[lbo-talk] Some Probably Naive Questions was Is Paul Krugman ...?

[Carrol Cox]

I've never paid much attention to this debate because the technicalities are
beyond me. And what follows probably uses the wrong terminology, among other
vacancies.  But I vaguely remember from Monopoly Capital a big point being
made about (a) railroads and (b) automobilization -- the point being how
_that_ kind of "capital spending" affected employment. Then they predicted
(??) that the newer technologies would not produce good new jobs, or
something like that.

Now -- certainly during the last 30 or 40 years a lot of capital spending
has been in new fast food restaurants, call centers, Walmart stores,
etc.????  And if so, hasn't that capital spending contributed to
"stagnation" (a return to Charles Dickens as it were) rather than to the
kind of growth railroads and automobiles created????

I'm not arguing; I really am just asking.

Carrol

-----Original Message-----
From: lbo-talk-bounces at lbo-talk.org [mailto:lbo-talk-bounces at lbo-talk.org]
On Behalf Of Doug Henwood
Sent: Monday, November 18, 2013 10:38 AM
To: lbo-talk at lbo-talk.org
Subject: Re: [lbo-talk] lbo-talk] Is Paul Krugman cribbing from Monthly
Review?

On Nov 18, 2013, at 11:23 AM, michael yates <mikedjyates at msn.com> wrote:


> The January 2014 Notes From the Editors in Monthly Review takes up the
Krugman/Summers acceptance of the notion of secular stagnation. But it notes
that the two economists ignore the problem of insufficient capital spending
and its connection to the growth of oligopolistic markets, something that
Hansen, Kalecki, Steindl, Baran, and Sweezy made more central to their
analyses.

Capital spending was high in the mid-1970s, mid-1980s, and late 1990s. If
you graph it, a clear uptrend is visible from the early 1950s through the
mid-80s. But the shareholder revolution, theorized by Michael Jensen,
thought it was too high and demanded more cash be turned over to the owners.
It then fell into the early 1990s, only to rise again during the dot.com
mania. The low level of capital spending in recent years, when combined with
high profitability, is anomalous, and can't be explained by a near-timeless
theory that's not validated by empirical data.

Doug
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