Re: / Andrew T on Marx, Luxemburg and Grossman

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Nov 02 2004 - 04:30:15 EST


Aside from this, you are theorizing unproductive expense not in the
classical Malthusian manner of solving a realization problem or in
the Kaleckian/Trigg manner  of an autonomous increase in effective
demand but as a diversion from accumulation and thus a stabilizer of
the OCC.

Paul C

Unproductive expenditure has both effects. It augments the level
of monetary profits, but investment has the same effect. Investment
however raises the capital labour ratio which unproductive expenditure
does not.


No time now to quote Marx on the decline in the rate of profit
actually serves to increase the rate of accumulation. See Marx
quoting Richard Jones on this in the third volume of Capital. Samuel
Hollander makes a lot of this possibility.

Paul C

Can you elaborate on what you mean here?

>I am at a disadvantage in not having seen Andrew's paper, but
>it looks to me as if he is merely drawing peoples attention to
>some old results from the 30's that are perhaps not as well known
>as they should be.

But I don't think it is true that a crisis of overproduction was
brought about by less than robust autonomous increases in luxury
spending. That would have made for interesting workers' banners in
the Great Depression: Capitalists of the World Unite and Luxuriate?!

Paul C

I am really not sure about this. I can not remember enough
about the trend in unproductive expenditure in the 20s. One very
obvious factor was the effect of the disarmament treaties of
the early 20s in reducing military expenditure during that
decade when compared with the period prior to World War 1 and
after World War 2. The arms race that was developing between
the USA on one side and Britain and Japan on the other in the
period 1918 to 1921 was brought to an abrupt halt in 1922.
I am not sure just what proportion of total surplus value
had been going on armaments prior to 1914 but I would guess
it would have been quite significant.

For centres of heavy industry in Britain like the Clyde and
Tyneside, warship production would have been major sources
of employment which were then withdrawn for 15 years or so.
I assume that there would have been similar effects on the
Japanese shipbuilding industry. For the US, shipbuilding may 
have been a less significant industry.

The restrictions on armaments expenditure in Germany imposed
by Versailles inevitably had a serious effect on employment
in heavy industry there.  The re-employment brought about
by re-armament in the 30s certainly helped the popularity of
the National Socialist government there.

I don't know enough about the trend of French armaments expenditure
in the 20s to know if it would have had an impact on their

Your joke about 'Capitalists of the World Unite and Luxuriate?'
what was a very real political issue at the time. Increased
unproductive expenditures - not so much by individual capitalists
but by the state, were certainly a very live issue in the
politics of the time. They have remained so until recent times,
one has only to think about the employment provided by Regan's
arms drive in the 80s and its effect in winning support for the

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