Re: capital-savings

[Adam Rose <adam@xxxxxxxx>]

>
> I thought perhaps one of the value theorists may want to comment on this:
>
>
> >From GLOBAL KEYNESIANISM IN THE WINGS by James K. Galbraith
>

Isn't it John Kenneth Galbraith ? Are there two J.K.Galbraith's ?
Or have I just got it wrong ?

> "The information technologies do not require enormous amounts
> of capital (their prices have been falling at 15 per cent per year
> for several decades), and have greatly increased our reach and
> efficiency, improving everyone's living standards. Transportation,
> materials science and many manufacturing processes are also all
> improving rapidly. Indeed, the extraordinary cheapness of new
> productive technology is perhaps the single defining feature of our
> age. Since few have grasped this point, let me try to explain what
> it means.
>

I'm not a value theorist, but I am an "information technologist".

It is true that the cost per byte ( memory size ) or flop ( processor speed )
is decreasing. But the amount of bytes and/or the processing speed required
goes up faster.

For example, information technology is now introduced in industries where there
simply was none before. So hospitals, schools, etc have not just one computer
but whole networks.

Those companies which have for a long time had coomputing power available to
them, now have to have far more. So, a bank does not simply have one
computer at head office one massive one at head office as it used to,
but also one ( probably cheaper but equally powerful ) network server at each
office, and a whole network of smaller computers on each desk.

It also has a network of ATM's ( cash machines ) linked to the network.

Meanwhile, it has massively reduced its workforce.

All this is just a particular example of the rising organic composition
of capital ie in order to compete, each company is forced to invest more
capital and employ fewer workers.

This tendency is most obvious in the companies which actually produce
silicon. Only a very small number of companies can actually afford the
massive investments to build the factories which produce chips in the
first place, even with huge subsidies. Even then , they often have to
form uneasy alliances to build them - eg the link between Siemens + IB

This shows that the forces of production have developed to such a state
that the system of multination corporations, each supported by a nation
state, is increasingly innappropriate to develop the forces of production
further.

> It means that we do not need as much saving, or as much
> financial investment, as we once did. It means we can afford to
> spend more, not less, on public amenities for the middle class and
> minimum living standards for the poor. We can also afford to pay
> more in wages, especially minimum wages. It means we can invest and
> lend more abroad, to help and benefit from development in poor
> countries, with more dramatic results than ever before. We can do
> more to maintain and improve the environment, both at home and
> abroad,  taking advantage of the fact that new technologies are not
> only cheap, but often comparatively more energy-efficient and clean
> than the old technologies"
>

So this whole paragraph is wrong, if you look at it from the point
of view of capitalist economics.

Of course, if the motive is not profit but need, then that paragraph
becomes true. But this is not what the author meant, is it ?

Adam

Adam Rose
SWP
Manchester
UK








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