The Real Movement

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Tag: law of the tendency for the rate of profit to fall

Is the proletariat the only revolutionary class in society?

This essay by Ben Noys, “Apocalypse, Tendency, Crisis”, got me thinking about that question. If we could extrapolate the accumulation process of the capitalist mode of production indefinitely into the foreseeable future where would it end up?

One huge problem is that there is nothing in Marx’s theory that says the accumulation process necessarily results in a proletarian revolution. Why is this a problem? Most people think communism requires a proletarian revolution. If the accumulation process doesn’t end in a proletarian revolution, there is this big black theoretical hole where we don’t know what happens if accumulation continues but a proletarian revolution never happens. We just don’t know where this process ends up. Read the rest of this entry »

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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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Schrödinger’s Capital: How the value-form school bet on a dead cat bounce

NOTE 27: Avoiding empirical proof at all costs

As I showed in my last post, the classical theorists prior to Marx held that the rate of profit had a definite tendency to fall. Since the capitalist mode of production is essentially production for profit, this immediately raised the question whether capitalism has a definite shelf-life beyond which it must collapse.

A falling rate of profit is inherently incompatible with the indefinite continuation of the capitalist mode of production for the rather obvious reason that the capitalist mode of production is production for profit. If the capitalist cannot realize a profit on his investment, he has no incentive to invest.

Marx had two tasks regarding this alleged tendency: first, to establish whether it in fact existed and why; second, to establish that the falling rate of profit in fact actually limited the life-span of the capitalist mode of production.

The value-form theorist, Michael Heinrich, has produced a critique of Marx’s effort in an essay published in Monthly Review, Crisis Theory, the Law of the Tendency of the Profit Rate to Fall, and Marx’s Studies in the 1870s, in which he argues Marx’s theory is not scientifically valid. Read the rest of this entry »

Post-capitalism, Accelerationism, communism and the march of the job-eating killer robots

Two speculative views of what comes after capitalism for those without enough imagination to picture themselves on a beach having group sex.

The first offer some discussion of the so-called Left accelerationist writers Nick Srnicek and Alex Williams. Left accelerationism is a sort of awkward nerdy, pimple-faced techno-fetishism that seeks to make Nick Land palatable to Sanders supporters.

The second discusses the even less credible argument, put forward by Channel 4 News in-house radical Paul Mason. Mason is … well, the Channel 4 News’ idea of a radical, if a radical worked for Channel 4 News. Of course no radical actually works for Channel 4 News, but if a radical did work for Channel 4 News, they would likely be a radical just like Paul Mason.

The starting point of these conceptions of life after the class-war, is the now ubiquitous prediction that soon capitalism will no longer generate enough new jobs to go around owing to the replacement of human living labor by machines.

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Why Keynes predicted a 15 hour workweek, but Marx did not

One final question raised by John Milios’ paper on crisis theory remains to be addressed.

I have shown that Keynes’ explanation of the Great Depression was identical to that underlying Marx’s prediction that commodity production would collapse, namely the constant reduction of the socially necessary labor time required for production of commodities.

3026617I have also shown that the Great Depression took the form predicted by Marx: a collapse of production on the basis of exchange value. If, as Marx’s theory asserts, exchange value must take the form of commodity money, we should expect the collapse of production on the basis of exchange value to express itself as a crisis of commodity money. The minutes of the Federal Reserve from the outbreak of the Great Depression does indeed indicate that commodity money stopped circulating in the “economy” after 1929.

Keynes failed prediction

Moreover, Keynes initially argued this crisis made necessary both the reduction of hours of labor as well as existing “social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties”. In other words, Keynes thought the Great Depression established the immanent economic necessity for an end to a society founded on wage slavery. If the critical question debated by the classical Marxists was whether or not Marx had established the immanent economic necessity for socialism, Keynes appears to suggest he did — although he never mentions Marx in his essay.

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That time when Ben Bernanke admitted Marx was right and John Milios was wrong

So what do we know regarding the validity of SYRIZA economist John Milios’ criticism of Marx’s alleged theory of crisis?

  • First, we know Marx never had a theory of crisis. This has long been acknowledged by almost all scholars of Marx’s theory.
  • Second, we know Marx predicted the collapse of production on the basis of exchange value. However, this fact is ignored by almost all scholars of Marx’s theory.
  • Third, we know Keynes agreed with Marx on what caused the Great Depression: the improvement in the productivity of labor.

ben-bernanke-goes-hardcore-doveKeynes hypothesis of the cause of the Great Depression, which is fully consistent with Marx’s theory, completely disagrees with the dominant explanations of crises advanced by the underconsumptionists, the falling rate of profit school and the “multi-causal” school of Milios, Harvey and Heinrich. Keynes, like Marx, locates the cause of crises in the constant reduction of socially necessary labor time required for production of commodities.

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How John Milios even screwed up Keynes’ argument

Mikhail_Ivanovich_Tugan-BaranovskijIt seems to me that for John Milios to be correct in his argument, the following must be true:

  1. Bernstein must be correct that Marx never demonstrated there was an immanent economic necessity for socialism.
  2. Tugan-Baranowsky must have proved a fully automated capitalist economy was possible without a necessary intervening collapse of capitalism that Marx himself predicted.
  3. Keynes must have corrected (or at least completed) Marx’s flawed analysis of the capitalist mode of production.

According to Milios, Tugan-Baranowsky’s analysis of Marx’s theory can be used as a point of departure to correct an apparent defect in Marx’s theory. Milios suggests the necessary connection between Marx and Keynes will be found by asking how investment can provide the demand that might be lost owing to the restriction on the consumption of the working class majority:

“What determines net investment and what dictates that it should occur to the extent required for unimpeded reproduction? And, by extension, what is it that, even if only temporarily, influences it in such a way as to generate disproportionality, and therefore crises? These questions open the way for creating a theoretical relation between Tugan-Baranowsky’s analysis and the Keynesian concept of effective demand.”

Thus, according to Milios, the problem Tugan-Baranowsky’s analysis uncovered is how to expand the net investment required for expanded reproduction. But is this actually the connection between Marx and Keynes? Drawing on Marx’s own argument on capitalist development in Capital and Keynes’ own discussion of the causes of the Great Depression, we find that what the two had much more in common than the alleged problem of managing net investment. What the two really had in common was an identical explanation for the Great Depression itself.

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