Understanding the economic calculation debate

[Schrödinger's Cat]

Anyone got some good links that disprove Hayek and Von Mises?

I found the following: http://www.cvoice.org/cv3cox.htm.


It's assumed that central planning will be the system of preference. Why not just mimic money via points? They don't have to do anything.

[GPDP]

The Anarchist FAQ discusses this point here (http://www.infoshop.org/faq/secI1.html#seci11) and here (http://www.infoshop.org/faq/secI1.html#seci12).

[Schrödinger's Cat]

Indeed. It does bring up some plainly obvious points. Why can't labor-hours or energy accounting be used as substitute for money - for example? If you think about it, even in a market there is still some arbitrary distinctions, like the excess in profit.

[Hyacinth]

I think there is a better response to the economic calculation debate than simply that labour-time credits or energy accounting can be substitute for the price mechanism, but alas at the moment I'm too tired and too drunk to elaborate on the point. I'll get back to the thread tomorrow.

[mikelepore]

A basic claim of Mises and similar writers is that prices determined competitively, prices determined by the clash of how desperately the seller wants to sell something and how desperately the buyer want to buy something, is itself a necessary form of "information" -- their favorite word. They claim that without that single number for each article, there would be no way for anyone to know what they should do at all, a claim for which they often give stupid examples, e.g., there would be no way to know that it's inefficient to pave a road with diamonds. But that's so easy to answer. The tagging of goods with their inputs in terms of labor time, industrial capacity usage, energy usage, etc. would also indicate which choices are the efficient and rational ones. In fact, it's the competitivley determined price which mostly has the fault of lacking information content; for example, the auction taking place between buyer and seller doesn't communicate a thing about how efficiently and wisely the earth's limited resources are consumed (but that's generally a "don't care" item among capitalists). Also, since consumer patterns can only indicate what buyers choose to buy, out of the limited roster of things that are already produced and which they can afford, we can't even say that what people buy indicates what they "want". So the "information" theory of prices collapses. Opinion by Mike Lepore.

[Schrödinger's Cat]

Excellent argument, Mike. Simple, but not simplistic. :)

[Hyacinth]

We have to recall the historical context of the economic calculation debate, it took place primarily in the 1920's and 1930's, and, at the time, the [correct] argument was made that planned economies were incapable of (a) gathering, and (b) processing all the data that would be required to plan an economy. The additional argument was also that (c) only price signals in a market place were effectively capable of communicating consumer to producers. Mike, I think, nicely handled (c). I shall address (a) and (b).

Traditionally, or at least since we invented the idea, economic models are, simply put, a series of linear equations (e.g. x+y=z, w+3x+23y=5z, etc.). And, for any sizable economy, the number of linear equations that are involved is staggeringly high. Simply put, an economy system, and any model thereof, is quite complex, and might well be non-linear. What this means is that solving the equations of an economic model, which is what would be required for optimal planning, is, without, computers, impossible to do.

GOSPLAN, after Leonid Kantorovich invented linear programming, did try to develop more limited models using linear programming for subsectors of the Soviet economy. The issue was that, even with the correct models, solving the linear equations *by hand* would take thousands upon thousands of years. Even if it worked in theory, at the time it was simply impossible in practice.

I emphasized "by hand" in the above paragraph because things have changed considerably since then. We now have computers, and, most importantly, we now have extremely powerful computers relative to what they had even as far back as 5, 10, or 20 years ago. Equations which would take years, if not centuries or millenia, to solve by hand can be done in a matter of minutes or seconds by today's supercomputers, and even desktop computers. I'll skip over the dry technical demonstration that we are capable of solving economic models of sufficient complexity required to plan a modern economy in a matter of days, hours, if not minutes, thus overcoming the (b) data processing limitation.

Likewise, for (a) data gethering, modern telecommunications technology, has solved the issue. We can (and already do) keep track of both consumption and production in real time (Walmart, in fact, employs this very method; they pioneered barcodes, and use them to keep track of stock of goods in both wearhouses and stores). As well, we have higly developed models of consumer behavior, and this is used by modern companies to maximize profit, by forecasting consumer demand rather than waiting for price signals to tell them what the demand is.

In short, advancements in computer technology have overcome the technical limitations which prevented the implementation of a real planned economy in the 20th centry. The objections against socialist planning which did hold in the past no longer hold. A planned economy today, with the right model, could outpreform a market economy.

[Lynx]

Can a demonstration be arranged? I'd like to see a pilot project.

[ckaihatsu]

Thanks, Hyacinth, for bringing up the Walmart point.

I've maintained, as early as 2004, that Walmart is the perfect example of communism, if only it wasn't based on private property. It, and all chain / franchise corporations like it, are logistical marvels and are rightly the technological wonders of the age we live in.

In other words, they're ripe for the plucking -- it's one more example of the adage that capitalists will sell us the rope that we use to hang them with. Now the proletarian revolution doesn't even need to build the logistical back-end systems for contemporary communism from the ground up -- the workers have already done it while in the yoke under capitalism.

With so much of the logistics taken care of we would barely even need conscious, mass-based (proletarian) planning. For all of the discussion that goes on here at RevLeft and elsewhere about the nature or composition of worker-based planning, I think much of the discussion has already been rendered moot due to existing technology.

Forget Parecon altogether -- once we can rid ourselves of the last remnants of '70s-era cyberphobia, we might realize that the capabilities of our present-day logistics in the Internet-enabled age have far exceeded the very notions of "central planning" or "local planning" -- once again, even despite capitalism's snail-pace of progress, we have, after decades, finally been brought to the ultimate point of customization -- that of the individual consumer.

Coupled with the personalized interface of Internet portals -- (raised earlier in another thread on this board) -- we have all of the logistical ingredients needed for the smooth operation of the economy without interference from private property or its devotees.

So let's bring it...! Revolution and communism with a mouseclick!


Chris



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[Lynx]

Here here! How do we get this project off the ground? How do we get it into the real world and have it scale? Would Walmart be willing to share its systems? Would their systems have to be reverse engineered? Would they have to be tailored to meet the needs of non-Walmart businesses? Would it be worthwhile for Walmart to fund a research project? What other sources might be interested in funding such a proposal?

This wouldn't be a revolution, but it would be about answering questions posed by critics. Lets build the means to collect the data. Lets crunch the numbers and analyze the results. Allow anyone interested to gauge the accuracy or effectiveness of the calculated output. Lets have a research project that we can field test and learn from.

[ckaihatsu]

Here here! How do we get this project off the ground? How do we get it into the real world and have it scale? Would Walmart be willing to share its systems? Would their systems have to be reverse engineered? Would they have to be tailored to meet the needs of non-Walmart businesses? Would it be worthwhile for Walmart to fund a research project? What other sources might be interested in funding such a proposal?

This wouldn't be a revolution, but it would be about answering questions posed by critics. Lets build the means to collect the data. Lets crunch the numbers and analyze the results. Allow anyone interested to gauge the accuracy or effectiveness of the calculated output. Lets have a research project that we can field test and learn from.


I'm not optimistic about going in the direction you're thinking of Lynx. Side-stepping the rule of capital / the state has *only* been successful in the realm of software (and other digital-based cultural goods) -- as with free and open-source software -- because of the nature of digital information -- it can be both possessed and given away without forfeiting possession. I mean this is Jesus with the loaves and fishes kinda shit -- it doesn't happen with *anything else*!

With everything else you have private property interests and the state to enforce the laws for them. Where would one get enough property in the first place to build factories that could rival, or replace, those of China's? And even if we could, as soon as something alternative starts making headway it captures the attention of the powers-that-be, and it gets crushed. Look at the difficulties that the foreclosed-on, evicted, tent city people are having in California (not to mention in poor areas in the rest of the world) -- they're about the least threat to the system and yet the police persecute them.

It's for this reason that revolution is all-or-nothing -- it requires the working class of the world to simultaneously say no to capital and its imperialist wars, and to begin providing its own vision and action steps for its own future, independent from bourgeois business and politics.

[Lynx]

I was thinking along the lines of existing businesses keeping a second set of books. If the algorithms showed promise, such as predicting the outcome of traditional human decision making, experiments could then proceed with the algorithms partially or fully in the 'drivers seat'. We're taking Walmart's systems and attempting to scale them to encompass more and more of an existing economy. The project would be non-political.

An alternative is to try it in Venezuela or another country, assuming they are receptive to computerized calculation of their proto-transitional economies.

Honest to goodness, if research can be done into String Theory, why not economic calculation?

[Die Neue Zeit]

Not very frequently do I venture into discussions on our maximum program, but it is refreshing compared to "Bernsteinian" ventures into redefining the minimum program (not that it's remotely close to class-collaborationist Bernsteinism or even the "post-war social-democratic consensus" :rolleyes: )...


Thanks, Hyacinth, for bringing up the Walmart point.

I've maintained, as early as 2004, that Walmart is the perfect example of communism, if only it wasn't based on private property. It, and all chain / franchise corporations like it, are logistical marvels and are rightly the technological wonders of the age we live in.

If only "enterprise resource planning" systems could be enhanced further to complement supercomputer linear programming. Some business instructors said there were problems with ERP.


With so much of the logistics taken care of we would barely even need conscious, mass-based (proletarian) planning. For all of the discussion that goes on here at RevLeft and elsewhere about the nature or composition of worker-based planning, I think much of the discussion has already been rendered moot due to existing technology.

Forget Parecon altogether -- once we can rid ourselves of the last remnants of '70s-era cyberphobia, we might realize that the capabilities of our present-day logistics in the Internet-enabled age have far exceeded the very notions of "central planning" or "local planning" -- once again, even despite capitalism's snail-pace of progress, we have, after decades, finally been brought to the ultimate point of customization -- that of the individual consumer.

Funny - I kept track of the debate between Cockshott and Devine, the latter accusing the former of not considering some "entrepreneurial" factors. Then again, the latter doesn't have a post-monetary solution. :(



Note to Comrade Mike Lepore: Either this thread or another Economics thread would be a good place to explain why labour credits should be allowed to circulate (which, IMO, goes against the very critique Marx made against money-capital).

[Hyacinth]

Can a demonstration be arranged? I'd like to see a pilot project.
I'm more than happy to provide a more detailed proof of my claim that we are capable of computing, in a reasonable amount of time, all the information that is necessary to plan an economy of a decent size. Though, not at the moment, yet again, I'm a little bit inebriated (it seems every time that I check this thread that turns out to be the case), so give me a few days to get back to you.

[mikelepore]

Note to Comrade Mike Lepore: Either this thread or another Economics thread would be a good place to explain why labour credits should be allowed to circulate (which, IMO, goes against the very critique Marx made against money-capital).

It's not exactly that I think credits should circulate. I think the people should be able to have whatever system details the majority want, and I feel rather certain that the majority will want credits to circulate, so I believe it will be done, as it should. The first reason: With industry collectively owned, the people will still find themselves bartering with simple services: I'll paint your bedroom if you'll fix my snowblower; I'll give you a basket of garden tomatoes if you'll style my hair. Then people will find it convenient to defer half of the deal until another time: I'll paint your bedroom today, but I'm not prepared for you to do anything for me just now. Therefore they will realize that paying someone for their time is the simplest method. The second reason: I expect a continuation of the tradition of giving people financial gifts for anniversaries, weddings, graduations, while other people choose to give wine glasses, etc. I see nor reason to think that these customs will diminish after socialism is established.

I don't see a connection to Marx's critique, which is about a society in which the essential means of life are under exclusive ownership, and the individual worker is informed that the rule is serve someone or or die. A very different situation.

[ckaihatsu]

I was thinking along the lines of existing businesses keeping a second set of books. If the algorithms showed promise, such as predicting the outcome of traditional human decision making, experiments could then proceed with the algorithms partially or fully in the 'drivers seat'. We're taking Walmart's systems and attempting to scale them to encompass more and more of an existing economy. The project would be non-political.

An alternative is to try it in Venezuela or another country, assuming they are receptive to computerized calculation of their proto-transitional economies.

Honest to goodness, if research can be done into String Theory, why not economic calculation?


Lynx, I really think that that kind of project is *not* a revolutionary one. Mathematical modeling is a bourgeois endeavor, while taking over existing structures that happen to keep accurate track of materials and labor is a revolutionary task.

[ckaihatsu]

I don't see a connection to Marx's critique, which is about a society in which the essential means of life are under exclusive ownership, and the individual worker is informed that the rule is serve someone or or die. A very different situation.


Mike, I think you're referring to Stalinism here. Don't you think that the working class of the world could liberate itself and run its own labor in ways that are *better* than that of Stalinist or capitalist rule?

[Ratatosk]

I don't even understand how this is a problem. Yes, the market provides prices. What reason did Hayek, Mises and the rest of them provide to believe that these prices are somehow "right" or "adequate" or "correct"? If they didn't, then they have no right to criticize any other economy for failing to do the same thing.

In short, advancements in computer technology have overcome the technical limitations which prevented the implementation of a real planned economy in the 20th centry. The objections against socialist planning which did hold in the past no longer hold. A planned economy today, with the right model, could outpreform a market economy.Interestingly enough, Allende tried to apply the principles of cybernetics to the Chilean economy already in the early 70s - google Project Cybersyn. (And it seems quite plausible that such an endeavour should be successful in the end.)

[ckaihatsu]

I'm concerned that this discussion is going in the direction of trying to find an "optimal" algorithm that would serve as an ultimate 'hands-off' mechanism for running the economy -- even if in a post-capitalism environment.

The Wikipedia entry on Project Cybersyn notes that the computer just made short-term, probabilistic predictions based on real-world data from the previous iteration. This is not the engine -- it is the transmission -- in the overall equation.

As far as Marxists are concerned I think we should look at everything *material* that goes into the workflow:

- natural / raw-ish resources

- energy

- means of mass production


--- These three items are collected and used by labor to produce finished products and services. ---


- Once produced the question of distribution of products and services comes into play -- how is society's wealth distributed, and to whom, and for what reasons?

- There is also a feedback loop here, of some sort, so that labor (and, currently, capital) has information about the use / consumption of products and services that can then be used to make improvements in the manufacturing and distribution processes.


The Internet / corporate-type digital infrastructure is excellent for expediting the * logistics * of all of this, but it does not provide the intelligence and decision-making that should only come from the workers themselves (based on feedback from consumers and the public at large).

[ckaihatsu]

Programming Class Struggle and Social Revolution

Immediate Demands

In keeping the common, historic aim of manual, clerical, and professional workers consciously in full view, pro-reform Social-Labourists hereby proceed from the above to issue political and economic demands for immediate but real, reform-enabling reform. Because the fulfillment of these demands and more will not fall charitably or spontaneously from heaven, all Social-Labourists are firmly convinced that their complete, consistent, and lasting implementation can only be achieved by transnational class struggle. These demands are, to begin with:

1. The reduction of the normal workweek to a participatory-democratic maximum of 32 hours or less without loss of pay or benefits, the minimum provision of double-time pay or salary/contract equivalent for all hours worked over the normal workweek and over 8 hours a day, the prohibition of compulsory overtime, and the provision of one hour off with pay for every two hours of overtime;
2. Full, lawsuit-enforced freedom of class-strugglist assembly and association, free from anti-employment reprisals and police agents such as agents provocateurs;
3. The expansion of the right to bear arms and to self-defense in general towards enabling the formation of citizens’ militias, especially in connection with class-strugglist association, and also free from police agents such as agents provocateurs;
4. The combating of degenerative personality politics through the institution, in the various legislatures, of the closed-list, proportional-representative form that allows mere parties to arbitrarily appoint to and remove from legislatures the party-affiliated legislators;
5. The institution of ever-progressive measures against the still-existing aristocratic “right” to anti-meritocratic inheritance for the “upper classes,” including the abolition of all remaining monarchies;
6. Socio-income democracy through direct proposals and rejections, at the national level, regarding all tax rates on all types of income – such as employment income, individual property income such as rent, both individual and corporate business income, both individual and corporate dividend income, and both individual and corporate capital gains – annual votes which include the right to raise upper tax rates, alternative minimum tax rates, and non-employment income gross-ups or multipliers;
7. The abolition of all indirect taxation;
8. Annual, non-deflationary adjustments of the minimum wage to match real inflation (not notorious government underestimations due to faulty measures like chain weighting) and, where possible, both the restoration of the minimum wage to its original living-wage level and the institution of annual, non-deflationary adjustments on a cost-of-living basis for all other non-executive remunerations and benefits;
9. The institution of income-based or preferrably class-based affirmative action, especially in the sphere of education;
10. The encouragement of, and unconditional economic support (both technical and financial) for, worker buyouts of existing enterprises and enterprise operations, first as a counter to workplace closures.

[Die Neue Zeit]

<"Bernsteinian"> Why is that material posted in this thread (and not in "To Begin With")??? </"Bernsteinian">

[ckaihatsu]

Jacob,

I posted that excerpt because it's relevant to the discussion here.


Chris

[Lynx]

Lynx, I really think that that kind of project is *not* a revolutionary one. Mathematical modeling is a bourgeois endeavor, while taking over existing structures that happen to keep accurate track of materials and labor is a revolutionary task.
Mathematical modeling is an academic endeavour. As I have stated earlier, an economic calculation project is non-political. Research could be started in any country, whether their economies are capitalist, transitional or socialist. If it works as well as some claim it can, it would be able to serve the needs of a planned economy.

Interestingly enough, Allende tried to apply the principles of cybernetics to the Chilean economy already in the early 70s - google Project Cybersyn. (And it seems quite plausible that such an endeavour should be successful in the end.)
Have further experiments been attempted since then? Are any computerized innovations being tried in Venezuela or Cuba or elsewhere?

I'm more than happy to provide a more detailed proof of my claim that we are capable of computing, in a reasonable amount of time, all the information that is necessary to plan an economy of a decent size.
I look forward to your reply.

[Die Neue Zeit]

Jacob,

I posted that excerpt because it's relevant to the discussion here.

Chris

Very well, comrade; I have posted a new article on one of the demands on the list (but I'd also appreciate it if you posted supplementary comments in either my article thread or my minimum program thread).

[Whatever relevance "socio-income democracy" has in relation to economic calculation can be commented on here.]

[ckaihatsu]

Mathematical modeling is an academic endeavour. As I have stated earlier, an economic calculation project is non-political. Research could be started in any country, whether their economies are capitalist, transitional or socialist. If it works as well as some claim it can, it would be able to serve the needs of a planned economy.

Have further experiments been attempted since then? Are any computerized innovations being tried in Venezuela or Cuba or elsewhere?

I look forward to your reply.


Lynx,

I appreciate your motivation here, but I have to question whether all of this attention towards math is really necessary.

I will counterpose a different scenario regarding the infrastructure for mass-managing a post-capitalism economy: Why not use the existing processes that work for mega-chain corporations, including sourcing, supply chains, labor schedules, and retail outlets, and simply put it all under the control of labor (and consumers / public), through Amazon-like feedback pages?


Some minor side notes:


Mathematical modeling is an academic endeavour.

If it's an academic endeavor, then is it actually revolutionary? I would say no, because one can spend one's whole life in academic pursuits without affecting the world in any forward- / labor-leaning way.



As I have stated earlier, an economic calculation project is non-political.

* Every * project is political in the sense that you are using your time for it instead of doing something more explicitly, and effectually, political.



If it works as well as some claim it can, it would be able to serve the needs of a planned economy.

Are you questioning whether the total supply will match the total demand, worldwide? Your quest for a mathematical model seems inappropriate since we all know that the problem is *not* one of overall capacity, it is a problem of distribution.

[ckaihatsu]

Very well, comrade; I have posted a new article on one of the demands on the list (but I'd also appreciate it if you posted supplementary comments in either my article thread or my minimum program thread).

[Whatever relevance "socio-income democracy" has in relation to economic calculation can be commented on here.]


Jacob,

I would just much rather re-post and support the maximal program that you (using Marxist sources) have laid out in the 'Immediate Demands'. I found it to be relevant to the discussion here as an appropriate 'next step' since so much of the topic is so far-reaching.

Comradely,


Chris

[Lynx]

I will counterpose a different scenario regarding the infrastructure for mass-managing a post-capitalism economy: Why not use the existing processes that work for mega-chain corporations, including sourcing, supply chains, labor schedules, and retail outlets, and simply put it all under the control of labor (and consumers / public), through Amazon-like feedback pages?
It is not all that different a scenario. I'm of the belief that the current infrastructure is incomplete.


If it's an academic endeavor, then is it actually revolutionary? I would say no, because one can spend one's whole life in academic pursuits without affecting the world in any forward- / labor-leaning way.
There are no guarantees that an academic endeavor will have revolutionary consequences - that is not a reason to avoid pursuing one. I appreciate improved weather forecasting, for instance. I do not appreciate the mystical orthodoxy that dominates modern economics and wish there were a concrete alternative.

* Every * project is political in the sense that you are using your time for it instead of doing something more explicitly, and effectually, political.
You are asserting an opportunity cost. My response is that I believe the effort required is worthwhile.


Are you questioning whether the total supply will match the total demand, worldwide? Your quest for a mathematical model seems inappropriate since we all know that the problem is *not* one of overall capacity, it is a problem of distribution.
An aspiring socialist country such as Venezuela faces problems related to its transition from capitalism to socialism. Some of these problems are technical economic ones.
When all is said and done, one remaining problem will be that of determining opportunity cost. Getting rid of the profit motive requires a new decision making model significantly more efficient than the current one.

p.s. Being in favor of a planned economy is a point of contention for the left.

[ckaihatsu]

Certainly I appreciate and wish the best to the working class and people of all countries that have undertaken tremendous efforts to socialize their societies -- it's no easy task, and Venezuela in particular has come a long way, post-failed-coup-of-2002.

I understand your point about calculating / quantifying opportunity cost. I think of it in terms of economic capital vs. political capital.

In the simplest terms -- possibly *too* simplified -- there is a trade-off between economic capital and political capital if one is trying to transition to a different type of economy. In the realm of the status quo, it's easy -- the two are aligned because of imperialism / fascism and hegemony. But in moving away from that all revolutionaries / reformers take on risks, and therefore political and economic costs, in carving out an island -- so to speak -- from the larger capitalist economy.

Consistent political work in a revolutionary / leftward direction can be quantified, at least in terms of labor-hours, and in terms of hegemonic money not needed as a result of dropping out of the mainstream economy.

At the same time there are costs incurred, such as risks taken on by not being "part of the crowd", or funds needed to pay bail if one is arrested in the course of political street actions, etc.

In order to just start somewhere, maybe we could use existing GDP-per-capita as a sort of baseline, in order to have something to compare alternative efforts to -- ?

I don't relish this sort of project you're taking on, but if I can be of any assistance in just thinking things out, feel free to continue to post about it here, Lynx.

[Lynx]

This is preliminary on my part. I'm studying Towards a New Socialism.
Energy accounting is another topic I hope to learn more about.

[ckaihatsu]

Okay, I gotta admit -- you got me thinking here, Lynx....

I would define the equation as being one in which we'd need to be able to keep track of all of the standard balance-sheet stuff, for economic factors, but also in a way that has a second, parallel balance sheet for political assets and liabilities, along with risks and rewards.

Overall I think we need to picture the whole endeavor as akin to building and living on rafts just offshore of the mainland. It seems crazy and vulnerable at first glance, but we know that, because of Marx's Declining Rate of Profit, the mainland / mainstream is drifting ever leftward while, at the same time, its right edge is crumbling and quickly falling off, like an eroding cliff face.

The reward is when the mainland / mainstream finds itself drifting closer and closer to the left, to the rafts we've built just offshore. That's where our "investments" of political and economic capital really pay off, because there's no going back rightward anymore, especially in an environment of credit and solvency crises, with question marks of valuation hanging over everything capital- and imperialist-based.

Please see these as references:


A Business Perspective on the Declining Rate of Profit
http://tinyurl.com/2bvq3a


Ideologies & Operations
http://tinyurl.com/yqotq9


Ideologies & Operations -- Dynamics
http://tinyurl.com/32qsdb


Ideologies & Operations -- Dynamics (Page 1 of 2)
http://tinyurl.com/275drt


Ideologies & Operations -- Dynamics (Page 2 of 2)
http://tinyurl.com/2vd8dg

[ckaihatsu]

THE ORGANIZER NEWSPAPER
P.O. Box 40009
San Francisco, CA 94114
Tel. 415 641 8616
www.socialistorganizer.org


Emergency Plan to Bail Out Working People
And the Economy is Needed Urgently

There is an urgent need to present an alternative plan to bail out working people and the economy - NOT Wall Street. What would such an alternative plan look like? Here are some essential components which we submit for the widest discussion among unionists and activists:

* Nationalize the Federal Reserve and Establish a Federally Owned, Public Banking System

To succeed with a national recovery plan, it will be necessary to nationalize the banks and financial institutions -- without compensation.

Assuming ownership of the banking system means taking all the speculators and predatory institutions out of the financial equation, not keeping them in the saddle with bailouts so that tomorrow they can again continue swindling the shareholders and the taxpayers. Assuming ownership means enabling the government to enact an emergency plan that addresses the needs and demands of working people and the oppressed.

Only through a State-run Emergency Board will the real economy be able to get back on its feet, removed from its addiction to war and speculation.

Establishing a national bank -- that is, a rational banking system -- would address a number of other pressing problems, including the infrastructure crisis and the energy crisis.

The "free market" is what has created the worst financial crisis since the 1930s. The people who created this mess should not be allowed to continue to run the financial system.

* End all Funding for the U.S. Wars in Iraq and Afghanistan, Close U.S. Military Bases Around the World

In their debate on Sept. 26, both Bush and Obama vowed to increase the military spending in the Middle East. Their only difference was over how much and when to transfer the massive war funding from Iraq to Afghanistan and Pakistan. McCain argued that the main military front remained Iraq, whereas Obama argued that this front had shifted to the surrounding countries, including Iran. But an intensification of the war in Afghanistan, Pakistan and Iran would lead to an even-more deadly quagmire.

The twin parties of the war are committed to U.S. imperialism's "endless war" on the grounds that our national security requires that we wage and intensify the so-called "war on terrorism." But the occupations of Iraq and Afghanistan are hated by the peoples in those countries and by working people the world over. These wars have little support at home and are ruining our domestic economy.

All the funds that have been allocated to the U.S. wars and occupations around the world, and all the military bases needed to sustain these wars, must be re-oriented immediately toward meeting human needs -- by funding public education, libraries, hospitals, roads, public housing, Reconstruction for the Gulf Coast, social services and more.

* Moratorium on All Home Foreclosures, Utility Shut-Offs and Evictions

Cynthia McKinney, presidential candidate of the Power to the People coalition, has put forward a comprehensive plan to deal with this burning issue for millions of working people. Her plan calls for the following:

1) enactment of a foreclosure moratorium now;

2) elimination of all ARM mortgages and their renegotiation into 30- or 40-year loans. (The government could refinance mortgages to provide such long-term loans at reasonable rates of interest -- but at the current market value of their homes, not the inflated prices of the boom.);

3) establishment of criteria and construction goals for affordable housing;

4) elimination of all discriminatory practices in the publicly owned credit industry;

5) full funding for initiatives that eliminate racial and ethnic disparities in home ownership; and

6) recognition of shelter as a right according to the United Nations Declaration of Human Rights to which the U.S. government is a signatory, so that no one sleeps on U.S. streets.

A resolution adopted by the San Francisco Labor Council on June 9, 2008, also calls on the president and the Congress to "implement a moratorium on public housing demolition, and that such demolitions shall not be allowed to proceed until all such public housing units have first been replaced with affordable units, on the basis of one-for-one replacement at comparable rents."

* Massive National Reconstruction Public Works Program

A WPA-type program is needed urgently to rebuild the nation's schools, hospitals and crumbling infrastructure and to put millions of people back to work, with a living wage and with the unfettered right to join a union and to wield their collective strength, including through strike action (for which the repeal of Taft-Hartley is essential), to press for better wages and working conditions

A job must be guaranteed for everyone at a living wage of $15 per hour.

The country also needs a National Mass Transportation System administered by public-labor-community boards throughout the United States.

Cindy Sheehan, who is running for U.S. Congress against Nancy Pelosi as an independent in San Francisco's District 8, includes the following demands in her Labor Platform.

"The growing environmental and energy crisis cannot be solved under private ownership of the energy companies. We need a mass transportation system. This will be financed by the nationalization of the oil, gas, and other energy companies -- all of which have thwarted mass transportation to keep profits flowing to their corporate investors."

* Repeal NAFTA and other "Free Trade" Agreements

The evidence is unmistakable: NAFTA has destroyed jobs, labor rights and standards, democratic rights, environmental and health standards -- in all three signatory countries.

James P. Hoffa, president of the Teamsters' union, is urging support for the NAFTA Accountability Act, or H.R. 4329. This legislation requires that action be taken to ensure that workers benefit from NAFTA by the end of 2008, or the U.S. must withdraw from NAFTA. (This deadline could be extended to the end of 2009.) This could be a positive step toward repealing NAFTA.

NAFTA and other similar "Free Trade" agreements are designed to depress wages and oppress workers in every country that signs such agreements. They must be repealed!

* Stop the ICE Raids and Deportations!

Tens of thousands of immigrant workers are being rounded up by Immigration and Customs Enforcement (ICE) officials across the country. These raids must be stopped today!

The only "crime" committed by undocumented immigrants is to work hard to support their families. The real criminal is the U.S. government and its Bureau of Immigration and Customs Enforcement (ICE), which is terrorizing and splitting up families across this country.

The raids are a crucial component of the reactionary drive to scapegoat immigrants for the problems caused by the crisis-ridden, profit-driven capitalist system: rising poverty, job losses, deepening inequality, and lower wages.

* For Universal, Single-Payer Healthcare!

H.R. 676, a bill that has overwhelming support in the U.S. labor movement, calls for taking the insurance companies out of the healthcare equation and creating a universal, single-payer healthcare system. Such a plan could be instituted immediately.

-- The Editors

[Lynx]

I've heard noise about investing in infrastructure projects, with an emphasis on funding from the private sector. Protectionism may get a boost.
I'm afraid no other items from this list will be considered. The situation will have to be a lot worse for large numbers of people in order for these demands to be politically viable.

[Die Neue Zeit]

^^^ That's the point, comrade (though on the basis of my programmatic work I don't want to transform the "immediate" section into one huge laundry list :( ). I'm thinking about the viability of extending the CPP's reach to 100% ownership of every natural monopoly in Canada, energy, and so on (a spin on Trotsky's stuff) - in the international context, that would mean the establishment of one single government or multi-government pension fund having full equity ownership in natural monopolies, energy, and so on. I'm also thinking about the viability of monopolizing all B2B and B2C credit in the hands of preferrably transnational central banks owned by the constituent governments, such as the ECB.

[Both items would be added to the bottom of the "immediate" section, and not be sandwiched somewhere.]

[mikelepore]

Mike, I think you're referring to Stalinism here. Don't you think that the working class of the world could liberate itself and run its own labor in ways that are *better* than that of Stalinist or capitalist rule?

Certainly the workers can administer production must better than Stalinism or capitalism.

I don't understand how your post is a reply to my post.

The sequence was:

Jacob asked me whether I thought the labor time credits that socialism will use in place of traditional money, proposed by Marx in _Critique of the Gotha Programme_, should be transferable among individuals and why. I gave Jacob reasons why I believe individuals should be able to transfer the credits to others. Then Jacob asked me: didn't my answer neglect Marx's critique of capitalism? I explained, no, the critique of capitalism isn't that the currency is transferable. The critique of capitalism is that one class owns the means of life, and the productive class is forced to to work for the owning class in order to survive. Socialism would remove all of the oppressive characteristics even if it had a circulating currency.

[ckaihatsu]

Thanks for the clarification, Mike.

[ckaihatsu]

http://www.fightbacknews.org/2008/11/capitalist-pigs.htm

Commentary on economic crisis: "Capitalist Pigs"

By Adam Price

Yes, I haven't heard, much less said "capitalist pig" for more than 30 years. But I couldn't help thinking it when I heard that Goldman Sachs, Morgan Stanley and Merrill Lynch (three former Wall Street investment banks; Merrill Lynch has been taken over by Bank of America) are planning to pay $20 billion in bonuses. To make matters worse, Goldman Sachs and Morgan Stanley are receiving $10 billion each in bank bailout money, while Bank of America will receive $25 billion.

But big bonuses aren't the only way bankers are going to spend with government help. PNC bank is taking over struggling National City Bank for $5 billion after getting $7 billion from the government bailout. The government refused to give National City, which needs the money, any help, while giving to stronger banks such as PNC. The bailout is speeding up the process of consolidation in the banking industry, for example in my community (San Jose, California) three big banks (Wells Fargo, Bank of America and JP Morgan Chase) have 58% of all bank deposits. Consumers are paying for this concentration, as studies have shown that the bigger the bank, the higher the fees they charge. This also means more bailouts in the future as these banks are considered 'too big to fail.'

But worst of all is the fact that banks are not short of cash, they are simply hoarding more and more money while individuals and small businesses suffer from a lack of credit. The latest statistics from the Federal Reserve show that U.S. banks are sitting on almost $300 billion in cash. These are so-called 'excess reserves' that banks could loan out, but are not willing to. A year ago these excess reserves were only $1.5 billion.

The Federal Reserve has loaned banks over $100 billion in cash, and another $250 billion in U.S. government bonds that banks could turn into cash. Despite this $350 billion injection of credit from the Fed and another $250 billion that the Treasury is planning to give to banks under the bailout program, banks are not lending. Mortgage interest rates are higher than they were a year ago and banks are continuing to cut credit to households and small businesses.

The problem is that big banks are not really in the business of lending. They, like other capitalist corporations, are in the business of making a profit. They don't see a profit in making more loans, so the economy tanks. This is the irrationality of capitalism: We have banks with hundreds of billions of dollars that they are not willing to lend as people lose their jobs, their homes and their businesses because of lack of credit. We have millions of empty houses while more and more people are being foreclosed on or evicted and have to scramble to find new housing, live with relatives or end up on the street. More and more, those who look can see the need for a socialist economy, one where people's needs, not corporate profits, are in charge.

__________________________________________________ ___
Fight Back News Service | www.fightbacknews.org

If you received this from somebody else, you can subscribe to Fight Back News Service at
http://www.fightbacknews.org/fbns/?p=subscribe&id=1

[Die Neue Zeit]

Chris and Lynx, you may find my response here interesting:

http://www.revleft.com/vb/transitional-demands-t93441/index.html

[Lynx]

So many things are interesting, this thread could be split into half a dozen topics!

[ckaihatsu]

Chris and Lynx, you may find my response here interesting:

http://www.revleft.com/vb/transitional-demands-t93441/index.html


Yup, thanks, Jacob.


Chris

[malice_iw]

This should be an easy one for better informed comrades here.

Considering the current stage of IT development, it should be easy to keep track of consumers' wishes and preferences in a planned economy. But how to make them set priorities, i.e. responsibly determine what they want more and what less?

[ckaihatsu]

This should be an easy one for better informed comrades here.

Considering the current stage of IT development, it should be easy to keep track of consumers' wishes and preferences in a planned economy. But how to make them set priorities, i.e. responsibly determine what they want more and what less?


I guess I wouldn't mind fielding this one -- big surprise there, huh?

The overall problem would be matching supply to demand in a post-capitalist economy.

Consumer items could be prioritized by each consumer, for personal use. Obviously, the most life-sensitive items would be ranked highest: Fresh water (where there is none), life-saving medicines, life-saving medical equipment, food, and so on, would be given the most urgency, and likewise from the supply side for manufacture, supply, and distribution.

Again, it would be as easy as using any retail outlet website. Instead of placing an order with a credit card it could simply be placed as a consumer ranking of priority. The rest would be a matter of supply, contingent on worker-factory agreement and the fulfillment of necessary labor for producing the stuff, whatever it is.

The overthrow of capitalism, with all of its wastefulness regarding human need, would easily free up enough supply to provide a decent, humane standard of living for every single individual on the planet.

I've addressed the general issue of what items should be prioritized, here:


Supply prioritization in a socialist transitional economy

http://tinyurl.com/5mjhhh


This overall prioritization, or hopefully one similar to it, would have to be decided on by the world's working class. Once demand from all 6,602,224,175 (July 2007 est.) people on earth has been tabulated every effort could be made to match the supply prioritization to the demand prioritization, on an ongoing basis.

Visually we could picture it as giant haystacks of different, desired stuff filling up holes of varying sizes in the landscape.

Consumer usage and unfulfilled demand would tell us which haystacks would have to be replenished, and how quickly. That would allow us to schedule factory up-time and put out requests for labor, on an ongoing basis.

Extending it outward we could also ask how closely a network of capable factories, with a network of sufficient resources, would be able to fulfill the requests of a given geographical area.

Optimizing the use of factories, resources, and labor -- and for scheduling the creation of new factories -- would involve mathematical scenarios, but nothing that hasn't already been covered before.

See:

http://en.wikipedia.org/wiki/Travelling_salesman_problem

http://en.wikipedia.org/wiki/Fuzzy_logic

Fuzzy logic is a form of multi-valued logic derived from fuzzy set theory to deal with reasoning that is approximate rather than precise. Just as in fuzzy set theory the set membership values can range (inclusively) between 0 and 1, in fuzzy logic the degree of truth of a statement can range between 0 and 1 and is not constrained to the two truth values {true, false} as in classic predicate logic.[1]

[...]

Degrees of truth

Both degrees of truth and probabilities range between 0 and 1 and hence may seem similar at first. However, they are distinct conceptually; truth represent membership in vaguely defined sets, not likelihood of some event or condition as in probability theory. For example, let a 100-ml glass contain 30 ml of water. Then we may consider two concepts: Empty and Full. The meaning of each of them can be represented by a certain fuzzy set. Then one might define the glass as being 0.7 empty and 0.3 full. Note that the concept of emptiness would be subjective and thus would depend on the observer or designer. Another designer might equally well design a set membership function where the glass would be considered full for all values down to 50 ml. It is essential to realize that fuzzy logic uses truth degrees as a mathematical model of the vagueness phenomenon while probability is a mathematical model of randomness.

[...]

[malice_iw]

Chris,

I'm not educated enough to raise any serious theoretical objections, but I'm not sure about the following practical issues...

It seems your supply prioritization scheme would be rather unpopular within developed nations... They have their most basic needs satisfied already, they have a higher level of wealth and they cherish quality... How would they benefit? Possibly, in terms of better environment and more quality time?

Have you taken into account the experience of the former Eastern-bloc countries? Were the basic needs of the population met? Yes. Were massive quantities of basic goods available? Yes. Was there less inequality? Yes. But people were still unhappy. Did they assign too much value to material things as a means of self-expression, in the absence of freedom of speech? Just a guess..

[ckaihatsu]

Chris,

I'm not educated enough to raise any serious theoretical objections, but I'm not sure about the following practical issues...

It seems your supply prioritization scheme would be rather unpopular within developed nations... They have their most basic needs satisfied already, they have a higher level of wealth and they cherish quality... How would they benefit? Possibly, in terms of better environment and more quality time?


Malice,

I've noted that the diagram is for a *socialist* transitional period -- this would *necessarily* have to be in accordance with the demands of the world's working class, in a revolutionary upheaval to overthrow capitalist rule.



Have you taken into account the experience of the former Eastern-bloc countries? Were the basic needs of the population met? Yes. Were massive quantities of basic goods available? Yes. Was there less inequality? Yes. But people were still unhappy.


I can't speak to your entire historical thesis here -- a complete response would be *very* wide-ranging in scope. I would like to note, however, that the Eastern bloc was under Stalinist rule at the time and so did *not* enjoy true working-class control of the economy.



Did they assign too much value to material things as a means of self-expression, in the absence of freedom of speech? Just a guess..


This, too, is a very intricate question, one that I would not presume to answer authoritatively. I can address the topic in a general fashion, though -- here is a passage that speaks to the general theme you've raised:

[Men] rage against Materialism, as they call it, forgetting that there has been no material improvement that has not spiritualised the world, and that there have been few, if any, spiritual awakenings that have not wasted the world's faculties in barren hopes, and fruitless aspirations, and empty or trammelling creeds. What is termed Sin is an essential element of progress. Without it the world would stagnate, or grow old, or become colourless. By its curiosity Sin increases the experience of the race. Through its intensified assertion of individualism, it saves us from monotony of type.

Wilde, "The Critic As Artist"

http://www.gutenberg.org/dirs/etext97/ntntn10.txt

[Hyacinth]

]
http://en.wikipedia.org/wiki/Travelling_salesman_problem

Very interesting, I wasn't familiar with this before, I'll have to look into it some more.

But now to the promised quick demonstration of the availability of sufficient data processing capability for socialist planning.

Cockshott and Cottrell, in Toward a New Socialism, bring up that solving the equations involved in an economy of 1 million distinct types of output via Gaussian elimination (which isn't exactly the most efficient way of solving linear equations, but we can ignore that for the purpose of the illusration) would, on a computer of about 500 MFLOPS take approximately 50 billion seconds, i.e. 16 thousand years (pp. 56-57). Rather obviously, far too slow.

The world's fastest supercomputer (http://tech.slashdot.org/tech/08/11/14/2148226.shtml) at the moment can run at 1.64 PFLOPS, that is approximately 3.28 million times faster than computer in the above example. Which means the same set of linear equations could be solved in ~15.25 thousand seconds, i.e. ~4.25 hours. And this time will only continue to decrease with continued advancement in computer hardware, allowing us to simulate more and more compelx systems.

The biggest problem facing socialist planning today, from a theoretical perspective, is not the availability of sufficient data processing or gatheirng capability, but rather instead the development of economic models that would allow us to do the planning in the first place.

[ckaihatsu]

Cockshott and Cottrell, in Toward a New Socialism, bring up that solving the equations involved in an economy of 1 million distinct types of output via Gaussian elimination (which isn't exactly the most efficient way of solving linear equations, but we can ignore that for the purpose of the illusration) would, on a computer of about 500 MFLOPS take approximately 50 billion seconds, i.e. 16 thousand years (pp. 56-57). Rather obviously, far too slow.


Excuse my skepticism here, Hyacinth, but I don't know if the problem is being set up properly in the formulation you're referring to. My concern is that it is too linear.

I'd like to emphasize that the crux, or independent variable, of the problem is on the demand side -- what things are people demanding, and in what priorities for the items?

We can set up a chart of people (on the rows) and items (on the columns) -- each intersection of person and item should tell us something about the prioritization (human need) of that item, for that person.

If the supply of something is readily abundant then the chart isn't even needed -- my favorite example is air, which is so abundant and readily available that we don't even need to construct for its manufacture and distribution at all.

More realistically we would have to consider the specifics of *supply* of an item for each particular person / consumer -- so instead of a generic "apple" in the supply column, we would have to specify "apple from ABC orchard" for a person, given a certain geographical region. See this diagram for an illustration:


Prioritization Chart

http://tinyurl.com/2q48sf


Initially the system of supply might not be that efficient -- or it might, as it could piggyback on developments in the supply chain that already exist due to capitalist corporations -- but over time it could be fine-tuned through observation and adjustments. This very task might wind up being the main role for the post-capitalist political economy, given the full computerization and automation of all lower-level functions (formerly human work).



The biggest problem facing socialist planning today, from a theoretical perspective, is not the availability of sufficient data processing or gatheirng capability, but rather instead the development of economic models that would allow us to do the planning in the first place.


Again, I have to be skeptical here, Hyacinth. The formal configuration of matching up consumer demand to available supply is not that computationally intensive. It's already being done by retail chains through their websites and IT infrastructure -- extending this model to supply for the larger pool of human need, instead of just for those with money to spend, would require enlarging the existing model, but it would not be prohibitive.

Given the starting point of consumer discretion we could step successively backward to include the areas of available inventories, available assets (factories, etc.), available labor, and available resources.

[Hyacinth]

Excuse my skepticism here, Hyacinth, but I don't know if the problem is being set up properly in the formulation you're referring to. My concern is that it is too linear.
Yes, I have that worry as well, the economy is likely a nonlinear system (or at least log linear), and I am not clear as to what complexity class it would belong to, largely because I'm not as familiar with econometrics as I'd like to be.

My illustration was not meant to address any concrete problems of planning, only to show the tremendous strides that we have made in data processing capability, such that at least one of the objections of the economic calculation problem no longer applies.

I don't think we fundamentally disagree, especially on the point that much of the necessary mechanisms for planning are already in place and being used under capitalism (e.g. the Wal-Mart model). When I said that coming up with a good economic model is the biggest problem for planners today, I did not meant to imply that it was a big problem. Ultimately, I think we could effect a working planned economy at preset, and one that outperforms markets.

[ckaihatsu]

Yeah, absolutely. I think that the 'traveling salesman' stuff would mop up most of the complexity involved in all of this -- the markets are already becoming a historical curiosity, even as speak...(!)

[Die Neue Zeit]

Last night, while I worked on my recent Article Submission on proportional representation, I had to read The Labour Revolution by the senile renegade Mr. Kautsky just to see how many illusions he entertained. It just so happens that this gentleman had a section in Chapter 10 on labour credits. Here he follows up on his nebulous remarks in the otherwise fine work known as The Social Revolution... by parroting the BS of Mises and Hayek:

http://www.marxists.org/archive/kautsky/1924/labour/ch03_j.htm#sc


Although money will exist in a socialist society, its functions will not be quite the same then as they are to-day.

Its most important function under the present mode of production is its transformation into capital. Each unit of capital must commence to function as a sum of money. If it is lent out at interest, it retains the money form, and becomes money capital transformed into commodities It may, however, also be which are to be resold at a profit – this constitutes mercantile capital. Finally, it may be employed in the purchase of means of production and labour-power, to produce new commodities with a surplus value -this constitutes the highest form of capital, industrial capital.

Whichever forms capital may assume in the course of its circuit it must always possess the money form at the outset. On the other hand, the opportunities for employing money as capital are to-day so very profuse that almost all money that is not destined for purposes of immediate consumption may become capital, at least in the form of interest-bearing capital.

Thus it frequently happens that money is identified with capital. Consequently, the abolition of the system of capital must involve the abolition of the system of money.

[...]

As the measure of value and means of circulation of products money will continue to exist in a socialist society until the dawn of that blessed second phase of communism which we do not yet know whether will ever be more than a pious wish, similar to the Millennial Kingdom.

[...]

But would the same money be necessary for this purpose as exists or ought to exist to-day, that is, money minted from a particular commodity, which is usually gold? Instead of using money as the embodiment of labour, could not labour itself be made to serve as a measure of value, involving the creation of labour-money which attested the amount of work performed?

[...]

But is it practicable? Let us ignore the complications which would arise from collective labour or from different scales of wages, as heavy or unpleasant work would have to be more highly remunerated than easy and pleasant work. Consider what colossal labour would be involved in calculating for each product the amount of labour it had cost from its initial to its final stage, including transport and other incidental labour.

[...]

For that value which Marx and classical economy had in mind, no determining factor other than labour has yet been found. The theory of labour-value has stood the test, inasmuch as it has afforded us a closer insight into the laws of capitalist enterprise than any other theory. We may therefore regard labour-value as a reality. All the same, it remains merely a tendency. It is real, but not tangible and exactly measurable. Measurements are only possible in the case of its temporary phenomenal form, price.

We are unable exactly to calculate and to fix the value of a commodity. Value is a social magnitude which can only be detected through observation of the conditions of production. The law of value operates in the following manner. Whenever the market prices of commodities exhibit wide or continuous deviations from their value, certain factors of resistance are set up, in consequence of which alterations are introduced into the conditions of production, which have the effect of counteracting the deviation of price from value.

In the light of this character of value, all attempts are doomed to failure which aim at “constituting” the value of each separate commodity, that is, to determine exactly the quantity of labour contained in it, and to issue a labour token as a means of circulation of the product thus determined. The labour involved in such an effort would be interminable. Yet the new labour token could not be allowed to function until the value of all products had been constituted.

Instead of grappling with the hopeless task of measuring running water with a sieve – and the constitution of value would be a work of this nature – a Labour regime should retain the means for the circulation of commodities which it finds ready to hand, viz. their price expression, which is to-day measured in money, and which is only concealed and confused, but never abolished, by the most drastic system of inflation.

Why I've quoted all this is that Paul Cockshott himself mentions this work in the link below and in several other links:

http://reality.gn.apc.org/econ/mfs.htm


Now the lesson which Marx and Engels read to the labour-money socialists, concerning the beauties of the supply/demand mechanism under capitalism and the foolishness of the arbitrary fixing of prices in line with actual labour content, are obviously rather pleasing to the critics of socialism. It appears that Kautsky also read the critique of labour money as casting doubt on the Marxian objective of direct calculation in terms of labour content, so that by the 1920s the figure widely regarded as the authoritative guardian of the Marxian legacy in the west had effectively abandoned this central tenet of classical Marxism.

[ckaihatsu]

Very good point, Jacob, and thanks for the highlighting to make your case clear.

At the same time Kautsky seems to abandon the quantification of labor value in this part that you've included:



a Labour regime should retain the means for the circulation of commodities which it finds ready to hand, viz. their price expression, which is to-day measured in money, and which is only concealed and confused, but never abolished, by the most drastic system of inflation.


My understanding is that this implies a political economy to oversee the circulation of commodities, as opposed to a system of (floating) prices, subject to the vagaries of capitalism's inflation (and hyper-inflation).

[Die Neue Zeit]

Contrast above, however, to the remarks in Social Revolution (at least here his "monetary" remarks don't address the issue of labour credits, which could actually fit into his scenario):

http://www.marxists.org/archive/kautsky/1902/socrev/pt2-1.htm#s4


But great advances in this direction demand building and technical changes which cannot be brought about between one day and the next. It will be neither an easy or rapid task to make the work in factories and mines very attractive. Beside the attractiveness of labor another power of attraction will come into operation through the wages of labor.

I speak here of the wages of labor. What, it will be said, will there be wages in the new society? Shall we not have abolished wage labor and money? How then can one speak of the wages of labor? These objections would be sound if the social revolution proposed to immediately abolish money. I maintain that this would be impossible. Money is the simplest means known up to the present time which makes it possible in as complicated a mechanism as that of the modern productive process, with its tremendous far-reaching division of labor, to secure the circulation of products and their distribution to the individual members of society. It is the means which makes it possible for each one to satisfy his necessities according to his individual inclination (to be sure within the bounds of his economic power). As a means to such circulation money will be found indispensable until something better is discovered. To be sure many of its functions, especially that of the measure of value, will disappear, at least in internal commerce. A few remarks concerning value will not be out of place here since they relate to what will be of much importance in our future discussion.

There could be no greater error than to consider that one of the tasks of a socialist society is to see that the law of value is brought into perfect operation and that only equivalent values are exchanged. The law of values is rather a law peculiar to a society for production for exchange.

Production for exchange is that manner of production in which with a developed division of labor independent producers produce for one another. But no manner of production can exist without a definite proportionality in production. The number of labor powers at the disposal of society is limited, and production can only be continued when a corresponding number of productive forces are active in each branch of existing production. In a communistic society labor will be systematically regulated and the labor power be assigned to the individual branches of production according to a definite plan. In the production for exchange this regulation is obtained through the law of value. The value of each product is determined not by the labor time actually applied to it but by the socially necessary time for its production. With the modification that this law receives in capitalist production by profits rye are not concerned because this would only unnecessarily complicate the analysis without bringing any new knowledge to the question. The socially necessary labor time in each branch of labor is determined on the one side by the height of its technique in any society and the customary exertion of labor, etc., in short through the average productive power of the individual laborers; on the other side, however, by the number of products demanded by the social necessity of a particular branch of labor, and finally by the total number of labor powers at the disposal of society. Free competition sees to it to-day that the price of products, that is to say the amount of money that one can exchange for them, is continually tending towards the value determined by the socially necessary labor time. In this manner the result is attained that the production in each department of labor, in spite of the fact that it is not regulated from any central point, never goes very far, or continues long away from the proper level. Without the law of value the anarchy that rules in the production for exchange would soon end in an inextricable chaos.

An example will make this plain. We will make it as simple as possible. As the sum of social production only two different forms of goods are necessary, so far as I am concerned – trousers and suspenders.

Considering then that a society demands as the socially necessary labor within a definite time for the production of trousers 10,000 labor days and for suspenders 1,000, that is to say, this amount of labor is necessary in order to satisfy the social need for trousers and suspenders at the present stage of the productivity of labor. If the product of the labor day is worth one dollar, the value of the trousers will be $10,000 and of the suspenders $1,000.

If the individual laborer deviates from the social form in his production and produces for example one-half as many products in a labor day as his colleagues, then, the price of his product for a day’s labor would be only the half of that inhering to what was produced by the others in a day of labor. This is well known. This happens also if the proportionality of labor is abnormal, for example, if the manufacturers of trousers attract more labor power today than is socially necessary this labor power must be taken away from other places so that the number of labor powers at the disposal of society in this line would be diminished. Take it in the simplest possible form, that they are all drawn away from the tailors. In place of the socially necessary time of 10,000 labor days here and the 1,000 there, we find only 5,000 actual labor days here and 3,000 there. The world is swamped with suspenders and we do not have enough trousers. What will be the result? The price of suspenders sinks and that of trousers rise. The 3,000 actual salable labor days in the manufacture of suspenders will then represent only the value of the 1,000 socially necessary and the value of the individual suspenders will sink to one-third of their former value. The prices will correspondingly sink below these one-third. The value of the trousers will, however, be determined as before by the socially necessary 10,000 and not by the actually supplied 8,000 labor days and as a result the individual producers will be worth five-fourths of their previous price. As a result of this the manufacture of suspenders will be unprofitable and the number of labor powers devoted to it will decrease and flow again to the manufacture of trousers which has become so extraordinarily profitable.

It is in this manner that the law of value under free competition regulates production. It is not the best conceivable way to regulate production but it is the only one possible with private property in the means of production. With social property in the means of production we shall have instead social regulation of production and the necessity of regulating production by the exchange of equal values will cease. Therewith also will disappear the necessity of money as a measure of value. In place of metallic money we can easily have token money. The price of products themselves can now be determined independent of their value. Meanwhile the amount of labor time embodied will always have an important bearing in determining its value and it is probable that the inherited price would be approximated.

While labor gives value and price to the product and labor must be paid with money there will be wages. In spite of this it would be false if one were to speak of a continuation of the present wage system as is done by many Fabians who say that the object of socialism is not to abolish the wage system but rather to make it universal. That is only superficially correct. As a matter of fact wages under the proletarian regime would be something wholly different from under capitalism. To-day it is the price of the commodity – labor power. This is determined in the last analysis by the cost of subsistence of the laborer, while its minor variations depend upon the operation of supply and demand. In a society ruled by the proletariat this would stop, as the laborer mould no longer be compelled to sell his labor power. This labor power would cease to be a commodity whose price is determined by its cost of re-production, and its price would become independent of the relation between supply and demand. That which to-day determines in the last analysis the height of wages is the number of products to be divided among the laboring class, the larger this number the higher can and will the general level of wages rise. All things considered the proportioning of the wages of labor among the different branches of industry is largely influenced by supply and demand, and since the laborers cannot be assigned by military discipline and against their wishes to the various branches of industry, so it may happen that too many laborers rush into certain branches of industry while a lack of laborers is the rule in others. The necessary balance can then only be brought about by the reduction of wages where there are too many laborers and the raising of them in those branches of industry where there is a lack of laborers until the point is reached where every branch has as many laborers as it can use. But the relation between supply and demand has really no influence upon a universal levelling of the wages of the entire laboring class which is determined only by the amount of existing product. A universal decline in wages as the result of over-production is impossible. The more there is produced the higher in general are the wages.

Now the following question arises. If the continuous progress of production is to be secured it will then be necessary to hold the laborers to production by a universal raising of wages. Whence then shall this increase of wages be paid and whence shall come the necessary amount of product? If we accept the most favorable conditions for the new regime, which we have not done, with all property confiscated, and with the total income of the capitalists flowing to the laborers, this in itself would give a very handsome rise in wages. I have pointed out in my writings on “Reform and Revolution” the statistics of England in the year 1891 where the amount of the income of the laborers was seven hundred million pounds sterling and where the amount of the income of the capitalists was in the neighborhood of eight hundred million pounds sterling. I have further shown that these statistics in my opinion were painted too rosily. I have reason to believe that they calculate the wages too high and the capitalist income too low. If we take, however, these figures of 1891 they will show that if the income of the capitalist was directed to the laborers wages would be doubled. But unfortunately things are not to be done so simply. When we expropriate capital we must at the same time take over its social functions. The most important of these is the accumulation of capital. Capitalists do not consume their entire income. A portion they lay aside for the extension of production. A proletarian regime would be obliged to do the same since it too must extend production. Accordingly for this reason even the most radical confiscation of capital could not turn its entire previous income to the laboring class. Even from the surplus value that the capitalists pocket they must again give up a portion in the form of taxes to the State. This share would increase enormously when the progressive income and property tax are the only forms of state and municipal taxation. And the burden of taxation would not diminish. I have pointed out above at what cost the re-arrangement of the school system alone could be brought about and besides this an old age insurance for all incapable of labor, etc., would be instituted.

We shall see that there is none too much remaining over from the present income of the capitalist to be applied to the raising of wages even if we confiscate capital at one stroke. There is even less if we wish to compensate the capitalist. It would then be absolutely necessary if we were to raise the wages of labor to raise production above its present amount.

It will be one of the imperative tasks of the social revolution not simply to continue but to increase production. The victorious proletariat must extend production rapidly if it is to be able to satisfy the enormous demands that will be made upon the new regime.

[ckaihatsu]

Jacob,

I appreciate the line of argument you're borrowing from Kautsky. Unfortunately the use of dated models bring with them the problem of obsolescence. In technical matters like this should we remain shackled to the past when we would do better to transcend it?



[Money] is the means which makes it possible for each one to satisfy his necessities according to his individual inclination (to be sure within the bounds of his economic power). *As a means to such circulation money will be found indispensable until something better is discovered.


The biggest problem with money is that it is anonymous, and therefore it is obsolete. The use of currency *could* be justified in bygone days, when it was actually a progressive practice that provided greater flexibility over the political hegemony of royal wealth,

But regardless of whatever class happens to be dominant in any given period, the interests of the laboring class remain the same: How do we retain the full value of what our labor is worth? No matter who the boss is our labor value will be seized away by the lord, commanded away by the slaveowner, bartered away by the mercantilist, extracted by the industrialist, and conned away by the financier

At no point do we have a tangible entry that says we did such-and-such labor, of a certain difficulty, for a certain length of time, that required a certain period of paid education and expertise, with itemized equipment costs and expenses, that produced an exact dollar amount of labor value.

These days there are no more excuses that can be passed off to us. The logistics of handling information is almost effortless, once set up correctly and put into motion. We should not be content to deal in methods that anonymize and scurry away our life and labor time, depriving us of both due compensation and of the recognition of vital information to rectify the injustice in the future.

I will again assert that we would be better off using *qualitative* methods of accounting for our labor, because that enables the political discussion of the same. The abstraction of labor value into *quantitative* data is already a defeat, with any resulting disputes already taking place on the grounds of this-or-that number, instead of on the grounds of what labor was performed, and at what social and human costs. This is the model that I would much prefer to see in use:


Supply prioritization in a socialist transitional economy
http://tinyurl.com/5mjhhh



The value of each product is determined not by the labor time actually applied to it but by the socially necessary time for its production.*


This turns out to not be a *qualitative* distinction, as the difference in terms would lead one to believe, but merely a *quantitative* distinction: Why not just measure labor time in hours, instead of in days, if a finer scale is called for? (Or minutes, even?)



All things considered the proportioning of the wages of labor among the different branches of industry is largely influenced by supply and demand, and since the laborers cannot be assigned by military discipline and against their wishes to the various branches of industry, so it may happen that too many laborers rush into certain branches of industry while a lack of laborers is the rule in others. The necessary balance can then only be brought about by the reduction of wages where there are too many laborers and the raising of them in those branches of industry where there is a lack of laborers until the point is reached where every branch has as many laborers as it can use.


I hesitate to make this following argument because it would seem to be a right-wing one, but I have to raise an objection against using a market-type exchange for matching labor supply to consumer demand, even in a post-capitalist world:

What's to prevent a spread of bad syndicalism from taking hold? In other words, if a post-capitalist society does *not* implement automation quickly enough and instead relies too much on labor for vital, specialized, and distasteful tasks, we would very easily see the re-emergence of a kind of feudalism, where certain labor guilds would hold far too much sway because of their organized control over socially needed labor. Without moving speedily to communism we would just relapse into patterns of corruption, patronage, and cronyism all over again because private ownership was not truly abolished. See:



[Syndicalism] states, on an ethical basis, that all participants in an organized trade internally share equal ownership of its production and therefore deserve equal earnings and benefits within that trade, regardless of position or duty. [...] Communism rejects government-sanctioned private ownership and private earnings in favor of making all property legally public, and therefore directly and solely managed by the people themselves.

http://en.wikipedia.org/wiki/Syndicalism


Finally, a quick note on one of the more vital -- and distasteful -- tasks required for civilized society:



> Relatively high voltage, high current electricity is passed between two electrodes, spaced apart, creating an electrical arc. Inert gas under pressure is passed through the arc into a sealed container of waste material, temperatures as high as 13,871°C (25,000°F)[1] are reached in the arc column. The temperature one meter from the arc can reach ~4000°C (~7,200°F)[2]. At these temperatures most types of waste are broken into basic elemental components in a gaseous form, and complex molecules are atomized - separated into individual atoms.

http://www.revleft.com/vb/showpost.php?p=1122483&postcount=1

[Die Neue Zeit]

Jacob,

I appreciate the line of argument you're borrowing from Kautsky. Unfortunately the use of dated models bring with them the problem of obsolescence. In technical matters like this should we remain shackled to the past when we would do better to transcend it?

That is true. The point I was trying to make is that Kautsky made a far superior argument, regardless of inherent deficiencies, in The Social Revolution than a certain gentleman did in The Labour Revolution.


The biggest problem with money is that it is anonymous, and therefore it is obsolete. The use of currency *could* be justified in bygone days, when it was actually a progressive practice that provided greater flexibility over the political hegemony of royal wealth

I know the labour-credit argument (or rather post-labour credit argument) you're trying to make here, but I'm not familiar with the historical remark you're making here. :confused:


But regardless of whatever class happens to be dominant in any given period, the interests of the laboring class remain the same: How do we retain the full value of what our labor is worth? No matter who the boss is our labor value will be seized away by the lord, commanded away by the slaveowner, bartered away by the mercantilist, extracted by the industrialist, and conned away by the financier?

:lol: (at all those different exploiters)


At no point do we have a tangible entry that says we did such-and-such labor, of a certain difficulty, for a certain length of time, that required a certain period of paid education and expertise, with itemized equipment costs and expenses, that produced an exact dollar amount of labor value.

With this and the rest of your remarks, perhaps you can help me out with the "demand" for "reform of accounting and pressure for fair prices (http://21stcenturysocialism.blogspot.com/2007/09/venezuela-and-new-socialism.html)."


I will again assert that we would be better off using *qualitative* methods of accounting for our labor, because that enables the political discussion of the same. The abstraction of labor value into *quantitative* data is already a defeat, with any resulting disputes already taking place on the grounds of this-or-that number, instead of on the grounds of what labor was performed, and at what social and human costs. This is the model that I would much prefer to see in use:

Supply prioritization in a socialist transitional economy
http://tinyurl.com/5mjhhh

You may wish to discuss this with Paul Cockshott directly.


What's to prevent a spread of bad syndicalism from taking hold? In other words, if a post-capitalist society does *not* implement automation quickly enough and instead relies too much on labor for vital, specialized, and distasteful tasks, we would very easily see the re-emergence of a kind of feudalism, where certain labor guilds would hold far too much sway because of their organized control over socially needed labor. Without moving speedily to communism we would just relapse into patterns of corruption, patronage, and cronyism all over again because private ownership was not truly abolished.

Yeah. I read Adam Buick's commentary on Bordiga (http://www.geocities.com/antagonism1/bordbuik.html), which said the same thing at one point.

[ckaihatsu]

I know the labour-credit argument (or rather post-labour credit argument) you're trying to make here, but I'm not familiar with the historical remark you're making here. :confused:


> Part of the rural population, especially the lords, had become too dependent on the goods produced in the towns for society to revert to a system of production on virtually self contained estates. As their demand for goods grew, so did their desire for cash, which they could only get by selling a growing proportion of rural output.


From:

Harman, _A People's History of the World_, pp. 155-156

The birth of market feudalism

The crisis of European feudalism was, however, different in one very
important respect from the crisis that had hit ancient Rome, Sung
China or the Arab empires of the Middle East. Recovery occurred
much more quickly.

There was economic recovery and a renewal of population growth
by the middle of the 15th century.125 There was also a rise in living
standards among the survivors of the famine and plagues, since al-
though the smaller population could only till a smaller area of land,
it tended to be the most fertile land. Food output fell by much less than
the number of people to be fed. What is more, the importance of
some towns actually increased. Part of the rural population, espe-
cially the lords, had become too dependent on the goods produced in
the towns for society to revert to a system of production on virtually
self contained estates. As their demand for goods grew, so did their
desire for cash, which they could only get by selling a growing pro-
portion of rural output. Market networks continued to penetrate the
countryside, linking each village and household to the traders of the
towns.

The growth of market networks slowly but surely changed feudal
society. A few of the merchants became rich from the international
trade in luxuries which brought products from India, south east Asia
and China to Europe.126Their wealth could be sufficient for them to
act as bankers to kings and emperors, financing wars and reaping po-
litical as well as economic rewards. Even those who could not aspire
to such heights could dominate the political life of their own towns,
making them vital allies for kings trying to expand their power.

The kings, in turn, began to see their futures not simply in fight-
ing each other or marrying into each other’s families for land, but
also in terms of gaining some of the profits from trade. Portuguese
monarchs encouraged merchants to use ships built with the most
modern techniques to find a way round Africa to the riches of Asia,
and the ‘Catholic monarchs’ of Spain financed Columbus’s voyage
west across the Atlantic.

[Lynx]

My understanding of labour credits is that workers are paid for the time they work (socially necessary work) without distinction for the type of work they do. Therefore, 5 hours of work as a janitor = 5 hours of work as a doctor. From this basic premise, it is usually surmised that incentives will be needed, above and beyond free education and job sharing.

Yeah, absolutely. I think that the 'traveling salesman' stuff would mop up most of the complexity involved in all of this -- the markets are already becoming a historical curiosity, even as speak...(!)
We might think so, yet the economic crisis demonstrates the near total hegemony of orthodox economics over any alternative. I hope the economic models mentioned by Hyacinth and others are being worked on, quietly; they aren't being mentioned by mainstream media and I find this very depressing :(

[Die Neue Zeit]

My definition of labour credits doesn't necessarily have that absolute equality of job compensation. I'm a bit skeptical on this equality, but I'd be more open to it if it were preceded by labour-credit inequality (not to be confused with the anti-capital "currency" that retains wage slavery).


We might think so, yet the economic crisis demonstrates the near total hegemony of orthodox economics over any alternative. I hope the economic models mentioned by Hyacinth and others are being worked on, quietly; they aren't being mentioned by mainstream media and I find this very depressing

Let orthodox "economics" and the politically correct media continue to discredit themselves. :)