August 8, 2012
"Proletarian centralism in setting economic and social priorities, and then collectively organizing to implement them in the workplace, is a powerful weapon -against- bureaucratic arbitrariness, abuse, and corruption. It is the opposite of the use of administrative, command-style methods of organization where clear lines of responsibility for decisions and their implementation disappear into a maze of bureaus. Progress toward greater solidarity and cooperation among working people is also destroyed by methods of administration and management that promote the maximization of profits by competing individual state enterprises."

— Jack Barnes

9:26pm  |   URL: http://tmblr.co/Z57pbxR1m9WC
Filed under: Jack Barnes Cuba Economics Economy Socialism Proletariat Centralism 
June 1, 2012
A Review of Kliman’s “The Failure of Capitalist Production” (unedited!)

“The Failure of Capitalist Production” is essential reading for the left— from liberal to Stalinist. Responding to the recent resurgence of advocates for Keynesian style “fixes” to capitalism, Kliman presents the case that papering over problems with state intervention delays, but actually intensifies the inevitable crisis. Kliman empirically deconstructs the arguments which blame the 2007-2008 crisis of capitalism on “greed” rather than inevitable structural flaws in capitalist production— in his words “Blaming the crisis on greed is like blaming a plane crash on gravity”. His scholarly rigor is impeccable, processing slowly and deeply how statistics are manipulated by the left and right to affirm reformist solutions to stabilizing capitalism. Analytically reviewing the economic trouble of the 70’s, he comes to the conclusion (against his own intuition as he explains) that Keynesian policies, coupled with the tendency of the rate of profit (LTRPF) to fall, began a period of stagnation that we have never recovered from. In fact, nearly all of the problems we try to pin to the unique policies of neo-liberalism (unemployment, wealth inequality, low investment in infrastructure, borrowing out of proportion to GDP growth) began in the Keynsian 70’s The main thrust of the book is to explain how the LTRPF can hold water against generally excepted framework from the Okishio theorem, and the claims of dogmaticism by other Marxists, with the implication that turning toward neo-liberalism or the welfare state are equally untenable.

The tendency in Marxist advocated by Kliman and others is called “TSSI”, the “Temporal Single-System Interpretation” that points to the LTRPF as a latent, but persistent cause of crisis, rather than some holy grail that can provide ready-made analysis when things go wrong. The “temporal” in TSSI measures the rate of profit arguably in the way Marx himself did, by looking at the aggregate of total investment in the initial purchase of the means of production, and then measuring this number (historically adjusted for inflation and the like) against produced surplus. This is counter to the tendency of Marxists and some bourgeois economists to measure the rate of profit merely as a relationship between surplus and the portion of constant capital that one is replacing. “Single-System” refers to the correlation between value (socially necessary labor time for production) and price(market variance of value): the relationship is single but irreducible. These points may seem semantic or obscure, but the implications are crucial for a strong analysis, and also for politics. Kliman uses the TSSI as an interpretive tool to combat modern left economic trends, as well as defend Marx from charges of inconsistency that have become orthodox.

The fashionable jargon around “financialization”, the move to a primarily consumer based economy, and the concept of “deindustrialization” are all put through the ringer; Kliman asserts in fact that between 1981 and 2001 corporations invested more in production than in 1947 to 1980. It is perhaps most boldly stated when he explains “The data therefore fail to support the notion that “finance” has become uncoupled from the “real” economy. No neo-liberal shift away from productive investment in favor of portfolio investment took place. The entire fall in the rate of accumulation is therefore attributable to the fall in the rate of profit.” Coupled with the statistic that the global proletariat has actually doubled since the 1970’s, the alleged paradigm shift argued for by post-Marxist/communization theory celebrities like Hardt and Marazzi become rather weak. Marazzi’s contention that “The extraction of value[…] enters directly into the sphere of the circulation of capital” through debt is countered effectively by Kliman, who argues that “ Sales activities, labor performed in financial, real-estate, and insurance industries, and legal activities transfer ownership of already-existing value; the labor of security personnel and some managerial activity protects already-existing value; and the labor of accountants and bookkeepers and some other managerial labor keeps track of already-existing value.” (my emphasis)

Now this may seem counter-intuitive to some, as debt makes up an increasing portion of the GDP, and most of us work in the service sector, or know someone who does. This doesn’t alter the fact that industrial production is at an all time high, and that the debt and securities “explosion” does nothing to fundamentally alter the way value (not to be confused with wealth) is created. Kliman elucidates to the contrary: “Production Investment spending has increased 5 times faster since 1933 than consumption spending. Capitalism doesn’t produce for human need, it is production for productions sake.” Segmenting financialization as the new paradigm over classic production, regardless of the degree to which the two are intertwined, masks capitalisms “dirty little secret” of surplus-value, and has the political ramifications of shifting our analysis away from the working class as the fulcrum for mobilizing and defeating the capitalism. It is pure commodity fetishism to believe that the mere circulation of wealth can stimulate its own surplus-value: the reality of this comes to light when the bubbles burst, and serious liquidity issues arise in regard to these immaterial assets. Debt and financialization are responses to cope with the underlying contradictions of capitalism itself.

Kliman also argues against Harvey and Luxembourg that surplus can increase indefinitely, and that attempting to explain imperialism by claiming capitalism needs to expand outward to find markets for realizing overproduced commodities is misguided. The faulty framework is the assumption that all production is slated for consumption by persons, whereas the majority of value is realized immanently among capitalists. “Let us consider businesses’ productive consumption demand— in other words, their investment demand. It consists of spending by businesses to build structures (factories, malls, offices, and so on), as well as purchases of machinery, other equipment, and software. If investment demand rises, and the rise is large enough to offset the fall in personal consumption demand, a decline in wages or workers’ share of income does not lead to a decline in total demand. It therefore does not lead to an economic crisis or recession. ” The fallacy of assuming that production need be geared toward human consumption stems from the idea that capitalism is a system designed to meet human needs in some way, whereas in reality capitalists would be (and mostly are) wholly content with selling amongst each-other. Kliman goes into great detail on the way the surplus is internally realized, ending with some equations that are a bit above my head, but from following the logical argument, I can see the consistency with Marx’s analysis in Capital volume 2. The evidence to back this claim is partly in relation to the 2008 crisis: “In the 65 years from 1943 to 2007, real personal consumption spending in the U.S. declined only twice, in 1974 and 1980, while there were 23 years in which real gross private domestic investment spending declined. Moreover, the percentage decline in consumption spending in 1974 and 1980 was on average just 7 percent of the percentage decline in investment spending. ” Further evidence emerges when a direct comparison is made: “In the case of the U.S., there is also very good evidence that the share of income devoted to investment rose, and the share devoted to consumption fell, during the three-quarters of a century following 1933, the trough of the Great Depression. ” (investment here referring to investment in the Means of Production)

The most controversial thesis of the book, especially for those of us on the left, is that equal wealth redistribution does not promote a healthy economy. This is of course the political conclusion of underconsumption theory: that people are unable to buy the products they make because of the increasing exploitation and wage depression. The unfortunate reality is that taking a portion of profit from capitalists, who primarily are trading amongst themselves, is actually a detriment to the profit rate, which is at the end of the day the fundamental underpinning of a healthy economy. This isn’t a call to abandon the fight for living wages, or universal health-care, or any of that good stuff; it is a warning that there is no solution within the capitalist economic relationship. To escape perpetual crisis and poverty for the vast majority of people, a revolution must eliminate these perpetuating institutions. The revolution is essential not merely as a measure of vengeance, justice, and morality— the revolution is a necessity to unburden our world from its massive debt by the direct destruction of capital value, and to assure that our new world is unfettered from value creation entirely. No reform or limitation to capitalism can succeed, as capital cannot abide a barrier, and will do it has done since day one: find a way through any fences we build to restrain it. Communism is not a utopian concept, it is the only realistic solution. Kliman elaborates: “Such risk exists only because lenders and borrowers are separate and opposed entities; it would not exist in a communal society. Indeed, the very notion of credit would be meaningless in such a society. Just as an individual or household cannot obtain credit from itself, repay itself, or default on its obligation to repay itself— it simply decides whether to use its resources or hold on to them— neither could a communal society. ”


The excitement around now cliché concepts like “prefigurative politics”, “building a new world within the old”, and other reformist garbage like Hakim Bey’s “Temporary autonomous zone” are also regarded contemptuously by Kliman: “This brings me to the notion of developing socialism within capitalism, enlarging the space of the commons or whatever. Unfortunately, it cannot be done. It has been tried (for instance, in the Israeli kibbutzim) and it does not succeed. The economic laws of the larger system will not allow it. If you buy from the capitalist world “outside,” you also have to sell to it in order to get the money you need to buy from it, and you will not sell anything if your prices are high because your costs of production are high. And if you have debts, you have to repay them.” (my emphasis) The seeds of Stalin’s “socialism in one country” are sown in the conception of creating a community or society that functions in capitalism, yet against it. This is important to firmly lay into anyone and everyone that believes we can overcome this system without a revolution, or that this revolution cannot succeed without an internationalist basis. By “revolution” I don’t mean inter-personally, or temporarily, in art, or the latest Apple product— I mean the working and oppressed peoples, collectively assuming power, smashing the capitalist social relation, and implementing global systematic oppression of the ruling class and their cohorts. As Kliman says “It seems utopian, but we have no alternative”; We have a lot of work to do.

(P.S.) I will forgive the unwarranted criticism of Lenin at the end… this time!


-M

2:59pm  |   URL: http://tmblr.co/Z57pbxMYrwlF
Filed under: Capitalism Crisis Currency David Graeber David Harvey Economics Economy Hakim Bey Keynes Kliman Liberal Marxism Money Neo-Liberalism Occupy Political Economy Revolution The Failure of Capitalist Production Temporary Autonomous Zone. 
May 31, 2012
"Marx uses the terms “value” and “surplus-value” to refer to specifically capitalism, a historical organization of the economy limited to certain times and places… to argue that value and surplus value are necessary to consider women’s work meritorious is to fall prey to “commodity fetishism”, the notion that people have no “value” without being able to produce commodities and money. The social and ethic use of the term “value” has been supplanted by the economic connotation, the production of profit for the expansion of capital."

— Ann Davis

4:50pm  |   URL: http://tmblr.co/Z57pbxMVIqty
(Notes: 1)
  
Filed under: capitalism Capital Economics Marx Feminism Economy Capitalism Value theory 
May 9, 2012
Lenin and Marx on the true nature of Capitalist Crisis

“It is a pure tautology to say that crises are provoked by a lack of effective demand or effective consumption. […]. The fact that commodities are unsalable means no more than that no effective buyers have been found for them, i.e. no consumers (no matter whether the commodities are ultimately sold to meet the needs of productive or individual consumption). If the attempt is made to give this tautology the semblance of greater profundity, by the statement that the working class receives too small a portion of its own product, and that the evil would be remedied if it received a bigger share, i.e. if its wages rose, we need only note that crises are always prepared by a period in which wages generally rise, and the working class actually does receive a greater share in the part of the annual product destined for consumption. From the standpoint of these advocates of sound and simple common sense, such periods should rather avert the crisis. It thus appears that capitalist production involves certain conditions independent of people’s good or bad intentions, which permit the relative prosperity of the working class only temporarily, and moreover always as a harbinger of crisis.”
-Karl Marx; Capital Vol. 2

“This brings us to the question of why a capitalist country needs a foreign market. Certainly not because the product cannot be realised at all under the capitalist system. That is nonsense. A foreign market is needed because it is inherent in capitalist production to strive for unlimited expansion — unlike all the old modes of production, which were limited to the village community, to the patriarchal estate, to the tribe, to a territorial area, or state. Under all the old economic systems production was every time resumed in the same form and on the same scale as previously; under the capitalist system, however, this resumption in the same form becomes impossible, and unlimited expansion, perpetual progress, becomes the law of production.”
-Lenin; A Characterization of Economic Romanticism

“The real barrier of capitalist production is capital itself”
-Karl Marx; Capital Vol. 3

8:46pm  |   URL: http://tmblr.co/Z57pbxLC0cAN
(Notes: 8)
  
Filed under: Capitalism Marxism Marx Lenin Overproduction Crisis of Effective Demand Economics Political Economy Liberalism Keynes Capital 
May 27, 2011
The Monopoly of Ideas

Ayn Rand indoctrination in Universities:

http://www.alternet.org/teaparty/151066/ayn_rand_u_rich_conservatives_—_not_just_the_kochs_—_buying_up_professors_and_influence_on_campus

________________________

What if I taught Atlas Shrugged by guiding students through a semester-long process of ripping apart every single page, while delivering a well-versed political critique of the socially abhorrent “philosophy” of objectivism? (Well, I would be immediately fired without recourse.) I’ve read several criticism of the university-as-corporation over the past few years, though they’ve tended to focus more on the consumer attitudes of students, and pressures exerted on professors who are actually trying to get people to challenge themselves, and not just fill up grade sheets with easy As. This article traces the problem to the source: massive conservative funding and privatizing agendas, which are successfully eroding any remaining semblances of oft-celebrated ‘academic freedom’ in a tide of money and propaganda. 

 Looking back, my seemingly liberal liberal arts education failed to expose me to the interconnected systemic oppressions of race, class and gender, or even to give me a clear picture of the kind of country we’re living in: an imperialist, capitalist, military dictatorship masquerading as democracy. I had to realize this outside the academy, through radical writing and communities, with an entry point through feminism. Admittedly, in college I mostly studied English Literature, which tends to put you out of touch with what’s happening in the world (not by inherent necessity, of course—I believe the study of literature can be as politically relevant as any study of history—but through the musty-eyed, obfuscatory way literature is often taught in classrooms, sequestering the students away into realms of pure language, symbols, motifs and themes which scrape the surface of real-world problems, but never rip off the skin). And in grad school, I did Creative Writing which is even more individualistic, elitist and careerist; despite a writer’s necessary engagement with “the real world,” discussion of this engagement usually focused on garnering material, profiling a readership, or navigating the bureaucracy of the publishing industry. Rarely did we talk, except in the abstract, of the political potential of writing, or engage with social problems beyond their narrative utilization within a story to create ‘conflict’. What I experienced was a friendly, supportive, intellectually-curious, but ultimately enclosed, self-congratulatory and bourgeois community of writers reading and critiquing each other’s work, with the intent of somehow making money off of writing.

Even after a year-long study of globalization as part of a community college honors program, which employed an economic, social and political analysis of this capitalist phenomenon, I emerged with a hazily rosy image of a more connected, communicative world, despite some problems. Though we talked about global homogenization and the destruction of indigenous cultures, the general attitude was of a Thomas Freidman-y, flat-earth optimism which espoused the benefits of micro-credit, the internet and international markets. Though I may be unfairly misremembering, due to my lack of engagement, it’s certainly true that imperialist wars, corporate destruction, world wide wage repression, and international racism were not made the focus of our discussion. No marxist or feminist perspectives were presented, nor was any sustained and integrated criticism of US. imperialism, neoliberal doctrine, or capitalism as the dominant economic mode; we read Friedman instead of Chomsky. We talked about the alienating technologies, but not the alienation of capitalist production. Taking the course now, I’m sure I would have serious objections, but at the time I was aimlessly apolitical and spent most classes doodling. I certainly can’t blame my professors for that, but in retrospect I can see my education marked by the insidious effects of a cultural climate which forces out into the illegitimate fringes any radical critique of the status quo.

Not once in my education did the curriculum challenge the existence of capitalism: sure there were liberal criticisms of its more egregious excesses such as corporate monopolies and extreme wealth inequality. But there was  no theoretical or material understanding of the fact that these problems are endemic to the system, and certainly no exploration of alternative economic theories or collectivist societies (except as pieces of trash in the dustbin of history). My liberal arts education was truly liberal in its emphasis on individual development, abstract freedoms, and fundamental complicity with capitalism. 

The article quotes the conservative dictum, “Ideas have consequences,” which sounds to me suspiciously Marxist. Certainly, what we are taught in classrooms comes loaded with the weight of truth, by simple virtue of being taught in a classroom, and those of us less critically engaged will easily buy whatever ideas are sold to us in educational market—in fact, we often have to accept and regurgitate the given truths in order to pass tests and classes, to receive the degrees we pay so much money for. Recently I was in the NYU library at 4am overhearing some students studying for their Economics finals. Their accents were not American, but South Asian. While dozing under a desk, I heard them running through the popular objections to US out-sourcing labor, mostly focused on the damage inflicted on the wages and quality of living of people in developing countries. The neoliberal justifications the students recited in response basically amounted to nothing more than “these objections are false, and even if they are true it doesn’t matter because out-sourcing is good for US business.” The blase way they reeled off this propaganda as unquestioned fact was, literally, a frightening wake-up call. I had heard of the unabashed capitalist monopoly over the Economics discipline, but never experienced it first hand.

The danger of this monopoly of ideas is not so much in the intellectual limitation of individual students, but in the way it legitimates these harmful ‘philosophies,’ forcing us as a society to perpetuate the alarmingly irresponsible policies which murder and impoverish people all around the world for corporate profit. 

What are you experiences with educational biases and agendas? And have you had any great radical professors?
-H

3:53pm  |   URL: http://tmblr.co/Z57pbx5Vz-HU
(Notes: 3)
  
Filed under: College Academy Ayn Rand Conservative Economics Monopoly Puppy Radical Schooling Deschooling unschooling 
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