Re: [OPE-L] NIPA (1) A practical proposal arising from a good discussion

Paul Cockshott (wpc@CS.STRATH.AC.UK)
Sun, 4 Jan 1998 18:20:08 GMT

At 10:19 28/12/97 +0000, Alan Freeman wrote:

>(e) that part of the labour of the state which is not consumed in the form
>of commodities (services provided as of right, such as free health care,
>state education, fire, police, etc) is a transfer income but of a different
>kind, since it creates new use-values that are not sold privately but
>distributed, as Rubin points out, according to principles of law and right.
>They are therefore not 'sold as commodities' and have to be accounted
>for distinctly. (Paul describes this as 'communist', which I wouldn't
>necessarily quarrel with, but I would add that we must be careful not to
>define a capitalist army - whose 'services' are also not distributed
>as commodities - as communist. A necessary additional qualification is to
>identify which social class benefits). These services, however, are
>ultimately paid for in money from the income of one or another class, via
>taxes, and consume (as intermediate inputs) a part of
>capitalistically-produced value, to which they add new labour organised as
>wage-labour but on a non-profit principle. IMO they are an intermediate
>form, best treated as a redistribution of existing value. I suggest simply
>that the net-tax procedure developed by Anwar and Ertugrul Tonak is the
>best generally-accepted procedure available and should be applied in order
>to identify the classes that receive the benefits of this use-value and
>impute a money magnitude to it, and to identify the classes that finance
>the labour which creates them.

I think that we have to be more precise than this. You say that the services
are ultimately paid for in money from the income of one class or another.
This is not quite true. If we compare the share of national income taken
up by healthcare, we find that in the UK it is lower than in many other
leading capitalist countries using existing accounting procedures. But
what conclusion are we to draw from this?

Is the provision of health services to the population less by the extent
of the discrepancy, or is it, as proponents of the NHS say, because socialised
medicine is more economically efficient than capitalist medicine?

If were to have compared a UK private and a UK NHS hospital in 1980
each employing 1000 people ( I chose a date before the Tory reforms
introduced an element of contracting out of services ), the national
income accounts would measure the contribution to national income
or the private hospital as wages + profits whereas that of the NHS hospital
would just be wages. If we were to compare the money values created
the private hospital ( assuming that it paid similar wage rates ) would
apparently contribute more to national income.

Let us assume for now that the intensity and efficiency of labour in
the two hospitals was the same, for 1000 person-years of labour the
NHS hospital contributed say 7 Million pounds whereas the private
hospital contributed say 10 Million pounds. The difference of 3 Million
would be profit plus consultancy fees for the private doctors.

Thus where communist production relations prevale in healthcare,
the money cost to the rest of society is only the necessary labour
time expended in healthcare. The surplus labour expended is appropriated
by society as a whole in kind without getting a monetary representation.
To the extent therefore to which the socialised sector of the economy
grows (shrinks) with time, the monetary categories used for measuring
it become less (more) accurate as a means of measuring the cost to
society in terms of social labour expended.

Ultimately therefore, when looking at mixed economies, and even more
when looking at primarily socialist economies, we should try to
measure the national income in terms of national labour budgets.
By using the actual labour time expended we can
escape from distortions of using monetary measures. The alternative
would be to impute profits to the NHS and education sectors. But how
would one arrive at these imputed profits?

One would have to look at the normal profit generated per worker in
the rest of the economy and apply this to the socialised sector, which
in effect means working out the rate of surplus labour and cross
applying it. This would merely be a monetary presentation of the
labour time data.

Paul Cockshott (