I started this blog because I wanted to post the text of my youtube videos somewhere.
These videos present critical arguments about capitalism. They are intended to convey complicated economic theories in clear, easy-to-grasp language. They are constantly getting better. Any feedback or suggestions is greatly appreciated.
People often ask which video to start with.
My two most recent videos are a step forward production-wise and do a good job of relating some theoretical ideas to important real world events:
Robots vs. Luddites
Manufacturing Consent.
For a good theoretical starting point here is a good trio of videos to begin with:
Commodities-Remix
Crisis- the Overaccumulation of Capital
Work
For more on crisis theory try this order:
Crisis-the Overaccumulation of Capital
Felix the Cat and Capitalist Competition
DIY exploitation
Capitalist Equilibrium
Consume!
The Falling Rate of Profit
What is Credit?
and maybe even Crisis Theory- and outline
For more on value and capital:
Commodities-Remix
What is capital?
What is capitalism?
What is Credit?
What the hell is money?
Labor Theory of Value (an older video I don’t like as much anymore)
Who is exploited?
Hi,
I’m a moderator at a place called politicalforum.com. We have a user there who is either you, or is stealing all of your work. Are you a user at PoliticalForum.com? Please send me an email and let me know. We’ll either cite your work in his posts or delete them… Your choice.
Thanks a bunch.
Comment by Metrophobe — June 23, 2008 @ 2:04 pm |
Dave Riley told me about your blog, excellent stuff…much appreciated, I will try and spread the word.
Comment by Derek Wall — October 30, 2008 @ 2:13 pm |
Thank you for all the great work that went into these videos. Along w/ David Harvery’s site — davidharvey.org, — you make the case for the compelling revelence of Marxism in our time in a clear and cogent manner.
Comment by trivas7 — January 27, 2009 @ 4:16 pm |
I took a look at The Labor Theory of Value. I agree to a large degree; labor augmented with technology does produce value in the forms of goods and services. Not all value must be produced. I do not have to sell my labor to capitalists, who are really a shrinking breed because they have let CEO’s mismanage their capital. I may sell my labor or the product of my labor to other workers. The valuing of goods and services is a result of people trading with each other and there is no necessary relationship between the amount of labor consumed to produce a product and the price of the product; did you hear about the baseball card which sold for 1.265 million on eBay? Or notice the dot com, housing, and oil bubbles. I would encourage you to read Murray Rothbard’s Man, Economy, and State.
Comment by DC — February 16, 2009 @ 3:33 am |
Please name something that has value that has no connection to the labor process.
The CEO is a modern evolution of the capitalist- a manager/capitalist.
You can sell the product of your labor to other workers only if you own the product of your labor which would mean you were self-employed. In this case you would still be selling it at its value so I fail to see how this is a critique of the LTV.
Your last comments regarding the effect of supply and demand on price are not exceptions to the LTV, though these represent a common misunderstanding about the relation of the LTV to supply and demand. The LTV was not meant to replace supply and demand as an explanation of supply and demand. Clearly there are always instances in which an extremely scarce commodity can command monopoly pricing far above its actual value. But the classical economists were not satisfied with this as the final theory of value because with freely-reproducible commodities it was obvious that supply and demand balanced each other out. There remained a need to explain the relative prices of commodities, or natural-prices as the classical economists called it, and to this we turn to the LTV. The LTV is the only thing that allows us to explain the social relations of capitalism and the way social labor is apportioned. Subjective value theory does none of these things.
In terms of your reference to credit bubbles, stock bubbles, housing bubble, etc. These are all examples of fictitious value- see my video “what is credit?”. The oil bubble is most likely a result of monopoly pricing.
Comment by kapitalism101 — February 16, 2009 @ 1:11 pm |
Thank you for the response.
1. Four phenomena having value without having to be produced: clean air to breathe, fresh spring water, a coconut, and a loving family.
2. A CEO sells his labor and is an employee.
3. I own my own labor which I may or may not sell to any particular employer, or I may decide to produce my own product. I may consume my own product, give it away or attempt to sell it below market value or attempt to sell it above market value. 40,000 consumers may look at my product and say no and then 5,000 may come along and pay more than what similar products are selling for on the market because of my creativity which has nothing to do with labor time. My labor belongs to me as an individual. I am free to develop or purchase the means of production and then the means of producing my product belong to me, not to some fictitious socially necessary labor time. The product of my labor belongs to me unless I choose to sell my labor power to produce a product or service for someone else who will own that product or service because s/he invested in the factors of production; in that case the wage belongs to me. The freedom to invest in myself, to own my labor power, to own property, to plan, organize, and own the means of production as well as the freedom to exchange my property and my labor with others who are free to do the same makes capitalism a very wonderful development in the history of humans. I am free to decide that a teacher is producing value when he teaches my child to read and write or that a janitor is producing value when she keeps my toilet clean or that a bank teller is producing value when he cashes my check or that a police officer is producing value when she gets a drunk driver off the road. Value is both a subjective and objective phenomenon and circumstances can alter what is and is not valued. We cannot collapse value into solely a subjective reality or an objective reality. Adam Smith, David Ricardo, and Karl Marx were mostly barking up the wrong tree with the labor theory of value.
4. When I have time I will watch the video “what is credit?” I believe the bubbles mentioned are mostly the result of the expansion of bank credit (fractional reserve banking) which allowed the price of oil, housing, et cetera to be bid up to a fictitious level as you stated.
Comment by DC — February 16, 2009 @ 11:40 pm |
1. None of these objects have exchange value unless they are accompanied by labor. Do I need to explain this?
2. A CEO is a hybrid between manager and capitalist. Capitalists both own and control the means of production. The CEO controls the means of production. He also receives a very large portion of his salary from stock options and so benefits from the exploitation of employees. More importantly, as CEO he becomes the objectification of capital- a man acting in the interest of capital with the logic of capital. Perhaps a quote from Marx himself would be useful: In discussing the joint-stock enterprise he notes the “transformation of the actually functioning capitalist into a mere manager, administrator of other people’s capital and of the owner of capital into… a mere money-capitalist.” Which means the “abolition of capital as private property within the framework of capitalist production itself.” (Das Kapital vol3.) It’s important to understand how the role of capitalist, as the personification of capital, has evolved as the form of capitalist organization has evolved.
3. I agree with much of these statements with the following exceptions: If your creativity is not patented then you will not be able to charge a monopoly price for your product and competition will force price back down to socially necessary labor time. If your creativity is patented then your product is not freely reproducible and you can charge monopoly prices. (Of course no idea is purely the product of one person. Knowledge is a social phenomenon and copyright law is becoming increasingly arbitrary and authoritarian as the absurdity of this becomes more and more clear. But I digress…) You are not free to purchase means of production unless you have a large sum of money, something which the vast majority of us don’t have. I don’t understand your statement about the products of your labor belonging to a “fictitious socially necessary labor time”. This seems to be some misunderstanding of the concept of socially necessary labor time… The comment that classical economists were “barking up the wrong tree with the LTV” has a nice rhetorical ring but nothing in your post actually refutes the LTV or shows that an alternative value system explains the world better. Lastly I totally agree that value is both subjective and objective which is why classical economists differentiated between use-value and exchange-value.
4. Yes banking is a part of the credit system.
Comment by kapitalism101 — February 17, 2009 @ 12:17 am |
kapitalism101, I must respectfully disagree.
You said,
“You are not free to purchase means of production unless you have a large sum of money, something which the vast majority of us don’t have.”
Almost all of us are free to purchase the “means of production” provided we can offer whatever it is the current owner of the means of production is willing to accept in exchange. The “means of production” can cost a lot or not so much; it is entirely dependent on what it is one is trying to produce and the number of units one is trying to produce. You cannot make a general claim that the “means of production” are beyond the attainment of “most of us.” This is simply untrue. For example, in 2004, the number of firms (businesses) in the US was just under 25.5 million. Of these, nearly 19.5 million were non-employers (i.e., no employees). This means roughly 75% of all firms in the US in 2004, were self-employed individuals, partnerships, etc exploiting no one. In fact, of all firms in the US in 2004, fewer than 5% had more than 9 employees. These facts seem to indicate that ownership of the means of production is within the grasp of far more of us than you care to admit and that most capitalists can’t exploit anyone in the Marxist sense (because they don’t have employees to exploit!).
There are reasons why members of a capitalist society CHOOSE to be wage laborers rather than capitalists. When I agree to pay you $200 a week to produce a product which I hope to then sell for a profit exceeding $200, you are usually accepting the $200 a week for one of 2 reasons: because you value the certainty and immediacy of a weekly paycheck over the uncertainty of attempting to produce and exchange the product yourself for a profit exceeding $200 at a later time; or because you don’t currently have access to the capital required to purchase the means of production for yourself. As a capitalist, I am forgoing the immediate receipt of $200 in the hope that I will receive more than that in the future. Any profit I make exceeding the $200 I could have received as a wage laborer is my compensation for assuming additional risk (e.g., maybe consumers won’t be willing to pay as much as I thought or the cost of production will rise and my profits will be less than I anticipated) and having to wait longer for my compensation (I don’t make a profit until the product is sold and my obligations to my employees, suppliers, etc are satisfied). Moreover, nothing stops the wage laborer from becoming a capitalist if he wants to. In fact, it is not uncommon that a wage laborer tires of watching his boss get rich and decides to save until he has accumulated the necessary capital and means of production to become a capitalist himself. No one is forced to be a wage laborer in a capitalist society. Equating wage labor with slavery (as Marxists almost universally do) is both dishonest and trivializes the crimes committed against real slaves. In most countries, only the state can use the threat of physical force to enforce its will. Thus, the exploitation which occurs in most societies is one where homesteaders/producers/savers (this includes wage laborers and capitalists) are exploited by non-homesteaders/non-producers/non-savers, i.e., the state. The state’s monopoly on the use of force is what allows it to exploit its citizens. Marxists make a fundamental error in identifying capitalists as the exploiters of workers when it is the state that exploits us all.
Comment by capitalism101 — February 17, 2009 @ 2:03 am |
Can I just state for the record that I did not post that link to my blog on Mises.org and that I am not interested in being an anti-Austrian crusader? If people want to actually watch/read some of my videos and leave comments about specific arguments therein, that’s groovy. If people are just here to repeat boring libertarian arguments over and over again on this- a blank page that doesn’t contain even a blog entry- I can only devote so much time to this. I’m into blogging, but I received an in-ordinate number of hits today after someone posted my blog on mises.org and I can’t really imagine myself having time to respond to torrents of miseoids all looking for a marxist strawman to beat on. If whomever posted that link to my blog on mises.org is reading this I’d just like to say: please ask before volunteering my services for your crusade. This blog is extremely time consuming to maintain. I really don’t have time to debate the entire libertarian right.
On to responding to capitalism101’s comment:
Please site the source of those statistics regarding self-employment. In addition please post stats on the average income of the self-employed versus the employed, the relation of the surge in self-employment over the last 30 years to declining wages and the degradation of work, the hours and nature of self-employed work; and the number of wage-laborers who become capitalists each year. I like statistics too, but we can both agree that they are pretty worthless out of context. There has been a surge in self-employment in the last 30 years as wage labor has become less attractive and less available. Still many self employed people find it quite hard to make a living. More significantly there has been a turn toward categorizing people formerly known as wage-laborers as independent contractors thus relieving capital of its responsibility towards its workers (it doesn’t need to pay insurance, 40-hour weeks, etc.) Yet these “independent contractors” remain just as exploited as wage laborers.
Re. wage slavery. (Please find one instance where I use the term “wage slavery” in my blog.) Yes workers choose to work for capitalists. But exploitation has nothing to do with free choice. It is an objective observation about the nature of profit under conditions of wage labor and private property. That is the Marxist argument, an argument that is internally consistent and explains a great deal of things about the world we live in that other theories of profit do not. For a more thorough explication of these things try watching any of my videos. To argue that profit comes from risk and not the difference between wages and the value of the product is a common bourgeois argument. It stems from a different theory of value. To debate these two value systems would take a lot of time. One must ask if this Austrian value theory is also internally consistent and what it can explain about the world that the LTV can’t. A more thorough engagement with various aspect of bourgeois economy is on my agenda for future study, but I don’t think I am prepared for a full-scale critique of this all now. And I tire of these circular debates in which Austrians post the same 3 or 4 arguments over and over again on my blog without even watching any of my videos. But, in light of my plans to one day further my understanding of Austrian econ, perhaps you could help me understand some of the subtleties of your argument:
How is the argument that risk creates value compatible with a subjective theory of value? If the value of the commodity, to Austrians, is the cost of production plus the risk/ingenuity of the capitalist how do consumers assign value to capitalist risk? If these products made by risky capitalists are competing with similar products made by self-employed workers, and if these products have the same price due to supply and demand, how can they be same price if one is taking risk and the other isn’t? Indeed how can subjective value theory have any relation to anything that goes on in the production process? Shouldn’t it be purely the result of consumer desire and not some additive result of various components of production? Does the value created by labor stay the same if wages change? If there is a difference between wages and the value created by labor what role does this play in the Austrian concept of value? These are all questions I have had about the internal consistency of the subjective theory of value.
Finally, when you say that the state is exploitative you must be using some alternative definition of exploitation. That is fine, but you should define this usage here so that I understand what you mean as it is different than the definition of exploitation used in my videos. Are you referring to taxes? Or maybe the Federal Reserve? In this case, how is your definition of exploitation different from appropriation or devaluation?
Comment by kapitalism101 — February 17, 2009 @ 7:21 am |
I have seen your videos, I am very impressed indeed. My critique to the LTV would be that we see everyday things exchanging in proportions that just are not equivalent in their “labor value”, an example would be the baseball card someone pointed above. Thinking obout on an aggregate perspective in which “total value = total prices” does not help us one bit, since (as another guy pointed out) anything can fill that equation (weight, volume, energy necessary to produce etc…) so it leaves us in the dark. The only thing that points us to an LTV would be then just common sense, but there is no shadow of proof then that labor is the moving force behing prices, it remains just an assumption.
I might be wrong but I think that you are also a bit confused about supply and demand. Your idea is that it works like this: “extra demand drives prices up, producers rush and create more stuff, the new supply drives prices go down again”, and just opening any Microeconomic textbook will tell you that that is just not the way supply and demand is conceived. I think that error goes down to Marx who said “when supply meets demand, they cease to act”, but in reality supply never meets demand in that way. Only a part of demand is supplied, if all demand would be suplied ie: everybody has exactly the amount of TV sets they want to own, then the price of a TV would be zero as it ceases to be an economic good.
Your notion of Subjective Theory of Value seems also a bit misguided. I might be wrong, but I think that you believe that the STV means that thing are worth what people want them to be worth (how convinient! you say), but marginalism also takes in acount the costs of production, or rather, the marginal costs of production. But that marginal cost is complemented by the marginal utility of things (hence, supply and demand).
Also something worth mentioning. Before the classical economists many other thinkers conceived value being based on an interaction between Utility and Supply/Demand, especially in mainland Europe (I believe Mariana was one of them but I am not sure… I’ll have to check). The cost of production theory of value and the LTV were not the only theories back then and they flourished mainly in England. Yet what is new is the “marginal” approach, that is calculating at the last product created. As for the “overacumulation” or “undercunsumption” theories, check “Say’s Law” which disproved them on the 17th century.
For all fellow Austrians that want to continue the debate, this will be helpful: Try to picture the “socially necessary labour time” as a supply curve (ie: the easier something becames reproducible, the supply curve shifts) , that will help you grasp the idea more easely.
Comment by Austrian — February 18, 2009 @ 3:47 am |
I have already responded to the baseball card question so I will not repeat myself. Regarding total value=total price: there is more to the price value relation than this one equality which I explain in my video on the transformation problem. The LTV also explains more than price. It explains the social relations of capitalism and how these relations take concrete forms. By focusing on price you narrow the debate about which theory of value describes the world better by just ignoring all the descriptive richness of the LTV.
By treating demand as an abstract psychological phenomena neoclassical economy can totally rid itself of any responsibility for actually explaining demand. For marx demand relates to the amount of money people have to spend. Without this component you can’t build a model of a capitalist system in reproduction, crisis, etc. You can’t explain the relation between capitalist investment strategy, wages and demand. You can’t explain the forces behind supply and demand. I also find it silly that neoclassical econ tries to ridicule the LTV for not being quantitatively precise enough in explaining price but then appeals to a completely unquantifiable source, group psychology, to explain demand. It becomes tautological: how much demand is there? whatever people are willing to pay. How much are they willing to pay? whatever their demand is. etc.
Marx refuted Say’s law in the 1860 when he showed that a purchase and sale are separated in time by money thus leaving the door open for crisis.
Trying to turn any marxist category into a category in a different economic system is dangerous. This was the source of the problem with the transformation problem in the first place. SNLT is not a supply curve. It’s the amount of time it takes, on average, to complete a task at a given time in history. It cannot be reduced to some marginalist concept without robbing it of its temporal, historical dimensions.
Comment by kapitalism101 — February 18, 2009 @ 2:14 pm |
I’m sorry to hear you’ve been beset by a plague of libertarians. I suppose such are the consequences of being a Marxist on the internet. The statistics I quoted are from the US Census Bureau. I apologize, but I’m not going to produce the other statistics you asked for since they would not support your claim that “You are not free to purchase means of production unless you have a large sum of money.” This is the statement I was refuting.
With regards to the Austrian theory of value, first, I’ll say that my economic views would be better described as neoclassical and libertarian. While I respect the work of Mises and Rothbard, the significant contributions of the Austrian school have largely already been absorbed into neoclassical theory. In my opinion, the elements of Austrian theory as described by Mises and Rothbard which depart from orthodox theory are mostly erroneous or insignificant. Therefore, I am not the best person to defend Austrian theory. However, the Austrian school (like almost all modern economic schools) adheres to a form of marginalism. Carl Menger, the founder of the Austrian school, is generally credited as a co-founder of the marginal utility revolution and Austrians since have built upon Menger’s foundation.
Assuming you’re familiar with the countless refutations of the Marxian LTV which have appeared over the last 120+ years, there is doubtless nothing I could say to change your mind. I do, however, wish you the best of luck with your research.
Comment by capitalism101 — February 18, 2009 @ 6:26 am |
I think that your one statistical figure is misleading. It tells us nothing about the actual nature of this “self-employed” work and how this term is categorized. It doesn’t tell us how many of these people own actual means of production, how many of them sell their services as “sub-contractors” to a capitalist firm, how many work in informal markets doing service-work without owning means of production, or what the percent of GDP is represented by their output. It also doesn’t speak to historical shifts in employment as they relate to ownership of means of production, the degradation of work/skill, automation, unemployment, wages, etc. I do not think your statistic adequately refutes the idea that the vast majority of citizens in a capitalist society own nothing but their own ability to work.
Comment by kapitalism101 — February 18, 2009 @ 5:33 pm |