So, I got feedback from three people who, in one way or another, say they don’t understand my last post on my conversation with Andrew Kliman. One person posting on Reddit, complained it was too dense; another wondered if I was advocating a return to the gold standard; a third person, who I asked to read it and give me feedback, began to have difficulty with it about halfway through it. Specifically that person had difficulty understanding my discussion of the “transformation problem”.
This is three more examples of my “tin-ear”, which expressed itself in my disagreement with Andrew. I have not been able to explain “my point” in a way that is not abstract, or explain the relevancy of the various statements I make to real events within society. Part of this is because I am a “Marxist” in the same way I could be considered a “Darwinist” — I am not an expert on either. The theory makes sense to me, and I accept it as a reasonable explanation for how the world works.
But, if someone argued a eugenics distortion of Darwin, I could not argue against that person by quoting Darwin. And, if someone argued a Keynesian distortion of Marx, I probably could not argue back using quotes from Marx. Until recently I was more a leninist than a “Marxist”; having read a lot of Lenin, but little more of Marx himself than the Communist Manifesto. And, neither of them had I read for more than two decades.
What got me interested in Marx again was my interest in reducing hours of work, and being handed a copy of Moishe Postone’s, “Time, Labor and Social Domination“. (PDF) Until I read that book, I considered reduced hours of work a nice idea for relieving the stresses of overwork and providing a little more vacation time, but not much else.
By the time I got to the end of it, I realized everything I had understood about communism was complete garbage.
To this day, I’ll bet I understand less than 25 percent of Postone’s argument; but it was enough to convince me getting rid of labor was not just a neat idea, but the entire point of the social revolution. I never knew this before I read Postone’s book — and it was very difficult for me to understand it even after I read it. But once armed with the idea when I returned to reading Marx again (really for the first time), evidence of this idea was all over his writings.
So, when I made the rather innocent suggestion to Andrew Kliman that he take a look at gold, I was pushing an agenda. And, that agenda can be framed by the question:
“Is the dollar really money?”
However, behind the innocent question is the entire point of the social revolution: the abolition of labor — in Marx’s sense of the term, that is, productive activity that creates value.
For several years now Fred Moseley, who I mentioned in my last post, has sponsored as small gathering of Marxists to discuss what money is. The question is typically framed as,
“Can the dollar do what gold does?”
Within Marx’s theory, of course, the dollar can do some of the things gold or another commodity money can do. For instance, it can serve as medium for circulation of commodities, for the purchase of the commodities we use every day. And, according to Marx, even when gold serves as money in an exchange, it is just like the dollar — a mere token of money.
Everyone at these gatherings seems to agree on that dollars can work just as well as money to buy groceries, but the controversy is whether it can act as measure or store of value;
and, thus, whether it can serve as the standard of prices of groceries.
But, framing the question this way is backward. It is not whether dollars can do what gold can do, but can gold do what dollars can do? The real question here is:
“What can dollars do that gold can’t do?”
The answer to that question is staggering: gold cannot under any normal circumstance represent a quantity of labor time that is not socially necessary.
Gold, in other words, cannot represent labor time that is wasted, unproductive, and does not create value. Marx insists on this limitation in his theory:
As materialised labour-time gold is a pledge for its own magnitude of value, and, since it is the embodiment of universal labour-time, its continuous function as exchange-value is vouched for by the process of circulation.
The limitation on gold is that it cannot express labor time expended by society that is materially unnecessary to the satisfaction of its needs. Marx’s theory does not work if this argument is thrown out. If dollars were a pledge for their own value in stead of completely worthless scrip, dollars would be money — but they do not have value and cannot stand as a pledge for the value of anything else. So, what does this mean for society?
It means gold cannot serve as money in a society where there is a lot of unnecessary, wasteful, and unproductive work. Eventually, the circulation of gold in such an economy will halt, and a credit crisis will ensue. I believe this is exactly what happened in the Great Depression, and is why the dollar was debased from gold.
Fred Moseley disagrees and argues dollars can represent socially necessary labor time. As I quoted Moseley previously, he states:
…money does not have to be a commodity in Marx’s theory, even in its function of measure of value. The measure of value does not itself have to possess value. Inconvertible paper money (not backed by gold in any way) can also function as the measure of value. In order to function as the measure of value, a particular thing must be accepted by commodity-owners as the general equivalent, i.e. as directly exchangeable with all other commodities.
I want to state for the record that Moseley’s argument is neoclassical economics masquerading as Marx’s theory. I want to call Fred Moseley out on this, because it is not Marx’s theory. To assume worthless dollars can serve as measure of value, is to assume the value of a good is its price. As the Wikipedia states:
In neoclassical economics, the value of an object or service is often seen as nothing but the price it would bring in an open and competitive market. This is determined primarily by the demand for the object relative to supply. Many neoclassical economic theories equate the value of a commodity with its price, whether the market is competitive or not. As such, everything is seen as a commodity and if there is no market to set a price then there is no economic value.
In Marx’s theory, the price of a commodity expresses the value of the commodity but is not identical with it. In neoclassical economics price and value are the same thing. However, this is not just a geeky debate over the interpretation of something a dead guy wrote 150 years ago. It has real world consequences: the neoclassical identity of the value of a commodity with its price basically states everything with a price tag is socially necessary! So, if you want to recruit Guatemalan teenagers under the DREAM Act to kill Afghan mothers, the labor time required to do this is necessary because it has a price. Marx’s theory, on the other hand, states the purchasing power of gold can only reflect labor time that is actually socially necessary and killing Afghan mothers is not socially necessary by any stretch of the imagination!
The difference in the quantity of labor time dollars can represent and the quantity of socially necessary labor time gold can express is the sum total of superfluous labor time of society, that Postone deduced from Marx’s theory. Postone writes:
The difference between the total labor time determined as socially necessary by capital, on the one hand, and the amount of labor that would be necessary, given the development of socially general productive capacities, were material wealth the social form of wealth, on the other, is what Marx calls in the Grundrisse “superfluous” labor time. The category can be understood both quantitatively and qualitatively, as referring both to the duration of labor as well as to the structure of production and the very existence of much labor in capitalist society. As applied to social production in general, it is a new historical category, one generated by the trajectory of capitalist production.
Until this historical stage of capitalism, according to Marx’s analysis, socially necessary labor time in its two determinations defined and filled the time of the laboring masses, allowing nonlabor time for the few. With advanced industrial capitalist production, the productive potential developed becomes so enormous that a new historical category of “extra” time for the many emerges, allowing for a drastic reduction in both aspects of socially necessary labor time, and a transformation of the structure of labor and the relation of work to other aspects of social life. But this extra time emerges only as potential: as structured by the dialectic of transformation and reconstitution, it exists in the form of “superfluous” labor time. The term reflects the contradiction: as determined by the old relations of production it remains labor time; as judged in terms of the potential of the new forces of production it is, in its old determination, superfluous.
I did not invent this; Postone deduced it from Marx’s discussion of superfluity of labor time. It is on page 374 of his book.
What this implies, as I stated to Andrew, is that eventually the price of every single commodity in our society is far higher than its value! Or, to put this another way: the labor time exchanged for every single good in dollars must be greater than the socially necessary labor time required to produce it in gold. Although, on the surface, I appear to violate Marx’s law of value, in fact this “violation” is necessary to posit the existence of superfluous labor time. I have, in fact, no more violated Marx’s law of value, than he does by saying capitalism is doomed — a declaration that requires the actual, and not simply theoretical, overcoming of the law of value.
It is true, Marx states the value of a commodity expresses the labor time socially necessary for its production. And, it is true to state there is an equalization of the rate of profit. But, to imagine these two laws sit together tanning themselves under a bright Caribbean sun, in loving embrace is a fantasy. They are antagonistic forces, each seeking to overthrow the other, and engaged in a life or death struggle within Marx’s theory. Marx declares, the law of the average rate of profit must win out, and thus destroy itself along with the law of value. Social labor in the form of capital, wins out over the market, only to destroy the very premise of its own existence.
What practical bearing does this have on the struggle today?
The practical bearing is that it makes the rift between Marxism and anarchism moot. If, my reasoning here can stand up to challenge, almost all labor time in our society is unnecessary. But, the entire difference between Marx and Bakunin consisted of the necessity for labor owing to the relatively low development of the capitalist mode of production in the late 19th Century and does not apply to us today. Marx’s criticism of the Gotha program was all about necessary labor time, as well. However, if, as gold measure of GDP suggests, at present almost all labor time expended in our society is superfluous, the higher stage of communism is immediately or almost immediately attainable. Which, itself implies the state can be done away with in its entirety. The state is, and has always been, nothing more than the necessity for labor imposed by one section of society on another. Even the proletarian dictatorship is nothing more than making necessary labor a compulsory requirement for everyone in society — including the former owners of property.
If labor at this point is almost entirely superfluous, so is compulsory labor for any and all.
For this reason, it is obvious why creating work has become the over-riding preoccupation of the fascist state. Without more hours of labor in ever increasing quantities, the entire edifice of class society must collapse. Without fascist state economic policy to “promote job growth”, the state itself cannot exist. In the final analysis, directly or indirectly, the growth of the state is the only means to keep capitalism alive. The fight against the state, on the one hand, and the fight against capital, on the other, comes down to the fight against overwork. It comes down to freeing society forever from the burden of labor, and the stultifying impact of being treated as draft animals.
Superfluous labor time is the expenditure of human labor that does not create value; that does not, directly or indirectly, satisfies human needs. Unnecessary labor neither produces things that satisfy real human needs or the things necessary to produce those things. We can, as an example, point to military expenditures, subsidies for agribusiness (to be really concrete). But, superfluous labor is far more nuanced than just these gross and obvious examples: the entire state apparatus — more than 50% of GDP — falls in this category. As does the entire financial industry.
My list cannot be exhaustive, since the point is that what is necessary must be decided in association by the members of society together. And this association has an incentive to minimize necessary labor to its smallest amount since absolute freedom only begins where necessary labor time ends.
In association, there is altogether different incentives with regards to hours of labor: instead of finding work to do, people have incentive to minimize labor. A communist political program, I think, would call for an immediate reduction of hours of work by some definite amount — say, 20 percent — and would encourage people to figure out what expenditures of labor time beyond this are also not necessary, in order to further reduce hours. Because the incentive of society is to end all necessary labor and enjoy free time to pursue whatever interest we want.
Unlike bourgeois politicians, communists can genuinely run on a platform of really smaller government and mean it. Communists are the only politicians who can really get elected promising a government that does less, and spends less — and can actually realize this promise in practice. This turns the entire debate on government spending and deficits on its head in a way that is unexpected by the two fascist parties. Moreover, it is a demand that cannot be duplicated or co-opted by bourgeois politicians in either party.
Now, if you cannot make a communist program out of that, and appeal to the mass of society, you just don’t deserve to call yourself a communist. Anarchists and Marxists can continue playing their silly little sectarian games with each other, or they can actually accomplish something. If you are not focused on getting rid of the state, capital and wage labor, you might as well shut the fuck up, stop writing your useless books, and get the fuck out of the way.
Because, frankly, you’re just using up precious oxygen.
Tags: Andrew Kliman, Bohm-Bawerk, boom and bust, contraction phase, Depression, devaluation of the dollar, Executive Order 6102, Federal Reserve Bank, Fred Moseley, gold measure, great depression, history of the great depression, Moishe Postone, monetary policy, Paul Samuelson, recession, roosevelt administration, state monopoly, transformation problem