A quick comment on the use of the term "state capitalism". This term was used to describe Russian economic development in the period immediately following the abolition of serfdom in Russia in 1861. It describes the policy of the Tsarist government and measures introduced "from above" following the reform. The Tsarist regime made use of high tariff barriers to protect local industry, placed big orders with local factories at advantageous prices, granted loans to local capitalists on favourable terms, etc.. The government encouraged the concentration of capital and channelled it into those sectors of the economy in whose development it had a vested interest.

Even before the reform of 1861 the Russian state owned large tracts of land, forests, mines and factories. After 1861, this sector assumed a more capitalist character. The Tsarist regime built railways at its own expense and bought up private railways. By 1894 more than half of the country's rail network was in the hands of the state. The Tsarist regime also owned a number of large railway engineering works and arms factories.

Many civil servants and even ministers bought shares in businesses. These businesses were given long-term loans and given orders at advantageous prices. Further, the policies of the Tsarist regime were strongly influenced by the owners of these businesses. Foreign capital was later allowed and French, Belgian, German and British financiers took over a number of businesses, especially in mining and metallurgy.

[I've dug this up from A Short History of the World, Ed. A.Z. Manfred.

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FM, the ways in which we could do things differently are endless. What's certain is that it will be absolutely necessary that we do before very long, because the current semi-capitalist system is destroying the natural economy. "Without the environment, there can be no economy." What we don't need is to transform our society into a neo-Liberal total capitalist economy. That way is a dead end for humanity. Socialism is the future.

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Table of Contents:

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Chapter One: The Ecological Tyranny of the Bottom Line
Chapter Two: Global Ecology and the Common Ground
Chapter Three: Ecology and Human Freedom
Chapter Four: Let Them Eat Pollution
Chapter Five: The Scale of Our Ecological Crisis
Chapter Six: Sustainable Development for What?
Chapter Seven: The Heresy of Ecological Economics
Chapter Eight: Globalization and the Ecological Morality of Place
Chapter Nine: Capitalism’s Environmental Crisis—Is Technology the Answer?
Chapter Ten: Environmental Problems in the “New Economy”
Chapter Eleven: The Limits of Environmentalism Without Class
Chapter Twelve: Malthus’ Essay on Population After 200 Years
Chapter Thirteen: Liebig, Marx, and the Depletion of Soil Fertility: Relevance for Contemporary Agriculture

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Originally posted by Frustrated Mess:

Yes, so along the endless line of possibilities, how does worker ownership of the means of production result in a different outcome than the dead planet predicated by capitalism?

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Ok, I see what you're saying. Keep in mind that a large percentage of the most important western economies are already socialist in nature. I pointed out James Galbraith's article on the real American model in another thread. A large part of the U.S. economy has nothing to do with "the free market", like: health care, social services, public education, government research(like DARPA, NIH and Health Canada), pharmaceuticals owing to public research, public administration and national arts, public utilities ie. meteorology, space exploration, state-subsidized agriculture(a lot moreso in the U.S. than here), the power grid(moreso here than there), telecommunications etc), law and order, public pension administration, public housing and so on.

In fact, a third of all employment in Scandinavian countries is in the public sector and has nothing to do with the free market. Publicly-funded and administrated economy became an important driver for the success of the most prosperous economy in the world post-1929, post-laissez faire state capitalism as was true of the rest of the western world. State-capitalism, as Lenin knew it to be, has changed radically since that time. In fact, many people recognize our current economies as a mix of socialism and capitalism which hasn't changed in decades. So I think this is where we would be starting off from and not the dated perception that was "state-capitalism" in bygone times before a world war was started to stop the spread of communism from East to West.

So this is where we are at today, with neo-Liberal ideologues wanting to turn back the clock on all those important changes made to western economies. And we've lost a lot of ground since the 1960's-70's. There are socialists who specialize in economics who will have a better idea what to do with the remaining workforce stuck in resource-depleting, monotonous and often times dangerous capitalist factories dedicating their lives to and risking health for the creation of useless widgets with built-in obsolescence, which is a feature of capitalism largely incompatible with a conservationist society needed in the future. And I see N. Beltov has posted an interesting link concerning this.

[ 09 December 2006: Message edited by: Fidel ]

But this is about socialist economics and different trends and formulations of socialist views internal to the tradition. Not something you know have spent a lot of time studying, i am afraid.

But I could be wrong, so I am interested in your views on Marx's Critique of the Gotha Program, how social relations would work vis "the market" in terms of his adage, "from each according to his ability, to each according to his needs."

I assert that his argument essentially supposes the type of social relations which would eliminate the exchange of goods, services and labour through the market mechanism, since his formulation implies nullifying the "exchange value" of labour.

[ 09 December 2006: Message edited by: Cueball ]

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Originally posted by Stephen Gordon:
This is the thing: economics is about resource allocation. The stuff you're talking about is a rhetorical sideshow.

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This is the thing: economics is about resource allocation.

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[O]nce you've convinced yourself that elites are manipulating market outcomes, it's all-too-easy to persuade yourself that those who would argue otherwise must necessarily be bought-and-paid-for apologists for the omnipotent elites. And once you've persuaded yourself of that, it becomes pretty much impossible for anyone to say anything that will budge you from your position.

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Originally posted by Stephen Gordon:
Ah. Another adherent of the Intelligent Design theory of economics:

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So what happened in Russia, Stephen ?. As far as I can tell, capitalism needed a wealthy investor class to start things off. So they did that in Russia. Shazam! Instant capitalist class is created. And they've done it in a few African nations with billions in IMF loans and aid money pocketed by the elite class who suddenly became a lot more elitist and spent it on military and personal luxuries. Ok, but the people are still poor while the elite become emormously wealthy from diamond mining and oil. Only now the people are not just poor, they're indebted to the global financier cabal - they're in the negative net worth column. Now what ?. Ah! Need I even ask. At this point, the economic long run kicks-in. I knew faith would come in to play at some point.

The people still need educating and basic infrastructure building. Who's going to do it ?. There's something missing before tens of millions of poor people can actually read and comprehend instructional recipes for beer and pizza.

[ 09 December 2006: Message edited by: Fidel ]

So, tell me then, Gordon, do we have an equitable system? Are resources efficiently and adequately allocated? Is everyone contributing according to his or her ability and is everyone receiving according to his or her needs? Is commodifying all human needs just? Or is justice a commodity?

If the lights were to go out today, we would still need farmers, carpenters, engineers, doctors, and workers. Economists would be food.

[ 09 December 2006: Message edited by: Frustrated Mess ]

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Originally posted by Frustrated Mess:
Ah, the appeal to authority. How unusual.

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Economics is about providing a rational base and an intellectual cover to exploitation and gross inequality -- Economists are PR hacks for the social and political elites.

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The reading? Economics is exactly what I said it is. There are many texts to support the pseudo-science of the paranormal, also. I do not need an economist to grow food, build a home, or stitch clothing. The political and social system founded on exploitation and inequality, however, does require economists to persuade the masses that their continued sacrifice and "belt tightening" is required so that they may enjoy an eventual feast, with the fattening of belly, and the joyful loosening of belt. In that sense, it is not unlike religion convincing people they must suffer now in service to "Caesar" in order to receive their just reward in the afterlife.

[ 09 December 2006: Message edited by: Frustrated Mess ]

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Originally posted by Stephen Gordon:
Okay. Just don't complain when economists ignore whatever it is you have to say.

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Economists are PR hacks for the social and political elites.

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[ 09 December 2006: Message edited by: Fidel ]

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This is the thing: economics is about resource allocation. The stuff you're talking about is a rhetorical sideshow

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Sure thing, Professor. And your PHD means what? Party Hopping Drunk?

It can’t mean much more than that if you actually believe your summary definition of economics.

The practical truth is economics is about resources allocation within the context of relations between people and their relative environment—not resource allocation in a vacuum.

That’s why the documents that Cueball referred to are so important and relevant to economics as they apply to people’s lives, values and conditions and aspirations—that’s why it’s called political economy, which even your Gods of Economic Stupidity and Dishonesty at the Chicago Business school, Fraser Institute, Chartered Banks, etc., accept this.

Maybe you should get off your sheltered academic high horse and start respecting the fact that there’s a whole lot more to economics than the narrow trickle-down corporate capitalist mantra and the dictates of the IMF and WTO or the Washington consensus.

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Don't appear to be trashing free market hypocrisy though, or he'll start slinging beer and pizza all over the place.

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It's too bad that thread is so dated. I would have had a couple suggestions to make had I been here at the time.

[ 09 December 2006: Message edited by: Steppenwolf Allende ]

One of the claims made for trading freely and applying the "comparative advantage" principle with nations specializing in, say, banana cultivation while its largest neighbor decides it must remain dominant in high technology is that world peace is more likely with this arrangement(David Ricardo). But there are glaring historical exceptions which make that claim simply untrue. And there are questions raised about the wisdom for straight-jacketing an entire nation's economic pursuits: issues with inequality, creating a one-dimensional economy, monotony for workers and several other disadvantages.

The other claim for trading freely is rapid economic growth potential. And that truth is clearly the case with China right now. But there are exceptions to that rule as well. In fact, the most prosperous economies of recent history have practiced trade protectionism in building their economies up from relative obscurity, like the U.S., Japan, Germany, Britain and the most significant western nations where Keynesianism(socialism-lite) was brought in to save those countries from full throttle capitalism which left factories idle and millions of workers unemployed in a wake of social and economic decline throughout the western world in the 1930's.

And wrt China and the Asian tigers, those economies were protectionist after WWII as well. China's and India's economies are expanding rapidly by trading freely with other nations, rich nations which used to be highly protectionist at one time and some still are, like the USA itself. India trades freely today, but they are still not progressing in areas of poverty reduction, and food insecurity that still exists for an estimated 320 million people.

China is remarkable though in that it was a fourth world nation behind even India wrt several important social statistics in 1949. China does not enjoy nearly the same natural wealth that exists in Russia, Africa and Latin America. And yet, there they go.

Fee trade talks being written up today behind closed doors and ever more remote locations around the world to avoid widespread protests are not about nations trading freely so much as they are about securing the rights of corporations, capital and "stuff." Those things enjoy more rights today than workers do. But at the same time, labour is still an integral part of the capitalist equation. There is no level playing field for the world's workers, and those rights, people's rights, are carefully ignored in these coercive and oppressive trade agreements. There can be no freer trade in goods while respecting human rights than under a global socialist economy.

[ 09 December 2006: Message edited by: Fidel ]

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I've totally lost track of this thread based on another thread I started.

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It’s true, Good Lord Palmerston. SO I will try to redirect it back on track by picking up where N Beltov left off.

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Even before the reform of 1861 the Russian state owned large tracts of land, forests, mines and factories. After 1861, this sector assumed a more capitalist character. The Tsarist regime built railways at its own expense and bought up private railways. By 1894 more than half of the country's rail network was in the hands of the state. The Tsarist regime also owned a number of large railway engineering works and arms factories.

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This is true (I should have mentioned this before). State capitalism was a common feature in the Russian economy well before the revolution. It certainly had at least some influence on the Bolshevik government’s economic business plans, as is indicated in as whole series of addresses and essays by both [URL=]Lenin, Stalin and Trotsky between 1918 and 1923.

Actually, the term “state capitalism” came into being in the 1870s as a description of the increasing dependence of the British, French, German and other European powers on nationalized industry and public sector—supposedly owned “in the name of the people” but still exclusively and dictatorially controlled by corporate hierarchies and bosses with capitalist agendas (in fact, many of these bosses were actual actual private capitalists appointed by their associated political leaders to these positions of corporate governance—a practice that goes back to the first capitalist era, known as the mercantile colonialism of the 1500s and 1600s).

The term has also been applied, albeit somewhat less accurately, to the central-state-regulated private sector capitalism promoted and practiced by the Nazi Regime in Germany, as described in Hitler’s essay
The German Economic Nation (excerpts)

[ 10 December 2006: Message edited by: Steppenwolf Allende ]

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But there was no capitalist investor class in the Soviet Union.

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Yes, there in fact was and continues to be (more so than ever) today.

We see this reported as far back as Lenin’s New Economic Policy discussions here was such a class reforming or being converted into state bureaucratic executives.

It was again seen in Stalin’s centralized corporate industrial management plans and who was in complete control of capital wealth and their direct function to accumulate as much capital as possible to fund further heavy industrial, military and international resource trade development, and, as much as possible, securing investments in other countries (preferably in banking and finance), which led to the final consolidation of what was known as the Nomenclatura, or ruling class.

After the Stalin era, the class continued to expand in wealth accumulation and international prestige.

And, as you have written about here many times, with the breaking up of the Soviet Union in the late 1980s and early 1990s, and with it the mass privatization, this Nomenclatura went “free market” with all of its accumulated millions.

Actually, a Russian report in 2003 , referred to by a Congress Liberbrary survey, claimed that over 60 per cent of its 35,000 millionaires are Nomenclatura or ex-apparatchiks who had much of their current millions during the Soviet era.

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There were no exclusive private property laws protecting vast accumulations of private wealth and assets.

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Yes there were, in the form of exclusive trust and power of attorney laws. Stalin apparently even re-introduced inheritance laws for large fortunes. And of course, the same basic provisions of the Master-Servant law, arguably the most fundamental legal basis for capitalism of every kind and dominant over just about every national economy going back to the 1500s, applied in the Soviet economy as well.

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Money lending and savings were handled by the national Gosbank. Soviet banks provided short-term credit to state-owned enterprises.

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Actually, the Soviet banking system is a good example of state monopoly capitalism in action, especially on the international scene, acting as an imperialistic force.

According to theRand Corporation, which did a lot of trade and investment consulting for Soviet corporations, reported the by 1980, there were over 60 banks loaning to just about everyone for everything.

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The Soviet currency, the ruble, was non-convertible after 1932. Black market buying or selling foreign currencies was a serious crime until the late 1980's.

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According to the essay compilation of Soviet Banking Policies and history, the Ruble has always been convertible. However, it was severely restricted to the point where in order to trade it on the open market, traders had to use a series of complex comparative figures, managed via the World Bank, in order to calculate the gold standard value of both the Ruble and whatever currency they wanted to exchange for it (or vise versa).

Apparently, this was set up by the Stalinist government in 1932 in order to prevent a sharp increase in trade price for the Ruble that was feared because of the intense capitalization (read profiteering) of state-owned corporations called-for in the Five Year Plan. A higher priced Ruble, would make Soviet goods less competitive on the world market, especially in Europe, where the regime was looking for trade.

The Soviet government apparently clung on to its primitive gold measure and desperately trying to keep the ruble’s trade price from plummeting during the inflationary late 1970s and 1980s. Of course, that’s what happened after the Soviet Union fell apart in 1991.

Keep in mind that it has been long established and recognized in socialist economic history that state ownership and bulk corporate nationalization are in themselves state capitalism, and have been developed as either a compromise between capitalist institutions and political forces and social democratic and labour movements, or to provide secure infrastructure to support private sector capitalism.

[ 10 December 2006: Message edited by: Steppenwolf Allende ]

Jeffrey Sachs was one of the Harvard economists advising on the privatization of Russian state assets in the 1990's. Some say the economists themselves were in conflict of interest by arranging financing and profiting from the economic reforms.

The Necessity of Gangster Capitalism: Primitive Accumulation in Russia and China

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So who were the capitalists, the "New Russian" entrepreneurs, supposed to be? Sachs was quick to rule out the workers: "[T]he overriding aim should be to transform state enterprises into private corporations, with transferable ownership shares, rather than, say, into cooperatives or firms self-managed by their workers." Sachs also insisted that "[T]he government must ... stop managers walking away with state property."

If not the workers and not the managers, who would become the capitalists, the owners of the private corporations? How could the reformers go "all the way" to set up a "western-style" capitalism without capitalists? To set up the basis for "normal" capitalist accumulation, they needed to carry out "primitive accumulation"—capitalists had to be created. Individuals had to take possession, privatize property, factories, mines, wells, and forests. But since no one had the money to buy these state properties from the government, there was no feasible way this privatization could be done legally, legitimately, or morally. And given Sachs' insistence on the need for speed in the transition, there was no time for a native capitalist class of small entrepreneurs to grow up over decades or centuries into large corporations. This class had to be hothoused, virtually overnight. And it was. In the end, a combination of elements of underground mafiosa, the nomenklatura, especially the top managers of certain industries, and segments of the intelligentsia —these people were essentially drafted to privatize the economy criminally. Indeed, Sachs and the HIID bear much responsibility for the creation of Russia's criminal capitalists because they drafted many of the privatization decrees. Indeed, the U.S. government is now investigating whether, and to what extent, the HIID broke U.S. laws by funneling hundreds of millions of United States Agency for International Development (USAID) dollars into the hands of corrupt privatizers like Anatoly Chubais and his cronies, and to what extent Harvard academic advisors personally profited in the process.

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If they had access to the measly few hundred million dollars used to buy up state assets at firesale prices, then they would not have needed the cash from western financiers, USAID, big oil companies, and billionaire Houston businessmen who eventually fled Russia to setup an office in Texas where they are now embroiled in legal battles with the Russian government over their claims to oil and other state assets. The nomenklatura were ruble millionaires perhaps, but not close to billionaire capitalists wrt western capitalists whose vast wealth is unparalleled then and today.

The manner in which an elite class was created in many third world capitalist nations in the past was to float IMF loans worth billions of dollars to friendly dictators who usually pocketed the money or spent it on military and opulent lifestyles while the country went into debt. At various times there were even accusations made for corruption within the World Banco itself.

[ 10 December 2006: Message edited by: Fidel ]

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Steppenwolf Allende, I believe the state bureaucrats and economic managers did have some wealth of their own, but not nearly enough to buy up 70 percent of state assets the way they did without outside financing.

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They had/have lots of wealth they sucked out of Soviet workers and the economy, for sure—quintessential capitalists, as far as I’m concerned. However, you are right in that they didn’t do it all by themselves.

Actually, reading through some of the sources I posted here earlier, the privatization efforts by the state capitalist bureaucrats started well before the Perestroika era—some going as far back as World War II, with key deals made between Soviet and European corporate hacks. Of course, though, as you point out, it really picked up in the 1980s and boomed in the early 1990s—and a lot of it was done in collusion with foreign capitalists looking for big bargains.

I remember covering the 1993 Russia-US Summit in Vancouver (I called it “the Boris and Bill Show). Then Yeltsin and Co. were pissed off that there wasn’t enough interest among big time western corporate sources in buying up Russian industries—despite the fact they admitted they recognized much of Europe and the US were in a recession at the time.

Meanwhile, right under his nose, a whole range of crooked back-room deals were being worked out without his knowledge.

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I don't believe they went from ruble millionaires to billion dollar oligarchs by drawing on secret bank accounts, otherwise, why were there American capitalists implicated in the criminal thefts of Russian state assets ?.

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Actually, according to the sources I have read, the Soviet-era millionaires were dollar millionaires with cumulatively billions invested all over the place. That’s largely how they forged long-standing relationships with foreign capitalists, including US ones. And that’s how US corporate hacks got involved with the pilfering that went on.

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Why did they have to offer foreign billionaire investors a cut of the booty when, if as you claim, that they already possessed the financial means to become the sole owners of hundreds of billions of dollars worth of Russia's oil and gas fields, mineral deposits, food processing, manufacturing plants and vast stands of timber?.

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Actually, Soviet commercial assets likely totaled in the trillions, not just the hundreds of billions.

But I’m sure you actually know the answer to the question already. As you say, there was no way either the Soviet or foreign capitalists could buy up all those assets entirely—not without crooked deals, which is exactly the legacy of the former republics after the Soviet Union fell apart.

In terms of the actual buying/selling of assets, it’s like any other massive corporate capitalist venture that’s super big and fairly risky: get together with a bunch of other big time corporate investors, spread the risk around and offer them a cut in return.

The Nomenclatura, being the capitalistic frauds they have always been, saw a great opportunity to make a lot more money teaming up directly with foreign capitalist investors while minimizing risks for themselves. They were multi-millionaires who wanted to become billionaires. Some of them sadly succeeded, and this was one way they did it.

The other important lesson for us working class slobs is that we cannot trust democratically-elected leaders to manage our natural wealth and state-owned assets. These things must be placed in the hands of a privileged few for profiteering. This is laissez-faire which died in 1929 around the western world, not after a vicious cold war and trade embargoes, but all on its own -- the people could not tolerate laissez faire capitalism after 1929. And it's no wonder Russians perished by the millions and drank themselves to death with the introduction of state-capitalism, the same ideology for planned and enforced impotence that was rejected around the western world over 70 years ago. We're being spoon fed to build up our tolerance for it again.

"There is no such thing as society."; -- Maggie Thatcher

[ 10 December 2006: Message edited by: Fidel ]

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Originally posted by Stephen Gordon:
This is the thing: economics is about resource allocation. The stuff you're talking about is a rhetorical sideshow.

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Is it? Actually I rather thought it expressed a clear economic principle about resource allocation "... to each according to his needs." I was quite well aware that you would reject it out of hand, but rather I was looking for some kind critique of the philosophical conception.

have you read the source material?

Myself, I think the conception is highly idealistic, yet it has a kind of internal logical consistency that I find interesting. I was interested in a deconstruction of the conception by you, not merely a denouciation.

Denouciations, as you have just pointed out are a dime a dozen on this board.

[ 10 December 2006: Message edited by: Cueball ]

Here it is.

It clearly follows a series of logical steps to come to the final assertion. It is not merely a boiler plate but consistent with arguement as made.

[ 10 December 2006: Message edited by: Cueball ]

But some people are gifted in the manner of comprehensiom, so why argue the point.

So what exactly is it about, anyway?

[ 10 December 2006: Message edited by: Cueball ]

It appears to arrive at the standard conclusion that wages should reflect productivity:

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But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form.

Hence, equal right here is still in principle -- bourgeois right, although principle and practice are no longer at loggerheads, while the exchange of equivalents in commodity exchange exists only on the average and not in the individual case.

In spite of this advance, this equal right is still constantly stigmatized by a bourgeois limitation. The right of the producers is proportional to the labor they supply; the equality consists in the fact that measurement is made with an equal standard, labor.

But one man is superior to another physically, or mentally, and supplies more labor in the same time, or can labor for a longer time; and labor, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labor. It recognizes no class differences, because everyone is only a worker like everyone else; but it tacitly recognizes unequal individual endowment, and thus productive capacity, as a natural privilege. It is, therefore, a right of inequality, in its content, like every right. Right, by its very nature, can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only -- for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal.

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Originally posted by Stephen Gordon:
I was looking for the part on resource allocation, and the only passage I could find is the one dicussing this point:"The emancipation of labor demands the promotion of the instruments of labor to the common property of society and the co-operative regulation of the total labor, with a fair distribution of the proceeds of labor."

It appears to arrive at the standard conclusion that wages should reflect productivity:

Or am I missing something?

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Yes, Stephen, you are missing something. That is not what Marx is getting at. You'd have to be a pretty big idjit to include that within the principle "from each according to his ability, to each according to his needs." I don't see how you got there actually. He does discuss the previous principle as part of an interim socialist formulation of economics, saying that, (in the very next paragraph, no less):

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But these defects are inevitable in the first phase of communist society as it is when it has just emerged after prolonged birth pangs from capitalist society. Right can never be higher than the economic structure of society and its cultural development conditioned thereby.

In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly -- only then then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!

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Whatever we think of that, I think this implies that in his utopic "best case" scenario, the exchange value of labour is nullified. completely the opposite of "wages should reflect productivity."

In this case I think it is pretty clear that if the exhange value of labour is nullified, then the whole premise of markets themselves would vanish. Or that is the idea.

What I like about it is that Marx is predicating his idea on the basis that all labour is eually valuable, as part of the whole coperative process. The dishwasher as important as the university professor. Do you find that premise reasoanable?

[ 11 December 2006: Message edited by: Cueball ]

Capitalism failed tens of thousands of poor people, as usual, with respect to tsunami relief in Indonesia and Sri Lanka in recent times. Capitalism is a car constantly on blocks and reliant on an invisible fist to prop it up around the world.

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Cueball: What I like about it is that Marx is predicating his idea on the basis that all labour is equally valuable, as part of the whole coperative process. The dishwasher as important as the university professor.

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The idea being that we might all be dishwashers at one time just as we might all be professors at one time. That would be a whole society like a Froebellian kindergarden; Marx's forecast was of an astoundingly flexible society peopled by citizens who might be one thing in the morning and something else in the afternoon without ever being constrained to be either.

These sorts of organizational principles are already used in some advanced production techniques to combat boredom and mind-numbing repetition and improve productivity; employees are "cross-trained" to do a variety of tasks to cover for each other, do something different, and so on. As Marx described capitalism growing in the womb of the old society, so too new ways of doing things, based on the most advanced priciples of production and organization, are developing in this, our, society. But these better ways of doing things are held back by capitalist property laws and the unresolvable contradition between the social character of production and the private appropriation of its result. The creativity of millions of workers is wasted by never being implemented. Anyone who works for a living and thinks a little for themselves knows this.

This is aside from the oafishly stupid wastage, the frighteningly near environmental armaggedon, the unyielding tendency to war and conflict, the never wholly dead threat of the restoration of fascism and the truncation of democracy, the oceans of money spent on marketing and advertising that stupefies the population, financial speculation and unproductive activity, wealth based on nothing but hedges, futures, currency deviations and so on that is characteristic of current day "monopoly-finance capitalism".

[ 12 December 2006: Message edited by: N.Beltov ]

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Originally posted by Cueball:
Whatever we think of that, I think this implies that in his utopic "best case" scenario, the exchange value of labour is nullified. completely the opposite of "wages should reflect productivity."

In this case I think it is pretty clear that if the exhange value of labour is nullified, then the whole premise of markets themselves would vanish. Or that is the idea.

What I like about it is that Marx is predicating his idea on the basis that all labour is eually valuable, as part of the whole coperative process. The dishwasher as important as the university professor. Do you find that premise reasoanable?

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Sure. Once you assume scarcity is no longer a problem, then you can organise resource allocation according to any principle you choose. And this seems as good as any: Free ice cream for everybody! Who could object to that?

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I was quite well aware that you would reject it out of hand, but rather I was looking for some kind critique of the philosophical conception.

Myself, I think the conception is highly idealistic...

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So. I am tempted to say it takes someone to be a little dumb themselves to assume that anyone could be so dumb as to literally believe that the "to each..., from each..." is actually a possibility. But then I guess some people need people to be that dumb so that they can think they are smart, don't you think?

Wishful thinking really. An ideal level of dumbness, as it where. Dumb, in an absolute sense. Dumbness on the level of a theoretical Maxim.

But as Bloch points out, 'ideals often serve as a measure by which we set our standards" however impossible they are. So for instance, when someone says "I would like to be truly free," we know that they are speaking in an ideal sense, as most people know that true freedom is a chimera. But its a nice idea.

By enouciating it, we get to think about all those things: "How free am I?" "Is this free enough?" And even "What is freedom?" All useful things when considering our place in the world.

But anyway, if you need to believe that everyone else is at this highly idealized level of dumbness, as to respond gullibly to the assertion "to each... from each..." as if Marx thought of that as anything other than a theoretical ideal, or a postulate, then I would ask you why you yourself are responding in the same way by actually going through the effort of pointing out that "from each... to each..." is not possible because that kind of abundancy is never available.

Of course in the ideal sense Marx seems to falling for the falacy of constant expansion rather in the manner of the Monetarists, but he wouldn't be the only one to do that would he? On the other hand I think we can reasonably assume that Marx was not asserting that as a real possibility but posing it as a theoretical absolute.

A philosphical premise so to speak.

There. I am. You are. We exist. Now let us begin.
So, you seemed to have missed the part about the
philosophical conception that underlies it:

To wit:

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What I like about it is that Marx is predicating his idea on the basis that all labour is eually valuable, as part of the whole coperative process. The dishwasher as important as the university professor. Do you find that premise reasoanable?

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[ 12 December 2006: Message edited by: Cueball ]

But lets skip the value part. Perhaps that is a little to complex for you.

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Originally posted by Cueball:
I talking about how the value of someones work is represented by how much they can obtain by it materially, through whatever currency of exchange is in practice.

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But lets skip the value part. Perhaps that is a little to complex for you.

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Even simpler: society is made up of a whole system of interelated persons, each contributing to the greater whole. Do you agree with this premise?

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Originally posted by Stephen Gordon:
You're going to have to explain what you mean by 'value.'

Hmm. I wonder if you're basing your arguments on the Labour Theory of Value. It was hashed out over here; you don't appear to have posted there, so perhaps you missed it.

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Apparently Marx referred to Labour Theory of Value(LTV) in describing others' theories. According to JDevine of Loyola, Marx referred to his own theory as the Law of Value (LoV), and contradicts neither empirical reality or supply and demand theories.

[ 12 December 2006: Message edited by: Fidel ]

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Originally posted by Stephen Gordon:

And the Platitude of the Week Award goes to....

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My qurstion is was do you agree with the underlying premise, as I outlined? Is it true, or not? Do you agree, or not?

Your answer seems to be a pack of smileys, but this intellectually assidious and oh so helpful response begs the question: Do you keep a packet of little stars in your desk to stick on your students papers when they have been good?

[ 12 December 2006: Message edited by: Cueball ]

[ 12 December 2006: Message edited by: Cueball ]

In the sense that the dishwasher is as important to society as a whole as the university professor.

So god loves all his children equally, but man doesn't or shouldn't, are you saying that?

[ 12 December 2006: Message edited by: Cueball ]

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Originally posted by Stephen Gordon:
Yeah, well, whatever: God loves all Her children equally. So what?

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The overweaning focus on economics is in fact one of the great failings of much Marxists analysis.

[ 12 December 2006: Message edited by: Cueball ]

A couple posts here. First on some glib responses to the Prof’s glib comments—mainly to do with respect and narrow-mindedness.

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Another sad example of a thread in which an important and interesting topic is reduced to a noxious mixture of pig-headed ignorance and crude conspiracy theories.

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SO, the Great Professor thinks discussing the real nature of the Soviet economy, based on the facts, such as those I have posted here, and that it played a huge role in shaping post-war economic policy and still affects economic policy today, is a waste of time, dismissing these facts as ignorance and conspiracy theories.

As a former student of economics, who included the study of the neo-con/neo-lib fiscal-monetarist Chicago Business Cult philosophies in which Professor Gordon seems to put so much stock, I say without doubt the terms “pig-headed ignorance” and “crude conspiracy theories” apply perfectly to these economics, as well as “religious cultism” and “total separation from reality.”

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Even though we're a long ways from the normal 100-post cutoff, this thread is over.

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How would you know that, considering you/ve posted repeatedly since you made this proclamation on a thread you havent’ really participated on seriously. This could serve as an example of how disconnected neo-lib economics are.

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Unless, of course, you're going to actually attempt to decide what people do or do not 'need', in which case, I'm going to mock you with little mercy.

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Watch out Prof. Remember that old cliché about people in glass houses.

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I'll go make some popcorn.

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I’m sure no matter what I write here, Super Steve will either ignore it or get mad. So of anyone else still reading this thread, I’ll try to put some of the Professor’s comments in some practical perspective.

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If you can make "to each according to his needs" an operational principle instead of meaningless boilerplate, I'd be happy to comment on it.

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In regard to the book Critique of the Gotha program, referred to here by Cueball:

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I've read it through twice now, and it's still gibberish.

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When debating corporatist, or self-proclaimed “classical” economists, I have found they usually develop what I call automatic self-induced comprehension problems when having to read or discuss economics that they don’t like. They just pretend they don’t understand, making it more work for their opponents, since they have to explain everything to them step by step.

Well, that need not be the case here, since this can be cleared up fairly quickly.

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It appears to arrive at the standard conclusion that wages should reflect productivity:

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So, despite his “gibberish” claim, Stephen clearly is forced to put value in what he’s read and interpret it. And he’s actually got it partly right.

The parts he quotes above are criticizing the Gotha Program (“Programme” in old English) of the United Workers’ Party of Germany (one of the wings of the Social Democratic Party), on its call for the right of equality of the proceeds of labour to everyone in society.

Marx, who wrote the critique, while having no problem with the equal right of access to the spoils of labour, doesn’t agree with the notion that people being compensated the same amount for their labour and fair distribution of the proceeds of labor is an equal right.

Obviously, if someone has a dependent family, they have greater immediate needs than someone who is single. At the same time, for example, the family person would likely be required to work less, therefore contribute less labour to the common economy, in order to spend time with and take care of their family, whereas the single person could likely put in all the overtime s/he can.

So obviously, someone who puts in more time, or uses their experience or acquired skills to increase the amount of labour they put in during the same time, they will obviously get paid more, etc.

So it’s true that all this refers to compensation for labour reflecting, in various ways and degrees, productivity.

Elsewhere in the book are references on addressing the unequal needs of people, via common funds and social supports, etc.—not unlike various measures that have been tried since then.

But what Gordon doesn’t get is the references to the developing stages of a democratic worker-run cooperative economy, which both the Gotha Program and the Critique refer to, and the addressing of inequality and overcoming scarcity and depreciative concerns.

At first an economy run democratically based on the general satisfaction of individual and community needs, especially in the long-term (that’s where the later-developed concept of sustainability takes much of its roots)—which is the historic definition of socialism--is just that: cooperative and democratic community-based business ventures and elected governments deciding how to manage the wealth and resources of society in the long-term public interest without playing second fiddle to undemocratic corporate institutions and bureaucracies (what Marx, in a play of words, calls “the revolutionary dictatorship of the proletariat,” as in the democratic rule by the working class majority).

But the argument is that as that economy and culture develop, and new innovations and technologies are freely put to use without being held up or used as economic blackmail by those institutions, society evolves economically to the point where it can produce in abundance, being able to provide for the needs, wants, aspirations etc. of people, (the ideal communist society) thereby overcoming scarcity and depreciation problems and the general lack of access that we have in today’s economies.

That’s the argument about the stages of future socialist economies: even if the economy has been overwhelmingly democratized, and the mode of community sustainability and the collective improvement harmonized with individual improvement (as in the slogan “free development of each be the free development of all), has mostly replaced the profiteering/maximum wealth accumulation and market monopoly mode, those economies will still have to address over time the problems created by the current capitalist economy, such as scarcity, depreciation, inequality, over/under-consumption, etc.

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Sigh. It's good to see you back, but not so good to see you making personal attacks. Could you please make your points without them, SA?

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I apologize again to you, and I don't want to make your job any harder.

But if you read back to the earlier posts on this thread, you will find that things got very personally insulting and disrespectful when Mr. Gordon entered the fray with very dismissive put-downs.

The fact he is an economist does not give him the privy of insulting people and dismissing what they say, especially when what is being said is based on fact and research.

As you can see from my last post here, I have tried to get things back on track somewhat with an economic discussion.

My post before would not even exist if this thread had not been hijacked by personal put-downs in the first place.

And I think this is interesting. Daly and Goodland once described corporations as working examples of central planning.

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Chomsky:Much of world trade (close to half, by some estimates) consists of intrafirm transfers -- centrally managed trade, internal to particular Trans National Corporations and guided by a highly "visible hand," to borrow the phrase of business historian Alfred Chandler. In an important critical analysis of the GATT World Bank economists Herman Daly and Robert Goodland point out that in prevailing economic theory, "firms are islands of central planning in a sea of market relationships." "As the islands get bigger" they add, "there is really no reason to claim victory for the market principle" -- particularly as the islands approach the scale of the sea, which departs radically from free market principles, and always has, because the powerful will not submit to these destructive rules.

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Machiavellian-capitalist rule numero uno: Socialize the risk, then privatize the profit.
I think Augusto Pinochet once said that everybody in the world is a Marxist, even if they don't know it themselves. Made me laugh when I read it.

[ 13 December 2006: Message edited by: Fidel ]

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Stiglitz: Underlying a lot of this book is the belief that incentives matter, but that, often, the incentives of the market are distorted. Therefore we have to realign incentives to make incentives directed in a way that is more socially productive. Using capital gains taxes to focus on long term capital gain. Using what I call the medical prize fund, so that people will have incentives to do innovation with important diseases like Malaria, AIDS, that involve hundred of millions of people, rather than to spend all the money on research to make hair grow better. Where it's a question of saving a hundred million people from Malaria, I think everybody in our society would say Malaria is more important. What does the market do? It says hair growth is more important than Malaria, because rich people and industrial countries pay for hair drug. They don't get Malaria so they won't pay for Malaria. So the market is not working.

It's really a book saying we can use the forces of market but we have to shape the forces of the market. Without shaping them, often they work in the wrong way. The companies maximize their profits by polluting.

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Originally posted by N.Beltov:
Interview with Nobel-Prize winning economist Joseph E. Stiglitz: The "Free Market" does not work.

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Making Globalization Work or Gloablization and its discontents?

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I got another question, how do MS economists think their theories of 'allocation of resources' relate to the reality that CEOs can now make ten Thousand times as much as those who work in their factories and fields? Does that not indicate a blind spot of their favourite capitalist models?

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It's what they call a distortion in the allocation of resources, and, yep, capitalism of every variety is pretty much about the distortion of the allocation of resources that would naturally go into addressing human need and development as it is needed, and instead redirecting much of the allocation toward exponential accumulation of wealth by those who undemocratically control it at the expense of everyone else.

And it gets more sickening every year. Check out the latest report on CEO "compensation" (more like pilfering):

CEO Remuneration report

On another matter discussed a while back:

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I wonder if you're basing your arguments on the Labour Theory of Value. It was hashed out over here; you don't appear to have posted there, so perhaps you missed it.

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It's funny when I see corporatists bashing the Labour Theory of Value. The truth is, there are so many versions of the LTV going back as far as Aristotle in about 300 BC in ancient Greece, and it, in one way or another, influences all economic thought across the board, including those who say they reject it.

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Steppenwolf Allende: It's funny when I see corporatists bashing the Labour Theory of Value. The truth is, there are so many versions of the LTV going back as far as Aristotle in about 300 BC in ancient Greece, and it, in one way or another, influences all economic thought across the board, including those who say they reject it.

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Our own Prof. Gordon conflated the labour theory of value with surplus value theory in a past thread. [I don't think that is the thread he linked to.] That led me to conclude that he was simply regurgitating poorly digested and understood critiques of Marxist LTV. In any case, I never got a reply from him on the "confusion". Better to go to the source - e.g., Marx's Capital vol. 1 is still very useful for the history of economic thought (up to 1860 or thereabouts) and is a model of how to give other creative thinkers their due.

[ 06 January 2007: Message edited by: N.Beltov ]

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Fidel: Marx referred to labour theory of value(LTV), but what's the "law of value" (LoV)?.

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I'm no economist, Marxist or otherwise, but this might help:

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Fox & Johnston: Abstracting from certain considerations which Marx deals with later in Capital (e.g., supply and demand, capitalist competition (and monopoly pricing - N.Beltov)), commodities exchange on the market in quantities of equal value. If one coat exchanges for a pair of shoes, it is because the same amount of socially necessary labour time is contained in each. This is the abstract law of exchange of value equivalents, a law which is fundamantal to the labour theory of value.

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The quote is from UNDERSTANDING Capital by John Fox and William Johnston. The concept of "socially necessary labour time" is important here, as it reflects an "average time of production under currrent technological and social conditions" and would vary with changes in technology, skill, social organization of production, etc.