If we assume that the advertising companies sell advertising services
as to manufacturers, then these services will be sold at a profit. Let
us assume that 25% of the turnover of the advertisers is profit, then
of the 4% of national income spent on advertising 1% will remain as
profits, available for accumulation. But what of the 3% that
went on copywriters wages?
This has been lost to the accumulation of capital. If, instead, the
4% was spent building new factories, the entire product worth 4% of
national income has been added to the accumulated capital of the nation
and ( assuming the same rate of profit ), the capitalists still have
the same 1% of the 4% available as profit for the next period.
> Given Marx's critique of Smith (cited by Alan) perhaps Smith had in
> mind the physical impossibility of accumulating services. But of
> course, on reflection, it is clear that the money representing the sv
> created by commodity-services is perfectly accumulable - or are we
> assuming a permanently binding labour-supply constraint here ... .
I think that an accumulation of money is only an accumulation of capital
if it is commodity money. In other circumstances, the accumulation
of money is not equal to an accumulation of value, it is simply
a book keeping operation. Under these circumstances an accumulation
of money is a zero sum game, the growth of credit balances in the
banking system is matched by debit balances, with no net accumulation
of value taking place. For accumulation to take place, value has to
be corporeal, it has to be embodied in material objects which
persist over time.