The Economic Surplus: Theory, Measurement, Applications

By Anders Danielson | Go to book overview

growth. This is really the fundamental issue; and there seem to be a shortage of convincing answers. Again, the case of Jamaica seems to have something in common with Chile. Nicholas Kaldor found that excessive consumption constituted the basic problem. The reason for the Chilean stagnation, writes Kaldor ( 1964,266-267),

is to be found in the high propensity to consume of the capitalist class who appear to have spent on personal consumption more than two-thirds of their gross income, or three-quarters of the net income after tax. Though a higher rate of investment is a matter of foreign exchange and not just of savings, it appears from the estimates that as far as savings are concerned the latent resources that could be mobilised through a reduction in luxury consumption would provide adequate resources to raise the rate of capital accumulation in Chile to a level comparable to that of the advanced industrial countries. 25

Is Kaldor's recipe for Chile in the 1950s also applicable for Jamaica today? Perhaps, but there is one important qualification. Although Kaldor suggests that investable resources may be generated through additional taxes on luxury consumption, an implicit assumption is that the government actually saves and invests a large part of these revenues. In this respect, the lessons of the PNP governments of the 1970s are not comforting. When the Bauxite Levy was introduced in 1974, government revenues increased by approximately 30 percent and government revenues from the mining sector increased from US$270 million during 1964-73 to approximately US$1,690 million during the following decade; yet, as Wesley Hughes ( 1984) and Omar Davies ( 1984) point out, only a tiny portion of these essentially "free" resources was actually allocated to expand or improve productive capacity. Although excessive consumption (in particular of imported commodities) certainly has been one of the major problems in Jamaica, intensified surplus appropriation from those that consume imported goods must be combined with a more restrictive behavior of the government with regard to consumption. If capitalists in Jamaica save too little--either because their income is too small or because they prefer an exuberant living--the appropriate role of the government is to use fiscal policies to generate sufficient funds for productive investments.


APPENDIX TO CHAPTER 6: SURPLUS ACROSS COUNTRIES AND OVER TIME

To check the validity of the results established in Chapters 5 and 6, data has been collected for 23 countries and this Appendix reports on some regression results. The data has, in its entirety, been collected from various issues of the UN's Yearbook of National Accounts Statistics and the International Labor Organization's Yearbook of Labor Statistics. The results presented here should

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The Economic Surplus: Theory, Measurement, Applications
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Figure and Tables ix
  • Acknowledgments xi
  • I - Introduction 1
  • 1: Surplus and Economic Development 3
  • II - Theory and Measurement 11
  • 2 - The Role of Surplus in Classical Political Economy 13
  • Notes 27
  • 3 - Making Surplus Visible: A National Accounts Approach 29
  • Notes 43
  • 4 - Accumulation and the Agricultural Surplus 47
  • Notes 61
  • III - An Application: Jamaica under Manley 63
  • 5 - Size and Distribution of the Surplus 65
  • APPENDIX TO CHAPTER 5: SOURCES AND QUALITY OF DATA 78
  • APPENDIX TO CHAPTER 5: SOURCES AND QUALITY OF DATA 79
  • Mechanisms of Stagnation 81
  • APPENDIX TO CHAPTER 6: SURPLUS ACROSS COUNTRIES AND OVER TIME 92
  • 7 - The Role of Interest Groups 101
  • Notes 123
  • IV - Concluding Observations 127
  • 8: Is Surplus Obsolete? 129
  • References 137
  • Index 147
  • About the Author 153
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