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Tag: absolute overaccumulation

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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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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Endnotes 4: Trying to dazzle us with bullshit

I have been reading Endnotes 4, when I came across an argument by the collective in Part 3 on why the industrial working class never became the majority of society and how this led to the failure of the working class movement. The argument the collective makes has my mind twisting:

“Revolutionaries’ belief that trends would continue to move in their favour was enshrined in the policy of abstentionism. Social Democratic parties became the largest factions in parliaments, even if they remained in the minority; but those parties abstained from participating in government. They refused to rule alongside their enemies, choosing instead to wait patiently for their majority to arrive: ‘This policy of abstention implied enormous confidence in the future, a steadfast belief in the inevitable working-class majority and the ever-expanding power of socialism’s working-class support.’ But that inevitability never came to pass.”

industrial_revolutionSo, the workers’ parties expected that a working class majority would soon arrive and produce a majority in favor of socialism. Is this the argument the Endnotes collective is trying to make? If true, where did this belief in inevitability go wrong?

What happened, according to the Endnotes collective, is that the working class met its external limit of growth long before it became a majority of society:

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The Great Unsolved Mystery of the 20th Century: Why did the Soviet Union collapse?

Despite its devastating impact on global relations between the proletariat and the bourgeoisie within the world market, the sudden collapse of the Soviet Union remains mostly unexplained. A large body of literature has been produced to explain the collapse, but, to my mind, very little of it provides a satisfactory explanation.

So I took up reading this paper, recommended by someone on, A Reassessment of the Soviet Industrial Revolution, by Robert C. Allen, without the expectation it would add much to the subject.

I was wrong. I now think it is a must read.

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Keynes and the myth of the Reagan administration’s neoliberalism

Robert Skildelsky, biographer of John Keynes, has written an essay written an essay on the 80 year legacy of the General Theory in which he credits Keynes with inventing macroeconomic policy and for showing how government could employ means at its disposal to offset economic depressions.

For all the genius of Keynes’ General Theory, its importance has not always been acknowledged by mainstream economics. By the 1980s, according to Skidelsky, most of mainstream economics came to reject many of the ideas first proposed by Keynes, particularly his argument capitalist economies were inherently prone to chronic underutilization of both capital and labor.

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The state and the final collapse of capitalism

I received a very good question on my

“Can you sketch out a devaluation crisis/scenario that would collapse capitalism?”

I could only partially answer the question, because of the limited space allowed by In my answer, I was only able to set the premises of my particular scenario for capitalist collapse. I want to extend my remarks here to fill in whatever blanks may exist.

Here is the most important premise I will be using in the following scenario, which is, of course, open to question:

The capitalist mode of production is in a permanent and continuous state of overaccumulation of capital. This condition Marx described as capital having reached the point where no new capitalist investment can increase profits. Under these conditions, each increase in capitalist investment of new capital has the paradoxical effect of reducing profits. This gives rise to a mass of capital that cannot be productively employed and a population of workers who cannot find productive employment.

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