How Marxist economists are failing our movement

One thing working for communists at the state and local level in the United States is that state and local governments don’t have access to conventional Keynesian economic policy tools: State and local governments can’t print currency and therefore can’t issue bonds based on a currency they control. If they issue bonds, sooner or later they have to raise taxes or cut spending to pay the debt off. This means state and local governments can’t spend their way out of the contradictions inherent in capitalism.

What does this mean practically?

Can communists fix “the poorest big city” in the US?

According to this article, Philadelphia, the site of the Democratic National Convention and long managed by the Democratic Party, has another unmentioned and less savory reputation. It is “the poorest big city” in the US.

“The nation is focused on Philadelphia as a smiling, spruced up city hosting hordes of delegates, visitors, protesters and journalists. But away from the TV cameras, thousands who live in the poorest neighborhoods know it’s unlikely that outsiders will see their Philadelphia, one defined by poverty, hardship and hopelessness.”

While I was reading it, I found myself asking, “When was the last time I read anything by a Marxist on how to fix poverty?”

Now, obviously, poverty is natural to the capitalist mode of production. Capitalism has an inherent tendency to impoverish wage workers as it concentrates wealth into fewer and fewer hands. Marxists thus have argued that if we want to fix poverty we have to get rid of capitalism. There is nothing wrong with this statement in and of itself, but it does beg the question: How do we get from point A to point B? Is there nothing short of communism that can fix this?

Capital, commodity production and collapse (V): After collapse, what?

Part 5: Is Marxism today out of sync with history?

“Whether you can observe a thing or not depends on the theory which you use. It is the theory which decides what can be observed.” –Albert Einstein

In first place, the failure to recognize production based on exchange value has already collapsed implies Marxists are (or may be) looking for an event to occur in the future that has already happened in the past. In second place, it is effectively the same thing as stating Marx was wrong about the ultimate trajectory of capitalist production. At best, we have to explain why Marx’s predicted breakdown has not happened already; at worst, we might conclude Marx’s theory has been falsified by history.

This problem is further complicated when Marx’s theory is misread to predict something he clearly never predicted, “a collapse of capitalism”. If capitalism did not collapse as Marx said it would — and, obviously, it has not — it must follow his theory has been falsified by history. The problem with this conclusion, of course, is that Marx never actually predicted capitalism would collapse, he predicted production based on exchange value would collapse. In Marx’s theory, the collapse of production based on exchange value might very well lead to the end of capitalism as well, but it could just as easily lead to the state becoming the national capitalist, the direct exploiter of the working class.

If you think Marx predicted the collapse of capitalism, Marx is obviously wrong. This is bad for Marx, but no worse than hundreds of would-be prophets throughout history who have turned out to be wrong, including a considerable population waiting for Jesus to return. But if you think Marx predicted the breakdown of production based on exchange value, as I do, the implications are much worse for the working class today.

If Marx was right, Marxists today are completely out of sync with history.

Capital, commodity production and collapse (IV): Collapse or Collapsed?

Part 4: Back to the future?

If you ask the typical Marxist to name the most important prediction made by Marx’s labor theory of value, they will likely point to his prediction of a proletarian social revolution. Few, if any, Marxists will argue Marx’s most important prediction was that commodity production would break down, capitalist private property would be expropriated and the bourgeois state would be forced to undertake management of production.

Which is odd, since, in the intervening 160 years, no successful proletarian revolution has occurred, yet we have witnessed the collapse of production based on exchange value, the expropriation of capitalist private property and we have seen the state undertake management of production — a ubiquitous and routine function in all countries today. By the measure of an alleged prediction of a proletarian social revolution, it can be said Marx’s theory, at best, remains unproven. Yet, by the measure of a break down of production based on exchange value, Marx’s theory has been remarkably accurate.

It’s almost as if Marx knew what he was talking about. “Almost”, reply many of our most influential Marxist theorists.

Capital, commodity production and collapse (III): Collapse of what?

Part 3: Breakdown in Marx’s Theory

So, I have been mulling Marx’s prediction of the ultimate result of capitalist development with increasing confusion — confusion because Marx is extremely precise, yet he never exactly predicts the breakdown or collapse of capitalism itself.

Marx makes three important predictions about capitalism.

First, in the Grundrisse, he predicts,

“As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value [must cease to be the measure] of use value. The surplus labour of the mass has ceased to be the condition for the development of general wealth, just as the non-labour of the few, for the development of the general powers of the human head. With that, production based on exchange value breaks down, and the direct, material production process is stripped of the form of penury and antithesis.”

Capital, commodity production and collapse (II)

Part Two: The ambiguous case of the Soviet Union

To explain profit, Marx proposed the existence of a new type of commodity peculiar to the capitalist mode of production. This new commodity, labor power, had the characteristics of a typical commodity; it had a value equal to its socially necessary labor time and it had a specific social use value: it could be used as capital to produced surplus value. The specific social use value of this commodity, argued Marx, explained how capital created profit apparently out of nothing.

It also explained how capital violates the premises of commodity exchange generally.

In commodity production, of which capital is a specific historical form, the value of a commodity is equal to the socially necessary labor time required for its production. The time spent on production of the commodity in excess of what is necessary on average for its production creates no value.

To illustrate his point, Marx pointed to the case of a producer who, by lack of skill or laziness, spent more time producing her commodity than the social average. This additional labor time, argued Marx, produced a commodity with no more value than that embodied in a commodity produced by a skillful efficient producer. In the market, each would fetch the same price, with no more paid for the commodities of lazy unskillful producers than for the commodities of efficient ones.

The reproduction of labor power as a commodity, however, operates according to decidedly different laws than those of simple commodities. It is the source of surplus value and the quantity of surplus value created by its productive consumption is directly proportional to its duration. In contrast to ordinary commodities, therefore, the duration of labor expended by labor power in production must always exceed the duration of socially necessary labor time required for the reproduction of the labor power itself.

Capital, commodity production and collapse (I)

Part One: Capital and commodity production

The anti-communist, Karl Popper has argued a good scientific theory is one that can be falsified by evidence. By this measure Popper claimed Marxism was not scientific.

Another, broader, view of what constitutes a scientifically valid theory is offered in Lee Smolin’s book, The Trouble With Physics, which makes this point about good theory: It brings together things once thought separate and thereby broadens our understanding of the world around us. A good theory, even when it cannot be immediately verified by experiment, revolutionizes our understanding of the world around us:

Labor Theory for (Marxist) Dummies: Part 4

Is a fully developed communist society possible right now?

I 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.

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.

Second, 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?

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.