How Monthly Review Published a Scholarly Essay Fundamentally Revising Marx’s Argument

mr-064-11-2013-04-133x200In April, 2013, Monthly Review  published an essay, Crisis Theory, the Law of the Tendency of the Profit Rate to Fall, and Marx’s Studies in the 1870s, by the labor theorist, Michael Heinrich, asserting that “In Marx’s work, no final presentation of his theory of crisis can be found. Monthly Review praised the essay, stating:

It is now clear that Marx never ceased to develop his thinking on the phenomena of crises in capitalism, and never ceased to discard earlier formulations; for example, at the end of his life he was focused on questions of credit and crisis. Monthly Review rarely presents its readers with discussions of economic theory at a relatively high degree of abstraction; this, however, is such an occasion. We trust that the author’s exemplary clarity will permit ready access to readers with any degree of interest in Marx’s theory; for those who wish to become familiar with the conceptual outline of Marx’s work, we cannot do better than to recommend the author’s An Introduction to the Three Volumes of Karl Marx’s Capital

In that essay, Michael Heinrich states:

In the so-called “Fragment on Machines,” one finds an outline of a theory of capitalist collapse. With the increasing application of science and technology in the capitalist production process, “the immediate labour performed by man himself” is no longer important, but rather “the appropriation of his own general productive power,” which leads Marx to a sweeping conclusion: “As soon as labour in its immediate form has ceased to be the great source of wealth, labour time ceases and must cease to be its measure, and therefore exchange value [must cease to be the measure] of use value. The surplus labour of the masses has ceased to be the condition for the development of general wealth, just as the non-labour of the few has ceased to be the condition for the development of the general powers of the human head. As a result, production based upon exchange value collapses.”5

These lines have often been quoted, but without regard for how insufficiently secure the categorical foundations of the Grundrisse are. The distinction between concrete and abstract labor, which Marx refers to in Capital as “crucial to an understanding of political economy,” is not at all present in the Grundrisse.6 And in Capital, “labor in the immediate form” is also not the source of wealth. The sources of material wealth are concrete, useful labor and nature. The social substance of wealth or value in capitalism is abstract labor, whereby it does not matter whether this abstract labor can be traced back to labor-power expended in the process of production, or to the transfer of value of used means of production. If abstract labor remains the substance of value, then it is not clear why labor time can no longer be its intrinsic measure, and it’s not clear why “production based on exchange value” should necessarily collapse. When, for example, Hardt and Negri argue that labor is no longer the measure of value, they do not really refer to the value theory of Capital but to the unclear statements of the Grundrisse.7

Marx indirectly addresses this set of problems from the Grundrisse in the first volume of Capital, when dealing with the concept of relative surplus-value: there Marx makes fun of the notion that the determination of value by labor is called into question by the fact that in capitalist production, the point is to reduce the labor time required for the production of an individual commodity—and that was the argument upon which the theory of collapse in the Grundrisse was based.8

In fact, a closer examination of this statement will show Heinrich is engaged in a fundamental revision of Marx’s argument in Capital and the Grundrisse for the express purpose of removing from labor theory both the idea of a final collapse of capitalism based on the inner laws of the mode of production and his law of the tendency of the rate of profit to fall. This is serious piece of academic malpractice and should be condemned.

Let’s walk through how Marx begins his discussion of the capitalist mode of production in Section 1 of Chapter 1 of Capital. Volume 1 and then compare it to Heinrich’s presentation of the same argument.

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The Unmaking of Labor Theory by Michael Heinrich, Andrew Kliman et al.

Michael Heinrich has produced a “new interpretation” of labor theory that some argue removes any discussion of a theory of crisis implicit in Capital. In response to this alleged attempt to fundamentally revise labor theory, Andrew Kliman, Alan Freeman, Nick Potts, Alexey Gusev, and Brendan Cooney have published an essay purporting to defend the law of the tendency of the rate of profit to fall against Heinrich. Although it appears both sides are in conflict, I will show that actually both sides of this debate share fundamental agreement on the only real issue raised by Heinrich’s argument.

michael-heinrich_boletimHeinrich has just about blown up the Marxist academy with his new interpretation of Marx and labor theory’s alleged crisis theory. His interpretation has been welcomed by some labor theorists and severely criticized by others. Michael Heinrich’s interpretation of Marx’s writings although less familiar to me, stands in contradiction to that of Robert Kurz. While Kurz believed capitalism had entered its final crisis, Heinrich, as I understand him, argues in his new interpretation that Marx’s writing contains no theory of capitalist collapse and not even a final theory of crisis.

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‘Marxist Economists’ and Simpleton Trolls

“The dominant political economy Marx engaged with in his critique was a very different beast.” —Mike Beggs

I have come to the conclusion that anyone calling themselves a “Marxist economist” can safely be dismissed as an idiot.

The very idea of defending historical materialism from bourgeois simpletons is offensive to me. The idea of setting Marx on par with ideologues like Samuelson and Keynes, as though Marx was braddelonginterested in “the economy” is disturbing. There is nothing in Marx that can be said to even distantly resemble a description of “How the economy works”. Marxists are “Marxists” precisely because they suffer the delusion Marx was, in turn, an “economist”, a “sociologist”, or a “philosopher, depending on which field the person talking about him belongs.

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Andrew Kliman on David Graeber and The “Post-Work” Society

I am going to spend some time comparing the approaches of Andrew Kliman and Robert Kurz to the problem of abolishing labor. Andrew Kliman’s contribution to this discussion is “Post-Work: Zombie Social Democracy with a Human Face?” and is presented in the form of a critique of the writers, John Quiggin, Peter Frase, Chris Maisano and, in particular, David Graeber’s essay on “bullshit jobs”. While Robert Kurz’s contribution is “The Lost Honour of Labour” — a critique of orthodox Marxism’s view of labor itself, of which Kliman’s critique can be considered an example.

Mhi-AndrewKlimanBriefly stated, the difference between the two labor theorists can be summarized as follows: For Andrew Kliman a reduction of hours of labor is not compatible with the capitalist mode of production. For Kliman then, only with socialism does it become possible to take advantage of technology to reduce labor for the great mass of society.  While for Robert Kurz, communism itself is not possible within the epoch of labor.  It is, from Kurz’s point of view, impossible for socialism to exist so long as the great mass of society labors.

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Really, I am done with the Left

Now here is an interesting argument made to me today on twitter:

“The shutdown was not an attack on the system, it was an attack on the welfare state!”

This how the Left usually begins its defense of the fascist state: the state is bad but has parts or elements that are for the working class: “[Insert personage or group here] is not aimed at the bad parts, but is only aimed at the good part” Thus opposition to the state must also be aimed at the bad parts, or must be ignoring that [Insert personage or group here] only hates the good parts.

You can fill in [Insert personage or group here] with your preferred fascist in Washington or even in the states.

The Left will then argue, “We need [Insert favorite social welfare program here] because [Insert favorite social welfare program here] helps the working class.

[Insert favorite social welfare program here] can be any program alleged to directly or indirectly help the working class; among the candidates for [Insert favorite social welfare program here] are Head Start, WIC, food stamps, Social Security, Medicare.

Since any attempt at all to call the state into question, necessarily calls these fascist state programs into question, we must do nothing that calls the state itself into question. The Tea Party can call for an end to deficits and point to food stamps as a target to cut to balance the budget, but the Left cannot call for a balanced budget and point to the military as a target to be cut.


This is because, if pressed to reduce its deficits, the capitalists will only cut food stamps, not the military.

But, the capitalists are already cutting food stamps, you might argue. How does this help? The capitalist have already cut Social Security numerous times in the past 30 years — again, how does not balancing the budget help. In fact, workers are paying an overtly regressive payroll tax to quietly fund the military deficits — so really how the fuck does that help? So, while the fascists are busily cutting or underfunding the very social programs alleged to help the working class, while using its deficits and regressive payroll taxes to fund the military. No one can say, “Hey, the real problem is the state.”. because that helps the Tea Party or some other fascist group or personage.

The one excuse advanced by that peculiar brands of social-fascists on the Left who call themselves Marxists is this:

“The Tea Party doesn’t really want to get rid of the state.”

Really? I am completely fucking floored by this new information you guys just handed me. Imagine, GOPoseur fascists don’t “REALLY” want to get rid of their fascist state. The mind boggles. I guess next you will inform the rest of us that the Tea Party just wants to use the capitalist state to attack the working class — what an ingenious deception: They actually use the capitalist state to attack the working class.

So, if I get this right, we should not be trying to get rid of the capitalist state, because any attempt to get rid of it only helps those who are using it to attack the working class.

I give up. You win. If you consider yourself part of the Left, just stop following me — I am not interested in hearing your insane thoughts anymore. Just go the fuck away and leave me the fuck alone. I really mean this: If you consider yourself part of the Left, don’t tweet to me, don’t communicate with me.

Really, I am done with the Left.

Food stamp socialism or communism?

The whining Left suffered a mild paroxysm last night when the EBT card system failed. Suddenly they were forced to consider the possibility that their dependence on the fascist state just might lead to widespread crisis. If people are dependent on handouts from the capitalists, something as insignificant as a minor systems failure could threaten millions.

EBT cardSince the EBT system is run for profit, the managers are forced to spend no more on maintaining it than they do maintaining the roads. They must in this area expend no more labor on maintenance than is socially necessary if they want to fatten their bottom line. When the system went down, thousands of families across the nation, who were lined up in queues, could not complete their purchases.

Rather than calling into  question such a fragile system of subsistence, the Left decried the Right for its direct or indirect role. Was this a result of the shutdown? Had the states in question turned off their support? It turned out that it was a “system glitch”, not an act of terrorism by the Tea Party. Still, many on the Left noted the voices on the Right for whom the failed EBT system became a point of entertainment. The Left was angered by this silly display of a lack of empathy with those having no resources but fascist state handouts.

Poverty is not a personal failure, it is as much the product of the mode of production as iPhones. This much is true with regards to the criticism the Left leveled at the Right. But it begs a question: if you know poverty is a product of the mode of production, why do you still support EBT cards? Since the mode of production is global, it is obvious that its product, poverty, is not being created in the US alone, but world-wide. EBT does not and cannot address poverty, since it is only a national system trying to address a global problem.

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Are state deficits “necessary”?

how-john-boehner-is-secretly-winning-the-war-in-the-government-shutdown-fightThe intense fear expressed in Washington and in financial markets around the world of simply balancing a fucking budget should grab your attention. It’s not like the capitalists are being asked to commit suicide as a class. So why the profound resistance to simply balancing Washington’s budget? If the state is running a deficit, it is spending more than it is directly extracting from the economy, i.e., from the total output of the capital. A balanced budget means the fascist state can spend no more than it directly extracts from the economy through taxes and other revenue.

So what is all the fuss about and how can we determine whether this deficit spending is necessary?

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Thinking the Unthinkable on the Shutdown

There is a recurrent theme in this shutdown. Let’s see if you are perceptive enough to pick up on it (courtesy Zero Hedge blog):

#6 Richard Bove, VP of research at Rafferty Capital Markets: “If they seriously default on the debt, what we’re really talking about is a depression”#7 Chinese vice finance minister Zhu Guangyao: “The U.S. is clearly aware of China’s concerns about the financial stalemate [in Washington] and China’s request for the US to ensure the safety of Chinese investments.”

#8 The U.S. Treasury Department: “A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse”

#9 Goldman Sachs: “We estimate that the fiscal pull-back would amount to 9pc of GDP. If this were allowed to occur, it could lead to a rapid downturn in economic activity if not reversed quickly”

#10 Simon Johnson, former chief economist for the IMF: “It would be insane to default, but it’s no longer a zero-percent probability”

#11 Warren Buffett about the potential of a debt default: “It should be like nuclear bombs, basically too horrible to use”

#12 Bloomberg: “Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.”

If the shutdown is not ended soon and the debt ceiling raised, all hell is going to break loose. These seem to be shared assumptions of both Democrats and GOP, hence public debate (propaganda) takes place within their parameters. The crisis as a mere political event begins with the assumption that any reduction in the debt must end in default, which is predicted to unleash such calamitous events as to be unthinkable.

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Is the partial shutdown of the federal government a “manufactured crisis?”

This is the charge made by some on the Left who oppose it.  Many point to the relatively small scale of the impact — estimated by a Forbes magazine writer to be less than 13% of federal expenditures. Others point to the focus of the shutdown on non-military expenditures, which must strike the programs that most closely appear to maintain the working class — which have been labeled “nonessential”. Deliberately excluded from the shutdown are the very mechanisms of state repression that capitalist class employs to maintain their rule.

Shutdown-thumbAccording to this line of thinking, the folks in Washington really aren’t in a crisis. Rather, the shutdown is an opportunity taken to further impoverish the working class. For this section of the Left, the shutdown is a purely political event driven by ideology, not by economic laws: We have a bunch of neoliberals who have decided their particular ideology is the proper way to organize society and they want to impose this vision on society by means of the state power they control.

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IT AIN’T YOUR FUCKING STATE: So stop whining about the GOP shutting Washington down!

If you look at the whole of the world market, the ruling classes of nearly every nation now is locked in deep political crisis and paralysis. The shutdown in Washington is not exceptional in this regard; it simply means that crisis has reached the core of the fascist world.

shutdownOne of the things the US had going for it in its “fight against deflation”, according to Bernanke, is that it had no political crisis. His argument was that Japan was unable to implement good monetary policy to prevent deflation because it also suffered a political crisis. This turned out to be untrue, once the depression began to be fully expressed in the US, a crisis in the ruling class emerged along with it just as had been the case in Japan.

Continue reading “IT AIN’T YOUR FUCKING STATE: So stop whining about the GOP shutting Washington down!”