[OPE-L:4909] armaments and value

From: Gerald_A_Levy (Gerald_A_Levy@email.msn.com)
Date: Thu Feb 15 2001 - 07:52:41 EST

Re Paul B's [OPE-L:4906]:

> (3) it  doesn't matter who buys these weapons

Yet, the demand by the state matters in terms of whether the weapons are
produced at all.

If we look at the armaments production more closely we might divide it as

(1) production undertaken by the state directly (this was the case with the
A-bomb). In this case all labour is unproductive and production is financed
through state taxation and borrowing and, thereby, through the
redistribution of value from capitalists and other classes.

(2) production undertaken by individual capitalist firms. This may be
further sub-divided as follows:

     (a)  firms producing armaments which are exclusively   sold as means of
consumption to individual consumers. This may or may not be considered
"luxury production" depending on the nature of the commodity and which class
(or classes) are buying. In this case,  most labour is productive of surplus
value (I say "most" because all firms have some amount of unproductive

     (b) firms producing armaments for sale both to individual consumers and
the state (or states). In this case, we might expect that for those
commodities sold to both consumers and the state, they would tend to be sold
at their value (although, with oligopolies this might not be the case and
the commodities might be sold above their value).

    (c) firms producing armaments for sale to the state. When we are talking
about this category, we have to remember that these firms do not operate
here within the context of a competitive market in the sense that they are
typically awarded a (usually exclusive) contract by the state in which price
and  individual profits are determined through a "cost-plus" agreement. In
this sense,  part of the price of the armaments might be thought of as a
monopoly price where there is a "rent" collected.  The "rent", of course, is
paid by the state and indirectly through taxation and borrowing from
capitalists and other classes (thus these contractors are beneficiaries of a
redistribution of surplus value that is undertaken ultimately on their
behalf  by the state).

When considering the effects of this on accumulation, is there a
"crowding-out effect" (!) ?  I.e. if the state has to borrow from the
private capitalist sector or increase taxation on capitalists to pay for
additional armaments purchases, won't that leave less money left over for
investment by private capitalists? While this might hurt most capitalists,
some firms (especially the armaments producers) might benefit by this
arrangement. And, of course, all capitalists within an individual capitalist
nation might ultimately benefit if they receive the rewards of imperialism
(which ultimately translates into an international transfer of surplus

What do you think?

In solidarity, Jerry

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