From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Thu Aug 23 2007 - 17:10:46 EDT
Dear Prof. Cockshott, Realised capital gains for tax purposes are actual income obtained from the sale of an asset. Many unrealised capital gains are not taxable. In national accounts, GDP can be measured according to an income, product or expenditure approach. By definition these must be equal in aggregate, only a "statistical discrepancy" can occur due to data collection problems. Why are they equal? Because of the way transactions have been selected and categorised in the product account, i.e. for every expenditure included in the account there exists an income, and the sum of incomes or expenditures is equal to the value of gross product. But this leaves out of consideration a whole set of transactions external to the primary circuit of income flows, which also generate income, including profit income. From the point of view of social accounting, this is regarded as property income/expenditure, which does not contribute to value added, and is external to the sphere of production. The data we have for this property income is sketchy, some indication can be gained from e.g. the flow of funds tables and tax tables or the capital account. Any story about capital accumulation is imbalanced, if it disregards that the value of physical assets external to the sphere of production is, in rich countries, nowadays larger than the stock of physical assets used for production. This is part of what it means to say they are rich. Thus, in the USA, the US Budget cites the 2005 stock of non-residentials structures + consumer durables as being worth $15.1 trillion as against $14.9 trillion worth of non-residential plant & equipment + inventories. I have not included the value of land here, because I have no breakdown for productive land and non-productive land. This stock of "unproductive assets" can be traded in. In the secondary circuits, profits can be made which are not directly attributable to any current surplus labour. Prof. Kliman claims that ALL profit is exclusively sourced to surplus labour, but a correct "Temporalist" perspective must at the very least distinguish between current and past surplus-labour. I haven't written a learned paper on this, but I trust the point is obvious. The analysis of the mentioned non-labour profits must consider whether they involve a genuine transfer of value from somewhere else, or whether they are due to a change in the value-structure of total domestic assets, as a result to changed social and economic relations. Moreover, surplus labour and surplus-value can be positive, while profits are negative, as happens when a business operates at a loss with the aid of credit. We should distinguish here between simple Marxian and Sraffian models of the distribution of current output, and empirical reality. It is also in principle possible that surplus labour is positive but surplus value is zero. Jurriaan
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