Communists Economics?

[Y2A]

I know that in the ideal communist world after the period of a socialist state there will be an abolishment of currency. Can someone please explain to me how this will work or point out some marxist doctorine which explains this in detail?

[LSD]

Could you clarify what you're asking?

How will what work?

[Osman Ghazi]

It isn't really known entirely how it will work. However, the main thesis is that since there will be a surplus of every type of product (ideally) there will not be any need for prices or market forces.
Basically, agricultural collectives will supply the cities with everything they need to produce i.e. food, flax, other natural fibers necessary for industrial work, (providing that natural fibers haven't been completed displaced by artificial fibres) and the cities will supply the collectives with all the manufactures they need i.e. consumer goods and agricultural machines. It will be very decentralized and the city will attempt to get all the resources it needs from as close as possible.


It is also important to note that Lenin wanted to redistribute the population so that there would be no distinction between rural and urban.

Since it has never been achieved even on a small scale, it is very hard to apply certain rules and to know what sort of problems may be encountered.

Anything else you want to know in particular?

[Hoppe]

Originally posted by [email protected] 11 2004, 08:26 PM
I know that in the ideal communist world after the period of a socialist state there will be an abolishment of currency. Can someone please explain to me how this will work or point out some marxist doctorine which explains this in detail?
Everything will just......happen. :)

Of course, if there is a surplus of every imaginable product, it looks to me communism is extremely wasteful. Very funny Osman Ghazi, that you talk about farming and manufacturing. I believe we live in the 21st century nowadays and in most modern countries those two sector are quite small in the overall economic picture. I believe your example puts us back about 2 centuries.

[Y2A]

But what happens if the agricultral and industrial collectieves fail to provide the people with there needs? Why do you automatically think there will be a surplus? What will happen when the population grows so large that the collectives are unable to provide everyone with what they need?

[kylieII]

I find it unlikely that under communism currency would disappear. Because unless there is extremely strict laws, then people are still going to trade, even if it is on a more localised basis. So to do this either barter will take place, or more likely people will make use of the current currency, or if it is not trusted due to inflation(one of the ways in which capitalism could collapse) some new kind of currency may take its place.

[Hoppe]

Originally posted by [email protected] 11 2004, 08:59 PM
I find it unlikely that under communism currency would disappear. Because unless there is extremely strict laws, then people are still going to trade, even if it is on a more localised basis. So to do this either barter will take place, or more likely people will make use of the current currency, or if it is not trusted due to inflation(one of the ways in which capitalism could collapse) some new kind of currency may take its place.
Capitalism collapsing because of inflation?? :lol:

Unless governments start issuing fiat money that is not going to happen.

[LSD]

But what happens if the agricultral and industrial collectieves fail to provide the people with there needs?

Well, the idea is that collectives would be founded that were able to provide for its members.

But if there is, say, a particularly bad year, or some event which negatively impacts production than the community can always import from another collective that has a potential surplus in that area


Why do you automatically think there will be a surplus?

I don't.

The point of communism is that there wouldn't a surplus. Only what is needed would be produced, unlike in capitalism there is no advantage in overproduction.


What will happen when the population grows so large that the collectives are unable to provide everyone with what they need?

The obvious solution is that if a collective gets too big part of it may well have to leave, but realistically, what is the chance of that happening?

How many small towns transform into cities, the fact is that most small communities remain small communities.


I find it unlikely that under communism currency would disappear. Because unless there is extremely strict laws, then people are still going to trade, even if it is on a more localised basis. So to do this either barter will take place, or more likely people will make use of the current currency, or if it is not trusted due to inflation(one of the ways in which capitalism could collapse) some new kind of currency may take its place.

The idea is that "trade" would not occur, in any form.

This is accomplished because society would provide for everything that people would need, and that accordingly your neighbour wouldn't have anything more than you do and hence nothing you need to trade for.

[Y2A]

Originally posted by Hoppe+Feb 11 2004, 09:04 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Hoppe @ Feb 11 2004, 09:04 PM)
[email protected] 11 2004, 08:59 PM
I find it unlikely that under communism currency would disappear. Because unless there is extremely strict laws, then people are still going to trade, even if it is on a more localised basis. So to do this either barter will take place, or more likely people will make use of the current currency, or if it is not trusted due to inflation(one of the ways in which capitalism could collapse) some new kind of currency may take its place.
Capitalism collapsing because of inflation?? :lol:

Unless governments start issuing fiat money that is not going to happen. [/b]
That&#39;s exactly what I thought. How is capitalism going to fall due to inflation? Inflation is reduced by capitalist competition. Unless what you mean is that capitalism will fall due to monopolization which in turn leads to inflation.

[Osman Ghazi]

The point of communism is that there wouldn&#39;t a surplus. Only what is needed would be produced, unlike in capitalism there is no advantage in overproduction.


Actually, i wasn&#39;t suggesting that. It is a main tenet of marxist theory that there is a surplus of everything. The problem is that commodities which are scarcer are worth more therefore, you would need to have a price on a product which would fluctuate and basically just mess with the economy. Therefore, Marx&#39;s solution was to have a surplus of everything. It wouldn&#39;t be a problem to make extra things in a society where production is maximized.

Edit: Inflation has little to do with competition but everything to do with the value of a currency. The thing that is being inflated is the price of the currency.

[Y2A]

Well, the idea is that collectives would be founded that were able to provide for its members.

But if there is, say, a particularly bad year, or some event which negatively impacts production than the community can always import from another collective that has a potential surplus in that area

That is trade.


The point of communism is that there wouldn&#39;t a surplus. Only what is needed would be produced, unlike in capitalism there is no advantage in overproduction.

Overproduction is a disadvantage in a capitalist system. And "only what is needed" is not good enough. What about advances in medicine or other technological fields that can do much more then spreading out the wealth evenly. Is it worth destroying that to keep the moral standards of attempting to keep everyone equal?


The obvious solution is that if a collective gets too big part of it may well have to leave, but realistically, what is the chance of that happening?

How many small towns transform into cities, the fact is that most small communities remain small communities.

I am not saying that the collective gets to big. I am saying that the collective does not produce enough. And another fact is that the global birth rate is higher then the death rate. Our population is growing and it will ultimately be impossible to satifiy the needs of everyone.



The idea is that "trade" would not occur, in any form.

This is accomplished because society would provide for everything that people would need, and that accordingly your neighbour wouldn&#39;t have anything more than you do and hence nothing you need to trade for.

Again, if the collective fails to provide the needs of everyone, it all goes down the gutter and trade will become neccessary.

[kylieII]

Originally posted by Hoppe+Feb 11 2004, 09:04 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Hoppe @ Feb 11 2004, 09:04 PM)
[email protected] 11 2004, 08:59 PM
I find it unlikely that under communism currency would disappear. Because unless there is extremely strict laws, then people are still going to trade, even if it is on a more localised basis. So to do this either barter will take place, or more likely people will make use of the current currency, or if it is not trusted due to inflation(one of the ways in which capitalism could collapse) some new kind of currency may take its place.
Capitalism collapsing because of inflation?? :lol:

Unless governments start issuing fiat money that is not going to happen. [/b]
Germany post world war 1 is a good example of what happens when inflation gets out of control. Maybe I should have been more clear, I mean hyper-inflation, not the ordinary 4% or so.

[Iepilei]

I believe the stress on the farming community is something that pertains mostly to under-developed nations. Central Americans should consider themselves lucky, as they live in an area which is kind to produce the bulk of the worlds food. But American&#39;s do take good care of their farmers. A joke, a little while back, on the libertarian boards stated that "9/10 farmers perfer communism&#33;" - an illusion to how much the goverment tries to subsidize farmers to keep their prices down.

In all fairness, of course. If that allows people to buy a 23 cent can of corn, then so be it&#33;

[Y2A]

Another thing is how would you keep workers producing to there maximum ability without competition? If there is no incentive to produce, that is not enforced by the state or a private owner, then how can you possibly insure that the maximum production is reached? It is not enough just to trust a worker to work as hard as possible. It is to risky, what if the workers do not produce as much as they could and inturn not enough is produced for the population.

[Osman Ghazi]

am not saying that the collective gets to big. I am saying that the collective does not produce enough. And another fact is that the global birth rate is higher then the death rate. Our population is growing and it will ultimately be impossible to satifiy the needs of everyone.


If you have ever studied anything related to population issues, you will see that Western countries do not even make the 2.1 children per woman (0% growth rate). Assuming that the circumstances of communism are that the entire world is equally (more or less) industrialized and that societies are living more or less like western societies would, the population of the world would actually decline. The reason that the population of earth is growing by 80 million a year is because people living in poorer countries do not have the same mindset about kids and tend to have much more of them. So this will not really be a problem.

Also, i have heard it theorized that working all the available land with the best techniques, the earth can support about 8 billion persons living at the current western level of consumption.

[LSD]

The All-knowing Y2A:


That is trade.

In a manner of speaking, it certainly isn&#39;t capitalist trade.

If you define trade to merely be any transfer of good or products, then yes.

But it isn&#39;t giving one thing in return for another which is what is usually meant by trade.


Overproduction is a disadvantage in a capitalist system. And "only what is needed" is not good enough. What about advances in medicine or other technological fields that can do much more then spreading out the wealth evenly. Is it worth destroying that to keep the moral standards of attempting to keep everyone equal?

Medical Research would certainly qualify as needed.

Furthermore, don&#39;t forget that even when one is finished with their required work, they will have a great deal of free time in which they could work on other products, such as technology or development. And that furthemore within industries, people can be allowed to work on improvment or development by the workers of that industry.


I am not saying that the collective gets to big. I am saying that the collective does not produce enough.

Well then it wasn&#39;t a very well established collective&#33;

If, again, you mean it initially was and then events transpire to change this, I have already answered that.


And another fact is that the global birth rate is higher then the death rate. Our population is growing and it will ultimately be impossible to satifiy the needs of everyone.

Well, that&#39;s a practical problem that needs to be addressed by any system.


Again, if the collective fails to provide the needs of everyone, it all goes down the gutter and trade will become neccessary.

see above.



Ozman Ghazi:



Actually, i wasn&#39;t suggesting that. It is a main tenet of marxist theory that there is a surplus of everything. The problem is that commodities which are scarcer are worth more therefore, you would need to have a price on a product which would fluctuate and basically just mess with the economy. Therefore, Marx&#39;s solution was to have a surplus of everything. It wouldn&#39;t be a problem to make extra things in a society where production is maximized.


Yes?
And who would hold on to this surplus?

I don&#39;t mean that there would only be enough for subsistence living, but I mean that there would not be overproduction or hoarding of resources. Everything would be produced with a specific purpose, thereby preventing elitism and classism.

[Osman Ghazi]

And who would hold on to this surplus?
The people who made it. If they couldn&#39;t get rid of it, they would just hold onto it until someone needed it.
If they still couldn&#39;t get rid of it after a while, they would just reuse it.

[Iepilei]

You make it sound as if people in steel mills, office complexes, and fast-food establishments all work because of some driven goal to rise higher on the grace of capitalisms silver wings.

Truth of the matter is, most people (I&#39;ve known/run into) don&#39;t work to their max ability - because they feel they have no say in what happens anyways. Hrm. Sounds a bit familiar. I know people who go to work and listen to music all day. I know people who go to work, and don&#39;t properly clean all their required cleaning areas (if you who go to resturants only knew)...

Truth be told. You will NEVER get rich through hard work under capitalism. EVER. No matter what they say, or what anyone ever tells you, if you ask someone with money they&#39;ll tell you it&#39;s a farce. You will never be well off by working hard.

[Y2A]

Originally posted by [email protected] 11 2004, 09:45 PM
You make it sound as if people in steel mills, office complexes, and fast-food establishments all work because of some driven goal to rise higher on the grace of capitalisms silver wings.

Truth of the matter is, most people (I&#39;ve known/run into) don&#39;t work to their max ability - because they feel they have no say in what happens anyways. Hrm. Sounds a bit familiar. I know people who go to work and listen to music all day. I know people who go to work, and don&#39;t properly clean all their required cleaning areas (if you who go to resturants only knew)...

Truth be told. You will NEVER get rich through hard work under capitalism. EVER. No matter what they say, or what anyone ever tells you, if you ask someone with money they&#39;ll tell you it&#39;s a farce. You will never be well off by working hard.
You completely missed my point. My point is that if there is no one to enforce the needs of the people, no state no competition, nothing. So what happens when production is not met??? The peoples needs are not satisfied. And by the way, I am from a working class family and capitalism has worked for me and many other immigrants. Face it, the system is not perfect but it is not impossible to work your way out of negative situations.

[Y2A]

And another question. If there is no state or private owner, then how will these products be spread amongst the people? Who will distribute these products and insure they are spread out evenly?

[LSD]

The people who made it. If they couldn&#39;t get rid of it, they would just hold onto it until someone needed it.


You&#39;re asking these workers to work harder and longer than they need to for no discernable reason.


If they still couldn&#39;t get rid of it after a while, they would just reuse it.

What?

If they could "get rid of it", then it wouldn&#39;t be a surplus would it?


You completely missed my point. My point is that if there is no one to enforce the needs of the people, no state no competition, nothing. So what happens when production is not met??? The peoples needs are not satisfied.

The idea is that the people are enforcing the needs of the people.

You still have not clarified your question. Why is production not being met?


And by the way, I am from a working class family and capitalism has worked for me and many other immigrants. Face it, the system is not perfect but it is not impossible to work your way out of negative situations.

Yes, yes, of course it works for some, so did feudalism.

What matters is that it doesn&#39;t work for most.


And another question. If there is no state or private owner, then how will these products be spread amongst the people? Who will distribute these products and insure they are spread out evenly?

Well that&#39;s certainly a needed occupation isn&#39;t it&#33;

Depending on what you&#39;re refering to, people will probably pick it up from the place of production or a central holding area.

[Osman Ghazi]

In the USSR, you still had retail outlets (though i don&#39;t really like to use that term). That is what is meant by &#39;the means of distribution&#39;.
More likely than not, it would serve merely as a warehouse like LSD said.

The &#39;discernable reason&#39; for &#39;making them work harder and longer&#39; is so that there will be no shortfalls. It is impossible to determine the exact amoun that will be necessary.
I do not think that money will be abolished because it is necessary in order for an individual to choose what sort of item they want. Obviously, it would be easier if you just gave everyone one chair, one table etc. but there are other factors to be considered, i.e. what colour and size would the table be. So, in order to meet everyone&#39;s demand, it would require a surplus of items.

Generally, going from a syndicalist theory of organization, the factory workers as a whole would have to ensure that necessary production was made.

[Iepilei]

Originally posted by [email protected] 11 2004, 09:50 PM
So what happens when production is not met??? The peoples needs are not satisfied.
So you&#39;re wondering what will happen after world-wide socialist revolution, and the reconstruction process. You&#39;re wondering how the minds of people will work after potentially centuries of change.

It is our hope that by this time, the workers will be able to manage themselves through a set of workers organisations and, should something/someone prove to be unsatisfactory - make amends. It isn&#39;t a real complicated process, yet it&#39;s nothing that can be completely written out on paper. No one really invisioned the growth of corporatism, or had it mapped out completely.

We do know that we plan for a time in which the workers will take charge of all aspects of factory production. Making management and economic heirarchy as we see it today, obsolete. They will control these aspects, and hopefully after much change and development, they&#39;ll be able to realise what is needed and use the advancements in technology to see that it&#39;s where it needs to be and when.

[Hoppe]

Germany post world war 1 is a good example of what happens when inflation gets out of control. Maybe I should have been more clear, I mean hyper-inflation, not the ordinary 4% or so.

Hyper-inflation in capitalism???? :lol:

I repeat, not unless the government start issuing fiat money.

If you know what the main cause of inflation is and what money really is you wouldn&#39;t say these crazy things. Money is not some sort of mystical device created by evil capitalist to control the world.


What matters is that it doesn&#39;t work for most

Haven&#39;t you been paying attention in history class?

[LSD]

Haven&#39;t you been paying attention in history class?

sigh...

Look, if you want to make a point make a point, but I&#39;m sick of trying to decypher your arguments from a string of sarcastic questions.

So...one more time....

Haven&#39;t you been paying attention in history class? = "Capitalism does work for most people" (??)

I think that was your point, but I can&#39;t really be sure. If so, than you will have to provide more evidence for it than your word as this forum is full of examples about how people are suffering due to capitalism.

[Hoppe]

Well ok, but that was what I was referring to.

Your statement that only a minority benefitted from capitalism is false. And please don&#39;t come with any third world things because that will only prove that you are even more wrong.

[Osman Ghazi]

Originally posted by [email protected] 11 2004, 10:10 PM

Germany post world war 1 is a good example of what happens when inflation gets out of control. Maybe I should have been more clear, I mean hyper-inflation, not the ordinary 4% or so.

Hyper-inflation in capitalism???? :lol:

I repeat, not unless the government start issuing fiat money.

If you know what the main cause of inflation is and what money really is you wouldn&#39;t say these crazy things. Money is not some sort of mystical device created by evil capitalist to control the world.


What matters is that it doesn&#39;t work for most

Haven&#39;t you been paying attention in history class?
Hmm... yes there certainly wasn&#39;t any inflation in the U&#036; after the Depression. Wait, weren&#39;t they capitalist?
But they weren&#39;t issuing &#39;fiat money&#39; were they? So that would make you, let me think... WRONG&#33;&#33;&#33;

Would you care to share the main cause of inflation with us, your highness? Let me guess: Communists&#33; :lol:

Actually, I have been paying attention in history class (although I don&#39;t know why I would learn economics in history class).

Haven&#39;t you ever noticed that 80% of the country is poor?

Also, the wealth of the world&#39;s 386 billionaires (222 of whom are from the U&#036;) is equal to the wealth of the world&#39;s porrest 2.8 billion people. I&#39;ll admit that it &#39;worked out&#39; quite well for the 386, but what about the 2.8 billion?

[Hoppe]

Monetary policies of governments are the main cause. The US went de facto of the goldstandard around 1914 I believe.

If you can tell me how hyperinflation will arise in a capitalist system with a goldstandard without fiat money, I will nominate you for the nobelprize.

[Osman Ghazi]

Easily, by the collapse of other currencies outside of their control. (Although, what is outside of the U&#036;&#39;s control, really) Are you telling me that the Great Depression didn&#39;t cause inflation all over the world?

Edit: Also, though i don&#39;t know all about this, i have heard that the U&#036; governments control of the price of gold has been a negative factor in the value of their currency. Do you know anything about this?

By the by, what is your Phd going to be in?
Plus you never told me what country your from. (Either that or I forgot)

[Hoppe]

Originally posted by Osman Ghazi[email protected] 11 2004, 10:36 PM
Easily, by the collapse of other currencies outside of their control. (Although, what is outside of the U&#036;&#39;s control, really) Are you telling me that the Great Depression didn&#39;t cause inflation all over the world?

Edit: Also, though i don&#39;t know all about this, i have heard that the U&#036; governments control of the price of gold has been a negative factor in the value of their currency. Do you know anything about this?

By the by, what is your Phd going to be in?
Plus you never told me what country your from. (Either that or I forgot)
There wasn&#39;t a real goldstandard anymore. If there is no interference of government hyperinflation can only occur if someone happens to stumble on a infinite amount of nicely minted gold coins.

I have heard about this as well. Recently some notes of secret central bank meetings were discovered. I have some sources but they are from a Dutch journalist. I&#39;ll have a look if I can find english ones.

Netherlands and I am not quite sure yet but probably finance.

[kylieII]

Hyper-inflation in capitalism???? :lol:
Its not that hard. Excessive growth could if its not controlled well enough lead to inflation rising. Too low employment, below the natural level. If some goods were to be in quite short supply, it may be enough to push inflation high enough to be self supporting(high inflation causing inflation to rise, as people save less and less, spending more and more.). Low interest rates too, encourage it.
Combined, or if not handled responsibly, these could cause significant increases in inflation.

[Hoppe]

Excessive growth could if its not controlled well enough lead to inflation rising.

The market will control growth. Capital is not abundant.


Too low employment, below the natural level

Technically in a free market no such thing as involuntary unemployment exist, except maybe in the short-term


If some goods were to be in quite short supply, it may be enough to push inflation high enough to be self supporting

But that&#39;s not hyperinflation. This would seem to me the highly unlikely situation of monopoly without substitution and extremely low price elasticity.


Low interest rates too, encourage it.

If government sets the interest rates. If interestrates are set by the market (timepreference of money) they will adjust.

[Osman Ghazi]

If government sets the interest rates. If interestrates are set by the market (timepreference of money) they will adjust.

But the government has to be able to control interest rates, otherwise they have absolutely no control over the economy, which is probably what you want anyway but i call attention to it just in case.

Plus, if the governement couldn&#39;t control interest rates, that would diminish their economic power, possibly so much that they wouldn&#39;t be able to stop anti-competition agreements between banks, which could set in theory, anyway, as high an interest rate as they wanted. Although, obviously, they wouldn&#39;t set it above a certain level that would make repayment impossible.

Just another one of the many abuses, not only possible under capitalism but in ages past abundant.

Again, I just say this so that you don&#39;t start thinking that capitalism is invincible.

[kylie]

The market will control growth. Capital is not abundant.

I disagree. If the government and banks were not to take measures to limit economic growth, inflation would occur. Money is very liquid now, as is demonstrated by the huge debts being accumulated from credit cards and long term loans.



Technically in a free market no such thing as involuntary unemployment exist, except maybe in the short-term


This is irrelevant to the point. Full employment is undesirable, and will lead to inflation increasing. I read you are doing a phd in economics, so surely you are familiar with the Phillips Curve, showing how full employment will lead to firstly wage inflation, and then inflation in general.


But that&#39;s not hyperinflation. This would seem to me the highly unlikely situation of monopoly without substitution and extremely low price elasticity.

It will work just as well under an oligopoly. And it can assist in pushing inflation up(the RPI), which coupled with other factors could lead to hyperinflation.


If government sets the interest rates. If interestrates are set by the market (timepreference of money) they will adjust.
Whether the market will adjust them or not isnt the point, too low interest rates will cause inflation. Why do you think it is that the UK government is now fixing to pushing interest rates up.

[Hoppe]

Are we talking about the same thing here? I was referring to a system with were all money is backed by gold (as in the way it should be) and certainly not present-day system.


I read you are doing a phd in economics

As we seem to be talking about different things here, I am not doing a phd in economics. :)