Hi Sé Sé: I think that I have clearly demonstrated the first argument to be true. With limitless or *sufficient* state intervention, an economy will expand - that afterall is quite obvious.
Karl: If, as you seem to suggest, there cannot be limitless state intervention then it makes no sense to claim that with limitless state intervention an economy will expand. If limitless state intervention were possible then there could be no capitalism. Consequently the issue would not arise. Notwithstanding this you are, in effect, claiming that state spending, in principle, based on borrowing is a solution to economic crises under capitalism. The point is that borrowing cannot dissolve economic crises. The cause of such crises are located within the production process. Consequently the solution must be correspondingly found within the production process. To suggest that (limitless) state spending can dissolve capitalist economic crises is to misrepresent the nature of capitalism. An economic crises is essentially the product of the inability of the production process to exploit labour power on a scale that produces a quantity of surplus value that serves as an effective counterweight to the tendency of the general rate of profit to fall. To achieve a rate of exploitation of labour power that to lifts capital out of recession requires an increase in the productivity of labour. Productivity increases can only take place by increases in the technical compostion of capital on a scale that leads to sufficient increases in the organic composition of capital. Neither borrowing nor state spending can achieve this. This is because they are activities that are independent of the process of production. Indeed state spending under capitalism generally entails a deduction from surplus value. State deductions from surplus value tend, in generl, to accelerate falling profitability thereby intensifying the economic crisis. This is why the bourgeoisie call for lower taxes. Tax constitutes a deduction from the bosses purse. It constitutes a deduction from surplus value (total profit so to speak). Obviously is not because the bosses care about the prols that they call for tax cuts. You say that state spending based on borrowing, in principle, can dissolve crisis. Yet other bourgeois ideologues argue that it has been massive borrowing that has led to what they call the recent equities bubble and even the general economic downswing itself. Some would argue that there has been limitless spending based in borrowing and that this has been the problem. Yet for you state spending based on borrowing is the solution. For them it is the problem. Some would argue that it makes no essential difference as to whether this particular borrowing is based on state or private spending. For them large scales spending based on borrowing whether public or private has essentially the same adverse effect. Karl Carlile Communism Site: http://homepage.eircom.net/~beprepared/