On Postone’s concept of the hollowing out of working society – XVIII
So let’s get some tedious chart stuff out of the way. Once we do this I can return to the subject at hand; namely, Postone’s concept of the hollowing out of working society.
In my last post, I left you with this chart, so let’s begin there:
The chart shows the run up to one of the least understood events of the 20th century, the depression of the 1970s. What makes the depression difficult to understand is that it doesn’t take the form most people expect it to take. The depression wasn’t characterized by mass unemployment like the Great Depression of the 1930s. As the above chart demonstrates, instead there was an immense swelling of the expenditure of superfluous labor time in the United States economy.
This is important to understand, because it was the malignant expansion of superfluous labor time in the 1970s that gave the depression its peculiar inflationary character.
Stripping away the layer of superfluous labor time on the chart, allows us to see some of the critical landmarks in the development of the mode of production; landmarks which are not evident if we confine our analysis to the level of state issued currency data.
Having established that I can at least make an argument for the validity of the empirical data I am using, I now want to extend this data further to include the period from 1980 to 2000 as in the chart below:
Here now, I include the period of the so-called Great Stagflation, i.e., the second Great Depression of the 20th century, which, as far as I know, is acknowledged by no authority, either officially or unofficially, but which plainly appears in commodity money measures of United States gross domestic product in the historical record. Also appearing in this chart is the subsequent expansion from 1981 to 2000, that is far from stable, but which eventually exceeds the previous peak reached in 1970.
Let me point out a few things you won’t find, if you stick to the government data that is based on state issued dollar currency:
In chart 1, that odd protuberance in the middle of the 1970s depression is actually formed by the so-called “oil shock recession of 1973-1975”. Now you might ask yourself why a recession results in an increase in the production of socially necessary labor time? I don’t have an answer at this point in this discussion. All I can say is that this recession followed the second largest stock crash since the Great Depression. The largest crash was in 2008.
Not surprising, when stated in valueless state issued dollar currency, United States gross domestic product, year over year, shows no evidence that this event ever occurred.
In chart 2, the second great depression of the 20th century ends with a double-dip recession when then Chairman of the Federal Reserve Bank, Paul Volcker, raised the monetary policy interest rate, ultimately to 20%, in an effort to extinguish inflation that was then running at nearly 15%. Again, why did this recession, one of the worst in post-war history, result in an increase in the production of value? Again, I don’t have an answer at this point in the discussion.
Not surprising, in this case as well, when stated in valueless state issued dollar currency, United States gross domestic product, year over year, shows no evidence that this event ever occurred either.
In chart 3, we have October 19, 1987. It was a day that began like any other Monday. Before it ended, it had acquired the infamous tag, “Black Monday”. As the trading day crossed the international dateline and opened in Australia and New Zealand, this tag morphed into “Black Tuesday”.
So it goes.
The chart above suggest that Black Monday began long before that Monday in October. There is clear evidence that GDP measured in gold plateaued between 1984 and 1985 and then fell in 1986 and again in 1987. The culprit in this case may have been two measures designed to contain the growing Reagan-era budget deficits: Gramm–Rudman–Hollings Balanced Budget and Emergency Deficit Control Act of 1985 and the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987. Together these measures are known as Gramm-Rudman. Which is to say, the market crash on Black Monday likely began as an attempt to control the federal deficit — a side-effect we will see again later on a much larger scale.
For the third time, it is not surprising that when stated in valueless state issued dollar currency, United States gross domestic product, year over year, shows no evidence that this event ever occurred either.
In chart 4, we have the fourth and final event: a real drop in the expenditure of socially necessary labor time from 1990 through 1992. The culprit again appears to be an attempt to contain the budget deficit through a measure known as the Budget Enforcement Act of 1990. According to Wikipedia, roughly $500 billion in savings was achieved over five years through a combination of spending cuts and tax increases. As can be seen, the effect on the production of value was almost immediate, with socially necessary labor time contracting.
Needless to say, as with all the other events above, when stated in valueless state issued dollar currency, United States gross domestic product, year over year, shows no evidence that this event ever occurred either.
But all of the charts above at trivial. I mean, they are important to me, because I actually care about labor theory of value. Most people don’t care about it and I can understand that.
In any case, the most amazing thing about the above charts is that when I set all of those developments against the change in the valueless state issued dollar currency measure of United States gross domestic product, you can see how those changes are almost imperceptible against the truly monstrous explosion of superfluous labor time since 1971:
The historical data based on commodity money is literally buried in an ever growing mountain of expenditures of empty labor time, of labor time that creates no value. By 2000, the labor time that is socially necessary for the production of material wealth, as measured in a commodity money, has increased perhaps 33% — again, it forms that thin sliver of gold at the very bottom of the chart — while the actual labor time expended, as measured in state issued currency, has increased 955%, and was going parabolic by 2000.
The tedious part is over.
Let’s get back to Postone’s argument.