Re: What is Marx's view of fiscal policy ?

[Fred Moseley <fmoseley@xxxxxxxxxxxxx>]

Hi Gernot, thanks for your message.

Are you suggesting that services generally have a lower composition of
capital than manufacturing, so that a shift from manufacturing to
services will reduce the aggregate 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.

Another important factor which has helped to increase the rate of
surplus-value and therefore the rate of profit, which has nothing to do
with fiscal policy has been the entry of China and India and other
low-wage countries into the world capitalist economy, which has roughly
doubled the world?s labor force and greatly increased the world?s
reserve army, which has put (and continues to put) downward pressure on
wages in the advanced countries.

Comradely,
Fred


Quoting Gernot Koehler <gko15@xxxxxxxxxxx>:

> I would like to add a bit to Fred?s report on Mattick (1969) and Fred?s own
> thoughts on the issue (see Fred?s posting of 25may07 below) ? namely, by
> mentioning the long-term restructuring of the national economy and of the
> global economy.
>
> The aggregate rate of profit of an economy can be studied as a composite of
> the various profit rates in the main sectors of the economy. In recent
> decades, the U.S. and some other economies experienced drastic restructuring
> from manufacturing to services (both in terms of jobs and contribution to
> GDP). There are now fewer jobs in the U.S. in manufacturing and more jobs in
> services than four decades ago (when Mattick wrote his book). On a global
> scale, manufacturing activities emerged in, or migrated or were exported to,
> low-wage countries. The capital-intensity (organic composition of capital)
> differs between manufacturing and services. Profit rates of these sectors
> seem to differ as well. These processes of national and global restructuring
> may explain the recovery of the aggregate profit rate in the U.S. in the
> recent past, as observed by Fred.
>
> If my speculation holds any water, then I would have to concur with Fred
> that fiscal policy may have had no _direct_ effect on the long-term
> development of the aggregate profit rate in the U.S., since fiscal policy
> seems to have little effect on the long-term restructuring of the national
> and global economies. (However, other public policies may have an effect on
> that.)
>
> Gernot


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