Capital accumulation

Trend corresponds to sustained and systematic variations over a long period of time. It is associated with the structural causes of the phenomenon in question, for example, population growth, technological progress, new ways of organization, or capital accumulation. 

It may be objected that simple reproduction is an assumption foreign to the capitalist basis (ibid. 470), since real capitalist economies are generally characterized by capital expansion. However, Marx argues that even under capital accumulation simple reproduction still remains a part of this (ibid. 471). The process of renewal that takes place under simple reproduction is an integral part of the more complicated process of expanded reproduction, and allows us to see more clearly its component parts. 

This introduction to simple reproduction, from an input-output perspective, paves the way for a consideration of the more relevant and complex case of expanded reproduction. Table 6.3(a) is the numerical input-output representation of the expanded reproduction schema (see Table 2.4). In algebraic terms, the expansion of constant capital is represented by dC and new variable capital by dV. Table 6.3(b) shows the set of input-output accounts using Marxian notation, with the new role for capital accumulation represented alongside the terms previously modelled under simple reproduction. 

This reading of Luxemburg throws up two parallel questions Where does the demand and money come from for capital accumulation Possible... 

This reduction in the proportion of profits consumed has important consequences for the economy as the simulation is repeated over subsequent periods. Although Bauer was able to demonstrate that expanded reproduction is sustainable over a four-year period Grossmann showed that if the simulation is continued for 35 years then this results in economic breakdown. Table 7.1 shows a steady fall in the proportion of profits consumed until, in year 34, only 2.16 per cent are consumed. The stringent demands of capital accumulation are fulfilled with constant and variable capital increasing by 10 and 5 per cent respectively throughout the 35-year period. The problem, however, is that with variable capital failing to keep pace with constant capital the pool of surplus value extracted from variable capital also fails to keep pace. 

The Kalecki modified schema retains the key characteristics of the Grossmann model. Constant capital still grows at 10 per cent each year compared to 5 per cent for variable capital, and this requires a steady increase in the proportion of profits saved, from 25 per cent in year 1 to 65.4 per cent in year 35. Also in keeping with the Grossmann model, the rate of profit steadily falls over time, from 33.3 per cent in year 1 to 14.6 per cent in year 35. The difference, however, is that capitalist consumption is not treated as a residual, dependent upon the amount of profits that happen to remain after the prior commitments of capital accumulation. In Table 7.2, capitalist consumption is modelled as an active component in the model, providing an important driver in the generation of profits, as capitalists cast money into circulation. 

Second, Domar shows that there is a paradox of borrowing in expanded reproduction (an insight later provided by Foley). Capitalists cannot borrow from an existing money hoard in order to expand capital accumulation they must borrow from financial institutions. This places financial fragility at the heart of the reproduction schema, since all capital accumulation is associated with borrowing and hence, all borrowing is potentially undermined by the problem of demand. This contrasts with Marx s identification of financial instability with occasions when capital accumulation overstretches itself. 

Similarly, Bleaney (1976 194) points out that Luxemburg clearly identifies the importance of demand for means of production as part of capital accumulation. It is not just demand for consumption goods that is important to capital accumulation hence the non-underconsumptionist character of Rosa Luxemburg s ideas . 

Fan-Hung (1968) Keynes and Marx on the theory of capital accumulation, money and interest , in D. Horowitz (ed.) Marx and Modern Economics, London MacGibbon and Kee, pp. 117-37. 

Hein, E. (2002) Money, interest, and capital accumulation in Karl Marx s economics a monetary interpretation , WSI Discussion Paper No. 102, Duesseldorf WSI. 

The firm s scientific base, and the knowledge capital acquired by that base, they contend, dominates any simple economies of either scope or scale in determining the success or outcomes of a firm s research and development process. Scope and scale by themselves are less important than the knowledge capital accumulated by the firm. 

Jomo, K. S. 1997. A specific idiom of Chinese Capitalism in Southeast Asia Sino-Malaysian capital accumulation in the face of State Hostility , in Daniel Chirot and Anthony Reid (eds.) Essential Outsiders Chinese and Jews in the Modem Transformation of Southeast Asia and Central Europe. Seattle University of Washington Press, 237-57. 

The second question concerns the repayment of a loan or something equivalent, as mortgage or life insurance. Let s consider the opposite problem what is the capital accumulated by investing regularly an amount R for which an interest rate i is received The accumulated value consists of a series of n regularly payments, called annuity. In an ordinary annuity the payments occur at the end of each period, so it will accumulate interests on ( -1) periods. Thus the partial capital generated by the first payment is 7f(l + 0 . The second payment brings, etc. The lumped sum accumulated... 

Safety nets allow households to take up investment opportunities that they would otherwise miss—both with regard to the human capital of their children and the livelihoods of household earners—despite credit market failures. Specifically, safety net programs can contribute to capital accumulation among the poor by preventing the negative outcomes... 

However, as useful as these accounts are for investigating the rise of plastic industries, they can sometimes render plastic a passive object of economic forces. Plastic is represented as something that seems to have an unfolding logic already within it it is an instrument for capital accumulation. The assumption is that plastic has intrinsic economic values that are realized in processes of industrial research or market application. While there is no question that plastic has been central to massive and diverse processes of industrial and market development, my claim is that its economic capacities are not so much intrinsic as enacted. Plastic s economic values have to be elaborated and produced. This is not to say that they are simply socially constructed. Rather, the economic capacities of plastic emerge in specific arrangements and processes, in which the material interacts with any number of other devices - human and non-human - to become valuable. 

Graulau, J. (2006). Gendered labour in peripheral tropical frontiers Women, mining and capital accumulation in post-development Amazonia In K. Lahiri-Dutt M. MacIntyre (Eds.), Women miners in developing countries Pit women and others (pp. 289-305). Ashgate Aldershot. 

Alan Wolsky Perhaps, the work of Harold Hotelling is in the minds of those trained in economics. His work concerned the desired rate of capital accumulation or nonrenewable resource depreciation. As I recall, his answer was the market interest rate. Consistent with his Une of thought, it seems to me the comparison is between the wealth that you would otherwise pass onto future generations and the amount of money you spend now on passing on the same atmospheric conditions, and the interest rate has little... 

Because bonds typically have a predictable stream of payments of interest and repayment of principal, many people invest in them to receive interest income or to preserve and to accumulate capital. If you are looking for current income, you will most likely be interested in bonds that pay an interest rate that stays fixed until maturity with interest that is paid semiannually. However, if you are saving for retirement or a child s education or other capital accumulation goal, you may wish to consider investing in zero coupon bonds which do not have periodic interest payments. Instead, they are sold at a substantial discount from their face amount and the investor receives one payment— at maturity—that is equal to the purchase price (principal) plus the total interest earned, compounded semiannually at the original interest rate. 

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