The Real Movement

Communism is free time and nothing else!

Mandel’s strange argument on value, exchange value and prices

As I showed in the first part of this series, Marx’s argument is that the rate of profit falls because, over time, generally less labor is employed in the production of commodities. The falling rate of profit triggers a crisis during which capital attempts to restore the normal operation of the mode of production.

Among Marx’s findings: Even if an increased quantity of labor is generally employed throughout the ‘economy’, this increase in the total sum of labor is accompanied by a decrease in the labor embodied in each of the individual commodities produced. The result is that, over time, even if more value is created, it is embodied in even more use values, each of which requires less labor to be produced.

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Ernest Mandel on currency crises and the end of money

For people who care about how the dollar works to slow capitalist collapse, Ernest Mandel wrote an interesting piece in 1968, The Crisis of the International Monetary System. I found the essay both interesting and puzzling.

Why I find the essay interesting is probably obvious to anyone who reads this blog regularly. I think Marx’s view of money and associated issues is far too blithely dismissed by even those who consider themselves orthodox followers of his theory. My argument is simple: you cannot claim labor theory is legitimate and valid while arguing one of the most fundamental and critical labor theory premises of commodity production and exchange — that money itself must also be a commodity — is invalid.

(Which is to say, of course, you can hold this position, and may even be right about it, but the results of your analysis won’t be consistent with labor theory. Something has to give here.)

Before I explain why I found Mandel’s essay not only interesting but, more importantly, puzzling, I want to provide some context.

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UBI: Why print money to buy groceries, when you can buy the farm?

In the National Review, another call from the fascists for the latest Leftist-failure-in-the-making known as Universal Basic Income. I have been holding it back, intending to do a piece on it at some point, but I never got around to it. This morning, however, @socialismical asked an interesting question about how to stop capital flight:

Socialismical: “Should the state subsidise a business to prevent it from moving elsewhere?”

Here is the problem: the loss of jobs owing to capital flight has a horrendous impact on communities like Detroit. In principle, communists should be standing for free trade and no barriers to the movement of workers and capital between countries; on the other hand, communities are devastated when a plant shuts down and moves to Mexico, China or wherever.

Moreover, as we have seen, fascists like Trump and social-fascist reformers like Sanders take advantage of this to fuel their own rise to political power.

Can communists offer a viable alternative that is consistent with free trade?

Yes and, unfortunately, No.

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Whoops! Did Michael Roberts and Fred Moseley just revise Marx?

In this morning’s compare and contrast, we look at two different formulations of the category, socially necessary labor time, in Roberts’ essay, Consistent, realistic, verifiable; his review of a new book on labor theory by Fred Moseley:

Formulation 1: “Marxist value theory is based on the view that commodities are priced in the market according to the labour time expended on them.”

Formulation 2: “The market decides whether certain amounts of labour time expended on producing particular commodities are ‘socially necessary’.”

In labor theory of value, socially necessary labor time, of course, is the labor time required for production of a commodity, its value. However, in Roberts’ summary of the argument made by Fred Moseley SNLT is first described as a quantity of labor existing before exchange. Then it is later described by Roberts as a quantity of labor determined by exchange — by “the market”.

So which is it, Mr. Roberts? Is socially necessary labor time determined by production or exchange? There is no rush on this, Mr. Roberts. I am sure the proletarian revolution can wait patiently while you theoreticians figure this out.

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The TSSI school has completely capitulated to the value-form school

In a surprisingly abrupt about face, it looks like the TSSI school has capitulated to the value-form school of Michael Heinrich and company on all the important points of controversy between the two schools.

Of course, the TSSI school is the least ethical of all Marxist schools, because they want to drop Marx while pretending to defend him. The value-form school at least has enough principles to admit they think Marx was wrong, but not the TSSI school. Expect the TSSI school to continue pretending they uphold an orthodox interpretation of Marx’s labor theory of value.

In any case, we now have it in black and white, courtesy of Michael Roberts, who, in his review of Fred Moseley new book, Consistent, realistic, verifiable, argues that Marx labor theory of value basically examines the capitalist mode of production, “[from] the capitalist point of view, [where] money advanced must lead to more money, or forget it.”

I have no words to describe my reaction to this statement.

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Empirical evidence that fewer hours of labor increases wages

As can be seen in the chart below, longer hours of labor does not increase the wages of the working class, nor do shorter hours of labor depress wages.

inversecorrwagehour

Empirical evidence for an inverse correlation between hours of labor and wages among euro-zone countries (Source: OECD)

In the euro-zone, as hours of labor fall (x axis), wages rise (y axis). The euro-zone is a good case study for the empirical relation between hours worked and wages, because the common currency means there is no need to adjust for currency exchange rates.

The data, provided by the OECD, shows that Greece, with the longest hours of labor, has among the lowest wages of the euro-zone countries, while Germany, with the shortest hours of labor, has among the highest wages in the euro-zone.

There is a definite inverse correlation between hours and wages.

Marxists who argue a reduction of hours of labor leads to a fall in wages have no empirical or theoretical evidence for their argument. They are just regurgitating the usual simpleton bourgeois nonsense that wage slavery is good for the working class.

Labor Theory for (Marxist) Dummies: Part 4

Is a fully developed communist society possible right now?

047I want to illustrate my point from the last post that to bring the labor reserve into production and so reduce hours to a minimum for everyone in society requires a much larger reduction than may be generally assumed in the literature on the subject. To do this, I will be using actual data drawn on the United States. As I will show, under present conditions in the United States the reduction of hours of labor now required to absorb the labor reserve into production may be so large as to effectively bring us to the threshold of a fully developed communist society.

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Labor Theory for (Marxist) Dummies: Part 3

Labor reduction and the horrific conditions of the labor reserve

I have made several important points about hours of labor reduction in the first two parts of my series “Labor Theory for (Marxist) Dummies”

The first point is that, according to labor theory, a reduction of hours of labor can drive the rate of profit to zero without any impact on productive employment and wages. This is an extremely important point, because much of the objection by Marxists and other workers to reducing hours of labor rests on their assumption that reducing hours will reduce wages. In fact, of all economic theories, labor theory alone suggest this cannot happen. Labor hours reduction has no impact on employment of productive workers and their wages.

thuglifeSecond, I have shown in part two of this series that when there is significant waste in employment of labor power in the economy, a reduction of hours of labor should actually increase both the number of productively employed workers and wages generally. When a significant portion of the existing employment of labor is wasted, reducing hours raises the wages of the working class.

If labor hours reduction does not negatively affect labor that produces value and surplus value, and if labor hours reduction forces capital to reduce the unproductive employment of labor power, can labor hours reduction actually eliminate unemployment altogether? To be more specific, to what extent is unemployment, underemployment and an entire body of workers who are today “unemployable” solely the product of the present 40 hours work week?

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Labor Theory for (Marxist) Dummies: Part 2

Steps the capitalists can take to counter a reduction in hours of labor and their effect when hours of labor are reduced

In the first part of this series, I showed that a reduction of hours of labor has no impact on wages and productive employment so long as this reduction does not actually encroach on the socially necessary labor required to produce the value of the wages of the working class. In this part, I will show why, under certain circumstances, a reduction of hours of labor will actually increase both wages and productive employment.

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Labor Theory for (Marxist) Dummies: Part 1

How exactly does hours of labor reduction work?

I have to say that I honestly have no idea how the minds of Marxists work — all of them, almost without exception. I have, by turns, alternately been accused of being reformist and ultra-Left for advocating hours of labor reduction. So, I thought I would show people how labor theory actually works in practice and why the struggle to reduce hours of labor is neither reformist nor ultra-Left, but a means to progressively abolish wage labor completely. It is the only real means of realizing a so-called ‘post-capitalist’ society.

What I find puzzling is that Marxists don’t seem to be able to do this very simple thought experiment on their own using Marx’s labor theory of value. The only real objection to reducing hours of labor is that Marxists don’t really want to kill capitalism in the first place.

One of the biggest problems I encounter when discussing hours of labor reduction with Marxists is not the dismissal of the idea as reformist or ultra-leftist. Rather, the problem is far more mundane and substantial. Marxists fear hours of labor reduction will plunge the working class into poverty as wages collapse with hours of labor.

This is an extremely important objection to reducing hours of labor, because it reflects what I think is a valid and extremely powerful fear among the working class. Since we live by selling our labor power, we must be suspicious of any proposal the seems to threaten that sale. However, there is no theoretical basis for this fear in labor theory as I will now show.

If you are a follower of value-form Marxism, don’t try this at home. It will only hurt your brain.

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