> On 1/19/06, Yoshie Furuhashi <furuhashi.1 at osu.edu> wrote:
>> I haven't read the book [Shaikh & Tonak], but what the book might
>> say (if I had written it) would be that a rising share of
>> unproductive labor was one cause (not the only cause) of the
>> decline of profit rates in the 1970s.
>
> the problem, as I see it, is that S &T's rate of profit isn't the
> one that affects capitalist behavior (i.e., what Fred Moseley calls
> the "conventional rate of profit"). Also, the only unproductive
> expenditure that plays a role in determining the rate of profit in
> their framework (if I remember it correctly) is that paid for by
> private business, not that part paid for by the tax payer. Taxes
> lower the after-tax (conventional) rate of profit, all else
> constant. But such taxes on business have been playing a smaller
> and smaller role in recent decades.
I haven't read the S&T book (nor will I have time to do so soon), so I'll set it aside.
The way I see it, taxes aren't the only consideration for capitalists confronted with the growth of unproductive labor done by government workers. Some of the people who work in the public sector are people who could have been in the reserve army of labor, and this job-making aspect of government work takes some of the market pressures off the working class; some of the work done by government workers is not to prevent or repress workers' (organized or unorganized) revolts -- the oldest and most essential function of the state -- but to socialize reproduction of the working class (education, social work, health care, etc.), which, too, takes some of the market pressures off the working class; some of the work done by government workers regulates conduct of businesses (concerning the environment, worker safety, consumer safety, building codes, etc.). None is good for profits. The goal of capitalists is not just to extract as much surplus value as possible from workers at work but also to subject workers off work to as much market pressures as possible, and to make workers really depend on the market and the market alone for their survival.
The diminishing tax burden on businesses doesn't make capitalists think, "Well, let workers have the public sector, now that they are paying for it." They think, "Now that workers are under a heavier tax burden, it's a great opportunity to pit public and private sector workers against each other, so we can privatize it all and make even more profits."
> WS makes a big thing about the need to make predictions. S & T's
> accounting framework doesn't make predictions. But then again, _no_
> accounting framework makes predictions, including the one that WS
> uses so approvingly (the system of national accounts> If we were to
> throw out accounting systems because they failed to pass the
> Popperian test (as WS would have it) then it would be even harder
> to develop theories that do make predictions. In fact, without
> double-entry bookkeeping -- which makes absolutely no predictions,
> by the way -- business would have a hard time doing anything. Some
> scholars even credit (or is it debit? ;-)) double-entry bookkeeping
> with allowing the development of capitalism in Europe, at least
> making big contribution.
>
> The Popperian biz about predictions is silly anyway. No social
> science can survive the Popper test. Maybe that's one reason why
> the philosophy of science people rejected it years ago.
>
> It's a good thing to make predictions, but I don't think it's
> necessary to social science.
Studying history, anthropology, economics, etc. helps you understand what you are and what you are up against, and that's what social science is all about. That said, lots of capitalists' behaviors are pretty predictable. E.g., given half a chance, capitalists try to cut labor costs, legally or illegally. Workers are more unpredictable -- they sometimes just take it, they sometimes speak up and back off, they sometimes fight for what they want (and a few times they actually get it). You seldom know when and how.
Yoshie Furuhashi <http://montages.blogspot.com> <http://monthlyreview.org> <http://mrzine.org>