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Thread: Capitalism, Marxism and Related Matters

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    Default Capitalism, Marxism and Related Matters

    I want to start a successor to this thread:

    http://www.dissensus.com/showthread....ght=capitalism

    In which (it seems to me) the Marxists got more or less routed by borderpolice.

    Is the labor theory of value of bullshit - and if so, what are the consequences for so-called Marxist theory? Is "capitalism" a meaningful concept, or is it really a more-or-less empty buzzword? Is it fair to say that leftist professors don't really understand economics? Do we even still live under capitalism, or have we entered into a profoundly new system? Or, despite it all, was Old Karl right all along?

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    It's a shame k-punk dropped out - he was making a lot of sense. Although this...
    Quote Originally Posted by k-punk
    It's not capitalism - the system dedicated to the replication of capital - which has agency but Capital, a vast parasitic artificial intelligence system which reproduces human beings as a means of reproducing itself.
    ...takes a little digesting.

    Maybe arriving at a definition of capitalism isn't as interesting or useful as getting at what, if anything, it is that is wrong with money as it is presently used. Although that might amount to the same thing.

    Borderpolice's argument seems to rest on this:
    Quote Originally Posted by borderpolice
    Yes, humans have had preferences and faced scarcity since they emerged on earth. that's what i'm saying. the introduction of money does not change that. money is a form of communication technology that facilitates communication preference decisions and expectations about future contingents. the novel thing about the emergence of money, which happened prior to what you call capitalism, is that it drastically increases the reach of exchange and the probability of acceptance of an exchange. prior to money goods were bartered. just as with money, that involved comparing and exchanging uncomparables.
    what's new is that everyone acceptes money in exchange for a good now. i no longer have to find a butcher who's willing to take my toothbrush for his sausage, which may be difficult, i only have to find a butcher who takes my money. that's much easier.
    Which explanation of money doesn't say anything about why it should be acceptable to make money out of money as far as I can see, and so doesn't actually discuss capitalism as such. Are we going to be back to the 'risk' thing? Because you know there is no real risk in lending someone money if you know for instance that you are going to be guaranteed in the future stuff that you actually need like food and clothes, as well as your money back, rather than more money.

    Also, how does Marx's understanding of money relate to currencies that are not based on real commodities, incidentally?

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    Quote Originally Posted by noel emits View Post
    It's a shame k-punk dropped out - he was making a lot of sense. Although this...
    It's not capitalism - the system dedicated to the replication of capital - which has agency but Capital, a vast parasitic artificial intelligence system which reproduces human beings as a means of reproducing itself.
    ...takes a little digesting.
    It's an idea that I find very compelling as a general concept, although I sometimes think it needs closer analysis of precisely what mechanisms are involved - for instance, if you want to talk about schools and newspapers and Hollywood films reinforcing yer state capitalist hegemony or propogating yer ruling class ideology then it 's worth asking what the anatomy of that reinforcement is, and what's influencing the individual journalists or or teachers or scriptwriters to work in the way they do, rather than always taking it as read that they will because they're part of an organism in whose general interests it is to do so.

    But that's veering off topic already.

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    Default Labour Theory of Value

    I thought borderpolice's main argument was that the labour theory of value was junk. To recap: the idea of the labour theory of value is that all value is ultimately a product of labor - so more value simply equals more labour. The reason why Bill Gates, say, is so rich is because he has exploited more people, and stockpiled their extracted surplus value.

    What follows from this is the idea that there is something inherently, not just incidentally, exploitative about labor under a capitalist system. The workers are being exploited as workers, not just because, for instance, the given conditions they work under (a sweat shop in China, say) are especially bad. From here, you get the idea of a vampiric ruling class feeding on the labor of the masses, and the idea of the proleteriat as the grave-digger of capitalism: the reason why this makes sense, according to the Marxist paradigm, is because they in fact create all of the value: capital is simply parasitic, and nothing else besides.

    But Borderpolice pointed out, what about the concept of risk? Which is connected to the idea of price differentials. If am a sea captain, involved in the business of carrying cargo, I think that I can buy, say, opium low in one place, and sell it high in another. So I go to Afghanistan, invest in some plants, and set-off for America, taking the risk that I'll be intercepted by customs. I'm not, the value of my stock increases. Why? Not because I've extracted some surplus labor exactly, though I may have done that as well, but because I placed a bet and won. And you could see lots of examples of this, if you looked.

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    Quote Originally Posted by josef k. View Post
    I thought borderpolice's main argument was that the labour theory of value was junk.
    It is: LTV is a classical economic theory and as such is a couple of hundred years out of date. No one uses it anymore (except Marxists like my boss, i.e. non-economists). Instead, value is thought to be determined by utility at the margin.

    We've done this topic to death, though, haven't we? Still good though...

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    Quote Originally Posted by josef k. View Post
    If am a sea captain, involved in the business of carrying cargo, I think that I can buy, say, opium low in one place, and sell it high in another. So I go to Afghanistan, invest in some plants, and set-off for America, taking the risk that I'll be intercepted by customs. I'm not, the value of my stock increases. Why? Not because I've extracted some surplus labor exactly, though I may have done that as well, but because I placed a bet and won. And you could see lots of examples of this, if you looked.
    Yep.

    Hence the famous description of Marx by Paul Samuelson: "a minor post-Ricardian".

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    "Which explanation of money doesn't say anything about why it should be acceptable to make money out of money as far as I can see, and so doesn't actually discuss capitalism as such."
    You mean interest right? I don't see why it's a problem, if money now is worth more than money later then it is worth paying to have it now isn't it? If it isn't worth more then no-one will pay for it and interest will disappear.
    This isn't an idea that arose with capitalism as such is it? I mean suppose every day in a bartering system I traded some bread for a pint of milk but one day I didn't have any bread, it's perfectly possible that the milk guy might have said something like "you can have the milk today without giving me any bread as long as tomorrow you give me two loaves".

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    Quote Originally Posted by noel emits View Post
    It's a shame k-punk dropped out - he was making a lot of sense. Although this...

    It's not capitalism - the system dedicated to the replication of capital - which has agency but Capital, a vast parasitic artificial intelligence system which reproduces human beings as a means of reproducing itself.
    ...takes a little digesting.
    It sounds cool, but does it even mean anything?

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    Quote Originally Posted by IdeRich
    You mean interest right? I don't see why it's a problem, if money now is worth more than money later then it is worth paying to have it now isn't it? If it isn't worth more then no-one will pay for it and interest will disappear.
    This isn't an idea that arose with capitalism as such is it? I mean suppose every day in a bartering system I traded some bread for a pint of milk but one day I didn't have any bread, it's perfectly possible that the milk guy might have said something like "you can have the milk today without giving me any bread as long as tomorrow you give me two loaves".
    I didn't mean interest Rich, I meant more broadly. Like, should it be acceptable for a broker to trade in essential commodities that they have no interest in other than to make money out of the trade? Isn't that rather arse about face as regards what we actually require of a market - i.e. a fair and workable distribution and valuation of goods? It all gets a bit artificial doesn't it, with too many scumbags skimming off profits and pushing up the price of things people need just because they have money to play with, while at the same time those valuable commodities are hoarded away from those that need them. So it becomes less about the use value of a thing and more about who has the purchasing power to hold others to ransom for it.

    But interest isn't based solely on inflation (money being worth more now than in the future) anyway. Getting into examples using commodities, and especially perishables actually helps to explain why, it's quite different -

    The guy offering milk has a surplus of milk he can't immediately use, he knows that it would be better to trade it for the same amount of milk, or something else he wants, in the future than to let it go unused and perish. So he wins purely by dint of offering the loan. Obviously the same goes for the bread. Money of course doesn't perish in the same way* so a money lender can happily withhold it until the borrower agrees to pay an agreed interest rate, or whatever.

    * Except by inflation but that of course is easily covered by the lender's other loans at interest.

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    "I didn't mean interest Rich, I meant more broadly. Like, should it be acceptable for a broker to trade in essential commodities that they have no interest in other than to make money out of the trade? Isn't that rather arse about face as regards what we actually require of a market - i.e. a fair and workable distribution and valuation of goods? It all gets a bit artificial doesn't it, with too many scumbags skimming off profits and pushing up the price of things people need just because they have money to play with, while at the same time those valuable commodities are hoarded away from those that need them. So it becomes less about the use value of a thing and more about who has the purchasing power to hold others to ransom for it."
    Ah, ok, I just thought I remembered you saying in the past that you had a problem with interest.
    But in answer to what you're saying - for me a broker is basically like an estate agent; some people have houses, some want houses but the agent has something that they both need - the expertise to put them together. He gets paid for that - unless people find a way to get together without him (and for more cheaply than his fee) and then his job becomes redundant.
    This kind of liquidity is presumed necessary for those who partake in a market - that's why exchanges pay companies to act as market makers.
    I don't think that brokers hoard commodities or raise the prices, as many trades are based on the price going down as up aren't they?

    "But interest isn't based solely on inflation (money being worth more now than in the future) anyway."
    I didn't mean that it was worth more now than in the future because of inflation, I meant that if you have it right now then that is better than having it at some date in the future because you can use it right now whereas if you just know that you are going to get some money in the future you can't spend it until then. If you need it immediately then it's worth paying (in the future) to have the chance to spend that money now regardless of inflation.

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    I didn't mean interest Rich, I meant more broadly...
    I think some of that is self-evident -- assume no or negligable inflation: would you rather have X amount of money now or in ten years time?

    Regarding making money out of money -- why should it be regarded as different to making money out of an other resource?

    Money has a function and it works.

    Isn't that rather arse about face as regards what we actually require of a market - i.e. a fair and workable distribution and valuation of goods?
    I dunno -- Brad DeLong would say that the market is useful for production (and valuation, to some extent), and that we have politics for the fair distribution of goods and services.

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    Quote Originally Posted by Idlerich
    if money now is worth more than money later then it is worth paying to have it now isn't it?
    Why should you have to pay if it doesn't really 'cost' the lender anything to lend it?
    Quote Originally Posted by Idlerich
    If it isn't worth more then no-one will pay for it and interest will disappear.
    No, because money can be withheld without loss to the lender. Interest is a ransom, a racket.
    Quote Originally Posted by vimothy View Post
    Regarding making money out of money -- why should it be regarded as different to making money out of an other resource?
    It's not a resource, it's a representation. Seeing it as a resource is part of the problem I think.

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    Quote Originally Posted by noel emits View Post
    Why should you have to pay if it doesn't really 'cost' the lender anything to lend it?

    No, because money can be withheld without loss to the lender. Interest is a ransom, a racket.
    EH?!?!?!?!

    Of course lending money has a cost -- even absent inflation, there is always an opportunity cost.

    It's not a resource, it's a representation. Seeing it as a resource is part of the problem I think.
    One of the problems with the original thread is that no one could even say what money's functions are.

    Money is a medium of exchange, a unit of account and a store of value, and as such it's very much a resource.

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    Quote Originally Posted by noel emits View Post
    Why should you have to pay if it doesn't really 'cost' the lender anything to lend it?

    No, because money can be withheld without loss to the lender. Interest is a ransom, a racket.
    I do have some sympathy with this position, but it leads to the following quandrary: if there is no interest charged, what incentive is there for the lender? And if no-one lends money, how do you afford anything you can't put up 100% of the capital to pay for in one go - like buy a house or set up a business?
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    "Why should you have to pay if it doesn't really 'cost' the lender anything to lend it?"
    Well, if they lend it, they can't spend it can they? Plus of course there is the risk that it won't come back.

    "No, because money can be withheld without loss to the lender. Interest is a ransom, a racket."
    I don't really understand this. In any transaction either party can choose not to enter into it if they please though obviously they don't gain the advantages they were hoping to from the deal. I just don't see how interest is a racket; it makes perfect sense to me that if I have a pound and I want to buy a lollipop and my brother has no money until pocket-money day and also wants to buy a lollipop then to persuade me to lend him the money now he would have to provide an incentive to cover my loss of lollipop until he can pay me back.

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