Re: capital-savings

[djones@xxxxxxxxxxxxxxxxxxx (rakesh bhandari)]

>. 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.

Thanks Adam for the reply.  I think that this argument allows us to
differentiate between direct savings on equipment and capital savings in
the economy as a whole. That is, a cheaper piece of equipment may result
from increased "roundaboutness of production and demand for capital. The
emergence of capital-saving equipment is not proof in itself of the
invalidation of Marx's theory that upward pressure on the organic
composition of capital is the most important tendency of capitalist
development.

Also, following John Ernst, we can also argue the following: as these
capital-saving innovations are not only being introduced in the conjectural
course of replacement of plant and equipment carried out to make up for
'normal' wear--and indeed are often availed in the course of a competititve
struggle between individual plants and industries and between products and
processes--these capital-saving innovations may be forcing industries into
decay, causing the shut-down of plants, leading to the discarding of
machinery still physically fit for operation.  As Alexander Gourvitch puts
it--and from whom, as always, my ideas here are taken --"to put the matter
in pecuniary terms, which are more realistic, the loss of the capital
invested in the obsolete units means an impairment, somewhere, of funds
available as a source of demand for labor."

rb

Alexander Gourvitch, 1940. Survey of Economic Theory on Technological
Change and Employment. Reprint. New York: Augustus Kelley, 1966, pp. 96ff




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