77 thoughts on “Monday Message Board

  1. Jim Rose :
    De long also notes that “Marx’s labor-theory-of-value-schema makes no distinctions between profits on capital that have their origins in luck, theft, and choosing the right parents on the one hand; and profits on capital that have their origins in sacrifice, industriousness, or flashes of genius on the other.”

    That is, don’t get me wrong, our current economic system. Rinehart and Romney receive a ton of praise for being brilliant businesspeople but they started off in a better financial position than 99.9% of the population ($75m corporation and six figure education fund respectively). There is no current distinction between profits due largely to winning the genetic lottery and those due to industriousness or entrepreneurial skills.

  2. Anyone who has even a passing familiarity with Marx will know that Marx’s socially necessary labour basis for exchange value completely distinguishes between profit through theft, and profit through all other occasions.

    Theft constructs bourgeois society. Theft using the coercive power of capital constructs capitalist society. Natural profits construct socialist society.

  3. @Chris Warren

    There seems to be some confusion here. I said GDP was valid as a measure of activity (eg output) despite its drawbacks because it was more closely related to emplopyment than other measures. You appear to suggest relating employment to total hours worked, which is not a measure of output.

  4. @Chris Warren

    Actually, at different points in Das Kapital Marx says that:

    (a) some profits are derived from eploitation of labour and some from utilizing economies of scale, and

    (b) all profits are derived from eploitation of labour

    (a) is used to analyse propensities to invest, while (b) is used to analyse returns on investment and to morally criticise capitalism.

    One may assume that the contradiction/intellectual dishonesty is not a problem for Marx, whose dialectical materialism holds that physical objects like cranes and machine tools contain contradictions.

  5. Tim Peterson :

    There seems to be some confusion here. I said GDP was valid as a measure of activity (eg output) despite its drawbacks because it was more closely related to emplopyment than other measures. You appear to suggest relating employment to total hours worked, which is not a measure of output.


    The confusion is equating “activity” with output. As demonstrated by your brackets.

    Activity is purchased by wages, output is a market measure and is greater because of different factors but debt is one.

    If you conflate “activity (eg output)” you just end up generating a GFC for future generations.

    Marx was analysing capitalism, and noted that capitalist profit was a share of surplus value (along with rent and interest). It is not clear that he intended to sweep all profits up in this criticism.

    Marx’s dialectical materialism does NOT hold that physical objects contain contradictions. It is how they impact in society that may introduce contradictions. Society creates the problems, not material wealth, goods and services in general.

  6. @Chris Warren

    I have never heard of that definition of output before.

    As for Marx, see his analysis of the organic composition of capital and the declining rate of profits.

    It is clear from his ‘bag of flour’ example that he thinks that contradictions are inherent in the nature of brute physical objects (which is a category error).

  7. @Ikonoclast How did you lose your false consciousness?

    Marx predicted the growing misery of working people would lead them to revolt.
    • Joan Robinson noted in 9142 that when the communist manifesto was published, its battle cry ‘Rise up ye workers for you have nothing to lose but your chains’ would have had some currency in 1848.

    • Alas 90 years later, Robinson suggested that this battle cry would have to be amended to ‘Rise up ye workers for you have nothing to lose but your suburban home and your motor car.’

    The forces of history can be cruel to consciousness raising. Not surprisingly, communist revolutions bypassed the industrialised nations where they were predicted to happen exclusively, occurring instead as coups in feudal agricultural economies.

    I agree with G.A. Cohen that there is no group in advanced societies united by:
    1. Being the producers on which society depends;
    2. Being exploited;
    3. Being in conjunction with their families the majority of society; and
    4. Being in dire need.

    Because of the rather unforeseen withering away of the penniless proletariat, Marxism failed to predict the natural course of the evolution of capitalism.

    Cohen further observed that Marxism is equally withered away if justice in the Marxist pattern ‘from each according to ability, to each according to need,’ then workers cannot be entitled to the full value of their own labour.
    • If people are entitled to the full value of their own labour, they are entitled to it regardless of whether or not the distribution within a society adheres to each according to their need pattern.
    • If workers are not entitled to the full product or value of their labour irrespective of the poverty of others, the Marxist concerns about capitalist exploitation loses all of their force.

    Exploitation will exist in the Marxist form in any society in which investment for growth occurs, or in which those unable to work are subsidised by the labor of others. This exploitation is neither unique to capitalism nor something a Marxist should consider wrong

    Labour theory of value can not explain value of found natural objects (valued above labor necessary to get them); the value of rare goods; value appreciation/depreciation over time; and differences in value due to skilled labour.

    • Workers trade possibility of large profits for security against large losses.
    • Capitalist profits are rewards derived from their willingness to take risks.
    • Because Capitalism allows divestment from risks of start-ups, workers are never exploited by employers that do not break-even.

    Menger noted that, for example,
    • whether a diamond was found accidentally or was obtained after thousand days of labour is irrelevant for its value.
    • no one in practical life asks for the history of good in estimating its value

    Nozick has criticised the qualifier “socially necessary” in the labour theory of value as not well-defined and concealing a subjective judgement of necessity. The qualifier reduces the value of an object to the value placed on it by the free market.

  8. I am not, as many know, a Christian, nor a religionist of any sort. I need no fatwa to discourage me from bidding others “Merry Christmas”. I regard the endorsement as at best vacuous and misleading, and now and again, rather worse than that. My standard greeting to the students of my school as we parted ways on Wednesday afternoon was Keep Safe over Christmas! and if there was a little more time than that, enjoy the break!. I could give these in good conscience.

    I believe I can say of this place that despite some unflattering moments, the tone of this place has on the whole been a good thing and the blog has maintained a focus on matters of salience to those of us interested in a world where human reason and evidence for cause inform our decision-making. I have been glad to participate.

    I wish the other participants here good judgement about your interests and how to puruse them without harming others. I wish you and those dear to you felicitous happenstance and ample occasion to share their warmth and solidarity. May your smiles be founded in insight into the human condition and its relation to authentic community and your passions driven by the desire to empower those who are marginalised and to see the burdens of work and the happiness it affords to be shared evenly amongst all who breathe the air.

    To the Professor, my thanks for conducting this blog. This is no small thing, and if I have seemed a little sharp at times, then I apologise. I too need to think as little harder about how I deal with others.


  9. I think Joan Robinsom to be possibly the best writer on economics, emphasis on writer.

    She was brilliant in her insight (and knowledge of Oscar Wilde) when she said once to a conference mainly made up of left-wingers, The only thing worst than being exploited by a multinational was not being exploited by a multinational.

    It didn’t go over very well.

  10. A bon mot is not an argument. A stolen and mangled bon mot is an unoriginal non-argument.

    It’s easy to support late-stage, neoliberal, endless growth capitalism (and carry on with typical hubris and triumphalism) before it hits the final wall. I’ll be intrigued, if I survive, to see the level of support it has after the collapse.

  11. @Fran Barlow
    Pursue, peruse, parse…amazing how often meaning comes from context despite spelling mistakes & misplaced words. So don’t swat the small stuff Fran.

  12. @Jim Rose

    How on earth does exploitation in the Marxist sense occur when workers cooperatives invest for growth?

    Why would a workers co-operative ever think that subsidising those unable to work, constitutes exploitation?

    Its all very well to quote various authors, in a stream of consciousness, but you have to understand what you are saying.

    Of course the labour theory of value (based on socially necessary labour) can explain the value of rare objects (commodities), and obviously appreciation/depreciation of commodities over time. Of course the labour theory is not relevent for valuing objects that are not commodities. This occurs through politics and culture.

    Maybe you should re-read your comments before posting them.

  13. @Nottrampis

    You believe it’s true apparently. If you are a multi-millionaire CEO or shareholder of a corporation then I understand your position though I don’t approve of it. If you are a wage worker supporting the power of capitalist corporations over workers and the environment then you are acting against your own best interests.

    A potential juncture occurred in 1972 with the publication of Limits to Growth. At that stage we had the options of listening to objective science or following the path of “endless” growth. We had the options of listening to scientists or listening to the “Hidden Persuaders” of our advertising and political system. To change our path we would have had to change our political and economics systems very thoroughly. This is because clearly capitalism was and is committed to “endless” growth. We failed to change our path. Hence, capitalism will destroy itself by destroying the environment on which all economic activity depends.

    “Only a madman or an economist could believe that exponential growth can go on forever in a finite world.” – Kenneth Boulding.

  14. @Nottrampis Joan Robinson gazed on China and North Korea with “starry eyes”, as Geoffrey Harcourt put it. In Economic Management in China (1975), she praised the Cultural Revolution! Her colleagues were quite embarrassed.

    In the early 1960s, Joan Robinson got into a debate with a colleague about the great economic success of Korea. A confusing debate until a listener realised that Robinson was talking about North Korea and the other about the South.

    Soon after, there was a coup. The new South Korean dictator knew nothing of economics, but he did know he was surrounded by the old dictator’s cronies so he fired them all. Before a new lot of cronies got properly into place in the bureaucracy, the economy boomed. Tullock considers that South Korea became an open economy as a by-product of a political purge.

  15. @Jim Rose ;
    Clive Hamilton’s Ph D thesis on S Korean industrialisation (published under similar title) made a strong case for it being a Stalinist mode with 5 yr plans by industry sector, import licences contingent on export quotas, ultranationalist labour mobilisation, violent attacks and gaoling of errant bosses, and smashing of the Chaebol industry committees. Not an economic flourishing through unshackling of bureaucratic constraints if that’s what you are suggesting.

  16. @kevin1

    Jim Rose is not really on the ball.

    Didn’t the Korean’s massacre students? Two thousand killed?


    So how come Australian media hardly shed a tear over this, as they did over Tiananmen Square.

    Do capitalist nations have special rights to massacre their citizens? Is this how you get extra economic growth?

  17. Someone with a gun/rifle lured firemen to the scene of a fire, and shot at them, killing two and wounding another two. Also wounded a cop attending the scene. The gun lobby will now—quite predictably—call for firemen to be armed to the teeth when attending fires. It would be funny, if it wasn’t so distressing.

    There has been a lot of commentary about how you have to be a loony to go on a killing spree with an assault weapon. Well, seems to me that you have to be a loony to want to own an assault weapon in civil society in the first place. In the case of the recent mass murder, it was the mother who was the owner of the weapons: her ownerhsip of assault weapons did little to prevent her own murder, committed by her son.

    Cue an outpouring of egregious bulldust about how (assault rifles, machine guns, RPGs) don’t kill people, people kill people.

    Perhaps in the USA they should issue a public buyback of all repeater shooting weapons that aren’t demonstrably required for an express purpose that doesn’t involve killing people, eg for use on the farm. The buyback could be in the form of shopping vouchers, thus providing further stimulus spending for the USA’s retail sector.

    And, as for the retailers who chose to sell assault weapons in the first place? The boards of companies that are multi-product retailers should ponder long and hard on the degree of moral responsibility they have over what they sell: noone is coercing them to sell assault weapons; essentially, it their choice to provide such easy access to people-massacring weapons. Just because they have a few words in an amendment supposedly giving a right to do something, doesn’t mean they are obligated to do it; in any case, the second amendment is silent about the process by which people are armed, or even what kind of weapons they may possess.

  18. “That is, don’t get me wrong, our current economic system. Rinehart and Romney receive a ton of praise for being brilliant businesspeople but they started off in a better financial position than 99.9% of the population ($75m corporation and six figure education fund respectively). There is no current distinction between profits due largely to winning the genetic lottery and those due to industriousness or entrepreneurial skills.”

    These are financial plays that Romney is involved in. He has good sources of cheap ponzi-finance, and he can make money by selling pieces of the business off and perhaps by creating a lot of interest in the remaining shares in a market that has eshewed value investing but that is rather awash in ponzi-finance. Little evidence could ever be found that he was in the wealth creation business. The classic model of wealth creation is where you reinvest profits to improve the effectiveness of the business, mostly in terms of getting hold of better machinery to make the workforce more productive. Here the value for investment is gained willingly rather then extorted; via the fractional reserve/central bank conspiracy against the public welfare. And Romney has to be presumed to be making a fortune by benefiting from being the other side of that racket.

    The claims made on behalf of the alleged benevolence of the super-rich are a misapplication of theory that would work under vastly different circumstances then what now prevails. Nonetheless a situation where broadly speaking people become rich by doing good can prevail if we want it. Actually in practice we find that very rich people don’t seem to be the least bit interested in such a system.

  19. Katz :
    Both Columbine HS and Virginia Tech employed armed guards at the time of their respective unpleasantnesses:
    This was something that the Gun Nut-in-Chief neglected to mention when he called for a universal weaponisation of US public space.

    Logically there is zero incentive for a minimum wage earning security officer to stick around after the bullets start flying. The loony right just can’t seem to grasp that firearms are not magic crime-repellants.

  20. “Subjective theory of value is like heroin – it posits that irrespective how much a commodity cost to produce that someone can be found who will pay more because they value it based on a subjective basis (utility). Once one commodity is sold on this basis, and an artificial profit realised, the capitalist demands more and more and more just to get the same hit…”

    What bizzare and incorrect economic theory. You are going to have to look elsewhere for a natural basis for imperialism.

  21. What bizzare and incorrect economic theory. You are going to have to look elsewhere for a natural basis for imperialism.

    Unfortunately capitalists try to sell at subjective values even within a closed economy. In the final analysis, imperialism is an attempt to get cheap offshore goods to sell in a home market at subjective prices. If spices and cotton were cheap to grow in England there would have been no imperialism throughout India or the Spice islands.

    Maybe you should make a New Years resolution to read up on these issues?

  22. @Chris Warren

    It seems about 90% of people are wired to believe “My culture/nation is always right”. We never did anything wrong in the whole of history and our current privileged and wealthy position is wholly due to our hard work and moral rightousness.”

    This is probably “soft-wiring” (happening after birth) but most of it is done and embedded by adulthood so you cannot reclaim adults who already have this belief set. They are a lost cause and will be reactionaries until the grave. We must concentrate on the young of 0 to 18 years and better educate them to avoid such prejudiced thinking. Only generational attitudinal change can move society to a better position. We have to allow the reactionaries to die off naturally and educate the next generation to be progressive and not reactionary.

  23. There are indeed spurs to imperialism. But it does no good morally, to get it technically wrong where these horrid impulses come from. Neither the Venetian nor the British Empire happened in “a fit of absentqmindedness” But we would wish to be more surgical in figuring out what the impetuous was.

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