[OPE-L] Capital reproduction theories and the facts - another addition

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Sep 05 2006 - 16:37:15 EDT

I said:

"Sure, the significance of value-adding production is that it makes net
additions to the total physical stock of assets which can be traded, whereas
activities external to production typically do not"

Of course, an economist might be quick to point out this ignores the
possibility of net imports of physical capital assets of any kind (i.e.
imports of physical assets - fixed assets, durables, raw materials etc. -
exceed the exports of them). You can appropriate wealth from the rest of the
world, isn't that right?

In this sense, Henry C.K. Liu maintains that with dollar hegemony the US
exchanges paper dollars for "real wealth" from the rest of the world, in
which case it would seem that the total stock of physical capital in the US
accumulates in part purely as a result of this buoyant import trade.
Importing obviously does involve production, but the production cost in this
trade as a fraction of the total value of the tangibles imported is,
relatively speaking, minor. If that wasn't the case, they wouldn't normally

US Census statistics suggest that in 2005, exports of goods were $905.9
billion and imports of goods were $1,673.4 billion, in which case you have a
net gain in the domestic economy of a capital value of about $767.5 billion
in physical assets of various kinds. It seems a lot.

As I mentioned in previous posts a while back, the bulk of this stock of
imports by value does not however consist of ordinary consumer goods, it
consists of capital goods and raw materials. Consumer goods - including
luxury consumer goods - are only about a quarter of the total imports, and
foods/feeds/bevs are 4% of total imports. About a third of total value of
goods imported into the US consists of oil, petroleum and gas supplies. This
fuel is burnt up, so it does not itself add to the durable stock of physical
assets, only to air and soil pollution. Imported capital goods except
vehicles represent 22% of the total imports, and vehicles another 14%,
giving a total of about a third of imported goods.  The rest is industrial
supplies (raw materials of various kinds). Statistics do not provide a split
for business vehicles as against personal use vehicles, but basically you
could say about half a trillion dollars worth of capital goods gets imported
into the US a year. That again seems a lot. But you also have to remember
the US also *exported* about $461 billion of capital goods in 2005,
including vehicles... so really the net gain to the US stock in physical
capital assets from imports is not all that significant. Imports, although
they exceed exports by far, do not in fact add a great deal to the
accumulation of the net stock of physical assets in the US, in value terms.
So my original argument still stands.

The main source of the accumulation of material wealth in the US is... the
US working class. That is the real economic strength of America in
Wallerstein's "world system".


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