(OPE-L) Re: Permanent Arms Economy

From: Gerald_A_Levy@MSN.COM
Date: Thu Nov 04 2004 - 09:47:41 EST

Previously, I wrote:

>So, military goods are means of production which take the
>form of constant capital?  Or, are the means of production
>which are used to produce military goods constant capital?
>If you mean the latter, then it is the case that when the use-value
>of military goods is exhausted through being used during war
>then the demand for replacement military goods grows.  This
>presumes that corporations producing military goods which are
>sold to the state increase (constant and variable) capital spending.
>But, this is simply the using-up of commodity values.  Why
>is it any more destructive of use-values than the process of
>eating a sandwich?

Rakesh replied:

> ???it needn't be, but when sandwiches aren't being eaten, ie
> aoutonomous investment falters as result of previous drop off in
> profitability, then military expenditures can lead to generally
> higher cap utilization and thus consumption of capital.

Perhaps sandwiches are a bad example.  Suppose there is
a category of goods for which there can periodically be a sharp
increase in demand.  To meet that increased demand, capitalists
can increase capacity utilization (if there is excess capacity) and
thereby hasten the depreciation of constant fixed capital or they
can increase capacity by producing and/or purchasing more
(and, possibly, better) means of production.  So long as there
isn't a product innovation for a particular type of military good,
why doesn't this general situation describe what happens to
the consumption of constant capital when there is increased
military expenditure (whether or not the military goods are
actually used for their intended purpose)?

If there is technological change in terms of new product
technologies then presumably the same type of issues would
arise with military production as with non-military good
production.  If an old product becomes obsolete (presuming
there is a high demand for the new, more advanced product)
then the old product tends to lose its value prematurely
(a form of moral depreciation?) and there is now new investment
for producing the new, more advanced, commodity.  In
principle this might be possible by increasing capacity (if
there is excess capacity) at existing production facilities.  In
practice, the new product often requires different and/or
more advanced means of production.  If the latter is the case,
then some proportion of the value in the old means of
production would probably become morally depreciated.

What _is_ different oftentimes about military goods is that
obsolete goods are 'mothballed' rather than scrapped.
Even though the military might plan on never using the older
goods, they expend money on the preservation of
the value of these goods.  This requires that labor, some means
of production, and land (or sea) be allocated for this purpose.
Hence, there are certain "fixed costs" simply for storing the
obsolete goods.  The only similar (hypothetical) example I can
think of  that might occur by capital, rather than the state, is
commodity hoarding as a form of speculation.  E.g. suppose
food was hoarded by capital or landowners in the hope that
there would be famine in the future and hence prices could be
sharply increased and they would be rewarded for their
speculation with a higher than average rate of profit. Like
the state, however, with a fleet of mothballed ships, the
food hoarders/speculators would have to expend money
preserving the value of the commodities.

Of course, not all obsolete military equipment is mothballed.
Some are sold at reduced prices or given as "aid" to other
countries in exchange for something else (e.g. support in the
U.N. for a vote authorizing an imperialist invasion of a
sovereign nation).

Let us not forget, however, that the state can by mutual agreement
with another state agree to (literally) destroy some type of
military system.  Hence, the partial (literally) forcible destruction of
some percentage of the arsenal (often referred to as a 'stockpile')
of nuclear weapons.  If this results in a lower amount of money
being spent by and for the military, then it frees up funds so that
the state can use this money for other purposes (the so-called
"peace dividend") or possibly lower taxation and thereby free-
up funds for additional consumption (by one or all classes,
depending on the character of the tax cut) and  investment.

In solidarity, Jerry

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