Capitalism Works [Archive]

krazy kaju

10th April 2010, 16:44

Just a few notes about capitalism:

1. Firms (businesses) are profit-motivated. If they weren't, they'd run out of money and be liquidated.

2. Firms earn profits by taking goods and services that are worth less and transforming them into goods and services that consumers value more. If they don't do this, they run out of money and must file for bankruptcy. For example, a firm that builds houses must take labor, land, lumber, plastic, capital, and other resources which are called input and build houses with them, which are called the firm's output. If the firm's output is worth less than it's input, then it's taking resources which are worth more and transforming them into resources which are worth less. The firm will ultimately go bankrupt. However, if the firm takes input that's worth less and transforms it into output that's worth more, then it stays in business and earns a profit.

3. Because firms are profit motivated and their main goal is to earn more and more profit, they must invest their money in things like capital equipment. An example of a capital good good be a bulldozer, which the housing company could use to smooth land or dig holes. The capital good is cheaper to use than labor. This allows the firm to cut costs, which allows it to build more houses, which in turn earns it a greater profit. Other firms can also invest their money into things like technology which increase profits (e.g. a Pharma company researching new drugs to treat patients with).

4. Thus, capitalism works. It takes resources which are worth less to individuals and transforms them into resources which are worth more. Firms then invest money, which allows them to produce more and more goods and services, which increases the standards of living.

This process, which can be summarized into "firms take their profits and invest them in order to earn more profits, and this investment raises living standards by expanding the supply of goods and services" is shown in these few statistics:

http://3.bp.blogspot.com/_otfwl2zc6Qc/SxHs-gJRDiI/AAAAAAAAMAw/eiCl3rc9toc/s1600/household2.jpg

As you can see, the average real wage has actually improved, despite contradictory claims. But what about the poor, you ask? Well, right now I work at McDonald's at $7.45 an hour (I'm working my way through college). If you take these same numbers, I still have higher purchasing power per hour worked than the average person in 1973. For example, I only have to work 54 hours for the washing machine and 57 hours for the fridge.

Here is a table which shows the improvement in the lives of the poor:
http://3.bp.blogspot.com/_otfwl2zc6Qc/SxHgynoVpdI/AAAAAAAAMAo/nFF6xFEr4kY/s1600/household1.jpg

As you can see, the poor can now afford the equivalent to what the average household in the early 70s could afford. This means that the poor have become wealthier, along with everyone else.

http://3.bp.blogspot.com/_otfwl2zc6Qc/SLWCRVSqwHI/AAAAAAAAFgs/aEXmkxBOraU/s1600/income1.bmp

The above graph clearly shows that the inflation-corrected income per person has increased over the past few years. This means that each person has been able to afford more and more goods.

http://research.stlouisfed.org/fred2/data/COMPRNFB_Max_630_378.png

Another graph showing how inflation-corrected incomes have risen. This means that goods and services have become more affordable to the average person.

http://1.bp.blogspot.com/_otfwl2zc6Qc/SwAcjo2YghI/AAAAAAAAL6w/YjHiVl87Zds/s1600/foodclotsh.jpg

This graph shows how Americans have been able to spend less and less on the essentials of life like food and housing. Capitalists made this possible by producing more food and more housing over the years, making these goods more affordable to the average American worker.

http://4.bp.blogspot.com/_otfwl2zc6Qc/S7iq7NG5ijI/AAAAAAAANJo/24anfjyOgCc/s1600/eggs.jpg

The above is an example of how a single market works in a capitalist economy. Farmers interested in earning a profit have figured out new ways to produce more and more eggs at a cheaper cost, making those eggs more affordable to the American consumer.

http://3.bp.blogspot.com/_otfwl2zc6Qc/S7il8Y8DM8I/AAAAAAAANJY/KXM_rWSlAf4/s1600/food.jpg

Disposable personal income is basically what the average person has available to spend. This graph shows that the average person is better able to afford food today than people in preceding decades.

http://2.bp.blogspot.com/_otfwl2zc6Qc/S7NA9EeMLlI/AAAAAAAANHA/OgAgecG4VUY/s400/mac2.jpg

This table is another example of a specific market working its magic. Apple has a profit motive, so it invests in technology and capital equipment. Because of this investment, it has greatly increased the computing power of its computers (along with other computer manufacturers) while reducing the price gradually, over time.

IcarusAngel

10th April 2010, 16:59

lol.

You forget that the government sets the minimum wage, so of course wages have risen.

You forget that the government subsidizes the food industry, so of course prices will fall. If I can monopolize the land and eliminate my competition, I can bring down prices.

You forget that the government funds the technology industry, and has historically funded half of all R&D. When you're given publicly funded research, of course you can do something with it.

This is the worst argument of all. The government CREATED the technology, the market merely finds ways to double the speed of memory or whatever through a series of ingenious ways, like increasing the number of pins or doubling the clock speed. And to this day a majority of research from programming is at Universities.

You should stick to your job at McDonald's instead of debating politics at 30 forums. You're probably good at that.

krazy kaju

10th April 2010, 17:20

You forget that the government sets the minimum wage, so of course wages have risen.

1. Most people work at wages above the minimum wage.

2. Wages have risen across the board, despite the fact that unions have declined in power and most people's wages are above the minimum wage.

3. If your statement were true, then wages would only rise when the minimum wage would increase. This would mean that every few years there would be a one-time increase in wages. As you can see, there has been a steady increase in real wages, which disproves your statement.

You forget that the government subsidizes the food industry, so of course prices will fall.

Actually, the USDA subsidizes farmers by paying them not to farm. This reduces supply, which increases prices. The subsidies are meant to help agribusiness - not consumers.

If I can monopolize the land and eliminate my competition, I can bring down prices.

1. I'd like to see anyone try to monopolize all land.

2. A monopoly would initially raise prices in order to maximize profits, but the increased profits would lend itself better to increased investment.

You forget that the government funds the technology industry, and has historically funded half of all R&D. When you're given publicly funded research, of course you can do something with it.

This is the worst argument of all. The government CREATED the technology, the market merely finds ways to double the speed of memory or whatever through a series of ingenious ways, like increasing the number of pins or doubling the clock speed. And to this day a majority of research from programming is at Universities.

Does government fund a significant portion of R&D? Sure it does. But it also taxes away a third of all income from corporations, as well as a significant portion of capital gains income (notice how this is double-taxation). The government also taxes away income from small businesses via the income tax.

Without these taxes, do you think that firms would just squander the extra money? No, firms are in the business of making money. They would definitely use a significant portion of their cash for R&D as well as other investment projects (which the government does not fund).

As for computers, government did not invent them. It did create ARPANET, which was an early predecessor of the internet. The market took ARPANET and made it into something that everyone could use. The market also created computers, which made ARPANET possible in the first place.

You should stick to your job at McDonald's instead of debating politics at 30 forums. You're probably good at that.

I'm an economics student at a major public university. I just happen to be working my way through it. Are you one of those rich, self-hating snobs who despises everyone who has to work for something in order to make it in life?

P.S. Exactly how many economists are socialists or radical leftists? Oh... that's right, practically no serious economist even thinks socialism could be viable. So maybe you should leave economics to the big guys and just go troll around on internet forums all day?

SocialismOrBarbarism

10th April 2010, 17:31

http://3.bp.blogspot.com/_otfwl2zc6Qc/SxHs-gJRDiI/AAAAAAAAMAw/eiCl3rc9toc/s1600/household2.jpg

As you can see, the average real wage has actually improved, despite contradictory claims.

No one bought this shit the last time you posted it, so what makes you think that would have changed? It's not like anyone has ever denied that increasing productivity means that people can buy the same things they could 10 years ago at cheaper prices, that's basic economics. That doesn't change the fact that the income of the rich grows faster than the income of the poor, and that therefore workers receive less of the total wealth of the country than they did 10, 20, 30, 40, or 50 years ago, or the fact that what are considered basic needs has a social and historical element to it. I'm sure someone could show you the same trend of rising productivity and the decreasing amount spent on food from places like the USSR.

red cat

10th April 2010, 17:31

P.S. Exactly how many economists are socialists or radical leftists? Oh... that's right, practically no serious economist even thinks socialism could be viable. So maybe you should leave economics to the big guys and just go troll around on internet forums all day?

Exactly how many economists are proletarians ? NONE !

Social science is not something that anyone studies neutrally. Everyone in the human society has or represents a class, and his plans for the society are invariably meant for the well-being of that class. We communists represent the proletariat leading the oppressed masses, who are the vast majority of the population. Hence our strategies and tactics are dedicated towards the overthrowal of all oppressors, including those "big guys" of yours.

P.S. We don't believe that these "big guys" are even a bit more special than a worker who toils to earn his daily bread. We couldn't care less about any of their production-consumption crap and the associated idiotic differential equations.

The Ben G

10th April 2010, 17:38

Of Course Capitalism works! It has been for Millions of years! The thing with Capitalism is that it is wrong. Dont you feel sorry that the ones that work the hardest get paid the least? Capitalism only works because it is everyone for themselves. Without restrictions, America would be run by 1 company instead of multiple. Slave labor would still be permitted, Imperialism would still be at its height, people would still be making 8 dollars a day for a 14 hour work day living in 2 room apartments.

Doesnt Capitalism sound great?

IcarusAngel

10th April 2010, 17:52

1. Most people work at wages above the minimum wage.

2. Wages have risen across the board, despite the fact that unions have declined in power and most people's wages are above the minimum wage.

3. If your statement were true, then wages would only rise when the minimum wage would increase. This would mean that every few years there would be a one-time increase in wages. As you can see, there has been a steady increase in real wages, which disproves your statement.

This is because the cost of living has increased and because of inflation, and because they want to pay people above the minimum wage. Furthermore, the real wealth in this country generally goes to the upper classes and the "wealth gap" has been widening over the years, not decreasing.

I don't see how you can attribute this to the "market" since the government is highly involved in every single industry of the country.

Actually, the USDA subsidizes farmers by paying them not to farm. This reduces supply, which increases prices. The subsidies are meant to help agribusiness - not consumers.

Lol The government pays some farmers not to provide more milk and so on. But the US farm bills are loaded with billions of dollars of subsidies to the corporations, which encourages them to process the cheapest foods possible so that they can make a profit:

For the last several decades — indeed, for about as long as the American waistline has been ballooning — U.S. agricultural policy has been designed in such a way as to promote the overproduction of these five commodities, especially corn and soy . . . The result? A food system awash in added sugars (derived from corn) and added fats (derived mainly from soy), as well as dirt-cheap meat and milk (derived from both). By comparison, the farm bill does almost nothing to support farmers growing fresh produce. A result of these policy choices is on stark display in your supermarket, where the real price of fruits and vegetables between 1985 and 2000 increased by nearly 40 percent while the real price of soft drinks (a k a liquid corn) declined by 23 percent. The reason the least healthful calories in the supermarket are the cheapest is that those are the ones the farm bill encourages farmers to grow.Source (http://www.nytimes.com/2007/04/22/magazine/22wwlnlede.t.html?_r=1&ei=5070&en=3b8480bb7549490b&ex=1177992000&pagewanted=all)

1. I'd like to see anyone try to monopolize all land.

They could do so in capitalism because you claim that people can own "unappropriated land" if they mix their labor with it, which is such a loose definition it creates chaos, and because "unappropriated land" doesn't exist.

Does government fund a significant portion of R&D? Sure it does. But it also taxes away a third of all income from corporations, as well as a significant portion of capital gains income (notice how this is double-taxation). The government also taxes away income from small businesses via the income tax.

It has to fund the R&D because the corporations aren't doing anything useful with it.

A majority of inventions come from people working under oppressive contracts for the corporations or the government.

As for computers, government did not invent them. It did create ARPANET, which was an early predecessor of the internet. The market took ARPANET and made it into something that everyone could use. The market also created computers, which made ARPANET possible in the first place.

You're a dumb-ass. The government created the internet protocols. After the government invented it, ARPANET was separated from the military, MILNET. ARPANET then became a civilian network. It was then subsidized by the National Science Foundation, and transferred to the University system. It was then "NSFnet." The old ARPANET backbone was disconnected in 1990, and the NSFnet backbone and the various regional networks connected to it became the internet.

(Notice how the Miseans fills in his gaps of knowledge with lies.)

What made the internet useful to consumers was the web, which was invented by Tim Berners Lee at CERN, which is Europe's government funded research.

The computer was not "invented" by the market and the von Neumann architecture was developed by the government. This is the predecessor to all modern computers and all computers are still von Neumann machines.

The first general purpose electric computer was the ENIAC. The EDVAC Was another computer that used vacuum tubes that was also invented by the government. The Holleirth was a tabulating machine that was invented for the census.

Operating systems such as Multics were also invented for government purposes and the Department of Defense poured funding into.

As far as I can see the market didn't do a damn thing, except delay progress in the 80s, which took over again in the 90s due to heavy government subsidization.

I'm an economics student at a major public university. I just happen to be working my way through it. Are you one of those rich, self-hating snobs who despises everyone who has to work for something in order to make it in life?

P.S. Exactly how many economists are socialists or radical leftists? Oh... that's right, practically no serious economist even thinks socialism could be viable. So maybe you should leave economics to the big guys and just go troll around on internet forums all day?

I'm not rich.

There are several economists who are socialists.

My University has a department dedicated to Marxism and runs a Marxism mailing list.

Robin Hahenl is a leftist and an economist. Edward Herman is a radical leftist, and also an economist.

There are also dozens of leftists in the other social sciences. Since economics is more of a field like statistics which studies the results of trade in capitalism (which would be useless if we lived in a free system) they do not come right out and state their political beliefs.

IcarusAngel

10th April 2010, 18:16

This Misean just makes things up as he goes along. Apparently, the US spends at LEAST $19 billion a year in expenditures to agribusiness. And no, it's not just to "stop them from growing food." Because of these subsidies, for every dollar of profit ADM makes on sweetener, it costs the taxpayers $10.

Now that's good capitalism.

http://www.nytimes.com/2004/06/19/business/wto-rules-against-us-cotton-subsidies.html?pagewanted=1

"At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30..."

"ADM's lobbying and campaign contributions have certainly been the key force in creating and perpetuating federal ethanol subsidies. Because combined federal and state ethanol subsidies probably amount to more than $1 billion, every dollar of ADM ethanol profits is costing the American public more than $30."

From beloved right-wing CATO institute:
http://www.cato.org/pubs/pas/pa-241.html

So basically, even CATO admits the corporations sell us back the stuff WE TAXPAYERS are funding? Come on. Some "economist" this misean is. He presents this same "presentation" at various forums such as PoliticalCrossfire.

(http://www.nytimes.com/2004/06/19/business/wto-rules-against-us-cotton-subsidies.html?pagewanted=1)

Â¿Que?

10th April 2010, 18:21

http://3.bp.blogspot.com/_otfwl2zc6Qc/SxHs-gJRDiI/AAAAAAAAMAw/eiCl3rc9toc/s1600/household2.jpg

As you can see, the average real wage has actually improved, despite contradictory claims. But what about the poor, you ask? Well, right now I work at McDonald's at $7.45 an hour (I'm working my way through college). If you take these same numbers, I still have higher purchasing power per hour worked than the average person in 1973. For example, I only have to work 54 hours for the washing machine and 57 hours for the fridge.

I definitely see some problems here. You say the average real wage improved, but the graph does not indicate anywhere what average wage is, although this is probably missing information located at the graph's source. I believe you when you say avg wage is $18.72. The problem though is that you don't mention which measure of average you're using. Mean, Median and Mode are the three measures, and generally in terms of income (I really don't know about wage) the median is used, because the data is skewed. The problem is that the few rich at the top skew the data up, so a mean is not an accurate representation of average income. I suspect something similar for wages, although it would be nice to at least know that.

http://4.bp.blogspot.com/_otfwl2zc6Qc/S7iq7NG5ijI/AAAAAAAANJo/24anfjyOgCc/s1600/eggs.jpg

The above is an example of how a single market works in a capitalist economy. Farmers interested in earning a profit have figured out new ways to produce more and more eggs at a cheaper cost, making those eggs more affordable to the American consumer.
To the American consumer? Are you aware your source is global financial data. Is this the price of eggs for Americans, or the average world price? This might make a difference in your graphs.

All those statistics lack any information on sampling. We don't know how many people were surveyed, how they were surveyed, not to mention regional differences, household make up (single parent) or whatever. Hell, you got one there that uses poor as a variable, but you don't even bother to define what you mean by "poor". Do you mean someone who makes $18.72/hr. Of course what do you expect from a third rate piece of prepackaged propaganda.

Thirsty Crow

10th April 2010, 18:58

I'm really curious, how do you (krazy kaju) and other proponents of the existing mode of production and resulting social relations explain the recent economic crisis. Hell, how do you explain any historical economic crisis and market crashes, as well as the ever widening gap between the wealthy and the impoverished?
Furthermore, how do you explain your conviction in liberal democracy (I suppose you possess it) and simultaneously argue bitterly against the evolution of democracy and its outspread to the very level of a local community (e.g. neighbourhood).

Drace

10th April 2010, 18:59

Wassup?

http://www.workinglife.org/wiki/Wages+and+Benefits:+Real+Wages+%281964-2004%29

Skooma Addict

10th April 2010, 19:09

I'm an economics student at a major public university. I just happen to be working my way through it. Are you one of those rich, self-hating snobs who despises everyone who has to work for something in order to make it in life?

Even though you think otherwise Kaju, you are being exploited. Even though you view private propery as legitemate, and even though you voluntarily chose to be a worker for McDonalds, you are still being oppressed. What needs to be done is to eliminate private property completely and then collectiveze all areas of work (even if the workers and owners themselves don't want this).

So once we force our view of legitemate property and fairness on the entire population, only then can it be said that nobody is being exploited. If some nay sayers like you want to go live with like minded people, we must prevent you from doing this for your own good.

Only then will there be an end to oppression.

Thirsty Crow

10th April 2010, 19:21

Even though you think otherwise Kaju, you are being exploited. Even though you view private propery as legitemate, and even though you voluntarily chose to be a worker for McDonalds, you are still being oppressed. What needs to be done is to eliminate private property completely and then collectiveze all areas of work (even if the workers and owners themselves don't want this).

So once we force our view of legitemate property and fairness on the entire population, only then can it be said that nobody is being exploited. If some nay sayers like you want to go live with like minded people, we must prevent you from doing this for your own good.

Only then will there be an end to oppression.
I've seen this kind of BS "critique" of anti-capitalist thought and action too often. The only thing that stands out is your ignorance (particularly when you add "even if the workers and owners themselves don't want this"). If you wish to prove me wrong, I'd like to see a quote from any such person, who argues that the wishes of workers themselves are not to be heard and respected.

Oh yeah, your little theory of "forcing" our view on the entire population does not stand as well since there are certain requirements for such a forcible imposition of opinion which the left does not even remotely fulfil. It seems to me that the only forcing of one's view which takes place in modern societies is, in fact, you own, i.e. the view which seeks to retain the old order and suppress any alternative (see, in this instance those requirements are undoubtedly fulfilled).

Skooma Addict

10th April 2010, 19:31

If you wish to prove me wrong, I'd like to see a quote from any such person, who argues that the wishes of workers themselves are not to be heard and respected.

You are going to have to be more specific about what it is you mean here. Some people will (wrongly) claim that only by adopting "democracy in the workplace" can the workers be heard and respected. And many supporters of a socialist state do in fact act in the way I described.

Oh yeah, your little theory of "forcing" our view on the entire population does not stand as well since there are certain requirements for such a forcible imposition of opinion which the left does not even remotely fulfil. It seems to me that the only forcing of one's view which takes place in modern societies is, in fact, you own, i.e. the view which seeks to retain the old order and suppress any alternative (see, in this instance those requirements are undoubtedly fulfilled).

I don't favor suppressing any alternatives. I also don't know what "requirements" you are talking about.

Cal Engime

10th April 2010, 19:32

I'm really curious, how do you (krazy kaju) and other proponents of the existing mode of production and resulting social relations explain the recent economic crisis. Hell, how do you explain any historical economic crisis and market crashes?A credit expansion created by the central bank encourages malinvestments that aren't backed by any real savings. A recession occurs when the structure of production is adjusted. I can't post links, but you can search YouTube for Peter Schiff's Mortgage Bankers speech, explaining the causes of the crash in 2006, or his lecture "Why the Meltdown Should Have Surprised No One", having the last laugh in 2009. There's also a rap video called "Fear the Boom and Bust" which will explain it all in six and a half minutes.

If you prefer writing, see Monetary Theory and the Trade Cycle by F. A. Hayek.

Thirsty Crow

10th April 2010, 20:40

You are going to have to be more specific about what it is you mean here. Some people will (wrongly) claim that only by adopting "democracy in the workplace" can the workers be heard and respected. And many supporters of a socialist state do in fact act in the way I described.

I don't favor suppressing any alternatives. I also don't know what "requirements" you are talking about.

What exactly is wrong in such a claim?
If I should be specific, I should point put that proponents of a hierarchical model, i.e. those who would force their view of a socialist state regardless of the opinion of the workers themselves are in fact deluded and do not really comprehend the idea of socialism.
While you personally may not favor suppressing alternatives, the entire media complex, as well as a vast array of think tanks and other components of the "ideological superstructure" surely does. What I'm trying to communicate is that a specific culture which corresponds to the capitalist model of production and resulting social relations has been in the making, and it is effective. For example, as I've said, the media, in which almost none plausible and true presentation of a socialist alternative can be found. History courses in secondary schools and colleges are mostly overrun by a vulgarly simplistic "analysis" of socialist revolutions as the the October revolution and workers' movement actions and results, if there is even a mention of the history of the workers' movement.
Moreover, the consumer culture with its pressure on the attainment of a nonchalant lifestyle produces a terrible contradiction with the official ideology of economic growth by means of hard work (although there are no objective contradictions between these two phenomena). The result being a specific form of culturally reproduced individualism, which flirts of course with "social responsibility" (charity as a form comes to mind) but nevertheless upholds the principle, or maybe an imperative of personal attainment of wealth. In turn, a specific vision of freedom is produced, and that vision is decisively marked by a anthropological reduction of every man and women to a mere homo oeconomicus.
When these processes converge, people find themselves in serious lack of time, transparency of existing public discussion and action, and psychological and intellectual ability to engage in a process that could enable them to change the way the work and live.

As far as the requirements go, I was alluding to the ownership of the media, i.e. the means of persuasion, as well as to the hegemony of a completely uniform outlook in "high politics". To put it bluntly, those who would cease to "run things" with the advent of a socialist order today have the hold of y have institutions, the means of mass communication, and last but not the least, they possess the sole right to violent action and repression, i.e. the state apparatus.

anticap

10th April 2010, 21:21

Capitalism Works

Even supposing that that were true (and that we could agree on what "works" means), it would also remain true that profit is theft (http://www.marxists.org/archive/marx/works/1867-c1/index.htm).

That violates your precious NAP (at least, according to the Rothbardite conception, which holds that aggression encompasses theft), and contradicts all the Misesite harping about unjust means.

LeftSideDown

10th April 2010, 21:23

Even supposing that that were true (and that we could agree on what "works" means), it would also remain true that profit is theft (http://www.marxists.org/archive/marx/works/1867-c1/index.htm).

That violates your precious NAP (at least, according to the Rothbardite conception, which holds that aggression encompasses theft), and contradicts all the Misesite harping about unjust means.

Profit is only theft if you accept the LTV.

Thirsty Crow

10th April 2010, 21:25

Profit is only theft if you accept the LTV.

Well I think that the most democratic way of resolving this issues would be a referendum prior to which every individual would be informed of the meaning behind the terms. So let the people decide.

LeftSideDown

10th April 2010, 21:55

Well I think that the most democratic way of resolving this issues would be a referendum prior to which every individual would be informed of the meaning behind the terms. So let the people decide.

Lets decide whether or not God exists by polling people. Whatever the majority decide we must abide by our be shot.

LeftSideDown

10th April 2010, 21:58

Actually, my example is bad. Whether or not God exists is opinion, the falseness of the LTV is easily demonstrable. So its more like lets vote whether or not 2+2=4 or =5, and we'll just hint that if they choose 5 suddenly they'll be living the life prophesied by Fourier:

"There will be anti-lions and anti-crocodiles, on whose back we shall be able to travel huge distances in no time, and the anti-hen who in six months would lay enough eggs to pay off the English national debt. An anti-beaver will see to the fishing, and an anti-whale will move sailing ships, an anti-hippopotamus will tow the riverboats. With no more than a few hours of daily work, men will be free to occupy themselves with play and developing their intellectual, moral, and artistic faculties to an extent hitherto unprecedented in history. But more, in this garden of delights men and women shall live 144 years, and of these 120 will be spent in the active exercise of love. This, then, is the vision of natural man, in the fulfillment, for the first time, of his new and unnatural powers."

Thirsty Crow

10th April 2010, 22:01

trivas7

10th April 2010, 22:08

Lets decide whether or not God exists by polling people. Whatever the majority decide we must abide by our be shot.
Indeed. In the eyes of the left revolutionary truth is decided by polling; societal arrangements are decided by the current majority in power on purely pragmatic grounds, e.g., the Communist Party of the People's Republic of China embrace of private property and bourgeois banking practices.

LeftSideDown

10th April 2010, 22:08

Seems like you specialize in silly, irrelevant analogies.
See, profit, this sacred cow of our time is something that effects peoples' lives since an entire globalized economy is structured upon its imperatives. Whereas the existence of God plays a role only in a psychological way, i.e. it helps an individual in making sense of the world.

Sou you're silly little analogy has nothing to do with the hard reality. While the objective existence of God is of no importance (maybe you're poll would result in a theocracy, but then you should rephrase the question) for material conditions of everyday life, the question of profit, and LTV in consequence, is of immense importance, in fact.

Why is it so hard to demonstrate points to you fellas? Democracy cannot decide the correctness of any action. You can't change 2+2=4 to 2+2=5 because a majority said this is what was right. Voting that the LTV is correct doesn't make it so, just like voting for George Bush doesn't make him the best or even the correct president.

anticap

10th April 2010, 22:14

Profit is only theft if you accept the LTV.

I was going to reply that one only rejects the LTV if one denies that the sky is blue (or something more clever, I would have hoped); but the fact is that you're just wrong. Exploitation can be shown by means of whatever ruling-class theory you care to present, given enough time. That's what happened with the LTV, after all. It was the prevailing ruling-class theory, until it was turned against them and had to be ditched. Attempts to prevent such reversals will always ultimately fail, because all such reversals will merely seek to explain reality using the framework of the given theory. Some may do it better than others, but they'll all be dealing with the same facts. Language is merely a reflection of reality: it can be made to tell a distorted tale, but that requires continuous effort; it's relatively easy by comparison to draw out the truth, but it still takes time to crack the code of whatever convoluted theory the ruling class has cooked up to justify living off the labor of others. Just as evolution is both a fact and a theory (http://en.wikipedia.org/wiki/Evolution_as_theory_and_fact), labor is in fact the source of exchange-value, and theory is used to try to explain that fact.

tl;dr: In the long run, you and your kind are fucked. :D The people will prevail against tyranny.

Thirsty Crow

10th April 2010, 22:15

My oh my, economics has nothing to do with what is true and what is false. Just as LTV is basically a theory which effectively strives to participate in a construction of a different economy, with a different social relations, so are other apologetic theories constructed to explain and justify existing practices.

Economics is already political economy, in every manifestation. Thus the absurd "ideal" of scientific objectivity is, in this case, nothing more than a ideological tool.

Btw., what I was trying to communicate with this idea of a poll was that there should be public, democratic debate regarding the very basis of our societies (the productive relations and the redistribution of wealth) and if a people decide that radical changes should occur, they must occur.

mikelepore

11th April 2010, 03:59

Profit is only theft if you accept the LTV.

We don't need to the LTV to observe that profit is theft.

We can see empirically that profit is theft, from the fact that that workers perform activities that are inherently useful for production (planting seeds, assembling parts, extracting ore, refining oil, driving trucks, healing the sick, teaching students, etc.), whereas capitalists perform socially useless activities that are made to seem "necessary" artificially by particular institutional forms (speculating about future market trends, talking to brokers on the telephone, meetings with advertising agencies, negotiating vendor contracts, meetings with lawyers, etc.)

The LTV only shows the mechanism used for making a profit, the fact that profits are derived from the difference in the labor cost and the work-in-process value-added at the time of the application of labor.

Aesop

12th April 2010, 19:26

'Capitalism works' is just empty rhetoric, what do you mean by it works?
(I know under this system people have to work under others, but i pretty sure you did not mean that)
In addition what happened to somalia?:)

anticap

17th April 2010, 14:14

Exploitation can be shown by means of whatever ruling-class theory you care to present

Just to raise a simple example, marginal productivity is based on the notion of a productive Holy Trinity (http://www.marxists.org/reference/archive/perlman-fredy/1969/misc/reproduction-daily-life.htm): Land, Labor, and Capital, each laying claim to a portion of the produce (the laborer's claim is clear enough; sadly, the bodiless Land and Capital must first be personified before they can be paid :laugh:). But why stop there? Why not factor in the hearty breakfast cooked by the laborer's wife? How much did that contribute? How much is she due? And we could carry on endlessly like this, dredging up unpaid laborers for eternity, and yet never manage to justify the claims of the Landlord or Capitalist.

These ruling-class theories collapse under the weight of reality.

inyourhouse

17th April 2010, 16:24

Just thought I'd pick up on a few comments in this thread:

Exactly how many economists are proletarians ? NONE !

Social science is not something that anyone studies neutrally. Everyone in the human society has or represents a class, and his plans for the society are invariably meant for the well-being of that class.

I think that's a very anti-scientific attitude (ironically, it's somewhat reactionary). If a theory is logically consistent and empirically predictive, then it's irrelevant what class the economist proposing it belongs to. Would you actually discount a theory that meets those two criteria simply because of the background of the person proposing it? I believe that is a circumstantial ad hominem:

"Circumstantial: A Circumstantial Ad Hominem is one in which some irrelevant personal circumstance surrounding the opponent is offered as evidence against the opponent's position. This fallacy is often introduced by phrases such as: "Of course, that's what you'd expect him to say." The fallacy claims that the only reason why he argues as he does is because of personal circumstances, such as standing to gain from the argument's acceptance. "

http://www.fallacyfiles.org/adhomine.html

We couldn't care less about any of their production-consumption crap and the associated idiotic differential equations.

What is idiotic about differential equations? They're a very powerful tool. Modern economic theory is based on marginalism, which cannot be expressed mathematically without the use of differential equations. For example, marginal utility is the change in utility (U) arising from a change in the number of units of a good (x) consumed - ie. dU/dx.

I'm really curious, how do you (krazy kaju) and other proponents of the existing mode of production and resulting social relations explain the recent economic crisis. Hell, how do you explain any historical economic crisis and market crashes,

In my view, there are two causes of recessions: real shocks and nominal shocks ("shock" meaning "unexpected change"). A real shock could be, for example, a sudden drop in aggregate supply due to a devastating war destroying a lot of capital. A real shock to aggregate demand could also cause a recession. Nominal shocks are more complicated, but they essentially revolve around the concepts of price stickiness and relative price changes. An overly expansionary monetary policy could cause a nominal shock by changing relative prices in a way that leads to a boom and then a bust. An overly contractionary monetary policy could cause a nominal shock by leading to lower than expected nominal revenue and thus comparatively higher nominal costs, leading to a decrease in output.

as well as the ever widening gap between the wealthy and the impoverished?

Widening income inequality is simply down to the nature of exponential functions. Suppose there is a society with two people, A and B. A receives an income of I, while B receives an income of x*I (e.g. 3 times A's income). The difference between the two incomes is (x*I)-I = (x-1)*I. Now, suppose every year for n years they both receive a pay rise of r%. A's income is now I*(1+[r/100])^n, while B's income is now x*I*(1+[r/100])^n. The difference between the two incomes is now x*I*(1+[r/100])^n - I*(1+[r/100])^n = (x-1)*I*(1+[r/100])^n. The difference between the two differences is (x-1)*I*((1+[r/100])^n - 1). As n tends to infinity, the absolute difference in incomes increases.

I was going to reply that one only rejects the LTV if one denies that the sky is blue

From what I understand, the "transformation problem" appears to disprove the possibility of a labour theory of value. The main issue is that there is no rule for transforming the labour inputs in a good into market prices.

My oh my, economics has nothing to do with what is true and what is false.

I completely disagree. Economics has everything to do with what is true and what is false. For example, an increase in the minimum wage either increase unemployment, has no effect on unemployment, or decreases unemployment - they are the only three possible options. Given that, economists construct theoretical models to derive a hypothesis (e.g. an increase in the minimum wage will increase unemployment). They can then use econometric techniques to test that hypothesis. Of course, data is not perfect, and different models/econometric techniques will result in a variety of outcomes. Nevertheless, it is clear that the goal is to find out whether that hypothesis is true or false - even if it is difficult in practice to reach a firm conclusion.

These ruling-class theories collapse under the weight of reality.

Is marginalism a "ruling-class theory"? I explained how marginal utility partially determines prices in another thread; do you disagree with my analysis?: http://www.revleft.com/vb/showpost.php?p=1720054&postcount=10

syndicat

17th April 2010, 17:24

It's necessary to look not at hourly pay but at weekly wages. From 1967 to 2000 average weekly wages, in constant 2000 dollars, fell from $525.06 to 474.03. That's a decline of about 10 percent.

thus the following claim is false:

2. Wages have risen across the board, despite the fact that unions have declined in power and most people's wages are above the minimum wage.

For young men with only a high school diploma, average weekly wages have declined by 29 percent from 1975 to 2005.

From 1968 to 2000, the minimum wage dropped in value by 35 percent.

1. Most people work at wages above the minimum wage.

This is true but the minimum wage affects wage rates above the minimum wage. That's because an employer, to attract who he wants, pegs his wages above the minimum so the job seems more attractive. If that gap between his wage and the minimum disappears because the minimum is raised, then he's under pressure to raise his wages too.

During this period of declining wages, productivity went up 74 percent. So the rate of exploitation greatly increased.

Average household income has remained basically flat. This is because more members of households are working since the '60s, mainly more women are working for wages. Households have to have more people earning wages to survive.

Housing over time has consumed a higher average share of budgets. In 1912 in Los Angeles rents generally consumed an average of 14 to 18 percent of working class household budgets, according to a survey in the Los Angeles Record. At one time in the post-World war 2 era the government used 25 percent of income as a criterion of affordability of housing. Now the government uses 30 percent. Young adults who pay over 30 percent of their income on rent has increased from 18 percent in 1979 to 43 percent in 2004 (according to a study by Demos on young workers, http://www.demos.org/pubs/esya_web.pdf.

Productivity in construction has not increased in the way it has in manufacturing. And increasingly speculative nature of the financial system tends to drive up real estate and hence housing costs.

From the 1970s to the present, the percentage of Americans in prison has gone from 0.3 percent to 1.5 percent.

Pensions are also disappearing. In 1979 36 percent of entry-level jobs of high school graduates had a pension plan of some kind. By 2004 this had dropped to only 18.8 percent.

Food prices have dropped but so has nutrition. The nutritional value of many foods has declined. When cattle are kept in pens and force-fed corn...which they are not designed by evolution to eat...this results in fattier meat. The vast increase in use of high fructose corn syrup has driven the increase in obesity. A majority in polls say they'd like to be able to buy organic produce, but only 31 percent do because they can't afford it or its not available. The most available food tends to be the junk food sold at convenience marts.

The food industry also has massive external costs -- there is continuing loss of topsoil, increasing pollution from petrochecmical fertilizers and pesticides, cancer and other ailments amont farmworkers and their families, and declining productivity of chemicals. So low prices only because costs are being externalized onto others. They're not paying their way.

anticap

17th April 2010, 17:39

From what I understand, the "transformation problem" appears to disprove the possibility of a labour theory of value. The main issue is that there is no rule for transforming the labour inputs in a good into market prices.

*yawn (http://kapitalism101.wordpress.com/what-transformation-problem/)*

Is marginalism a "ruling-class theory"?

Currently, yes.

I explained how marginal utility partially determines prices in another thread; do you disagree with my analysis?

I can't think of anything I'd rather do less, except perhaps to defecate, which I loathe. Perhaps if you read my full comment, to which you refer here, you'll realize that my point is a general one. I haven't bothered to investigate whether anyone has attempted to show exploitation via MU, because I've got a perfectly sound theory in the LTV. I've been told, however, that some so-called "market socialists" [sic] utilize it to their own ends, so perhaps you've been led down a primrose path if you think MU serves your ruling-class interests to the exclusion of socialist ones (that is to say, it may also serve the bastardized, oxymoronic conception of "socialism" that doesn't preclude markets by necessity).

Now, if you'll play along, I'd like to set all this aside and ask you a question: why on Earth would you even want to "disprove the possibility of a labor theory of value"? Here, let me list what I see as the main possibilities, and you can tell me which one best describes you, or educate me on the one(s) I've excluded:

1. You're a capitalist (literally; not merely a pro-capitalist member of the working-class), and therefore wish to "disprove" any theory that might undermine your ability to profit from the labor of your employees.

2. You believe that, since the USSR and PRC once claimed to adhere to Marx's LTV, and since great horrors resulted from those regimes, the LTV must therefore be discounted or we risk the deaths of countless millions in future gulags and famines.

3. You're a self-hating worker, somewhat like the self-hating Jew stereotype, only for real; i.e., you don't feel that you deserve the full value of what you produce, perhaps because you're a sinner, etc.

4. You are genuinely convinced that MU is a superior theory to LTV, and you intend to maintain your intellectual honesty (as it were) even if it means that you and your fellow workers will suffer a lower standard of living (this may be considered a variant of #3).

5. You hold to #4, except that you deny that workers' standard of living would be higher if their remuneration was based on the LTV.

IcarusAngel

17th April 2010, 19:21

Widening income inequality is simply down to the nature of exponential functions.

lol. You have to show that this is the case for the economy, not just state the implications of the functions. Ask me to find the difference between two algorithms and I'm back in two seconds. But you have not shown the economy works like this.

You're starting with the mathematics and working backwards - which is considered pathological mathematics.

inyourhouse

17th April 2010, 20:07

It's necessary to look not at hourly pay but at weekly wages.

I don't want to get involved with your dispute with the other poster, but why exactly do you think it's necessary to look at weekly pay rather than hourly pay? If hourly pay is going up and weekly pay is going down, then the only explanation is that workers are working less hours. Isn't that a good thing, from a leftist perspective?

*yawn (http://kapitalism101.wordpress.com/what-transformation-problem/)*

That article is quite unclear. Are there any mathematical representations of this Temporal Single System Interpretation?

Now, if you'll play along, I'd like to set all this aside and ask you a question: why on Earth would you even want to "disprove the possibility of a labor theory of value"?

I believe that the theoretical and empirical evidence behind marginalism makes it reasonable to conclude that it is the correct explanation of resource allocation. I'm interested in what is correct, not what serves my interests.

lol. You have to show that this is the case for the economy, not just state the implications of the functions. Ask me to find the difference between two algorithms and I'm back in two seconds. But you have not shown the economy works like this.

I apologize. I thought it was implicit that I was accepting the premise that the incomes of the poor do not increase at a high enough rate to maintain the same absolute income gap with those on higher incomes.

anticap

17th April 2010, 20:26

That article is quite unclear. Are there any mathematical representations of this Temporal Single System Interpretation?

The videos may help, as they contain visuals and are very beginner-friendly. You might also refer to the bibliography, when you feel that you're ready.

I believe that the theoretical and empirical evidence behind marginalism makes it reasonable to conclude that it is the correct explanation of resource allocation.

OK, so that's either #4 or #5.

I'm interested in what is correct, not what serves my interests.

As am I. It just so happens that the correct theory (LTV) serves the interests of all laboring peoples, including myself and, most likely, you (unless you're a capitalist).

But never mind that. The question now is, did you mean to select #4, or #5? I understand that you don't care one way or the other; but just out of curiosity, which theory do you believe would see workers enjoy more of the fruits of their labors?

syndicat

17th April 2010, 20:55

I don't want to get involved with your dispute with the other poster, but why exactly do you think it's necessary to look at weekly pay rather than hourly pay? If hourly pay is going up and weekly pay is going down, then the only explanation is that workers are working less hours. Isn't that a good thing, from a leftist perspective?

First of all, hourly pay isn't going up. As I pointed out, the average of hourly pay for "non-supervisory and production employees" (80 percent of the economically active population) declined by more than 11 percent from 1968 to 1998, and has continued to decline.

But the issue isn't just how much a person is paid per hour, but also how much work people get. With the spread of part-time and temp jobs, there is an increase in underemployment. Just looking at hourly wage rates doesn't look at average worker income...you have to look at income and employment prospects over the course of longer periods of time.

griffjam

17th April 2010, 20:56

http://www.youtube.com/watch?v=HFxYyXGMfZM (http://www.youtube.com/watch?v=HFxYyXGMfZM)

syndicat

17th April 2010, 21:02

I believe that the theoretical and empirical evidence behind marginalism makes it reasonable to conclude that it is the correct explanation of resource allocation. I'm interested in what is correct, not what serves my interests.

I guess you're referring to neoclassical economic theory. It makes many false assumptions, such as the assumption that there are no externalities, no public goods, and a competitive economy. None of these conditions are even possible.

Externalities are absolutely pervasive. From global warming to toxic polutants from manufacturing, to pollution from power generation and internal combustion engines, to shifting of costs onto workers from close monitoring and intensification of work pace (which cause stress and higher blood pressure and over time heart disease), exposure to dangerous chemicals at work.

Systematic under-development of the potential of the working class through class biased educational systems and de-skilling and dead-end jobs, concentration of decision-making and expertise into the hands of a few are forms of inefficiency. Waste of a potential resource is an inefficiency.

Capitalism generates enormous bureaucratic bloat, to police a workforce whose interests are fundamentally at odds with the employers. Nearly 16 percent of the economically active population in USA are employed in a supervisorial capacity. And this is only part of it. There is also the massive prison guard workforce to guard the 1.5 percent of the population...working class people...who are stuffed in cages. Mainly due to non-violent infractions like petty theft or drug possession. The "war on drugs" is a war on the working class. It's a way of tightly controlling people who the system is incapable of providing jobs for, rather letting them hangout on street corners and maybe start riots.

inyourhouse

17th April 2010, 21:46

The videos may help, as they contain visuals and are very beginner-friendly. You might also refer to the bibliography, when you feel that you're ready.

Very well. I shall read those articles cited in the bibliography.

The question now is, did you mean to select #4, or #5? I understand that you don't care one way or the other; but just out of curiosity, which theory do you believe would see workers enjoy more of the fruits of their labors?

I would say #4. The aggregate effect of a system based on acceptance of the LTV would lead to a large decline in real standards of living across all incomes, in my view. Income equality would probably increase, but I've always considered absolute income levels to be more important than income equality.

First of all, hourly pay isn't going up.

Perhaps (the BLS's ECI seems to suggest that it did go up from 2001-2009), but hourly total compensation certainly is; from 2001-2009, total compensation increased at an annualized rate of 3.2% on average (BLS series CIU2010000000000A). The reason is that "fringe benefits" (pension plans, healthcare, etc.) have increased. Total compensation is a more appropriate measure of total standard of living, in my opinion.

But the issue isn't just how much a person is paid per hour, but also how much work people get. With the spread of part-time and temp jobs, there is an increase in underemployment.

A degree of underemployment seems unavoidable, particularly in a recession. How can it be avoided?

I guess you're referring to neoclassical economic theory. It makes many false assumptions, such as the assumption that there are no externalities, no public goods, and a competitive economy.

No, that's not correct. Most (I would say every one, but I'm not certain) undergraduate neoclassical textbooks have chapters on externalities and public goods, as well as non-perfect market forms (e.g. oligopoly). What exactly made you think that these issues were ignored? More fundamentally, how do any of those issues affect the validity of marginalist concepts? Marginalism is actually used to analyze each of those issues (e.g. with negative externalities we talk about marginal social costs).

As for you comments about education and the police force, I'm not really sure what they have to do with marginalism.

syndicat

17th April 2010, 22:38

Perhaps (the BLS's ECI seems to suggest that it did go up from 2001-2009),

ah, there's your problem. you're using the employment cost index. but BLS has a separate series on hourly earnings for "nonsupervisory and production employees" (80 percent of the economically active population). and according to that series hourly wage in 1998 was $12.78 but in 1973 was $14.46 in 1998 dollars. That's a decline of 11.6%. for all I know the employment cost index may include massive perks to the CEOS and other managers. if you want to talk about wages and conditions for the working class, you have to separate out their compensation from the top officers and the bureaucratic class (managers, high end professionals).

even the "nonsupervisory and production employee" series doesn't exactly correlate with working class wages because it includes some high-end professionals who are really part of the bureaucratic class. if you look for example at the data on male workers with a high school diploma but no college, their wages have fallen since the early '70s by 29%. since only 28 percent of adults have four year college degrees, we can see there's been a huge decline in real wages for working class males who work less skilled jobs. wages for females have declined to a lesser extent because back in the early '70s there was more sex based wage inequality than there is now, i.e. women were even lower paid back then.

costs to employers are not benefits to workers. for example, due to the inefficiency of the capitalist insurance scheme, which employers support for ideological reasons, their costs for health benefits may go up even when benefit for workers goes down. for example due to the huge bureaucratic bloat from competing health insurance bureaucracies, duplicated at hospitals and doctor's offices, who have to deal with hundreds of plans, administrative costs consume 31 percent of premiums. hence 31 percent of the premium cost to employers is not a benefit to workers.

No, that's not correct. Most (I would say every one, but I'm not certain) undergraduate neoclassical textbooks have chapters on externalities and public goods, as well as non-perfect market forms (e.g. oligopoly). What exactly made you think that these issues were ignored?

if you examine the technical neoclassical argument to show efficiency of markets, you'll notice they assume away lack of competition, public goods and externalities. these are "simplifying assumptions", they say. they may discuss these things, but their discussions can't be taken seriously. they're mere handwaving. they usually claim for example that externalities are a very minor problem. they do not deal with the totality of the externalities that i listed.

inyourhouse

18th April 2010, 18:37

costs to employers are not benefits to workers. for example, due to the inefficiency of the capitalist insurance scheme, which employers support for ideological reasons, their costs for health benefits may go up even when benefit for workers goes down.

I was only looking at the wage/salary component of the ECI for those in private industry (BLS series CIU2020000000000A). Nevertheless, it is wrong in principle to look solely at wages. Even if the rising cost of fringe benefits is due to some sort of inefficiency, it is still demonstrative of the fact that employers tend to increase the amount they spend on employees. A supermarket cannot be blamed for the apparent inefficiency of the US healthcare system - they can only keep increasing the amount they spend in employees in line with increases in their productivity.

In any case, the inefficiency of the US healthcare system is largely down to the fact that insurance is used for too many health purchases. Insurance is efficient when it pools funds to pay for events that have some quantifiable risk (e.g. a fairly predictable share of the total population will be diagnosed with cystic fibrosis each year). For non-risky health purchases (e.g. going to the GP for a checkup), it is more efficient to pay out of pocket (or through direct government purchases). The main reason for the prevalence of insurance in the US seems to be the employer-based insurance system (http://www.nber.org/papers/w13371.pdf), which has been propagated through the tax system (http://www.nber.org/papers/w5147.pdf).

if you examine the technical neoclassical argument to show efficiency of markets, you'll notice they assume away lack of competition, public goods and externalities. these are "simplifying assumptions", they say.

I don't think that's correct. Certainly, economists have demonstrated that a competitive equilibrium is efficient (the first fundamental theorem of welfare economics), but it is precisely that: a proof that a competitive equilibrium is efficient. I have not seen an economist claim that because a competitive equilibrium is efficient, the market must therefore always be efficient. Indeed, economists have produced separate models evaluating market efficiency under conditions of imperfect information, externalities, monopolistic competition, etc. I honestly don't know where you got this idea that these issues were not analyzed.

they may discuss these things, but their discussions can't be taken seriously. they're mere handwaving. they usually claim for example that externalities are a very minor problem. they do not deal with the totality of the externalities that i listed.

Again, I think this is incorrect. I have not seen an economics textbook claim that externalities are a minor problem (unless it's an externality that can be bargained with low transaction costs, per the Coase theorem), and pollution is almost always an example. Pigovian taxes are usually the recommended solution.

syndicat

18th April 2010, 19:59

Nevertheless, it is wrong in principle to look solely at wages. Even if the rising cost of fringe benefits is due to some sort of inefficiency, it is still demonstrative of the fact that employers tend to increase the amount they spend on employees. A supermarket cannot be blamed for the apparent inefficiency of the US healthcare system - they can only keep increasing the amount they spend in employees in line with increases in their productivity.

I didn't say one should look only at wages. but benefits to workers have to be actual benefits to workers. now, costs for health premiums per worker for an employer may go up at the same time that the employer gets a plan that requires higher copays and higher deductibles. The higher copays and higher deductibles mean less actual health benefit.

Also, numbers of uninsured are growing and with rising copays and deductibles, health care becomes more unaffordable. It's still the case that health costs are the main cause of bankruptcy for those who do have health insurance coverage.

the "overuse" argument about health insurance is just the propaganda of the capitalist health insurance industry. this is used as an excuse to deny people care.

the main source of inefficiency is that there isn't a single risk pool and a single claims administration. duplication of claims bureaucracies at insurance companies and at doctor's offices & hospitals eat up 31 percent of health insurance premiums.

Certainly, economists have demonstrated that a competitive equilibrium is efficient (the first fundamental theorem of welfare economics), but it is precisely that: a proof that a competitive equilibrium is efficient.

yes, and this "proof" makes exactly the assumptions that I cited. It assumes competitive markets, it assumes no externalities, no public goods. They would not be able to make their proof go through without those assumptions.

I have not seen an economics textbook claim that externalities are a minor problem

To not acknowledge the fact that externalities are absolutely pervasive is in fact to claim they are a minor problem. As I said, externalities are pervasive and massive. Global warming, toxic pollution to surrounding neighborhoods, air pollution by power generating plants and internal combustion engines of cars and trucks and ships and commercial aviation.

And there is the fact the working class doesn't live as long as the dominating classes...due to firms externalizing costs onto workers. They do this through speedup, constant monitoring...things that cause stress and cause heart disease when subjected to them over a long period, exposure to dangerous chemicals. Neoclassical theory doesn't even recognize these costs pushed onto workers as external costs.

Mo212

19th April 2010, 05:54

No one really wants to talk about how capitalism and war are intimately connected, thats one thing capitalists simply do not get. Notice the most capitalist nation on earth is also the one with biggest military budget, all that money is not going to help the system or fund research into civilian uses, it's going for toys to destroy masses of people, a tremendous waste of resources. No analysis of economics can be done without understanding the relationship between war, enclosure, property and the capitalist monetary system.

Klaatu

19th April 2010, 06:21

You are able to buy appliances more cheaply, simply because they are now manufactured in extremely low-wage countries. Your food is cheaper because illegal immigrants are willing to work in the fields for sub-minimum wages, and will not complain, because they are afraid to be deported (and another illegal will eagerly take his place)

Nothing against poor migrant workers here; they are only trying to scrape out a living.

But for a capitalist to make short-sighted claims, as you have, of the beauty of the free market, and all of that rubbish, is not telling the whole story.

Klaatu

19th April 2010, 06:37

Lets decide whether or not God exists by polling people. Whatever the majority decide we must abide by our be shot.

Why not change your moniker to Red Herring

LeftSideDown

19th April 2010, 08:33

Why not change your moniker to Red Herring

It was a bad analogy. I admitted that. My point was very clear: democracy cannot change facts of existence through the power of voting. Voting 2+2 = 5 does not make it so.

Common_Means

19th April 2010, 10:02

It was a bad analogy. I admitted that. My point was very clear: democracy cannot change facts of existence through the power of voting. Voting 2+2 = 5 does not make it so.

So let me get this straight. You, a person that likely promotes a theory of marginal utility, is lecturing others on what existence is. Sorry if I don't have a chuckle at your expense.

I suppose next you're going to tell me that one day the fairy god mother came down from the clouds, waved her magic wand and declared "let there be value!"

Your insertion of God into this topic was relevant indeed.

LeftSideDown

19th April 2010, 15:56

So let me get this straight. You, a person that likely promotes a theory of marginal utility, is lecturing others on what existence is. Sorry if I don't have a chuckle at your expense.

I suppose next you're going to tell me that one day the fairy god mother came down from the clouds, waved her magic wand and declared "let there be value!"

Your insertion of God into this topic was relevant indeed.

I'm lecturing others on the failings of democracy, but, more importantly, how democracy is seen as the end-all-be-all of all problems. Just because something is democratically voted on does not make it right.

Common_Means

20th April 2010, 01:20

I'm lecturing others on the failings of democracy, but, more importantly, how democracy is seen as the end-all-be-all of all problems. Just because something is democratically voted on does not make it right.

Hardly. From what I can tell, you're madly attempting to construct another straw-man. The LTV exists. Those who deny its existence are ideological. So long as capitalism exists, no vote will ever change this.

Alas, appearances can be deceiving, and people like you can continue to spew their ideological BS.

Jacobinist

20th April 2010, 01:23

Common_Means

20th April 2010, 01:31

You dont even mention inflation, so obviously to me, arguing with you would be pointless.

This thread is a joke. A kid in grade 7 could look up that real wages have been declining since the 1970s...

Sam_b

20th April 2010, 01:49

I might have missed something, but..

You should stick to your job at McDonald's instead of debating politics at 30 forums

Do you have a problem with workers at McDonalds? Why is this turning into some sort of classist insult?

LeftSideDown

20th April 2010, 02:33

Hardly. From what I can tell, you're madly attempting to construct another straw-man. The LTV exists. Those who deny its existence are ideological. So long as capitalism exists, no vote will ever change this.

Alas, appearances can be deceiving, and people like you can continue to spew their ideological BS.

What straw men? Yes the LTV exists, but that doesn't make it right. "Time cube" exists, but that doesn't make it right. Those who assert that others are ideological who, themselves, adhere to an unproven (and indeed, falsified) ideology are at least hypocrites.

Drace

20th April 2010, 02:41

Common_Means

20th April 2010, 02:59

What straw men? Yes the LTV exists, but that doesn't make it right. "Time cube" exists, but that doesn't make it right. Those who assert that others are ideological who, themselves, adhere to an unproven (and indeed, falsified) ideology are at least hypocrites.

The LTV has not been disproved.

cska

20th April 2010, 03:11

The LTV has not been disproved.

While I think the LTV is right, it is not because I believe in the LTV religion, but rather because I have seen evidence to support its correctness. Please don't use the "you can't disprove it, so it must be right" bullshit.

Common_Means

20th April 2010, 03:42

While I think the LTV is right, it is not because I believe in the LTV religion, but rather because I have seen evidence to support its correctness. Please don't use the "you can't disprove it, so it must be right" bullshit.

Hey bud, don't project your BS onto me.

LeftSideDown

20th April 2010, 04:30

Wait what? Eggs used to be $10 a dozen in the early 1920s? People didn't even earn that much...I can't take those graphs seriously at all.
All of the sources for the graphs also come from some random blogspot.

Its probably adjusted for inflation.

But no shit, of course people could afford more goods, but that's all thanks to the advances in technology and production, not capitalism.

It is commonly viewed that they go hand in hand

As Chomsky put it, living standards for slaves were much better in the 1800s than the 1700s, does that justify slavery?
And did the agrarian revolution justify feudalism because people were able to obtain more food?

The comparison of one who voluntarily sells his labor to one who is enslaved his not apt at all and this analogous relationship you conjure up with a wave of your magic wand that makes unlike things alike is truly amazing.

LeftSideDown

20th April 2010, 04:30

The LTV has not been disproved.

Bohm-Bawerk "Marx and the Close of His System"

Common_Means

20th April 2010, 05:02

Bohm-Bawerk "Marx and the Close of His System"

Ok, what about him? If we're going to get into it you're going to have to do better than citing the transformation problem.

Tell me, in your own words, why the LTV is wrong - and I will reply. However, so long as you give pop-gun responses, you shall receive the same in return.

anticap

20th April 2010, 05:38

Pay no mind to LeftSideDown, he's just parroting the names of texts that he's been told are damning. He clearly hasn't been briefed on the intervening century or so since that attack on a straw man was written.

And pay him no mind when he asks for counter-arguments; he's been shown them, on numerous occasions, yet he goes on posting as though every post were his first (the modus operandi of right-wingers and trolls).

Don't pay him any mind even when he asks to be shown where he's already been shown; he knows how the search engine works.

Pay him no mind; he's a troll.

LeftSideDown

20th April 2010, 05:42

Pay no mind to LeftSideDown, he's just parroting the names of texts that he's been told are damning. He clearly hasn't been briefed on the intervening century or so since that attack on a straw man was written.

And pay him no mind when he asks for counter-arguments; he's been shown them, on numerous occasions, yet he goes on posting as though every post were his first. That is the modus operandi of right-wingers.

Don't pay him any mind even when he asks to be shown where he's already been shown; he knows how the search engine works.

Pay him no mind; he's a troll.

I'm not a right winger.

anticap

20th April 2010, 05:53

I'm not a right winger.

Of course you are; you simply define "right-wing" as "not right-wing." That's been the M.O. of your ilk for centuries.

But more importantly, how was it that my slight edit got through without showing me as having made an edit, even though you quoted my pre-edit text? Is it because you had the reply window open for ~4 minutes? Is that what happens when I start to reply to someone, but leave the PC in mid-rant, and when I come back to finish it turns out they've added another dozen paragraphs in the interim (just to piss me off and make me write more, of course)? Weird how that works without showing the edit notice. :confused: (And even more important still: we need a shrug emoticon.)

LeftSideDown

20th April 2010, 06:21

Ok, what about him? If we're going to get into it you're going to have to do better than citing the transformation problem.

Tell me, in your own words, why the LTV is wrong - and I will reply. However, so long as you give pop-gun responses, you shall receive the same in return.

Well, normally I'd start with mudpies, but Marx's theory says it only applies to things that have utility. So, skipping this preliminary, and obligatory, strawman, let us delve into the LTV.

Marx and Subjectivists share at least one thing in common: namely, that in order for a good to have economic value it must have utility. However, once a good passes the so-called "utility test" subjective valuations no longer have any effect on the economic value of a good (according to Marx). This is because Marx realized that subjective values are ordinal. Because he wanted to make a cardinal science of economy he abandoned subjective valuations because you can not put a number on the value someone places on something, or if you put a number on it it is purely ordinal and lacks units.

Marx also asserted that economics goods have another property other than use-value and that is exchange-value. He bases his labor theory of value off exchange value, rather than use value (since obviously you can have no units for use, but you can for exchange (namely, money)). So, supposing that someone exchanges one apple for one orange, according to Marx, one apple = one orange.

But this not true in the slightest. One apple =\= one orange because an exchange is not an equality it is a double inequality. I value one orange more than one apple and you value one apple more than one orange. There is no equality. Marx's obvious reply to this, since it is easily recognizable that there is a double inequality, is that use value does not determine economic value. economic value is only determined by exchange value, and in this there must be an equality. However, this only reveals another basic mistake and that is to completely separate use value from exchange value. An apple only has exchange value because I want it for its use value. Exchange value comes from use value, and as such, using only exchange equality to equate economic value you come up against quite a formidable wall (namely that you have completely ignored that something has exchange value because it has use-value and these things are not separate and Marx ignores use-value).

Well, now we are starting to get to the heart of the LTV. Going back to the basics, we know (from earlier) that one apple = one orange in exchange. But obviously these goods are not identical; it is not the same as saying 1=1 because apples are very different from oranges. What the LTV asserts is that, while these goods are not identical, they have some underlying entity that is the same for both. The "underlying entity" Marx chose was that they are both the product of labor. One apple = one orange because the same quantity of human labor is required to produce them.

Bohm Bawerk, generous as he is, located another flaw in Marx's argument. He conceded, for the sake of argument, that there exists an equality in exchange. He also granted, for the sake of argument, that equality entails an identity. Why, he asked, does the identical element have to be labor? Why can't it be something else? Obviously using labor was very important for Marx's political schemes, but this is not sufficient justification for asserting that it is the entity responsible for economic value. And there are some problems with labor, like it doesn't always (or even most of the time) work. Some goods, like wine, increase in value the longer they are stored. The labor required to get grapes and then turn them into wine contributes very little to the price of wine.

Another issue Bohm Bawerk brought up was that obviously the labor of some is worth more than others, and more labor (if it is unskilled) =\= less labor (if it is skilled). Marx knew this, and so, instead of just saying labor time, he said "socially necessary" labor to produce an item of a certain class. There are numerous criticisms that can be brought up here. What determines the amount of labor that is "socially necessary"? Obviously you wouldn't use someone incompetent as the standard for which you would calculate "socially necessary" labor time; your standard would be off. But who, or what do you use as your criterion? Should it be the least possible time it takes anyone to produce something? If not this, what?

Bohm Bawerks solution to this problem, unsurprisingly, was the market. You needed market prices to determine "socially necessary". Socially necessary labor, in a market, would be equal to the labor needed to produce a good at market price. Those who required more labor than this were not performing labor that was "socially necessary". Marx's reasoning for his method was circular in a very blatant fashion: the market price of a good is determined by the socially necessary labor to produce it. But, because of this, you cannot appeal to the good's market price in order to find out how much labor is socially necessary.

Moreso, how can labor hours required to produce one hour of a good be compared with the labor hours needed to make a good of a completely different type? How do you compare a surgeons labor with that of a brick layer? How can my labor typing up this refutation be compared to a football player's labor on the football field?

Marx, of course, recognized this. His solution? He argued that many different varieties of labor could indeed be reduced to a common measure. How did he say this could be done? He said one would have to make reference to the market prices of different types of labor! Again, using market prices to reduce the types of labor to a common measure is blatantly reasoning in a circle.

With all of the reasoning Marx did, even he recognized that we would not have a theory that adequately explained price. He knew full well, and explicitly stated, that goods do not in a capitalist economy exchange at their labor values. Marx has gone to great lengths to arrive at an allegedly scientific theory that will explain why goods exchange at ratios they do. But his theory, and by his own admission, does not do this.

Marx's answer is as follows: true, the labor theory does not explain actual prices. But given labor prices, the theory can show how actual prices are derived. Thus he, apparently, vindicates his theory: it does not explain price after all. Bohm Bawerk extensively showed that Marx's attempted derivation of real prices from labor values just didn't add up, but I'm not going to write out all the ways he did this (look up the essay yourself, its a free pdf). Instead of going into Bohm Bawerks details, I will raise a more general issue.

Suppose Marx could derive real prices from labor values. That is to say, suppose Marx's arithmetic was right: what difference would it make? Marx claims to show what the "laws of motion" of capitalism really are. But how does deriving one figure from another meet this exacting requirement? Using the apples and oranges example again we will say that "one orange exchanges for one apple". IN this circumstance there is a 1:1 exchange ratio. The apple price of one orange is one apple. Given that the apple price of oranges, we can at once derive the orange price of apples. But in so doing this we have not shown that the apple price of oranges somehow underlies (that is to say, more basic than) the orange price of apples. To get a genuine explanation, more than a numerical derivation is needed.

Drace

21st April 2010, 00:05

It is commonly viewed that they go hand in handIts then commonly viewed falsely. That's not an argument.

The comparison of one who voluntarily sells his labor to one who is enslaved his not apt at all and this analogous relationship you conjure up with a wave of your magic wand that makes unlike things alike is truly amazing.I did not even attempt to equate capitalism and slavery.
Your not even staying on topic.
The examples merely go to show that you can't attribute the increase in living standards due to the nature of capitalism.

I mean cmon, the cost of eggs dropping shows merely the increased efficiency in the production of food, not some magical aspect of capitalism. Just because the net wealth created is positive, does not mean that capitalism is justified.

Dermezel

21st April 2010, 00:10

Drace

21st April 2010, 00:15

2. Firms earn profits by taking goods and services that are worth less and transforming them into goods and services that consumers value more.How can goods and services be worthless? "Goods" and "services" necessitate something useful.
And how do firms just take over these goods and services?

LeftSideDown

21st April 2010, 00:28

I don't want to keep bumping this troll thread but the second Premise is just wrong:

"2. Firms earn profits by taking goods and services that are worth less and transforming them into goods and services that consumers value more."

Why are they worthless? Is a Rain Forest worthless until a Firm owns it? Is a collective or independently owned farm worthless? Is a public school worthless?

You are misinterpreting it. He is saying "worth less" not "worthless". Steel, in its raw form, isn't worth much to consumers. When molded into a frame of a car it is worth more. A forest doesn't have much worth to a human. When lumber is taken from it and made into a structure that someone can live in its made worth more. So the steel is "worth less" (Not worthless) when it hasn't been made into something that gives utility (it is in its raw form) than it is when it has been.

Dermezel

21st April 2010, 00:34

You are misinterpreting it. He is saying "worth less" not "worthless".

Then he's still wrong. A pristine Rain Forest or Coral Reef is worth a lot more then a polluted hellhole of oil spills and stumps. A Public School that teaches evolution is worth a hell of a lot more then a Private School that teaches Creation Science.

Bud Struggle

21st April 2010, 00:36

A Public School that teaches evolution is worth a hell of a lot more then a Private School that teaches Creation Science.

To you. Such things are always subjective.

Dermezel

21st April 2010, 00:40

To you. Such things are always subjective.

Uh no Science is about objective evidence. Gravity is not subjective. Evolution is not subjective. The Law of Centralization is not subjective. These are Scientific Facts.

When I mix two parts hydrogen and one part oxygen the outcome is not subjectively determined, it is based on the Laws of Molecular Chemistry.

Even a kid knows that.

LeftSideDown

21st April 2010, 00:46

Uh no Science is about objective evidence. Gravity is not subjective. Evolution is not subjective. The Law of Centralization is not subjective. These are Scientific Facts.

When I mix two parts hydrogen and one part oxygen the outcome is not subjectively determined, it is based on the Laws of Molecular Chemistry.

Even a kid knows that.

Hes not debating whether or not evolution is right. A school that teaches creation science is more valuable to a fundamentalist christian than one that teaches evolution. This is true, no?

LeftSideDown

21st April 2010, 00:48

Then he's still wrong. A pristine Rain Forest or Coral Reef is worth a lot more then a polluted hellhole of oil spills and stumps. A Public School that teaches evolution is worth a hell of a lot more then a Private School that teaches Creation Science.

Thats subjective. If you're dieing of thirst you'd much rather have an not aesthetically pleasing water treatment plant than a beautiful coral reef in an undrinkable pool of water. Well, thats subjective too (You may be suicidal and love natural beauty). Anyway, a tree is not of much use to me, a house is. Thats what the statement means.

trivas7

21st April 2010, 00:49

Marx and Subjectivists share at least one thing in common: namely, that in order for a good to have economic value it must have utility. However, once a good passes the so-called "utility test" subjective valuations no longer have any effect on the economic value of a good (according to Marx). This is because Marx realized that subjective values are ordinal. Because he wanted to make a cardinal science of economy he abandoned subjective valuations because you can not put a number on the value someone places on something, or if you put a number on it it is purely ordinal and lacks units.

All this is nonsense. Marx wrote in Capital a critique of political economy, not a science of one. Marx wanted to demonstrate that economics was rooted in social relations, and that commodities hid these. Marx discovered that it was at the point of production that surplus value was stolen from one class and expropriated by another.

Marx also asserted that economics goods have another property other than use-value and that is exchange-value. He bases his labor theory of value off exchange value, rather than use value (since obviously you can have no units for use, but you can for exchange (namely, money)). So, supposing that someone exchanges one apple for one orange, according to Marx, one apple = one orange.
OTC, Marx based his labor theory of value by looking at how capitalism operates genetico-evolutionarily, materially, and dialectically according Ernest Mandel.

Dermezel

21st April 2010, 00:54

Hes not debating whether or not evolution is right. A school that teaches creation science is more valuable to a fundamentalist christian than one that teaches evolution. This is true, no?

Not really because it disqualifies them from pursuing a decent career and makes the family ignorant.

Dermezel

21st April 2010, 00:56

Thats subjective. If you're dieing of thirst you'd much rather have an not aesthetically pleasing water treatment plant than a beautiful coral reef in an undrinkable pool of water.

How the hell do you know what I want? And why can't I have both? Oh yeah- because capitalism leads to a disorganized economy where there are no priorities- that's why.

And I already do have both- so you're just objectively wrong. Arguing it "could" be a choice doesn't make it subjective. That's like arguing gravity is a choice because if you were Dr. Manhattan you "could" choose to ignore it.

LeftSideDown

21st April 2010, 01:45

Not really because it disqualifies them from pursuing a decent career and makes the family ignorant.

I'm talking a father making a decision for the child. It is more valuable. I don't care what economic effects it may have, that person values eternal salvation more than anything earthly. It is subjective.

LeftSideDown

21st April 2010, 01:51

How the hell do you know what I want? And why can't I have both? Oh yeah- because capitalism leads to a disorganized economy where there are no priorities- that's why.

And I already do have both- so you're just objectively wrong. Arguing it "could" be a choice doesn't make it subjective. That's like arguing gravity is a choice because if you were Dr. Manhattan you "could" choose to ignore it.

I LOVE HOW YOU IGNORE MY VERY NEXT STATEMENT WHERE I SAY IT IS SUBJECTIVE AND BASE YOUR ARGUMENT OFF THE FIRST; CLASSIC AVOIDANCE.

There are priorities and in fact there is the most important demand; that of meeting consumer demand.

What I am responding to is your objective statement that beautiful nature is more important than industrial progress. That is clearly subjective. If I disagree and say progress is more important than beauty in nature I could be just as correct.

turquino

21st April 2010, 01:55

Bohm Bawerk, generous as he is, located another flaw in Marx's argument. He conceded, for the sake of argument, that there exists an equality in exchange. He also granted, for the sake of argument, that equality entails an identity. Why, he asked, does the identical element have to be labor? Why can't it be something else? Obviously using labor was very important for Marx's political schemes, but this is not sufficient justification for asserting that it is the entity responsible for economic value. And there are some problems with labor, like it doesn't always (or even most of the time) work. Some goods, like wine, increase in value the longer they are stored. The labor required to get grapes and then turn them into wine contributes very little to the price of wine.I just want to quickly respond to this. The labour involved in the cultivation of grapes and transformation into either grape juice or a fine wine involve similar amounts of labour but sell at different prices. This is because the commodity sells at its price of production which is the price that equalizes the rate of profit between grape juice-making and winemaking. If the rate of profit was ignored, all but a few of the wineries would stop making wine and switch to grape juice. Aged wine has a long turnover time because it has to sit in barrels for years until it is ready to drink; not so with juice. If winemakers are ever to survive, the price of their wines must rise above their values. The distinction between values and prices of production is an important one.

So what use is labour value? Prices of production that equalize the rate of profit presuppose profits. This is what leads Marx to look closer at what lay behind the profit of capital, and he concluded that it arose from the surplus labour performed by workers in production. The prices of commodities that we see in the shops are probably not equal to the money price of the labour they contain, but it doesn't matter. In circulation prices that equalize the rate of profit are dominant, but circulation cannot completely detach itself from production. If there was no value created by labour in the first place, there could be no profits and therefore no prices.

Dermezel

21st April 2010, 01:59

I'm talking a father making a decision for the child. It is more valuable.

Yeah and we know that fathers never make a mistake.

Dermezel

21st April 2010, 02:02

I LOVE HOW YOU IGNORE MY VERY NEXT STATEMENT WHERE I SAY IT IS SUBJECTIVE AND BASE YOUR ARGUMENT OFF THE FIRST; CLASSIC AVOIDANCE.

Quite an odd response from a Subjectivist.

There are priorities and in fact there is the most important demand; that of meeting consumer demand.

Well with socialism we get both drinking water and corral reefs so problem solved.

What I am responding to is your objective statement that beautiful nature is more important than industrial progress. That is clearly subjective. If I disagree and say progress is more important than beauty in nature I could be just as correct.

You aren't making any sense because everything you said has nothing to do with the Centralization of capital.

Even from a consumer standpoint it is bad because it allocated them less value- immediate value and surplus value. That means less economic power in general, which objectively means they get less of their general demands met and less power to prioritize.

LeftSideDown

21st April 2010, 02:16

Yeah and we know that fathers never make a mistake.

WHETHER OR NOT IT IS A MISTAKE IS IRRELEVANT. A fundamentalist christian could value you the institution that promulgates his own views he probably (he may not) value more than a school that teaches evolution. Whether or not his value judgement is the one that is best for his son's future is irrelevant.

LeftSideDown

21st April 2010, 02:26

Quite an odd response from a Subjectivist.

I don't think so. You ignored my second statement where I expressly stated it was subjective.

Well with socialism we get both drinking water and corral reefs so problem solved.

That doesn't prove that the value of those items are both subjective. Someone who is drowning in drinking water probably doesn't value it very highly, and more than likely gives it a negative value (he would pay someone to take it so he wouldn't drown) whereas someone who has been in the desert for a day probably places a huge value on water (between a bottle of water and an ounce of gold he'll probably choose a bottle of water). Just because in socialism you assert that you would have both doesn't mean that their values are any less subjective.

Anyway, to assume that socialism doesn't cause pollution is just wrong.

"A typical example of the environmental damage caused by the Soviet economic system is the exploitation of the Black Sea. To comply with five-year plans for housing and building construction, gravel, sand, and trees around the beaches were used for decades as construction materials. Because there is no private property, "no value is attached to the gravel along the seashore. Since, in effect, it is free, the contractors haul it away. This practice caused massive beach erosion which reduced the Black Sea coast by 50 percent between 1920 and 1960. Eventually, hotels, hospitals, and of all things, a military sanitarium collapsed into the sea as the shore line gave way. Frequent landslides–as many as 300 per year–have been reported."

"Water pollution is catastrophic. Effluent from a chemical plant killed almost all the fish in the Oka River in 1965, and similar fish kills have occurred in the Volga, Ob, Yenesei, Ural, and Northern Dvina rivers. Most Russian factories discharge their waste without cleaning it at all. Mines, oil wells, and ships freely dump waste and ballast into any available body of water, since it is all one big (and tragic) "commons."

"The Aral and Caspian seas have been gradually disappearing as large quantities of their water have been diverted for irrigation. And since untreated sewage flows into feeder rivers, they are also heavily polluted."

Source:http://www.thefreemanonline.org/columns/why-socialism-causes-pollution/

There are so many other examples of socialist countries doing all these things you think are only possible in capitalist ones that I could make a whole thread about it. I'll let the above suffice

You aren't making any sense because everything you said has nothing to do with the Centralization of capital.

Even from a consumer standpoint it is bad because it allocated them less value- immediate value and surplus value. That means less economic power in general, which objectively means they get less of their general demands met and less power to prioritize.

We're not talking about the centralization of capital. We're talking about subjective value.

Dermezel

21st April 2010, 02:27

WHETHER OR NOT IT IS A MISTAKE IS IRRELEVANT. A fundamentalist christian could value you the institution that promulgates his own views he probably (he may not) value more than a school that teaches evolution. Whether or not his value judgement is the one that is best for his son's future is irrelevant.

Well then he doesn't really care about his son. If he makes a mistake and screws up his son's entire life and doesn't care, it's not like a value judgment like vanilla or chocolate ice cream, he just doesn't care about his son.

If some Christian Scientist doesn't take his son to the hospital and he dies of an ear infection, it's not a "value judgment"- his son's dead. Period.

Dermezel

21st April 2010, 05:30

I don't think so. You ignored my second statement where I expressly stated it was subjective.

Again- Subjectivity. You see Subjectivity and Objectivity as absolute categories, or think Subjectivity overall is a larger determining factor in the Universe.

That doesn't prove that the value of those items are both subjective. Someone who is drowning in drinking water probably doesn't value it very highly, and more than likely gives it a negative value (he would pay someone to take it so he wouldn't drown) whereas someone who has been in the desert for a day probably places a huge value on water (between a bottle of water and an ounce of gold he'll probably choose a bottle of water). Just because in socialism you assert that you would have both doesn't mean that their values are any less subjective.

Neurons and physiology determine value judgments. Those are objective.

Anyway, to assume that socialism doesn't cause pollution is just wrong.

Who said this? When? I am saying Socialism can reduce and eliminate pollution.

"A typical example of the environmental damage caused by the Soviet economic system is the exploitation of the Black Sea. To comply with five-year plans for housing and building construction, gravel, sand, and trees around the beaches were used for decades as construction materials. Because there is no private property, "no value is attached to the gravel along the seashore. Since, in effect, it is free, the contractors haul it away. This practice caused massive beach erosion which reduced the Black Sea coast by 50 percent between 1920 and 1960. Eventually, hotels, hospitals, and of all things, a military sanitarium collapsed into the sea as the shore line gave way. Frequent landslides–as many as 300 per year–have been reported."

Oh pick on the Soviet Union. A Third World Country. That ALMOST took out the US.

A Third World Country competes with the US- the world's biggest super power, and you put down the Third World Country.

It's not "Good Job Rocky!" it's "You're a fucking LOSER!"

LeftSideDown

21st April 2010, 05:34

Well then he doesn't really care about his son. If he makes a mistake and screws up his son's entire life and doesn't care, it's not like a value judgment like vanilla or chocolate ice cream, he just doesn't care about his son.

If some Christian Scientist doesn't take his son to the hospital and he dies of an ear infection, it's not a "value judgment"- his son's dead. Period.

You really do not get what I'm saying do you?

Does the christian fundamentalist value a christian school the preaches christian creation science more than a secular school? Well, it doesn't have to be yes, but more than likely he does. Whether or not one is superior is entirely irrelevant, the fact is he values one institution more than another, and this value judgement is not an incorrect one to hold. Its not an incorrect value judgement to say that apple is better than pecan pie.

Dermezel

21st April 2010, 05:38

You really do not get what I'm saying do you?

Does the christian fundamentalist value a christian school the preaches christian creation science more than a secular school? Well, it doesn't have to be yes, but more than likely he does. Whether or not one is superior is entirely irrelevant, the fact is he values one institution more than another, and this value judgement is not an incorrect one to hold. Its not an incorrect value judgement to say that apple is better than pecan pie.

16 million people starved to death this year. Do you think- subjectively- that is okay? Because if so you are psychologically sick.

If some father, wants his son to be ignorant. To screw up his life, narrow his mind, mess him up intellectually, he is a bad father period.

If I had kids I would cherish them more then my own life. I wouldn't fuck up their life and say "Well it's a subjective value judgment".

LeftSideDown

21st April 2010, 05:40

Again- Subjectivity. You see Subjectivity and Objectivity as absolute categories, or think Subjectivity overall is a larger determining factor in the Universe.

I do not think it is the determining factor of the universe, just of value.

Neurons and physiology determine value judgments. Those are objective.

Even if that is 100% true it doesn't change that people make different valuations of the same object. Given the choice between an apple and an orange, if I choose an apple (because I prefer it) and you choose an orange (because you prefer it) one of these decisions is not correct and one is not wrong. They are both correct subjective valuations.

Who said this? When? I am saying Socialism can reduce and eliminate pollution.

So can capitalism if property rights are enforced. In fact during the 1800s there were a number of court cases in the US where factories were held liable to damage to the property of people nearby (clothes left out to try on clothes lines were dirtied, the house became black with soot, railroads near farms could sometimes start fires from the sparks). Factories began to use higher smoke stacks and began to discover scrubbers and costs to the environment became real costs that they had to include in their calculations. During the 20th century more and more courts started favoring factories over people and corporations stopped caring. If property rights are enforced capitalism is much better at reducing pollution than socialism.

Oh pick on the Soviet Union. A Third World Country. That ALMOST took out the US.

A Third World Country competes with the US- the world's biggest super power, and you put down the Third World Country.

It's not "Good Job Rocky!" it's "You're a fucking LOSER!"

Define "third world country" and tell me how the heavily industrialized USSR fits this category.

LeftSideDown

21st April 2010, 05:42

16 million people starved to death this year. Do you think- subjectively- that is okay? Because if so you are psychologically sick.

If some father, wants his son to be ignorant. To screw up his life, narrow his mind, mess him up intellectually, he is a bad father period.

If I had kids I would cherish them more then my own life. I wouldn't fuck up their life and say "Well it's a subjective value judgment".

It does not matter. He may well be a bad father. This is irrelevant; it is irrelevant. All that matters is that he may or may not value one more than the other. Does it matter if someone is a murderer and they value peaches more than pears? No, it does not matter in the slightest. You asserted that, objectively, people value schools that teach evolution more than creation science. This is not true; this is all I set out to prove. Some do value creation science schools more than others.

Dermezel

21st April 2010, 05:51

It does not matter. He may well be a bad father. This is irrelevant; it is irrelevant.

If I was a father that'd be super-relevant. If I was a father, and you could prove, and I mean absolutely prove, I was hurting my son I'd feel horrible.

All that matters is that he may or may not value one more than the other. Does it matter if someone is a murderer and they value peaches more than pears?

Yes dude.

You asserted that, objectively, people value schools that teach evolution more than creation science. This is not true; this is all I set out to prove. Some do value creation science schools more than others.

The people who do not value such schools are not educated enough to know otherwise. If they were they'd change their minds. That is an objective fact for anyone who has a conscience.

LeftSideDown

21st April 2010, 05:56

If I was a father that'd be super-relevant. If I was a father, and you could prove, and I mean absolutely prove, I was hurting my son I'd feel horrible.

It doesn't matter that your value judgement can be changed (kind of proving subjectivity). All I am saying is that someone could value the christian school more than the scientific one. Whether or not this is the best decision is irrelevant. It is possible.

Yes dude.

Why?

The people who do not value such schools are not educated enough to know otherwise. If they were they'd change their minds. That is an objective fact for anyone who has a conscience.

You're avoiding the point. Is it possible that someone could value the christian school more than the scientific school?

Dermezel

21st April 2010, 06:05

It doesn't matter that your value judgement can be changed (kind of proving subjectivity). All I am saying is that someone could value the christian school more than the scientific one. Whether or not this is the best decision is irrelevant. It is possible.

Not if they had enough knowledge. Knowing you are fucking up the future generation with Global Warming, fucking up your son's or daughter's life, is not good parenting by any, but the most Social Darwinian, measure.

And you ask why is murder wrong? For anyone but a sick person that should be intuitive.

LeftSideDown

21st April 2010, 06:09

Not if they had enough knowledge. Knowing you are fucking up the future generation with Global Warming, fucking up your son's or daughter's life, is not good parenting by any, but the most Social Darwinian, measure.

And you ask why is murder wrong? For anyone but a sick person that should be intuitive.

How do you miss everything? And you can make value judgments without knowing everything. If I prefer peach to apple cobbler, do I have to know about how much healthier apple cobbler is? Its a personal taste. I am NOT asking whether or not the value judgement is the wisest, just whether or not it exists (which I don't think you can deny that it does).

I did NOT ask why murder was wrong, I merely asked if being a murderer precludes one's ability to make subjective valuations.

Dermezel

21st April 2010, 06:10

How do you miss everything? And you can make value judgments without knowing everything. If I prefer peach to apple cobbler, do I have to know about how much healthier apple cobbler is? Its a personal taste. I am NOT asking whether or not the value judgement is the wisest, just whether or not it exists (which I don't think you can deny that it does).

I did NOT ask why murder was wrong, I merely asked if being a murderer precludes one's ability to make subjective valuations.

I am not a parent. But I know a father is not okay knowing he fucked up his son's or daughter's future through lack of education.

LeftSideDown

21st April 2010, 06:15

I am not a parent. But I know a father is not okay knowing he fucked up his son's or daughter's future through lack of education.

What if he believes, because of his choice, his son will have eternal happiness in heaven?

Dermezel

21st April 2010, 06:19

What if he believes, because of his choice, his son will have eternal happiness in heaven?

You tell him the concept is superfluous.

LeftSideDown

21st April 2010, 06:29

You tell him the concept is superfluous.

This is off topic. His reasons for making a value judgement do not matter. Does it matter why you prefer red to blue? Does it matter whether you like sweet things more than bitter? The point is that people have preferences and make subjective valuations all the time.

You made the assertion "A Public School that teaches evolution is worth a hell of a lot more then a Private School that teaches Creation Science."

While I tend to agree with you, my only point was to prove that to some people it would not be because they believe the public school would send their loved ones to hell. Whether or not they're assertions are true, superfluous, mystical, or primitive is beside the point. They made this valuation and it is not wrong, no matter what effects it has on them. Someone could value a cigarette more than a piece of candy and later die of cancer, however, it does not change the validity of his value judgement.

Dermezel

21st April 2010, 06:49

This is off topic. His reasons for making a value judgement do not matter.

But it isn't value judgment at this point. It is delusion. It is like a dad who thinks if he feeds his son rat poison he will make his son fly with UFOs to an alien paradise.

LeftSideDown

21st April 2010, 06:58

But it isn't value judgment at this point. It is delusion. It is like a dad who thinks if he feeds his son rat poison he will make his son fly with UFOs to an alien paradise.

It is a value judgement. He values the chance of eternal life more than economic wealth. Reasons for valuation do not matter. That a man values right poison for improbable reasons does not matter, his subjective valuation is still acceptable. If I value peach pie more than apple pie because I think peach pie is an anti-carcinogen this does not diminish the validity of my value judgement. While someone could convince me to change my value judgement (show me facts, for instance) this does not change the validity of subjective valuations, only proves that they are subject to change.

Dermezel

21st April 2010, 07:02

It is a value judgement. He values the chance of eternal life more than economic wealth.

Only because he believes his son will go to heaven. The belief is a delusion.

LeftSideDown

21st April 2010, 07:03

Only because he believes his son will go to heaven. The belief is a delusion.

The reason for the valuation does not matter. You get hung up on one thing, and I even attempted argue against this before you even posted it with the peach pie eating person. The reasons for a valuation do not matter, merely that they do exist.

Dermezel

21st April 2010, 07:08

The reason for the valuation does not matter. You get hung up on one thing, and I even attempted argue against this before you even posted it with the peach pie eating person. The reasons for a valuation do not matter, merely that they do exist.

Well the reasons would matter for someone who truly cares about their kids. If I believe, by buying a medicine, I am helping my kid get better, but in reality it is fraud (and I am poisoning my child) that matters a lot.

LeftSideDown

21st April 2010, 07:40

Well the reasons would matter for someone who truly cares about their kids. If I believe, by buying a medicine, I am helping my kid get better, but in reality it is fraud (and I am poisoning my child) that matters a lot.

The effects matter, of course. The reasons do not matter for the valuation, and all I am establishing is the legitimacy of the subjective theory of value.

Dermezel

21st April 2010, 07:45

The effects matter, of course. The reasons do not matter for the valuation,

So if you are a parent, and you buy medicine because you think, you reason, it is a cure, and instead it makes them suffer and die- that does not matter?

LeftSideDown

21st April 2010, 07:48

So if you are a parent, and you buy medicine because you think, you reason, it is a cure, and instead it makes them suffer and die- that does not matter?

It does not refute the subjective theory of value, no. In that sense it does not matter. In the legal sense of course it matters.

Dermezel

21st April 2010, 07:49

It does not refute the subjective theory of value, no. In that sense it does not matter. In the legal sense of course it matters.

Okay, is subjectivity determined by neural, psychological and physiological factors? Because if so those are objective.

LeftSideDown

21st April 2010, 07:56

Okay, is subjectivity determined by neural, psychological and physiological factors? Because if so those are objective.

What do you mean? Are some tastes determined by genetic make up and individual circumstances/nurture? Yes of course? What do you mean by objective?

Anyway, subjectivity is also determined because we exist, objectively. That does not mean subjective valuations are objective.

Dermezel

21st April 2010, 08:14

What do you mean? Are some tastes determined by genetic make up and individual circumstances/nurture? Yes of course? What do you mean by objective?

Those are measurable, objective factors. The need for food, water, shelter are objective factors.

RGacky3

21st April 2010, 12:41

That does not mean subjective valuations are objective.

Of coarse its subjective, but the question is who gets to make that subjective desicion. Our answer is everyone has equal say, your answer is, your say is based on how much money you have.

Thats why food for the starving has such little value but yachts for the rich have such high value.

LeftSideDown

21st April 2010, 15:38

Those are measurable, objective factors. The need for food, water, shelter are objective factors.

So you can measure how much someone's love of apple pie is because his mother's cooking was delicious? Or you can measure how much the genetic makeup of his body contributed to his preference for apple pie? The "need" only exists because we want to live. I could say I "need" a tuba to play in a marching band, but that doesn't make this tuba a "need". It only makes it a "need" if you desire to play in a marching band. Food, water, shelter are only "needs" if you wish to live. Why should a wish to live be different than a wish to play in a marching band?

LeftSideDown

21st April 2010, 15:42

Of coarse its subjective, but the question is who gets to make that subjective desicion. Our answer is everyone has equal say, your answer is, your say is based on how much money you have.

Thats why food for the starving has such little value but yachts for the rich have such high value.

My answer is that someone should be able to make more (quantity) and more meaningful decisions the more resources they've been entrusted to command and the more productivity they have. Someone who is lazy, ignorant, racist, and smokes meth should not control the same resources as someone who is industrious, productive, and meets consumer demand.

Are you sure its not because yachts are expensive to make? Because I'm pretty sure they are quite expensive and capital intensive. And if it has little value it is cheap and easier to provide for. So its actually a plus that food has little value.

RGacky3

22nd April 2010, 14:49

My answer is that someone should be able to make more (quantity) and more meaningful decisions the more resources they've been entrusted to command and the more productivity they have. Someone who is lazy, ignorant, racist, and smokes meth should not control the same resources as someone who is industrious, productive, and meets consumer demand.

I did'nt ask who should get more, I'm asking who should make the desicions.

The truth is, your answer, no matter how you frame it, is, the rich, and by consumer demand what you mean is moneyed demands.

Are you sure its not because yachts are expensive to make? Because I'm pretty sure they are quite expensive and capital intensive. And if it has little value it is cheap and easier to provide for. So its actually a plus that food has little value.

Yachts are expensive to make under a market system yes. What I mean by high value is not price, but there is a large market for yachts, yet not a large market for food for the poor (even though there are millions starving). The reason is, rich people that buy yachts have lots of money thus they have market power, poor people who are starving have almost no money, thus have no market power, thus theres not a market, even though millions are starving.

Thats what I ment be value.

Dermezel

22nd April 2010, 17:59

So you can measure how much someone's love of apple pie is because his mother's cooking was delicious?

Again, the Centralization of Capital is not subjective, it is measurable: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

The Wealth Distribution

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2009).

Table 1: Distribution of net worth and financial wealth in the United States, 1983-2007 Total Net Worth Top 1 percentNext 19 percentBottom 80 percent 198333.8%47.5%18.7% 198937.4%46.2%16.5% 199237.2%46.6%16.2% 199538.5%45.4%16.1% 199838.1%45.3%16.6% 200133.4%51.0%15.6% 200434.3%50.3%15.3% 200734.6%50.5%15.0% Financial Wealth Top 1 percentNext 19 percentBottom 80 percent 198342.9%48.4%8.7% 198946.9%46.5%6.6% 199245.6%46.7%7.7% 199547.2%45.9%7.0% 199847.3%43.6%9.1% 200139.7%51.5%8.7% 200442.2%50.3%7.5% 200742.7%50.3%7.0%
Total assets are defined as the sum of: (1) the gross value of owner-occupied housing; (2) other real estate owned by the household; (3) cash and demand deposits; (4) time and savings deposits, certificates of deposit, and money market accounts; (5) government bonds, corporate bonds, foreign bonds, and other financial securities; (6) the cash surrender value of life insurance plans; (7) the cash surrender value of pension plans, including IRAs, Keogh, and 401(k) plans; (8) corporate stock and mutual funds; (9) net equity in unincorporated businesses; and (10) equity in trust funds.
Total liabilities are the sum of: (1) mortgage debt; (2) consumer debt, including auto loans; and (3) other debt. From Wolff (2004, 2007, & 2009).

Figure 1: Net worth and financial wealth distribution in the U.S. in 2007 http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_1.gif

In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

Table 2: Wealth distribution by type of asset, 2007 Investment Assets Top 1 percentNext 9 percentBottom 90 percent Business equity 62.4%30.9%6.7% Financial securities 60.6%37.9%1.5% Trusts 38.9%40.5%20.6% Stocks and mutual funds 38.3%42.9%18.8% Non-home real estate 28.3%48.6%23.1% TOTAL investment assets 49.7%38.1%12.2% Housing, Liquid Assets, Pension Assets, and Debt Top 1 percentNext 9 percentBottom 90 percent Deposits 20.2%37.5%42.3% Pension accounts 14.4%44.8%40.8% Life insurance 22.0%32.9%45.1% Principal residence 9.4%29.2%61.5% TOTAL other assets 12.0%33.8%54.2% Debt 5.4%21.3%73.4% From Wolff (2009).

Figure 2a: Wealth distribution by type of asset, 2007: investment assets http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_2a.gif
Figure 2b: Wealth distribution by type of asset, 2007: other assets http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_2b.gif

Figures on inheritance tell much the same story. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000). Thus, the attempt by ultra-conservatives to eliminate inheritance taxes -- which they always call "death taxes" for P.R. reasons -- would take a huge bite out of government revenues for the benefit of less than 1% of the population. (It is noteworthy that some of the richest people in the country oppose this ultra-conservative initiative, suggesting that this effort is driven by anti-government ideology. In other words, few of the ultra-conservatives behind the effort will benefit from it in any material way.)
For the vast majority of Americans, their homes are by far the most significant wealth they possess. Figure 3 comes from the Federal Reserve Board's Survey of Consumer Finances (via Wolff, 2009) and compares the median income, total wealth (net worth, which is marketable assets minus debt), and non-home wealth (which earlier we called financial wealth) of White, Black, and Hispanic households in the U.S.

Figure 3: Income and wealth by race in the U.S. http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_3.gif

Besides illustrating the significance of home ownership as a measure of wealth, the graph also shows that Black and Latino households are faring significantly worse overall, whether we are talking about income or net worth. In 2007, the average white household had 15 times as much total wealth as the average African-American or Latino household. If we exclude home equity from the calculations and consider only financial wealth, the ratios are in the neighborhood of 100:1. Extrapolating from these figures, we see that 70% of white families' wealth is in the form of their principal residence; for Blacks and Hispanics, the figures are 95% and 96%, respectively.
Historical context

Numerous studies show that the wealth distribution has been extremely concentrated throughout American history, with the top 1% already owning 40-50% in large port cities like Boston, New York, and Charleston in the 19th century (Keister, 2005). It was very stable over the course of the 20th century, although there were small declines in the aftermath of the New Deal and World II, when most people were working and could save a little money. There were progressive income tax rates, too, which took some money from the rich to help with government services.
Then there was a further decline, or flattening, in the 1970s, but this time in good part due to a fall in stock prices, meaning that the rich lost some of the value in their stocks. By the late 1980s, however, the wealth distribution was almost as concentrated as it had been in 1929, when the top 1% had 44.2% of all wealth. It has continued to edge up since that time, with a slight decline from 1998 to 2001, before the economy crashed in the late 2000s and little people got pushed down again. Table 3 and Figure 4 present the details from 1922 through 2007.

Table 3: Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-2007. Bottom 99 percentTop 1 percent 192263.3%36.7% 192955.8%44.2% 193366.7%33.3% 193963.6%36.4% 194570.2%29.8% 194972.9%27.1% 195368.8%31.2% 196268.2%31.8% 196565.6%34.4% 196968.9%31.1% 197270.9%29.1% 197680.1%19.9% 197979.5%20.5% 198175.2%24.8% 198369.1%30.9% 198668.1%31.9% 198964.3%35.7% 199262.8%37.2% 199561.5%38.5% 199861.9%38.1% 200166.6%33.4% 200465.7%34.3% 200765.4%34.6% Sources: 1922-1989 data from Wolff (1996). 1992-2007 data from Wolff (2009).

Figure 4: Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-2007. http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_4.gif

Here are some dramatic facts that sum up how the wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions: Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s (Wolff, 2007).
The rest of the world

Thanks to a 2006 study by the World Institute for Development Economics Research -- using statistics for the year 2000 -- we now have information on the wealth distribution for the world as a whole, which can be compared to the United States and other well-off countries. The authors of the report admit that the quality of the information available on many countries is very spotty and probably off by several percentage points, but they compensate for this problem with very sophisticated statistical methods and the use of different sets of data. With those caveats in mind, we can still safely say that the top 10% of the world's adults control about 85% of global household wealth -- defined very broadly as all assets (not just financial assets), minus debts. That compares with a figure of 69.8% for the top 10% for the United States. The only industrialized democracy with a higher concentration of wealth in the top 10% than the United States is Switzerland at 71.3%. For the figures for several other Northern European countries and Canada, all of which are based on high-quality data, see Table 4.

Table 4: Percentage of wealth held in 2000 by the Top 10% of the adult population in various Western countries
wealth owned
by top 10% Switzerland71.3% United States69.8% Denmark65.0% France61.0% Sweden58.6% UK56.0% Canada53.0% Norway50.5% Germany44.4% Finland42.3%

The Relationship Between Wealth and Power

What's the relationship between wealth and power? To avoid confusion, let's be sure we understand they are two different issues. Wealth, as I've said, refers to the value of everything people own, minus what they owe, but the focus is on "marketable assets" for purposes of economic and power studies. Power, as explained elsewhere on this site (http://sociology.ucsc.edu/whorulesamerica/theory/studying_power.html), has to do with the ability (or call it capacity) to realize wishes, or reach goals, which amounts to the same thing, even in the face of opposition (Russell, 1938; Wrong, 1995). Some definitions refine this point to say that power involves Person A or Group A affecting Person B or Group B "in a manner contrary to B's interests," which then necessitates a discussion of "interests," and quickly leads into the realm of philosophy (Lukes, 2005, p. 30). Leaving those discussions for the philosophers, at least for now, how do the concepts of wealth and power relate?
First, wealth can be seen as a "resource" that is very useful in exercising power. That's obvious when we think of donations to political parties, payments to lobbyists, and grants to experts who are employed to think up new policies beneficial to the wealthy. Wealth also can be useful in shaping the general social environment to the benefit of the wealthy, whether through hiring public relations firms or donating money for universities, museums, music halls, and art galleries.
Second, certain kinds of wealth, such as stock ownership, can be used to control corporations, which of course have a major impact on how the society functions. Tables 5a and 5b show what the distribution of stock ownership looks like. Note how the top one percent's share of stock equity increased (and the bottom 80 percent's share decreased) between 2001 and 2007.

Table 5a: Concentration of stock ownership in the United States, 2001-2007 Percent of all stock owned: Wealth class200120042007 Top 1%33.5%36.7%38.3% Next 19%55.8%53.9%52.8% Bottom 80%10.7%9.4%8.9%
Table 5b: Amount of stock owned by various wealth classes in the U.S., 2007 Percent of households owning stocks worth: Wealth class$0 (no stocks)$1-$10,000More than $10,000 Top 1%7.4%4.2%88.4% 95-99%7.8%2.7%89.5% 90-95%13.2%5.4%81.4% 80-90%17.9%10.9%71.2% 60-80%34.6%18.3%47.1% 40-60%52.3%25.6%22.1% 20-40%69.7%21.6%8.7% Bottom 20%84.7%14.3%2.0% TOTAL50.9%17.5%31.6%
Both tables' data from Wolff (2007 & 2009). Includes direct ownership of stock shares and indirect ownership through mutual funds, trusts, and IRAs, Keogh plans, 401(k) plans, and other retirement accounts. All figures are in 2007 dollars.

Third, just as wealth can lead to power, so too can power lead to wealth. Those who control a government can use their position to feather their own nests, whether that means a favorable land deal for relatives at the local level or a huge federal government contract for a new corporation run by friends who will hire you when you leave government. If we take a larger historical sweep and look cross-nationally, we are well aware that the leaders of conquering armies often grab enormous wealth, and that some religious leaders use their positions to acquire wealth.
There's a fourth way that wealth and power relate. For research purposes, the wealth distribution can be seen as the main "value distribution" within the general power indicator I call "who benefits." What follows in the next three paragraphs is a little long-winded, I realize, but it needs to be said because some social scientists -- primarily pluralists -- argue that who wins and who loses in a variety of policy conflicts is the only valid power indicator (Dahl, 1957, 1958; Polsby, 1980). And philosophical discussions don't even mention wealth or other power indicators (Lukes, 2005). (If you have heard it all before, or can do without it, feel free to skip ahead to the last paragraph of this section)
Here's the argument: if we assume that most people would like to have as great a share as possible of the things that are valued in the society, then we can infer that those who have the most goodies are the most powerful. Although some value distributions may be unintended outcomes that do not really reflect power, as pluralists are quick to tell us, the general distribution of valued experiences and objects within a society still can be viewed as the most publicly visible and stable outcome of the operation of power.
In American society, for example, wealth and well-being are highly valued. People seek to own property, to have high incomes, to have interesting and safe jobs, to enjoy the finest in travel and leisure, and to live long and healthy lives. All of these "values" are unequally distributed, and all may be utilized as power indicators. However, the primary focus with this type of power indicator is on the wealth distribution sketched out in the previous section.
The argument for using the wealth distribution as a power indicator is strengthened by studies showing that such distributions vary historically and from country to country, depending upon the relative strength of rival political parties and trade unions, with the United States having the most highly concentrated wealth distribution of any Western democracy except Switzerland. For example, in a study based on 18 Western democracies, strong trade unions and successful social democratic parties correlated with greater equality in the income distribution and a higher level of welfare spending (Stephens, 1979).
And now we have arrived at the point I want to make. If the top 1% of households have 30-35% of the wealth, that's 30 to 35 times what we would expect by chance, and so we infer they must be powerful. And then we set out to see if the same set of households scores high on other power indicators (it does). Next we study how that power operates, which is what most articles on this site are about. Furthermore, if the top 20% have 84% of the wealth (and recall that 10% have 85% to 90% of the stocks, bonds, trust funds, and business equity), that means that the United States is a power pyramid. It's tough for the bottom 80% -- maybe even the bottom 90% -- to get organized and exercise much power.
Income and Power

The income distribution also can be used as a power indicator. As Table 6 shows, it is not as concentrated as the wealth distribution, but the top 1% of income earners did receive 17% of all income in the year 2003 and 21.3% in 2006. That's up from 12.8% for the top 1% in 1982, which is quite a jump, and it parallels what is happening with the wealth distribution. This is further support for the inference that the power of the corporate community and the upper class have been increasing in recent decades.

Table 6: Distribution of income in the United States, 1982-2006 Income Top 1 percentNext 19 percentBottom 80 percent 198212.8%39.1%48.1% 198816.6%38.9%44.5% 199115.7%40.7%43.7% 199414.4%40.8%44.9% 199716.6%39.6%43.8% 200020.0%38.7%41.4% 200317.0%40.8%42.2% 200621.3%40.1%38.6% From Wolff (2009).

The rising concentration of income can be seen in a special New York Times analysis of an Internal Revenue Service report on income in 2004. Although overall income had grown by 27% since 1979, 33% of the gains went to the top 1%. Meanwhile, the bottom 60% were making less: about 95 cents for each dollar they made in 1979. The next 20% - those between the 60th and 80th rungs of the income ladder -- made $1.02 for each dollar they earned in 1979. Furthermore, the Times author concludes that only the top 5% made significant gains ($1.53 for each 1979 dollar). Most amazing of all, the top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).
But the increase in what is going to the few at the top did not level off, even with all that. As of 2007, income inequality in the United States was at an all-time high for the past 95 years, with the top 0.01% -- that's one-hundredth of one percent -- receiving 6% of all U.S. wages, which is double what it was for that tiny slice in 2000; the top 10% received 49.7%, the highest since 1917 (Saez, 2009).
And the rate of increase is even higher for the very richest of the rich: the top 400 income earners in the United States. According to an analysis by David Cay Johnston -- recently retired from reporting on tax issues at the New York Times -- the average income of the top 400 tripled during the Clinton Administration and doubled during the first seven years of the Bush Administration. So by 2007, the top 400 averaged $344.8 million per person, up 31% from an average of $263.3 million just one year earlier (Johnston, 2010). (For another recent revealing study by Johnston, check out "Is Our Tax System Helping Us Create Wealth? (http://sociology.ucsc.edu/whorulesamerica/power/is_our_tax_system_helping_us_create_wealth.pdf)").
How are these huge gains possible for the top 400? It's due to cuts in the tax rates on capital gains and dividends, which were down to a mere 15% in 2007 thanks to the tax cuts proposed by the Bush Administration and passed by Congress in 2003. Since almost 75% of the income for the top 400 comes from capital gains and dividends, it's not hard to see why tax cuts on income sources available to only a tiny percent of Americans mattered greatly for the high-earning few. Overall, the effective tax rate on high incomes fell by 7% during the Clinton presidency and 6% in the Bush era, so the top 400 had a tax rate of 20% or less in 2007, far lower than the marginal tax rate of 35% that the highest income earners (over $372,650) supposedly pay. It's also worth noting that only the first $105,000 of a person's income is taxed for Social Security purposes, so it would clearly be a boon to the Social Security Fund if everyone -- not just those making less than $105,000 -- paid the Social Security tax on their full incomes.
A key factor behind the high concentration of income, and another likely reason that the concentration has been increasing, can be seen by examining the distribution of all "capital income": income from capital gains, dividends, interest, and rents. In 2003, just 1% of all households -- those with after-tax incomes averaging $701,500 -- received 57.5% of all capital income, up from 40% in the early 1990s. On the other hand, the bottom 80% received only 12.6% of capital income, down by nearly half since 1983, when the bottom 80% received 23.5%. Figure 5 and Table 7 provide the details.

Figure 5: Share of capital income earned by top 1% and bottom 80%, 1979-2003 (From Shapiro & Friedman, 2006.) http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_5.gif

Table 7: Share of capital income flowing to households in various income categories Top 1%Top 5%Top 10%Bottom 80% 197937.8%57.9%66.7%23.1% 198135.8%55.4%64.6%24.4% 198337.6%55.2%63.7%25.1% 198539.7%56.9%64.9%24.9% 198736.7%55.3%64.0%25.6% 198939.1%57.4%66.0%23.5% 199138.3%56.2%64.7%23.9% 199342.2%60.5%69.2%20.7% 199543.2%61.5%70.1%19.6% 199745.7%64.1%72.6%17.5% 199947.8%65.7%73.8%17.0% 200151.8%67.8%74.8%16.0% 200357.5%73.2%79.4%12.6% Adapted from Shapiro & Friedman (2006).

Another way that income can be used as a power indicator is by comparing average CEO annual pay to average factory worker pay, something that has been done for many years by Business Week and, later, the Associated Press. The ratio of CEO pay to factory worker pay rose from 42:1 in 1960 to as high as 531:1 in 2000, at the height of the stock market bubble, when CEOs were cashing in big stock options. It was at 411:1 in 2005 and 344:1 in 2007, according to research by United for a Fair Economy. By way of comparison, the same ratio is about 25:1 in Europe. The changes in the American ratio from 1960 to 2007 are displayed in Figure 6, which is based on data from several hundred of the largest corporations.

Figure 6: CEOs' pay as a multiple of the average worker's pay, 1960-2007 http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_6.gif Source: Executive Excess 2008, the 15th Annual CEO Compensation Survey from the Institute for Policy Studies and United for a Fair Economy.

It's even more revealing to compare the actual rates of increase of the salaries of CEOs and ordinary workers; from 1990 to 2005, CEOs' pay increased almost 300% (adjusted for inflation), while production workers gained a scant 4.3%. The purchasing power of the federal minimum wage actually declined by 9.3%, when inflation is taken into account. These startling results are illustrated in Figure 7.

Figure 7: CEOs' average pay, production workers' average pay, the S&P 500 Index, corporate profits, and the federal minimum wage, 1990-2005 (all figures adjusted for inflation) http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_7.gif Source: Executive Excess 2006, the 13th Annual CEO Compensation Survey from the Institute for Policy Studies and United for a Fair Economy.

LeftSideDown

27th April 2010, 10:13

Have I contested your assertion that capital centralizes? Honestly I don't know why you post these blocks of text, I am certainly not going to burrow through them. Pick out choice quotes and provide links; don't use brute force attacks in order to seem intelligent.

Common_Means

29th April 2010, 07:46

Well, normally I'd start with mudpies, but Marx's theory says it only applies to things that have utility. So, skipping this preliminary, and obligatory, strawman, let us delve into the LTV.

Marx and Subjectivists share at least one thing in common: namely, that in order for a good to have economic value it must have utility. However, once a good passes the so-called "utility test" subjective valuations no longer have any effect on the economic value of a good (according to Marx). This is because Marx realized that subjective values are ordinal. Because he wanted to make a cardinal science of economy he abandoned subjective valuations because you can not put a number on the value someone places on something, or if you put a number on it it is purely ordinal and lacks units.

Marx also asserted that economics goods have another property other than use-value and that is exchange-value. He bases his labor theory of value off exchange value, rather than use value (since obviously you can have no units for use, but you can for exchange (namely, money)). So, supposing that someone exchanges one apple for one orange, according to Marx, one apple = one orange.

But this not true in the slightest. One apple =\= one orange because an exchange is not an equality it is a double inequality. I value one orange more than one apple and you value one apple more than one orange. There is no equality. Marx's obvious reply to this, since it is easily recognizable that there is a double inequality, is that use value does not determine economic value. economic value is only determined by exchange value, and in this there must be an equality. However, this only reveals another basic mistake and that is to completely separate use value from exchange value. An apple only has exchange value because I want it for its use value. Exchange value comes from use value, and as such, using only exchange equality to equate economic value you come up against quite a formidable wall (namely that you have completely ignored that something has exchange value because it has use-value and these things are not separate and Marx ignores use-value).

Well, now we are starting to get to the heart of the LTV. Going back to the basics, we know (from earlier) that one apple = one orange in exchange. But obviously these goods are not identical; it is not the same as saying 1=1 because apples are very different from oranges. What the LTV asserts is that, while these goods are not identical, they have some underlying entity that is the same for both. The "underlying entity" Marx chose was that they are both the product of labor. One apple = one orange because the same quantity of human labor is required to produce them.

Bohm Bawerk, generous as he is, located another flaw in Marx's argument. He conceded, for the sake of argument, that there exists an equality in exchange. He also granted, for the sake of argument, that equality entails an identity. Why, he asked, does the identical element have to be labor? Why can't it be something else? Obviously using labor was very important for Marx's political schemes, but this is not sufficient justification for asserting that it is the entity responsible for economic value. And there are some problems with labor, like it doesn't always (or even most of the time) work. Some goods, like wine, increase in value the longer they are stored. The labor required to get grapes and then turn them into wine contributes very little to the price of wine.

Another issue Bohm Bawerk brought up was that obviously the labor of some is worth more than others, and more labor (if it is unskilled) =\= less labor (if it is skilled). Marx knew this, and so, instead of just saying labor time, he said "socially necessary" labor to produce an item of a certain class. There are numerous criticisms that can be brought up here. What determines the amount of labor that is "socially necessary"? Obviously you wouldn't use someone incompetent as the standard for which you would calculate "socially necessary" labor time; your standard would be off. But who, or what do you use as your criterion? Should it be the least possible time it takes anyone to produce something? If not this, what?

Bohm Bawerks solution to this problem, unsurprisingly, was the market. You needed market prices to determine "socially necessary". Socially necessary labor, in a market, would be equal to the labor needed to produce a good at market price. Those who required more labor than this were not performing labor that was "socially necessary". Marx's reasoning for his method was circular in a very blatant fashion: the market price of a good is determined by the socially necessary labor to produce it. But, because of this, you cannot appeal to the good's market price in order to find out how much labor is socially necessary.

Moreso, how can labor hours required to produce one hour of a good be compared with the labor hours needed to make a good of a completely different type? How do you compare a surgeons labor with that of a brick layer? How can my labor typing up this refutation be compared to a football player's labor on the football field?

Marx, of course, recognized this. His solution? He argued that many different varieties of labor could indeed be reduced to a common measure. How did he say this could be done? He said one would have to make reference to the market prices of different types of labor! Again, using market prices to reduce the types of labor to a common measure is blatantly reasoning in a circle.

With all of the reasoning Marx did, even he recognized that we would not have a theory that adequately explained price. He knew full well, and explicitly stated, that goods do not in a capitalist economy exchange at their labor values. Marx has gone to great lengths to arrive at an allegedly scientific theory that will explain why goods exchange at ratios they do. But his theory, and by his own admission, does not do this.

Marx's answer is as follows: true, the labor theory does not explain actual prices. But given labor prices, the theory can show how actual prices are derived. Thus he, apparently, vindicates his theory: it does not explain price after all. Bohm Bawerk extensively showed that Marx's attempted derivation of real prices from labor values just didn't add up, but I'm not going to write out all the ways he did this (look up the essay yourself, its a free pdf). Instead of going into Bohm Bawerks details, I will raise a more general issue.

Suppose Marx could derive real prices from labor values. That is to say, suppose Marx's arithmetic was right: what difference would it make? Marx claims to show what the "laws of motion" of capitalism really are. But how does deriving one figure from another meet this exacting requirement? Using the apples and oranges example again we will say that "one orange exchanges for one apple". IN this circumstance there is a 1:1 exchange ratio. The apple price of one orange is one apple. Given that the apple price of oranges, we can at once derive the orange price of apples. But in so doing this we have not shown that the apple price of oranges somehow underlies (that is to say, more basic than) the orange price of apples. To get a genuine explanation, more than a numerical derivation is needed.

Sorry have been busy - hence no reply.

You said to me once that you had only read the Communist Manifesto, to which I reply, perhaps you should read something other than a "hackish" secondary source of Marx before feeling qualified to critique him.

Value does not equal exchange value - take your BS straw-man arguments elsewhere. Value equals socially necessary labour time. Oh oops! And down goes your pathetic "use-value abstracted from exchange-value" fallacy.

If you want to engage in discussion on Leftist forum, at least do a littl reading before hand; otherwise you're nothing more than a trolling hack ignorant of his/her surroundings.

LeftSideDown

29th April 2010, 08:45

Value does not equal exchange value - take your BS straw-man arguments elsewhere. Value equals socially necessary labour time. Oh oops! And down goes your pathetic "use-value abstracted from exchange-value" fallacy.

Marx says himself the way you discover "socially necessary labor time" is to look at the market price which is based on exchange value. Exchange value derives from use value as even Marx admitted by saying things that do not have utility do not have value.

LeftSideDown

29th April 2010, 08:50

From Wikipedia:
Marx begins his analysis with what he calls the “commodity.” Marx explains that the commodity is something independent of ourselves that meets a human want or need of any kind. It is clear that Marx is not concerned with why people buy commodities, only that people buying commodities is inevitable. Marx explains that the commodity has something called a “use-value.” The use-value is determined by how useful the commodity is. The actual use-value, however, is intangible. He explains that use-value can only be determined “in use or consumption”. After determining the use-value of the commodity, something called an “exchange-value” is then derived from it when the commodity is exchanged.

Marx then goes on to explain that the exchange-value of a commodity is merely a portrayal of its value. Value is what connects all commodities so that they can all be exchanged with each other. The value of a commodity is determined by its socially necessary labor time, defined as “the labour time required to produce any use-value under the conditions of production, normal for a given society and with the average degree of skill and intensity of labor prevalent in that society.”

anticap

29th April 2010, 11:05

Exchange value derives from use value as even Marx admitted by saying things that do not have utility do not have value.

You're stretching the meaning of "derives." Certainly use-value is a necessary condition for exchange-value, but you seem to be reading more into that than is warranted.

LeftSideDown

29th April 2010, 15:09

You're stretching the meaning of "derives." Certainly use-value is a necessary condition for exchange-value, but you seem to be reading more into that than is warranted.

I really do not think so. If X is necessary for Y and the larger X is for a large number of people, the larger Y is, I would say they're pretty intrinsically linked and one can logically deduce that Y comes from X.

anticap

30th April 2010, 00:30

If ... the larger X is..., the larger Y is

What makes you think that this will necessarily be the case?

LeftSideDown

30th April 2010, 04:10

What makes you think that this will necessarily be the case?

Because if a lot of people value something a lot (it gives them lots of utility) they will be willing to trade more (a higher exchange value) in order to obtain it?

anticap

30th April 2010, 04:18

Because if a lot of people value something a lot (it gives them lots of utility) they will be willing to trade more (a higher exchange value) in order to obtain it?

It is fitting that you ended with a question mark to denote your uncertainty, because you really need to think on this some more.

REVLEFT'S BIEGGST MATSER TROL

30th April 2010, 05:01

It was a bad analogy. I admitted that. My point was very clear: democracy cannot change facts of existence through the power of voting. Voting 2+2 = 5 does not make it so.

Nobody thinks this.

You are confusing people advocating democracy as a means for solving our problems for specific reasons, or trying to indicate a consensus on an issue that can only be determined by people (in this case, whether workers "felt" exploited or not).

REVLEFT'S BIEGGST MATSER TROL

30th April 2010, 05:09

I really do not think so. If X is necessary for Y and the larger X is for a large number of people, the larger Y is, I would say they're pretty intrinsically linked and one can logically deduce that Y comes from X.

'Fraid that just isn't so.

Airplanes require wings and the larger the wings are, the larger the airplane is.

Airplanes come from wings.

Look, do I have to point this stuff out? Things can be related without some definite "this comes from..." thing being stated. I don't think such a question is really relavant to the issue at hand at all, since you are attacking a strawman of the ltv (like every single misean who comes here) and everyone else is responding assuming that you actually speak the same language as us.

To put it simply, for "marxian" economics, value comes from peoples own valuations...but, since thats so obvious marx accepts that as axiomatic, and works on a few unstated assumptions about capitalism (like that people want cheaper shit if its the same quality) etc etc to then state, and exchange value nessacaryily comes from labour cause thats the only thing that can give something a price (IN A CAPITALIST ECONOMY BASED ON LABOUR WITH COMPETITION BETWEEN CAPITALISTS ETC)

LeftSideDown

30th April 2010, 06:39

It is fitting that you ended with a question mark to denote your uncertainty, because you really need to think on this some more.

I was answering your question. The question mark wasn't for uncertainty of the answer just uncertainty as to way I had to provide it. Like this:

An attractive girl walks by
Person A: Did you think she was hot?
Person B: Uh, yeah?

LeftSideDown

30th April 2010, 07:12

'Fraid that just isn't so.

Airplanes require wings and the larger the wings are, the larger the airplane is.

Airplanes come from wings.

Look, do I have to point this stuff out? Things can be related without some definite "this comes from..." thing being stated. I don't think such a question is really relavant to the issue at hand at all, since you are attacking a strawman of the ltv (like every single misean who comes here) and everyone else is responding assuming that you actually speak the same language as us.

To put it simply, for "marxian" economics, value comes from peoples own valuations...but, since thats so obvious marx accepts that as axiomatic, and works on a few unstated assumptions about capitalism (like that people want cheaper shit if its the same quality) etc etc to then state, and exchange value nessacaryily comes from labour cause thats the only thing that can give something a price (IN A CAPITALIST ECONOMY BASED ON LABOUR WITH COMPETITION BETWEEN CAPITALISTS ETC)

Your analogy is inept. Marx himself admitted exchange value comes from use-value. Wings do not come from airplanes. Its kinda like how in order for a series to converge its limit as n -> infinity must = 0, but just because the limit = 0 doesn't mean that it converges. So, in order to be an airplane it must have wings but just because something has wings doesn't mean its an airplane. In order for something to have exchange value it must have usevalue, but just because something has use value doesn't mean it has exchange value (as in the case of something like a rock which has sentimental value to someone, but no one else values it).

Really? Labor is the only thing that can give something a price? It also has to exist, doesn't it? Why don't we have the Existence Theory of Value?

anticap

30th April 2010, 07:19

I was answering your question. The question mark wasn't for uncertainty of the answer just uncertainty as to way I had to provide it. Like this:

An attractive girl walks by
Person A: Did you think she was hot?
Person B: Uh, yeah?

OK. But that doesn't change the fact that you really need to think on this some more, as Gangsterio ably demonstrated (and there are even more obvious examples).

BTW, people who speak like in your example, ending everything -- even declarative statements -- in a questioning tone, sound utterly unsure of themselves. I can't stand it; it's a pet-peeve of mine. You could ask such a person where they're going, and they'll reply, "To the store?" I want to shake them and ask if they're telling me, or asking my permission. This is a trend that must die; it has left an entire generation sounding completely spineless.

IOW: your example didn't really help you.

Marx himself admitted exchange value comes from use-value.

Source this, and demonstrate that he means "comes from" the same way you do.

Marx stated the obvious: that you can't exchange something if nobody has a use for it; but -- for the umpteenth time -- he wasn't implying anything like you're trying to lay on him.

IcarusAngel

30th April 2010, 08:14

http://i44.tinypic.com/2lvcwtg.jpg

Capitalists are proud of the fact that government involvement strengthens capitalism is the point of this thread.

Common_Means

1st May 2010, 05:13

I really do not think so. If X is necessary for Y and the larger X is for a large number of people, the larger Y is, I would say they're pretty intrinsically linked and one can logically deduce that Y comes from X.

If you want to slam Ricardo's LTV be my guest; though I really don't see the relevance in this thread.

Learn the difference between Ricardo and Marx, then get back to me.

Common_Means

1st May 2010, 05:17

REVLEFT'S BIEGGST MATSER TROL

4th May 2010, 02:23

Your analogy is inept. Marx himself admitted exchange value comes from use-value. Wings do not come from airplanes. Its kinda like how in order for a series to converge its limit as n -> infinity must = 0, but just because the limit = 0 doesn't mean that it converges. So, in order to be an airplane it must have wings but just because something has wings doesn't mean its an airplane. In order for something to have exchange value it must have usevalue, but just because something has use value doesn't mean it has exchange value (as in the case of something like a rock which has sentimental value to someone, but no one else values it).

Really? Labor is the only thing that can give something a price? It also has to exist, doesn't it? Why don't we have the Existence Theory of Value?

Well ok? I think your hugely misinterpreting what Marx meant by "exchange value "comes" from use value, if he did use that exact phrase.

Maths hurts my brain so I can't really comment on that example, but yeah, you summed up what marx thought rightly, but your interpretation of it is totally confused. That Marx said anything with exchange value must also have use value doesn't mean that the LTV is wrong, and that all value comes from subjective preferences (i.e. use value), it means you are talking about apples and organes. Don't worry, its actually a common mistake. Value means a different thing in LTV speak, than it does in austrian speak. Kinda. Basically, use value = value in austrian/neoliberal terms, but exchange value is used to talk about the value people place on exchanging things...usually as a society wide affair, and this is (unless otherwise said) stricly limted to the capitalist type of production, and with some parameters attached like, as you said, for something to have exchange value it must have use value.

This isn't meant to be a grand statement of the psycology of humans and what they value, or some kind of eternal law that people must always value what they labour on, so trying to compare it to the STV in terms of "where is the real source of value" in like, the most "fundamental sense" and where does it "come from" is really a nonsensical affair - at least too Marxists, nobody is saying that the LTV does that.

Hope this helps? I find so often libertarians don't get this, and so much time is wasted on arguing wheter value is "objective" or "subjective" or some such thing.

The Red Next Door

4th May 2010, 03:03

You poor little neocon idealist.