MELTing the concept of socially necessary labor time

Not Sally

I have been reading a series of essays by the Australian economist Peter Cooper on the alleged compatibility between Marx’s labor theory of value and modern monetary theory, which he has given the title, Marx and MMT. In particular I have been studying this particular essay, Part 1: Three Kinds of Macro Variables, which purports to show consistencies between Marx’s approach and modern money theory.

Needless to say, I am not impressed.

Peter borrows heavily from the TSSI school, who employ the so-called MELT approach to money as a substitute for Marx’s own theory of money. Here is the problem with the so-called monetary expression of labor time employed by the TSSI school as a substitute for Marx’s theory of money:

In the United States, according to the Bureau of Labor Statistics, during the month of May, 2019, approximately 162.6 million workers were employed. The BLS also estimates that, on average, these employed workers worked about 34.4 hours each week. This amounts to a total of 5.6 billion hours of labor time per week.

Does this mean that the value produced by these workers amounts to the equivalent of 5.6 billion hours of labor?

Perhaps, but how would we know?

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Marx, TSSI and Modern Money

The Daddy-State economy in modern money theory according to MMT theorist Billy Mitchell

Here is an interesting post: Marx, Fiat Money and a Simple Business Card Economy, from the blog, Magpie’s Asymmetric Warfare. The motto of the blog is appropriate: “Maybe the world is going to hell. But I’m not going down in silence.”

The post is actually from February 2016. As things so often happen, it is only now coming to my attention. I came across this piece from the internet the way I come across most things I come across on the internet when it popped up on my blog as a link.

I usually ignore these referrals, but this one contained three words I cannot resist: Marx, Fiat and Money. So I went to investigate. The post began with a quote from one of my old posts and it seems the writer thinks my take on fiat money is wrong. My error appears to have something to do with my misunderstanding of modern monetary theory.

At the top of the page there is a category titled, “Marx + MMT“. Although I think MMT is a crock, I was intrigued by what possible connection this group thought existed between Marx and the modern money school. So I decided to check it out.

Three significant notes from Britain tonight

With Trump on the ground there, events in Britain appear to be accelerating.

1. Corbyn’s position in the Labour Party is under attack on charges that he is entertaining antisemitism.

2. Corbyn is rumored to have withdrawn from Brexit talks with the conservative government and is prepared to call for a second referendum on Brexit.

3. Corbyn is rumored to be floating a proposal to reduce the working week in the UK to four days if a new election is forced.

None of these reports are confirmed.

Pro-Tip: To Fight Austerity the Radical Left Must Embrace Austerity

I have already said that if you want to make sense of the European elections, don’t look at the results in the UK.

Okay, the statement was a little bit cryptic and could even be said to be reductionist. So, let me expand on this argument briefly. Instead of trying to make sense of the European Parliament results, look instead at Fiat Chrysler. That’s right, Fiat Chrysler, not the Brexit Party, Labour Party or even the UK European elections results generally.

From SYRIZA to Brexit

Don’t make the mistake of trying to make sense of the EU parliament election results. Remember, in Britain a party that didn’t exist a month ago managed to come from nowhere and capture the plurality. You can’t make sense of the complete collapse of the nation-state, because the nation-state was how you made sense of everything up until this point.

But there is a pattern if you are cunning enough to catch it. We have been here before. In 2015, SYRIZA, just three years old, swept aside the major parties in Greece and became the ruling party. It had all the appearance of a party in power. The reality turned out to be otherwise, of course. What SYRIZA actually had was the opportunity to bury the state — an opportunity it squandered foolishly in a vain attempt to hang on to state power.

I said at the time that SYRIZA’s failure would be to the benefit of the fascists and let me just emphasize that I was absolutely correct. The radical Left refuses to admit its mistakes, refuses to correct its errors. It paves a path for its political enemies. Even now radicals want us to believe that the results of the European election have no domestic political consequences, that business as usual, in the most literal sense of a continuation of wage slavery, can continue unhindered.

Suit yourselves, the nation-state is dead; stick a fork in it … and the radical Left.

Farewell to the Labour Party … and the European Union

A party that didn’t exist a month ago, now leads in Britain and will determine the UK’s relations with the European Union.

Wage Labor and Inflation III

If we consider the two most important commodities in the capitalist mode of production, labor power and gold, side by side, we can see that the prices of the two have clearly followed very different trajectories since 1970:

The difference is so stark in fact, that the dollar-denominated price of labor power appears hardly to have changed at all, when in fact it has risen five-fold, from $1.45 to $7.25, over the period covered by the chart. The increase in the minimum wage, although 500%, is nowhere near the astonishing increase in the price of gold, which has, during the same period, increased by more than 3500%.

It might be said that gold is unique in this regards, but this would be wrong. Let’s look at another group of market transactions that seem to defy the modest inflationary performance of minimum wage since 1970 — the stock market.

Wage Labor and Inflation II

Above is one of those misleading minimum wage charts you might come across in radical activist agitation. As is usually the case, it tells us very little about the minimum wage or why, despite its steady increase since the late 1930s, a minimum wage worker continues to be mired in poverty. The answer, as I will show, is that it is designed to keep the worker in poverty. The minimum wage is set at such a level as to maintain the worker in such condition that she must sell her labor power no matter the increase in the productive power of her labor.

How this is accomplished is the subject of this post.

Wage Labor and Inflation I

This post is based on a discussion I had on Reddit, r/antiwork. It is a work in progress.

I posted this item to Reddit and was not surprised by the reaction. In fact, I expected it:

If the minimum wage kept pace with depreciation of the dollar it would be $45 an hour today

In 1970, the minimum wage was about $1.25. Today it is about $7.25. If some on the Left had their way, the minimum wage would be $15.

To see how low the Left sets it sights, we need only realize that in 1970 an ounce of gold went for $35. Today that same ounce of gold fetches $1,250. Over the intervening 50 years gold hasn’t become more valuable, the dollar’s purchasing power has declined.

This means your real wage has collapsed without you even realizing. In truth, to have the same standard of living your parents had working a minimum wage job in 1970, you would have to be earning $45 an hour today.

You’re not even close. Wage slavery doesn’t work for wage slaves. That’s why they call it slavery.

The post garnered several negative comments, that took exception to my approach, which uses gold price as the metric for inflation. Most people preferred the Bureau of Labor Statistics Consumer Price Index (CPI) instead: