The Real Movement

Communism is free time and nothing else!

II: How Andrew Kliman crippled his own argument on the rate of profit

The phony debate over investment and the cause of crisis

One of the biggest controversies among labor theorists when it come to calculating the rate of profit is whether the profit rate should be calculated based on the original amount of capital laid out by the capitalists minus depreciation or the current cost of replacing this capital. For example, assume I bought a widget machine for 100 dollars last year. Assume also that since I bought this machine, the price of widget machines fell from 100 dollars to fifty dollars. When I calculate my profit do I do this based on my original investment of 100 dollars or on the basis of the current market price of fifty dollars?

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I: Critical weaknesses in Andrew Kliman’s argument on the falling rate of profit

I have been looking at the numbers in this very interesting paper by Carchedi: “The Law Of The Tendential Fall In The Rate Of Profit As A Theory Of Crises”. I decided to test his 12 reasons why the falling rate of profit is the best explanation for the financial crisis of 2008 — not because I disagree, but because I think he makes a poor case for it. I thought I might go over his material in order to get an idea of how far off his calculations are when measured against a commodity money as Marx used in Capital. The problem, however, is that, so far as I can tell, Carchedi has not published the source data he used to arrive at his conclusions in the paper. (It is possible he published it in a different place, but I just haven’t come across it yet.)

Fortunately, an argument similar to Carchedi’s is also made by Andrew Kliman in his 2011 book, ‘The Failure of Capitalist Production’. And, unlike Carchedi, Kliman generously published a comprehensive spreadsheet of his source material compiled while writing his book. So, with this post, I am going to kick off a comprehensive review of Kliman’s empirical argument for the falling rate of profit thesis.

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Labor Theorists, Money and Lies: A brief rant

So here is a case study for how our Marxist labor theorists work:

First you establish a position that is diametrically opposed to Marx; namely that he was wrong to say money has to be a commodity. Second, you “prove” why labor theory also shows why Marx was wrong, because, in your opinion, the “dialectical movement of money as a category” means money loses its commodity character. Third, you declare you are the real Marxist and Marx was just some witless Victorian who did not have the relevant data at his disposal.

Finally, you declare the collapse of the Bretton Woods in 1971 was not the collapse of production on the basis of exchange value, but the “dialectical movement of money as a category”, which you then top off with this sort of completely devious and deliberately misleading statement:

“Nevertheless we cannot deduce from this any sort of a ‘breakdown’ theory of capitalism.”

The actual breakdown of production on the basis of exchange value in 1971 — the collapse of Bretton Woods itself — having been dismissed as unnoteworthy, you are now free to state that there is nothing about the situation after this breakdown that shows the necessity of a breakdown!

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The Value of Labor Theory: Money as a class dictatorship

Continued from here

Labor screen_shot_2014-04-13_at_7.29.21_pmtheorists are so used to expressing their ideas in the form of abstract, scholastic, indecipherable bullshit, they have lost all ability to state in clear language, comprehensible to the working class, the gist of the argument they wish to make.

Take, for instance, this passage from Paulani’s paper:

“the categorical evolution of money results in a need for the expulsion of the materiality of money, that is, its ‘natural’ logical movement leads it to a figure that is no longer connected with a real (produced by labour) commodity.”

What does this gibberish even mean?

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The Value of Labor Theory: Money is a political weapon of one class over another

Continued from here

Here is a fact that is absolutely vital to your material standard of living and that of your children:

Money is political.

atlanticapril2012It is a political weapon employed by one class in society to subjugate the other class and force it to labor ceaselessly.

Yet, today, we have a bunch of useless labor theorists running around who approach money as if it is above classes. There are two classes in society and, therefore, two antagonistic and incompatible expressions of the socially necessary labor time of society. This cannot but give rise to two fundamentally incompatible money forms. The struggle in society over which money form will be established as the universal equivalent cannot be divorced from the struggle over what constitutes the socially necessary labor time of the working class.

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The Value of Labor Theory: Money as an unconscious class war raging in society

Continued from here

One of the difficulties I often encounter when discussing money is that the discussion is so couched in incomprehensible philosophical or scholastic bullshit that the absolutely vital stake ordinary working folks have in the debate never dwars 88 Unifac Financien - Basia Dajnowiczsees the light of day. The question at issue in the debate is not just “What is money?” Rather, the question posed is “What would be the socially necessary labor time of society today if the money we used was a commodity money as Marx argued?”

Labor theorists have a number of very interesting answers to the question, “What is money?” But not a single one of them has ever actually investigated the implications for wage slavery if their pet answer were true. You can look at the writings of people like Moseley, Foley, Nelson, Arthur, Campbell, etc. All have very interesting answers to the question, “Must money be a commodity?” However, one thing you will notice in common in all of these papers is that not one of these useless academics ever manages to explain how their particular answer affects the labor time of the working class.

It is time to put an end to this sort of nonsense: money is class warfare and labor theorists are fighting on the wrong side.

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The Value of Labor Theory: “Our friend, Moneybags, should be so lucky …”

In part I of this series, I explained how the events of 1971 — the collapse of Bretton Woods — had its roots in a process Marx first fully described in Capital: the ever increasing separation of the useful qualities of the commodity from its value, i.e., the socially necessary labor time, required for its production. In this separation, for the first time the labor time required to produce the commodity takes a form that is independent of the useful qualities of the commodity.

banqueroThis fact has significance for us because unless Marx established in the opening chapter of Capital that these two characteristics of the commodity take on forms that are independent of one another, he could not show that Keynes’ so-called “technological unemployment” was an inevitable result of capitalist commodity production. In other words, Marx intended to show that absolute overaccumulation — in the form of an excess mass of capital and an excess population of workers — had to develop, leading to the complete breakdown in production on the basis of exchange value that he predicted in the Grundrisse.

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The Value of Labor Theory (and the uselessness of labor theorists)

In 1971, the United States, under pressure from international economic forces, was forced to abandon the gold standard. Yet forty years later, labor theorists have failed to come to grips with that event and refuse to acknowledge what it technologicalunemploymentsignified: the final collapse of production on the basis of exchange value, as was predicted by Karl Marx in 1858. This incapacity to recognize Marx’s prediction in the actual events of 1971, probably more than any other single event in 20th century history, demonstrates the utter and complete failure of the post-war Marxist school.

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Fuck ‘Europe’ and Fuck Zizek too! (A reply to Slavoj)

I had a chance to read this ridiculous piece by Slavoj Zizek on the Left’s responsibility as bearers of the legacy of liberalism, “Slavoj Žižek: Only a radicalised left can save Europe”. As the title of this post implies, I am not a supporter of his view.

Eu-flag-vector-material2From what I can tell, for Zizek, the job of the working class is now to clean up the mess that is ‘Europe’ after a three decades long neoliberal orgy. Surveying a scene littered with the remnants of national sovereignty in the form of the United Kingdom Independence Party, the National Front, Golden Dawn, Alternative for Germany and the like, Zizek lectured the eurofascists running the European Union of the danger posed to ‘Europe’ by the rump national fascists in the euro-skeptic parties:

“The lesson that the frightened liberals should learn is thus: only a radicalised left can save what is worth saving from the liberal legacy. The sad prospect that lurks if this doesn’t happen is the unity of the two poles: the rule of nameless financial technocrats wearing a mask of populist pseudo-passions.”

Is this asshole serious?

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Abstract Labor and the Puzzle of Unproductive Labor

Value-form theorists love to repeat a statement of Marx that seems to have been first marked by Rubin in the 1920s.

“Political economy has indeed analysed, however incompletely, value and its magnitude, and has discovered what lies beneath these forms. But it has never once asked the question why labour is represented by the value of its product and labour time by the magnitude of that value.”

Says Rubin,

“The concept of labour must be defined in such a way that it comprises all the characteristics of the social organisation of labour, characteristics which give rise to the form of value, which is appropriate to the products of labour.”

As the name implies, the value-form school places great emphasis not simply on the value of commodities and the magnitude of value, but also on the appearance value takes in a commodity producing society. Rubin argues “that value arises not only from the substance of value (i.e. labour) but also from the ‘form of value’”

This argument resonates with a very large body of labor theorists today because of one simple fact: What we today call money is a valueless token issued by the fascist state and controlled by it through its laws and central banks.

This fact suggests Marx fundamentally misunderstood a critical category of the capitalist mode of production. Since the movement of capital begins and ends with money, you cannot misunderstand money without misunderstanding both the beginning and end of the movement of capital itself.

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