April 1 at 6:16am
http://thenextrecession.wordpress.com/2014/03/31/marx-blogged-to-death/#comments
Marx blogged to death The New York Times has launched a debate about whether Karl Marx was right after all about capitalism ( As the NYT put it in its introduction to the contributions of some well-known economic commen... thenextrecession.wordpress.com Like · · Share
John Streater likes this. John Streater Quite a conversation. 13 hours ago · Unlike · 1 Charles Brown "in the golden, post-war years of Western economic growth, the comfortable living standard of the working class and the economy's overall stability made the best case for the value of capitalism and the fraudulence of Marx's critical view of it. But in more recent years many of the forces that Marx said would lead to capitalism's demise - the concentration and globalization of wealth, the permanence of unemployment, the lowering of wages - have become real, and troubling, once again. So is his view of our economic future being validated?"/////////// As if there wasn't globalization of wealth and permanence of unemployment in the golden , post-war years of Western economic growth. Oh well good that they even have to say Marx is true for the present. 1 hr · Like · 1 Justin Schwartz Is that why he died so young? Because of blogging? 1 hr · Like Charles Brown Hey, 63 is old. I'm 63 and I'm old. I'm claimin old. If i die , say "he was old". 1 hr · Like Charles Brown Marx blogged to death
The New York Times has launched a debate about whether Karl Marx was right after all about capitalism (http://www.nytimes.com/roomford.../2014/03/30/was-marx-right). As the NYT put it in its introduction to the contributions of...See More Was Marx Right? - Room for Debate - NYTimes.com www.nytimes.com While Marx's prediction of our political future was finally discredited with the fall of communism, is his view of our economic future being validated? 59 mins · Like · Remove Preview Charles Brown But again, no matter, Strain has to admit that Marx may still have point about capitalist crises: "There is an inherent instability in capitalism -- cycles of boom and bust lead to human misery. Capitalism does create income and wealth inequality." That doesn't sound good for 'free enterprise' but Strain then tells us that, after all, such crises are not 'inherent' and all this inequality and boom and bust were just leftovers from the Great Recession and capitalism would be soon all right. Great - panic over!/////////////// CB: and of course, even during the "boom" of the economic cycle, there is mass unemployment, poverty, misery, Les Miserables, toujours. 55 mins · Like Charles Brown according to De Long "made his technical economic analyses of little worth". You see, Marx's claim that only labour creates value meant that he could not see rising living standards being achieved if the rate of exploitation of labour rose over time. Marx was "confused between levels and shares" of income. After all, you can have a falling share of value going to labour, but still have rising living standards./////// Oh Brad D. you fool. It was Marx and Engels in 1848 in _The Manifesto of the Communist Party_ and other works who demonstrated how capitalism both raises the living standards of the proletariat over that of the peasantry ( Who do you think buys most of the wealth of capitalist production which presents itself as an immense accumulation of commodities , but the working class ?), and simultaneously shoves the proletariat into "misery, oppression, slavery, degradation, exploitation" 47 mins · Like Justin Schwartz De Long ought to be smarter than that. Marx's point is about relative, not absolute immiseration. Several people, including me, probably explained this to him several decades ago on the old Marxism list on spoons, where he participated. But he's only a Berkeley economist, so what do you expect? 43 mins · Unlike · 1 Charles Brown Strain's arguments are thin indeed. We get a more serious bashing of Marx from top Keynesian Brad de Long, professor of economics at University of California, Berkeley, and who blogs at Grasping Reality With Both Hands. First, he tries a quick demolition of "Marx's fixation on the labor theory of value" which according to De Long "made his technical economic analyses of little worth". You see, Marx's claim that only labour creates value meant that he could not see rising living standards being achieved if the rate of exploitation of labour rose over time. Marx was "confused between levels and shares" of income. After all, you can have a falling share of value going to labour, but still have rising living standards. This, of course, is yet another chestnut: that Marx reckoned wages would keep on falling under capitalism until the point that, as De Long puts it, the working class would starve. And how wrong was that. This is a nonsense view of Marx's immiseration theory. Marx clearly recognised that rising productivity of labour under the dynamic development of the capitalist mode of production could lead to increased wages, except that the workers would have to fight for them. A rising rate of exploitation did not necessarily mean falling wages, although sometimes it could. Again this is all in Marx's Capital - but our esteemed economist seems ignorant of that.
All these misrepresentations of Marx's value theory are deliberate. Marx's theory explains that the world's wealth does not come from capitalists investing, landlords from owning land or bankers from lending money, or somehow from 'technology', but from the effort of human labour. But the product of labour is usurped and appropriated by the owners of capital so there is a direct contradiction between profit and the value created by labour. This is something that cannot be admitted or accepted by the apologists of capital.
De Long tells us that Marx thought that new technology under capitalism would lead inexorably to rising unemployment and Marx was wrong. But what Marx explained was that capital's drive for higher profits would mean more labour-saving technology. That would mean a rise in the ratio of machinery, plant and technology per employee, what Marx called the organic composition of capital. The evidence for this happening over time in every major capitalist economy is overwhelming. The ratio of the means of production to the employment of labour has risen hugely. And this creates a tension between capital and labour on sharing out the new value created and on the continued employment of labour in outdated industries. A reserve army of labour is permanently available for capital to exploit or not. This seems to describe exactly the nature of technology and labour under capitalism, not De Long's distortion. Ironically, De Long says at the end of his piece that maybe robot technology will actually displace human labour permanently after all. But that's another story. 30 mins · Like Justin Schwartz I wouldn't say Brad misrepresents Marx deliberately. I'd say he's in the grip of ideology. 28 mins · Unlike · 1 Charles Brown I'll take a behaviorist/B.F. Skinner posture toward Brad D. Practice is the test of theory for me. 27 mins · Like Justin Schwartz Meaning, Charles? 24 mins · Like Charles Brown This review is excellent ! Michael Roberts is a learned Marxist ! 22 mins · Like Charles Brown Michael Roberts: "Tyler Cowan is a professor of economics at George Mason University and blogs at Marginal Revolution, which covers economic affairs. Tyler is a firm proponent of modern neoclassical economics that starts from the assumption of free mar...See More 22 mins · Like Justin Schwartz Thanks, Charles. Will read after court this morning. 17 mins · Unlike · 1 Charles Brown Oops, just as I compliment Michael Roberts, he makes an error: Yves Smith writes the blog Naked Capitalism. She is the head of Aurora Advisors, a management consulting firm and generally considered more to the left in the economic spectrum. But she soon dismisses Marx's analysis, as she sees it, in her contribution. We are told that Marx had an underconsumption theory of crises under capitalism, namely that "Marx believed that overproduction would lead to pressure on wages, which would prove to be ultimately self-defeating, since the drive to lower pay levels to restore and increase profit levels would wreck markets for goods and services. That's very much in keeping with the dynamic in advanced economies today."
This is the usual view of Marx by many lefts and the modern version of this is to claim that rising inequality of incomes is the cause of crises, or at least the latest one. I have spent a lot of time on my blog explaining both that this is wrong and it was not Marx's view either (see my post: http://thenextrecession.wordpress.com/.../is-inequality.../.) ///// To be exact, Marx does hold that the "ultimate" cause of all crises is the restricted consumption of the masses, although the immediate cause of any given crisis is not an immediate previous fall in overall wages. It's more convuluted than that. But Big Daddy does say: " Let us suppose that the whole of society is composed only of industrial capitalists and wage-workers. Let us furthermore disregard price fluctuations, which prevent large portions of the total capital from replacing themselves in their average proportions and which, owing to the general interrelations of the entire reproduction process as developed in particular by credit, must always call forth general stoppages of a transient nature. Let us also disregard the sham transactions and speculations, which the credit system favours. Then, a crisis could only be explained as the result of a disproportion of production in various branches of the economy, and as a result of a disproportion between the consumption of the capitalists and their accumulation. But as matters stand, the replacement of the capital invested in production depends largely upon the consuming power of the non-producing classes; while the consuming power of the workers is limited partly by the laws of wages, partly by the fact that they are used only as long as they can be profitably employed by the capitalist class._ The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit." _ ( emphasis added - Charles B) https://www.marxists.org/archive/marx/works/1894-c3/ch30.htm Is inequality the cause of capitalist crises? thenextrecession.wordpress.com Is inequality the cause of crises (slumps) under capitalism? Well, the majority...See More 12 mins · Edited · Like · Remove Preview Charles Brown Michael Roberts: "But no matter, because according to Smith, Marx got it wrong anyway about class struggle under capitalism eventually leading to its overthrow. You see, a 'middle class' developed around managers and trade unionists and this has permanently blocked any move to end capitalism. So Marx was wrong in his expectation of change. There was only one blogger who defended Marx's ideas out of the five invited to contribute to the NYT debate - I suppose a fair ratio of views among economists. Doug Henwood is editor of Left Business Observer, host of a weekly radio show originating on KPFA, Berkeley, and is author of several books." //// Doug Henwood , moderator of Left Business Observer email list http://www.leftbusinessobserver.com/lbo-talk.html lbo-talk - a mailing list www.leftbusinessobserver.com archive, economics, politics, political economy, postmodernism, identity politic...See More 8 mins · Like · Remove Preview Charles Brown Henwood makes it clear where he stands: "I don't see how you can understand our current unhappy economic state without some sort of Marx-inspired analysis." Even better, he places the Marxist theory of the cause of crises under capitalism squarely with the movement of profitability. "Corporate profitability -- which, as every Marxist schoolchild knows, is the motor of the system -- had fallen sharply off its mid-1960s highs." As Henwood explains, the strategists of capital moved to raise profitability through a reduction in labour rights and by holding down wages. "The "cure" worked for about 30 years. Corporate profits skyrocketed and financial markets thrived. The underlying mechanism, as Marx would explain it, is simple: workers produce more in value than they are paid, and the difference is the root of profit. If worker productivity rises while pay remains stagnant or declines, profits increase. This is precisely what has happened over the last 30 years. According to the Bureau of Labor Statistics, productivity rose 93 percent between 1980 and 2013, while pay rose 38 percent (all inflation-adjusted)". However, Henwood reckons the current crisis is the result of inequality and low wages reducing consumption and thus the answer is to raise wages and public spending. The problem with this view of Marx is that it does not match the facts: consumption did not slump at all prior to the Great Recession: it was the collapse of the housing market, profits and then investment, not consumption. Raising wages and reducing inequality will help the majority but lower profitability further and thus reignite the capitalist crisis. It's not higher shares for labour that is the answer but the replacement of the capitalist mode of production. But at least Henwood understands better Marx's views, unlike the other bloggers. That did not stop Philip Pilkington, a heterodox economist, blogging that Henwood was wrong. Pilkington correctly refutes De Long's distortion that Marx thought wages must keep falling. As he says "I don't know why this myth continues to bounce around. Everyone and their mother seem to think that Marx was dead sure that real living standards of workers could not rise under capitalism. But this is simply not true...Marx did not argue that real wages could not rise under capitalism. End of story"
Unfortunately, Pilkington relies on the arguments of the 6 mins · Like Charles Brown Michael Roberts does not understand Marx on this point: "The problem with this view of Marx is that it does not match the facts: consumption did not slump at all prior to the Great Recession: it was the collapse of the housing market, profits and then investment, not consumption. Raising wages and reducing inequality will help the majority but lower profitability further and thus reignite the capitalist crisis. It's not higher shares for labour that is the answer but the replacement of the capitalist mode of production."
"There was only one blogger who defended Marx's ideas out of the five invited to contribute to the NYT debate - I suppose a fair ratio of views among economists. Doug Henwood is editor of Left Business Observer, host of a weekly radio show originating on KPFA, Berkeley, and is author of several books. Henwood makes it clear where he stands: "I don't see how you can understand our current unhappy economic state without some sort of Marx-inspired analysis." Even better, he places the Marxist theory of the cause of crises under capitalism squarely with the movement of profitability. "Corporate profitability -- which, as every Marxist schoolchild knows, is the motor of the system -- had fallen sharply off its mid-1960s highs." As Henwood explains, the strategists of capital moved to raise profitability through a reduction in labour rights and by holding down wages. "The "cure" worked for about 30 years. Corporate profits skyrocketed and financial markets thrived. The underlying mechanism, as Marx would explain it, is simple: workers produce more in value than they are paid, and the difference is the root of profit. If worker productivity rises while pay remains stagnant or declines, profits increase. This is precisely what has happened over the last 30 years. According to the Bureau of Labor Statistics, productivity rose 93 percent between 1980 and 2013, while pay rose 38 percent (all inflation-adjusted)". However, Henwood reckons the current crisis is the result of inequality and low wages reducing consumption and thus the answer is to raise wages and public spending. The problem with this view of Marx is that it does not match the facts: consumption did not slump at all prior to the Great Recession: it was the collapse of the housing market, profits and then investment, not consumption. Raising wages and reducing inequality will help the majority but lower profitability further and thus reignite the capitalist crisis. It's not higher shares for labour that is the answer but the replacement of the capitalist mode of production. But at least Henwood understands better Marx's views, unlike the other bloggers." -Michael Roberts
Marx blogged to death
by Michael Roberts
http://thenextrecession.wordpress.com/2014/03/31/marx-blogged-to-death/#comments