[OPE-L:4407] Re: produced and realized profit

Paul Cockshot (wpc@cs.strath.ac.uk)
Mon, 17 Mar 1997 03:25:27 -0800 (PST)

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> From: Gerald Levy <glevy@pratt.edu>
> To: Multiple recipients of list <ope-l@anthrax.ecst.csuchico.edu>
> Subject: [OPE-L:4360] Re: produced and realized profit
> Date: 11 March 1997 18:58
> >
> I have a few tentative comments, made without reference to Kalecki:
> (1) The rate of accumulation depends on the conversion of surplus-value
> into profit and then the subsequent re-investment on an expanded level of
> c + v. If we allow capitalist consumption to be greater than -0- (i.e. if
> there is some level of unproductive consumption of s by the capitalist
> class), then this decreases the amount of money that can be advanced by
> capitalists for c + v.
I think this is a serious misunderstanding that arises from focusing
on the activity of the individual capitalist rather than
seeing things as a whole.
When the system is viewed simultaneously there is no 'subsequent'
re-investment of surplus value. There is a flow of expenditure
on capital goods which simultaneously constitutes part of the
flow of profits for that period. Expenditures on investment do
not depend upon prior profits, they are the cause of current
profits. They not limited by past profit because they can
be funded on credit.

Kaleckis argument is

Total income = wages + profits

Total income = total expenditure

total expenditure = workers expenditure + capitalist expenditure

workers expenditure is assumed to equal wages,( one must
modify this in the light of consumer credit and saving schemes).

Thus capitalist expenditure = profits

capitalist expenditure = investment + personal consumption
> (2) On the other hand, if capitalist consumption increases, then the
> demand that capitalists have for consumption goods (so called "luxury
> goods") increases. If, then, the demand for these commodities increases,
> one would anticipate that the demand for labour-power and means of
> production by the capitalists producing luxury goods will increase.

Ok. This is marxs argument in wages prices and profit.

> (3) The mark-up in price by oligopolies could be initially thought of as
> leading to a redistribution of s among capitalists. However, if what is
> being marked-up are means of consumption purchased by workers, then the
> mark-up could lead to a decrease in real wages. If what is being
> are "luxury goods", then this would lead to a re-distribution of income
> among capitalists.
True if oligoplies are concentrated in workers consumer goods.

> (4) Increased taxation of capital means that capitalists will have less
> money capital that they can use for productive investment and
> accumulation. From that perspective, increased taxation if the money then
> goes towards increasing employment of unproductive labor by the state,
> leads to a decrease in accumulation. It might be possible, however, that
> the increased taxation might in certain circumstances lead to a
> redistribution of income such that the real wage of workers (including
> "social wage") increases.

I think it is wrong to say that taxation necessarily reduces the
'money capital' in the hands of capitalists. What is this 'money capital',
and why does it reduce. The banking system can expand money capital
very elastically.

It is not even necessarily the case that increased taxation on profits
reduces the flow of after tax profit. If the taxes are spent for instance
on arms, the effect is to increase the mass of profit to compensate.