At 02:54 18/08/97 -0700, Paul C. wrote:
>The analysis put forward so far is of a flow character.
>What about stock effects. Suppose that the armaments
>industry requires a very high capital stock in the form
>of nuclear reactors, gas diffusion plants etc.
>This is not part of the basic sector. It does however,
>if privately owned, earn profits on capital. I would
>suspect that very high levels of investment in such
>capital would depress the average rate of profit.
______________
Why do you think nuclear reactor is non-basic? Is it because arms
production is non-basic? If nuclear reactors are used in the production of
electricity etc., which by any account is basic, then nuclear reactors
would also be basic. However, if you are arguing that arms are non-basic
(and I would agree with that) and that nuclear reactors etc. are only used
in arms production, then they would be considered non-basics. The second
point is that, of course, the capital invested in non-basic goods
production would earn profits; otherwise why would a private business
invest in such sector. The point is that in a competitive long term
situation all sectors must earn the same rate of profit basics and
non-basics alike. Now, if there is a change in the production conditions of
non-basics, then allocation of labor would change between basics and
non-basics; however, it is not clear at all why the general rate of profit
be affected by this. I don't think that stock and flow has much to do with
the argument. The long term for the armament industry would certainly be
much longer than say textile industry. The other point, I think, we need to
keep in my is that in the real world situation we are dealing with
imperialism, where armament industry plays a role in maintaining an
imperialist rate of return on capital invested world wide. But this, of
course, is not the theoretical competitive case we are dealing with.
Cheers, ajit sinha