Re: [OPE-L] Capital reproduction theories and the facts

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Mon Sep 11 2006 - 04:47:39 EDT


If you look at a single nation, then net financial assets can be
positive if citizens
of that nation have made net loans abroad.

I think we have to differentiate what are in principle 3 classes of
assets which
are being grouped in the net worth here:

1. Ownership of equities, direct or indirect, this represents the
current price
    placed on the stock of constant and variable capital
2. Ownership of houses - this is value but not capital, unless it is
being rented out.
3. Holdings of bank deposits and bonds, these are financial assets
properly speaking
   and it is these that cancel out overall. One complication here is tha
the nominal liability
   represented by a bond will deviate above or below its current price,
hence at a period
   of unusually low interest rates the value of holding the bonds will
exceed their nominal repayment liability
   value and vice versa when interest rates are high.


Jurriaan Bendien wrote:

> Hi Paul,
>
> Just quickly, I'm aware that assets and liabilities are equal in a
> balance
> sheet consolidation - what I was thinking of though was the aggregate
> "net
> worth" of financial assets, expressed as a sum of capital owned at a
> balance
> date (a "stock value"), and this net worth is usually expressed as a
> non-zero number unless I am very much mistaken.
>
> This is often difficult to measure - although various countries
> nowadays try
> to measure the "net worth" of at least households in the national
> economy,
> this is often a total net worth, not differentiated according to *asset
> types* held. The American IRS provides tables for example on "All Top
> Wealthholders by Size of Net Worth" where financial assets are tabulated
> separately:
> http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96426,00.html
> but this
> does not cover the whole population obviously. You can also get IRS
> data on
> the "net worth" of corporations, but there is no separate treatment of
> financial assets and physical assets.  Tax-reported assets and
> liabilities
> may of course vary from the true situation.
>
> In the UK, however, more relevant data is readily available which you can
> consult for yourself. Thus, the Statistics Office reported on 23 July
> 2005
> as follows:
>
> "The total value of the UK at the end of 2004 was 5.8 trillion. Latest
> estimates from an Office for National Statistics (ONS) report, Capital
> Stocks, Capital Consumption and Non-Financial Balance Sheets 2005,
> show that
> at the end of last year the total net worth of the UK including financial
> assets was 5,843 billion - an increase of 404 billion on the previous
> year. Today's report publishes tables showing the market value of the
> UK's
> non-financial assets - a measure of the country's wealth. The detailed
> figures show that the most valuable asset continues to be housing with a
> total value of 3,427 billion - up 12 per cent on the previous year
> and 59
> per cent of total wealth. Of this, 3,221 billion belongs to
> households and
> non profit organisations - around 55 per cent of the nation's wealth in
> 2004."
> www.statistics.gov.uk/pdfdir/capital0705.pdf
>
> So from the British data, you can separate out the "stock" of physical
> assets and the "stock" of financial assets for the whole economy.
>
> ... and later:
>
> "Total net worth of the UK including financial assets at end 2005 was
> 6,012
> billion. This is an increase of 119 billion on the previous year.
> Detailed
> figures of the country's wealth show that the most valuable asset
> continues
> to be housing with a total value of 3,575 billion. This is up 4 per
> cent on
> the previous year and is equivalent to 59 per cent of the nation's
> wealth.
> The value of housing stock belonging to the household and non-profit
> organisations sector was worth 3,356 billion."
> www.statistics.gov.uk/cci/nugget.asp?id=479
>
> I do not have the relevant publications available here just now to
> make an
> analysis.
>
> But anyway, this is just to say there are several measures available in
> macroeconomic statistics to assess the role of the international
> transfer of
> wealth in the accumulation process. No Marxist that I know of has
> tried to
> establish what the gains and losses are in this respect though.
>
> Jurriaan



--
Paul Cockshott
Dept Computing Science
University of Glasgow



0141 330 3125


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