Lakshmi Rhone wrote:
> OK so you are saying that it's not just a matter of a worse distribution of
> a given net product, but the use of labor's weakness to get it to produce
> an even larger net product? So the distribution story is not just about the
> distribution of income after production but the intensification of
> production as well.
Right.
> Yet what I meant by production is something else, and raises the question of
> how the government could contribute to the prospect of greater profitable
> real production as a way to stabilize the most volatile element of aggregate
> demand, i.e. investment demand. I don't think a better distribution of
> income will do it; in fact it may compound the problem, and the threat of
> future progressive tax hikes may well depress investment and thereby
> effective demand as much as an increase in consumption demand would increase
> effective demand. <
Right: there's a conflict here. Though, as social democracy argues, a
better distribution of income (from a left perspective) is better for
business (as during the "Golden Age" of the 1950s and 1960s in the
US), businesses want to make more and more profits _now_ (and that's
what motivates investment). There's insufficient political pressure
right now to push capital to go for its own long-term collective
interests, so it's likely that the neoliberal trend will continue,
with only a few of the rough edges sanded off.
To stabilize investment, it seems, the US might need a good
old-fashioned war (as I said in my previous missive). Maybe a
permanently-larger military establishment could do the trick (with or
without more wars). Large public investment aimed at fighting global
warming and similar problems would help, but it seems that all we'll
get is minor sops at this point. I think that calls for some
eco-investment will likely rise in the future, as the ecological
situation worsens further. (What if BP declares bankruptcy? Then the
US government might jump in to clean up the mess.)
> What the government will have to do is the following
> 1. Raise the rate of exploitation via inflation from monetizing the
> deficits.
Inflation doesn't always do that, but it could have that effect given
the way money wages don't seem to rise anymore these days. But
inflation would help the working class by erasing a lot of private
debts.
> 2. Allow capital costs to be cut by relaxing anti-trust legislation.
I don't know if that helps, since much of monopoly profits are
redistributions from other capitalists. Further, foreign competition
for US business is pretty strong these days, so that weakening
anti-trust won't help much. (Anyway, hasn't that been the trend for 30
years?)
> 3. Hope that debt-financed government demand will allow the working down of
> excess capacity so that firms are willing to invest in more
> capital efficient and hence more profitable production systems
that's the hope of Keynesian economics: it's not just labor that
benefits from stimulus but also capacity utilization rates.
> 4. Secure foreign markets so that firms can see the increased profitability
> issuing from economies of scale and thus make
> large scale investments.
I doubt that business wants that. The most powerful parts of
manufacturing (what's left of it) and retail (WalMart, etc.) want
their foreign operations to prosper.
> I would not be sanguine about the government's ability to stabilize the
> economy either through a social democratic redistributive strategy or
> through means meant to bolster directly profitability as mentioned above.
> For that reason I expect the Democrats to be routed and the Republicans to
> make things even worse eventually.
I agree. Anyway, it's hard to imagine where social democracy would
come from at this point in history (without any popular pressure for
it). born full-grown from the brain of Barack?
--
Jim Devine
"Those who take the most from the table
Teach contentment.
Those for whom the taxes are destined
Demand sacrifice.
Those who eat their fill speak to the hungry
of wonderful times to come.
Those who lead the country into the abyss
Call too ruling difficult
For ordinary folk." – Bertolt Brecht.
_______________________________________________
pen-l mailing list
[email protected]
https://lists.csuchico.edu/mailman/listinfo/pen-l
