# Re: [OPE-L] cockshott, Fw: [OPE-L] basics vs. non-basics and financial services

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Mon Oct 10 2005 - 16:12:09 EDT

```I agree that you now have a feasible transition from stage
A to C1. But I think your example now proves my point, which
was that growth and accumulation depend on the surplus produced
in sectors I and II whereas sector III is indistinguishable from
the employment of servants at the macroeconomic level.

A) Simple reproduction:

I        10c + 5v + 5s        =   20
II        8c + 4v + 4s         =   16
III       2c + 1v + 1s         =   4
---------------------------------
Total    20c + 10v + 10s  =   40

In order to get a feasible transition to expanded reproduction
you had to amend this to a new Table A, call it A'
A')
I        10c + 5v + 5s              =   20
II        9c + 4.5v + 4.5s         =   18
III       1c + 0.5v + 0.5s         =   2
-------------------------------------
Total    20c + 10v + 10s       =   40

Note that in this you have had to reduce the output of dept III
from 10% of total output to 5%. This rise in the share of the
basic sector allows for the system to have an increased capacity
to grow.

You then shift to state B with the same number of industrial
workers.

B)
I        11c + 5.5v + 5.5s        =   22
II        8c + 4v + 4s               =   16
III       1c + 0.5v + 0.5s         =   2
-------------------------------------
Total    20c + 10v + 10s       =   40

B has an expanded sector I and is now capable of
accumulation which your original system was not. Note
that the precondition of accumulation is an economy
with an increased surplus in depts I and II.

Thus in order to carry out accumulation, sectors I and
II had to produce more surplus value. The surplus value
that you were originally producing in sector III (example A) was
as I contended incapable of supporting accumulation.

In your scenario C1 the servants are now working in
sector III
C1)
I        12c + 6v + 6s              =   24
II        7c + 3.5v + 3.5s         =   14
III       3c + 1.5v + 1.5s         =   6
-------------------------------------
Total    22c + 11v + 11s       =   44

The capitalists are now consuming their servants labour
indirectly in the form of commodities which accounts
for 2 of the growth of sector III from 2 to 6.
The remaining growth of 2, in sector III is accounted
for by consuming a higher part of the output of
dept I unproductively.

The original capitalist consumption was
8(ii) + 2(III)
now it is
2(i)+3(ii)+6(iii)

You now have a system capable of growing and accumulating
but that capacity to grow has nothing to do with the new
workers in dept III since their labour is being unproductively
consumed, instead it is due to the rise in sector I.

C2)
I        12c + 6v + 6s               =   24
II        9c + 4.5v + 4.5s          =   18
III       1c + 0.5v + 0.5s         =   2
-------------------------------------
Total    22c + 11v + 11s       =   44

differs from c1 in that you have expanded II and
the capitalists are presumably consuming more of dept II and
less of dept III.

But look at the balance of of the basic sector
in the two cases. In c1 we have a surplus of
5(I) + 3(ii)
from the basic sector
in case c2 we have a surplus from the basic
sector of
3(i)+ 7(ii)

the output of the basic sector can potentially
take the form of new capital either constant capital
in the case of (i) or the real wage correlate
of variable capital in the case of (ii).
We know from your example (c2) that the capitalists
can cut their consumption of dept ii to 2(ii).

This indicates that after providing necessary consumption
to the capitalists the respective surpluses are:

5(i)+1(ii) =6  :C1
3(i)+5(ii) =8  :C2

Thus as I have argued, example C2 where the servants
move to depts I and II has the greater capacity for
accumulation, and this greater capacity of accumulation
is due to the servants having been productively employed.
The employment of the servants in dept III in C1 can be seen
to deduct from the accumulable surplus value.
In case C1 all that has happened is that a number has been
allocated to the domestic labour of the servants, it now
appears on the books of the capitalists at its full value
rather than half value. But the labour is still being
consumed unproductively and supported out of revenue.
-----Original Message-----
From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Diego Guerrero
Sent: 10 October 2005 15:41
To: OPE-L@SUS.CSUCHICO.EDU
Subject: Re: [OPE-L] cockshott, Fw: [OPE-L] basics vs. non-basics and
financial services

Paul
----
>The problem here is that you endow capitalists with the power of
>magic. In period 1 the total output of means of production was 20c
>by the miracle of abstinence they now find themselves in possession
>of a total means of production of 22c to use up in the second period.

Diego
----
There is no magic nor miracles. Perhaps I jumped too quickly to the
final
state inmy previous post. Look at the tables A, B and C1:

A)
I        10c + 5v + 5s              =   20
II        9c + 4.5v + 4.5s         =   18
III       1c + 0.5v + 0.5s         =   2
-------------------------------------
Total    20c + 10v + 10s       =   40

B)
I        11c + 5.5v + 5.5s        =   22
II        8c + 4v + 4s               =   16
III       1c + 0.5v + 0.5s         =   2
-------------------------------------
Total    20c + 10v + 10s       =   40

C1)
I        12c + 6v + 6s              =   24
II        7c + 3.5v + 3.5s         =   14
III       3c + 1.5v + 1.5s         =   6
-------------------------------------
Total    22c + 11v + 11s       =   44

In A and B we have all servants at capitalists' houses. But in A,
a consumption of 8(II) plus 2(III) and no investment, they spend 6(II)
plus
2(III) plus investment 2 (I). Factories workers have to partially move
from
II to I, and therefore production have to change in the same direction
to
face the new structure of demand.

In C, all servants (who are a quantity of 1) come to factories of III,
but
as accumulation proceeds we have at the same time new changes in labour
and
production from II to I. Expenses by capitalists of their new total
income
(11) go to 3(II) + 6(III) + 2(I).

So, there is no magic but growth due to investment in factories (1 new
workers coming to factories in III + 2 new means of production used up
in
III). Capital variable has grown by 1, Value added by 2, and total value
by
4.

You can compare now Tables C1 and C2, where new workers have not gone to
III
but to the other departments instead. The situation is the same. This
can be
interpreted in this way: using a model with only 2 dep. instead of III,
C1
and C2 amounts to the same situation: means of consumption and means of
production are in the same relative proportion.

Therefore, it does not matter if goods of consumption are "contingent"
or
"necessary" --remember?--: in both cases labour producing them are
productive of surplus value.

C2)
I        12c + 6v + 6s               =   24
II        9c + 4.5v + 4.5s          =   18
III       1c + 0.5v + 0.5s         =   2
-------------------------------------
Total    22c + 11v + 11s       =   44

----- Original Message -----
From: "Paul Cockshott" <wpc@DCS.GLA.AC.UK>
To: <OPE-L@SUS.CSUCHICO.EDU>
Sent: Monday, October 10, 2005 11:59 AM
Subject: Re: [OPE-L] cockshott, Fw: [OPE-L] basics vs. non-basics and
financial services
```

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