Diss capital
January 9, 2011 9:32 AM Subscribe
This is interesting, thanks! It's a nice journalistic expansion on the premise of "Marx in Soho" by the late Howard Zinn.
posted by honest knave at 9:40 AM on January 9, 2011
posted by honest knave at 9:40 AM on January 9, 2011
Does he just fall apart when he actually attempts to interview living people?
posted by parmanparman at 9:50 AM on January 9, 2011
posted by parmanparman at 9:50 AM on January 9, 2011
Well, on the plus side he's at least addressing one of the problems in applying Marxist ideas to the current situation. Marx predicted that the rate of profit would fall, leading to a cycle of ever-greater exploitation until the Revolution happened. In the current situation, corporate profits are high. So the interview says:
Back when he was alive, Marx didn't wave his hands much when he was discussing his contemporary situation, he tended more towards grindingly detailed research. I guess you can take things a bit easier once you're dead.
posted by TheophileEscargot at 9:58 AM on January 9, 2011 [2 favorites]
"Company profits are high; profits for savers are low. But companies don't reinvest. They typically bank their profits or pay them out in dividends. What this is telling me is that the rate of profit for capital in general is low.This really does seem very handwavey. The low rates on savings could have all kinds of reasons: bankers could be hoarding profits, the banking system could be messed up or frozen as a result of the banking crisis, or we could just be in a temporary recession with few opportunities for new businesses. If so, there will be no cycle of exploitation and the capitalist system will gradually return to normal.
“So, anyway, this is a profits crisis at root. It's a global profits crisis masked by the incredible returns bankers were earning and all this crazy, childlike, credit-driven consumption." He waves a hand in the direction of everybody and everything in Starbucks
Back when he was alive, Marx didn't wave his hands much when he was discussing his contemporary situation, he tended more towards grindingly detailed research. I guess you can take things a bit easier once you're dead.
posted by TheophileEscargot at 9:58 AM on January 9, 2011 [2 favorites]
Well, on the plus side he's at least addressing one of the problems in applying Marxist ideas to the current situation. Marx predicted that the rate of profit would fall, leading to a cycle of ever-greater exploitation until the Revolution happened. In the current situation, corporate profits are high.
But how are profits so high? (Hint: Ever-greater exploitation helps.)
posted by Sys Rq at 10:23 AM on January 9, 2011 [2 favorites]
But how are profits so high? (Hint: Ever-greater exploitation helps.)
posted by Sys Rq at 10:23 AM on January 9, 2011 [2 favorites]
It is put a bit vaguely, but I reckon Mason is thinking along the right lines saying it's a profits crisis.
There's the bit earlier where he has his pseudo-Marx say, "[Economic laws are] objective laws but often so deep that you can only experience their secondary effects." First world or higher-tier corporations elsewhere may be making higher profits than ever, but perhaps that is merely one such epiphenomenon. Further down the supply chain now it's all outsourced and sub-contracted and the margins are super-tight at the point where capital is actually being invested in making shit - i.e. we're mistaking the burgeoning of the 'mass of profits' for the underlying 'rate of profit' as set out in section III of this screed 'ere.
posted by Abiezer at 10:23 AM on January 9, 2011 [2 favorites]
There's the bit earlier where he has his pseudo-Marx say, "[Economic laws are] objective laws but often so deep that you can only experience their secondary effects." First world or higher-tier corporations elsewhere may be making higher profits than ever, but perhaps that is merely one such epiphenomenon. Further down the supply chain now it's all outsourced and sub-contracted and the margins are super-tight at the point where capital is actually being invested in making shit - i.e. we're mistaking the burgeoning of the 'mass of profits' for the underlying 'rate of profit' as set out in section III of this screed 'ere.
posted by Abiezer at 10:23 AM on January 9, 2011 [2 favorites]
Err, I didn't make that much clearer myself - a profits crisis in the sense that profit is no longer to be made in sufficient quantities from the sustainable making of stuff, hence the further drive to financialisation, as I agree with that article I linked to about the 'rate of profit' not meaning the same in modern conditions.
posted by Abiezer at 10:29 AM on January 9, 2011
posted by Abiezer at 10:29 AM on January 9, 2011
I like this bit:
"it's not f***ing rocket science: we know tectonic plates. Ever seen a tectonic plate? Ever seen one photographed from below, in the magma of the earth? It's impossible, so you need logic."
posted by Mngo at 10:51 AM on January 9, 2011
"it's not f***ing rocket science: we know tectonic plates. Ever seen a tectonic plate? Ever seen one photographed from below, in the magma of the earth? It's impossible, so you need logic."
posted by Mngo at 10:51 AM on January 9, 2011
But how are profits so high? (Hint: Ever-greater exploitation helps.)
That's a good question, which I don't think anyone has adequately answered.
But to Marx, a problem with capitalism was the relentless competition. He saw a world of ruthless, cut-throat competition amongst businesses, in which the relentless pressure of the market would constantly reduce their profits, which would force the capitalists to cut the wages of their employees to stay in business.
But looking at the world today, I don't really see that everywhere. A lot of large corporations seem to huge, sluggish, complacent institutions; with only a few competitors who are similar to themselves; enjoying huge benefits from government in the form of fat contracts, tariff protection, iextensive intellectual property laws and so on.
To me, it doesn't really look a lot like Marx's particular vision of the collapse of capitalism.
One reason that profits are high may be to do with the way that capitalism is a process of creative destruction. New businesses are formed, new jobs are created; and at the same time old businesses go bust and jobs are lost. With this recession, new businesses and new jobs are not being created fast enough to compensate for the losses. But the existing businesses are recording high profits.
Now, governments are taking various forms of action to try to ameliorate the recession: low interest rates, deficit-funded stimulus programmes, quantitative easing. Essentially, pumping more money into the system. I suspect that this is behind the high rates of profits of the surviving corporations: the money's finding its way to them.
(If nobody clicked the link, the last quarter of 2010 was a 19-year high for US corporate profits,. They're not just high for a recession, they're high absolutely, which is a problem for Marxists who think they should steadily decrease towards the collapse of capitalism.)
posted by TheophileEscargot at 10:54 AM on January 9, 2011 [1 favorite]
That's a good question, which I don't think anyone has adequately answered.
But to Marx, a problem with capitalism was the relentless competition. He saw a world of ruthless, cut-throat competition amongst businesses, in which the relentless pressure of the market would constantly reduce their profits, which would force the capitalists to cut the wages of their employees to stay in business.
But looking at the world today, I don't really see that everywhere. A lot of large corporations seem to huge, sluggish, complacent institutions; with only a few competitors who are similar to themselves; enjoying huge benefits from government in the form of fat contracts, tariff protection, iextensive intellectual property laws and so on.
To me, it doesn't really look a lot like Marx's particular vision of the collapse of capitalism.
One reason that profits are high may be to do with the way that capitalism is a process of creative destruction. New businesses are formed, new jobs are created; and at the same time old businesses go bust and jobs are lost. With this recession, new businesses and new jobs are not being created fast enough to compensate for the losses. But the existing businesses are recording high profits.
Now, governments are taking various forms of action to try to ameliorate the recession: low interest rates, deficit-funded stimulus programmes, quantitative easing. Essentially, pumping more money into the system. I suspect that this is behind the high rates of profits of the surviving corporations: the money's finding its way to them.
(If nobody clicked the link, the last quarter of 2010 was a 19-year high for US corporate profits,. They're not just high for a recession, they're high absolutely, which is a problem for Marxists who think they should steadily decrease towards the collapse of capitalism.)
posted by TheophileEscargot at 10:54 AM on January 9, 2011 [1 favorite]
Back when he was alive, Marx didn't wave his hands much when he was discussing his contemporary situation,
Perhaps Astro Zombie can confirm that the dead wave their arms about in front of them?
posted by rough ashlar at 11:02 AM on January 9, 2011
Perhaps Astro Zombie can confirm that the dead wave their arms about in front of them?
posted by rough ashlar at 11:02 AM on January 9, 2011
Wages are down over the last thirty-odd years, Theophile.
posted by Pope Guilty at 11:12 AM on January 9, 2011
posted by Pope Guilty at 11:12 AM on January 9, 2011
To understand the financial crisis, try Minsky rather than Marx.
posted by storybored at 12:36 PM on January 9, 2011
posted by storybored at 12:36 PM on January 9, 2011
"...Lenin, the Warsaw Pact, the John Betjeman statue."
That is good, nice post.
posted by clavdivs at 2:08 PM on January 9, 2011
That is good, nice post.
posted by clavdivs at 2:08 PM on January 9, 2011
Marx would never use a Blackberry, would he? He seems more like a Droid kinda guy.
posted by jng at 2:48 PM on January 9, 2011
posted by jng at 2:48 PM on January 9, 2011
But to Marx, a problem with capitalism was the relentless competition. He saw a world of ruthless, cut-throat competition amongst businesses, in which the relentless pressure of the market would constantly reduce their profits, which would force the capitalists to cut the wages of their employees to stay in business.
But looking at the world today, I don't really see that everywhere.
That's because you're not looking any further than your own backyard. Take a gander at Asia and Africa, where the sort of labour Marx was writing about is still being done. I have a feeling Marx would be saying, "See, I told you so!" Capitalism would have collapsed had it not automated and outsourced labour to reduce both its expense and its connection to the consumer.
In Marx's day, labourers were often consumers of the goods being produced--or, at the very least, the two groups intermingled--so any cut to labour meant a corresponding cut to consumption; this is no longer the case. The connection of production and consumption also meant that a strike would usually go hand-in-hand with a supportive boycott; now, those in a position to boycott would have no idea any strike is taking place, let alone the conditions necessitating it, so strikes are largely ineffective. Score one for Capitalism.
posted by Sys Rq at 3:08 PM on January 9, 2011 [2 favorites]
But looking at the world today, I don't really see that everywhere.
That's because you're not looking any further than your own backyard. Take a gander at Asia and Africa, where the sort of labour Marx was writing about is still being done. I have a feeling Marx would be saying, "See, I told you so!" Capitalism would have collapsed had it not automated and outsourced labour to reduce both its expense and its connection to the consumer.
In Marx's day, labourers were often consumers of the goods being produced--or, at the very least, the two groups intermingled--so any cut to labour meant a corresponding cut to consumption; this is no longer the case. The connection of production and consumption also meant that a strike would usually go hand-in-hand with a supportive boycott; now, those in a position to boycott would have no idea any strike is taking place, let alone the conditions necessitating it, so strikes are largely ineffective. Score one for Capitalism.
posted by Sys Rq at 3:08 PM on January 9, 2011 [2 favorites]
If Karl didn't know who he was, and didn't exchange numbers when he discovered the mistake, how did he text him after he left?
I call fake.
posted by clarknova at 4:02 PM on January 9, 2011 [1 favorite]
I call fake.
posted by clarknova at 4:02 PM on January 9, 2011 [1 favorite]
"Shit, 4got to plug new book. PR lady will kill me. Can you plug title pls? 'Crash: Why Random Swans Lie Down on Broadway and the Tao of Hu Jin-Tao'. Publisher rejected 'Capital Vol IV' :o) Pls link to my twitterfeed also. Karl."
classic.
posted by memebake at 4:07 PM on January 9, 2011
classic.
posted by memebake at 4:07 PM on January 9, 2011
"Yeezzz, Groucho, its seems rather petulant to diversify false consciousness with varied troupes of comedic practices. Zeppo, Yezzz, Zeppo is the clever boots is he not."
posted by clavdivs at 4:25 PM on January 9, 2011 [1 favorite]
posted by clavdivs at 4:25 PM on January 9, 2011 [1 favorite]
Heh. That was much better than i expected. Thanks.
posted by Lutoslawski at 7:38 PM on January 9, 2011
posted by Lutoslawski at 7:38 PM on January 9, 2011
I think Marx was thinking about the trajectory of capitalism in the long term. We probably won't see the kinds of crises he talks about for a while yet, perhaps another century or more.
Ridiculously simplified summary of the world economy:
* Rich nations exploit poor nations for profit. Labor is the ultimate source of all wealth. Cheap labor = more efficient profit generation. Trade/finance systems allow dramatic optimization of exploitation system. Poor nations sometimes get richer, and move on to exploit poorer ones. *
Timeline:
1) Western Europe exploits much of the rest of the world through colonialism (East and South Asia, Americas, etc.)
2) Colonial system evolves into global financial/trade system.
3) Rich nations (W. Europe, USA, Japan, Australia, Canada) exploit East Asia, Eastern Europe,etc.
4) East and South Asia grows stronger, rich nations in turn move on to exploit even poorer nations (SE Asia/Africa, etc.) [PRESENT DAY]
...
5) If all nations climb out of poverty and there is no one left to exploit, capitalism collapses.
*therefore*
Capitalism requires that a certain portion of the world be poor and exploitable. Wars are good to make sure this situation continues.
posted by jet_manifesto at 8:04 PM on January 9, 2011 [1 favorite]
Ridiculously simplified summary of the world economy:
* Rich nations exploit poor nations for profit. Labor is the ultimate source of all wealth. Cheap labor = more efficient profit generation. Trade/finance systems allow dramatic optimization of exploitation system. Poor nations sometimes get richer, and move on to exploit poorer ones. *
Timeline:
1) Western Europe exploits much of the rest of the world through colonialism (East and South Asia, Americas, etc.)
2) Colonial system evolves into global financial/trade system.
3) Rich nations (W. Europe, USA, Japan, Australia, Canada) exploit East Asia, Eastern Europe,etc.
4) East and South Asia grows stronger, rich nations in turn move on to exploit even poorer nations (SE Asia/Africa, etc.) [PRESENT DAY]
...
5) If all nations climb out of poverty and there is no one left to exploit, capitalism collapses.
*therefore*
Capitalism requires that a certain portion of the world be poor and exploitable. Wars are good to make sure this situation continues.
posted by jet_manifesto at 8:04 PM on January 9, 2011 [1 favorite]
Labor is the ultimate source of all wealth.
Occasionally, we conspire to pretend this is not so, and that bankers, or sometimes stockbrokers, are the source of all wealth. Laborers, of course, bear the hardest part of the brunt of these flights of fancy.
posted by Pope Guilty at 8:09 PM on January 9, 2011 [1 favorite]
Occasionally, we conspire to pretend this is not so, and that bankers, or sometimes stockbrokers, are the source of all wealth. Laborers, of course, bear the hardest part of the brunt of these flights of fancy.
posted by Pope Guilty at 8:09 PM on January 9, 2011 [1 favorite]
Nature is the ultimate source of all wealth. Labour turns those pre-existing resources into something hopefully more valuable for society. Presently, bankers et al are mostly parasites who are disproportionately rewarded for their admittedly important role.
posted by Bangaioh at 3:40 AM on January 10, 2011
posted by Bangaioh at 3:40 AM on January 10, 2011
Theories of Value are theories about the ultimate source of all wealth. Marxism uses the Labour Theory of Value. Most modern economists use the Marginalist theory of value originated by Alfred Marshall.
posted by TheophileEscargot at 5:00 AM on January 10, 2011
posted by TheophileEscargot at 5:00 AM on January 10, 2011
also see brad delong's (econ 1 ;) growth lecture, cf. growth theory
posted by kliuless at 6:09 AM on January 10, 2011
posted by kliuless at 6:09 AM on January 10, 2011
Bangaioh, yes, I agree, ultimately the source of all wealth can be abstracted to Nature. Probably to the sun, or back to the Big Bang or whatever. Spinoza might have called that source God.
Nevertheless, I still think Labour (ie. the work we humans do, with our hands and minds and systems) is what creates value for us. We are no different than any other living creatures in this respect. We exist within and are part of Nature, and therefore by definition anything we do is an element of Nature, including our Labour.
TheophileEscargot, yes, Marginalism is an important part of modern economics. However, I think the fundamental concept of Marginalism, that is, that the value of a commodity is best judged at the outer margin of demand, is not actually incompatible with a Labor Theory of Value.
Here's a bite-sized piece from Marshall on marginal value:
III.III.8 The larger the amount of a thing that a person has the less, other things being equal (i.e. the purchasing power of money, and the amount of money at his command being equal), will be the price which he will pay for a little more of it: or in other words his marginal demand price for it diminishes.
Ref: http://www.econlib.org/library/Marshall/marP11.html#III.III.7
The fact that one theory is seen in contemporary economics as somehow antithetical to the other is more an artifact of the spectre of communism.
posted by jet_manifesto at 6:26 AM on January 10, 2011
Nevertheless, I still think Labour (ie. the work we humans do, with our hands and minds and systems) is what creates value for us. We are no different than any other living creatures in this respect. We exist within and are part of Nature, and therefore by definition anything we do is an element of Nature, including our Labour.
TheophileEscargot, yes, Marginalism is an important part of modern economics. However, I think the fundamental concept of Marginalism, that is, that the value of a commodity is best judged at the outer margin of demand, is not actually incompatible with a Labor Theory of Value.
Here's a bite-sized piece from Marshall on marginal value:
III.III.8 The larger the amount of a thing that a person has the less, other things being equal (i.e. the purchasing power of money, and the amount of money at his command being equal), will be the price which he will pay for a little more of it: or in other words his marginal demand price for it diminishes.
Ref: http://www.econlib.org/library/Marshall/marP11.html#III.III.7
The fact that one theory is seen in contemporary economics as somehow antithetical to the other is more an artifact of the spectre of communism.
posted by jet_manifesto at 6:26 AM on January 10, 2011
I don't think they are seen as antithetical. The marginal theory of value don't deny that labour has a value, or that natural resources have a value. It just provides a way to integrate the two, and explain why the value of something can vary: why a pint of fresh water can be more valuable than a fistful of diamonds if you're in a lifeboat but not if you're in New York City. (In New York City you've got plenty of drinkable water so the value of an extra, marginal pint is low).
Marginalists would say it just supersedes and incorporates the Labour theory of value. Marxists would say it's partially correct in that it says labour has a value, but partially incorrect in that the pint of water really has exactly the same value in both the lifeboat and New York City: the value of the labour it took to extract it.
posted by TheophileEscargot at 6:58 AM on January 10, 2011
Marginalists would say it just supersedes and incorporates the Labour theory of value. Marxists would say it's partially correct in that it says labour has a value, but partially incorrect in that the pint of water really has exactly the same value in both the lifeboat and New York City: the value of the labour it took to extract it.
posted by TheophileEscargot at 6:58 AM on January 10, 2011
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posted by Abiezer at 9:36 AM on January 9, 2011