Debate: The Restructuring of Global Capital

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pingtiao
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May 9 2005 11:01
Debate: The Restructuring of Global Capital

I thought i'd repost something form the Aut-op-sy elist here, as it seems quite interesting. I'm going to start looking at this now, but thought that some of the more theory-inclined comrades here might also be interested.

pingtiao

===

Friends

I am sending out all the particulars of a debate which I believe has

enormous ramifications for all of us today. It stems from the recent

circulation of a paper written by Loren Goldner originally in the 1980s

and which has recently been subjected to strong debate within the

ultra-left internationally. I believe it deserves a much wider

audience,

since it cuts straight through some of the more familiar twaddle on the

nature capitalism and socialism (whether academic, non-academic or

theological), and hence I am posting it to different forums, in the

hope

that it will spark a wider reconsideration of fundamental issues.

(Loren I am copying to you as well so that you know what I am up to,

but also so that you can correct any errors that my brief presentation

below may contain.)

The original paper is called The Remaking of the American Working

Class: The Restructuring of Global Capital and the Recomposition of

Class Terrain. It concerns the question of fictitious capital and

capitalist crisis, and has important consequences for the war and

destruction which we are now beginning to see on a massive scale. This

paper has been criticised by the British Aufheben group, amongst

others.

The following is my brief attempt at a summary of the debate following

which I will give the relevant URLs. Finally I will paste a more recent

email posting from Goldner that builds on the same debate. (If I have

sent this material out to any forum where it is not welcome, please let

me know.)

Goldner crucially distinguishes between profit at the level of the

individual capital on the one hand, and profit at the level of the

total

capital on the other.

For him this corresponds to the analysis and critique of capitalism by

Marx in Vols. 1 & 2 of Capital and Vol. 3 respectively. For Goldner,

Capital should be read as a phenomenology in the manner of Hegel, and

suggests that only in Vol. 3 does Marx fully break out of the Ricardian

political-economy paradigm (i.e. to consider the level of the total

capital). Correspondingly, he also discusses the total worker and

points

out that the total wage does not merely correspond to the sum of wages

paid by individual capitalists, but also includes the total costs of

reproducing labour power, such as education, public transit, health,

etc.

At the same time he points out that there is also enlisted by capital a

certain amount of unpaid labour (e.g. non-capitalist classes such as

peasants) and also labour that is paid a non-reproductive wage.

The elements to Goldner's argument are the following: 1. Technical

innovation to increase relative surplus value, which creates more

titles

to wealth than it increases surplus value. 2. Fictitious capital, which

originally arises in production due to capitalization of devalued

(semi-obsolete) fixed capital, a factor which is 'hidden' by the

accounting practices of capitalization, at least until the particular

firm goes bankrupt. 3. An absence of profit at the level of the total

capital and a consequent inability to reproduce the total worker. 4.

The

credit system, whereby in the financial markets the bases of credit

expansion lose all relationship with the rate of surplus value capable

of guaranteeing their valorization, the two prime sites of operation

being the system of international loans, whereby valorization can be

supported by unpaid values taken from non-capitalist sectors, and the

state debt, whereby the fictitious titles representing that debt become

the basis of the reserve of the entire banking system.

(It is point no.2 above which appears to be most problematic to the

Aufheben group.)

Among the consequences of the above, are: 1. A tendency of the

productive working class to decline globally as a percentage of the

capitalist active population (especially since 1945). 2. Value

relations

that can no longer mediate the reproduction of the species. 3. Ever

more

desperate attempts to stave off the resulting (deflationary) crisis,

firstly through interventions such as manipulation of the credit rate,

recomposition of the labour force, and finally through war and

destruction of labour power.

The uniqueness of Goldner's contribution seems to lie in his deployment

of the notions of total social capital, total worker and social

reproduction. The failure of the total capital (as opposed to

individual

capitals) to valorize itself leads either to non-reproduction within

the

system or primitive accumulation outside the system.

In all of this there is also a strong critique of what Goldner calls

"left wing devalorisation", which implies recomposition of labour as a

material community and which takes the ideological forms of

glorification of labour found in Social Democracy, Stalinism, and

fascism alike. Goldner extends his critique to the Leninist theory of

imperialism and the "monopoly capital" school, which according to him

completely accept the neoclassical notion of underconsumption (thereby

obliterating the question of value) while merely changing judgements on

the question of welfare. The whole matter of value and relations of

production is then mutated into sociological categories of power and

morality.

(Loren, on a personal note, the part that I have struggled with the

most in this paper is how exactly it is that a "segment of devalorized

fixed capital is transferred to the sphere of circulation by the

mechanism of capitalization and the credit system," but maybe I need to

go back and study that more carefully - I'm not an economist!)

Tahir

Here are the URLs:

The original paper:

http://home.earthlink.net/%7Elrgoldner/remaking.html

First Aufheben response:

http://home.earthlink.net/~lrgoldner/aufhebencomments.html

Reply: http://home.earthlink.net/~lrgoldner/aufheben.html

Second Aufheben response:

http://www.geocities.com/aufheben2/auf_lg_reply.html

Other responses:

http://home.earthlink.net/~lrgoldner/othersaufheben.html

Perelman on fictitious capital:

http://home.earthlink.net/~lrgoldner/perelman.html

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Lazy Riser
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May 28 2005 11:34

Hi

I am not sure how interested people are in this kind of stuff, I surmise not very much. It’s difficult to know how much energy someone should expend analysing it.

What stands be to learnt from the proposal? It depends on what you already know and believe. From my perspective on mathematical economics, Marxist logic, although arguably progressive in its historical context, leaves something to be desired. Marx’s particular humanitarian ethical system means a good deal of hand waving, jargon and sophistry surrounds his notion of the cycle of commodities and money, the formulation of the relationship between profit, capital and labour, and social class.

The problem of knowing how much effort one should dedicate to challenging or supporting Marxist positions is exacerbated by the lax science that pervades some of the material, I would advise all to check the algebraic abilities of any self-described Marxist before believing too much of what they have to say.

Swallowing Marx whole requires a certain amount of religious faith, which can cause mild hysteria when orthodox positions are challenged. When faith based reasoning prevails, common sense is often expressed in platitudes.

Marxism is already known to be weak, there is little point in gossiping any further regarding its inadequacies. Loren Goldner concedes that there were serious errors in “The Remaking of the American Working Class”, notably some muddled formulations. His closing summary…

“The slagheaps of the former industrial zones of the West, particularly in the United States and England, have closed forever the period of leftist exoticism. "Workers' control of production", today, separated from a program for the reconstruction of the material basis of production, starting with labor power, which has been eroded by deindustrialization and devalorization is a meaningless phrase, and the disappearance of "anti-bureaucratic struggles" in the unions in the U.S. since 1973 are the best proof of this.”

is a truism that the work’s analysis supports morally, but not objectively.

The sight of floundering Marxists, bereaved in the passing of the prize social phenomena central to their theories, is but one of the exotic, morbid, delights afforded to us by late Capitalist culture. It would be more useful if Loren had gone some way towards developing a program for reindustrialization rather than bait his detractors with Marxoid gobbledygook.

Cheers

Chris

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May 29 2005 02:27

so your claiming that because the manufacturing sector decreased in size a bit and cuts its workforce, marx's economic theory is wrong? I would have thought it was obvious that the crisis of the late 60's and 70's proved him right.

Capital will continue to improve the means of production cutting the size of the labour force, wherever a profitable monopoly is maintainable, as such capital will be reconstructed more towards a social economy, which is just a step on from the way in which wider markets were created for goods with the rise of large metroploitan cities.

If anything, the increased surplus in production and decreased labour time, makes workers control of production even more likely.

Mike Harman
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May 29 2005 08:16

agree with the first bit, however

cantdocartwheels wrote:

If anything, the increased surplus in production and decreased labour time, makes workers control of production even more likely.

It also means that most jobs in "post-industrial" countries are at best working in logistics, at worst primarily consumptive occupations - using commodities, not contributing to their manufacture, and often not even producing tangible services. To take control of this kind of production is worthless, it exists mainly to occupy our time by maintaining wage relationships, not very often to produce use-values.

The basic things we require in society: food, clothing, energy, shelter (and transport to get to them). Only the last of these has to be made where we live, the rest are often produced hundreds if not thousands of miles away, and this means that controlling the means of life, rather than the means of production may well be more difficult than it was 70, 100, 150 years ago.

Mike Harman
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May 29 2005 08:18

On a related note, I picked up "Contemporary British Industrial Relations" by Sid Kessler and Fred Bayliss for a quid from Oxfam yesterday! Anyone read it?

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May 29 2005 18:12
cantdocartwheels wrote:
so your claiming that because the manufacturing sector decreased in size a bit and cuts its workforce, marx's economic theory is wrong? I would have thought it was obvious that the crisis of the late 60's and 70's proved him right.

No, I'm sorry if that's the impression I left. I'm with you to a certain extent on this, I'm not daft enough to reject all Marxist analysis in general, although I'm highly suspicious of orthodox Marxist labour theory of value.

Cheers

Chris

Mike Harman
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May 29 2005 18:51

Lazy Riser, what's your reason for being "highly suspicious" of LTV. For me it means that something produced for exchange (commodities) gains it's value from labour, not some magical property of capital. I'm familiar with the criticism that it treats natural resources as if they have no intrinsic worth - but to assign natural resources exchange value in the context of capitalism is to either impose tax on them, or some kind of levy by the person owning the land - either way supporting the expropriation of labour. The LTV isn't some ideal philosophical model, it's an analytical tool for studying the social relationship of capitalism.

Mike Harman
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May 29 2005 21:51

pingtiao, you read the original article all the way through?

I've got to about a third (not sure I'll get any further tbh, in the middle of Reading Capital Politically atm and I don't want to get the two confused). I agreed with his "total capital, total labour-power" analysis of useful labour, although Bookchin was saying the same thing years earlier, but I don't think I like the "creation of fictitious capital via selling commodities produced by obselete machinery at historic prices" line - which appears to be the bit aufheben slammed. When I've got a break between books, I'll have a bit more of look. What did you get out of it yourself?

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May 30 2005 00:05
Catch wrote:
most jobs in "post-industrial" countries are at best working in logistics, at worst primarily consumptive occupations - using commodities, not contributing to their manufacture, and often not even producing tangible services. To take control of this kind of production is worthless, it exists mainly to occupy our time by maintaining wage relationships, not very often to produce use-values.

seems to b a very reductionist outlook you have, if you are working in services and more ''consumer goods'' type industries, which since the expansion of these industries after fordism and the welfare state, more people are doing, you are producing directly for human need, so surely it wuld be easier for people to regulate directly.

Quote:
The basic things we require in society: food, clothing, energy, shelter (and transport to get to them). Only the last of these has to be made where we live, the rest are often produced hundreds if not thousands of miles away

not sure on that one, It hasn't changed much really, i mean copper and types of timber are imported in large quantities for example, but on the other hand plenty of raw materials are made here, likeplastics, glass and steel. I don't think its changed as much as you make out in the last 100-150 years to be honest.

Mike Harman
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May 30 2005 10:22

Cantdo.

I worked in a plastics factory for six months, one that made tomato punnets, ready-meal trays and inserts for biscuit packets - that sort of thing - it's one of only six factories in the country doing this, and supplies a lot of very major food manufacturers and retailers. I was temping in the sales department, so it doesn't help my proletarian credibility great deal, but I'll put my hand on my heart and say that not a single thing made that factory produced a tangible use value in terms of satisfying human need. Plastic trays are the most wasteful form of packaging and one of the hardest to dispose of, and they add a significant cost to the price of food packaged in them. The guy who used to do the pricing for new quotes said he never, ever bought anything in a plastic tray because he knew how much extra it costs.

Fair enough, taking over that factory, ousting the six directors, and running it co-operatively would change the economic relationships within it. But in terms of "from each according to ability; to each according to need" it satisfies neither. Now, it might be possible to change the plastics processing in that factory to produce something else useful, that's fine, but simply shouting "workers management" and then assuming that's fixed the problem doesn't do it for me, and it would take scientific and technical knowledge that probably isn't available in that factory to shift it over. Service industries are fine, but they mean nothing if there's no food to serve in the restaurant, no energy to heat the hospital etc. etc.

If we ever get to a revolutionary situation in this country, we'll have to deal with the fact that much of our agricultural land is set-aside and would take a fair bit of time to get back into use, that many of our staple foods (bananas, lots of grains, tomatoes) are imported etc. Self-management of hair-dressing salons, tanning booths, internet cafés and fried chicken outlets, not to mention PR, accountancy, business services, web design, banks won't cut it on it's own. As such, although people should of course organise in their workplaces, suggesting the revolution can happen "at the point of production" is both reductionist and outdated by several decades. It will require many people to largely abandon their existing occupations (not hard to persuade most people I reckon), to manage areas of activity that no longer form a significant part of our economy.

I'm not saying there'll be no transnational trade, but it won't just keep running as it is now on the same scale. Unless you think that during a period of civil war, the Mid-western US, China, and West Africa will continue to grow grain, produce consumer goods and deplete their fish stocks in order to keep us afloat while we sort it out, 'cos we can always exchange financial services, CDs and defense systems (our three biggest industries) in return roll eyes

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May 30 2005 19:19

Hi Catch

Catch wrote:
The LTV isn't some ideal philosophical model, it's an analytical tool for studying the social relationship of capitalism.

I agree. It’s this kind of view that I regard as “suspicious” of Marxist LTV, at least compared to the perspective of those who study Marxism largely for its own sake.

That aside, I have to admit to having trouble believing that a thing’s value, in a politically useful sense, follows from the man-hours expended in its production. I also face difficulties reconciling LTV to goal driven mathematical utility.

It may be the case that, as you say…

Catch wrote:
To assign natural resources exchange value in the context of capitalism is to either impose tax on them, or some kind of levy by the person owning the land - either way supporting the expropriation of labour.

But that does not prove, my admitedly potentially incorrect interpretation of, general Marxist LTV. Perhaps you could clear something up for me, does the LTV not formulate utility and wages under Communism as well as Capitalist profit?

I'd be interested to see if you agree with me that Marxist Crisis Theory depends on the LTV, in which case I'm thinking (that for some folks at least) it's a more significant part of a broader philosophical model than you give it credit.

Regards

Chris

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May 30 2005 19:46
Lazy Riser wrote:
Hi Catch

That aside, I have to admit to having trouble believing that a thing’s value, in a politically useful sense, follows from the man-hours expended in its production.

There are two sides to value, use-value and exchange value. Exchange value is determined by socially necessary labour time, and expressed by the money form at the point of exchange. It's therefore only applicable in a capitalist system, which is the one Marx was analysing in Capital. The combination of commodities and wage labour both forces people to work and restricts their access to the means of life, allowing the expropriation of a proportion of their labour as surplus value.

Quote:
does the LTV not formulate utility and wages under Communism as well as Capitalist profit?

Under communism (rather than Communism), there'd be neither commodities, nor wages. If all goods are produced "according to need", then they aren't produced for exchange, and hence the concept of exchange value, and hence the LTV is meaningless. They'd be produced only according to their use-value, for the direct satisfaction of human need.

Quote:

I also face difficulties reconciling LTV to goal driven mathematical utility.

Could you expand on this?

Quote:

I'd be interested to see if you agree with me that Marxist Crisis Theory depends on the LTV, in which case I'm thinking (that for some folks at least) it's a more significant part of a broader philosophical model than you give it credit.

Regards

Chris

I don't know much about Crisis Theory, hence my trouble getting through the original article linked to. I'd assume it does (since crisis theory depends on surplus value and the limits to this under expanding production - anything talking about surplus value depends on the LTV), but I dunno if LTV/surplus value necessarily leads to crisis theory.

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Jun 1 2005 21:16

Hi Catch

Catch wrote:
Under communism (rather than Communism), there'd be neither commodities, nor wages. If all goods are produced "according to need", then they aren't produced for exchange, and hence the concept of exchange value, and hence the LTV is meaningless. They'd be produced only according to their use-value, for the direct satisfaction of human need.

This line of reasoning doesn’t quite work for me, but I’m OK with it working for you. I’ll have to agree that Marxian LTV is meaningless outside an analysis of capitalism, because I can’t find the passage in Capital, I seem to remember, that talked about the “fair wage” being an socially equal, hourly rate. Maybe I made it up in my head. Whatever. Have you read The Communist Manifesto (Marx, Engels)? I find it very cagey when it comes to the question of property and wages, it spends much more time refuting reactionary prejudice than positively developing its position.

Catch wrote:
Quote:
I also face difficulties reconciling LTV to goal driven mathematical utility.

Could you expand on this?

As a throwaway model for analysing capitalist social relations, as opposed to a theory of value or price, then there is no reason why Marxian LTV should reconcile with utility. As one of general LTV’s many detractors, my appraisal of a thing’s value, and hence the price I can afford for it, is the payoff I receive from its utilisation. I’m thinking along the lines of Von Neumann’s “Theory of Games and Economic Behaviour”.

Catch wrote:
I dunno if LTV/surplus value necessarily leads to crisis theory.

Yes, I think it’s best to maintain an open mind. I doubt there is any profit for us in either defending or refuting Marx, only by learning from his mistakes and successes using the benefit of our hindsight. I’d like to draw your attention to this Wikipedia entry on LTV, and to the bit on “crises” towards the end …

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

I’m enjoying discussing this with you, thanks for such stimulating, friendly, discourse.

Cheers

Chris

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pingtiao
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Jun 1 2005 21:49

These are some really interesting posts- i feel im learning: thanks.

Welcome to the boards Lazy Riser.

Mike Harman
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Jun 1 2005 23:23

I'll check the wikipedia thing tomorrow, off to bed now, but quickly:

Lazy Riser wrote:

As one of general LTV’s many detractors, my appraisal of a thing’s value, and hence the price I can afford for it, is the payoff I receive from its utilisation. I’m thinking along the lines of Von Neumann’s “Theory of Games and Economic Behaviour”.

Quote:
the payoff I receive from its utilisation

Use-value then.

The fact that you can only get that use-value by paying for the commodity, and you can only pay for it by earning a wage (unless you're living off surplus value), and hence only by producing commodities (directly or indirectly) and reproducing capital, leads us back to what is the fundamental nature of the commodity. It represents both use-value and exchange value, value, abstract labour.

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Jun 11 2005 11:34

Hi Catch,

I’m far from convinced that Von Neumann utility and Marxian use-value are strictly equivalent, although I would encourage work to correlate their higher level theoretical models with a view to developing a mathematically verifiable political strategy which maximises my payoff. Scepticism aside, your insight here is propelling us towards the frontiers of political science, so thank you.

I can make sense of your point regarding the three faces of a commodity’s value, but you’ll forgive me for suggesting that behind the specialised Marxist vocabulary is a truism. I expect you’ll agree that this analysis of the commodity is designed to show how capitalism is necessarily increasingly exploitative and therefore doomed due to the unbearable duress it places upon the proletariat.

Providing I’m allowed an especially indulgent, not to mention cheekily pro-situ, interpretation of “unbearable duress”, then I wouldn’t contend with this crisis theory’s summary position. Whilst I have reservations about the literal truth of some of the workings in the margins, I’m thinking that investing much effort in refuting them is unproductive, and likely to play against my best interests.

Cheers

Chris

Mike Harman
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Jun 11 2005 12:54

I'm not familiar with Von Neumann utility. If I wake up a bit more later I'll go look it up.

The specialised marxist vocabulary does indeed describe very simple concepts, dunno if they're truisms. Capital really isn't all that difficult, but it's necessary to strictly define terms in order to be clear on their meaning, and this makes it look more complicated than it is.

However don't think Capital starts with the a priori assumption that "capitalism is necessarily increasingly exploitative and therefore doomed due to the unbearable duress it places upon the proletariat.

"

Marx quite liked capitalism - he considered it a very progressive force compared to earlier forms of accumulation, one which would greatly increase productive forces and create the material pre-conditions of socialism. Note I said pre-conditions though, the idea that capitalism _automatically_ leads to communism was not as far as I know put forward by Marx, he simply thought it _could_ lead to communism.

I'm not sure about that last sentence. Does that mean that if you really sat down and tried to refute Marx's concepts you might find yourself agreeing with his analysis? And that might cause ethical problems with your leisure empire or something?

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Jun 11 2005 18:29

Hi Catch

“Theory of Games and Economic Behavior” (Von Neumann, Morgenstern). It’s devastatingly technical, for me at least, and has been carefully set out to allow no ideological current to gain credibility by laying claim to its principles.

I think you’re right about Capital’s initial assumptions, and I accept your idea of Marx’s affinity with capitalism. But, I think I’ll stick my neck out and maintain that considering the different faces of commodity value, with particular regard to exploitation and diminishing returns in the creation of a surplus in exchange-value over labour-value and fixed costs, sits at the root of the nature of the Marxian theory of capitalist crisis.

Your candidate reason for zero expenditure on anti-Marxist refutation is one that I had not considered, but is certainly as valid as any other. My particular reason, at least for today, is that there are already plenty of well rehearsed anti-Marxist positions and I see no point in developing another, especially as doing so plays to the bourge’s hand.

Lots of love, must go to pub now, I’ll have one for you Catch.

Chris