[OPE-L:112] [OPE-L:348] Re: working-class savings

Francisco Paulo Cipolla (cipolla@SOCIAIS.UFPR.BR)
Thu, 19 Nov 1998 12:54:27 -0300

Gerald Levy wrote:
> Hasn't this
> infusion of money from the working-class been a major force driving
> changes in international stock markets in the last two decades? Indeed,
> one might even argue that these savings (especially if one also adds the
> funds from pension funds invested in stocks) has been a major source of
> funds for investment by private capital. Is this a scenario that others
> see happening as well?

Well, I certainly partake with you on this general concern about trying
to quantify the contribution of the working class to the accumulation of
money capital. Interestingly enough, Marx has a chapter on vol. III
exactly about this kink of phenomena. It is called Real Accumulation and
Money Accumulation. In that chapter he tries to show that due exactly to
the type of thing Jerry is pointing at money accumulation may not be a
mere mirror of real accumulation. In fact, wages are not capital when in
the hands of workers. They are rather revenue and their use constitute
circulation of revenue. But in the hands of banks it becomes loanable
capital; in the hands of pension funds they are invested in different
forms of ficticious capital yielding interest. In the US most of pension
funds resources stays inside US and finances firms through the buying of
stocks. (There is a paper on this, called something like "Uses of
Pension Funds" - could it have been published by RRPE? - with data
showing the extent to which pension funds serve as a basis for capital
accumulation. There is also a book -- a piece of propaganda -- but which
shows how the magnitude of the phenomena can lend itself to propaganda,
by Decker whose name I think is Socialism in America, or something like
this. I do not recall though having seem much in the way of data in
it.(As soon as I find the right references I will send them to the
It does not seem to me that Marx does much in the way of showing the
possible effects on real accumulation of this money accumulation
originating from the working classes. If there are articles out there
trying to figure that out it would be useful to read them.
Curiously enough it is Pasinetti, developing Kaldor solution to the
knife edge (Harrod-Domar) problem, whom proposes to include in the model
earnings corresponding to the savings by workers. But the problem they
are facing is different than the problem Jerry is posing: they are
trying to give a solution to a persistent divergence between supply and
demand. Would anything similar be occurring in Marx's schemes of
reproduction once you allow for real accumulation out of monetary
accumulation coming from workers?
Paulo Cipolla