From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Fri Oct 07 2005 - 05:19:40 EDT
> A stimulation of employment may pull the economy out of recession > and allow the expansion of the basic sector which in turn will allow > the physical surplus of the basic sector to grow, and this, when > expressed in money terms will represent surplus exchange value. > Unproductive employment in the military may stimulate this but > that does not make employment in the military productive. Rakesh Well it is productive enough to have pulled the economy out of recession and allowed the expansion of the basic sector. Your choice not to call it productive seems arbitrary in what you have conceded. Moreover, do remember that you defended Andrew Trigg's argument that the whole economy could be pulled forward as long as banks were willing to finance and capitalists were will to indulge in ever more orgiastic luxury spending. Now you are arguing that luxury spending is not truly productive, but this runs against Trigg's, Kalecki's and Keynes' argument. You simply have to choose between Smith and Keynes. Paul ---- I am distinguishing between first order and second order effects. The first order effect of for example expenditure on armaments is unproductive. As a second order effect, through the 'accelerator' you can subsequently get a growth in the productive sector but only provided that there is sufficient spare labour and means of production to allow for this. The effect is clearer if you look at two hypothetical routes out of recession: 1) The state builds aircraft carriers and battleships as happened 1939 - 45 in UK and the USA. 2) The state expands publicly owned industries investing in real means of production in the railways, steel, gas electricity. This happened in the UK from 45 to 52 and averted a post-war recession of the type that occurred in the early 20s. Although both cases led to full employment, the first course of action led to a run down of the constant capital stock of the economy but the second course of action led to a rapid growth in that stock. The first involved a growth in unproductive sectors the second a growth in the productive sectors. This distinction is crucial to understanding the long term trajectory of the organic composition of capital and the rate of profit.
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