>"weed[ing] out inefficient plant and equipment, creating a much newer >capital stock" isn't disinvestment? (after all, cleaning out the dead wood >lowers the average age of the capital stock.) replacing 1/2 of "all >manufacturing equipment in the US" may not be disinvestment, but it's >probably not net investment, i.e. new investment. Raising productivity can >occur either due to new investment or due to disinvestment. >"Rationalization" might include disinvestment along with new investment.
Jim D, this is a very helpful distinction (Webber and Rigby also have a typology of different forms of rationalization and productivity growth in their big book). If businessmen had come to believe that valorization base could not undergird a high rate of net investment and this in turn led to dimishing prospects of profitability, then a scrapping of labor intensive plants, along with new investments in less labor intensive ones, may brighten the profit outlook; however, this would then compound, or at the least not solve, the problem of unemployment which has presently resulted from the retrenchment in investment demand. This compounding of the problem of unemployment would indicate the perversity of the capitalist way out of crisis, as Makoto Itoh would underline. However, note that the crisis would be overcome not at all by raising the consumption of the masses! >I don't know where you got the idea that "disinvestment" necessarily >involves foreign investment. It can (as it does these days), but >disinvestment simply means scrapping or dismantling part of the existing >capital stocks, almost always the oldest vintages... James Galbraith and Wm Darity argue that recessions help the capitalist class coordinate scrapping and the making of new investments; recessions allow this to happen in an orderly way that prevents the outbreak of fraticidal competition. He also argues that scrapping is followed by the setting up of new plants, esp in Dept II, abroad. rb
