Labour vouchers and credits: immediate issues

[Die Neue Zeit]

http://21stcenturysocialism.blogspot.com/2007/09/venezuela-and-new-socialism.html
http://21stcenturysocialism.blogspot.com/2008/08/programmatic-objectives-of-socialism.html

I'm still getting my head around the "immediate" or "directional" demands posed by Paul Cockshott in the above links:


The state place a legal obligation on the central bank to maintain a stable value of the currency in terms of labour.


The government should make it a condition of their accounts being approved for auditing, that they also produce labour time accounts. and that they mark on all products that they sell their labour content.

The above links don't mention any role whatsoever for so-called "local exchange trade systems," alternate currencies in our time that are similar to Proudhon's "labour money" criticized by Marx. What are the benefits and pitfalls of this "labour money" in modern capitalism? What of the considerations above?

[cyu]

The above links don't mention any role whatsoever for so-called "local exchange trade systems," alternate currencies in our time that are similar to Proudhon's "labour money" criticized by Marx. What are the benefits and pitfalls of this "labour money" in modern capitalism?

Capitalists have power because they have a lot of money (or claim the right to control a lot of other property). So one avenue of attack against capitalism would be to make the money that capitalists hold as worthless as possible. That's where alternate currencies come in.

The more people you can get to switch to using the alternate currencies as their primary currency, the more power you are taking away from the capitalists... Currency, after all, isn't valuable in itself - it is only valuable in terms of the real goods you can trade it for.

Anyway, what is a currency strike? When the population has been divided into one group that has a lot of currency (or gold) and another group that actually has to work for a living, a currency strike is when the second group stops accepting the existing currency (or gold) as legal tender.

In effect, this renders the first group broke. The result? The second group has more to share among themselves because the first group is no longer living off them. How does the second group decide who gets what? That depends on their policies - maybe they barter, maybe they share equally, maybe they just establish a new currency to use.

Although this scenario describes inflation with respect to the existing currency (or gold), it does not affect any new currencies the second group decides to establish.

If the second group is not particularly leftist, then in the future, there may emerge yet another group with vast amounts of the new currency, while everyone else does the real work... nothing another currency strike can't cure - it could conceivably keep going in cycles until the selfish give up on the notion that they should keep trying to accumulate more stuff.

[Lynx]

Venezuela has not tied the Bolivar to labour productivity or enacted labour-time measurements. There have been recent developments (LETS related?) - time for a blog update!!

http://21stcenturysocialism.blogspot.com/2008/08/new-venezuelan-law-on-community.html

[Die Neue Zeit]

Comrade, what else did you expect from Mister Hugo "Comrade Bush" Chavez Frias and company? If they can't get their monetary socialism right (nationalizing all banks and thereby gutting the boliburgesa's control over the money supply, particularly in light of the current financial mess), how much moreso labour credits (if they're even familiar with that stuff)?

[Lynx]

Chavez is not masterminding the transition all by himself, who are his economic advisers? They deserve as much scrutiny.

[cyu]

From http://21stcenturysocialism.blogspot.com/2008/08/new-venezuelan-law-on-community.html


The grave danger here is that a power of seigneurage will pass to local groups who will issue currency in an uncoordinated fashion. This will be inflationary and would in short order lead to that local currency loosing its value relative to the Bolivar. If on the other hand the central bank has an obligation to back these local notes, the net effect would be to accelerate the devaluation of the Bolivar itself, whilst in the process opening up huge opportunities for corruption on the part of those responsible for the issuing of the local currencies.

The whole attempt at backing one currency with another or maintaining exchange rates is like tilting at windmills and fairly irrelevant.

I would instead encourage these communities to just issue currency backed by what those communities are already producing. If they are producing grain, then issue 1 bushel notes. If they are producing oil, then issue 1 barrel notes.

Sure the value of these notes may fluctuate with respect to other goods (just like how prices of goods change all the time with respect to unbacked currencies) - however, there is no inflation with respect to the good used to back the currency.

The best part of this is that you don't have to worry about who controls the banks - instead, it puts control of the currency in the hands of the people who actually produce things for a living.

[Die Neue Zeit]

I think the Economist mentions this phenomenon already:

Tokens of utopia (http://www.economist.com/world/americas/displaystory.cfm?story_id=12814666)


The cimarrón is one of at least ten alternative currencies in different parts of Venezuela. They have the blessing of Hugo Chávez, the country’s left-wing president. They will help do away with capitalism and hence combat poverty, he says. But none of these tokens can be exchanged for the bolívar, the country’s legal currency. Their use is limited to “prosumers”—you have to bring something to sell before you can actually buy anything with them. The markets where they circulate are modest affairs: at Río Chico only a dozen or so products were on sale. But that is not the point.

Here's a longer, more politically friendly article:

Venezuela's Currencies Promote Cooperation, Not Competition (http://www.nowpublic.com/tech-biz/venezuela-s-currencies-promote-cooperation-not-competition)

[Hyacinth]

I'll have to read more on the alternative currencies idea before I can comment in detail, but briefly: I do not they are necessary, we are fully capable of switching to either labour-time vouchers or energy credits or some other accounting method within short order, it seems as though Chavez simply isn't interested in such a radical transition, which, if anything, exposes his reformist tendencies. That being said, the Guardian article was interesting indeed, but the sort of initiatives taken there seem to me to be coming from below, and have received token endorsal from above, which just goes to show that it is the working class that is often far more radical than its purported leaders.

[Elect Marx]

we are fully capable of switching to either labour-time vouchers or energy credits or some other accounting method within short order

I am curious; how would such systems coexist with the current monetary system? Would there be some sort of exchange rate for goods? While both of these alternatives make an attempt at objective value, monetary counterparts will remain abstract. Like everything else, the profit motive of capitalism puts pressure and irrational complications on this model.

[Die Neue Zeit]

Cockshott and Cottrell dedicated a whole chapter of Towards a New Socialism on this subject, on foreign trade:

http://ricardo.ecn.wfu.edu/~cottrell/socialism_book/

However, I have suggested the possibility of extending the logic behind their argument on foreign trade towards global industries. Obviously finance in the immediate transitional period would be monetary, but I'm sure some industries can transition immediately towards electronic labour credits and, if society is advanced enough, towards some form of energy accounting.

[cyu]

how would such systems coexist with the current monetary system? Would there be some sort of exchange rate for goods?

If it were up to me, I would use such systems to "destroy" the current monetary system. Excerpt from http://knol.google.com/k/j-y/capital-flight/gcybcajus7dp/5#

Your nation may still have in its treasury the remnants of the capitalist financial structure - gold, other precious metals, paper money from nations around the world. Spend it - as soon as possible. Buy commodities - those things you need to survive and buy any equipment you need to produce the goods you need. That is the real wealth to people who actually have to do the work.

What happens in the rest of the world as the people of your nation are suddenly flooding it with various currencies and "precious" metals, while snapping up real goods? The supply of those currencies and "precious" metals go up, while the supply of real goods go down. These goods become more and more expensive, while "money" becomes more and more worthless. Thus, there is all the more reason to exchange your money as soon as possible for real goods you will need.

So the goal is to actually cause a crash in the value of all the currencies currently held by capitalists - the more nations (assuming they are controlled by working people) that you can get to join in spending their existing old currency, in order to improve their productive ability, then the more old currency there would be floating around in the market, thus devaluing it.

At first, there will be an "exchange rate" between the old currency and what you're replacing it with - meaning at first there will still be producers willing to accept the old currency in exchange for their goods - or only have the old currency to pay you with. However, since your nation is not holding on to the old currency, but instead spending it to improve your productive ability as soon as you get it, then your own nation is protected from devaluation in the old currency.

The more nations that join you in no longer "saving" the old currency, the market will experience a glut in the old currency. If no one is willing to hold their savings in the old currency, then it will eventually become worthless - which leaves capitalists that hold a lot of the old currency economically powerless - while your nation holds all the "real wealth" - people, raw material, machinery, equipment, etc.

[Elect Marx]

So the goal is to actually cause a crash in the value of all the currencies currently held by capitalists - the more nations (assuming they are controlled by working people) that you can get to join in spending their existing old currency, in order to improve their productive ability, then the more old currency there would be floating around in the market, thus devaluing it.

How does everyone think this would play out? First off, you would need to actually have the working class (an actual DoP) in control, rather than a middle class that would hoard wealth.

Would capitalists sell their own rope? Or, like relations with counties that oppose US domination, would they make efforts to close out your market? Obviously in a revolution, the rulers and opportunists would first try to run off with the wealth and/or buy into the movement as leadership.

[davidasearles]

I am curious; how would such systems coexist with the current monetary system? Would there be some sort of exchange rate for goods? While both of these alternatives make an attempt at objective value, monetary counterparts will remain abstract. Like everything else, the profit motive of capitalism puts pressure and irrational complications on this model.

The model that I see is that a workers' collective utilize labor credits for inhouse transfers to different departments and for workers to withdraw products of the collective - but at the same time the political govt. will maintain the present fiat currency system that could be utilized by the collective for purchesses and sales outside of the collective where labor credits were not available or accepted. That as the collective grew larger and larger the fiat money could be used on a more reduced basis where eventually it would likely be phased out completely.

[Elect Marx]

The model that I see is that a workers' collective utilize labor credits for inhouse transfers to different departments and for workers to withdraw products of the collective - but at the same time the political govt. will maintain the present fiat currency system that could be utilized by the collective for pruches and sales outside of the collective where labor credits were not available or accepted. That as the collective grew larger and larger the fiat money could be used on a more reduced basis where eventually it would likely be phased out completely.

Does that mean the government would manage the import/export of all goods? I suppose there could simply be a currency exchange agency. Either way, having an institution with that much power is problematic, because it could be corrupted or infiltrated.

[cyu]

you would need to actually have the working class (an actual DoP) in control, rather than a middle class that would hoard wealth.


Yes, it does imply that leftists have at least some political power over the economy in your nation. The original article http://knol.google.com/k/j-y/capital-flight/gcybcajus7dp/5 was actually about what would happen if your country had a leftist revolution and experienced "capital flight" (capitalists pulling out their investments).



Would capitalists sell their own rope?


It depends on the situation. Their businesses need to survive as well. If, for example, the world economy was going into collapse, there were mass lay-offs around the world, and nobody was buying their stuff, then what is really the difference between one buyer of their goods and another - especially since the capitalist model forces businesses into competition with one another - those that refuse to sell will be replaced by ones that do not refuse.


would they make efforts to close out your market?
I'm not quite sure what you are asking here, but if you mean capitalists would try to prevent your nation's goods from selling in their countries, that's not a problem. The goal of your nation is to produce things for the people of your nation - to satisfy its own needs - not to satisfy the needs of wealthy capitalists.



Obviously in a revolution, the rulers and opportunists would first try to run off with the wealth


The great thing about real capital is that they can't do it. From http://knol.google.com/k/j-y/capital-flight/gcybcajus7dp/5 : "Real capital - the people, natural resources, and equipment needed to produce real goods - cannot be packed up in a bag when the capitalist skips town. They will require a lot of labor if they truly want to escape with real capital. What remains when the capitalists are gone are merely the people who are doing the work, and the means to do it."

[davidasearles]

Does that mean the government would manage the import/export of all goods? I suppose there could simply be a currency exchange agency. Either way, having an institution with that much power is problematic, because it could be corrupted or infiltrated.

The political govt. will have the power granted to it under the constitution.

The political govt. doesn't manage inport and export now. Why would it be much different when a significant part of the industrial economy is workers' collectives?

And why a currency exchange agency? From one county to another? I don't see why. From Labor Credits to fiat money and back? Again I don't see why. Why couldn't they float against each other? Is this what you're talking about? To set exchange rates?

[Hyacinth]

I am curious; how would such systems coexist with the current monetary system? Would there be some sort of exchange rate for goods? While both of these alternatives make an attempt at objective value, monetary counterparts will remain abstract. Like everything else, the profit motive of capitalism puts pressure and irrational complications on this model.
In short: I don't think it could coexist, the monetary system would have to go. But, to give a more complex answer, presuming that the whole world doesn't go socialist at the same time, trade could still exist on the basis of barter: goods for goods. At the end of the day both the monetary system and some alternative currency are intended to represent the value of, and facilitate the exchange of, goods and services, and while we might not be able to provide an accurate exchange rate between these different currencies (as they are based on completely different principles), we can still barter with goods.

[Hyacinth]

The political govt. will have the power granted to it under the constitution.

The political govt. doesn't manage inport and export now. Why would it be much different when a significant part of the industrial economy is workers' collectives?
I don't think so neat a division can be made between political and economic affairs. Regardless, pace Elect Marx, I don't think there is any issue as such with having some body or other with the responsibility of coordinating trade with non-socialist economic systems on the basis of exchange of goods for goods is problematic; corruption is not inevitable with a properly structured political system with sufficient oversight.

[Elect Marx]

I'm not quite sure what you are asking here, but if you mean capitalists would try to prevent your nation's goods from selling in their countries, that's not a problem. The goal of your nation is to produce things for the people of your nation - to satisfy its own needs - not to satisfy the needs of wealthy capitalists.

The problem is, that without being able to spread your goods worldwide and interact, the implication of a worker-run society is somewhat lost internationally (through media propaganda, market manipulation and reactionary conditioning). Isolation is a great enemy. You would inherently be increasing market volatility and that might be enough for capitalists to attempt to quarantine you. You may indeed be lacking certain quantities of useful metals for example, necessary to defend yourself or effectively run advanced production. Oil is another example of a scarce resource that capitalists are not investing into moving past, especially because it allows them a measure of market control. Fortunately, bio-diesel, grass based ethanol and electric are becoming viable alternatives. You do however need very sophisticated technology to produce and use these (bio-diesel may be an exception).

[davidasearles]

[quote=Hyacinth;At the end of the day both the monetary system and some alternative currency are intended to represent the value of, and facilitate the exchange of, goods and services, and while we might not be able to provide an accurate exchange rate between these different currencies (as they are based on completely different principles), we can still barter with goods.[/quote]

yes, pretty much. barter the goods or some symbolic representation of those goods.

[cyu]

The problem is, that without being able to spread your goods worldwide and interact, the implication of a worker-run society is somewhat lost internationally (through media propaganda, market manipulation and reactionary conditioning). Isolation is a great enemy. You would inherently be increasing market volatility and that might be enough for capitalists to attempt to quarantine you.

Right - but the real question is, "who is quarantining whom?" If you divide up the world into nations currently controlled by capitalists and nations currently controlled by anti-capitalists, then yes, the ones controlled by capitalists are in the majority.

However, if you divide up the world into people who currently produce things for a living and people who make most of their money off the backs of their employees or through their "investments", then those who produce things for a living far outnumber the capitalists.

Let's say we "quarantined" Wall Street instead: ship no goods into Manhattan. What do the rest of us get out of Wall Street besides paper and numbers on computers? Basically all the capitalists living off Wall Street are just there for one purpose: to consume the things the rest of society produces.

If Wall Street (and similar financial centers) were quarantined, then that just means more real goods left for everyone else to use.

[Elect Marx]

cyu,

I agree, however, you did not address my concerns about shortages. Depending on your geographical location, you might have a number of shortages in important materials/resources. Clearly you would want to invest remaining capital in them immediately, but what if that wasn't enough?

[cyu]

you might have a number of shortages in important materials/resources


So you look at the source from which you used to get those raw materials - are they capitalist? Or more importantly, would the people who are currently pulling those raw materials from out of the ground (or wherever) benefit from freeing themselves from capitalism? The answer, in all probability, is that, yes, they would benefit without capitalists trying to control them.

So here are some possibilities.

1) The source of those raw materials are already anti-capitalist. In this case, it would be in both your interests to help strengthen one another.

2) The source of those raw materials is currently controlled by capitalists. Support anti-capitalist revolutionaries in those areas - or encourage "black market" corruption in those companies - where the employees would tell the corporate execs that they only produced X amount of raw materials, when in fact they had produced X + Y. They hand over the X amount to the execs, and negotiate directly with you regarding Y.

3) The source of those raw materials is currently capitalist but you deal with them as normal, except you use capitalist currency as little as possible. For example, say your country produces natural gas or oil. Offer to pay them directly with natural gas or oil. If they accept the offer, then you've already side-stepped using capitalist currency - no problem. If they won't take natural gas / oil as direct payment (maybe because they don't need it) and are still demanding capitalist currency, then you sell just enough natural gas / oil to get the amount of capitalist currency that they want, and spend it immediately to buy the raw materials you want. At the end of the day, you still have no capitalist currency in your hands, which is your goal - either because you're actively trying to devalue the capitalist currency or because it's going to crash regardless of what you're doing.

[Die Neue Zeit]

From http://21stcenturysocialism.blogspot.com/2008/08/new-venezuelan-law-on-community.html


The grave danger here is that a power of seigneurage will pass to local groups who will issue currency in an uncoordinated fashion. This will be inflationary and would in short order lead to that local currency loosing its value relative to the Bolivar. If on the other hand the central bank has an obligation to back these local notes, the net effect would be to accelerate the devaluation of the Bolivar itself, whilst in the process opening up huge opportunities for corruption on the part of those responsible for the issuing of the local currencies.

This is the same response Cockshott gave me in recent correspondence, and he added that opportunities for financial fraud would arise (during the appropriation of resources for initial issuance of notes). The local currencies would have to be a subordinate form of state money.

He also pointed out one other obvious shortcoming: that, in an unplanned exchanged economy, shortages of some things and overproduction of others would result if one tries to tie an hour to one hour's sale price.

[Elect Marx]

This is the same response Cockshott gave me in recent correspondence, and he added that opportunities for financial fraud would arise (during the appropriation of resources for initial issuance of notes). The local currencies would have to be a subordinate form of state money.

He also one other obvious shortcoming: that, in an unplanned exchanged economy, shortages of some things and overproduction of others would result if one tries to tie an hour to one hour's sale price.

If producing the currency is almost as difficult as legitimate work, that isn't a problem. Why make money when you can make money. Also, if you have worker agreements, it would take a large-scale conspiracy to organize such fraud. Really, this may somewhat be a matter of shear vigilance, because capitalists will go to extreme measures to undercut your economy. The main point is to move past the monetary mechanics ASAP, and use mutualistic means.

Shit 3100 posts! When did this happen? :unsure: :lol: