From: ae547@yfn.ysu.edu (Ronda Hauben)
Subject: Re: Clinton on Economics (transcript of speech)
Reply-To: ae547@yfn.ysu.edu (Ronda Hauben)
Organization: St. Elizabeth Hospital, Youngstown, OH
Date: Fri, 21 Aug 1992 16:56:52 GMT


In a previous article, jwh@citi.umich.edu (Jim Howe) says:

>In article <1992Aug19.150321.29646@usenet.ins.cwru.edu>, au329@cleveland.Freenet.Edu (Ronda Hauben) writes:
>|> 
>|> "Growth" is a false category. So is "investment" . These false
>|> categories have led us into the economic mess that the U.S. is currently
>|> in.
>|> 
>|> Growth can mean more yachts or golden staircases are being produced
>|> by backward hand labor - and the whole society falls apart as the 
>|> wealthy are catered to.
>|> 
>
>In your example, who builds the yachts and the golden staircases?
>The wealthy may be catered to but workers are employed to do the
>catering.  In your example wealth is being exchanged, the worker
>exchanges labor for 'money' and the wealthy exchange money for
>some other good.  Society hardly falls apart in this scenario.
>
But who is the important party in the production of WEALTH is 
where we have the difference. One can produce wealth WITHOUT
capital or the capitalist. One CANNOT produce WEALTH witout
the WORKER. 

Any strike shows that this is true.

Yet the whole effort in your model is to pretend that Capital
is essential and that labor is the beneficiary of Capital, when the
opposite is the reality.

For example, John Bellers in 1696 wrote:
"For if one had a hundred thousand acres of land and as
many pounds in money, and as many cattle, without a labourer,
what would the rich man be, but a labourer? And as the 
labourers make men rich, so the more labourers there will be, the more 
rich men...the labour of the poor being the mines of the rich." 
  (from Proposals for Raising a College of Industry of All Useful Trades
   and Husbandry, London)


>|> 
>|> What is needed is that more of the wealth of the society go to more
>|> of the people of the society.
>|> 
>|> And there is a need for more *WEALTH* for the society, not *growth*
>|> for the wealthy at the expense ofthe society.
>
>I don't disagree.
>
Good that we agree - that seems the basis to figure out the differences.
>|> 
>|> This requires figuring out where such wealth comes from. It does 
>|> *not* come from *investment* but from *labor* and *nature*, as
>|> Sir William Petty, the Father of Scientific Economics, pointed out in
>|> the 17th Century. He explained that Labor is the Father and Nature the 
>|> Mother of*WEALTH* and that Labor is the active element and Nature the 
>|> passive.
>
>This, however, I do disagree with.  Labor and nature can only go
>so far.  A farmer may be able to work very hard on fertile ground
>and still not be able to produce enough food to provide for all
>his needs (food and otherwise).  Making an investment in tools,
>such as a tractor, suddenly enables him to make much more productive
>use of his time and produce far more than he was previously capable
>of.  This is the power of investment.  This is why capital formation
>is the key to economic growth.  The key to increasing *wealth*
>for all society.
>
But tools and labor saving devices are not the same as *CAPITAL* or
*CAPITAL FORMATION*.

Petty clarified that labor saving devices were *ARTE*.

A country very rich in CAPITAL like the U.S. has its large corporations
constantly favoring backward hand labor NOT investment in labor
saving devices. 

Large U.S. corporations are concerned that their RATE OF PROFIT be
as high as possible which means that they want to make as large
a profit as possible with as little investment in capital as possible.

ALL THE INDUCEMENTS IN THE WORLD FOR LARGE CORPORATIONS TO GAIN
HIGH PROFITS DO NOT SERVE TO ENCOURAGE LABOR SAVING DEVICES IN 
MANUFACTURING.

Thus your equation of CAPITAL FORMATION with ARTE (LABOR SAVING DEVICES
BEING USED IN PRODUCTION) IS INACCURATE.

>|> 
>|> That means labor legislation at the very minimum which shortens the
>|> hours of work and vigorously enforces health and safety regulations,
>
>How you can think that arbitrarily reducing the number of hours worked
>and imposing extra costs on production can lead to increased wealth

I am not proposing *arbitrarily* reducing the number of hours worked -
BUT laws reducing the number of hours worked and vigorously enforcing
such laws.

Since it is the workers who produce value and hence wealth - if they
are rested they will be more productive. 

Also, when their employers cannot rely on working their workforces
long hours, the employers will have the needed incentive to invest
in LABOR SAVING MACHINERY. If the employers don't invest in such,
then the society will have to figure out how to put labour saving
machinery into production.

What is important is that the society commit itself to good working
conditions and to getting rid of outmoded employment practices
that prevent such conditions.

>is beyond me.  If hours are reduced because of new production techniques
>which enable a worker to produce more than they used to then I
>would agree with you.  This is what happened during the industrial
>revolution and after.  Work weeks were able to be shortened because

No the increased productivity was the result of the shorter hours, 
not the cause of the shorter hours.

>of increased productivity.  Productivity did not increase because
>of shorter work weeks.
>
>|> the rights of workers to ORGANIZE into LABOR UNIONS OF THEIR CHOICE
>|> (which means getting rid of mandatory membership and dues collection -
>|> i.e. returning to the right of a union to represent workers in a shop if
>|> they have a majority vote, but workers keep the right to voluntary join
>|> or pay dues to that union.)
>
>I have no problem with workers joining any organization they wish.  I
>only object to special legal treatment granted to labor organizations.
>
But labor unions now have special legal treatment - and WORKERS have
no legal rights. Also, corporations have special legal treatment
as they are accorded the right to organize, but workers are denied
that right as the trade union leaders have the rights, not the workers.

>|> Only an economic policy of government which enforces high standards in
>|> how employers treat their workers can begin to change the economic
>|> crisis in the U.S.
>
>Only an economic policy which rewards capital formation can change
>the economic crisis in the U.S.

Clearly this is where we differ. An economic policy which CATERS
to CAPITAL FORMATION caters to low wages, backward working conditions, 
and to the society going downhill which has such a policy.

Your support of *capital formation* assumes that the interest of 
those who own capital is the interest of society.

Adam Smith and I differ with you.

Adam Smith, in the Wealth of Nations explains:

The interest of this order "those who live by profit" "has not the same 
connection with the general interest of the society" as do
the workers or land-owners. (see page 250)

He explains further that this order of those who live by profit "is never
exactly the same with that of the public, who have an interest to deceive and
even to oppress the public, and who accordingly have, upon many occasions, both
deceived and oppressed it." (pg 250 Modern Library Edition)

He explains further that this order tries to keep prices high and production
low to be able to maintain their dominance - and that that is in opposition
to the public interest to have maximum production so that prices can be
lowered for goods and they can be available to wider segments of the 
population.

Thus GM and othere auto companies are restricting production of autos
and keeping prices high rather than putting in new technology and lowering
prices as they produce more cars. 

That is the aim of monopoly corporations and the whole cry of 
*international competition* is really how to get unbridled power to
impose monopoly practices on the society they are part of.

                 Ronda

-- 
Ronda Hauben                    email address:ae547@yfn.ysu.edu
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