Current Downturn???

[Justin Schwartz]

If you find the "sub costs" crisis argument puzzling, you should look at 
Robert Brenner's account of the current crisis (since 1973) in his NLR piece 
a few years ago. Basically the argument is that you need to make back the 
value of the investment, and can't just dynamite it before you do that, but 
new technologies may make it impossible to do that because they can do what 
your old stuff did a lot cheaper. This is also one of Marx's accounts of the 
crisis of overproduction. --jks


>
> > Remember, though, that a lot of this surplus capital equipment
> > becomes obsolete very quickly, so while it may represent a big loss
> > to the people who bought it (or financed it, in the case of busted
> > IPOs), it may not represent the same economic overhang that a bunch
> > of redundant steel mills would have a generation or two ago.
>
>I must confess to the guilty secret that I have always had a blind spot
>for this argument.  I've never been able to understand how physical
>objects can be a drag on the economy merely by existing.  I can see how
>they are worthless, but the "overhang" argument seems to suggest that
>surplus capital effectively has negative output.  Unless you make what
>I would have thought were absurd assumptions about space constraints,
>surely it could just be ignored?  Hell, there's always the option of
>putting a couple of sticks of dynamite under the bloody things if
>overhang is so pernicious.
>
>d^2
>
>=====
>For the stronger we our houses do build
>The less chance there is of being killed
>
>-- William McGonagall.
>
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