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Tag: Karl Marx

The “socialist” argument for Universal Basic Income

karikatur-das-verhaeltnis-arbeiter-unternehmer-559b3ce83fafbd59048b4567Every movement that hopes to be embraced by society at large must be translated into the specific class consciousness of each of the various classes prevalent in that society. This was once true for socialism, and it is no less true for Universal Basic Income. UBI has become the elephant in the room that a motley collection of blind wise men are each trying to describe to their followers in words appropriate to their particular worldview.

Here is an interesting set of talking points for UBI someone developed for socialists, which invokes Marx and equates UBI to the free universal public education he proposed in the Communist Manifesto.

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A policy framework that kills capitalism, rather than fixing it

albert-einsteinI am in the process of reading a book with a very long title, Black hole: how an idea abandoned by Newtonians, hated by Einstein, and gambled on by Hawking became loved by Marcia Bartusiak.

According to Bartusiak,  few scientists believed Einstein’s theory had any practical use before mid-century. Einstein’s theory wasn’t even taught in most universities and Newton’s theory was thought to be adequate:

“After the flurry of excitement in 1919, when a famous solar eclipse measurement triumphantly provided the proof for Einstein’s general theory of relativity, the noted physicist’s new outlook on gravity came to be largely ignored. Isaac Newton’s take on gravity worked just fine in our everyday world of low velocities and normal stars, so why be concerned with the minuscule adjustments that general relativity offered? What was its use? “Einstein’s predictions refer to such minute departures from the Newtonian theory,” noted one critic, “that I do not see what all the fuss is about.” After a while, Einstein’s revised vision of gravity appeared to have no particular relevance at all. By the time that Einstein died, in 1955, general relativity was in the doldrums.”

As I read Bartusiak’s book it occurred to me that much the same is true of Marx’s theory. Marx’s labor theory of value, although a giant step beyond the classical theorists of his time, and despite initially producing a huge wave of revolutionary fervor, has mostly been ignored at least since the 1930s.

The depression that never ended

In his own book, Austerity, the history of a dangerous idea, Mark Blyth argues that Marxists in Germany in the 1930s assumed the Great Depression be like any previous crisis– it would devalue excess capital and establish a basis for a new expansion. Although Blyth is only speaking of the SPD he may have a point. Every previous crisis had unfolded that way. Why would the Great Depression be different? No one at the time knew things had changed forever, nor how they had changed forever. Most of all no one seems to have realized that only with the Great Depression did Marx’s theory really become relevant to policy.

Most economists, even Marxist economists, are not accustomed to thinking about labor theory as a policy framework. Even for self-identified Marxists like SYRIZA in Greece or the SWP in Britain Keynes not Marx provides the policy framework. This leads to the sort of theoretical contradictions highlighted by SYRIZA MP and Marxist economist Costas Lapavitsas that the Keynesian policies he advocates are designed to save capital not kill it:

“Keynes is not Marx, and Keynesianism is not Marxism. Of course there’s a gulf between them, and it’s pretty much as you have said. Marxism is about overturning capitalism and heading towards socialism. It has always been about that, and it will remain about that. Keynesianism is not about that. It’s about improving capitalism and even rescuing it from itself. That’s exactly right.”

Hence in an ironic turn of a phrase usually applied by Stalinists to Trotskyists, Marxists appear to oppose capitalism everywhere but where it exists. If you ask Marxists what they would actually do once elected they could hardly give you anything more Marxist than SYRIZA’S Thessaloniki programme. The program that Marxists run on in elections is not their complete program, of course, and they will emphasize this, but it is their ‘immediate’ program to ‘address the crisis’; while their full program is overthrow of capitalism.

I would argue this sort of division between immediate and full program is what became obsolete in the 1930s.

The breakdown of marginalist school theory

How does this relate to Bartsiak’s insightful observation about Einstein’s theory? When scientists began to test the limits of Newton’s theory its limitations became apparent and Einstein’s theory became necessary. Bartusiak observed that Newton’s theory was good enough to get us to the moon and back, but broke down after that. In a similar sense, marginalist theory worked up until the Great Depression, but proved incapable of addressing the sort of mass unemployment that erupted in the 1930s.

Marx’s theory certainly predicted the emergence of mass unemployment, but this prediction, although interesting, was irrelevant until capitalism reached a certain point in its development. Up until that point, economists could ignore the contradiction between production on the basis of exchange value and production for profit. Which is to say, they could ignore the contradiction between values of commodities and their capitalistic prices of production. Even if this contradiction existed, as a practical matter the mode of production was motivated by profit, not by exchange value. As a practical matter, if you want to transform values into prices, said Paul A. Samuelson:

“It’s easy, you erase [Marx’s labor] values and replace them with prices of production”.

This is how things stood until the Great Depression, when, as former Federal Reserve Chairman Ben Bernanke put it, the gold standard mysteriously “malfunctioned”; transmitting the shock of absolute overaccumulation throughout the entire world market. Capitalism, in short, had gone to the moon and back, but it was now on the frontier of an economy where marginalism was inadequate.

Why would Marx’s theory be particularly relevant beginning with the Great Depression? First, because in Marx’s theory capitalism constantly reduces the socially necessary labor time required for production of commodities. The reduction of the socially necessary labor time required for production of commodities is the reduction of the values of commodities. Second, and simultaneously, capitalism constantly extends the labor time of the social producers so as to maximize its profits. With the values of individual commodities declining, and the total labor time of society increasing, the mass of commodities produced during the labor day grows phenomenally.

It is true that new consumer needs are created by, and new export markets open up to, this massive torrent of commodities, but eventually, as Keynes observed, the growing productive capacity of social labor outstrips any and all new uses for labor. Commodities can no longer be sold at their prices of production, because the average rate of profit has fallen to zero. The capitalist mode of production has reached the limits of the expansion of capital, of production of surplus value, production for profit.

In Marx’s labor theory, the capitalist price of a commodity is some duration of living labor, divided into necessary and surplus labor time. This gives us the mathematical expression, v+s. This is opposed to the simple labor value of a commodity, whose price is mathematically expressed as v. The capitalist commodity production price is maintained by extending the labor of the worker beyond the point necessary given the technological development of the productive forces. This extension is mathematically expressed as s — i.e., surplus value or surplus labor time. So long as the labor time of the social producers can be extended beyond what is necessary for their material need, surplus value is created.

Thus, at the point where capitalistically produced commodities can no longer be sold at their prices of production, the labor time of the social producers can no longer be extended beyond that duration necessary to satisfy their material needs. The surplus labor time of the social producers, no matter how great or materially necessary, produces no new value. Since capitalist production is the production of surplus value, it halts, and must of necessity halt, at the point where labor no longer produces value.

Animal spirits versus labor time

This cessation of production is not a subjective phenomenon; the result of animal spirits, or inadequate demand; nor is it the result of malinvestment, overproduction of commodities or too little money or some other nonsense. The source of the collapse of capitalist production is too much capital, i.e., the production of surplus value, production for profit. Capital suffocates on its own capacity for self-expansion. So soon as capital has successfully reconstructed society in its image, the means by which it overturns the old society — by extending the labor time of the producers and increasing the productivity of labor — becomes a weapon turned against itself.

Like Einstein’s theory in the natural sciences, Marx’s theory only proved significant when society had actually crossed the threshold of absolute overaccumulation. Until that time, capitalist production went through crises, but these crises were simply momentary forcible adjustments that paved the way for new capitalist expansions. When the Great Depression hit, everyone thought it would end up the same way — a short-term forcible readjustment of capitalist production. In fact, the depression never ended; it just went on and on without any let up. As in the case of Greece today, no one realized something had changed permanently with the way capitalism worked.

When it comes to policy, Marx’s argument is not well understood even by Marxist economists and certainly not by anyone else. To understand why this is true, doesn’t take much analysis. We can all agree that Marx essentially called for the abolition of wage labor. This call by Marx is typically cast in a political context: The working class must seize political power and employ its position as the new ruling class to work out its emancipation. There is, in fact, nothing about this political interpretation of Marx’s theory that is wrong or even misunderstood, per se.

However, what most people overlook is that Marx did not make this argument out of the blue, i.e., he was not describing his peculiar blueprint for society, nor a vision of the future that could be imposed by political measures. For Marx, capitalism was already in the process of abolishing labor by developing the productive forces of society. The proletariat could not abolish labor unless, simply because it wanted to end wage slavery, any more than slaves could abolish slavery simply because they wanted to be free.

What the proletariat had that slaves did not is that the capitalist mode of production itself was already headed toward abolition of wage slavery — something that was never true of slavery. The proletariat could accelerate the process already under way in the capitalist mode of production, because the way capital accomplished the abolition of labor periodically created obstacles to that historical result. Properly armed with theory, the working class could remove those obstacles and emancipate itself. Simply removing the obstacles to the development of social labor was sufficient to accelerating the process.

Every crisis is a crisis of overwork

The biggest obstacle to development of the productive forces was the tendency toward overaccumulation of capital. But the overaccumulation of capital resulted solely from the extension of hours of labor of the social producers beyond that duration socially necessary for production of commodities. Marx’s theory states that the solution to any crisis of capitalism is simply to reduce hours of labor.

Perhaps, he got this wrong; perhaps he dropped a stitch somewhere. In that case, those who accuse Marx of getting it wrong have to explain why every crisis is accompanied by a general social demand for Keynesian stimulus to achieve full employment. If hours of labor are not the problem, why does the fascist state have to create jobs to maintain full employment? Why does every crisis generate political calls for job creation or a subsistence stipend for those without jobs? Why do even the opponents of the working class drape their proposals in the flag of job creation?

If Marx’s theory is correct, the only policy any Marxist needs to advocate “to address the crisis” is a reduction of hours of labor. But the reduction of hours of labor is itself only the progressive abolition of wage slavery itself. Thus, the immediate program of Marxists to “address the crisis” is EXACTLY the same as their full program; there is no longer the contradiction of an immediate program to address a capitalist crisis that saves capitalism rather than killing it.

The Myth of Secular Stagnation, Part Two

In part one of my blog post, The Myth of Secular Stagnation, I explained the background to the debate among bourgeois simpleton economists. The stagnation debate among bourgeois economists begins with the Great Depression and Keynes’ characterization of the problem of the Great Depression as “technological unemployment”. The source of the technological unemployment was the improvement in the productivity of labor, the industrial revolution wrought by capital. For Keynes in 1930, this was not necessarily a malady in and of itself, it promised a future where labor itself would be abolished. The transition to a society of less work might be very painful, but the distress was only temporary.

By 1933, however, Keynes’ argument had changed: although he continued to insist that, technically, the “economic problem” had been solved he now focused on the problem of restoring capitalist profit. The Great Depression was no longer caused by the lack of investment opportunities, instead there was a lack of sufficient state deficit spending. The Great Depression, now having lasted 3 years, required state intervention; “a blend of economic theory with the art of statesmanship”.

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A reply to Reidkane on the class character of proletarians

In 1846, Karl Marx and Frederick Engels met together with a few other communists to lay out their common approach to the social revolution then developing in Europe. The results of their work, hqdefaultas we all know, was an unpublished manuscript now known as the German Ideology. In it Marx and Engels elaborate on a method of social analysis we now refer to as historical materialism.

That document makes a number of claims about the proletarians which we today might consider heresies. Three in particular are the subject of the commenter, Reidkane:

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MMT and the heresy of the self-financing fascist state

At Nathan Becker’s (twitter: @netbacker) suggestion, I have been reading this piece by Billy Mitchell on modern money theory, Deficit spending 101 – Part 3. If you have any background in the assumptions of mainstream economic theory, you will notice that the piece makes a number of surprising claims:

The idea that a currency-issuing government is financially constrained is a myth. The funds that government spends do not come from anywhere and taxes collected do not go anywhere. Taxes do not finance anything and government spending is independent of borrowing. The government deficit determines the cumulative stock of financial assets in the private sector. Moreover, when government runs a surplus, purchasing power is destroyed forever. Finally, government expenditures do not crowd out private expenditures.

That is a lot of heresy in one short (by Billy Mitchell standards) article. People hearing the MMT argument for the first time must have the same reaction I had the first time I heard Warren Mosler pedro-meyer_06explain it in simple language: “That guy is insane.” Over time, I gradually began to realize what Mosler was saying: modern money (as they call the floating dollar/gold standard) was the practical result of the US withdrawing from Bretton Woods in 1971. When the US went off the gold standard, the fascist state no longer was financially constrained in its spending, i.e., it was no longer constrained by the requirement it exchange its worthless currency for gold. The implications of Moser’s talk was that the fascist state’s capacity to absorb excess surplus value is limited only by the quantity of excess surplus value produced in the entire world market. Previously, a given fascist state could appropriate (i.e., borrow or tax) the surplus value produced by private capitals within their territories (including colonies). Since 1971, however, the United States has been able to do this to the entire planet, because it alone controls the world’s reserve currency.

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“There is no alternative” (for Marxists): Costas Lapavitsas Edition

“There is no alternative”, is the famous aphorism coined by Margaret Thatcher in reply to her critics. According to the Wikipedia, TINA means, “economic liberalism is the only valid remaining ideology.” Economic liberalism is generally taken to mean dismantling of the social welfare state that emerged after World War II and collapsed into disarray beginning with the 1970s depression. However, in a recent interview, Costas Lapavitsas essentially argued that, for Marxists another sort of TINA TINAreigns: Because of a lack of policy tools drawn on labor theory, Marxists had on alternative but to make use of the very same Keynesian policy tools that produced the rampant stagflation of the 1970s depression. In this post, I take exception with Lapavitsas’ argument.

My argument is not only that Marxists have no need to rely on Keynesian policy tools for their short-run program, Keynesian policy tools have the same aim of Margaret Thatcher’s neoliberal policy tools and run counter to the aim of communism. Instead, Marxist should drawn directly on labor theory to produce a set of immediate demands. Labor theory, according to my reading, argues Marxists should not seek to “exit” the crisis of capitalism, but should take as their starting point the limits imposed by production for profit on the production of material wealth. Our immediate program should be to push the production of material wealth beyond the limits imposed on it by production for profit.

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Capitalism Without A Capitalist: Why SYRIZA probably will fail

arguing-evangelismThere are two absolutely essential essays drawn from post-war Marxism that are key to understanding why SYRIZA most likely will fail: The first is Robert Kurz’s “Domination without a subject” and Michael A. Lebowitz’s “What Keeps Capitalism Going”.

Kurz explains why what we call Marxism is a reductive critique of the concept of domination  that is incapable of explaining “mature” capitalism:

“One of the favorite terms of leftist social critique, stated with all the thoughtlessness due to the obvious, is that of “domination”. The “rulers” were and still are considered in countless essays and pamphlets as malefactors of vast and universal but vague reach, in an attempt to explain the miseries of capitalist socialization. This framework is retrospectively applied to all of history. In the specifically Marxist jargon this concept of domination is extended by adding the concept of the “ruling class”. In this manner the understanding of domination acquires an “economic basis”. The ruling class is the consumer of surplus value, which it cleverly and perfidiously and, of course, violently, appropriates.

It is immediately apparent that most theories of domination, including the Marxist ones, display a reductive utilitarian approach to the problem. If there is an appropriation of the labor of “others”, if there is social repression, if there is open violence, it is for someone’s use and advantage. Cui bono—this is what the problem is reduced to. A consideration of this kind does not fit with reality. Not even the construction of the pyramids of the ancient Egyptians, which devoured a not-insignificant portion of the surplus product of that society, can be forcefully reduced to a perspective of (purely economic) benefit of a class or caste. The reciprocal massacre of the various “rulers”, for reasons of “honor”, remains notably outside of any simple calculation of utility.”

Lebowitz explains why a close reading of Marx will show capital “produces a worker who looks upon its requirements as ‘self-evident natural laws’?

“When we think about the dependence of the worker on capital, is it difficult to grasp why capitalism keeps going? After all, Marx not only proposed that capitalism “breaks down all resistance” he also went on to say that capital can “rely on his [the worker’s] dependence on capital, which springs from the conditions of production themselves, and is guaranteed in perpetuity by them” (899). Capitalism tends, in short, to produce the workers it needs.”

Both essays go a long way toward explaining why SYRIZA, although it now has in its hands management of the largest single employer in Greece, likely will never consciously exploit this position to advance the emancipation of society from labor.

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An uncomfortable question for the Left after SYRIZA’s victory: Was Nick Land right all along?

Rory Scothorne (@shirkerism) tweeted this interesting statement:

“tbh the best way of getting a Scottish Syriza probably would have been via the brutal troika/IMF restructuring following independence”

wowtripod_profileSo does this mean Nick Land is at long last vindicated? The Left is very bad at drawing lessons from its own experiences, so I just want to hear the Left acknowledge Nick Land was mostly right.

SYRIZA’s victory in Greece, has only come after years of a brutal austerity regime, where, SYRIZA finance minister Varoufakis once argued, “everyone except the Nazis, the bigots and the misanthropic racists will be a loser”.

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In case you were wondering: Yes, the chief economic adviser to Tsipras is insane.

The title of this post is, by any measure extremely rude and provocative, but bear with me. If you can get through the first section of this post, which is extremely wonky, I will show why one of the most important advisers to SYRIZA is likely living in his own special world, and not subject to arguments founded in the real world. According to Einstein (or Mark Twain, or an old Chinese proverb or Benjamin Franklin — who knows for sure) insanity is doing the same thing over and over again but expecting different results. If this is true John Milios is insane, as I will prove.

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After Ferguson: Labor, competition and the long ugly history of American white working class racist mob violence

As expected, a mostly white Grand Jury declined to indict the murderer of Michael Brown, who was gunned down without provocation on the streets of Ferguson, Missouri. This is in keeping with 1599a long history of racist mob violence that has been directed at the black working class by their white counterparts dating back at least to the early 19th century. As Justice Taney argued in his Dred Scott decision nearly 160 years ago, the grand jury decided that African-Americans were “beings of an inferior order, and altogether unfit to associate with the white race, either in social or political relations, and so far inferior that they had no rights which the white man was bound to respect.”

The time for mere political protest is past, we are confronted by the necessity to overthrow the regime of white supremacy and the capitalist mode of production which daily, hourly, constitutes this white supremacy and provides the material basis for its continuing existence. Like any difficult venture, this effort must be undertaken based on a sober examination of how white supremacy is constituted by capitalist relations of production in order to demonstrate why nothing short of the abolition of the capitalist mode of production itself will put an end to white supremacy. I hope to demonstrate this very thing in the essay that follows and thus provide radical activists with material for agitation for the complete overthrow of capitalism and white supremacy.

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