"People caused the crisis"

[ed miliband]

I've started to hear a really bizarre narrative of the financial crisis being used in response to protests over austerity measures, etc. This comment, taken from a New Statesmen article on the use of kettling at protests last Wednesday is pretty typical of this version of the crisis:


What a massive pile of tosh.

The New Statesman does nothing but separate the population into 'the people' and 'the establishment'.

If you're shouting loudly about something it means you're going to alienate people, and therefore perpetuate this 'struggle' that political left-types like to talk about.

Fact of the matter is - very few people in the UK have the right to be complaining so vociferously over these cuts. So what if we've got less money to spend? Maybe we'll stop spending it on crap like iPods or on teaching ourselves how to stare angrily into the camera lens for website profile shots (Pennie).

This entire country needs to face the fact that the bankers, the politicians, the mortgage dealers - they didn't cause the crisis. We all did. Overextending ourselves on credit cards, mortgages, overdrafts - all for crap we didn't need - whilst letting the state grow into the bloated, wasteful behemoth that it has become. Who in the middle class honestly needs child benefit? Why do people feel they are entitled to go to university for free? Higher education should be hard work and you should have to pay for it. The less media studies (Pennie) students out there the better.

We all need to pony up to the fact that we are lazy and have an unbelievable sense of self-entitlement. These childish, pointless protests and their asinine rhetoric make me embarrassed to engage a lot of people in conversation.

Stop it please, and get over yourselves.

I've had the same argument regurgitated to me by an American on another forum I use, and I've heard a number of people irl use it. I've also seen comments on apparently left-wing blogs from people claiming to be socialists basically saying 'yeah, the crash was needed because people are too greedy, and they deserve everything they get'.

Now this argument is completely flawed, conveniently ignoring wage stagnation and the fact that people were widely encouraged to borrow, but what I find most bizarre about this argument is the idea that if people 'lived within their means' everything would have been fine - do these people not understand that consumption is necessary for capitalism to function? Most of the people who make this argument seem to argue it very matter-of-factly, being good readers of The Economist with a solid grasp of economics, and yet the argument is so riddled with holes that it's laughable.

Other than being really flawed, it's pretty offensive. Yeah, the proles caused the financial crisis because they wanted iPods and computers. It's all perfectly clear now.

[CAleftist]

Even the economists admit that there is a fundamental problem with capitalism-but they admit offhandedly that it's just "systemic risk."

The campaign to blame the proletariat for the bourgeoisie's fuck-ups is a bourgeoisie campaign.

[Leonid Brozhnev]

Why do people feel they are entitled to go to university for free? Higher education should be hard work and you should have to pay for it.

This kind of comment sounds like a pile of privileged piss from someone who hasn't practised what they're preaching. :laugh:

I love it also, because I've tried it already. To work and achieve the fee's needed in the uneducated Job I had for the cheap Uni course I am doing, I would have needed to work 35 hours a week for an entire year without spending a penny of my wages. At the rate I was 'saving' after food, rent, bills, clothes, petrol, car tax and insurance, I would probably had to work there for 15 years before I was able to go to Uni.

[ZeroNowhere]

So basically they're blaming the housing bubble for the crisis. Now, if there hadn't been a bubble, then we would be in a crisis anyway, because it's the bubbles that have been keeping us out of crises since the '70s. As Andrew Kliman has shown, capitalism since the '70s has been unable to have a sustained recovery, and essentially it has simply been propped up by debt.

Either way, this argument is fairly silly. What is the crisis anyway? It's the economy failing and therefore causing human suffering, increasing poverty levels and so on. Indeed, it will lead to increased starvation and deaths among the poor, as well as expanding poverty and 'austerity' programs. Something like a natural disaster. In fact, like a natural disaster, this failure of the economy was not a result of any human intention. What is the economy? It's a human invention. Wait a minute, something's wrong here.

[The Red Next Door]

Even the economists admit that there is a fundamental problem with capitalism-but they admit offhandedly that it's just "systemic risk."

The campaign to blame the proletariat for the bourgeoisie's fuck-ups is a bourgeoisie campaign.

Also, we live in a society that says; If you do not have this or that. then you are a fucking loser. these same people who are blaming the little people for the same mess they cause; are also the ones who push ads that tell people if you don't buy the latest this and that then you are a loser and nobody want to be your friend.

[Ovi]

Blaming people for the crisis for taking loans and buying crap they don't need is pathetic. Weren't we taught that everyone acting in their own self interest creates the efficient economy that is capitalism? Now it's not and we should stop doing it?

[thriller]

People did cause the crisis. The people who make up the upper class. The bankers and the wall street merchants. I like what Red Next Door said. It's a double edged sword. If we do what the bourgeoisie say and use credit and over-consume, it's apperantly our fault. But if we don't spend money or use credit and keep our wages to ourselves and not put it back into the economy, we are stunting growth and not allowing business to expand. Bunch of ass-hats.

[ZeroNowhere]

People did cause the crisis. The people who make up the upper class. The bankers and the wall street merchants.
This isn't necessarily any more accurate. If they didn't go all-out towards profits, the fact that the profit rate has not made a sustained recovery would simply bite them in the ass faster.

[Lyev]

This is what I've heard Slavoj Zizek call the "cheap moralization" of the crisis, although he was perhaps referring specifically to bankers, but it is pertinent here regardless. Anyway, I concur with other posters; that article is bigoted rant. With the presupposition that it was, apparently, all of us, being greedy and "overextending" ourselves, that caused the the economic slump, I guess we should just sit complacently whilst austerity robs from, attacks and degrades the poor hardest. And I guess this article is at least pertaining to the recent struggle in the UK by students against rising fees and whatnot, as it mentions free education and a need for less media students. Especially the part about wanting less media students makes me really angry: I was discussing the attacks on education with a friend yesterday, and his attitude was one of indifference - "it's someone else's problem" - because he plans to study medicine, which, having been deemed of 'economic' or 'utlitarian' value, will be 'ring-fenced' to a much greater extent than something like media studies, or, as I want to study, English literature. I recently read an article in the IMT's paper that cited an investigation which said if you want study something like English (i.e., something not of worth) you'll have to study it in tents in the university carpark. Effectively, with millions of people across the country my age, we're having control of our lives and what we want to do with them taken away from us - and the correlation between the amount of control and one's wealth is of course very much negative. Now, because of this crisis supposedly caused by 'all of us', I am having to pay for my own mistakes of 'living beyond my means' and then this patronising, unintelligent, crass piece-of-shit excuse for journalism is telling me that it is my own fault I can't do what I want with my life?? That's quite amazing. Anyway, rant over.

[ed miliband]

The thing that I quoted wasn't an article published by the New Statesmen, but a comment left underneath an article that was condemning the police's conduct in London last Wednesday.

It's interesting that you bring up Zizek, however, because did he not recently argue that those opposing austerity measures are 'conservative' or something equally bollocks?

[Tzonteyotl]

Indeed, it's only the poor hard working people who need to worry about "living within their means." The rich have little to worry about there. They can have multiple homes, numerous cars, servants, etc. But if I decide to buy an mp3 player to have a little entertainment in my life, knowing it will likely leave me a little less for food or gas, well goddamn, I'm just the most horrible person around, right? I caused the crisis! This argument also assumes that the vast majority of people live lives where unnecessary consumer goods are prioritized over basic needs. Because you know, every working class person I know has a big screen television, the latest in fashion, and drives a new car. *Sigh*

[Milk Sheikh]

All the more reason to support Trotsky's vanguard concept, for, left to themselves, workers cannot get things right.

[the last donut of the night]

I don't know about Britain, but this is quickly becoming standard rhetoric here in the US as well. If the right-wing doesn't scapegoat the crisis on lazy union workers, immigrants, or the supposed communist conspiracy in power, it tries to sell this cheap excuse for a lie. It's a standard bourgeois media tactic in the wake of crisis. It's either an outside group to blame, an accident, or the fault of everybody -- therefore, in the end, we can all hug and "get through it together" (while, of course, the wealthy continue to pillage and rob the workers of surplus value to finance their yachts, their jets, resorts, and of course, more crises-in-the-making). It's designed to pull at people's basic moral need of having a sense of togetherness in times of toil, and when class consciousness among the workers is so low was today, it works (at least here in the US).

[Red Commissar]

Yeah, I remember even in the early days of all this mess when Lehman Bros. was collapsing and FreddieMac and FannieMae were about to implode, the common thing going around was blaming people who bought houses that they couldn't afford for the crisis. I believe there was some legislation or something they kept blaming on from the 1990s that made it easier to secure a loan and mortgage for a house (all part of the illusion of American house ownership, of course).

[Steve_j]

Im with Zero nowhere on this, and this is the best argument to fight the cuts, as it argues for an alternative. Fundamentally, all these cuts do is force the working classes to accumulate further debt in order to sustain the current economic system, it simply passes the state debt onto persons, (the students are a good example of this) meaning more of the same that resulted in the crisis in the first place.

So how in the hell is this going to prevent a repeat occurence?

[Jimmie Higgins]

This entire country needs to face the fact that the bankers, the politicians, the mortgage dealers - they didn't cause the crisis. We all did. Overextending ourselves on credit cards, mortgages, overdrafts - all for crap we didn't need - whilst letting the state grow into the bloated, wasteful behemoth that it has become. Yeah this argument is the standard one in the US. It was used as early as the TARP bailout and the fact that they started promoting this argument while giving a trillion dollars to the banks shows that it is fairly transparent propaganda designed to deflect anger at the banks and Wall Street. What's worse is that the US right blames the housing collapse on banks being "too generous" to minorities. Since the truth is that minorities were quasi-legally targeted for shady deals that the Banks set-up to fail (or at least cost a lot more to the homeowner in the long-run) this argument would be like blaming a sunk slave ship on the slaves weighing too much.

[NecroCommie]

He who has the power has the responsibility. People don't make the economic decisions, and cannot be held accountable because of that.

[NecroCommie]

Also, who says the system has failed? It is doing exactly what it was planned to do, namely to put all the property in the hands of few monopolies. This has been achieved, and the people responsible for these acts have gained what they wanted. If the rest of us suffer as a byproduct then too bad, but the basic statement here is that the system has produced what it was made to produce, and all is well as far as the great planners are concerned.

[Thirsty Crow]

So basically they're blaming the housing bubble for the crisis. Now, if there hadn't been a bubble, then we would be in a crisis anyway, because it's the bubbles that have been keeping us out of crises since the '70s. As Andrew Kliman has shown, capitalism since the '70s has been unable to have a sustained recovery, and essentially it has simply been propped up by debt.

Can you provide a source for this claim? It would be very useful for future debates :)

[ZeroNowhere]

Can you provide a source for this claim? It would be very useful for future debates :)
Well, the best source is probably this one (http://akliman.squarespace.com/persistent-fall/). However, it doesn't seem to be online any more, so your best bet is probably to look at Kliman's speeches and such, available here (http://akliman.squarespace.com/crisis-intervention/), where the same graphs and such are often used.

[Kiev Communard]

The very idea of some uniform "people" is flawed one. The bourgeoisie in this logic is, too, part of the "people", and so this argument could be extended to them as well :D.

[Oswy]

Also, who says the system has failed? It is doing exactly what it was planned to do, namely to put all the property in the hands of few monopolies. This has been achieved, and the people responsible for these acts have gained what they wanted. If the rest of us suffer as a byproduct then too bad, but the basic statement here is that the system has produced what it was made to produce, and all is well as far as the great planners are concerned.

This is a very important point. For those of us outside the club this crisis is a systemic failure of capitalism, but it's not the bankers, financiers and wealthy more generally who will suffer at the hands of the 'austerity' policies which are now being implemented to get the system back on track. Millionaires in recessions are still, usually, millionaires, they still eat, they still have homes, they can still pay their bills. I'm sure all the pro-capitalist economists and commentators know that capitalism generates these breakdowns and recessions (they've been happening often enough) but because they aren't problems for them the issue is never going to be presented so honestly - it's much easier to blame the unemployed for being lazy or characterise those who got loaded with debts as feckless. Yes it sucks but we have to recognise that capitalism has a whole industry at its disposal to deflect or deny the fact that capitalism is a system which intentionally exploits, marginalises or excludes the many for the direct benefit of the few.

[ckaihatsu]

Fact of the matter is - very few people in the UK have the right to be complaining so vociferously over these cuts. So what if we've got less money to spend? Maybe we'll stop spending it on crap like iPods or on teaching ourselves how to stare angrily into the camera lens for website profile shots (Pennie).





And I guess this article is at least pertaining to the recent struggle in the UK by students against rising fees and whatnot, as it mentions free education and a need for less media students.




media studies, or, as I want to study, English literature





But if I decide to buy an mp3 player to have a little entertainment in my life,


Speaking of media studies -- since *they* brought it up -- I find it quite telling as to *what* they've picked out to demonize and scapegoat us for: media- and communications-oriented education and technologies -- !

So this is sounding like a souring political tone throughout -- that, with the fracturing of the elitist playground, the wealthy now turn their poisonous attentions around to see what the proles are doing, and are forced to feel a pang of 'sour grapes' as they realize that now-affordable and capable consumer technologies are enabling even the working poor to have a voice of their own and access to a diverse media...!

In lieu of being able to exercise their *own* social power -- since the markets are all being underwritten by public funding -- the elites are up against their old foe, free speech, and all that it might entail....

[ed miliband]

The very idea of some uniform "people" is flawed one. The bourgeoisie in this logic is, too, part of the "people", and so this argument could be extended to them as well :D.

Of course, but people who make this argument usually use "people" to mean 'The Mob' or proles, and very rarely include themselves in the group they are lambasting (the comment I quoted being a rare exemption).

[ZeroNowhere]

While the economies of developing countries as a whole are still likely to achieve a 1.5 percent growth rate in 2009, between 55 million and 90 million of their citizens are expected to join the ranks of the absolute poor, according to the nearly 300-page 'Global Monitoring Report 2009: A Development Emergency'. Per capita income is expected to fall in some 50 poor countries, most of them in Africa.

"The numbers will rise if the crisis deepens and growth in developing countries falters further," the report warned, adding that in sub-Saharan Africa and South Asia, where poverty rates are highest, the sharp slowdown in economic growth "essentially eliminates the pre-crisis prospect of continued reductions in the poverty count in 2009."

That will have serious and long-lasting impacts on health and education, as well, according to the report, which cited estimates that the current financial crisis may cause as many as 200,000 to 400,000 more infant deaths each year between 2009 and the MDG target year of 2015.
These infants, of course, are feeling the just desserts of their appalling over-consumption.

[Rakhmetov]

I've started to hear a really bizarre narrative of the financial crisis being used in response to protests over austerity measures, etc. This comment, taken from a New Statesmen article on the use of kettling at protests last Wednesday is pretty typical of this version of the crisis:



I've had the same argument regurgitated to me by an American on another forum I use, and I've heard a number of people irl use it. I've also seen comments on apparently left-wing blogs from people claiming to be socialists basically saying 'yeah, the crash was needed because people are too greedy, and they deserve everything they get'.

Now this argument is completely flawed, conveniently ignoring wage stagnation and the fact that people were widely encouraged to borrow, but what I find most bizarre about this argument is the idea that if people 'lived within their means' everything would have been fine - do these people not understand that consumption is necessary for capitalism to function? Most of the people who make this argument seem to argue it very matter-of-factly, being good readers of The Economist with a solid grasp of economics, and yet the argument is so riddled with holes that it's laughable.

Other than being really flawed, it's pretty offensive. Yeah, the proles caused the financial crisis because they wanted iPods and computers. It's all perfectly clear now.

The bourgeoisie and their opinionmakers in the media never explain why THE BANKS must EXTEND workers credit cards, pay day loans, etc. BECAUSE WORKERS ARE NOT PAID ENOUGH BY THE BOSSES TO BUY BACK EVERYTHING THEY PRODUCE AND CREATE.

[IndependentCitizen]

The upsetting thing is that many working class people will read this, and believe their lies and accept they're a part of the problem..

[ZeroNowhere]

The bourgeoisie and their opinionmakers in the media never explain why THE BANKS must EXTEND workers credit cards, pay day loans, etc. BECAUSE WORKERS ARE NOT PAID ENOUGH BY THE BOSSES TO BUY BACK EVERYTHING THEY PRODUCE AND CREATE.It's not a question of workers not being paid enough. Inasmuch as workers aren't paid, it's because capitalists are, and capitalists can very well consume as much as workers. The problem is structural, to do with the fact that, under capitalism, the purpose of production is realization of surplus-value rather than production for human use, rather than simply a problem of bosses being too stingy.


"It is a pure tautology to say that crises are caused by the lack of effective consumption or effective consumers. The capitalist system does not know any other modes of consumption but paying ones, except that of the pauper or the thief. If any commodities are unsaleable, it means that no solvent purchasers have been found for them; in other words, consumers (whether commodities are bought in the last instance for productive or individual consumption). But if one were to attempt to clothe this tautology with a semblance of profounder justification by saying that the working class receive too small a portion of their own product, and the evil would be remedied by giving them a larger share of it, or raising their wages, we should reply that crises are precisely always preceded by a period in which wages rise generally and the working class actually get a larger share of the annual product intended for consumption. From the point of view of the advocates of healthy, "simple" (!) common sense, such a period should rather remove a crisis. It seems, then, that capitalist production comprises certain conditions which are independent of good or bad will and permit the working class to enjoy that relative prosperity only momentarily, and at that always as a harbinger of a coming crisis."
- Karl Marx, Capital Vol. II.

[Das war einmal]

This article is a lot of hogus. The people can't be hold responsible for this economic crisis. Maybe the masses are responsible for not acting enough to remove the system, but that is another question entirely

[ckaihatsu]

The bourgeoisie and their opinionmakers in the media never explain why THE BANKS must EXTEND workers credit cards, pay day loans, etc. BECAUSE WORKERS ARE NOT PAID ENOUGH BY THE BOSSES TO BUY BACK EVERYTHING THEY PRODUCE AND CREATE.


Call it 'fractional reserve *buying*'...!


8 p



en.wikipedia.org/wiki/Money_supply#Fractional-reserve_banking



Disclaimer: No information about the personal material position of the author may be inferred or assumed from the contents of this posting.

[Lyev]

Is MHM's view - workers cannot buy back what they produce - the theory we call 'underconsumptionism', as in what Keynes espoused? I think the Marxist line is that this was, put simply, a crisis of overproduction (typical boom and bust kinda thing), right?

Anyway, the consequence of the view that people caused the crisis is defending a political position of reformism, because it implies just a few diseased elements (i.e., greedy bankers, lazy and demotivated people) need to be dealt with, rather than the whole system (i.e., wage-labour, division of labour, private capitalism) be abolished and we build a new society, with production and distribution centred around human need and social use. I just thought that was an important point to add.

[NecroCommie]

As far as I get it, the faults of the crisis in capitalist system can be less attributed to the "false" measurements and distribution of value, and more to the fact that commodities are attempted to issue a value in the first place. Monetary value in itself is an abstraction without any basis in real life. It assumes that all commodities can be issued an objective value, and that through that abstraction the values of different commodities could be compared. This creates a system of absurdity in which famine can be seen as economically desirable if the output of monetary abstraction is fine on overall level. Such abstractions are harmful because the "value" of scarce food cannot be replaced with the "value" of abundant hammers.

Feel free to correct me if something seems off.

[ckaihatsu]

Feel free to correct me if something seems off.


Overall I'd say that you're blurring many economic components, or dynamics, together. I'll give this a shot, and others should feel free to correct *me*....





Monetary value in itself is an abstraction without any basis in real life.


We know that this statement isn't 100% true, because if it were then all monetary values would be *entirely* fictitious, like a plotline out of a novel, while the actual world got on differently, fully independent of that storyline.

As soon as you say 'abstraction' you're indicating that *something* is being abstracted, something in real life. So this statement of yours is actually a contradiction in terms.





It assumes that all commodities can be issued an objective value,


This portion calls into question the fully objective basis of the valuations of commodities -- it's a valid premise.

(It's a valid premise for several reasons, including state control over the money supply -- as through the Fed and central banking -- imperialist acquisition, the emergence of overproduction, the tendency for the rate of profit to fall, speculative bubbles of finance capital, international currency exchange rates, external geopolitical events, market failures, market psychology, etc.)





and that through that abstraction the values of different commodities could be compared.


So it follows that if the valuations aren't fully valid then the resulting comparisons *based* on those valuations will be less than reliable as well....





This creates a system of absurdity in which famine can be seen as economically desirable if the output of monetary abstraction is fine on overall level.


Here you're using a real-world example where the lack of more expansive (imperialist, "innovative", and/or luxury) investments for economic activity results in a flood of capital (overproduction of capital goods -- surplus) falling back to invest in the most mundane, routine staples of human economy activity, seeking low risk -- "the commodities markets", in jargon, meaning basic foodstuffs like corn and beef, and copper (etc.).

In simple supply-and-demand terms *of course* capital would want buyers to be more-desperate for participation in the markets, as for food -- that would mean that they'd be willing to spend more of a percentage of their total household income on food.

The combination of lack of growing and stable ("regular") investments, *plus* the increasingly lowest-common-denominator status of the commodities markets (foodstuffs, etc.), adds up to a more attractive "haven" for capital, and so it comes flooding in, effectively acting as a de facto speculative bubble, even -- ironically -- though there's nothing much sexy going on in such a base, human-needs sector of the economy -- the commodities markets.

So this speculative bubble increases the amount of capital demanding returns -- more of a political-sided thing, really, since by the numbers alone more capital *should* mean more market capitalization, more funding, and thus more costs covered, leading to an *oversupply* of product and thus *cheaper* costs for consumers. But capital will (politically) demand *returns* on its investments, so it won't be looking to actually *fund* production, as of foodstuffs, because that would cut against its financial interests for *limiting* supply. Instead it can withhold productive activity and keep demand high, even if that means famine.





Such abstractions are harmful because the "value" of scarce food cannot be replaced with the "value" of abundant hammers.


I'm not quite sure what you mean here, because, by market valuations, the financial value of scarce food *is* fluidly interchangeable with the financial value of abundant hammers. That's what a system of abstract (financial) values does -- it enables an abstracted layer of values that are all interchangeable, no matter what the underlying goods or services are.

If you're talking about *use* values, that's another matter, of course.





As far as I get it, the faults of the crisis in capitalist system can be less attributed to the "false" measurements and distribution of value, and more to the fact that commodities are attempted to issue a value in the first place.


Well, we *know* that *any* claim for an impartial, apolitical, objective basis to the market / financial valuations of commodities can be shot to hell from many different directions. These counter-arguments to market objectivity would be enough by themselves to call into question what financial values really represent, *before* even looking at systemic failures like recessions and depressions, not to mention steady and rising rates of unemployment, poverty, lack of social spending, etc.

But the most damning dynamic -- to me, anyway -- is that of the speculative bubble, fueled by governmental deficit spending (as a no-alternative-remaining attempt to keep the economy alive on some kind of life support), since such bubbles just roll into whatever sector -- now even hedging against entire national sovereign governments themselves -- and just blow market capitalizations and expectations sky-high out-of-proportion during their upswing without assuring the least bit of stability against the high risk that accompanies their volatility.

*Finally*, we know that capitalist valuations are parasitic on labor value since the production process [expropriates] surplus labor value from those who only receive a wage for their work while the product of their labor is sold onward at market rates on the market.


Labor & Capital, Wages & Dividends

http://i47.tinypic.com/dzbdzq.jpg

[NecroCommie]

Maaan! Sorry dude, I just now noticed you had replied. :blushing:


We know that this statement isn't 100% true, because if it were then all monetary values would be *entirely* fictitious, like a plotline out of a novel, while the actual world got on differently, fully independent of that storyline.

As soon as you say 'abstraction' you're indicating that *something* is being abstracted, something in real life. So this statement of yours is actually a contradiction in terms.
I admit, the wording was not as good as it could be. Let me put this another way.

People often talk about monetary economy as if it is somehow an advanced stage from basic non-monetary exchange economy. In reality this could not be further from the truth. Money has not given us any standard that we could not have otherwise, but it has only added one more exchangable good to the markets. Only difference is that unlike squirrel hides or camels, money has no use value and only has exchange value.

Where absurdities begin is when we start to act as if it is OK to use that abstract exchange value to exchage it for more abstract things, like more exchange value, or the bourgeoisie consept of ownership. It would have to be absurd when we think the original purpose of the "commodity of exchange" which money ultimately is. It was originally intented to make it easier to switch between goods that had different use values to different persons, because money would have identical use value for all, meaning none at all. However, the primitive functioning of monetary exchange means that unlike the original intention (in which the abstract is subjucated to the material) the material becomes subjucated to the endless jungle of abstract exchanges.

If I were to give an example why this should not happen, apartment and house markets are the most perfect example. When we buy the house we are not actually buying the use value of the house, but we are paying for the abstract concept of owership. This is prove by the fact that the current use-needs of housing have nothing to do with what kind of house do you get, and with how much money. Your relation to the use value of the house is entirely subjucated to the abstract exchange value you and others in your society possess. In concrete examples this would mean that your ownership does not have any obligations to manifest itself as use (as was the original intention of ownership, it is my understanding that ownership in the beginnings of time was born out of use) because you could always rent the house, or only buy "your share" of the ownership while other people used the house. A perfect example of how the real is subjugated to the imaginary.

If we stay in the realm of real estate, rent is even better example of the absurdity of exchanging the exchange. If we imagine the situation in which there is a built house (the house is already built, it stands there right on the field), and it is owned by three persons. None of them use it, but they decide to rent it. What then happens is that someone comes and uses their standard of exchange (money) to gain the permission to the use value of the house for a certain period of time. Note, they are not actually getting the use value of the house because the three owners can possibly dictate the use value of that house differently, because they still own the house. If the abstract exchange value of the house does not meet the needs of the owners they most propably demolish the house, if only to not damage the overall relations of excahnge (the markets). This is done even if there is a massive population of the homeless in the area, that is to say there is a massive demand to use houses.

If there were a martian who would land on the field now, he would propably laugh at the absurdity of it all. He would see the three owners, all with their own houses, arguing with the homeless while the house is being demolished. He would notice how the abstract is dictating the material to a ridiculous extenct.

This all could easily be replaced by a participatory economy, in which the standard of exchange could only be traded for something with direct use value. The abstract could not be exchanged for permissions, or ownerships. In a word, the abstract would serve and be subjugated to the material. But then again I am sure you know this.



This portion calls into question the fully objective basis of the valuations of commodities -- it's a valid premise.

(It's a valid premise for several reasons, including state control over the money supply -- as through the Fed and central banking -- imperialist acquisition, the emergence of overproduction, the tendency for the rate of profit to fall, speculative bubbles of finance capital, international currency exchange rates, external geopolitical events, market failures, market psychology, etc.)

Indeed. I would like to point out, as I said before, that money has no more objective exchange value than camels or squirrel hides. It indeed has an objective value, but that is objective use value. (no use value at all)




Here you're using a real-world example where the lack of more expansive (imperialist, "innovative", and/or luxury) investments for economic activity results in a flood of capital (overproduction of capital goods -- surplus) falling back to invest in the most mundane, routine staples of human economy activity, seeking low risk -- "the commodities markets", in jargon, meaning basic foodstuffs like corn and beef, and copper (etc.).

In simple supply-and-demand terms *of course* capital would want buyers to be more-desperate for participation in the markets, as for food -- that would mean that they'd be willing to spend more of a percentage of their total household income on food.

The combination of lack of growing and stable ("regular") investments, *plus* the increasingly lowest-common-denominator status of the commodities markets (foodstuffs, etc.), adds up to a more attractive "haven" for capital, and so it comes flooding in, effectively acting as a de facto speculative bubble, even -- ironically -- though there's nothing much sexy going on in such a base, human-needs sector of the economy -- the commodities markets.

So this speculative bubble increases the amount of capital demanding returns -- more of a political-sided thing, really, since by the numbers alone more capital *should* mean more market capitalization, more funding, and thus more costs covered, leading to an *oversupply* of product and thus *cheaper* costs for consumers. But capital will (politically) demand *returns* on its investments, so it won't be looking to actually *fund* production, as of foodstuffs, because that would cut against its financial interests for *limiting* supply. Instead it can withhold productive activity and keep demand high, even if that means famine.

This is exactly what I am saying. What you obviously know, but what needs to be reminded everytime when talking with capitalists, is that while this is monetarily desirable it cannot be seen as useful or moral. This, and numerous other examples are very good reasons not to see monetary economy as a very usable measure of an entire economical system. I will elaborate more on the comment to the next paragraph... thingy.



I'm not quite sure what you mean here, because, by market valuations, the financial value of scarce food *is* fluidly interchangeable with the financial value of abundant hammers. That's what a system of abstract (financial) values does -- it enables an abstracted layer of values that are all interchangeable, no matter what the underlying goods or services are.

Another bad choice of phrasing on my part.

Yes, it is undoubtedly true that this is exactly what a standard of exchange does, but my point was that we cannot judge entire economies on their exchange rates. That is to say while the monetary situation might be good in Chile, we cannot say that the economy is working very well if that same economic model is responsible to a raving famine and poverty.

That is to say, while standards of exchange are useful we should not subjugate entire economies under what seems to be useful for these abstractions. When judging and evaluating economies, we should above all see whether it fullfills it's original purpose, whether it can feed the populace, give clothing, tools, services and other commodities. Only then should we see whether the monetary situation is good. What this means is that the exchange value needs to exist for the ease of use value, not the other way around.



Well, we *know* that *any* claim for an impartial, apolitical, objective basis to the market / financial valuations of commodities can be shot to hell from many different directions. These counter-arguments to market objectivity would be enough by themselves to call into question what financial values really represent, *before* even looking at systemic failures like recessions and depressions, not to mention steady and rising rates of unemployment, poverty, lack of social spending, etc.

But the most damning dynamic -- to me, anyway -- is that of the speculative bubble, fueled by governmental deficit spending (as a no-alternative-remaining attempt to keep the economy alive on some kind of life support), since such bubbles just roll into whatever sector -- now even hedging against entire national sovereign governments themselves -- and just blow market capitalizations and expectations sky-high out-of-proportion during their upswing without assuring the least bit of stability against the high risk that accompanies their volatility.

*Finally*, we know that capitalist valuations are parasitic on labor value since the production process [expropriates] surplus labor value from those who only receive a wage for their work while the product of their labor is sold onward at market rates on the market.
I would have to agree on these points, but I would also like to add that these parasitic labor cons and other absurdities are only possible because of "exchanging the exchange".


All in all, when I said money is an abstraction without any basis in real life, I was actually referring to the fact that monetary exchange contains to notion of exchanging the abstract. This has little basis in real life. And when I said the assumption about issuing an objective value is false, I meant that having a commodity with the same use value for all does not mean that the commodity would have the same exchange value for all, which seems to be the assumption with some capitalists. Especially with those who would compare inflations and currency values, as if they could measure the exchange value through some third party, through some abstraction of the abstract.

[La Comédie Noire]

Let us tighten our belts around their necks!!!

[Cane Nero]

"Why do people feel they are entitled to go to university for free? Higher education should be hard work and you should have to pay for it. "
Of course! The taxes we pay do not have any relation to the maintenance of these "free" universities. They keep the university working with imaginary money.:laugh:

[ckaihatsu]

If there were a martian who would land on the field now, he would propably laugh at the absurdity of it all. He would see the three owners, all with their own houses, arguing with the homeless while the house is being demolished. He would notice how the abstract is dictating the material to a ridiculous extenct.


Yup...!






This all could easily be replaced by a participatory economy, in which the standard of exchange could only be traded for something with direct use value. The abstract could not be exchanged for permissions, or ownerships. In a word, the abstract would serve and be subjugated to the material. But then again I am sure you know this.


Yes, and you provided a very good illustrative explanation.





That is to say, while standards of exchange are useful we should not subjugate entire economies under what seems to be useful for these abstractions. When judging and evaluating economies, we should above all see whether it fullfills it's original purpose, whether it can feed the populace, give clothing, tools, services and other commodities. Only then should we see whether the monetary situation is good. What this means is that the exchange value needs to exist for the ease of use value, not the other way around.


Agreed -- I'll go further and assert that from the revolutionary left we can advance methods for a post-capitalist political economy that may not even depend on exchange values *at all*. I've developed two models myself....


Rotation system of work roles

http://postimage.org/image/1d53k7nd0/


communist supply & demand -- Model of Material Factors

http://postimage.org/image/35sw8csv8/





All in all, when I said money is an abstraction without any basis in real life, I was actually referring to the fact that monetary exchange contains to notion of exchanging the abstract. This has little basis in real life. And when I said the assumption about issuing an objective value is false, I meant that having a commodity with the same use value for all does not mean that the commodity would have the same exchange value for all, which seems to be the assumption with some capitalists.


On a *technical* point here I'll have to say that *no* capitalist would say that "a commodity has to have the same exchange value for all". They would refer you to the existence of the markets, through which -- online, especially -- one could see the vast ranges of prices representing any given product.