Re: (OPE-L) Re: Dynamic value and natural price

From: Michael Williams (michaelj.williams@TISCALI.CO.UK)
Date: Wed Nov 05 2003 - 17:03:03 EST

PaulC wrote 

I would like to distinguish between the accumulation of accounting claims 
and the accumulation of capital proper. 

An accumulation of money is simply an accounting operation, it indicates 
that there is a growth of credit and debit entries in the accounts held by 
the banking system. By itself this involves no accumulation of value. This 
can be seen for several reasons: 

1. At an intuitive level one can see that it is merely an accounting entry
    does not represent 'real' wealth that can be used. 
2. At a purely accounting level, the process of the growth of money here 
    involves strictly balancing debit and credit entries so that it is a
    game when taken accross the banking system as a whole. 
3. The artificiality of such claims to value is demonstrated by the
    of inflation. 
4. At a definitional level, value is defined by Marx and Smith in terms of 
    embodied labour, and such accounting entries have no particular relation

    to embodied labour. 

In principle capital can accumulate as gold, but that is a physical object, 
requiring labour to produce it. Accumulation as gold is in principle no 
different from accumulating as any other semi-finished product. 
[MJW] But this seems to me just to be a response to my perhaps too truncated
point. Expanding a bit: capital accumulation is in principle indifferent as
to the use-values in the production of which it is invested.This
indifference is manifest in capital in the money form. Clearly I am not
disputing that Smith and Marx made a distinction between productive and
unproductive wage labour. I am rather probing the sustainabilty and
insightfulness of that putative distinction 

but capital as such is not tied to particular use-value productions, but
flows around in pursuit of profitable sectors in which to invest. 


This is a metaphor. What is really happening here? 

Are you talking about purchases and sales of stocks and shares 
or are you talking about accumulation of real capital assets? 

If it is real capital assests, these require the expenditure of 
labour to obtain them. In which case the 'flow of capital' is 
just a mystified reflection of the movement of productive workers 
from one sort of activity to another. 

When 'capital flowed into Railways', what actually happended 
behind the appearance was that hundreds of thousands of workers 
started building railways under the direction of the railway barons. 
[MJW] yeah - and when smaller amounts of capital flow into Group 4 (etc) a
number of workers start producing security services. When capital flows into
banking, many (more) workers start producing intermediation and other
financial services. So where's the relevant difference? 

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