Sandwichman wrote:
There's one prior step that needs to be mentioned -- the origin of big finance in sovereign loans to governments to finance wars and war making. These are unique because governments aren't constrained by the indeterminacy of demand and price you emphasize. They tax to pay the interest on the debt, roll over the principal, borrow some more and tax some more to pay the higher interest. The demand for the commodity, war, is whatever the 800-pound gorilla says it is.
If by demand you mean the output of governmental activity; then, to the extent it doesn't depreciate and needs periodical upkeep, it locates itself outside the economy. In this respect it is the same as bought and paid for retail output, ready for (extra-economic) consumption. In my analysis of economically acquired debt and its feasible resolution over time, governments (at least in non-inflationary terms) are yet constrained by the indeterminacy of demand and price, within an all encompassing income circuit. If one accepts that ultimately, all such borrowing is constrained by the ability to tax, and all taxes regardless of how they are charged are being paid out of income; then all taxes are assumed by retailers as costs of doing business, to be resolved by the final recipients of governmental expenditures through the purchase of retail output. There is no other way of resolving governmental debt in real terms. The outlet for war profiteering lies in asset inflation, subject to implosion whenever the real economy fails to supply returns.
Does Sismondi go into this? It's one of the aspects of Dilke's analysis I particularly appreciate and that IMHO surpasses Marx's.
He doesn't in the (almost) three of the seven "books" of his magnum opus Nouveaux Principes... (2nd ed. 1827) that I translated and is available in annotated form on my website. I was most intrigued by the fact that even though he invented the use of aggregate income equations in 1802, he immediately disavowed their usefulness; as a vital attribute of the real economy [its indeterminacy] was uncapturable. So I concentrated on that aspect of his work, which is habitually overlooked (even in the recent Hyse translation) and I never even bothered to read "On Taxation" (the sixth of the seven), wherein he may have broached the subject.
Note to Jim: Sorry for the delay, I'm not as smart as most of you guys, and it takes me a lot of time to come up with what I believe to be a fitting answer. It's in the works though. In the mean time I'm glad my main website was discovered, as there is an awful lot of background info there.
John V _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
