[OPE-L:4919] Re: armaments and value

From: paul bullock (paulbullock@ebms-ltd.in2home.co.uk)
Date: Fri Feb 16 2001 - 17:37:50 EST

-----Original Message-----
From: Gerald_A_Levy <Gerald_A_Levy@email.msn.com>
To: ope-l@galaxy.csuchico.edu <ope-l@galaxy.csuchico.edu>
Date: 15 February 2001 12:45
Subject: [OPE-L:4909] armaments and value

>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.

Gerry,  my remark related to the definition of 'productive' or not,
naturally if there were no demand then there would be no production, but
this was not the issue I was addressing

The actual process of tracing out an analysis passing from fundamental concepts/ categories,  to undeniable empirical phenomena  is  a difficult business, I shall just add a few comments here
>If we look at the armaments production more closely we might divide it as
>follows:  Why do you want to do this?
>(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.(but always in the end from the workers)

(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
labour). OK... 

     (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). This sentence is speculative, it depends entirely on different regimes, contexts etc. Bigger firms will usually have higher organic compositions of capital and their prices of production will be above their individual values.

    (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 (one wouldn't believe if one read the comment on the placing of orders by the UK govt..awarding contracts before competitive bids is still rather rare!) by the state in which price and  individual profits are determined through a "cost-plus" agreement. 
( Mixing up the concrete issues of competition here now takes us away from the original 'productive'or not discussion.) 

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). No comment on this issue of 'rent' for the moment.

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
value). I previously pointed out that the problem is that the armamnets industries cannot produce relative surplus value, this is why there is such a fuss about 'crowding out'. But you have not followed those points up.

What do you think?

>In solidarity, Jerry

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