Critical comments on Vytautas Liutkus’ “Marxist Political Economy in the Age of Inflation” (Part Five)

I have been reading a paper, Marxist Political Economy in the Age of Inflation, by Marxist theorist, Vytautas Liutkus (VL). At least in part, the writer seems to offer an explanation for post-World War 2 inflation in the monetary system that is consistent with Marx’s labor theory of value. This is my fifth post on VL’s paper.

***

Quick recap:

Previously, I argued that a theory of inflation that would be consistent with Marx’s labor theory of value is not as simple and straightforward as it seems. I suggested it would take a roadmap of sorts to get there. The reason for this is probably obvious: in Marx’s labor theory of value, unlike bourgeois economics, a description of the way the mode of production works begins with production, not exchange.

This fact hints that an explanation of inflation that would be consistent with labor theory likely should begin on the production side of the mode of production as well.

This where VL’s discussion of Paul Mattick’s ideas on inflation enter the picture. Mattick proposes that inflation is an expression of a crisis of profitability; part and parcel of an effort to raise the rate of profit. VL, while not disagreeing directly with Mattick on this point, points out that, first, such a strategy could only be possible once the gold standard was abolished. Second, VL points out that, even with the abolition of the gold standard, inflation would not alter the distribution of the social product between classes.

In the previous post, I offered a hypothesis to answer VL’s objection regarding the end of the gold standard that did not depend on state policy, but relied instead on Mattick’s idea that inflation has its roots in capitalist crisis, specifically in the Great Depression of the 1930s. Evidence shows that the owners of commodity money, including national governments, abruptly began to withdraw commodity from circulation beginning around the 1930s and hoarding it. This is a process that continued until 1971, when the last remaining currency tied to a commodity money, the dollar, was finally debased by the United States.

But this was only step one of our roadmap in answer to the objections raised by VL: accounting for the end of the age of commodity money. This accounting does not yet explain inflation, although it provides a necessary precondition for inflation. Still less does it explain how inflation might be used to alter the distribution of the social product between capital and labor to raise the rate of profit above zero — an argument made by Mattick in his essay.

The critical next step on our roadmap may be to discuss the implications of the withdrawal of commodity money from circulation for the mode of production because some of them may not be so obvious.

*****

Critical comments on Vytautas Liutkus’ “Marxist Political Economy in the Age of Inflation” (Part Four)

I have been reading a paper, Marxist Political Economy in the Age of Inflation, by Marxist theorist, Vytautas Liutkus (VL). At least in part, the writer seems to offer an explanation for post-World War 2 inflation in the monetary system that is consistent with Marx’s labor theory of value. This is my fourth post on VL’s paper.

***

As anyone reading this post likely knows, unlike bourgeois neoclassical economic theory, Marx’s labor theory of value begins with production not exchange, when describing the normal operation of the capitalist mode of production.

In bourgeois economics, newly produced commodities enter circulation without value. After this, the forces of supply and demand establish an equilibrium price for them at the time of sale. Ideally, this equilibrium price includes, among other things, the wages paid to the workers, the profit of the capitalist and the costs of necessary inputs.

In labor theory, the process is a bit more complicated.

The capitalist purchases the labor power of the worker and the necessary means of production. Under his direction, the two are combined in an act of production that creates a social product. A portion of this social product simply embodies the value (i.e., the socially necessary labor time) originally advanced by the capitalist for the labor power of the workers and the means of production. Another portion embodies an increment of surplus value (i.e., an increment of unpaid surplus labor time). This social product enters into circulation as commodities.  When it is sold, the surplus value produced in the act of creating commodities is realized in the exchange as profit.

*****

How does this difference play out in the bourgeois economic theory and labor theory notions of inflation?

Critical comments on Vytautas Liutkus’ “Marxist Political Economy in the Age of Inflation” (Part Three)

I have been reading a paper, Marxist Political Economy in the Age of Inflation, by Marxist theorist, Vytautas Liutkus (VL). At least in part, the writer seems to offer an explanation for post-World War 2 inflation in the monetary system that is consistent with Marx’s labor theory of value. This is my third post on VL’s paper.

***

At the end of part two, we have come now to what looks like an apparent irreconcilable theoretical disagreement between VL and Mattick Sr. about post-war inflation, so let’s take a moment to sum up:

Critical comments on Vytautas Liutkus’ “Marxist Political Economy in the Age of Inflation” (Part Two)

I have been reading an paper, Marxist Political Economy in the Age of Inflation, by Marxist theorist, Vytautas Liutkus. At least in part, the writer seems to offer an explanation for post-World War 2 inflation in the monetary system that is consistent with Marx’s labor theory of value. This is my second post on VL’s paper.

***

So, who do you believe? The guy telling you why he fired his gun or the guy who just got shot at?

The story told by the guy doing the shooting:

“At 12:06 and 12:08, a border patrol ship fired warning shots, at 12:19, a Su-24m aircraft performed a warning bombing (4 OFAB-250) ahead of the course of the USS Defender.”

Russia ministry of Defense

The story told by the guy being shot at:

We believe the Russians were undertaking a gunnery exercise in the Black Sea and provided the maritime community with prior-warning of their activity.

No shots were directed at HMS Defender and we do not recognise the claim that bombs were dropped in her path.

UK Ministry of Defence Press Office

NOTE ON TURNING A BLIND EYE: “…it is commonly accepted that turning a blind eye comes from a comment made by British Admiral Horatio Nelson. In 1801 he led the attack alongside Admiral Sir Hyde Parker in the Battle of Copenhagen. Nelson was blind in one eye. Parker communicated to Nelson at one point, via flags, that he needed to retreat and disengage. Nelson, however, was convinced that he could prevail if they pushed onward. Nelson then, holding the telescope to his blind eye, pretended not to see the signal—making a sly comment to a fellow officer about reserving the right to use his blind eye every now and again.” Source

Reaktywacja systemu „nakazowo-rozdzielczego” – nowa perspektywa

I love this guy. In Polish, I think. I used Google to translate the page. Duck! He tosses out a lot of daring ideas.

(Odcinek zainspirowany komentarzem internauty citizencokane  do tego wpisu Jehu.)

Niezaprzeczalnym faktem z życia współczesnego kapitalizmu jest zjawisko masowego występowania stanowisk pracy najemnej typu superflouos, tj. takich, które w żaden bezpośredni (czy najczęściej nawet nie w  pośredni) sposób nie przyczyniają się do zwiększenia efektywności zagospodarowania zasobów (bądź inaczej: nie wytwarzają wartości użytkowej).

Typowymi przykładami tego typu praco-najemno niewolnictwa będą biurwy gubmintowe, cała potężna armia rzucona na front sprzedaży, obsługa zbędnych czy sub-optymalnych z punktu widzenia zasobowego łańcuchów dostaw, jak również załogi zaangażowane najpierw do wytworzenia, a następnie do utylizacji „nadmiarowej” (czy zaplanowanej pod kątem wartości wymiany, a nie wartości użytkowej) produkcji i towarzyszących jej odpadów, pracownicy zakładów wytwarzających przedmioty na potrzeby ostentacyjnej konsumpcji  jak i produkujący środki przeznaczone do eksterminacji innych sapiensów czy w ogóle stworzeń wszelakich,  a także prolo-kompost zaangażowany do wykonywania usług służących li-tylko podtrzymaniu statusu klasy próżniaczej (kamerdynerzy, trenerzy zwierza domowego, polerowacze sreber etc.), plus do…

View original post 2,919 more words

Critical comments on Vytautas Liutkus’ “Marxist Political Economy in the Age of Inflation” (Part One)

I have been reading an paper, Marxist Political Economy in the Age of Inflation, by Marxist theorist, Vytautas Liutkus. At least in part, the writer seems to offer an explanation for post-World War 2 inflation in the monetary system that is consistent with Marx’s labor theory of value. In doing so, he makes an effort to, in his words,

“… develop further our examination of the historical evolution of the credit-system – with particular emphasis on the emerging importance of the role played by the central banks – until this system, initially built upon gold as the money-commodity, is finally stripped of all material direct links with the precious metals.”

Intrigued by his effort — I follow his work a lot — I began making notes on it, collected below. This is part one of that reading.

***

The format is as follows:

Excerpts from VL’s paper are in quotes.

[My comments on that text follow in brackets]:

Kliman and ‘company’ double down on their tragic 2020 election debacle…

 

Presented, as published, the apology of the Klueless Kliman Kompatriots in defense of their hapless, hopeless strategy of support for ‘Jim-Crow’ Joe Biden in the 2020 presidential election, further evidence that post-war Marxists just don’t get it:

Example 3 of bad practice

There are also attacks on MHI that cannot even be treated as criticism of ideas; they come from people engaging in trolling. A lot of these attacks are directed at Andrew Kliman, MHI’s most high-profile theoretician. In a blog called “The Real Movement” by someone who goes by the name Jehu, there was a picture of Kliman with the caption “Will somebody out there tell Kliman to get off his knees and stop servicing “Jim-Crow” Joe. It’s embarrassing now.” The hyperlink within the caption was to an article, carried in With Sober Senses. It consisted of contributions from three people who normally don’t bother to vote but who cast their ballot for Joe Biden in 2020 with the express wish to get Trump out. The article was not pulled together by Kliman; the views of the contributors were those of those individuals, none of whom is Kliman; Kliman is not the editor of With Sober Senses; and he did not commission these pieces.

The effort to portray everything from MHI as something that comes from Kliman personally ignores the fact that we are an organisation, not just an individual, with a set of principles and by-laws that govern our functioning. It is an ad hominem attack on Kliman and––by misattributing a piece not written by him, but carried in With Sober Senses––it is the dismissal of MHI as an organisation. The misattribution by Jehu is also an example of the false cause logical fallacy, because it assumes that everything done by MHI comes from Kliman, who in fact had nothing to do with that article. In addition to insulting those of us in MHI who are assumed to be the puppets or mouthpieces of Kliman, Jehu’s attack is also objectionable because of his homophobic use of the words “servicing” and “on your knees”.

While it is true that Biden voted against the bussing of Black kids to predominantly white schools as a means to break down school segregation, at a time when the efficacy of bussing was widely questioned amongst liberals, to slur him with the term “Jim Crow” Joe is wholly misleading. Jim Crow was the system of local and state laws that allowed the discrimination against Black people after the Supreme Court ruled in 1883 that the Civil Rights Act of 1875 was unconstitutional. Jim Crow was officially ended with the passage of the Civil Rights Act of 1964. Joe Biden did not enter politics until he was elected to the US Senate in 1972. He never voted or campaigned for discriminatory laws or practices against Black people. Biden’s record on issues of racial justice, while questionable, does not merit the epithet “Jim Crow” Joe.

This distortion of Biden’s record, by Jehu, is particularly troubling given that Biden was the only presidential candidate able to electorally stop the proto-fascist Trump (who has actually repeatedly defended the cultural legacy of the Confederacy) from winning a second term.

Really? Do you think I give a flying fuck that you support this or that bourgeois politician? Do you think my censure would have been less severe had you supported, for instance, Bernie Sanders or even Donald Trump? Do you think it matters to me that you enlist equally clueless proletarians to parrot you nonsense, rather than Kliman himself?

Elections today amount to little more than a formal democratic contest between which gang of slavemasters will conquer and wield the machinery of the fascist state for the next four years.

You brain-dead clowns!

Your endorsement of this war criminal and segregationist didn’t even amount to the most trivial, negligible rounding error in the column of the mass of apathetic non-voters, who rightly reject participation in this quadrennial farce.

You are worse than nothing!

You are a distraction from the real work that must be done.

Grossman on how the Marx exposed the ‘flaw’ in the Law of Value

In this quote Grossman explains, as clearly as I have ever seen it put, why, eventually, exchange value can no longer be the measure of use-value, and why, ultimately, production based on exchange value must breakdown as predicted in the Grundrisse by Marx.

Source, Henryk Grossman Works, Volume 1, page 475:

In his critique, Marx proceeds from the mystifying character of the reified forms of value, that is the fact that relations that people enter into in the process of production appear as relations between objects, things, and that these reified forms conceal true relations between people. Marx therefore speaks of the deceptive appearance of all forms of value. In contrast to transparent, precapitalist forms, the relation between exploiter and exploited in the modern capitalist form of value is opaque because in the wage-relation, that is a form of value which regulates the ‘exchange’ between the wage labourer and the entrepreneur, it appears that the worker’s wage fully compensates all his labour and no unpaid labour is performed.

According to classical theory, all exchange transactions correspond strictly to the law of value, i.e. equal labour times always exchange for equal labour times. This principle also applies to the exchange relation between the worker and the entrepreneur. Now, according to Marx, it is quite evident that there is no exchange of equivalents between worker and entrepreneur. If workers were to receive as much in wages (measured in labour) from entrepreneurs as they give in labour then profit, surplus accruing to entrepreneurs, and hence also the capitalist economy, which is based on this profit, would be impossible. Since both profit and capitalism do, however, exist, no exchange of equivalents can take place. Marx’s entire effort is directed at showing that the transaction between capitalist and worker is as much an exchange of nonequivalents as of equivalents, depending on whether this transaction is regarded within the sphere of circulation (on the market) or during the process of production. The exchange of equivalents between worker and capitalist on the market is merely an appearance arising from the form of exchange. Despite the alleged exchange of equivalents, the laws based on the production of commodities … become changed into their direct opposite … The relation of exchange between capitalist and worker becomes a mere semblance belonging only to the process of circulation, it becomes a mere form, which is alien to the content of the transaction itself, and merely mystifies it. The constant sale and purchase of labour power is the form; the content is the constant appropriation by the capitalist, without equivalent, of a portion of the labour of others, which has already been objectified, and his repeated exchange of this labour for a greater quantity of the living labour of others.

Marx regards it as one of Smith’s great merits that he at least sensed that the exchange between capital and wage labour is a flaw in the law of value. Although Smith could not clarify it, he could see ‘that in the actual result the law is suspended’. According to Marx, it is precisely the form of exchange value which mystifies the real content. ‘The wage form thus extinguishes every trace of the division of the working day into necessary labour and surplus labour, into paid labour and unpaid labour.5 Just as the wage form does, so too all the other forms of value that emerge in the process of exchange mystify. The reified forms of value (exchange value, ground rent, profit, interest, wages and prices, etc.) conceal and invert the real relations between people, by making them appear as the ‘fantastic form of a relation between things’, ‘a social hieroglyphic’, ‘something dark and mysterious’.