Re: [OPE-L] [Fwd: Re: [OPE-L] basics vs. non-basics and financial services]

Date: Tue Oct 04 2005 - 21:28:47 EDT

I must say that your position confuses me; one day you appear
sympathetic to Keynes, the other day you are saying pre Keynesian things.

On Tue, 4 Oct 2005 21:10:22 +0100
  Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote:
> Neither of these.
> If the rate of profit is too low relative to long term rates
> of interest capitalists decline to accumulate constant capital.
> This prevents extended reproduction and, if nothing is done will
> lead to contracted reproduction. In either case unemployment will
> rise significantly.

I get this case. What is the other case?

> State expenditure on unproductive activities can create additional
> demand which allows simple reproduction to take place by converting
> some of the output into commodities which are not accumulated.
> This corresponds to a shift in the working population out of the
> production of means of production and into  the production
> of weapons etc.

Huh? This assumes full employment; there need not be a shift in the working

The absorbtion of another part of the population
> in unproductive financial activities also prevents accumulation since
> the people who work in stock exchange offices of banks are people
> who are not working in factories producing means of production.

Yes but by giving a market to div i and div ii excess capacity can be worked off, possibly
creating the conditions for an investment led boom.

Do you agree with Keynes or not?


> -----Original Message-----
>From: OPE-L on behalf of Rakesh Bhandari
> Sent: Tue 10/4/2005 4:26 PM
> Subject: Re: [OPE-L] [Fwd: Re: [OPE-L] basics vs. non-basics and financial services]
> At 11:35 AM +0100 10/4/05, Paul Cockshott wrote:
>>I agree that mature capitalist economies can have a tendancy to spiral
>>into unemployment, and that the expenditure of the state on  weapons
>>can prevent this. But it prevents unemployment by at the same time
>>preventing accumulation and shifting the economy from expanded to simple
> Not following. Prevents higher levels of employment? And how is the
> state preventing accumulation if the economy is already spiralling
> into unemployment as a result of slow down in accumulation? Or are
> you saying that the state causes that downward spiral by, say,
> regressive taxes or the coddling of labor? Were Thatcher and Reagan
> right?
> rb
>>Paul Cockshott
>>Dept Computing Science
>>University of Glasgow
>>0141 330 3125

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