Does the collapse of the gold standard and the switch to commodity money have any implications for labor theory? The Brazil labor theorist, Paulani argues it does not:
“when, historically, the umbilical cord that linked the money form to the commodity form was cut (in 1971), the dollar value of goods shifted in relation to other currencies, but they kept between themselves the relations which their labour values (prices of production) produced earlier, backed in gold…”
According to Paulani, then, the prices of commodities may have no longer been convertible into gold after 1971, but they did not shift relative to each other. If, before the collapse of the gold standard, four candy bars exchanged for one pair of socks, this much remained unchanged afterwards. Whether this is true is not the point, since, stated in this simplistic form, it can easily be disproven; however, many such changes can be written off to supply and demand “shocks” of one sort or another. Since any such shock is accidental, Paulani’s argument can be reduced this: whatever change did occur, they were accidental and did not result from the collapse of the gold standard. In fact, since relative prices fluctuated constantly even before the collapse of the gold standard, this is a reasonable explanation.
However this argument by Paulani in her 2014 paper is directly challenged by Peter Jones in his 2013 paper, The Falling Rate of Profit Explains Falling US Growth”. Jones argues the collapse of the gold standard directly explains the difficulty labor theorists are having substantiating Marx’s falling rate of profit thesis.
Continue reading “V: How Peter Jones demolished Andrew Kliman’s book in 22 brief pages”
As I explained in my last post, substantiating Marx’s falling rate of profit as the cause of capitalist crises, and, in particular, as the cause of the so-called great financial crisis of 2008, runs into the difficulty that Marx made his argument on the basis of values. The difficulty this poses for analysis is that, since 1971, the various categories of analysis employed in measuring the rate of profit are denominated in inconvertible fiat dollars. Fiat dollars are not money in themselves, but tokens — placeholders — for commodity money. Prices denominated in this inconvertible fiat, therefore, are not values in the sense Marx employs this term throughout Capital.
Thus, in order to construct an empirical proof of Marx’s thesis on the causes of capitalist crises using the empirical data, labor theorists are forced to convert inconvertible fiat prices into Marxian values. This is a new problem that did not exist before the period between 1933 and 1971 when the gold standard began to come unraveled. Since the dollar was pegged to some definite quantity of gold, dollars prices represented some definite quantity of gold as well. After the collapse of Bretton Woods in 1971, however, this relationship was severed and the dollar’s exchange rate with gold was allowed to float.
The question immediately arose whether Marx’s theory applied in the case where the currency used in daily transactions no longer had any fixed and definite relation to commodity money. Since the quantity of fiat in circulation has always been determined by the state, not by the values of the commodities in circulation, was it not the case that the socially necessary labor time required for production of commodities (value) no longer determined how a capitalistic economy functioned?
Continue reading “IV: Simon Mohun’s unproductive effort to identify productive labor”
The problem of unemployment has been addressed from two different angles by activists: the guaranteed job for everyone who wants one and the basic income guarantee to provide every worker an income above the poverty level whether he or she can find a job or not. Both schemes have their advocates and some activists even advocate both ideas together.
The problem with both idea separately or in tandem is simple: No one can explain how either reform gets us where we want to go: not simply the end to unemployment, but the complete abolition of wage slavery — to end unemployment forever as the Sword of Damocles hanging over the head of the working class.
Continue reading “The single non-reformist reform that can end capitalism within months, not decades”
In my previous post I showed that unemployment in the capitalist mode of production has its genesis in employment. Unemployment is not the result of a lack of means to employ the unemployed, but results from the fact that the steady improvement of the productive power of labor displaces an ever larger portion of the working class from all possibility of being employed productively.
In the mode of production, to be employed productively means the worker is employed directly for production of value and surplus value. It has to be understood that capitalism is not the production of useful objects in general, but useful objects only insofar as these objects also contain surplus value, i.e., profit.
With development of the productive forces — of machinery, technology, science and the division of labor — an ever larger mass of useful commodities can be produced in the same period of time. On the other hand, a given mass of commodities can be produced with a diminishing expenditure of human labor.
The capitalist is not concerned with the ever growing mass of useful objects that can be produced, but with the diminishing expenditure of human labor necessary for production. This human labor alone is the source of the profits that is the sole aim of capitalist production.
Continue reading “How the state began systematically privatizing profits and socializing losses”
In my previous post, I argued the aim of fascist state “full employment” policy is maximization of profits, not maximization of employment. The term “full employment” is a deliberately misleading label chosen by the fascists to present the policies of the fascist state as necessary to promote employment in the interest of both classes. In fact, “full employment policies” do not in any way address the need of workers and are only designed to maximize the profits of capital.
This is a significant finding at odds with how the issue is often presented on the Left. To put it simply, “full employment” is only necessary for the working class insofar as the worker is treated as a draught animal to be kept constantly at work.
Continue reading “Capitalism’s Dirty Little Secret: Employment creates unemployment”
This new paper, by Hornstein, Kudlyak and Lange, shows how simpletons are trying to minimize unemployment by constructing a new measure of what they call “resource utilization in the labor market”. The message of the paper seems to be clear: If you have no hope of ever recovering employment to pre-2008 crisis levels, explain it away with statistics.
Continue reading “‘Full Employment’ and Profits: An introduction”
Theses on competition
What are the prospects for social emancipation when the progressive abolition of labor is called unemployment and treated like a disease? The capitalist mode of production can only present the abolition of labor in the form of unemployment.
This is a feature of competition: labor going away leads to competition between classes over who will bear the burden of it going away. The capitalist class does not want to bear this burden, so it seeks to push it off on the working class. If labor can no longer be employed profitably, the solution sought by capital is to idle a mass of workers, to save profits.
Continue reading “Thesis on competition within the working class”