[Marxism] Surplus capital

["Jurriaan Bendien" <andromeda246@xxxxxxxxx>]

It's difficult to assess what minor portion of private debt securities is in
reality indirectly applied to finance production in some way, but basically,
in Europe excess capacity combines with a stagnation or decline in fixed
investment. In the case of Germany, the annual level of total gross fixed
capital formation declined absolutely in real terms since 2001, by about 9%

In the first quarter of this year, total fixed investment in the Eurozone
was estimated to fall in real terms by about 0.2% or so, and since that time
it has increased by less than 1% each quarter. So accumulation in the "real
economy" is basically stagnating or even declining (I am not able to
separate out residential from non-residential fixed invesment for Eurozone
data available online). If real wages stagnate while real GDP nevertheless
grows at around 2%, all you really can say is that this represents a rising
rate of surplus-value, plus increased profits in the non-productive sector.

For the world as a whole, the IMF estimates a total stock market
capitalisation of US$31.2 trillion as against US$51.9 trillion in debt
securities, i.e. the global mass of share capital is only about 60% of the
value of global capital tied up in securities. In the US, portion of capital
tied up in stocks as against securities (2:3) is higher than in Europe
(1:2), hence the perception that the US economy is more "dynamic".

Assume for the sake of argument a profit rate of 10% on stocks, then the
global mass of profit on stocks per year is equal to the annual take-home
pay of around a hundred million workers, if they earn around US$30,000.

Assume an annual profit rate of 5% on securities, then the global mass of
profit on securities per year is equal to the annual take-home pay of around
85 million workers earning around US$30,000.

Another rough calculation: let's assume an average composition of capital
where 30% of the total capital outlay per year is spent as wages, and an
average wage of US$30,000.  In that case, if all the capital tied up
globally in debt securities was directly invested in additional production,
you'd have 50 million more jobs or so straightaway (disregarding
"multiplier" effects).

Currently world unemployment is said to be around 180 million people or so
(not including under-employment), of which 50 million or so in the
industrialised countries (whose take-home pay is obviously significantly
higher than in developing countries, and where the organic composition of
capital is higher).

At a guess, if all capital tied up in debt securities were invested in
production, you'd thereby wipe out about 2/3 of world unemployment directly.

Jurriaan





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