This is my attempt at answering some specific concerns raised by
Tom, Tony, Julien and others.
First, I AGREE WITH AMIRI BARAKA:
>>Don't confuse the practical Need to demand, from the forceful presence of
Left Bloc, concessions from the Democrats, and Nader's solipsistic "talent
show", which offers nothing practically.. We are talking about organizing a
consistent political presence that extends past now, not just some "feel
good" stunting for the similarly confused.<<
And:
>>One group too revolutionary to Unite, the other making opportunist
submission to the right.
We have no upper hand or not much of a hand at all because we are SPLIT now.
<<
And, in order to find the was towards a MASS politics and a MASS movement,
we have to ground ourselves in a MATERIALIST analysis of the capitalist
world system and its in-built tendency to crash.
Second, on value: I'm sorry if what foolows reads like a value-primer
but it's necessary to define some terms. And I do wish that people would
go to the bother of looking at the Crashlist website and reading Michael
Perelman
for instance.
I think we have to accept that in marxian usage it is a
technical term (indeed, in ALL economics it's the same). Economists have
always been concerned to find out what (if anything) lies behind prices: how
are prices formed, how do they tend to develop stable relationships to each
other over long periods, so that in most societies and at most times for
example a loaf of bread is always priced at only a fraction of the price of
a diamond? How do markets work? It's a longstanding question. The first
economist was probably Aristotle [384-322 BC], who wrote a book on
economics. I have a copy of it, but it is out of print and hard to
come by, unlike his 'Politics'. The reason for this is clear if you read it,
because after a few pages the thought pops into your head: 'My
God, Aristotle was a _Marxist_?' He too believed in the labour theory of
value (LTV). So his book is _still_ proscribed.
People who believed in the LTV are generally known as 'classicals'
(incidentally, the word 'economy', for those who don't know, comes from the
Greek word _oikos_ meaning 'household'. Economics was household or estate
management.). David Ricardo and Adam Smith were both LTVers, even
though they were great free market apologists and so was Malthus, and
that was the orthodoxy up until about the 1850s. It wasn't a very good
theory, and looks pretty circular, because how do you define the value *of
labour*? After all, labour too is a commodity with a price: employers pay
for it on the never-never, in the form of wages. If labour is the measure of
economic values, what is the measure of labour? This was a conundrum they
never satisfactorily answered. They had no theory of the wage.
The other problem with classical theory was that it made it
easier for the wage-slaves themselves to rise up and to say,
'Why if I am the producer of all values, is it that I am
walking around with no shoes while the employer drives in a
carriage?'
Later the neoclassicals came along, beginning with W J Jevons (1835-82)
and Alfred Marshall (1842-1924). Jevons' _Theory of Political Economy_
(1871) set out the principles of so-called 'marginal utility' while
Marshall's _Principles of Economics_ (1890) first systematised
neo-classical thinking.
The essence of it is that things have value if we desire them, and the
price is set by their marginal cost of production. This theory has a number
of advantages: it glorifies entrepreneurs, stops the workers feeling
exploited (by pointing out that, since they always get a fair day's pay for
a fair day's work, what *is* their problem?'), and it avoids the problem of
accounting for the wage. The price of labour, like all other market-clearing
prices, is set by the marginal cost of production of labour. In other words,
labour (a factor of production) has to be adequately remunerated, as
do other 'factors'.
In the Marshallian world, there are different 'factors of production' which
each have their owners, and it's a level playing field (as long as workers
don't form trade unions, which are conspiracies designed to thwart the
working of the market, are therefore infringements of freedom and should be
banned). Capital is a factor, so is labour, so are resources and raw
materials of all kinds. Capital has a price: this is the average rate of
profit. Labour has its price (the wage). Raw materials etc have their price:
the rent paid to their owners (net of production costs).
Using these simple ideas, Alfred Marshall managed to produce
the first neo-classical equilibrium models, which did
indeed show why it is that wheat has price (a) and diamonds
always have price (x), etc.
Jevons was a contemporary of Marx. Marshal was a bit later
(Karl Marx published Das Kapital in 1867). Marx was in some
ways the last of the great classicals, since he believed in a variant
of the LTV, which the marginalists rejected. But like Jevons and
Marshall (the first 'neoclassicals') he was also critical of
the LTV. David Ricardo and Adam Smith and the other classicals
gave hopelessly unsatisfactory solutions to the problems
of wages and prices and the origin of profit (BTW, good
discussion of all this on the Crashlist website, where you can find Michael
Perelman's 'Invention of Capitalism'). Not only could they not explain the
price of labour, a fatal flaw, they also could not explain how
modern economies could emerge, with a division between different
branches of industry, and the emergence of whole groups of industries:
heavy industry, metallurgy, machine building; consumption goods
industries; farming etc etc. What was needed (Marx was the FIRST to
understand this) was a 'general equilibrium' model which explained how
modern advanced industrial economies came into existence and perpetuated
themselves. Marx's theory was the first attempt at true marcoeconomics,
the first general equilibrium theory, and the neolclassicals owed him a
great deal altho they never admitted it.
Marx had understood that no theory of prices OR of equilibrium could
work which did not include the functioning of the market. This set him
apart from Smith and Ricardo. It also comes as a shock to many
inexperienced socialists to discover that Marx believed in the role and
importance of markets, or anyway, he took them as significant
historical givens. Marx was not a supporter of capitalism. But unlike
the classicals, he was able to properly account for price
formation.
It was always obvious that prices differed from 'values'. The latter,
according to the classicals, were determined by the amount of labour
a commodity contained. But prices moved around a lot, veered sharply up and
down. This constant fluctuation of 'price-signals' obviously served
some very importanbt purposes. This no doubt was why early utopian-
socialist attempts to do away with money and create pure labour-time
economies, for example in the various experiments of Robert Owen,
Saint-Simon and others, where labour-chits were used, always
collapsed (the labour-chit was a kind of banknote which was worth
whatever number of 'labour-hours' was printed on its face).
What Marx set out to do (and this is his enduring importance in
economics) was (a) show how the price of labour was derived (which the
classicals had failed to do, since they always got trapped in circular
arguments) (b) show how values are transformed into prices and (c) derive a
general equilibrium model of the economy. In doing so, Marx took a
good step towards sharing both the issues and concerns of the
neoclassicals.
What he did (and he did it starting right on page 1 of Capital) was to show
that a COMMODITY is a unique thing, it is something which has no analogue in
nature. A commodity combines within itself both a use-value and an
exchange-value. Its use-value can be anything at all, from the utility of a
pair of spectacles to a weapon to any other good or service sold on a market
anywhere. Use-values are always uniquely intrinsic to the object. Since they
are all different, they cannot easily be exchanged. But markets enable
hundreds of millions of similar transactions to occur, so that prices are
and to become historically real and socially accepted.
Marx pointed to the fact that the classicals had missed a crucial step out
in defining the LTV (labour theory of value). They said that the value of a
particular commodity depends upon the amount of labour-time it embodies
(i.e., requires to make it in the first place). But this always varies.
Different people work harder or slower, sometimes they have machinery,
sometimes not, sometimes the place of manufacture is conveniently near a
power or raw material source, sometimes not, etc etc.
But Marx saw that if all these differences were averaged out, then
labour-time would assume a generalised, homogenous form. One pair of
spectacles might have taken 50 minutes to make, another 20 minutes, and the
'average' was therefore 35 minutes. This is why labour-chit systems
didn't work; they couldn't do the averaging, and were intrinsically unfair
(a lazy worker was rewarded for laziness, a fast worker punished for
accuracy). ONLY THE MARKET could do this averaging-out. For Marx,
therefore, the MARKET is an ESSENTIAL SOCIAL
INSTITUTION; it is at the heart of the Marxist analysis of capitalism
AND OF CAPITALIST CRISIS.
The market averages out all the differences and through millions
upon millions of transactions and through the creation of a world market,
which obliterates regional and local differences, it creates the correct
price for a commodity, i.e. the price that reflects the average of
SOCIALLY-NECESSARY labour-time an article takes to produce.
So by incorporating the market price-setting mechanism Marx went a long way
to resolving one of the key problems left by the classicals. He showed that
what gets embodied in a commodity is not just any old labour-time but
SOCIALLY-NECESSARY ABSTRACT LABOUR-TIME.
'Abstract' meaning 'abstracted from all particularities of place, skill of
worker, availability of machinery, etc etc'. This process of abstracting
from
empirical circumstances, is the achievement of the market, its main function
in the process of regulating and equilibrating social production.
'Socially-necessary' meaning the time taken by all the producers in that
sector of industry on average, to produce one unit of a commodity.
It is obvious that 'socially-necessary abstract labour-time' (SNALT) is by
definition different from the labour-time of any PARTICULAR individual
worker. Marx's value theory (i.e., theory of how economic values, i.e.
commodities, are produced and priced) is already no longer the simplistic
LTV of old. It is already WRONG to speak of Marx having a 'labour theory
of value'. It is already something else, and this is why Marx himself and
Marxists generally speak only of Marx's value theory (as opposed to see
Alfred Marshall's value theory, for eg). Marx introduced the market, and the
process of price-formation as KEY elements in VALUE formation.
This development of theory now made it possible for Marx for the first time
to solve another conundrum: how does LABOUR itself get priced? The
classicals had no theory of the wage. They went round in circles, trying to
explain the wage in terms of labour and labour in terms of the wage. Marx'
solution is neat and elegant. He showed that in commodity-producing society
(of which capitalism was only one example) SOCIETY ITSELF makes a
distinction between the work done by each individual worker, and the
socially-average work done by a particular group of workers in a particular
industry. What the workers gets paid therefore, is not for HIS/HER own time,
but for the socially-average quality of his time. He/she is not selling
him/herself, but is only selling his/her CAPACITY to do work. It is up to
the employer to utilise that capacity. And how is the price set for the
worker's labour capacity? By the market, of course. What the wage buys is
the quantity of consumption goods and services (consumption-basket)
needed to ensure that that labour-capacity (or labour-power) will continue
to appear on the market.
Like any other commodity, the value of labour-power is the cost of
reproducing it. Any commodity sells for its production price. It cannot be
sold for less, because then the producer will go out of business. It cannot
be sold for more, because competition will ensure that there are no
takers. A product must be sold for its cost of reproduction; that is its
value, and prices must in the run gravitate around values.
A manual worker requires one set of consumption goods, in order to not just
stay alive but to have a family and produce his/her own successors. An
intellectual worker of some kind requires different consumption
goods and services. (Marx pointed out how the Factory Acts and
the legislation around the 8-hour day showed that the capitalists
themselves understood that it was no good simply working
people to death, as they had been doing; it was necessary to keep the
working-class in being).
A doctor, lawyer, etc requires a different consumption basket. Social
inertia, convention and the strength of vested interests will also obviously
play a part, but the more the world market entrenches itself, the more
globalisation takes hold, the less chance anyone will have of being paid
over their real value.
One more thing: neither the classicals, nor the neoclassicals, could explain
how profit came about. Marshallian utility theory, and all modern economics
depends upon its believers behaving like credulous congregations in a church
of black magic. Heroic suspension of disbelief is required. People must come
to think of 'capital' as a thing, and actually as practically the ONLY real
thing that matters. No-one has EVER seen or touched it, but you are required
to believe as an article of faith, that capital exists, is just as corporeal
as labour, or earth, or oil, and requires recompense as a factor of
production accordingly. The profound absurdity of this notion is
obvious - unless you happen to own stocks and shares, in which case you
immediately become as scientific as an Aztec who believes the sun thinks and
converses with your own High Priests.
Capital, as Marx was the first to point out, is a *social relation*. It
exists only in symbolic form, i.e. in the form of symbols printed on pieces
of paper. These give the owner/bearer certain rights over things which DO
exist, but have been created by the labour of others: the means of
production (factory mine and mill, or rather, network, airline and software
house).
Where does the profit accruing to capital come from?
It comes from the simple fact that a worker gets paid the SNALT
('socially-necessary abstract labour-time') required to reproduce him/her.
That indeed is a 'fair day's pay for a fair day's work'). But when the
employer puts your labour-power to use, he/she expects you to produce MORE
than this amount. You produce not only your own 'value' (as labour-power)
but some surplus value, too. This surplus-value is invisible, it is
inseparable from the simple value embedded in the stream of goods produced.
But it is present, in each article sold. In the process of formation of
capitalist society, the great social classes are defined historically by
their relationship to the mode of production and the way this stream of
value which emerges from production, is divided up. Workers are waged (or
unemployed). Capitalist reap profit. Owners of raw materials, mines etc, get
rent, and this rent is a subsidiary stream from the general flow of
surplus-value created by the total production process. If you want to know
more about how this happens, read Capital Vols I-III.
> Is the idea of nature contributing value (or wealth .. whatever small
> distinction that affords you all, it honestly seems like hair splitting)
is
> anathema to those who hold marxist positions? What value, then, is marxism
> to a discussion of the Crash?
I hope I've given a primtive but accurate Marxist answer to the first
question. The second question I'd answer thus: the Crash is precisely the
process of disintegration, of collapse, of capitalism.
Capitalism is a historical social formation which had a beginning
and will have an end. Commodity-production predated it and
will continue to exist after capoitalism has disappeared.
Industrial capitalism is a high point of commodity-producing
society. It is a grow-or-die society. It is grow-or-die because
it cannot help creating surplus-value as well as value; cannot help
creating MORE commodities than are actually required just to simply
reproduce itself. This is WHY CAPITALISM IS NOT AND NEVER CAN BE
SUSTAINABLE, why it MUST by its nature continue to expand until all
possibile resources, all land, all historical spaces, are filled and
overfilled. Wihtout knowing anything more than this Marxist theory of
capitalist-commodity-production, without knowing anything about the
geology of oil (for instance) or when and how the oil might run out, it is
possible to say categorically that capitalist production will continue to
expand without any limit until it runs up against a wall of natural limits.
That is why *our* politics *cannot be* about searching for *sustainable*
forms of capitalism, or for 'natural capitalism' (useles blather! and
dangerous too, since so many are taken in by it). If you are worried about
warming, ecocide, or the social catastrophe following the Crash, then you
have only one task, and that is to help overthrow, destroy, world
capitalism.
But simple models are almost useless except as learning tools or metaphors.
We do know that it is a complex mechanism with many counterbalancing
features - counter-tendencies which help keep the system afloat and give
it a lease on life. We have to understand how the system works in order
to understand the Crash and work out a politics about it. It is not enough
to concentrate only on the physical explanations of resource-depletion,
ecocide, warming etc - or the physical narrative about counter-tendencies:
new advances in science, rising social productivity etc. Nor is it enough to
ground our theories in evolkutionary psychology or even evolutionary
economics. Evolutionary psychology in any case is too theoretically flawed
to
be much use. It produces a blank malthusian pessimism which is just a
mirror-inverse of the blind social optimism of most economists. It is NOT
'all in the genes'. We can make a difference; there is a chance we can
avoid extinction and even avoid the worst features of the Crash. But we
have to avoid false optimism about that as well. Utopian schemes for
co-operatives, or anarchist scenarios, only lead to either continued
marginality and irrelevance, or to serious mistakes. In the end they lead
to being used as a tool by the power elites who are the main instutional
roadblocks and which must be removed.
> Whether it is using the word "value" or speaking about "immigration" or
> WHATEVER, I find it disheartening that the list seems to quibble endlessly
> about the meaning of words and what is or is not an acceptable
> interpretation of the marxist ideology.
I agree with this; we have to avoid going round in circles and being
preachy.
> Does marxist theory have ANYTHING to say about the "dynamics of the
Crash",
> as Mark puts it?
It does, and what's more, it's a key component of any sufficiently complete
and complex analysis of the totality of the Crash and the interplay between
social and natural causes and effects.
>
> Does marxist thought offer us any constructive avenues to approach either
> understanding the crash or acting in some way to ameliorate what most of
us
> see as a world-wide catastrophe?
You cannot change what is not in your power. But you can educate people, you
can put the truth before them. If there is a big economic recession,
millions will be out of a job and (as with hundreds of milions in
the 3rd world today, who are RIGHT now homeless, out of a job etc)
they won't have time or energy to worry about global
warming; and in any case, a recession will reduce carbon emissions and the
problem will seem to solve itself; similarly, oil shortages will be 'solved'
by the recession which they help trigger.
But we have to keep showing people what lies under the surface.
A recession which is ended by going back to business as usual,
to resumed growth etc, may look inviting but just guarantees worse
ecological etc problems down the line. A recession which turns into a
slump from which there is just no visible exit and which goes on for many
years (that has already happened in eastern Europe) poses a different set of
political challenges. This work of political edcuation can be and is a
frustrating and lonely business (Gramsci, an Italian revolutionary in the
1920s, said ruefully after Mussolini jailed him, 'we thought we were going
to
be the plough that turns over history, but instead we are just the manure
that gets plowed under'; but this implicitly recognised the special value of
teaching people the underlying truths of their world. Knowledge makes you
free. So what we are doing is specially important).
> Outside marxist discussion Hardin, Hanson (and Hawking in the NY Times)
> Ehrlich, even HENwood at least speak to the issue of the crash, with some
> expertise. So do hundreds of others. Not all of them are stupid assholes
and
> eventually you are going to have to deal with their arguments, (I hope.)
Henwood says there will be no Crash! Jay Hansen is in a different category,
and this list and his are complementary and each has its role.
If Henwood is right, then fine. There will be no Crash, I am
a deluded Casandra and there is nothing to worry about. He will
never be persuaded otherwise (even, I suspect, by events themselves). It is
useless to persuade the unpersuadable. I had connections enough with Big Oil
in the past 20 years to know that whether or not anyone else believes in the
Hubbert Peak , they do and they have been preparing for it for a long, long
time. It's going to happen, and is already happening (net per capital global
energy consumption peaked years ago).
HOW it happens and what WE do about it: both require MARXIST analysis.
Mark
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