I think Shane's comments are dead on. There is scant evidence that "service industries" share any uniformity in composition of capital.
The transportation sector in particular has some of the highest rates of fixed, and constant capital. The restructuring of the RR industry, including post OPEC bankruptcies in the 70s/80s, mergers, and recoveries in the 90s did not in any way depend on reducing the aggregate composition of capital, nor slowing down its growth. What occurred is what always occurs with capitalism: overproduction of the means of production; reduced employment (after WW2, and with the introduction of diesel-electric locomotives with "multiple-unit" single point of control capabilities, RR employment declined); reduced rates of return; bankruptcy; even greater reductions in employment; applications of advanced technologies to augment rates of surplus value; increased capital spending; and improved rates of return-- just in time to start the whole process over again. Here's a tip: get ready to say good-bye to CSX. And other service areas have operated with rates of return consistently below those in manufacturing. -----Original Message----- >From: Shane Mage <[EMAIL PROTECTED]> >Sent: Jun 4, 2007 11:56 AM >To: [email protected] >Subject: Re: [PEN-L] What is Marx's view of fiscal policy ? > >Fred Moseley wrote: > >>Hi Gernot, thanks for your message. >> >Are you suggesting that services generally have a lower [organic] >composition of capital than manufacturing, so that a shift from >manufacturing to services will reduce the aggregate [organic] >>composition of capital (or slow down its increase)? If so, I think >>you are right, and this has been a factor in the recovery of the >>rate of profit in recent decades, which has nothing to do with >>fiscal policy. > >This is far from evident, because it depends not only on the >capital-intensivity of the service sector, but also on how much of >the service sector is productive of surplus value (transportation, >food service, etc.) and how much unproductive (retailing, merchandising, >finance, insurance, etc.). Any relative increase in the portion of >total capital in the unproductive sector will directly increase the >overall >mass of constant capital while, employing by definition no variable >capital, representing a pure increase in the overall organic composition >of capital. Thus, unless the organic composition of capital in the >productive part of the service sector is very very much less than in >manufacturing, any shift from manufacturing to services will tend to >increase the aggregate organic composition of capital. > >Shane Mage > >"This cosmos did none of gods or men make, but it always was and is >and shall be: an everlasting fire, kindling in measures and going out >in measures." > >Herakleitos of Ephesos, fr. 30
