Doug wrote, > The concept is that households are > the ultimate holder of business debts - financial institutions are > just intermediaries.
It depends on your theory, I guess. What you say above is reasonable from the point of view of some economists. But in the crude marxist theory I work with, the surplus is what is left after "necessary product" is subtracted from output. The surplus goes to various economic actors, but it is still the surplus regardless of who gets it or regardless of what story they tell about why they should get it. Going into pendantic mode ... For instance, presuming the ever popular population corn economy, if I lent you 10 bushels of corn. You planted the corn using wage labor and no tools. Say you end up with 20 bushels of corn. If the workers get 4 bushels in wages, then the surplus you have is 6 bushels of corn (20 - 10 - 4). Included in necessary product is the 10 bushels of corn you gave to me. You give it back to me (thank you!). But I also want interest, say $1. You give me this $1 by taking it out of your 10 surplus. You now have 9 of the surplus while I have 1 of the surplus. But the total surplus remains 10. Here, the business profit is $9 while net interest is $1. But, still, the surplus is $10: profit plus net interest. I might CLAIM that I got the $1 as a reward for my risk-taking, waiting, or some other silly idea. Or, because I was the ultimate holder of corporate debt. But, regardless of what I think was the reason I got the $1 it remains a fact that I got $1 of the surplus. At least that's how I see it. Eric ./
