67 thoughts on “Monday Message Board

  1. Update, Update, Update, today Julie Bishop confirmed what everyone dreaded that the very generous paid parental leave scheme will be funded by imposing ‘a temporary levy on businesses with a taxable income over $5 million’. In other words, pensioners and families will be worse off under the Coalition as business pass on the costs in the form of higher prices for goods and services.

  2. @Michael of Summer Hill
    so pensioners and families are worse-off as a result of higher taxes notwithstanding the paid parental leave or other government expenditure increase.

    an excellent point worthy of general application.

  3. There are many ways to skin a cat but Labor’s scheme which would pay either mum or dad 18 weeks parental leave at the minimum wage of $543.78 per week is fair.

  4. Jim Rose :@Peter T On the 100th anniversary of capital, Paul Samuelson wrote of Marx:
    “was Marx right as a prophet of the future of Victorian capitalism? The immiserization of the working class, which he thought to deduce from the labor theory of value and his innovational concept of surplus value, simply never took place. As a prophet Marx was colossally unlucky and his system colossally useless when it comes to this key matter…”

    Samuelson is not a suitable authority. He never recognised that Marx’s theory was based on the “socially necessary labour theory of value”. Samuelson nased his understanding on Adan Smiths Labour Theory of Value.

    Also it was Samuelson who said:

    By means of appropriate monetary and fiscal policies, (capitalism) can avoid the excesses of boom and bust and can look forward to healthy progressive growth.

    He is not alone.

  5. Looks to me that the key sentence is “the socially necessary labor theory of value” refers to the social reproduction aspect of social theory.

  6. Update, Update, Update, the Coalition are running a phoney campaign and cannot fund the pork barrelling going on without going into the red. That is correct the figures do not stack up. Abbott is a fraud.

  7. @Chris Warren
    correct me if I am wrong, but you say that “Samuelson is not a suitable authority. He never recognised that Marx’s theory was based on the “socially necessary labour theory of value”. Samuelson based his understanding on Adan Smiths Labour Theory of Value.”

    Samuelson discusses the socially necessary labour theory of value in Marxian Economics as Economics. Paul Samuelson. American Economic Review, Vol. 57, No. 2, (May, 1967), pp. 616-623 at 619ff.

  8. @Jim Rose

    I will have a look at this, but if this is his well known paper on the “Marxian Theory of Exploitation”, then he definitely uses the example of labour needed to produce a deer and beaver – in the Adam Smith manner.

    I would be quite interested to see how Samuelson deals with the “socially necessary” factor as, in essence, all Marx’s concepts are socially expressed (eg Capital is a coercive social power), and economics only has its real problems within its social expression.

  9. Jim Rose

    Obviously Marx was wrong about the immiseration of the working class. But it seems he was right to predict that under capitalism all social values would be, as far as possible, commodified – we no longer regard people as complex social beings but as components in a utilitarian machine. Or at least much of the argument here and elsewhere has this tone (“what does this hospital/war/national park cost, and how much do we ant to pay?” is the typical form of the question).

  10. @Jim Rose

    Unfortunately Samuelson, in this 1967 piece (a tirade), though using the words ‘socially necessary’ did not particularly discuss this aspect.

    Certainly, to understand Marx, you have to assume competitive markets and equilibrium prices on average. As soon as you introduce monopoly, or a degree of monopoly, then relative prices diverge – as Samuelson cites Sweezy and Barran (p622).

    And as Samuelson was aware, in 1865 Marx specifically addressed this point about monopoly.

    So if the challenge to the socially necessary labour theory of value is based on the fact that monopoly power adjusts prices in different ways, then so what? Monopoly always distorts markets, and I do not think you can ever get fair prices with degrees of monopoly. If you have monopoly in society’s commerce then society needs some regulation in the market.

    As rude and crude as Samuelson’s AER 1967 article was, his 1971 was even more confused when he actually presented his understanding of Marx’s labour theory of value. Most people regard his efforts as embarrassing.

    This follows his earlier naive attempt in Amer. Ec. Rev. December 1957 where he played monkey mathematics, wrongly assuming from the outset, that output was a non-linear function of Capital and Labour. For Marx, capital was not productive after the market has adjusted. It only provided a competitive advantage to one capital compared to others to more competitively transfer wealth from labour.

    For Marx output = labour plus replacing circulating capital (raw materials, repairs, depreciation). L + C is linear unless the population expands or L is more heavily exploited or more cheaply obtained. The growth is all L and any capitalist “profit” is an expropriation from this L.

    Samuelson used his false premise to then try to understand Marx’s analysis.

    The 1967 paper was written for a special purpose and is best ignored. I have never seen it referenced.

  11. Jim Rose :@Chris Warren Google scholar list 107 cites of the 1967 paper.

    When I searched on Google scholar for

    samuelson “Marxian Economics as Economics”

    I only got 16 citations as expected. What string did you search for?

  12. @Chris Warren
    Chris – you cant even get fair prices with Oligopoly – which is what dominates many Australian sectors – (and it has ever been this way due to population size and tyranny of distance and exclusive agency deals made with overseas suppliers).

    If you dont believe me…price shoes (a womans first love)…then price the same brand in the US states. There is a difference that cant be explained by cartage plus a reasonable profit. I am taklking double the retail price between the US and heren and I know what I am talking about…because I like shoes!

    Now this is just one market. Im sure many import markets in Australia are the same. The price has not been lowered by “free markets”. There are deals stichted up within exclusive agency agreements.

  13. Jim Rose :@Chris Warren I clicked on the JSTOR link to google scholar

    This is not the best way to use Google scholar as the defaults usually result in relatively broad and “fuzzy” searches.

    It is far better to enter your own search string with appropriate syntax.

    But even then you still get inflated counts as citations included also cover Samuelson self-citing himself.

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