[Marxism] The accumulation of fixed capital: notes on recent trends in the US economy

Jurriaan Bendien andromeda246 at hetnet.nl
Mon Dec 6 15:52:52 MST 2004


According to the NIPA's, total new "net" (after deducting depreciation) 
additions to fixed assets per year in the US economy (grand total) declined 
from an index of 100 in 2000 to 74.8 in 2003. That's overall one-quarter 
less new fixed investment in 2003 than in 2000.  But the decline in fixed 
investment is even more pronounced if we look at total non-residential net 
fixed investment, where the index moves from an annual investment level of 
100 in 2000 to 40.2 in 2003.

Annual private non-residential fixed investment as moved from an index base 
of 100 in 2000 to 98.5 in 2003, the growth occurring in the area of 
structures being more than offset by falling investment in equipment and 
software. As regards government fixed investment in the national defense 
area, it's up from an index of 100 in 2000 to 126.2 in 2003.

The accumulation rate of the stock of fixed capital is increasing fastest 
among US corporate financials. It is difficult to measure the rate of 
reinvestment of realised surplus-value because the NIPAs strongly adjust IRS 
based profit volumes to fit with their definition of income generated from 
current production (that's another story to write up).

The total NIPA stock of private fixed capital in industry was estimated in 
2003 to be $25.9 trillion. For comparison, total US stockmarket 
capitalisation in 2003 was $14.3 trillion, and total debt securities held in 
the US (i.e. mainly bonds) $23 trillion (IMF figures). The "Analytical 
Perspectives" document for Fiscal 2005 (annex to the federal budget) values 
US non-residential plant & equipment at $11.8 trillion (total privately 
owned physical assets is supposed to be $28.7 trillion, including land), and 
publicly owned physical assets are valued at $5.6 trillion).

Curiously, if we look at the 1997-2003 interval, we find that while the 
value of the total US capital stock of "office and accounting equipment" 
nosedived from an index of 120.7 to 97.7 (base 100=2000), the value of the 
total US capital stock of non-residential "furniture and fixtures" was 
boosted from an index of 86.4 to 104.6 (figures rounded to 1 decimal point). 
http://www.bea.doc.gov/bea/dn/FA2004/TableView.asp#Mid . At the same time, 
new private fixed investment in non-residential structures (office and 
factory buildings) has also fallen sharply.

In a longer term perspective, the fastest-growing types of fixed asset 
stocks in the US economy, by value, are in fact computers, peripherals and 
software; medical equipment; communications equipment; and engines and 
turbines, in that order. The really interesting part now is, where those 
computers being invested in by US investors, actually come from? You guessed 
it, an increasing amount is actually imported. Thus, while the value of US 
exports of computers & peripherals went down from an index base of 100 in 
2000 to an index of 82.2 in 2003, the value of US imports of the same 
increased from an index base of 100 in 2000 to an index of 109.7 in 2003. 
Using Census data we can discover the total value of imports and exports of 
some leaders in the area of fixed investment goods in 2003 (seasonally 
adjusted):

EXPORTS
Semiconductors                                          $46.1 billion
Computers                                                   $8.7 billion
Computer accessories                                $31.3 billion
Medicinal equipment                                    $15.7 billion
Business machines and equipment             $1.9 billion
Measuring, testing, control instruments        $13.9 billion
Telecommunications equipment                   $20.7 billion
TOTAL (approx, due to rounding)              $138.3

IMPORTS
Semiconductors                                 $24.6 billion
Computers                                      $20.4 billion
Computer accessories                           $56.1 billion
Medicinal equipment                            $16.2 billion
Business machines and equipment                 $7.1 billion
Measuring, testing, control instruments         $9.7 billion
Telecommunications equipment                   $24.8 billion
TOTAL (approx, due to rounding)   $158.9 billion

As you can see here, of the leading types of fixed equipment being invested 
in by the United States in 2003, a large part actually consists of imported 
goods. This is especially true of computers and computer accessories.
Aha, you say, but are you not forgetting production of computers by 
Americans for Americans within the USA? Okay, the NIPAs show that the total 
US domestic fixed investment in computers and peripheral equipment in 2003 
was $95.3 billion, in software it was $165.8 billion, and in communication 
equipment, nonmedical instruments, medical equipment and instruments, 
photocopy and related equipment, and office and accounting equipment it was 
$170.0 billion. (most of the computer hardware equities are up). So, anyway, 
as far as computers and software are concerned, the imported stuff is 
actually a very large component of the annual US capital invested in this 
area.

Jurriaan








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