Free Time and Nothing Else : Selected Works of Jehu [1, 1 ed.]

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Compiled by Karim Ibn Rashid

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Compiler’s preface. This is a selection of Jehu’s work from 2013 to 2020 aimed to introduce readers to Jehu’s radical ideas. Everything in this selection is available on his blog therealmovement.wordpress.com . My main objective with this selection of writings is to lower the barrier of entry into Jehu’s work. For anyone who doesn’t know Jehu, Jehu is a Marxist blog poster that has been active online from 2013 to the present day. His project bases itself on a critical reevaluation of Marx’s labor theory of value and thus a critique of the present Western mainstream and academic consensus on it. From there, he draws his revolutionary strategy, which is the radical eradication of wage labor, and his analysis of the current mode of production, which he calls the political economy of barbarism. Jehu is also the one who created the aphorism: communism is a free time and nothing else. For clarification, Jehu is not a Marxist-Leninist, a Trotskyist or a left-communist. He adheres mostly to Marx, while learning from past socialist experiments, he does not follow any of their schools of Marxism. I divided the selection into what I think are the main topics of his writings. This is by no means a complete assessment of his ideas; it rather serves as way to constitute an essential summary. Special thanks to the Infrared collective for introducing me to Jehu.

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Table of Contents Introduction ....................................................................................................................................................... 6 Jehu, what is your philosophy? ......................................................................................................................... 6 Labor Theory of Value .................................................................................................................................. 17 Introducing the individual ............................................................................................................................... 17 Labor Theory for (Marxist) Dummies .............................................................................................................. 18 Why Read Capital At All? (Where almost all introductions to Capital go wrong)........................................... 54 You produce twice as much as your parents did, for one fifth of their wages. .............................................. 62 Why superfluous labor time is a really big problem for labor theory............................................................. 70 How superfluous labor time creates inflation ................................................................................................ 75 Superfluous labor and state debt ................................................................................................................... 79 Are state deficits “necessary”? ....................................................................................................................... 85 Cuckolding Marx: David Harvey’s ‘Unfaithful Companion’ to Capital ............................................................ 94 Spinning Marx in His Grave: How David Harvey got rid of labor power in his unfaithful Companion. ........ 100 “Schrödinger’s Capital”: ................................................................................................................................ 109 Labor hours reduction and the abolition of capitalism: An outline for an essay .......................................... 148 The Strategy .................................................................................................................................................. 155 To move forward, the Left must admit it has been a failure for forty years ................................................ 155 Why Marxist academics are charlatans — all of them, without exception .................................................. 164 FUZZY LOGIC: What is communism anyway? ............................................................................................... 170 You don’t ‘build’ communism: It’s not a commodity; it’s free time ............................................................. 176 A simpler, more elegant, route to communism ............................................................................................ 182 “Everybody wants to go to heaven, but no one wants to die to get there” ................................................. 187 The single non-reformist reform that can end capitalism within months, not decades .............................. 192 Ten common questions about the revolutionary potential of reducing hours of labor............................... 197 Abolish Wage Labor by 2027: Is such a movement possible? ...................................................................... 202 Getting beyond ‘regime change’ (Part 1) ...................................................................................................... 206 Rethinking Marx’s Grand Strategy ................................................................................................................ 234 PRO-TIP: Communists don’t care about how communist production will be organized ............................. 239 Class struggle and the abolition of wage labor: Did 20th century Socialism have it backwards? ................ 243 Communization of the Whole World in Five Years or Less: A practical guide .............................................. 250 Contemporary Analysis and the Current Mode of Production......................................................... 263 A Brief Sketch of the Political Economy of Barbarism .................................................................................. 263 The Weird Netherworld of Barbarism .......................................................................................................... 275 Class Struggle and the Breakdown of Production Based on Exchange Value ............................................... 280

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Labor power, the Law of Value and social production as an emergent property ........................................ 285 How the state began systematically privatizing profits and socializing losses ............................................. 295 A Question for the Wertkritik School: Does the commodity even still exist? .............................................. 299 Marxist Accelerationism, (Nick) Land, Capital and Labor ............................................................................. 304 According to the Central Intelligence Agency, we almost reached communism by 1980 ........................... 308 How the argument of one economist helped kill the Soviet Union.............................................................. 316 How labor hours reduction brought about the collapse of the Soviet Union .............................................. 324

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Introduction

Jehu, what is your philosophy?

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I received this request from @RealRomCade: “Could you go over your whole philosophy with me. Not debating, I’m just not sure I quite understand it all seems really complex I’d like to understand. If you have the time of course.” A good deal of what I write might appear obscure to most people. This, of course, in large part results from my poor writing skills. But it is also caused by the nature of the argument I am making, as well as the nature of the political position against which I am arguing. To be honest, it is not always clear from my writing what I think the two sides are in this debate. I want to try to rectify this somewhat in the following discussion. The argument I will be making here is a logical one. As such I will discuss labor theory of value only briefly. I want to explain the logic behind my approach, not so much the theory that underlines that logic. If you want to know more about the theory that, I think, supports my approach, you will have to read Marx’s Capital.

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If I am successful, you should have a better idea of the logic of my main argument. If I am unsuccessful you can post questions in the comments section and I will clarify my points. ***** My central thesis My central argument is mostly unremarkable: all of the problems identified on the Left, from poverty to climate change, basically stem from the system of wage slavery. This concept, although very simple, contradicts the dominant, political approach on the Left to social problems, which see each problem as discrete and separate. For instance, the political approach sees the problem of climate change as having no real material relation with, and even, to some extent, complicating a solution to the problem of poverty and vice versa. Some folks who are very interested in climate change, for instance, think we must accept degrowth as the price to maintain sustainable growth. There is, they allege, a tradeoff between eradicating poverty and stopping climate change.

By contrast I think all the issues we care about today — poverty, inequality, war and aggression, climate change, budget deficits, etc. — can be traced to the fact that hours of labor are too long. The problem with politics It would be an understatement to say my view is far from popular today. The political system is structured in such a way that we are used to looking for particular solutions for each of a laundry list of problems. This pragmatic, technical approach to problems, which tries to design specific solutions to each identified social ill, is entirely unworkable. In the first place, a political approach is unworkable because people can attention to so many issues at once. If I care about poverty, climate change and employment, I am less attentive to foreign wars, budget deficits and police killings.

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Just look at your twitter feed sometime. It is a steady barrage of single issue complaints, often made without context by persons for whom this or that particular issue is more important than all the rest. People can only focus on so many issues at once and they literally get overwhelmed by all the issues championed by special interest groups. It is really impossible for people to strongly care about every issue, much less understand how the issue they care about connects to and influences every other issue they also care about. So people tend to just give up caring about anything except the single issue in front of them.

Bourgeois politicians prefer this approach because by focusing on discrete issues, the system as a whole is never questioned. They are free to craft “solutions” that marginally address one issue or another but never challenges the system as a whole. This pragmatic (piecemeal) approach is the preferred approach for anyone who wants to protect the system as a whole.

However, if the fundamental problem is the system as a whole, and not any particular problem, social ills fester without any solution. Yes, you can jury-rig some solution to health care that increases coverage, like Obamacare, simply by passing a law that says everyone must buy healthcare insurance. but you are simply moving the problem to another area: the price of the coverage available to people.

Economic growth as the premise of all technical reforms Another critical problem of this sort of pragmatic (political) approach is that all solutions on offer are more or less premised on more people working more hours.

One of the biggest scams along this line is climate change: Some propose we can fix climate change by “investing” in green technology. Somehow we will fix a problem caused by too many hours of labor by increasing the amount of labor we do. Another one is unemployment, which some people think we can fix by faster economic growth. Somehow we can fix a problem created by too long hours of labor by expanding how many hours people work. And how does the problem of unemployment fit in with the problem of climate change? Simple: we just give the unemployed a job producing green technology. Problem solved.

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It is this kind of stupid shit that just begins to wear people out mentally. My approach differs from this in that it proposes one solution that can address all of the many social problems we face at once. ● ● ● ● ● ● ● ● ● ●

Don’t like climate change? Okay work less. Don’t like poverty? Okay work less. Don’t like budget deficits? Okay work less. Don’t like the high cost of living? Okay work less. Don’t like the war in Syria? Okay work less. Don’t like US support for Israel? Okay work less. Don’t like inequality? Okay work less. Don’t like not having health care? Okay work less. Don’t like police killing citizens? Okay work less. Don’t like the president? Okay work less.

Everything you don’t like about present society can be addressed by one single solution: Work Less. PROBLEM: It is not the least bit clear that working less will fix anything This approach is not without its own problems, of course. One difficulty with it is that now I have to show why all the various things people don’t like about present society are caused by them working too many hours. That is where all the complicated discussion comes in: to show how the hours of labor we work are directly implicated in all of the social ills we complain about.

The biggest difficulty with telling people that the solution to all of our social ills is to work less is that they are not stupid. They know how economies work and they know that economies incentivize people to work more. They know that in a capitalist society no one gets richer by working less unless they already started out richer. Paris Hilton can get richer by working less because she started out 3 billion dollars ahead of the rest of us. So the very idea that the rest of us can live better and solve all existing social problems by working less appears to be sheer fantasy.

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And, moreover, the idea we can solve all the social ills of society by working less is a fantasy for any one of us taken separately. As a solution to social ills working less only works when we all work less together. Otherwise we are worse off for the (lack of) effort. But when the solution of working less is posed to us, we immediately think of the individual case, not the general policy.

The idea that we can address social ills by working less requires a revolution in consciousness — for people to begin to view social ills in a social, rather than individual, context. Something like this revolution in consciousness preceded all great social revolutions in the past. During the rise of the bourgeoisie, the scattered capitalists began to express their individual circumstances in a collective fashion. They expressed not primarily what was unique to each, but the conditions common to them all. And they expressed these interests against the existing state, the feudal regime and it sparked an epoch of political revolutions.

Something of this sort is required now: not for a political revolution, but for a social one. Systemic social problems require systemic social solutions As I have stated above, my approach differs from the dominant Left approach in two important ways: First, it assumes all the social ills against which the Left throws is political weight are not problems that can solved with limited technical reforms. Second, it assumes that the means to solve these social ills are not directly in the hands of individuals, but require their collective direct action. The problems we face are not individual problem, but social problems. This means, at some level, they are all connected to one another. If these problems are social problems, they require a solution that itself must be social as well, and cannot be solved on an individual level. I think most on the radical Left would agree with this much in theory, although they fail to follow through on the idea in practice.

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In the first place, in response to every particular problem, radicals tend to cluster around solution that are technical. Under this heading, I would put things like a higher minimum wage, basic income or jobs guarantee to address the problems of poverty and unemployment. These are technical fixes that are arrived at by thinking about the problems of poverty and unemployment in isolation from other social ills. In isolation, poverty and unemployment appear very susceptible to such technical fixes like a higher minimum wage, but in reality they are not. Change one variable in a system and you begin to affect many other variables that you have not taken into account in your technical fix. For instance, change wages in an economy and you immediately begin to affect an incredible number of other variables.

Yes wages are now increased, but what impact will this have on employment, foreign trade, climate change and profits. Technical fixes are never of the sort that a change in one variable will have little or no affect on all the other variables in the system, but a lot of radical Leftists think (obsess) only in terms of that single variable and never give any thought to whether the impact of a change in their preferred variable will improve or worsen all the others.

Why profit is the key variable at present By contrast, my approach assumes from the beginning that a change in one variable will have more or less large affects on all the other variables in the system. I want to have those affects on the other variables; which is to say, I want an increase in wages to affect employment, inequality, foreign trade, climate change and, military spending. Not only do I want to affect all of the other variables, I want the strongest possible affect on all the other variables.

And the variable on which I want to have the strongest possible affect is the one most radicals don’t even mention: profits.f Now why would profits be the critical variable to influence the system as a whole? Is this because I have some ideological aversion to profits? That I hate capitalists. Or I want communism? No. The reason why I want the

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strongest possible affect on profits is because the economy is based on production for profit. If you want to maximize your impact on a system of variables, it might help to know which variable has the greatest influence on that system — and profit is without a doubt the most important variable in a mode of production founded on wage labor. For this reason, we want to identify profit as the most important variable and figure out how we can directly affect this variable to the greatest extent possible.

Why politics isn’t the critical variable Most radicals who go through this same exercise identify the state (politics) as the most important variable we should try to affect. This is a reasonable conclusion but wrong: Our economy is not based on the state, but only profit and of production for profit. The state itself is derivative of the system of production for profit; it feeds on the mode of production. This is true even though, admittedly, the state arose well before production for profit. The state is an unproductive stratum of society that attaches itself to whatever mode of production is dominant like a parasite. Since it produces nothing itself, it is forced to survive off the surplus produced by the dominant mode of production in every epoch.

Identifying profit as the most important variable we want to affect is usually taken negatively to mean we want to increase profits. This is particularly the objection of many radicals to the idea of accelerating capitalism into its demise. Many critics of accelerationism, like Ben Noys, have strong objections to this strategy because they imagine it means fattening the profits of capital.

This is an understandable error on the part of radicals who seldom if ever have made a serious study of how capitalism works. They assume that since the capitalists want to increase their profits, an accelerationist strategy designed to affect profits seeks this as well. This is mistaken. In first place no one has to encourage capitalists to increase their profits, this is the way capitalism works already. What we want to do is exploit this tendency for our own purposes.

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But what are our purposes? To end poverty, unemployment, climate change, budget deficits, inflation, the war in Syria, US support for Israel, inequality, the appalling lack of health care, police killing citizens. We even want to get rid of presidents — and not just the bad ones, because they are all bad. All of these social ills arise from a system of production based on profit. Since most radicals never consider these problems taken as a whole, and because even if they do they never see the obvious connection to profit, few radicals realize how affecting profit can have dramatic affects on the many social ills they think need to be addressed. To give a single example: the war in Syria could not be prosecuted unless the US government had access to huge amounts of profits that it could essentially spend freely in this way. If you want to end the war in Syria, basically you have to deny the US government access to this huge mass of profits it borrows for war. The problem then becomes how to deny the US government access to this huge mass of profits it can borrow at will for aggression?

The only way this can be done is by ending production for profit — a step most radicals are not willing to even consider. The fundamental problem is too much profit And even among the small minority of radicals who might consider this idea, not one in 10,000 have any idea how to accomplish it. Capitalism appears to be such a complex organism almost no one — including economists and capitalists themselves — have even the faintest idea where profits even come from. This too is understandable since the way capitalism operates leaves the origin of profit impossible to determine empirically. The origin of profits is the surplus labor of the worker, but there is absolutely no way to trace the connection between labor and profit. It is as if profits arise from the activity of the capitalist, not the labor of the worker. This is not the result of ideology but arises from the actual structure of the mode of production itself. Even if you accepted the idea that labor is the sole source of profit — which most radicals don’t — you could never trace the profits of a capitalist firm to the actual labor of its workers.

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Thus it is not clear (even to the tiny handful of people who suspect that the sole source of all the social ills we suffer are caused by profit) that the only way to end these social ills is to reduce labor hours. The very idea we can end the biggest, most intractable problems of society by simply working less, appears to be a utopian fantasy. Here is what most radicals miss because they are not really at all familiar with the way capitalism works: Capital is a marvelously efficient machine for extracting surplus (unpaid) labor from the worker, but it is not all that efficient in converting this unpaid labor into profit. The labor process is under the direct control of the capitalist, and he pays attention to every detail of this process. By contrast, the conversion of the unpaid labor into profit takes place under circumstances over which the capitalist has no control whatsoever.

Capital thus always has a tendency for the production of surplus value to (as Keynes puts it) outrun the pace at which the capitalist can find new uses for it. Most of the social ills against which radicals direct their protest are in fact products of this tendency of capitalistic accumulation. Too much surplus value can result in unemployment, poverty, war, environmental degradation, relentless expansion of the state against society, etc. Thus, the solution to these social ills is already given by the definition of their fundamental cause: reduce production of surplus value. The production of surplus value is, as defined here, nothing more than the extension of hours of labor beyond a certain definite point. For surplus value to be produced, the worker must work longer than is required to produce her wages. This unpaid labor time produces a surplus product that when sold becomes the profit of the capitalist.

Thus, the solution to the social problems most radicals think of as requiring immediate social action is simple: reduce hours of labor. Capital, the state and hours of labor But there is a problem with this solution: even if the working class wanted its hours of labor reduced, the capitalists and the state do not. The capitalist don’t want this to happen because their profits depend on the amount of surplus labor they can squeeze from the workers. It is easier to squeeze a lot

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of surplus labor from the workers when the day is long, but much more difficult when it is short. Since the capitalist don’t like to work anyways, they certainly don’t want to have to sweat to increase their profits. The opposition of the state to a reduction of hours of labor may be harder to understand at first, but it is just as simple. The state has access to and feeds off the surplus labor time that can’t be reinvested by the capitalists. The longer the working day, the greater the mass of surplus value produced by capitals, the more of this surplus value can be “siphoned off” (as the Truman administration put it) to finance US military and political aggression. No less than the capitalists themselves, nation states resist every reduction of hours of labor because it places incredible masses of surplus value at their disposal, which they can then use for whatever aggression they desire.

This begins with the rise of imperialism and culminates in 1914 with wars of aggression against their industrialized competitors and even earlier against relatively backward countries. Today it takes the principal form of the US military doctrine of Full-spectrum dominance, which depends fundamentally on US control of and access to every form of surplus value produced domestically and world-wide. So long as Washington has access to this massive global pool of surplus value, nothing we do to protest its behavior has any significance at all.

To deny both capital and the state access to this surplus value we must take back our labor time by converting our surplus labor time directly into free time. This then is my approach to addressing the social ills identified by radicals. My approach is decidedly not political, but aims at the immediate abolition of both capital and the state through our direct action.

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Labor Theory of Value Introducing the individual In the German Ideology, Part 1, Section D, Karl Marx and Frederick Engels mention the term, individual, 98 times. In each case they are not speaking of the individual as an abstraction, but the real individuals of whom society is composed. They are clear on this: The individuals, who are no longer subject to the division of labour, have been conceived by the philosophers as an ideal, under the name “Man”. They have conceived the whole process which we have outlined as the evolutionary process of “Man,” so that at every historical stage “Man” was substituted for the individuals and shown as the motive force of history. The whole process was thus conceived as a process of the self-estrangement of “Man,” and this was essentially due to the fact that the average individual of the later stage was always foisted on to the earlier stage, and the consciousness of a later age on to the individuals of an earlier. Through this inversion, which from the first is an abstract image of the actual conditions, it was possible to transform the whole of history into an evolutionary process of consciousness. These individuals are the subject of this blog.

Labor Theory for (Marxist) Dummies: Part 1 How exactly does hours of labor reduction work?

I have to say that I honestly have no idea how the minds of Marxists work — all of them, almost without exception. I have, by turns, alternately been accused of being reformist and ultra-Left for advocating hours of labor reduction. So, I thought I would show people how labor theory actually works in practice and why the struggle to reduce hours of labor is neither reformist nor ultra-Left, but a means to progressively abolish wage labor completely. It is the only real means of realizing a so-called ‘post-capitalist’ society. What I find puzzling is that Marxists don’t seem to be able to do this very simple thought experiment on their own using Marx’s labor theory of value. The only real objection to reducing hours of labor is that Marxists don’t really want to kill capitalism in the first place. One of the biggest problems I encounter when discussing hours of labor reduction with Marxists is not the dismissal of the idea as reformist or ultraleftist. Rather, the problem is far more mundane and substantial. Marxists fear hours of labor reduction will plunge the working class into poverty as wages collapse with hours of labor. This is an extremely important objection to reducing hours of labor, because it reflects what I think is a valid and extremely powerful fear among the working class. Since we live by selling our labor power, we must be suspicious of any proposal the seems to threaten that sale. However, there is no theoretical basis for this fear in labor theory as I will now show.

If you are a follower of value-form Marxism, don’t try this at home. It will only hurt your brain.

Labor power as the source of all value and surplus value In Marx’s labor theory of value, as many people know, labor power is the source of both value and surplus value. Okay, I know, I know. Not everyone agrees with this. In fact, not even most Marxists believe it anymore. They think value is the product of money and prices, not the other way around. Just to be clear, I am not trying to convince anyone that Marx’s labor theory of value is correct — that is impossible. We still have people who believe there is no such thing as global warming, despite mountains of scientific evidence. And we still have people who believe the Earth and all life on it was created in just six days. Some people want to believe the myth stories on which they were raised and nothing will change their minds. Fine, I won’t argue with you if you think labor theory is not valid. I am not here to change your mind, but to expose your medieval stupidity.

I insist that it is the key premise of labor theory that labor power is the source of all value and all surplus value. I am using this premise as my starting point in explaining how hours of labor reduction works. With that, let us begin.

How is the magnitude of value and surplus value determined? How is the quantity of value produced by labor determined? In Marx’s labor theory it is determined by the duration of labor time, measured in hours or days or weeks, etc. What unit of time we employ as the unit of duration is not a problem. No matter the unit, labor productively expended for that duration should produce value equal to it. An hour of labor will produce an hour of value; a day’s productive labor will produce a day’s worth of value and so on. Assuming her labor is productive of value, if we know how long the producer has worked, we know the value of her total product. Now, how is the quantity of surplus value determined? In Marx’s labor theory surplus value is determined by the total duration of labor time, measured in hours or days or weeks, etc. minus the duration of labor time paid to the worker in the form of wages. If the total of labor time is represented by the formula,

x … y … z, the wages of the worker is represented by the duration, x … y, and the surplus value accruing to the capitalist is represented by the duration, y … z. How does hours reduction affect wages and profits? Now, suppose all the workers got together and forced the capitalist state to reduce hours of labor from x … y … z to x … y. How would this affect wages, and how would it affect profits? The first thing that is obvious is that if the labor day was reduced from x … y … z to x … y, the rate of surplus value would now be zero. We know this, because in the little diagram we are using surplus value is produced during the portion of the labor day y … z. If no surplus value is produced, there is no profit to be realized: the rate of profit falls to zero as well. We don’t have to guess about what this implies in a capitalist economy, since Marx wrote about it extensively in Capital: If the rate of profit falls to zero, this will produce a crisis for capital. It does not matter what causes the rate of profit to fall to zero — overproduction or reduced hours of labor; if the rate of profit falls to zero, a crisis must result. In section III of chapter fifteen Marx goes into some detail about what happens in a crisis produced by the falling rate of profit. His most important point is that the crisis is capital’s attempt to restore the rate of profit, i.e., to restore the conditions for sound operation of the capitalist mode of production.

Since the rate of profit is driven to zero in our example, it is of great interest what effect this will have on the existing employment and wages of the working class. This is the subject to which I will turn next.

How does reduced hours of labor affect productive employment? According to Marx’s labor theory of value, in a normal crisis caused by overproduction of capital and a falling rates of profit, a portion of capital has to lie unused and a portion of the worker population would be discharged into the ranks of the industrial reserve army of labor. “A drop in the rate of profit is attended by a rise in the minimum capital required by an individual capitalist for the productive employment of labour; required both for its exploitation generally, and for making the consumed labour-time suffice as the labour-time necessary for the production of the commodities, so that it does not exceed the average social labour-time required for the production of the commodities. Concentration increases simultaneously, because beyond certain limits a large capital with a small rate of profit accumulates faster than a small capital with a large rate of profit. At a certain high point this increasing concentration in its turn causes a new fall in the rate of profit. The mass of small dispersed capitals is thereby driven along the adventurous road of speculation, credit frauds, stock swindles, and crises. The so-called plethora of capital always applies essentially to a plethora of the capital for which the fall in the rate of profit is not compensated through the mass of profit — this is always true of newly developing fresh offshoots of capital — or to a plethora which places capitals incapable of action on their own at the disposal of the managers of large enterprises in the form of credit. This plethora of capital arises from the same causes as those which call forth relative overpopulation, and is, therefore, a phenomenon supplementing the latter, although they stand at opposite poles — unemployed capital at one pole, and unemployed worker population at the other.”

However, in our own discussion, the rate of profit has fallen to zero, not because of the overproduction of capital, but because the working class has

withdrawn the portion of the social labor day y … z, during which surplus value is created and retained by capital as profit. Since the rate of profit has fallen to zero because fewer hours of labor are worked by the working class, no productively employed workers would be discharged, nor would productively employed capital stand idle when the rate of profit falls to zero. Why? The reduction of the social labor day from x … y … z to x … y, has the same proportional effect as laying off an equal portion of the workers and the same proportional effect on the existing capital as leaving a proportional mass of the existing capital laying unused. To make this clearer: If 100 workers each work an eight hours day, they contribute a total of 800 hours in aggregate. If four hours of the social labor day is paid out in wages and four hours is retained as the profit of capital, a reduction of the social labor day from x … y … z (eight hours) to x … y (four hours) has the same effect as discharging half of the 100 workers through layoffs and letting half of the means of production stand unused. In either case, the new aggregate social labor day is now 400 hours; down from 800 hours previously.

Which is to say, capital could not restore the rate of profit by discharging half the workers or by letting half the existing capital stand idle as would occur in a normal crisis of overproduction, but will be forced to somehow increase output by other means. Thus, reducing hours of labor has the same effect (on the labor day) as discharging workers into the reserve, except there is no unemployment. How does reduced hours of labor affect the wages of productively employed workers? Since wages are paid by the hours, some Marxists (particularly those who follow the value-form school) wrongly believe a reduction of hours of labor will proportionally reduce both wages and profit, leaving the rate of surplus value unchanged.

This is not true. The worker sells her commodity, labor power, all at once for the period of labor, even if it is paid out by the hour, by the piece (as in piece-rate) or by the day. Those who have questions about this can read Marx here on the subject of how piece-rate works. The result of all of this is that insofar as a reduction of hours of labor does not fall so far as to encroach on the socially necessary labor time materially required to produce the wages of the working class, a reduction of hours of labor can only reduce the profits of capital. The wages of the working class cannot be affected by a reduction of hours of labor, no matter how they are paid out — by the piece, the hour or the day. I conclude that with hours of labor reduction neither the wages nor the employment of existing productively employed workers are affected by this crisis.

As can be seen from this simplified example, in theory: 1. There would be no unemployment caused by reducing hours of labor. A normal crisis leads to unemployment, because workers are discharged. But we have reversed the process: by reducing hours of labor first and causing the rate of profit to fall to zero, the capitalist cannot layoff millions of workers. We have “laid ourselves off” partially by reducing our own hours of labor in order to prevent the capitalists from laying a section of us off completely. The capitalists, therefore, cannot use discharges to restore the rate of profit.

2. Contrary to the fears of most Marxists, wages are not affected by a reduction in hours of labor. This may seem to contradict logic, since workers are paid by the hour. But being paid by the hour has nothing to do with the issue. A worker is paid for her commodity, labor power, no matter that this is paid out by the hour, the piece or the day. ***** Our discussion has not ended however. We know capital will respond viciously to a fall in the rate of profit. In my next post, I will explain what weapons capital has to restore the normal operation of the mode of production. Once we understand how this is done, we can better map a strategy to defend against it.

Labor Theory for (Marxist) Dummies: Part 2 Steps the capitalists can take to counter a reduction in hours of labor and their effect when hours of labor are reduced

In the first part of this series, I showed that a reduction of hours of labor has no impact on wages and productive employment so long as this reduction does not actually encroach on the socially necessary labor required to produce the value of the wages of the working class. In this part, I will show why, under certain circumstances, a reduction of hours of labor will actually increase both wages and productive employment. I. Intensification of Labor As I have shown in the first part of this series, in theory, there is nothing that prevents the working class from forcing a reduction of hours of labor of such magnitude that the reduction drives the rate of surplus value to zero. Such a reduction would not simply drive the rate of surplus value to zero, but would also drive the rate of profit to zero. However, the rate of profit is the goad of capitalist production. Nothing is produced if a profit can’t be made on it. Given the sensitivity of capital to the rate of profit, how might capital respond to a zero rate of profit? Marx addresses this in some detail in chapter 14 of volume 3 and also in chapter 15 of volume 1.

In volume 3, Marx calls the various strategies employed by capital to raise the rate of profit, “counteracting influences”. Can these counteracting influences overcome the impact of a reduction in hours of labor? And, if so, which ones and how? The first counteracting influence Marx addresses is intensification of the exploitation of the working class. According to Marx, this intensification of labor can be realized by, ● ● ● ● ●

Prolongation of the working day; increasing the pace of labor; heightened tension of labor power; reducing the unproductive employment of labor; improving the organization of labor.

In this section, I want to focus on two of the above mentioned means of intensifying the labor of the working class: the heightened tension of labor power and reduction of unproductive employment. Labor hours reduction and the heightened tension of labor-power In chapter 15 of volume 1, Marx has this to say about the impact of fewer hours of labor: “[So] soon as the compulsory shortening of the hours of labour takes place. The immense impetus it gives the development of productive power, and to economy in the means of production, imposes on the workman increased expenditure of labour in a given time, heightened tension of labour-power, and closer filling up of the pores of the workingday, or condensation of labour to a degree that is attainable only within the limits of the shortened working-day. This condensation of a greater mass of labour into a given period thenceforward counts for what it really is, a greater quantity of labour.”

Marx argues more work can be gotten out the worker because the intensity of labor is heightened when it is expended for a shorter period of time. Marx speaks of a ‘self-evident law’: Within certain limits, the efficiency of labor is inversely proportional to its duration. Once hours of labor are reduced,

labor becomes more efficient, uniform, regular and continuous, and accomplished with greater energy. According to Marx, the empirical evidence available in his day from the reduction of hours of labor from 12 hours to 10 hours showed the workers’ productivity increased to such an extent as to completely offset the fall in hours of labor:

“The denser hour of the ten hours’ working-day contains more labour, i.e., expended labour-power than the more porous hour of the twelve hours’ working-day. The product therefore of one of the former hours has as much or more value than has the product of 1 1/5 of the latter hours. Apart from the increased yield of relative surplus-value through the heightened productiveness of labour, the same mass of value is now produced for the capitalist say by 3 1/3 hours of surplus-labour, and 6 2/3 hours of necessary labour, as was previously produced by four hours of surplus-labour and eight hours of necessary labour.” According to Marx, then, the reduction of hours of labor produces a dividend in the form of increased energy on the part of the work during the now compressed labor time, allowing the workers to produce more output in the same period of time. When the social labor day was reduced from 12 hours to a ten hour day, the increased energy of labor was great enough that the same mass of value was produced less time than before. Thus, although it may be difficult to estimate its extent, it is likely that, in our example, when hours of labor are reduced from eight to four, a similar output premium will be produced.

This effect is important and should not be overlooked when considering the impact of reduced hours of labor, but it is not the only aspect to be considered. The extent to which the present working day can be compressed without any impact on real production of use values is directly proportional to the quantity of labor power that is, at present, employed unproductively. Thus, to understand how far this effect might go, requires a short discussion of the Marxian concept of superfluous labor.

Superfluous labor time

As has been marked by many Marxist writers in the past four decades, a growing proportion of workers are not productively employed. These unproductively employed workers perform labors that do not enter into the further production of commodities. According to an essay written by Chris Harman in 2007,Marxists have long noted the growth of non-value producing labor in the economy: “Moseley, Shaikh and Tonak, and Simon Mohun have all noted another feature of capitalism’s most recent development – one highlighted by Kidron back in the 1970s. This is the growing ‘non-productive’ portion of the economy.

Mainstream neoclassical economics regards all economic activities involving buying and selling as “productive”. This follows from its limited focus on the way transactions take place in markets. Marx, like Adam Smith and David Ricardo before him, had a deeper concern – to discover the dynamics of capitalist growth. He therefore further developed a distinction to be found in Smith between “productive” and “unproductive” labour. For Marx, productive labour was that which created surplus value through expanding production. Unproductive labour was that which, rather than expanding production, was simply distributing, protecting or wasting what was already produced – for instance, the labour of personal servants, policemen, soldiers or sales personnel.” To give you a concrete idea of what superfluous labor time might look like: Five American soldiers in Iraq may be very efficient at raping a 14 year old girl and murdering her family, but they do not produce anything having value or use value. Moreover, while the soldiers are engaged in raping the child and murdering her family, they still must be clothed, housed, fed and supplied munitions. This requires the labor of other, productively employed, workers from various productive industries. Thus, the soldiers perform no useful labor of their own and require the useful labor of others to sustain them in their atrocities.

Of course, since almost all labor in our society is abstract homogenous labor of the type that can produce value, it is problematic to produce a comprehensive list of labors that are unproductive of surplus value in the ‘economy’, because, by and large, we cannot tell by looking at any specific concrete act of labor whether it is productive of value or surplus value; in principle, value can’t be seen and, for the most part, value-producing labor cannot be distinguished from labor that does not produce value. I admit this is a real problem that requires a real solution, but for the moment let me set it aside. Even if I cannot tell by looking at a specific concrete act of labor whether it is productive or unproductive of surplus value, I can still at least make the assumption that not all labor in the economy may be productive of value and surplus value. And making this assumption, we can ask how reducing hours of labor might affect wages and employment when a portion of labor power is employed unproductively. Condensation of the working day Again, assume a total labor force of 100 workers, each working eight hours. The aggregate social labor day is 800 hours, but only half of the workers actually produce value. As a result, an aggregate social labor day of 800 hours only produces 400 hours of value. In our example, however, 100 workers receive a wage, but of those 100 workers only 50 workers actually produce the value of those wages. Those 50 workers produce not only their own wages, but the wages of the remaining 50 workers and the surplus value of capital. The total pot of value from which both wages and profits are drawn cannot exceed the aggregate labor day of the 50 productively employed workers, i.e., 400 hours of actual value producing labor.

If the rate of surplus value is 100%, half of all productive labor time falls as wages to the entire body of workers and half is unpaid labor time that falls as profits to the capitalist. Which means, of the total value actual produced (400 hours), 200 hours cover the wages of both the productively and unproductively employed workers and 200 hours are the profits of the capitalist.

In our original example in part one of this series, each worker received four hours of labor time as wages; however, in this case, on average each worker must receive only two hours as wages. The wages of the workers that is paid out of the total capital advanced, but which produces no value must, therefore, be paid for out of the pockets of the workers that are productively employed.

No matter what the nominal (currency) wages of the workers, on average their real wages contain only half the value of wages in our original in part one of this series.

A reduction of superfluous hours of labor must increase wages If the above argument is correct, a reduction of hours of labor, under conditions where a significant part of the working class is unproductively employed, will not just reduce the rate of profit to zero, it will also have the surprising effect of increasing the aggregate wages of the entire working class; this time from 200 hours to 400 hours. This is because, when hours of labor are reduced, the superfluous labor time of these unproductive workers is no longer economically sustainable. These formerly unproductive workers must now be employed productively and thus begin reproducing the value of their own wages. If Marx is correct in chapter 15 of volume 1, the condensation of a greater mass of labor into the new, shorter labor day, (i.e., the reduction of wasted, unproductively employed labor power), must have the effect of forcing capital to reduce the inefficient expenditures of labor that produces no value. The existence of a mass of unproductively employed labor power, what Marx calls “the pores of the working-day”, whether this unproductive employment occurs within the individual capitalist firm or in society generally, (as in the case of military spending), is no longer economically sustainable once hours of labor have been reduced. To summarize this part of my series, three things stand out: We have seen above that a reduction of hours of labor must force capital to reduce the unproductive employment of labor power, while this reduction

makes possible a heightened tension of labor power, allowing the worker to produce more labor in less time. Based on this, I argue: 1. With the reduction of hours of labor, the workers, now working only four hours instead of eight, can focus more closely on their tasks for shorter periods of time, providing increased energy to their labors. Marx estimated a similar reduction of the labor day from 12 hours to 10 hours in his day increased output by about 20% — enough to completely offset the reduction of hours of labor. While it may be difficult to estimate how a reduction of hours of labor today would impact output, we can assume there will be such an effect allowed by the condensation of productive labor time. 2. In our own time, Marxists have noted a huge mass of labor time that is unproductive. This mass may be far larger than what Marxists typically assume is available. If hours of labor are reduced, potentially, this massive duration of superfluous labor time also will be reduced without any impact on the production of material wealth. In their blind drive to restore the rate of profit, the capitalists must closely attend to eliminating all waste from the existing labor day and closely guard against every inefficient employment of labor power. This impact, I argue, is not limited to labor in the individual capitalist firms, but must include the unproductive employment of labor-power in society at large — for instance, the reduction of unproductive expenditures of the defense industry.

3. If, as several Marxists have suggested, there is a very large mass of superfluous, (non-value producing) labor in our economy today, labor theory of value suggests a reduction of hours of labor of sufficient size will not only drive the rate of profit to zero, but will, at the same time, raise wages considerably. Reducing hours of labor under this condition not only does not reduce the wages of the working class — as I have already shown in part one of this series — but must raise the wages of the working class. The mechanism for this increase in wages is the transfer of workers from superfluous employment to productive employment. The formerly superfluous workers no longer live off the labor of the productively employed workers, but begin to reproduce the value of their own wages.

*****

In the next part of this series, I will show why reducing hours of labor has to force capital to operate as if it is in an expansion phase of the industrial cycle, throwing the industrial reserve army of labor into production in a desperate attempt to raise the rate of profit. This has huge significance for those strata of workers who have been locked out of all productive employment for decades.

Labor Theory for (Marxist) Dummies: Part 3 Labor reduction and the horrific conditions of the labor reserve I have made several important points about hours of labor reduction in the first two parts of my series “Labor Theory for (Marxist) Dummies” The first point is that, according to labor theory, a reduction of hours of labor can drive the rate of profit to zero without any impact on productive employment and wages. This is an extremely important point, because much of the objection by Marxists and other workers to reducing hours of labor rests on their assumption that reducing hours will reduce wages. In fact, of all economic theories, labor theory alone suggest this cannot happen. Labor hours reduction has no impact on employment of productive workers and their wages.

Second, I have shown in part two of this series that when there is significant waste in employment of labor power in the economy, a reduction of hours of labor should actually increase both the number of productively employed workers and wages generally. When a significant portion of the existing employment of labor is wasted, reducing hours raises the wages of the working class.

If labor hours reduction does not negatively affect labor that produces value and surplus value, and if labor hours reduction forces capital to reduce the unproductive employment of labor power, can labor hours reduction actually eliminate unemployment altogether? To be more specific, to what extent is unemployment, underemployment and an entire body of workers who are today “unemployable” solely the product of the present 40 hours work week? Conditions of the lowest sections of the working class This is a highly relevant question for communists today, because a huge mass of the working class has been condemned to the most horrific conditions of existence imaginable. According to the Chicago Tribune, a recent report shows an astonishing 47% of black men between ages 18-29 are unemployed in that city and as much as 32% nation-wide. The levels of unemployment among young black men has reached catastrophic proportions: “While declines in youth employment across all races have raised concerns for a number of years, the new report puts into stark focus the connection between unemployment and Chicago’s racially segregated neighborhoods that also are home to high rates of poverty and crime.

The report shows the highest concentration of youth unemployment is in neighborhoods on the city’s South and West sides, especially Fuller Park, Englewood, East Garfield Park and North Lawndale, each of which is more than 90 percent black. The lowest concentration is in mostly white neighborhoods on the North and Northwest sides.

‘Conditions of joblessness are chronic, concentrated and comparatively worse than elsewhere in the country,’ said Teresa Cordova, director of the Great Cities

Institute. She called the prevalence of jobless among black males ‘definitely at crisis proportions.'”

The chance these workers will find jobs given the sort of stagnant job growth we have witnessed in the last eight years is dim. It is unlikely conventional bourgeois simpleton fascist state “full employment” policies will ever produce the employment growth necessary for them to find jobs. Moreover, beyond the huge body of black workers who have been locked out of employment for generations, official statistics (which are always misleading) show another 40% of workers who no longer even participate in the labor force. Additionally, each day thousands of migrant workers stream into the United States looking for work.

To be fair, however, the failure to address the plight of these workers does not simply lie with fascist state economic policy. Communists themselves have failed to raise any credible, measurable demands that really address the millions of black workers locked out of employment, the ten of millions more workers who form what Marx called the latent section of the reserve army, migrant labor, and those workers who might be considered altogether unemployable.

Can labor hours reduction address the needs of the lowest strata of workers?

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an reduction of hours of labor bring the huge population of the reserve army of labor into production and raise their conditions? This question is extremely important for communists, because those locked out of productive employment are, by and large, the parts of the working class — women, black and immigrant — who have suffered the worst effects of the capitalist mode of production.

It is fair to say communists have, at best, a spotty record of addressing the demands of these sections of the working class. This record includes a number of rather bizarre theories like privilege theory, which traces its background to a proposal by some communists not that unemployment should be abolished, but that white male workers should be required to accept an equal proportion of unemployment with black workers so as to guarantee equality of conditions within the working class. Other spurious theories argue historical materialism ignores the conditions of women or race in its analysis of bourgeois society. Still other Marxists insist historical materialism is outdated because it ignore so-called “affective labor” outside the work place.

Whether these “theories” have any merit is not my concern, since, in any case, women, black, immigrant pauperized workers continue to bear the brunt of the worst effects of capitalism. Even if we reject all of these specious theories, communists still have to explain how their aim of abolishing wage labor is not a sectional aim of the productively employed, but one that aims to improve the conditions of the entire class together. If that is not bad enough, let me admit that even posing the problem of unemployment the way I have above (stagnant employment growth) falls for the fallacy that wage labor is a normal state of affairs. In my view, no one should have to sell themselves to secure the means to live. Communists reject the implicit assumption that the physical survival of human beings should rest on their ability to sell themselves into slavery one day at a time. Instead, we ask to what extent the existence of a huge industrial army of labor has already made it possible to abolish wage slavery entirely and for everyone.

If abolishing wage slavery will improve the conditions of even and especially the lowest, most destitute, sections of the working class, as I insist, progress in this direction through reduction of hours of labor should

unambiguously result in an improvement of their conditions as well. If reducing hours of labor can be shown to bring the vast labor reserve into production, communists could reasonably claim to address the concerns of the entire class in their program and not just that of ‘privileged’ white male workers.

To restate my argument in a way that is more consistent with the communist aim of abolishing wage labor entirely: Can we reduce the need for labor to a minimum for everyone by bringing the women, black and immigrant workers into productive labor? From this viewpoint, the reduction of hours of labor is not intended primarily to create jobs; rather, we reduce hours in order to progressively abolish wage labor completely. While capital sees in the industrial reserve a means to extract more surplus value, we should see in it a means to reduce labor to an absolute minimum for all by bringing the vast labor reserve into productive employment.

Ambiguous empirical results of labor hours reduction Can reduction of hours of labor bring the various strata of the labor reserve into productive labor and reduce the need for labor for all? To be perfectly honest, the literature on the subject is not that promising. The empirical case for how a reduction of hours of labor affects employment and wages is ambiguous at best and may actually be negative. This is the conclusion Axel Börsch-Supan drew based on the experience of labor hours reduction in Germany in the 1990s: [NOTE: The corrected link for the paper is here] “None of the few existing econometric studies could find a significant effect over various time periods and different degrees of aggregation. All studies use inter-industry differences in working hours as identifying instruments. The econometric evidence rather unambiguously rejects the idea that reducing work hours will help decrease the unemployment problem.

Only two simulation studies predict a positive employment effect. One uses a unit labor cost decrease as an engine to create employment (productivity increases faster than

hourly wages), the other pays a high price for employment increases in the form of a GDP decline and an inflation increase. Both models rest on counterfactual mechanisms in detail.

In summary – and this may come as a surprise given the subtlety of the issue, once the arena of prima facie arguments has been left behind – this old debate with equally old arguments has quite an unambiguous answer: the German experience provides no convincing evidence that reduced work hours will increase employment. Reduced work hours probably have increased workers’ utility by providing them with more leisure at only slightly reduced income. This is not a small achievement which labor unions can be proud of. But there is simply no evidence that it can work as an instrument for the solution of the unemployment problem.” Börsch-Supan’s study raises serious questions about the efficacy of reducing hours of labor. An equally ambiguous study by Kallis, et al, concluded “the results of reducing working hours are uncertain”. If hours of labor reduction does reduce unemployment, the authors of the study conclude, it is likely the impact is less than many advocates of labor hours reduction assert.

A reduction of hours of labor must be larger to improve the conditions of the labor reserve However, the reason for the ambiguous results of the these studies is not surprising for labor theory. I have shown that a reduction of hours of labor has two immediate effects that are actually negative for reducing unemployment. First, reduction of hours of labor was shown by Marx to actually increase the productivity of the existing labor force owing to increased energy of the worker. According to Marx, “the mere shortening of the working-day increases to a wonderful degree the regularity, uniformity, order, continuity, and energy of the labour.” Thus, within limits, a shorter labor day may actually increase output so that net output after hours are reduced may exceed the aggregate output of the previous, longer, working day.

Second, a reduction of hours of labor compels the capitalist to reduce waste and inefficiency in the employment of labor power. The capitalist also employs speed up and deployment of improved means of production, science and technology to raise the rate of profit. The net effect of the two influences means a reduction of hours of labor may actually reduce aggregate demand for labor power, rather than increase it. To put this another way, a reduction that appears sufficient to draw the huge reserve army of labor into production may in fact be too small once we take into account how fewer hours of labor affect the efficiency and productivity of social labor. To give an example to illustrate my point: an unemployment rate of 10% may requires a reduction of hours of labor of 20% or even 40%. It is not at all the case that 10% unemployment can be eliminated by a 10% reduction of hours of labor.

***** Moreover, as I will show next, this reduction cannot be a onetime thing: Once begun, the reduction must be continuous and progressive. As Marx showed, capital responds to a reduction in the absolute hours of labor by increasing the relative portion of the labor day that is unpaid.

Labor Theory for (Marxist) Dummies: Part 4 Is a fully developed communist society possible right now?

I want to illustrate my point from the last post that to bring the labor reserve into production and so reduce hours to a minimum for everyone in society requires a much larger reduction than may be generally assumed in the literature on the subject. To do this, I will be using actual data drawn on the United States. As I will show, under present conditions in the United States the reduction of hours of labor now required to absorb the labor reserve into production may be so large as to effectively bring us to the threshold of a fully developed communist society. Keynes prediction of a fifteen hours working week To begin, let me borrow a quote from Keynes in 1930 that will, no doubt, be familiar to you regarding the technical progress of material production:

“From the sixteenth century, with a cumulative crescendo after the eighteenth, the great

age of science and technical inventions began, which since the beginning of the nineteenth century has been in full flood—coal, steam, electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production, wireless, printing, Newton, Darwin, and Einstein, and thousands of other things and men too famous and familiar to catalogue.

What is the result? In spite of an enormous growth in the population of the world, which it has been necessary to equip with houses and machines, the average standard of life in Europe and the United States has been raised, I think, about fourfold. The growth of capital has been on a scale which is far beyond a hundredfold of what any previous age had known. And from now on we need not expect so great an increase of population.

If capital increases, say, 2 per cent per annum, the capital equipment of the world will have increased by a half in twenty years, and seven and a half times in a hundred years. Think of this in terms of material things—houses, transport, and the like.”

In a later passage, Keynes extrapolates his technical argument to arrive at a conclusion that has been often cited by many writers today: “The economic problem may be solved, or be at least within sight of solution, within a hundred years.” The labor time technically required of each of us to produce all we need may be as little as fifteen hours per week. Of course, Keynes argument above, as prescient as it was technically, ignores that the capitalist mode of production is production for profit. He therefore ignored the fact that, no matter the technical progress of material production, the production of surplus value remains the over-riding concern of capital. And this ideological prejudice has proven to be a fatal flaw in his argument as it was for so many political-economists before Marx.

While technically we may get by with fewer hours of labor, capital requires ever increasing quantities of living labor, since living labor is the only source of value and surplus value. Moishe Postone uncovers the fatal flaw in Keynes’ prediction The conclusion by labor theory that living labor is the only source of surplus value has consequences because it implies that, with the technical improvement of the productivity of labor, the labor time of the working class will not decrease but, instead, will become increasingly superfluous to the production of material wealth. Thus, instead reducing the labor time of the working class, the capitalist mode of production gives rise to a new peculiar category: superfluous labor time.

As Moishe Postone explains, in his book, Time, Labor and Social Domination, the capitalistic requirement for ever larger quantities of living labor in the production of surplus value leads paradoxically to a growing mass of labor time that produces nothing: “Until this historical stage of capitalism, according to Marx’s analysis, socially necessary labor time in its two determinations defined and filled the time of the laboring masses, allowing nonlabor time for the few. With advanced industrial capitalist production, the productive potential developed becomes so enormous that a new historical category of “extra” time for the many emerges, allowing for a drastic reduction in both aspects of socially necessary labor time, and a transformation of the structure of labor and the relation of work to other aspects of social life. But this extra time emerges only as potential: as structured by the dialectic of transformation and reconstitution, it exists in the form of “superfluous” labor time. The term reflects the contradiction: as determined by the old relations of production it remains labor time; as judged in terms of the potential of the new forces of production it is, in its old determination, superfluous.” Postone’s argument is very simple: although, as Keynes stated, capital brings into existence all the technical means to abolish labor, capital itself cannot realize this abolition, because labor is the sole source of surplus value for capital. Rather than abolishing labor, capital progressively renders labor superfluous to the production of material wealth. However, although labor theory suggests Keynes’ technical argument was fatally flawed, because it ignored the fundamental logic of the capitalist mode of production, calculating how much of the present working day is actually wasted, superfluous labor time runs into a practical problem of its own.

Calculating superfluous labor time in ‘the economy’ That problem can be stated this way: Even assuming there is a huge mass of superfluous labor time in the economy, we have no way of directly identifying it. Since we cannot identify which labors produce value, it would seem almost impossible to calculate how far the work week must be reduced

to draw the reserve army of labor into production in order to reduce the labor time of all to some necessary minimum. Once labor power becomes a commodity, the producer no longer sells her product directly. Instead, she sells her labor power to the capitalist, who then puts it to work creating surplus value. Generally speaking, we assume the employment of the labor power by the capitalist is productive, but if Postone’s reading of labor theory is correct, this is not necessarily the case and it becomes increasingly less likely as the forces of production develop. To give an example: The worker in a steel factory and a worker in a defense plant both sell their labor power, but only one is productively set to work by the capitalist for production of surplus value, while the other simply consumes the surplus value that has already been produced. However, things are not always so cut and dried: To further complicate the problem of identifying superfluous labor in the economy, the productively employed worker at the steel factory may produce a commodity that enters into the product of the unproductively employed worker in the defense plant. Did the labor expended on the production of the steel industry input for the defense industry product create value?

If we cannot answer this question, how do we determine how much unnecessary labor is today being expended that could otherwise be reduced to free the working class from wage labor? I want to make a suggestion at this point: insofar as exchange value requires the exchange of one commodity for another, we can use the state sector as a proxy for non-value producing labor in the economy. I will admit that, as a proxy, the state sector only approximates the total volume of superfluous labor that may be present in the economy. However, the state sector fits remarkably well with Marx’s definition of a product of labor that is not a commodity in chapter 1 of Capital. Engels emphasized this point by inserting the statement:

“In order to produce the latter, he must not only produce use values, but use values for others, social use values. (And not only for others, without more. The mediaeval peasant produced quit-rent-corn for his feudal lord and tithe-corn for his parson. But neither the quit-rent-corn nor the tithe-corn became commodities by reason of the fact that

they had been produced for others. To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.)” [My emphasis] According to labor theory, then, a product of labor transferred by taxes, tithes, etc., is not commodity exchange. If my reading of Engels is correct, the entire state sector of ‘the economy’ is, by definition, superfluous to the production of material wealth. The results of my calculation Using the state sector as an admittedly imperfect proxy for non-value producing labor in the ‘economy’, one thing stands out. Almost forty percent of the U.S. ‘economy’ consists of labor time that, by my crude definition above, produces no value. This is down slightly from the immediate aftermath of the financial crisis, but continues to trend upward over the long-term, as the chart below shows:

States sector spending as a percentage of total US GDP, 1900-2015 (sugovernmentspending.com) On top of almost 40% of social labor time that I am using to crudely approximate superfluous labor time in the economy, are some 37% of all workers who no longer participate in the labor force at all. This measure of the reserve army of labor has been rising at least since 2000, reflecting a persistent failure of fascist state “full employment” policies.

Percentage of workers who form the labor reserve army, 1948-2016 (St. Louis Federal Reserve Bank) Taken together, these two categories are critical to our analysis of the potential impact of labor hours reduction. According to the figures supplied by the capitalist state, of every 100 workers in the U.S. economy, almost 37 do not participate in the labor force, per BLS statistics. Perhaps a further 39 workers are not employed productively, but perform superfluous (even outright destructive) labor, like serving in the far-flung network of

U.S. military bases and working in defense-related industries serving this vast network. Incredibly, of every 100 workers available to work in the United States, then, only 24 workers are actually employed in sectors that can be said to produce value, while 76 out of 100 workers either produce no value or are in the labor reserve.

Implications of my calculation for labor hours reduction In the United States, the legally established social working day is eight hours. If 63 out of every 100 workers is employed the aggregate social labor day is 504 hours for every 100 workers. But, as we have seen above, another 39 of the 63 employed workers are employed yet produce no new value themselves; leaving us a mere 24 workers who are both employed and produce value. The aggregate value of the social product of the working day per 100 workers is thus only 192 hours of productive labor.

In most of the literature I have read, writers assume a marginal reduction of hours of labor would be sufficient to absorb the unemployed into the active labor force. For instance, with the broadest measure of unemployment, U6, presently standing at approximately 10%, a reduction of hours of labor from 40 hours per week to 36 hours per week would be sufficient to eliminate all unemployment.

This is a terribly wrong assumption. In first place, the number of workers who are today locked out of productive employment is far larger than those defined as unemployed in fascist state statistics. It includes a massive body of women, black and brown workers and a huge hidden mass of migrant labor. Communists ignore the huge mass of the labor reserve at their peril. Further, this is where the critical labor theory category of superfluous labor time comes into play: Of the 504 aggregate hours of labor hours worked for every 100 workers in the U.S. economy, only 192 hours of value is today being produced; the rest of the labor time is wasted and creates no value. This is because of the 61 workers out of every 100 with jobs, only 24 workers, produce value: 24 times 8 hours equals a mere 192 hours of value.

While it may appear possible to absorb the officially defined 10% unemployed workers by reducing hours of labor from 40 to 36, this reduction in fact would only negligibly affect a portion of the presently unproductively employed workers, while leaving the unemployed and the larger reserve labor force completely untouched. And, as I argued in the previous post, Marx’s argument suggests it will actually have a negative effect on overall employment, causing it to rise. To actually draw the reserve army into production, hours of labor have to be reduced from 8 hours per day to 2 hours or less per day.

Yes, you read that right: a two hour social labor day is possible right now! The result of my rough calculation is surprisingly close to Keynes’ own estimate in 1930 that, within 100 years hours of labor could be reduced to 15 hours. The available data suggests if both superfluous labor and the industrial reserve army were absorbed into productive employment, hours of labor for everyone could be reduced to less than 10 hours per week. Would this be enough to uusher society into a fully developed communist society? Yes. And I will show why in the conclusion to this series.

Why Read Capital At All? (Where almost all introductions to Capital go wrong) I have been reading this essay by a writer at Unity and Struggle on chapter 1 of Capital, but I am not sure what his/her intent was. The writer asserts that if you don’t understand Marx’s concept of labor in its philosophical dimensions you cannot grasp his concept of the human being and therefore his notion of freedom and liberation. “The commodity is therefore not a thing, but a social relation. It is the relation between the labor for use and the labor for exchange. For Marx social relations are relations of labor and the commodity is the form of labor in capitalist society. Marx argues that the dual character of the commodity is also, at the same time, the dual character of labor in capitalist society. However, before we get into the dual character of labor, the commodified form of labor, it is worth taking a step back for a moment and looking at what Marx exactly means by “labor.” This is critical because if you don’t understand his concept of labor in its philosophical dimensions you cannot grasp Marx’s concept of the human being and therefore his notion of freedom and liberation.”

The problem with this approach to Capital, as I see it, is not with any of the points the author makes in the essay, but with her/his project itself. Grasping Marx’s concept of the human being, freedom and liberation might be entirely appropriate for a course at a

university, but, frankly, Marx’s concept of human beings, freedom and liberation is not the least bit relevant for a worker at Wal-Mart.

Marx wrote Capital as a finished work that can be understood on its own terms and does not require us to trace the formation of his ideas. If he had believed that we needed to understand his notion of human beings, freedom or liberation, it seems to me he had the responsibility to include this stuff in his first chapter. In fact, Marx did not include it in his first chapter except insofar as it concerns the topic he has set before him: the nature of the capitalist mode of production. For our purposes, it seems to me the question should be why read it? What use does Capital have in trying to make sense about events going on around us? Can it tell us why wages continue to stagnate? Can it tell us why unemployment remains at levels that are historically unprecedented for the post-war period? Can Capital explain why, without apparent warning, the world financial system collapsed only six years ago? Can it explain why Washington seems completely indifferent to the needs of the vast majority of its citizens and only concerned with policies that advance the interest of the very wealthy.

A lot of commentators on Marx’s Capital find the need to trace all of this stuff back to Marx’s philosophical roots. Marx, on the other hand, saw no need whatsoever to show the connection of his ideas to his Hegelian philosophical background, etc. According to Marx, everything we needed to understand about human being, freedom and liberation could be found by examining the commodity. So, naturally, he begins with the commodity. One good statement David Harvey makes in his introduction to Capital is to bring our attention to how ubiquitous the commodity is, how insignificant and dull it is. Most of our daily life is spent either producing, consuming or exchanging commodities — but never questioning them. The commodity, however, contains the whole DNA of the capitalist mode of production. If labor was so important in Marx’s argument, as the writer asserts, why didn’t Marx begin with labor? Simple: because he was only interested in labor insofar as labor entered into the value of the commodity. Marx has no interest in labor in general in Capital — neither in labor as self-activity nor as an expression of the necessary interchange between mankind and nature. The labor he is concerned with is that specific labor which imparts value to the commodity.

This is important because Marx makes several assertions about this particular sort of value producing labor that are often ignored, even altogether dismissed, by most of the people who write popular introductions to Capital. ● First, we cannot see it directly, but only in the form of the exchange ratio one commodity has with another. ● Second, this labor is not the labor of any individual, but only of the community of producers as a whole. ● Third, this particular value producing labor is strictly limited in its duration to the socially necessary labor time required for production of commodities. ● Fourth, the duration of this value producing labor diminishes as the development of the productivity of the labor increases. ● Fifth, labor cannot produce value unless it also produces a socially useful object that is exchange for another commodity in the market.

These five points are important to grasp, because almost all interpretations of labor theory today violates one or more of them. If you go down the list it is possible to see how one argument or another of some Marxist directly ignores one of the five.

To give just three examples: 1. Is all the labor we do today necessary?

First, there is a lot of talk about the idea of unproductive labor among Marxist academics and great effort spent to nail this category down empirically. This is labor that produces no value or surplus value. As such this sort of labor implies the possibility of a massive reduction in hours of labor with no reduction in the material subsistence of the working class. In direct contradiction to Marx’s argument in capital, the labor theorist, Simon Mohun, seems to think he can identify the sort of labor that produces value and differentiate this labor from labor that does not produce value. In a 2013 paper, Mohun writes:

Conservation of aggregate value added through the circulation phase of the circuit of capital entails that there is no alteration of aggregate value added in the flows that transform a stock of money capital (M) into a stock of productive capital (C: inputs of

labor-power and non-labor means of production), and in the flows that transform a stock of commodity capital (C’: outputs) into a stock of money capital (M’). Hence any laboring activity involved in these “metamorphoses” of capital (M – C and C’ – M’) adds no new value, and is unproductive. Only the wage-labor involved in the transformation of productive capital into commodity capital is productive.” Thus, Mohun seems to have no problem taking a state issued table of job classifications and deciding for himself where in the labor force value is produced and what particular labor produces no value at all. This directly violates the assumption that value is produced by the whole community of producers, not individuals.

2. Has production on the basis of exchange value collapsed? Second, many Marxist have been confused about how to treat inconvertible fiat currency after 1971, when the gold standard finally collapsed. Marx predicted capitalism would lead to a breakdown or collapse in production on the basis of exchange value. Is this what occurred in 1971? Some labor theorists, like Fred Moseley, answer, “No.” They argue that the value of commodities can be determined without employing a commodity money — using only inconvertible fiat currency. This argument means the collapse of the gold standard was not the breakdown of production on the basis of exchange value. Says Moseley, “I argued in Moseley (2005a) that money does not have to be a commodity in Marx’s theory, even in its function of measure of value. The measure of value does not itself have to possess value. Inconvertible paper money (not backed by gold in any way) can also function as the measure of value. In order to function as the measure of value, a particular thing must be accepted by commodity-owners as the general equivalent, i.e. as directly exchangeable with all other commodities.

This clearly violates the assumption that the value of one commodity can only appear in the material form of some definite quantity of another commodity. Moseley seems to have no problem ignoring Marx’s argument that the value of a commodity can only be expressed as exchange value.

3. Is capitalism capable of endless expansion?

Finally, almost all Marxists today assume capitalism can continue on much as it is without collapse unless it is overthrown by the working class. This does not mean these Marxists think there won’t be crises; they just think capitalism will adapt to its crises and need not collapse. An argument along these lines has been made by Michael Heinrich. In his view, and in contradiction to labor theory, abstract value-producing labor has no socially necessary limit:

“The distinction between concrete and abstract labor, which Marx refers to in Capital as ‘crucial to an understanding of political economy,’ is not at all present in the Grundrisse. And in Capital, ‘labor in the immediate form’ is also not the source of wealth. The sources of material wealth are concrete, useful labor and nature. The social substance of wealth or value in capitalism is abstract labor, whereby it does not matter whether this abstract labor can be traced back to labor-power expended in the process of production, or to the transfer of value of used means of production. If abstract labor remains the substance of value, then it is not clear why labor time can no longer be its intrinsic measure, and it’s not clear why ‘production based on exchange value’ should necessarily collapse.” This idea violates the basic assumption that the labor that produces value is subject to strict limits. It also violates the assumption that ‘socially necessary labor time’ is constantly diminished by improvement in the productivity of labor. If both of these assumptions hold, the impact capitalism has on value production, by constantly improving labor productivity, has to end in the complete self-negation of capital. By progressively diminishing the need for labor, capital progressively undermines its own material foundation.

Almost all the stuff I read about capitalism and communism assert that communism is only possible if the working class overthrows capital. There is, in fact, nothing in Marx’s theory to support this claim. If left unchecked, capitalism has to collapse of its own internal contradictions. The reason for this is already introduced in the first chapter of Capital in the form of socially necessary labor time: value producing

labor is not an unbounded duration of labor time, but is limited only to the socially necessary labor time that is required for production of commodities.

In chapter 1 of Capital, Marx asserted the duration of this value producing labor is inversely correlated with the development of the productivity of labor. Yet, if you question some of these academics passing for labor theorists, few if any believe capitalism collapses on its own. David Harvey, for instance, never mentions that Marx’s definition of value as socially necessary labor time implies a limit on the capitalist mode of production, nor does the German labor theorist, Michael Heinrich, nor is it ever mentioned on the site, Kapitalism101 nor in Harry Cleaver’s introduction to Capital, Reading Capital Politically.

So far as I can tell, the only writers who seem to see some limit to capital are Moishe Postone and Robert Kurz — and even here, this notion is an ambiguous one, where the end of capital may not be synonymous with the emergence of communism, but with the emergence of some not very well defined barbarism.

What is established in the first chapter of Capital is that value producing labor has a material limit that imposes a material limit on the lifespan of the capitalist mode of production. Thus, no matter the outcome of the class struggle, this mode of production is doomed. Our attention, therefore, when reading Capital should be directed at identifying the vulnerabilities inherent in the mode of production and the hidden material (not just political) opportunities in a crisis. Most of all, what practical steps we can fight for to accelerate the demise of the mode of production and the emergence of communism.

We need an introduction to Capital written for activists directly engaged with the capitalists and the fascist state.

You produce twice as much as your parents did, for one fifth of their wages.

I have already shown you this chart, which demonstrates that between 1964 and 2012, the nation’s labor force doubled.

Change in total nonfarm payroll between 1964 and 2012 (BLS) During the same time as the labor force doubled, I showed, hours of labor doubled as well:

Change in total hours of labor in the United States between 1964 and 2012 (BLS) But this doubling of hours of labor only examines part of what has actually happened in the last fifty years. Not only has the labor force and hours of labor doubled, the Bureau of Labor Statistics data shows during that same period output per worker increased at an annual average rate of approximately 2 percent over the last fifty years. Which means output per employed worker has doubled as well.

Increase in productivity of labor between 1964 and 2012 (BLS) That means we have achieved a five-fold increase in total material wealth produced annually between 1964 and 2012 in the United States. Yet, for all this increase in material wealth, poverty still exists.

It gets worse: According to data supplied by the Department of Agriculture, between 1964 and 2012, the farm labor force fell from 7.2 million to 872 thousand — a fall of 88%. Yet, despite the fall in the number of people engaged in agriculture over the period owing to improvements in the productivity of farm labor, people still go to bed hungry in this country. Total real material output rises to 500% overall and labor needed in agriculture falls 88%; yet, despite this improvement in material wealth, 43 million workers still live in poverty according to Washington. Moreover,

there has been an actual increase in the number of workers living in poverty since 1964.

Despite these facts, Washington tells us we cannot afford our current material standard of living. Politicians say either retirement has to be delayed and medical coverage cut, or Washington must go still deeper in debt.

Now ask yourself: If you are working twice as long as your parents, producing five times as much material wealth, should you be better or worse off than they were? So where did all that increased wealth go? Since you are, in fact, poorer than your parents, it is obvious none of that increased wealth made its way into your pockets.

So why are we working like dogs if no increase in the amount of labor we do adds anything to our material standard of living? Ask politicians in Washington this question and they will give you two different answers. The GOP says you need to learn to live within your means, while the Democrats say you need to carry even more public debt. However, ‘your means’ have

increased five-fold in the past fifty years, and debt cannot by anything that has not already appeared on the shelf at Wal-Mart. Both Republicans and Democrats say you aren’t working hard or long enough — you need to work more years and more hours. So, in return for all this additional work, they promise you less.

And why isn’t the communist Left addressing this issue? Personally, I think they don’t talk about it because the labor hours issue doesn’t involve more fascist state spending. The communist Left in this country are a bunch of fascists dressed up as communists. For the communist Left, there is no problem that cannot be fixed with more fascist state spending.

***

The first and most banal of objections to the possibility labor can be reduced or even abolished altogether that I usually hear from communists is that any reduction in hours of labor must lead to a fall in real or nominal wages. This argument is entirely without any merit whatsoever and is made mostly by people who are either completely ignorant of the difference between nominal and real wages or prefer to pretend they don’t know the difference.

The argument is used only to distract people from the fact that nominal wages have been rising for decades while real wage has been falling. The real hourly wage peaked in 1970, as research shows, and has been stagnant even in the empirical data of the fascist state. This data is not to be trusted, however, since it rests on the most savage and highly suspect notions of ‘utility’. It is nothing more than an attempt to quantify how much it costs to maintain the working class at the lowest possible level of material subsistence consistent with the continued physical existence of the worker. And, moreover, the data itself is highly vulnerable to manipulation by

anyone with a political agenda — in first place corporate interests in Washington.

However, if we measured wages in 2012 by the same objective standard used in 1964 — a definite quantity of gold with a definite exchange rate with dollars — the real wage in 2012 has fallen to just 18 percent of what it was in 1970.

Average daily wage in gold 1964-2012 Using this measure there is no question why you think you are poorer than your parents. You clearly are only earning in a week what your parents earned in a single day when they were your age.

The apologists for the fascist state (and dumb Marxist academics following them) argue employing gold as a measure for the real wage is ‘gold-buggery’ or fraudulent. Gold, they say, is a barbaric relic.

Really? Whoever showed this to be true? Marxists who agree with this bourgeois opinion need to provide evidence that this is true — any empirical evidence at all that the dollar gives gold its value, not the other way around. There are dozens of currencies in use today and hundreds in the last 200 years. Communists who mindlessly repeat the bullshit spewed by bourgeois economists need to show — employing actual empirical data, not their fevered delusions — how any currency in the world market today — from the dollar, to the euro, to the yen, or yuan — gives gold its value.

You fuckers using M.E.L.T. theory need to prove it or pack your shit and go back to the university cubicle where you fuckers belong.

There is no question at all that Americans are doing twice as much labor, producing 2.5 times as much output, for wages that are a fifth of what they were in 1964. Longer hours of labor has done nothing to increase wages; instead they have been accompanied by a continuous fall in wages. That 80 percent fall in wages between 1970 and 2012 had to go somewhere — if it did not go to the wages, then where?

There is no question what has happened in the past fifty years: every hour of additional labor has been diverted to profits and fascist state spending. The argument of the Republicans is that increased profits is necessary to the increase employment of the working class. The argument of the Democrats is that increased fascist state spending is necessary to increase the material living standard of the working class. In fact what is demonstrated in the data is that increased labor by the working class only increases profits and

fascist state spending. Increased hours of labor does nothing for the working class but make it poorer — there is no trickle down.

What is so fascinating about this is that every statistic I have mentioned comes down to the same thing, which every communist researcher knows to be true. There has only been a deterioration of the condition of the working class over the past fifty years. However, no communist researcher ever seems to ever make the connection between this fact the working class is poorer today than fifty years ago and the increase in hours of labor over the same period. The cause of our increasing poverty is always attributed to some cause other than labor. Dumenil and Levy for instance argue: “The new configuration of income distribution was the outcome of various converging trends. Strong pressure was placed on the mass of salaried workers, which helped restore profit rates from their low levels of the 1970s or, at least, to put an end to their downward trend. The opening of trade and capital frontiers paved the way to large investments in the regions of the world where prevailing social conditions allowed for high returns, thus generating income flows in favor of the U.S. upper classes (and broader groups that benefit to some extent by capital in-come). Free trade increased the pressure on workers, the effect of the competition emanating from countries where labor costs are low. Large capital income flows also derived from the growing indebtedness of house-holds and the government. Extreme degrees of sophistication and expan-sion of financial mechanisms were reached after 2000, allowing for tremendous incomes in the financial sector and in rich households. The crisis, finally, revealed that a significant fraction of these flows of income were based on dubious profits, due to an increasing overvaluation of securities.” So what is missing here? In all the talk of “new configurations of income distribution”, “income flows”, and “financial mechanisms”, the two writers produce a book totaling hundreds of pages and never even once mention that total hours of labor and that the productivity of this labor have both doubled in the past fifty years. This is entirely laughable, since Marxism asserts that it uses ‘labor’ theory in its analysis. How can you argue you use labor theory if you never actually look at labor itself? How does that work? Are we just supposed to take your word that you employ labor theory when you never actually mention labor? Do you think we are so dumbed down by phony debates in DC, we will just accept any assertion you make?

Why superfluous labor time is a really big problem for labor theory To explain the impact a reduction of hours of labor has on the state, it is first necessary to explain three interrelated phenomena that, while not explicitly assumed by Marx in Capital Volume 3, chapter 15, nevertheless can only be explained based on that text. Taken together these three premises amount to the breakdown of production based on exchange value. These premises are: 1. A growing mass of superfluous labor time within the mode of production; 2. a growing divergence between the values and prices of commodities (i.e., inflation); and 3. a growing mass of state debt that cannot be repaid.

With regards to point 1, we have already spoken of the empirical work of both labor theorists and bourgeois simpletons that point in the direction of a significant mass of unproductive labor time within the so-called economy. However, this observation immediately runs into a problem for labor theory: superfluous labor cannot exist on the premises Marx assumes in Capital, yet it has to be explained based on those premises.

In Capital, Marx assumes the mode of production adapts the mass of production to the scale of production, As the scale of production increases, the total labor time of society is forcibly adjusted “so that it does not exceed the average social labour-time required for the production of the commodities.” Thus, the very idea there can be significant amounts of superfluous labor time in the economy runs into the problem that, on the premise Marx assumes in Capital, superfluous labor time should not exist. This is not a defect of labor

theory, but simply requires us to explain superfluous labor time rather than simply assume it.

Under what conditions might the labor time of society exceed the socially necessary labor time required for production of commodities? Marx provides no direct answer to this problem, because he is not considering it in Capital. A growing mass of superfluous labor time within society clearly violates the law of value, yet no labor theorist has seen fit to explain how such a violation can occur. To put it simply, the existence of superfluous

labor time can only be premised on conditions where the law of value no longer holds sway over society, but this premise also suggests labor theory is no longer a valid description of how society reproduces itself. Since the existence of superfluous labor means the labor time expended on production of commodities exceeds the labor time socially required for production of commodities, this conclusion is impossible to sidestep. Marx, however, does provide us with a hint for when this condition must emerge — absolute overaccumulation of capital: “There would be absolute over-production of capital as soon as additional capital for purposes of capitalist production = 0. The purpose of capitalist production, however, is self-expansion of capital, i.e., appropriation of surplus-labour, production of surplus-value, of profit. As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working-time supplied by this population, nor the relative surplus working-time, could be expanded any further (this last would not be feasible at any rate in the case when the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore, when the increased capital produced just as much, or even less, surplus-value than it did before its increase, there would be absolute over-production of capital; i.e., the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC. In both cases there would be a steep and sudden fall in the general rate of profit, but this time due to a change in the composition of capital not caused by the development of the productive forces, but rather by a rise in the money-value of the variable capital (because of increased wages) and the corresponding reduction in the proportion of surplus-labour to necessary labour.”

To be sure, many labor theorists, like Simon Clarke, reject this passage from Marx’s Capital as “a purely hypothetical case, based on ‘the most extreme assumptions that might be made'”, not an accurate description of the process of capitalistic reproduction. However, in both Postone’s work, (see page 374 of his book, Time, Labor and Social Domination) and in the writings of Robert Kurz the idea is firmly demonstrated as a necessity, and more than a few labor theorists have asserted empirical evidence for superfluous labor within the mode of production.

Assuming Marx argument regarding absolute overaccumulation in volume 3 is not hypothetical, labor that is superfluous to the production of commodities must emerge at the point where no mass of additional capital adds to the mass of surplus value that can be employed as additional capital. At that point in the development of the productive forces, “there would be a steep and sudden fall in the general rate of profit”. Thus, whatever causes the emergence of superfluous labor time must be secondary to a crisis brought on by absolute overproduction; which is to say, the routine expenditure of labor time in excess of that required for the production of commodities (superfluous labor time) must begin with this expenditure having already occurred historically. At that point society would be confronted with the fact that further extension of hours of labor must be entirely superfluous to its material needs. At the same time, society must be confronted with the situation that the extension of hours of labor beyond its socially necessary limit has become “a condition – question of life or death – for the necessary”, that is, for the production of value. (Marx, Grundrisse.) Which is to say, at some point the buying and selling of labor power must run into the problem that it can continue only if the labor power is to be employed unproductively. Essentially, the production of surplus value by one section of the population of workers is made dependent on the unproductive consumption of this surplus value by another section.

Since at least Rosa Luxemburg, the state has been implicated in this problem by labor theorists. In this perverse relationship, capital employs labor power for the production of surplus value, while the state employs labor power to consume it unproductively. On the other hand, the production of value and also surplus value and exchange relations have not been overthrown. Although, as Marx predicted in the Grundrisse, “production based on exchange value breaks down”, exchange continues to appear as the basis for economic activity. Production based on exchange value has broken down, but exchange relations continue.

Since there is no longer the exchange of values, a commodity can no longer function as the medium for circulation of commodities. Production under these circumstances is still the production of values, but the circulation of these values is no longer determined by their exchange value. And the reason for this is simple: if the circulation of the commodities were determined by their exchange value, there would be no profits. According to Marx, “capital consists of commodities, and therefore over-production of capital implies over-production of commodities.” In a condition of general overproduction, the market is saturated with over-produced commodities. The commodities that have been over-produced cannot be sold at a profit, and must even be sold below their values. In other words, the exchange value that expresses the value of the commodity has fallen below the socially necessary labor time required to produce it. This exchange value, according to Howard Nicholas, expresses not the labor time required to produce the commodity, but to labor time required to reproduce it after it has been consumed. (See chapter 2 of his book, “Marx’s theory of price”) It is prospective labor time, in that it establishes the new maximum of socially necessary labor time that can be expended on reproduction of the commodity. If this prospective labor time now falls below the minimum required to produce the commodity at a profit, profit can only be secured by paying more for the commodity than its value. However, on this premise commodity money can no longer serve as the medium for the circulation of commodities. Commodity money suffers the ‘defect’ that it can only express the value of the commodity as some quantity of exchange value. But, if Nicholas is correct, this exchange value has now fallen below the minimum necessary to produce the commodity at a profit. To produce a commodity at a profit, it must sell above its exchange value — a condition impossible on premise of commodity money. Thus the emergence of superfluous labor time has implications for the relationship between the values and prices of commodities — the emergence of superfluous labor must be expressed in a growing divergence between the values of commodities, as expressed in exchange value and, therefore, in the prices of these commodities denominated in some commodity money, and the prices of the same commodities in some token that now serves a medium for the circulation of these commodities. I will discuss this implication next.

How superfluous labor time creates inflation

The purchasing power of one dollar, as measured in percentage of an ounce of gold. (1970-2012) I want to turn to the question of the impact of the growing mass of superfluous labor time has on the exchange value and prices of commodities. Once i am finished, I hope you will understand why inflation is not a mystery — and, consequently, why all inflation within the mode of production can be traced to the growing mass of unproductive labor. As I explained in the previous post, the emergence of a significant mass of superfluous labor time within the mode of production is the result of the tendency toward overproduction of commodities, of overproduction of capital in the form of commodities. According to Marx in Volume 3 of Capital, this overproduction necessarily results in the devaluation of capital: At the point where overproduction of capital becomes a general condition of the mode of production, no increase in the mass of capital can add to the mass of profits; indeed, the possibility exists that an increase in the mass of capital actually results in a fall in the mass of profits.

This result can be grasped if we think of overproduction in the form of additional commodities produced in a market already completely saturated by overproduction. Under such conditions, new capital in the form of the commodities does not add to profits but only results in a fall in the prices of the commodities and, therefore, a fall in profits. New capital added to the

mass of capital would, under these circumstances, only lead to the withdrawal of an equal portion of existing capital under the pressure of competition. Says Marx, “In reality, it would appear that a portion of the capital would lie completely or partially idle (because it would have to crowd out some of the active capital before it could expand its own value), and the other portion would produce values at a lower rate of profit, owing to the pressure of unemployed or but partly employed capital.” A portion of the total capital would have to give up its characteristic quality as capital; it could no longer be productively employed for the purpose of producing surplus value. It is true, as some Marxists argue, that there are counteracting tendencies to this, but, in this case, we are assuming a general condition of overproduction under which these counteracting tendencies no longer serve to restore profits. Once overproduction is absolute, no counteracting tendency suffices to enable the mode to restore itself nor all of them together. The mass of capital has encountered the limits of its expansion as a mode for the production of material wealth; in this situation, any additional expansion of hours of social labor must be superfluous to the production of material wealth.

On the other hand, capital is the production of surplus value, which must lead to the expansion of hours of social labor and to the employment of additional labor power for purposes of production of surplus value. To put this another way: If the production of surplus value is to increase, the surplus value produced by this increase must be consumed unproductively. Marx explains why:

“It would be immaterial in this respect if a part of the additional capital were to take the place of the old capital, and the latter were to take its position in the additional capital. We should still always have the old sum of capital on one side, and the sum of additional capital on the other.” Newly produced capital, if it found its way into productive employment, would simply push a portion of older capital out of productive employment. In any case, some definite mass of capital would always be forced to cease operating as capital. The capital has already lost its capitalistic character,

i.e., it can no longer operate as capital, can no longer be employed as capital to produce surplus value. On the other hand, the existence of this excess capital, (of excess capital in the form of commodities and means of production), depresses the profits of productively employed capital. Destroying (unproductively consuming) this excess capital is a means to reduce the pressure on profits. Since this mass of capital already has ceased to function as capital, it can be tapped by the state for this purpose. This can be seen clearly in the Agricultural Adjustment Act of 1933, “which reduced agricultural production by paying farmers subsidies not to plant on part of their land and to kill off excess livestock.” This crude, primitive method of reducing overproduction of capital already contains in itself all the features of superfluous labor. The law came into effect on May, 1933, about one month after Roosevelt signed Executive Order 6102, which replaced commodity money with fiat dollars. Once the holding of monetary gold was outlawed in the United States, Washington could begin counterfeiting its currency without fear that a two tier system of prices — one for gold, the other for fiat dollars — would emerge.

As a result, the Roosevelt administration could simply print the necessary currency to pay farmers to not grow food. The stated aim of this policy was, “to relieve the existing national economic emergency by increasing agricultural purchasing power”. Which is to say, the state could maintain farm output prices above their exchange values. But the rate of profit is the goad of the mode of production; thus by maintaining prices above their exchange values and artificially subsidizing profits, the state made possible additional employment of capital in a branch of production already suffering massive overaccumulation. Thus the additional investment in the branch was achieved by the wholesale destruction of the productive forces produced within the branch. Had the state simply counterfeited its currency to pay the farmers to not grow food, and allowed this counterfeit to circulate along side commodity money, a two tier system of prices would have immediately popped up within circulation. The purchasing power of the currency would have fallen in proportion to the additional currency created and issued by the state. According to labor theory, this is because, the exchange value represented

by the mass of state issued currency, no matter its quantity, can only equal the value of the mass of gold that would have taken its place in circulation. Since the exchange value of farm output had fallen due to overproduction, the additional currency paid to the farmers would have no more purchasing power than the real value of the output. Paying subsidies to the farmers to not grow food would have only brought discredit to the currency, because of the inflation of currency prices of commodities. Currency prices of commodities would inflate, while the prices of the same commodities denominated in gold would have remained stable and the sellers of commodities would have demanded gold for their commodities.

By replacing gold with fiat currency and outlawing the monetary use of gold, the state could not prevent the inflation of currency prices, but it could prevent the sellers of commodities from demanding gold in exchange for their commodities. In case you missed the significance of this statement: the biggest sellers of commodities are not Wal-Mart, Target or any other capitalist firm, but the proletariat, who sell their labor power to Wal-Mart, Target and similar capitalists firms. Removing gold from circulation and replacing it with a valueless fiat currency, therefore, had the double effect of devaluing labor power and subsidizing profits.

I believe it is critical to understand that inflation is not caused by counterfeiting currency; rather it is the overproduction of capital that requires the counterfeiting of currency. The bourgeois monetarist simpletons ascribe to currency counterfeiting a power it does not have to create inflation. The overproduction of capital is, at the same time, the overwork of the population of workers for the purpose of producing surplus value. Inflation, therefore, begins not with the counterfeiting of the currency, but with hours of labor that are too long.

The whole of the secular inflation that has occurred since the Great Depression in all countries can be traced to overwork of the working class, not to currency counterfeiting. The expenditures of hours of labor beyond the duration of socially necessary labor time required for the production of commodities requires also prices for these commodities that increasingly diverge from the values of the commodities. While commodity money prices reflect, and can only reflect, the actual exchange value of the commodities

(i.e., the labor time required for their reproduction), prices must increasingly reflect the actual labor time expended during that production. The relation between the sum of prices and the sum of exchange values is the relation between the total labor time of society and the socially necessary labor time required for reproduction of the material needs of society. The general rule regarding the relation between these two magnitudes of labor time is this: as the socially necessary labor time of society decreases, the total labor time of society must increase. This is why the very possibility of price deflation produces so much horror within the ruling class. Bourgeois theory states this inflation can be produced by printing money, as Bernanke explained in his 2002 speech on deflation. But this is not true: inflation can only be produced by extending hours of labor. Likewise, profits cannot be increased by austerity or cutting wages, but only by increasing hours of labor. Both the failure of QE and the failure of austerity in Greece demonstrate profit can only be increased by increasing hours of labor.

Superfluous labor and state debt In his “Apotheosis of Money”, Robert Kurz makes this statement: “If State consumption and State credit, crushed together as if by an avalanche, play a central role in this development, this is also due of course, to the fact that the State (unlike a private entity which avails itself of credit) is considered to be a “secure debtor” which means, however, that the State, in the event of a great monetary and credit crisis, will not declare bankruptcy, but will simply expropriate its citizen-creditors.” The argument Kurz makes here is that the unproductive consumption of surplus value, made possible by the credit extended to the state, is dependent on the state’s ability to repay its debt and must, sooner or later, result

Decreasing federal deficits preceded both the 2001 and 2008 crises. (Source: St. Louis Federal Reserve) in the state expropriating the owners of capital. I am not especially satisfied with the way Kurz formulates the problem here. My difficulty with Kurz’s formulation is probably best expressed in the words of the bourgeois simpleton, Paul Krugman — for reasons that are not entirely clear to the bourgeois simpletons the long-standing prediction of an impending crisis for Washington’s finances over the last thirty years never finally materialized:

“Fear of a Greek-style fiscal and financial crisis has loomed over much of our policy discourse over the past four years, and has played a significant role in shaping actual policy, constituting the principal argument for austerity in countries that don’t face any current difficulties in borrowing. However, despite repeated warnings that crises of confidence are imminent in floating-rate debtors – mainly the United States, the UK, and Japan – these crises keep not happening.” Krugman has his explanation for why the predicted crisis “keeps not happening”, but he is a simpleton who thinks the problem is, “as simple and silly” as he is. Labor theory offers a much simpler and elegant explanation for why Washington has never experienced the sort of crisis predicted by bourgeois economists. It is an explanation I will need if I am to finally explain how reduction of hours of labor affects profits in an economy characterized by massive expenditures of unproductive labor time.

***** As I mentioned, there is already a mass of capital that is incapable of functioning as capital, incapable of producing surplus value. This capital does not become unproductive because it is unproductively consumed by the state; rather it must be lent to the state because it is already unproductive, i.e., because it already is superfluous to the production of surplus value. On

this assumption, at an earlier stage in the development of the mode of production, this excess capital would have suffered devaluation. Since the capital is incapable of operating productively, repayment of the debt does not figure in the discussion.

It is true debt is regularly retired by the state; and it is true the retired debt may be taken by its owners and invested productively; however, under the conditions I am considering (absolute overproduction of capital), the capital withdrawn from the state is immediately replaced by other capital that now cannot be employed productively and which must, therefore, be lent to the state. Thus the total mass of excess capital never falls, although it may change hands.

This argument generally follows Marx’s that some portion of capital must stand idle no matter that new capital might take the place of old capital in productive employment. Which capital can be employed productively and which must stand idle is, of course, settled by the competitive struggle. However the result of this struggle never changes: some definite given mass of capital must stand idle. This mass of idle capital constitutes accumulated state debt. Since this mass of idled capital does not decrease (under the assumption I am using), it follows that the state never has to repay it. The question of whether the state can repay this debt never enters the picture, except in the imagination of bourgeois simpletons. The state is a “secure debtor” not because it can expropriate its citizens, but because the mass of superfluous capital that must be lent to it always increases. No matter how much the state might desire to reduce its debts, such a reduction is a fantasy dreamed up by “deficit hawks”. Retiring or even reducing the state’s total mass of debt has no basis in reality. Not only can state debt not be reduced, even the rate of growth of this debt is imposed on the state. Should fascist state officials try to reduce the rate of growth, as was attempted during the Clinton administration (see the accompanying chart), the result would be the same as occurred then: a crisis. The rate of growth of state debt is determined not by the aims or policies of the state, but by the accumulation of superfluous capital. The Tea Party learned this lesson the hard way, when the whole of Washington turned on it for interfering with the increase in the debt ceiling.

However it is not enough that the state should simply consume the superfluous capital. If the aim of the state were simply to consume superfluous capital, it could do this by taxing the capital and spending the revenue thus generated unproductively. But the crisis that produces superfluous capital and an excess population of workers is a crisis produced by the falling rate of profit. The superfluous capital must indeed be consumed, but it must be consumed in a way that adds to the mass of profit. From the standpoint of the mode of production, the superfluous capital cannot be simply taxed away, but must be borrowed from the capitalists in order that interest can be paid on it. The payment of interest on the borrowed capital keeps up the facade that this capital is still productive, i.e., still producing surplus value. The truth behind this fiction is revealed once we realize the state produces no surplus value and, hence, cannot really add to the mass of surplus value.

The MMT school has a description of federal debt that is a smidge closer to an accurate description than the one made by Kurz: “The Government of the United States offers the functional equivalent of interest-bearing savings accounts to investors, usually wealthy individuals, large corporations, and foreign nations. The savings accounts are usually called US Treasury securities and the sum of their face values is called the debt-subject-to-the-limit; or more colloquially, the national debt, even though comparable savings accounts in banks, are for some reason, not called bank debt.” First, according to the modern money school then, the state “accepts” the excess capital from capitalist firms, the very wealthiest persons and foreign governments and pays interest on this capital like a bank; even though treasuries function more like a savings account, it is still referred to as if it is debt. But even the MMT description does not capture the what has taken place: by lending its excess capital to the fascist state, the capitalist class expropriates itself. The mass of capital held by the state in the form of outstanding treasuries never falls — thus it has effectively ceased to be private capital. The capital is now capital held in common by the whole class throughout the entire world market and accrues interest to each capital based on the size of their holdings. On the other hand, the mass of capital held in this form is now completely social and has lost its private character entirely.

Second, the capital exists only notionally as an entry on a ledger or a piece of paper labeled “U.S. treasury”. It has, in fact, ceased to exist at all, since it has been entirely consumed by the state. To grasp the significance of this fact, requires only that we imagine what it would take for Washington to make good on the debt should it not be able to “borrow” additional capital to service its debt. Since the state produces nothing, its only source of payment of its outstanding obligations would be taxes and counterfeiting; thus the state would have to tax capital in order to repay its debts to capitalists, or the state would have to counterfeit dollars on such a scale as to render the currency used to pay its debts worthless. In either case, the effective selfexpropriation of capital by the capitalists would be converted into a real expropriation by the state.

The following conclusions can be stated: First, the state does not borrow capital and then employ it unproductively; rather the capital is already unproductive, i.e., incapable of producing surplus value on its own; and must, therefore, be placed with the state. Second, the mass of this excess capital never falls and, therefore, the mass of capital at the disposal of the state must always increase. Third, state debt is not driven by the aims or policies of the state, but by the needs of this excess capital to produce a profit. Fourth, since this process is determined by a crisis produced by the falling rate of profit, the state must resolve it in a way that adds to the mass of profits, i.e., it takes the form of money loaned to the state on which the state pays interest to the capitalists. State debt is a mass of excess (entirely superfluous) capital that could not produce profit unless the state borrowed it and paid interest. Thus, the reason the state accumulates debt is not to achieve any policy aim, but to restore profits by converting some definite mass of excess capital into interest-bearing capital. However, unlike industry, the state does not produce commodities and cannot produce the surplus value necessary to pay interest; thus the state’s ability to pay interest on the capital it has unproductively consumed rests on borrowing additional excess capital.

Since the mass of excess capital is constantly increasing within the world market, there is always some mass of capitalists competing to lend their capital to the state. The state does not compete for capital, rather the opposite is the case: capitals compete against each other to lend to the state. If the rate at which the state borrowed the excess capital fell below that required by the mode of production, the competition among capitalists to lend to it would actually intensify — leading to what the bourgeois simpletons call “the flight to safety”; i.e., the phenomenon where the interest the state must pay falls in a crisis.

This phenomenon is already well documented by the simpletons and is the exact opposite of what they assert happens in a crisis. Rather than Washington’s interest rates rising during financial crises, capitalists will even place their capital with Washington at a loss. The loss experienced by capital at negative interest rates is far less than would be experienced should the capital be devalued. The capital is already devalued in fact — i.e., it no longer can produce surplus value and is, therefore, worthless — in a crisis this actual devaluation is threatens to materialize itself in the form of a proportional devaluation in nominal terms.

The less capital Washington borrows and unproductively consumes, the greater the competition among capitals to lend to it, and the lower the rate of interest Washington must pay for this excess capital. It follows from this that unusually low “policy” interest rates as at present is a sign the world market is awash in superfluous capital that must be consumed unproductively through fascist state borrowing, or the mode of production will suffer a massive devaluation event.

On the basis of this and the preceding post, I believe we can now outline how a successful struggle to reduce hours of labor by the working class will affect both capital and he state. I will turn to this next.

Are state deficits “necessary”?

The intense fear expressed in Washington and in financial markets around the world of simply balancing a fucking budget should grab your attention. It’s not like the capitalists are being asked to commit suicide as a class. So why the profound resistance to simply balancing Washington’s budget? If the state is running a deficit, it is spending more than it is directly extracting from the economy, i.e., from the total output of the capital. A balanced budget means the fascist state can spend no more than it directly extracts from the economy through taxes and other revenue. So what is all the fuss about and how can we determine whether this deficit spending is necessary?

1. The practical aim of fascist state spending

The Left always wants to begin the discussion of the shutdown by focusing on the aim of fascist state spending. They assert this spending is necessary based on any number of objectives: taking care of those who cannot work, educating children, engaging in scientific research or mobilizing sufficient resource to undertake really large scale capital improvements. The state, they argue, improves means of communication, education, medical care and support research which can add to productiveness of labor. It can undertake very large projects that support the expansion of capital — for instance, the Hoover Dam, rural electrification, the national defense highway system, etc.

These may be worthy endeavors indeed, even if the Left, at the same time, overlooks or quietly ignores the fact the state also spends on rather horrific activities as well. But even here one person’s worthy objective is another person’s horrific act of naked aggression and terror aimed at the Muslim world. Except in the most egregious cases, it is difficult, if not impossible, to go through state spending line by line and decide what is worthy and what is naked terrorism. Medical care, for instance, would probably pass the test of a necessary expenditure, but what of medical care rendered to wounded soldiers who have just attacked an Afghan village?

This problem is as difficult as it is to pick out labor that can be categorized as productive and labor that must be categorized as unproductive. On the one hand, you have the clearly wasteful military expenditures of the state, but, on the other hand, large scale capital improvements like the Hoover Dam; on the one hand, you have expenditures that result from the perverted logic of the mode of production — like unemployment compensation, food stamps, WIC, etc., but, on the other hand, you have public expenditures that would be necessary under any mode of production — such as caring for the sick, the elderly, those unable to work and education of children.

Even apart from purely ideological, moral or political differences among members of society, state expenditures cannot be so easily divided into spending that is necessary versus spending that is clearly waste, fraud and abuse as is typically promised by politicians. We certainly need a way of approaching this problem that is not subject to moral, ideological or political prejudices.

2. State Spending from the standpoint of the mode of production

What additional measures are available by which we can decide which state spending is necessary and which can be safely eliminated? Obviously one

measure is the activity society must undertake no matter what mode of production we consider: capitalism or communism. It is obvious that no matter which mode of production is involved, we have to care for the sick, the elderly, children, etc. And it is equally clear, certain activities of the state are entirely connected to the mode of production under consideration.

Examples of this latter group would be food stamps, unemployment compensation, Social Security and the military. Since communism is a mode of production without money, there would be no need for Social Security allotment for those no longer able to work. Since communism is a mode of production without wage labor, obviously there is no need for unemployment compensation. And since communism is a mode of production without nation states or borders, obviously there is no need for military expenditures.

This conceptual division of state spending into two categories does not by any means resolve the practical problem we face in any given budget. But it does permit us to see that much of the spending we consider essential today are only essential insofar as we presume no change in the mode of production. If we assume the continuation of wage slavery, many state spending line items appear necessary to a civilized society, but this alleged civilized society rests on the most uncivilized reduction of the mass of society to slaves. For instance, unemployment compensation appears necessary only because the capitalist can deny you employment at will and let you starve to death. If the capitalists did not have the power to deny you access to the most vital means of life, unemployment compensation would be irrelevant.

Some on the Left might object to this definition of state spending as well — arguing that present state expenditures that may not be necessary under communism are not unnecessarily against the backdrop of present

relations. Insofar as we must deal with present reality, we cannot base our preferences on circumstances that will only exist in the future. This is an valid objection, in my opinion.

3. The sources of state expenditures

So it appears we may be at an impasses if we just focus on the aim of fascist state spending. Is there another route to arriving at an objective measure of what is necessary and unnecessary in fascist state expenditures? I would suggest there is.

On the other side of this ledger fascist state finances is the income of the state: the various sources of state revenue: taxes, fees and debt. Like any other buyer, the state cannot buy unless it has cash. In labor theory, no one can become a commodity buyer unless he has previously been a commodity seller. Before we talk about anyone buying commodities in the market, we have to account for the money in their hands — and this presupposes the buyer comes into the money by having previously sold a commodity of his own. In labor theory there is one notable exception to this rule — one buyer who does not sell before buying. That exception is the producer of the money commodity who produces money directly with her own labor — think of the producer of gold or silver. The producer of the money commodity ‘barters’ her commodity directly for the things she needs.

However, there is another buyer who also does not sell and for whom we must account for how it appears in the market as a buyer of labor power and commodities: the state does not gain cash for its purchases by selling a commodity. The state buys without having first sold, but this is not because it produces money. Some economists, like those in the so-called “modern money” school, argue that the state appears in the market as a buyer by creating currency out of nothing. It then uses this currency to make

purchases of labor power and other commodities. This argument, however, is wrong.

To account for the expenditures of the state, we must first account for how the state comes into the money it employs to buy commodities. Unique among all buyers, the state can buy without selling any commodity or producing anything. Since it does not produce a commodity, the means for its purchases must come from society at large. Whatever the aims of state expenditures, therefore, the analysis must begin by explaining where the means for those expenditures come from.

This fact is almost always overlooked when it comes to analyzing the role of state spending in society. The Left usually want to jump into the middle of the discussion and talk about how the state spends its revenue but never about how it gets it in the first place. Since the state produces nothing, it cannot spend anything that does not already exist prior to its proposed spending.

The state is not the producer of the means it uses to buy commodities, society is the producer of those means. If we outline the means by which the state buys without selling in its simplest forms, we get this: First, the state can directly expropriate a physical portion of the total product of society to maintain itself as the state. Second the state can levy a tax on a portion of the total product of society in its money form and employ this money to purchase commodities as needed. Third, the state can over-issue (counterfeit) its fiat tokens to make the purchases of commodities as needed without seizing commodities or money.

In all three examples I outlined above, nothing has changed in its essential character: the state is still essentially expropriating a portion of the social product. It can do this by seizing the commodities outright, seizing a

portion of the money in circulation, or simply purchasing them with its fictional money. And in all three cases, should the state overstep its bounds, it risks bringing discredit to itself or its fiat. If it discredits itself, it will be overthrown; if it counterfeits its tokens excessively, it will bring discredit to its fiat — and the fiat will be rejected. In any case, we have to assume there is a limit beyond which the state cannot advance based on the material requirements of the social process of production.

The problem with what a stated above is that, with the shutdown, we are dealing with an altogether different problem: Perversely, the crisis is not produced by the state overstepping its bounds and expropriating an excessive mass of the social product — by imposing excessive taxes or excessive counterfeiting — the crisis produced by the shutdown results if state spending DOES NOT exceed the state’s capacity to tax and counterfeit. The state must, in other words, spend more than it can raise in revenue either by taxing or counterfeiting. It must borrow from the available pool of idled capital in order to supplement its capacity to buy commodities based on taxes and counterfeiting fiat.

If it does not do this, the simpletons warn us of a likely economic calamity on the scale of the Great Depression or even greater.

4. Deficits as the real devaluation of capital within capitalist society So there is a greater problem with defining what state spending is ‘necessary’ and ‘unnecessary’ than the aim of the spending. When trying to determine necessary spending, we tend to focus on the aim of the specific spending. I would suggest this is wrong — we have to begin where all discussion of spending must begin. Namely, where are the means to spend coming from?

All state spending has its source in the labor for which the social producers are not compensated: it is a form of surplus value. The entirety of fascist state spending is the product of the exploitation of the working class and has no other source but this exploitation

Some on the Left argue the state can increase it spending simply by taxing the capitalist, but this is utter bullshit. Even if we assume there are no taxes at all on the working class, all the taxes paid by capitals result from exploitation of the social producers. Taxing capital only indirectly taxes the working class by taxing the surplus extracted from it, taxing the working class directly only adds to the surplus produced by the working class. The widespread notion on the Left that the capitalists can be made to pay for their state is sophomoric drivel.

Jesus Christ, people! The capitalist doesn’t even pay for labor power, but only advances his variable capital. How does he pay for his state?

Thus all state revenue results from the exploitation of the social producers and all state debt over this revenue is simply borrowing from the capitalists the wealth they have already extracted from the social producers. The source of all wealth in the society, no matter what form it takes, and insofar as it does not take the form of wages, results from the unpaid labor of the social producers. And, by wages, I mean the actual real wage — the basket of commodities the laborers need to reproduce themselves as wage slaves.

This wealth is divided among the class of parasites as profits, interest, rent and taxes. Each specific portion of these parasites, including the state, seeks their share in the unpaid labor of the worker. The relation between the state and the rest of the parasites is peculiar in that its share of the unpaid labor of the worker is determined not by competition but by the material conditions among the parasites themselves. The state arises out of the

material conditions of the bourgeois class as a whole and stands over against the individual members of the class. This means the material conditions of the class as a whole determines the state’s share of the unpaid labor of the workers, not competition within the class of parasites.

If the state must run deficits as is alleged by the simpletons, these deficits are being driven by the material conditions of the class of parasites as a whole — it is a requirement imposed on them by these material conditions. Whether the state runs deficits or not has no direct connection with the class struggle between the proletariat and bourgeois class. In fact, the question of deficits presumes the proletariat is already absolutely subordinated to the rule of the bourgeoisie. The problem of state spending can only arise on the basis of this complete and absolute subordination.

The conflict that the Left believes concerns the real subsistence of the working class actually has nothing whatsoever to do with this subsistence. This conflict assumes the wage slaves already receive, on average, no more than is necessary for them to reproduce themselves as wage slaves. This means that, even when the workers receive no more than is absolutely necessary for their reproduction as wage slaves, the total mass of profits is still insufficient.

5. Deficits and the falling rate of profit

The deficits at stake in this shutdown are the result of a long slow decline of US surpluses after World War II. US surpluses shrank from World War II to 1980 or so and then went negative from that point forward. During that period, in order to maintain profits, the fall in profits were increasingly concentrated in the federal budget deficits. Viewed historically, it is clear the capitalists are shifting their losses onto the state in the form of persistent

deficit spending. The state is being used to absorb the losses suffered by the capitalists owing to overproduction of capital.

We already know the state is being used to compensate for the losses of capital, and refer to this as bailouts for the “too big to fail” or, sarcastically (but no less accurately), as “socialism for the rich”. What most of the Left do not realize is this subsidy is on display not just in extraordinary times of crisis but is a permanent feature of the state. Deficit spending of the fascist state is meant to subsidize the profits of a failed mode of production that no longer functions on its own.

Without the deficit spending of the fascist state, over and above what it expropriates through taxes, there would be a mass of unsold goods. These unsold goods are nothing more than capital in the form of unsold commodities. Were they not sold, this capital would have to be devalued — it would be rendered superfluous, along with a portion of the means of production and a mass of labor power.

Society would be forced to confront the fact that its labor is no longer necessary in any form. If labor is no longer necessary, the premise of capital — which is nothing but socially necessary labor — has been abolished. Thus, the deficit is only the real devaluation of the existing capital in which the state pays interest on a fiction. The devaluation of existing capital is absorbed by the state, but the fiction this has not occurred rests on the state’s interest payment. The fiction is maintained that the capital is still in circulation, producing surplus value, when it has actually been destroyed.

Seen from this point of view, all deficit spending by the fascist state and all debts accumulated by these deficits are unnecessary and must be abolished.

Cuckolding Marx: David Harvey’s ‘Unfaithful Companion’ to Capital Part One People often ask me what current books I recommend to help them understand Marx’s Capital. My answer to this is almost always the same. There is to my understanding no book out there written by anyone I know that accurately presents Marx’s argument except his own book, Capital. How is it that almost 150 years after the publication of Capital is there not a simple and accurate popularization of his fundamental ideas that I can point to? This can’t be because of the complexity of his ideas. Einstein’s theory is no less complex than Marx’s, but you can find many good and accurate popularizations of his fundamental theories. I don’t know anyone who has ever read Darwin’s Origin of Species, yet there are many good and accurate popularizations of Darwin’s ideas. The same can be said of Freud.

Most of the great scientific discoveries of the 19th century are now widely understood by everyone in society. What is it about Marx’s ideas that make them so resistant to accurate and simple popularization? My answer to this is that I really do not know.

My hesitation in recommending books that might help folks understand Marx’s argument in Capital is probably best exemplified by a close reading of a section of one of the most popular books and lecture series in circulation today: David Harvey’s Companion to Marx’s Capital. As I will show, this “companion” is anything but faithful to Marx’s argument. This is part one of a two part series. In this part, I will address Harvey’s overall characterization of Marx’s fundamental categories. A priori and cryptic Is section 1 of Capital a priori and cryptic? David Harvey seems to think so. In his examination of section 1 of chapter one of Capital, volume 1, Harvey uses the term “a priori” four times and cryptic three times. First, he tells us, “Marx here lays out fundamental categories in an a priori and somewhat cryptic, take-it-or-Leave-it fashion that could do with elaboration.” Then, he tells us “The commodity is Marx’s a priori beginning point.” After this he explains Marx “[makes] another of those a priori leaps by way of assertion—“that of [commodities] being products of labour”. Finally he argues that, “This a priori assertion [that commodities are products of labor] has huge implications.” He is equally forthcoming about the alleged cryptic character of Marx’s argument. Having already asserted Marx lays out his categories in “an a priori and somewhat cryptic, take-it-or-Leave-it fashion”, he says of the first four pages:

“It has, you will notice, taken a mere four pages of rather cryptic assertions to lay out the fundamental concepts and move the argument from use-value to exchange-value to human labor in the abstract, and ultimately to value as congealed quantities of homogeneous human labor.” What ultimately saves Marx from his own cryptic style, says Harvey, is that readers of his own time were familiar with Ricardo: “One reason Marx could get away with this cryptic presentation of use-value, exchangevalue and value was because anybody who had read Ricardo would say, yes, this is Ricardo.”

That is a lot of references to Marx’s alleged a priori and cryptic assumptions in a section of Capital that is less than 20 paragraphs long. I am not sure what is meant by this term as Harvey employs it. A priori means, “in a way based on theoretical deduction rather than empirical observation.” Synonyms of the terms include, theoretical, deduced, deductive, inferred, postulated, suppositional. The last term, suppositional, includes terms like belief, suspicion, conjecture, speculation, hunch, presumption. Does Harvey really think Marx is speculatively choosing his fundamental categories? Harvey’s use of the term, cryptic, is equally troubling. The term cryptic is defined as “having a meaning that is mysterious or obscure.” Synonyms for cryptic include, enigmatic, mysterious, confusing, mystifying, perplexing, puzzling, obscure, abstruse, arcane, oracular, Delphic, ambiguous, elliptical, oblique. In popular language, the term cryptic implies Marx’s discussion of value is “Clear as mud”. Does Harvey intend to argue that Marx’s definition of value is muddled or confusing? This, mind you, is how the author of a book meant to introduce Capital to new readers characterizes his grasp of fundamental categories of that book, which reappear again and again in the succeeding pages. It helps to remember that in one of his own recent books on the subject, Harvey describes the capitalist mode of production as an enigma. Perhaps in describing capital as an enigma, Harvey is attempting to capture the same meaning with which he characterizes Marx’s discussion of value as cryptic; namely that he neither understands the capitalist mode of production nor Marx’s Capital. It is not everyday people who know nothing of a subject turn to a book in which the author admits he knows nothing of the subject as well, but in Harvey’s Companion to Marx’s Capital, this, unfortunately, may just be the case. Just to be certain, let’s turn to the rest of his discussion of section one of chapter one.

Mapping the categories Does Harvey mean Marx’s choice of categories or his methods of interrogating them is “arbitrary”? He definitely intends to call into question Marx’s approach or to convey either his disagreement with Marx’s approach or his lack of understanding why Marx chose this particular approach. We know Harvey in fact completely disagrees with Marx’s approach to the

capitalist mode of production. This is not a problem — many people disagree with Marx’s approach to the capitalist mode of production. Marx isn’t special and deserves no sacred treatment. However, it seems to me Harvey is editorializing when he should be providing an objective presentation of Capital. If he disagrees with Marx, Harvey had a fairly long introduction to the book to explain his own view. He could have warned his students, “I don’t agree with Marx’s approach to capital” and left it at that. He has also written numerous books explaining his own views on the subject as well as his disagreements with labor theory. Beyond this, critical readings of Marx are as common as raindrops in a hurricane these days. Harvey could he pointed to any of these authors to expand on his disagreements.

What is most bizarre in this case is that no one was in his class to hear Harvey’s personal opinions; they wanted to understand Marx’s theory. And they came to the class, or watched his lecture or bought his book because they thought Harvey would provide this. Now, I will admit when I took my introduction to micro and introduction to macro classes, I was interested in the professor’s view of the material, but this is because I was skeptical. I wanted the professor to validate my skepticism, of course. However, the professor, a radical Keynesian, who wrote for Dollars and Sense magazine, made it clear that I had to master the material first — only later, after I mastered it, could I dispute it. She insisted people mastered the material first and then criticize it.

Here is the thing: Marx’s approach, which Harvey might consider “cryptic”, leads to certain conclusions Harvey disputes. To what extent is Harvey’s dispute with Marx the result of their differing approaches? I am pretty sure it plays a rather large role. According to Harvey, Marx begins “a priori” with the commodity; then he makes the “a priori” assertion that this object is a product of labor. Is Marx being arbitrary here in any way? Of course not. Marx in fact fastidiously references contemporary writers in political economy in section one of chapter one — citing various writers no less than twelve times in about 20 paragraphs. He begins by citing his own earlier work as to the reason for beginning with the commodity. For the rest, he goes on to cite, Nicholas Barbon, John Locke, Guillaume-François Le

Trosne, and one unnamed writer, of whom Marx says, this “remarkable anonymous work [was] written in the last century”. Since Capital is a critique of political economy, it is no surprise that Marx’s starting point are the writings of contemporary political economists and begins with the very same categories with which they began. There is in fact nothing the least bit “a priori and somewhat cryptic” about any of his fundamental categories. What Marx is actually doing here is mapping existing categories of contemporary political economy to like categories of his own theory. He is doing this so that he can illuminate those categories in relation to his own theory. Harvey admits as much when he notes Marx’s concept of value is mapped to Ricardo’s value. There was nothing “cryptic” about this approach taken by Marx and Harvey should know this. To put this another way, Marx is decidedly not making a priori assumptions about his fundamental categories. He is importing those assumptions one by one into his theory from his contemporaries who wrote on political economy. Harvey might disagree with those categories, but he should not imply Marx just pulled them out of his ass.

Marx’s ‘a priori leap’ on value and labor Perhaps it wasn’t his intention, but the impression Harvey has left us with is that Marx’s starting point in analyzing the capitalist mode of production was arbitrary. This is utter bullshit. In fact, just by looking at the foot notes to this section — twelve in all — we can see Marx was trying to map his own categories to the categories commonly employed in contemporary political economy. He does not invent the terms use value, value or exchange value in his discussion but draws them from other sources. What is “a priori” or “cryptic” about this? Indeed, as Harvey finally admits, at least in the case of Ricardo, readers of the time would have recognized his categories as commonplace.

Marx, says Harvey, “abstracts from the incredible diversity of human wants, needs and desires, as well as from the immense variety of commodities and their weights and measures, in order to focus on the unitary concept of a use-value.” Harvey asserts this is necessary because we cannot perform lab experiments on society. But is this why Marx abstracts from the particular useful qualities of the commodity? In fact, Marx abstracts from the particular useful qualities of the commodity in order to establish these qualities play

no role in value. What makes any object useful to us, has nothing whatsoever to do with what makes it a value to us. This is a direct retort to economists both in his day and today who argue the value of a commodity is its usefulness.

Marx is saying: “I am abstracting from all the possible useful qualities of commodities because value has nothing to do with what makes them useful to us.” While Harvey is saying: “Marx abstracts from all the useful qualities of commodities because we cannot perform experiments. The class where Harvey delivered the lecture and the far wider audience of readers of his book and viewers of his video series are left thinking Marx abstracts from the useful qualities of commodities before he could subject these qualities to empirical experiment. This is a variant of the canard that Marx settled on labor as the substance of value without making an exhaustive search for other qualities commodities had in common — for instance, energy.

According to one writer, Chris Arthur, for instance, labor is not the source of value, because, as he puts it, “the actuality of value cannot be established through the analytical reduction of the extremes of a simple exchange relation to value”. Marx’s error, says Arthur, is that he was trying to deduce value (socially necessary labor time) from exchange value before money. This, of course, is why Harvey argues Marx made an unsupported (a priori) leap from exchange value to labor. And it is some really deep inside baseball shit among academics that never should have been included in an introduction to Capital.

Someone sitting through Harvey’s video lecture series or reading his book will have no idea he is making room for some deeply controversial readings of Marx. Arthur’s value-form reading of Marx in particular argues you cannot have value without the value-form, i.e., without money, and

criticizes Marx for arguing value is appears prior to money. That is as fucked up and dishonest as you can get in an introduction to Capital. This aspect of Harvey’s intro, by itself, is enough to qualify never including it on a recommendation list. Harvey could have fixed this by simply stating: “Marx believed value is prior to money, but Arthur argues money is prior to value.” But Harvey did not even do this: he just slipped it into his presentation dishonestly.

In the next part, I will address Harvey’s complete distortion of Marx’s argument on value, in which Harvey is trying to squeeze Marx’s argument into a value-form school interpretation.

Spinning Marx in His Grave: How David Harvey got rid of labor power in his unfaithful Companion. Part two In part one of this series I emphasized the highly irregular, even dishonest, methods David Harvey employs in his introduction to Marx’s Capital, A Companion to Marx’s Capital. In particular, I called attention to Harvey’s use of the terms “a priori” and “cryptic” to characterize how Marx handles the fundamental categories of political economy, the critique of which is the project Marx undertook by writing Capital.

Since Capital is a critique of the theories of Marx’s contemporaries, it is not surprising that he begins with the categories already in place at the time he wrote his book. Harvey is essentially criticizing Marx for subjecting the categories of political economists like Ricardo, Malthus, Barbon, Mills and others to critical analysis, when this is precisely the project Marx had in mind when he began writing Capital. When, for instance, Harvey criticizes Marx for making the ‘a priori’ assertion that the labor time required to produce commodities lay behind their exchange values, Harvey knows, or should know, that Marx is actually dismissing the argument of one school of political economists who claimed the values of commodities were expressions of their utility, i.e., of their capacity to satisfy human needs.

It is rather puzzling Harvey would call Marx’s argument that labor, not utility, gives commodities their values an “a priori leap by way of assertion” unless he has another candidate for the job. In this part I will show that this is just Harvey’s motivation. Harvey does not think either labor or utility gives commodities their values; rather, Harvey is of the school that believes value itself is impossible until money has already emerged.

In Marx’s argument, money is just another commodity, while the value-form school believes value arises from exchange, not production. Thus exchange is necessary to reduce concrete particular use values into commodities. Knowingly or not, Harvey’s “Companion to Marx’s Capital” is a polemic against Marx’s Capital on behalf of the value-form school.

Value’s ‘phantom-like’ quality There are three basic questions Marx answers in section 1 of the first chapter of Capital: 1. What is value? 2. What is the measure of value? 3. What is the source of value?

In section 1 of chapter one, Marx goes about methodically providing his answer to these three questions. The labor that creates value, as Harvey explains, isn’t the actual concrete labor expended on production of each of the commodities, but only the labor expenditure necessary on average for their production. This argument by Marx clearly troubles Harvey. He points to the questionable materialism of Marx’s notion of value with its “phantom-like” quality. Value, which we cannot detect by any means, somehow makes commodities commensurable and is itself passed from one producer to the next through exchange.

This is nothing more than an attempt to throw dust in our eyes. Is there really anything enigmatic, mysterious or arcane in Marx’s discussion here? Is Marx delving into metaphysics? Of course not. In first place, as we all know, Marx’s approach here is not at all unusual in the sciences. Something similar to Marx’s characterization of value as a “phantom-like objectivity” can be found in a wide variety of scientific fields. Consider, for instance, Darwin’s concept of evolution. We regularly refer to evolution, but has anyone ever actually observed the evolution of a new species? Or consider Einstein’s theory of relativity. We know a gravitationally collapsed star must exist because we can see the indirect evidence for this, but has anyone ever actually seen a black hole? Obviously not, because the same theory that predicts the black hole says we can never observe it. Or Freud’s theory of consciousness: Can we detect consciousness in a brain cell? Has anyone ever actually peered into the head of another person to locate her consciousness?

Obviously none of these objects have ever been actually observed. Yet, we regularly refer to evolution, black holes and human consciousness as if we have observed them. In fact, we can only infer their existence from indirect evidence. They are theoretical constructs proposed to explain phenomenon

we can observe. Likewise, the phantom-like quality of value is by no means a unique phenomenon in the world of science. Harvey’s concern about the ‘phantom-like objectivity’ value, seems pretty silly; but, in fact, his statement is not silly at all. Rather, it is the opening salvo for a direct assault by Harvey on Marx’s argument on value. Does value arise from exchange? Harvey wants us to interpret Marx’s argument that exchange value is “the necessary mode of expression, or form of appearance, of value” in the way we might have once thought exposure to cold causes illness. According to one source, the common cold was originally diagnosed in the 14th century as a “discomfort caused by cold” and not an infection caused by a virus. In a similar vein, rather than seeing in exchange value evidence for value, in his discussion of section 1, Harvey tries to twist Marx’s argument to conform to the value-form school’s notion value arises from exchange. However, to actually flip Marx’s argument over on its head, Harvey has to provide his own peculiar spin on Marx’s argument. On page 19 of his Companion to Marx’s Capital, Harvey makes this statement: “Value is “abstract human labour … objectified … or materialized” in the commodity. How can this value be measured? In the first instance, this plainly has something to do with labor-time. But as I already argued in setting up the difference between concrete and abstract labor, it cannot be the actual labor-time, because then the commodity would be “more valuable the more unskillful and lazy the worker who produced it:’ So “the labour that forms the substance of value is equal human labour, the expenditure of identical human labour-power:’ In order to get at what the “expenditure of identical human labour-power” might mean, he needs, he says, to look at “the total labour-power of society, which is manifested in the values of the world of commodities” In the above passage, Harvey provides the answers to the three questions posed above. He has told us what value is: the substance of value is homogenous abstract human labor. He has defined how the value of a commodity produced by this abstract labor is measured: it is only labor time

that is socially necessary on average for production of the commodity that counts as value. Finally, Harvey has told us the source of the value: the values of commodities are simply manifestations of the total labor power of society.

This last point is very important. As we all know, in Capital Marx introduced a novel concept into economic thought, “labor power”. Marx did not simply modify Ricardo’s argument to replace the term “labor time” with his own innovation, “socially necessary labor time”, he also distinguished between “labor” and “labor power” — defining the latter as the source of value. Unfortunately, Harvey’s ‘close reading’ of Capital completely fails to acknowledge this novel concept that had not appeared previously in the writings of Marx’s contemporaries.

Now why might Marx’s introduction of this new category, labor power, as the source of value at the beginning of his exhaustive discussion of the capitalist mode of production be something we might want to note? Obviously, we would want to take note of it because Marx later argues labor power is not just the source of value,but also surplus value. How could labor power create surplus value in Marx’s theory unless it created all value in commodity producing societies?

So, why did Harvey fail to mention the critical role labor power plays in Marx’s theory for production of value? Harvey spins while Marx spins in his grave But before we answer the question, let’s continue with Harvey’s own discussion. From Marx’s phrase, “the total labour-power of society, which is manifested in the values of the world of commodities”, what grabs Harvey’s interest, oddly enough, is not the part where Marx introduces his new category, “the total labor power of society”, but the part where Marx adds the phrase, “the world of commodities”.

Marx, says Harvey, does not elaborate on the statement, so he volunteers to do it himself, “lest you misconstrue what the value theory is about.”

According to Harvey, the critical portion of Marx’s statement is not where he speaks about the total labor power of society — a new category that Harvey knows will become critical to understanding the capitalist mode of production at some later point — but rather, to invoke the idea of world trade. World trade is very big today, Harvey tells us (as if we did not already know this), far bigger even than in Marx’s day (as if we did not already know this too).

Thus, says Harvey, “The measure of value is derived out of this whole world of human laboring.” “It is on this dynamic global terrain of exchange relations that value is being determined and perpetually redetermined. Marx was writing in a historical context where the world was opening up very fast to global trade, through the steamship, the railways and the telegraph. And he understood very well that value was not determined in our backyard or even within a national economy, but arose out of the whole world of commodity exchange. But he here again uses the power of abstraction to arrive at the idea of units of homogeneous labor, each of which “is the same as any other, to the extent that it has the character of a socially average unit of labour-power and acts as such;’ as if this reduction to the value form is actually occurring through world trade.“ (my emphasis) Now, I admit I could be wrong, but it appears to me Harvey is twisting Marx’s argument to say value is determined by world trade. Is this unfair? Am I getting this wrong? Let’s see. Here is Marx’s argument: Value is the expenditure of identical human labor power; which is to say, the expenditure of the total labour-power of society “is manifested in the values of the world of commodities”. To put Marx’s argument in the simplest possible terms: Human labor power goes into the production process, value emerges from the production of commodities, appearing to be an attribute of the commodities. And here is Harvey’s argument: Value is being determined and redetermined on the “dynamic global terrain of exchange relations”; which

is to say, “reduction [of commodities] to the value form is actually occurring through world trade.” Thus value is not determined in our backyard or even within a national economy, but arises “out of the whole world of commodity exchange”.

To put Harvey’s argument in the simplest possible terms: concrete useful labor goes into the production process and use values emerge from the process. The reduction of concrete useful labors to the value-form is actually the result of world trade. Under the guise of introducing his readers to Marx’s Capital, Harvey actually alleges that Marx has misunderstood capitalism and thus inverts the process by which commodities acquire their character as values. Commodities emerge from production as mere use values; they acquire their values through exchange within the world market. Marx’s value versus Harvey’s values Yet, if this were the only error Harvey passes on to his readers under the guise of familiarizing them with Marx’s theory, we might still imagine he simply misread Marx’s argument in Capital. The idea that the values of commodities arise from exchange is in fact a quite common misconception among bourgeois simpletons and Marxists seem no less prey to it. However, it turns out this misinterpretation of Marx is only the beginning. Harvey progresses from here to completely overthrow the classical concept of value itself.

Marx, explains Harvey, could get away with his cryptic presentation of the categories he employed in Capital because anybody who had read Ricardo would say, yes, this is Ricardo. However, Marx modifies Ricardo’s concept of value by inserting the phrase, “socially necessary”, into Ricardo’s definition of value, to arrive at a new definition of value not simply “labor time”, but “socially necessary labor time”. This modification, Harvey rightly argues, “makes a world of difference.”

“We are immediately forced to ask: what is socially necessary? How is that established, and by whom? Marx gives no immediate answers, but this question is one theme that

runs throughout Capital. What are the social necessities embedded within a capitalist mode of production?” Really? What the fuck does this statement even mean? At this point, Harvey adopts a completely different sense of the word value than one employed by Marx — a moral, ethical or political sense of the term. In Marx and classical political economy the term value meant simply the labor time embodied in a commodity or, alternately, the worth of one commodity expressed in the form of another commodity, including money. Not so for Harvey. According to his concept of value, we must include morality, ethics, politics and some undefined catch-all category Harvey ‘cryptically’ refers to as “social necessities”.

“Is there, as Margaret Thatcher famously remarked, “no alternative;’ which in a way is like saying that the social necessities that surround us are so implacably set that we have no choice but to conform to them? At its foundation, this goes back to a question of by whom and how “values” are established. We all like to think, of course, that we have our own “values;’ and every election season in the United States there is an interminable discussion about candidates’ “values:’ But Marx is arguing that there is a certain kind and measure of value which is being determined by a process that we do not understand and which is not necessarily our conscious choice, and that the manner in which these values are being imposed on us has to be unpacked. If you want to understand who you are and where you stand in this maelstrom of churning values, you have first to understand how commodity values get created and produced and with what consequences-social, environmental, political and the like.” Now I ask you, is this the sense of the term value Marx is trying to explain? Why does Harvey deliberately conflate the moral and/or political sense of the term value with the economic sense Marx employs the term in Capital? Conflating labor theory with fascism The answer to these questions probably won’t surprise you. By employing value in a political sense, Harvey can then argue what is “socially

necessary” is not determined by socially necessary labor time, but is determined by state economic policy, i.e., by the outcome of a political struggle. Harvey’s argument is that what counts as socially necessary labor time is to be determined not by a material production process, but by fascist state economic policy.

How does this relate to the value-form school argument? If commodities become values only through exchange, money plays a necessary role in determining value. Since the Great Depression, and especially since 1971, this function has been appropriated by the fascist state as its sovereign power. Through its control of the national currency the state can, in the thinking of the value-form school, determine what economic activity is “socially necessary”, according to some preconceived, despotically imposed, plan.

Part of the aim of the value-form school in overturning Marx’s labor theory of value can be accomplished by dismissing his prediction production on the basis of exchange value was wrong and ultimately discarded by Marx. Another part of the aim is accomplished by constantly impugning the reputation of Marx’s life-long comrade, Frederick Engels. A third part is inventing a socalled “Marxian theory of crisis” intended to ‘prove’ capitalism, although subject to periodic crises, can continue indefinitely without collapse.

However, the aim of the value-form school is impeded by a particularly thorny problem. Marx makes the argument in chapter one of Capital that labor power is the source of value. This is an innovation he invents to replace Ricardo’s argument that labor itself is the source of value. Based on this innovation, Marx can later argue that once labor power itself becomes a commodity it also becomes the source of both value and surplus value. In Marx’s argument, the commodity, labor power, is the source of surplus value precisely because, even in its non-commodity form, it is already the source of all value. You cannot get rid of Marx’s argument that labor power creates value, without immediately overthrowing the long-standing argument of communists that the capitalists exploit the working class. Once the first is rejected, the second must follow, sooner or later.

This argument is inconvenient for the value-form school, which seeks to demonstrate that money (exchange generally) is the source of the values of commodities. To accomplish their aims, the value-form school must show that the value of the commodity only emerges after money has already been established to give all commodities their values. And they must show this is already implicit in the “a priori and somewhat cryptic” argument Marx is making.

This is the service Harvey attempts to provide to the value-form school with his awful and unfaithful Companion.

“Schrödinger’s Capital”: The neoclassical core of the value-form argument NOTE 9: Value equals price? Marx makes a pretty simple argument in Capital: In any exchange, the only property a commodity has in common with any other commodity is that it is a product of labor. The values of the commodities consists of an expenditure of homogenous human labor power. Later (in chapter six), Marx defines labor power this way:

“By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description.”

For some odd reason, Marx only actually says what he means by the term, human labor power, in chapter six. But, okay. What he means by the term “labor power” is the “capacity for labor”. And this must be emphasized: labor power, or labor capacity is not actual labor, which latter is always concrete. So far as I can tell, human beings do not labor in the abstract any more than any other animal. The total capacity for labor of a commodity producing community, or its total labor power, however, is the aggregate mental and physical capabilities they possess. Which raises n important question we need to get out of the way: Do these capacities for labor themselves have value that are passed on to the product of labor? To be honest, I am not sure, but the answer seems to depend on the specific situation. In a capitalist society, the answer is clearly, Yes. In the capitalist mode of production, labor power is a commodity and like any other commodity has value. In a community of individual producers, however, labor power is not a commodity. Thus, I would assume labor power has no value in that situation.

Despite lacking value of its own in a community of commodity producers, the expenditure of labor power (i.e., the expenditure of the capacity to labor) is itself proposed by Marx as the source of value. Marx’s argument seems to go like this: In a community of commodity producers, the homogenous abstract capacity to labor is used up by being expended in actual concrete particular heterogenous useful labors. However, human beings are not perpetual motion machines; if they expend a certain amount of labor capacity, this capacity must be replaced out of the product of labor. The act of labor (expenditure of capacity) incurs a physical ‘debt’, so to speak, that the laws of nature demand be repaid at some point. If this physical debt is not repaid at some point, the human being who expended it will die.

Does Marx’s argument require him to show that value is intrinsic to commodities, i.e., a physical attribute of the objects? No. Does Marx’s argument require him to demonstrate value is “secreted” in the course of labor by the producers of commodities? No. All Marx is required to show, it seems to me, is that the capacity for labor, having been expended in actual labor, must be replaced. Mind you, this is not even a huge hurdle to jump, since we all know this is true. We have to eat if we are to live.

Value as expression of anarchic production Absent value, commodities are simply use values — objects that satisfy human needs. There is nothing in the objects, (no secretions or substances), that make them values, per se. What makes them values is that the material requirement that the labor capacity of the community must be replenished or the producers die is nowhere the starting point of labor in a commodity producing community. The requirement that labor power must be replenished is as much a natural law for a community of commodity producers as it is for individual producers.

The difficulty for commodity producers is that, since everyone is working by his lonesome, no one is thinking globally about this problem and nowhere

are their combined efforts consciously directed. Marx, of course, explains all of this in his very powerful section, “The fetishism of commodities and the secret thereof”. The secret of commodity fetishism, says Marx, is that no one is directing the productive activities of the community, so its underlying material productive requirements (including bare physical metabolism) are imposed on the community as if they were natural laws. Everything in the productive life of the commodity producing community is unregulated by conscious design. It is very fashionable among some Marxists today to talk about commodity fetishism, but I seldom come across anyone who really explains it satisfactorily. It’s really very simple: since the producers are not consciously directing their productive activities, the material requirements of production operate as if they were a law of nature, imposing themselves on the community.

The imposition of these material requirements of production are what Marx calls the law of value. I really don’t understand the problem here, because Marx states it as plainly as he can in section 4 of chapter 1. ● ● ● ●

No. Value is not a substance excreted by society into its product. No. Value is not a physical property of the product of labor. No. You cannot decompose a use value and find value embedded in it. Most of all, No; value is not an unreal abstraction. Unless you call starvation unreal or abstract.

So this is Marx’s argument on value. But Chris Arthur seems to feel Marx botched it. Marx, says Arthur, had one job and only one job: to explain what value was, “but his results are somewhat inconsistent, I think.” While Marx defines the source of value as an expenditure of human capacities for labor, Arthur thinks he should have defined value as the “power of exchangeability”.

Why does Arthur want to replace Marx’s argument with his own argument that value is the power of exchangeability? It appears, Arthur accuses Marx of failing to “establish a common substance to products because the labours referred to are just as heterogeneous as the commodities themselves.” Marx, says Arthur, admitted the labors of the various producers in a commodity producing community are heterogeneous and incommensurable, but he insisted these labors had to be treated as if they were abstract and commensurable activities. Ignoring labor power If you have been following the discussion so far, you can see the problem with Arthur’s accusation against Marx: Arthur just ignores Marx’s statement that by abstract labor he [Marx] was referring to labor power or the capacity to labor, not actual labor. And he ignores, as David Harvey did in his, “Companion”, that labor power was a new category first introduced to economic thought by Marx. Before Marx the distinction between the capacity for labor (abstract) and actual labor (concrete) did not exist.

Rather than recognizing this new category, Arthur asserts Marx was clumsily trying to establish a counterfactual: that production on the basis of exchange value, (i.e., commodity production), can work without money. Having set up this straw man argument, Arthur goes in for the kill: “[Without] money to make visible such a homogeneous value space there could be only an incoherent morass of molecular ‘value’ relations which fail to integrate into a common universe.” For the life of me, when I first read this statement, I had no fucking idea what Arthur was babbling on about. After much contemplation, it appears to me he is arguing that since every transaction is accidental, there would be no consistent measure of values of commodities.

To give an example of what Arthur is talking about here: Two producers meet in the market and exchange their products — ten apples are exchanged for one hoe. Later, the new owner of the hoe exchanges it for six oranges. He then takes the six oranges and exchanges them for two hoes. We now have a problem: Ten apples = one hoe; and, one hoe = six oranges; but, six oranges = two hoes These sorts of exchanges can happen in the real world, of course, because every exchange is a comparison of incommensurable use values and thus somewhat accidental; the exchange of one incommensurable use value for another. The resulting exchange ratios would be all over the place. Certainly there is no consistency to exchange we would expect for a production mode based on exchange values. But here is the thing: Marx never makes this damn argument and Arthur, if he ever bothered to read Capital, would know it. Since no one knows the value of their own product, nor the value of the product of anyone else, how can Marx argue exchange of incommensurable use values gives rise to commensurable exchange values?

Nevertheless, Arthur states, “These considerations lead me to underscore the importance of Marx’s section on the forms of value.” “Money, as the universal equivalent form of value, overcoming the ‘defects’ of the simple and expanded forms of value, is itself essential to the actuality of value”. Money as value-form Essentially, Arthur turns Marx on his head: for value to exist, it requires a form to make value an actual power in society. Arthur proposes money is this power.

Value, says Arthur, only exists in the material use value serving as money. Although like other use values, money has no intrinsic value; by becoming the universal means of exchange, money confers value on other use values. To put this another way: no use value has value according to Arthur. A commodity acquires value only by being exchanged for the use value serving as money.

It may be objected that if no commodity really has value, the money also has no value, but Arthur’s reply is that this does not matter: the material of the object serving as money (gold, paper) itself is the form value takes in a community of commodity producers. Further, since the thing serving as money, like all other use values, has no value, Arthur’s argument carries a dividend: You do not have to explain valueless inconvertible state issued fiat. If people object that fiat paper has no value, Arthur can respond: “Of course it doesn’t, silly. No use value has value. Didn’t you read my paper?” In Arthur’s argument, the use value serving as money does not have value; rather, it is value. Mind you, this argument is very appealing because how else do you explain how an inconvertible fiat currency is world money after 1971? Arthur says this is because money is not the measure of value. It is value, i.e., whatever serves as money, becomes, in this role, the object giving (conferring) value to all other use values. At one point, he argues money works by making visible, “a homogeneous value space”. Arthur’s neoclassical theory of value Contra Marx, Arthur argues not only is value not a physical property of the commodity or a substance secreted by producers into their product, it is not even a social attribute of the commodity, but merely states the commodity has been exchanged for the money object. If he had been honest, and not a sleazy academic, he would have admitted at this point he does not think value even exists. If no commodity has physical

substance called value and no commodity has a social attribute called value, what is the possible purpose of using the term? Why would Arthur even involve himself in the discussion, since he knows value does not exist and never has existed?

Arthur’s argument can be restated with far less ambiguity than he does: “The money price of any commodity is its value.” All that fucking around with Marx and Hegel and “‘essence must appear’, together with its corollary” served no real purpose but to dazzle his audience with bullshit and obscure his conclusion. The real reason why Arthur puts us through this torture is that he knows no one is buying the value-form school’s “price equals value” bullshit. That argument is entirely drawn from neoclassical theory: “In neoclassical economics, the value of an object or service is often seen as nothing but the price it would bring in an open and competitive market.” –From Wikipedia: Arthur really has to explain how his notion of value differs from the neoclassical definition.

Schrödinger’s Capital: How Marxists missed the biggest story of the last 45 years

NOTE 11: What the fuck happened to wages? This is what US price inflation looks like from 1913 to 2012 according to Bureau of Labor Statistics (BLS).

Consumer Price Index 1913-2012 (BLS Series Id: CUUR0000SA0)

This is what the change in the standard of prices (gold) look like over the same period:

Gold price standard – 1913-2012 (KITCO.com) I would like to you to see what happens when I set these two measures of depreciating dollar purchasing power side-by-side

CPI versus Gold measure of dollar purchasing power depreciation – 1913-2012 One of these measures of dollar purchasing power depreciation is lying. Can you guess which one it is? Using gold as the standard of dollar prices, the collapse of the purchasing power of the dollar is decidedly more severe in that measure. These three charts are important because they allow us to evaluate an assertion made by Christopher J. Arthur, David Harvey and the rest of the value-form school that it does not matter what serves as money. If this assertion is true, the value-form school should be able to tell us why gold says depreciation of the dollar since 1913 has been about 7 times as severe as the Consumer Price Index measure. How gold and currency differ

Now, I am not an expert on this question, but I have followed the CPI-gold inflation paradox into a number of commodities. All of them basically demonstrate the same tendency. So, I did some investigation into how the CPI is constructed to see if I could figure out what was going on and which measure is valid.

Let me say this: I don’t know why gold is showing the data it is, but I do know this: Gold has long been a money commodity. Up until 1933, the dollar and gold prices of commodities track each other fairly closely. When dollar prices rose, gold prices rose; when dollar prices fell, gold prices fell. This is because Washington maintained a close peg of the dollar to a definite quantity of gold.

The first big change in this relationship occurred in 1933 when by executive order, Roosevelt devalued the dollar against gold. Where before the devaluation 20.67 dollars represented the value of one ounce of gold, after the devaluation of the dollar it took 35 dollars to represent the value of one ounce of gold. It was called “devaluation” because the value of gold represented by one dollar was reduced. After devaluation, dollars represented less value.

The next big change occurred in 1971 when Nixon unilaterally removed the United States dollar from its peg to gold entirely and let the currency float. If when Roosevelt reduced the value represented by gold from 20.67 dollars to 35 dollars was devaluation, what do you call what Nixon did? The value-form school says nothing at all happened — gold was simply replaced by the dollar as world money. Yet, if the above chart is correct, something really did happen. Something so huge that inflation measured in dollar terms and in gold terms radically diverged and never recovered. Perhaps something changed when the dollar was detached from gold that skewed gold.

I will admit this is possible, but I sincerely doubt it. In any case gold has been a traditional measures of the value of commodities for a long time now; while the dollar was always a mere symbolic representative for the value of gold. This, of course, changed in 1971 with the collapse of the Bretton Woods agreement. And you can see

where Bretton Woods collapsed on the gold chart, because after this the dollar’s real devaluation against gold goes batshit crazy. Like I said, I wanted to know why gold and the CPI were sending mixed signals about how rapidly the dollar was depreciating. So, I went looking for a quick and dirty primer on the CPI and how it is constructed beginning with Wikipedia. According to the Wikipedia, “The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. “ Wikipedia notes that the items covered in the index are very limited and exclude a lot of costs people actually bear. Although many people refer to the CPI as a cost of living index, the BLS itself admits that the CPI is not a true cost of living index, since it specifically excludes most of the costs we pay to live.

“The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure. A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living.” So what is missing? Interestingly enough, the CPI excludes the cost of the state itself; the costs you bear, directly and indirectly, in supporting the state in various ways. Nothing in the CPI provides any measure of the costs society bears arising from the state sector, although it accounts for about half of the economy.

The Consumer Price Index doesn’t really measure price inflation So, the first big problem is that the CPI begins by throwing out half of the economy based on the argument no one can agree how to value the “services” provided by the state. Of course, among these services are the hundreds of military bases the US maintains around the planet and several ongoing wars.

Now think about that: service members have to be supported by you but produce nothing of value in return. Add to this the operation of the various fleets and the dense network of military bases encircling the globe. You pay for this, but its massive cost is not in any way captured by the CPI. But there is another problem with the CPI that is just a important as this one: The CPI doesn’t measure value, it measures utility. According to the BLS, the CPI measures “changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living.” Here is the problem with that: fiat dollars have no value and the goods bought by the dollars are not treated as values either. If the dollar is actually depreciating in purchasing power, against what is this depreciation being measured?

If you answered, “It’s being measured against the cost of goods in dollars.”, you are wrong. Washington’s CPI does not actually care about goods; it cares about something it calls utility — whatever that is. It is true that the price of a steak may increase, but Washington doesn’t care about this increase, it cares about “meat utility”. The “utility” provided by steak can be filled just as readily by hamburger or chicken. In terms of pure protein, the utility of the steak can even be filled by a can of beans. So what does this mean? If the price of steak soars out of the reach of most families, Washington simply does what those families do: they switch to a cheaper alternative foodstuff. The BLS can do this, they argue, because this is what the proletarians whose consumer spending they are tracking do when prices rise. Thus, the CPI does not measure how the prices of commodities are changing, it measures how your spending habits change as prices increase. If you think about it, how can they possibly care about how prices are changing when they exclude half of the costs you actually bear? The biggest expense you have ain’t chicken or steak; it’s government. You typically spend as much on government as you spend on rent/mortgage and a car note — combined. Moreover, since 1913, government has been the single fastest growing sector of the economy by any measure — by cost, by employment, as a percentage of GDP, etc.

Think about the political implications if every year for the past 102 years, government costs showed up as far and away the fastest growing inflationary cost in the expenses of the working class? And, makes no mistake on this score, the costs of the state are easily the most inflationary item in the economy — which is why you will never see those costs included in the CPI.

I say all of this not to bitch about the costs of the state sector, but to make one critical point: the purchasing power of your wages are not measured by the CPI. The CPI only measures the changes in your spending habits as the purchasing power of your wages decline. When the price of steak increases, you switch to chicken and so does the CPI. Despite this fact, most of the data on wages you come across measures only the changes in your spending habits as the value of your wages fall.

The collapse of wages since 1964 Let me give you a good example: Here is the raw data on hourly wages since 1964 in chart form:

Average hourly wages in nominal dollars (BLS, series id: CES0500000008) According to the BLS, between 1964 and 2015 the hourly wage rose from $2.50 to about $21.00. That is an eight-fold increase over about a 50 year period.

However, the increase in nominal wages are misleading and should not be taken at face value. (Pun not intentional.) Nominal wages do not really measure anything but the amount of paper you have in your wallet. The real question is what you can buy with this paper, i.e., your real wages, or wages after the depreciation of the paper dollars is subtracted. According to Pew Research, when adjusted for inflation, average hourly wages have barely moved since 1964, when your grandparents had your job — or more likely, a good solid manufacturing job, not a six months unpaid internship:

Average hourly wages adjusted for inflation (Pew Research) Using the CPI, Pew Research found that in purchasing power your wage today is about the same as it was 50 years ago. Unfortunately for you, however, even adjusted for inflation, Pew Research is lying through their teeth about your wages compared to your grandparents. The real story is that the purchasing power of average hourly wages have collapsed over the past 50 years.

Here are average daily wages since 1964 in nominal dollars:

Average daily wage (nominal) – 1964-2010 And here are those same wages measured in gold:

Average daily wage (in gold) – 1964-2010 So, here is the story After World War II, real wages peaked in 1970 and then began to plunge to where they are today. They never recovered in the 45 years since Nixon left the gold standard. Almost everyone accepts the government’s self-serving myth that wages have been stagnant since 1970, but this is not true — wages have collapsed. Your grandparents would have never worked for the paltry chump change you accept — if you get paid at all for your “internship”. The CPI Pew Research uses to calculate the real wage doesn’t measures inflation; it measures how spending habits have changed over the years since your grandparents worked as wages paid for labor power collapsed.

You would think Marxists would be screaming about how wages have collapse after 1970 and publishing one example after another. But you won’t hear peep out of them. This is not because they don’t care. The problem is far more horrific:

Marxists don’t even know the collapse of wages happened. The value-form school argument that it doesn’t matter what serves as money is not just perverse and opportunistic because it ignores the exorbitant privilege Washington enjoys over other countries by having its currency serve as world reserve currency, it even ignores the devastating consequences of currency depreciation on the subsistence of the working class at home.

Still, I do not want people to think I blame the value-form school for this failure. The failure of Marxists actually long predates that theory. The value-form school did not cause this shocking failure of Marxist analysis, it is the most systematic theoretical expression of that failure.

Schrödinger’s Capital: Is the US dollar world money or the end of money? It is important to say I want to preserve the science of historical materialism. To be clear, the outcome of this debate has nothing whatsoever to do with the outcome of the class struggle. Despite claims to the contrary by various vanguardist parties, no class in history ever made a revolution based on its theoretically accurate grasp of the society it was seeking to overthrow. The proletariat will not break that pattern. We can thus safely separate the issue of the scientific veracity of historical materialism from the social implications of its conclusions to answer the troubling questions raised by the value-form school argument.

I say this to emphasize I do not think Chris Arthur is “being revisionist” or some such nonsense. Instead, the science itself is being challenged by the appearance of something many people assume labor theory never predicted, a fiat currency filling the role of ‘world money’. Historical materialism has a big problem of explaining whether this fiat ‘world money’ is in fact money, and, if so, how it works.

NOTE 12: The end of exchange value?

According to Marx, a use value has value only if it is the product of human labor. The quantity of value contained in any product of human labor is the duration of socially necessary labor time required to produce the commodity. The value of a commodity is expressed as exchange value in a transaction in which the value of the first commodity is expressed in the use value of the second commodity. According to Marx the value of a commodity can only be expressed in the use value of another commodity also having value. The commodity socially recognized as playing the role of money is simply the one whose use value serves to express the values of all other commodities in the community.

This definition of money is commonly recognized by almost all Marxists. But if Marx is correct about this, the dollar, a valueless state issued inconvertible fiat paper currency, cannot be world money. The problem with the dollar serving in the role is that, as bitcoin shows, it can be produced with no expenditure of human labor whatsoever. And, it can be produced in whatever quantity is required almost instantaneously. This means the dollar is not a product of human labor and thus contains no value at all. Which bring Marxists face to face with a paradox: If the dollar is world money, Marx must be wrong by his own definition. If Marxists recognize dollars as world money, they are — by the same definition — no longer Marxists.

Forced to go beyond Marx This is great, because, no matter what the outcome, we are forced to move beyond Marx. This thing we call the US dollar, in its function as world money, did not exist in Marx’s time and he swore it could not exist. If this is

true, the role of the dollar as world money since 1971 constitutes a world historical event. It amounts to witnessing the birth of a new species or peering into the heart of a singularity. How can something lacking value express the labor contained in the commodities for which it is exchanged? In his 2003 paper, Chris Arthur tries to explain how something lacking all value can express the values of commodities. According to Arthur, money is not the expression of labor value; rather, it provides the dimension of value to commodities. In this sense, money is the magnetic field from my earlier example: the magnetic field does not express the self-alignment power of iron filings, rather, it is the force lining the filings up.

In other words, what Arthur has done is replace labor power from Marx’s theory with money in his (Arthur’s) own theory as the explanation for the movement of commodities. In Marx’s theory, the force “directing”, (I use this term in its loosest possible meaning), the movement of commodities is the expenditure of abstract homogenous human labor power, value. Arthur’s explanation of fiat world money Arthur argues Marx is wrong: the movement of commodities is not determined by labor, but by money. Money constitutes a “social space” or “dimension” we call value, which Arthur defines as the power of exchangeability. Certainly, people exchanged the products of their labor before the emergence of money, but without money such exchanges were incoherent, where each exchange could only be understood on its own terms as an isolated act that had no necessary relation to the next exchange. Money plays a critical role by emerging as the single “space” or “dimension” by which values of commodities can be compared to each other. For this reason, Arthur argues: “money acts as origin of the value dimension itself.” Money both makes value measurable as well as providing the standard for measurement of value. By analogy, space defines the separation between bodies and, at the same time, becomes the measure of their separation.

Money, according to Arthur, is a function not a thing. This function can be filled by a succession of things filling that function more or less adequately.

If we focus on the thing, we miss the real story: the function itself, the role played by money in the evolution of commodity production and exchange. Marx, says Arthur, erred in that he assumed money had to be a product of labor. Of course, he explains, in lower stages of production we do find that money is often just this. This, says Arthur, led Marx to conclude the two (money and commodities) had to share a common substance in order to be directly compared.

However, argues Arthur, money does not express expenditure of the capacity to labor; rather, it expresses the power of each commodity to attract other commodities for exchange. Because we highly value the object serving as money, its exchangeability with all other commodities is universal and unconditional. Since money can be exchanged immediately and unconditionally for any other commodity, it serves for all other commodities as the measure of their limited, conditional, exchangeability. Arthur concludes money does not measure the abstract homogenous human labor contained in commodities, but their power of exchangeability. With this, Arthur poses a critical question: “Insofar as such money validates commodities and hence labour, what other measure is required?” Why would money have to measure the abstract human labor contained in commodities when, in its own body, it is the measure of their exchangeability.

Chris Arthur thus makes a powerful argument on behalf of the value-form school: Whatever accounts for fiat world money it is not the abstract homogenous labor contained in the commodities. The dollar is not product of labor and, therefore, cannot express the labor contained in commodities. If the dollar is today serving as world money, this cannot have been determined by the labor times required to produce commodities, but something else.

An anomaly or the new normal

Now here is the thing: One fact is absolutely clear to all sides in the debate: The US dollar has no value and thus cannot possibly express the values of commodities. It must, therefore, express some other force. We don’t have to accept Arthur’s explanation that money expresses the exchangeability of commodities to grasp his essentially correct conclusion. Whatever accounts for a fiat world currency, it cannot be abstract homogenous labor, i.e., value. Thus, it would appear that if the dollar is world money, the Marxian labor theory of value, as it is commonly understood by most Marxists, is finished. It has been proven wrong by life itself. One possible reason this conclusion might not be entirely true is that labor theory already fully accounts for the fiat dollar in the role of world money. No, says labor theory, the fiat dollar is not money; and, No, it does not express the values of commodities. However, the law of value is still expressed even in this situation.

These are the fact we already know incontestably: 1. No matter where you fall in the debate over whether a commodity contains a social property called value or not, there is no question the US dollar does not have this social property — it does not contain even an instant of value. 2. Thus, even if Arthur is completely wrong in his criticisms of Marx, he is correct to argue the US dollars function as world money cannot in any way be determined by it sharing a common social attribute with the commodities for which it serves as their expression. Which is to say, the US dollar is not world money because it expresses the values (socially necessary labor times) of commodities. 3. Thus, If the US dollar is world money, this bizarre situation must express some other common property of commodities than their socially necessary labor times.

What other common social property can a fiat world currency express? Arthur proposes it must express the individual power of exchangeability of

commodities. While Arthur uses this conclusion to overthrow Marx’s labor theory, I would argue this is not necessary. Think of it this way: We are, after all, only trying to explain the last 45 years of world history when the US dollar has served in the function of world money. Inconvertible fiat currencies have existed before in the historical record and were known to both Marx and Engels. There is no reason to overthrow the entire history of mankind simply in order to explain the last 45 years of it. It is very possible we are merely experiencing an anomaly in the history of mankind. In this anomalous situation, for some unexplained reason, a paper currency is filling the role we would normally expect to be played by a commodity.

Now, we can come to at least three different conclusions about this anomaly: 1. It is a temporary anomaly and thus society will, sooner or later, revert to a commodity money to express the values of commodities. 2. It is a permanent anomaly, i.e., not an anomaly at all, but an event revealing the real content of money as, for instance, Arthur’s “power of exchangeability” or some other force we do not know about at present. 3. A fiat currency serving as world money is not an anomaly, but, rather, the catastrophic end stage of money and the entire mode of production based on exchange value.

The collapse of exchange value The dollar serving in the role of world money is historically unprecedented and, at the minimum, represents a true anomaly for labor theory. To my mind, however, labor theory can explain this event, but only on the basis of the last of the three options, the collapse of production on the basis of exchange value.

How so?

In the Grundrisse, Marx makes exactly that prediction, which has mostly been ignored or dismissed by post-war Marxist scholars and out right rejected by the value-form school: “As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value [must cease to be the measure] of use value. The surplus labour of the mass has ceased to be the condition for the development of general wealth, just as the non-labour of the few, for the development of the general powers of the human head. With that, production based on exchange value breaks down, and the direct, material production process is stripped of the form of penury and antithesis.” If the value-form school is correct, the role of the valueless US dollar as world money powerfully suggests that labor time is no longer the measure of use-value. I think they are correct about this. However, they go beyond this statement to argue that labor time has never been the measure of value; rather, the measure of value is money itself. Here, I take exception with their argument.

According to Arthur, money expresses the exchangeability of commodities: “[If] such a universal equivalent were to be established, it would have a relevant unique property: it would be immediately exchangeable. In other words the objectivity of such a value for itself appears phenomenally in its immediate exchangeability.” Here Arthur makes money synonymous with a universal and unconditional power of exchange, even if it lacks a value social attribute. “Implicitly therefore, as a form, money does not itself have value, it is value as form.” The reason, of course, is that whether or not the thing serving as money has value, all other commodities must be exchanged for it. The problem with this argument is that it does not account for exchange itself. The value-form school treats exchange apart from production, when, by definition, it is obvious that commodity production includes both production and exchange.

Exchange is not voluntary in a commodity producing community Although this is seldom noted in the discussion of commodity production, in community of commodity producers, exchange within the community is not a voluntary or discretionary act by its members; it is a critical element of the mode of production itself. If we think about this community as a single all-encompassing producer, the numerous exchanges among the separate producers constitute as much a part of the mode of production as a hammer, anvil and fire constitute the conditions for the labor of a blacksmith. The exchange of the products of labor among members is the material condition for the survival of the commodity producing community as a whole. Once commodity production has been finally established as the mode by which the community reproduces itself and its environment, no individual producer can produce without exchange. Exchange is not only a necessary consequence of commodity production, it is also its precondition. Under these conditions, money is not so much an expression of the power of exchangeability of the product of labor, but the manifestation of the necessity for exchange of the products of labor. For the individuals concerned, exchange is not a discretionary act; it has become a fundamental premise of their material existence.

In chapter six of Capital, Marx explain where society actually crosses the threshold where exchange becomes not only the precondition for production, but the material (physically necessary) premise of society. The emergence of labor power itself as a commodity: “The second essential condition to the owner of money finding labour-power in the market as a commodity is this — that the labourer instead of being in the position to sell commodities in which his labour is incorporated, must be obliged to offer for sale as a commodity that very labour-power, which exists only in his living self.” For the worker, exchange of money for her commodity is not a voluntary act to realize the value of her product, but a life necessity to be accomplished to ensure her physical survival. Money constitutes for the worker not the

source of “social validation” of the value of her labor power, but the essential condition for life itself. Thus, once labor power itself becomes a commodity, money in principle has no need for its commodity form and thus begins to progressively shed this husk. Money now stands in decided antagonism to its physical form. Which is to say, money, having been exchanged for labor power, sheds its bodily form and is now capital.

Schrödinger’s Capital: Why price never equals value in Marx’s labor theory of value NOTE 24(b): Why Marx’s argument on value causes such controversy A reader of this blog made this excellent statement regarding my last post: “Yes indeed, after having to offer so many caveats about value, bourgeois economists and most ordinary people start to wonder what good the concept is in the first place. Especially if it is not directly visible, if nobody really knows the value of any commodity,

and if it doesn’t directly determine prices, fretting over it starts to sound to people like a bunch of obsessive woo-woo pseudoscience, like worrying about ghosts and such.”

If the value of a commodity cannot be detected or measured by any known means, why do I spend so much time talking about it? The answer is simple: qualitatively, value, exchange value and prices are all the same thing: they are each some definite quantity of socially necessary labor time. Unless you can explain value, you cannot explain prices nor the constant, apparently random, movement of the price of a commodity in the market.

Before we can explain why prices randomly shift according to supply and demand, we have to explain why prices even exist; i.e., we have to explain what price itself is. To approach the problem from another direction, it might help to think of it this way: In Capital Marx never needed to prove that labor lay behind the prices of commodities. Almost every economist in his own time accepted that this was true.

Folks like Bohm-Bawerk challenged the idea that labor is the source of value not because it was unproven, but because of its implications for capitalism. As BohmBawerk argues in his critique: “And this principle, entirely unfounded as it is, the socialist adherents of the Exploitation theory do not maintain as something unessential, as some innocent bit of system building; they put it in the forefront of practical claims of the most aggressive description. They maintain the law that the value of all commodities rests on the labour

time incorporated in them, in order that the next moment they may attack, as “ opposed to law,” “ unnatural,” and “ unjust,” all formations of value that do not harmonise with this “ law,”—such as the difference in value that falls as surplus to the capitalist—and demand their abolition. Thus they first ignore the exceptions in order to proclaim their law of value as universal. And, after thus assuming its universality, they again draw attention to the exceptions in order to brand them as offences against the law.” As he honestly explains, Bohm-Bawerk’s opposition to labor as the source of social wealth was based on his view that it provided a political argument for the working class against capitalist exploitation. (By contrast, Harvey and the value school have yet to explain the grounds on which their opposition to labor theory of value is based.) However simply saying labor time is behind the prices of commodities explains almost nothing. Even if labor value lay behind the prices of commodities, Marx still had to explain a problem for which no economist in Marx’s time could offer a satisfactory explanation: If labor was behind both value and prices, why did the prices of commodities almost always diverge from their values — something that is implied by what is often called ‘the problem of the transformation of values into prices of production’. Given the roadblock Adam Smith and Ricardo ran into trying to explain how the values of commodities were transformed into the capitalist production prices of commodities, Marx first had to explain what price was and the relation of price to value.

Unlike bourgeois simpletons, Marx did not accept price as a given. He argued price was the observable manifestation of something that could not be observed: labor value. However the relation between prices and value was nowhere near as simple and straightforward as was commonly assumed. Let’s restate the critical points of the previous discussion To begin his explanation, Marx had to first show why value, exchange value and price are not the same thing and must be distinguished from one another. As I stated in the previous note, although Marx is often accused of having a mechanical view of labor value, where the price of a commodity is also its

value, Marx held no such theory. In Marx’s labor theory value, exchange value and price are three separate and distinct properties, each of which almost always embody a different quantity of labor time and each of which must, therefore, be explained separately. The relation between the value, exchange value and price of a commodity can be understood this way: ● First, a commodity may have value without having exchange value or price. ● Second, a commodity may have exchange value, without having any value at all. ● Third, a commodity may have a price, without having either value or exchange value. ● Fourth, even in a transaction involving a commodity that has value, exchange value and a price, nothing in labor theory states these three quantities of abstract homogenous socially necessary labor time will be equal.

A commodity may be a product of labor and thus have value. This, however, does not mean the commodity has exchange value or a price in the market. Nor does it mean the exchange value and price of the commodity are equal quantities of socially necessary labor time as is embodied in the value of the commodity.

On the other hand, a commodity may have a price in the market, without having either value or exchange value. Even if the commodity has a price, a definite value and a definite exchange value, there is nothing to say the price of the commodity embodies a quantity of socially necessary labor time equal to either its value or its exchange value. Finally, a commodity may have exchange value without embodying a single instant of value. Even if the commodity possesses both value and exchange value nothing in labor theory suggest the same quantity of socially necessary labor time is embodied in each. Defining terms

Surprisingly, in labor theory, although the value of a commodity, its exchange value and its price, all refer to some quantity of socially necessary labor time, they are three different and distinct things that can contain unequal quantities of socially necessary labor time. In first place, the value of any commodity is the socially necessary labor time required to produce the good. This value arises from the expenditure of labor power on an object of nature in the course of producing the commodity. The value contained in the commodity is nothing more than some definite expenditure of labor power in some specific form. The relation between the value (socially necessary labor time) of the commodity and the commodity itself is peculiar to the commodity.

The exchange value of the commodity is the quantity of another commodity for which the first commodity can be exchanged. This second commodity, like the first, is also nothing more than some definite expenditure of labor power in some specific form. When the two commodities are exchanged, their owners attempt to estimate their respective values and this is a problem. According to Marx neither owner knows the value of his commodity nor the value of the other commodity. It follows from this that neither owner has any idea what the proper exchange ratio is for the two commodities. They are guesstimating or approximating the proper exchange ratio for the two commodities. Depending on the knowledge of the owners and market conditions, this guess may be more or less accurate, but it is always just an approximation. The exchange value — the quantity of a second commodity given in exchange for the first — can never be anything more than a more or less educated approximation of their actual exchange values.

Finally, we have the price of the commodity — which, of course, assumes a money of some sort. The exchange value and the price of a commodity are often assumed to be the same thing, but actually they are not the same. While the exchange value of any commodity is the definite quantity of one commodity paid out for another commodity, its price, however, can simply be a certain quantity of a token of money, rather than an actual commodity money. The token is assumed to stand in the place of the money commodity that is being exchange for the first, but this is not always the case. For example, when the dollar was debased from gold after 1971, price was also, at the same time, severed from exchange value. As a result, today the price

of a commodity no longer represents any definite amount of a commodity money. The debasement of the token of money actually can lead to the oddest sort of result: a good for sale in the market may have a price without having either value or exchange value. Bourgeois economists, value and price Contrary to most explanations of Marx’s labor theory of value, there is nothing in the labor theory of value that says the price or exchange value of any commodity is its value. The argument that the value of a commodity is its price (or that the price of a commodity is its value) is not Marx’s theory of value, it is bourgeois simpleton theory. As the argument against Marx made by Bohm-Bawerk demonstrates, in neoclassical economic theory the terms value, exchange value and price are essentially three interchangeable terms for the same thing. By contrast, In Marx’s theory these three terms do not refer to the same thing.

Thus, it is the most bizarre thing that Marx, who alone states value, exchange value and price are not the same and can never be the same except by chance, is the one person everyone else accuses of saying the value of a commodity is its price. What is even more bizarre is that when bourgeois simpletons like Bohm-Bawerk make this charge against Marx, Marxists often rush in to defend the principle that value equals price! What accounts for the incongruity between value, exchange value and price? The question this raises is obvious: How can we explain the persistent inequality between the magnitudes of value, exchange value and price? Since each of these categories is simply some definite quantity of socially necessary labor time in the form of a particular product of labor, the relation between the three cannot just be determined by the socially necessary labor time each embodies. All we have here are socially necessary labor time in three different and unequal quantities, embodied in three different objects: a commodity, a second commodity for which the first is exchanged and an object serving as money. Since the socially necessary labor times of the three are all simply a definite quantity homogenous abstract labor, i.e., the expenditure of a definite quantity of labor power, nothing differentiates

them as labor values but the duration of socially necessary labor time that is embodied in them. Socially necessary labor time, since it is the “substance” the three share in common, can explain why commodities can be compared to one another, but it cannot explain why they exchange in the market in proportions that persistently diverge from their actual relative values. Yet we know this persistent inequality of labor values in exchange not only happens, it is the general rule of exchange according to Marx. Since the three quantities of socially necessary labor time — value, exchange value and price — are simply three different durations of socially necessary labor time, their persistent inequality in actual exchanges cannot be explained by the quantity of socially necessary labor time they each embody.

We are thus forced to conclude that the persistent divergence between values, exchange values and prices cannot be explained by the socially necessary labor time they each embody and which allows them to be compared as values. Rather, this persistent inequality must be explained by something else having no relation to socially necessary labor time required to produce them.

We have to look elsewhere for an explanation.

Schrödinger’s Capital: Why Chris Arthur followed Bohm-Bawerk in rejecting the law of value NOTE 24(c): The superposition of socially necessary labor time As I showed in my last post, bourgeois simpletons have tried to expunge the law of value from economics without success. This is because, as Bohm-Bawerk admitted, the law of value provides a weapon for the working class in its conflict with the capitalist. Assuming Marx is correct, says Bohm-

Bawerk, “the difference in value that falls as surplus to the capitalist” is revealed by the law: “And this principle, entirely unfounded as it is, the socialist adherents of the Exploitation theory do not maintain as something unessential, as some innocent bit of system building; they put it in the forefront of practical claims of the most aggressive description. They maintain the law that the value of all commodities rests on the labour time incorporated in them, in order that the next moment they may attack, as ‘opposed to law,’ ‘unnatural,’ and ‘unjust,’ all formations of value that do not harmonise with this ‘law'”

It is obvious why Marx’s law of value might be a problem for Bohm-Bawerk and the neoclassical school, but it is not at all evident why the value-form school should spend so much time trying to

expunge the law of value from Marxism as well. In any case, this effort by the value-form school is just as impotent once the content of their criticism of the law of value is explained. According to the Chris Arthur and value-form school, it is not value that determines the prices of commodities, but prices that create a ‘value dimension’ allowing use-values to then be compared with one another as values:

“The unity of commodities as values is secured only in their common relation to money. Money is not therefore a measure of value, it is the form of value as measure. Only through this coordination are commodities situated in a value dimension, and hence only through the mediation of money may such social aspects of commodities as their representation of abstract socially necessary labour be secured. It is not that the commodities themselves have a common value dimension subsequently given a metric

by money. It is our practice of pricing commodities that creates this value dimension ideally. Social practice posits the presupposition [that commodities are values].” While both Bohm-Bawerk and the value-form school deny that value has an existence independent of money, the argument of the Austrian school and that of the value-form school should not be conflated. For the Austrian school the denial of the independent existence of value is a rejection of the claim of the working class that its labor is the sole form of social wealth and, with nature, constitutes the source of all material wealth. Does satisfaction of human needs require living labor? Not so with the value-form school. As can be seen above, Arthur’s argument amounts to the assertion no socially necessary labor time is required for the production of use values until these use values first acquire prices in the market. By contrast, we already know that in Marx’s labor theory of value, value is nothing more than the socially necessary labor time required for production of the use value and must therefore arise from production prior to their exchange in the market.

But we also know something else, in Marx’s theory, value, exchange value and prices are simply definite quantities of congealed socially necessary labor time in three different forms. Value is the socially necessary labor time required for production of a commodity. Exchange value is the socially necessary labor of a second commodity that is exchanged for the first. Price is some quantity of socially necessary labor time required to produce the object serving as money.

In a twist on the punchline of one of Stephen Hawking’s stories: “it’s socially necessary labor time all the way down!” Following from one commodity to money and on to another commodity all we are dealing with are different forms of socially necessary labor time. Chris Arthur, and the value-form school generally, take the rather bizarre and theoretically indefensible position that the satisfaction of human needs does not require any living labor. And they seem to base this rather bizarre argument on the observation a community of producers have no means to directly compare the relative values of their commodities.

Since the socially necessary labor time required to produce any commodity cannot be determined simply by examining the commodity. the value-form school concludes this socially necessary labor time cannot exist until the commodity acquires a price in an exchange. The value or socially necessary labor time required to produce a commodity results from the universal social practice of pricing commodities in exchange; value or socially necessary labor time does not account for the universal practice of pricing commodities.

This argument is then turned into a perverse challenge against labor theory that we must prove the satisfaction of human needs requires labor. Bohm-Bawerk and the problem of ‘exclusions’ from the law of value I can identify six forms of material wealth Marx refers to in chapter 1 of Capital. These are (in no order): 1. Natural use value: this is a product of nature, which is not a product of labor. This use value: a. has no value; b. has no exchange value; and c. has no price. 2. Man-made use value: this is a typical commodity, a product of living labor. This use value: a. has value; b. has exchange value; and c. has price. 3. Man-made use value, This is a use value created by labor but transferred without exchange (taxes, tithes, etc.)

a. has value; b. has no exchange value; and c. has no price. 4. Special case of a natural use value: This is not a product of labor, but bought or sold. This use value: a. has no value; b. has exchange value; and c. has price. Two other categories are not directly mentioned by Marx, but can be inferred. 5. Overproduction of man-made use values: This is a commodity that has been produced for which there is no demand in the market. This use value: a. has value; b. has no exchange value; and c. may of may not have a price (e.g., agriculture price supports). 6. Superfluous man-made products: This is a commodity that has been produced that has no use value (or what me might call waste): This use value:

a. has no value; b. has no exchange value; and c. may or may not have a price (e.g., military spending).

In his critique Bohm-Bawerk refers to several of these exceptions, although his categories are drawn from many labor theory writers and thus may not agree with Marx’s. He argues since an object without value can have a price (as in case 4) and an object with no price can have value (as in case 5), Marx’s rules are incoherent.

However, another way to look at this is that in Marx’s theory value and price can and will very often be unequal. A commodity containing no socially necessary labor time, may nevertheless have a price equal 1 hour of socially necessary labor time; while a commodity with a value of 1 hour of socially necessary labor time, may have a price equal to zero hours of socially necessary labor time. This inequality cannot be explained by the socially necessary labor time of the commodity itself, nor of the socially necessary labor time of the commodity for which it is exchange. Socially necessary labor time allows us to explain why objects can be compared to one another as values, but it does not explain why they exchange in ratios that are unequal.

Capital, prices and the law of value To use one of Bohm-Bawerk’s examples: a seam of coal may have a price in the market, not because it is a product of socially necessary labor time, but because living labor can be expended on it to produce surplus value; which is to say, the seam of coal acquires a price in the market resulting from its quality as capital, not labor. Obviously, in chapter 1 of Capital, Marx has not yet introduced the concept of capital as distinct from commodity production, so he could not fully explain this in the chapter, but could only indicate it needed to be explained. However, as BohmBawerk explains, Marx notes the peculiar category of natural objects that have prices without having value. The existence of objects that have prices without having values, suggests also that there are commodities that have values but no prices. To explain this, consider two commodities in any exchange: Ideally, these two commodities are exchanged at some ratio thought to reflect their relative values. But this is not always the case — in fact it is generally the case that commodities will more often exchange in

proportions that do not reflect their relative values. This is because while we can approximate the relative value of the two commodities, some level of error must enter into our calculation. One commodity may be undervalued relative to the other commodity and if one is being exchanged above its value, then by a process of exclusion the other must be exchanged below its value

On one level, Marx is showing that there is an opposition between value and price, but he is also showing that they are both expression of the same thing: socially necessary labor time. The value and the price of any commodity may indeed be a loggerheads with one another, but both can only be at loggerheads because they are composed of one and the same social substance: socially necessary labor time. The sum of the socially necessary labor time expended by society may alternately appear as the values of commodities and as the prices of the commodities.

In the same sense that energy and matter are merely two forms of the same thing, represented by Einstein’s equation e=mc-squared, so values and prices are simply two forms of the same thing; two different forms of socially necessary labor time. Marx thus provides a unified theory of value where the prices and values of commodities are not simply in contradiction with one another, but each also assumes the form of the other. The paradox of the price-form and the conversion of values into prices, inherited from Smith and Ricardo, is solved in principle.

The general law of value and prices That law can be stated this way: The sum of the values of all commodities produced in a community of commodity producers is equal to the sum of all the prices paid for the commodities they produce. Thus: (SUM)P = (SUM)v

However, a caveat is in order: it does not follow from the general law (SUM)P=(SUM)v, that P, the price of a particular commodity equals v, the socially necessary labor time required for the production of the commodity. As we have seen the relative values of commodities are almost never equal to their actual exchange ratios in the market. The actual exchange ratios are simply approximations, more or less arrived at by some combination of experience and circumstance. The players in the market have no idea of the value of their commodities, nor the values of any other commodities. We can, therefore, arrive at another rule: While (SUM)P=(SUM)v, the price of any given commodity will never be its actual value. Which brings us to another paradox: So far as Marx’s labor theory of value is concerned, in any actual exchange in the market, the values of the commodities in the exchange do not exist for the parties to the exchange. This allows us to fully account for the observations of bourgeois simpletons like BohmBawerk and also of the value-form school who both take market prices as their starting point. If you begin with market prices and the exchange of commodities in the market, you must conclude prices are not determined by values. This conclusion is not a fallacy. It is an entirely accurate observation; and moreover one that can be demonstrated empirically.

Labor hours reduction and the abolition of capitalism: An outline for an essay

NOTE: This outline has been developed based on Marx’s argument in Capital, volume one and volume three. In particular, I borrow the salient points of Marx’s theory from chapters seven and fifteen in volume one and chapter fifteen in volume three. Any errors are the result of my misreading, not the author. ***** INTRO: The production of surplus value, i.e. profit as a direct function of hours of labor:

“the past labour that is embodied in the labour-power, and the living labour that it can call into action; the daily cost of maintaining it, and its daily expenditure in work, are two totally different things.” -Capital, Volume 1, chapter seven

“The fact that half a day’s labour is necessary to keep the labourer alive during 24 hours, does not in any way prevent him from working a whole day.” (Ibid)

“The labourer therefore finds in the workshop the means of production necessary for working, not only during six, but during twelve hours.” (Ibid)

“If we now compare the two processes of producing value and of creating surplus-value, we see that the latter is nothing but the continuation of the former beyond a definite point.” (Ibid)

***** Thus, in Marx’s labor theory of value, the production of surplus value, i.e., profit is nothing more than labor of a duration that is longer than that required for the subsistence of the worker. In first place, a reduction of hours of labor acts on this duration, by reducing it and by reducing the duration of labor that is in excess of that required for the subsistence of the worker. A reduction of hours of labor that does not go so far as to impinge on the duration of labor required to produce the 1.

2. subsistence of the worker, must reduce the absolute quantity of surplus value, i.e., profit, produced by the worker for the capitalist. ***** 2. What impact might this have on a system of production of material wealth founded on the production of surplus value, i.e., profit? As we have seen, the reduction of hours of labor in first place reduces the absolute quantity of surplus labor time and thus reduces the absolute quantity of surplus value. In a system founded on production for profit (capital), profit

is the goad of all investment. With his profits suffering the impact of of a sudden fall in the absolute mass of surplus labor time, in theory at least, the capitalist can respond by extending hours of labor and by increasing the intensity of the labor he has employed. ***** 3. Since an extension of the individual hours of labor of his workers is not possible (hours having been fixed by law or by direct action on the part of the workers), what other recourse does the capitalist have for extending aggregate hours of labor? If he wishes to recover his profits, the capitalist can extend hours of labor, not by extending individual hours of labor, but by employing more workers. Two hundred workers, each working four hours, can create as much value as one hundred workers each working eight hours. If hours of labor are cut in half, the capitalist can offset this reduction by doubling the aggregate number of workers he employs.

***** 4. The first and most immediate effect of a fall in profit subsequent to a reduction of

hours of labor is an increase in the employment of labor power; this being the simplest methods of recovering the lost profits for the capitalist. From where do these additional workers come? In first place, they come from the domestic industrial reserve army of workers; those workers who are by and large utterly cut off from all productive employment in normal times. This includes, in the United States, for instance, a huge mass of black and brown workers, who, owing to rampant antiblackness, have been permanently imprisoned in the labor reserve (often literally by

mass incarceration in prisons). It also includes, a rather sizable number of migrant workers who travel to the US in search of employment. And, finally, it includes a very large number of workers who are now employed, but in jobs that produce no value, 5. such as defense industry workers, and household labor of the very wealthy. These superfluous workers too form a part of the reserve army, but their labor is seldom tapped for productive purposes even in normal times; they are a hidden reserve of capital, whose cost is expressed in rising prices rather than increased unemployment..

***** 6. A reduction of hours of labor that goes so far as to reduce profits to zero has an effect of forcing capital to tap all available sources of additional labor power for the production of surplus value, i.e., profit. It may be asked how a fall in profits results in increased employment of labor power? Surely the capitalist has fewer profits with which to hire labor power. To ask this question is to ask how, at the very nadir of a depression, when profits are at their lowest, capital finds means to increase investment. A surplus population of workers is accompanied by a mass of excess capital, which, like these workers, is unable to find productive employment for purposes of self-expansion of the invested capital. According to Marx:

“This plethora of capital arises from the same causes as those which call forth relative over-population, and is, therefore, a phenomenon supplementing the latter, although they stand at opposite poles — unemployed capital at one pole, and unemployed worker population at the other.” Capital, volume 3, chapter 15 The same forces than condemn a huge mass or the worker population to the industrial reserve army, produces a huge mass of excess capital that cannot find productive investment. A reduction of hours of labor operates so as to require the mobilization of this excess capital for capital’s self-expansion. ***** 6. A second question might now be asked: Even if a reduction of hours of labor has the effect of increasing employment, isn’t it true that with increased employment of labor power, labor costs (wages) also rise? Two hundred workers working four hours may indeed produce as much value as one hundred workers working eight

hours, but the wages of two hundred workers is twice that of one hundred workers. If, before, half the day was spent producing the wages of one hundred workers, now the entire day is spent producing the wages of two hundred workers. What have I missed? The absolute mass of surplus value is still zero.

***** 7. Marx’s answer is that more value can be created in less time with the two hundred than could be created by the one hundred previously. While the duration of labor is the same in both cases, 800 hours, with 200 workers the density of the labor time is increased. Based on England’s experience in the 19th century, Marx discovered that fewer hours of work allowed the workers to work with greater intensity. This enabled them to produced the same amount of value in less time, or, conversely, more value in the same period of time. Although one would assume that value is fixed in relation to its duration, Marx discovered that a labor period of shorter duration created the same or more value than the labor of a longer duration. -Capital, Volume 1, chapter fifteen ***** 8. The effect occurs because the worker is no longer being worked to the point of exhaustion and can maintain greater attention to task for shorter periods. Although we assume the workers works with the same intensity over the entire workday, this is obviously not true. Labor after lunch, for instance, may have entirely different productiveness than labor when the worker is fully rested first thing in the morning. In the course of the labor day the workers capacities are progressively used up, degraded, by the act of labor itself. A shorter period of labor exerts less degradation than a longer period of labor, allowing the worker to be more productive. The conclusion seems to be that two hundred workers, each working four hours, will be more productive than one hundred workers, each working eight hours.

***** 9. Modern industrial studies seem to confirm Marx’s observations. See, for instance, studies drawn on labor hours experiments in Sweden. ***** 10. But we haven’t exhausted the impact of labor hours reduction on the mode of

production. Increased employment of labor power, the employment of the industrial reserve, migrants and superfluously employed workers, is the most readily available means for offsetting a reduction of hours of labor, but it has material requirements itself. These additional workers cannot be employed unless the means upon which they will labor has also increased. This means additional raw materials, additional

11. machines, additional technology and science, less waste in production and greater efficiency. In a phrase, a reduction of hours of labor calls upon the entire mode of production to increase its productivity by intensifying the employment of improved methods of production. ***** 11. A reduction of hours of labor, therefore, has the effect of accelerating capital’s own revolutionizing of methods of production. The aim of this revolution is to further reduce the necessary portion of the labor day in order to increase the unpaid portion. Reducing hours of labor not only has the effect of reducing that portion of workers who are locked out of productive employment and decreasing the mass of excess capital sloshing around the economy, (which is the primary source of speculation), it also accelerates capitalism headlong into its inevitable demise. The most important result of reducing hours of labor is the effect this reduction has on capitalistic automation.

***** 12. This impact should be prized by communists; it is the very one we seek because it is the creation of the material foundation for communism. We don’t, in first place, fight to reduce hours of labor in order to reduce unemployment — in fact we want to abolish all employment — but because a reduction of hours of labor, in and of itself, makes possible a world without labor.

The Strategy To move forward, the Left must admit it has been a failure for forty years A tweep tweeted this gem the other day and I honestly didn’t know how to respond to it: “Inequality grew faster under Obama” It would be no surprise to learn that the guy who wrote the tweet self-identifies as a “Breitbart conservative”. For some on the Left, his opinion can be safely ignored, because, as we all know, the ‘real cause’ of growing inequality in society is Boehner or the Koch Brothers, or the Tea Party. When you think about it, his argument is no more politically opportunistic than someone describing herself as an Obama Democrat blaming Boehner for the low wages of the working class.

While, by every measure, the headline is correct, what does it even mean to say inequality has grown faster under Obama? Is the tweep suggesting growing inequality is Obama’s fault? Is Obama personally responsible for it? Is the tweep implying the crisis would have turned out differently if, say, McCain or Romney had been elected? I mean, as a communist, I have answers to headlines like this; but my answer operates on a whole different level from mainstream party politics. There are so many people who blame basic shit about capitalism on one or another party, administration or politician. And — yes — this would be intolerable for a communist or some advanced thinker, but, on another

level, it is how the rest of the world actually thinks about capitalism. Most of the working class thinks the problems associated with capitalism can be blamed on Obama or Bush or some party. Politics is superstition And, frankly, I don’t see how anything can possibly change this view of the world, because, in large part, it is determined by the division of labor — the fragmentation of labor itself shrouds all social relations in mysticism and superstition. All politics is superstition and cannot be anything but superstition. But there has to be some way for activists to cut through the superstition and I don’t mean just on the level of radical critique of existing relations. I also mean on the level of simple trade union consciousness, on the level of everyday life.

For instance, while it may be thought of as unusual, there is no reason in principle that an Obama Democrat and a Breitbart conservative cannot be members of the same trade union. When it comes to trade unions, these sorts of political differences count for nothing. I have personally experienced that range of political opinion within my classes teaching 1199SEIU members.

But is this sort of thing capable of going beyond simple trade unionism? Can there be a “no politics” or “anti-politics” movement that aims for something more than negotiating the next labor contract? An “anti-politics” movement means you cannot discuss politics or bring politics into the movement at all. You don’t formulate political demands, you don’t discuss political action or concern yourself with, or respond to, political elections, etc. You don’t even organize political protests. Instead you narrowly focus on the immediate aim of your class organization.

The Left has to admit its complete failure To be clear: It is not even possible to begin a discussion like this until the Left admits it has been an utter failure for the last 40-odd years. The Left refuses to admit to this fact and keeps trying to blame its failures on the capitalists or politicians. We are constantly told that the failures of the Left can be blamed on neoliberal ideology infecting parties or the capitalists (as if the capitalists have ever been in favor of emancipating society).

Honestly, I don’t know where some of this shit comes from. You cannot blame the capitalists for being capitalist — that is simply fucking irrational. Of course they are going to be capitalists. It is simply astonishing how often radical scribbling begin with complaints about neoliberalism or globalization or monetarist ideology as if the radical writer expected something different from the capitalist class.

One of the most astonishing (and most remarked on) features about this crisis is that the Left remains marginal even with almost 20% of the labor force unemployed in the United States. And, by Left, I mean all variants of that term in its broadest, most inclusive, meaning — from progressives to mildly social democrat to Leninists to anarchists. To be completely frank: The Left has been on the losing side of every battle, at every point in time and on every issue where it has engaged the capitalists in the past four decades.

The Left Legacy: Forty years of failure Radical activism is permanently isolated on the margins of political life and has been thoroughly defeated on every political issue in the last 40 years — yet radicals have never even once questioned their horribly failed approach to social emancipation. The state has imprisoned them, pushed them to the brink of starvation, invaded other nations at will, and murdered children in their beds in a dozen countries without any consequences at all. But, it appears, no one on the Left wants the marginal influence of the Left to produce radical change if it means they have to change their pet ideas about anything. So, after 40 years of growing poverty, most, if not all, of these ‘radicals’ still defend a failed system of food stamp socialism; after 40 years of stagnant wages and employment, they still insist labor is necessary and that jobs must be created and a basic income handed out by the fascist state; and after 40 years of almost continuous wars of aggression, they still defend the state as essential for the protection of the working class. For 40 years the Left has lost every battle it has engaged in with the capitalists. I don’t think anyone can point to a single victory by the Left over that time — but still the Left refuses to face its utter failure. And this is true no matter what variant of the Left you choose to define as “THE LEFT”.

That includes all of you fucking progressives, you democratic socialists, you fucking Leninists, and you goddamned anarchists. Not. One. Victory. You haven’t even stopped one fucking war in the past forty years — and people mostly hate war. That is how much of a fucking failure you are — you can’t even stop a war no one wants. Jesus, the Left can’t even get a single fucking cop arrested for shooting an unarmed young man in broad daylight in front of a dozen witnesses.

This is the Left. THIS IS THE LEFT! You are fucking pathetic! You keep failing because you keep trying to do the same dumb ass shit over and over again. The Left has no killer instinct anymore. It has no desire to destroy the capacity of its enemies to subjugate the class. It wants to reform its enemies, to give us a humane capitalism. All politics is dead Despite 40 years of abject failure, the radical Left think they can alter existing political relations in a way that promotes human emancipation. This cannot be done. Nothing of existing political relations can be salvaged — not even your precious food stamp socialism can be allowed to survive. Society is not going to be able to exit the crisis either through incremental political reforms or even through a comprehensive political revolutionary effort.

Politics is a dead end and has been a dead end at least since the end of World War II. There is only one way to cut through the fetishistic nightmare of bourgeois politics: Setting an aim that is immediately revolutionary, while, at the same time, being simple, straightforward and measurable. There is no way a radical alternative to existing political relations can emerge except in the form of the direct opposition to the continuation of wage labor itself. So, if you are not ready to undertake the radical abolition of all existing relations, starting immediately with wage labor, don’t even bother to call yourself radical.

You cannot begin a movement for social emancipation based on assumptions that normalize wage slavery. If your movement assumes wage slavery is normal, necessary or natural, you will always act politically as though wage slavery is normal, necessary or natural. You have to begin where you want to go: That wage slavery is a reprehensible and unnecessary evil that must be directly abolished through social action; that wage labor is an unnatural condition for any human being; that wage labor is an obscenity that has no place in a civilized society.

If you do not begin with the argument that wage labor is the present day version of chattel slavery and segregation, you are not interested in social emancipation.

Normalizing the perverse There is no possibility that wage labor will be gradually abolished; it will take a movement to end it immediately and for everyone together at once throughout the entire world market. Wage labor is the last possible form of labor. Once wage labor is gone, all labor and all social relations founded on labor will go with it. We desperately need a movement that has no other aim than the immediate end to wage labor. A movement that doesn’t care about anything but that singular aim. A movement that only cares about one method of achieving this, the direct action of the members of society. Today, I think, activists no longer have the imagination to conceive of an end to wage labor; at best they only want to manage it ‘rationally’. But we need a movement with the imagination to grasp how abominable wage labor really is.

Part of the problem is that nowadays people think chattel slavery and race segregation were always unacceptable in American society. They weren’t. It was once normal in society to own another person and even be elected president as a slave-owner. You once could run for and get elected president even if the voters knew you owned human beings and regularly forced them to fuck you when you felt the urge. In fact, You could get elected president even if you owned human beings as if they were cattle, fucked them whenever you felt like, and even if one of the human beings you owned and fucked was commonly known in polite society to be the half-sister of your wife.

That is how normalized slavery was in America at one time. It took a long period of agitation for slavery and Jim Crow to be rejected by American society and a lot of people died trying to get society to the point where owning human beings was considered at least a reprehensible character flaw.

Today almost everyone believes wage slavery is normal. People even run for office bragging that they ran a business and hired wage slaves to produce surplus value. They even promise to run the fascist state itself “like a business”. This situation is made even more politically difficult because although labor is today completely unnecessary, it appears to be necessary because the working class has no means to life except to work for wages. A reprehensible institution like wage slavery will always appear to be necessary to them because people do not go to work to produce things, but to earn money. Thus, people who do the most ridiculously and obviously unnecessary or even counterproductive shit for wages think their job is necessary because it pays the bills.

Wage labor is not necessary Many on the Left will agree that wage labor is a social evil, but they insist it is a necessary evil, a natural consequence of the need to feed, house and clothe mankind. However, during World War 2, the US devoted 40 percent of its industrial capacity to prosecuting the war against Germany and its allies, yet experienced no significant shortages of necessary goods. Forty percent of U.S. GDP was devoted to a completely unproductive war effort and nobody complained “We can’t afford to spend that much time away from growing food or building cars.” Or, “But, who will build the fucking roads?” No one asked, “How can we possibly spend all that time building tanks and warships when so much infrastructure investment is needed?” Surprisingly, despite all talk of no room to reduce hours of labor during the Great Depression, when it came to killing German workers plenty of spare time was found by Washington for that purpose. But when it comes time to emancipate society from labor, all of a sudden there is no room in the work day to accomplish this.

Another source of objections come from Leftists who insist, despite conclusive historical evidence, that people cannot afford to work less. If this is true why the fuck are we not all working 72 hours as was the norm in the 19th century? Did the reduction in hours from 72 hours to 40 hours drive the working class into poverty? People making this ridiculous argument need to bring out the fucking data to prove it. Reducing hours of labor has the exact opposite effect: it reduces profits and forces the capitalist to produce more goods with less labor at lower prices. Not one Leftist opponent of reducing hours of labor has ever produced a single piece of evidence that reducing hours of labor reduces wages, because the entire argument contradicts almost 200 years of empirical data.

All objections to reducing labor come down to this: some people want to control everyone else and reducing hours of labor makes this impossible. Indeed, everyone on the Left has their own pet projects that, they argue, makes reducing hours of labor impossible: “green energy”, “infrastructure investment”, “social security”, etc. All of these pet projects are just another way to maintain a grip on the disposable time of society. All of the objections to reducing hours of labor come from people who think they have a better use for your time than you do.

Wages: The price of repression Well, let’s just be clear about a few things: That murderous cop who killed Michael Brown would not have been there to kill him if you were not working long hours to pay his salary. American, French and British jets would not be flying over Iraq and Syria, if you were not working long hours to pay for them. Washington would not be able to maintain a vast network of military installations around the globe, if you were not putting in incredible long hours of unnecessary labor to finance it. Your long hours of labor, which you think are necessary to pay your bills, only make death and oppression possible over the entire planet.

Look at your paycheck: Forty percent of everything you earn goes to fund the global machinery of repression, war and exploitation. Your taxes are the carrying cost of the very state some of you dumb Leftists think is vital for protecting the working class from the capitalists. Your labor funds the state; your labor funds the Koch Brothers and ALEC; your labor funds Obama and his military adventures. You can complain about Obama or the Koch

Brothers or killer cops all you want, but your labor pays for everything you hate about them. If you are not willing to take on wage labor directly, your labor only serves to enforce your subjugation. Even when Leftists know their labor funds the entire apparatus of repression — as Marxists do — they refuse to actually acknowledge it in their agitation. And they blame who? The capitalists, or politicians or even the workers. They blame everybody but themselves and their tired ass strategy. Marxists are the absolute worst because they should know better, but they no longer fucking care because it is not politically correct, i.e., the working class is not able to understand how capitalism works. The social necessity of wage labor There is today no materially necessary reason for keeping wage labor at all — it survives solely because the two classes depend on it as classes. Without a growing mass of wage labor the working class cannot sell its labor power nor can the capitalists make a profit. The reason for the continuation of wage labor is social not material. And this problem cannot be addressed through politics because Washington is a machine for ensuring the constant expansion of wage labor. Every political party seeking power in Washington has its own plan for maintaining wage labor in one form or another. Thus, getting rid of wage labor cannot be a political movement, but must be directed against the state itself and, for all intents and purposes, wage labor itself must be seen as the state. A movement against wage labor is a movement against the state and, therefore, a movement against both classes, labor and capital.

Moreover, getting rid of wage labor is not as difficult as the Left tries to portray it. Since our Leftists seem unable to imagine a complete elimination of wage labor let me offer this simple program for completely eliminating it within five years:

How to abolish labor within 5 years in five simple steps:

● STEP ONE: In the first year, add one three day weekend per month every quarter. By the end of the year, the work week will be reduced to four days ● STEP TWO: In the second year, add one four day weekend per month every quarter. By the end of the year, the work week will be reduced to 3 days ● STEP THREE. In the third year, add one 5 day weekend per month every quarter. By the end of the year, the work week will be reduced to 2 days ● STEP FOUR. In the 4th year, add one six day weekend per month every quarter. By the end of the year, the work week will be reduced to 1 day. ● STEP FIVE. In the 5th year, add one full week off per month every quarter. By the end of the year, the work week will be reduced to 0 days

A five year plan to reduce hours to zero gives the capitalists and managers and workers all the time they need to adjust schedules and introduce improved machinery to compensate for the reduction of hours of labor. And I know the capitalists will not object to this plan because they all swear labor does not produce profit, capital does. At any point during the reduction, the process can be slowed if a complete abolition of paid labor creates an undue burden on society.

The entire process can be managed by our unions and does not require the state. Moreover, since the state accounts for 40% of the American economy, it is the single largest consumer of labor power. It will thus be forced to reduce its reliance on labor power just like any corporation. (In fact, the easiest shit to get rid of are all those jets flying over Iraq and all of those military installations spread around the world. Once you aim for the end to wage slavery, everything becomes really simple, straightforward and measurable. There is no more need for fussing around with complex mathematical formulas invented by simpleton economists to determine the proper and balanced fiscal and monetary policy for Washington bureaucrats. Instead, Washington bureaucrats can do what they do best — stop working.

Why Marxist academics are charlatans — all of them, without exception

The argument that needs to be explored is that between 1867 and 1971 an essential category of Marx’s Capital disappeared. In 1867 money was a commodity with value, transactions involving money were exchanges of value, exchanges of socially necessary labor times; by 1971 this was no longer true. Its disappearance was predicted by Marx’s labor theory of value, but has not been recognized by the Marxist school of political economy. The Marxist school have refused to recognize this change, its cause and its implications. For the life of me, I cannot understand why they are so stubborn on this. Even if you don’t agree with my view on this, it is a testable counterfactual: the dollar in 1867 was pegged to gold, today it is not. Both gold and the dollar continue to exist today. We know gold is money. And we know why it is money. The question is whether currency is money apart from its relation to gold.

To test the counterfactual that currency in circulation today is not money, all you have to do is compare dollar prices since 1867 to gold prices since 1867. If the relation between the two is unchanged since 1867, my counterfactual argument is falsified. Not a single Marxist who has challenged Marx’s theory of money has ever provided any empirical proof for their claim. They will provide charts and graphs to prove any assertion except the one that says fiat currency behaves like gold. Mind you the implications of debased fiat currency are staggering: if my counterfactual is falsified, Capital Volume 1 can be thrown in the trash. There is no more Marx’s labor theory of value. And no need to ever speak of it again. All it takes to completely discredit Marx is a single empirical demonstration that fiat prices and gold prices behave the same way. ***** Why might the gold/fiat counterfactual be important apart from me wanting to expose Marxists for being pitiful charlatans? In Marx’s theory, gold is the universally recognized embodiment of exchange value. In this function gold (commodity money generally) expresses the socially necessary labor time required for production of commodities. Fiat is not money precisely because it cannot express the socially necessary labor time required for the production of commodities. If fiat cannot express the socially necessary labor time required for production of commodities, it would be nice to know what it does express, right?

If fiat can’t express the values of commodities, what function is it fulfilling when it serves as means of exchange? We know it is not a measure of the values of commodities according to Marx. This means wages paid in this fiat currency are not a measure of the value of labor power. Groceries paid in fiat are not the measure of the values of the groceries. And, if they are being paid in valueless counterfeit, they are using valueless counterfeit to purchase groceries. Which means, as things now stand, neither labor power nor any other commodity have exchange value.

Essentially, paying for commodities in fiat currency is the same as handing them out for free! Do you think the working class might just want to know their wages don’t express the value of their labor power? Do you think the working class might want to know they being paid in valueless counterfeit? Do you think they might want to know that paying for necessities with fiat is the same thing as handing them out for free?

***** What evidence do I have for the proposition that paying for commodities with fiat is the same getting them for free? Simple, when the fascist state paid for its new aircraft carrier, the Gerald R Ford, it simply “printed” the currency up and paid for it. Another example: When the financial system began to collapse, Bernanke simply “printed” currency up and bought outstanding toxic assets. In both case, the fascists raised no taxes and had to borrow no capital for these items, they simply printed up what they needed. The fascist state could do this because it is the sovereign issuer of the currency.

This is just not limited to aircraft carriers and toxic assets; the fascists can purchase anything, from labor power to corn. And they do this without paying anything for the commodities. This should immediately raise a question: if the fascists can print up money and bail out banks why can’t they print up money and hand out UBI? Why can’t they print up money and hand out free healthcare or free college education? Why can they print up money and pay off the student debt of millennials? Do you think there are millions of folks out there who might want to know the answers to these questions? Just maybe? But we can’t get to why the state buys toxic assets but won’t buy up student debt because we have a bunch of fucking Marxist academics who insist fiat is fucking money!

You can’t print money, you have to dig it out of the ground; which means, you can’t hand out UBI, free healthcare, free education or pay off student loans with money. But you can do all of this and more if you can just print up as much valueless currency as it takes. Bernie Sanders and a host of reform-minded fascists propose programs like this and Marxist academics have nothing to say about it because they base their own arguments on obsolete assumptions. Bernie Sanders comes off looking like the radical and Marxists come off looking stupid. ***** And here is the kicker: if you can just print up currency and pay for any commodity, you can just as easily abolish prices outright. Which is to say, if you print up currency to pay for healthcare, you really don’t need to pay for healthcare at all; if you can print up currency and pay for labor power, groceries, healthcare and education, all these things could be provided free. There is no reason for wages and thus no reason for any other commodity purchased by wages to have a price. Now, I don’t know what that sounds like to you, but to me that sounds like full communism. The same argument that argues the counterfactual — namely, that fiat is not money — also implies a fully developed communist society is possible right now. We could possibly have a society based on the old communist ideal of “from each according to ability, to each according to need”. Thus, by falsifying my counterfactual argument, it is possible not only to refute Marx, and discredit Capital, but also to show why a fully development communist society is not possible now. To put this another way: our ability to determine how close we may be to fully communistic society hinges on the capacity of fiat to accurately tell us how much of the social labor day at present is socially necessary. The communization theory argument that it is possible to move directly from capitalism to a fully communistic society largely depends on evidence for a very large mass of unnecessary labor time that can be converted directly into free time for all members of society. Only a money commodity can tell us how much of the present working day is unnecessary, because only a money commodity can express the socially necessary labor time required for production of commodities. Fiat currency can serve as means of exchange, but it cannot tell us the values of the commodities for which it is exchanged. It is possible, therefore, for fiat prices to conceal a rather large amount of socially unnecessary labor time within the social labor day and none of us would be the wiser.

Potentially, fiat prices could even conceal unnecessary labor that, on the surface, appears to be socially necessary like, for example, the steel used to build an aircraft carrier. Few Marxists would argue that aircraft carrier production is necessary labor, but how many realize that the steel that goes into the production of the aircraft carrier is also unnecessary precisely because it ends up in production of the aircraft carrier? All of the labor expended on all of the commodities going into the production of the aircraft carrier and all of the new labor expended directly on it’s production is unnecessary because the final product, the aircraft carrier, is unnecessary to material production.

Despite this, however, the production of aircraft carriers can be extremely profitable for capital; more profitable in fact than any other production because none of the outlay of capital for its production can possibly add to the subsistence of the workers, nor does it reenter the circulation of capital as new additional capital.

But let’s not get ahead of ourselves counting our communist chickens before the capitalist eggs have even been laid. ***** Given the huge stakes here, I can’t understand why none of these fiat loving Marxists don’t just go ahead and falsify my counterfactual argument. All you academics who think Marx was wrong about money, here is your chance to make a name for yourself by proving him wrong. Take the gold and dollar prices of 100 commodities since 1867 — iron, cotton, labor power, shoes, etc — and show that the prices of these commodities denominated in gold and dollars track one another within the limits of accurate measurement. ● ● ● ● ● ● ● ●

There goes your next book, Andrew Kliman. There goes your next book, Michael Heinrich. There goes your next book, David Harvey. There goes your next book, Michael Roberts. There goes your next book, Gerard Dumenil. There goes your next book, Chris Arthur. There goes your next book, Anwar Shaikh. There goes your next book, Fred Moseley

Make a real name for yourselves by showing conclusively, based on real empirical data, that Marx was wrong about money.

FUZZY LOGIC: What is communism anyway?

I find it helpful to think about the bourgeois epoch as a period of transition between individual production carried on separately and directly social production. This transition is essentially the replacement of the conditions of individual production with the conditions of directly social production. Contrary to most Marxists who neatly divide up this transitional period into capitalism and socialism, I make no necessary division. The transition can unfold under the rule of the bourgeoisie or under the rule of the proletariat. If the transition takes place under the rule of the bourgeoisie, we call it capitalism; if it takes place under the rule of the proletariat, we call it socialism. This means in theory, at least, there is no sharp fixed or fast division between the two forms of transition. The distinction between capitalism and socialism is political: which class rules.

This makes it very hard to tell just by looking at various “socialisms” that have emerged in the 20th century and say with a fair degree of precision whether they were socialist or capitalist. To give an example of what I mean: Folks who know more about the subject than I do nevertheless sharply disagree whether the Soviet Union was socialist or capitalist or even a completely different animal altogether. There is no real consensus on how to classify the Soviet mode of production among Marxists.

I have tried to finesse this problem by suggesting the SU was a capital — not “capitalist”, but the thing itself: a giant capital. The peculiar thing about a capital as a unit of production is that it has none of the features we normally associate with a capitalist economy. Internally, a capital has no money relations; production is carried on according to a plan; there is no tendency toward over-production, unemployment or crises we take as essential to the definition of capitalism. These features of a capitalistic economy are expressed in the exchange relations between capitals, not in their internal operation. All forms of directly social labor look alike If you observed the operations of a capital internally , it would be hard decide whether it was a capitalist organization or a commune – both are essentially identical in their operation internally, forms of directly social labor.

To give an example: a cooperative managed by the workers essentially will function identically to a capitalist firm. This is so true that it only takes the briefest examination of the operation of a cooperative to understand how superfluous the capitalists are to modern capitalist production. There is nothing the capitalist does that the workers can’t do themselves cooperatively. Assuming I am correct on this, it may be impossible to really tell whether the SU was a socialistic or a capitalistic society. In either case the SU would still have functioned pretty much the way it did. This leads to a rather disturbing conclusion: Insofar as the actual operations of the Soviet mode of production was concerned it was entirely irrelevant which class was actually in power. In truth, there are only so many ways you can manage directly social production. Technically, both a capital and a commune work the same way. Politically, of course, it makes all the difference which class is actually calling the shots, but technically politics is irrelevant.

The ambiguity of class rule This might explain why even as the classification of the SU as socialist or capitalist is very controversial, so has been the classification of what we call fascism. Even my personal working definition of fascism — a state managed capitalist economy — begins to look very ambiguous. Indeed, many communists define the SU as statemanaged capitalism. To nail down the difference between capitalism and socialism in practice, we now have to nail down things that are by their very nature fuzzy and ambiguous: class rule. Honestly, how do you tell which class is actually in power? What evidence do you have that one or the other class is ruling class. But there is a problem that is even more intractable than that one: Even if you could establish that a particular society is ruled by the working class, does the rule of the working class guarantee the society is socialist? In fact, we all know that the working class can act as its own capitalist? Is it possible to have capitalism without capitalists? Fascism without either capitalists or capitalist private property?

If the technical condition of directly social production do not allow us to differentiate between capitalism and socialism, the political conditions offer even shakier grounds for differentiation than the technical conditions. Literally, we could have a completely fascist society without either capitalists or capitalist private property.

Fuzziness We assume we can tell the difference between fascism and socialism, but the reality is that it is mostly a matter of individual prejudice. Look at the Democratic People’s Republic of Korea or even the People’s Republic of China. There is no consensus even among communists over how to characterize these societies.

We just make it up as we go along. We talk a lot of shit about what a socialist society looks like, but the reality is that the markers most communists employ use to differentiate capitalism from socialism are pretty fuzzy.

I just want to put this out there because a lot of people think they know what communism is but actually rely on very fuzzy definitions. They can’t even agree on whether the defunct SU was socialism or not, much less classify China. The definitions most communists take as settled and obvious begins to break down the moment we apply any critique to it. Definitional issues But let me state something else: every characteristic we think defines socialism is wrong. We are looking for socialism in the wrong place. I think I have made the case that the alleged markers for a socialist community are not as persuasive as they appear. We can’t look at the technical conditions of production and tell whether the society in question is capitalist or socialist. Further, we cannot look at the political condition of the society as a whole, i.e., which class is actually ruling. and tell the difference.

Even if we discovered a society where production is based on a community of social producers, and even if these social producers ruled through their own association, we still could not determine with a high degree of confidence whether the society was in fact capitalist or socialist based solely on these characteristics.

Whether a society is capitalistic or socialistic has nothing to do either with its technical conditions of production nor the form of state. Certainly these characteristics are important — no society can be socialistic without them — but they are not, of themselves, sufficient for definitively classifying the society in question as socialistic. Accumulation versus free development If I am correct about this what additional characteristic is necessary for the society in question to be classified as socialistic? I think Marx offers a clue in his discussion in the so-called fragment on the machine. Socialism, Marx seems to be saying, aims for,

“The free development of individualities, and hence not the reduction of necessary labour time so as to posit surplus labour, but rather the general reduction of the necessary labour of society to a minimum, which then corresponds to the artistic, scientific etc. development of the individuals in the time set free, and with the means created, for all of them.” What distinguishes a socialist community from a capitalist community is not its technical or political conditions, but whether labor time is reduced to a minimum to make room for the development of individuals, rather than accumulation. Marx actually doubles down on this assertion by quoting an anonymous writer:

“‘Truly wealthy a nation, when the working day is 6 rather than 12 hours. Wealth is not command over surplus labour time’ (real wealth),‘ but rather, disposable time outside that needed in direct production, for every individual and the whole society.’” In my opinion, the only way to tell whether a particular society is socialist is whether or not labor time is being reduced for everyone. Communism is free disposable time and nothing else.

You don’t ‘build’ communism: It’s not a commodity; it’s free time

There is this recurrent theme in communist literature that portrays communism as if it were a commodity to be produced and it goes something like: We have to build communism. Communism, in this proposal, is conceptualized as a the product of decades of constructive effort.

Here are some examples of what I mean: ● A book by Michael Lebowitz, who proposes we “Build It Now: Socialism for the 21st Century”. ● Deng Xiaoping proposed the China needed to “Build socialism with chinese characteristics”. ● Saul Alinsky couldn’t quite bring himself to propose we build socialism, but some allege he proposed we “Create a Social State”. ● In the UK, and indeed all across Europe there are a bunch of young folks who want to instruct us on “Building a Socialist Society”. ● According to The Nation, Kshama Sawant wants to, “Build an Actual Socialist City in America”. ● While Cuba, we are told, is actually trying to “Build Socialism in a Neoliberal World”. ● Finally, Cockshott and Cottrell don’t just want to build socialism, they want to build a New Socialism. (I guess the old socialism wasn’t good enough — a Model T — when we need a Tesla-class socialism today.)

Anyways, you get the idea: socialism is not a set of social relations but product, essentially the iPhone 7 of historical development. If we want this new fancy society, iSocialism, we will have to build it from scratch beginning now or some time in the not too distant future. Visions of what this imaginary future will look like once constructed can range anywhere from a banal Capitalism-without-poverty-and-inequality, to something akin to Jodi Dean’s endless general assembly, where everyone has to discuss every detail of management of society before we all get to work.

Like constructing a bridge or designing a new mall, various models for this new product are displayed. Most of these ideas are dead on arrival, of course; producing more questions than answers and descending into eye-rolling levels of minutiae: How is the production stuff organized? How are things to be distributed? Who will build the roads, take out the trash, get widgets from Guangdong Province to Capetown? There are 7 billion people on this planet who have to be fed, clothed and sheltered under any mode of production, while simultaneously we are pulling back our species from the brink of a self-inflicted extinction event. These 7 billion people each have their own interests and their own ideas on

how to satisfy those interests that may or may not (mostly not) be addressed by any or all of the various blueprints floating around. To make things worse, we have to make critical life and death decisions about basic necessities under a threatening environmental deadline and battered by ruthless economic competition. These are hardly the optimal conditions for making this sort of deliberate, highly complex decisions that would then have to be ratified by billions. But the model of socialism as a thing to be constructed, built, manufactured, coded or otherwise produced, an analogy borrowed from commodity production, is fatally flawed: communism is not product, it is not a commodity that rolls off an assembly line. You can manufacture an iPhone, assemble a car, construct a house, but you can’t get to communism by any of these methods. The entire analogy that conceptualizes communism as something to be built has to be rejected: Communism is not soviet power plus electrification of the whole country. Lenin. Was. Wrong. If communism is not a product — a commodity — to be built, what is it? Communism is free, disposable time away from production, from labor, from building; time for individuals to realize their own self-development through their self-activity and in association with others. Communism places the entire wealth of mankind at the disposal of fully rounded individuals. There is no blueprint for selfdevelopment, no model for self-activity, no necessary form of association — all of these flow directly from individuals who have the sum wealth of humanity at their disposal. You can’t get to communism through a construction project, but only through free disposable time.

To be honest, the radical implications of communism as free disposable time for the mass of society deeply troubles communists. They are so used to thinking of communism as a massive construction project, stretching over decades and involving billions of people, where they serve as project managers, owing to their theoretical clarity. The idea that the new higher society flows directly from the selfactivity of individuals is difficult for even the most radical communist to grasp. It seems only right that a billion

individuals, motivated by a common will, marching in lock step, can breach the barrier between capitalism and communism far more quickly than a billion selfdirected individuals. The analogy collapses, however, once you realize that the self-directed activity of individuals is itself communism. There is no way individuals marching in lock step can breach this barrier because its the marching in lock step part that has to be abolished. Capitalism trains us to march in lock step, in ever larger phalanxes, precisely to appropriate our surplus labor time as profit. We don’t have to march in lock step to produce what we require, but only to produce surplus value for the capitalists. The expropriators of our surplus labor require us to organized in this way, not to meet our needs, but theirs. In fact, for communism to appear as an empirical necessity, almost all labor must be undertaken solely for this purpose.

In other words, for communism to appear as free time and nothing else, the only real purpose of labor must be the production of surplus value. This is where we are now. The most deadening conception of communism possible is, thus, the idea that it is something to be constructed, a commodity, product. Historically, this conception of communism might have been justified in early 20th century Russia, but it is now entirely destructive to the idea of communism. Lenin was justified in defining communism as soviet power plus electrification of the whole country, in the same way capitalist exploitation was historically justified by rapid development of the forces of production of material wealth. Both sought to create what Marx calls the material basis for a higher mode of production.

However, we are no more confined to backward forces of production today than the characters in Star Trek — if anything we are threatened by the ever growing superfluity of labor power and means of production. There is no justification whatsoever to remain wedded to Lenin’s conception of communism. We are free to define communism as what it is, free disposable time for the vast majority of society and nothing more. What individuals do with their free time is no more our concern than how they spend their weekends, nor does this free activity require any necessary form apart from their particular aims.

Any definition of communism (or socialism) contrary to free time should be condemned. Communism is free time and nothing else. If you’re not fighting for free time, you are not a communist.

A simpler, more elegant, route to communism An increasing number of folks have been raising the question about hours of labor and the problem of what David Graeber called “bullshit jobs”.

I have spent some time on the subject in the past few months, but feel it necessary to return to the question again, since I have just come across a paper appearing to refute the idea. The paper by the bourgeois simpleton economist, Axel BorschSupan, purports to lay out the argument against a reduction of hours of labor. It is an interesting read because the guy, who is clearly an opponent of reducing hours of labor, thinks he can be trusted to state the case on its behalf. And, bizarrely enough, instead of refuting the idea, Borsch-Supan actually may have ended up making an argument on its behalf. The question, as he very narrowly defines it, is this: Can fewer hours of labor reduce unemployment? He begins the effort to find an answer to this question by setting out “the theoretical background of the debate in order to isolate the main mechanisms that might create (or inhibit) positive employment effects in response to an hours reduction. ” However his argument against fewer hours of labor comes down to exactly one point: The amount of labor is not given as a fixed lump which can only be redistributed among a given number of workers. According to Borsch-Supan, the case for hours of labor reduction hinges on the so-called lump of labor fallacy. This alleged fallacy states there is a fixed amount of labor required for production of commodities, which can be divided among the total available workers in the market for labor power, both employed and unemployed, simply by reducing the hours of labor of the employed. If the total labor requirement of production is fixed, reducing

labor for employed workers will increase the demand for the labor of the unemployed.

Of course, no one actually uses the above argument, but people who support the reduction of hours of labor are regularly accused of committing the fallacy. But this is not because proponents of shorter hours employ this fallacy — instead, the lump of labor fallacy figures in the debate simply because the opponents of reduced labor hours have no other argument on which to rest their case than to state the proponents of shorter hours of labor are engaged in a fallacy. Having identified a straw man position as his opponent, Borsch-Supan argues the employment effect of reducing hours of labor has a fatal flaw: the amount of labor needed is not fixed. “While the often-voiced first-round theoretical argument – less work for some must create more work for others – appears “obvious” in favor of a positive employment effect, it has several major flaws. First, the amount of labor is not given as a fixed lump which can only be redistributed. The total amount of labor demanded and supplied changes as the economy evolves, and a reduction of working time may affect this total amount of labor. Thus, partial analysis of the labor market needs to be supplemented by a general equilibrium analysis of total demand in the economy.” Which is to say, while it might appear hours of labor are fixed, once legally mandated hours are reduced, other changes occur in the “economy” that can significantly reduce the need for labor. For example, as Borsch-Supan tells us, once the legal maximum hours of labor are reduced, the capitalist must choose between bearing the increased cost of labor or replacing a portion of his work force with machines, etc. The so-called lump of labor fallacy runs into an additional problem: while reducing hours of labor might open up new jobs to be filled, the skills of the unemployed workers may not be sufficient to fill those positions. Useful labor is not homogenous. To give an extreme example: someone trained adequately to flip burgers at McDonald’s is not necessarily qualified to run a nuclear power plant.

Finally, according to Borsch-Supan, the proponents of labor hours reduction conflate hours of labor needed with number of people need to work those hours. Since a legal maximum on hours of labor only constrains employers, it is possible that some workers may wish to work longer than the legally mandated maximum

hours of labor — they may, for instance, choose to do voluntary overtime for their existing employer or even work a second job. Borsch-Supan’s argument against reducing hours of labor thus rests on the argument that any such reduction will have little or no effect on the rate of unemployment. But, of course, hours of labor reduction doesn’t just hinge on its employment effect: Fewer hours of labor is (in bourgeois simpleton parlance) a “good” in and of itself. If we can reduce hours of labor by fifty percent and still produce the same output as at present, who cares about the employment effect?

Employment is an important consideration for reducing hours of labor, but it is not the only consideration in the argument — nor is it the most important consideration. Assuming six percent unemployment, if after reducing hours of labor by 50% we still have six percent unemployment, who is going to complain? The 94% of the workers who have jobs now need only work 20 hours per week instead of 40. BS makes it appear that reducing hours of labor is a failure if no reduction in unemployment is achieved when people now only have to work 20 hours a week

The core fallacy for reducing hours of labor, Borsch-Supan explains, rests on the Keynesian assumption that wages and prices are sticky — that is, the owners of commodities will try to resist any fall in wages paid for labor power or the prices of other commodities. If wages and prices are sticky, as the Keynesians argue, a legally mandated reduction in hours of wage labor will lead to a proportional increase in employment, and total worker-hours remain constant.

Or so the argument goes. Of course, this Keynesian assumption is silly, but can the argument for reducing hours of labor only be made on the basis of an assumption that wages and prices are sticky? Further, do we have to hold to the idea that the need for labor is constant and unchanging (the “lump of labor fallacy”)? Suppose we assume the opposite case: If hours of labor are reduced, the need for labor will fall and, moreover, wages and prices will decline as well. These two assumptions are not the least bit Keynesian — they are the assumptions of labor theory of value.

According to labor theory if hours of labor are reduced, wage and prices and the need for labor fall more rapidly. The labor theory argument is based on a simple assumption: as hours of labor are reduced, the demand for labor power will be reduced as well, because the capitalist class now has an added incentive to introduce improved machinery, technology, scientific know-how and better organization of the labor process to replace labor whenever the legal hours of labor are cut. Beginning from the opposite assumption of the “lump of labor” fallacy, we arrive at the reality that capital is compelled by a reduction of hours of labor to develop the productive forces. This particular argument is actually 150 years old and can be found in Marx’s Capital, volume one: “The shortening of the hours of labour creates, to begin with, the subjective conditions for the condensation of labour, by enabling the workman to exert more strength in a given time. So soon as that shortening becomes compulsory, machinery becomes in the hands of capital the objective means, systematically employed for squeezing out more labour in a given time. This is effected in two ways: by increasing the speed of the machinery, and by giving the workman more machinery to tent. Improved construction of the machinery is necessary, partly because without it greater pressure cannot be put on the workman, and partly because the shortened hours of labour force the capitalist to exercise the strictest watch over the cost of production. “ Thus, reducing hours of labor works three ways according to Marx: the performance of the workers are improved, because they are better rested; improved machinery are introduced; and the efficiency in the use of capital is increased. In fact, Marx concluded that it was the shortening of hours of labor that made England into an industrial superpower in the 19th century: “There cannot be the slightest doubt that the tendency that urges capital, so soon as a prolongation of the hours of labour is once for all forbidden, to compensate itself, by a systematic heightening of the intensity of labour, and to convert every improvement in machinery into a more perfect means of exhausting the workman, must soon lead to a state of things in which a reduction of the hours of labour will again be inevitable. On the other hand, the rapid advance of English industry between 1848 and the present time, under the influence of a day of 10 hours, surpasses the advance made between

1833 and 1847, when the day was 12 hours long, by far more than the latter surpasses the advance made during the half century after the first introduction of the factory system, when the working-day was without limits.” So, in labor theory, reduction of hours of labor not only accelerates the development of the productive forces, with this development of the productive forces successive reductions of labor becomes becomes necessary: it “must soon lead to a state of things in which a reduction of the hours of labour will again be inevitable.” Which is to say, reducing hours of labor first and foremost accelerates the demise of capitalism and wage slavery — freeing up disposable time for the great majority of society.

“Everybody wants to go to heaven, but no one wants to die to get there” If you ever want to make a good case against communism to a worker, tell her that communists want the following things: ● ● ● ●

Everyone is unemployed No one has any income Democracy no longer exists No one can own anything

The paradox of communism is that it appears to involve conditions that are absolutely unacceptable to any rational person. Who in their right mind wants to give up having a job that pays a decent wage, the right to vote and control over means of production? And why would anyone who claims to fight for social emancipation stand for these sorts of things.

Yes, you can try to clean this shit up by saying, “Oh, I don’t mean everyone is unemployed; what I meant is no more wage labor”, but people are not dumb. They know that when you write “No more wage labor”, what you really mean is “100% unemployment.” They know that communist want to put everyone out of a job — which, if you communists ever succeed, will kill the economy and, in most scenarios they can imagine, plunge us all into poverty. And don’t say you don’t want this, because communists don’t think people should even be paid for their labor power. So tell me this: How are people supposed to pay their bills if they don’t get paid for their labor power? Do you just think we can all just stop paying our bills? And then what? Who will build the roads? Who will grow the food? What if I get sick and need medical attention? Who will educate my kids? Confronted by these sorts of questions, most communists I have read or talked to immediately begin trying to show how their imagined communist utopia will work — they build imaginary systems, or cite limited experiments, like these ideas mentioned by Alan Nasser in a recent article: “We have real-world examples that can serve as a starting point for a working model of a democratic socialist economy. Mondragon leaps to mind. For about twenty-five years Yugoslavia under Tito had an economy in which workers leased productive facilities fron government, organized production themselves and determined the distribution of the firm’s revenues between wages and reinvestment in the firm. In After Capitalism (Rowman and Littlefield, 2011), David Schweickart offers a refined and realistic model of what a practicable democratic socialist economy would look like, based in part on the Yugoslav experiment. Gar Alperovitz (What Then Must We Do?, Chelsea Green, 2013) and Michael Albert (Parecon: Life After Capitalism, Verso, 2003) have also contributed to the discussion. There’s plenty of grist for our mill.” The question raised by Nasser’s examples are two-fold: First, if Yugoslavia was so successful, where is it today? Second, why, in all of examples cited, do we never clearly see a path to the end of class, labor, property and the state? Because they can never move beyond certain definite limits, these systems always collapse into some new state, some new method of coercing labor, and some new form of property.

The paradox of communism This is what I call the paradox of communism: Everything communists stand for appears in this society as a catastrophe to existing society. This paradox is not simply a product of the lack of imagination of folks in present society. To go from a situation where everyone has to sell their labor power to communism under the premises of present society implies an ever bigger shitload of people can’t find work. Communism may be the end of wage labor, but getting to the end of wage labor implies ever increasing unemployment, competition to sell labor power and social disruption. And if people can’t find work, they will turn to people who promise to create work, not those who argue we can live without it.

What distinguishes communism from politics is not the realization that the end of wage labor is a good — which it never appears to be empirically — but that it is inevitable. So 100% unemployment may not figure as a benefit for the working class, but it is the inevitable result of processes taking place beneath present society. It cannot be avoided. This is what Ben Noys calls the “radical or quasi-Marxist ‘cunning of reason'” — the idea that in the capitalistic mode of production unemployment is the most likely path to communism. Noys’ argument is simply the academic version of the reaction any worker would have if you told them communism aims to get rid of their job. And Noys’ reaction to this process is exactly what we should expect: A demand for immediate political intervention to stop communism from happening. Nobody in their right mind wants communism because it naturally emerges in the form of a huge social catastrophe. It is like the B.B. King saying, “Everybody wants to go to heaven but no one wants to die to get there.” Everybody wants to live without the need to sell their labor power and the daily grind of wage labor, but nobody wants to be unemployed. However, so far as I know, with the exception of a few old patriarchs, everyone who went to heaven had to die first. So it would appear that we are destined to fight against the emergence of communism until all means of fighting are exhausted. Thus fight is a profound political reaction to the terrifying prospect of unemployment and operates on a level of consciousness that is not easily combated.

The reaction of the entire society, and of both classes in society, is to prevent the emergence of communism at all costs. This political reaction, however, operates on two distinct levels that should not be conflated. We need to deconstruct the fear communism inspires in the working class. Deconstructing fear If we go back to volume 1 of Capital, Marx begins his analysis of the capitalistic mode of production by distinguishing between the two aspects of the commodity: exchange value and use value. I believe the reaction of the two classes is each related to a different aspect of this initial contradiction.

Although the political reaction of both classes is the same, each class expresses in its politics a fear regarding the impact on their material conditions of existence of different aspects of commodity production. With regards to the capitalist class, the reaction is tied to the commodity as an exchange value; however, with regards to the working class, its reaction is tied to the commodity as a use value. Which is to say, the capitalists experience the end of wage labor as the end of the production of value and surplus value; while the working class experiences the end of wage labor as an actual mortal threat to its physical existence, as the threat of starvation. The distinction between the two classes here must be emphasized because the end of wage labor may indeed be the end of commodity production, but this does not imply the end of both value and use value production. While value production comes to an end, the production of use values does not and cannot come to an end. And this distinction is also critical to our consideration because the production of use values does not in any way necessarily depend on living labor. Use values can be produced in huge quantities with only a negligible quantity of living labor incorporated into their production.

At the political level of the social reaction to the idea of 100% unemployment, both classes have the same reaction: They will both fight against the emergence of communism with all means at their disposal. This implies that, at the level of politics, communists of all varieties will never be anything but a marginal political force. To the extent communists aim at the end of wage labor, this aim cannot have anything more than a marginal political expression. Communism can only be the aim of society to the extent the production of use values can be separated from the production of exchange value. Theoretically the separation of the production of use values from the production of exchange values can only begin once the productive activity of the working class is not solely engaged in production of exchange value. This requires society has free disposable time to engage in productive activities that do not and cannot in any way aim at producing exchange values. In other words, the separation of production of use values from exchange values is possible only when free disposable time of society becomes the prime source of use values. I think this cannot happen until almost all (or at least the largest part) of the personal time of individuals in society is free disposable time. The larger the quantity of free disposable time society possesses, the more likely this free time will itself become the most important source of material wealth. The problem we face at present is that the production of material wealth cannot be separated from the production of value, because the working class has very little time of its own to engage in any activity that is not premised on value production. This cannot be fixed by demanding the state create jobs, handout basic income, raise the minimum wage or other measures very popular on the Left right now. It cannot even be fixed by more advanced ideas like market socialism, cooperatives and even Soviet style central planning.

The problem is not how wage labor is organized, managed or compensated; it is how communists propose to abolish it in a way that does not result in a catastrophe.

The single non-reformist reform that can end capitalism within months, not decades

The problem of unemployment has been addressed from two different angles by activists: the guaranteed job for everyone who wants one and the basic income guarantee to provide every worker an income above the poverty level whether he or she can find a job or not. Both schemes have their advocates and some activists even advocate both ideas together. The problem with both idea separately or in tandem is simple: No one can explain how either reform gets us where we want to go: not simply the end to unemployment, but the complete abolition of wage slavery — to end unemployment forever as the Sword of Damocles hanging over the head of the working class. It can’t be overestimated how important a job is in a society where few have any means to access the means to life except their capacity to work, the sale of their labor power. And it cannot be overestimated how important it is that with a job or without everyone must have some form of income if they are not to starve.

Nevertheless having a job and and adequate income is by no means the aim of our struggle. An employed and/or well compensated slave remains a slave — a mere object of economic forces over which she has no control and which no organization can give her control. Social emancipation means more than a guaranteed job or income — in the end it has to mean emancipation from wage labor itself. And this is where both the guaranteed job or the guaranteed basic income fails miserably: no one can explain how we go from a society of wage slaves subordinated to capital to a society of self-directed individuals. As reforms, however attractive they appear, a basic income or jobs guarantee are dead end reformism. Is there a path that avoids this reformist cul-de-sac? It is a problem Andre Gorz raised in his discussion of non-reformist reforms — reforms which however initially limited, ultimately tend to transform “the system”. We can also think of them as measures which while not aiming at the immediate social emancipation of the working class must ultimately result in just such emancipation

Reducing hours of labor as means for ending unemployment One measure that I think fits this description is the progressive reduction of hours of labor. The problem of reducing labor time can be broken down into at least three phases: In the first phase, the goal is to put an end to unemployment and to bring those workers back into the labor force who have been forced out by improvement in the productivity of labor. With nearly 22-25% hidden unemployment in the United States, this means hours of labor could be reduced by at least as much.

Table B2 of the Bureau of Labor Statistics shows average hours as of May 2014 worked is now about 34.5 hours per week. This ranges from a high of 43.8 hours in construction to a low of 26.1 hours in the leisure and hospitality industry. A 25% reduction of hours of labor would reduce the average labor time to about 26 hours per week, i.e., on the level of employment hours in leisure and hospitality. This reduction of hours could be enforced by requiring that employers pay double, or even triple, the normal hourly wage for overtime — or a similarly prohibitive fee to the worker.

Since unemployment is the result of improvements in the productive capacity of labor, the reduction of hours would not be a one-off event. As productivity improved, hours would have to be periodically reduced to prevent the emergence of an unemployed population of workers. Thus, of itself, reducing hours to maintain zero unemployment must eventually lead to abolition of labor.

Reducing hours of labor as a means of getting rid of unnecessary labor In the second phase of getting rid of labor, the goal is to eliminate unnecessary, unproductive employment of labor. This expenditure is estimated by labor theorists to be as large as 49% of all labor in the economy. According to Simon Mohun: “Unproductive labor amounted to about 42 percent of employment in 1964, and increased to a peak of around 49 percent in 2003, falling back to 47.5 percent in 2010. So the proportion of unproductive labor was generally increasing over time (most markedly in the 1980s).” With an average hours worked estimated at 34.5 hours per week according to the BLS, reducing hours of labor to eliminate all wasteful, unnecessary labor in the economy amounts to at least another 17 hours reduction. By itself, in other words, reducing hours to squeeze out the wasted labor time in the economy by itself would mean a reduction of hours from 34.5 hours per week to 17 hours per week.

However, unlike in the case of reducing hours of labor to absorb the unemployed population back into the labor force, reducing superfluous labor time means shifting employment from unproductive labor to productive labor with a consequent adjustment in total hours of labor in various sectors of the “economy”. It would involve eliminating some jobs of the presently employed who are locked out of productive employment, but not out of employment altogether.

This shift will largely hit the state sector of the “economy”, since this is the only sector able to function without producing any value at all — think, for instance, of the NSA employee who has a job reading your email. In general, the state does not produce commodities and its expenditures are not the result of a previous sale. Instead, as Mohun explains, the state expenditures are financed by taxes and debt. State sector expenditures are, in other words, financed out of the surplus value squeezed from the productively employed workers.

Reducing unnecessary hours of labor is deflationary Reduction in unproductive labor expenditures in the state sector, however, does have a very big impact on the costs of production generally and the cost we pay for commodities in the market. A growing mass of unproductive labor amounts to a growing mass of costs of production that do not result in additional output. These costs are borne by the prices of every commodity you buy in the market.

Since unproductive labor enters into the costs of production, a reduction of unproductive labor has the effect of reducing prices. A fall in labor time of 50%, accomplished by a reduction of unproductive labor, will have a corresponding effect on prices. However, to the extent improved productivity and lower prices increased the market for the product of labor, this would not be reflected in an increase in the unemployed population. With phase 1 and phase 2 reductions of hours of labor we have fallen from 34.5 hours of labor to just over a single day labor per week. With less than 9 hours of labor per week, we have eliminated all unemployment and almost all unproductive labor in the economy. Moreover, the reduced labor time in both categories has reduced the total costs of production of commodities. Reducing hours spurs improvement in the productivity of labor The third phase of a reduction of hours of labor directly addresses profit. So long as there is a profit for the capitalists, the hours of labor of the workers are too long. By reducing hours of labor the capitalist is forced to introduce machinery, technology etc. to conserve on the direct expenditure of labor. This introduction of improved machinery further reduces the labor time required in production of commodities. By reducing its own labor time,

therefore, the working class forces the capitalists to abolish the remaining need for labor at an accelerated pace. The reduced costs of production made possible by a reduction in the necessary labor being expended in production and by improvement in the productivity of labor have to make their way into prices of commodities sold in the market. Prices fall because the total labor time of society falls. This means that even as less labor is being performed by the workers, their real wage is rising. In this regards it does not matter that nominal wages — paid by the hour — might fall since the real purchasing power of wages — what those nominal wages can buy — are rising.

Adding up the compound effect of reduction of hours of labor Here is the thing: the three phases I just laid out do not in fact appear successively but operate simultaneously. Reduction of hours of labor of the employed to provide work for the unemployed at the same time reduces the total hours of unproductive labor and forces the capitalists to introduce improved machinery to conserve labor. This is because a reduction in hours of labor reduces the surplus value produced during the labor day and consequently the rate of profit and state expenditures.

Thus, all three effects of a reduction of hours of labor operate simultaneously and together as hours of labor are reduced. The same measure taken to provide a job to all the unemployed by reducing the hours of work of the employed also progressively abolishes labor, capital and the state together.

The Left has long sought a way to fight for non-reformist reforms — reforms that in and of themselves have revolutionary implications. Reducing hours of labor to address the profound employment problem is the sole means by which such a non-reformist reform can be achieved. It is a reform that of itself carries the implication of abolishing wage labor merely by additional measures along the same line and requiring no other action than to be carried to its logical end. Although it does not aim directly at abolition of property, it abolishes property; although it does not aim directly at abolishing the state, it must of necessity end in the abolition of the state; and although it seeks only to end the unemployment of the surplus population of workers, it can only do this by means that, at the same time, progressively put an end to wage slavery itself.

Reduction of hours of labor is a powerful weapon in the hands of the working class for its emancipation. This is why Marx called reduction of hours of labor the modest Magna Charta of the working class.

Ten common questions about the revolutionary potential of reducing hours of labor According to this note by Warren Mosler of the modern money school, more income inequality will require bigger deficit by the state to maintain full employment.

This implies we need a larger deficit than otherwise to close the output gap/sustain full employment, has higher income earners tend to generate more unspent income/more savings than lower income earners.

Looks to me like the “1.2 million who lost benefits at year and took menial jobs” narrative has run its course, and consequently H2 employment gains will be that much weaker than H1, as suggested earlier…

The idea that increasing income inequality requires larger state deficits points to the basic irrationality of the modern money school’s policy recommendations. As income becomes more unequal, more excess capital is being produced, this excess capital cannot produce a profit unless it is lent to the state, thus the total output that must be unproductively consumed by the fascist state constantly increases.

But this increase in unproductive state consumption does not do away with the inequality; it simply acts as a savings account for excess capital. The state not only absorbs the excess capital, it begins to pay interest on the capital, adding to the income inequality. While many MMTers advocate it for reasons that might be labeled ‘progressive’, in the end MMT simply becomes another means to offset the falling rate of profit. If the fascist state does not pay interest on this ever growing mass of excess capital, it will have to be devalued. Based on questions I have received, I decided to contrast Mosler’s approach with a labor theory approach the calls for reduction of hours of labor. I have set it up in the forms of several pointed questions about, and objections to, the idea that people have directed at me at one time or another. 1. Why is it necessary to run bigger deficits? ANSWER: Because the rising income inequality is symptomatic of growing rise in the mass of excess profits that cannot be productively employed, i.e., cannot be employed as variable and constant capital for the production of surplus value.

2. How does increased deficit spending fix the problem of excess capital? ANSWER: It does this two ways: First, the excess capital cannot be employed productively and, therefore, cannot produce surplus value. If the excess capital is lent to the state, the state can pay interest on it and the capital can still appear to undergo self-expansion without being employed productively. Second, when the excess capital is lent to the state it is consumed in its entirety. The unproductive consumption of the state thus removes huge masses of excess capital from circulation and destroys it even as it pays interest on the destroyed capital.

3. Why do you insist state expenditures are consumed unproductively? Why can’t the state invest it like a private business? ANSWER: Because the problem forcing the state to borrow the capital is excess capital. If the state were then to employ this borrowed capital productively, this would only exacerbate the original problem. 4. Assuming the state cannot employ it productively, why can’t it be used socially to fix inequality by creating jobs or a basic income? ANSWER: For the same reason one cannot use a credit card to buy groceries: First, the revenue used to create jobs or a basic income is borrowed from the capitalists. Interest must be paid on the borrowed capital. By paying interest on the borrowed capital the state does not fix inequality, it adds to it by paying a stream of income to the wealthiest members of society. Second, since the capital borrowed from the capitalists is not employed productively, the consumption of the capital is not replaced by new value. The means to repay the debt must come from still more borrowing, which further exacerbates inequality. 5. Why can’t capital be taxed instead of borrowed? ANSWER: The capital can be taxed, but this defeats the purpose of state intervention in the first place: the state intervenes because a mass of capital has been produced that cannot find its place in productive employment for purposes of creating surplus value. If the state simply taxed the excess capital away, this would effectively reduce the rate of profit to zero — bringing down capitalism.

6. “What inhibits the “excess capital” from being “employed productively” eg. venture capital? State regulations?” ANSWER: The productivity of labor, its sheer capacity to produce material wealth, has outgrown the narrow confines of production for profit. This is expressed in the tendency toward a fall in prices below the costs of capitalistic production, i.e., deflation. If the existing capital were employed to the extent possible, prices would never recover the costs of inputs plus an average rate of profit. State intervention is only required because it can offset this by unproductively consuming the excess produced capital.

7. How does reducing hours of labor address the problem of overproduction of capital differently than state full employment policies? ANSWER: The problem inequality has to be addressed at its source, i.e., beginning with the overproduction of capital itself. In labor theory, the mass of excess profits produced is a function of the length of the total social labor day. State economic policy attempts to address the problem after the excess capital has already been produced, while labor theory proposes to reduce the excess capital being produced by reducing the portion of the labor day that is excess. The labor day is too long and must be shortened; this will convert the excess hours of labor into free time for the whole of society.

8. Why would this not just damage the economy and reduce the whole of society to poverty, (i.e., who will build the roads?) ANSWER: According to labor theory analysis, the portion of the labor day that is excess has nothing to do with the production of material wealth. It is completely superfluous to all productive purposes. This is labor time being expended by society that produces neither value (social wealth) nor use value (material wealth). This excess labor time takes the form of state debt precisely because only the state can pay its debt with currency created out of nothing. The currency created out of nothing can purchase commodities that have no value — such as the bloated military industrial sector. People cannot eat, wear, or shelter themselves in the faux use values and they exist only threaten mankind with destruction. If labor theory is correct, the growth of labor time that is unnecessary must take the form of an ever growing mass of state debt. The empirical evidence tends to support this claim — the state sector has grown faster than almost every other sector except finance.

9. So you are claiming that it is possible right now for society to work fewer hours and still enjoy more material wealth? ANSWER: Yes. This is my claim. The first effect of reducing hours of labor is to reduce the mass of labor that is currently being wasted. This way the mode of production is presently organized is such that waste has become the condition for any new productive investment. Once hours of labor are reduced, waste will no longer figure as economically necessary for the production of material wealth

10. Why isn’t reducing hours of labor just another reformist utopian panacea? ANSWER: The aim of social emancipation is to free society from labor and the division of labor. Reducing hours of labor directly seeks to accomplish this by forcibly imposing a reduction of the employment of living labor in production. In contrast to all other methods for freeing society from the domination of capital and from wage slavery, only reducing hours of labor directly attacks the problem in a way that is empirically obvious to the vast majority of workers. The result of the movement is exactly what is aimed at and involves no gimmicks. It simplifies the contradictions of capital into a single, directly resolvable, movement of society.

Abolish Wage Labor by 2027: Is such a movement possible?

I want to be absolutely clear on what I am calling for here: Communists must lead a fight to reduce hours of labor to zero in the next ten years; to completely abolish wage labor as an institution within a decade and realize full communism in North America and Europe by a date certain: 2027. For purposes of this discussion, I define full communism as the complete abolition of wage labor: the end to the requirement of labor as a condition for access to the means of consumption; to replace this system by the free access to the means of consumption; and to replace present society, founded on wage labor, by one founded on the principle of “From each according to ability to each according to need.” This replacement would include the abolition of both money and the existing state.

***** Is this possible? Am I demanding some utopian goal that cannot be realized in reality? There are several possible general objections to ending wage labor in ten years as I have outlined above. First, there is the objection that the the complete abolition of wage labor is not technically feasible. This objection, although powerful, flies in the face of all economic theory today. If abolition of wage labor is not technically feasible, why do capitalist states today devote trillions of dollars every year to promoting economic growth and full employment? Why is economic growth and job creation the central aim of all economic policy in every country on the planet today without exception? Absent this sustained and aggressive intervention by states wage labor would collapse right now. The state today is the only thing keeping wage labor viable as a means of producing material wealth and everyone knows this. Why then do we accept the idea that access to the means of consumption must remain dependent on wage labor? State economic policy is required today precisely because wage labor has outlived its usefulness as a means of producing material wealth. Second, there is the objection that the idea is not politically feasible. This would be a reasonable objection if we were running for office, but we are not. Why would communists care that abolition of wage labor is not politically feasible? Since we don’t care about holding office in the present state, why would we choose our positions based on what is politically popular at the ballot box. What is popular at the ballot box and what is necessary to end wage slavery are two distinct and separate issues. To give an analogy, if we based our positions on what is politically popular, black people would still be sitting in the back of buses. What possible objection is it that we can’t stand for complete abolition of wage labor because it doesn’t poll well? What communist in their right mind even makes this sort of argument?

Third, there is the objection that a reduction of hours of labor will cause a massive economic crisis. This objection has more validity for us than the above two objections. A reduction of hours of labor would cause a massive economic crisis. But reducing of hours of labor causes a crisis in the economy because the economy at present is based on exploitation of the working class. Any measure that reduces the exploitation of the working class in an economy based on exploitation of the working class must throw the economy headlong into crisis.

Let me argue that this is not our concern. We no more care about the fact that ending exploitation of the working class would throw the economy into a crisis than we should have been concerned in 1860 that end of slavery would throw agriculture in the American South into a protracted economic crisis. We are not the least bit concerned that businesses and governments will go bankrupt because they will be starved of profits and revenue. We are today, as in 1860, only concerned about the emancipation of the working class, whose material conditions will improve at the expense of both businesses and governments.

Reducing hours of labor forces a massive shift in the distribution of the social product from capital and the state to the working class. This is not a bug. It is a feature. It is exactly what we are trying to do: to shift the social product from capital to the working class. For centuries that working class has taken the brunt of every crisis. This is our chance to force capital and the state to eat those costs.

Fourth, there is the objection that even if technically and politically feasible, ten years is much too short a period of time. To the objection that ten years is too short a period of time to put an end to wage labor, my response is, “How do you know?” Can you cite a single study ever published that says the end of wage labor will take another 50 years? 100 years? 1000 years? Your objection amounts to the same gradualist attitudes that characterized opposition to the end of segregation and anti-gay laws. For gradualists, any change is too fast because they really oppose all change. To these gradualists, I say what Dr. King said to the gradualists of his time:

“We know through painful experience that freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed. Frankly, I have yet to engage in a directaction campaign that was ‘well timed’ in the view of those who have not suffered unduly from the disease of segregation. For years now I have heard the word ‘Wait!’ It rings in the ear of every Negro with piercing familiarity. This ‘Wait’ has almost always meant ‘Never.’ We must come to see, with one of our distinguished jurists, that ‘justice too long delayed is justice denied.'” Your gradualism is just another way of telling the working class not to demand an end to their exploitation under the guise of sympathy. The only reason for not demanding an immediate end to wage labor is a desire, more or less hidden, to see it remain in place. In my opinion, none of these objections to a movement to abolish wage labor by 2027 have a shred of validity.

Getting beyond ‘regime change’ (Part 1)

INTRODUCTION: Why read Gene Sharp’s book? I have proposed communists aim to realize a communist society within ten years. The aim may seem unrealistic for two reasons: first, it would appear we are nowhere near technically capable of putting an end to the connection between labor and subsistence. Without being able to produce enough goods to feed, house and clothe the entire population of the planet, communism is not possible. Second, even if it were technically possible to put an end to wage labor, there does not appear to be sufficient willingness on the part of the working class to act in that direction. On the streets of Europe and North America, at least, the working class do not seem inclined to fight for their own emancipation.

With regards to the first objection, let me state that in 1930 Keynes argued that with just 2% increase in productivity, we would have a work week of just 15 hours. Since 1930, the average increase in productivity has easily exceeded Keynes’ projection. Technically, conditions are now ripe not just for a reduction of hours of labor to 15 hours per week, but for the complete elimination of wage labor — for a society founded on each according to need. I have concluded that there is no objection on account of technical capacity for a fully communist society today.

Still, such a society is not possible without struggle. The fascists no more want to part with our labor power than they want to part with their monopoly on the means of production. If we are to realize communism, we must force that society into existence through our own struggle. To judge by the level of class struggle the objection that the working class is unwilling to emancipate themselves may seem to have some merit, but it has never really been tested in the streets. In my opinion, the problem here is not that the working class are opposed to the end of wage slavery. Rather, communists have failed to put this option before them. Communists cannot just invent a society founded on each according to need, of course, but if such a society is already technically possible today, the problem has to be in the sphere of consciousness — and this points to a failure on the part of communists. We will not realize communism in ten years unless we plan how our actions will produce this result. Put simply: there is something terribly wrong with our approach to the struggle for emancipation and we need to fix it. The symptoms of this failed approach is the vague, ineffective strategic thinking on the part of many communists. No one seems to know how we get from here to a communist society or even to socialism. No one knows how the daily struggle for survival becomes a struggle for emancipation. This essay is intended to address this failure. The bourgeoisie literally wrote the book For people who are skeptical that a social revolution can be planned I want to spend some time looking at a familiar handbook for US color revolutions, Gene Sharps’ “From Dictatorship to Democracy”. As everyone knows, Washington spends a great deal of time subverting and overthrowing foreign governments. This does not always take the form of military aggression or sponsoring military coups. Occasionally, as in Venezuela and Syria today, the US makes use of disaffected local forces to promote so-called “regime change”.

Such efforts do not emerge overnight; they are often the product of years of efforts by US intelligence and “non-profit” agencies. Washington maintain a whole range of semi- and non-government agencies that can be deployed for this purpose. One such group is the Albert Einstein Institution, who produced this handbook on color revolutions.

How about we learn from the regime change experts how to subvert the US fascist state? If they can do it to Venezuela, we can do it here; although our aims and strategy would be very different. My reason for critiquing this booklet, despite its origins, is that no class in modern society is more adept at political struggle against its enemies than the bourgeoisie. If communists want to learn how to destabilize and overthrow capital, we can learn from no better source how to do this than the class that invented regime change in its political struggle against feudalism. This should address the objections of those communists who, realizing Sharp has written an instruction manual for destabilizing Left regimes, want to dismiss it as imperialist propaganda or some such. A political revolution is not mysterious. The bourgeoisie know regime change because they were the original regime changers. On numerous occasions throughout history, the bourgeoisie has mobilized the entire society to fight its enemies, foreign and domestic. It knows how to foment revolutions as well as it knows how to run a factory or a bank.

Further, it may be hard to imagine that such different countries, with such varying histories, could nevertheless be captured by a pamphlet produced by a Washington agency that makes a study of color revolutions. But there you have it. This book should come as no surprise to us, since it is the bourgeoisie who teaches the proletariat how to fight. When it comes to a political revolution the bourgeoisie literally wrote the book. If you are not studying and critiquing the bourgeois play book, how are you going the make your own revolution.

Don’t be put off by the subject matter simply because Washington uses what it learned through centuries of history to destabilize or overthrow rivals in the world market. The bourgeoisie has always used these methods to attack its enemies and rivals domestically. You just weren’t paying attention. I am critiquing Sharp’s book precisely because it has been tested in a wide number of countries and has proven at least moderately successful on a global level.

Limits to Sharp’s analysis But most important, (and this cannot be emphasized too much), My reason for critiquing this book is that the analysis Gene Sharp employs in this handbook is precisely the one most communists instinctively tend to adopt in their own praxis. Critiquing Sharp’s approach can reveal weaknesses in our own approach. Thus, there are a few modifications we have to introduce to Sharp’s analysis to adapt it to our own needs. I will touch on this subject as the essay develops. As will become clear, a communist revolution is not mere regime change.

Sharp makes that point this way: “[Centers] of power provide the institutional bases from which the population can exert pressure or can resist dictatorial controls. In the future, they will be part of the indispensable structural base for a free society. Their continued independence and growth therefore is often a prerequisite for the success of the liberation struggle.” In this argument, the foundations of the existing society — particularly its economic base — are not to be ripped up, but to be preserved. If presently these institutions support the existing regime, Sharp proposes they can be indispensable support for a future regime. As a person in one of the videos I have watched put it: Every regime rests on several social institutional pillars, Sharp wants to weaken those pillars just enough so the regime slides off and a new one can take its place.

This strategy, although somewhat politically radical like most progressive strategies, is ultimately conservative. In a more stable regime, like the one we have in the United States, this “radical-conservatism” would resolve itself into nothing more radical than periodic elections. Two or more political gangs would vie for power in elections, but the election would never touch on the underlying “institutional support” for the regime. Rather than “regime change” every 30 years with massive upheaval, the contending political gangs switch places every four or five years.

The most important of these “institutions” is the one of which Sharp never speaks, of course: the buying and selling of labor power. Sharp aims to preserve the wage labor system to whatever extent is possible. The goal is to seduce the bourgeoisie and other disaffected classes from supporting the existing regime. Since the Sharp never mentions the most important and fundamental “institution” of modern society, we can assume that for most part it does not actually aim to make any material changes in the society at all. The analysis of the weakness of regimes is thus largely circumscribed by the limited aim of regime change, rather than abolition of the state.

In this booklet, the weaknesses of regimes are largely caused by “cracks and fissures” in the state machinery itself. By state machinery I mean the the sorts of mechanisms you might expect: “Intelligence agencies, police, military forces, prisons, concentration camps, and execution squads are controlled by a powerful few. A country’s finances, natural resources, and production capacities are often arbitrarily plundered by dictators and used to support the dictators’ will.” Like the limited aim of the political revolution, the target of the revolution is described in a very narrow fashion. On the one hand, we have the forces of overt repression; while, on the other hand, the means to fund those forces that are directly or indirectly controlled by the regime. Although the regime may be powerful, it has a number of weakness putting this power to work. The weaknesses of the regime are stated almost exclusively in political terms: policy problems, administrative failures, informational blindspots, lack of public support, internal dissension, rivalries, sectarian conflicts within the society, apathy and so forth. Sharp recommends we exploit the political weaknesses within the regime itself in isolation from material transformation of the society as a whole. This follows on from the limited aim to remove political support from the regime while preserving those institutions to the extent possible as support for a future regime.

It is just this sort of limited aim that showed itself in events in Egypt, Ukraine, Greece, etc., where the goal was limited to merely cosmetic

political changes. In Egypt, all the population got for their efforts was a change in the name of the military strongman running the state apparatus. In Greece, all the population got was a change in the acronym of the party enforcing the austerity imposed by the troika. We are certainly looking for changes more profound than this, so we will have to appropriately adjust many of Sharp’s recommendations consistent with our own aims.

Getting beyond ‘regime change’ (Part 2)

We will not realize communism in ten years unless we plan how our actions will produce this result. Put simply: there is something terribly wrong with our approach to the struggle for emancipation and we need to fix it. The symptoms of this failed approach is the vague, ineffective strategic thinking on the part of many communists. No one seems to know how we get from here to a communist society or even to socialism. No one knows how the daily struggle for survival becomes a struggle for emancipation. This is part two of an essay is intended to address this failure. ***** 2. Targeting the sources of the enemy’s power While Sharp recommends a strategy of non-violent resistance that exploits the political weaknesses of a regime, communists aim for the material transformation of the society as a whole, for abolition of wage labor and the state. For this reason, our strategy must exploit the material vulnerabilities of the state, not merely its political weaknesses. We don’t seek the replacement of the present Republican administration by a Democrat administration, nor even the replacement of both Democrats and Republican governments by a radical government of some third party. Our aim is the abolition of the state, of the political system bound up with the state and the replacement of government of people by the administration of things.

This requires the sort of strategic considerations normally not found among those who aim for mere cosmetic, political changes to society. We must identify the sources of the state’s social power which are not at all to be confused with the sources of the political power of any party. Sharp tells the tale of the “monkey-master,” a brutal dictator who dominated a colony of monkeys until they realized his sole power over them was their compliance with his unreasonable demands for a tenth of their labor. Sharp concludes with this observation:

“Some men in the world rule their people by tricks and not by righteous principles. Aren’t they just like the monkey master? They are not aware of their muddleheadedness. As soon as their people become enlightened, their tricks no longer work.” The argument is that a political regime requires a compliant population. Whether or not this is an oversimplification is not the question here. More important for our purposes is whether this observation applies not just to individual regimes or governments, but to the state itself. While particular regimes can be said to rise or fall on the political support of the population, the state itself requires much more than political support: it requires the surplus value extracted from the working class in capitalist production.

While the overthrow of a political regime may be brought about by subverting the political support of the population in one way or another, the abolition of the state requires that we end the production of surplus value itself. It is impossible to bring the production of surplus value to an end without at the same time abolishing wage slavery. Sharp elaborates some important principles of which we should take notice. The most important principles, I think are these: ● ● ● ●

We must identify our enemy’s strengths and weaknesses; Develop our capacity for strategic planning; Aim to sever our enemy from their sources of power; and, Learn how to exercise power.

From our point of view, there are ways in which the applicability of these principles are limited by the limited aim of regime change. Groups like Sharp’s aim for a political result — regime change — not abolition of the state. It follows from this that they want to preserve the existing state and merely change the faces in power. Sharp ultimately wants to preserve both the existing state and the system of wage labor that makes it possible. Thus his aim is merely superficial cosmetic changes.

Nevertheless, the pamphlet has these suggestions that are very pertinent for our consideration. Sharp recommends that we never fight using methods the enemy prefers and can easily combat. He also recommends we aim to sever the enemy from their sources of power; keep the initiative over where and under what circumstances we confront the enemy in our hands; employ methods that exploits the enemies errors; effectively mobilize the entire population against the enemy; and increases the capacity of the people to fight through their self-organization.

I will examine some of these ideas more in the next few sections. 3. Communism is not a political movement In chapter five of his booklet, Sharp reiterates his contention that those seeking to destabilize a dictatorship should avoid armed struggle. Dictatorships, by their nature, tend to have massive superiority in a military conflict. If the opponents of a regime seek its overthrow, Sharp recommends they should choose non-violent methods to destabilize it. In choosing the term, non-violent, however, Sharp actually means political methods short of armed struggle. Since the regime is likely militarily strong, opponents should confine the conflict to terrain where the enemy is weak: its political support.

Seen in this light, what options do communists have against a ruling class that is both militarily strong and politically secure? Think about this: Washington has fought four great conflicts in its history — the American Revolution, the Civil War, World War I and World War II. Further, it has carried out scores of major and minor interventions in just the past 60 years alone. Through these interventions it has acquired a great deal of skill in the sphere of military conflict against forces who were far better prepared for conflict than we are. It also spends more on force projection than all other nations combined and has a very deep bench among its experienced military leaders.

Obviously, communists are no position at this time to directly challenge Washington militarily — but what of a direct political confrontation?

I would argue that Washington is no less formidable in this area as it is militarily. Anyone whose strategy is based on the idea the American bourgeois political system can be overthrown is hallucinating. The American state set all the rules for political contests and can alter those rules as it sees fit. It has two major parties that between them have almost 400 years of experience governing under the most diverse social condition — from major economic depression to a civil war to major conflicts involving formidable imperialist powers. I think we can safely rule out challenging the ruling class of this country either militarily or politically — at least in the short run. In the absence of military and political capacity to challenge Washington, what other options do we have? I would propose that we think in terms of what at this point I will simply call an “anti-political” strategy. This is a strategy that not only seeks to avoid military confrontation, but also to avoid all engagement with politics and the state. Our anti-political strategy seeks the disintegration (or abolition) of the existing state. Nothing short of this will satisfy our demands. We want no engagement with the state; no reforms short of the state’s complete abolition; no inclusion in its deliberations; and no seat at the table. Where Sharp’s “democracy advocates” seek the replacement of one regime by another, more democratic, regime, we seek only abolition of the state itself. All we want from the state is that it cease to exist.

To be clear: this is not a sign of our strength — bravado — but a clear and honest acknowledgement of our real weakness in the face of the vast military and political superiority of the enemy. We can no more go toe-to-toe with the Democrats and GOP than we can go toe-to-toe with the Marines. Since, in principle, we avoid confrontations with the enemy where they are strong and seek confrontations with them where they are weak, both military and political confrontations must be avoided at this time. Again, our anti-political approach is not a matter of principle, but based solely on pragmatic concerns about the balance of forces. It is possible that in the future this balance may change and open up the possibility of military or political confrontation on grounds favorable to us. For the moment,

however, efforts to directly engage Washington on military or political grounds are sheer lunacy. 4. Communism is not a national movement To put this is in terms communists might understand: Our enemy prefers to fight in the national political arena. The enemy relies on the strength of control of the electoral process, backed up by its forces of repression. Let me argue that it is as insane to try to directly challenge the fascists using national, political means as it is to try to challenge the Marines, Army and police. In the first place, they control all of the conditions of election contests. In the second place, when they lose they will resort to force in any case. If we are going to fight the fascists effectively, we have to avoid making this a national political contest.

Our terrain is global and we have to force them to fight on our terrain. From the point of view of the proletariat, to sever our enemy from their sources of power we must tackle the problem of interrupting the production of surplus value. But the production of surplus value no more take place at the national level than it takes place in a single factory. Surplus value is the product of the total labor power of society — throughout the world market. We have to be able to strike wherever surplus value is being created — and that means everywhere. Every factory, every community and every country is a site of potential struggle to sever the enemy from their sources of power. Our fight has to be waged in such a way that it engages not just the workers of one country, but the global population of proletarians. And it has to encourage selforganization everywhere where there are proletarians.

The limitations of a national political fight is not only that the terrain is dominated by the most powerful bourgeoisie on the planet, a fight limited to the national political level effectively isolates the US proletariat from the rest of the class. This is particularly true of fights to realize limited reforms within the existing state and which rely on the state to effect them. The struggles for a higher minimum wage, jobs guarantee or universal basic income erect a wall between US workers and the rest of the class who have no standing in the national political contest. Meanwhile, Washington

routinely consults and coordinates it interventions with all of its allied counterparts to settle on a common strategy of global domination. Moreover, workers of the whole world are producing the surplus value that ultimately finances US global military and political dominance. It is not possible to sever Washington from its sources of power without engaging the working class worldwide. To give an example of how impossible it is to do this, consider that the US has run an unbroken string of federal and trade deficits for the last 36 years. That financing has enabled Washington to undertake the largest military build out in human history. Unless we can cut this surplus value off at its source, which is not just in the United States, our cause is hopeless.

It is obvious that we cannot defeat Washington militarily — anyone who offers that path is a charlatan. But it should be just as obvious that we cannot defeat Washington in a political struggle, although many still hope for this. We go global or we go home. It is that simple. 5. Maintaining the discipline of a communist movement An anti-political strategy, which avoids both political and military engagement, poses a problem that people m ostly think in political terms. For most of the past 120 years or so, the debate has been over whether we should pursue peaceful means or armed struggle. If you were a “reformist”, you made a fetish of peaceful methods of confrontation. If you were a “revolutionary”, you made a fetish of armed struggle. In truth almost no one ever actually limited their struggle to one or the other, but we still divided ourselves into these silly camps. It was more territory marking than anything else.

It is a lot harder to think of offensive actions against the bourgeoisie that are neither political or military than it is to think of political offensive actions that fall short of armed struggle. Both the armed struggle and the electoral struggle are political forms, while anti-political offensive action is not. We don’t even have a word for this sort of struggle that I can think of. It is very hard to imagine a form of struggle when you don’t even have a word to describe it.

I would propose we think of this sort of struggle as a “social struggle”, as opposed to the anti-sociality of capitalistic relations. In our social struggle we seek to avoid political terrain — be it either military or electoral. Politics, even when conducted by non-military means, is the sociality of a fundamentally anti-social process; to which we should counter-pose our real social movement.

A critique of the ideas in Sharp’s book should begin with how those ideas can be adapted to a social movement. To give a good example, on page 32 of his booklet, Sharp makes this argument: “Since nonviolent struggle and violence operate in fundamentally different ways, even limited resistance violence during a political defiance campaign will be counterproductive, for it will shift the struggle to one in which the dictators have an overwhelming advantage (military warfare). Nonviolent discipline is a key to success and must be maintained despite provocations and brutalities by the dictators and their agents.” This idea can be applied to the antagonism between a social and a political struggle as well. For a social struggle, political engagement with the existing state and its agents shift the battle from our terrain to the terrain controlled by the enemy. The discipline of those involved in the social movement is key to success and should be maintained not only against violent provocations, but also against political and individual blandishments, like offers for reform, political dialogue or negotiations. The more the power of the social movement increases, the more likely the offers for reforms and dialogues will swell — as well as acts of violent repression.

Both Occupy and Black Lives Matter were inundated with political party operatives, opportunists, as well as state violence, disruption and surveillance. Denying political operatives and opportunists a platform in the social movements is as vital as uncovering paid and unpaid informers. We do this not out of hostility to people who retain faith in the political process, but to prevent our social movement from being disrupted and diverted along a political path.

Many folks engaged in politics may have genuine interest in supporting or maintaining links with the social movements, like, perhaps, SYRIZA in Greece, but these folks always ultimately seek power or reforms within the

existing state, not its abolition. By contrast, a social movement wants only to abolish the state and does nothing to normalize its existence. Maintaining discipline of hostility to the state in all of its manifestations is important to turning the state’s own corruption against it. We don’t want any part of the sausage making process. We just want it to go away. Certain communist groups, particularly those organized along the lines of political parties, may be unwilling to abandon politics. They should be told in no uncertain terms to separate themselves from our social movement. While we even may share the same ultimate aim — communism — their engagement with the state and politics undermines this effort. Hostility to politics both requires and tends to produce a loss of respect for the state and politics. That loss of respect is a key element in destroying the power of the state over the general population. The social movement should treat even wellmeaning individuals, parties and political measures with absolute indifference.

Getting beyond ‘regime change’ (Part 3)

We will not realize communism in ten years unless we plan how our actions will produce this result. Put simply: there is something terribly wrong with our approach to the struggle for emancipation and we need to fix it. The symptoms of this failed approach is the vague, ineffective strategic thinking on the part of many communists. No one seems to know how we get from here to a communist society or even to socialism. No one knows how the daily struggle for survival becomes a struggle for emancipation. This is part three of an essay intended to address this failure. ***** 6. STRATEGY In chapter six of the booklet, Sharp emphasizes the need for strategic planning — a topic few communists ever bother to study.

Ask the typical communist in the United States how revolutions happen and s/he will likely tell you revolutions are largely spontaneous. We are gripped by the myth that revolutions are largely unplanned events, mostly triggered by economic or political conditions. A close reading of history, however, will demonstrate that economic or political conditions are insufficient to explain revolutions. If revolutions were explained by political and economic crises, why were there no successful revolutions in the 1930s. Why did we instead see the rise of fascist regimes in Germany, Italy, Japan, France, the UK and US? Why is that today, in the face of 1930s style depressions in Greece, Spain and Portugal, have the proletarians of those countries not spontaneously acted to take power?

Most communists can’t even tell you what it is they actually hope to achieve by this effort. Of the handful who can tell you, most of what they describe looks a lot like today’s economic system. Some may want a society that look like a giant cooperative market without private ownership or with a subordinate role for private ownership. Others imagine a society that more resembles the failed Soviet mode of production. But even among the communists who can talk persuasively about the sort of society they hope to see replace the present one, the strategy to achieve it looks pretty much the same. Almost all communists who have ever bothered to understand how capitalism works know that it could not survive for even a single day if the working class collectively refused to produce surplus value. Without surplus value, there is no profit; without profit, there is no capitalism. . The difficulty with getting to the end of wage slavery appears to be getting the proletariat on the same page with this model of capitalism. Nobody seems to have any real idea how we get everyone on the same page; and no one thinks this is at all very weird for a movement that has existed for almost two centuries.

Clearly, relying on the possibility that we will all get on the same page as the result of political and economic crises is a non-starter. It may happen of course, but I would not hold my breath waiting for it to happen. A realistic strategy can’t rely on what “might” happen; it has to try to make things happen.

Most communists don’t think wage labor can be abolished Sharp offers several reason why people don’t plan strategically. In first place we are not accustomed to strategic thinking. It does not come naturally to us. It is a habit that has to be acquired. Second, people just get used to reacting to the latest outrage, as your twitter feed will attest. Then we have progressive moralizers who think there should be “justice” in the world and everything will be just fine. However, there are also a lot of communists — far more than you would think — who simply don’t believe wage slavery can be abolished. Since these communists have already implicitly or explicitly dismissed the possibility that wage slavery can ever be abolished, they don’t give serious thought to the sort of strategic thinking that might make abolition of wage labor possible. They tend to focus on issues they think are realistic and these are typically the sorts of issues that can be attained by political pressure on the existing state and its political parties.

Without really intending to, perhaps, their strategy is unconsciously adapted to the aim of realizing limited goals like the election of the least offensive political party in an election race. They may continue to insist they want to see an end to wage slavery — they even may not reject communism outright — but they never offer any realistic strategy to achieve that goal. Since we want a society of freely associated individuals, where the development of the capacities of each is the condition for the development of the capacities of all, at each step along the way we have to be able to say how this or that individual action moves us closer to our ultimate aim. This requires we create a real strategy. A social revolution is not spontaneous This is the subject that Sharp spends a lot of time contemplating in chapters 6 and 7 of his handbook. Sharp says if you want to abolish wage slavery and the state, you have to spend a lot of time strategically planning for this goal:

“While spontaneity has some positive qualities, it has often had disadvantages. Frequently, the democratic resisters have not anticipated the brutalities of the dictatorship, so that they suffered gravely and the resistance has collapsed. At times the lack of planning by democrats has left crucial decisions to chance, with disastrous results. Even when the oppressive system was brought down, lack of planning on how to handle the transition to a democratic system has contributed to the emergence of a new dictatorship.” Communists always lose because they don’t plan ahead, which leaves crucial decisions being made spontaneously. In the heat of a conflict, an election or a campaign, the state never gets challenged and once emotions cool, we end up in much the same place as before. This is not to say events won’t emerge spontaneously, but it requires a lot of forethought to effectively respond to these events. The fascists have all the resources of a modern society at their fingertips. By contrast, we have only ourselves and our organization.

The future toward which we are striving is a stateless, classless, propertyless society, where wage slavery has been abolished. The present system of production will give way to the free development of individuals. Our immediate task is to devise a course of action that will allow us to abolish the system of wage slavery, the state and replace both with a society founded on the principle of to each according to need that is managed by an association of the members of society. We intend to accomplish this through a phased series of campaigns and other organized activities designed to unify and organize the world proletariat, abolish production for profit world-wide and replace the existing state with a global association of producers.

Notice here that our aim is not simply to overthrow the existing state of one country, but to replace it by a global association of the members of society. Our plan has to take into account not just what we oppose, but also what we desire.

The first thing we have to do is abolish the state. Typically, communists who think in strategic terms formulate the grand strategy more or less in terms of the immediate outcome of the class struggle. The working class engages the existing state, overcomes it by political or military means, and establishes some sort of “workers’ state” to manage the affairs of society. The term given to this is socialism, a distinct lower phase or stage of communism. The conquest of political power then becomes the strategy around which our tactics and methods of struggle unfold.

At the risk of looking silly, let me say that I think this approach is very wrong. The approach emphasizes methods that may be appropriate for regime change, but not for the abolition of the state. Our objective is not regime change but abolition of the state and this objective determines the appropriate methods of struggle we adopt. To make my point clearer, the abolition of the state is not an eventual outcome of a communist revolution, but its initial result. The first thing we have to do — not the last thing — is abolish the state. The so-called conquest of political power by the working class is not conquest of political power at all but the immediate abolition of the state. Now, how are you going to employ political means, tactics and methods to abolish politics? How is that supposed to work?

The strategy most communists have instinctively adopted is not to seek abolition of the state but its capture by the working class. We have adopted this strategy, not because we are bad people, but because that is how we are indoctrinated as members of bourgeois society. Appealing to some authority for redress of our grievances — to mommy and daddy — is a habit hammered into our brains long before we formulated our first communist idea.

This is an important reason why we find it so difficult to conceive of a plan of action that is not political. For whatever reason, Marxists of various stripes almost to a person conflate abolition of the state with mere regime change. Their strategy, tactics and methods of struggle inevitably are oriented toward the seizure of political power by whatever means. However, for reasons I will now show, a strategy aimed at abolition of the state cannot look like a strategy aimed at a political revolution.

Material relations are not like political relations If you want a strategy aimed at seizing political power, Sharp’s handbook is fine. Your color revolution may be anything from deep red to pale pink, but it will never go beyond the limits of bourgeois society. However, if your strategy aims for abolition of wage labor and the state, Sharp’s handbook on how to make a color revolution has serious defects, because, even if Sharp’s advice is followed to the letter, you still end up with a state. Those trying to change the existing party in power or a dictatorial regime never challenge the economic foundations of society. Even very radical changes are confined to existing political relation and do not encroach on material relations. If our goal is abolition of the state, we have to uproot all existing material relations as well. This is a huge problem for us because material relations don’t appear to us nor operate like political relations. The logic of political relations is such that our target is the existing regime and this regime can be distinguished from society. The regime is personified as “Trump” or “Mubarak” or more broadly as “Apartheid” or “Zionism”, etc. Material relations, on the other hand, are by definition highly abstract, offer no real personification, and subject us to its domination without ever appearing as a subject. Material relations appear to us as, if anything, natural laws — “The way the world works”. It is one thing to confront a regime whose actions are clearly identified and obvious in their negative impact on us; quite another to confront highly abstract social relations that appear natural no matter how negative their impact.

People will adapt to social relations they mistakenly assume are natural much as they adapt to harsh natural conditions. Take a person who dwells in the harsh environment of a desert and place her in the harsh environment of the Arctic, she will adapt to it. This is what humans do and we seem to be very good at it.

NEEDED: One revolution in consciousness This means that a large part of our task is in the realm of consciousness; of changing attitudes toward conditions we now accept as natural. To give an example: For the longest time Americans largely believed black people were inferior and that segregation was natural. It took a struggle by black folks to change this attitude — at least to the point where segregation was no longer lawful.

The same problem applies to wage slavery. People think it is acceptable to force people to create profit as a condition for food. Even the very people being forced to do long hours of surplus labor believe it is their natural station in life. They accept that if they can’t create profit for someone, they should be left to starve or in such miserable conditions it amounts to this. Moreover, since the mode of production is founded on wage slavery, the very operation of the economy confirms this fallacy. It is almost impossible to find empirical evidence to contradict the idea that wage slavery is a natural condition of human society. And even if you could find evidence, it would only confirm suspicion that history consists entirely of a succession of modes of domination.

“Someone has always been on top and someone will always be on top.” People will tell you. A grand strategy that doesn’t take into account how material relations actually appear to us, is doomed to failure at the outset. We cannot rely on the idea that political and economic crises will accomplish this important work. We have enough proof from history that this won’t happen. Nor can we rely on the idea that the spontaneous emergence of new movements will produce this consciousness.

A movement that seeks abolition of labor and the state must make this abolition its starting point. Such a movement has to begin with altogether different premises than a mere political movement. Our aim is not to overthrow a political regime, but to bring about an unprecedented revolution in consciousness of the social producers themselves.

Getting beyond ‘regime change’ (Part 4)

A summary of the argument so far in my latest essay, “Beyond regime change”: ● Part 1: Argues communism is much more than a mere political revolution or movement. ● Part 2: Argues communists should avoid direct military or political confrontation with the state. ● Part 3: Argues communists have to revolutionize the consciousness of the working class.

Assuming that the capitalist mode of production can be brought down if the working class simply reduce its hours of labor to the point that the rate of profit collapses, what I intend to show in part four of this series is how that result can be produced. My intention in this post is not to create this strategy by my lonesome, but to illustrate, based on the principles Sharp describes in his book, what such a strategy would look like if communists decided to pursue it.

Although the strategy I will outline here is simple, it is fraught with a number of difficulties that must be discussed. In first place, it is a matter of some controversy whether this sort of strategy can work even in theory. Most Marxists today have dismissed the core assumption in Marx’s theory that the profits of capital are determined by the unpaid labor time of the working class.

Beyond this group of Marxists, a much larger group of communists, both Marxists and anarchists, are either unfamiliar with Marx’s theory or reject it entirely. This latter group of communists tend to gravitate around some version of Keynesian theory, which recognizes no role for labor in profit and looks to the state to address the problems of capitalist production. I would think it is fair to say almost all communists today either are unfamiliar with Marx’s basic argument or reject it entirely, which adds a level of additional complexity to the discussion of strategy. This is no place to address objections to the strategy on theoretical grounds, but it is necessary to recognize such objections exist and must be settled if we are to move forward.

***** Second, even if no such objections existed or those objection could be settled by honest debate, we still have to deal with the fact that the capitalist mode of production is highly opaque. It is impossible to trace the profits of any capitalist firm or country to the unpaid labor of its working class. This is because the profits of firms and of countries is not directly related to the unpaid labor of their working class, but is the share of each firm or country in the total loot squeezed from the working classes of all firms and countries.

This poses a much bigger problem than the theoretical one, because it means the working class have no idea that our unpaid labor time is the sole source of all the profits of capitalist firms and economic growth of national economies. Not only do we not know we can bring down the mode of production by reducing our hours of labor, we have no idea there is any connection between our labor time and the social ills of capitalism. While the peasant could see the portion of the product of their labor that was expropriated by the lord, the expropriation of the capitalists takes place behind our backs, so to speak.

Thus any strategy to overthrow capital and the state has a task that is a rather unprecedented: we literally have to educate ourselves as a class in a scientific critique of capitalism, to teach ourselves how capitalism works. This is not something that can be done in a classroom and it certainly cannot be done in some sectarian study circle; it has to be done live. And it has to be done not for a few advanced workers but for all of us, because we aim not just for abolition of wage slavery and the state, but also for the replacement of wage labor and the state by a self-managed association of social producers.

We cannot manage society if we remain ignorant about the conditions of social production. It is not enough for a relatively small vanguard to understand why we fight the way we do and for what we a fighting. For our aim to be achieved, each of us (or, at least, a solid majority) must understand the strategy. Our strategy must be as simple and easy to understand as basic reading skills or the voting process.

This task imposes a unique burden on communist activists that is far more difficult than that of the democracy activists in Sharp’s color revolution. All revolutions in history required some level of political consciousness among the population to achieve its aims. In the past, political consciousness may have been sufficient to overthrow an existing regime, but sill insufficient to establish democracy. In any case, the alteration in relations was purely political and did not directly touch on actual material relations. By contrast, our revolution is aim at the material transformation of society, not just its political relations. We require a level of consciousness that is a magnitude beyond that required for mere political change. We face not just the problem of a regime that will fight to the bitter end for its survival and

has at its disposal the full force of the state, but also a set of social relation that are shrouded in mystery and superstition. We have to figure out creative ways to break through the gauzy opaque film that conceals capitalist relations from us.

I would suggest this cannot be accomplished outside a conscious determined struggle for communism itself. ***** GRAND STRATEGY: Speaking of grand strategy, Sharp has this to say:: “Grand strategy is the conception that serves to coordinate and direct the use of all appropriate and available resources (economic, human, moral, political, organizational, etc.) of a group seeking to attain its objectives in a conflict.” Following Sharp, I have attempted to answer a number of question that go to the heart of strategic thinking. Again, these are just my answers to the questions posed by Sharp. A collective communist strategy may adopt altogether different answers. ● What are the main obstacles to achieving communism?

Technically, the main obstacle to achieving communism is whether we can feed, clothe and house ourselves without requiring . labor from each member of society. This is a technical question and cannot be answered based on what we wish to achieve but on the material development of the productive forces themselves.

Beyond this, however, is our consciousness. This is not a political consciousness — so-called class consciousness — but a scientific understanding that permits us to pierce the opaque veil of capitalist relations which conceal the link between our unpaid labor time and the profits of capital. This scientific consciousness is no more a product of

everyday life than knowledge of how the universe works is a product of every day observation of nature. It must be acquired by engaging and transforming capitalist society. ● What factors will facilitate achieving communism?

Achieving communism will be facilitated by our self-education and self-organization in the struggle to overthrow the existing state. Understanding of the nature of capitalist relations and the role labor plays in its functioning will be facilitated and advanced only by directly engaging in the struggle for communism. This understanding cannot be acquired from books nor by spontaneous political struggles over everyday social issues. ● What are the main strengths of the capitalist state?

The state controls a highly disciplined military with a deep bench of experienced military leaders. It also control the entire political system in most advanced countries, with almost 400 years of experience ruling in the United States alone. Beyond this, the state machinery of the advanced countries is supported by access to enormous quantities of surplus value within the world market that allow them to run both massive trade and budget deficits for decades on end.

● What are the various weaknesses of the state?

The weakness of the state is that ultimately it rests on the surplus labor squeezed from labor power. The labor power that produces the surplus value necessary for the state and both its military and political power is formally in our hands, (although this does not imply we actually effectively control it at this time.) The possibility that the labor power now only formally in our hands becomes effectively managed by us through increase understanding of how capitalism works and increased organization to overcome competition is a huge source of vulnerability.

● To what degree are the sources of power of the existing state vulnerable?

Technically, wage slavery is extremely vulnerable to our collective power. However, as a practical matter, this vulnerability is limited by the very appearance of capitalist social relations, our understanding of capitalism’s vulnerability to our actual material position in production and our own organization. No power is real if those in the position to wield it do not recognize it or are unable to wield it due to their lack of organization and skill.

● What are the strengths of the working class?

The most important strength of the working class is that it is in possession of the only commodity that can make real capital out of capital. The production of surplus value, and thus the production of profit, cannot take place without the labor power of the worker. Our labor power is indivisible from our physical persons. Thus the production of profit requires our compliance.

● What are the weaknesses of the working class and how can they be corrected?

We are not conscious of our actual power. This is in large measure not the product of ideological factors, but the product of our competitive fragmentation and lack of organization, as well as the opaque nature of our role in capitalist production. This competitive fragmentation is a problem not just within each country but also between countries. The working class is a global productive force divided along every conceivable line. The mystification of our role in society is, in the final analysis, a product of this competitive fragmentation.

*****

CHOICE OF MEANS: Speaking of the means chosen by a population in their struggle, Sharp has this to say:: “At the grand strategic level, planners will need to choose the main means of struggle to be employed in the coming conflict. The merits and limitations of several alternative techniques of struggle will need to be evaluated, such as conventional military warfare, guerrilla warfare, political defiance, and others. In previous chapters we have argued that political defiance offers significant comparative advantages to other techniques of struggle. Strategists will need to examine their particular conflict situation and determine whether political defiance provides affirmative answers to the above questions.” Our aim is the abolition of the state, of the political system bound up with the state and the replacement of government of people by the administration of things. The abolition of the state requires that we put an end to the production of surplus value itself. It is impossible to bring the production of surplus value to an end without at the same time abolishing wage slavery.

Our chosen method of struggle, the direct disruption of the production of surplus value by reducing our labor time, will avoid both military and political confrontation and engagement with the existing state. Unlike a conventional political struggle which targets the state, our effort at first will be largely educational and organizational: we intend to convince the working class to reduce their hours of labor. The struggle requires we to raise our understanding of the mode of production, organize ourselves to wield our labor power as a weapon in the struggle against capital and prepare ourselves to manage society after capital is overthrown.

As a initial action, I am proposing we undertake campaign, “Fridays Off.” Initially starting out small, with the “Fridays Off” campaign we will engage in actions designed to disrupt the labor process beyond 32 hours per week. This includes, but is not limited to disruption of the morning commute; interruption of the labor process on shop floors and in offices, action to force suspension of brick and mortar shopping sites and online shopping; strikes and other job action as

Initially setting a goal of a reduction of the work week by one day (eight hours), we will continue to reduce hours of labor over a set period of time (five year?) until the work week is abolished entirely. Economically, our initial efforts will have only small results, of course — a mangled commute here or the disruption of an online shopping site there — serving more educational aims than actually affecting the profits of capital, but we must start somewhere to learn our real power. To paraphrase Marx, “The whole thing begins with the self-education of the commune.” The working class cannot learn to manage society until it has learned to managed its own labor time; to decide for itself when the time which the worker sells is ended, and when his own begins.

Sharp offers a number of ideas in an appendix many of which can be adapted to our efforts for promoting and enforcing a reduction of hours of labor, so long as we keep in mind that our objective is to disrupt the production of surplus value and avoid any engagement with the state. Labor power is the only commodity that can convert capital into real capital. This places the working class in a irreplaceable position in the operation of the mode of production. A campaign to reduce hours of labor strikes capital at it weakest, most vulnerable point. In our struggle to collectively reduce our hours of labor, we will learn how to manage our labor power collectively and lay the foundation for the new society.

Rethinking Marx’s Grand Strategy

Of the three men Marx, Bakunin and Lassalle, it might be helpful to think of their differences in terms of grand strategic thinking. Each of the three had a unique grand strategic idea. Lassalle’s is probably easiest to describe as it is this way by Wikipedia: “Lassalle considered the state as an independent entity, an instrument of justice essential for the achievement of the socialist program.” This attitude toward the existing state is in marked contrast with that of both Bakunin and Marx. Despite their differences with Lassalle, however, Bakunin and Marx had entirely different strategic views of the existing state. Bakunin is generally held to have rejected any involvement with, or action in relation to, the existing state. A Proudhonist in outlook, Bakunin’s view can likely be characterized this way in a quote from Graham: “[Pretending] to establish order among men, [states] arrange them forthwith in hostile camps, and as their only occupation is to produce servitude at home, their art lies in maintaining war abroad, war in fact and war in prospect.” Governments arouse and manipulate nationalist feelings, such that the “oppression of peoples and their mutual hatred are two correlative, inseparable facts, which reproduce each other, and which cannot come to an end except simultaneously, by the destruction of their common cause, government.” In the Proudhonist theory of the state, government was the “common cause” of social conflict and divisions; for Marx, it was the reverse: the state was not the cause of social divisions, but a product of those social divisions. As long as society remained divided by classes, classes would give rise to states that, essentially, were only dictatorships of one class over another: “But whatever form they may have taken, one fact is common to all past ages, viz., the exploitation of one part of society by the other. No wonder, then, that the social

consciousness of past ages, despite all the multiplicity and variety it displays, moves within certain common forms, or general ideas, which cannot completely vanish except with the total disappearance of class antagonisms. “ Three thinkers, three different views of the state, three different grand strategies. Lassalle’s grand strategy is likely the easiest to understand: The working class should aim to gain control of the state through universal suffrage. It would then use the existing state to implement radical reforms in the form of a comprehensive practical program. For Bakunin’s grand strategy, the working class should aim for the immediate abolition of the state. Since the state was itself the common cause of social conflict and divisions, abolition of the state was the common remedy. Marx’s grand strategy is likely the least understood and most often misstated. Like Bakunin, Marx believed the working class should aim for the abolition of the existing state. However, in Marx’s opinion, the state was a product of class society and could not be completely abolished until class society was. In the best scenario, the working class could put an end to existing state and replace this state with its own association. According to Marx, initially, the association would retain features of the old state it replaced in that it would still be an instrument of class repression. The working class would employ its association to repress its class enemies, with all the brutality this implies. But the state power would also be used to speed up the development of the productive forces by concentrating under its control all instruments of production. This latter effort would eventually result in abolition of social conflict and divisions; making possible the final abolition of the state. This greatly complicates reducing Marx’s ideas to a bumper sticker. With Lassalle, it is easy to state his objective: Seize the state. With Bakunin, it is also easy to state his objective: Abolish the state. With Marx, it is nuanced: Abolish the existing state, replace it with our association, develop the productive forces and eventually the state will go away. Try putting that on a bumper sticker.

While Lassalle wanted to seize the existing state, Marx wanted to abolish it. But while Bakunin also wanted to abolish the existing state, he argued that nothing should replace it, while Marx argued for an association. Marx’s grand strategy after Marx Here is where it start to get complicated; and where I think Marxists lose the thread of Marx’s thinking. Certainly Marx’s differences with Bakunin are fundamental: Marx thinks the state is a product of social conflict while Bakunin thinks the state is the cause of social conflict. However Marx’s differences with Bakunin is based on the actual material state of society. Which is to say, Marx thought the state had to be abolished, but did not think it could be abolished on the basis of then existing economic reality. Marx’s differences with Bakunin, although resulting from a different analysis of the relation between class society and the state, had to change as society itself changed. If in 1874 the state could not be abolished because class society could not be abolished, this was by no means a permanent feature of society; rather, whether the state could be abolished was determined by the actual state of development of the productive forces. It was possible that with the development of the productive forces of society, in theory at least, we could one day get to the point where both class society and the state could be immediately abolished in one and the same stroke. Development of the productive forces was the only way to put an end to classes and class society — and thus the only way to be finally rid of the state. But — and this is what many Marxists miss — development of the productive forces is exactly what capital does. It is entirely possible that capital could develop the productive forces to such an extent that the simultaneous abolition of both class society and the state could be accomplished. Marxists, however, have dropped the thread of Marx’s argument on this score. Ask a Marxist today and they will insist that there has to be a more or less extended period of time — the duration of which is never quite defined — where wage slavery has been abolished, but society is not ready for full communism. There is in fact nothing in Marx’s theory of the state that says this must be true.

To give this a practical example: Suppose in Marx’s day, the period of socialism would have lasted –say — 140 years, would it still be 140 years in the 1930s? Would it still be 140 years today — almost 140 years after Marx’s death? Does the proletariat get time served off its sentence of hard labor? In another 140 years from now, will it still take another 140 years? Ask a Marxist this question and watch them gaze dully into the middle distance. Marxists who, today, still reproach anarchists for seeking the immediate overthrow of the state in its entirety don’t have a leg to stand on; not because Bakunin was right in his dispute with Marx, but because it has been 134 years since that dispute played out. Our grand strategy as communists today cannot look like Marx’s in 1848. To try to make it look the same would be to deny history itself. What sort of historical materialism is it that denies history?

PRO-TIP: Communists don’t care about how communist production will be organized

One of my mutual follows on twitter tweeted this today: “asking questions like ‘how will communism actually work’ will be classed as unnecessarily pedantic within 6 months” Let us all hope this prediction comes true. I say this because the question itself is incoherent. Its persistence can be explained by the fact that too many radicals do not realize capitalism has already answered this question. To understand my point, consider that no radical ever asks, “How does Walmart or Amazon actually work.” It’s obvious that these huge capitalistic firms manage huge supply chains. They bring the most diverse products together with customers without any of the fuss or bother that is said to be an obstacle in a planned economy. The only objection to this cold fact is to assert that Walmart and Amazon do this rather amazing feat without planning their activities. We know in fact that this is not true. Production and distribution of commodities is not an art, but a hard science. These massive capitals know, almost down to a single screw, where every commodity is in their logistic chains and can tell you when and where it will finally arrive on a store shelf or your doorstep. Place an order with Amazon and you can follow your purchase from reception to delivery on your smartphone. Communism doesn’t invent this modern marvel and to ask how communism works in this regards is indeed to concern oneself with trivialities. There is a deeper question here, however. Some people think communism has to reinvent the wheel when it comes to the organization of production, but nothing could be further from the truth. Communism is essentially economic and, insofar as it is economic, it is created directly by

capitalist accumulation and nothing more. The communistic organization of production is not itself created by communism, but capitalism.

The very idea that this marvelous instrument of social production has to be reinvented by communism is a misapprehension of communism that results from the rather primitive backward economic conditions of Russia or China. It is entirely true that before actually reaching communism, Russia and China had to first create the material foundations for communism, but this fact has now entered into the conception of communism as some necessary preliminary stage of history. It is not. Unlike Russia in 1917 or China in 1949 there are no peasants in the United States. The idea that we have to create the material foundations of full communism prior to realizing communism is completely mistaken. People today are seriously talking about the imminent complete replacement of living labor in production with AI. China already has factories where living labor has been almost entirely replaced by robotic processes. And the US has been boasting of “lights-out” manufacturing, where there is little or no human intervention in the production process at least since 2003.

Living labor in production is already obsolete and continues only on the basis of the most egregious reduction of wages to unimaginable levels of poverty. The worker can only compete with the machine if she can survive, as the machine does, without food, clothing or shelter. Even if the worker could live on air alone, she could not compete with a machine. To put this in the most brutal accelerationist terms: A meatbag cannot compete with artificial intelligence. Communism has no purpose if the creation of modern industry were at issue. Communism has another purpose entirely: As Marx and Engels put it: “The reality, which communism is creating, is precisely the true basis for rendering it impossible that anything should exist independently of individuals”. We communist don’t give a fuck about factories or machines or production or distribution or any of that productivist bullshit. We only care that these things should not exist independent of the individuals.

People. That is all we fucking care about. People! If a radical comes to you asking how production will be organized under communism, pop that motherfucker in the face, he is the enemy. No communist should ever give a fuck about how production is organized. If anyone is concerned about how to organize production, they can go to business school.

We don’t care how the future society will produce widgets; we only care how to end work itself — wage slavery.

Class struggle and the abolition of wage labor: Did 20th century Socialism have it backwards?

I know I said I would review Nicole Pepperell’s essay next, but I still haven’t figured out what the fuck her argument is, yet. I apologize for that. I will keep at it until I have something relevant to say about it. In the meantime, one of the more interesting takes on the notion of communization as a strategy is offered by Jasper Bernes’ “The Double Barricade and the Glass Floor”. Bernes explains how really difficult it may be to produce a strategy based on

communization theory. I think he is right. Communization theory seems to get the relation between the class struggle and the immediate abolition of labor exactly backwards.

Trying to produce a strategy based on the premise that class struggle leads to the abolition of wage labor may not just be difficult, it may be impossible. ***** Bernes begins his discussion by citing an argument from Theorie Communiste (TC): “For TC, the proletariat now finds itself confronted with a paradoxical condition where ‘acting as a class has become the very limit of class action.’ In recent struggles (basically since the mid-1990s) TC note the emergence of new forms of struggle in which ‘class belonging [is] an external constraint.’ It is no longer possible to propose a politics based upon the affirmation of working-class autonomy, as there is no longer an independent ‘workers’ identity.’ Every affirmation of the class of labor becomes, by necessity, an affirmation of capital: ‘in each of its struggles, the proletariat sees how its existence as a class is objectified in the reproduction of capital as something foreign to it.’ This is a limit in the double sense above – a fetter on revolutionary action, but also a generative condition which produces the possibility of superseding the capital-labor relationship. The self-abolition of the proletariat is now possible because ‘being a class becomes the obstacle which its struggle as a class has to overcome.’” According to Bernes, in the course of its battle with capital, the proletarians encounter, not just the capitalist class, but their own position as a class of workers. They find that their ultimate obstacle is their own class position. Their position as a class becomes a fetter on their struggle against capital. The workers must put an end to their position as workers, not just to emancipate themselves, but merely to guarantee their own survival. There is some fine print, of course. At the beginning of their life-long collaboration, Marx and Engels observed that communism implied the universal dependence of the revolution in one nation on the revolution of all the others. The capital-(wage)-labor relationship is a global relationship. Because of the global character of the class of proletarians, the selfabolition of the proletariat can only be

effected all at once by all of the proletarians together. If this conclusion is not obvious, just think what would happen if you just decide on your own to stop selling your labor power to capital all by your lonesome. You would be homeless and hungry within weeks, if not days. ***** This is an unimaginably high bar for proletarians to clear: they can’t put an end to wage slavery unless they do it together as a class. In practice, however, the class struggle is like a game of whack-a-mole, with conflicts between the classes breaking out here and there with little relation to one another.

Egypt and Tunisia may be popping off, while the streets of the United States and Europe are deathly quiet; Athens and Madrid may be in turmoil, while Berlin is indifferent or even hostile. You can’t really put an end to wage slavery this way. Ending wage slavery is like a symphony; everybody has to be on the same sheet of music or the result is just cacophony. Add to this the fact that In the 21st century, no one can simply grab a factory, office building or campus and declare a liberated zone. As Bernes observes, even if you could seize a strip-mall, the DMV or an industrial park, what would you do with it? “The project of the ‘seizure of the means of production’ finds itself blocked, or faced with the absurd prospect of collectivizing Wal-Mart or Apple, workplaces so penetrated to their very core by the commodity-form that they solicit nothing less than total destruction.This is different than France in 1871 or even 1968, different than Russia in 1917 or Spain in 1936, places where the industries of the means of subsistence were ready to-hand and expropriable, where one might have found, in some reasonable radius, the food, clothing, housing and medicine necessary for a future society liberated from the exigencies of value.” Moreover, even when the proletarians struggle side by side they often find that their immediate aims are incompatible with one another. Are we trying to negotiate a wage agreement or occupying the university campus? Shutting down the campus or making it available to everyone?

Unfortunately, it is one thing to say the workers encounter the paradoxical condition where acting as a class has become the very limit of class action; it is quite another thing to say the proletarians realize that to overcome the limits of class action, they must put an end to their class. It is just as likely that the proletarians, having encountered the limits of class action, become discouraged after beating their heads against a brick wall for decades without success. This is the real problem we face now. In Europe and America, there is no class struggle to speak of and an atmosphere of despair hangs over everything.

***** There is a certain fallacy that the class struggle against capital and the abolition of wage labor are joined at the hip, so to speak. The relation is stated along lines similar to the argument of 20th century socialism. Roughly, it goes this way: In their struggle against the capitalists, the workers come to see that they must put an end to wage labor As this argument suggests, 20th century socialism proposed that the workers become conscious of the need to abolish wage labor through their struggle with the capitalists. As this class struggle deepens and intensifies, so will the communist consciousness of the workers. I would like to throw cold water on this rather overly optimistic argument. In fact, the class struggle has no direct relation with the consciousness of the need to abolish wage labor. The two — the class struggle and communist consciousness — are concerned with two different things. The class struggle is concerned with the class conflict between the proletarians and capital; while the communist consciousness of the working class concerns the conflict within the proletariat itself: on competition among workers as individuals over sale of their labor powers.

I want to emphasize that I am not saying there is no relation between the class struggle and the abolition of wage labor; rather, I am arguing that there is no direct relation between the class struggle and the abolition of

wage labor. Not even a relationship as tenuous as the one Theorie Communiste proposes. There is an indirect relationship, but it is not a relationship where the abolition of wage labor arises directly from the class struggle as TC and Bernes appear to argue. ***** At one point we could have argued that there is a direct relationship between the class struggle and the communist consciousness of the proletarians. It still would not have been accurate even then, but it was effectively true. This was the case prior to the Great Depression, when rapid industrialization required ever greater masses of workers to feed the hungry maws of capitalist factories. The rapid expansion of capital required an equally rapid expansion of workers available to produce still more capital. Labor power was at a premium and the competition among workers over sale of their labor power was less of a factor than the conflict between the two classes.

Today, the era of rapid industrialization is behind us in the most advanced capitalist economies. (Not all countries, of course; late-comers like China and India are still in a period of rapid industrialization. But let’s leave them out of the equation for the moment.) With most of the advanced industrial countries now mired in stagnation, barely growing at all, competition among the workers is now a larger factor than it was during what many are calling fordist industrialization.

This is a big problem because the class struggle is attenuated by intensified competition over the sale of labor power. To put an end to competition of the sale of labor power, however, the proletarians must put an end to the sale of labor power; they must abolish wage labor. To state this another way, the movement to abolish wage labor is not a product of the class struggle; rather, at this point the class struggle is a product of the movement to put an end to wage labor.

*****

Our attention has been misplaced. For decades communists have understood the relationship between the class struggle and the abolition of wage labor to be the exact opposite of what it really is. It is not the class struggle that prepares the proletarians for the complete abolition of wage labor, but the fight for the abolition of wage labor that propels the class struggle.

Communization of the Whole World in Five Years or Less: A practical guide

I have been paying more attention to the communization tendency of late. For those who are unaware of this tendency, the communization tendency is a radical offshoot of communism that proposes we set as our immediate goal the complete abolition of property, wage labor and the state in order to directly and immediately establish a fully communist society. According to Wikipedia, “In these accounts humanity as a whole, directly or indirectly, would take over the task of the production of goods for use (and not for exchange). People would then have free access to those goods rather than exchanging labor for money, and distribution would take place according to the maxim ‘from each according to his ability, to each according to his need.'” As can be inferred from this short description of communization, communizers dispense with the so-called ‘lower phase’ of communism (sometimes called socialism) and move directly to a fully functioning communist society where that will be no classes, money or state. The idea is very close to my own view that capital has so developed the social forces of production that society is in the position to move directly to full

communism. This is a decidedly different situation than the one that prevailed at the time Marx and Engels wrote the Communist Manifesto. In 1848, the social forces of production had not reached such a state of maturity as to permit the immediate establishment of a communist society. The Manifesto advanced a sort of work around in which the working class would organize itself as a ruling class and do what capital had not yet finished doing: create the material foundation of a fully communist society. In the 170 years since the Manifesto was written, however, much of that preparatory work has been accomplished by capital itself. What remains for us today is to take control of society and immediately realize full communism; to complete the socialization of labor by ending the buying and selling of labor power. Unfortunately, as allsotiresome nicely put it, the idea of communization remains “practically and strategically undertheorised”. No one really knows what a movement committed to the immediate establishment of a fully functioning communist society looks like, what its goals are, or how it intends to realize those goals. Communization very much remains just another idea on paper.

This essay is my attempt to help remedy this defect. ***** So, let’s talk about communism in as practical a way as possible To focus our minds on the subject in the most practical way possible, let’s set a hypothetical target for our fully communist society in the very near future — say, in five years. In other words, in five years we want to have a fully functioning world communism up and running. With time so short, we need to start getting ready for it right now. Is this approach wrong-headed?

Well, in 1971 several countries in Europe got together and decided to set a goal for a single market with a single currency. I do not see why setting a target date for communism is any more unthinkable than creating a common currency among countries that only a few years before had been locked in mortal conflict. I’ll admit that it took 30 years to make good on the goal of a single market in Europe, but the time it might take is not important for this exercise. What is important is that now that we have a target date, March 2023, what exactly is it we want to accomplish by that date? Not details, mind you. We can leave the details to a later point. I am talking about the broad strokes, like the creation of the euro. The six members of the EC set out a broad goal: a single currency.

They did not get into details. Similarly, in broad strokes, we can set a goal to reach communism by March 2023 and leave the details for the future? Concretely, what do we mean by the term “communism” We all know what a currency is, but what exactly is communism? What do we expect to have in place by March 2023? By March 2023, we want to have a society founded on the principle of “from each according to ability, to each according to need.”. We want, in other words, to completely sever the connection between individual hours of labor and individual consumption. While the six members of the EC wanted to create a single currency for their six nations, we want to abolish all currency in the whole world. After March 2023, no one anywhere on the planet will need money to pay for anything. You just walk into a store and go home with your groceries or whatever.

Now, that is a tall order because it applies to everyone, everywhere, from Buffalo to Bogota to Burundi to Burma to Beijing and back again. Don’t ask if this is a realistic five-year plan. We can address the scheduling problem later. For now, let’s just focus on what it is we want to do. At present, it is not possible to know if we can get to communism in five years or five hundred years because we don’t yet know how much labor it would take to to

realize communism as defined above. Does it take an average of 40 hours of labor per person per week to satisfy the basic need of everybody on the planet? 20 hours of labor per person per week? Or five hours of labor per person per week? Frankly, we don’t know because no one has ever tried to calculate this. The biggest problem, however, is not trying to calculate how much labor time communism requires per person per week, but that communists are almost completely incapable of thinking about communism concretely. It may be possible that we could satisfy all basic human needs right now with no more labor than individuals are willing to give voluntarily, but we would never know this because communists have no real idea what they mean by communism.

For most communists, communism is an abstraction, a philosophical concept dancing around in our heads, not an actual society with certain definite material requirements. Let’s fix this Communism concretely defined Does our goal mean everyone can have everything in their most incredible fantasy? No. Does it mean everyone will have a mansion and a yacht, like Elmer J. Fudd? Again, no. What then is included in this communism that I am talking about? Have you ever seen the basket of goods that composes the consumer price index of a country? Basically, I mean that. The components of the American Consumer Price Index (CPI) is a list of the prices of all of the commodities that go into working class consumption. This index is composed of a basket of goods ordinarily purchased by workers. We can say that

the commodities listed in the CPI are the equivalent of labor power stated in the form of the commodities that go into its value. The basket of use value is tracked by most governments and used as a measure of the price of labor power. The links below will take you to the basket of basic goods that compose the CPI in three countries today: ● Canada ● United States: ● United Kingdom

Not surprising, the chief fascist states know the prices of the components of labor power almost down to the last bean. And they track the change in those prices religiously. Which is fortunate for us because we can use the same basket of goods to define what we mean by providing for basic human needs anywhere on the planet. On this basis, we should be able to calculate, almost down to the second, how much labor time goes into the production of the goods required to satisfy basic need of the whole world. The goal is that in five years every person living on the planet will have all of their basic needs met irrespective of their labor contribution. We then can use this as our first approximation for what we mean by the term communism. We can call this first approximation the “material economic foundation of communism” and set this as the goal we hope to achieve within five years.

***** A working definition of communism: Concretely stated, when we speak of a society founded on the principle of “from each according to ability, to each according to need“, we are explicitly referring to a society where all the basic needs of human beings are met employing only the labor individuals voluntarily provide to society based on their own desire to be productive, creative, persons. No one has to be compelled to labor or offer anything in return for their access to this basket of commodities. Thus, they are free to engage in any pursuit that brings them satisfaction. They exercise their human capacities only in those directions they desire.

***** But, what about …? The first objection to this approach may be that even if we define communism in terms of a basket of commodities like the American CPI provided to each individual on the planet without regards to their labor contribution, the whole world cannot afford an American level of consumption based on that basket of goods. This might be true because we don’t have sufficient means of production at hand to be able to produce this standard of living. However, the lack of means to produce on this scale, may change our timetable, but it doesn’t make the goal impossible. The goal may require a certain preliminary investment, but it is still doable. It may just take us ten or twenty years, instead of five. This objection is not really about the goal, but about the timetable.

Second, it may also be objected that the proposed standard of living is not environmentally sustainable. This objection might appear to kill the idea altogether. Given the impact we are already having on the environment, the prospect of 7 billion people enjoying an American standard of living seems completely unsustainable — at least to the people now enjoying that standard of living.

The problem with this second objection is that no one has ever actually calculated the environmental impact of a typical American CPI basket of goods. Since no one has ever actually taken the time to calculate the environmental impact of a typical American basket of goods, how can we take this objection seriously? It is likely complete bullshit. Perhaps it is not bullshit, but how would we know?

Bizarrely, we know the price of a typical basket of commodities consumed by the American working class, but we don’t know how much labor it requires nor its environmental impact. And, there is a reason we don’t know the cost of the basket in terms of human labor time and the environment: capital doesn’t give a fuck about such things. It’s only concern is how much profit is to be had, not the cost of this profit in human beings and the environment.

Interestingly, no objection is made that providing for the basic needs of the entire population of the planet without labor may not be profitable. Instead opponents of communism point to the lack of means and environmental impact of providing the basket. How hypocritical. How do you propose to realize this communism? Now I have set a target date for communism, March 2023. And I have defined communism as the provision to everyone on the planet of a basket of goods represented in the consumer price index of the United States. I think it is possible on this basis to establish how much labor time is required for an entry level full communism of this sort. To meet our definition of communism, the duration of social labor (per month, week or day) required for production of this basket of goods must be less than what individuals might voluntarily contribute. In other words, if individuals, motivated solely by their desire to be productive, voluntarily contributed more labor time than is required to provide everyone this basket of goods, we would have full communism. In other words we can sever the connection between labor and consumption for everyone on the planet.

Of course, this is not fully automated luxury communism. It is just an entry level sort of communism. But it satisfies our definition of communism as a society founded on the principle of “from each according to ability, to each according to need.” We still can get to the luxury version of full communism in due time.

Cool! So we just pass a law abolishing wage slavery and — BOOM — full communism? Not so fast. There is a real problem with a strategy that assumes we can vote communism into existence. In the first place capital requires surplus labor time to produce profits. This means, over and above whatever labor time is required to provide everyone on the planet with an American-style basket of goods, we would have to

tack on additional labor time to cover the profits of capital. The capitalists are not going to want to give up this surplus labor time. They will fight us tooth and nail to prevent abolishing wage labor. The real problem, however, is that the existing state, no less than capital, requires surplus labor time for its revenues. This means, over and above whatever labor time is required to provide everyone on the planet with an American-style basket of goods, and over and above whatever additional labor time is required to cover the profits of capital, we need a still greater additional increment of surplus labor time to cover the revenues of the bourgeois state.

This is a big obstacle for any strategy based on a political movement. As can be seen in the chart below, at present the state sector consumes about 40 percent, and in many cases in excess of 50 percent, of the total output of OECD countries. That is a huge quantity of surplus labor time that the existing state will not concede lightly.

General government spending, as a share of GDP for selected OECD countries. (Source: OECD) The existing state is, by far, the very largest consumer of the surplus labor time expended in any OECD country and likely has been the largest single consumer of surplus value since World War I. As Roland Boer observes in a recent blog post, “the very nature of the bourgeois state is to exploit the working

class”. Moreover, in return for this consumption the state provides nothing that can be used by us to create a society where all basic needs of human beings are met without requiring labor from anyone. To this I should add that the relentless expansion of the state in the 20th century is made necessary by the explosive increase in the productivity of social labor. The state itself has assumed the function of what some Marxists at the turn of the 20th century called “third persons”, a sector of the so-called economy whose noncapitalist (and entirely unproductive) consumption is now required to absorb the excess product of social labor. Without this consumption, which operates like a countervailing influence preventing a fall in the rate of profit, capital would have collapsed a long time ago.

While capital exploits the working class and consumes their surplus labor time, at least it consumes this labor time productively, i.e., with an eye toward increasing the scale of production. By contrast, the state produces nothing — neither values nor use-values. It leaves society worse off than it was before.

The state sector as the low hanging fruit for communization The massive state sector is bad news for the strategy of voting communism into existence, but, paradoxically, it is also good news in a certain sense. The monstrous growth of the state sector, especially in all of the most developed economies over the past 100 years or so, means that this unproductive consumption — unproductive not just in the capitalist sense, but absolutely unproductive even of use values — is the low hanging fruit for communization.

Far from expecting to employ the state as an instrument to abolish wage labor, the abolition of the existing state is today the necessary precondition for the abolition of wage labor and a society founded on the principle of “to each according to need.”

Today, any realistic strategy of communization requires the direct and immediate abolition of the state and the conversion of the surplus labor time locked up in this sector directly into free time for everyone. There is no

substitute for this strategy; no other way to get to full communism without first abolishing the state. Communism cannot be voted into existence because the state itself is the immediate target of communization. So, if we can’t vote communism into existence, how do we get there? The problem is the means available to reach this goal. Here, I am not talking about the technical issue of whether we have enough means of production to produce the basket for everyone. And I am not talking about whether the planet can sustain such a level of consumption for everyone, not just proletarians of Europe and North America. Rather, I am talking about the social movement required to make communism into a reality. Note, I did not say the political means required to make communism a reality. I said social. The problem I have with the phrase, “political means” is that this usually implies some form of a political movement — a political party whose effort is focused on attaining state power. In fact, we know from the bitter experience of 20th century betrayals that politics cannot break through existing bourgeois social relations. To get to communism we have to go beyond the politics of the bourgeois epoch; we need a movement that directly communizes society. Here let me propose that our five-year plan for communization of all existing relations take the practical form of a movement to reduce hours of labor to zero in five years. As I have argued on several occasions, such a progressive reduction of hours of labor must result in the fall of profits before it even begins to affect wages, because this reduction insofar as it does not exceed certain limits only involves the reduction of the surplus labor time on which the profits of capital are premised. According to Marx, this fall has the effect of accelerating the development of the social forces of production; encouraging their maturation and thus maturation of the material conditions for full communism.

To the above effect of a progressive reduction of hours of labor, we can add that the reduction of hours of labor must reduce the existing state and its revenues before it begins to affect the profits of capital. Insofar as the profits of capital are being productively reinvested for the expansion of material production, they are not superfluous to the production of material wealth of the sort we need to realize communism. On the other hand, the revenues of the state are entirely excess of the production of material wealth and, in most case, actually destructive of material wealth. We want to target the existing state, because its abolition is the precondition for communization of society. Draining the swamp Our goal then is to deny both capital and the state a progressively larger share of our surplus labor time over a five year period — to drain the swamp of the surplus labor time on which the capitalists and their state relies. In first place, this denial should force the out-right reduction of the state sector. In second place, it should force concentration and centralization of capital in order to accelerate the development of the social productive forces as capital desperately tries to restore the rate of profit. The exact mechanism of the above process is described in great detail by Marx in chapter 15 of volume three. Essentially, we need to begin now to use direct action to impose a progressive reduction of hours of labor according to a schedule I have previously discussed: How to abolish wage labor within 5 years in five simple steps: ● STEP ONE: In the first year, add one three day weekend. Each week activists would target one working day to disrupt all wage labor. The work week will now be reduced to four days and all wage labor beyond this point will be targeted. ● STEP TWO: In the second year, add one four day weekend. Each week activists would target two working days to disrupt all wage labor. The

work week will now be reduced to three days and all wage labor beyond this point will be targeted. ● STEP THREE: In the third year, add one 5 day weekend. Each week activists would target three working days to disrupt all wage labor. The work week will now be reduced to two days and all wage labor beyond this point will be targeted. ● STEP FOUR: In the 4th year, add one six day weekend. Each week activists would target four working days to disrupt all wage labor. The work week will now be reduced to two days and all wage labor beyond this point will be targeted. ● STEP FIVE: In the 5th year, add one full week off. Each week activists would target all five working days to disrupt all wage labor. The work week will now be reduced to zero days and all wage labor will be targeted.

This reduction would not be imposed by state laws. In fact, we don’t want anything from the state. We don’t care what politicians promise, nor what laws they propose to enact. They cannot satisfy our demands. We only want them to go away and take their fascist state with them. We rely only on the direct action of committed communist activists. These working class activists, initially numbering in their thousands or even just hundreds, but eventually in their millions, must begin to disrupt, insofar as this is possible, all wage labor in our society. By this I mean that, on the specified day of the work week that we intend to abolish, all wage labor is to be discouraged. Activists will take to the streets to physically prevent other workers from working by closing roads, blocking entrances to factories, office parks and public buildings, disrupting the operations of shopping malls, occupying restaurants and bars to prevent the seating of customers, etc.

We must do whatever it takes to peacefully disrupt business (wage slavery) as usual. At first only serving as isolated propaganda actions, in much the same way as the initial civil rights sit-ins in the South of the United States only served to highlight the abuse to which African American citizens were subject, in

time we must see to it that these actions actually begin to disrupt the wage labor system and have a real measurable impact on both capitalist profits and state revenues. Wage slavery is normalized in our society; seen as a natural and normal condition of society. We must begin to directly challenge the idea that we have to live under the constant threat of starvation. There is no getting past the fact that we must begin, sooner or later, to directly challenge the premises of wage labor.

We cannot evade this issue. So, where do we begin? No one can tell you where to begin disrupting the system of wage labor. There is no central committee. There is no vanguard party. There isn’t even a movement. We begin with nothing. Just like a few activists operating on their own set in motion a process that ultimately brought down segregation in the 1960s. You must directly confront the working class itself and force it to recognize that its slavery is not a natural state of society. The disruption of the system of wage slavery means the direct disruption of the wage slaves who engage in what they think is a natural and ordinary activity. You have to convince them that wage slavery is not natural; that it is horrific; above all, that it is unnecessary.

Contemporary Analysis and the Current Mode of Production

A Brief Sketch of the Political Economy of Barbarism So what is the political economy of barbarism (fascism) and can it be critiqued by labor theory? I would suggest this is very difficult, since the law of value no longer operates freely in such a mode of production. What we take as the real categories similar to the ones found in Marx’s Capital can be entirely misleading unless we are careful in our analysis.

We can begin, as Marx did for political economy generally, by examining the mode of production as it appears in bourgeois political economy itself and do in reverse what Marx did prospectively in some instances. In various places in his writings, Marx clarified the workings of the capitalist mode of production in terms of how similar processes would appear under communism. An example is to be found in a 2011 dissertation produced by Peter Hudis, “Marx’s Concept of the Transcendence of Value Production“.

Hudis argues in chapter four of his dissertation that in Capital Marx makes critical comments about the capitalist mode of production by throwing light on how these

same processes might appear in the new society. He employs these observations in an attempt to construct in rough outline how the transcendence of value might appear in the new society. For instance, he states,

“While the scope of Capital is restricted to an analysis of capitalism, an examination of its most important concepts shows that they contain a number of suggestions regarding his view of a postcapitalist society.” Is it possible to do this in reverse? Can we examine barbarism as it appears in the conception of bourgeois economists in order to relate these ideas to the familiar categories of labor theory analysis of the capitalist mode of production?

One clue to this is provided by John Weeks in a rather astonishing (for me at least) outline of the assumptions of neoclassical money theory in his paper: “The theoretical and empirical credibility of commodity money”. Although Weeks’ aim in this paper is to demonstrate the superiority of a commodity based theory of money compared to the neoclassical idea that ‘anything can be money’, in his attempt, he dissected the neoclassical idea of money for us. As a result of this effort, Weeks laid bare the basic mechanism of fascist state economic policy in a detail and clarity I had not encountered before. Weeks’ discussion demonstrates that barbarism is not, as Luxemburg and Lowy assert, a regression in the mode of production, but an advance in the mode as was indicated by Engels in Socialism, Utopian and Scientific. It turns out state economic policy may be for the American system, what Gosplan was for the Soviet Union: a means of managing the total capital under the state’s control. The distinction between the two must be noted: Gosplan managed the act of labor itself and the production of use values directly. Fascist state economic policy, to the contrary, manages the act of production through the price mechanism, divorced from any particular act.

Both, however, can be thought of as similar to this extent: the whole of the capital operates essentially on the principle of a company town. Everything within the town is essentially owned or controlled by the company; all apparent distinctions between company and town governance is merely formal. The state is not just the representative of capital, it is the manager, more or less, of the process of reproduction of the total capital. In the Soviet system this management is completely transparent, while in the American system, the real and actual role of the fascist state in managing the reproduction of the total capital is indirect and obscured by the very method of management: prices.

So how is this management effected?

As would be expected, any system of management that takes prices as its mechanism of management, must begin with the object serving as money. This method of management requires the state has control over what ever material serves as the money in the so-called economy. According to Weeks, therefore, fascist state economic theory begins with a variant of the quantity theory of money that attempts to demonstrate how the quantity of money in circulation can determine, “the level of output and employment as well as prices and interest rates.”

To be clear (and I will show why this is true) it should be noted that what Weeks calls “prices”, is actually wages, and what he calls “interest rates” is actually profits. So fascist state money theory seeks to explain how the quantity of money in circulation determines employment, output, wages and profits.

Fascist state money theory, says Weeks, presents two difficulties from the outset. The first difficulty is whether the state is trying to determine the prices, employment, output and interest rates on production of only one or several commodities. According to Weeks,

“The standard approach in the neoclassical quantity-based monetary framework is to assume that the hypothetical economy has only one product”

Weeks thinks this assumption is absurd, but nevertheless forced on neoclassical economists: “While the assumption of a single, composite commodity may seem absurd (which it is for most purposes), it is essential in the neoclassical monetary theory.” Is this neoclassical assumption really absurd, however? Of course not. We are after all talking about the capitalist mode of production, where there is only one commodity capable of making real capital of money capital: labor power. The sale and purchase of labor power is the sole necessary commodity transaction in the capitalist mode of production that is the premise of the mode itself. All other commodities produced in this mode of production are more or less raw materials in the production of this one commodity. And the production process of the mode is more or less the consumption of this one commodity to produce surplus value. While there are many commodities within any other system of commodity production, in the capitalist mode of production there is only one real or final commodity. Or, perhaps more accurate, all other commodities are only the production of this one commodity at its various stages of production. In any case, the whole of capitalist production can be conceptualized as essentially the production of labor power.

If the entirety of the output of a capitalist economy can be conceptualized as the production of a single commodity, labor power, the entirety of prices in the economy can be conceptualized as wages plus profits. As the blogger Sam Williams has pointed out, in neoclassical theory the term ‘interest rate’ has been substituted in place of the term ‘profit’. When neoclassical economists refer to the ‘rate of interest’, they are simply referring to the ‘rate of profit’, and nothing more. (I do not think this is

an accident, but is determined by the very regime of accumulation in advanced capitalist economies.)

The second difficulty for fascist state economic theory is what serves as the money in the economy. Neoclassical theory assumes “the quantity of the means of payment is determined ex machina by an entity usually identified as the ‘monetary authority’.”

Can the state determine the supply of money? Weeks’ discussion of this problem is not at all satisfactory, because he never grasps that the state control over what serves as the money in the economy arises because real (commodity) money no longer can circulate as money. It is not that the control over money is usurped from society by the state, but that society itself expelled money from circulation. This is not a mystery: we know exactly when and under what circumstances money was removed by society from circulation. And we know exactly how and under what circumstances the state had to step in with its own fiat as substitution for this catastrophic event.

The cause in both cases are identical: commodity production came to an end. Once commodity production came to an end, commodity money could no longer serve as money in the so-called economy. Labor theory emphasizes this: the movement of money is only a reflex of the movement of commodities. (How many times must this be repeated before goddamned Marxist academics get it through their thick skulls.)

The very same events that forced the fascist state in Washington to substitute its valueless fiat dollar for money, therefore, brought the whole of productive activity within the world market bound up with the dollar under Washington’s control. This was the culmination of decades of catastrophic development, consisting of two world wars, a massive depression, and the imposition of an effective hegemony over the national capitals of all advanced capitalist economies by Washington.

Let’s see why this is true. Weeks explains that to understand the neoclassical theory, we have to “begin as capitalist exchange presents itself.” In a given time period, the sum of all sales (total number of commodity sold times their prices) is equal to the sum of all purchases (total means of purchase used in those transactions). If we divided the sum of purchases by the sum of means used to make purchases, we get the turnover rate of money. In standard neoclassical theory, there is only one commodity and the state controls the quantity of money in circulation. Thus, in order to erect a quantitative theory, therefore, neoclassical theory has to assume the turnover rate of money (velocity) is constant.

In labor theory the velocity of money rises or falls with the movement of commodities, but in neoclassical theory, it is constant. Since there is only one commodity in the economy and since the turnover of money (v) is constant, neoclassical theory proposes any change in the quantity of money in circulation will increase the price or the quantity of the single commodity. The state can, therefore, simply increase the prices and quantity of the single commodity by adjusting the quantity of fiat in circulation.

This argument, states Weeks, is vulnerable on a number of counts: First, there is not one, but millions of different commodities produced in the world market. Second, Weeks claims fiat behaves like commodity money, with some portion of fiat held idle. Thus the quantity of fiat in circulation may not equal the quantity counterfeited by the Fed. Third, Weeks claims the neoclassical theory is only valid if the output is constant. Lastly Weeks claims neoclassical theory is ultimately done in by the realization no state can determine the quantity of money in circulation.

So let’s take these objections one by one to see if Weeks critique of neoclassical theory is valid.

First it has to be stated that if we were dealing with a system of commodity production, Weeks would not only be true, he would be dead on. But we are not dealing with a system of commodity production — there is, in fact, only one commodity produced in this system. That commodity is labor power. which is the source of surplus value, and hence the only necessary commodity in the entire mode of production All other ‘commodities’ in this system are mere use values: they are not commodities, but the raw material necessary for the reproduction of labor power.

Second, we are talking about a continuous process of circulation, where capital must always circulate to be capital. The problem here — the obstacle to the continuous circulation of capital — is itself commodity money, which is why society abolished it. To prevent capital from becoming a hoard of commodity money, commodity money had to be replaced by valueless token dollars. The assumption here is that these valueless tokens will remain in circulation because they are money-capital, not money. So, the assumption in labor theory is that no capital is held idle and money that is held idle is not capital. This assumption suggests neoclassical theory is only concerned with money-capital, not money at all. Moreover, as I will show, the velocity of money has no significance whatsoever under barbarism.

Third, the assumption that the system is always at full potential is very odd. The self-expansion of capital is already given as the aim of the capitalist mode of production. And the exploitation of labor power (the sole commodity consumed) the production of surplus value is already given as the means to this aim. As I will show, just as v (turnover) has no meaning under barbarism, so Y — that is labor power — has none at all.

Fourth, this is the triggered my understanding of how profound Weeks’ paper was. Weeks argues “Not even in theory can there exist a monetary authority that determines the quantity of money.” This statement has to be seen as absolutely true, BUT entirely beside the point: society has already set the quantity of money at zero. It set the quantity of money at zero when it removed all commodity money from circulation and forced the state to replace it with fiat. The rest of Weeks’ paper is devoted to this problem, but the problem doesn’t actually exist. In the mode under consideration, barbarism, the total sum of money in circulation, in all currencies and forms, is zero. Moreover, the total sum of the various monies and near monies in circulation has to be zero because real money, and any token of money pegged to it, won’t circulate AS MONEY.

The argument by neoclassical theory in this instance is a feint, and Weeks fell for it, as I will show. It is obvious that the Federal Reserve cannot itself determine the quantity of money, even if it had a definition that was less bullshit than the one offered by neoclassical theory. As Weeks shows, this definition basically comes down to this: nothing will be allowed to threaten the position of the dollar as reserve currency in the world market. Weeks puts it this way:

“The essence of the neoclassical monetary problem can be simply stated: the theory provides no nominal anchor for prices. Without a nominal anchor, the need to define and restrict what can serve as money is absolute.” (my emphasis) Simply stated, The United States will turn this fucking planet into a SMOKING CINDER before it lets any other currency threaten the dollar’s position as world reserve currency. Academics are entirely too polite when it comes to telling the rest of the world the limits to their behavior that will be tolerated by Washington. Misconceptions, like the US will stand by idly and let other nations challenge the dollar, must lead to Iraq being reduced to a mass of burning flesh and screaming women and children. So while Weeks is trying

to prove why an ounce of gold serves better as a measure of value in the economy, the US is explaining the harsh realities of fascist state economic policy to recalcitrant pupils in Afghanistan, Libya, Syria, etc.

Anything can be money?

Although fascist theory states anything can be money, it turns out the real problem, if neoclassical theory is to be believed, is precisely that “anything can be money”, which is to say, in barbarism, money is a worthless token whose function can be filled by ANYTHING. Under this condition, the fascist state has to ensure that its token alone serves as money, to the exclusion of all other tokens. The real monetary policy of the United States, according to Weeks, consists entirely of preventing any competitor to the dollar to emerge.

Weeks argues: “The theoretical ambiguity is implied, since something which can be anything has no separate existence from all other things. The existence problem derives from the methodological core of neoclassical economics, the combination of the assumptions of individual utility maximization and full knowledge of the information generated by markets. If people have full knowledge of all markets, they will know the money price at which each commodity would be bought and sold. If they know this, they can exchange commodities directly without passing through the intermediary of money.” This criticism is badly stated: In a factory system, unlike the market, it is not true that economic actors have no knowledge of the socially necessary labor time required for the production of their commodities. Since in the factory system all production proceeds according to a plan — however despotic this plan may be — the requirements of the activity of producers does not have the anarchistic character of a society of individual producers each of whom carry on their activity in isolation. Money itself arises because

the activity of isolated individual producers only becomes social in the act of exchanging their commodities. In the factory system no such impediment occurs and there is no need for money arising from exchange of products.

This can easily be seen when we evaluate the equations provided by Weeks in his paper: In equation 1, the sum of all purchases is equal to the sum of all payments:

Sum (P1Q1) = Sum M1

What is the value of M1? In neoclassical theory this value is assumed to be zero since money itself has no value. Which is to say, the sum of all transaction is always zero no matter how large the number or how big each transaction is. The value of the total trade between the US and China has exactly the same value as a candy bar: zero. If the sum of all transaction is zero, the sum of all purchases must be zero as well, e.g. the prices of all the commodities purchased and sold in the US annually (GDP) is zero.

This, mind you, is not an artifact of some silly assumption of neoclassical theory: in order for fascist state policy to work, the products of labor no longer can be treated as values, as commodities; they can only be treated as use values. In order for the fascist state to take the management of the total capital of the world market under its control it must, at the same time, strip this capital of its labor values.

Since the total capital of the world market can only be managed as a whole if the products of labor is treated as non-commodities, as mere use values, what function do prices play in this system of production? If prices do not result from the socially necessary labor time required for the production of goods, they must have some other cause. Marx already has established the values of commodities do not arise from anything particular to those

commodities — weight, color, etc. No particular characteristic of individual commodities plays any role in the determination of their value.

Now, if neoclassical theory is to be believed, and the characteristics of the currency employed in the economy tends to support their assertion, socially necessary labor time itself plays no role in the determination of their prices. But, the exchange value (price) of an object is a wholly social relation between people that appears in the form of a relation between things, so this would suggest that price in this case expresses an implicit relation between the social producer and the product of her labor: it is not hers. The product of her labor belongs to the issuer of the currency that serves as money in the transaction.

But it seems to me this does not exhaust the issue: in the exchange of labor power for wages, the worker is paid nothing. Since the currency with which she is paid has no value, from the standpoint of both labor theory and neoclassical theory, she is working gratis. Isn’t this right? It is not as though labor theory comes to one conclusion and neoclassical theory another — both agree on this — a valueless inconvertible token cannot express the value of any commodity.

Fiat currency, therefore, stamps not only the product of her labor, but the worker herself as the property of the fascist state. How the fuck is this not slavery? What the fuck am I missing here?

See, here is the problem: the worker has no means to life nor access to any means to produce those means. She is, therefore, absolutely dependent on selling her labor power to access those means. But the sale of her labor power for valueless fiat in no way constitutes an exchange of equivalents — she has essentially given it away.

This is not just the conclusion of labor theory analysis of the transaction, it is the conclusion of fascist state economic policy itself. Which means fascist state economic policy BEGINS with the assumption that the worker is not paid for her labor power. It begins with the assumption that all sales and purchases of labor power in the so-called economy are fictions. Labor theory does not disagree with this conclusion: it confirms that, indeed, every transaction in this economy is a fiction.

And this raises no red flags among the Red Flag people?

The value of any commodity can only be expressed in the form of an exchange value contained in the money. Fascist state issued currency — the dollar — has no value at all and, therefore, cannot express the value of a commodity in its own material. This is not an accident of history, the fascist state from the beginning sought to replace money with an object having no value. Moreover, this has to be emphasized: I am not talking about sterile competing theories of money here, I am describing what is actually occurring in the ‘economy’ right now. A transaction in which one individual must provide to another an object of value in return for nothing is not a transaction, it is slavery. The pieces of scrip floating around through the economy as a result of ‘transactions’ of this sort, are only a distraction. The pieces of scrip conceal the unique feature of barbarism: in this mode of production the worker herself is the property of the state. The worker in this mode of production is no longer the doubly free laborer Marx wrote of under capitalism: she is free of all means to life, but free also from the ‘burden’ of her peculiar property. She is, in other words, absolutely impoverished, absolutely immiserated, completely bereft even of herself — and this no longer merely the result of exchange relations. Alienation (to use a term that will be comprehensible to our dumb fucking Marxist academics with eight fucking semesters of god-damned Hegel) has reached its extreme expression within

society, in which the vast mass of the population no longer even own themselves, but merely inhabit the property of the fascist state.

The Weird Netherworld of Barbarism The odd case of superfluous labor time Based on the assumptions Marx employs in Volume 3, superfluous labor time should not exist under capitalism. At the same time, the mode of production is the production of surplus value, i.e., labor time that is

superfluous to society. These two ideas mean that when superfluous labor time does actually emerge in the social labor day, a crisis should erupt and the capital produced during this superfluous labor time should be devalued. So all of the evidence pointing to a large amount of superfluous labor time in the economy suggests something else is at work. This something else has allowed the accumulation of superfluous labor time within the social labor day for almost seven decades.

So, for seven decades capital has gone without flushing the superfluous labor time out of the labor day. This is like the pressure building along a fault line that is long overdue for an earthquake. One of the difficulties conceptualizing how capitalism “just dies on its own”, is actually understanding how this can happen practically. Since capitalism “survived” the Great Depression, it seems it can survive anything — it is just a matter of how much suffering there is among the working class. In this view, given enough time, capitalism will adapt itself to its crisis.

In fact, capitalism adapted after the Great Depression by means that imply a massive terminal event that can be conceptualized this way: Almost all accumulation since World War II has taken the form of superfluous capital. When this superfluous capital is devalued, it will take the entire mode of production with it in one massive event. Capitalism as a mode of production is already dead in fact, but manages to keep itself alive in the form of the accumulation of superfluous capital. All the effort of the fascist state at present is aimed at trying to forestall the devaluation of excess capital. Eventually, the effort must fail, devaluation will ensue and seven decades of history will unfold in a matter of days or weeks. There is no question this is going to happen. We saw it in the death throes of the Soviet Union. If a centrally planned capital can implode in a matter of weeks any capital can and will.

Additionally, almost all bourgeois economists and labor theorists have noted the slowing of the growth rate. Larry Summers’ discussion last year focused on what he called stagnation of growth (which he argues is not a temporary problem). Among labor theorists the tendency has been noted since the 1960s-1970s. Even earlier than this, Hansen discussed the problem of stagnation in the 1930s during the Great Depression. However, although labor theorists have sometimes used superfluous labor to explain stagnation, they have never explained superfluous labor itself — it is simply a convenient crutch for their analysis. In fact, there is nothing in labor theory that gives credence to Hansen’s stagnation thesis. Which is to say, there is nothing in labor theory that suggests the rate of capitalist growth slows. According to Marx, capitalist crises add momentum to its rate of growth.

No depression since World War II On the other hand, stagnation in the rate of growth has been accompanied by the remarkable absence of a replay of the Great Depression since World War II. There is at least a strong correlation between the tendency toward stagnation, accumulation superfluous labor time within the social labor day and the absence of depression. This strong correlation among the three suggests over the last 60-70 years the three may be linked in some way. Moreover, in labor theory there is no more explanation for the long absence of depressions than there is for stagnation and the accumulation of superfluous labor time. So here are three things — none of which can be explained by labor theory of value, but all correlated temporally.

And what else emerges during this time? Secular inflation of prices or the constant depreciation of state issued currency. The period also witnesses the collapse of the gold standard and the emergence of inconvertible fiat currency. Finally, we begin to hear that the state has a role to play in managing the socalled “business cycle”. Okay, so the tendency toward stagnation and accumulation of superfluous labor time in the work day might be written off as coincidental, right? But add in the fact that there hasn’t been a depression since World War II? Does this now seem a little less like a coincidence? Toss in rampant sustained post-war inflation and the breakdown of money into commodity and inconvertible fiat. Now it seems as though either Marx was horribly wrong about capitalism, or something else is happening. Add in state managed capitalism and I think it is safe to say we are not in Kansas anymore. But, hold on! We haven’t even touched the surface of this shit yet. The capper to this — the thing that calls Das Kapital itself into question — is this: jobs now have to be created by the state! Since the capitalist mode of production is nothing more than the employment of labor power for the purpose of producing surplus value, how the fuck do jobs have to be created by state? There is only one explanation for this that is consistent with labor theory: the additional employment of labor power no longer creates additional surplus value.

Is capitalism already dead? Frankly, once you begin to add up all the seemingly coincidental facts of our time, I don’t see how you escape this conclusion. What separates Das Kapital from an economics textbook is not just that it accurately describes the capitalist mode of production, but that it also predicts historical conditions under which the analysis present in Das Kapital will no longer be relevant. Several times Marx goes off on these tangents where he describes how the future society will not operate like capitalism. And in these excursion into the future society Marx never describes, in Das Kapital or anywhere else for that matter, a situation where the state has become responsible for creating jobs.

As @JochemDeVr pointed out, when Marx spoke of conditions where Das Kapital did not apply, he was generally speaking about socialism. I think this is absolutely correct. So are we now living under socialism? Let me rephrase this question more broadly: Do so many fundamental categories of Marx’s analysis appear to contradict him because capitalism no longer exists? Let me just make an observation along these lines: Almost all Marxists argue that the end of capitalism is not the same as communism. Okay. Then if this is true, have we already passed the end of capitalism and are now in some netherworld between capitalism and communism? Postone argued that Kurz’s prediction of capitalist collapse was wrong. Capitalism, says Postone, cannot just collapsed but would give way to a sort of barbarism. Kurz argued in response that were capitalism to collapse without a revolution, it would indeed look just like Postone’s barbarism. For both Postone and Kurz the description of this barbarism looks surprisingly like today — megacities occupied by a superfluous population, policed by the state. Connect the list of phenomena that appear to contradict Marx with these huge megacities of superfluous proletarians and I see barbarism. (Of course, I call it fascism — but this is only semantics.)

Did capitalism collapse, but not get replaced by socialism as Marxists say would happen in absence of a proletarian revolution? This gets to the question of what Barbarism is. There is no literature on the political-economy of barbarism, so we don’t even know what we are dealing with. But we do know this: the phenomena I listed are features of this period — features that appear to contradict Das Kapital.

Here is another thing: What is the difference between barbarism and socialism? Both seem to imply capitalism has collapsed, but only socialism assumes the working class has seized power. Barbarism assumes, at a minimum, the working class did not seize power. So if capitalism no longer exist, and the proletariat is not ruling on its own behalf, who or what is exercising power at this point?

Barbarism as a form of transition to communism? Let me offer an possible idea along these lines: In his critique of the Gotha Program, Marx speaks of a period of revolutionary transformation of capitalism into communism. We already know socialism is that period of transformation under the rule of the proletariat. Is it just possible barbarism is this same period of transformation under the rule of capital? I know this might sound far-fetched, but we already widely assume capitalism can collapse without producing socialism. And we already widely assume this failure by the working class to assume power must result in barbarism. The question then comes down to whether barbarism is also a transition of sorts to the higher phase of communism. A transition where the proletariat cannot assume power, but the capitalist can no longer rule.

This sort of formulation appears in Lenin’s writings to describe “dual power”, right? One thing Lenin says in “Dual Power”: While the analysis of Marxists might on the whole be right, “their concrete realisation has turned out to be different.” We expected socialism after the collapse of capitalism, but instead we got barbarism. Capitalism collapsed, but the proletariat could not establish its own rule. The question raised by this awful state of affairs is whether communism still results at the end of this awfulness or not. Is barbarism a permanent state of mankind, as most Marxists seem to believe, or does it have a trajectory just like any other mode.

The trajectory of socialism begins with the abolition of wage labor and the establishment of the principle: “He who does not work, neither shall he eat.” Although wage labor is abolished, the level of development of the productive forces does not allow labor itself to be abolished. A form of state is established where access to the commonly produced means of consumption is made dependent on a labor contribution. This is nothing more than a state of the producers: their association and it is enforced over the former owning classes — essentially, the property of the capitalists and landlords is made common property and they are told to get real jobs. That is the trajectory of socialism: eventually the need for labor disappears and so the requirement. Once completed, society passes over to realm of “To

each according to his needs.” A labor contribution is abolished as a condition for access to the commonly produced means of consumption. So does barbarism have a trajectory similar to this? Barbarism implies wage labor is not abolished, so does it also imply no transition to communism? Are we stuck forever in a netherworld of wage slavery that no longer produces anything of value? Insofar as Marxists have given this any thought at all, the answer appears to be that barbarism is some sort of permanent state. It can just go on forever — it has no trajectory, no political-economy, no future: it is the Marxist equivalent of the end of history. However, it seems to me that barbarism is a readily accessible to critical analysis as capitalism. Social labor progressively loses its substance, i.e., its capacity to produce value. Money is steadily depreciated toward zero. The state is forced to assume control of more and more of “economic activity”. And employment increasingly stagnates. This looks a lot like a definite trajectory to me.

Class Struggle and the Breakdown of Production Based on Exchange Value

You have to notice what the labor theorist, George Caffentzis, asserts in his essay “Marxism After the Death of Gold“. Although, according to Anitra Nelson, Marx believed the credit system itself “signals

the disintegration of capitalist relations”, according to Caffentzis, the final detachment of the credit system from gold refutes Marx. Caffentzis and other labor

theorists had two ways of interpreting Nixon’s actions in 1971: the death of capitalism or the death of labor theory. Guess which one they chose. For labor theorists like Caffentzis, the collapse of the Bretton Wood agreement wasn’t a signal that production on the basis of exchange had finally broken down completely, rather, it was a signal that Marx turned out to be completely wrong about such an elementary and fundamental category of his labor theory as money.

Thus, throughout the 1970s, we have these Marxists who are trying to explain the relationship of the state to the mode of production yet don’t even realize production based on exchange value no longer exists. Moreover, as the recent publication of Caffentzis’ essay demonstrates, even 40 years later they don’t realize it. Yet we are expected to believe these labor theorists are able to explain the relationship of the state to a mode of production that effectively ceased to exist in 1971? It is, of course, a heresy these days to suggest production on the basis of exchange value no longer exists, despite the fact Marx predicted just such an outcome. Even if Marx had not predicted precisely this outcome, all the evidence at the disposal of labor theorists point to this conclusion. The fact that on top of Marx’s prediction, the evidence available to labor theorists supports this conclusion only makes their errors that much more egregious and unforgiveable.

If production on the basis of exchange value had already ceased to exist by the time of the debate of the 1970s, what then was the “function” of the state? The question answers itself: the function of the state was to facilitate the production of surplus value in a period where exchange value no longer existed. The production of surplus value did not cease, but the newly produced surplus value could no longer be expressed in the form of exchange value. To be expressed in the form of exchange value required a commodity money to serve as standard of prices, however, in 1971, the US was forced to end redemption of dollars with gold under the Bretton Wood agreement. Henceforth dollars could only be redeemed for dollars, or, what is the same thing, the dollars themselves become “world money”. The role played by gold as world money came to an end along with breakdown of production on the basis of exchange value in the world market.

Facilitating the production of value amidst the breakdown of production based on exchange value is not a function of the state in general; rather it is a function that can only be played by one state in particular: Washington. No other state has this capacity and, therefore, in relation to Washington, all other states are merely failed fascist states. Thus, by the 1970s, the relation of the state to the mode of production came down to the relationship of Washington to the total capital of the world market. Since the relationship of “the political” to “the economic” (as Clarke puts it), is the relation of any given state to the total capital of the world market, it is obvious that, contrary to Holloway and Picciotto’s argument, the class struggle of any country has no impact whatsoever on this relation. The class struggle in Britain is over which class will control the state power in Britain, but the state power in Britain has no control over the total capital of the world market. The same, with more or less the same degrees of validity, can be said of the class struggles in Greece, Spain, Russia, Ukraine, etc. What does it mean to say production on the basis of exchange value finally broke down in 1971? It means, in first place, that capital could no longer become money and, unable to become money, could not be exchanged for labor power. As explained in Wage Labour and Capital, “Capital perishes if it does not exploit labour-power, which, in order to exploit, it must buy.”

To exploit wage labor, capital must first become money, i.e., the surplus value produced exploiting labor power must be realized in a sale. The breakdown of production on the basis of exchange assumes no more than this leap of value from commodities to money cannot take place. This is exactly the situation France and other advanced capitalist countries found themselves in when Nixon closed the gold window. The dollars they accumulated through trade surpluses with Washington were only placeholders, tokens, of money to be redeemed for gold. When Nixon refused to redeem the dollars for gold, these countries were forced to recognize the dollar as “money”, just as previously their own citizens were forced in the 1930s to recognize the tokens issued by each state as such.

But the recognition of US dollars as “world money” amounted to the exchange of commodities for a symbol of money having no value at all. It was, in fact, the recognition that the commodities themselves had no exchange value and, therefore, that the surplus value they contained could not be realized. Although nations protested this state of affairs, outside the dollar zone the limits of surplus value realization was severely constrained. To realize the surplus value in the form of a trade surplus, this trade surplus had to be realized in the form of valueless American tokens. And this was because no other nation was willing or able to run the trade deficit necessary to absorb the excess capital accumulating within the world market. Just as Keynesian style deficit spending had been shown to be necessary to avoid depression within each nation, the deficit spending of the United States was now a condition for production of surplus value in the entire world market.

Labor power, the Law of Value and social production as an emergent property

This post continues from here Marx was emphatic that labor power is not labor; it is a commodity. But he was equally emphatic that it is not an ordinary commodity. According to Marx, labor power is a peculiar commodity, what we today would call a superposition — a mashup — of the two categories: a commodity,“whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value.”

Labor power is a social, scalable commodity; essentially, forming one homogenous mass composed of billions of individual units, each of which are assumed, in Marx’s theory, to possess the properties applying to the whole.

Also, unlike labor, but like commodities in general, labor power has exchange value, which, according to Marx,“resolves itself into the value of a definite quantity of the means of subsistence [that] varies with the value of these means or with the quantity of labour requisite for their production.” In other words, the exchange value of labor power is equal to the value of the means of subsistence required to maintain it. The consumption of labor power, the act of labor itself, creates both use-values and values, in the form of commodities. Unlike the consumption of any other commodity in the act of production, however, this consumption of labor power — its expenditure in the act of labor — does not simply pass into the value of the new use-values, but creates new value. So, sharing characteristics of both the commodity (in that it possesses a definite value) and labor (in that it creates new value), labor power possesses a twofold character. And, like all commodities, it is the use-value of labor power, not its exchange value, that is relevant to its purchaser, the capitalist. Relevant for good reason in this case: The use-value of labor power is the very premise of the capitalist mode of production: the production of surplus value, production of profit. ***** Let us consider the consumption of labor power. As I do occasionally, today I went to the grocery store. In observance of the ongoing disaster in Louisiana, I purchased commodities to be used for a dinner of red beans and rice: ● ● ● ● ●

1 pound dry kidney beans olive oil 1 large onion 1 green bell pepper garlic

● ● ● ● ● ● ● ● ●

celery bay leaves cayenne pepper thyme sage parsley Cajun seasoning 1 pound andouille sausage long grain white rice

Following my favorite recipe, I prepared my ingredients and made a delicious meal, which I and a few friends enjoyed. Now, although I enjoyed my meal with a few friends, the consumption of the meal was, technically speaking, a private, individual affair. It was social insofar as I invited my friends to consume it with me, but I could have just as easily consumed the commodities I purchased and prepared entirely by myself, right?

(Okay, what’s the point of all this blather, Jehu?) The point is that the consumption of labor power isn’t like the consumption of the commodities that went into my red beans and rice. In the first place, the consumption of the meal of red beans and rice created no new value; rather, in this consumption the value of the ingredients were consumed unproductively. Second, the consumption of labor power is never an individual act. Now, there are examples of commodities that are consumed socially, of course — a passenger plane is a good example. But even a passenger plane can be converted into a private jet and used by a wealthy person, like Donald Trump.

With labor power, however, it is otherwise. As a commodity, the consumption of labor power is always directly and irreducibly a social act,

carried on by at least two people: a capitalist and a worker — and usually more than one worker at that. And since this consumption is also an act of production — the production of surplus value, production of profit — this act of capitalist production is immediately social as well. Which makes the social character of this sort of labor an emergent property within commodity production generally. What do I mean by an emergent property? According to the Wikipedia, “An emergent property of a system, in this context, is one that is not a property of any component of that system, but is still a feature of the system as a whole.” In this case, none of the members of a community engaged in commodity production exchange are assumed to engage in directly social labor. Instead, according to Marx, the members of the community carry on their labors in isolation:

“As a general rule, articles of utility become commodities, only because they are products of the labour of private individuals or groups of individuals who carry on their work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact with each other until they exchange their products, the specific social character of each producer’s labour does not show itself except in the act of exchange. In other words, the labour of the individual asserts itself as a part of the labour of society, only by means of the relations which the act of exchange establishes directly between the products, and indirectly, through them, between the producers. To the latter, therefore, the relations connecting the labour of one individual with that of the rest appear, not as direct social relations between individuals at work, but as what they really are, material relations between persons and social relations between things. It is only by being exchanged that the products of labour acquire, as values, one uniform social status, distinct from their varied forms of existence as objects of utility.”

—The fetishism of commodities and the secret thereof, Chapter one, Capital, Volume 1 The emergent directly social property of labor based on the purchase and sale of labor power is a novel characteristic within commodity production and exchange generally. The capitalistically-produced commodity is, therefore, an anomaly in this world of commodity production. It is not the product of the labor of private individuals who carry on their work independently of each other. Its producers do not first come into social contact only when they exchange their products. The social character of their production does not need to be validated as social through an exchange. The relations connecting the labor of one individual and another are already directly social. The social character of their labor is manifested immediately in the act of production itself.

This emergent form of production is directly and irreducibly social, and its product, surplus value, is immediately a social product as well. ***** If I am correct that the commodity labor power is an emergent form of directly and irreducibly social production, and its product, surplus value, is immediately a social product as well, I think it follows that the social character of this mode of production determines the peculiar expression of value in the prices of capitalistically produced commodities. Now, what do I mean by this? In his critique of Marx’s labor theory of value, Bohm-Bawerk rather stridently criticized Marx for engaging in a tautology in his transformation of value into prices of production: “The state of the case is this: To the question of the problem of value the followers of Marx reply first with their law of value, i.e., that commodities exchange in proportion to the working time incorporated in them. Then they–covertly or openly–revoke this answer in its relation to the domain of the exchange of separate commodities, the one

domain in which the problem has any meaning, and maintain it in full force only for the whole aggregate national produce, for a domain therefore in which the problem, being without object, could not have been put at all. As an answer to the strict question of the Problem of value the law of value is avowedly contradicted by the facts, and in the only application in which it is not contradicted by them it is no longer an answer to the question which demanded a solution, but could at best only be an answer to some other question.

“It is, however, not even an answer to another question; it is no answer at all; it is simple tautology. For, as every economist knows, commodities do eventually exchange with commodities–when one penetrates the disguises due to the use of money. Every commodity which comes into exchange is at one and the same time a commodity and the price of what is given in exchange for it. The aggregate of commodities therefore is identical with the aggregate of the prices paid for them; or, the price of the whole national produce is nothing else than the national produce itself. Under these circumstances, therefore, it is quite true that the total price paid for the entire national produce coincides exactly with the total amount of value or labour incorporated in it. But this tautological declaration denotes no increase of true knowledge, neither does it serve as a special test of the correctness of the alleged law that commodities exchange in proportion to the labour embodied in them.”

-Bohm-Bawerk, “Karl Marx and the Close of His System”, CHAPTER III Clearly, Bohm-Bawerk misunderstood Marx’s point here. Far from expressing a mere tautology, Marx is describing capital as something completely unprecedented in the 7,000 year history of commodity production. In the first place, Marx was not describing the “whole national produce”, whatever Bohm-Bawerk meant by that phrase. Marx solely is describing the social product of the total social capital of society. Nothing here applies to any but the specific commodities produced by capital.

Second, contrary to Bohm-Bawerk, although in Marx’s theory the total social capital functions as a single individual commodity producer, this total social capital continues to appear in the market to other commodity producers (and to bourgeois simpletons as well) as what it really is: a gaggle of competing individual commodity sellers, exchanging commodities side by side with other individual commodity producers — the latter whom carry on their individual labors independent of one another. However, what is distinctive about this peculiar commodity seller is not only that it appears to be composed of many competing commodity sellers operating separately, but that it is, in reality, a single social producer, encompassing the total social capital, composed of innumerable labor powers — billions of social producers — who carry on their labors under conditions of directly social production. Yes, in the market they really do appear to be separate firms, but this appearance is misleading! To understand the profound implications of Marx’s argument, we have to examine how Marx discusses the relationship this peculiar commodity seller has, not as the seller of commodities in the market, but as buyer of that peculiar commodity that is alone capable of turning the capitalist’s money capital into real capital, labor power: “The more or less favourable circumstances in which the wage working class supports and multiplies itself, in no way alter the fundamental character of capitalist production. As simple reproduction constantly reproduces the capital relation itself, i.e., the relation of capitalists on the one hand, and wage workers on the other, so reproduction on a progressive scale, i.e., accumulation, reproduces the capital relation on a progressive scale, more capitalists or larger capitalists at this pole, more wage workers at that. The reproduction of a mass of labour power, which must incessantly re-incorporate itself with capital for that capital’s self-expansion; which cannot get free from capital, and whose enslavement to capital is only concealed by the variety of individual capitalists to whom it sells itself, this reproduction of labour power forms, in fact, an essential of the reproduction of capital itself. Accumulation of capital is, therefore, increase of the proletariat.”

-Karl Marx, Capital, Volume, chapter 25

(emphasis mine) Bohm-Bawerk, typical of bourgeois economists and commodity sellers in general, sees in the market only buyers and sellers of commodities, and believes, for this reason, that what is taking place in the market is fully explained by the actions of buyers and sellers of commodities. This is what is now referred to as a reductionist position: the belief that a mode of production is no more than the aggregate of the sum of its parts. Bohm-Bawerk can, therefore, see no reason why under the conditions Marx describes the law of value undergoes a definite emergent modification wherein the prices of commodities produced by this peculiar organism, capital, are determined socially; rather than, as under non-capitalist commodity production, according to labors of individual producers who carry on their activities in isolation and only meet for the first time in the market to exchange their products.

To put this another way, within the capitalistic mode of production the prices of individual commodities, including labor power, are as irrelevant as they are between departments of a single factory. Capital is solely concerned with the production of surplus value, production for profit; and this emergent social form of labor takes place only as a result of the operation of the mode of production as a whole.

As I will show, contrary to writers like Heinrich, this conclusion naturally leads to the inevitable collapse of production based on exchange value.

How the state began systematically privatizing profits and socializing losses In my previous post I showed that unemployment in the capitalist mode of production has its genesis in employment. Unemployment is not the result of a lack of means to employ the unemployed, but results from the fact that

the steady improvement of the productive power of labor displaces an ever larger portion of the working class from all possibility of being employed productively. In the mode of production, to be employed productively means the worker is employed directly for production of value and surplus value. It has to be understood that capitalism is not the production of useful objects in general, but useful objects only insofar as these objects also contain surplus value, i.e., profit.

With development of the productive forces — of machinery, technology, science and the division of labor — an ever larger mass of useful commodities can be produced in the same period of time. On the other hand, a given mass of commodities can be produced with a diminishing expenditure of human labor.

The capitalist is not concerned with the ever growing mass of useful objects that can be produced, but with the diminishing expenditure of human labor necessary for production. This human labor alone is the source of the profits that is the sole aim of capitalist production.

Capitalism, therefore, presents the paradox that as material wealth increases conditions for realization of surplus value diminishes. The very improvement in the productive forces that allow creation of historically unprecedented masses of

material wealth, is expressed in the increasingly difficult conditions for the production of value and of surplus value. But the motive of capitalist production is the production of value and surplus value, of profit. The production of material wealth is subordinated to the capitalistic necessity that this material wealth contain value, and exists as wealth for the capitalist only insofar as it contains values. Labor that produces material wealth that has no value is, for the capitalist, unproductive labor — no matter how useful the product may be. However the capitalist has no idea of the value contained in his commodities; thus, like every other seller of commodities, he can only find out how much value he has produced by trying to sell his commodities in the market. If he cannot sell all of his commodities, the unsold portion is only then revealed to contain no value. Although unproductive labor appears to have its genesis with unsold commodities, in fact, the unsold commodities are already themselves the product of unproductive labor. This is labor that produces an object that has no exchange value at all — that cannot be sold for hard cash. Despite this, however, empirically, unproductive labor appears first as a mass of unsold commodities and not as an expenditure of labor that produces no value. The bourgeois simpletons take this appearance for reality and declare there is “insufficient demand” for the commodities and by “demand”, they only mean “money demand”, i.e., a customer with the cash in hand to purchase the commodity.

When this situation first arose in the Great Depression Keynes suggested that the problem of “insufficient demand” could be remedied by advancing excess capital to the state on credit. Keynes argued businesses would not expand their production operations until profits began recovering and output increased:

“Thus the first step has to be taken on the initiative of public authority; and it probably has to be on a large scale and organised with determination, if it is to be sufficient to break the vicious circle and to stem the progressive deterioration, as

firm after firm throws up the sponge and ceases to produce at a loss in the seemingly vain hope that perseverance will be rewarded.” Now you have to mark what Keynes is arguing for in this passage: The unsold commodities piling up in warehouses in every country was the product of labor already expended unproductively on their production. Keynes simply argued that the costs of this unproductive labor already laid out by the capitalists for labor that produced no surplus value and thus already lost could be transferred to the state sector by means of loans advanced to the state for this purpose. The state would absorb an ever increasing mass of unproductive labor time by taking on an ever increasing mass of debt from private capitals. In this way, the overproduction of private capitals would be facilitated and subsidized by the steady accumulation of public debt. The state would pay interest on the public debt, adding to the mass of profits and thus offsetting the falling rate of profit. Thus, the “privatization of profits and the socialization of losses”, that was so evident in the financial crisis of 2008, had its genesis in Keynes’s scheme for escaping the Great Depression. So far as I know, no labor theorist has ever actually described how this nasty little scheme works: By extending credit to the fascist state, private capitals are able to dump their unsellable commodities on the public, while ensuring a steady stream of lucrative interest payments from the fascist state. And here the role of the state cannot be overestimated: in a credit transaction the buyer himself stands in place of his money. As Anitra Nelson explains, in labor theory the buyer himself and his reputation is the means of payment: The validity of a transaction, therefore, rests on the ability of the individual to make good on his IOU and in this regard, the state, the issuer of the currency, has no equal as guarantor of its debts. While debt increases exponentially with chronic or absolute overproduction, in the final analysis the only debt that matters is that of the fascist state. Debt increases not because of the lack of sufficient means (cash) to purchase the commodities, but because the commodities themselves have no exchange value and, therefore, cannot be sold unless the means to buy them are advanced to the

buyer by the seller. On the other hand, real (i.e., commodity) money falls out of circulation because exchange relations cause it to be exchanged below its value.

These two appear side by side: a mass of ‘commodities’ lacking any exchange value and withdrawal of a mass of commodity money into hoards. The resultant “credit crisis” produces the breakdown of production based on exchange value, forcing the state to step in and substitute its own valueless tokens in place of money. So, is there a limit to this silly ponzi scheme? I will look at this next.

A Question for the Wertkritik School: Does the commodity even still exist? Here are some thoughts on “The metaphysical subtleties of the commodity” by Anselm Jappe. Part of the dead end wertkritik has encountered in its critique seems to be contained in several of the formulations Jappe employs in this talk.

In his talk, given in 2011 or so, Jappe argued: “The commodity possesses a peculiar structure, and if we thoroughly analyze the most diverse phenomena, contemporary wars or the collapse of financial markets, the

hydro-geological disasters of our time or the crisis of the nation-state, world hunger or changing gender relations, we will always find the structure of the commodity at the bottom of it all.” I find Jappe’s argument hard to accept, since the commodity has likely not existed at least since 1971, and perhaps as long as 1929, when advanced countries moved away from the gold standard and the use of commodity money as the standard of prices. I make this apparently outrageous statement in order to raise a fundamental question about the wertkritik approach. That approach, as I understand it, rests on the definition of the commodity as given by Karl Marx in Capital, Volume 1.

Marx defines the commodity as combination of two characteristics: use value and value and he makes three important points: 1. “A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another.” 2. “In the form of society we are about to consider, they are, in addition, the material depositories of exchange value.” 3. “The progress of our investigation will show that exchange value is the only form in which the value of commodities can manifest itself or be expressed.”

Marx seem pretty clear in the argument that in the capitalist mode of production the socially necessary labor time of a commodity can only be expressed in the form of exchange value, i.e., in the form of the material of another commodity. This, of course, does not imply that just because the value of the object is not expressed this way it has no socially necessary labor time. Nor does it imply that because the value of the object is not expressed this way it has no useful qualities. However, in the capitalist mode of production, to be a commodity it must have both value and use

value. And in the capitalist mode of production the value of the commodity must be expressed or manifested as an exchange value.

I raise this question because, at least, since 1971 and, perhaps, as far back as 1929-1930, the products of labor have been unable to express or manifest their values as exchange values. This fact does not represent a defect in the products of labor themselves, but in the object that serves as money in the exchange. The objects produced may be useful and may contain socially necessary labor time, however they do not meet Marx’s strict definition for a commodity.

Jappe states, a commodity “only attains use value by means of the transformation of the product itself into exchange value, into money.” But I am not sure this statement is well formulated. Rather, I would state it this way: a product of labor only becomes a commodity by means of the transformation of the product itself into exchange value, into money. The product of labor may have social usefulness without its transformation into exchange value, but it is not a commodity; it is only a commodity when this socially useful quality is manifested in exchange value.

To give an example of where a socially useful object is not a commodity: In a community of directly social producers, the various products of labor have social use value, but never become commodities. The conversion of the value of the commodity into exchange value has nothing to do with its social usefulness, except it must be useful. So long as the product of labor is useful to someone other than the producer, it is socially useful, but it can only become a commodity through its transformation into exchange value.

This point is critical, because if the value of the product of labor cannot be expressed in exchange value, it cannot become a commodity. However, as I argued above, since 1971, the values of the products of labor have not been

expressed in this necessary form. Effectively, therefore, no products of labor have been able to become commodities since that time. Jappe is clear in his statement that this is necessary to the definition of the commodity: “A commodity qua commodity cannot be defined, therefore, by the concrete labor which has produced it, since it is a mere quantity of indistinct, abstract labor; that is, the quantity of labor time which it took to produce it.” However here too his definition of the labor is imprecise and must be corrected: It is not just “the quantity of labor time which it took to produce it.”, but the socially necessary labor time required to produce it. Marx is quite clear on this point:

“We see then that that which determines the magnitude of the value of any article is the amount of labour socially necessary, or the labour time socially necessary for its production.” Jappe, therefore, subtly revises Marx both on the definition of the commodity and the nature of value of the commodity.

It seems to me that, at least theoretically, we are in a gray, undefined, area, since clearly wage slavery has not ended. Yet, labor power — which is just a commodity — no longer exists as Marx defined the commodity. Jappe tries to finesse this with his redefinition of the commodity, but this is not going to fly.

*****

So here is the interesting and completely bizarre point of this discussion: The Frankfurt school, the Situationists, 1968 and the discussion of fetishization all occur at the point in time where the commodity has

disappeared for all intents and purposes — at least this is true so far as a strict interpretation of Marx is concerned.

How the fuck are we to explain this? This suggests to me that wertkritik isn’t really concerned with the commodity at all — it is about the fascist state. Wertkritik critiques the commodity, but, it seems to me, this is only a means to encompass both capitalist societies of the West and the now defunct socialist societies of the East. What wertkritik is really trying to get a handle on are all the variants of state managed societies. In order to critique the state as manager of the capitalist production process, wertkritik tries relax Marx’s definition of the commodity and value:

First, the commodity is no longer a depository of socially necessary labor time, but of “indistinct, abstract labor” Second, the commodity, rather than being an object of use in its own right, becomes useful by means of its transformation in money. These two arguments by the wertkritik school suggest an inversion has taken place between the commodity and its price: If, previously, the commodity is produced for its exchange value, the price it could fetch in the market; in the present circumstances, the exchange value of the commodity does not count at all.

With the collapse of the gold standard, the state now has a monopoly on the thing serving as “money” in the economy — its own fiat currency. Clearly, because of this, the price of an object is of no concern to the state, since, unlike all other buyers in the market, it is not limited by the need to sell before it buys. Thus as manager of the process of capitalist production, the prices of the commodities employed in the production process is of no concern to state — whatever this cost it has the means at its disposal to “pay”. Since the state has as its monopoly disposal the thing serving as

money in exchange, its aim cannot simply be, as it is with the capitalist, more money.

So what is the aim of the state? I would suggest that in the form of the state, capital itself appears in its ideal form as capital, which seeks, not more money, but only its self-expansion. Now compare this idea with Jappe’s quote from the Situationists:

“The spectacle is the moment when the commodity has attained the total occupation of social life” If we substitute the term “state” for the term “commodity”, the argument of wertkritik is obvious. “The spectacle is the moment when the STATE has attained the total occupation of social life”

Marxist Accelerationism, (Nick) Land, Capital and Labor Say what you want about Nick Land, but he has Marxists figured out.

Marxists have attached themselves to every new trend emerging out of social movements in the past 80 years only to suffocate and destroy them. When black workers were burning cities in the 1960s, Marxists suddenly discovered racism.; when this morphed into a broader critique of privilege, Marxists declared “classism” was the central privilege; when anarchism and libertarianism experienced a mild resurgence, Marxists said they had the ability to change the world without taking power; and

when the Soviet Union collapsed and China followed Deng to get rich, Marxists swore they did not know this Jesus. Now, as Nick Land explains, Marxist have attached themselves to the hyper-radical critique of Landian Accelerationism. However, as Land warns, as in the previous vampire-like efforts, Marxism raises the banner of Accelerationism only to back into a more recognizable Marxian framework. Marxism, which, as Kurz points out, has exhausted its own critique of capitalist society, has now been reduced to living off whatever shit it finds among the detritus that once was the workers movement. Last year, after much dithering, Marxism decided to marry Land’s nubile young offspring, Accelerationism, and introduce it to the Left’s version of respectable society. Like most things Marxist, this awkward pairing came in the form of a Manifesto for an Accelerationist Politics. At the last minute, however, Land, the father of the very attractive blushing bride, raises an objection regarding the intentions of the groom: “While both of our families trace their lineage back to 1848, I believe your intentions are dishonest.” Exclaims the suspicious patriarch. “Prove you are worthy of my precious offspring: solve the riddle of the transformation of values into prices!” And, with this demand, the family of the groom fell upon each other with knives — the Klimanites against the Monthly Review, the TSSI school against the SSI school; and the whole of them against Kurz and Postone. Says Land: “The decisive question internal to the (serious) Marxist tradition concerns the Transformation Problem, since it is only if this is considered soluble that anything like a continuity of classical Marxism (or credible ‘Law of Value’) can be envisaged at all.”

Which is to say, despite the argument of the Marxist accelerationists that, “All of us want to work less”, Marxist accelerationists, like their more staid predecessors, have yet to show any connection between capital and labor. Land will have none of this. He demands Marxists Accelerationists produce their bona fides: “Without a resolution of the Transformation Problem — and even a well-positioned sticking plaster would do provisionally — there can be no consistent concept of exploitation, or even a theoretically significant sense of labor time.” Marxists have yet to agree on answer to Bohm-Bawerk’s dispatch of Marx, Ricardo and Smith. Moreover, most, if not all, simply wish that critique to

go away — to bury it under incomprehensible formulas and philosophical mutterings. Bohm-Bawerk’s critique is simple enough to understand — at least it was before Andrew Kliman opened his mouth. In volume 1 of Capital, Marx says the price of a commodity is more or less equal to the socially necessary labor time required to produce it, but, in volume 3 of Capital, Marx says the price of a capitalistically produced commodity is equal to this plus an average profit. Since any commodity has only one price, how do we reconcile these two different measures of that price?

Bohm-Bawerk was beside himself with this patent self-contradictory behavior on Marx’s part. How dare an economist contradict himself? “I cannot help myself; I see here no explanation and reconciliation of a contradiction, but the bare contradiction itself. Marx’s third volume contradicts the first. The theory of the average rate of profit and of the prices of production cannot be reconciled with the theory of value.” Interestingly enough, Engels offered no comment on Bohm-Bawerk’s observation and none was needed, because Bohm-Bawerk was clearly correct in his “discovery” of a contradiction in Marx’s theory. The problem was not a contradiction in Marx’s theory, but that Marx’s theory reflected the contradiction at the heart of capitalistic prices. As Marx argued in his Grundrisse, sometimes the contradiction in economics text books express a real life contradiction. Despite their obvious genius, Ricardo and Smith could not expunge this contradiction from their theories because the fucking contradiction wasn’t in their theories. Without grasping this contradiction at the heart of capitalistic prices, Accelerationism has no purchase at all as a strategy. The whole point of the exercise is to accelerate the inherent contradictions that lay at the heart of the capitalist mode of production. If there is no contradiction at the heart of

the capitalist mode of production, Accelerationism simply becomes a death impulse.

According to the Central Intelligence Agency, we almost reached communism by 1980

In the aftermath of World War II and the post-war reconstruction effort, the Soviet Union was beginning to look beyond reconstruction following the devastation of the world war to describe, in terms of concrete practical steps, the material conditions it had to meet to transition to a fully communist society.

How it tried to get there and why it failed has never been explained until now.

Part One

In 1950, Stalin, gave his ideas on what it would take for the Soviet Union to transition from socialism to communism. Living standards had to be doubled and hours of labor had to be radically reduced: “It would be wrong to think that such a substantial advance in the cultural standard of the members of society can be brought about without substantial changes in the present status of labour. For this, it is necessary, first of all, to shorten the working day at least to six, and subsequently to five hours. This is needed in order that the members of society might have the necessary free time to receive an all-round education. It is necessary, further, to introduce universal compulsory polytechnical education, which is required in order that the members of society might be able freely to choose their occupations and not be tied to some one occupation all their lives. It is likewise necessary that housing conditions should be radically improved, and that real wages of workers and employees should be at least doubled, if not more, both by means of direct increases of wages and salaries, and, more especially, by further systematic reductions of prices for consumer goods.

….

Only after all these preliminary conditions have been satisfied in their entirety will it be possible to pass from the socialist formula, “from each according to his ability, to each according to his work,” to the communist formula, “from each according to his ability, to each according to his needs.”

This will be a radical transition from one form of economy, the economy of socialism, to another, higher form of economy, the economy of communism.” If communists remember 1956 for anything, it is the secret denunciation of Stalin by Khrushchev. What they likely do not realize is that Khrushchev’s repudiation of Stalin did not extend to Stalin’s ideas on hours of labor and communism. Starting in 1956, the USSR began a scheduled reduction of

hours of labor that, if completed as planned by 1968, would cut the work week from 48 hours to 30 hours and double the minimum wage from 250 rubles to more than 600 rubles. The reduction of hours of labor was seen as an essential part of a transition to communism that could be accomplished perhaps as soon as 1980. ***** By 1961, the CIA seriously was concerned that the Soviet Union was well on its way to reducing hours of labor without affecting its defensive military posture against the United States. The original assessment of the Soviet effort to reduce hours of labor as part of a deliberate effort to transition to communism is on the CIA website. A followup to the original assessment, by David Bronson at Columbia University in 1968, can be found here. The Central Intelligence Agency reviewed the program in 1961. Their interest was to uncover the motivation of the Soviets for reducing hours of labor in the middle of the cold war. And to assess whether such a bold program could be realized without compromising the Soviet defense effort. The CIA’s interest in the motivation of the Soviets in pursuing a planned reduction of hours of labor was based on the assumption that as workers supplied fewer hours of labor to the Soviet central plan, it should become harder for the Soviets to maintain its defense effort. Why would the Soviets deliberately undertake a program that, if successful, virtually guaranteed a less robust defense program?

The CIA analysts acknowledged that reduction of hours of labor was a long term position of the communist movement. It was clear that the Soviets had long pursued this sort of reduction since the earliest efforts to establish an eight hours day. And it was clear that the leadership of the Soviets under Khrushchev described communism in terms of a working day of no more than 3-4 hours by 1980.

To give you an idea of how bold Soviet ideas about the length of the work day was at the time, a three hours work day is roughly what Keynes predicted the UK could achieve by 2030. Khrushchev was proposing that the Soviet Union could reach Keynes’ target fifty years earlier than an advanced capitalist industrial power. Thus, the establishment of a thirty hours work

week would have had great propaganda value for the Soviet system against the West. Despite the obvious historical, political and ideological value of a drastic reduction of hours of labor as was planned, the CIA analysts assumed the reduction would have costs in terms of the pace of Soviet defense construction. Why were the Soviets willing to pay this cost? Were there factors influencing the pace of Soviet defense construction that Washington had not bargained on when it started the Cold War?

The shocking implication of the Soviet planned reduction of hours of labor is that it suggested the SU could effectively match the US expenditures even as its reduced hours of labor; that the SU had vast resources to call upon such that it could match US military spending AND continue to cut hours of labor in its march toward full communism. This implied that the SU was fighting the US with one hand behind its back. ***** What the CIA found was that a reduction of hours of labor rather than being an impediment to production actually spurred production. By reducing hours of labor, say the analysts, the SU was able to solve a number of problems it could not solve previously: “Soviet managers have been forced to make beneficial but formerly neglected changes in methods of operation, thereby sharply raising efficiency in the nonagricultural sector with a minimum amount of new investment. Finally, the shorter workweek, together with the higher hourly pay, has helped to relieve the pinch of the tightening urban labor market by providing a particular inducement for housewives and young people to seek employment.” The SU had a huge hidden reserve of labor power that took the form of massive inefficiencies in the employment of labor in production and a huge industrial reserve of mostly women workers. By cutting hours of the already employed workers, the Soviets forced managers to employ labor more efficiently. It also attracted women into production who could not work the

longer hours. By forcing managers to introduce new technology and new methods of production, the Soviets had tapped additional productive potential at little or no additional cost to the state plan, and thus at low or no cost to its defense construction. According to the CIA, these hidden labor reserves took the form of the lack of “synchronization of production flows, better allocation of primary and secondary workers, and the elimination of idle time apparent in many time-and-motion studies … to reduce tardiness of employees and “down-time” on machines.” It also took the form of managers who hoarded labor “to insure themselves against underfulfillment of the output plan by maintaining a reserve of labor and other inputs for use toward the end of the plan period or for the fulfillment of other lucrative priority output goals.” By reducing hours of labor, the Soviets were ‘draining the swamp’, so to speak; forcing managers to release their labor reserves. Amazingly, even as it was reducing hours of labor the state also reduced its military by more than a million troops. The Soviet Union could boast that it was able to roughly match the US pound for pound in military power even as it reduced hours of labor for workers. Contrary to many Marxists today who argue the SU could not reduce hours of labor because of its defense needs, the CIA at the time worried the SU had proven both could be done simultaneously. ***** You can almost feel the confusion of the CIA analysts trying to make sense of the reduction of hours of labor: “In view of the regime’s apparent penchant in the past for ever expanding output of physical goods at maximum rates, any action that substantially reduced the potential for increased output might be regarded as irrational.” This is the understandable confusion of a group of analysts who conflate the production of use values with the production of value. The magnitude of value production is a function of hours of labor, while the production of use

values has no necessary relation to labor. It is thus possible (at least in theory) for the production of physical output to increase even as the labor time expended on this production is rapidly decreasing. Operating from the premises of a monetary economy, in which physical output is measured in money terms, the CIA analysts were not equipped to analyze a planned economy. Thus, it appeared to the analysts that the SU was “foregoing” potential output in order to “pay” for free time. They return to this issue again and again; wondering if the reduction of hours of labor is a “costless or low cost good”.

To give an example, of what I mean, if after a reduction of hours of labor the shoes sector could still produce enough shoes to supply the entire country, the typical capitalist would ask himself, why should production stop there? Why shouldn’t labor continue until twice as many shoes could be produced as the country needed?

In a money economy, these additional shoes would take the form of profit for the shoe sector. But this profit only existed in ideal form, as a mass of shoes that now had to be sold for money. Basically, to realize the additional shoes as profit, the SU had to export shoes to other regions of the world market.

However, under the conditions of a closed, planned economy, having achieved self-sufficiency in shoes, the SU had no choice under the plan but to end production at the point where the need for shoes was satisfied. Additional labor time in the shoe sector had to be set free. To the CIA analysts, however, this cessation of production at the point where the need for shoes were satisfied appears as foregone output. The time freed in the form of “leisure” appears as the cost, in terms of forgone output, of this “leisure.” They spent a lot of time trying to understand the economic logic behind the soviet program: “[The] regime may have been aware of the costs of the program at some point in the process of policy formation but was willing to forego the potential increase in output in order to move toward the goal of increased leisure, to check the potential for rapid wage

increases by altering work norms, or to crack the whip on Soviet managers. Alternatively the regime may have mistakenly evaluated the program as one without costs.” In their view, the SU was either choosing to pay this “cost” for propaganda or ideological purposes or was using reduced hours as an administrative weapon to force managers to use labor more efficiently; to mobilize the hidden labor reserves in enterprises. Free time as an end in itself, as communism, did not exist for the CIA analysts, who only could conceive of free time as lost output. ***** According to the CIA analysts, the Soviet reduction of hours of labor passed to two periods and was rapidly approaching a third. The first period resulted in the improvement in the efficiency in the employment of the existing pool of labor power. The second period was characterized by the increased participation of women and youth in production. In the first period, then, the reduction of hours forced enterprises to tap their hidden reserves that existed in the form of hoarded labor power. This meant additional output could be achieved without any additional expenditure of wages. It was essentially costless because wages were already being paid, but the workers idle. In the second period, by contrast, and particularly in light industry, maintaining or increasing output was achieved by additional employment.

Thus, reduced hours of labor in periods one and two had the effect of both increasing efficiency and increasing employment. These two effects have been theorized by many proponents of reduced hours of labor today and appear confirmed by the Soviet experience. But there is a third effect of reducing hours of labor that is not mentioned in the analysis: shorter hours allows for workers to maintain a higher intensity of labor since this higher intensity must be maintained for a shorter period of time. While the analysis does not directly address this problem, the analysts do note that opposition to higher production targets (speedup) considerably declined after hours of labor were shortened.

The labor force was being worked more intensively, but the duration of this labor was considerably shortened. Taken together, the efficiency, intensity and employment effects were predicted by Marx’s theory and discussed in Capital, v. 1 ch. 15. The Soviet experience thus proved Marx’s contention that the density of the labor day could be increased by working fewer hours. More could be produced in less time than had been produced formerly with longer hours of labor. ***** The real problems the Soviet Union faced in making the transition to communism did not arise until the third period.

How the argument of one economist helped kill the Soviet Union

(Continued from part one) Obviously the Soviet Union never made it to a fully communist society, but what is unclear is why the SU failed to achieve its goal and why it subsequently collapsed. Moishe Postone has suggested that the collapse of the Soviet Union has to be seen in the context of the global failure of the workers movement after 1970 or so. This makes sense, but it is only a suggestion, not an explanation. It suggests that the same forces leading to neoliberalism in the West were at work within the Soviet Union as well, although perhaps in a different form.

What we know are the historical facts: first, Khrushchev was replaced by Brezhnev and the goal of communism by 1980 seems to have disappeared from the literature sometime after this. Second, between 1961, when the CIA wrote its report, and 1968, when the SU was scheduled to have reduced hours of labor to 30-35 hours per week, no further substantial reduction of hours of labor took place. A number of targets for labor hour reduction were proposed, but between 1961 and 1989 it appears working hours in the Soviet Union remained more or less at 40 hours. The work week was reduced from 6 days to 5 days, but the working day was increased

from 7 to 8.5 hours. This change in the pattern of labor hours seems to reflect a desire on the part of the Soviets to maximize output, not to reduce overall hours of labor for the working class. The story of how this change may have led to the collapse of the Soviet Union likely has never been told until now. ***** Part Two In 1989, before a meeting of the United Nations Conference on Trade and Development Abel G. Aganbegyan, an important economic adviser to Gorbachev and one of the architects of Perestroika spoke on efforts to reform the Soviet economy. The economic and political situation in the Soviet Union was dire, within months the SU would disappear forever. The gravity of the situation was fully evident in the speech Aganbegyan delivered that night:

“We must sadly recognize that the standard of living of our people does not correspond to the position of our country in the world, its industrial might, the level of development of its science and technology, and the generally high level of education of its population. Our people are living worse than they could be. The last 15 to 20 years before perestroika, the years of stagnation, were particularly unfavourable. During that period, more than half of the gross national product went into capital investment – which is excessive for our country – investment used for bringing into production more and more resources, for greater and greater expansion of production. In addition, there were large military inputs. On the other hand, only a small part of the gross national product went for consumption by the population, particularly personal consumption.” In just thirty short years, the Soviet Union had gone from imagining a fully developed communist society to lying on its death-bed. How had things taken such a dire turn for the Soviet people? To hear Abel G. Aganbegyan tell it, the dire situation was the result of two decades of over-investment in the capital sector of the economy:

“In the past, our economy was developed primarily by extensive means, through the application of additional production resources, and attention was mostly directed towards the dimension of production, towards expanding the sphere of production, whereas now we want to turn to intensive methods and develop by improving efficiency and quality, making the technological revolution the key source of development. Our standard of living will ultimately depend on how well we can increase the effectiveness and productivity of labour.” Aganbegyan’s description of the problems of the Soviet economy sounds very similar to the problems CIA analysts predicted the SU would face as it continued to reduce hours of labor. In the first and second period of the reduction of hours of labor, the CIA analysts wrote, the Soviet economy had exploited the low hanging fruit in the form of labor reserves that could be mobilized — excess workers hoarded in the enterprises and women and youth who were not as yet entering the labor force. ***** In the third period, however, analysts predicted the Soviets could no longer rely on its labor reserves to maintain or increase planned output targets. To maintain the pace of expansion of production while reducing hours of labor, the Soviets would have to increase the employment of improved machines in place of living labor:

“Although the increased leisure obtained by the Soviet worker-consumer during 1956-60 may have been “free” or “low-cost” in terms of foregone potential output, this result appears to have been a unique one, occasioned by the existence of substantial “internal reserves” in many Soviet enterprises and by the short-run difficulties (costs) of converting these reserves into increased physical output. The cost of further reductions in hours during 1964-68, in terms of foregone output, probably will be much higher and could represent either the costs of fulfilling a long-term Communist goal or, alternatively, the costs of maintaining a planned “mix” of physical output in which consumption goods are accorded a relatively low priority. The further reduction in hours without a consequent reduction in real weekly earnings, therefore, may depend heavily

on the successful introduction of new technology and on the ability of the Soviet planningmanagement system to install new equipment and to use the new techniques efficiently.”

This is consistent with Marx’s prediction in Capital, volume one, chapter 15 that at a certain point squeezing more output from the labor force required introduction of new technologies. Reducing of hours of labor from 41 hours in 1961 to 30 or 35 hours in 1968 called for accelerating the development of the productive forces: speeding up automation; and substituting living labor with machines in the production of commodities. To sustain the pace of labor hours reduction as the 1961 schedule called for, the Soviet economic mechanism would have to actually accelerate, not decrease, capital investment.

According to Aganbegyan, much of the disaster that threatened the very existence of the Soviet Union resulted from a planned economy that emphasized constant expansion of means of production at the expense of social consumption. What Aganbegyan failed to note in his lecture that night was the role he had personally played in forcing the Soviet Union’s development in that direction.

***** In 1960, the Soviets embarked on a plan that if successful would have reduced hours of labor from 41 hours a week to 30-35 hours a week by 1968, even as the minimum wage would be more than doubled from 250 rubles to 600 rubles. Soviet leaders like Khrushchev openly spoke of a work day of no more than 3-4 hours by 1980 — more than five decades ahead of Keynes prediction of a three hours day by 2030. What Aganbegyan neglected to tell his audience listening to his lecture is that he had personally authored an important economic paper that helped to justify breaking this commitment to free time in favor of an economic program that committed the Soviet economy to maximizing output, rather than communism. The disaster of which Dr. Aganbegyan spoke that night was one to which he had helped contribute and for which he prescribed more of the same medicine:

“Our standard of living will ultimately depend on how well we can increase the effectiveness and productivity of labour.” Fortunately, Aganbegyan’s role in the disaster that ultimately led to the collapse of the Soviet Union is detailed and preserved in a paper by David W. Bronson written in 1968, “Soviet Experience with Shortening the Workweek”. In that paper, Bronson returns to the original subject of the CIA analysis of 1961, reduction of hours of labor in the Soviet Union and the idea floated by Khrushchev that communism could be realized by 1980. The paper found that efforts to reduce hours of labor had faltered and halted completely after 1961. Some effort had been made to reduce the number of days worked per week from six to five, but this change was accomplished without a reduction of hours of labor. In place of a 6 day, 41 hours work week, the SU moved to a 5 day, 8 hours work week — leaving total hours almost unchanged. Bronson perceptively pointed out that this change reflected “the tacit abandonment of a longstanding Soviet tenet providing for a continually shorter workday and workweek.”

While the Soviet Union never actually admitted that reducing hours of labor was no longer the aim of its development plan, this fundamental change in course had in fact occurred. ***** According to Bronson (1968), the rationale for moving to a five days work week without changing total number of hours was simply that the sixth day of labor was generally of lower quality in terms of output: “Lower productivity with the 6-day workweek was caused, in part, by a 15 to 20 percent loss in working time due to machine stoppages, worker absence, etc. The new schedule, which reportedly has reduced these losses by half, attacks the problem by reducing the number of work periods when lost time is the greatest—start-up and shut-down, Saturday and night shifts.

“The first and last hours of the workday tend to be the least productive, according to the Soviets. At one machine shop in the Urals, for example, more than 40 percent of all lost time during the normal 7-hour shift occurred during the start-up and shut-down period. Some workers arrived late, others left early, machines needed supplies, some time was required for the production process to reach full speed, and during the last hour some workers kept one eye on the clock. Under the new schedule, start-up and shut-down time is reduced by 1/6 (through the reduction from 6 to 5 workdays per week) without affecting total work time.” The Soviets planners found that Saturday and night shifts contributed to a number of labor problems, including absenteeism, fatigue, work slowdowns or stoppages, scheduling problems related to certain prohibitions on when women and youth could work, waste owing to machine idle time, and worker preferences for more consecutive days off. Economists concluded that if total hours of labor were held approximately constant (40 hours over 5 days, as opposed to 41 hours over 6 days), more labor could be squeezed out of the worker during the fewer days of work.

However, framed this way, the aim of labor time reduction was also being subtly redefined: no more was the SU aiming for the shortest labor hours in the world; instead, labor hours reduction was being considered primarily from the view of raising output and labor productivity. Thus, according to Bronson fewer days of work per week was not aimed at freeing the workers from labor, but increasing their productivity: “Khrushchev’s Seven-Year Plan specified that an additional hour would be cut from the workweek in 1962. The Plan also stated that the shift to a 35-hour workweek would be achieved “in the coming 10 years,” and that the workweek would be reduced even further during the following decade. In spite of these promises, no reductions in scheduled work time have occurred since 1960. Instead of putting their emphasis on shortening hours of work, Soviet economists, in the early 1960’s, directed their writings more to the optimal length of the workday and the optimal scheduling of work time.” According to the original schedule of labor hours reduction the work week should have been 5-10 hours shorter by 1968 than it actually was. Instead,

planners busied themselves trying to establish the “optimum” length of the working day, which, not surprising, was pretty much the same as the actual hours. The soviet economists came up with a number of spurious theories for why an 8 hours, 5 days work week was the optimal duration for production.

***** Abel G. Aganbegyan wrote a paper in which he argued the 8 hours, five day work week was the ideal schedule to maximize output: “Professor Abel G. Aganbegyan, one of the new generation of Soviet economists, makes an argument for the optimality of an 8-hour workday solely on the grounds of its productivity and welfare advantages. He argues that the additional output obtained by working more than 8 hours per day is very small, while the reduction in output in workdays of 6 or 7 hours in length is quite substantial. Thus, curtailment in the length of the workday will inevitably involve sacrificing real income for increased leisure. In 1966, another Soviet economist stated that at the current level it is hardly expedient to seek a shortening of the workday.. .in the future the normal workday will be 6-8 hours and shortening of work time probably will come in the form of more holidays and longer vacations.”

A general and subtle shift in emphasis had occurred in how hours of labor were assessed by Soviet planners: “Soviet economists became concerned with the costliness in terms of foregone output of further reductions in work time per man. Undoubtedly, this concern was reflected in the leader-ship decision to shelve the scheduled reduction in work time and to abandon, at least temporarily, the goal of instituting the world’s shortest workday. The economists’ concern with output was also reflected in the effort to choose a schedule which would maximize output for a given length of the workweek. This effort is based on Soviet analysis of experiments with the 5-day workweek which have been underway for ten years.”

Labor hours were being chosen not in order to maximize the free time of the social producers and as a path to a fully communist society as had been argued at least previously, but in order to maximize the production of a surplus product over the needs of the producers. ***** If Bronson is correct in his 1968 assessment that this was “the tacit abandonment of a long-standing Soviet tenet providing for a continually shorter workday and workweek”, its abandonment may just explain why the Soviet Union collapsed two decades later. I will turn to this idea in the last part of this series.

How labor hours reduction brought about the collapse of the Soviet Union

Pardon my heavy use of direct quotes in this post. I find it necessary to do this because I want to demonstrate in detail my chain of reasoning that leads to the admittedly controversial conclusion that the Soviet Union was not “dismantled”, as certain Marxists allege, but collapsed owing directly to the operation of the law of value. –Jehu This is the final part of a series. Part one is here.

Part two is here. ***** What led to what Bronson calls “the tacit abandonment of the Soviet commitment to providing for a continually shorter workday and workweek” and ultimately to a fully developed communist society? And how might this tacit abandonment have contributed to the collapse of the Soviet mode of production?

In his essay, “Lessons from the Demise of State Socialism in the Soviet Union and China”, the writer, David M. Kotz argues that the Soviet Union did not in fact collapse. It was dismantled by a group of persons committed to creating a capitalist society in its place: “As we show in Kotz and Weir (1997, ch. 5), the Soviet planned economy did not collapse. Despite some disruptions from economic reform legislation that took effect in 1988, real output and real aggregate consumption grew continuously from 1985 through the first half of 1990. … The record shows that the Soviet planned economy did not collapse — it was dismantled through political means, as power shifted from Gorbachev to Boris Yeltsin and the pro-capitalist coalition.” The argument by Kotz rests on the assumption the reforms of 1988 were not themselves an expression of the collapse, but is this true? I want to suggest that the collapse of the Soviet Union began long before the events of 1989-1991. The collapse of the Soviet Union began with the tacit abandonment by the Soviets to continually shorter labor time and a fully developed communist society.

The collapse of the Soviet Union begins, in other words, long before the attempt to reform the economic mechanism; it begins in the 1960s with the decision by the Soviets to forego reduction of hours of labor in favor of maximizing output.

*****

First, I want to challenge David M. Kotz’s timeline on this subject. The crisis appears to begin not in the 1980s as Kotz and Weir (1997) suggests. It actually looks like this according to the CIA: 1958: The Soviet Union embarks on a bold and unprecedented effort to create a communist society within the then foreseeable future: In November 1958, Khrushchev presented theses on the 1959 to 1965 economic plan to the Central Committee of the Communist Party. He boasted of past economic progress and said that in the coming period–the period of large-scale building of a communist society–the main tasks would be “creation of the material-technical basis of communism; the further strengthening of the economic and defensive might of the USSR; and simultaneously, the fuller satisfaction of the growing material and spiritual requirements of the Soviet people”. (James Noren, CIA’s Analysis of the Soviet Economy, 1998)

1961: According to the CIA, the initial reduction of hours of labor seems to have had a significant and positive impact on the rate of growth: Reduction of the workweek during 1956-60 has contributed to the solution of several important problems facing the Soviet leadership in recent years, including the need to reestablish control over wages, to improve economic efficiency, and to adjust to a tightening urban labor market. By means of the program, levels of living have been raised (through increased leisure), and the resistance formerly experienced to upward adjustments in work norms has been quieted. Soviet managers have been forced to make beneficial but formerly neglected changes in methods of operation, thereby sharply raising efficiency in the nonagricultural sector with a minimum amount of new investment. Finally, the shorter workweek, together with the higher hourly pay, has helped to relieve the pinch of the tightening urban labor market by providing a particular inducement for housewives and young people to seek employment. (Central Intelligence Agency, An evaluation of the program for reducing the workweek in the USSR, 1961)

1963: According to economists working for the CIA, however, economic growth in the Soviet Union begins to slow, owing initially to a series of unforeseen economic shocks: A little more than three years after the Dulles testimony, a major CIA paper, Trends in the Soviet Economy (February 1963), recognized the falloff in the rates of growth in industry and agriculture. In particular, agriculture had been hit by a series of poor or indifferent harvests. As a result of an acceleration in defense spending, resources were overcommitted and the consumer suffered. In 1962, meat prices were raised by 30 percent, scheduled reductions in personal income taxes were deferred to restrain consumer demand, and housing construction was cut. The paper questioned whether the Soviet leadership would countenance an “inclusive military buildup” for very long, given the “fundamental” long-term Soviet policy of overtaking the United States economically. Furthermore, consumers were becoming more insistent on having “better quality food, decent housing, and more consumer durables.” Finally, Soviet leaders were increasingly aware that the arms and space races were hurting economic growth much more in the USSR than in the United States. (James Noren, CIA’s Analysis of the Soviet Economy, 1998) I quote extensively from the analysis of the Central Intelligence Agency in order to emphasize the exact sequence of the events leading to what CIA economist, Bronson (1968), calls the, “the tacit abandonment of a long-standing Soviet tenet providing for a continually shorter workday and work-week.”

It is important to note that this tacit abandonment is not a response to the initial reduction of hours of labor, which, according to the CIA’s own analysts, raised the standard of living of Soviet citizens, increased output, forced beneficial changes in methods of production, improved the efficiency of employment of labor and increased participation in the labor force. On the other hand, short-lived shocks like poor harvests are an insufficient cause to explain the forces that ultimately led to the collapse of the SU. To explain that event, we probably need to link these short-lived shocks to the actual defects in the Soviet model.

***** As Kotz explains, the Soviet model had contradictory characteristics. Although a form of social production based on public ownership of the means of production, the society was dominated by a relatively small clique of individuals who enjoyed a lifestyle uncharacteristic of that of the majority of the working class:

The Soviet state was run by a privileged group of officials, who not only received high money incomes but also had substantial perquisites that included special stores stocked with high-quality goods made in special enterprises (and lacking the long lines found in ordinary stores), homes built by special construction enterprises, and so on. Whether or not one can consider this group to be a surplus-appropriating ruling class, they clearly were a privileged ruling group that would have no place in a fully socialist system. However, no matter how contrary to communist management, this privileged group was essential to the Soviet top down development model: While socialism requires economic planning, the Soviet system utilized an extremely centralized form of planning, in which the attempt was made to direct, in a very detailed way, the entire Soviet economy from the center in Moscow. This left enterprises with little role to play but that of carrying out orders from above. Within enterprises, the general director was the absolute authority, and work relations were strictly hierarchical. This feature was the only important one that bears a strong resemblance to the relevant capitalist institution, although the substantive power relations were different in certain respects. Soviet workers lacked unions that sought to actively defend their rights, but, as was noted above, full employment gave the workers significant informal bargaining power, both individually and collectively. Kotz treats the privileged strata basically as little more than a nuisance factor in the Soviet mode of production, but was it just that? Let me suggest the antagonism between the form of management and the so-called “informal bargaining power” of the workers was an explosive combination looking for a trigger. This explosive contradiction found that trigger in the reduction of hours of labor begun in 1958.

***** In his argument that the working class enjoyed significant informal bargaining power within the Soviet mode of production, Kotz is simply borrowing from Kalecki (1943), who used this idea to explain the resistance of the capitalists to the full employment policies of the fascist state: “We have considered the political reasons for the opposition to the policy of creating employment by government spending. But even if this opposition were overcome—as it may well be under the pressure of the masses—the maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders. Indeed, under a regime of permanent full employment, the ‘sack’ would cease to play its role as a disciplinary measure. The social position of the boss would be undermined, and the self-assurance and classconsciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension. It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire; and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But ‘discipline in the factories’ and ‘political stability’ are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the ‘normal’ capitalist system.” You probably can see where I am going with Kalecki’s argument here, right? Assume that, in place of a policy of full employment as characterizes a post-war fascist economy, we have a centrally planned economy committed to full employment of all resources to maximize what Khrushchev called, “creation of the material-technical basis of communism; the further strengthening of the economic and defensive might of the USSR; and simultaneously, the fuller satisfaction of the growing material and spiritual requirements of the Soviet people”.

This centrally planned economy already has to deal with the political problem of a working class whose bargaining power is significant owing to full employment; in fact it begins with this, which makes even day to day management of an enterprise difficult. Now, Khrushchev was proposing that hours of labor be dramatically reduced to 30 or 35 hours by 1968 and hopefully to 15 or 20 hours by 1980. How does this affect the bargaining power of the working class against the centrally managed plan? Reduction of hours of labor, i.e., the creation of the material-technical basis of communism, would run headlong into extremely centralized top-down soviet relations of production. Khrushchev (perhaps unknowingly) was proposing that the informal bargaining power of the workers be given a massive shot of steroids; that the mode of production double down on the already significant bargaining power of the working class. How does the contradiction between the extremely centralized top-down management of the soviet mode of production and this highly enhanced bargaining power of the working class express itself in the face of the sort of short-lived shocks the Soviet mode of production encountered in 1962-63? ***** In the idealized narrative of most socialists, socialism does not suffer the contradictions of the capitalist mode of production arising from the law of value. Stalin, at least, did not hold this view. According to Stalin, so long as labor power was being bought and sold as a commodity, the law of value played a role in the economy: “In our country, the sphere of operation of the law of value extends, first of all, to commodity circulation, to the ex-change of commodities through purchase and sale, the ex-change, chiefly, of articles of personal consumption. Here, in this sphere, the law of value preserves, within certain limits, of course, the function of a regulator.

But the operation of the law of value is not confined to the sphere of commodity circulation. It also extends to production. True, the law of value has no regulating function in our socialist production, but it nevertheless influences production, and this fact cannot be ignored when directing production. As a matter of fact, consumer goods, which arc needed to compensate the labour power expended in the process of production, are produced and realized in our country as commodities coming under the operation of the law of value. It is precisely here that the law of value exercises its influence on production. In this connection, such things as cost accounting and profitableness, production costs, prices, etc., are of actual importance in our enterprises. Consequently, our enterprises cannot, and must not, function without taking the law of value into account.” To restate Stalin’s argument in the simplest possible terms, so long as labor power was bought and sold in the Soviet mode of production, the conflict between the soviet state central plan mechanism and the working class was the expression of the law of value. This conflict over the division of the social product arose directly from the continuation of wage slavery within ostensibly socialist relations of production. ***** If Stalin is correct, when transitory economic shocks like poor or indifferent harvests hit the soviet economy, who would bear the burden of these shocks became a matter of political conflict between the state and the working class. By attempting simultaneous expansion of investment, consumption and the military, on the one hand, and reduced hours of labor, on the other hand, Khrushchev was leaving very little room for maneuver in event of unforeseen economic shocks.

This is important to recognize precisely because production (in the form of the managers of enterprises) and defense (in the form of the military) had seats at the table where decisions on how to respond to unforeseen shocks were being made. Because of the top-down character of the soviet mode of production, the working class had no seat where decisions were taking place, but owing to full employment the working class did still possess

significant bargaining power which they could demonstrate both individually and collectively. How this conflict would work out was likely telegraphed, at least initially, by the decision in 1962 to reduce the consumption of the working class by raising prices and taxes. The Soviet Union was turning its back on the effort to realize the materialtechnical basis of communism precisely because realization of the material-technical basis of communism, i.e., reduction of hours of labor, threatened the top-down centralized management of the society that had proved so impressive in the earlier phases of development of the productive forces.

***** In theory at least, in order to maintain its grip on production, the privileged group of officials, who functioned essentially as “a surplus-appropriating ruling class”, had to back off the reduction of hours of labor and ultimately of communism itself, because this effectively implied increasing control over production in the hands of the working class. Further, let me emphasize that this ruling stratum had to go beyond simply maintaining its privileged position in production. To really maintain it grip on production, this stratum had to actually become a ruling class; had to become exploiters of the working class in its own right.

Yeltsin and his crew did not challenge Gorbachev’s reforms. Those reforms were aimed essentially at intensifying the exploitation of the soviet workers. What Yeltsin and his crew did was to carry Gorbachev’s reforms to their ultimate conclusion: the collapse of the Soviet mode of production.