[OPE-L:7363] [OPE-L:893] Re: Re interest and accumulation

Wed, 14 Apr 1999 13:49:19 +0100

At 07:02 AM 14-04-99 -0400, you wrote:
>> The trigger was a rise in interest, so the overall effect will
>> be to depress real investment, employment, and wages.
>Suppose that the Fed lowers the discount rate in an attempt to stimulate
>real investment, employment, and wages. Will this be effective?
My argument was that the rate of interest indirectly sets a floor
to the rate of exploitation. In setting a floor I was only arguing
that a rise in the rate of interest cuts back accumulation and causes
unemployment. From this it does not necessarily follow that a fall
in interest rates will cause accelerated accumulation. It may,
but other conditions have to be met as well.

>Before we can answer that question, don't we have to look at what is
>happening in terms of the rate of accumulation and changes in aggregate
>demand? If, for instance, the economy was in a depression, then would
>decreasing interest rates alone stimulate capitalists into increasing
Again you have slipped into the converse arguement from what I was
originally asserting.

>I think we have to remember not to assume Say's Law when considering the
>effects of state monetary policy (or at other times as well).
Taken as self evident.
Paul Cockshott