The Economic Surplus: Theory, Measurement, Applications

By Anders Danielson | Go to book overview

that the possibilities of taxing quasi-capital goods sectors have been more or less exhausted, due to a contraction of output. Furthermore, it is likely that the initial stimulation of the consumption goods sectors was guided by considerations concerning the costs of surplus extraction. 23

Stage III: The additional tax revenue collected from the consumption goods sectors is used to finance an expansion of the service sectors and, in particular, the government sector. Space limits prevent discussing the reasons for this expansion here. 24 Since it is the government sector that accounts for the bulk of the service sector's expansion, it might be suggested, however, that one important reason probably is lack of confidence in "the market mechanism" and trust in the government's talents for efficient resource reallocation.


CONCLUDING REMARKS

It has been suggested in this chapter that changes in the sectoral and functional distribution of the surplus to some extent reflect the wishes of the government. In particular, it has been asserted that the apparently irrational loyalty toward import substitution policies has a logical explanation if it is assumed (1) that the government has little confidence in the market mechanism, (2) that the government has a high regard concerning its own abilities to reallocate resources efficiently and (3) that the costs of surplus extraction are relatively low in the manufacturing sector.

Official statement is one thing; realpolitik another. Although it should be no surprise that the Manley government attempted to attain a higher degree of state involvement in the economy, and to expand state enterprises, it might be unexpected to find the "conservative" Seaga government continuing the protective, high-tax policy of the 1970s. The expressed objectives of the Seaga government included, inter alia, increased reliance on the market mechanism and although "state intervention in the economy would not actually be reduced back to the pre-1972 level, . . . there was an explicit commitment . . . to investigate divestment of all state enterprises other than utilities" ( Stephens & Stephens 1986, 252). The material presented in this chapter does not suggest that state involvement in the Jamaican economy has been curtailed after 1980.


NOTES
1.
This statement requires an explanation. The problem of surplus method consists mainly of a reasonable definition of "subsistence." As seen in Chapter 3, most authors follow Baran ( 1957) in using the concept "essential consumption," which does not lend itself to a straightforward interpretation. The issue, then, boils down to the question of

-123-

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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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