RE: Re: Marx & Ricardo on fiscal impotence

[Rakesh Bhandari <rakeshb@xxxxxxxxxxxx>]

Jim doesn't want our very civil offlist exchange on the list so i'm
just sending my reply especially because i want to share the quote
with which i end:

Constatin Pecquer, 1839:

"One fact is certain, general...it is the silent but very decisive
struggle of the workers against their masters with a view to forcing
the captains of industry to raise their wages...

"How can one not see that to leave [the wage earners] dependent on
the insufficiency of a fluctuating wage is to wish to find oneself
surrounded in times of crisis and general unemployment by a famished
multitude, to create riot and civil war, and perhaps to arm new
Spartans..."

__________




Marx didn't write the book on the state, so it's up to us to figure
out what a value theoretic based view of the state would be and then
to determine whether such a theory is illuminating, right? I refer to
Mattick because he saw himself working out exactly this--a strictly
value theoretic analysis of state deficit spending.



yes but that implies that govt bonds are directly fictitious. That
is, the state borrows sum of money and then buys arms or hires people
to buy roads. That value which the state has borrowed has now been
pulverized in the sense that it will not itself expand. The road may
however encouage more investments in car and truck making.




NO MARX does not refer to an immediate crowd out effect. HE DOES NOT
SAY THAT MONEY BORROWED BY THE STATE WOULD HAVE OTHERWISE BEEN
INVESTED BY THE PRIVATE SECTOR.

 But my point is that deficits do not necessarily increase the size
of the surplus value or necessarily encourage entrepreneurs to make
investments that they wouldn't have otherwise.



I think Marx does have multiplier and accelerator effects in vol 2
from private investments, but this is a good question, and i am
excited to stick my head back into vol 2.


the problem is that radical keynesians do not entertain the
possibility of fiscal policy inadequacy. it's always a matter of
pushing for more intervention or a different kind of policy mix. even
the radical keynesians are bourgeois: they believe that the state can
set things right even if idle money and productive capital are left
in private hands.

if you want to read a real inflationist deficit spending fanatic,
check out george gilder who wants interest rates to go ever lower, no
matter the effect on the retired, and defense to be ever stregthened,
no matter the effect on world peace. While taxes on capital are ever
reduced even if that is irrational from an efficient stimulus point
of view as the Kaleckian John Foster has very interestingly argued.

People like Sweezy and Foster accept the technical validity of
Keynesian economics but do not think the state can be used *given the
political balance of class forces in a monopolized capitalism* to
mediate the conflict between property owners and the property less.

Constatin Pecquer, 1839:

"One fact is certain, general...it is the silent but very decisive
struggle of the workers against their masters with a view to forcing
the captains of industry to raise their wages...

"How can one not see that to leave [the wage earners] dependent onthe
insufficiency of a fluctuating wage is to wish to find oneself
surrounded in times of crisis and general unemployment by a famished
multitude, to create riot and civil war, and perhaps to arm new
Spartans..."

Rakesh