Robots vs. Luddites
part one:
part two:
Robots vs. Luddites
1812 Nottingham England
In 1812 sabotage crept through the British countryside. By the cover of darkness gangs of weavers organized under their anonymous leader “General Ludd” broke into factories by night and smashed the new automated looms to pieces. Cloaked armies of “Luddites” appeared at factory gates in the day to demand better wages, better working conditions, and the right to produce higher-quality fabric. The weavers had not always been guerilla fighters. For 300 years they had passed down their craft from generation to generation of skilled artisans, weaving fine silk and stockings in the comfort of their own home. But now there was a machine that could do all that. It was called the power-loom.
But why would a worker break a machine? A machine is supposed to make work easier and make life better. To understand the violence of the Luddite rebellion we need to remember that when a worker uses a machine he/she enters into social relations with people. Work is always a social process entailing some sort of social cooperation. (In a capitalist society we can’t understand this social dimension without understanding the relations of private property which define it.) A machine conceals a social relation. Lift the veil and we see that the machine is an expression of the relationship between capitalist and laborer.
Throughout human history the social relations which we labor under have changed, from the primitive hunter-gatherer, to feudal societies, to modern industrial capitalism. We call these different organizations of social labor the “relations of production.” Different relations of production are characterized by different types ownership, different divisions of labor and different organizations of work.
Throughout human history the relations between people and the tools and machines they use has also evolved. From stone axes and knives to the automated loom to the personal computer the technical “forces of production” have undergone numerous revolutions.
These two aspects of work- the forces and relations of production- form the inner dynamic of human history. We might make some obvious observations about the two: Modern capitalist social relations couldn’t survive if we were constrained to the use of stonge-age tools. Conversely, the internet wouldn’t find much fertile ground for use within the social relations of 16th century European feudalism. We might use these obvious observations to make a more interesting observation: that the forces and relations of production co-evolve over time. This means that changes in one can have a profound effect on the other and that the inability of one to change can constrain the ability of the other to change.
By examining the coevolution of the forces and relations of production we can illuminate much about our history and our future.
So back to our question: why did the mysterious General Ludd and his followers steal through the English countryside under cover of darkness smashing the machines which were intended to make their work easier? To answer this question, let’s take a closer look at the machine in question.
The power loom did something that no loom before had done. It replaced the hands of the weaver with a mechanical hand that moved faster and more efficiently than the the most skilled of weavers. (figures?) The power loom didn’t just happen by accident. It appeared at a distinctive time in history when capitalists were introducing automated machines into production to replace the hand of the worker. Thus behind the machine, lay a social relation: a social relation between capitalists and workers.
By replacing the hand of the worker with the cold steel of a machine the skilled craftsman, the master weaver, was transformed into an unskilled machine-tender, an appendage of the machine. Unskilled workers could be paid lower wages. The pace of work could be dictated by the speed of the machine, not the pace of the human. Thus work could be sped up and intensified. Because less labor went into the product the prices of products fell making it impossible for independent craftsmen to compete with the new machines. In short, the replacement of the human hand with the automated tool meant a huge revolution in the social relations of 19th century Europe as the system of skilled craftwork was transformed into the large scale capitalist industry with its shopfloors of roaring machinery and the unskilled proletariat that tended these machines. The Luddite attack on the powerloom was a last-ditch defense of a dying labor process, a labor process quickly being replaced by modern industrial forces and relations of production.
And the Luddites weren’t the only barrier to the emergence of large-scale capitalist industry. The 19th century was filled with social conflict between capital and labor as workers resisted the impositions of the industrial labor process. The deskilling of work, the disciplining of the labor force and the acclamation of the population to the labor process continued into the 20th century inspiring innovators like Frederick Taylor and Henry Ford to lend their efforts to the problem. These were the major social problems of the times. The need for state regulation of labor conflict was a major factor in the emergence of the modern capitalist state. But of all the political and social attempts to regulate this conflict it may have been the machines themselves that did the most to discipline humans beings to modern capitalism.
But it would be a mistake to say that all of these changes were brought on by machines themselves, as if machine evolution was dragging human history along with it, kicking and screaming. Machines were introduced into production because they gave capitalists power in their conflict with workers. If you can be replaced by a machine you are much less likely to form a union or go on strike. If you are an unskilled machine-tender you can’t bargain for high wages like a skilled craft worker. Before the large-scale Industry of the 1800′s lay a tumultuous 200 year history in which capitalism ate away at the institutions of feudal property, creating the conditions for a modern labor force. The Manufacturing period which preceded the 1800′s still retained some held-over characteristics from the feudal period: There was still a lot of semi-skilled handicraft work, machines were used in a piece-meal fashion, and the size of the workforce was still relatively small.
But as more machines were introduced into the Manufacturing system, that system of production became less and less able to handle the demands of the machine. The powerloom, for instance meant that suddenly a factory could produce a lot more output than before. But this required increased input of raw materials. The sudden increase in demand for raw materials meant that those industries that produced raw materials were also under pressure to automate production. Increased output also meant finding new markets for goods. This required revolutions in transportation and communication: canals, railroads, and eventually automobiles and airplanes…
Automated production eventually meant the linking of all the machines in one workplace together to form one massive mechanical monster. This meant finding a regular, controllable motive power like the steam engine or, later, electricity to power production. Such a motive force became the regulator of the speed of production- the entire factory, its machines and human appendages, fell into rhythm with the rhythm of the steam engine. Once electricity became the prime moving force of production this meant revolutions in the system by which power was transmitted to production: power lines, power grids, etc. By the dawn of the 20th century the entire globe was linked up in interlocking power grids all coordinating the speed of production with a single motive power. Human life changed too, our movements falling into rhythm with the gentle hum of the power grid.
The demand for machines which would all be linked together in one big factory, powered by a uniform motive power, required both a huge increase in machine production and a uniformity of production that the semi-skilled workers of the manufacturing system couldn’t provide. It wasn’t until these workers were replaced by a less-skilled automated production system- the production of machines by machines themselves- that the Industrial Revolution could truly revolutionize European society.
The Luddite movement ended with violent repression and the hanging of its leaders. It seems that the defense of private property was more important to the emerging social order than human life. We see a curious relationship here. The technology that was to make life easier for humans becomes the source of the most violent, anti-human behavior. The social conflict that required the evolution of the machine in the first place is altered by the machine itself. But the conflict between labor and capital isn’t resolved, it’s merely transposed to another level: the social conflict of modern, industrial capitalism. The question then becomes, in this coevolution of the forces and relations of production, of machines and people, is there ever a point in which the technical basis of society can no longer support the class antagonisms of capitalism, in which the tremendous productivity and abundance made possible by technology can no longer function within the distorted social relations of private property?
Why should you care about the coevolution of the forces and relations of production in the 19th century?
Because these are the laws of motion of human history, laws we can see operating right now. We are living in the midst of a similar revolution in productive forces.
If the automated tools of the 19th century replaced the human hand what does a computer replace? The modern computer is the descendent of the Turing Machine. A Turing Machine, put simply, is a machine that can follow changing instructions. Feed in one set of instructions and the machine does one thing. Feed in another set of instructions and the machine does something else. Defined this way, a human being is also a turing machine. Tell Jim to lift pig iron and Jim lifts pig iron. Tell Jim to answer phones and Jim answers phones. With the advent of the Turing Machine it became possible to make a single machine which could do almost anything: a laptop that can check email and edit video, an iphone that can record music and get directions to the airport. One of the things about human beings that had made them so distinct from machines in the 19th century- their ability to follow instructions- had been eliminated.
There is a central contradiction in the replacing of humans with machines. Machines can produce commodities but they can’t create value. So while capitalists replace humans with machines in the search for more short-term profit, in the long run less value is being produced. The prices of commodities fall as less labor goes into them. If the turing machine can follow any set of instructions, the only labor that needs to go into the production process is the creation of these instructions themselves. The production of instructions, or information, then becomes the source of value. [Because the machine can do any task, the information we feed to machines becomes the most important aspect of production.]
Enter the information age- an age where the production and ownership of knowledge is the central thing around which all production revolves. If the speed of life in the industrial age was dictated by the pace of the steam engine or electricity, the speed of life today is dictated by the speed of information transfer. This speed of information transfer has increased rapidly in the last few decades to the point where huge amounts of information can now be sent across the globe with the click of a button. We are only beginning to see the tremendous revolutions in social relations that will be created by this evolution in the forces of production.
The race to improve the speed of information transfer to machines has led to revolutions in all sorts of industries like micro-processing, data storage, personal electronics, and the information infrastructure (cable, wireless, DSL, ethernet, etc.). It’s also causing the destruction of many older industries, industries which derived their profits from their exclusive ownership of the “means of duplication” like the record industry or print media. Recording a phonograph and pressing it used to require a great deal of capital. A record company’s profits relied not just on their ownership of the masters of a record but also on the fact that they had a monopoly over the ability to make more copies of that record. Now a musician can record their own album in their kitchen and distribute it online relatively cheaply. A fan can duplicate that recording a thousand times over with the click of a button. An entire generation of music listeners is now growing up with the expectation that they should be able to listen to any music they want at any time for free. Is this not proof of Marx’s argument that when human labor is removed from a task, the social value of that task falls to zero?
The newspaper industry is facing the same problem. Nobody wants to pay for the duplication of print media when they can get it for free online. Of course recording an album or writing a news article still requires labor from musicians and reporters. This is the information part of the commodity. But the crisis in the newspaper and record industry reveals an interesting aspect of information as a commodity: Information can only be bought and sold as a commodity if the seller has a monopoly over the right of duplication. When printing a newspaper required an expensive printing press and a complicated labor process it was a given that a newspaper was a commodity. But now that the duplication of news can happen at the click of a button that monopoly over duplication has disappeared.
For the newspaper industry the only solution so far has been to give news away for free online and rely on advertising for revenue. Meanwhile the recording industry has resorted to extravagant lawsuits against internet “piracy” and increasingly exploitative recording contracts with musicians called “360 deals” which demand a cut of all a bands revenue from merchandise sales to ticket sales.
If the monopoly on duplication is the only thing that makes information a commodity we are left wondering what is the true nature of information when this monopoly disappears. It seems increasingly obvious that information has an inherently social dimension. Where social knowledge leaves off and one person’s private contribution to social knowledge starts seems an increasingly arbitrary distinction defined by a narrow legal definition of intellectual property (a definition based in old-fashioned notions of commodity duplication.)
It’s not just that newspapermen and record industry executives are old-fashioned, or aren’t savvy enough with computers. It’s that the basic parameters of production and profit, the social relations, are changing as the forces of production evolve. As many times as they sue Napster or PirateBay the reality is that Napster and PirateBay represent the inherent nature of the new technology and the emergence of a new type of social relation that suggests a collective ownership of information. From wikipedia, to the blogosphere, to Linux, to the open-source software, new models of production and distribution are being experimented with on a collective level never before seen. But what kind of society is emerging? Clearly there are all sorts of problems with the way knowledge is created on the internet and there is a great deal of room for capitalism to expand into the internet for its own purposes of commodification and control. And outside of the internet there is still a great deal of real production that is done by human labor. What do the emerging models of information transfer of the internet-age have to offer the real-world labor process?
Industrial capitalism emerged from the manufacturing system of the early 1800′s spurred on by revolutions in the forces of production. But in order to come into its own as a new system of social relations it had to revolutionize the existing social relations. Today we can see the new forces of production overthrowing the established economic order. But what sort of society will emerge from this is yet to be seen.
Marx saw that despite of all the misery and exploitation of the Industrial Revolution that there were great socializing processes at work. The working class was being stripped of its antiquated, local superstitions. In being reduced to an unskilled, proletarian appendage to the machine, all workers were equalized, sharing the same social solidarity and common material interests. The labor process was becoming increasingly collective even as it became more degrading. Capital on the other hand was encountering greater and greater crisis and causing more and more people to question whether it could survive for much longer without destroying itself. But the great revolution that Marx had hoped for didn’t happen. It seemed that capitalism was not done learning how to displace crisis and finding new avenues of growth. And it seems revolutionary theory wasn’t ready to live up to the potential Marx saw in a post-capitalist society.
We have a lot of work to do in our time. These tectonic shifts in the forces and relations of production have coincided with global economic crisis and environmental crisis. At such times the future is uncertain. Anything can happen. If the left is to seize the initiative in the 21st century it has much theoretical work to do examining the trajectory of these new forces and relations of production and discerning what sort of possibilities they present for radical breaks from the present order.
Recommended reading:
Das Kapital, Karl Marx, the chapters on manufacturing and large scale industry
Cutting Edge,Technology, Information Capitalism, and Social Revolution; ed. Jim Davis. This is a great collection of essays about the information age and value theory.
“Digitalization and the Monadization of Power”, a lecture by Dylan Suzanne: http://www.archive.org/details/suzannemainelecture2 . I am curious to acquaint myself more with Suzanne’s work. This is a good lecture.
Soderberg, Johnathan. “Copyleft vs. Copyright; A Marxist Critique.” First Monday volume 7, number 3 (March 2002) URL: http://firstmonday.org/issues/issue7_3/soderberg/index.html This is an early work of Soderberg’s which eventually turned into his book Hacking Capitalism which I haven’t read yet because it’s way too expensive. If anyone has access to a digital version please let me know.
Also check out the P2P Foundation: http://p2pfoundation.net
music by a great Trio from the West Coast called “Beep”. Check them out at myspace.com/beeptrio
“Capitalist vs laborer” and “capital vs labor” are not interchangable. In this video you actually write the former while reading the latter — and you tend to use the two interchangably throughout your videos. I think this is misleading at the very least.
The latter are commodities, while the former are the alleged owners of those commodities. I think Marx knew this and also understood the significance of this distinction regarding the needed change in the relationship between workers and capital. Absent passive ownership, workers become the decision-makers and the residual claimants in production, and there is no antagonism between workers and capital.
“Workers must control the means of production”. How can this ever materialize if the interests of labor and capital are inherently antagonistic?
One of my favorite quotes is by the socialist Robert Blatchford, from his book “Merrie England” (which I’ve not actually read):
“To say that we could not work without capital is as true as to say that we could not mow without a scythe. To say that we could not work without a capitalist is as false as to say that we could not mow a meadow unless all the scythes belonged to one man. Nay, it is as false as to say that we could not mow unless all the scythes belonged to one man and he took a third of the harvest as payment for the loan of them.”
I’ve received negative feedback on that quote from a serious Marxist, who took issue with the apparent conflation of “capital” with “means of production.” I was told that this is not only incorrect, but it plays into the hands of our enemies (somehow, I never got a response when I asked how).
I’m not sure what to think (I’m very much an amateur).
Looks like you’re doing pretty good to me. Thanks for the great quote!
I think when Brendan uses the two somewhat interchangably he is following in Marx’s footsteps. After all, Marx noted how the capitalist was “capital personified, and functions in the process of production solely as the agent of capital” (Capital, Vol III, ch 48). It thus serves the prupose of demonstrating the manner in which social relations manifest themselves in commodity relations. Just as an adjunct, capital technically isn’t a commodity either…
As for your “workers become the decision-makers and the residual claimants in production, and there is no antagonism between workers and capital”, that is utterly fallacious. If the workers could claim the whole of their labour product, where would profit come from and subsequently why would the “capitalist” bother producing stuff? It’s the precise difference between labour power as the input commodity and the value created by it’s use, labour, that is the basis for profit making and expansion of value – to imply that workers claim the product is highly misleading and misunderstands the very essence of capitalism.
Regarding the ““Workers must control the means of production”. How can this ever materialize if the interests of labor and capital are inherently antagonistic?”; means of production as physical items are not themselves inherently “capital”. They only become capital in the context of the social relations of capitalist society, i.e. they are put to use with aims of expanding value. In a post-capitalist society, there would by definition be no capital. It is not the physical machinery etc which is the source of the antagonism (and it’s very ironic that you are making this point as if it applies to Marxism on a video about Luddism, to which your statement was adopted); it is through capital as a social relation where the antagonism arises.
Perhaps “absent passive ownership” wasn’t clear enough. Does “absent capitalists” make more sense? Also, “post-capitalist society” means (by definition) “no capitalists” — not “no capital”. The notion that capitalists are “capital personified” does not suggest that capital cannot exist in the absence of capitalists. In fact, to eventually arrive at a post-capitalist society where capital doesn’t exist (higher communism?), we will probably transition through some form of “socialism” where capital does exist but capitalists don’t (lower communism). People like David Schweickart and Michael Howard call this “economic democracy”. For more information, Schweickart’s “After Capitalism” and Howard’s “Self-Management and the Crisis of Socialism” are very good reading.
Absent from the production process? Isn’t this common reality under a capitalism with so developed a financial sector as actually existing capitalism?
Post Capitalist society by definition means no capitalists; it likewise means there is no capital. Capital is a social relation; what constitutes capital only constitutes capital under capitalism (my god, thats a lot of capitals.) Would a hoe or plough under feudalism be capital? No, and any attempts to cite it as such are a classic case of the backwards claiming nature of modern economics, which sees vague similarities with other periods and claims it as it’s own (same case applies with money, for instance). It is sheer lyrical sophistry to suggest that capital can exist without capitalists..
Well, a hoe or a plough aren’t necessarily “capital” under capitalism either. Money and commodities are only capital when they enter the circuit of capital. In any case, we appear to disagree about some fundamentals, and I doubt any further debate will conclusively resolve the dispute. But I will leave you with some thoughts:
“Having said what successor-system theory is supposed to be, let me underscore what successor-system theory is not. It is not the whole of counterproject theory. It is not even the whole of the economic component of this theory. Successor-system theory is centered on a rather abstract economic model. It does not concern itself with the actual history of capitalism — its development from feudalism, its relationship to slavery and colonialism, its curious mix of progressive ideals and brutal practices. It does not address, except indirectly, such Marxian concepts as alienated labor, fetishism of commodities, the labor theory of value or the falling rate of profit. It does not concern itself with theways in which the economic “base” of society manifests itself in other areas of society.
“Nor does successor-system theory address in a sustained or systematic fashion the issues of racism, sexism, homophobia and other forms of structural oppression. These issues are important to the counterproject, exceedingly so, but they lie outside the purview of successor-system theory, at least as it will be sketched in these pages.
“Successor-system theory is further restricted in that it is not a theory about Marx’s “higher stage of communism,” or the ultimate fate of humanity. It is concerned with what is both necessary and possible now — the immediate next stage beyond capitalism, a stage that will be marked by its origins within capitalism. One can speculate as to the evolution of a POST-CAPITALIST society such as the one I will describe — indeed, I will offer some thoughts on this topic at the end of this book — but such speculations extend beyond the range of the theory itself.”
– David Schweickart on counterproject theory and successor-system theory
“In “The Communist Manifesto”, Marx himself put forward a model of socialism as a classless society, but one with commodity exchange. Some capitalist enterprises survive. There are markets for means of production, labor, and consumer goods. Socially owned enterprises also operate through these markets. In preserving commodity exchange, such a market socialism has a greater continuity with the society it displaces than does nonmarket socialism, and thus it is more likely to emerge from capitalism as a result of tendencies generated within it. Nonmarket socialism may better fit the moral ideal in Marx’s philosophical communism, but it is detached from the historical tendencies to be found in the real world. Some have interpreted Marx as having left behind moral prescription iin favor of historical description, particularly after developing the theory of historical materialism in the late 1840s. Thus historical materialism might be thought to favor the market-socialist model. Yet Marx later consistently favors the nonmarket models of the “Critique” and “Capital”.”
– Michael Howard on Marx and the market
Sat there isolated doing nothing, of course they aren’t capital. Applied in the production process they certainly are. I meant this implicitly when I gave my example; I apologise if it wasn’t clear enough, but I took it as a given that this was what I meant.
As for your quotes, the former has very little relevance to the piece at hand, although is interesting albeit somewhat suffers from the “abstract economic model” statement he made. It makes me recall those economists who seek to explain the role of money for instance in Roman society by reference to it’s role in capitalist society; it’s almost impossible to make abstractions that cover all variants of society conceivable when society is so flexible.
As for the second quote, I’m not necessarily sure that’s so true either; mostly because of the fact that many of the prescriptions Marx offered (like the proposals he gave on taxation etc) he later repudiated. The rest is entirely speculative however, and I disagree with it (as much as I disagree with the implication that the only other alternative is a centrally planned economy), but as here isn’t the time nor place to discuss that I simply won’t.
The quotations I provided were not intended to “prove” anything. I merely wanted to show that I am not plucking ideas out of thin air. Sorry you don’t see the relevance. Moreover, I doubt there is any way for me to “prove” that capital can (and does) certainly exist in the absence of capitalists. But I would like to expand on your “hoe and plough” analogy (see paragraph below). I would also like to suggest that the “social relations” of production must be destroyed and replaced with new social relations (Barone and Schweickart below). The interests of capitalists and the interests of workers are indeed antagonistic, and this problem can be solved by democratizing the workplace and capital investment to remove the dominance of capitalists from society. But assuming an antagonistic relationship between workers and capital (embodied labor) irrationally renders any transition away from capitalism impossible. Hence, my original point: the distinction between “capital” and “capitalist” is not trivial.
“Sat there isolated doing nothing” (as you say) — or in my hands, cultivating my own garden to produce vegetables for my own consumption — those tools (the hoe and the plough) are not capital, and I am not a capitalist. I am a gardener. However, if I sell the produce from my garden in the consumer market for profit, then the tools the land and the produce can all be considered “capital” (“embodied labor”, “wealth devoted to generating more wealth”), even though I am merely an “independent commodity producer”, not a “capitalist”. In fact, as an independent commodity producer, I can even hire workers for wages occassionally and still not be considered a “capitalist” because my income is derived primarily from my own toil, not from the passive ownership of capital and the exploitation of labor. I cross the line to become a capitalist when my income is derived primarily from passive ownership. I no longer need to work by virtue of my ownership of the means of production and my capacity to rent (exploit) the labor-power of others.
Once again, here are some additional thoughts to consider:
Charles Barone:
“The class structure in the United States has thus undergone significant change as a result of the changes associated with capitalist accumulation. The means of production, once widely held by independent commodity producers, have been concentrated in the hands of a small capitalist class… Radicals define the capitalist class as those who both own capital goods and control the wage labor of others.”
David Schweickart:
“For our purposes, a reasonable definition of ‘capitalist’ is someone who owns enough productive assets that he can, if he so chooses, live comfortably on the income generated by these assets. A capitalist is not simply someone who believes in capitalism. Nor are you a capitalist just because you happen to own a few stocks or bonds. To be a capitalist you must own enough income generating assets that you can live comfortably without working. You may work — you probably do — but you don’t have to. (As we shall see in Chapter Four, the capitalist class in the United States comprises roughly one percent population.) The capitalist class derives its wealth from its ownership of productive wealth, i.e., from ‘capital.’ A capitalist receives income because he “contributes” his capital to production. But what exactly is the nature of this ‘contribution’? Indeed, what exactly is ‘capital’? These questions are more difficult to answer than one might think. Answering them carefully will allow us to see through a number of spurious justifications for capitalism itself.
“To the question, “what is capital?” Marx offered a straightforward answer: capital is “embodied labor,”–the material result of past labor. The machine the worker is using, which so greatly enhances her productivity, is the product of other people’s labor. The food the worker eats, purchased with her wages, is the product of other people’s labor. When you think about it, says Marx, every conceivable good we consume comes from human beings working with and on non-human nature. These are the only factors of production–human labor (mental as well as physical) and non-human nature.
“This is a dangerous thought. If there is only labor and nature–where does “the capitalist” enter the picture? It is clear that labor should be rewarded for its contribution to production. It is equally clear that non-human nature need not be. (It must be replenished or conserved, but that’s a separate matter.) The capitalist also demands a reward, a “fair return on his investment”–but on what basis?
“The standard answer, taught in every introductory economics course, is that goods are the product of three factors of production–land, labor and capital–and that the owners of these factors are rewarded on the basis of their contributions. Well, land is clear enough–that’s shorthand for natural resources, i.e. nature,–and labor is labor. But what then is capital? Tools? Technology? Money? Congealed time? Embodied labor? What?” (Schweickart’s discussion continues with a debunking of the theory of marginal utility).
Charles Barone:
“Marx saw history as a sequence of different modes of production, each representing ‘epochs marking progress in the economic development of society.’ Each succeeding mode represents a higher level of economic development that advances human and social development. The process of social change from one mode to another is based on the internal dynamics of contradictions existing within each mode of production; the seeds of self-destruction are also the seeds for a succeeding economic formation. Thus Roman society based on a slave mode of production gives way to European feudalism, and feudalism to capitalism.
“In each socioeconomic formation conflicting forces exist. The basic conflict is between the material forces of society, which are seen as dynamic, and the relations of production, which are not. The source of antagonism between the social relations and the development of the material forces is divergent class interests. Social relations of production are resistant to change. Each mode of production advances the material development of society, but only within the limits of existing social relations of production. When the current relations of production block development ofo the material forces, the dominant classes who have vested interests in maintaining the status quo resist the required new relations of production.
“The result is class conflict and struggle, which, according to Marx, act as a propelling force. The resolution of this conflict leads either to a new set of social relations of production, that is, new class relations and a new mode of production, or to the stagnation of society and the possible common ruin of the contending classes.”
“Marx thought that the capitalist relations of production would be the last antagonistic social form of production. Thereafter, production would come under the collective, democratic control of society and the interest of individuals would coincide with the community of interests.”
It seems I am weighing in a bit late in the discussion….
David, in terms of your original complaint of conflating capital and capitalist may I just quote Marx himself? “The reproduction of labor-power which must incessantly reincorporated into capital as its means of valorization, which cannot get free of capital, and whose enslavement to capital is only concealed by the variety of individual capitalists to whom it sells itself, forms in fact a factor in the reproduction of capital itself.” (Kapital. vol. 1 Chapter 25) … one of many quotes in which Marx expresses the idea that individual capitalists are merely the personification of capital.
I agree with Murray that nowadays with the rise of the corporation that it is hard to identify specific individuals as the sole capitalist of an enterprise. We might make the same observation of the petit-bourgeoisie as well. In the small business much of the profit doesn’t go to the business owner but to the landlord or the bank. Which one is the actual capitalist? It doesn’t matter- the logic of capital acts in its own interests despite the individuals who personify its movements.
Why is this important? You yourself show how not understanding this can lead to theoretical errors that could compromise your ability to articulate political goals/strategies. In your description of an independent producer with a hoe and garden you state that if you sold these commodities you would generate profit and that the garden/hoe would be capital. This is not correct. You wold be engaging in C-M-C, not M-C-M. In a system of free-exchange the price of your product above the costs of the inputs would be the result of your own labor, not some magical quantity of profit derived from the exchange process. Now you could defer your own private consumption and use some of this value to increase your means of production, and this increase of means of production would represent embodied labor, but this is not the same as capital. You have not increased the total amount of value in society. Your deferred consumption has come at the price of not buying some other commodities of equal value.. the net value of society has not expanded. This is important. Value is expanded and capital reproduced by the sale of wage labor. Labor power is the only commodity whose use-value creates more value than its exchange value. Were you to hire workers, as you say, this would indeed be exploitation and you would be a capitalist. Your workers would indeed be creating more value than they cost and your means of production would become capital. I do not agree with your definition of capitalist as requiring “passive ownership”. What makes a capitalist a capitalist is their relation to the means of production. If Bill Gates were to roll up his sleeves and scrub toilets at the Microsoft office this would not stop him from being a capitalist. If he were to decrease his salary to $10,000 a year and distribute his former profits amongst the workers he would still be a capitalist. The amount of surplus value siphoned off of surplus value by the capitalist for their personal consumption does not stop surplus value from being surplus value. Marx is very clear on this point.
I agree that the transition away from capitalism may involve all sorts of transitions, experiments, symbiotic and antagonistic modes of production coexisting for a time… but to theorize this we have to be clear with our conceptual models in order to avoid relapsing into capitalist social relations. Marx put a great deal of work into creating a critique of capitalism and a theory of history that makes sense. He did this for a reason. To have alternatives to the present we can’t just speculate in a utopian fashion about the future. We can’t create models that don’t make sense. We have to have academic rigour. If you think market socialism is the answer, that’s fine but you need to understand Marx’s critique of markets before you enter into planning the market-socialist revolution. Whenever people ask me “what’s the answer?” I always say, “I don’t know yet- I’m not done understanding capitalism yet.” In this time of crisis we desperately need people with fresh ideas and energy to be thinking about the future, but we also need these people to know their stuff- to keep studying capital.
Sorry for taking up more space, but following are more quotations. As Kilman says in Cooney’s videos, we need to read and understand Marx directly. But as Cooney himself has said, “we can’t understand anything in isolation”. We need to make comparisons between our own views and the views of others; hence, “discussion”. Moreover, as Schweickart suggests, critique is fine (for 150-years or so), but at some point, the Left must propose a viable alternative to capitalism.
Brendan says my analogy of the independent commodity producer versus capitalist is incorrect. As an independent commodity producer I would be engaging in C-M-C, not M-C-M. I have not expanded the total amount of value in society through the sale of wage labor, so my hoe and plough cannot be considered capital: “Value is expanded and capital reproduced by the sale of wage labor — because — Labor power is the only commodity whose use-value creates more value than its exchange value.” Once I hire workers, this would indeed be exploitation and I would be a capitalist. My workers would be creating more value than they cost, and my means of production would become capital.
This seems logical — in theory. But in practice, Charles Barone has a slightly different view:
Barone:
“Radicals distinguish between the old and new middle classes. The old middle class includes those who own their own means of production — *but do not control on a regular basis the labor of others*. They include small businesses (e.g., family stores and farms) as well as those who ar self-employed, like plumbers or lawyers. Although they are their own bosses their fate is often determined by captitalist enterprises. Once a majority class in the United States, these —> *independent commodity producers* *passive*. <—– They don't supervise workers; they don't invent anything; they don't make any decisions as to what to produce or what technologies to employ. They are wholly absent from the production process, merely granting permission for their land and capital to be used — in exchange for a healthy cut of the proceeds. But since "granting permission" is not a productive activity, Marx's question retains its bite. To produce material goods, we need human labor, and we need nonhuman raw materials — but why do we need landlords or capitalists?."
Brendan is correct that capital is far more than merely "stuff that you use to make more stuff." But speaking of Henry George (see Murray's comment below), his definition of capital is "the portion of wealth devoted to producing more wealth." This isn't trivial. He goes on to say "wealth in all its forms is the product of labor applied to land or the products of land." Others have expanded on this to suggest "wealth" includes the efforts of all mankind throughout history — a common heritage that belongs to us all, not just an exclusively (legally) entitled few, and should be distributed accordingly. Murray is also correct to observe Schweickart's "capital assets tax" looks a lot like Henry George's "single tax" — though Henry George doesn't appear anywhere in Schweickart's theories. But there is one other key similarity, and this brings us full-circle, back to my original question, as Henry George states:
"There is in reality no conflict between labor and capital; the true conflict is between labor and monopoly… Abolish the monopoly that forbids men to employ themselves and capital could not possibly oppress labor… Remove the cause of that injustice which deprives the laborer of the capital his toil creates and the sharp distinction between capitalist and laborer would, in fact, cease to exist".
Modern day Marxists like David Schweickart concur with this evaluation. I can provide further quotations if you wish. But if basic survival needs seem like some kind of strange "utopia", then we, the idiots, have our standards set far too low. That's probably enough from me for now.
Here is where theoretical errors (and I mean error, not disagreements or opinions) lead us down the wrong path… and just when I was starting to come around on some of your arguments about market socialism.
In terms of your Henry George definition of capital as wealth that is used to create more wealth…Yes, this is the bourgeois definition of capital. As I summed it up in my Left Forum talk the bourgeois definition of capital is “stuff that you use to make more stuff.” It is true that throughout human history humans have used the natural world around them to increase their material wealth. It is true that a social surplus that is used to generate more physical surplus has existed for some time now. Marx is interested in the specific form this takes under market exchange, a form called surplus value. Because commodity exchange requires a value system that apportions social labor, the physical products of labor have both use-values and exchange-values, the latter based on labor. This understanding of surplus value, its unique properties as the capitalist form of surplus product, leads Marx to a continuing series of revelations about the antagonistic nature of this value, an antagonism rooted in the basic structure of value itself: the self-negating nature of capitalists social relations. Capital is a self-perpetuating system which has its own internal dynamics and rhythms, which invades more and more territory as it accumulates, sucks more and more people into its web of relations bending them to its will.
Marx is not opposed to social surplus. He is opposed to a social surplus taking form as surplus value, because as surplus value it is inherently contradictory. When he uses capital and capitalist interchangeably it’s not just because he is being sloppy. It’s because beyond the social relation between capitalist and laborer lies an even deeper and more profoundly contradictory relation- that between labor and alienated labor. Alienated labor is our own labor, embodied in commodity form, which we cast off into the marketplace (which we alienate from ourselves) and which comes back in the form of capital to dominate us.
The question then, when evaluating market socialism, is not whether we can get rid of capitalists but whether we can get rid of capital. Can we have C-M-C without M-C-M? That is the question which I would use to evaluate a proposal for market socialism. As I’ve said, I’m not sure I am ready to evaluate Schweikart’s proposal at the moment. The question is never about whether or not to have a social surplus measured in use-value. To turn the conversation in that direction is to just avoid the entire Marxist critique of capital in the first place. If you just ignore Marx then yes you can worry about the things like Monopoly because, of course, if you don’t see anything antagonistic about capitalist social relations then the only domination you can complain about is that domination exercised through the market (monopoly).
I was a bit confused by you paragraph about the “old middle class.” Can you define what you mean by “passive ownership”? Also how does a plumber grant permission for his land and capital to be used by capital? And why does any of this have to do with the fact that the labor process must interact with nature? How is nature capital merely because it is used by a laborer?
As I explained privately, the comment you’re referring to here got truncated because I used some special characters that I shouldn’t have. I’ve reposted the original comment without the special characters, so you might want to remove the old one to save space and confusion. Briefly, the capitalist doesn’t actively contribute anything to production; he passively contributes his ownership of capital. Even if he rolls up his sleeves and cleans toilets, even if he actually pays himself a salary to participate in the labor process, he doesn’t have to because his income is derived primarily from passive ownership, not from wages. Hopefully the corrected post will answer your other questions. If not, let me know and I’ll try to explain further.
Meanwhile, another argument occurred to me today regarding your doubts about the existence of capital in a post-capitalist society. Under economic democracy (Schweickart’s model), the capitalist has been removed, but exploitation of labor remains. But now, society exploits labor through the capital assets tax instead of capitalists exploiting labor through appropriation of surplus value. So the decisions in this regard have been democratized. Schweickart says workers become the “residual claimants”, and this is true. But since the “residuals” are what’s left after the enterprise pays for depreciation of equipment and the capital assets tax, those residuals could be considered “wages”. However, workers now democratically control the distribution of wages, not the capitalist.
I’m not sure what Schweickart would think of this explanation. But I think it fits, and even from this perspective it’s still a huge improvement over capitalism. And correct me if I’m mistaken, but I think it also explains how capital can exist in the absence of capitalists in a post-capitalist society.
It seems there are several unresolved points left in this discussion.
1. The question of what capital is. You say: “So Barone says I can hire workers occasionally and not be a capitalist, while Cooney says I can’t. But it’s not yet clear to me whether or not my hoe and plough can be considered “capital” — regardless of my status as a “capitalist”. After 150 years or 300 years or 800 years (depending on which author you talk to), why is this still a mystery?”
I don’t understand what the mystery is. If your means of production form part of the circuit of capital, that is they are used to expand value through wage labor, they are capital. If not they are just means of production. Can you tell me what is so mysterious about this?
2. The difference between wealth and value. Wealth is used to describe an increase in physical products. A Roman slave who makes more millet is increasing his masters wealth. If I make a bunch of furniture for myself I have expanded my wealth. Value refers to the role exchange value plays in the production process of a market society. Value measures labor time. When we expand value we aren’t just expanding material goods, we are expanding the social labor time. Exchange value has all sorts of properties that are distinctive to capitalism. One of the important differences between wealth measured in physical terms and value is that physical wealth can increase while value stays the same. This happens whenever technological progress increases the physical productivity of labor.
3. The question of whether capital would exist in a market socialist society without capitalists. It seems to me that there are only three possible answers: 1. David’s answer that it can, in which case this implies the collective exploitation of labor by society itself. I find this answer problematic. 2. That the existence of a social surplus measured in value terms creates the possibility of M-C-M and that this ultimately would undermine the market socialist project, creating a class of people with a privileged relation to this surplus, thus a class of capitalists who personify this capital. and 3. That a “capital assets tax” in a market socialist society would actually be a wage tax since there are no profits. This means that there is no surplus value. The only possibility for M-C-M would be if this wage tax were used to invest in production for the sake of increasing the wage tax.
I have other things to do, too, Brendan. As I suggested at the beginning of this discussion, the issues we’re discussing probably won’t be resolved in this blog debate. But here is a quick summary, as I understand it:
You and others claim that capital is an antagonistic social relation that cannot exist in the absence of capitalists in a post-capitalist society. Please correct me if I’ve misunderstood. Meanwhile, Schweickart, Howard and others claim that the social relations of capital are not set in stone, and that they need not be antagonistic. Democratization of the workplace and investment removes the capitalist class from society and places workers in direct control of production. Thus, the social relations of capital have changed. Exchange has not been equalized, but it has been normalized by removing the extreme influence of passive ownership from the distribution of social relations. Workers (and other members of society) are now active participants, not merely passive spectators, in the decisions that affect them most directly. (Again, hopefully I haven’t misunderstood, as I don’t wish to misrepresent anyone.) Therefore, in my view, a clear distinction between the terms “capital” and “capitalist” is essential in discussing either capitalism or alternatives to capitalism.
Now on to your specific bullet points:
1. There is no mystery, Brendan. But again, I don’t think the rules are nearly as rigid as you suggest. According to at least one “radical” named Charles Barone, at least implies that an independent commodity producer can occasionally (though not “on a regular basis”) control the labor of others and still not be considered a capitalist (see Barone above). However, the passage above does not clarify whether or not the means of production can be considered “capital” in the case of an independent commodity producer. You say it cannot be. I accept that. Since the main question of our discussion is about post-capitalist society, not pre-capitalist producers, let’s move on.
2. For the most part, I also agree with you regarding wealth versus value. The biggest “error” I made in this regard was in suggesting that Schweickart might concur with Henry George in any or all regards. So for the record, I should clarify. Schweickart does discuss the issue of monopoly versus competition in his book, and his capital assets tax reminds me (somewhat) of the resource rent suggested by Henry George. But his writing does not discuss Henry George at all, and I honestly have no idea what Schweickart actually thinks of Georgist views regarding “wealth”.
However, Schweickart does say some very interesting things about surplus value from a Marxist perspective. The third quote below is of particular interest in our discussion — “… the surplus value that constitutes the investment fund…”:
Schweickart 1: “Dividend payments [under capitalism] come from net profit, and net profit derives from surplus value — the difference between the monetary value added to the raw materials by the workers (including management) and what they are paid. As any economist will confirm (since it is an analytical truth), unless labor costs are less than the value added by labor, there will be no profit.”
Schweickart 2: “The real basis for stock appreciation [under capitalism] lies not in investor psychology, but elsewhere. Part of a company’s net profit is paid out to the stockholders in the form of dividends, but the remainder is reinvested in the company. These “retained earnings” increase the real value of the company, and hence the value of the stock itself. So the capital-gains portion of stock income also derives from profit, hence from surplus value — hence from what Marx called the “exploitation” of labor.”
Regarding an investment fund generated by his capital assets tax under economic democracy, Schweickart says:
Schweickart 3: “If one wants a positive justification for the principle of per-capita capital allocation, one can appeal to Marx’s insight that labor, not capital, is the source of value, and hence of the surplus value that constitutes the investment fund. Therefore, the investment fund ought to be distributed to regions in proportion to the size of their workforces, that is, (essentially) on a per-capita basis. Or, if one prefers a non-Marxian justification, allocating investment funds to regions may be regarded as providing a public service. Hence the allocation of investment funds should follow the principle used in the allocation of such public services as education and health care (at least in those parts of the world where education and health care are publicly funded and rationally distributed) — namely per-capita share.”
3. (1.) My suggestion regarding the exploitation of labor under economic democracy was merely one possible perspective that I hoped might explain how capital *could* exist under economic democracy in the absence of a capitalist class. Schweickart’s book doesn’t support or reject this view. Michael Howard does discuss some possibilities of exploitation under economic democracy, but not the exploitation of labor. There’s no point in discussing all that here, but I did find some extremely pertinent nuggets:
“Ones ‘contribution’ is simply defined as the fair price for what one contributes. One is exploited when one gets less than the fair market price for the capital (labor, etc.) one contributes and has nowhere else to go… The heart of Marxist analyses of exploitation is the idea that there is a failure of reciprocity in the *wage* labor-capital relation, because the workers contribute more than they receive and the capitalist contributes nothing.”
I found this very interesting because with reference to the antagonistic social relations of capital, Michael Howard uses the term “wage labor”, not merely “labor”:
“The capitalist class is the personal embodiment of a more fundamental alienation of labor. The worker, in exchanging his labor power for a *wage*, alienates himself from his producing activity and his product (both the artifact and the value it yields from exchange, and hence from capital as the ever increasing accumulation of such value). The worker is accordingly alienated from other human beings — notably, the capitalist, but also workers competing in the labor market and consumers seeking lower prices — and from his social being, in that he has no part in the planning of production or affairs of state, no part in matters that would bring him to identify with a universal interest and perspective.”
Again, this distinction is not at all trivial. The social relations between labor and capital are not necessarily antagonistic, while the relations between wage-labor and capital most definitely are. The capitalist is the manifestation of antagonistic social relations precisely because the wages of active participants in production are controlled by the passive owners of the resulting product. Therefore, social relations must be altered to remove the capitalist — along with any possibility of future capitalists — from society.
3. (2.) “In market socialism the workers become the residual claimants and ultimate decision makers, the state is the provider of capital, and managers who monitor, direct, and coordinate inputs and outputs are accountable to the workers”, (Howard).
In other words, cash flows throughout the economy are controlled democratically, and management of the workplace and the state is controlled democratically. So I’m not sure what class of people might claim privileged relation to the surplus. As I recall, Albert and Hahnel are concerned about the rise of a “managerial class”. But I’m not sure this is in reference to Schweickart’s model. In fact, Schweickart’s model of workplace democracy is set-up to prevent that sort of thing. But your concern is extremely valid, as all human beings are potential “capitalists”. So the litmus test for any alternative to capitalism is that it must inherently prohibit — not merely legislate against — the rise to power of a new ruling class. In my view, Schweickart’s approach is most viable in this regard.
As I understand it, economic democracy is not necessarily C-M-C, though it is probably the most viable transition toward those conditions. One of the most exciting things to me about your videos, Brendan, is that I have finally gained an understanding of what this means (correct me if I’m wrong). C-M-C is not all that different from C-C, except that money is now involved. Likewise, M-C-M is similar to C-M-C in that no new value is being created. M-C-M1 is where new value is created based on the exploitation of labor. As Schweickart and others explain, economic growth (M-C-M1) is possible and favorable (in moderation) under economic democracy, but it’s not an economic imperative as it is under capitalism — mainly because market competition is not purely for the sake of profit. There is no incentive for enterprises to expand (or for the economy to expand) unless there is a social need for them to do so. So economic democracy can withstand “break-even” conditions of M-C-M or even C-M-C without going “bust”. In fact, accompanied by a Basic Income Guarantee (as Howard suggests) or Employer of Last Resort (a role played by the state as Schweickart suggests), economic democracy could be a viable transition from M-C-M1 toward C-M-C.
Unfortunately, M-C-M is potentially M-C-M1, and again this is an extremely valid concern. But human history demonstrates that C-C is potentially C-M-C, which is potentially M-C-M, which is potentially M-C-M1. So where do we go from here: chaos or community? As you suggest, studying the social relations of labor, money, power and decision is key to developing viable alternatives to capitalism and any other sort of privileged relations to surplus. But an abstract proposal is merely an alternative hypothesis until experiments are conducted in real world practice. There is no perfect solution or blueprint approach. Transition will continue to be a very messy process. Some solutions have already been tried and failed, at least in part — for example, Soviet Socialism and Social Democracy in the Nordic countries. There has even been some failure in the Mondragon region of Spain. But there have also been great successes in Russia, Sweden, Norway, Denmark, Spain and elsewhere. Comparing these results to our alternative hypothesis, we can learn a great deal from failures and successes in terms of which approaches are most and least viable. This process involves discussion, so thanks again for providing a medium.
3. (3.) Schweickart’s “capital assets tax” is not a wage tax or a tax on wages or an “income tax”. It’s a tax specifically on “land buildings and equipment”. It’s a lease that each enterprise pays for the use of socially owned capital (public property?). I think it replaces all other taxes, but I would have to verify that. I don’t think he clearly specifies in his book whether it does or not. In any case, yes the whole purpose of it is to reinvest in production, both public infrastructure and private enterprise. He says:
“In Economic Democracy investment funds are generated in a more direct and transparent fashion. We simply tax the capital assets of enterprises–land, buildings and equipment. This tax, a flat rate tax, may be regarded as a leasing fee paid by the workers of the enterprise for use of social property that belongs to all.
“Receipts from the capital assets tax constitute the national investment fund, all of which is earmarked for new investment. (“New investment” is simply investment over and above that financed by enterprises directly from their own depreciation funds.) All new investment derives from this fund. In stark contrast to capitalism, Economic Democracy does not depend on private savings for its economic development.
“Since investment funds are publicly, not privately, generated, their allocation back into the economy is a public, not a private, matter. These funds are dispersed throughout society, first to regions and communities on a per capita basis, then to public banks in accordance with past performance, then to those firms with profitable project proposals. Profitable projects that promise increased employment are favored over those that do not.
“At each level, national, regional and local, legislatures decide what portion of the investment fund coming to them is to be set aside for public capital expenditures, then send down the remainder to the next lower level. Associated with most banks are entrepreneurial divisions, which promote firm expansion and new firm creation. For large (regional or national) enterprises that need access to additional capital, it would be appropriate for the network of local investment banks to be supplemented by regional and national investment banks. These too would be public institutions that receive their funds from the national investment fund.”
If I thought that the discussion was merely a matter of differences of opinion I might just drop it but in this case I still have the suspicion that you are misusing the word “capital”… that this is a misunderstanding of this term on your part and not just a different opinion. I do not have an opinion about market socialism, so that can’t be what the discussion is about. In fact, I am quite intrigued by what you have described of Schwiekart’s model.
Here is what the circuit of capital looks like, expanded:
M-(MP+LP)…C-M1
Money buys means of production and labor power. These enter the production process and out comes commodities which are sold for more money than they cost. The difference between M and M1 comes from the fact that labor, sold as a commodity, produces more value than it costs in wages.
Here is how I would chart the model of economic democracy you have described:
M-MP-C-M1
Worker collectives buy means of production. They add their own labor to turn these into commodities and sell these for more money. Where does M1 come from? It comes from the fact that value has been added by labor, not from a difference between wages and total value added. So this “surplus” isn’t really a surplus at all in the same way that capital is a surplus. The only way for workers to invest in production the next period is to defer some of their personal consumption and reinvest this money in buying new MP. (As I understand you this purchase of MP would also entail paying a tax to the state. Your “capital gains tax” is not really a capital gains tax at all because there is no capital: the tax doesn’t come out of “profits” but merely reflects a tax on the value of the MP.) But this deferred personal consumption does not expand value. All it does it merely choose to spend the value created by workers on MP instead of consumer goods. In such a system work always adds new value, but this new value is entirely consumed, either by buying consumer goods or MP. There is no surplus value.
Unlike capital there is no imperative to expand production merely for the expansion of value. Unlike capital, there is no expansion of value and hence no surplus. And unlike capital there are no social relations of capitalism.
Sorry for taking up more space, but following are more quotations. As Kilman says in Cooney’s videos, we need to read and understand Marx directly. But as Cooney himself has said, “we can’t understand anything in isolation”. We need to make comparisons between our own views and the views of others; hence, “discussion”. Moreover, as Schweickart suggests, critique is fine (for 150-years or so), but at some point, the Left must propose a viable alternative to capitalism.
Brendan says my analogy of the independent commodity producer versus capitalist is incorrect. As an independent commodity producer I would be engaging in C-M-C, not M-C-M. I have not expanded the total amount of value in society through the sale of wage labor, so my hoe and plough cannot be considered capital. “Value is expanded and capital reproduced by the sale of wage labor — because — Labor power is the only commodity whose use-value creates more value than its exchange value.” Once I hire workers, this would indeed be exploitation and I would be a capitalist. My workers would be creating more value than they cost, and my means of production would become capital.
This seems logical — in theory. But in practice, Charles Barone has a slightly different view:
Barone:
“Radicals distinguish between the old and new middle classes. The old middle class includes those who own their own means of production — *but do not control on a regular basis the labor of others*. They include small businesses (e.g., family stores and farms) as well as those who ar self-employed, like plumbers or lawyers. Although they are their own bosses their fate is often determined by captitalist enterprises. Once a majority class in the United States, these independent commodity producers have shrunk to include only 13 percent of USers.”
So Barone says I can hire workers occasionally and not be a capitalist, while Cooney says I can’t. But it’s not yet clear to me whether or not my hoe and plough can be considered “capital” — regardless of my status as a “capitalist”. After 150 years or 300 years or 800 years (depending on which author you talk to), why is this still a mystery?
I accept that capital is a social relation, and that the capitalist is a personification of capital. But this does not suggest that capital cannot be personified in some other (perhaps more humane) manner. Brendan’s Marx quote above does not suggest that capitalists and capital are inseparable. It suggests that the social relations between labor and capital are inescapable — as long as capitalists exist, as long as these “social relations” remain concealed by the capitalists themselves. Meanwhile, using the terms “capital” and “capitalist” interchangably — as in “the interests of capital and labor are antagonistic” — suggests that surplus value must forever be the private property of capitalists; i.e., if there is no capitalist, then there is no surplus value, there can be no surplus value, and there is no need for surplus value.
But I think I’m in fairly good company when I say that’s probably not true. In fact, I doubt it’s even what Marx himself intended. As Schweickart’s model suggests, surplus value (in moderation) can be a wonderful benefit to society instead of a constant threat. It doesn’t have to be an evil thing, siphoned away from the productive activities of society by a handful of wealthy parasites. Likewise, absent the passive capitalist, “economic growth” is not an imperative. An enterprise, or even society as a whole, can “break-even” or even suffer an annual loss occasionally without throwing people into unemployment, homelessness, disease and starvation.
Brendan’s reference to Gates and the toilet brush is both entertaining and appropriate. But this is pretty much what Schweickart says in the quotation I already posted (see above). Your point is one of the reasons I posted it, sorry you missed that. It doesn’t negate the fact that the role of capitalists (and landlords) in production is entirely passive. And here (below) he says it again, along with a number of other points at the end of his discussion of neoclassical theory:
Schweickart:
“I am not saying that in actuality landlords and capitalists do nothing. Often they too expend physical and mental energy during the process of production (although often too they do not). What is interesting, indeed paradoxical, about the neoclassical argument is that in making enough simplifying assumptions to be able so elegantly to invoke a mathematical theorem, it assumes away anything the landlord or capitalist might actually be doing to justify his reward. In the neoclassical story, landlords and capitalists are wholly passive. They don’t supervise workers; they don’t invent anything; they don’t make any decisions as to what to produce or what technologies to employ. They are wholly absent from the production process, merely granting permission for their land and capital to be used — in exchange for a healthy cut of the proceeds. But since “granting permission” is not a productive activity, Marx’s question retains its bite. To produce material goods, we need human labor, and we need nonhuman raw materials — but why do we need landlords or capitalists?.”
Brendan is correct that capital is far more than merely “stuff that you use to make more stuff.” But speaking of Henry George (see Murray’s comment below), his definition of capital is “the portion of wealth devoted to producing more wealth.” This isn’t trivial. He goes on to say “wealth in all its forms is the product of labor applied to land or the products of land.” Others have expanded on this to suggest “wealth” includes all the efforts of mankind throughout history — a common heritage that belongs to us all, not just an exclusively (legally) entitled few, and should be distributed accordingly. Murray is also correct to observe Schweickart’s “capital assets tax” looks a lot like Henry George’s “single tax” — though Henry George doesn’t appear anywhere in Schweickart’s theories. But there is one other key similarity, and this brings us full-circle, back to my original question, as Henry George states:
“There is in reality no conflict between labor and capital; the true conflict is between labor and monopoly… Abolish the monopoly that forbids men to employ themselves and capital could not possibly oppress labor… Remove the cause of that injustice which deprives the laborer of the capital his toil creates and the sharp distinction between capitalist and laborer would, in fact, cease to exist”.
Modern day Marxists like David Schweickart concur with this evaluation, and I can provide further quotation if needed. Meanwhile, that’s probably enough from me for now.
Where are you getting this “prove” from? I didn’t ever say that whatsoever, so I have no idea why you are saying it (other than presumably to be irritating).
My point about the relevance is a simple one; they are irrelevant to what was being discussed (ie are means of production capital under non capitalist social relations?), and subsequently I really don’t care to discuss them. This was never a discussion about alternatives to capitalism, and it’s simply swinging it to turn it into such.
You continually seem to either willfully misinterpret what I am saying, or just misunderstand me. Either way, I shall repeat what I have said; means of production are not capital under conditions of non capitalist production. It is true that an item like a hoe or plough can only be capital when used in the capitalist production process; this is because the process of production is then capitalistic, and it is therefore completely consistent that such is the case.
Your example of an independent commodity producer is the common example of the “I’m self employed, am I exploited?” argument. Firstly, it is highly uncommon for self employment under capitalism in the first case; secondly, the competition in the marketplace under highly centralised conditions mean that said person suffers at the hands of business and often falters. This however is entirely besides the point; what you say about the transition from “independent commodity producer” to capitalist is fair enough, but you are still framing it in capitalist relations. It is a case of appropriation of the full value of the labour in the case of the independent commodity producer (not necessarily the case even, as he may be forced to charge a depressed market price but that’s moving away from the point at hand); he is both capitalist and worker. The point doesn’t change by simply changing who *is* the person doing it, if you are presupposing identical capitalist social relations (ie market production).
As for the quotes:
The Barone quote is absolutely correct, but that’s just describing centralisation of capital and has no relevance for the actual notion of “Can capital exist without capitalism?”
Schweickart’s quote is likewise quite good (although where he attributes Marx’s concept of capital as being simply “embodied labour” is not 100% accurate; Marx viewed capital as a social relation, of which the value form takes the model of socially necessary labour time, an important distinction) but again isn’t really relevant; it just seems like the first chapter of any “Introduction to Marxist Economics” book and a criticism of the concepts of profits being rewards for abstinence, good investment etc.
The second Barone quote is just a summary of the materialist conception of history. Whilst this could be relevant if it was directly linking to the point at hand (is there capital in non capitalist relations?), it isn’t, it’s just a brief summary. The equivalent is me simply posting a quote from Engels’ Socialism: Utopian and Scientific – it could be vaguely relevant but likely won’t relate to what we are going on about.
A clear distinction between “capital” and “capitalist” is essential to discussing alternatives to capitalism. This was the whole point of my original criticism, and the quotations I’ve provided are extremely relevant in this regard.
I generally appreciate Brendan’s work a great deal and I highly recommend it to everyone I know. This was not a personal criticism of him. In fact, one of the reasons this has bothered me for so long is that I don’t think his attention to detail would allow something like this to arbitrarily slip by. So when he says the interests of capital and labor are antagonistic, I must assume it is very deliberate.
Meanwhile, another fairly well-known Marxist named David Schweickart has proposed a very plausible post-capitalist model he calls “economic democracy”. One of the key components of this model is social control of investment, where funds for new investment are generated by a —-> *capital assets tax* <—– and are returned to the economy through a network of public investment banks.
How can we have a capital assets tax in a post-capitalist society where capital doesn't exist? You're obviously going to say "we can't, and Schweickart's model is a pipedream", so here's a real-world example: How can worker cooperatives handle capital all day long in the absence of capitalists? I appreciate everything you're saying about capital being a social relation. I get that. The point of the Barone quotation is that social relations can (and must) eventually change. The most likely next step toward a social mode of production that is not antagonistic is to dismiss the capitalist from society while retaining capital under democratic control.
Thanks for the discussion, Murray, but I can't think of any way to make it more clear. As I said earlier, I don't think our disagreement is going to be resolved. I'm comfortable with that —- though I would like to hear back from Cooney at some point.
David- for clarification does Schweickart actually talk about capital existing under market socialism or are you inferring this from his use of the phrase “capital assets tax”? Does he use “capital” and “means of production” interchangeably? I’m afraid I have not read his book and an not prepared to offer a critique of it here, but I do think your question is an important one. I just want to make sure I understand your reading of Schweickart first.
I love how Marxism is one of the few areas were so seemingly trivial a distinction is actually very important.
I totally agree with you that there is a clear distinction of “capital” and “capitalist”, and I have nowhere claimed otherwise. However, as Marx pointed out (and Brendan’s given a quote to demonstrate it), the capitalist is “capital personified” – the manifestation of the capital-labour relation in human form.
Likewise I’d accept your point that the distinction of capital and capitalist is vital to proposing alternatives; however, my comment of a level of irrelevancy was levelled at the manner in which the quotes did not make the distinction and were related to seemingly arbitrary and unrelated points to the distinction. That they presuppose a distinction I have no doubt but they didn’t actually tackle a distinction – hence the charge of irrelvancy. However, I stand by what I said that “Capital” cannot exist under non capitalist production relations – for instance, as Marx says in Capital, Vol 1 Chapter 4;
“The exact form of this process is therefore M-C-M’, where M’ = M + D M = the original sum advanced, plus an increment. This increment or excess over the original value I call “surplus-value.” The value originally advanced, therefore, not only remains intact while in circulation, but adds to itself a surplus-value or expands itself. It is this movement that converts it into capital. ”
Capital can only exist when commodities are put to use with the aim of expanding value, hence profit; capital cannot exist under non capitalist relations, but as physical items (means of production etc) it will exist but will not take the form of Capital.
You make the point about workers cooperatives; “How can worker cooperatives handle capital all day long in the absence of capitalists?”. The very reason why is because they still function under social relations of capitalism; ie, they produce commodities that are alienated from them for market production, and more importantly for a profit. The distribution of these profits may differ from the somewhat zero-sum distribution typical in capitalism (although with loans and the like the real world examples may be further proof of it), but in no way does it render their labour “non capitalist”.
Having not read Schweickart’s book I can’t comment, but that “Capital Assets Tax” reminds me somewhat of Proudhon and Henry George..
Thanks very much for this discussion opportunity. This is what I was originally hoping for, and your questions are good ones. No, I’m not “inferring” anything. But I should consult with Schweickart’s book and get back to you later tonight or tomorrow with more complete answers, rather than attempting to answer your questions off the top of my head. I don’t want to misrepresent Schweickart or misinform you. Thanks again for the discussion and the forum.
Brendan, the answer to your second question is easiest. Since the means of production is only one form of “capital”, it’s safe to assume that Schweickart makes that sort of general reference. But no, he doesn’t use the terms “capital” and “means of production” interchangeably as if “capital” refers only to the means of production. For example in the video listed below he states: “In essence, capital, under economic democracy, is public money generated by a business tax, which flows to where the people are. This contrasts with capitalism which generates its capital from private savings of private individuals who are free to invest wherever they choose, thus compelling people to go to where the capital is flowing.”
More to come…
Your other question is a little more involved: “Does Schweickart actually talk about capital existing under market socialism or are you inferring this from his use of the phrase “capital assets tax”"? The answer is basically “yes he does”, but as he suggests above, the nature of capital (social relations?) has changed under economic democracy. To explain this, I need to sketch at least a brief outline of how Schweickart suggests economic democracy could replace capitalism. For brevity sake, I’ll just provide the nuts and bolts and then discuss further below.
***************
In his book, “After Capitalism”, David Schweickart suggests, “The structure of a capitalist society consists of three basic components:
• Wage labor: Most of the people who work for pay in this society work for other people, who own the means of production. Most working people are “wage laborers.”
• The market: Products are exchanged in a “market;” that is to say, goods and services are bought and sold at prices determined for the most part by competition and not by some governmental pricing authority. Individual enterprises compete with one another in providing goods and services to consumers, each enterprise trying to make a profit. This competition is the primary determinant of prices.
• Private ownership:The bulk of the means of production are privately owned, either directly or by corporations that are themselves owned by private individuals.
We can also view this in terms of three distinct markets: 1) labor, 2) goods and services, and 3) capital. As outlined below, Schweickart’s model democratizes the labor market and the capital market while retaining the market for goods and services as is.
***************
Economic democracy, like capitalism, can be defined in terms of three basic features (one of which it shares with capitalism):
• Worker self-management: Each productive enterprise is controlled democratically by its workers.
• The market: These enterprises interact with one another and with consumers in an environment largely free of governmental price controls. Raw materials, instruments of production and consumer goods are all bought and sold at prices largely determined by the forces of supply and demand.
• Social control of investment: Funds for new investment are generated by a capital assets tax and are returned to the economy through a network of public investment banks. Although workers control the workplace, they do not “own” the means of production. These are regarded as the collective property of the society. Workers have the right to run the enterprise, to use its capital assets as they see fit, and to distribute among themselves the whole of the net profit from production. Societal “ownership” of the enterprise manifests itself in two ways: 1) All firms must pay a tax on their capital assets, which goes into society’s investment fund. In effect, workers rent their capital assets from society. 2) Firms are required to preserve the value of the capital stock entrusted to them. This means that a depreciation fund must be maintained. Money must be set aside to repair or replace existing capital stock. This money may be spent on whatever capital replacements or improvements the firm deems fit, but it may not be used to supplement workers’ incomes.
***************
So the short answer to your question is yes, Schweickart does actually talk about capital existing under market socialism, and no, I am not inferring this from his use of the phrase “capital assets tax”. But I have learned some new things about the nature of capital under his model that hadn’t occurred to me before, so this discussion has been good for me overall.
One of my favorite features of his model, is that it removes the capitalist from society altogether. But what I didn’t realize until now is that it also removes two major commodities (forms of capital): 1) labor and 2) money. As he states in the video listed below:
“Workplace democracy is the replacement for the capitalist labor market. Labor is no longer a commodity to be bought and sold… Capital markets are replaced by what I call social control of investment. Funds for investment are generated from a capital assets tax, a flat rate tax imposed on all enterprises, not from the private savings of wealthy individuals. This tax may be regarded as a leasing fee that workers of the enterprise pay for their use of society’s capital.”
So labor is no longer a commodity, and money is no longer a commodity to be bought and sold. There is no stock market, no speculation, no dividend or interest income. Banks are now public institutions that provide grants, not loans, “to existing enterprises that want to expand production or upgrade their technologies, to individuals or collectives who want to start a new business, and to local governments who want to upgrade infrastructure build parks and so on.”
I hope this answers your questions, Brendan. Now that we’ve outlined the basics here, I should be able to answer any other questions more briefly. You can also watch the video listed below or look up Schweickart on YouTube. He outlines all this in the first ten minutes of his talk. There is also a more detailed outline on Wikipedia at the link listed below.
All that said, I don’t expect to “sell” you on the idea of economic democracy. But I hope you do understand my concerns about using the terms “capital” and “capitalist” interchangably. I understand what you mean when you do it. But I’m not sure everybody does, particularly people who are very new to all this. While the capitalist is “capital personified” under capitalism, I don’t think capitalists and capital are inseparable. In fact, I think separating the two is an increasing urgency. What if society as a whole was the personification of capital?
Schweickart video
http://video.google.com/videoplay?docid=9209944117922775831&ei=-vMcSqD-BaD8qAOZteCKDw&q=%22schweickart%22+%22economic+democracy%22&hl=en
Wikipedia: Economic democracy
http://en.wikipedia.org/wiki/Economic_democracy#Market_models
The discussions here are educational in their own right.
If I understand correctly now, Blatchford, in the quote I posted above, is indeed conflating “capital” with “the means of production,” but it’s not too big a deal if we’re talking about conditions under capitalism, as he clearly is. (?)
Just to drop another quote from my Big File O’ Quotes, because Brendan’s Marx quote (“enslavement to capital is only concealed by the variety of individual capitalists”) reminded me of it (Engels, Principles of Communism): http://www.marxists.org/archive/marx/works/1847/11/prin-com.htm
“The individual proletarian, property as it were of the entire bourgeois class which buys his labor only when someone has need of it, has no secure existence.”
I like that quote (his whole answer about proletarians vs slaves) for responding to those who say we have a choice of capitalists and that this makes capitalism voluntary.
Thanks David for the Schweickart quotes. I wanted to read further where you said he debunked marginal utility, because I hear a lot about that online but I didn’t understand it well enough to argue against. I went to Google Books and started reading. There were pages missing in the middle of the section, but it was a nice easy read so I’ll probably grab a copy (or check the library first). More for the debunking than the stuff he’s advocating. But I’m sure that’s interesting too. (But something strikes me as just fundamentally wrong about “market” socialism. I think of socialism as production for consumption, not trade/profit — the profit motive is responsible for planned obsolescence! Talk about contra-socialism. But I’m still interested.)
Thanks for the Engles quote. To answer your question as to why someone told you this quote was “playing into the hands of the enemy”: Though I might not use these particular words to describe it, the idea is that bourgeois ideology achieves its goal of making capitalism seem eternal, universal and unchanging by projecting its own categories back and forward in time so that we are made to believe that there is no alternative to the present inequalities and injustices of the world. Bourgeois economic theory, by defining capital in physical terms (as just use-values, just material wealth) and denying the specific form of value that these commodities takes, avoids the entire question of the unique property relations that underlie capitalism.
You’re welcome, Blatch!
Regarding the Engels quote, this morning I was reading Ernest Mandel’s “An Introduction to Marxist Economic Theory” regarding social surplus and surplus value and such. Under Roman slavery and European feudalism, at least the slaves and peasants were entitled to a small piece of land they could work for their own sustinence. Under capitalism, we don’t even have that much.
In fact, unemployment is a structural feature of the system, not an accident. In Mandel’s “Marx’s Theory of Surplus Value”, he goes on to explain how capitalists (or capitalism, however you want to look at it) actively seek to expand the “reserve army of the unemployed” through both conquest and crisis. This explains a lot about what’s happening in the world right now. I wish I were nearly as eloquent as either he or Brendan.
As for Schweickart’s debunking of marginal utility, he does a good job. I would gladly post it here, but we’re running out of space. If Brendan thinks it’s okay, then I’ll go ahead and post it (about 3 pages of a 5.5″ x 8.5″ paperback book). If not, then maybe we can figure out something else, or you can get a copy of your own. It’s pretty cheap on Amazon. But he says he’s making revisions this summer regarding the current crisis. So you might want to wait. Up to you. Glad you liked it.
The main thing that’s “wrong” with market socialism (at least from a Marxist perspective) is that it does not conform to the (“utopian”?) ideals of Karl Marx. This is not to belittle his views in any regard. But I think even Marx would agree that one step at a time is the way we march through history or evolution or whatever it is — not quantum leaps in the blink of an eye. As Noam Chomsky suggests, there is no blueprint, there’s no road-map. We need to be looking for and working toward the next logical step — away from capitalism.
I would be interested in reading Schweickart on marginal utility but I think this might be a cumbersome amount of text to paste here. Is there somewhere else you could post it and leave a link here?
In terms of “what’s wrong with market socialism from a marxist perspective”…. I don’t think it is that it’s not utopian enough. Marx actually railed against “utopian socialists”, people who created these abstract models for socialism based on moral ideas without looking at the historical trajectory of capitalism’s contradictions and taking into account the influence of money and capital on struggles for social change, not realizing the historical stages that a society would have to pass through to get somewhere. In the scattered writings of his on the topic he seems to be quite wary of actually describing any perfect future model but instead to focus on more immediate steps. I am not well read on Marx’s criticisms of these theories, nor am I well read on the concept of market socialism and the criticisms of it, so I don’t really want to venture down that path. But I think that the beginning of a critique of market socialism would have to begin by trying to get at the link between markets and capitalism as understood by marx. I am not yet sure I fully understand this so I don’t feel comfortable making this critique either. (There is only so much time in the world and I have a lot of unfinished thoughts to ponder, many books to read, many videos to make.) Rather, I have tried to restrict my comments to David’s original question about whether capital can exist without capitalist social relations, a notion I find dubious.
Blatch,
Schweickart’s book, “Against Capitalism” is also available for viewing at Google books search, and the entirety of his “debunking” of the neoclassical argument (marginal utility) appears on pages 1 through about 13 and beyond. In short, he says, “The flaw is the assumption that providing capital is a productive activity, a notion that appears as virtually a truism when mediated by neoclassical categories.”
http://books.google.com/books?id=A_0afomkjQYC&printsec=frontcover&dq=against+capitalism#PPA12,M1
In this section he also explains that to be “capitalist”, a society must feature all three sets of institutions: 1) private ownership of the means of production 2) a free market, and 3) wage labor. If a society is not comprised of all three, then it is not capitalist. So by this definition, Schweickart’s economic democracy would not be a “capitalist” society — it would be post-capitalist.
Unfortunately, this doesn’t address Brendan’s and Murray’s argument that capital can exist in a post-capitalist society in the absence of a capitalist class. At this point, I’m calling upon Dr. Schweickart himself to explain how this can happen, and I hope he will do this with specific reference to Marx’s diagram of the circuit of capital. For if capital exists, then the circuit of capital must also exist in some form or another. Brendan and I have both experimented with a number of revisions of Marx’s circuit of capital to illustrate what economic democracy might look like in those terms. But I don’t think either of us are satisfied with the results.
This seems like a fundamental question. So I can hardly believe Schweickart has never been confronted with it. Unfortunately, I’m not finding anything about it in his book “After Capitalism” or in Michael Howard’s book. The latter covers all kinds of arguments regarding economic democracy — except this one. I’m quite disappointed about that, but I’m now also hunting through Schweickart’s earlier book “Against Capitalism” online to see if he covers it there.
The following is from Howard’s book, “Self-Management and the Crisis of Socialism”, chapter 5, “Markets without Alienation and Exploitation”:
“Along with Marx, though more explicitly, [N. Scott] Arnold does hold that market socialism would fail to provide a radical alternative, one that could abolish alienation and exploitation. However, his argument concerning alienation, as I have shown earlier, merely assumes that commodity production must always entail commodity fetishism. There is no reason to accept this assumption. In questioning it, I am willing to grant that commodity production generally creates tendencies toward fetishism (in the psychological sense) and hence that it might be impossible to abolish alienation entirely. But a deep, if not “radical,” critique of capitalist society still stands if, in that space between capitalism and its total transcendence, alienation can be substantially reduced.
“In comparison with capitalism, worker self-management in a market economy, with social ownership of the means of production and a democratically controlled investment fund, would give to workers direct control of their product. The market would place some constraints on workplace humanization, but the parameters for improvement in this situation can be narrowed or widened through the investment process. Working for a share of the residuals is arguably qualitatively different from working for wages. Whereas central planning, in its ambition to control the production process, produces absurdities and makes a mockery of rational collective control, a democratically controlled investment fund, more modest in its goals, promises a more reasonable measure of genuine collective control without denying the real contingencies and unintended consequences that attend any complex, changing economy. The very real alienation between workers and owners will be overcome, without being replaced by “state capitalism.” Some degree of widespread commercialism will persist, but cooperatives are less driven than capitalist enterprises, by the growth imperative, allowing a more harmonious combination with ecological and other extracommercial imperatives. A distinction between civil society and the state would remain, but the major divide between classes would have been closed, allowing the state to actually become what it only pretends to be in capitalist societies, the expression of a general interest. (Consider this a concession, contra Marx on the state, to Hegel and a concession, contra Hegel on classes, to Marx.) Would this not be a transformation sufficiently qualitatively superior to capitalism to qualify as radical?”
– Michael Howard
In chapter 4, “Marx and the Market”, he outlines the possibility of “structural fetishism without psychological fetishism”. We can discuss that further if you like.
Meanwhile, there are no conclusive answers to the questions you raise about alienation and commodity fetishism. To draw conclusions, real world data must be collected and analyzed. But there is none in these regards — yet. There is no fully functioning system of economic democracy (Schweickart’s model) in the real world — yet. Economic democracy is an alternative hypothesis, not a conclusion. But since the components of Schweickart’s model are drawn from the real world, we can analyze those components and make reasonable assumptions about them to arrive at reasonable expectations about likely outcomes of the overall experiment.
Assuming that workplace democracy and social control of investment will effectively remove the capitalist class from society, the state will most likely become an instrument of the general interest. Under these conditions, though commodity production remains, economic democracy is probably the most viable *transition* between M-C-M1 and C-M-C. While economic democracy is not the final objective in this regard, it is probably the best next step in the right direction. Alienation and commodity fetishism and all kinds of exploitation are some of the problems to be analyzed and hopefully resolved by conducting real world experiments. In the meantime, a clear distinction between “capital” and “capitalist” in relation to labor is essential to making these first steps.
You raised some other questions that aren’t addressed here, Brendan. But this was a tough one. So I’ll leave it at that for now, and get back to you.
The reason market socialism (Schweickart’s economic democracy in particular) is an issue in this discussion is because of the way Schweickart — not just me — uses the term “capital” with reference to his model. I’ve tried to carefully avoid misrepresenting him in any way, and I’ve corrected myself in any way that I might have. It is possible that I misunderstand Schweickart, but I rather doubt it. In fact, I’ve directly cited specific examples of his usage of the term “capital” (and surplus value, etc. ) with reference to his post-capitalist model. I didn’t include page numbers, but I can if you’d like — or you could go to Google book search and search through his book.
Does Schweickart misunderstand the meaning of the word “capital”? I kind of doubt that, too. With a PhD in mathematics and philosophy, he’s a Professor of Philosophy at Loyola University in Chicago, and he’s probably been a Marxist / Socialist since before you or I were even born. The latter is just a guess, but hopefully you get my drift. While I might be a little bit of a newby (if not a dummy) regarding this stuff, Schweickart certainly is not. Does Cooney misunderstand the meaning of the word “capital”? No, I really don’t think so. In fact, your video series and this discussion have been the greatest learning experience I’ve had in that regard. Your simple explanations demystify Marx’s theories for dummies like me, without diluting any of his original intent. You are obviously very serious about what you’re doing, and I’m behind you all the way in this endeavor. At this point, you also seem to have a reasonable understanding of Schweickart’s model (further comments below).
So at this point, I’d be very interested in some commentary from Schweickart himself — not to intervene or to mediate our discussion, but to clarify his intent regarding his usage of the word “capital” versus “capitalist” from a Marxist perspective in reference to his post-capitalist model.
Meanwhile, regarding your expansion of the M-C-M chart and modification regarding economic democracy: Well done, Brendan! Bravo! I do like the way you explain the circuit of capital better than other methods I’ve seen. The Barone book I keep citing, “Radical Political Economy”, was one of the textbooks for a college class in Political Economy I attended a few years ago. It has a similar chart, though still more involved than what you present here, and again yours is more self-explanatory. His is probably Marx’s full model. But I think your explanation of M-C-M is a much better place for newbies to start, unless they happen to be wackos like me who are looking for an alternative to capitalism.
See chart at top of page 13
http://books.google.com/books?id=tnhnk598i-IC&printsec=frontcover&dq=charles+barone#PPA13,M1
The one thing that always bothered me about Barone’s chart (at link above) — also reflected in your condensed versions — is that the capitalist is absent from the model. All the other factors of commodity production are represented, but the capitalist is absent. Why? Well, Schweickart’s model explains why — because the capitalist is non-essential personnel. He’s a completely useless parasite, passively siphoning surplus value away from the productive activities of others, and he should be dismissed, not just from production, but from society altogether. The role of “capitalist” in society, not necessarily the people who happen to be capitalists, should be dismissed. We’ve outgrown them. Likewise, wage labor need not be a cost of production, and surplus value need not be siphoned away from the activities of workers. Your modification of Marx’s model illustrates this very nicely.
But this raises another question along the same lines. If labor power is no longer a factor in the circuit of capital, then does this mean workers are also non-essential personnel? Eventually, I think history will say “yes” — and as we continue removing other factors from Marx’s model, I think we’ll find that the whole circuit of capital based on the production of commodities for sale is completely unnecessary and obsolete. In some sense, I think this aligns with your speculation about technological advancement eventually dissolving the whole process, bringing us full-circle to conditions of production for use rather than production for exchange — though hopefully on a higher plane than “hunting and gathering”. It also aligns with ecological perspectives that suggest this planet and all its life-forms will no longer tolerate the likes of capitalism. But all of this is speculation for other discussions.
Meanwhile, your understanding of Schweickart’s model is not quite correct in that deferred consumption of workers is not a factor in new investment. From his book: “Private savings are not only *not* necessary for economic growth, but they are often harmful to the overall economy”, (pg 17). Receipts from the capital assets tax constitute the national investment fund, all of which is earmarked for new investment. All new investment derives from this fund… In stark contrast to capitalism, Economic Democracy does not depend on private savings for its economic development. Since investment funds are publicly, not privately, generated, their allocation back into the economy is a public, not a private, matter”, (pg 50). For an outline of the flow of “capital” in Schweickart’s model, please see figures 3.1, 3.2 and 3.3 on pages 56 – 58 at the link below:
http://books.google.com/books?id=KWy9JbWvjywC&printsec=frontcover&dq=after+capitalism#PPA56,M1
Now your conclusions:
• “Unlike capital there is no imperative to expand production merely for the expansion of value.” — I concur, though I question your use of the word “capital” here where “capitalism” seems more appropriate. With a dramatically minimized growth imperative, economic democracy is far preferable to capitalism from many perspectives (especially the ecological) though it doesn’t solve other problems like unemployment and poverty. This is why it should probably be accompanied by a Basic Income Guarantee and/or Employer of Last Resort.
• “Unlike capital, there is no expansion of value and hence no surplus.” — After some further thinking on this, I’d like to propose another perspective. Previously, I suggested maybe workers are still exploited, still working for some kind of “wages” under economic democracy. Let’s scrap that and take another look at Barone’s (Marx’s) model of the circuit of capital, and then consider your revisions.
Under capitalism, labor power (LP) is “variable capital”, receiving a fairly constant income and yielding a variable income (surplus) to handful of capitalists.
Under economic democracy, the socially owned means of production (MP) is “variable capital”, receiving a fairly constant income (surplus) and yielding a variable income (surplus) to a large majority workers.
The implications of the above comparison raise many questions — probably for other discussions. Meanwhile, Barone (pgs 12-14) explains that raw material, tools, and equipment are considered “constant capital” because their value is equal to the amount of previous labor time already invested in their production. This value is fixed, it can’t be changed. Labor power is considered “variable capital” because its value is equal to the labor required to physically and culturally reproduce the worker; i.e., the amount of “wages” necessary to keep the worker alive so (s)he can show up for work the next day. Labor is the one commodity that produces more than it costs, and the variable income of capitalists (profit) is derived from the difference between the value workers produce and the wages they are paid. In other words, labor power (LP) is “variable capital”, receiving a fairly constant income (wages) and yielding a variable income (profit) to capitalists. So capitalists endeavor to “vary” the cost of labor by drive wages down.
Barone says capitalists “buy” labor-power, which others (Chomsky for instance) suggest amounts to little more than “renting” workers (rather than “owning” slaves). Now Schweickart comes along and removes the capitalist (and wages) from society. As you suggest, Brendan, this also removes labor power from the circuit of capital — because labor is no longer a cost of production — but there is still surplus value. Why? Because the means of production (MP) is now “variable capital”, receiving a fairly constant income (the capital assets tax) and yielding a variable income (residuals) to workers. The capital assets tax could be considered “primary surplus value”, paid to society for workers’ “rent” of the socially-owned means of production. Residuals might be considered “secondary surplus value”, paid to members of self-managed enterprise for their active participation in production. In other words, the social surplus previously expropriated by capitalists has been reallocated, first to society as a whole and then to producers. Workers “rent” the means of production (through the capital assets tax) instead of capitalists “renting” workers (through wages). Instead of capitalists controlling the circuit of capital strictly for the sake of profit, society now controls the flow of capital for the common good.
• “And unlike capital there are no social relations of capitalism.” — While the capitalist and wages have been dismissed, social relations remain. But as you say, these social relations are not “of capitalism” any longer — they are “of” something other than capitalism. Production and many other functions of society — the social relations of capital — have been democratized.
What makes variable capital variable is the difference between the exchange value and use-value of labor power. The exchange value of labor power is the wage. The use-value is it’s ability to labor. But there is no necessary correlation between the two. A worker can produce a varying amount of value during an hour of work regardless of whether the wage changes.
In your description of surplus value in marker socialism you seem to suggest that the means of production can create value on their own- that there would be something variable about this. Only human labor can add value to production. The value of MP is merely transferred to the commodity, but MP can’t add anything new.
Now if workers add new value in their work this may indeed expand the total pool of value in society. If all of this new value is consumed and not reinvested to enlarge production then I can’t see how we could call it surplus. If workers decide to defer some of this consumption and reinvest this value in MP in order to expand production…. then perhaps it would be some sort of surplus value. But we both agree that it would not operate in the same way that SV does under capitalist social relations…
This is why I am so hesitant to use the word capital to describe a different set of social relations. What is useful about Marx’s language is that it describes these social relations. If we use the term to describe a different set of social relations, although there may be similarities, we deprive the term of its distinctiveness.
I believe I made a mistake in my earlier post regarding the circuit of value production in market socialism by saying that a reinvestment in MP would not expand value because it would be the same as consuming that value in non-productive consumption. I’m not sure how to characterize this adding of value through labor rather than expanding value via exploitation. In capitalism there is an inequality within the wage relation that creates SV: literally one amount of value goes into the factory and another out…
In market socialism, because there is no cost of labor it seems harder to divide the value added by labor into V and SV. After pondering this for awhile I am starting to realize that there are some theoretical ideas about the LTV that I need to explore more before I can make any more conclusive statements about this issue. But let me briefly speculate as to them here:
In Kapital Marx starts his discussion of LTV by examining a society of simple commodity producers, C-M-C and observes that here each measures the value of their labor in relation to the value of other’s labor. Subjective valuation about the utility or use-value of a commodity only regulates the proportion of each commodity that is created (supply and demand). But underneath this subjective valuation lies a deeper valuation and this an objective valuation about exchange ratios based on labor.
Marx then tells us that such a relation of exchange based on labor values only emerges in a capitalist society where capital has torn away barriers to exchange. But this introduces another relation. Now instead of one commodity producer relating to another we have the labor-capital relation and M-C-M. This introduces another element into how labor is valued. For the worker- they still engage in C-M-C, but the commodity they sell is their labor power itself and the money the receive is not equal to the value they create. The capitalist does not value the expenditure of human energy of his workers in the same way the workers do. For the capitalist there is only the wage cost (always below value) and the drive to get as much work out of these workers as possible. So the initial relation that informs the labor theory of value, that between commodity producers, is transformed by the capital relation. (In Volume III of Kapital Marx introduces a third mediating relation- that between capitals in competition. This is the theory of prices of production.)
In market socialism this capital relation would not exist. Workers would not value their labor in the same way capitalists do. They would make different decisions about how much to invest in MP and how much to spend on consumer goods. They would do this for the same reasons that Marx explains form the basis for the LTV- that each producer values his own labor time in relation to others. He/she must decide how much to work in proportion to how much he/she wants to consume.
My thinking on these topics will probably evolve as I tackle some new books on my summer reading list:
Vol. III of Kapital
Kevin Carson’s “Studies in Mutualist Political Economy”: http://mutualist.org/id47.html
II Rubin’s “Studies in Marx’s Theory of Value”: http://marxists.org/archive/rubin/value/index.htm
That’s way too much to read this summer….
Wages, the length of the working day, working conditions, retirement and medical benefits, governmental regulations regarding all the above — yes, these are all factors in the variance of surplus value under capitalism. It’s not just that “there is no way of knowing how much value a worker will produce” that makes the cost of labor power “variable”, as you suggest in several of your videos. Rather, there are many dynamic “social relations” that impact the variance of surplus value.
Now maybe this is a stupid question, but please humor me. Is “variable” an attribute that Marx assigned to labor power itself, or is “variable” an attribute he assigned to the yield (surplus value) of labor power? While both are probably true, the latter conclusion seems more significant, mainly because it is far more politically and economically charged (in terms of social relations) than the former. Moreover, “variability” is not a characteristic that can be assigned exclusively to either the means of production or to labor power. It is more significantly a characteristic of surplus value resulting from interaction between the two.
Please forgive my rough renditions of Marx’s circuit of capital below.
M–>C(MPc+LPv)–>P–>C1–>M1
In some circles (statisticians perhaps), this might be considered Marx’s null hypothesis. But now comes David Schweickart with his alternative hypothesis. Again this is speculation on my part, not necessarily Schweickart’s views. But — what happens when surplus value becomes a finite constant rather than an infinite variable in society?
M–>C(MPv+LPc)–>P–>C1–>M1
At first glance, the change is almost imperceptible, and it’s not so much qualitative (ethical) in this view as it is quantitative (mathematical). Human labor power is indeed variable. The cost of sustaining human labor power is also variable. But the variable yield of human labor power when applied to the means of production — surplus value — seems far more economically and politically significant. In this view, variance is a characteristic that can be assigned to either the means of production or to labor power or more realistically split between both.
In the real world, these decisions about social relations are made democratically, whether we, the people, are actively involved in those decisions or not. In Marx’s model (above) the distribution of decision-making power (democracy) is heavily skewed in favor of great wealth derived from the accumulation of capital. In Schweickart’s model (at least my speculations above) a statistical error called “the capitalist” has been removed, thereby “normalizing” the distribution of decision-making power. The character of “LP” is now much more constant or “stable”, even though workers now receive a variable income. The character of the “MP” is now much more innovative, creative, inventive and entrepreneurial, even though the owners of the means of production (society) now receive a fairly constant (fixed) income in this regard.
But at this point, I need to stop speculating about what Schweickart thinks (before I get a headache). I’m ready to hear from Schweickart himself — good, bad or ugly. I sent him an email, and I hope he responds. Meanwhile, this from Schweickart’s “Against Capitalism” (which I haven’t read yet – looks pretty good though, so I’ll probably get it):
“Using the economic categories of Adam Smith and David Ricardo (specifically, the labor theory of value), Karl Marx argued that capitalism is inherently exploitative. Even without monopolies (Smith’s concern) or landowners (Ricardo’s bete noire), free, competitive capitalism exploits the working class, for workers are the source of all value, and yet they are excluded from the economic surplus. Capital, said Marx, is not a thing possessing mysterious productive power but, rather, a social relationship among human beings, a relationship of power. The free market masks the fact that capitalist society is formally homologous to a feudal or even slave society: A ruling class controls the means of production while a dominated class does the work.”
I want to thank David Schweickart for kindly taking time out of his busy schedule to respond to my(our) request for clarification. Following is Dr. Schweickart’s first of two email responses regarding our discussion:
David,
Your “capital controversy” is quite interesting, reminiscent of a famous debate of the late 60s, early 70s, the “Cambridge Controversy,” which pitted two Nobel Laureates from MIT, Paul Samuelson and Robert Solow, against the great Left Keynesian, Joan Robinson, of Cambridge, England. For the neoclassical U.S. economists, “capital” is one of the three factors of production (the other two being land and labor), the return to which is interest. Joan Robinson–attacking the logical foundation of the neoclassical paradigm–argued that this made no sense. One can make sense of labor and land generating a wage rate and a rent by calculating their marginal products (as I show in Chapter One of AfC), but how might that work for “capital”? What is “capital”? It must be a material thing–on par with land and labor–if it’s to determine an interest rate analogous to the way rent and wages are determined–but in what units might “capital” be measured? We can speak of hours of labor and acres of land–but what are the units for “capital”? You can’t appeal to physical units; you must go to monetary value, but that means you must be able to determine the monetary value of whatever this “capital” is, without bringing in interest rates, for these interest rates are supposed to be determined by the “quantity” of capital employed, just as wages are determined by (the marginal product of) the quantity of labor, and rent by (the marginal product of) the quantity of land employed. (In my view JR won the argument.)
This controversy is not the same as the one in which you’re engaged, but both turn on seemingly simple question which is not simple at all, namely, what is capital? When I use the term in AfC, I’m thinking of it as “means of production.” These are what are leased to workers–the leasing-fee being the capital-assets tax.
It hadn’t occurred to me until reading through your debate that I’m using “capital” in a different sense than does Marx. For Marx, capital is the money the capitalist brings to the market, for which he purchases commodities, which, when sold, somehow produce more money than he started with, the famous M-C-M’, where M’ >M. It’s money that seems to possess the mysterious power to expand in value–even when all commodities, including money (money, for Marx, is gold, which is itself a commodity), exchange for exactly what they are worth: the amount of labor embodied in them. Marx’s great puzzle is: if equals always exchange for equals in the market, how is profit possible?
His solution to this paradox is brilliant. He distinguishes between the commodity the capitalist purchases, namely labor-power (one’s capacity to work), and the number of hours the laborer is compelled to work. So long as the amount of labor it took to produce the laborer for a day (i.e., the labor that went into producing the things the worker purchases with his wage) is less than the length of the working day, profit is possible. Surplus value is produced, which is the source of the capitalist’s profit. (For Marx, profit is produced, not in the market, but behind the factory gates—one of the reasons for thinking that market socialism is compatible with Marx’s own thinking.)
In this analysis, capital is *not* means of production. The money the capitalist lays out is divided into two parts, constant capital (which pays for the raw materials and depreciation of the machinery) and variable capital (which pays the workers’ wages). The latter capital is most certainly *not* “means of production”—not as I use the term. Capital’s defining characteristic, for Marx, is its seemingly magical ability to grow.
But if we use this definition of capital, there is no “capital” in Economic Democracy. (I had not realized this before.) There is no way (at least not in the basic model) for a person to make money with money. A group workers may receive a grant from a bank to start up a new business, on which they must pay that capital-assets tax, but the income they receive is from their labor, not from their “capital.” The thing that corresponds to Marxian “surplus value” in this example is capital asset tax–which will be used to finance new investments. But this surplus value belongs to society as a whole, to be distributed according to democratically-decided criteria. There’s nothing mysterious about this procedure. There are no individuals who receive income based on the quantity of “capital” they invest, i.e., there are no capitalists.
So, from a strictly Marxian point of view, there are neither capitalists nor capital in ED, though obviously there are means of production.
Make sense?
–David
As everyone reading this might imagine, I was not at all happy with the above response from Dr. Schweickart — and I told him so. I’m not sure it’s either appropriate or necessary to post my private email responses to him here. As he observes below, my replies were a little bit “vehement” — “hot under the collar”, one might say — I was a little rough on him, and he doesn’t understand why. However, my “vehement” response did elicit a more detailed explanation from him, which appears below. So I will post that for now, and if Brendan’s blog allows, I will follow with an explanation of why this is not only unsatisfactory, but fairly “troubling” to me.
***************
David,
I must say, I’m a bit shocked by the vehemence of your response. I’d carefully worked through the 40 pages on Kapitalism 101. I’d been impressed by your detailed defense of Economic Democracy. It seemed to me that the dispute between you and Murray and Brenden was essentially semantic. You were using “capital” in a different sense that they were. You were right that under ED there would be “capital” but no capitalists, given your (and my) meaning of the term, whereas they were right, if one used a more technically-Marxist definition.
In writing AfC, I was writing for a general audience, and so, except in Chapter One, where I was trying to undercut some of the classic non-comparative defenses of capitalism, I used the term “capital” as it tends to be understood in our culture, namely as “means of production,” or as “funds for investment.” Thus under ED we have capital but no capitalists.
Marx’s usage is a bit different. He is interested in demystifying “capital,” this “thing” which seems driven to expand, expand, expand. He does so by showing how this “magical” power comes from a set of social relations that require individuals to sell their capacity to labor for less than the value they create in exercising this capacity.
For Marx, as you know, there is both constant capital and variable capital. The “variable” capital is simply the money the capitalist uses to pay the worker’s wage. In Marx’s model, they money the capitalist uses to pay for the raw materials and machinery depreciation is called “constant” capital, because the value of those raw materials and machinery are merely passed on to the product. To quote Marx, “That part of capital, which is represented by the means of production . . . does not, in the process of production, undergo any quantitative alteration of value. I therefore call it constant capital.”
“On the other hand, that part of capital, represented by labour-power, does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value, and also produces an excess, a surplus-value, which may itself vary, may be more or less according to circumstances. Therefore I call it “variable capital.”
The key circumstance is precisely the length of the working day. The worker must work more hours than are embodied in his wage. How many more depends on “circumstances.”
So Marx is using “capital” to mean more than “means of production.” For Marx, “capital” is the money the capitalist brings to market for purposes of investment, not personal consumption. If private individuals do not bring money to market for such purposes, i.e., if there are no capitalists, then it would seem to follow that there is no “capital”–in his sense of the world.
I don’t see why the fact that Marx and I are using a particular term in different ways should be so troubling to you. Marx is using the term in a precise, technical sense to solve an abstract problem. I am using the term in a more general, common sense to explain how the investment mechanism under Economic Democracy works.
This difference has nothing whatsoever to do with whether or not Economic Democracy is a viable alternative to capitalism. This is where I lose you. You seem to think it vitally important to be able explain ED in terms of Marx’s “circuits of capital.” I don’t. Marx’s analysis of the move from C-M-C to M-C-M’ is a very abstract way of describing the historical evolution from barter (C-C) to a market economy in which money has been introduced to facilitate exchange to a capitalist economy. There’s no reason to think that the stage after capitalism should be a reversion back to C-M-C.
To show that ED is a viable alternative to capitalism, one must show the workplace democracy can be as effective a way of organizing a productive enterprise as the capitalist way–an authoritarian management hiring workers and trying to maximize “shareholder value.” One must also show that a public banking system, which generates investment funds via taxation, and allocates them via public banks can be as effective as a financial system that depends on private investors. That’s what I try to do–that and show an economy organized as an ED would vastly superior to the capitalism in terms of democracy, equality, sustainability, etc. These arguments could have been made without using the word “capital” at all. It seems to me, given your often eloquent defense of ED, that these arguments have persuaded you.
I’ve tried to explain to you how I’ve been using the term “capital,” and how I think Marx uses it. You haven’t, so far as I can tell, tried to explain how *you* understand the term. I really don’t see why you think the arguments I’ve given for the viability of workplace democracy and social control of investment collapse, just because I’ve used the term “capital” in a way you seem to think is incorrect. I really don’t see why you think this somehow constitutes a “monumental flaw.”
The serious question that seems to be troubling you is whether ED might revert to capitalism. That’s a question often raised when one defends some version of “market socialism,” and it’s a fair question–especially with respect to ED, since the “expanded model” even allows for some capitalists (entrepreneurial capitalists) within ED. I’ve tried to show why there is little danger of a reversion to capitalism, so long as laws are put in place to block the entrepreneurial capitalist (or his heirs) from becoming passive capitalists, simply making money with their money.
I don’t know whether these remarks will calm you down, or upset you further. I appreciate the time and effort you put into defending ED. I hope you find these remarks helpful. If not, I doubt there’s any more I can say.
–David
I’m troubled by this for a number of reasons. In short, I’ve studied and developed a high level of faith in an alternative to capitalism over the past few years, only to be told now by its creator that many of my assumptions regarding that alternative are incorrect. I’ve made certain assumptions, albeit perfectly reasonable ones, about Schweickart’s proposal that he now claims are untrue. I assumed that Dr. Schweickart uses certain key terms with regard to economic democracy in the same way that both he and Marx use those terms with regard to capitalism. While this seems a reasonable assumption for anyone to make, given Schweickart’s thorough understanding and acceptance of Marx’s critique, it is nevertheless — false.
This is significant because, if any proposed solution to a problem is not defined in the same terms as the problem itself, then the proposed solution is dubious at best. Lots of people don’t like Marx’s definition of the problem because it presents a number of “inconvenient truths”. So they try to redefine the problem in their own terms and then go about trying to solve the problem from there. Schweickart, on the other hand, doesn’t try to dodge Marx at all. He accepts Marx’s definition of the problem, he clearly understands the terms Marx uses in defining the problem, and he explains the problem as well as anybody I’ve seen.
Then he goes on to outline his proposed alternative using those same terms. What he doesn’t bother to explain is that those terms are defined differently with regard to his proposed solution than they are with regard to the original problem. Why? Is this an innocent oversight (as he claims above), or a deliberate effort to mislead, or is Dr. Schweickart suffering from a “poverty of time” which prevents him from investing any serious thought or commentary in these regards?
The first option above suggests Schweickart is an idiot, which I doubt very much despite his humble pleas (see above). This asks us to believe that he’s invested 40+ years in developing an alternative to capitalism based on a number of glaring oversights. I find this hard to swallow. Senility, rather than stupidity, is another possibility at his age, but there’s good reason to doubt that, too. The second option suggests Schweickart is a liar, which also seems doubtful for plenty of reasons. I don’t know him personally, so I can’t dismiss the idea completely. But it doesn’t seem nearly as likely as other possibilities.
The third option suggests that Schweickart doesn’t have time to mess around with abstract debates about whether or not capital can (or should) exist in a post-capitalist society in the absence of a capitalist class. I am inclined to believe this and to excuse him on these grounds for a couple of reasons. Most importantly, either of the first two notions above indicate that Schweickart’s thinking is significantly influenced by “Bourgeois economic theory”. As Brendan suggests, “defining capital in physical terms (as just use-values, just material wealth) and denying the specific form of value that these commodities take, avoids the entire question of the unique property relations that underlie capitalism… wealth that is used to create more wealth…Yes, this is the bourgeois definition of capital.” From everything I’ve studied, there is no reason for me to believe David Schweickart has been infected by the Bourgeois disease. Rather, he seems to be a very healthy, intelligent and active Marxist / Socialist.
Secondly, Schweickart says “there is no way in Economic Democracy for a person to make money with money. There are no individuals who receive income based on the quantity of “capital” they invest, i.e., there are no capitalists.” Fine. He’s eliminated usury. But usury is not the issue, and Schweickart knows it’s not. At issue under capitalism is surplus value derived by capitalists from the exploitation of labor. Economic Democracy removes the capitalist from society by democratizing control of the labor process and the distribution of surplus value. But the exploitation of labor is merely democratized under Economic Democracy, it’s *not* eliminated. I’m not at all opposed to this arrangment. All of the above seems like a great improvement over capitalism, a genuine step in the right direction. But Dr. Schweickart disagrees. In his most recent email to me he states:
“It does *not* follow that the fact that surplus value is created in ED implies that labor is exploited. Workers are exploited under capitalism because they produce the surplus value, but have no control over it. It belongs to the capitalist. In ED they *do* control it, for that surplus value belongs to society as a whole, which is a democratic society. That is to say, workers, as citizens, decide on investment priorities—not capitalists.”
To conclude, the question of our discussion is whether or not capital can exist in a post-capitalist society in the absence of capitalists. I say “yes” because, under economic democracy, exploitation of labor yields surplus value to society (not capitalists) which is reinvested into production. David Schweickart says “no” because, while surplus value is indeed generated under economic democracy, there is no exploitation of labor. But his evaluation still leaves us with at least one bothersome question: If surplus value is not generated by exploitation of labor under economic democracy, then how exactly is it derived? Schweickart’s answer is typically “taxation of capital”. But he also explains (see above) that “capital” denotes the means of production under economic democracy, and that the means of production don’t yield ANY “value” under ANY model unless human labor power is applied to them.
This is a fundamental contradiction — a “monumental flaw” — but it’s not hard to resolve. Dr. Schweickart simply needs to concede that labor is indeed exploited under his model of economic democracy. This isn’t something to be ashamed of. Consenting adults “screw” each other every day. “Rape” (capitalism), on the other hand, is a screwing without full knowledge and/or consent. Under capitalism, this sort of exploitation is masked (magically) by the market. Is the capital assets tax under economic democracy merely an alternative method for (magically) concealing the exploitation of labor? Doesn’t it make more sense for people to know upfront that they are being exploited and to have a democratic voice in the process of getting screwed? Isn’t that what “democracy” is all about?
For the capital assets tax to be a genuinely “democratic” affair, it seems to me that we, the people, had better know what the hell is going on — rather than merely trading one set of blinders for another. If we can at least agree on some of these questions, then maybe we can apply Schweickart’s social revisions to Marx’s circuit of capital and begin to examine his model in Marxist terms, as I’ve suggested previously. We can begin to evaluate, not whether these revisions are “good” or “bad”, but whether or not they are a step in the right direction and how far-reaching the results might be, and what the next step our social evolution might be after Economic Democracy. Nobody is asking you to eradicate the exploitation of labor, Dr. Schweickart. But any step in that direction is something that many generations of society will probably thank you for in the centuries ahead.
Once again, many thanks to Dr. David Schweickart, Professor of Philosophy at Loyola University Chicago for his very kind and thoughtful response.
I think don’t think Scheickart’s use of “capital” constitutes at monumental flaw. I was not surprised to read that he saw our discussion of one of semantic confusion. If I may summarize our discussion:
me: …capital and labor….
you: capital and capitalist are not interchangeable b/c under market socialism you have capital w/o capitalist
me: that’s impossible b/c capital is a social relation between capitalist and worker.
you: no. it’s wealth creation.
etc.
Then a discussion ensued over the definition of capital, a definition in which both of us fluctuated in the consistency of our definition. On my part, I at one point suggested that since Marx saw the individual capitalist as merely a pawn in the overall domination capital in the abstract that perhaps capital could exist without the capitalist… that perhaps it could be personified in some other way. But, I argued, this would lead to someone having privileged access to this flow of value expansion and an exploiting class would emerge. I don’t know what to think of this train of thought- it requires more thinking. Aside from this diversion I have mostly argued that capital cannot exist without capitalists.
We also were diverted into discussing whether surplus value would exist. After some wavering on my part I conceded that something that could be called SV might exist but that it would be created by a very different social relation and therefore could not constitute the self-expansion that characterizes capital. Capital self-expands because from the perspective of capital there is no cost of expansion- it is free. You pay money for wages and more comes back. From capital’s perspective it is like magic. From a workers perspective, creating a surplus above the cost of their own means of subsistence has a cost- a cost of their own labor. This is a very different valuation and would lead to different types of labor processes, different investments, and probably lower value surpluses…. It would be a different sort of social relation, different enough to warrant a different name.
I agree with you that Schweikart’s use of the term capital to describe something which is not capital is unfortunate and confusing. Having not read his book I do not know how hard it would be to deduce his definition from the context. He would not be the first person to conflate bourgeois and marxist terms and so I wouldn’t hold it against him or think it egregious enough to constitute a major flaw in his model…. unless it was symptomatic of some deeper problem with his concept of an asset tax or of profits.
Though Schweikart seems to think it unnecessary I would be interested in seeing a circuit of value flows mapped out for a market socialist economy. There are several reasons for why I think this would be important: 1. every system must reproduce itself. in studying the way capital reproduces itself in physical and value terms marx discovered all sorts of crisis-causing tendencies. I would be curious if similar problems might be averted in ED. I would assume they would be as the wage-relation is at the root of most crisis tendencies. 2. I would be curious whether an average rate of profit could be achieved. 3. I would want to know if SV could take on any of the properties of capital, that of an alienated product which has its own movement and logic which acts back on the worker in dominating ways….
The only thing I disagree with in Schwiekart’s reply is his idea that C-M-C wouldn’t be relevant in ED. First of C-M-C still happens in a capitalist society. M-C-M describes the capitalist’s activity. C-M-C describes the worker’s (she sells her labor power for money with which she buys commodities.) In a market socialist society workers would be making commodities and selling them for money with which they would buy the means of subsistence, saving some money for reinvestment. That sounds like C-M-C to me…. kind of.
It’s great that Schweikart wrote back to you so quickly. And I’m surprised he had the time to wade through what now has become a quite long and meandering conversation. It was good to read his response. I will have to read that book.
Without reading Schweickart’s book, your difficulty in discussing his alternative model is quite understandable, Brendan. But you’ve done very well overall, and I appreciate your willingness to make the effort. Meanwhile, please allow me to revise your “summary”:
Brendan: “capital and labor are antagonistic” = “capitalist and laborers are antagonistic”
David: capital and capitalist are not interchangeable b/c under market socialism you have capital w/o capitalist
Brendan: that’s impossible b/c capital is a social relation between capitalist and worker.
David: no. capital is social relations of power. social relations can be changed to normalize the distribution of power.
I agree that “capital” denotes a set social relations which happen to include “wealth creation”. I don’t think I’ve ever argued that capital is exclusively “wealth creation”. In fact, I believe the social relations of capital extend far beyond the relationship between capitalists and workers to weave the fabric of our entire society. It’s also important to understand (albeit without reading his book) that workers don’t “save money for reinvestment” under Schweickart’s model. Rather, this is the function of the “capital assets tax” — a flat tax imposed upon enterprises for their use of the means of production.
All that said, the monumental flaw is not in Schweickart’s model. I do now question his use of the word “capital” (along with other terms) in reference to his model, but even that is not the monumental flaw I was referring to. The flaw (contradiction) is in Schweickart’s claim that labor is not exploited under his model because surplus value is generated by a tax (which workers control democratically) on the means of production, *not* from exploitation of labor.
The flaw in this reasoning is that the means of production cannot generate any surplus value unless human labor power is applied to it. This is troubling for the same reason that started this discussion — clearly defined terms is essential to discussing, not only capitalism, but also viable alternatives to capitalism. The distinction between “capital” and “capitalist” was the main question at the beginning of the discussion. Along the way, we’ve discussed other terms like “wealth” and “surplus value” and “labor” — and now we’re adding “exploitation” to the list.
Contrary to Schweickart, I don’t think the question is whether or not exploitation of labor exists under his model, but to what degree it exists and under what conditions. Giving workers (and society) democratic control of surplus value does not eliminate the exploitation of labor that generates it. Rather, the distribution of decision-making power has been normalized under Schweickart’s model. This is a good thing, it’s a huge step away from capitalism toward something better. But it does not remove the exploitation of labor, and I don’t think it needs to.
Schweickart argues further that society (including workers) are the recipients of surplus value under his model. Fine. But some segment of “society” is already the recipients of surplus value under capitalism. They’re called “capitalists”, and the distribution of surplus value and decision-making power is heavily skewed in their favor as a result (see Chandler’s “L-Curve” at http://www.lcurve.org/). Workplace democracy and social control of investment removes the capitalist from society and normalizes the distribution of wealth and decision-making power. But this new set of social relations does not remove the exploitation of labor required to generate surplus value.
In fact, I would argue that exploitation of labor will not be removed from society until surplus value is removed from society. As I think you’ve argued previously, Brendan, Schweickart’s model is still M-C-M, not C-M-C. But as I’ve added, Schweickart’s model could be a viable transition between M-C-M and C-M-C. As you and I both have suggested above, intelligent discussion of this possibility requires examination of Schweickart’s model in terms of Marx’s expanded model of M-C-M. But we can’t do that if Schweickart insists upon dismissing all of Marx’s theories about how surplus value is generated, specifically from the exploitation of labor. In this regard, I think Schweickart is missing a great opportunity to honestly evaluate the pros and cons of his model. He’s shooting himself in the foot.
For example, Schweickart’s model replaces an infinitely expanding variable called “capitalist profit” with a democratically controlled and fairly constant “capital assets tax”. The source of both is surplus value. But the former is the difference between C and the value of C1 while the latter is a flat rate tax on the means of production. Likewise, Schweickart’s model replaces a fairly constant rate of pay called “wages” with a variable rate of pay for workers called “residuals”. The former is a cost of production subtracted from net income while the latter *is* net income. So our punishment-based labor process enforced by unemployment and “the business cycle” is replaced by an incentive-based labor process which inherently drives workers to properly maintain the means of production and to maximize productive efficiency.
There are plenty of other observations regarding Schweickart’s model that are easy to illustrate using Marx’s circuit of capital, if Schweickart would admit that SV is still derived from the exploitation of labor under his model. But he refuses. Why? Is there something I’m not understanding about the exploitation of labor that would inherently collapse his model? I don’t think so. In fact, at this point I’m beginning to wonder if there are some things Dr. Schweickart doesn’t understand. Specifically, it seems irrational to insist that “exploitation” or anything else in the real-world is a black & white (“either, or”) issue. In fact, there is no such thing as either “black” or “white”. In the real-world, there is a continuous distribution of “gray”, which can be heavily skewed toward one extreme or the other but extends infinitely in both directions.
As you suggest above, Brendan, no society will ever be absolutely either M-C-M or C-M-C. It seems more useful to determine which kind of system is dominant in any given society. As Schweickart suggests, his model doesn’t remove the capitalist from society absolutely. But it does remove the dominance of a capitalist class. Is it possible to do this without also removing the exploitation of labor absolutely? Further, is it possible to democratize the labor process without removing surplus value (derived from exploitation of labor) absolutely? Moreover, is it possible for capital to exist in a post-capitalist society in the absence of capitalists? I think the answer to all the above questions is “yes”, because capital is a social relationship of power that can be changed, it’s not strictly social relations between capitalists and workers. The capitalist class can be removed from society while much improved social relations of capital remain. Therefore, a clear distinction between “capital” and “capitalist” is essential in discussing viable alternatives to capitalism.
If there was no money in a socialist society then there would just be production of use-values and not values. I think we’d all agree that we would like such a society to produce a surplus of use-values. We don’t just want enough apples to eat today. We want extra ones in case we run out. We may want to work extra hard to build better tools and machines in order to make work more productive. And since there is no private property the fruits of this surplus would belong to everyone. There would be no exploitation because nobody would be benefiting from someone else’s labor because of a privileged relation to the means of production. This means that the decisions made about work would be much different decisions.
If money were used instead to organize such a society these use-values would also have exchange values. The social surplus which was shared by all would have a money price. But the social relations would not change. How would this be exploitative? You seem to suggest that the concept of a collectively owned surplus means the exploitation of the individual by the collective. Perhaps then you should become a libertarian.
As I understand it, surplus value (whether we call it “capital” or not) has always been generated by the exploitation of labor. This has been true for every society in which there was a ruling class. Under Economic Democracy, we no longer have a ruling class, but we still have surplus value.
How is surplus value generated under Economic Democracy?
SV is created by workers creating more than they consume in means of subsistence. In Economic Democracy it is not appropriated by anyone but is collectively owned.
Right. As you say above, laborers must work longer, harder, faster to generate surplus value. Surplus value comes from the variability of labor power, whether exploited by capitalists or not. Economic Democracy does *not* remove labor power, or the variability of labor power, or the surplus value generated by combining LP(v) with MP(c). Turns out, Economic Democracy doesn’t alter the circuit of capital at all. But it does so radically change the social relations of capital that, according to Marx, we can’t even call it “capital” anymore; i.e., workplace democracy and social control of investment remove the capitalist and exploitation of labor from society.
Schweickart says we can call it whatever “tends to be understood in our culture” at the moment. Brendan argues that this “bourgeois definition of capital” is a “theoretical error” that “leads us down the wrong path” and “compromises our ability to articulate political goals/strategies”. I’m still inclined to think capital can exist in a post-capitalist society in the absence of capitalists, but I’m not nearly as concerned about it now. So if you need a concession, Brendan: I was wrong — dead wrong all along — You’re right. I’m sorry I wasted your time or anyone else’s. Thanks very much for the discussion.
Re: Capital as a social relation, Anwar Shaikh has an excellent article on it in The New Palgrave Marxian Economics – it’s available at his website here:
http://homepage.newschool.edu/~AShaikh/pal2.pdf
Brendan, I don’t necessarily want to start this debate up again, mainly because my original claim is still technically “wrong”. That is, I didn’t merely *say* I was wrong just so I could go stomping away from the discussion in a pout. In strictly Marxist terms, I honestly think you might be correct that capital cannot exist in a post-capitalist society in the absence of the capitalist. But after some study of David Harvey’s work (at your suggestion), there are some new perspectives on David Schweickart’s work I’d like to share, if I may.
First, according to David Harvey, the “capitalist” is not so much a particular person or a specific group of people, but a role that exists within the social relations of capital. As such, this role possesses certain characteristics, which David Schweickart divides into two general categories: passive ownership (a parasitic “class” that contributes nothing and controls everything), and entrepreneurial innovation. Under Economic Democracy, the former is dismissed while the latter is retained through workplace democracy and social control of investment. We don’t need passive ownership anymore, i.e. we don’t need a ruling class of people (royalty) whose massive savings (deferred consumption) we rely upon for our very existence. On the other hand, entrepreneurial innovation could be an wonderful social benefit if controlled democratically. Moreover, anybody can be an “entrepreneur”, whether it be an individual or a group of workers or a government agency or a combination of all the above. Thus the role of “capitalist” is transferred to all of society, in some real sense, under Economic Democracy.
While Schweickart might concur with the above, I’m afraid he might dispute the following. Even so, I’ll press on even if I’m wrong, because I strongly believe proposed solutions to any problem must be outlined in the same terms the problem was originally defined. Karl Marx most clearly defined the problems of “capital”. David Schweickart accepts Marx’s definition, and claims to have developed his alternative model in similar terms. Again, I’m a little more than bothered by his sudden abandonment of Marx’s terms in the notations cited above. But because I strongly believe in both Marx’s definition of the problem and in Schweickart’s proposed alternative, I will stubbornly continue to risk my neck to reconcile the two.
If the capitalist is a “role” within the social relations of capital, as David Harvey suggests, then so is the worker. Under capitalism, the role of the worker is to exchange his/her labor-power for monetary remuneration and then exchange that remuneration for a bundle of goods that keeps him/her alive so that (s)he can show up for work the next day. In essence, there is no change in this C-M-C process under Schweickart’s Economic Democracy. Workers still sell their labor-power as a commodity in exchange for money which is then exchanged for commodities. Therefore, the role of labor-power in the overarching circuit of capital is also unchanged. The only difference, as mentioned previously, is that the remuneration for workers is now a variable “residual” (Economic Democracy) rather than fixed “wage” (Capitalism). Is this a benefit for workers or a detriment? Even Schweickart admits Economic Democracy doesn’t resolve the unemployment problem. So workers now seem to be faced with even worse difficulties than they were under capitalism — a double-edged sword, as it were.
But waking up from our nightmare we realize that, as we change the world around us, we also change ourselves — as David Harvey very cleverly reminds us. In the absence of a passive ruling class, the general character of our society is no longer antagonistic. We aren’t forced to rely on “them” for our subsistence anymore. So decisions like shortening the working day to provide substantial increases in leisure and income for all is not an unreasonable possibility. Employer of Last Resort and/or Basic Income Guarantee now become real-world possibilities. Half of the human population is no longer starving to death because unemployment is no longer a club for beating people into submission. As Noam Chomsky might say, “It’s an “economic miracle”. Production for the sake of production and accumulation for the sake of accumulation are no longer economic imperatives. We can begin to make decisions based on priorities other than merely reproducing — the passive ruling class. What a freakin’ relief. Feels like the whole world just took a collective dump.
But again, as far as I can tell, I was wrong. Schweickart’s Economic Democracy does not necessarily demonstrate that capital can exist in a post-capitalist society in the absence of the capitalist. The capitalist has not been totally removed from society and neither has capital. Since there is no longer a ruling class that contributes nothing and controls everything, exploitation of labor seems to have been removed for the most part. But since the “market” for commodities has not been removed, the production of commodities remains. Therefore the circuit of capital also remains, albeit with significant transformations in the surrounding social relations of capital — “transition”, as it were.
Does commodity circulation imply the existence of capital? I think all it technically implies is that social labor is apportioned through exchange in the market place. This is C-M-C. Capital is a social relation that depends on wage labor. How is there wage labor in a collectively owned work-place?
In a collectively owned workplace, there are no wages. But under Schweickart’s model, worker coops are owned by society, not by the workers.
In a worker cooperative under Capitalism, the workers’ pay basically *is* surplus value. The enterprise is not only controlled democratically by the workers but is also *owned* by the workers. Therefore, all of the surplus value produced by the enterprise is retained by the people who work there in the form of “residuals”. But this is not true of “residuals” in Schweickart’s model.
Under both Capitalism and Economic Democracy, the function of workers is generally to exchange labor-power for pay in order to produce surplus value. As such, one function of workers’ pay is to yield surplus value to someone else — to the capitalist through profit under Capitalism and to society through the capital assets tax under Economic Democracy. Either way, workers are paid less than their productive contribution. So whether “wages” or “residuals”, the function of workers’ pay is essentially the same under both systems.
Fredy Perlman’s definition of “Capital”:
“… Capital … is at once a name for a social relation between workers and capitalists, for the instruments of production owned by a capitalist, and for the money-equivalent of his instruments and ‘intangibles’ …”
http://www.marxists.org/reference/archive/perlman-fredy/1969/misc/reproduction-daily-life.htm
^ Highly recommended!
(BTW, there is at least one typo that may leave you scratching your chin: “… he ceases to exert his own Fewer …” (from a great passage that I’ll leave you to discover for yourself); “Fewer” should read “power.” I have a PDF copy from another source to verify this. Also, the above link is unfortunately missing many instances of italics.)
I love this Perlman article. I first read it in the book “A Subtle Anatomy of Capitalism” edited by Jesse Schwartz. I think I mentioned the book on my recent “annotated bibliography video.” It is a fantastic book full of lots of great essays. Perlman’s is one of the best. My other acquaintance with Perlman comes from the introduction to I.I. Rubin’s “Essays in Marx’s Theory of Value”… one of the best things I’ve ever read.
[...] enough, Marxist Brendan Cooney seems to agree that free and open source software demonstrates the ‘validity’ of Marx’s theories. In a post on his blog (with accompanying youtube video narration) entitled “Robots vs. [...]
I’d just like to interject for a moment
Brendan: what you’re referring to as Linux, is in fact, GNU/Linux, or as I’ve recently taken to calling it, GNU plus Linux. Linux is not an operating system unto itself, but rather another free component of a fully functioning GNU system made useful by the GNU corelibs, shell utilities and vital system components comprising a full OS as defined by POSIX.
Many computer users run a modified version of the GNU system every day, without realizing it. Through a peculiar turn of events, the version of GNU which is widely used today is often called “Linux”, and many of its users are not aware that it is basically the GNU system, developed by the GNU Project. There really is a Linux, and these people are using it, but it is just a part of the system they use.
Linux is the kernel: the program in the system that allocates the machine’s resources to the other programs that you run. The kernel is an essential part of an operating system, but useless by itself; it can only function in the context of a complete operating system. Linux is normally used in combination with the GNU operating system: the whole system is basically GNU with Linux added, or GNU/Linux. All the so-called “Linux” distributions are really distributions of GNU/Linux.