The Real Movement

Communism is free time and nothing else!

Month: August, 2021

Value, price and the superposition of the capitalistically-produced commodity

_8f934e92-d143-11e5-94bd-a06a76346e8f

This post continues from here

Michael Heinrich thinks Marx prediction of capitalism’s inevitable collapse as a result of progressive substitution of machinery for human labor was itself simply the result of his (Marx’s) irrational exuberance in the 1850s.

So, for shits and giggles, let’s assume Heinrich is wrong about this.

I know, I know — Heinrich’s been published by Monthly Review for God’s sake! He’s actually German or some shit. He actually LIVES in Germany.

He just HAS to know what he is talking about, right?

Bear with me.

Let Marx speak for himself — even though he wasn’t published by Monthly Review, lived in England for a good period of his life and was prone to irrational exuberance in the 1850s.

*****

In the 1850s, Marx and Engels think capitalism was headed for collapse for reasons I already explained above.

In the 1880s, Marx and Engels apparently still think capitalism was headed for collapse — again, for reason I already explained above. (Weren’t you listening, edwad?)

Between those two decades, in the 1860s, Marx writes Capital, which, according to Heinrich, contains not a trace of this irrationally exuberant prediction.

It turns out that another critic, Eugen von Bohm-Bawerk, made a criticism similar to Heinrich’s that Marx made some sort of 180 in his thinking while writing Capital. The issue was not expressly the same as the one directly touched on by Heinrich, but, I want to suggest, it is related to it: the transformation of labor values into prices of production.

Why the two criticisms are related is the subject of this series.

To be clear, although Volume Three was only published in the 1890s, according to Rudolf Hilferding, two years before he publishes Volume One Marx had already completed at least portions of the draft for the third book concerning the transformation of values into prices.

Specifically, Hilferding says:

Before we consider these “arguments” and the counter-arguments of Böhm-Bawerk, it is necessary to say a word or two concerning the “contradiction” or the “withdrawal” which Marx is supposed to have perpetrated in the third volume. As regards the alleged withdrawal, those who use this term have forgotten that the first volume was not published until the tenth chapter of the third volume, which forms the bone of contention, had already been composed. For the draft of the last two books of Capital was composed by Marx during the years 1863 to 1867, and from a note by Engels (III, 209n) we learn that the tenth chapter of the third volume, the one containing the solution of the riddle, was written in 1865. To speak of a withdrawal in this connection is tantamount to saying that Marx, in order to remain at a definite point, first moved a mile forward and then a mile backward. Such is, nevertheless, the view which the vulgar economists have formed of the essence of the dialectic method, because they never see the process but only the completed result, so that the method always seems to them a mystical “hocus-pocus.” Nor is there any better justification for the accusation of contradiction than for the accusation of withdrawal.

I offer this statement only in order to establish a timeline, of sorts, for when Marx formulated his argument on the transformation problem in Volume Three. It seems that Marx was writing portions of several volumes at once, although they were published serially — and two of them posthumously.

Like Bohm-Bawerk on the transformation problem, many post-war Marxists like Michael Heinrich expect us to believe that Marx somehow made a prediction of a collapse of production based on exchange value in the Grundrisse, only to later withdraw that prediction when he set down to write Capital. According to this conspiracy theory, Marx then later stood by, in silent acquiescence, as his life long collaborator, Frederick Engels, revived his allegedly long abandoned prediction in the latter’s own book, the highly popular primer on Marx’s ideas: Socialism, Utopian and Scientific.

Well, I am not buying the “Marx made a U-Turn on his collapse theory” argument.

Instead, I propose an alternative theory:

Das Kapital is Marx’s presentation of the theory of the inevitable collapse of production based on exchange value in its complete form.

*****

This is where the discussion of the transformation of values into capitalist prices of production in Volume Three may be relevant.

And to understand why the transformation problem is relevant, we have to talk about … uh, why Albert Einstein never won the Nobel Prize for his General Theory of Relativity.

Yeah, that’s right.

Einstein won the Nobel Prize in 1925, but not for Relativity. Instead, he won it for settling a long-standing controversy, much like the one Marx settled in Volume Three. Only for Einstein, the controversy was about the nature of light.

What was the controversy about the nature of light that Einstein settled?

About 2400 years ago, the philosopher, Democritus and the mathematician, Euclid proposed models that assumed light was composed of particles. About 1000 years ago, the scientist, Ibn al-Haytham, described light as a ray composed of particles traveling from a point of illumination to the eye.

That view of the nature of light mostly held sway until about 400 years ago, when philosopher, mathematician and scientist, Rene Descartes, proposed an alternative model in which light was a wave that behaved much like sound waves through a medium he called the “aether.”

The controversy over the nature of light, whether it was a particle or a wave, continued until Einstein proposed a rather startling answer: Light was both a wave and a particle, simultaneously — a superposition of the two states.

To borrow a quote from the Wikipedia, which is usually accurate about this sort of thing, except when it comes to Marx’s labor theory of value:

It seems as though we must use sometimes the one theory [of the nature of light] and sometimes the other, while at times we may use either. We are faced with a new kind of difficulty. We have two contradictory pictures of reality; separately neither of them fully explains the phenomena of light, but together they do.

-Albert Einstein, 1938

*****

We have a similar controversy in classical economics prior to Marx.

The problem was this: if value is an objective thing, having a real influence on the real world market, how do we go from this objective thing to actual prices that this objective thing (namely, value) is supposed to determine?

Now, basically, this doesn’t seem like a really big problem to explain, if the only thing you cared about was how value and price worked together in simple pre-capitalist commodity producing societies — although even there some difficulties arise.

But when political economists like Smith and Ricardo tried to describe how prices and profit worked in the more modern complex capitalist mode of production — (and who wasn’t trying to do this in the 18th and 19th century?) — they kept running into an irreconcilable contradiction.

The problem: In theory, at least, there appears to be not one, but two determinants of price in the capitalist mode of production. Further, the two determinants are irreconcilable because they don’t agree on the price of the commodity.

As Sam Williams of the Critique of Crisis blog explained, those two determinants of price are the Law of Value and the Law of the Average Rate of Profit.

The first law says that the price of a commodity is determined by the socially necessary labor time required for production of the commodity:

The law of value as developed by classical political economy held that the value of a commodity is determined by the amount of labor that under the prevailing conditions of production is on average necessary to produce it.

According to the classical economists, the value of a commodity determines its natural price around which market prices fluctuate in response to changes in supply and demand. The fluctuations of market prices around values—or what comes to exactly the same thing, according to classical political economy, natural prices—regulate the distribution of capital among the various branches of production.

But the second law says that the price of a capitalistically produced commodity is determined by the average rate of profit on the total capital of society:

However, it was realized already by Adam Smith that the law of value thus formulated is in apparent contradiction with the tendency of competition to equalize the rate of profit. Under the relentless pressure of competition, no individual capitalist can afford to settle for a lower rate of profit if a higher rate of profit can be achieved. Every capitalist under pain of bankruptcy must seek the highest rate of profit possible.

Assuming there are no barriers to the free flow of capital among the various branches of production—that is, free competition or, as Adam Smith called it, “perfect liberty”—competition among capitals will tend towards a situation where capitals of equal size earn equal profits in equal periods of time.

To put this in terms that might be familiar to folks who are acquainted with the physical sciences, the problem of the price of capitalistically produced commodities result from the fact that they occupy a superposition of both a commodity and a capital.

Marx described it this way:

The whole difficulty arises from the fact that [capitalistically-produced] commodities are not exchanged simply as commodities, but as products of capitals, which claim participation in the total amount of surplus-value, proportional to their magnitude, or equal if they are of equal magnitude. And this claim is to be satisfied by the total price for commodities produced by a given capital in a certain space of time. This total price is, however, only the sum of the prices of the individual commodities produced by this capital.

-Marx, Capital, Volume Three

If, in the case of light, we find it to behave both as a particle and as a wave and neither of these behaviors, taken separately, completely explain physical reality, so in the case of capitalistically-produced commodities, their prices behave simultaneously as if they are the product of labor carried on separately, and the product of directly social labor carried on in cooperation.

This has several implications that I will discuss in the next post.

Again on the transformation problem…

0 yxp19XkXMoKabOoJ

In 2013, Michael Heinrich wrote an essay on what he considered the basic fallacy of Marx’s labor theory of value that included these words:

In the first half of the nineteenth century, it became clear that periodic economic crises were an inevitable component of modern capitalism. In the Communist Manifesto, they were regarded as a threat to the economic existence of bourgeois society. Crises first took on a special political meaning for Marx in 1850 when he attempted a closer analysis of the failed revolutions of 1848–1849. He now regarded the crisis of 1847–1848 as the decisive process which led to revolution, from which he drew the conclusion: “A new revolution is possible only in consequence of a new crisis. It is, however, just as certain as this crisis.”

In the following years, Marx eagerly awaited a new deep crisis. It finally came in 1857–1858: all capitalist centers experienced a crisis. Whereas Marx acutely observed the crisis and analyzed it in numerous articles for the New York Tribune, he also attempted to work out his critique of political economy, which he had planned for years. The result was the untitled manuscript which is known today as the Grundrisse.

In the Grundrisse, the theory of crisis bears the stamp of the expected “deluge” that Marx wrote about in his letters. In an early draft for the structure of the manuscript, crises come at the end of the presentation, after capital, the world market, and the state, where Marx fashions a direct connection to the end of capitalism: “Crises. Dissolution of the mode of production and form of society based upon exchange value.”

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.”

It was. and remains, the contention of most, if not all post-war Marxists, that Marx never actually embraced a theory of capitalist collapse or a theory of a solely endogenous breakdown of the mode of production. They hold to this idea despite the many references to such an idea within the body of Marx’s own writing and that of Engels, his life-long collaborator, that can be found in multiple sources.

Even if we were to accept Heinrich’s argument regarding the fragment, we would then have to explain this passage taken from Engels, taken some twenty-three years later, in a book that was notoriously popular among Marxists at the time, Socialism, Utopian and Scientific — a book so popular among Marx’s followers that it sold more copies than the Communist Manifesto itself at the time of its publication and for many years thereafter:

II. Capitalist Revolution — transformation of industry, at first be means of simple cooperation and manufacture. Concentration of the means of production, hitherto scattered, into great workshops. As a consequence, their transformation from individual to social means of production — a transformation which does not, on the whole, affect the form of exchange. The old forms of appropriation remain in force. The capitalist appears. In his capacity as owner of the means of production, he also appropriates the products and turns them into commodities. Production has become a social act. Exchange and appropriation continue to be individual acts, the acts of individuals. The social product is appropriated by the individual capitalist. Fundamental contradiction, whence arise all the contradictions in which our present-day society moves, and which modern industry brings to light.

A. Severance of the producer from the means of production. Condemnation of the worker to wage-labor for life. Antagonism between the proletariat and the bourgeoisie.

B. Growing predominance and increasing effectiveness of the laws governing the production of commodities. Unbridled competition. Contradiction between socialized organization in the individual factory and social anarchy in the production as a whole.

C. On the one hand, perfecting of machinery, made by competition compulsory for each individual manufacturer, and complemented by a constantly growing displacement of laborers. Industrial reserve-army. On the other hand, unlimited extension of production, also compulsory under competition, for every manufacturer. On both sides, unheard-of development of productive forces, excess of supply over demand, over-production and products — excess there, of laborers, without employment and without means of existence. But these two levers of production and of social well-being are unable to work together, because the capitalist form of production prevents the productive forces from working and the products from circulating, unless they are first turned into capital — which their very superabundance prevents. The contradiction has grown into an absurdity. The mode of production rises in rebellion against the form of exchange.

D. Partial recognition of the social character of the productive forces forced upon the capitalists themselves. Taking over of the great institutions for production and communication, first by joint-stock companies, later in by trusts, then by the State. The bourgeoisie demonstrated to be a superfluous class. All its social functions are now performed by salaried employees.

Here, we meet again with Marx prediction of a solely endogenous breakdown of production based on exchange value, this time in Engels’ hand and, moreover, emphasized in the original, so that the prediction cannot be missed by the reader!

Twenty-three years after Marx’s prediction in the Grundrisse, alleged by Heinrich to be made in the heat of revolutionary exuberance, the self-same prediction by his collaborator in a text that was written specifically to acquaint people with Marx’s ideas.

Twenty-three years later.

Twenty.

Three.

Years.

Later.

23, goddammit!

Perhaps, we are to believe that somewhere between the 1850s and the publication of Capital, Marx changed his mind on his prediction of a solely endogenous breakdown of the mode of production, and then, between the publication of Capital and that of Engels’ book, Socialism, the latter went his own way and on this question and issued his rebuttal to the now less than exuberant Marx.

Perhaps.

This, it seems to me, is the only way we can make sense of the debate over what has become known as the “transformation problem.”

Now, why would the transformation problem have anything to do with what I was just writing about?

Let me explain in my next post.

2020 reduction of labor hours led to 6% fall in carbon emissions

Carbon emissions fell at the fastest rate in the last 30 years, driven entirely by the reduction of hours of labor forced on countries by the emergency measures necessary to contain the pandemic.

The data shows that only an immediate and radical reduction of hours of labor has any hope of avoiding a catastrophic climate crisis.

Wage slavery has outlived its welcome.

E9x23wUWYAQrnX-

How the NatSec apparatus organized the debacle in Afghanistan…

In the previous post, I showed how the Soviet party-state apparat disorganized food distribution and forced unpopular decisions on Khrushchev in an attempt to hurt his popularity before driving him from office.

Today, we are seeing a similar campaign against Joe Biden, who had the temerity to demand the complete withdrawal of troops from Afghanistan by August 31st — essentially sticking to the decision of his predecessor, Trump.

Biden is in the unfortunate position of having to rely on a recalcitrant state machinery that does not want to withdraw from Afghanistan (or anywhere else, for that matter) to plan and execute his ordered withdrawal from Afghanistan by August 31st.

 

President Biden’s decision to remove all U.S. troops from Afghanistan ran counter to the recommendations of his top military commanders, who feared it could undermine security in the country.

Gen. Frank McKenzie, the commander of U.S. forces in the Middle East, Gen. Austin “Scott”  Miller, who leads NATO forces in Afghanistan, and Gen. Mark Milley, chairman of the Joint Chiefs of Staff, all recommended retaining the current force of 2,500 troops while stepping up diplomacy to try to cement a peace agreement, U.S. officials say.

Defense Secretary Lloyd Austin, himself a retired military commander for the region, shared the concerns of the senior officers, cautioning that withdrawing all U.S. troops would suspend what amounted to an insurance policy for maintaining a modicum of stability in the country, the officials said. (Wall Street Journal, April 17, 2021)

But these are the very people who planned and executed Biden’s orders. Being in charge of the planning of the withdrawal meant they could sabotage it from the inside at every step of its execution.

Jim-Crow Joe will pay dearly for Trump’s withdrawal. This clusterfuck was a trap they had laid for Trump if he followed through with the withdrawal, but Jim Crow Joe walked into it instead.

But the debacle has its own logic too: It is unlikely that Biden will want to face off against the NatSec apparat down the road to withdraw troops from — say — Korea, Syria or Iraq after this chilling debacle.

He likely has learned his lesson.

How the Soviet party elite used long hours of labor to bring down Khrushchev

How do you bring down a popular political leader? Well, the Central Intelligence Agency knows: engineer an economic crisis and blame the current administration for it. Apparently, that playbook worked as well in the Soviet Union as it did in Guatemala, Nicaragua or Iran, as the folks who planned the coup against Khrushchev learned.

As the plot to remove Khrushchev unfolded in the summer of 1964, conspirators among his inner circle approached him to convince him to delay reduction of the working week, even while others among the party elite were engaged in sabotaging food distribution throughout the entire Union. By the time it came to getting rid of the old guy, workers were dancing on tabletops with joy, according to one western observer. No sooner had Khrushchev been removed than all the problems mysteriously went away.

The Soviet state had organized its first successful capital strike against the working class.

*****

Read the rest of this entry »

What defeat in Afghanistan?

external-content.duckduckgo.com

U.S. faces defeat in Afghanistan

I almost laughed when I read that headline on one radical Leftist rag site.

Let me see if I get this: the United States occupies your country for two decades and bombs the hell out of everything that moves until it gets tired and bored with the slaughter.

Then it withdraws, leaving the country in the hands of semi-feudal clerics with iPhones.

This somehow amounts to a defeat in the opinion of the radical Left?

You have to be kidding me. Do you really have this little imagination left?

A dismal failure even by the utterly dismal standards of the American labor movement.

The entire German yield curve goes negative … again

Excess capital frantically scrambling for a way to avoid the abyss…

From Reuters:

Germany’s 30-year government borrowing costs fell below 0% on Monday, taking the entire yield curve back into negative territory for the first time since early February as euro debt markets tracked another leg lower in U.S. Treasury yields.

From one analyst on Bloomberg:

“There has been a loss of hope.”

Remembering the Audacity of Postone: Dead labor is the source of emancipation.

[Capital] is not simply an abstract vampire sitting on top of the concrete whereby one could simply get rid of it, like taking a headache pill. Within this imaginary, capital is considered extrinsic to the concrete, to production or labour. Capital, however, actually molds the concrete. It empties labour increasingly of its meaningfulness. At the same time it is an alienated form of human sociality, of human capacities. As such, it is generative of socially general forms of knowledge and power, even if it generates them historically in a form that oppresses the living. Yet, in many respects, precisely this becomes the source of future possibilities. That is, living (proletarian) labour is not the source of future historical possibilities. Rather, what has been constituted historically as capital is that source. Now, I know this sounds like I am turning everything on its head. I am saying that the category of living labour in Marx is not the source of emancipation. Rather, dead labour is. Maybe this sounds like a provocation, but it needs to be thought about. (emphasis added)

Interview with Postone