Date: Tue, 24 Jun 1997 09:22:40 -0500
From: Doug Henwood <dhenwood-AT-panix.com>
Subject: Re: M-I: OCC


rakesh bhandari wrote [in part]:

>Let's see what the optimistic bourgeois economist could say about this. He
>may agree that this ratio has not increased due to stagnation in
>investment, which is itself the result of the savings-draining budget
>deficit and rigidities in the labor market and the like.  But the real
>optimist may note that the  US remains the most advanced in the innovation
>of *capital-saving innovations*, and  maintains the scientific-personnel
>necessary for further such innovation[....]
>
>What do you think?

Rakesh! You're not supposed to play the optimistic bourgeois economist
here!! You did this too well; I'm a bit worried.

Anyway, this would no doubt be the line, from our O.B.E., and it
contradicts Mattick. So it looks to me that we're in the midst of an
interesting experiment: which analysis is right? Will the U.S. be able to
maintain its dominant status at low levels of investment? Or is the
apparent resurgence of the U.S. economy in the mid-1990s a kind of
tubercular flush that will come to a bad end?

A related issue: U.S. research and development funds, both public and
private, are being pinched. Industrial R&D is focusing more on the
development of commercial products than basic research, and cutbacks in
Pentagon spending are undermining an important source of subsidy to U.S.
basic research. Will this start showing up in U.S. economic performance
over the next several years?

Doug

--

Doug Henwood
Left Business Observer
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