nov 30 2006 - 09:16:36 EST
Jerry, OK. But I was really surprised at Rakesh's 'maximize luxury consumption' frame of reference for somebody's theory (Marx? Grossmann?). I just didn't think it should pass unnoticed (I wasn't wanting to start a whole new thread). If Rakesh hadn't pushed it, I still might have let it pass as a slip. But... Now I think I have a better handle on where he is coming from. Paul --On Thursday, November 30, 2006 8:53 AM -0500 Jerry Levy <Gerald_A_Levy@MSN.COM> wrote: >> The object of capital is to control as much surplus value as possible. >> His/her personal choice thereafter regarding how much to use for luxury >> consumption is just that, but a capitalist who likes luxury consumption >> too much is violating his/her social function and that is NOT virtue. >> That's in Marx, but I don't feel like finding the exact passage in >> 'Conversion of Surplus Value into Capital'. > > Hi Paul Z (and Dogan, for reasons that become clearer in the following): > > I agree, but think that its important to note that this subject is > returned to by Marx at another level of abstraction, namely, that of > capitalist production as a whole. In Volume I there is the character > mask/capital personified assertion, but later where 'many capitals' are > taken into account, there is another argument. In the context of > competitive branches of production, any capitalists who increase > individual consumption at the expense of the productive re-investment of > their money capital in more C & V run the risk of being uncompetitive and > being driven out of the market and hence for them is not a 'virtue'. In > this sense, there is a somewhat modified 'invisible hand' argument: > capitalists are led as if by an invisible hand to productively re-invest > (and engage in technological changes in constant capital) at a greater > scale. Unlike the Smithian argument, though, the social-economic > consequences are not all or basically positive. In this sense, I think > that his presentation of the law of the tendency for the general rate of > profit to decline (LTGRPD) is implicitly a critique of Smithian doctrine. > But, I admit that there isn't textual evidence to show that Marx intended > the LTGRPD in part to be a critique of Smith. > > At a still more concrete level of abstraction (one that goes beyond > _Capital_) it could be claimed that corporations must invest in R&D now > if they expect to remain competitive over the longer-term. Of course, > there is risk in such expenditures since monies allocated for R&D are in a > sense speculative to the degree that corporations do not know whether > their research will pan out in terms of new product technologies or > advances in the quality of means of production. In this sense also, firms > are driven to undertake these expenditures in order to remain competitive > and these monies mean that there is less left over (in the short-run) for > individual consumption. > > One can also argue that firms for competitive reasons are driven to > increase some *unproductive* expenditures. For example, firms in > oligopolistic markets tend to spend heavily on advertising and marketing. > This (if there aren't price increases as a result of increased market > power) reduces the possible amount of monies which can be used for > individual consumption _and_ reduces the amount of monies that can be > used for productive investment. From the perspective of individual firms > the above seems entirely rational; from a broader social perspective > (which Dogan has been interrogating) it is another question. > > In solidarity, Jerry > > ************************************************************************** THE HIDDEN HISTORY OF 9-11-2001 --"a benchmark in 9/11 research", review Volume 23 (2006), RESEARCH IN POLITICAL ECONOMY, P.Zarembka, ed., Elsevier *********************** http://ourworld.compuserve.com/homepages/PZarembka
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