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Clever Monkey versus the Accelerationists (2)

May 9, 2013 1 comment

desire1

Part Two: (Nick) Land, Capital and Labor (Theory)

Clever Monkey’s argument against the accelerationists seems to rest on a precise formulaic incantation repeated over and over: the only accelerationism possible is Nick Land’s accelerationism. Thus accelerationism itself is merely a virulent subform of neoliberalist ideology that advocates commodification of all human relations. Which is to say all talk of accelerationism must lead us to embrace anarcho-capitalism, the Thought of Murray Rothbard, and the good folks at the Mises Institute.

Read more…

Anarchists, Libertarians and Marxists need to change the debate on jobs and debt (2)

October 13, 2012 2 comments

We have to change the terms of the debate on jobs and debt. We need to insist a job is nothing more than wage slavery and we don’t need Washington’s effort to create more of it by adding to this wage slavery even with more debt slavery. It is not like we have to argue existing jobs need to go away; why is Washington creating more of them, when existing hours can be reduced to solve the problem of unemployment rather than more debt?

2. Monetary Policy, or what happens when a hyperinflationary collapse of the dollar is NOT the worst possible outcome

The media is abuzz with speculation following the Federal reserves announcement of quantitative easing version 3.0. This version calls for the Federal Reserve to pour unlimited quantities of currency created out of nothing into the market, buying up worthless assets on a monthly basis to the tune of $40 billion per month. The result could be the printing of nearly a half trillion dollars in new, freshly produced, token money being forced into the economy every year until further notice.

The implications of this monetary insanity can be understood simply by reading the opinions of any number of economists and market watchers who are very delicately raising the spectre of a Zimbabwe style hyperinflation. Still subdued but growing talk of such an event has moved from the periphery of “financial advisers” and gold bugs into the mainstream argument of some pretty staid experienced players.

Take, for instance, a recent comment by Art Cashin, a veteran of the stock market who has probably seen every high risk moment in the market since well before Nixon closed the gold window in 1971, up to and including witnessing the market plunge 25% in a single day in 1987.  Cashin oversees the management of more than $600 billion in assets and is not given to losing his head over every minor fluctuation in the S&P 500. A market crash is not Cashins concern, however — he fears hyperinflation. Cashin notes Weimar Republic hyperinflation did not burst out all at once, but was preloaded by continuous money printing that only made its way into the market over time:

“It (the inflationary spiral) was in fact delayed for a couple of years.  But once it started, it could not be taken back.  So here in the United States and in the European Union, there are very few, if any, signs of inflation because people are so concerned (that they are hoarding money).

“[You] will have to keep an eye on the velocity of money.  Watch figures like, here in the United States, the M2 (figure), and see if it begins to grow through velocity, and get very cautious at that point.  There are some potentially eerie parallels (today vs the Weimar Germany era).  The United States trauma was unemployment and deflation (in the 30s), but in Germany in the 20s, it was money that ruined an entire society.”

Events are not yet to the point where Cashin is advising his clients to take their worthless fiat currency and sell it for gold, silver and other precious commodities, but he is suggesting there is such a heightened level of potential for a monetary catastrophe at present to warn people should begin to look for indicators of hyperinflation in the data:

“I think you are certainly at a ‘flashing yellow alert.’  You have in place a variety of things that could begin to react somewhat domino-like.  As I said, there are measures and items that the listeners (and readers) can look for themselves.  Look at, what is the growth in the money supply, M2?  It comes out every week.

If [the M2 measure of the money supply] begins to grow rapidly, then the money that the Fed has created will be seen as moving through the system.  That will create the high risk of accelerated inflation, and perhaps, God forbid, runaway inflation.”

Even if we discount Cashin’s argument as just another example of fringe hysteria, Zero Hedge recently explained, there are voices within the Federal Reserve’s own research department that echo Cashin’s argument:

Yes, it is ironic that the Fed is talking about “common sense”, we know. But the absolute punchline you will never hear admitted or discussed anywhere else, and the reason why the Fed can no longer even rely on its models is that…

Carlstrom et al. show that the Smets and Wouters model would predict an explosive inflation and output if the short-term interest rate were pegged at the ZLB (Zero Lower Bound) between eight and nine quarters. This is an unsettling finding given that the current horizon of forward guidance by the FOMC is of at least eight quarters.

In short: the Fed’s DSGE models fail when applied in real life, they are unable to lead to the desired outcome and can’t predict the outcome that does occur, and furthermore there is no way to test them except by enacting them in a way that consistently fails. But the kicker: the Fed’s own model predicts that if the Fed does what it is currently doing, the result would be “explosive inflation.”

You read that right: if Bernanke does what he not only intends to do but now has no choice but doing until the bitter end, the outcome is hyperinflation. Not our conclusion: that of Smets and Wouters, whoever they are.

And these are the people who are now in charge of everything.

Is there anything worse than a hyperinflation for capitalism?

The warnings by Cashin and the writers at Zero Hedge suggest Bernanke’s Federal Reserve is engaged in an extremely risky gamble on a policy that could lead to the dollar replacing Kleenex as the preferred method of catching sniffles during cold and flu season. I think it is safe to say the Fed would not be undertaking this gamble just to move unemployment a few points. A high risk gamble on this scale with the world’s reserve currency clearly hints what is at stake is likely much worse than a mere outburst of hyperinflation.

So what is worse than a hyperinflation of the dollar? What threat could there be to capitalism right now that risks reducing the dollar to a worthless piece of scrip with no purchasing power whatsoever? How about, a hyperdeflation, an inverse condition where all prices instead of going to infinity and beyond go to zero?

But there is a big problem with this argument: There is not a single recorded instance of hyperdeflation in history, we are told, and logically it cannot happen. Zero Hedge remarks on the question in a caustically titled post “The Monetary Endgame Score To Date: Hyperinflations: 56; Hyperdeflations: 0”:

We won’t waste our readers’ time with the details of all the 56 documented instances of hyperinflation in the modern, and not so modern, world. They can do so on their own by reading the attached CATO working paper by Hanke and Krus titled simply enough “World Hyperinflations.” Those who do read it will discover the details of how it happened to be that in post World War 2 Hungary the equivalent daily inflation rate of 207%, the highest ever recorded, led to a price doubling every 15 hours, certainly one upping such well-known instance of CTRL-P abandon as Zimbabwe (24.7 hours) and Weimar Germany (a tortoise-like 3.70 days). This and much more. What we will point is that at no time in recorded history did a monetary regime end in “hyperdeflation.” In fact there is not one hyperdeflationary episode of note. Although, we are quite certain, that virtually all of the 56 and counting hyperinflations in the world, were at one point borderline hyperdeflationary. All it took was central planner stupidity to get the table below, and a paper with the abovementioned title instead of “World Hyperdeflations.”

The Cato Institute’s paper presents a very powerful empirical argument against the case for deflation and hyperdeflation. Unfortunately it rests entirely on two fallacies that are hidden in its very title: First, hyperdeflation has nothing to do with the fate of any fiat currency, even the world reserve currency, the US dollar. A hyperdeflation is not the death of any particular currency nor even a series of currency collapses — it is the death of money itself.

The second fallacy in the Cato paper will take a bit longer to explain and once explained will show why it is so important to every anarchist, libertarian and Marxist.

Can there be such a thing as a hyperdeflation?

A hyperdeflation might possibly be defined as a situation where prices of commodities declined even as the supply of money increased. As the Cato Institute paper explains — there is no recorded instance of a hyper-deflation in the historical record. Of course, mild and even very severe deflations did occur several times up until the Great Depression; but history has many more examples of hyperinflations, as the Cato paper argues.

The problem with the Cato paper, however, is that its argument rests on the “quantity theory of money” fallacy — which according the Wikipedia states “that money supply has a direct, proportional relationship with the price level.” Which is to say, the Federal Reserve can force prices to increase — create inflation — if it increases the quantity of currency in circulation. In fact, this theory is wrong. The prices of commodities do not depend on the quantity of money in circulation, but on the quantity of socially necessary labor time required for their production. And here, at least theoretically, the case against hyper-deflation falls apart.

Here is the problem at the end of capitalism’s life: If the Marxist writers Moishe Postone and Robert Kurz are correct, the socially necessary labor time of commodities now have two distinct and contradictory measures: its labor time as a simple commodity and its labor time as a capitalistically produced commodity — yielding two quite different potential prices.

To put this in simpler terms, the price paid in a store for a typical commodity like an iPhone is mostly a reflection of the costs of economically wasted labor. The iPhone itself takes very little direct labor to produce, but, if its production is to be profitable, the accumulated costs of waste within the economy requires a massive mark up in the price you pay for it at the checkout counter.

What is this waste? Well, one source is the overhead created by the costly burden of government at present. Since the government doesn’t produce anything, its entire cost is borne by the rest of society. If, for instance, government accounts for about 50% of GDP, this means every product has a 100% markup just to pay for the operating expense of federal, state and local government. So about half the cost of your iPhone goes to cover things like drone attacks on Afghanistan civilians or corn subsidies to agribusiness. These cost don’t appear anywhere unless it comes directly from your wages in taxes, but even in this case the costs must be passed on in commodity circulation and will accumulate there in the costs of each commodity.

So every commodity essentially has two prices: the one that you pay at the checkout counter, which includes all the wasted economic activity in society, and the other, hidden, true price, which is the actual direct cost of producing to commodity. Surprisingly, this latter price is now only a negligible fraction of the total price of an iPhone, a pair of shoes, or even an automobile — the overwhelming bulk of the price of every product you buy consists of the hidden costs of economic waste within society that has accumulated over the past eighty years.

This is why, as I discussed in part one of this series, it now takes as much as seven dollars of debt, or even more, to create a single dollar of wages through fascist state economic policies designed to create jobs. Simply put, this internal discordance in the price of every commodity is a hyperdeflation weapon of mass destruction just waiting for a triggering event. What is making the Federal Reserve risk even the total collapse of the dollar on an insane gamble is the fact that this implosion can be triggered by the mildest hint of deflation. To prevent this event, the Federal Reserve must restart the failed system of debt accumulation that crashed in the financial meltdown of 2008.

Anarchists, libertarians and Marxists have a chance to put sand in the gears of the fascist state and bring it down along with the entire mode of production. All it requires is for us to change the debate over jobs and debt — opposing both Federal Reserve monetary and Washington fiscal policy aimed at expanding still further the system of wage slavery through policies designed to promote economic waste and debt.

But we can do this only if we are willing to take capital and the state head on by demanding an immediate reduction in hours of work until everyone who wants to work has a job, along with the elimination of all public and private debts, and abolition of all taxes.

Anarchists, Libertarians and Marxists need to change the debate on jobs and debt (1)

October 6, 2012 Leave a comment

We have to change the terms of the debate on jobs and debt. We need to insist a job is nothing more than wage slavery and we don’t need Washington’s effort to create more of it adding to this wage slavery even with more debt slavery. It is not like we have to argue existing jobs need to go away; why is Washington creating more of them, when existing hours can be reduced to solve the problem of unemployment rather than more debt?

1. Fiscal policy, or how to create one job on Main Street by borrowing five jobs from Wall Street

In 2011, a congressman made the argument that Obama’s stimulus program had produced jobs at the cost of $278,000 per job. Although the charge was nothing new, it made its rounds on the conservative GOP talking points circuit, and even ended up in the congressional record. This number, of course, was so outrageous by any measure of efficiency that it had to be analyzed by what we might call “clear thinking persons with no agenda”, i.e., the news media.

One “news source” in particular known for its ability to vet these things is PolitiFact.com, and it went after the congressman’s charge. PolitiFact established that the congressman, a Republican, was deliberately distorting facts against Obama’s stimulus program.

At $666 billion, the bill was estimated by the White house to have “saved or created” between 2.4 to 3.6 million jobs. What the congressman did, was employ the low end of the number of jobs “created or saved” and apply it to the total of the bill.

The Obama administration responded that this was unfair, since the money went to more than just creating jobs, it also invested in infrastructure, energy, education etc. Which is an odd response, since obviously the administration included those “investments” in its estimate of jobs “created or saved”. The Associated Press made the further argument that,

“Any cost-per-job figure pays not just for the worker, but for the material, supplies and that workers’ output — a portion of a road paved, patients treated in a health clinic, goods shipped from a factory floor, railroad tracks laid,”

So what AP is stating is that a job created by economic stimulus must account not just for the labor power directly expended, but also the constant capital used up in the course of this expenditure. But then AP performs an almost unnoticed sleight of hand and counts everything  twice. So we count the money spent to build a road in terms of wages and materials, then we count the road as a finished product; we count the wages and material employed to build a clinic, and then we count the clinic as an operating concern.

Once we remove the misleading double counting from our calculation in the argument in the AP version of this story, how this differed from what the congressman said, is unclear. Indeed his criticism was later refined by one conservative media outlet this way:

“He says he never said that $278,000 per job went to salaries, but ‘rather that each job has cost taxpayers $278,000.'”

Five dollars of debt to produce one dollar of wages

So what the worker actually receives of the $278,000 spent to create her job is one thing, and the cost of creating that job is another. Assuming the worker received an average hourly wage of around $19, she would have an annual wage of $38,760, minus taxes. But to receive this $38,760 minus taxes in wages, the taxpayer must pony up $278,000 minus the taxes paid by the worker.

Which is to say, it roughly takes about 7 dollars of spending to create 1 dollar worth of wages using fiscal stimulus. Moreover, this fiscal stimulus must be newly created money, through debt, and, therefore, created out of nothing. If we take the administrations preferred figure of $185,000 per job, this still amounts to 5 dollars of new debt to produce 1 dollar of wages.

Between the GOP and the Democrats, then, there is agreement that it takes somewhere between $5 and $7 of debt to create $1 of wages. For some reason, despite the general validity of the congressman’s claim, Politifact.com decided it was not true on a technicality:

“Contrary to Dewhurst’s statement, the cited cost-per-job figure was not aired by the Obama administration. At bottom, his statement leaves the misimpression that the money went solely for jobs rather than a range of projects and programs, including tax breaks. We rate his claim False.”

There is, of course, another way of looking at this from the point of view of Wall Street banksters. From their point of view, it only takes 1 dollar of wages to create 5 dollars of new debt. Since the banksters are only interested in the accumulation of debt, which sits on his book as an asset, this is a fine ratio.

If the fascist state wants to create one job, it has to borrow the equivalent of five jobs to create this one job. The accumulation of the public debt outruns the income of the members of society who must eventually pay off the debt with their income. For every dollar they get in increased income, their debt obligation increases by five dollars. They must work to pay off this debt, requiring a further extension of wage slavery beyond what is required just to satisfy their needs.

Since after the housing market meltdown citizens can no longer be relied upon to accumulate this debt on their own (they have all become subprime  borrowers) the state now takes on this obligation on their behalf, and raises the funds to service it by slashing their retirement and health benefits, reducing their access to public services like education, and inflating the prices of commodities by depreciating the currency.

This is how the scam works, folks!

You vote for Obama and the Democrats, and they mortgage your life and labor to banksters. They call this mortgaging of your life “progressive fiscal policy”, and sell it to you as a benefit.

However, since the congressman hails from the GOP, an avowed political opponent of the democrat president, he failed to add this additional fact: The argument does not change if, instead of democrat spending, we substitute GOP tax cuts, except that tax cuts are even more inefficient at “creating jobs” than fiscal spending. With GOP tax cuts, as the research suggest, the actual relation between the debt accumulated and the jobs created is aimless and dispersed and rather a bit more difficult to assess. Rather than aiming at some specific form of wage slavery as the democrats do, GOP tax cuts aim solely at subsidizing all wage slavery.

Tax cuts only have some definite targeted effect to the extent they increase the deficit and the flows of state expenditures into the coffers of banksters. While both spending and tax cuts result in a massive expansion of the public debt, in general, the less targeted the accumulation of the public debt, the more it directly favors only the banksters, who, in any case, underwrite this debt. The question is only one of degree, not result.

With democrat spending, the accumulation of debt takes a specific form — a road, a school, or an industry. It is targeted, and, therefore, can be more precisely applied, no matter that is still wasteful. What’s more, as Democrats and Republicans alike already know, the produced product can now be renamed the Obama Bridge-Tunnel Highway to Nowhere, or the Obama Elementary School, or the Obama Green Energy Research Park, or, as is always inevitable, no matter which party incurs the debt, the USS Obama.

If the outrageous cost of creating unnecessary jobs by fiscal policy is staggering, just wait until I next explain what knowledgeable insiders are saying about the cost of the Federal Reserve’s monetary policy.

Reply to @sushi_goat: How does reducing hours of labor work?

September 28, 2012 11 comments

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:

5. C:(Vp+Vu)

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. [47]

“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:

6. s/(Vp+Vu)

In this case, only Vp produces the surplus value shared between both sectors Vp+Vu.

And the formula for profit s/v+c becomes

7. s/c+(Vp+Vu)

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.

Value and the Demise of Capitalism: Reconciling Postone and Kurz

September 20, 2012 2 comments

Posted on the blog, principiadialectica, is a question to Robert Kurz about his differences with Postone on value and the current crisis that is bugging the hell out of me. In an interview conducted in 2010, Kurz is asked to explain his differences with Postone regarding the impact improvement in the productive power of labor has on value:

“For you, with the gains of productivity, capital loses its substance (abstract work) and, with the third industrial revolution, it loses it absolutely. For Moishe Postone, on the contrary, the gains of productivity increase value, but provisionally. According to him, as soon as the gain of productivity has generalized itself, the growth of value is cancelled, the basic unity of abstract work (the hour of work) having been brought back to its initial level. Thus, for you, value is collapsing, whilst, for Postone, value is growing continually then comes back to its starting point. Hence the question: doesn’t that break down the plausibility of the critique of value? Or should we see in this a point undecided at the moment?”

In Kurz’s argument, the gains of productivity gradually result in capital losing its value content; while, for Postone, the gains in productivity result in the expansion of prospective value until the social relation reaches its endpoint. Although both writers end up at the same point — capital is abolished by its internal laws — the description of the process differs in the perspective of the two writers.

The question posed in the interview is which of these two theoretical approaches is valid for the period leading to the demise of capitalism.

Read more…

Social emancipation cannot be founded on labor

September 14, 2012 9 comments


Disconnection from the current relations of production is easier said than done in Kurz’s opinion. It is not a matter of simply seizing a single factory, a retail outlet, an office or a school, nor even of seizing all the factories, retail outlets, offices and schools altogether in a simultaneous uprising in all countries at once. These institutions evolved within the context of commodity production and exchange and are fit only to function within this mode of production. It is not simply a matter of laying hold to them on the day after “the revolution” and employing them for the cause of social emancipation. Says Kurz,

The difficulty consists in the fact that the capitalist form of the functional division of society, as in the case of the capitalist structure of use value, cannot be assimilated, without alterations, into an emancipatory reproduction.

If this argument sounds familiar to you, it should; it is precisely the difficulty the Communards faced in Paris when they took control of the old machinery of the state. They were compelled to dump that entire structure and create a new one on the fly to suit their specific needs. Marx concluded from that experience that the working class could not simply lay hold of the existing machinery of state and wield it for its purposes — that machinery had to be broken. Kurz is extending Marx’s argument well beyond the state to encompass the entire economic mechanism bound up with the capitalist mode of production. And he gives several pretty convincing reason for his conclusion:

First, if a group of workers could seize their own factory, office or school, this institution could not be pulled out of the commodity production system, because the workers don’t produce anything they directly consume. This is already obvious in an office or a school since nothing material is produced in those institutions at all — they only serve as moments in the overall system of commodity production. But, it is also true for workers in an auto factory, a packing plant, or an industrial farm.

Second, even if we assumed a global movement of factory, office and school expropriations that succeeded throughout the world market, we would still be presented with a very great difficulty. Many of these firms engage in business that are absurd outside of commodity relations — like a human resources firm, a private security firm, or contractors supplying the needs of the fascist state military for “commodities” like trident nuclear subs or predator drones. Others pose an ongoing hazard to the public, like GMO producers, pesticides manufacture, or firms constructing and operating nuclear power plants.

Third, Kurz argues there is a grotesque ignorance on the part of capitalist society and its members concerning how the current system as a whole actually functions. Most firms know little about the larger material requirement of their own activity beyond their own suppliers and clients. Frankly, what keeps capitalism working is not the conscious action of the individuals within it, but blindly acting forces operating behind the backs of the members of society. The relations between billions of daily separate acts of production only become visible in the form of innumerable transactions and capital flows.

Fourth, these billions of separate individual acts of production could only be mediated by money relations or, in the best possible outcome, by a new political structure of planning and control, which would have to intervene in social production and would, because of this, bring in its trail the danger of a new managerial elite always ready to usurp control on its own behalf. Moreover, planning, in old Marxist theories of transition, does not overcome the problem of commodity production, but merely mediates it. It simply replaces the role of prices in commodity production with the plan itself as regulator of billions of acts of production. And the plan itself is as much subject to the law of value as are the fluctuations of prices in unplanned social production. By definition, “The Plan” must be the plan of “society” as a whole, in direct opposition to the free conscious self-activity of society’s billions of individual members.

Kurz concludes from this that social emancipation cannot begin, as traditional Marxism holds, with seizing this machinery of production, but only where the act of production bound up with capitalist relations ends:

“An embryonic form such as that of a “microelectronic natural economy”, which supersedes private property in the means of production, cannot be represented at isolated points within the structure of reproduction (which at the beginning only exist in a capitalist form), but only at its end-points—where production becomes consumption. Only at these points is the constitution of a social space of cooperation possible whose activities do not lead back to the market, but are preferentially consumed, in their results, by the members themselves.”

Which is to say, this new form of organization of society must be a self-contained, autonomous, space situating entirely outside capitalist structures. Unfortunately, Kurz fails to actually come up with a model, I think, because he neglects a simple logical implication of his own analysis. In this passage, Kurz treats the material side of capitalist production and consumption as the production and consumption of material objects that can, somehow, be removed from the process of capitalist production as a whole, when it is actually inextricably connected to the production and consumption of values in the process of capitalist reproduction.

This is a common enough mistake — we all make it — but in this case it damages Kurz overall magnificent analysis. Insofar as capitalist production and consumption is conceived, it must be conceived simultaneously as the production and consumption of values, and of material objects. Thus, with regards to this capitalist act, social emancipation should be conceived as having nothing to do either with production or consumption in any form, nor as beginning with consumption, nor with regards to the nexus between the two. This must include both the production and consumption of values and also the material objects in which these values are embedded.

My argument on this point requires us to expose the mystified form on which the entire notion of value rests. Value is not a substance embedded in the commodity itself, as Marx explains in volume 1 of Capital; it is nothing more than the amount of labor time required for the production of the commodity. It, therefore, cannot be separated from the existence of the commodity itself. A society governed by value is nothing more than a society governed by the labor time required for the production of its material needs. It is silly to keep discussing value in its mystified form, as a quality of commodities, once Marx demonstrated this fact. Ninety-nine percent of the stupidities passing the lips of a Marxist consists of treating value as some ethereal substance that permeates the atmosphere of capitalist society.

As a result of this mystification of value most Marxist theories of social emancipation consists of various schemes to set labor on a new foundation when the point of the fucking exercise is to abolish labor entirely. social emancipation is not, and cannot exist, as a new foundation for labor — communist society is not a fucking society of labor. Social emancipation begins and can only begin where the socially necessary labor time of society ends — and this is the whole meaning of the present crisis.

The labor time of society has been pushed well beyond its necessary limit and this has resulted in the formation of a mass of superfluous workers and capital — as many writers like Kurz have demonstrated. The argument of bourgeois thinkers (and in this sense we must include both Marxist and alternative theorists) consists in their refusal to recognize any limits to capitalist accumulation. A society whose thinking is conditioned by the value fetish is a society whose thinking is conditioned by labor — simply put, it is a society conditioned by inescapable material want.

The true perversity of this material want is not that it exists beside actual and real wealth, but that it cannot conceive of wealth in any other fashion than universal want. It, therefore, takes the absence of want as the premise of a social catastrophe that threatens the existence of civilization itself. On all accounts, this universal want, which is the only conceivable form of wealth in a society regulated according to the law of value, must be imposed with all the means available to society.

It is only on this premise that the insane logic of fascist state economic policy can appear rational by a society drowning in unemployment, overproduction and the filth created by its own productive capacities. Marx explains this in the Grundrisse, where he writes that capitalism creates, for the first time in human history, the possibility of free disposable time for the mass of society, but only in the form of surplus labor time by this mass:

“The creation of a large quantity of disposable time apart from necessary labour time for society generally and each of its members (i.e. room for the development of the individuals’ full productive forces, hence those of society also), this creation of [non-labour] time appears in the stage of capital, as of all earlier ones, as [non-labour time], free time, for a few. What capital adds is that it increases the surplus labour time of the mass by all the means of art and science, because its wealth consists directly in the appropriation of surplus labour time; since value [is] directly its purpose, not use value. It is thus, despite itself, instrumental in creating the means of social disposable time, in order to reduce labour time for the whole society to a diminishing minimum, and thus to free everyone’s time for their own development. But its tendency always, on the one side, [is] to create disposable time, on the other, to convert it into surplus labour. If it succeeds too well at the first, then it suffers from surplus production, and then necessary labour is interrupted, because no surplus labour can be realized by capital. The more this contradiction develops, the more does it become evident that the growth of the forces of production can no longer be bound up with the appropriation of alien labour, but that the mass of workers must themselves appropriate their own surplus labour. Once they have done so – and disposable time thereby ceases to have an antithetical existence – then, on one side, necessary labour time will be measured by the needs of the social individual, and, on the other, the development of the power of social production will grow so rapidly that, even though production is now calculated for the wealth of all, disposable time will grow for all. For real wealth is the developed productive power of all individuals. The measure of wealth is then not any longer, in any way, labour time, but rather disposable time. Labour time as the measure of value posits wealth itself as founded on poverty, and disposable time as existing in and because of the antithesis to surplus labour time; or, the positing of an individual’s entire time as labour time, and his degradation therefore to mere worker, subsumption under labour. The most developed machinery thus forces the worker to work longer than the savage does, or than he himself did with the simplest, crudest tools.>”

Social emancipation consists in no more than the mass of society’s members wresting this free disposable time back from capital. This is not time spent in capitalist production (which, as Kurz explains, must be understood as both production and consumption bound up with capitalism, or commodity production generally) but in non-labor for the mass of society, freeing them to develop their own capacities apart from labor.

This self-development has no aim other than that given to it by the individual herself. It is, therefore, no longer “productive” in any sense of that term — neither materially or value-producing — but only the free individual unstructured activity of the members of society. As can be now seen, by resting the premise of the inevitability of the collapse of capitalism on the productive forces created by the digital revolution, and the resulting mass of superfluous workers and capital, Kurz also rendered his argument for a positive program of social emancipation unnecessary. The material for the supercession of capitalism by social emancipation is already given in the form of a mass of superfluous labor and capital produced by the material impact of the digital technology itself. To realize this new stage of society, we need only reduce hours of labor within the logic of value production and realize the result as free, disposable time of each individual.

This is why bourgeois economists, like Paul Krugman, condemn every suggestion that unemployment can be ended by a reduction of hours of labor. This proposal is routinely disparaged by the advocates of fascist state fiscal and monetary policy, who call it a proposal based on the “lump of labor fallacy” that there can be an end to the need for labor. For the apologists of the capitalist mode of production any suggestion hours of labor can be reduced is tantamount to a suggestion there is a limit to capitalist accumulation. And it is why even academic Marxists like Michael Heinrich must denounce Kurz’s analysis and posit in its place (as the blog principia dialectica delightfully put it) a theory of “the eternal return of capitalism”. As Kurz argued, no less than bourgeois economists, “historical materialism “pisses its pants”, so to speak, as soon as it is called upon to define the so-called socialist revolution.” And this is because it is incapable of conceiving human activity outside the fetishistic structures of value production.

The Marxism of the 20th Century is dead and its foul rotting corpse is stinking up the very air we breathe. All the categories of traditional Marxist analysis, having reached the theoretical limits of the expansion of human activity under the value form, can offer no help in defining social emancipation insofar is this emancipation actually crosses the threshold of communist society itself. A completely new discourse is necessary formulated in the concept of freely associated individuals, for whom activity serves as forms of self-development of each individual; and of the further development of society within these forms. This discourse, contrary to most Marxist assertions to the contrary, is littered throughout Marx’s own argument and is the premise of his own critique of social emancipation (i.e., Utopian Socialism) from the start of his career to its end.

Kurz’s argument is not quite yet that discourse, but must be considered the moment when such a discourse became necessary for the further advance of social emancipation. Our job is to elaborate this discourse, showing that it rests on the very premises of existing society – a mass of unemployed labor and a mass of superfluous capital, the premise of wealth that rests on, and cannot be conceived apart from, universal want and privation — that makes possible the unfettered self-development of each individual within society.

When we say that social emancipation is the solution to capitalist crisis, we only mean free disposable individual time away from labor is the solution to the horrors of capitalist austerity, unemployment, poverty and want.