[OPE-L:110] [OPE-L:346] RE: Re: Re: working-class savings

Wed, 18 Nov 1998 17:52:46 -0000

In reply to Jerry: Pasinetti, who takes Marx seriously, proves using an
ingenious mathematical proof that the Cambridge equation still holds
even though there is worker savings (see Pasinetti, L.L. 1974. Growth
and Income Distribution). This is a well known proof in the growth
literature. It would be interesting to know how it squares with
Pasinetti's other work on the labour theory of value. I think there is
some literature on linking the Cambridge equation to Marx.

Andrew (Trigg)

> -----Original Message-----
> From: Gerald Levy [SMTP:glevy@pratt.edu]
> Sent: 18 November 1998 11:43
> To: ope-l@galaxy.csuchico.edu
> Subject: [OPE-L:343] Re: Re: working-class savings
> Thanks for the reference, Ajit. However, when you write --
> > <snip> All these variables are determined in the
> > historical class struggle. Marx's point is not that an individual
> worker
> > cannot save at any given point in time. His basic point is that for
> the
> > working class as a whole there cannot be persistent positive saving,
> i.e.
> > the working class cannot go on bequeathing property from one
> generation to
> > another. If the working class as a whole could go on saving
> persistently,
> > then, in the long run, they would not remain the propertyless
> proletariats,
> > and the whole basis of the capitalist mode of production would
> collapse.
> > Thus, the assumption that workers consume all the wages is a sound
> > assumption in Marx's theoretical system.
> I think you misunderstand my question(s). I was not asking whether
> Marx
> assumed that workers' savings = -0-. I was asking, instead, for any
> references written by Marxists in which workers' savings were > -0-.
> You raise the question of whether, over the long-run, the inheritance
> of
> workers' savings can lead to a change in class membership. I think you
> raise a valid point, *but* workers' savings doesn't have to be large
> enough per family or a large amount of inheritance/family for it to be
> important for the macroeconomy. After all, we're talking about savings
> by 80% (or so) of families. Even if that doesn't break-down to much
> money
> per family in relationship to savings per bourgeois family, the total
> amount saved would be important to the macroeconomy. Also, it would be
> important to the individual working-class families. Suppose a
> significant
> percentage of an individual working-class family income (let's say
> 20%) is
> derived from interest. Under those circumstances then if they are
> receiving less interest with the same amount saved, then their total
> income has gone down, ceteris paribus. Before someone considers this
> to
> be a marginal case, consider the elderly who in many countries have
> over
> the course of a lifetime saved a substantial amount of money. Indeed,
> in
> many countries they *have* to save some money to be able to pay for
> medical bills, nursing, housing, and burial when they are older. In
> Japan,
> for instance, there aren't generally pensions and instead a worker is
> given a one-time "golden parachute" of sorts (in practice, this
> generally
> means that the elderly family members often become more reliant on
> their
> children or other relatives). Thus, by the time many (most?) of these
> former workers die their savings will have either been greatly eroded
> or
> completely disappeared. There isn't therefore generally what you call
> "persistent positive saving" (as you define it above).
> Thus, on the level of concretion where we are examining an advanced
> capitalist economy in the period of late capitalism, we have to
> consider
> the effect of savings by working-class families. This would be the
> case
> regardless of what Marx wrote or did not write. Do you agree?
> In solidarity, Jerry