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, 28 Aug 1992 11:57:17 GMT


In a previous article, josh@foglet.rutgers.edu (J Storrs Hall) says:

>ae547@yfn.ysu.edu (Ronda Hauben) writes:
>
>(about ice machines)
>>No labor and nature produced the machine.
>
>>It is not that CAPITAL INVESTMENT produced the machine.
>
>>Capital investment doesn't produce anything.
>
>>A machine is producing ice - the machine is a machine not a 
>>CAPITAL INVESTMENT. 

The following examples that you give of what you call  *Capital
Investment* I have found called *arte* in classical economics
>
>Think again, please.  A machine is the very epitome of a capital
>investment.  Suppose you live on a farm.  You have a choice: every
>time you need a bucket of water, you can walk half a mile to the
>nearest stream, cup your hands, and walk back trying not to spill
>the water; alternatively you could spend a day's work making a
>bucket out of whatever natural materials you had available, and
>bring back a bucketful of water for the same effort in the future.
>
>If you were even more ambitious, you could dig a well, weave a rope,
>and save the walk entirely.  Ultimately, you might build a windmill
>and a pump and have a regular supply of water delivered automatically
>to you with minimal further effort on your part.
>
>Now please notice that there is NO TRADE whatsoever in the above 
>scenarios. You will do all the labor involved, yourself, whichever
>alternative you choose.  EVERY choice involves only labor and nature;
>the only difference is how much extra labor you are willing to do 
>at the start to save yourself labor later on.
>

"Arte" says Sir William Petty, the father of scientific economics,
 is "equal to the labour & skill of many in producing commodities."
(from Petty Papers, vol I p. 211)

But this ability to apply skill and thought to production to save
labour is not a characteristic of "capital".

It is a characteristic of the economic categorie of "arte" which
Aristotle also referred to (also as technique in the Greek sense
of the work).


Thus I agree that what I understand has historically been called
*arte* is needed - but that has nothing to do with 
Capital Investment.

You have transposed the advantages of technology and of machinery
and claimed that the achievement belongs to Capital.

But there ere machines before there was such a category as Capital.

Petty has a term *stock* which seems to be closer to what you are
calling *capital investment* but that has to do with the things
or funds - not with the ability to make a machine to save labor.

The ability to make a machine to save labor is something that 
has existed before Capital and will exist after Capital.


>Doing extra labor now to save labor later on is called "capital 
>investment".  Sometimes the early extra labor takes the form of
>building machines.  Sometimes it takes the form of learning skills.
>Whether the person who does the early labor is the same as the one
>who does the later labor is completely irrelevant.  "Capital 
>investment" is simply the term we use to describe the situation 
>where someone -- anyone -- does extra work beforehand to reduce 
>the amount of work needed afterwards, to produce the same amount
>of goods


So I have found your examples very helpful - but I don't understand
why you are calling labor saving machinery "capital investment" -
it is labor saving machinery.

Are you familiar with the term *arte*  as an economic category?

                        Ronda

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