The Real Movement

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Tag: Tugan-Baranowsky

Can the state prevent the collapse of capitalism by printing currency?

Tom Cutterham seems to believe to the answer to that question is, Yes. Cutterham’s review of Paul Mason’s book, Postcapitalism — Forget Wikipedia — is a common enough response by some activists to any mention of communism:

“Again and again, those who predicted imminent collapse were proved wrong. There were always new ways for the system to adapt to its inherent contradictions and crises, always new markets to pry open and new forms of labour to exploit.”

Capitalism, this argument goes, is apparently capable of almost infinite adaptation. The response usually does not deny that capitalism is prone to crises, nor that these crises may trigger some political event like a social revolution. However short of a social revolution, (triggered usually by an alteration of consciousness secondary to a crisis), there is nothing inherent in capitalism driving it toward its self-annihilation.

The current iteration of this argument, which among Marxists seems to date back to Tugan-Baranowsky, is now defended by the value-form school and almost all Marxists today. This school includes very influential Marxist writers like Michael Heinrich in Germany, John Milios in Greece and David Harvey in the United States.

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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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How SYRIZA economist Milios deliberately distorted Marx’s theory to serve his own purposes

In my previous post, John Milios’s strange explanation of capitalist crises, I noted Marx did not have a theory of crisis. Mind you, everybody who has ever studied Marx’s theory knows this is true and there is not the slightest hint of disagreement about this. Since the lack of theory of crisis is alleged to have such far-reaching theoretical implications, you would think scholars of labor theory would devote at least a paragraph or two to speculating why Marx himself did not feel the need to develop a theory of crisis.

Instead, folks like the German theorist, Michael Heinrich, suggest Marx was so overwhelmed by his subject that he was unable to complete it. Heinrich argues capitalism was rewriting its own code faster than Marx could transcribe it into a finished work. This argument, although having a hint of credibility, is actually self-serving hogwash on the part of Heinrich. For Heinrich’s version of history to be correct, capitalism has to be fundamentally different than what Marx describes in Capital. How different? In the Grundrisse, Marx predicts a specific historical event he believed was inevitable: the complete collapse of commodity production, but Heinrich argues collapse was never inevitable:

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