The Real Movement

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Month: March, 2014

Class Struggle and the Breakdown of Production Based on Exchange Value

2002_currency_exchange_AIGA_euro_moneyYou have to notice what the labor theorist, George Caffentzis, asserts in his essay “Marxism After the Death of Gold“. Although, according to Anitra Nelson, Marx believed the credit system itself “signals the disintegration of capitalist relations”, according to Caffentzis, the final detachment of the credit system from gold refutes Marx. Caffentzis and other labor theorists had two ways of interpreting Nixon’s actions in 1971: the death of capitalism or the death of labor theory.

Guess which one they chose.

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You can’t understand the state if you don’t understand capital

One of the fundamental problems of Marxism’s explanation of the role of the state is its rather weak grasp of capital itself.

Richard NixonIn my last post I argued there was nothing extraordinary about the failure of social democracy in the 1970s, nor its success in the 1960s. Even if we leave politics out of the equation altogether, we would expect wages to rise during booms and fall during busts. This is pretty much what occurred in fact according to Simon Clarke. Clarke attributes the cause to the success or failure of social democracy, when in fact, social democracy had no real impact on wages.

Where Keynesian policies did seem to work, however, is during the depression of the 1970s. During the 1970s, the depression never led to the fall in output and employment that was seen in the Great Depression. While social democracy is not necessary to explain the rise and fall of wages, it does seem to have an effect on output and employment. In the depression, we should have seen output collapse severely and a population of excess workers to form up in all advanced countries.

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A Brief Note on Simon Clarke’s “The State Debate”

I have been reading the introduction to Simon Clarke’s, 1991 book “The State Debate”. The book is an interesting collection of paper produced by writers in the 1970s trying to come to grips with the fascist state. It does not appear any of them are directly trying to grapple with fascism; rather they seem to grappling with the previous formulations of the problem of the state and society.

Clarke makes this interesting statement:

“There was no way in which economic issues could be isolated from political questions in the atmosphere of growing economic crisis and sharpening political and ideological conflict through the 1970s.”

Yet, most of the authors referred to in this book are attempting just this: to isolate economic issues from political questions. As Clarke describes it, at the outset there were two poles in the debate: The first pole proposed “an immediate identification of the state with the interests of capital”. The second pole proposed, “institutional separation of the state from the economy, and so stressed the autonomy of the state as a political institution.”

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The Weird Netherworld of Barbarism

The odd case of superfluous labor time

Based on the assumptions Marx employs in Volume 3, superfluous labor time should not exist under capitalism. At the same time, the mode of production is the production of surplus value, i.e., labor time that is superfluous to society. chile-protest-001These two ideas mean that when superfluous labor time does actually emerge in the social labor day, a crisis should erupt and the capital produced during this superfluous labor time should be devalued. So all of the evidence pointing to a large amount of superfluous labor time in the economy suggests something else is at work. This something else has allowed the accumulation of superfluous labor time within the social labor day for almost seven decades.

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Notes on the essay, “The Logic of Gender”

 Endnotes has published an essay that purports to correct Marx’s “deficient” discussion of the reproduction of labor power. Admittedly, I am not by any means an authority on many of the issues discussed, so I confine myself to matters on which I feel qualified to comment.

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Superfluous labor and state debt

In his “Apotheosis of Money”, Robert Kurz makes this statement:

“If State consumption and State credit, crushed together as if by an avalanche, play a central role in this development, this is also due of course, to the fact that the State (unlike a private entity which avails itself of credit) is considered to be a “secure debtor” which means, however, that the State, in the event of a great monetary and credit crisis, will not declare bankruptcy, but will simply expropriate its citizen-creditors.”

The argument Kurz makes here is that the unproductive consumption of surplus value, made possible by the credit extended to the state, is dependent on the state’s ability to repay its debt and must, sooner or later, result

Decreasing federal deficits preceded both the 2001 and 2008 crises. (Source: St. Louis Federal Reserve)

Decreasing federal deficits preceded both the 2001 and 2008 crises. (Source: St. Louis Federal Reserve)

in the state expropriating the owners of capital. I am not especially satisfied with the way Kurz formulates the problem here. My difficulty with Kurz’s formulation is probably best expressed in the words of the bourgeois simpleton, Paul Krugman — for reasons that are not entirely clear to the bourgeois simpletons the long-standing prediction of an impending crisis for Washington’s finances over the last thirty years never finally materialized:

“Fear of a Greek-style fiscal and financial crisis has loomed over much of our policy discourse over the past four years, and has played a significant role in shaping actual policy, constituting the principal argument for austerity in countries that don’t face any current difficulties in borrowing. However, despite repeated warnings that crises of confidence are imminent in floating-rate debtors – mainly the United States, the UK, and Japan – these crises keep not happening.”

Krugman has his explanation for why the predicted crisis “keeps not happening”, but he is a simpleton who thinks the problem is, “as simple and silly” as he is. Labor theory offers a much simpler and elegant explanation for why Washington has never experienced the sort of crisis predicted by bourgeois economists. It is an explanation I will need if I am to finally explain how reduction of hours of labor affects profits in an economy characterized by massive expenditures of unproductive labor time.

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How superfluous labor time creates inflation


The purchasing power of one dollar, as measured in percentage of an ounce of gold. (1970-2012)

I want to turn to the question of the impact of the growing mass of superfluous labor time has on the exchange value and prices of commodities. Once i am finished, I hope you will understand why inflation is not a mystery — and, consequently, why all inflation within the mode of production can be traced to the growing mass of unproductive labor.

As I explained in the previous post, the emergence of a significant mass of superfluous labor time within the mode of production is the result of the tendency toward overproduction of commodities, of overproduction of capital in the form of commodities.

According to Marx in Volume 3 of Capital, this overproduction necessarily results in the devaluation of capital: At the point where overproduction of capital becomes a general condition of the mode of production, no increase in the mass of capital can add to the mass of profits; indeed, the possibility exists that an increase in the mass of capital actually results in a fall in the mass of profits.

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Why superfluous labor time is a really big problem for labor theory

To explain the impact a reduction of hours of labor has on the state, it is first necessary to explain three interrelated phenomena that, while not explicitly assumed by Marx in Capital Volume 3, chapter 15, nevertheless can only be explained based on that text. Taken together these three premises amount to the breakdown of production based on exchange value.

These premises are:

  1. A growing mass of superfluous labor time within the mode of production;
  2. a growing divergence between the values and prices of commodities (i.e., inflation); and
  3. a growing mass of state debt that cannot be repaid.

socially-necessary-labor-time-as-a-percentage-of-the-work-dayWith regards to point 1, we have already spoken of the empirical work of both labor theorists and bourgeois simpletons that point in the direction of a significant mass of unproductive labor time within the so-called economy. However, this observation immediately runs into a problem for labor theory: superfluous labor cannot exist on the premises Marx assumes in Capital, yet it has to be explained based on those premises.

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