No one knows what the unfair restriction thread is for anymore

[IcarusAngel]

hayenmill and dejavu support moves toward societies like the 'free-state proejct'.

I'd recommend checking the site out - it's basically the type of society that the Libertarian Party (a capitalist party) advocates, and has no real concern for political freedom, as it equates economic freedom of the corporations with 'freedom.'

This is not 'revolutionary left' at all; just point that out - in fact, I'd wager that it's even worse, a Gilded Age style of capitalism.

[Havet]

hayenmill and dejavu support moves toward societies like the 'free-state proejct'.

Actually I think it's a waste of time


I'd recommend checking the site out - it's basically the type of society that the Libertarian Party (a capitalist party) advocates, and has no real concern for political freedom, as it equates economic freedom of the corporations with 'freedom.'

Touché - though I never claimed otherwise


This is not 'revolutionary left' at all; just point that out - in fact, I'd wager that it's even worse, a Gilded Age style of capitalism.

Incidentally, the gilded age saw one of the greatest rise in Unions and worker organization throughout all America (http://en.wikipedia.org/wiki/Gilded_age#Labor_unions).

If you portray the Gilded Age as bad i'll respond that you don't care about workers and wish worker unions to be abolished

See? I can make strawmans too :)

[Parker]

If other left-libertarians and libertarian socialists are tolerated, why can't I as well?
[/FONT]


I'm talking of Parker, Genecosta and IcarusAngel

Hi, I just read this thread and wanted to clear something up.

I have called myself a libertarian socialist (http://en.wikipedia.org/wiki/Libertarian_socialism) for a number of years, pretty much ever since I became a socialist in the mid-1990s (yes, I am getting on a bit now:)).

For me, this was in opposition to authoritarian socialism, of the Leninist variety, of the "communism" of the Eastern Bloc, and so on, and European Labour Party/social democratic reformism. The adoption of "libertarian" and "socialist" indicated I was (and still am) opposed to both the state and capitalism.

I was also influenced a great deal by Maurice Brinton (http://en.wikipedia.org/wiki/Maurice_Brinton) and the UK group Solidarity (http://en.wikipedia.org/wiki/Solidarity_%28UK%29), who called themselves libertarian socialists. Noam Chomsky was also an influence on me, as were Orwell, Marx, Gerrard Winstanley, William Morris and the anarchist movements of Spain, the Ukraine and so on. In the real world - at least in my part of it, in the UK and Europe - people very easily understand what libertarian socialism means (http://libcom.org/library/as-we-see-it-solidarity-group).

But, I have always been aware that in the United States "libertarian" conveys a different meaning to that in Europe. I even knew that some thought "libertarian socialism" to be an oxymoron, which is fair enough, given the differences in political culture between the two regions.

However, it was only very recently that I discovered a tendency within the pro-capitalist libertarian movement in the US, influenced by Konkin and Rothbard, which called itself "libertarian socialist" too. My understanding of this is that they believe that the wholesale adoption of anti-state capitalist-libertarianism will lead to widespread social equality.

I have nothing to do with this tendency.

I am not going to get into a pointless argument about who gets to call themselves "libertarian" or "anarchist" or whatever. People can call themselves what they like. I am always happy to debate the issues, though.

[Havet]

The adoption of "libertarian" and "socialist" indicated I was (and still am) opposed to both the state and capitalism.

Same here


But, I have always been aware that in the United States "libertarian" conveys a different meaning to that in Europe. I even knew that some thought "libertarian socialism" to be an oxymoron, which is fair enough, given the differences in political culture between the two regions.

Yeah in the U.S. they usually just mean libertarian as a person who opposes the state but wants capitalism, basically stateless capitalism, with a branch of minarchists and objectivists as well


However, it was only very recently that I discovered a tendency within the pro-capitalist libertarian movement in the US, influenced by Konkin and Rothbard, which called itself "libertarian socialist" too. My understanding of this is that they believe that the wholesale adoption of anti-state capitalist-libertarianism will lead to widespread social equality.

Well those whom ive seen which claim to be influenced by Konkin and rothbard usually dont propose stateless capitalism

[Parker]

Well those whom ive seen which claim to be influenced by Konkin and rothbard usually dont propose stateless capitalism

They're a weird mob, that lot.

They change a few of the definitions about but it's hard to see the difference between agorism and anarcho-capitalism (or even capitalism) as such. Both will still be based on the extraction of surplus labour via rent and interest. And even if some agorists reject wage-labour, they still favour instead a society of individual producers who rent the means of production, i.e., authoritarian social relations. Of course, if you reject this, then one could reasonably ask why you are an agorist or anarcho-capitalist at all ...

Also, the Rothbard crowd, the anarcho-capitalists, are still too much influenced by vulgarised Austrian economics for me ever to take it remotely seriously.

[Havet]

They change a few of the definitions about but it's hard to see the difference between agorism and anarcho-capitalism (or even capitalism) as such. Both will still be based on the extraction of surplus labour via rent and interest. And even if some agorists reject wage-labour, they still favour instead a society of individual producers who rent the means of production, i.e., authoritarian social relations.

How does a society of individual producers (who can be free to join and organize themselves into collective producers) will somehow lead to authoritarian social relations?


Also, the Rothbard crowd, the anarcho-capitalists, are still too much influenced by vulgarised Austrian economics for me ever to take it remotely seriously.

Well i'll just leave this between you, Olaf and Dejavu.

[Parker]

How does a society of individual producers (who can be free to join and organize themselves into collective producers) will somehow lead to authoritarian social relations?

the keyword is rent. It presupposes a class which owns, and a class which pays for the use of, the means of creating society's wealth. It is the same with interest and wage-labour.


Well i'll just leave this between you, Olaf and Dejavu.

But if you're an agorist, a propertarian market anarchist, you have more in common with their politics than you do with mine.

As agorist Brad Spangler writes (http://bradspangler.com/blog/archives/350):


In a market anarchist society, law and security will be provided by market institutions, not political institutions. Agorists recognize, therefore, that those institutions can not develop through political reform. Instead, they will come about as a result of market processes.

How different in effect is a private judiciary, jail system and police force from a state judiciary, jail system and police force?

[Havet]

the keyword is rent. It presupposes a class which owns, and a class which pays for the use of, the means of creating society's wealth. It is the same with interest and wage-labour.

Actually, it doesn't presuppose anything. I don't see the prevalence of rent (and consequently a class who owns and another who pays) when there is equality of opportunity and free banking.

If mutual banks of the Proudhonian variety were allowed to issue private banknotes with the output of future production used as collateral, then the capacity for credit, and self-employment, would be readily available for anyone with marketable skills.

Rents, mortage payments and credit debts would undergo an overall decrease and home ownership would become more accessible to the average working person. Greater accessibility to land resulting from the elimination of federal government and agribusiness related land monopolies and the application of the homesteading principle (or other principles) would result in the revival of traditional familyfarms. Similarly, a lowered cost of living would reduce the need for two-income households thereby reviving traditional households and increasing the degree of attentiveness of parents to children.


But if you're an agorist, a propertarian market anarchist, you have more in common with their politics than you do with mine.

Ah well, you see, I don't mind both forms, either possessions, or collective property, or even "private" property, as long as in every case the community which held such view wouldn't force their view upon their neighbours.

So basically I have a pluralist anarchist without adjectives views. I came this far because I realized collective ownership/property is no more justified than individual property. There are simply no deontological arguments to back either of them (the "natural rights" arguments), so it's all a matter of preference really, since in a society with equality of opportunity none of those systems would be likely to submit the other, unless they were terribly cost-efficient and the people accepted it.


How different in effect is a private judiciary, jail system and police force from a state judiciary, jail system and police force?

Well, as far as i know, I never heard ancaps talk of jail systems, so I wouldn't know much about that (considering i'm not an ancap)

Anyway, the main difference is that the later has the monopoly on law enforcement and law creation, whereas the first doesn't.

In any case, I don't think this matter is of terribly importance, especially if you're concerned about little tyrannies that might appear, because law enforcement and defense doesn't need to be made only by profit-seeking institutions, but also by other methods, such as a sheriff elected by the community, or a community militia made of voluntary citizens, or even something resembling what we see today in switzerland (http://en.wikipedia.org/wiki/Switzerland#Swiss_Armed_Forces), though slightly changed.

[Parker]

Actually, it doesn't presuppose anything. I don't see the prevalence of rent (and consequently a class who owns and another who pays) when there is equality of opportunity and free banking.

Of course there's no problem of rent in a world without rent! You can of course simply wish it all away. That, however, is not where private property leads.


If mutual banks of the Proudhonian variety were allowed to issue private banknotes with the output of future production used as collateral, then the capacity for credit, and self-employment, would be readily available for anyone with marketable skills.

This is sheer fantasy land. You do know that Proudhon's attempt at banking was a miserable failure? Besides, banks already issue credit on expectation of future revenue streams. Marketable skills presupposes social relations of prodution of commodities for exchange on a market - capitalism in embryo.


Rents, mortage payments and credit debts would undergo an overall decrease and home ownership would become more accessible to the average working person.

How would credit debts be reduced if banks were to issue unlimited, interest free credit? The average worker already has no problem in getting a mortgage. But again, mortgages and rents presuppose a market in housing, landlords, the requisite social relations, etc., etc.


Greater accessibility to land resulting from the elimination of federal government and agribusiness related land monopolies and the application of the homesteading principle (or other principles) would result in the revival of traditional familyfarms. Similarly, a lowered cost of living would reduce the need for two-income households thereby reviving traditional households and increasing the degree of attentiveness of parents to children.

And how does this all come about? How do we get back to the small business society? Big business was once small business, but the nature of trade means that companies grow and merge. The very logic of production for exchange engenders monopolies, cartels, price-fixing and so on.

Economic power is always also poltical power.


Ah well, you see, I don't mind both forms, either possessions, or collective property, or even "private" property, as long as in every case the community which held such view wouldn't force their view upon their neighbours.

Social prodution is not about "imposing views".

[Skooma Addict]

Also, the Rothbard crowd, the anarcho-capitalists, are still too much influenced by vulgarised Austrian economics for me ever to take it remotely seriously.


What do you mean by this? Certainly, some AnCaps will only read works by Rothbard and other radical libertarians. Is that what you mean by "vulgarized Austrian economics?" What in your opinion separates Vulgar Austrian economics from normal Austrian Economics?

[Parker]

What do you mean by this? Certainly, some AnCaps will only read works by Rothbard and other radical libertarians. Is that what you mean by "vulgarized Austrian economics?" What in your opinion separates Vulgar Austrian economics from normal Austrian Economics?

oh, I wouldn't read too much into that. Obviously I must think there is something of value in Austrian economics. I was thinking of a couple of people I sometime debate on other forums.

[Havet]

This is sheer fantasy land. You do know that Proudhon's attempt at banking was a miserable failure?

How is this relevant to anything?


Besides, banks already issue credit on expectation of future revenue streams. Marketable skills presupposes social relations of prodution of commodities for exchange on a market - capitalism in embryo.

There is difference between banks now and hypothetical mutual banks. Surely you can use your imagination.


How would credit debts be reduced if banks were to issue unlimited, interest free credit? The average worker already has no problem in getting a mortgage. But again, mortgages and rents presuppose a market in housing, landlords, the requisite social relations, etc., etc.

The point is not to reduce credits, but to allow people who don't own the MOP to get started.

And there are other things far more important besides credits restrictions that do not allow a worker to get a morgage, or have the freedom to produce.


And how does this all come about? How do we get back to the small business society? Big business was once small business, but the nature of trade means that companies grow and merge. The very logic of production for exchange engenders monopolies, cartels, price-fixing and so on.

Most big businesses became big due to government laws, regulations, intellectual property laws, special privilege, so on.

For example, take Wal-Mart. Besides the fact that it enjoys a special government status (http://en.wikipedia.org/wiki/Limited_liability), like any other corporation (http://en.wikipedia.org/wiki/Legal_fiction), their lower prices are possible only because of the massive state subsidies to trucking, shipping, infrastructure, aviation, etc. If such corporations had to cover their own costs in these areas, they might not be able to compete with local alternatives.(See "Iron Fist", by Kevin Carson). In other words, most of these corporations got so big because they externalized costs.

To see how, historically, the cartels and predatory pricing you are denouncing did not arise out of the more or less free-market in the U.S.A, check this (http://www.revleft.com/vb/showpost.php?p=1560065&postcount=71) post of mine.


Social prodution is not about "imposing views".

Good then. I get to keep my system, and you get to keep yours.

[Parker]

How is this relevant to anything? There is difference between banks now and hypothetical mutual banks. Surely you can use your imagination.

And I suppose these hypothetical mutual banks are free from the laws of economics?


Most big businesses became big due to government laws, regulations, intellectual property laws, special privilege, so on.

You aren't telling me anything I don't already know. The difference is you think there is some pure capitalism underneath all this. I don't.

[Havet]

And I suppose these hypothetical mutual banks are free from the laws of economics?

Nope. But what is it you're concerned about them?


You aren't telling me anything I don't already know. The difference is you think there is some pure capitalism underneath all this. I don't.

There is no such thing as pure capitalism. To some, capitalism might mean individual ownership of capital is allowed , or even encouraged, but on a larger scale capitalism is synonymous with mercantilist practice. You're not going to win the hearts and minds of any potential anarchists by positing capitalism as part of it. Capitalism is functionally a state enforced system and is quite contrary to anarchism. This also makes capitalism incompatible with free enterprise.

There is no reason to romanticize capitalism, especially if you're an anarchist.

[Parker]

Nope. But what is it you're concerned about them?



There is no such thing as pure capitalism. To some, capitalism might mean individual ownership of capital is allowed , or even encouraged, but on a larger scale capitalism is synonymous with mercantilist practice. You're not going to win the hearts and minds of any potential anarchists by positing capitalism as part of it. Capitalism is functionally a state enforced system and is quite contrary to anarchism. This also makes capitalism incompatible with free enterprise.

There is no reason to romanticize capitalism, especially if you're an anarchist.

Just let's clear this up. Do you think wage-labour is non-exploitative? Interest, rents and profits?

[Havet]

Just let's clear this up. Do you think wage-labour is non-exploitative? Interest, rents and profits?

Wage-labor, interest, rents and profit will always be exploitative so long as one man, or class of men, are able to prevent others from working for themselves because they cannot obtain the means of production or capitalize their own products, so long those others are not free to compete freely with those to whom privilege gives the means.

[Skooma Addict]

Parker, I have a thought experiment for you.

Assume everyone suddenly forgot how much labor went into producing every commodity and every producers good. Do you think prices would change? Nobody has any idea how much labor went into building a rocket ship or a wagon. Nobody has any clue whatsoever. Why do you think prices would/wouldn't change?

[Bud Struggle]

Nice to know we spun you guys off into an alternate universe! :D

(I enjoy your posts--I'm just intellectually incapable of replying in any of them. :) )

[IcarusAngel]

Nice to know we spun you guys off into an alternate universe! :D

(I enjoy your posts--I'm just intellectually incapable of replying in any of them. :) )


It's funny watching to competing ideologies under the same name argue it out, both purposing abstract solutions, I admit it. But this happens to every ideology including capitalism. There are like 10 different forms of 'minarchism' - Randism, Miseanism, Hayekism, and so on - also all abstract, which is ironic considering they all claim to have discovered 'true human nature' and natural rights.

Communists have Stalinists, we Anarchists have 'market-anarchists' (who are different from market-socialists like Professor David Schweickart). Evolutionists have creationists; geologists have flat earthers, etc.

It happens to every decent theory and field.

[Parker]

Parker, I have a thought experiment for you.

Assume everyone suddenly forgot how much labor went into producing every commodity and every producers good. Do you think prices would change? Nobody has any idea how much labor went into building a rocket ship or a wagon. Nobody has any clue whatsoever. Why do you think prices would/wouldn't change?EDIT: sorry, Olaf, I misread your question. I am not sure that it really means anything, however. Economics is full of these little thought-experiments, such as "imagine we are all on a desert island", etc.. There is no way in the real world that a business would "forget" how much time went into producing something.

Nevertheless, because all inputs are labour inputs (living labour or past labour embodied as means of production and capital goods commodities) then you are really saying that no-one knew the extent of the value of any of the inputs into their products. In that case, then undoubtedly things would go awry.

[Parker]

Wage-labor, interest, rents and profit will always be exploitative so long as one man, or class of men, are able to prevent others from working for themselves because they cannot obtain the means of production or capitalize their own products, so long those others are not free to compete freely with those to whom privilege gives the means.

To me this is some kind of "petty-bourgeois" fantasy-utopia of small producers, one that seeks to abolish capitalist production according to its own laws (e.g., free competition, equal exchange, and so on). You indicate this when you say that "men capitalise their own products" - the aim of social production is accumulation of capital, rather than production based on the principle of human needs.

[Havet]

To me this is some kind of "petty-bourgeois" fantasy-utopia of small producers, one that seeks to abolish capitalist production according to its own laws (e.g., free competition, equal exchange, and so on). You indicate this when you say that "men capitalise their own products" - the aim of social production is accumulation of capital, rather than production based on the principle of human needs.

The point of social production is to allow each person to be free to produce according to what they need, and if they want, to accumulate capital to supply other people's needs through trade. Of course the dynamic of this free market will posit limits on what one person alone can produce and accumulate.

You still don't seem to come up with some strong counter-arguments.

[Parker]

The point of social production is to allow each person to be free to produce according to what they need, and if they want, to accumulate capital to supply other people's needs through trade. Of course the dynamic of this free market will posit limits on what one person alone can produce and accumulate.

You still don't seem to come up with some strong counter-arguments.

You are just trying to evade the necessary conditions of the form of production you propound.

Say the worker-producer gets to keep the full product of his labour and trade and exchange with others in a stateless system, being mutually bound by money and the market - this is still commodity production, production for profit not use, with the goal being to make profits, to accumulate capital.

Market forces will still dominate in the sphere of production. There will be competition between rival suppliers. The exchange value of commodities being determined by the average labour time the individual producer or co-operative takes to make it, still entails constant pressure to keep up the pace of work.

Instead of human values, society will be based on the values of money and commerce. Factor in the fact that you think wage-labour is okay, and its not exactly "From each according to his ability, to each according to his need" is it? Little wonder Kropotkin and other anarchists rejected this approach altogether.

Anyway, your ideas only make sense in a past age of self-sufficient famrs, workshops and artisanal production. Indeed, that is the era from which it sprang, to which it belongs and I suppose in which it made sense. A variant was also called Guild Socialism, but it died out before the war. No-one really wants to return to a yeoman society.

[Skooma Addict]

EDIT: sorry, Olaf, I misread your question. I am not sure that it really means anything, however. Economics is full of these little thought-experiments, such as "imagine we are all on a desert island", etc.. There is no way in the real world that a business would "forget" how much time went into producing something.

Nevertheless, because all inputs are labour inputs (living labour or past labour embodied as means of production and capital goods commodities) then you are really saying that no-one knew the extent of the value of any of the inputs into their products. In that case, then undoubtedly things would go awry.

I agree with you when you say that there is no way a business would forget how much time went into producing something. But the point is that prices would not change if such an event occurred. Prices would only change to the extent that people valued how much labor went into a product in and of itself. But the point is that how much labor went into producing a commodity has no real bearing on its value or its price.

All other things being equal, the diamond I find on the beach is just as valuable as the diamond my neighbor extracted after 3 years of mining.

[Havet]

You are just trying to evade the necessary conditions of the form of production you propound.

Say the worker-producer gets to keep the full product of his labour and trade and exchange with others in a stateless system, being mutually bound by money and the market - this is still commodity production, production for profit not use, with the goal being to make profits, to accumulate capital.

I don't see the problem of someone making profits if the profits he is making are not at the forceful expense of anybody else. Given the different dynamic of that system, and the existence of equality of opportunity, we would witness dramatic increase in the number of businesses and employers would mean that workers would have a much larger number of potential employers to choose from in addition to greatly expanded opportunities for self-employment.

This would in turn radically increase the bargaining power of workers in terms of their dealings with employers. The cost of wage labor would increase as the market for employees became drastically more competitive. Workers in large-scale industrial operations would have the option of demanding the right of self-management if they so desired and, given the expanded availability of credit and capital, workers would be able to buy out capitalists and essentially become their own employers.


Market forces will still dominate in the sphere of production. There will be competition between rival suppliers. The exchange value of commodities being determined by the average labour time the individual producer or co-operative takes to make it, still entails constant pressure to keep up the pace of work.

How is this somehow bad? Remmember, "The differences in natural ability are not, in freedom, great enough to injure any one or disturb the social equilibrium. No one man can produce more than three others"


Instead of human values, society will be based on the values of money and commerce. Factor in the fact that you think wage-labour is okay, and its not exactly "From each according to his ability, to each according to his need" is it? Little wonder Kropotkin and other anarchists rejected this approach altogether.

I only think wage-labor is okay because the workers will be receiving the full product of their labor, unlike now, where their choices are restricted.

Anyway, what's this talk about "human values vs money & commerce values"? What are you implying? That people will do *everything* in order to create profit? You are forgetting that such system would be different than today. There would be physical barriers and ideological barriers to prevent massive concentrations of private power in a way that would endanger other people's lives, freedom, and freedom to trade.


Anyway, your ideas only make sense in a past age of self-sufficient famrs, workshops and artisanal production. Indeed, that is the era from which it sprang, to which it belongs and I suppose in which it made sense. A variant was also called Guild Socialism, but it died out before the war. No-one really wants to return to a yeoman society.

And it also makes sense now. I'm not trying to forcibly reduce the progress of mankind. The dominant forms of economic organization in an authentic free market would be worker-owned and operated industries, partnerships, cooperatives, a mass of small businesses, modestly sized private companies and self-employed persons. Industries that remained nominally owned by outside shareholders would largely function on a co-determined basis, that is, as partnerships between shareholders and labor with labor having the upper hand.( See "Iron Fist", by Carson. See also a review of Carson, "Capitalism Versus Free Enteprise" (http://attackthesystem.com/capitalism-versus-free-enterprise-a-review-of-kevin-carsons-the-iron-fist-behind-the-invisible-hand/)). So the traditional anarcho-syndicalist ideal of an industrial system owned and operated by the workers could, for the most part, be achieved in the context of a stateless free market.

[Parker]

But the point is that prices would not change if such an event occurred. Prices would only change to the extent that people valued how much labor went into a product in and of itself. But the point is that how much labor went into producing a commodity has no real bearing on its value or its price.

Hi Olaf.

I think you contradict yourself there - twice!



Prices would not change.
Prices would change depending on how people valued the labour inputs.
But labour has no bearing on value or price anyway.


On average, the ratio at which commodities exchange with each other is conditioned by the amount of effort it took to produce them, i.e., more inputs. A car will always be more expensive than a pencil, a television more than a toothbrush, a computer more than a ball-point pen ... Why? Because these inputs are real costs.


All other things being equal, the diamond I find on the beach is just as valuable as the diamond my neighbor extracted after 3 years of mining.

Depending on its size, if you find a diamond on the beach you would certainly be a rich man. Or at the very least you'd be able to pocket a few grand. :D Why? Becuase commodities' values are related to the averges in social production, to the socially necessary labour, the "abstract labour", required to produce them.

A diamond that appeared from nowhere, by magic, that had had not the slightest shred of concrete human labour expended in its mining or polishing, etc., would still be worth thousands because of its relation to the average value of diamonds mined in normal diamond production. That is, its value in relation to all the other diamonds produced in the normal fashion. If, however, diamonds started to magically appear everywhere, they would become worthless. People would still "value" them in the sense that they would still be pretty jewels, but they would no longer command thousands in price.

[Parker]

I don't see the problem of someone making profits if the profits he is making are not at the forceful expense of anybody else. Given the different dynamic of that system, and the existence of equality of opportunity, we would witness dramatic increase in the number of businesses and employers would mean that workers would have a much larger number of potential employers to choose from in addition to greatly expanded opportunities for self-employment.

Hi Hayenmill,

Profit comes from the unpaid labour of others, i.e., selling something one has not bought, which is why I object to it. If you mean the income derived as a self-employed producer, then yes we are talking about something different, "given the different dynamic of that system". However, it seems to me that the dynamic is not that much different at heart than the old one, i.e., production for exchange rather than direct use. I think this cuts to the centre of where we disagree.


This would in turn radically increase the bargaining power of workers in terms of their dealings with employers. The cost of wage labor would increase as the market for employees became drastically more competitive. Workers in large-scale industrial operations would have the option of demanding the right of self-management if they so desired and, given the expanded availability of credit and capital, workers would be able to buy out capitalists and essentially become their own employers.

Oh, I am all for workers taking over their own large-scale industrial operations. I absolutely agree with self-management. Co-operatives are very useful in showing that workers can organsie production themselves without the need for a boss. Insofar as it is possible under capitalism, and to the extent of the will and aims of the membership, co-operatives are literally living proof of anarchism.

In the transition stage out of capitalism workers may indeed be running their own factories and acting as their own employers. For me it is a mid-way strategy, but it expresses the will of workers as a class with a common interest. I do not see this as an end in itself. I do not think that it is a question of trying to out-compete capitalists, but of self-organised workers directly confronting the state and capital.

Having said that, this revolution business does not seem like it is going to come about any time soon ...


How is this somehow bad? Remmember, "The differences in natural ability are not, in freedom, great enough to injure any one or disturb the social equilibrium. No one man can produce more than three others"

I am not quite sure how it is relevant to the point I raised. In any case, I do not see people as being equal to each other. We all have different talents, abilities, etc. This is, I would have thought, obvious. It is capitalism, which reduces all labour to abstract labour, i.e., that it only values labour as average labour, that imposes an equality on all of us.


I only think wage-labor is okay because the workers will be receiving the full product of their labor, unlike now, where their choices are restricted.

Wage workers never receive the full product of their labour.


Anyway, what's this talk about "human values vs money & commerce values"? What are you implying? That people will do *everything* in order to create profit? You are forgetting that such system would be different than today. There would be physical barriers and ideological barriers to prevent massive concentrations of private power in a way that would endanger other people's lives, freedom, and freedom to trade.

Yeah, this is again a major disagreement I have with the individualist/mutualist anarhcists. Small businesses, if they are successful, grow. They become big businesses. Market forces engender the behaviour of rational economic calculation, independent of anyone's will. Even with the best of intentions at the outset, even amongst the co-operative movement. I am still a member of the Co-Op here in the UK, for what it's worth, but to all intents and purposes it functions as a normal bank and financial services company and as a normal supermarket.


And it also makes sense now. I'm not trying to forcibly reduce the progress of mankind. The dominant forms of economic organization in an authentic free market would be worker-owned and operated industries, partnerships, cooperatives, a mass of small businesses, modestly sized private companies and self-employed persons. Industries that remained nominally owned by outside shareholders would largely function on a co-determined basis, that is, as partnerships between shareholders and labor with labor having the upper hand.( See "Iron Fist", by Carson. See also a review of Carson, "Capitalism Versus Free Enteprise" (http://attackthesystem.com/capitalism-versus-free-enterprise-a-review-of-kevin-carsons-the-iron-fist-behind-the-invisible-hand/)).

Thanks. I did actually read that as I hadn't come across it before. I agree with much of Caron's criticism of the existing state of affairs and his analysis of histroy, but feel he gets too misty-eyed when it comes to the potential extent of the impact of his ideas.

The reason I was a bit hostile when we first started this discussion was that a) I have come across plenty of anarcho-capitalists who claim mutualism as their own, and b) Greens who come out with a similar line about societies of small, self-sufficient producers that I think is irrelevant in a major advanced economy.


So the traditional anarcho-syndicalist ideal of an industrial system owned and operated by the workers could, for the most part, be achieved in the context of a stateless free market.

Except that, for anarcho-syndicalists, self-managed production in a stateless society would be for direct social use, not exchange on the market.

[Havet]

Profit comes from the unpaid labour of others, i.e., selling something one has not bought, which is why I object to it. If you mean the income derived as a self-employed producer, then yes we are talking about something different, "given the different dynamic of that system". However, it seems to me that the dynamic is not that much different at heart than the old one, i.e., production for exchange rather than direct use. I think this cuts to the centre of where we disagree.

I'm talking that given the different dynamic of a free market society, and given a readily available capacity for self-employment, the workers, being scarcer, will thus command higher wages and more influence upon the employer, making it a much more fair system.

In short - people would not be forced to become wage-earners.


Oh, I am all for workers taking over their own large-scale industrial operations. I absolutely agree with self-management. Co-operatives are very useful in showing that workers can organsie production themselves without the need for a boss. Insofar as it is possible under capitalism, and to the extent of the will and aims of the membership, co-operatives are literally living proof of anarchism.

In the transition stage out of capitalism workers may indeed be running their own factories and acting as their own employers. For me it is a mid-way strategy, but it expresses the will of workers as a class with a common interest. I do not see this as an end in itself. I do not think that it is a question of trying to out-compete capitalists, but of self-organised workers directly confronting the state and capital.

Having said that, this revolution business does not seem like it is going to come about any time soon ...

This revolution can only come through the abolition of the State, making it as likely as a communist revolution.


I am not quite sure how it is relevant to the point I raised. In any case, I do not see people as being equal to each other. We all have different talents, abilities, etc. This is, I would have thought, obvious. It is capitalism, which reduces all labour to abstract labour, i.e., that it only values labour as average labour, that imposes an equality on all of us.

The point is that the different natural inequalities are not great enough to create big disparities. With equal opportunity to produce, the division of product will necessarily approach equitable distribution.


Wage workers never receive the full product of their labour.

Yes, this is what happens now. I am talking of what would happen in a freer society. Now pretty much everyone is forced into becoming a wage worker, with some lucky exceptions, whereas in a freer society, people would be freer to chose other paths, and those who still wanted to become wage workers would be consenting to have some value of their labor removed, because they could be doing something else.


Yeah, this is again a major disagreement I have with the individualist/mutualist anarhcists. Small businesses, if they are successful, grow. They become big businesses. Market forces engender the behaviour of rational economic calculation, independent of anyone's will. Even with the best of intentions at the outset, even amongst the co-operative movement. I am still a member of the Co-Op here in the UK, for what it's worth, but to all intents and purposes it functions as a normal bank and financial services company and as a normal supermarket.

Yes, small businesses, if successful, can grow. But I do not see how they can grow too much to pose a threat to the equality of opportunity of everyone else. There are many ways for a big businesses, with a natural monopoly, to fall apart.

Here's a post I did a while back about it:

First, a small introduction: A natural monopoly (http://en.wikipedia.org/wiki/Natural_monopoly) occurs when, due to the economies of scale (http://en.wikipedia.org/wiki/Economies_of_scale) of a particular industry, the maximum efficiency of production (http://en.wikipedia.org/wiki/Production,_costs,_and_pricing) and distribution (http://en.wikipedia.org/wiki/Distribution_%28business%29) is realized through a single supplier.

We, smaller competitors are less efficient than the monopoly firm and hence unable to compete with it. Except where the market is very small (a small town grocery store for example), this is a rather uncommon situation. Even so, there are several ways to remove that monopoly.

Potential Competition

If a natural monopoly raises prices high enough, we smaller and less efficient firms can compete profitably, because customers will find the monopoly prices too much expensive.

If otherwise, the monopoly decides to keep prices low enough so that we cannot compete, well it depends on the actual competition. If they keep the prices low, but enough new firms still keep appearing, at some point they won't be able to keep placing the prices so low without losing large amounts of money, making it more profitable to stop trying to drive us out and thus losing its monopoly position. Thus a solution is to keep new firms appearing.

Indirect Competition

Imagine steel production were a natural monopoly. Even if the monopoly firm were enormously more efficient than potential competitors, its prices would be limited by the existence of substitutes of steel. As it drove prices higher and higher, people would use more aluminium, plastic, and wood for construction. Similarly a railroad, even if it is a monopoly, faces competition from canal barges, trucks and airplanes. So another way to dismantle a monopoly is by entering commerce in substitutes of the monopoly's products/services.

Example by David D. Friedman

"Suppose a monopoly is formed, as was U.S.Steel, by financers who succeed in buying up many of the existing firms. Assume further that there is no question of a natural monopoly; a firm much smaller than the new monster can produce as efficiently perhaps even more efficiently. It is commonly argued that the large firm will nonetheless be able to achieve and maintain complete control of the industry. This argument, like many others, depends on the false analogy of market competition to a battle in which the strongest must win.

Suppose the monopoly starts with 99% of the market and that the remaining 1% is held by a single competitor. To make things more dramatic, let me play the role of the competitor. It is argued, that the monopoly being bigger and more powerful, can easily drive me out.

In order to do so, the monopoly must cut its price to a level at which I am losing money. But since the monopoly is no more efficient than I am, it is losing just as much money per unit sold. Its resources may be 99 times as great as mine, but it is also losing money 99 times as fast as I am.
It is doing worse than that. In order to force me to keep my prices down, the monopoly must be willing to sell to everyone who wants to buy; otherwise unsupplied customers will buy from me at the old price. Since at the new old price customers will want to buy more than before, the monopolist must expand production, this losing even more money. If the good we produce can be easily stored, the anticipation of future prices rises, once our battle is over, will increase present demand still further.

Meanwhile, i have more attractive options. I can, if I wish, continue to produce at full capacity and sell at a loss, loing one dollar for every hundred or more lost by the monopoly. Or I may save money by laying off some of my workers, closing down part of my plant, an decreasing production until the monopoly gets tired of wasting money.

What about the situation where the monopoly engages in regional price cutting, taking a loss in the area i am operating and making it up in other parts of the country? If i am seriously worried about that prospect, I can take the precaution of opening outlets in all his major markets. Even if i do not, the high prices he charges in other areas to make up for his losses against me will make those areas very attractive to other new firms. Once they are established, he no longer has a market in which to make up his losses."

"Over-Agglomeration" tactic

So what if the monopolist tries to buy out competitors? After all, this is usually cheaper than spending a fortune trying to drive them out - at least, it is cheaper in the short run.

Well, to tell you truth, this problem is not new. It was once done by Rockefeller (http://en.wikipedia.org/wiki/John_D._Rockefeller) in order to achieve monopoly. Using oil refineries as the example, I would recommend realizing that you can build a new refinery, threaten to drive down prices, and sell out to monopolist at a whopping profit. Repeat this action several times until the monpolist can no longer afford to have so many refineries.

For a real-life example of this, let's go back to Rockefeller's time. David.P.Reighard apparently made a sizable fortune by selling three consecutie refineries to Rockefeller. There was a limit to how many refineries Rockefeller could use. Having built his monopoly by introducing efficient business organization into the petroleum industry, Rockefeller was unable to withstand the competition of able imitation in his later years and failed to maintain his monopoly.




Thanks. I did actually read that as I hadn't come across it before. I agree with much of Caron's criticism of the existing state of affairs and his analysis of histroy, but feel he gets too misty-eyed when it comes to the potential extent of the impact of his ideas.

Well that's good to hear. I can't even remmember the last time someone actually read a link I sent them xD


The reason I was a bit hostile when we first started this discussion was that a) I have come across plenty of anarcho-capitalists who claim mutualism as their own,

Well, that's understandeable. Traditionally, market anarchy = mutualism, but recently some ancaps have tried to take the name as their own.

http://www.youtube.com/watch?v=9U-iwhE4-fc


and b) Greens who come out with a similar line about societies of small, self-sufficient producers that I think is irrelevant in a major advanced economy.

Well of course if an industry is impossible with small self-suficient producers, I don't think we shouldn't have that industry just because it requries an agglomeration. The thing is, i'd rather that agglomeration were formed of worker-owned and operated industries, partnerships, cooperatives, a mass of small businesses rather than today's corporations.


Except that, for anarcho-syndicalists, self-managed production in a stateless society would be for direct social use, not exchange on the market.

Same thing. Those who want to produce for their direct social use are free to do so. And the surplus can be used to trade for non-direct necessities, such as entertainment, for example.

[Robert]

This revolution can only come through the abolition of the State, making it as likely as a communist revolution.

Less likely, you mean. Even commies (especially commies:o?) see the need for orderly administration of public services: Interstate highway construction and repair, airline routes and altitudes, orphan and abused child protection, oil pipeline maintenance and repair, bag limits and seasons for hunters, electric power generation and distribution, none of which responsibilities I trust an individual to respect or be able to manage.

If "the community" administers these interests, and raises public funds to pay for it, with the force of law behind it, it's "a state" by any other name.

[eyedrop]

If "the community" administers these interests, and raises public funds to pay for it, with the force of law behind it, it's "a state" by any other name.

Fair enough, it's just by a leftist definition of a state that abolishing the state makes sense.

I can certainly see that many people would be calling what I envisage as being the organisational organ a state.

Leftist terminology and propaganda can be somewhat archaic, but there is always the hope of getting your version of words to become the mainstream ones.

It makes some good slogans though, although you shouldn't say it in day to day conversations without explaining what you mean by it.

[Skooma Addict]

Hi Olaf.

I think you contradict yourself there - twice!



Prices would not change.
Prices would change depending on how people valued the labour inputs.
But labour has no bearing on value or price anyway.



Prices would change. But they would only change to the small extent that people value labor in and of itself. It would be similar to the situation where everyone suddenly knows what race the people who made their products are. The vast majority of the population would not care if their product was made by a "black" man or a "white" man. However, some people would care, so prices would change. Prices would change because it is safe to assume that some people out there actually value labor in and of itself. But these people are so few and the price change so minimal that saying that prices would change is misleading. For all intents and purposes, labor has no bearing on price (just like the race of the man who made the product has no bearing on price).


On average, the ratio at which commodities exchange with each other is conditioned by the amount of effort it took to produce them, i.e., more inputs. A car will always be more expensive than a pencil, a television more than a toothbrush, a computer more than a ball-point pen ... Why? Because these inputs are real costs.

Right now a television may be worth more to you than a coat. But if you find yourself stranded out in the cold, then the coat is more valuable to you. The reason why you value these things has nothing to do with their labor inputs or costs.


Depending on its size, if you find a diamond on the beach you would certainly be a rich man. Or at the very least you'd be able to pocket a few grand. :D Why? Becuase commodities' values are related to the averges in social production, to the socially necessary labour, the "abstract labour", required to produce them.

A diamond that appeared from nowhere, by magic, that had had not the slightest shred of concrete human labour expended in its mining or polishing, etc., would still be worth thousands because of its relation to the average value of diamonds mined in normal diamond production. That is, its value in relation to all the other diamonds produced in the normal fashion. If, however, diamonds started to magically appear everywhere, they would become worthless. People would still "value" them in the sense that they would still be pretty jewels, but they would no longer command thousands in price.

This is difficult to accept because nobody values diamonds for this reason. If diamonds started to appear out of nowhere, then they would eventually become worthless for the same reason water has become pretty much worthless (in certain areas of the world); because the supply is so high.

Also, there are examples where commodity X is more valuable than commodity Y, even though more labor went into producing commodity Y.

[Parker]

I'm talking that given the different dynamic of a free market society, and given a readily available capacity for self-employment, the workers, being scarcer, will thus command higher wages and more influence upon the employer, making it a much more fair system.

In short - people would not be forced to become wage-earners.

I think a lot of the problems that arise between socialist anarchists and market anarchists arise because of the terminology. As I see it, free access to the means of production, directly associated producers, democratic control, self-management, etc., are all things I agree with. I certainly agree that co-operatives have a role to play in the transition, amongst other things such as advice centres, housing, education - in short, all the great multiplicity of manifestations of mutual aid.


Yes, this is what happens now. I am talking of what would happen in a freer society. Now pretty much everyone is forced into becoming a wage worker, with some lucky exceptions, whereas in a freer society, people would be freer to chose other paths, and those who still wanted to become wage workers would be consenting to have some value of their labor removed, because they could be doing something else.

I disagree. In a society free of the compulsion to work for a wage, it would probably just "wither away". The whole point of wage-labour is not just paying for the convenience of having someone work for you. It is owning the things that they make or the services they provide, and reaping the profits when these are sold. So, if I worked for 35 hours in a week at one co-operative I'd get the same value back. This wouldn't be wage-labour at all.

The problem would come in having to validate this labour in exchange, as we do now. What right would I have to draw on the labour of society if my own labour were deemed socially wasted? Assuming this freer society, people would probably just move to a pull-system of production for use, with some planning, particularly for things such as power generation and public goods.


Yes, small businesses, if successful, can grow. But I do not see how they can grow too much to pose a threat to the equality of opportunity of everyone else. There are many ways for a big businesses, with a natural monopoly, to fall apart.

I'll get back to you on this. This is where another disagreement lies.


Well that's good to hear. I can't even remmember the last time someone actually read a link I sent them xD

:)

I do have a critique of some of Carson's arguments in his Mutualism book, but I can save them for another time.


Well, that's understandeable. Traditionally, market anarchy = mutualism, but recently some ancaps have tried to take the name as their own.

I still have my disagreements, but yes anarcho-capitalism =/= mutualism.


Well of course if an industry is impossible with small self-suficient producers, I don't think we shouldn't have that industry just because it requries an agglomeration. The thing is, i'd rather that agglomeration were formed of worker-owned and operated industries, partnerships, cooperatives, a mass of small businesses rather than today's corporations.

Yeah, it would be a problem when it came to, say, nuclear power generation. I mean, like it or not, the by-product of nuclear power generation is going to be around for thousands of years anyway ... And mining, oil refinery, plastics production, etc., etc.


Same thing. Those who want to produce for their direct social use are free to do so. And the surplus can be used to trade for non-direct necessities, such as entertainment, for example.

[Parker]

Right now a television may be worth more to you than a coat. But if you find yourself stranded out in the cold, then the coat is more valuable to you. The reason why you value these things has nothing to do with their labor inputs or costs.

oh lol, I already said to you in posts gone by that how we "value" something and the economic value of things are not the same. Read up on the LTV.

[Skooma Addict]

oh lol, I already said to you in posts gone by that how we "value" something and the economic value of things are not the same. Read up on the LTV.

So then to be clear, you admit that the reason we value something is purely subjective, yet you also say that an objective economic value does exist. Sounds a lot like Neo-Platonism.

As you said earlier...



Depending on its size, if you find a diamond on the beach you would certainly be a rich man. Or at the very least you'd be able to pocket a few grand. :D Why? Becuase commodities' values are related to the averges in social production, to the socially necessary labour, the "abstract labour", required to produce them.

But again, nobody values diamonds for this reason. If diamonds were just as rare as they are today, but almost no labor went into extracting them, the price of diamonds would not change because people would still value diamonds just as much as they do today.

Commodities have no inherent or objective value. There is no such thing as inherent value, just like there is no such thing as inherent goodness or beauty. You seem to have a Neo-Platonic theory of value. Your claims are just as absurd as saying "how we judge beauty and an objects inherent beauty are not the same."

But to go further, we run into examples where commodity X has a higher price than commodity Y, even though on average more labor goes into producing commodity Y.

[Parker]

So then to be clear, you admit that the reason we value something is purely subjective, yet you also say that an objective economic value does exist. Sounds a lot like Neo-Platonism.

No, I don't think you understand what neo-platonism is and I don't think you understand what the labour theory of value is either! I never said that the reason we "value" something is purely subjective. I said that it is not pertinent to the discussion. The labour theory of value is not either a normative theory about why we should value something. It is concerned with the form of value in commodity producing society. Value is a social relation, not a thing.

Socially necessary labour time is what conditions price magnitudes under capitalism. It works as a blindly operating average that corrects itself with successive crises.

I also don't think you understand how a business in the real world calculates its costs, profits and prices. You keep looking at things from a very obtuse angle (coats, black people, diamonds on beaches) and this shows how far your thinking is from the actual world of production and circulation of commodities.

You keep using value in a completely normative way that is more related to aesthetics, but this is not the way in which economists use it. You are not doing economics, in other words.

Also, you haven't answered how subjective value is transformed into price.


But again, nobody values diamonds for this reason. If diamonds were just as rare as they are today, but almost no labor went into extracting them, the price of diamonds would not change because people would still value diamonds just as much as they do today.

NOthing to do with the LTV.


Commodities have no inherent or objective value. There is no such thing as inherent value, just like there is no such thing as inherent goodness or beauty. You seem to have a Neo-Platonic theory of value. Your claims are just as absurd as saying "how we judge beauty and an objects inherent beauty are not the same."

False equivalence.


But to go further, we run into examples where commodity X has a higher price than commodity Y, even though on average more labor goes into producing commodity Y.

You may run into instances like this, but this will likely be the result of subsidies, taxes, etc. Also, supply and demand creates fluctuations in the market, etc., etc. - but again if you actually knew what you were arguing agaisnt, you'd know this.

But one thing: if labour is not the source of value, if all value is merely subjective, what would happen if we all stopped working for a week?

[Havet]

I think a lot of the problems that arise between socialist anarchists and market anarchists arise because of the terminology. As I see it, free access to the means of production, directly associated producers, democratic control, self-management, etc., are all things I agree with. I certainly agree that co-operatives have a role to play in the transition, amongst other things such as advice centres, housing, education - in short, all the great multiplicity of manifestations of mutual aid.

My thoughts exactly. This is why I stimulate the conversation regarding ansocs from a market anarchist point of view.


I disagree. In a society free of the compulsion to work for a wage, it would probably just "wither away". The whole point of wage-labour is not just paying for the convenience of having someone work for you. It is owning the things that they make or the services they provide, and reaping the profits when these are sold. So, if I worked for 35 hours in a week at one co-operative I'd get the same value back. This wouldn't be wage-labour at all.

Sure, you'd be free to engage in cooperatives. My point is precisely that. Since people have that option without the restrictions of today's society, then they can't complain about getting a wage-earning job when they have just as much opportunity to do something else.


The problem would come in having to validate this labour in exchange, as we do now. What right would I have to draw on the labour of society if my own labour were deemed socially wasted? Assuming this freer society, people would probably just move to a pull-system of production for use, with some planning, particularly for things such as power generation and public goods.

I'm sorry but I honestly don't understand your argument here. How would your labor be deemed socially wasted? It can only be deemed socially wasted if you're trying to produce something with low demand. Then again, we already know people can just produce for their necessities.


I'll get back to you on this. This is where another disagreement lies.

k


Yeah, it would be a problem when it came to, say, nuclear power generation. I mean, like it or not, the by-product of nuclear power generation is going to be around for thousands of years anyway ... And mining, oil refinery, plastics production, etc., etc.

Exactly. There are some industries who have to be big.

[Skooma Addict]

No, I don't think you understand what neo-platonism is and I don't think you understand what the labour theory of value is either! I never said that the reason we "value" something is purely subjective. I said that it is not pertinent to the discussion. The labour theory of value is not either a normative theory about why we should value something. It is concerned with the form of value in commodity producing society. Value is a social relation, not a thing.

Except why we value objects is pertinent to the discussion, and I never said the LTV is a normative theory of value. Can you explain why value is a social relation? Also, you seriously don't think that the reason why we value something is subjective? The reason why people disagree over what constitutes good art is differences in subjective valuation.

Also, I studied under a Neo-Platonist for over a year. I know what Neo-Platonism is. Hopefully you aren't assuming that only followers of Plotinus are Neo-Platonists. Or the more likely scenario is that you don't understand what Neo-Platonism is.


Socially necessary labour time is what conditions price magnitudes under capitalism. It works as a blindly operating average that corrects itself with successive crises.

Supply/Demand is what determines prices. The reason why people demand certain goods is due to subjective valuations. This is what connects costs with subjective preferences. How labor time can be connected to prices is beyond me. I can spend decades making something that will be worth 3 dollars if I really wanted to.


You keep using value in a completely normative way that is more related to aesthetics, but this is not the way in which economists use it. You are not doing economics, in other words.

I have not used value in a normative way. I haven't said why people should value something.


Also, you haven't answered how subjective value is transformed into price.

Explained above.


NOthing to do with the LTV.

I was just explaining why price has nothing to do with labor inputs.


False equivalence.


Can you explain why?


You may run into instances like this, but this will likely be the result of subsidies, taxes, etc. Also, supply and demand creates fluctuations in the market, etc., etc. - but again if you actually knew what you were arguing agaisnt, you'd know this.


Even without taxes and subsidies, there is no reason to assume that commodity X couldn't be more valuable than commodity Y, even if more labor goes into producing commodity Y. I also know supply/demand creates fluctuations in the market. Where you got the idea that I didn't know this is anyone's guess. Just like where you got the idea that I didn't know what Neo-Platonism was is anyone's guess.


But one thing: if labour is not the source of value, if all value is merely subjective, what would happen if we all stopped working for a week?Lots of things would happen. Assuming demand doesn't change, the decrease in supply will cause a constant increase in prices.

Here is something for you. If you don't think value is subjective, why do people value so many different things for reasons completely unrelated to labor inputs?

[Parker]

Here is something for you. If you don't think value is subjective, why do people value so many different things for reasons completely unrelated to labor inputs?

except this is not about why people "value" things in that sense, as I keep saying, This is about what determines exchange value.

[Skooma Addict]

This is going to be my final reply to this conversation.


except this is not about why people "value" things in that sense, as I keep saying, This is about what determines exchange value.

I think the two are related. That is the whole point. Supply/Demand determines prices. Demand is determined by individuals subjective valuations. So how we value goods is related to exchange value.

[Parker]

This is going to be my final reply to this conversation.



I think the two are related. That is the whole point. Supply/Demand determines prices. Demand is determined by individuals subjective valuations. So how we value goods is related to exchange value.

but when supply and demand are equal for different commodities, this doesn't explain why different products are different prices, i.e., why a motorbike costs more than a ruler.

The difference is explained by the greater amount of work that goes into the former compared to the latter.

EDIT: this FAQ is useful (http://www.dreamscape.com/rvien/Economics/Essays/LTV-FAQ.html).

[Skooma Addict]

I guess I was lying earlier about making my final post...


but when supply and demand are equal for different commodities, this doesn't explain why different products are different prices, i.e., why a motorbike costs more than a ruler.

The difference is explained by the greater amount of work that goes into the former compared to the latter.

EDIT: this FAQ is useful (http://www.dreamscape.com/rvien/Economics/Essays/LTV-FAQ.html).

Theoretically, if the supply and demand schedules really were equal for different commodities, then they would have the same price. But in the real world, there are various factors that need to be taken into account. For starters, it is not as though supply instantly changes to meet demand, and producers do not know exactly what demand will be at any given moment. This alone would mean that even if there really was an equal supply and demand, the prices still may not be equal. Then there is the fact that producers forecast future demand, and this has an influence on current prices. So even if the current supply and demand schedules were the same for Bikes and Rulers, producers may foresee a huge increase in demand for bikes in the near future. But out of curiosity, are you aware of any examples where supply and demand have been exactly the same for two separate commodities? It seems like such a scenario would be ridiculously unlikely to occur.

[Parker]

I guess I was lying earlier about making my final post...

That's no problem at all. I am happy to debate the issues. But first you should really get an idea of what it is you are arguing against. This is about the magnitude and form of value - meaning exchange value - in commodity producing society. Because this is a market society, things do not always sell at their values, they can go above or below, but on average at the level of total social capital, total price=total value. For now we are dealing with a simplification. There are all sorts of other dynamics in the market, e.g., monopolies, that distort individual cases.

A commodity, as I already explained, is a use-value and an exchange value. It must be useful to someone in some way for them to buy it. In a complex society like ours, consumers will have all sorts of perceptions of how useful something is for them, but the level of supply is obviously objective. The input prices into commodities themselves are objective. Also, there can be all the demand in the world for something, but what counts, as any market analyst will tell you, is effective demand.

There is a contradiction in the idea that subjective utility determines prices, when what determines how a business in the real world sets its prices is objective - unless you think that the cost-inputs that go into a product are not somehow objective. If a product is not selling, a firm will lower its prices to cut its loses, and also cease new production to avoid incurring future losses. Commodities gathering dust unsold in a warehouse are objective.


Theoretically, if the supply and demand schedules really were equal for different commodities, then they would have the same price.

No. When supply and demand are equal, they cancel each other out. This is a necessarily abstract point. It doesn't happen in the anarchy of the market. Still, if an economy makes a million pencils and sells them all, while at the same time it makes a million televisions and sells all of those too, this doesn't make a pencil cost the same as a television, and this is because different inputs have gone into the different products.


But in the real world, there are various factors that need to be taken into account. For starters, it is not as though supply instantly changes to meet demand, and producers do not know exactly what demand will be at any given moment.

I absolutely agree. This is because production in our society is organised on the basis of market exchange, i.e., products made for sale. This is also why our society is prone to recurrent crises of over-production: piles of commodities left unsold, which leads to payment crises, etc.


This alone would mean that even if there really was an equal supply and demand, the prices still may not be equal.

This doesn't follow. Assuming that on a total social level, all demand and supply for every commodity could be matched, different individual commodities would have different prices because they all incur differing magnitudes of inputs.


Then there is the fact that producers forecast future demand, and this has an influence on current prices. So even if the current supply and demand schedules were the same for Bikes and Rulers, producers may foresee a huge increase in demand for bikes in the near future.

I don't see that that is a problem. Any sensible firm will try to anticipate its market, do its research, etc. They would then place orders for future materials and prepare to hire new people. They would also try to improve the efficiency and intensity of production to meet this anticipated demand - and the actions of their competitors - which has the effect of decreasing the value of end-products (this has been seen most markedly in the electronics sector).


But out of curiosity, are you aware of any examples where supply and demand have been exactly the same for two separate commodities? It seems like such a scenario would be ridiculously unlikely to occur.

I already said we are dealing with abstractions, but that's a common method in economics - especially, I might add, Austrian economics. But the fact that demand and supply are dis-equilibrated in a capitalist economy, one based on production for exchange and not direct social use, is for me a criticism of capitalism.

You really should read something on this. Start with Ricardo (http://www.marxists.org/reference/subject/economics/ricardo/tax/ch01.htm). There is also Marx (http://www.marxists.org/archive/marx/works/1867-c1/ch01.htm), Proudhon (http://www.marxists.org/reference/subject/economics/proudhon/philosophy/ch02.htm), etc., etc. Also, Kevin Carson's Studies in Mutualist Political Economy (http://mutualist.org/id47.html) contains a discussion of the LTV in the light of the Austrian School.

[Skooma Addict]

There is a contradiction in the idea that subjective utility determines prices, when what determines how a business in the real world sets its prices is objective - unless you think that the cost-inputs that go into a product are not somehow objective. If a product is not selling, a firm will lower its prices to cut its loses, and also cease new production to avoid incurring future losses. Commodities gathering dust unsold in a warehouse are objective.

When peoples demand for a good rises, the price will rise. When demand falls, the price will fall. Subjective utility is what determines a person demand schedule. So there are no internal contradictions. Maybe you think I am wrong, but I did not contradict myself.


No. When supply and demand are equal, they cancel each other out. This is a necessarily abstract point. It doesn't happen in the anarchy of the market. Still, if an economy makes a million pencils and sells them all, while at the same time it makes a million televisions and sells all of those too, this doesn't make a pencil cost the same as a television, and this is because different inputs have gone into the different products.

If pencils and televisions really had the same supply and demand schedule, they would have the same price (theoretically). What inputs have gone into the production process has nothing to do with the products selling price.


I absolutely agree. This is because production in our society is organised on the basis of market exchange, i.e., products made for sale. This is also why our society is prone to recurrent crises of over-production: piles of commodities left unsold, which leads to payment crises, etc.

You mean the business cycle? I don't see how production for profit itself leads to sudden and massive malinvestment in higher order capital goods.


This doesn't follow. Assuming that on a total social level, all demand and supply for every commodity could be matched, different individual commodities would have different prices because they all incur differing magnitudes of inputs.

If two products had the same supply and demand schedules, they would have the same price. If inputs determined prices, then I could build a highly complex yet worthless piece of junk using many different inputs, and that would somehow sell at a high price. But that makes no sense.


I don't see that that is a problem. Any sensible firm will try to anticipate its market, do its research, etc. They would then place orders for future materials and prepare to hire new people. They would also try to improve the efficiency and intensity of production to meet this anticipated demand - and the actions of their competitors - which has the effect of decreasing the value of end-products (this has been seen most markedly in the electronics sector).

Yet nobody perfectly anticipates the future, so my point stands.

If we lived on a desert Island, and I built a highly complex supercomputer, do you think that it would have a higher selling price than a fishing net?

[Parker]

When peoples demand for a good rises, the price will rise. When demand falls, the price will fall. Subjective utility is what determines a person demand schedule. So there are no internal contradictions. Maybe you think I am wrong, but I did not contradict myself.

You only don't contradict yourself because you say:


What inputs have gone into the production process has nothing to do with the products selling price.

This is obviously silly. A car manufacturing firm has, say, per-unit costs of $20,000. Tell me how this has "nothing to do with the products selling price".

By the way, I never said that supply and demand have no effect on price. Commodities, as I wrote in my last message, can sell above or below their values, but their prices of production are the centres of gravity about which these prices fluctuate.


The vulgar economist has not the slightest idea that the actual, everyday exchange relations and the value magnitudes cannot be directly identical. The point of bourgeois society is precisely that, a priori, no conscious social regulation of production takes place. What is reasonable and necessary by nature asserts itself only as a blindly operating average. The vulgar economist thinks he has made a great discovery when, faced with the disclosure of the intrinsic interconnection, he insists that things look different in appearance. In fact, he prides himself in his clinging to appearances and believing them to be the ultimate. Why then have science at all?


You mean the business cycle? I don't see how production for profit itself leads to sudden and massive malinvestment in higher order capital goods.

Increased efficiency has the effect of lowering the value of each end commodity. Over time, competition drives the rate of profit down. There are countervailing forces that can offset this but it is a general law. Plus, I wasn't referring to "malinvestments" in higher order capital goods. This can occur across industry.


If two products had the same supply and demand schedules, they would have the same price. If inputs determined prices, then I could build a highly complex yet worthless piece of junk using many different inputs, and that would somehow sell at a high price. But that makes no sense.

You're forgetting that even the most rudimentary labour theory of value says that a commodity must be a use-value to have an exchange value at all. If you make something useless (or not "socially necessary" to use the jargon) you have wasted your labour. I believe I have made this point several times now :D


Yet nobody perfectly anticipates the future, so my point stands.

I don't know what your point is.


If we lived on a desert Island, and I built a highly complex supercomputer, do you think that it would have a higher selling price than a fishing net?

Ugh, I hate "desert island" arguments. Whoever lived like Robinson bloody Crusoe anyway?

Nevermind, my Robinsonade friend, if you built a complex supercomputer on a desert island this would presuppose the available technology, labour processes, social relations of production, scientific knowledge, etc., etc., necessary to make a supercomputer. It also presupposes a single human possessed with the enormous requisite skills, like no-one who has ever previously walked the Earth and a massive supply of all the ready and necessary components. It also presupposes a market economy based on buying and selling that is unlikely to occurr when a couple of people are stranded on a desert island.

No, on a desert island people would be practising a rudimentary form of ...

... communism.

[Parker]

A couple of additional questions, what is the subjective value of capital goods? What is the subjective value of money? What do you think of the fact that a crude socialism can be constructed out of economic subjectivism?

Also, as you know from Mises, subjective utility is ordinal not cardinal. But how do you measure the degree of intensity of subjective preference without reference to price, which is said to be determined by subjective preference?

And social utility?

[Skooma Addict]

This is obviously silly. A car manufacturing firm has, say, per-unit costs of $20,000. Tell me how this has "nothing to do with the products selling price".

The firm will try to sell the car for the highest price possible. Sure, their goal may be to sell it for over 20,000 dollars, but that that has nothing to do with how much it will sell for. If the supplier thinks it can sell the car for 40,000 dollars, then it will do that. If it thinks it will only sell for 18,000 dollars, then that will be the price.



By the way, I never said that supply and demand have no effect on price. Commodities, as I wrote in my last message, can sell above or below their values, but their prices of production are the centres of gravity about which these prices fluctuate.

I have epistemological disagreements with this. I will save it for another time though.


Increased efficiency has the effect of lowering the value of each end commodity. Over time, competition drives the rate of profit down. There are countervailing forces that can offset this but it is a general law. Plus, I wasn't referring to "malinvestments" in higher order capital goods. This can occur across industry.

Is this your theory of the business cycle? I was referring to malinvestments because the business cycle is typified by sudden malinvestments in higher order capital goods made by many people at the same time. Consumer goods are not as effected.


You're forgetting that even the most rudimentary labour theory of value says that a commodity must be a use-value to have an exchange value at all. If you make something useless (or not "socially necessary" to use the jargon) you have wasted your labour. I believe I have made this point several times now :D


Do you believe there is an objective "use-value," or do you think an items use value differs with each person?


I don't know what your point is.

Even if supply and demand were the same for two different commodities, their price would still be different because producers take anticipated future demand into account when pricing their goods.



Nevermind, my Robinsonade friend, if you built a complex supercomputer on a desert island this would presuppose the available technology, labour processes, social relations of production, scientific knowledge, etc., etc., necessary to make a supercomputer. It also presupposes a single human possessed with the enormous requisite skills, like no-one who has ever previously walked the Earth and a massive supply of all the ready and necessary components. It also presupposes a market economy based on buying and selling that is unlikely to occurr when a couple of people are stranded on a desert island.

My thought experiment is less extreme than Nozicks Experience Machine, Erwings Utilitarian Torture, Mary's Room, or the Chinese Room Experiment (which are respected thought experiments). A thought experiment doesn't have to be physically realizable or ordinary. I can always change the "supercomputer" to something else and the point would be the same.

So I really do single handedly make a computer. Will this computer have a higher selling price than the fishing net?



A couple of additional questions, what is the subjective value of capital goods? What is the subjective value of money? What do you think of the fact that a crude socialism can be constructed out of economic subjectivism?


What do you mean when you say "what is the subjective value of ____" That question does not make sense to me. As for money, I believe in the regression theorem. I think money arises from highly marketable commodities. I do not think Socialism can work due to the calculation problem.


Also, as you know from Mises, subjective utility is ordinal not cardinal. But how do you measure the degree of intensity of subjective preference without reference to price, which is said to be determined by subjective preference?


You cannot measure subjective preferences with price. If I will pay 5 dollars for Item X, and you will pay 10, that doesn't mean you value it more. All other things being equal, if I will pay 5 dollars for an aple, and 10 dollars for an Orange, then I subjectively value the Orange more than the apple. But that is all we can say. We cannot say I value the Orange twice as much as the Apple.


And social utility?

What is Social Utility and can you calculate it?

[Parker]

The firm will try to sell the car for the highest price possible. Sure, their goal may be to sell it for over 20,000 dollars, but that that has nothing to do with how much it will sell for.

it has everything to do with it. Unless you live in a world where, if a firm doesn't at the very least recoup its costs, it will go bust.

This isn't going to go anywhere but round and round into an anoying word game. Been there, done that.

Ask some questions based on what you've read in a text.

[Skooma Addict]

it has everything to do with it. Unless you live in a world where, if a firm doesn't at the very least recoup its costs, it will go bust.

This isn't going to go anywhere but round and round into an anoying word game. Been there, done that.

Ask some questions based on what you've read in a text.

No, it has nothing to do with the selling price. As I said, the supplier will sell the vehicle for the highest price possible...that's it, there is nothing else to it. This price may still result in a loss for the company. I know that a business will go bust if it cannot recoup its losses.

Part of the reason why this is turning into a "word game" is because your terms are philosophically unsound. The idea that something either has or does not have a "use value" is flawed. Also, only by subjective judgment can we say what labor is socially necessary/unnecessary. The problem is that you are looking at this solely in economic terms. Your entire theory of value is based on an incorrect epistemology, not to mention that it completely violates Occams Razor. It also falls apart once we look at it in the context of a radical thought experiment.

Part of the problem is that I do not accept some your terms themselves as meaningful, so discussing them is more difficult. But I did try to avoid epistemological arguments where I could.

[Parker]

The problem is that you are looking at this solely in economic terms.

:confused:


It also falls apart once we look at it in the context of a radical thought experiment.

This is why it is annoying. Judging real-world phenomena according to "radical thought experiments".

[Skooma Addict]

This is why it is annoying. Judging real-world phenomena according to "radical thought experiments".

People have been doing it for a few thousand years, so you should probably get used to it. Galileo disproved Aristotelian Physics with a single thought experiment. If you think it is "annoying," well then that is your problem.

[Parker]

People have been doing it for a few thousand years, so you should probably get used to it. Galileo disproved Aristotelian Physics with a single thought experiment. If you think it is "annoying," well then that is your problem.

Well, you've really rather proved my point. Thought games are fine for philosophy, I suppose, but not economics. I am not really interested in philosophy, but I am interested in economics.

Abstracting from the data/evidence is fine, but your abstractions should have at least some correspondence to the real world - as, I believe, did Galileo's in the experiment you are referring to. Otherwise they are trivial and superficial diversions. And in the end all it shows is that you just want to talk about something else, because the objections you've advanced don't violate the labour theory of value, because you either don't understand or don't know what it is.

And also because the case you advance for your own position is so poor: inputs have no effect on prices; it is just a coincidence that commodities that require more effort to make are on average more expensive; when supply and demand are in equilibrium for all commodities, their prices will be the same.

Your assertion, however, that subjective utility is the determinant of price could only occur in a monopoly situation of inelastic supply. Therefore it doesn't aplpy to generalised commodity production. At best, all you are going to be able to do is argue about the degree to which the labour theory of value has explanatory power in all cases, e.g., for goods with an inelastic supply. In an advanced economy like ours, this is pretty rare nowadays and in any case, Ricardo himself already accounted for works of art, etc., in his theory. You accuse me of having faulty epistemological foundations, but it is your radical scepticism that troubles me.

You accuse me of using terms you dislike. Fine, but any social scientist or scientist uses words or phrases with meanings specific to the argument they convey. I don't see what is so controversial about that. In any case, the meaning of the term use-value is perfectly simple. Commodities must have a use to be exchanged. But this use itself does not determine the objective amount of value embodied in them which makes them exchangeable. Commodities that are more expensive generally contain more labour than less expensive ones. It's pretty simple and is an observable phenomenon. This value only makes sense in relation to other commodities in a society of generalised commodity production, hence it is socially determined, but in a blind way (like Smith's invisible hand). Divergences in price from value are not violations of the law of value but the means by which it works.

You say in the light of this that I violate Occam's razor. But, if I present complex and seemingly contradictory picture of capitalist society, that is because it is in fact complex and contradictory.

You can have the last word.

[Skooma Addict]

Well, you've really rather proved my point. Thought games are fine for philosophy, I suppose, but not economics. I am not really interested in philosophy, but I am interested in economics.

Yet every school of economics makes epistemological and even metaphysical assumptions. If you make incorrect assumptions, your entire doctrine is flawed.


Abstracting from the data/evidence is fine, but your abstractions should have at least some correspondence to the real world - as, I believe, did Galileo's in the experiment you are referring to. Otherwise they are trivial and superficial diversions. And in the end all it shows is that you just want to talk about something else, because the objections you've advanced don't violate the labour theory of value, because you either don't understand or don't know what it is.

You would only think this if you did not know what the purpose of a thought experiment was.


You say in the light of this that I violate Occam's razor. But, if I present complex and seemingly contradictory picture of capitalist society, that is because it is in fact complex and contradictory.

It's not that. It is that my theory of value is supported by modern psychology and it fits in perfectly with our knowledge of reality. Yours fails on both accounts.

OK, here is a decent criticism of the idea of objective or inherent value.

In order for something to have value, there must be someone doing the valuing. If there were no people on earth, we wouldn't say that gold would somehow have value. Do you accept this much? If yes, then we will move on.

Assume that a tribe of Indians works together to make a house for their children play in. The children all love spending their time in the house, and it gives the adults more time to hunt for food since they don't have to watch the children. Would you say this house has inherent value? If so, then we move on.

Then one day a plague kills the entire tribe of Indians. These Indians were either the last surviving humans, or they were the first humans. Either way, there are no people left on earth. Obviously, the house would no longer have any value because there are no people to do the valuing. We run into an absurdity if we say that the house somehow has value. If the house has inherent value, then the extinction of humans would have no effect on the houses value.

Now, this means that the idea that inherent value can exist is incorrect. If your theory of value would hold that the house is no longer valued after all the Indians die, then it does not hold that value is inherent. For if value were inherent, the house would still have value after there were no people left on earth.

This is not a direct attack on the LTV, so do not say that I am misrepresenting the LTV. This is an attack on the idea of inherent value.

You can respond if you want. I am curious to know if you think the thought experiment I provided (I didn't come up with it) proved anything.

[Parker]

This is not a direct attack on the LTV, so do not say that I am misrepresenting the LTV. This is an attack on the idea of inherent value.

But the LTV isn't based on the idea of "inherent value" in that way, so it's not a criticism and therefore is irrelevant.

Again, you don't understand what the LTV is. Try reading about it.

this is definitely my last word.