Karl,

I think we agree on the fundamentals so will get stuck in to the detail.

Karl: I cannot subscribe to your argument. Even if Brown were to increase 
state spending by a putative "sufficient
amount" it would not necessarily led to real economic growth.

Effectively, you are denying the validity of a Monetary intervention to burn 
out of recession. I don't think that's right. If Brown could borrow £10 
trillion and spend it within the British economy - I'm pretty sure that it 
would grow GDP to an extent which would pull the economy out of its current 
dip. Indeed, there are whole sets of figures (known as Type 2, Input-Output 
tables) which relate spend in a given sector with growth in another one. As 
I have proven that State Spending can grow GDP in an extreme case, your 
argument loses it's validity, let's see where the argument has lost the 
line.

Karl: The accelerated accumulation of capital is not a function of state 
spending.

I don't think that this is wrong, although it would be hard to prove as a 
universal statement. I guess this is what you blame the current 
recession/depression on? I think that a less simplistic viewpoint is 
required. There have been a whole range of explanations for the period of 
extended growth that the US has experienced [including extracting surplus 
value from the USSR following its collapse]. Others include the New IT 
Paradigm or even increased Globalisation and super-exploitation - what is 
clear however, is that these openings cannot deliver GDP growth rates 
sufficient to support expectations. I think that the issue of 'accelerated 
accumulation of capital' is only a 'catch-all' for all these specific 
trends.

Karl: Indeed in principle state spending constitutes a deduction from 
surplus value which means that less surplus value exists for capital 
expansion.

This statement is completely incorrect. You might wish to change it to 
'state spending has no impact on capital expansion as it merely the 
redistribution of surplus wealth from one sector to another' as you are 
forgetting the spend side. Even then, the statement is still wrong as you 
are forgetting that Keynesian Intervention (and this is what Brown is doing) 
involves borrowing to grow the economy. That means in Marx-speak: Accessing 
Surplus Value/Dead Labour extracted elsewhere in the world and utilising it 
to increase both the rate and size of domestic surplus value extraction.

Karl: Consequently the rate of capital accumulation correspondingly 
declines.

Not so. This corollary has not been proven. In effect, you are denying that 
Government Intervention can grow an economy at all - this would deny the 
sort of growth that Stalin managed in the early Soviet Union. He extracted 
surplus value from the peasants and redistributed it to growing his 
industry. For details read Preobrazhensky - I think he studied this case 
best.

Karl: Keynesian economics has been proven by economic development to be
incorrect which is, in part, why it has been abandoned by the bourgeoisie. 
To describe Brown as some sort of Keynesian makes no sense given the track 
record of what is called New Labour. The recent state spending promises dont 
necessarily have anything to do with adherence to
Keynesian philosophy. New Labour is far too pragmatic for such
crusading.

No, I think that Brown is a closet Keynesian as are many within the British 
Economic Establishment. Don't forget Keynes was no socialist. He was a 
hard-headed Liberal. Brown is a closet Keynesian but he is scared to go the 
whole hog as Keynes would have recommended, therefore, he sticks a little 
intervention in there. Going on New Labour's track record, we might have 
expected him to be the 'iron chancellor' which he played out for the last 
few years. However, now he's taken a risk and will likely pay with a 
combination of borrowing and a tax increase. His previous building up of 
surpluses must be seen in the context of his use of some of them at this 
stage of the economic cycle.

Karl: The spending by Brown, in many ways, has more to do with politics than 
economics: The spending has more to with New Labour's political defence. It 
is aimed at undermining any growing left opposition within the Labour Party 
and the trade union movement. It is also forms part of a political strategy 
to win the next general election.

On this we agree. I stated such in my post. The intervention is too small to 
be really Keynesian yet, but it's a sign of his direction - particularly, 
for internal consumption.

Karl: Ultimately the modest state spending programme is a device to maintain 
the British working class in a state of passivity.

Well, you can look at it two ways - from the bourgeois management viewpoint 
or from the working class as agents of change viewpoint. Either way the 
'modest state spending programme', the NHS, the Universal Education system, 
etc have been won through the struggle of the working class. I choose to 
think we forced them to give this.

Neo-Keynesianism is merely a modification of bourgeois ideology designed to, 
among other things, protect a "discipline" that has  proven its bankrupcy 
concerning its ability to explain and assist in the development of the 
capitalist economy. History has verified the falseness of both Keynesianism 
and Monetarism. They have been reduced to a quieter role because of the 
glaring contradictions, as theories and forms of analyses, against the 
backdrop of economic reality.

You might usefully expand upon this. I think we basically agree, as 
Marxists, but I think you need to reconsider your absolute opposition to 
Keynesian economics to include a more scientific critique of to what extent 
it actually works. Governmental intervention is something which Keynesian 
economics and Marxist economics (excluding those from an Anarchist bent) 
hold in common - to criticise Keynes' economics because they work within a 
framework of capitalism is fine as far as it goes. We need more however. I 
reiterate, I am no Keynesian, but I recognise the value of Governmental 
interventions into the economy.

Sé





_________________________________________________________________
Send and receive Hotmail on your mobile device: http://mobile.msn.com

Reply via email to