[OPE-L:113] [OPE-L:349] Re: working-class savings

Gerald Levy (glevy@pratt.edu)
Sat, 21 Nov 1998 07:18:46 -0500 (EST)

Paolo C wrote in [OPE-L:348]:

> <snip> 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.

An empirical comment first: While I'll have to check-out the paper "Uses
of Pension Funds" that you refer to, I wonder about the idea that pension
fund monies stay within the US. If by this it is meant that pension fund
monies in the US tend to be invested in US stock markets, then that is
probably correct. However, pension funds generally purchase so-called
"blue-chip" stocks of major corporations which are thought to be
"low-risk". Yet just about all of the "blue chips" are transnational
corporations (with corporate headquarters in the US) so the money doesn't
really just stay in one country.

> But the problem they [Pasinetti, Kaldor, etc., JL]
> 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?

I agree that the issue in growth theory that Pasinetti was addressing was
different than the one I posed. It would, as you say, be interesting to
see how this topic could be viewed if one included workers' savings in
the reproduction schemes, although I think that the reproduction schemes
are presented at a more abstract level than the question of workers'
savings. What we need, I think, is some more concrete analysis on this

btw, Gil (hi Gil!) has been busy co-writing a textbook on "Labor
economics", I wonder if that book will have a section on workers'

In solidarity, Jerry