The Real Movement

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Tag: Soviet Union

The Great Unsolved Mystery of the 20th Century: Why did the Soviet Union collapse?

Despite its devastating impact on global relations between the proletariat and the bourgeoisie within the world market, the sudden collapse of the Soviet Union remains mostly unexplained. A large body of literature has been produced to explain the collapse, but, to my mind, very little of it provides a satisfactory explanation.

So I took up reading this paper, recommended by someone on, A Reassessment of the Soviet Industrial Revolution, by Robert C. Allen, without the expectation it would add much to the subject.

I was wrong. I now think it is a must read.

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Schrödinger’s Capital: What can the defunct Soviet Union tell us about value, exchange value, prices and money

NOTE 23: What can the Soviet-era rouble tell us about the inconvertible fiat dollar?

For one thing, it tells us that sometimes it is very difficult to look at a category like value in isolation and assess what about it is necessary and what is purely contingent.

To clarify what I mean, let me use two analogies, both drawn from evolution science:

At some point a feathered flying creature emerged that was no longer a dinosaur but not yet a bird. At another point an upright walking ape emerged who was no longer simply an ape, but not yet human. In either case, what we have learned by studying the fossil record is that the creatures were both specific forms of life and, at the same time, transitional forms to new forms of life.

We encounter a similar difficulty when trying to ascertain the significance of categories of capitalist society. Which of the phenomenon we observe are necessary and which are purely transitory expressions of the movement of society.

To show how this might be significant to the problem of value, exchange value, and money, it might help to do what Marx did: compare present society to social formations that had none of these categories.

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What if there is no such thing as a socialist “economy”?

chaplin-charlie-modern-times_01According to a post on the NorthStar blog by Gavin Mendel-Gleason and James O’Brien, at least part of the problem socialism has gaining purchase among the working class is that socialists have difficulty describing what it will look like:

“Nothing springs from the naked void fully formed. We need to examine the best avenues open to us for changing our current social direction into a society we would like to bring into existence.”

This is creating a problem for socialists, because, as the writers explain, socialists have so far been unable to coherently describe the society they propose to replace the present mode of production:

“Socialists are often loathe to get into the exact details of what a socialist economy would look like. This is caused, perhaps in equal measure, by complete ignorance and an extensive knowledge of just how large the space of possibilities is. Indeed many proposals have been given about how a socialist economy might best be run.”

And here, of course, the problem only gets worse.

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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 »