Choices are limited. Command economies, like Nazi Germany or the Soviet Union, oppress the people. Free market economies result in market failures and abuses that lead to opression as well. Mixed economies produce better results, which is the reason why probably the world’s happiest people live in such economic systems.
I doubt that the OP supports a command economy. I think this very discussion stems in the OP exasperation with the absolutization and idealization of the free market economy, whose consequences can be as extreme and negative as those of command economies.
Those the surveys often show people in desperately poor third world countries as being happy, too.
There’s a mountain of cultural stuffthat goes into happiness, much more than economics. In some cultures, expressing unhappiness to a stranger (including a survey-taker on the phone) is considered rude.
Having said all that … there is no purely free market economy anywhere on Earth, and outside a few lunatic-fringe types, nobody is calling for it. Every developed economy in the world is mixed, and the differences between the freest-market places like Israel and Ireland, and the more centralized economies of a place like Finland are marginal. See, for example, the total tax burden in OECD countries: all between 25%-50%.
Except, of course, that there’s no such “absolutization and idealization” advocated in this thread, on this board, or pretty much anywhere.
To dust off a hoary cliche, “at the end of the day”, if I’ve earned a day’s worth of bread which I promptly feed entirely to my hungry family, have I increased my wealth?
Wealth is claim on future economic production, less what you must consume of future economic production. If you have 40 years of retirement expenses saved, and you expect to live 40 years, some would consider you wealthy in monetary terms, but you are scarcely more wealthy than the man who can put a day’s worth of bread on the table.
By the same token, it is ludicrous that both these categories exist in the same world where it’s possible for a human to live maybe 120 years and yet lay claim to a million years of future production.
It was your term, you explain it. Sorry, I did not introduce the term and indeed you seemed upset when I neglected to use it. “Socially necessary labor time” is your term; you define it and explain how it’s figured out.
The thread is (as these things do) becoming broken up into too many little sentence-to-sentence replies, so I’m going to cut out a few things that are kind of repetitive, and try to get back to the basic problem; you claimed that two parties can’t benefit from a trade, and yet by any rational analysis they can. If we can at least just settle on calling it “utility” because “wealth” was a poor choice of word on my part, it is just wildly obvious that if I give you something I don’t want as much as you give me, and vice versa, we have - indeed, whether we call it utility, wealth, value or whatever I don’t think it’s usually going to matter, but utility is really the correct term - both come out ahead. And to be honest it took me awhile to understand your math:
To be honest this really threw me for a loop, until I realized you seem to be assuming “Exchange value” must equal “use value.” It doesn’t. I can’t eat exchange value.
If I produce a hundred pounds of pork per month and can only consume ten pounds, the ninety pounds of pork above my consumption needs - we will assume a weird indifference curve where I value pork equally up to ten pounds but have no desire for it at all above that - has no utility for me except as a trade good. It is thus worthless to me unless you take it. It has no “trade value” until it’s traded. I possess the utility of ten pounds of pork; my labour COULD get me more, by trading for your milk, but until I do I don’t have that utility.
By trading you ten pounds of my extra pork for ten gallons of milk, I now have the utility of ten pounds of pork AND ten gallons of milk. I’m better off. So are you. You must see that, right? I do not have the same utility, I have more. My bundle of goods is now quite clearly on a superior indifference curve.
As it happens, what really happens in a modern society is that I sell the pork for money and use the money to buy the milk you sold, but the money’s just a middleman, so to speak. I could attain even greater levels of utility by trading more of my extra pork for wheat, juice, porn or iTunes gift cards or whatever I want.
You then spoke of “there is an “average social price” that *does *(or slightly less orthodox, would) represent value, because it is freed of all the subjective inputs.” I’ve no idea what that even means or how you can free the value of anything from subjectivity.
Again, not all trades benefit every agent. I would say with absolute confidence that 99% of them do, maybe 99.9%, but some don’t. Theft, fraud, slavery, plain old-fashioned errors and stupidity, addiction, monopolies, rent-seeking, government interference - a lot of things can cause a severely lopsided or ill-advised trade. And I am no materialist, and if you want someone to tell you people buy too much useless shit I’m in your corner on that one. But, who am I to judge? Maybe I’m wrong about that.
Not part of the Marxist definition debate, but for an interesting historical perspective, we can return to Adam Smith as he discusses “value in use” and “value in exchange”.
Emphasis added. This couldn’t be more clear. For Smith, “value in use” is utility, and “value in exchange” is price. That’s how they’re explicitly defined.
And he’s laying out the puzzle of why a good as useful as water trades at a price so low compared to entirely useless sparkling stones. And of course, of course, of course, the first drink of water is beyond any substitute. Nothing can replace it. The thousandth gallon has no use at all. Tricky. The “value in exchange” (the price) derives from the “value in use” (the utility) of the very last gallon, not the first parched drink. Very tricky. Smith got it wrong. It took people another hundred years to untangle that knot, but when the pressure was too much, the dam burst in spectacular fashion. Three different people independently came up with the solution. Now that is an idea whose time had come, better even than the calculus.
Sorry it took me a while to get back to it. I think this is an incoherent position. I don’t suppose that if I were to tell you “That social system of yours, where you kill all new born children? I think it’s got a flaw,” you would absolutely require me to offer an alternative system before you agreed it has flaws. Now, THIS system is easily improved. But that shouldn’t detract from the logic.
If the existence of poor people were an unavoidable facet of the human condition, yes. But that’s merely a claim, a naturalization of what are socially determined conditions of human existence. I’ll defer you to the reply I’ll give furt in a second, because it’s essentially the same point.
We have to live in reality rather than theory, but we don’t have to live in the particular social system that the chance of our birth under capitalism has provided us. You’re really having it both ways, though: poverty is a fact of the human condition, but billions “lived and live in poverty” because of communist of socialist-leaning governments. Billions “lived and live in poverty” because of capitalism–do you agree? If not, on what basis do you disagree?
And perhaps every advocate of communism you know has refused to acknowledge that “communism” has caused suffering because it’s an unhelpful though common contraction of meaning that merely serves to discredit a system which may or may not be possible in reality (I think it probably is), but which has not become reality yet. I’m fully prepared to admit that all kinds of regimes which have born the communist banner have been quite awful in many, many ways, depriving people of life and liberty, and not adequately supporting them in their livelihoods.
Hah! Well, good. It would depend on the definition of “familiar,” I suppose, but see below.
Yes, you’re quite right about this last bit, and it’s a fair characterization of my knowledge about marginalist economics: I don’t think the issue is summarization so much as being at all times immediately familiar with the way particular terms get used in a particular iteration of the marginalist idea.
Fair enough, I’ll make a note not to mince words with you. I do care about tone, however. We’re at an impasse, I guess.
You say I do this? I don’t think I’ve done it, as I replied to RickJay quite thoroughly.
In point of fact: RickJay’s question does not stand anymore, because I answered it, and then he asked me something else, and then he asked me the same thing over; in other words, you needn’t remind me of the unrewarding nature of explicating theoretical jargon…
You’re a native speaker of economics, Hellestal, and I’m not. But how were you not arguing that I shouldn’t speak economics until I’ve perfected my grammar and diction? I’ve said, over and over, that I’m willing to learn.
What about my posts indicated to you, that I am not familiar with the most commonly accepted ideas, rather than that I fundamentally disagree with most of them?
If you’re interested enough, I’d be happy if you’d remind me in a couple of weeks of the possibility of discussing socialist economics (for lack of a better word). I’m not sure I’ll find the time before.
RickJay, before I plow through this once more: I asked you twice whether you think there was a way of convincing you of the validity of my argument. You have twice not replied. Now in a second, I’ll be answering a question that I’ve already answered, only for you to say that that wasn’t what you asked. This is a perfectly fruitless way of spending my time, and I’ll not continue doing it after this post unless you indicate clearly to me what you expect me to do. Sorry.
[QUOTE=Enterprise]
Second, socially necessary labor time is determined by a host of factors: technological productivity, labor laws, average worker skill, the organization of the production process, the conditions imposed by the natural environment; I’m probably missing a lot of things that impinge upon it, but this should do. To quote you, "from a survey of that, we would be able to arrive at some idea" of what labor is socially necessary to produce a particular commodity at any point in time.
[/QUOTE]
This is what I have already given as an explanation for what socially necessary labor time is. What particular part of this would you like me to elaborate on?
By the way, if this is too short for you, Wikipediais quite good at explaining it and giving some of the criticism pertaining to it.
If it’s true I said that two parties cannot “benefit” from a trade, I renounce myself, and would appreciate you telling me where I said that. I said that two parties don’t increase their wealth by the simple act of an exchange of commodities, because, unlike you, I see the need to differenciate between value, price, utility, and wealth–all of which terms, at various points in this thread, various people have argued were essentially synonymous. But, for the record, once more, I agree that in capitalist economies, no freely-willed trade takes place unless utility for both parties is increased. (At least, I think I do, but I may not have fully figured out the implications of this concession.)
RickJay, it’s quite clear that you’ve no real understanding of the terminology, and that’s fine. But would you please stop assuming and instead say: “I don’t understand what “use” and “exchange” value are, respectively, can you explain?” I’m not going to keep spending time defending myself against things I neither said nor implied, nor from within the confines of the theory I’m espousing could possibly mean.
Yes, exchange is necessary. Commodities are defined by their exchangeabiltity. Exchange value inheres only in commodities. You are only producing more pork than you can eat in economies that have a means of exchanging those commodities.
Yes, and you lost the exchange value of those ten pounds. You’re “better off” (perhaps, for given values of being “better off”–you’re quite possibly less healthy, for example, for eating more pork). We’re fully agreed that we’ve both maximized our utility–my little calculation actually put that into numbers. We both have 1.0 utility now, instead of 0.9. But unless I’m mistaking you, you would not have us merely have that 1.0, but rather 1.1 (or any number above 1.0), i.e. an increase in our utility above the exchange value of the commodities we exchanged. Where does that utility come from?
Yep.
Okay, you could look it up then, no? As I did look up the words “utility” and “wealth” to see if there was a natural connection between them that I had missed?
There’s no problem as long as people respond substantively.
From what I’ve seen, I wouldn’t say you’ve done this yet. But in my experience the people who complain most about tone are generally the ones whose arguments can’t handle honest scrutiny. Tone is the excuse when their logic breaks down.
That is not universal. There are exceptions.
There’s a wide gap between “perfection” and “demonstrating the most rudimentary knowledge”. I don’t expect perfection, but given the thread topic, I do expect some demonstration of previous exposure. Any demonstration.
I haven’t seen it.
Maybe I missed it, but I doubt it.
Everything about your posts conveys a lack of familiarity. Asking questions about the most basic material conveys a lack of familiarity.
Your writing is not distinguishable from that of someone who has never before been exposed to standard economics. You are now asserting otherwise, and that’s fine. If you open your thread in a few weeks, you’ll have a chance to flex your knowledge and go more into depth with direct comparisons.
Sure, present logic and evidence that convinces me of it. I’m sorry but what other answer could there possibly be?
I’m sorry but this just isn’t a definition, it’s a basket of inputs. Sure, I know what the Marxist definition is; it’s the average amount of labour time it takes to make something, assuming average inputs. Why does that have anything to do with the utility or price of the things being made? Or, more precisely - because I suspect this is where you’re going with this - why should we be concerned about SVLT?
We started at 0.9, or some fractional figure betwene 0.9 and 1, and now have 1.0. The pork I traded you wasn’t as valuable to me, as measured by utility, as the milk you gave me. I cannot be where I was before. I have a bundle of goods I prefer; my utility is higher.
Your math assumes exchange value and use value are equal. They are not (and in modern economics exchange value isn’t even really a thing.) In that respect, Marx agrees with me.
Honest question; do you know what an indifference curve is?
The logic of your rebuttal doesn’t hold up for a minute. Everybody knows that in our society as it is now, and in countless others, there’s no slaughter of all newborn children. So in your hypothetical scenario everybody knows about the alternative, making it unnecessary for anyone to state the alternative explicitly. The same is clearly not true if you’re criticizing the capitalist system for the existence of poverty within it. No one has any empirical reason to believe that any social system can totally eliminate poverty; no social system has ever done so.
Oh, I thought it was 'I’m indifferent to your facts, I knows Capitalism (see, I capitalized Capitalism, so I knows what I knows, and I knows that I nose this stuff!).
The point really isn’t hard to understand, and others have made it in this thread. All nations in history have had poverty. That poverty has varied tremendously in amount and severity. In first world countries like the USA, Canada, or Japan, a small slice of the population is poor. In Bangladesh or Ethiopia or Haiti, almost everyone is. Further, a person below the poverty line in Canada may well have a higher standard of living than a middle class person in India. Capitalism does much better at reducing and alleviating poverty than any other system. It does not eliminate poverty, but does make the problem of poverty much smaller. Most people view this as a good thing.
Nations which choose communism or socialism are sentencing large portions of their people to poverty. By making free market reforms, they could allow many of their own people to rise from poverty. This has been demonstrated countless times. You yourself have mentioned the fast economic growth in China and Vietnam. When those countries were hardcore communist, their populations were mired in poverty. Only when they chose to allow some private business, investment, and trade did large numbers join the middle class. If they had liberalized their economies earlier, tremendous suffering could have been prevented.
There’s a reason why so many poor people move from Cuba to the USA and from Morocco to western Europe, rather than in the other direction. Poor people want the opportunity to be less poor. Capitalism gives them that opportunity; socialism does not.
Yes, but where? I mean, I’m here to learn, right? So a simple pointer towards a question that I asked that I should (you think) know about would be helpful.
Good. Just to make sure, that was to be supposed a thread that explains how the Marxist (well, a version of it) of capitalism works, right?
Fine, I’m just checking. It might be helpful then if you could just indicate your objections in a less piecemeal manner, so I can see where you’re even going with your objections and questions.
It doesn’t have anything to do immediately with price (except the social average price, as noted), nor with utility–did I say it had? We got here, I think, from you claiming that the labor theory meant all labor increased value, and I’m simply telling you that that’s not so. Socially necessary labor time is, according to the Marxist analysis, the maximum amount of value you can make a commodity bear.
Yes, my math assumes that, because it’s an example of how we need not magically create indefinite extra value for a trade to make sense, not because all use values will always equal their exchange values. And no, modern economics doesn’t think exchange value is a thing (I’m not sure how that matters). Marx would agree that exchange value and use value are not equal concepts: but their relationship is what the term “value” is supposed to grasp (and value, as noted, is socially necessary labor time). So, to backtrack: I have 1,0 value at any given point in time, because of my labor, and this splits up in various fractions of use- and exchange value. But it never changes, until I add to this value through my labor.
Sorry to hear that Google doesn’t work all browsers. LBJ had a war on poverty and Ronald Reagan had a war on the poor. A war still carried on today. Ronald Reagan was an extraordinarily despicable human being.
I don’t think this critique of Marxism is pitched fairly. There are many questions of economics: scarcity is one, but so is distribution. There is no reason to believe that markets will generate an equitable distribution of resources (however you conceive that) - indeed this result is presented in intermediate classes in economics. You can snip out the labor theory of value without destroying the whole Marxist edifice.
I think it’s fine to discuss commyism and libertaria here, as long as you realize that you’re basically exploring hippy-dippy stuff or maybe fan wank. But I agree: serious discussions address mixed economies. I wouldn’t call the differences among them small (comparisons between Germany, Japan and the US can be pretty interesting for example) but compared with extremist stuff they certainly are. Not all discussions need to be serious of course.
Nice presentation and interpretation, but I feel a need to qualify. Murder rates vary vastly across time and country. Ponder this chart a while then consider that hunter gatherers apparently have even higher murder rates. So in some sense I’d say that civilization in general and 20th century prosperity in particular has freed me from a lot of primal concerns. (But free 100%? That’s another matter.)
I actually never replied to this, which is a bit of a shame since its concerns are much closer to the idea of the OP than the talk about labor value (by the way, just to make there’s no confusion, I disagree with Measure for Measure on the about the need of the labor theory of value for the edifice. I don’t think you can remove it in order to understand Marx’s critique, though there have been efforts to do so by some Marxists; I’d much rather hold on to it).
Yes, I’m a Marxist. And still, that doesn’t tell you anything about the system I’m advocating, except for some very general points. Central planning, much to ITR’s chagrin and despite his personal insistence on it, is not a part of that system, at least not in the Soviet style.
You may suspect all you want, I’m sure. More power to you! You’re wrong. There’s a neat line of indefensibility in my mind, going from the libertarian vision of an unfettered free market through various kinds of regulated market systems (neoliberal minimal regulation through social democratic strong regulations) to socialist systems to communist systems. I’m perfectly willing to entertain defenses of some of the heavily regulated market systems, none of which exist today; I’m finding socialism and communism eminently defensible. I find “Marxism” a very powerful critique of capitalism.
One of the problems of your argument, such as it is, is that you’re positing capitalism as a solution to a problem that it itself has defined as the chief problem of social life (scarcity), when capitalism (by its very nature) excerbates scarcity simply because of the infinite need to grow. I notice that Sam Stone never got back to me on answering the problem (with the exception of once suggesting, effectively, “the lord shall provide”–we’ll find ways of addressing resource depletion, ecological destruction, global warming, growing inequalities of income and wealth, etc.). Capitalism’s “solution” to the problem of scarcity is allocating scarce resources through the market without addressing the underlying question of scarcity at all.
Yes, I know! Except, no. The defense of capitalism through the alleged nature of the human is about the thinnest defense of capitalism one could possibly except anyone to make. Even if it were true (which you’ve not shown): market systems have been shown to increase that tendency in humans (cite; pdf). Capitalism has made you well-off, and me, too. What it has had to do to make it so, however, is a story you prefer to ignore.
My apologies for calling you a dupe of the system, if you’ve taken offense.
However: you are talking about these so-called desires as though they had been shown to be immutably part of human nature; as though no system could be devised to limit them; as though a system which systematically foregrounds the benefits of such behavior should not be criticized for that foregrounding; as though the manifestly antisocial consequences of such behavior should be countenanced like an errant child’s misbehaving. I presume that you do not hold (as most people here claim they don’t) that capitalism should be unregulated; but can you devise logically coherent limits to those regulations? Where does “regulation” become “socialism”?
The capitalist system is not just rapacious and necessarily creates inequalities that lets personal wealth range from absolute destitution to single people holding so much wealth that they could eliminate human poverty altogether, it is also fundamentally incoherent: it can only work in the presence of restrictions to itself (as posters here are agreed).
Have you got any evidence that capitalism is addressing “the wants and needs” of most people? Even if that were so, how many people to “most” people need to be before the failure to address the wants and needs of fewer people becomes a problem? By a rough guestimate, there’s a billion people in “the West” living in comparatively wealth; there’s (as I noted) as many people living in hunger. There will be many more people for whom satisfying their “wants and needs” means: not being hungry from day to day. For you, “your wants and needs” include iPads, cars, holidays, and so on; for most people, “wants and needs” means survival. You’d have me think that capitalism is doing a good job when it keeps as many people in absolutely destitution as it keeps in comparative affluence, and a thin, thin, thin slice of people in really unimaginable wealth. Just because you can’t imagine an alternative.
