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

[Fred Moseley <fmoseley@xxxxxxxxxxxxx>]

Quoting Shane Mage <shmage@xxxxxxxxxxxx>:

> Fred Moseley wrote:
>
> > Hi Gernot, thanks for your message.
> Are you suggesting that services generally have a lower [organic]
> composition of capital than manufacturing, so that a shift from
> manufacturing to services will reduce the aggregate [organic]
> > 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.
>
> This is far from evident, because it depends not only on the
> capital-intensivity of the service sector, but also on how much of
> the service sector is productive of surplus value (transportation,
> food service, etc.) and how much unproductive (retailing, merchandising,
> finance, insurance, etc.).  Any relative increase in the portion of
> total capital in the unproductive sector will directly increase the
> overall
> mass of constant capital while, employing by definition no variable
> capital,  representing a pure increase in the overall organic composition
> of capital.  Thus, unless the organic composition of capital in the
> productive part of the service sector is very very much less than in
> manufacturing, any shift from manufacturing to services will tend to
> increase the aggregate organic composition of capital.


Hi Shane, I agree with the thrust of what you say, although I disagree
on your classification of unproductive capital as constant capital (I
remember this disagreement from reading your great dissertation many
years ago).  I (along with most other people, I think) argue that
constant capital and variable capital (and thus the composition of
capital) refer only to productive capital.

But I agree that much of the service sector is unproductive, and that
an increase of this part of the service sector has a negative effect on
the rate of profit.  I was thinking more of the productive part of the
services sector in my last comment.

Comradely,
Fred

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