Currency and Units of Labor

[ExUnoDisceOmnes]

In Das Kapital, Marx talks about currency being an expression of the relative exchange values of products. He also shows that currency isn't the best expression of this exchange value because it can be "fixed" and artificially manipulated by business, which helps to contribute to surplus values. It has also been shown that a fiat currency has numerous problems such as inflation, artificial devaluation, etc.

Looking at this, I had a question...

Do you think that replacing currency with a "state" run system dealing in units of labor in which products are valued based solely on the labor embodies within them would solve the problems with a fiat currency? Production would be planned based on use values, but exchange would work based on labor units.

If not, what would you suggest for an exchange system? Would the government doll out necessary goods? How would people secure what they "needed". Perhaps I've missed some essential document/piece of writing that explains this but... as of now I'm unsure as to how it would work.

[Die Neue Zeit]

I asked something similar here (not yet answered):

http://www.revleft.com/vb/chartalism-and-tying-t146255/index.html

How can one reconcile the proposal to tie pre-socialist currencies to labour hours with the monetary theory of Chartalism? According to that theory, the money supply is expanded by printing money and then shrunk through taxation. Governments spend first and collect taxes later, despite budgeting rhetoric.

Meanwhile, the proposal itself is a more labour-centric response to right-populist calls to return to the gold standard as an anti-inflation measure, with the wide publicity for the time-to-money ratio exposing exploitation. It is not yet the full system of labour credits.

[ExUnoDisceOmnes]

I asked something similar here (not yet answered):

http://www.revleft.com/vb/chartalism-and-tying-t146255/index.html

How can one reconcile the proposal to tie pre-socialist currencies to labour hours with the monetary theory of Chartalism? According to that theory, the money supply is expanded by printing money and then shrunk through taxation. Governments spend first and collect taxes later, despite budgeting rhetoric.

Meanwhile, the proposal itself is a more labour-centric response to right-populist calls to return to the gold standard as an anti-inflation measure, with the wide publicity for the time-to-money ratio exposing exploitation. It is not yet the full system of labour credits.

I'm glad that someone understands haha... it seems that people respond to unimportant threads, but when a legitimate question is raised... well it's ignored (how are we possibly going to iron out the ideology that way?)

[ckaihatsu]

Do you think that replacing currency with a "state" run system dealing in units of labor in which products are valued based solely on the labor embodies within them would solve the problems with a fiat currency?


Yes, because by tying the system of abstracted values to labor-hour-based labor credits the (credits') values approach a status of being politically non-controversial. Given the transcending of the class division a post-capitalist political economy would be able to finally put to rest all (fundamental) political issues related to the system of economics it supports.





Production would be planned based on use values, but exchange would work based on labor units.

If not, what would you suggest for an exchange system?


Exchange should be viewed as redundant, given a politically intentional, planned system of collectivized production and mass distribution.





Would the government doll out necessary goods? How would people secure what they "needed". Perhaps I've missed some essential document/piece of writing that explains this but... as of now I'm unsure as to how it would work.


I developed a model that addresses this topic -- here's an excerpt, and the entire model is attached, and is also at my blog entry.





Determination of material values

communist administration -- Assets and resources may be created and sourced from projects and production runs

labor [supply] -- Labor credits are paid per hour of work at a multiplier rate based on difficulty or hazard -- multipliers are survey-derived

consumption [demand] -- Basic human needs will be assigned a higher political priority by individuals and will emerge as mass demands at the cumulative scale -- desires will benefit from political organizing efforts and coordination


communist supply & demand -- Model of Material Factors

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

[ExUnoDisceOmnes]

Thank you for the useful post!


Determination of material values

communist administration -- Assets and resources may be created and sourced from projects and production runs

labor [supply] -- Labor credits are paid per hour of work at a multiplier rate based on difficulty or hazard -- multipliers are survey-derived

consumption [demand] -- Basic human needs will be assigned a higher political priority by individuals and will emerge as mass demands at the cumulative scale -- desires will benefit from political organizing efforts and coordination

My problem with this methodology is that it leaves no room for growth/expansion of industry. Individuals should hold the means of production at which they work. By doing this, they would not have to be paid the FULL value of their labor, but the labor unpaid by the labor credits would be invested into their respective means of production. This investment would result in an increased productivity, providing more commodity for less labor.

However, my issue is that people still wouldn't be paid the full value of their labor if business is expected to grow. Surplus labor will be avoided because all labor credits would be spent... but is it fair for the same labor discrepencies to occur in the Communist system as in the Capitalist system? (On a smaller scale for sure, but nonetheless...)

If this lack of paid labor didn't happen though, the economy couldn't grow and industry couldn't improve. Hmmm... on top of that how MUCH labor would be invested back into the means of production?

[ckaihatsu]

Thank you for the useful post!


You're quite welcome. Thanks for the response and comments -- I appreciate the feedback and would be glad to discuss the model to whatever extent you're willing to go. Here's a recent conversation on it:


How to keep workers engaged in workplace governance?

http://www.revleft.com/vb/keep-workers-engaged-t146685/index.html





My problem with this methodology is that it leaves no room for growth/expansion of industry.


This is an excellent concern, and one that I share as well. I'll invite you to see the attachment from my previous post and/or to look at my blog entry for the full text of the model -- it may be worth your while. I'll respond here with relevant sections from it....





Determination of material values

communist administration -- Assets and resources may be created and sourced from projects and production runs




Infrastructure / overhead

communist administration -- Distinct from the general political culture each project or production run will include a provision for an associated administrative component as an integral part of its total policy package -- a selected policy's proponents will be politically responsible for overseeing its implementation according to the policy's provisions





Individuals should hold the means of production at which they work.





Material function

communist administration -- Assets and resources are collectively administered by a locality, or over numerous localities by combined consent [supply]




Ownership / control

labor [supply] -- Only active workers may control communist property -- no private accumulations are allowed and any proceeds from work that cannot be used or consumed by persons themselves will revert to collectivized communist property





By doing this, they would not have to be paid the FULL value of their labor, but the labor unpaid by the labor credits would be invested into their respective means of production. This investment would result in an increased productivity, providing more commodity for less labor.

However, my issue is that people still wouldn't be paid the full value of their labor if business is expected to grow. Surplus labor will be avoided because all labor credits would be spent...





Associated material values

communist administration -- Assets and resources have no quantifiable value -- are considered as attachments to the production process


- The labor credits in this model are *not* exchangeable for anything material -- they circulate and are *only* for organizing and compensating incoming labor (hours), going forward.

- This model requires a mode of production that is *post*-commodity-production, meaning post-capitalist, or socialism / communism.





but is it fair for the same labor discrepencies to occur in the Communist system as in the Capitalist system? (On a smaller scale for sure, but nonetheless...)

If this lack of paid labor didn't happen though, the economy couldn't grow and industry couldn't improve. Hmmm... on top of that how MUCH labor would be invested back into the means of production?





Propagation

labor [supply] -- Workers with past accumulated labor credits are the funders of new work positions and incoming laborers -- labor credits are handed over at the completion of work hours -- underfunded projects and production runs are debt-based and will be noted as such against the issuing locality

[ExUnoDisceOmnes]

How then would you propose the distribution of resources to take place?

[ckaihatsu]

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How then would you propose the distribution of resources to take place?





To extend this meandering direction of thought, I've always pictured the *logistics* -- beyond the information flow, which could be thought of as ubiquitous -- of a collectivized cooperative economy to be akin to several concurrent expanding ripples in a pond. The ripples represent "pulses" of productive output from each locus out into the larger society. The edges of two expanding ripples touching could be thought of as points of *transfer* from one productive center to another -- linkages in a supply chain. (Since all production would be pre-planned there would not have to be any significant waste, pictured as parts of the ripple's perimeter that radiated out to infinity.)




Realistically the pond might be better thought of as having the viscosity of *broth*, meaning that "waves" of supplies are physically / materially limited in their geographical radii of outreach, due to logistical *costs* (of transportation, etc.). In practice perhaps this highly stochastic web of logistical interconnections might simply use a communications overlay that mirrors their radii of *physical* outreach -- limited-range wi-fi "clouds" that extend out to communicate current inventories and capacities with their productive-capacity neighbors, and no further.

[Dean]

How then would you propose the distribution of resources to take place?

Assuming a centralized method of control over distribution (or, preferably, a decentralized system of communes which voluntarily aggregate their resources) then I would expect that goods would be dispersed to free stores which participate in production and distribution within the communist program.

These stores would naturally run a surplus whenever possible, roughly equivalent to the standard deviation of demand or expanded / reduced to match expected shifts in population distribution. A lot of the concerns about over-consumption will be solved with a decentralized model of economic incentivization - that is what kinds of production are encouraged by the ruling class - because it will be the oppressed, have-not class which has taken the reigns of said economy. If you performed an intricate, scientific referendum among any nation's masses, you would find that they overwhelmingly support realigning and adjusting production to meet the critical needs of the human race.

Simply put, fundamental goods will be free (since their underproduction is not for lack of material or labor available) and scarce goods will be regulated by some kind of sharing or choice mechanism insofar as it is necessary. The rest - that is the dispersal of goods to regions, localities and individuals - is simply a matter of rational logistics.

[ckaihatsu]

Simply put, fundamental goods will be free (since their underproduction is not for lack of material or labor available) and scarce goods will be regulated by some kind of sharing or choice mechanism insofar as it is necessary. The rest - that is the dispersal of goods to regions, localities and individuals - is simply a matter of rational logistics.


Would you mind elaborating on this "sharing or choice mechanism" here? I've gotten into a fair number of discussions on the topic of scarcity.... (My own model is at my blog entry.)

[Dean]

Would you mind elaborating on this "sharing or choice mechanism" here? I've gotten into a fair number of discussions on the topic of scarcity.... (My own model is at my blog entry.)

Well, it depends. On the one hand, there are those goods which can be shared by people in the context of scarcity - for instance, computers - wherein the major problem is the dispensation of time using the goods rather than the dispensation of goods which are thereby consumed by individuals - i.e., gasoline.

Both can pass over to the individual-consumptive mode with the right degree of production and materials. But either can pass into the scarce-rationed mode given the right conditions.

It is only in the latter that we need to worry about distribution of goods as a critical political issue. This is because it will still have an exclusory nature. But I don't know what works best for people - what the best mode of voluntary choice would be. I know that people like to have a blueprint but I think its hard to even know what will be viable in a post-revolutionary setting.

[ckaihatsu]

Well, it depends. On the one hand, there are those goods which can be shared by people in the context of scarcity - for instance, computers - wherein the major problem is the dispensation of time using the goods rather than the dispensation of goods which are thereby consumed by individuals - i.e., gasoline.

Both can pass over to the individual-consumptive mode with the right degree of production and materials. But either can pass into the scarce-rationed mode given the right conditions.

It is only in the latter that we need to worry about distribution of goods as a critical political issue. This is because it will still have an exclusory nature. But I don't know what works best for people - what the best mode of voluntary choice would be. I know that people like to have a blueprint but I think its hard to even know what will be viable in a post-revolutionary setting.


Agreed, and well put. Given that politics addresses quantities (of service-time and goods, as you mention), and that time flows in one direction, from the past to the future, would you be open to considering some kind of a 'prioritization' system, along the lines of 'triage' in the medical practice (generic, though, of course, without the association of tragedy) -- ?

[Dean]

Agreed, and well put. Given that politics addresses quantities (of service-time and goods, as you mention), and that time flows in one direction, from the past to the future, would you be open to considering some kind of a 'prioritization' system, along the lines of 'triage' in the medical practice (generic, though, of course, without the association of tragedy) -- ?

Do you mean the prioritization of goods? I imagine such a rule would occur in any scarcity economy (rather than a simple glut in an otherwise stable economy) and communities of collectives would have to convene to determine priorities. I'm sure that some kind of enumeration of products would come out of this - for instance, the secure distribution of water and food would usually take precedence over medical infrastructure, which would in turn take precedence over transportation infrastructure... but again, these are contingent on circumstances. A defunct bridge which served as the only access to a stranded community experiencing an epidemic would turn it on its head.

[ckaihatsu]

I imagine such a rule would occur in any scarcity economy (rather than a simple glut in an otherwise stable economy) and communities of collectives would have to convene to determine priorities. I'm sure that some kind of enumeration of products would come out of this - for instance, the secure distribution of water and food would usually take precedence over medical infrastructure, which would in turn take precedence over transportation infrastructure... but again, these are contingent on circumstances. A defunct bridge which served as the only access to a stranded community experiencing an epidemic would turn it on its head.




Do you mean the prioritization of goods?


Yes -- goods and services.

I'm attaching this chart as an f.y.i....


[17] Prioritization Chart

http://postimage.org/image/35hop84dg/