The Real Movement

Communism is free time and nothing else!

Tag: surplus value

Whoops! Did Michael Roberts and Fred Moseley just revise Marx?

In this morning’s compare and contrast, we look at two different formulations of the category, socially necessary labor time, in Roberts’ essay, Consistent, realistic, verifiable; his review of a new book on labor theory by Fred Moseley:

Formulation 1: “Marxist value theory is based on the view that commodities are priced in the market according to the labour time expended on them.”

Formulation 2: “The market decides whether certain amounts of labour time expended on producing particular commodities are ‘socially necessary’.”

In labor theory of value, socially necessary labor time, of course, is the labor time required for production of a commodity, its value. However, in Roberts’ summary of the argument made by Fred Moseley SNLT is first described as a quantity of labor existing before exchange. Then it is later described by Roberts as a quantity of labor determined by exchange — by “the market”.

So which is it, Mr. Roberts? Is socially necessary labor time determined by production or exchange? There is no rush on this, Mr. Roberts. I am sure the proletarian revolution can wait patiently while you theoreticians figure this out.

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The TSSI school has completely capitulated to the value-form school

In a surprisingly abrupt about face, it looks like the TSSI school has capitulated to the value-form school of Michael Heinrich and company on all the important points of controversy between the two schools.

Of course, the TSSI school is the least ethical of all Marxist schools, because they want to drop Marx while pretending to defend him. The value-form school at least has enough principles to admit they think Marx was wrong, but not the TSSI school. Expect the TSSI school to continue pretending they uphold an orthodox interpretation of Marx’s labor theory of value.

In any case, we now have it in black and white, courtesy of Michael Roberts, who, in his review of Fred Moseley new book, Consistent, realistic, verifiable, argues that Marx labor theory of value basically examines the capitalist mode of production, “[from] the capitalist point of view, [where] money advanced must lead to more money, or forget it.”

I have no words to describe my reaction to this statement.

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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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The Myth of Secular Stagnation, Part Two

In part one of my blog post, The Myth of Secular Stagnation, I explained the background to the debate among bourgeois simpleton economists. The stagnation debate among bourgeois economists begins with the Great Depression and Keynes’ characterization of the problem of the Great Depression as “technological unemployment”. The source of the technological unemployment was the improvement in the productivity of labor, the industrial revolution wrought by capital. For Keynes in 1930, this was not necessarily a malady in and of itself, it promised a future where labor itself would be abolished. The transition to a society of less work might be very painful, but the distress was only temporary.

By 1933, however, Keynes’ argument had changed: although he continued to insist that, technically, the “economic problem” had been solved he now focused on the problem of restoring capitalist profit. The Great Depression was no longer caused by the lack of investment opportunities, instead there was a lack of sufficient state deficit spending. The Great Depression, now having lasted 3 years, required state intervention; “a blend of economic theory with the art of statesmanship”.

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In case you were wondering: Yes, the chief economic adviser to Tsipras is insane.

The title of this post is, by any measure extremely rude and provocative, but bear with me. If you can get through the first section of this post, which is extremely wonky, I will show why one of the most important advisers to SYRIZA is likely living in his own special world, and not subject to arguments founded in the real world. According to Einstein (or Mark Twain, or an old Chinese proverb or Benjamin Franklin — who knows for sure) insanity is doing the same thing over and over again but expecting different results. If this is true John Milios is insane, as I will prove.

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Four questions on reduction of hours of labor

clock-newI received a comment on my blog regarding hours of labor that raises four questions that deserve answers. I am taking them slightly out of order, since it is easier for me to answer them that way.

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VI: Kliman’s staggering 2009 admission that the rate of profit did not fall before the financial crisis

Can state deficit spending be used to artificially add to the mass of profits? And if so, would deficit spending account for the rather ambiguous (even contradictory) results labor theorists’ produce when they try to empirically substantiate Marx’s thesis on the falling rate of profit?

In his 2013 paper, the Australian labor theorist, Peter Jones, provided a persuasive argument that the fascist state can indeed augment or subsidize the rate of profit through its deficit spending. And he argues this capacity can explain much of the ambiguous results labor theorists have produced over the last three decades as they attempt to empirically demonstrate or disprove Marx’s argument on the role played by the falling rate of profit in capitalist crisis.

According to Jones, government borrowing mystifies economic relations by making it appear as if the state can consume surplus value without reducing either profits or wages. If labor theorists do not account for this false appearance, they are implicitly accepting the Keynesian assumption embedded in mainstream economics that government borrowing can create new surplus value.

In his 2012 paper, “Could Keynes end the slump? Introducing the Marxist multiplier”, Gugliemo Carchedi discussed how Keynesian deficits spending works and, like Jones, concluded this deficit spending cannot create money (or, more accurately, value) out of nothing. However, he went one step further: Carchedi argued that once the state began to repay its debt, it would have to raise taxes for this purpose. Whatever additional ‘demand’ the state created by deficit spending during an economic downturn would turn out only to be deferred taxation on the population. Essentially, since the state is not a producer of commodities, it could only bring spending forward; this credit funded ‘prosperity’ would have to be repaid at some point by higher taxes.

Carchedi’s argument may or may not be correct in the long run, but Jones’ paper suggests Washington has been able to run deficits — and, therefore, artificially prop up profits — over a fairly long period of time without running into the need to balance its budget. For more than thirty years, the US has been able to spend more than it takes in without apparent difficulty or obvious limits.

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