The Real Movement

Communism is free time and nothing else!

Tag: “Socialism or Barbarism”

Reply to LK: Notes on the historical and monetary implications of the transformation problem

One of the big problems with a discussion of Marx’s formula for transformation of labor values into capitalistic prices of production is that no one, not Marxists nor bourgeois simpleton economists, seem to understand what he was doing. Now, I will admit this argument is pretty arrogant, because it implies that I, somehow, have figured out what everyone else didn’t, but bear with me and decide for yourself. If my argument doesn’t make sense at the end, please correct me.

As I stated in my last post, the transformation problem expresses an irreconcilable contradiction within the capitalist mode of production. Marxists will not be surprised at this assertion; digital_money_764bourgeois economists, on the other hand, deny the existence of this contradiction and have an ahistorical conception of capital. In their view, the bourgeoisie has invented the ideal state of man which, having been invented, can continue indefinitely unless interrupted by an exogenous event. So, when they look at the transformation formula, they see in it a contradiction and assume Marx has failed to make his case.

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The Weird Netherworld of Barbarism

The odd case of superfluous labor time

Based on the assumptions Marx employs in Volume 3, superfluous labor time should not exist under capitalism. At the same time, the mode of production is the production of surplus value, i.e., labor time that is superfluous to society. chile-protest-001These two ideas mean that when superfluous labor time does actually emerge in the social labor day, a crisis should erupt and the capital produced during this superfluous labor time should be devalued. So all of the evidence pointing to a large amount of superfluous labor time in the economy suggests something else is at work. This something else has allowed the accumulation of superfluous labor time within the social labor day for almost seven decades.

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Chris Cutrone’s Pessimism and the Prospects of Social Emancipation

Chris Cutrone thinks the idea of socialism has been “disenchanted” and this disenchantment is linked to a jarring lack of class consciousness among the working class and the class struggle between capitalist and workers:

“The difference between Marx’s time and ours is not in the essential problem of society, its self-contradictory form of value between wages and capital, but rather in the social and political conflicts, which no longer take the form primarily, as in Marx’s time, of the “class struggle” between workers and capitalists. “Class” has become a passive, objective category, rather than an active, subjective one, as it had been in Marx’s day and in the time of historical Marxism. What Marxists once meant by “class consciousness” is no more.”

rosa-luxemburg-older-rlsIn place of the class struggle of the workers against the capitalists, conflicts of culture, ethnicity and religion replace the struggle over capitalism. Socialism has been replaced with competing notions of social justice that borrow from ancient values; and cultural affinities seem to matter more than socioeconomic interests. Capitalism still determines social relations, but it is no longer recognized. What matter is not one’s class position in society, but “whether one lives in a ‘red or blue state,’ or what one’s ‘race, gender, and sexuality’ are”.

Cutrone’s essay is extremely pessimistic, but is it wrong?

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Follow the money …

I am still looking for a good formulation of the idea that Washington is using the dollar to control all capital in the world market.

And it ain’t easy.

I think the elements of the basic argument can be found in Anitra Nelson’s, Claus Germer’s and Suzanne de Brunhoff’s chapters in “Marx’s Theory of Money“. The three together establish that insofar as labor theory is concerned the dollar is not money; doesn’t behave like money; and doesn’t serve any of the functions of money.  At best the dollar can be considered a token of money with the caveat that tokens do not behave like money, nor do they fulfill any of the functions of money beyond that minimum required as medium for the circulation of commodities.

dollar_marxThe first point is obvious: the dollar is not a commodity, nor does it possess anything more than a negligible value of its own. This fact is aggravated by such glaring problems as that a sheet of one dollar bills requires no less time for production than a sheet of twenty, fifty, or one hundred dollar bills. The problems is further aggravated by the instantaneous creation of any quantity of dollars at a computer terminal. (During the recent crisis, for instance, Bernanke showed the television audience that he simply created the currency to bail out the banks at a computer terminal.) This suggests not only is the labor time required for the creation of a dollar negligible, it is, in addition, indeterminant.

The second argument — the dollar does not behave like money — is equally easy to establish. In labor theory, the circulation of money is merely a reflex of the circulation of commodities. This reflexive movement is not the least bit true for any fiat currency at present, including the dollar. Although this might seem to be a small point, it is, in fact, quite significant, since it implies the dollar is not a medium of circulation. As medium for the circulation of commodities, money no more explains the movement of commodities than water explains the movement of fish. This argument, of course, does not deny that money, like water itself, is subject to forces that influence the movement of commodities, as water might for fish, but it suggests the effect on their movement is secondary. It is altogether the opposite with fiat dollars otherwise how could fascist state monetary policy exist at all?

The third argument is that fiat dollars neither can serve as measure of value nor standard of prices as money does in labor theory. I would argue that it is not as if these two core functions of money are separate: no money can serve as a measure of value if it cannot serve as a standard of price. Although as measure of value the function of money is merely an ideal one, this ideal function must be grounded in some actual relationship between the socially necessary labor time contained both in the money and in the commodity.

Assuming for the sake of this argument that these three problems of fiat currency are settled in labor theory, what then is fiat currency? I would argue 99% of the problem Marxist academics encounter with fiat money in labor theory is that they have no explanation for it if fiat dollars are not money. We are, in effect, dealing with an economy that functions entirely without money — which appears absurd. So far as labor theory is concerned, a moneyless economy is incompatible with capitalist relations of production. Since we are apparently dealing with a capitalist economy, the default theoretical position must be that fiat dollars are money unless proven otherwise. Read the rest of this entry »