[OPE-L:5304] Re: Re: Re: Unproductive labour and illusions of competition

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sun Apr 01 2001 - 07:08:22 EDT

re 5303

>On Sat, 31 Mar 2001, Gerald_A_Levy wrote:
>>  Re Paul C's [5203]:
>>  No one has answered the above post (which
>>  is reproduced at the end of this post).
>Paul's post was closely argued and took a bit of digesting.  I printed
>it out and studied it the other day.  I find it very persuasive.  The
>gist of it is that if an armaments industry is transferred from state
>to private capitalist ownership, with no change in the technical
>conditions of production, the effects are (a) that the
>armaments-producing capitalists make a profit, but (b) the capitalist
>class a a whole must pay higher taxes to finance the arms-producers'
>profits, so that the net effect on profits is zero.
>The shift of the arms industry to the capitalist sector could augment
>aggregate profits only it it were accompanied by (a) a shift in the
>tax burden towards the working class, raising the general rate of
>surplus labour, or (b) an increase in deficit financing on the part of
>the state.  But both of these factors are "extraneous", in the sense
>that they are not logically associated with the change in ownership of
>the arms industry and could equally well occur in the absence of such
>a change in ownership.
>Paul makes a good case for the proposition that the "classical"
>marxian analysis of productive and unproductive labour is not adequate
>to grasp the issue.
>Allin Cottrell.

I disagree, Allin.  If privately produced, the arms are a value; the 
arms dealer alienates a commodity which comes through the market to 
represent some aliquot of socially necessary labor time. Since they 
are a value, it follows that the labor expended in the production 
thereof was labor productive of value and surplus value for the arms 
mfg, if not for the capitalist class as a whole.

What is important is not whether the labor employed by the arms mfg 
is productive but rather--and here the point can easily be made in 
terms of the categories of Capital, vol I which Paul C argues is not 
up to the task--that arms are not values which in the production 
process are not only preserved but also used to absorb surplus labor. 
Arms, like luxuries, are unreproductive goods.

Thus, from the perspective of total capital, state spending on its 
own direct productin of arms or on purchases from private contractors 
represents a pulverization of value, for no matter how the arms are 
used, their value (to the extent that they are values) will not only 
not be valorized, it will be destroyed--though the state will still 
owe interest if it has borrowed for the purchase.

Why then would the capitalist state embark on an arms build up? This 
non important state of affairs you and Paul are not explaining.

Aside from so called security concerns, the state may turn to arms 
production as a temporary economic stimulant which seems all the more 
attractive since it is not immediately clear that state spending on 
arms represents an annihilation of value; after all, arms producers 
enjoy a rapid enrichment;  higher levels of production can be 
maintained and due to multiplier effects total profits are--contrary 
to what you say--higher than they would have otherwise been had 
surplus value remained uncapitalized and idle, instead of deployed 
through govt taxation or borrowing on the purchase of arms; and 
rentiers who would have had no other outlet for excess savings have 
amassed a portfolio of government bonds, seemingly safe and stable 
assets (which however are simply fictitious capital).

That an arms build up represents the same annihilation of value which 
has historically been effected by outright depressions is the 
fundamental illusion through which we fail to see since an arms build 
up can  stimulate production and aggregate profits in the short run.

While the chaos and unemployment of depressions can be avoided 
through an arms build up, the state is left in debt and thus 
desperate to leverage the military assets which it has accumulated. 
This is an exit from crisis which only results in greater horrors.

By the way, I fully expect especially medium to small cap high tech 
companies to report terrible quarterly reports starting next week; 
the Nasdaq should give another 300 to 400 points in the next month; 
and this should be enough to ensure that a recession hits hard by the 
end of the year. In this context, Bush will be tempted by ever bigger 
arms build ups.

Yours, Rakesh

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