Tweep @BrianGallaghe17 sent me this tweet the other day:
@ReThePeople Kliman interviewed about his new book in which he claims the profitability crisis is from the 70s
So I went to see what Kliman is up to now. In the interview, Kliman makes this statement:
So what we have is a major debt crisis. I don’t think it’s very likely that we’ll have a sustained boom unless and until the debt problem and the deeper, underlying problem – the profitability problem – are resolved. We may have a long period of very weak growth, as Japan has had ever since bubbles in its real-estate and stock markets burst at the start of the 1990s, or we may have something worse. Given the magnitude of the bust in the US construction industry and the magnitude of the recession in general, it would have taken a long time for production and employment to return to pre-recession levels in any case. It’s likely that the persistent debt problems and pessimism about the future have slowed down the recovery, and that they’ll continue to do so. Real gross domestic product in the UK and most other major European countries is still lower than before the recession. And even in countries where that’s not the case, like the US and Germany, GDP growth is still quite slow.
I wondered if in the US case GDP grew at all, much less growing slowly, since 2007. In 2007, GDP was estimated by the BEA at $14.028 trillion versus $15.075 trillion in 2011, an increase of $1 trillion or so in output. As far as Kliman is concerned, that pretty much settles it, because the fascist state says dollars are money, not tokens of money. We can, therefore, assume that these dollars measure “real” economic activity, without more inquiry.
However, Marx said money had to be a commodity — and no matter how much Kliman might trust Washington’s monetary policy, good analysis suggests we should at least check GDP using a commodity money to see if we can confirm Washington’s numbers. In 2007 one ounce of gold fetched a price in the market of $695.39, however by 2011, that same ounce of gold was priced at $1,571.52. So, during the same period that GDP rose 7.5% in nominal dollars, these same dollars depreciated to less than half their former purchasing power against gold.
Now before I read and compared Kurz to Postone, I would have suggested dollar denominated measures of GDP were completely bogus. But, no more — I am reformed, I have seen the light! Thank you Jesus! I have come to the conclusion that, in fact, both are right, Halleluiah!
Can I get an Amen?
Which means, quite oddly, that the US “economy” has both grown and shrunk during the same period 2007 to 2011. So things are a bit more complicated than simply stating the economy grew or shrank during some period of time. By one measure it has grown and this has implications, but by another measure it continues to shrink and this has other implications. If we say it grew, simply because dollar denominated values have increased, we miss that it shrunk in commodity money terms. On the other hand, if we say it shrunk in commodity money terms, we miss the fact that it grew in dollar denominated terms.
We end up dissing either Postone or Kurz, and I kind of like both of them.
It occurred to me while reading the Kliman interview that we need a measure that captured this relationship in terms of the historical trajectory of value. Something along the lines of Marx’s organic composition of value, c:v. This measure would reflect the dollar denominated value of output as a ratio to the commodity money value of this same output.
But how would it be structured as a ratio? Gold to dollars, or dollars to gold? Bourgeois economics places the relation as the dollar price of gold, i.e., the value of gold is measured in some quantity of dollars. This relationship can be expressed as dollars per ounce of gold. This is precisely the question I am interested to know when i am trying to stock my gulch with beans, guns and gold for the coming global apocalypse that threaten civilization itself.
However, Sam Williams and I have suggested the actual relationship is reversed: it is actually some physical quantity of gold per dollar; which is to say, dollars do not denominate the price of gold, gold denominates the price of dollars. I am proud to say I blatantly stole the idea from FOFOA, the Austrian school blogger, where he quotes his mentor, Another:
Gold! It is the only medium that currencies do not “move thru”. It is the only Money that cannot be valued by currencies. It is gold that denominates currency. It is to say “gold moves thru paper currencies”.
Dollars bidding on MSFT stock set the value of that stock. If dollars are frantically bidding on MSFT (high velocity), the stock skyrockets. If dollars stop bidding for MSFT all at once (low velocity), the price falls to zero. This is true for everything in the world **except gold**.
Gold bids for dollars. If gold stops bidding for dollars (low gold velocity), the price (in gold) of a dollar falls to zero.
And he arrives at the conclusion that:
All Paper is STILL a short position on gold!
Which is to say, fiat currencies do not express the value of gold, but only symbolically represent some magnitude of value denominated in a physical quantity of gold. Employing this method, I think, but I am not sure, that the ratio should be set as G:D — which is a bizarrely pseudo-religious formulation. If we used this to measure the value content of a single dollar, this is how GDP has actually changed since 2000:
That is also the value content of US GDP over the same period. If we look at how the value content of the dollar has fallen since 1970, the results are even more starkly represented.
During this same period, 1970 until 2011, the nominal GDP of the United States has almost increased every year, but the value content of this GDP has fallen for most of that period. This graphically represents the relation between Postone’s and Kurz’s definitions of value as a relation between gold and the dollar. It confirms, I think, the argument of both that the value form, measured in dollar, and the content of this form, measured in gold, have become completely disconnected from one another.
In Marx’s and Engel’s manuscript (not published in their lifetimes), The German Ideology, they set out what must be a surprising argument if you read the typical member of the Marxist Academy, because that argument is still not taken seriously by Marxists, who insist the social revolution is a political event — the seizure of state power.
Tweep @sushi_goat asked me a series of questions regarding reducing hours of labor yesterday. I made a stab at it, but I want to give a fuller answer here.
My argument on the impact of a shorter work week on “the economy” is based on Postone’s and Kurz’s analysis of superfluous labor. In his magnificent book, “Time labor and Social Domination”, Postone showed that superfluous labor is a necessary result of late capitalism and includes labor time that is necessary from the standpoint of the capitalist mode of production but superfluous from a higher mode of production. To call labor superfluous therefore does not imply that it appears empirically in this form within the capitalist mode of production itself. Within the capitalist mode of production this superfluous labor appears to be necessary.
In his own groundbreaking essay, “The Apotheosis of Money“, Kurz further defined this category from the standpoint of a theory of capitalist circulation as a whole. While he enumerated how this form appears in the form of many particular and obvious types of labor time, his real contribution was to nail down its implications for the capitalist mode of production. What Kurz showed is that this superfluous labor time consists in the production of values that do not reenter the capitalist reproduction process. To give an example: the production of an ear of corn is the production of a value; but if the corn is not consumed by a worker productively employed in the capitalist production process, it cannot reenter capitalist self-valorization. The corn could be eaten by a soldier, but the soldier as living labor does not replace the ear of corn in the capitalist production process, thus the value is consumed unproductively.
Unfortunately, what Postone has not done (yet?) nor Kurz before his death is extend this analysis to the category of Marx’s organic composition of capital. If this had been done, I think it would have yielded very important results regarding the significance of their ideas.
First we begin with three important formulas in Marx’s theory:
1. c:v, or the organic composition of capital. This is the ratio of constant capital (c) necessary to set in motion a given quantity of living labor (v). In Marx’s theory, this ratio is always increasing.
2. s/v, or the ratio of newly produced surplus value (s) to the mass of living labor expended in its production (v).
3. s/(c+v), or Marx’s formula for profit, expressed as the ratio of newly produced surplus value (s) to the mass of constant capital used up in production (c) and the mass of living labor expended in this production (v).
For the purpose of analysis, I assume the total labor time of society can be divided into a mass of productively expended labor time (Vp) plus a mass of unproductively expended labor time (Vu). In other words, let the mass of the total labor time of society be represented by V, this total labor time can be further divided into productively employed labor time (Vp) and Postone’s and Kurz’s unproductively employed labor time (Vu)
On this basis the total labor time of society can be represented by the equation
4. V = Vp+Vu
Again on this assumption, the organic composition of capital (C:V), can be further defined as:
The problem here is that in Marx theory the organic composition of capital can only refer to capital’s self-expansion, which implies all labor is employed productively. So, the formula, C:(Vp+Vu), must be understood only as the prospective (or fictitious) organic composition of capital. Which is to say, this formula applies only to how the organic composition must appear, consistent with capitalist relations of production.
In this formula, however, it appears the expenditure of unproductive labor time reduces the organic composition of capital — as several writers have asserted, most notably Chris Harman, who argued:
“There is a vicious circle. Reactions by individual firms and states to the falling rate of profit have the effect of further reducing the resources available for productive accumulation. 
“But the effect of unproductive expenditures is not only to lower the rate of profit. It can also reduce upward pressure on the organic composition of capital. This was an insight used by Michael Kidron to explain the “positive” impact of massive arms spending on the system in the post-war decades. He saw it, like luxury consumption by the ruling class and its hangers-on, as having a beneficial side-effect for those running the system – at least for a time.
“Labour which is “wasted”, he argued, cannot add to the pressure for accumulation to be ever more capital intensive. Value which would otherwise go into raising the ratio of means of production to workers is siphoned out of the system. Accumulation is slower, but it continues at a steady pace, like the tortoise racing the hare in Aesop’s fable. Profit rates are weighed down by the waste, but do not face a sudden thrust into the depths from a rapid acceleration of the capital-labour ratio.”
In fact, this was complete nonsense. The organic composition of capital is not affected by the growth of superfluous labor time. So-called “economic growth” appears to stagnate not because superfluous labor makes capital less productive, but because the increase in the productive capacity of labor requires increasing quantities of unproductive labor time.
In the capitalist mode of production Vp+Vu can only appear as V — which is to say as abstract homogenous labor in general. It cannot, under any circumstances appear as discrete quantities of qualitatively differentiated labors Vp and Vu. On the other hand, only productive labor can produce surplus value; unproductive labor as Kurz argues, does not produce surplus value but only mediates its distribution. This has implications for my analysis.
Since, Vp+Vu can only appears as V, it would appear that a reduction of labor hours imposed on capital must result in a proportional reduction of both productive and unproductive labor. For instance, it would appear reducing hours of labor from 40 to 24 would have an equal impact both on General Motors and Federal employment. In fact, this cannot happen: General Motors as a productive capital produces surplus value that is distributed as the profit of GM and state expenditures. Given this, the effect of reducing hours of labor must have a greater impact on the state, or a defense contractor, than it has on productively employed capital.
Why? If we plug our substitute for V into Marx’s formula for surplus value, it might become clearer:
The formula 2. s/v becomes:
In this case, only Vp produces the surplus value shared between both sectors Vp+Vu.
And the formula for profit s/v+c becomes
Since the aim of capital is self-expansion, and, therefore, of the production of surplus value, this has implications for the impact a reduction of hours has on the mode of production. Labor time Vu produces no surplus value, although it will mediate the distribution of the surplus value produced by Vp. The reduction of total hours of labor will not have a proportional impact on the two mass of labor time, Vp and Vu, but a disproportional impact — reducing the relative proportion of labor time, Vu against Vp.
This is because, 1. a reduction of labor time Vp, reduces the mass of surplus value, and therefore, the mass of s in the formula for profit, s/c+v; while, 2. the reduction of labor time Vu, has no impact on the mass of surplus value, and, therefore, no impact on the mass of s in the formula for profit, s/c+v. On the other hand, the increase in the mass of labor time expended productively (Vp) will increase the mass of surplus value s, while the increase in the mass of unproductively expended labor time (Vu) will not.
The distribution of the mass of profit produced by productively employed capitals is, in part, settled by competition between the class of owners of capital. Under conditions of a general and comprehensive reduction of hours of labor, productively employed capital can increase their profits by reducing the expenditure of labor in unproductive forms, such as the state sector. While the state is incapable of increasing itself, by increasing its unproductive consumption of the surplus value produce by productively employed capital, i.e., by raising taxes or borrowing.
In the first place, a general and comprehensive reduction of hours of work — e.g., from 40 to 24 hours — must result in a reduction first of the state sector. In the second place, it must result in massive shift of the employment of labor from unproductive capitals (e.g., finance) to productive capitals. The losers in such a reduction would be first the state, second those capitals producing for the state (defense contractors) and financing it (Wall St.). By contrast, the productive employment of capital becomes more profitable, although the actual quantity of surplus value produced is smaller. Although less actual surplus value is produced, less also has to be shared with a mass of unproductive capitals and the bloated state.
This must increase demand for the productive employment of labor power, along with an increase in the wages. The rise in wages would in turn force productively employed capitals to further rationalize expenditures of labor through methods that improve the productivity of labor. Although employment is rising, along with wages, the actual improvement of the productivity of labor compels the further reduction of hours. In this way, there is both a rapid increase in the material living standards of the mass of society and more disposable time.
Reducing hours of labor not only means free disposable time for the mass of society, it pays for itself by compelling capital to revolutionize the labor process and increase the efficient employment of existing labor power. In Capital somewhere, Marx argues the capitalist class is, historically speaking, only the stewards of the total capital, who used their position to the disadvantage of the mass of society. This might not have been obvious in his day, but with the professional class of managers who have since arisen and now shuttle between Washington and Wall Street, and the resulting division of ownership from effective control of capital, it is clear this is all that class ever was. Paris Hilton’s family has long since retired to the vocation of coupon-clipping, while her functions have been assumed by these parasites.
For this reason, I think the most fanatical opponent to reducing hours of labor will be the state itself, and, in second place, the managers of the capitalist firms directly dependent on the state. Reducing hours of labor cannot be thought of as a political demand; it is, rather, a textbook example of what Kurz called antipolitics.
The key thing to understand here is that with Postone and Kurz we get two entirely antithetical forms of labor time that result in two contradictory definitions of value.
Marxists have yet to integrate Postone’s and Kurz arguments into an updated analysis of capital in the tradition of Marx reflecting post-war capitalism, although both arguments rest directly on Marx’s own analysis. It makes it difficult, if not impossible, therefore, to convince Marxists of the significance of a demand for reduction in hours of labor.
This provides with a practical route to what Kurz called the internal breach in the capitalist mode of production itself:
Where and how to begin, within the existing capitalist form of socialization which rules over all reproduction, with the intention of finding in the latter, so to speak, an internal breach and to break free of it, to take the first step, to point out a formulable beginning for social emancipation?
Clearly, this crisis presents us with a mass of unemployed workers, who are having great difficulty finding work in the advanced countries, side-by-side with a regime of austerity that only promises to intensify unemployment. If this breach can be exploited by a concerted call on the Left for a reduction in hours of labor, the stage may be set for a series of events carrying all of society beyond this historical phase.
Marco Deseriis and Jodi Dean have opened their sectarian Marxist pie holes to argue Occupy is unable to address “division within the movement”. Their nonsense is posted to Kasama Project here.
Their trash is titled, “A movement without demands?”; but its real complaint can be better stated as “A movement without politics?”. Since Marxists can only conceptualize a movement of society as a political movement, Occupy’s refusal to raise political demands is confusing.
There is, Deseriis and Dean explain, a division within Occupy that many want to deny. However, to become more than a protest movement, Occupy will have to “acknowledge division, build alternative practices and organizations, and assert a commonality.” I think this is a bold assertion, since, so far as I can tell, neither of these two idiots has any accomplishment building anything.
I mean, when I was just a dumb kid, I went on a trip to China as guest of the Communist Party of China — it was a big deal to me. Here I was going to the place only just recently presided over by the great Chairman Mao himself. Surprisingly, although this party had in fact liberated China from the sphere of US hegemony, reorganized society along completely different lines, and turned the capitalist class into docile toadies, never once did anyone there say, “This is how you do it.” They had done it, but never once acted as though their practice had any particular significance for our own. They even emphasized that Mao’s ideas were only “Marxism-Leninsm adapted to the conditions of China” and did not have global significance.
But, Mr. Deseriis and Ms. Dean, who have never built a thing in their lives apparently think this lack of accomplishment sets the stage for them to “educate” the Occupy on how “to metamorphose from a protest movement into a revolutionary movement”. The fucking arrogance of these two imbeciles is just breathtaking.
According to Deseriis and Dean, apparently the objection to turning Occupy into a political movement arise from three different arguments within the movement. These arguments state that political demands are by definition not representative; that they reduce the autonomist character of the movement; and that they subject the movement to threat of being co-opted.
Deseriis and Dean take each of these three objections in turn, based on …what? Experience? No. It actually results from Deseriis’s and Dean’s diagnosis that what really bedevils Occupy at this point in its evolution is that it refuses to acknowledge the principle problem faced by the movement is not the state, but Occupy itself.
“The problem is that the objection as it has been raised in the movement misconstrues the location of the division that matters.”
Really? How so?
“The co-optation objection presents the problem as between the state and the movement rather than as a division already within indeed, constitutive of, the movement itself.”
According to Deseriis and Dean, then, the problem is not Wall Street, but Occupy Wall Street; the problem is not the one percent, but the 99%. The resistance of Occupy to reconfiguring itself as a mere political movement suggests it wants to suppress divisions within itself and these divisions are expressed in an aversion to raising political demands. But this aversion is entirely misplaced, Deseriis and Dean explain,
“First, we can make demands on ourselves. Second, demands are means not ends. Demands can be a means for achieving autonomous solutions. When demands are understood as placed on ourselves, the process of articulating demands becomes a process of subjectivation or will formation, that is, a process through which a common will is produced out of previously divergent positions. Rather than a liability to be denied or avoided, division becomes a strength, a way that the movement becomes powerful as our movement, the movement of us toward a common end.”
This argument appears quite rational — indeed it looks all dialectical and shit, Hegelian even — on the surface. But, let me ask Deseriis and Dean one question: Is not the state itself already this “subjectivation or will formation” that naturally emerges out of the divisions of society? And why must we replace the existing “subjectivation or will formation” of the existing state with just another form of “subjectivation or will formation”?
Is the social revolution simply the replacement of one form of impersonal subjectivity with another? Or is it the abolition of all impersonal subjectivities?
If one is looking for a process unequalled by “which a common will is produced out of previously divergent positions” we already have one: the bourgeois democratic state. The periodic elections within the state, with its cesspool of corruption and parasitic collusion, gives us the opportunity to forge a “common will” every four years.
If this is what the Occupy should aspire to be, in the opinion of Deseriis and Dean, no matter how much this is framed in the form of obligatory references to “the commons” — that sacred institution of Marxist dogma — it is not just a dead end, but ignores the fact that every socialist state in the 20th Century was based on common ownership of the means of production.
And every one of them proved to be a horrific failure.
Does my argument deny the existence of divisions within the Occupy movement? Of course not. But these divisions cannot be overcome with some barbaric and regressive attempt to create a common will out of previously divergent positions; rather, it requires the end of circumstances by which individual wills are compelled into a state of absolute dependence and universal competition with one another.
Deseriis and Dean are deliberately confusing the need for associative management of common resources, with the needs for a common will. This is based on a fundamentally flawed Marxist analysis of the problem facing mankind. The problem is not that the common resources of society are not subject to a common will, but that the will of each individual has been subjected to the control of common resources.
Whatever form this control takes — individual, cooperative, or state ownership — the individual has always been subject to this form. It is always the commons of society that acquires subjectivity at the expense of the members of society. In the social revolution it is otherwise, the individual achieves true subjectivity, and the commons is reduced to mere means. Wal-Mart is just a place to buy toilet paper to wipe your ass after a satisfying shit — there is no reason it should be dominating our lives in any incarnation — individual, cooperative or as the common property of society.
My reply to Deseriis and Dean, therefore, is the same as my reply to Kliman:
“Fuck you and fuck Zizek too!”
Since Occupy Wall Street appears to be undertaking a concerted push toward addressing the growing debt servitude of the mass of working families to Wall Street banksters, I thought it might be interesting to understand how the Federal Reserve is now doubling down on a policy of manufacturing an even greater debt burden for working families under the guise of stimulating the economy.
Comments and suggestions for improvement to this post are welcomed.