Nathan argues that we can only understand economics as politic economics now that state spending has been an integral part of industrial development for decades.
But this can be done on the basis of Marx's basic concepts--I argue or rather Okishio has argued. For example, even if we do not accept Marx's argument that technical progress raises the productivity of labor through upward pressure on the organic composition of capital, we may argue that he was still correct to underline the growing minimum level scale of investment required by up to date techniques. (The other variation is possible as well--lower minimum investment with higher OCC.) To the extent that the necessary minimum, including R and D, grows more and more, even the largest enterprises cannot finance the necessary investment or prepatory R and D for themselves. As Okishio argues, the state is then required to provide finance. Now because economists by assuming the homogenity of the production function cannot study this question of the minimum size of investments, they may miss that which the sociologist Nathan underlines--the contradiction between private ownership and control and the public mobilisation of investment funds. I have a tough time however understanding why people think that just because the state mobilizes "public" money, it can be used as tool for the working class's interest.
(See N Okishio, "Technical Progress and Capitalist Society, Cambridge Journal of Economics, 1977 1).
Nathan, I am wondering whether you understand arms and govt high tech expenditures as did Rosa Luxemburg: the expanded reproduction of capital is impossible in a closed capitalist economy and thus requires exogeneous stimuli in the form of arms expenditures.
Also, I am quite interested in Bob Jessop's idea of a transition from a Keynesian Welfare State to a Schumpeterian Workfare State, which has been developed by Jamie Peck in Work Place: THe Social Regulation of Labor Markets.
Another interesting question is about the effects on the technological trajectory of the microprocessor industry, given the heavy dependence on govt and military spending. Early on, bipolar technology, using a bipolar junction transistor, may have been preferred because it was impervious to the effects of radiation, delaying the switch to MOS metal-oxide-semiconductor technology, using a field effect transistor though MOS had several advantages. See The Microprocessor: The Biography, p. 254.
As for Markusen's research--to state the obvious--it seems to me difficult to determine whether high tech, being skill intensive, is biased against blacks or the unskilled among whom blacks are over-represented. However, the "racial" biases in this kind of high tech industrial policy are underlined in Martin Carnoy's book, Faded Dreams. The strongest evidence for racism in industrial location has been accumulated by Gregory Squires, I believe.
Walker has written a fine historical analysis of the politics of race and class in California in Representation 55 Summer 1996. It would be interesting to know what he has to say about Grey Davis' landslide victory, along with the specific effects of the "today Asia-tomorrow the world" economic crisis on California.
I have a lot of problems with Peter Evans' apologia for the so called development state. But that would require a lot of research.
Yours, Rakesh