Oversupply of labour

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Jehu@rethepeople
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Aug 1 2012 18:13

georgestapleton Aug 1 2012 13:34

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And why would capitalists not just take their money out of production in the country if the surplus is falling?

Yes. They would try this. Capital flight is the most obvious response. But capital flight would be more than offset by the expansion of the domestic and world market for the output of the technically advanced nation reducing hours of work and able to offer its commodities at lower prices. Eventually even the capitals that move would be forced to lower prices. As to removing it from circulation altogether, this would amount to the frozen capital ceasing to be capital; and so open the market to more productive capitals that could compete in the face of a lower rate of profit, as well as further the centralization and concentration of capital capable of operating on a larger scale.

I only offer this as an argument. I am still thinking about it.

ADDED: Remember, a fall in the rate of profit, no matter the cause, has, in Marx's theory, certain definite outcomes which cannot be avoided. In this case we are only forcing it to fall -- by reducing hours of work.

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Railyon
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Aug 1 2012 18:13
Jehu@rethepeople wrote:
Since this wasted labor time adds no material wealth, but does add labor cost to prices, its elimination would amount to a controlled deflation in prices, without a corresponding increase in unemployment.

So what you're saying is that Marx was wrong about socially necessary labor time and that instead actual labor time is important for the formation of prices?

Jehu@rethepeople
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Aug 1 2012 18:26
Railyon wrote:
Jehu@rethepeople wrote:
Since this wasted labor time adds no material wealth, but does add labor cost to prices, its elimination would amount to a controlled deflation in prices, without a corresponding increase in unemployment.

So what you're saying is that Marx was wrong about socially necessary labor time and that instead actual labor time is important for the formation of prices?

No. I completely agree with Marx -- however inflation is impossible in Marx's argument unless the currency is being deliberately depreciated by overissue. So the prices we are talking about here are not commodity money prices, but ex nihilo currency prices. This is what I think is happening -- wage slavery is being subsidized through inflation.

Harrison
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Aug 2 2012 11:59

How do you put footnotes in forum posts Railyon?! This is important and relevant to my intersts!

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Book O'Dead
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Aug 2 2012 20:51
Tommy Ascaso wrote:
The key structural reason for the global financial crisis seems to be what Dan Alpert recently described as "global insufficiency of demand relative to an immense oversupply of labor and productive capacity."

The immense oversupply of labour is something Paul Mason briefly touches on in his latest book when he talks about "The Great Doubling" and how since 1989 the number of workers in the world doubled from 1.5bn to 3bn, halving the ratio of labour to capital.

From discussions I've had with people I get the impression Marx discussed this in part of Capital or the Grundrisse I've not yet reached, is that the case? There seems to be an argument that workers are now being permanently excluded from wage labour, I'm not sure that's what we're actually seeing and think the global economy will probably recover at some point in the future, but I'd be interested to hear what people think.

Excellent post!

I'm not sure about if or where Marx might have pointed out in Capital or Grundisse the exponential growth of the working class as such because I have not completely studied through either works.

However, once I read your questuion I was instantly referred to this passage in the Communist Manifesto wherein, it can be argued, the assumption is implied:

Quote:
But with the development of industry, the proletariat not only increases in number; it becomes concentrated in greater masses, its strength grows, and it feels that strength more. http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm#007
chapter I paragraph 38 Bourgeois and Proletarians
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Book O'Dead
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Aug 2 2012 21:18

As a follow up to my previous rant:

Of course, relying exclusively on the argument about numerical majorities as a justification for socialism is good and well but it works only with people who intuitively accept the idea that the greater good is served when the majority is served.

The moral argument of relative numerical majorities doesn't work with the econometricists of the Misean or Kenyesian schools of economics or with Randians who cannot wrap their heads around the concept of mankind as a living entity, as a social body. Arguing with them about the merits of socialism is a specialized art (which I do not possess) requiring the skillful use of all of the refined tools of Marxian political economy, and consists mainly of defensive maneuvers.

Thankfully the human world is populated largely by that numerical majority we can reach with our moral message for socialism and not by Misean or Randian crackpots who, due to their insignificant numbers and small mass, gravitate toward the centers of capitalist power where they smash themselves and burn up like meteorites against the atmosphere.