Author Archive for Bill Kerr

Capital volume 2 by Karl Marx

I’m in the process of reading some of the papers from The circulation of capital: essays on volume two of Marx’s ‘Capital’ (1998). A number of the papers point to the relevance of Marx’s Volume 2 to the current structures and ways in which modern capitalism is analysed. Other of the papers are helpful in explaining the dialectical method used by Marx in his analysis with the clear implication that that method is still essential today to analyse capitalism. So, I offer below an extract from the General Introduction as a preliminary guide to accessing this book.

My argument has been and remains that we need good guides to Marx. The reasons for this are becoming clearer:
– some modern authors build a bridge between the capitalism of Marx’s day and modern capitalism
– much of Marx’s work was published after his death and it needs editing and interpretation simply because it was rough drafts
– various translations from the original German are significantly different and some of the modern authors go to a great deal of trouble in sorting out those issues by comparing translations or going back to the original German
– Marx often wrote things in certain ways without explaining clearly why he was doing this. He didn’t like to point out where his argument was heading because that would prejudice the rigour of his analysis. This makes him harder to understand to us spoilt moderns who are used to being hand held along the way.
– Marx is deep and hard to understand anyway, so we need all the help we can get!

Marx’s Capital II, The Circulation of Capital: General Introduction
Christopher J. Arthur and Geert Reuten


Marx’s Capital Book II, ‘The Circulation Process of Capital’, is divided into three main parts. In Part One, Marx considers the metamorphoses capital undergoes in its circuit, namely as money capital, production capital and commodity capital. Of course, in normal conditions, this sequence is expanded into a regular imbricated set of sequences such that at any given time a different component of the total capital is present in each form.

In Part Two, Marx examines the circuit as a turnover. He shows how various components of capital (for example, so-called ‘fixed’ and ‘circulating’ complete their circuit at different rates; he argues that the influence of the circuit’s periodicity, and the varying ratios of such components, must affect the annual rate of surplus value. In both these parts capital as such is treated; but it is not considered as a system of capitals; however, the reproduction of any given capital is necessarily bound up with the reproduction and circulation of the total social capital.

Thus in Part Three, when Marx considers reproduction, he examines the revolution of this totality which necessarily includes not only the intertwining of each individual capital circuit with others but the whole circulation of commodities, those commodities bought by the workers to maintain themselves as well as those means of production capitals sell to each other. On this basis Marx distinguishes two ‘departments’ of production: those producing means of production and those producing means of consumption. This very division, as well as the analysis of the relations between these departments, is one of the enduring achievements of Marx’s work.

The relatively ‘technical’ character of much of Book II misled Engels, for one, into thinking that the argument concerns only relations between capitals; this is a grave mistake, for class relations are integral to capital and thus the matters dealt with here stand in intimate connection with its class basis; for example, capital’s concern with shortening turnover time has consequences for the intensity of labour, and the very choice of criterion for discriminating departments is rooted in the necessary reproduction of class relations (as Mattick points out in Chapter 2).

Even if this Book II study is still one at a relatively abstract level, the phenomenal expressions of the abstract categories developed may be visible to the extent that the concrete is a simple expression of the abstract categories – but not if in this process of concretion the system inverts its fundamental logic in its appearances (for example, in interest or ‘productivity of capital’) or reverses its dynamic (for example, in the case of tendencies and countertendencies). Tony Smith, in Chapter 4, shows how many of the categories developed in Marx’s Book II indeed find phenomenal expression; hence he can show how much of the Book II analysis can help us in understanding current developments in capitalism such as ‘flexible production’ …


We turn now to outlining the sequence of essays in this volume. We begin with two papers that pertain to Capital II as a whole. Paul Mattick shows how Book II fits into the overall structure of Capital. He argues that, just as the social form of commodity exchange that formed the starting point of the analysis in Book I was unmasked as the social form of an exploitative class relation obscured from view by market relations, so in Book II Marx considers how that form is structured in terms of the circulation of capital. The circulation of capital as a totality among economic categories gives rise to the idea of ‘the economy’ as an autonomous system of forces rather than a feature of a particular form of social life with a particular class structure. Marx’s analysis of reproduction in terms of the two departments, Mattick indicates, shows how the categories of the market lose their explanatory independence. In this context he shows the underconsumptionist explanation of economic crisis to be an untenable interpretation: effective demand is determined by capital accumulation. The schemes of reproduction then highlight the conditions for the possibility of economic crisis, along with the existence of capital as a class relation, rather than the issue of maldistribution of income or of disproportionality ­between departments of production.

In the following paper, Patrick Murray indicates that the purpose of Capital’s middle volume is to deepen the analysis of the double character of the commodity (use value and exchange value) of Book I and to show that what circulates in a capitalist economy is capital. In stressing that commodities in capitalism are use values which have the specific social form of capital, Murray convincingly takes distance from the view, held by Sweezy for example, that use value is irrelevant to Marx’s analysis. In this perspective his main focus is to debunk the ‘commerce and industry’ picture of the economy in capitalist society. This picture breaks down capital’s circulation into a generalized circulation of wealth whose basic forms are money and commodities, buying and selling (‘commerce’), accompanying a production process which, devoid of any determining social forces simply transforms material inputs to create new wealth (‘industry’­). Murray points out that, oddly, this pictures leaves out capital itself. In criticising it he shows how the categories of the commerce and industry picture prove conceptually too ‘thin’ to grasp the circulation of capital; likewise ‘thicker’ co-involvements of use value and value must be acknowledged in order to comprehend capital, its turnover and reproduction, productive and unproductive labour, and fixed and circulating capital. For example the phenomenon of the material reshaping of circulatory functions (see Smith, Chapter 4 on ‘lean production’ delivery systems) would be unintelligible on the basis of the ‘commerce and industry’ picture. In an appendix, Murray shows that Ernest Mandel erred in claiming that Marx came to the conclusion that labour in ‘service industries’ cannot be productive because it is not ‘concrete’ and does not result in a free-standing product.

The next paper, by Tony Smith, directly relates Part Two of Book II of Capital to recent trends in contemporary capitalism and its apologetic. Marx here derives a drive to lower circulation time and circulation costs. Analysing the move towards so-called ‘lean production’ in the perspective of Marx’s thesis, Smith concludes that this development corroborates the theory. Next he moves on to considering lean production from another perspective of the Book II analysis. Marx argues that in the circulation process capital accumulation is the independent variable and consumer activity a dependent variable. The defenders of lean production insist that, while this indeed holds true for the era prior to ‘lean production’, the reverse now obtains: information technologies allow manufacturers to trace changes in consumer desires accurately; and flexible production techniques allow firms to shift production rapidly in response to new consumer demands. So, they claim, true consumer sovereignty is now being instituted for the first time; the consumer is the sun around which the lean production system turns. If this claim is warranted, Smith allows, the Marxian perspective in this respect is refuted. However, building on Marx’s account in Book II of the place of consumer activity in the circulation process of capital, he argues that overcoming conflicts in the relation of capital to consumers requires a thoroughgoing social transformation far beyond the possibilities of ‘lean production’.

In his own paper, Chris Arthur calls attention to the significance of the introduction of the concept of ‘circuits of capital’. He examines Marx’s theory of the circuits of capital outlined in Part One (chs 1-4) of Book II. He traces the form of the circuit and shows how it may be viewed as the imbrication of three circuits. On this basis he argues that capital cannot be understood as a fixed form but only as the totality of functional forms through which it passes in its circuit; that is, capital exists as the identity-in-difference of all its functional forms, an identity established and maintained only in its movement through them. Such a view of the three circuits Marx distinguished he illuminates by outlining its background in Marx’s knowledge of Hegel’s Logic, and especially therein his theory of the syllogism which examines successively its mediation in the universal, the particular, and the individual judgments. In addition Arthur addresses a surprising feature of the recently published 1865 manuscript of Book II, namely the appearance in it of four circuits, not three.

Martha Campbell’s essay examines Marx’s explanation of the functions money must perform in the circulation of capital. In the first part of the paper she provides an important outline of the methodological frame of Marx’s monetary theory of Book II, explaining why Marx adopts particular assumptions for his analysis (an analysis that runs in fact throughout Book II). From his analysis of turnover Marx concludes that capital must occupy all three of its forms simultaneously; although the money form is no less transient than the others, Marx demonstrates that money hoards are required by the needs of circulation, and this is the foundation of his explanation of the credit system. Capitalists transform their hoards into interest-bearing capital in order to gain an additional share of the social surplus value. As a result money capital is concentrated in banks and in the bond and stock markets. Campbell argues that, by analysing capitalist reproduction apart from the credit system, Marx shows that the possibilities for its disruption are not limited to the problems resulting from debt and the conditions of credit. In proposing that the credit system develops so that capital in its money form will bring in surplus value, Marx is rejecting the claim that it develops to solve the problem of the shortage or high cost of gold money. Campbell concludes that the credit system complicates rather than simplifies capitalist reproduction and renders it more precarious.

In Chapter 7, Fred Moseley examines Marx’s reproduction schemes of Part Three of Capital II against the background of correspondence between Marx and Engels and the Theories of Surplus Value. He argues that the initial purpose of Marx’s reproduction schemes was to refute Adam Smith’s view that the price of the total commodity product of society is entirely resolved into wages plus profit plus rent; that is, entirely resolved into revenue with no component left to replace the constant capital consumed in production; he notes that Quesnay’s Tableau Economique could have helped Marx in so doing. Important to this refutation, Moseley indicates, is the distinction between money which functions as revenue and money which functions as capital. Emphasizing that Marx extensively criticised classical economics’ conception of capital as merely physical means of production, common to all types of economic systems, Moseley in the course of his paper contests Sraffian, or generally neo-Ricardian, interpretations of Marx which read his analysis in physical terms.

Finally Geert Reuten’s paper examines the same Part Three from the perspective of Marx’s method: is it akin to a modelling approach as we find it in modern orthodox economics, or does it rather fit into a systematic-dialectics methodology? More so than any other part of Marx’s work, his theory of reproduction influenced orthodox economics: it laid important foundations for its later macroeconomics and theory of the business cycle. Why particularly this text? In answering these questions the major part of Reuten’s paper is devoted to an examination of the systematic character of the exposition of Marx’s reproduction theory, focusing on its procedure in laying out assumptions. Reuten concludes that, while the text may not be incompatible with a systematic-dialectical methodology, it is certainly defective in that respect; rather the textual evidence favours the view that Marx, in this part, takes a particular modelling approach.

The papers brought together here show differences in historiographic and analytical emphasis and this makes them complementary studies. Certainly many questions concerning Marx’s Book II of Capital remain unanswered, an obvious example being why dialectics can be so prominent in Part One (Arthur) while trifling in Part Three (Reuten). All the authors agree that this work is crucial in understanding the trilogy of Capital and its method. Without this middle book we cannot grasp the juxtaposition of the analysis in the other two.

Marx on Money by Suzanne De Brunhoff

Marx on Money by Suzanne De Brunhoff 1973 French, 1976 English

“The principle difficulty in the analysis of money is surmounted as soon as it is understood that the commodity is the origin of money” (Marx, Critique Ch 2)

Marx initially provides us (Critique, Ch 2; Vol 1, Ch 3) with an abstract study of the functions and properties of money, which he initially assumes is gold, “for the sake of simplicity” (Vol 1, Ch. 3)

There is no talk in this section of greedy, selfish, power seeking capitalists but only some passing references to how money can make fools of all of us. He is explaining money, not condemning it. He pursues this approach rigorously but without explaining why he approaches money in this way.

The strength of Suzanne De Brunhoff’s book is that she fills this gap. She explains that Marx is outlining a General Theory of Money and a Complete Theory of Money and the reasons why. My introduction to De Brunhoff here can’t be a substitute for reading her or even less a substitute for reading Marx. But I think her work is valuable because she provides some extra connective tissue to the body of Marx’s work, some overall perspectives that he didn’t provide.

Some essential background: the commodity

Both Marx (1818-1883) and his predecessor Ricardo (1772-1823) saw value as originating in labour. One difference between them is that Ricardo just accepted that as the way things were, whereas Marx saw value as a perverse social relation which would have to be overthrown.

Marx chose the commodity as the starting point of his critical study of capitalism and political economy. A commodity is different from a product in that it is both a use value and an exchange value. A product is just a useful thing whereas a commodity is produced for the purpose of being exchanged in the market place. Use values as products of labour are always useful no matter what the social system. Value, on the other hand, is a social category which arises from the exchange process.

You can imagine societies both past and future where there is no exchange of products and hence there would be no value category. eg. there would be no value in a hunter gatherer society where individuals or families provide mainly for themselves and there is limited exchange of products occurring. You can also imagine a future communist society where people just take the things they need from a commons, there is enough for everybody. There would be no exchange and no value category. “From each according to their ability, to each according to their wants”. Of course, such a society could not be arrived at immediately and the transition process is far from clear. But it can be imagined.

The Origin of Money is the Commodity

How does Marx’s commodity starting point relate to our understanding of money? What follows from the analysis of the commodity as a unity of use value and exchange value is that money originates in commodity value. Value is an abstraction that has to appear (reference Patrick Murray).Exchange value is the form of appearance of commodity value (reference Marx, The Value Form). Money crystallises value in a physical sense. Gold becomes money. The social relation of value (social because commodity exchange is a social process) ends up taking on a physical form. Since the exchange of commodities involves an equivalence relationship Marx describes money as the perfected form of the general equivalent.

Other economists don’t see money as originating from the commodity. A common view is that money is a convenient symbol to facilitate exchange, since barter is too inefficient. The quantity theory of money takes the view that the value, properties and quantity of money all originate from money itself and not from the commodity.

De Brunhoff argues that some “marxist’ economists make such errors as well as bourgeois economists. For example, Hilferding overestimated the importance of finance capital because he did not have a clear grasp of the fundamental functions of money (xiv)

If you don’t understand the origins of money in the value form of the commodity and even if you understand that value originates in labour, as a quantity, then you will lose your bearings completely when capitalists create different forms of money such as banking money. Money, as “the perfected form of the general equivalent” may cease to be metal but it can’t escape its origins in the commodity, which is a unity of use value and exchange value. Moneys’ essential functions (measure of value, medium of circulation, money – object of demand) can be traced back to the use value / exchange value contradictory nature of the commodity or evolve out of it. Those essential functions of money never go away even though capitalists create forms of money, such as credit, which attempt to negate those functions.

A “General Theory” of Money

Is money just part of the machinery of capitalism or does it have a broader necessity? The way in which the capitalist uses money, to employ wage labour and buy means of production, and the way in which the average worker uses money, mainly to buy necessities, suggest that some of its functionality is bound closely to the inner workings of capitalism whilst other of its functionality is more benign and may be useful in a post capitalist society.

By contrast, utopian schemes such as The Zeitgeist Movement and The Venus Project aim to overthrow “the system” by popular acclaim, abolish money and replace the market with computer surveys of peoples needs. Such movements by pass the need for a real analysis of the diverse functions of money.

De Brunhoff argues for the necessity of a general theory of money as distinct from a specifically capitalist theory of money. Sorting out the monetary problem consists

“… in knowing the meaning of this strange existence of money, inseparable but distinct from the other relations characteristic of capitalism … Hence a theory of money applicable to the capitalist system must be subsumed under a theory of money in general, valid for every monetary economy; in other words a general theory of money … Thus Marx considers it necessary to begin with a study of money in its general aspect, independent of the capitalist form of production in order, among other things, to determine its role in the capitalist form of production” (p. 19)

So, what is this abstract society that uses money but is not capitalist?

Marx’s study is based on an idealised scenario of a simple commodity economy, although De Brunhoff doesn’t use this phrase. I base my interpretation here on Maksakovsky:

“Simple commodity economy is production for exchange but without the use of wage labour. Artisans and private farmers produce commodities with their own means of production.” In its more developed form it involves monetary exchanges. (Maksakovsky, p. 37 FN33)

For the purpose of Marx’s analysis of money, the simple commodity economy involves:
– private production
– exchange of commodities using money

A simple commodity economy is not capitalism because capitalism involves ownership of the means of production and the hire of wage labour by those who own the means of production. The money used to buy means of production and wage labour is called capital. Capital can be money but not all money is capital.

Marx develops a general theory of the circulation of commodities and money. By contrast, capitalism develops institutions such as Banks and money such as credit, which are specifically designed for the needs of capitalism. Marx delays detailed treatment of these until Volume 3.

“One becomes unable to see how the general laws of monetary circulation continue to function in the capitalist form of production where there is a special monetary circulation, that of credit” (SBD, p. 20)

The three essential functions of money (measure of value, medium of circulation, money – object of demand) are spelt out in detail by Marx in both Critique Ch 2 and Capital Ch 3. De Brunhoff argues that all three of these functions have to be taken together as an ensemble “which in their entirety constitute the general theory of money” (p. 20) She criticises Hilferding’s Finance Capital for discussing inconvertible paper and credit before discussing the role of money hoarding, a part of Marx’s third function of money. “The monetary theory of credit involves a knowledge of the role of hoarding”. She argues that Hilferding makes a grave error in discussing capitalist money before outlining the entire general theory of money. (pp. 20-21)

The Good Abstraction

We have already explained the difference between a simple commodity economy and capitalism.

De Brunhoff also differentiates between a barter economy and a monetary economy. Once production transcends individual needs then, in becoming social, it involves exchange. The simple commodity economy that Marx discusses transcends barter and uses money for exchange. Once gold money emerges as always useful or the “god of commodities” (Marx) or as the universal equivalent then hoarding of this precious substance will follow. Hoarding becomes one of the essential functions of money (categorised under money as money). Marx chooses his starting point (private commodity production and exchange of commodities using money) because it is a “good abstraction” for explaining the fundamentals and subsequent development of capitalism.

“In simple circulation one studies the ebb and flow of money in relation to other commodities; this abstraction has the appearance of a visible datum, with all the brilliance and solidity of metal. In contrast, the network of debts and credits which Marx rejects as a starting point for the analysis of money, forms an immaterial circuit in which reciprocal obligations and rights confront and counterbalance one another. Why does the “good abstraction” take as its initial object the metallic material of money and not some of the elements already spontaneously abstracted by the very process of monetary circulation”? (De Brunhoff, p. 22)

This is because Marx begins his analysis of capitalism with the commodity and traces the origin of money back to the commodity. Gold emerges as the most suitable commodity to play the role of money. Furthermore, gold as the general equivalent of money excludes other commodities as the general equivalent. “It has a socially validated monopoly of equivalence, and this is what characterises its social function as money.” (De Brunhoff, p. 23)

Marx’s method here in choosing a metal as money is a good example of ascending to the concrete, as part of his dialectical approach. It could also be seen as utilising an object to think with. This was also a strategy employed by Seymour Papert, a modern day computer scientist and learning theorist in developing the logo programming language which features a turtle as an object to think with (reference). From the latter perspective a simple commodity economy as explained by Marx could be programmed fairly easily in today’s visual programming languages such as Scratch, Build Your Own Blocks or Kedama depending on the level of complexity required. This could be done up to the point of illustrating Marx’s quantity of money theorem depending on the price of commodities (directly) and the velocity of money (inversely).

This is the opposite of the idea that gold is a symbol of value. Gold is commodity money. Gold as money is distinct from all other commodities. Without a clear distinction between the money commodity and other commodities then all commodities would or could be money and money would be just another commodity. With such thinking the monetary privilege assigned to gold appears arbitrary and unfounded.

Some have argued in Marx’s time (Gray’s theory of labour money, Proudhon) and today (The Zeitgeist Movement and The Venus Project) that the key to solving the problem of capitalism is to abolish money or the privileged place of money. What this misses is that the origin of money, actually the necessity of money, is in the commodity with the commodity being a unity of use value and exchange value. Hence, to solve the problem of capitalism you have to solve the problem of the commodity, which is a far bigger or more fundamental problem.

Although it originates from all commodities, money is special and develops its own properties and functions distinct from other commodities. The important point is not the metal aspect but moneys’ unique role as the general equivalent.

Having established that money is a general equivalent form the next step is to articulate all the functions of this form. De Brunhoff stresses the importance of considering all these functions of money together “which complement one another, different yet necessarily linked with each other, which only in combination preserve and reproduce the general equivalent form … etc. (p. 25)

A “Complete” Theory of Money
(1) The Measure of Value (2) The Medium of Circulation (3) Money

“One is immediately struck by the discussion of the third point under the heading “Money” in a chapter entirely devoted to money and it various functions” (De Brunhoff p. 25)

Yes indeed! One aspect of this is that money as gold disappears. In Marx’s time gold money had disappeared in its role as (1) measure of value and (2) medium of circulation. And since Marx’s time it has further disappeared in its role as world money. So, money originates in the commodity and then more or less totally disappears.

This disappearance of commodity money highlights the importance of understanding Marx’s analysis of the fundamental functions of money based on its origin as a commodity. The material disappears but the functions do not.

a. Money, Measure of Value

What determines the general price level?

The subjective utility theories of price that overthrew and replaced Marx in mainstream economics have created a difficult problem for themselves that was already solved by Marx.

With gold as the universal money equivalent then the value of gold is determined by socially necessary labour time. Gold money can be used to assign price through a general equation:
x whatever commodity = y money commodity
and so commodities have a price before they enter circulation. Problem solved.

Note though that the actual presence of gold is not required for this function. To assign price through the above equation gold money does not have to be physically present. Ideal or imaginary money will do the job. It has become legally sanctioned as money of account pounds, shillings, pence, etc.

b. Money, Medium of Circulation

commodity – money – commodity

Money measures commodity value. Then “money as medium of circulation is not merely the manifestation but the practical guarantee of the role of money as measure of value” (p. 30)

Function 1, Measure:
1 ton iron = 2 ounces of gold
1 quarter wheat = 1 ounce gold

Function 2, Medium of Circulation:
1 ton iron → 2 ounces of gold → 2 quarter wheat
One ton of iron is sold for 2 ounces of gold which is then used to purchase 2 quarter of wheat. The physical presence of money in the circulation process acts as a practical guarantee that the measure of value function has been performed correctly.

De Brunhoff points out the intimate connection between Function 1 and Function 2:

“Only circulation, in which money effectively replaces the commodities, gives the fixing of prices its full significance. The first function of money is the condition for the second, but the second is the necessary complement of the first. Without this connection, money would have only a purely functional character, as medium of circulation, or a purely “ideal” character, as unit of account” (p. 31)

The anti-Quantity laws of money which Marx develops flow directly from the intimate connection between functions 1 and 2:

“… the quantity of money functioning as the circulating medium is equal to the sum of the prices of the commodities divided by the number of moves made by coins of the same denomination. This law holds generally” (Marx, Volume One, Ch 3)

Marx’s anti-quantity law is the opposite of the view that the quantity of money determines prices.

If the quantity of money in circulation depends on commodity prices then what happens if there is too much or too little money in circulation? This is where hoarding enters the picture, which is part of the third function of money:

“The difference between the total stock of gold and the amount which circulates is absorbed by hoarding … These points form the basis for Marx’s refutation of the Quantity Theory of Money. Thus the intrinsic connection between these functions rules out not only their separation but their presentation in any old order and their confusion with one another. Hence the metamorphoses of money in circulation (edit: she means here that money may change between gold, tokens, paper) do not raise any question about the value of gold as general equivalent and measure of value; they affect only the instrument of circulation” (p. 32)

This is all very clear provided money is gold. So we can surmise that Marx made money gold in part to make his argument clear or concrete. As mentioned above, it would be worthwhile to present this visually in one of the modern visualisation programming languages. Alan Kay, computer scientist, drew inspiration from learning theorist Jerome Bruner’s slogan “Doing with images make symbols” in developing etoys in smalltalk. (Alan Kay’s Educational Vision) We can write a program using gold as a concrete manifestation of the universal equivalent to make a qualitative and quantitative model of Marx’s version of the circulation process. Marx’s philosophy of ascending to the concrete can be programmed on modern media.

This is all clear when money is gold. But the reality is that gold money disappears.

“Its functional existence absorbs, so to say, its material existence. Being a transient and objective reflex of the prices of commodities, it serves only as a symbol of itself, and is therefore capable of being replaced by a token” (Marx, vol 1, Ch 3)

In circulation the wear and tear on coins reduces their weight and makes demonetization inevitable. The standard weight of gold coins ceases to be a real equivalent of commodities. Gold is replaced by tokens. Marx’s response to this is to say that the tokens which replace gold must represent the real value of gold quantitatively. Representative or symbolic money or tokens will suffice. Gold does not have to be present.

Nevertheless, it appears that the ongoing dematerialisation of money as governments introduce fiat money (government issued legal tender, inconvertible, used for the payment of taxes) into circulation appears to totally undermine or abolish Marx’s alleged laws of circulation.

“What Marx called ‘the inherent laws of circulation’, based on the role of the money commodity, appear to be abolished when the medium of circulation, with no intrinsic value, depends on government decisions which fix the amount issued.” (De Brunhoff, p. 33)

Since the Nixon Shock (1971) all reserve currencies including the dollar and euro have been fiat money

De Brunhoff goes into Marx’s differences with Ricardo, who supported a Quantity theory of money, that the amount of money in circulation determines prices. What arises from that discussion is the need to distinguish between the different roles of the different types of money – gold, fiat, credit. Tooke and Marx criticise Ricardo for attributing the same economic role to different types of currency. Ricardo was obsessed with the quantity of money in circulation without distinguishing between the different types of money.

The different types of money arise from the different functions of money:
– measure of value
– medium of circulation

Ricardo’s mistake was that he “regards currency, the fluid form of money, in isolation” (Marx, Critique, Ch 2)

This comment by De Brunhoff is crucial:

“The loss of metallic substance in circulation never results in reducing money to a mere medium of circulation. Rather, it is an indication of the functional difference between money as measure of value and money as an instrument of circulation” (p. 35)

How may these different types of money be categorised?

De Brunhoff quotes Charles Rist to good effect here:

“The theory of paper money is to that of metallic money as in medicine the study of the pathology of an organ is to that of its normal anatomy and physiology” (p. 35)

Marx is very clear that credit follows different laws to true money and so separates off and delays the discussion of credit to volume 3.

“During the following analysis it is important to keep in mind that we are only concerned with those forms of money which arise directly from the exchange of commodities, but not with forms of money, such as credit money, which belong to a higher stage of production” (Marx, Critique, Ch. 2)

So gold is true money (but no longer exists legally!), credit is false money (because it is only of use in circulation, functions 1 and 3 are ignored?) and the US dollar is diseased money (legal but printed in excess – Quantitative Easing)? This need further clarity.

Is fiat money true, false or diseased? De Brunhoff is ambivalent here. See page 36. She says it is true insofar as it represents or symbolizes gold. But then suggests it is false because it is condemned to remain in circulation, that it can’t be hoarded. Remember that the ability to hoard, the third function of money, is necessary to complement the other two functions, since hoarding is essential to control the quantity of money in circulation. She concludes that fiat money is true but bad money. But is this true, don’t banks withdraw paper money? I’m confused about this issue of whether or not paper money can be hoarded.

Was Marx a metallicist? No, but he was a 3 way functionalist who asserted that true money, commodity money, which originates before capitalism, followed definite laws. And these laws do not magically disappear when full blown capitalism arrives and develops it own forms of diseased money such as credit.

The important issue is the starting point. If you start your analysis of money with fiat paper money which is arbitrarily added to circulation you are bound to get it wrong:

“It is thus evident that a person who restricts his studies of monetary circulation to an analysis of the circulation of paper money with a legal rate of exchange must misunderstand the inherent laws of monetary circulation. These laws indeed appear not only to be turned upside down in the circulation of tokens of value but even annulled; for the movements of paper money, when it is issued in the appropriate amount, are not characteristic of it as token of value, whereas its specific movements are due to infringements of its correct proportion to gold, and do not directly arise from the metamorphosis of commodities.” (Marx, Critique, Ch. 2)

So, what are Marx’s laws of money?

  • The quantity of true money (gold) in circulation is directly proportional to the sum of prices of commodities and inversely proportional to the velocity of circulation of the money
  • The quantity of tokens in circulation is equivalent to the quantity of true money (gold) that the tokens represent

Gold can’t be replaced by things without value, by symbols, except when it is means of circulation. An awareness of 3 functions of money and how they are intimately connected is essential to appreciate this. Circulation allows tokens – coins, paper – it does not negate the other functions

“Paper money is a token representing gold or money. The relation between it and the values of commodities is this, that the latter are ideally expressed in the same quantities of gold that are symbolically represented by the paper. Only in so far as paper money represents gold, which like all other commodities has value, is it a symbol of value. [37]“ (Marx, Vol 1, Ch 3)

In the footnote Marx is incredulous at Fullarton for thinking that the replacement of gold with paper symbols can be interpreted as meaning that gold no longer represents the value of commodities or a standard of price.

c. Money, Instrument of Hoarding


The possibility of hoarding arise from the coming into existence of the universal equivalent as a real, material substance. The commodity circuit C-M-C splits into C-M and M-C. Someone sells a commodity and acquires money. Their is no obligation for them to spend that money immediately. Hence, C-M-C is very different from C-C, direct commodity exchange.

The desire for hoarding is simply money lust, money as the ideal abstract wealth.

The real economic function of hoarding is as a regulator of functions 1 and 2, to keep the right amount of money in circulation.

Does money solve the problem of equilibrium between functions 1, 2 and 3? De Brunhoff has some discussion on the differences between Marx and Keynes in their treatment of liquidity and the problem of the limited supply of money. That required further study.

The C-M-C split into C-M and M-C suggests the possibility of crisis because the possibility now arises that buying and selling will no longer be in equilibrium. There is no guarantee that those who buy will sell. But the possibility of crisis is a far cry from the reality of crisis. Marx has shown that for a simple commodity economy there can be equilibrium. Money as such is not the problem. Capitalism is the problem.

“This long analysis explains nothing, nothing except the conditions of the existence of money; by doing this, it prevents the disruptive intrusion of the analysis of money into that of production …” (De Brunhoff, p. 43)

Money is not as important as we tend to think it is. Money is more of a reflection than a source of problems. The diseases of money arise from capitalist production and circulation. Look for the real dynamic behind the veil of money. Money can get in the way of our understanding of the real dynamic

d. Money and Social Power

In the rough drafts of his works (early drafts of the Critique and Grundrisse) Marx discussed the social power accruing to individuals and notions who hoard money.

“But Marx did not retain these analyses of the political and social power inherent in money as a part of his theory of money” (De Brunhoff, p. 46)

This is in stark contrast to those reformers who see “money as the root of all evil” or the elimination of money as the nirvana which will solve all social problems. It is true that money is power but that is more to do with Capital, not money as such. Money accumulates to certain individuals. They have privileges. Some go onto become successful capitalists. But money is not the same thing as Capital. Capital needs to be dealt with later after establishing the fundamentals of money.

The State / Central Bank has some apparent control over money and can exercise power through monetary policy. They can decide to maintain or not maintain a gold standard, they can print more paper money, they can alter interest rates and control credit through fractional reserve banking policies. However, what follows from the outline of Marx’s fundamental functions and laws of money is that in the final resort all this power is more apparent than real.


Marx’s anti-quantity theory is based on the coherence of the 3 functions of money (measure, medium, hoard). It follows that the quantity of money in circulation is proportional to the sum of prices. Capitalist money such as credit floods the money market and breaks Marx’s law. We can either retain Marx’s law and query the legitimacy of capitalist money, ie. see it as diseased, or, we can see all money as non diseased. If we do the latter then money doesn’t make a great deal of sense, fundamental truths of the functionality of money and capitalism are lost and we are left in a sea of confusing surface phenomenon. That is my understanding at this point.

Some big questions epistemological questions need to be kept in mind:

  • Is it possible for any of the 3 functions of money described by Marx or their intimate interrelation to be somehow negated?
  • How is it possible for a non commodity such as the diseased US dollar to measure value accurately?

update (10th Jan): This review of Suzanne de Brunhoff’s book is only a review of Part one: The Marxist Theory of Money.. Hopefully, I’ll also be able to review her part 2: Money and Capitalism, which refers extensively to Vol 2 and 3 of Capital.

Further Study
Updating by De Brunhoff of her original book:
De Brunhoff (2003) Marx’s contribution to a search for a theory of money

How can paper money represent Value? Articles which argue how fiat paper money can replace gold as a measure of value (MELT = monetary equivalent of labour time)
Duncan Foley (2003) Marx’s Theory of Money in Historical Perspective
Fred Moseley (2004) The “Monetary Expression of Labour” in the Case of Non-Commodity Money

Article with some original ideas about the real function of credit:
Campbell, Martha (1997) Money in the Circulation of Capital

A modern fundamental challenge to Marx’s concepts:
Likitkijsomboon, Pichit. Marx’s anti-quantity theory of money: A critical evaluation

De Brunhoff, Marx on Money
Hilferding, Finance Capital
Maksakovsky, Pavel. The Capitalist Cycle
Marx, Grundrisse
Marx, Contribution to the Critique of Political Economy
Marx, Capital, Vol 1
Marx, The Value Form. Appendix to the first German edition of Capital
Murray, Patrick. Money as Displaced Social Form: Why Value cannot be Independent of Price
The Venus Project
The Zeitgeist Movement

Martha Campbell debunks the quantity theory of money

Marx’s Explanation of Money’s Functions: Overturning the Quantity Theory (2003) by Martha Campbell. The comments about this paper by conference participants in the third column at Papers should be read in conjunction.

My comments here are partly a summary and partly reflections that have arisen from thinking about Campbell’s paper. As always, read the original.

Marx was fully aware that capitalist money or credit is not gold. Yet he insists on developing a theory of money based on gold in Capital vol 1 and 2. Campbell argues that he does this because he believed that the main obstacle to understanding anything about money is the Quantity theory. Hence, we are implicitly involved in a discussion where starting points are of vital importance. Marx starts with gold as money, other economists start with what they find on the surface of social reality. In my opinion, Marx wins out because his starting points are superior to those of other thinkers.

Marx’s anti-quantity theory is that the commodity is the dog and money is the tail. The quantity theory position is the opposite: that money is the dog and the commodity is the tail

Campbell’s emphasis is on the 3 inversions or reflections of commodity relationships as a conceptual refutation of the Quantity theory of money. The 3 inversions are the mirror image reversals of these principles:
– that commodity value determines money value
– that commodity circulation determines the properties of money
– that commodity prices determines the quantity of money in circulation

So, Campbell is arguing that these principles from Marx are fundamentally correct and that the Quantity theory is incorrect because it confuses the reflection with the source. But it is more than a confusion because capitalism creates it own form of money, credit money, which does obey the inverted principles. With credit money the inversions do hold true:
– money value determines commodity value
– the properties of money are determined by commodity circulation
– the quantity of money is determined by commodity prices

It’s obvious that the quantity theory is right, isn’t it? Ben Bernanke decides to print more money to “save” the economy. In his view inflation is better than deflation. So the value of money must decline. The quantity of money Bernanke decides to print determines the value of money. This is what Marx says is wrong.

In what sense then is Marx correct? There are different types of money – gold money, paper money issued by the central bank and credit money which can be issued by anyone. You could say that Marx’s principles hold true for gold money or paper money that is convertible to gold but don’t hold true for other types of money. So, given that, since 1971, we no longer have a gold standard then aren’t Marx’s theories no longer relevant?

Since credit money escapes from Marx’s first function of money (money is a measure of value using the commodity gold as the measure) then, in that sense, it is not true money. The same could be said of paper money issued by governments through the printing press (quantitative easing) in times of crisis. Everyone knows that this money is not worth much. In times of crisis the value of this sort of money crashes back to earth, the earth that contains gold as a true measure of value.

I also found Campbell very helpful in pointing out clearly that in Chapter 3 of Capital vol 1 Marx is discussing the price form, which is separate from any discussion of a measure of price. Part of the problem with “economics” is that it is obsessed with measurement, ignores social forms in its own analysis and does not even notice that Marx is emphasising that many of the thing we take for granted (eg. the commodity, money, price) have a social origin and meaning. Marx explains how capitalism really functions as a social system in contrast to “economists” who seem to do little more than watch the stock market go up and down.

Price and value must part company. This is a feature of Marx’s theory and not a problem. Since money exists concretely as gold separate from commodities then it is certainly possible for price to deviate from the abstraction value. The price form is both an ideal expression of value and a realised misrepresentation of value. The commodity is caught in the middle of the social processes of production and exchange, “they link the activities that produce them” (page 9)

Campbell poses a crucial question that worried me in my early study of value theory:

“If price doesn’t express the right quantity of value, then why bother with value at all, since it is of no help in formulating a theory of price?”

Marx’s value theory seemed to me to be so difficult to understand that I could certainly comprehend why many give up on it and prefer to start at the more practical point of price. The answer is that if we start with price and not value then we will never understand the social forms that constitute the internal dynamics and contradictions of capitalism

Since prices can and do deviate from values then part of our answer to the Quantity theorists is that they are talking about prices and we are talking about values. Prices may be all over the place, eg. during inflation, but values are the important underlying measure of how the economy is really performing.

In his comment Geert Reuten agrees but anticipates that more work needs to be done with respect to price:

“ …we agree (Campbell and myself at least) that “quantity of money” plays no role in the measurement of value … in the end Marx does have a “quantity of money circulation theory of price” (the name quantity theory of money is confused anyway, since for the proponents it is a “quantity of money theory of price-level”) – even if it is about an inverted reality (p.18), it has nevertheless real effect”

Moving on. Campbell’s argument about money beginning as a commodity (gold) and then progressing, since Marx’s death, to not being a commodity are not so clear to me.

“… money is the materialisation of value … money must be a commodity, at least until it can be shown how money could represent value without being a commodity” (page 6).

“Marx shows that money is not a commodity … by the end of Chapter 3” (page 17)

“ … it seems unlikely that he (Marx) would consider the development of international monetary institutions to be impossible. Thus, of the two functions Marx associates with gold, one is pre-capitalist (hoards) and the other is historically contingent (world money)” (page 27)

“By the collapse of the credit system into the monetary system, he means instead that payments must be made in money (whatever the form of money happens to be)” (page 30, footnote 112)

My question here is: How could money represent value accurately without being a commodity? Campbell doesn’t seem to provide an answer to that in her paper.

This point was also raised by some of her fellow presenters at the conference.

“I don’t think Martha is clear enough on the crucial question of whether or not money has to be a commodity in its function as measure of value … how else could the value of commodities be measured, except by another commodity?”


“I believe that Marx’s commodity-money basis is unnecessarily somewhat brushed away (referring to pages 17 and 27)… This brushing makes the general argument less instead of more convincing.”

Smith: (referring to the Campbell quote on page 30 above)

“I’m not at all sure Marx meant that. I think it is more likely that he thought that inter-state conflicts will prevent any national currency from serving as the ultimate and unquestioned form of world money, and so at some point in a crisis in the world economy there will always be a “flight to gold.” Regarding the former, I think he was correct (and so I also think he probably wouldn’t have agreed with you and Mike Williams (p. 27) that the lack of a world monetary authority is a mere historical contingency, if what you mean by that is some regime of global governance that establishes a particular currency or international clearing unit as world money). Regarding the latter (my correction, the original says former here), I don’t see any reason why interstate conflicts (and the inter-capital conflicts inseparably connected to them) can’t be played out indefinitely through massive disequilibriums in the currency exchange rates of the leading hard currencies, followed by abrupt revaluations of those rates. In every crisis in the world market there is then a flight from one (or more) hard currency to another (or group of others).”

Martha Campbell’s paper and the responses to it by the other conference participants give me confidence that there are marxists in the world still thinking hard about the important questions. I look forward to studying more of the papers from the 2003 conference site: Marx’s Theory of Money: Modern Appraisals

marx on money

Apart from Marx himself, so far the most useful book I have read about Marx and money is:
Marx on Money by Suzanne De Brunhoff (1973 French, 1976 English translation). The link goes to a searchable pdf which can be downloaded without sign in. A review of part one of this book has now been published on this site, here

I’ll just setup this page now as a placeholder since we need a thread to post links about Marx on money. This page is being updated as new references come to hand.

updates (see comments for discussion about these):
Introduction to Money and Totality: Marx’s Logic in Capital by Fred Moseley. Provides a useful overview and the authors conclusion of the outcomes of the papers presented to the 2003 Marx’s Theory of Money conference.

Marx’s Explanation of Money’s Functions: Overturning the Quantity Theory by Martha Campbell. Also see the comments about this paper in the third column at Papers. Now summarised and discussed on a separate thread on this site: Martha Campbell debunks the quantity theory of money

Marx’s Theory of Money in Historical Perspective by Duncan Foley.

The “Monetary Expression of Labor”: in the Case of Non-commodity Money by Fred Moseley.

Money in the Circulation of Capital by Martha Campbell. An excellent account of the importance of the Volume II material on turnover.

The Culmination of Capital: Essays on Volume III of Marx’s ‘Capital’ (v. 3)

egypt in turmoil

Some links to information with photos and videos about the recent turmoil in Egypt. Please add your thoughts and analysis in comments.

Dec 17: They say Isis’ tears for Osiris give rise to the nile flood

Two iconic images among many: the Institut d’Egypt/Scientific Society building burning, taking with it priceless documents dating to the Napoleonic expedition, and a woman demonstrator being beaten and partly stripped to reveal her bra in the street by military police

Military Police beat protestors, strip woman to her bra and burn tents
(uploaded to You Tube Dec 17th)

December 20: secretary-clinton-denounces-systematic degradation of women in egypt
Secretary of State Clinton yesterday:

“This systematic degradation of Egyptian women dishonors the revolution, disgraces the state and its uniform, and is not worthy of a great people.”

December 20: egypt-womens-march

Today, some 10,000 women of all ages and background marched in downtown Cairo to protest military violence directed at women, including the now famous woman beaten and stripped by the military police in what Secretary of State Clinton called the “systematic degradation of women.” The photos confirm the presence of young and old, clad in Western garb, hijab, or even niqab, many of them carrying the photo that went around the world.

Egyptian Women Send a Message to SCAF
(uploaded to You Tube Dec 20th)

Outline on technology and progress

– written October 1979 by Arthur Dent, who was then Albert Langer

This was referred to in a recent discussion on another thread. The political points made are still very relevant to our critique of the pseudo-left. It also has some further historical interest in that computer technology has come a long way since then. An old but still relevant response and an answer to that response has been omitted for now, since the opening argument is longer than a normal blog post, but is available here (scroll down) for those interested in further elaboration of the argument. (these introductory comments written by Bill Kerr)

The following outline for an article is unfinished, incomplete, out of sequence and lopsided in emphasis. A major section or companion article on Braverman’s “Labor and Monopoly Capital” has not been prepared yet.

1. Objections to the trend of modern technology and economic growth may be summarised under the following headings:

a) Eco-catastrophe

b) Environmental degradation

c) Limits on Growth

d) Third World Dependency

e) Wasteful Consumption

f) Technocratic Priesthood

g) Centralisation

h) Unemployment

i) Commercialisation and rat race

j) Degradation and Deskilling of Labor

2. These themes are all part of the very fabric of “left wing” and “radical” thinking in Western countries. Reference to them, often in a glib and trendy way, has become a trade mark to distinguish “them” (“the establishment”) from “us” (“the radicals”). Rejection of these themes is generally considered heretical and a sign of impending desertion to the other side.

3. Nevertheless, Third World revolutionaries actually engaged in armed struggle against imperialism, the classic founders of scientific socialism and the leadership of socialist countries have never stressed these themes in the same way. This paper will challenge the widespread assumption that emphasis on these themes reflects a more “advanced” conception than other “simplistic” views, and will show that a polemic against opinions that are now most fashionable among the “left” was a central feature of the development of scientific socialism (by which I mean “orthodox” Marxism, or Marxism-Leninism).

4. This paper has nothing new or startling to say but will simply try to raise the banner of a position of whose existence most “radicals” seem quite unaware, without undertaking a comprehensive defence of that position. Since in surveying the literature I couldn’t find a single article advocating the position I hold, and which I understand to have always been the “orthodox” Marxist view on these questions, I felt obliged to write one myself. Any assistance from readers who can point me to relevant material would be most appreciated.

5. The major trends among Western “radicals” on issues concerning technology and progress can be summarised as follows:

a) Outright opposition to modern technology and nostalgia for the past, summed up in the slogan “Small is Beautiful”.

b) Acceptance of modern technology if society was socialist, but Luddite hostility towards it in capitalist society, summed up in the slogan “For Whom”.

c) Acceptance of modern technology in present day capitalist society but a rejection of the social relations that have developed together with it and a romantic “nostalgia for an age that has not yet come into being”, where the dignity of craft skills will prevail.

The dominant view is of course an eclectic mixture of all three, sometimes even combined with views taken from the pro-technology, pro-growth camp.

6. In the camp which rejects the main objections to economic growth and modern technology listed above, and which criticises the reactionary, Luddite and romantic assaults on modern society, the dominant trend is straight forward bourgeois complacency or Liberalism, which explains the unpopularity of pro-technology, pro-growth views among the “left”.

Closely allied to Liberalism, and subordinate to it, is a Social Democratic trend which dresses up much the same analysis of society with a few Marxist phrases about promoting the revolutionisation of society by developing the productive forces. This has more support than Liberalism within the “left” because it is more critical of modern society and therefore closer to the anti-technology, anti-growth camp on issues unrelated to technology and economic growth.

The dominant ideology in such allegedly “socialist” countries as the Soviet Union, post-Mao China, and Albania, reflects a mixture of Liberal and Social Democratic attitudes and therefore adds to the unpopularity of pro-technology, pro-growth views within the “left”.

7. But also in the pro-technology, pro-growth camp, is a quite different position, which I would call the “orthodox” Marxist, Marxist-Leninist, or scientific socialist view. This fundamentally agrees with the Liberal and Social Democratic trends in opposing reaction, Luddism and romanticism (as Lenin agreed with Struve and the “legal Marxists” in fighting Narodnism in Russia). But it fundamentally breaks with these trends in its analysis of the revolutionary implications of modern technology and economic growth. While joining with the anti-technology, anti-growth camp in rejecting modern society, this rejection is positive in contrasting the present with the future and not negative in trying to retard the further development of modern capitalist society.

The views of this trend will be found in various works by Marx, Engels, Lenin, Stalin and Mao Tsetung, many of which are explicit polemics against romanticism etc.

8. Let’s review the various anti-technology, anti-growth themes one by one. The first eight, which tend to attack modern technology and economic growth as things in themselves, will be dealt with rather quickly. The last two, concerning Commercialisation and the Rat Race, and the Degradation and Deskilling of Labor raise more serious issues about capitalist social relations, and will be dealt with more fully when analysing romanticism and commenting on Harry Braverman’s “Labor and Monopoly Capital“.

9. a) Eco-catastrophe

Various scenarios for the catastrophic destruction of humanity if present trends continue have been put forward by the more extremist opponents of modern technology and economic growth. These range from the “population explosion” to the long term effects of heat pollution, carbon dioxide or the break up of the ozone layer. Although in one sense a “lunatic fringe”, these ideas do have some real influence within the “left” and people often fall back on them (without necessarily knowing any of the details) when otherwise stuck for arguments.

Detailed refutation of the various theories is not appropriate here. But its worth noting that some people actually want their disaster theories to be true because they want there to be some barrier to the further development of industrialisation. Feelings of “doom” are widespread because the present social system is in fact doomed, but instead of correctly identifying exactly what is doomed, people tend to transfer their feeling to anything convenient. Catastrophe theories are not being put forward by scientists who believe in technical progress and economic growth and are worried because they have come across some phenomena that might threaten this. These theories are put forward by people (whether scientists or not), who already want there to be a barrier and go out looking for it.

They do not understand Marx’s proposition that “the only barrier to capital is capital itself” and they look for some external obstacle to the further development of capitalism, lying outside capitalist society itself.

There is even a kind of “eco-fascism” with ideas and solutions remarkably similar to those of fascists in the 1930s, particularly in regard to population control.

10. b) Environmental degradation.

This theme is also taken up by people who want there to be some external barrier to the further development of capitalism. It is really only relevant to the technology and growth debate insofar as some catastrophe is predicted. Insofar as one is talking about incidental environmental degradation, the classic answer given by Liberals cannot be refuted:

“It is easier to modernise plant and equipment (e.g. to incorporate pollution control mechanisms) and to engineer structural readjustments to the changing pattern of economic activity in a growth context than otherwise. More fundamentally, economic growth implies that the stock of resources (including technology) which the community has at its disposal is continually expanding… Nowadays we have the opportunity that comes with growth to opt for a more pleasing environment. If that opportunity occurs in an expanding economy, opting for it need not involve an absolute reduction in presently enjoyed standards in other respects. In short, ‘growth’ entails a positive contribution to pollution control in a way which a ‘stationary state’ cannot…

…If pollution control standards are set to high that the costs of control clearly exceed the resulting benefits, resources will be wastefully diverted from other purposes – including perhaps other forms of environmental improvement. Moreover, it is already apparent – with the technology of pollution control only beginning to develop – that even modest expenditure can have large effects in reducing pollution.

In summary the damage from environmental pollution in a large and growing economy with effective pollution control standards certainly need be no greater and in practice is likely to be far less than the damage in a small and slower growing economy operating in the same area without effective pollution control measures. The quality of the environment can be improved much more – and more quickly – by measures to counter pollution than by steps to contain economic growth. It is doubtful in any case whether action of the latter kind will be deliberately attempted, and if it were, and the improvement in living standards were slowed down as a result, the resistance to applying resources to control pollution would be so much the greater.”

(Treasury Economic Paper No 2 “Economic Growth: Is it worth having?” June 1973, AGPS Canberra, p19 and p21)

Even leaving aside the difference between capitalist and socialist attitudes to the environment, it is clear that industrialisation has markedly improved the environment compared with pre-industrial societies. Not only was the life of the “noble savage” something “nasty, brutish and short” but even in feudal times the environment can be summarised in this jingle:

In days of old, when knights were bold,

and lavatories weren’t invented;

People laid their loads, beside the roads,

and went away contented.

Even the aristocrats, let alone the “solid yeomen” of pre-industrial society literally stank – and not only in the towns where the streets were used as sewers. Forests were denuded and dustbowls and deserts created, before modern agriculture began to reverse this process.

Over the last decade in particular (as a result of pressure from people concerned about the environment) we have seen a clear and definite improvement in environmental protection. The increasing concern with pollution controls today precisely reflects the fact that as industrialisation proceeds, higher standards not only become necessary but also possible and are demanded.

11. c) Limits to Growth

Depletion of non-renewable resources is another fashionable attempt to find some barrier other than capital itself. The Club of Rome’s project, and all derivatives, carry out exactly the same exercise as Malthus in comparing geometric growth of consumption to arithmetic growth of production and drawing tautologous conclusions.

Of course its true that any positive rate of growth, no matter how small, must eventually (and in fact quite quickly) exhaust any finite non-renewable resources. But if this spells doom for industrial society, then it should be added that any positive rate of consumption at all even if there is a declining rate instead of growth, must also eventually exhaust any finite non-renewable resources, though it may take longer. The issue is whether “resources” are “finite”. If they are then we are doomed, growth or no growth.

As Ehrlich points out, with any positive rate of population growth, humanity would eventually occupy a volume larger than the planet earth and expanding faster than the speed of light. But what does this actually have to do with the real and pressing problems of the world we really live in?

Again the Liberal answer to these themes is straightforward and irrefutable:

“As an historical fact, the long-term trend has been for the cost of mineral inputs to decline as a proportion of total production costs. Numerous studies of the available statistical data, spanning more than a century, have demonstrated that the tendency during this phase of unprecedented growth in the world economy and in the use of minerals has not been towards scarcity but towards abundance. In the United States the real cost of minerals output was less than one-half the average 1870-1900 level by 1929; and by 1957 it was less than one-half the 1929 level…(ibid p33)

…Such resources may be being ‘used up’, but they are also – and as an integral part of the same process- being ‘created’. It is in the twentieth century that the essential uniformity of energy and matter has been discovered, that the development of new synthetic materials has become almost commonplace, and that technological advance has become virtually continuous, each improvement creating new opportunities for further advance. The extension of knowledge about the world has not only confounded past predictions of resource scarcity but has been in directions which make such predictions less and less defensible as time goes by.” (p39)

Since such predictions are less and less defensible, why are they also more and more popular? It seems clear that the degree of rejection of this “bourgeois optimism” is not related to the degree of one’s knowledge of industrial processes, but to the degree of one’s rejection of modern society. Those who recognise there is a barrier, but do not fully understand the barrier is capital itself, look for that barrier in something else, like “Limits to Growth”.

12. d) Third World Dependency

This theme has been adequately refuted by Bill Warren, who belongs to the Social Democratic rather than purely Liberal trend. As a Social Democrat, Warren tends to defend imperialism, playing down its contradictions in a Kautskyite way opposed to Leninism, although some of this can be excused as iconoclastic shock treatment against the excesses of “dependency theory”. Warren’s refutation of the “radical” conventional wisdom about the Third World is quite crushing and no serious attempt has been made to refute him.

It is a historical fact (not emphasised by Warren) that the development of technology and economic growth has been extremely uneven, with imperialist exploitation of the poor nations by the rich (just as internally too, industrialisation has meant the exploitation of the poor by the rich and polarisation of society).

But it is equally a historical fact (denied by dependency theorists), that imperialism has meant the more rapid spread of capitalist social relations throughout the world and that far from becoming more and more dependent, the backward countries are proceeding very rapidly along the same path of commercialisation and industrialisation that Europe undertook a few hundred years ago.

The world is becoming more polarised, with even imperialist “second world” countries joining the Third World in suffering from superpower exploitation and domination, but it is doing so in the course of a rapid progressive social development – just as the internal polarisation of capitalist societies into a smaller and smaller handful of exploiters (the Rockefellers and such) against a larger and larger proletariat including the ruined middle classes, was also part of a progressive social development.

Lenin’s classic work “The Development of Capitalism in Russia” described this process, which is now taking place in most Third World countries,as it took place in the then backward agrarian and semi-feudal Tsarist Russia. Answering the Narodnik “dependency theorists” of his day:

“The Russia of the wooden plough and the flail, of the water-mill and the hand loom, began rapidly to be transformed into the Russia of the iron plough and the threshing machine, of the steam-mill and the power-loom. An equally thorough transformation of technique is seen in every branch of the national economy where capitalist production predominates. This process of transformation must, by the very nature of capitalism, take place in the midst of much that is uneven and disproportionate: periods of prosperity alternate with periods of crisis, the development of one industry leads to the decline of another, there is progress in one aspect of agriculture in one area and in another aspect in another area, the growth of trade and industry outstrips the growth of agriculture, etc. A large number of errors made by Narodnik writers spring from their efforts to prove that this disproportionate, spasmodic, feverish development is not development.” (Collected Works Vol 3, p597)

Precisely because the Third World is industrialising, its importance in world affairs is greatly increasing, to an extent that has not been recognised by most Western “radicals”. This profound social change which is affecting some two thirds of the world’s people is obviously of enormous importance and cannot simply be dismissed.

We have lived through the post-war decolonisation and have only recently experienced the defeat of the USA by Vietnam, as well as the general rise of the Third World in the United Nations. It is quite clear that economic growth and technical progress has not reinforced the conditions for dependence, but has been abolishing the situation which made it possible for backward regions to become colonies or “mandated territories” of the “civilised countries” who bore the “white man’s burden”. “Countries want independence, nations want liberation, and the people want revolution”.

On an international scale, the trans-national corporations are creating and uniting an international proletariat to be their grave diggers, as earlier the bourgeoisie broke down local boundaries and created nations with a national proletariat, In defending national independence and other democratic rights, it is no task of the “left” to support protectionism and try to retard the integration of the world capitalist market. We can only support “Free Trade”, not oppose it – but in the same revolutionary and critical spirit that Karl Marx did.

13. e) Consumerism

Instead of the “old-fashioned” socialist critique, which condemned capitalism, even in England, the richest capitalist country of the time, for holding down the living standards of the masses, we have a “new” critique which condemns it for inundating us with “useless” and “wasteful” products. Although often coupled with moralising lectures about the poverty of people in Third World countries, this is really quite irrelevant to the issue and the “new” theme bears a strong resemblance to the old “barracks communism” of Weitling.

Certainly some quite useless and even harmful products are sold because of advertising and this should be opposed. But people who make “consumerism” their theme are talking about something more fundamental than that, and calling for a far reaching change in Western consumption patterns towards a “simpler” and allegedly more “wholesome” lifestyle based on “necessities” and with less emphasis on “unnecessary” consumer durables, “gadgets”, motor vehicles etc.

It is not clear whether these changes are to be compulsory, with restrictions to prevent people from buying the dishwashers, cars or electric toothbrushes that our “radicals” disapprove of, by inhibiting their production. Or is it to be voluntary, with a massive propaganda (advertising) campaign to dissuade people from buying products the “radicals” don’t like?

Either way involves an enormous elitist contempt for the common sense of ordinary people. Part of this is a reaction against the political backwardness which has led many people to accept the continuation of capitalism without revolt, in exchange for the post-war “affluence” (a mess of potage). Understandable as this is, it is still elitist.

People are entitled to want, and to be satisfied to get, access to things that used to be regarded as luxuries. There has been a very substantial improvement in mass living standards since the 1930’s and it is hardly surprising that while the post-war boom continued, the capitalist social order was relatively stable. Not only material standards, but also the “quality of life” with access to culture, education etc has improved with the rise in real wages (even if the value of wages in terms of labour time has declined, exploitation increased and the social position of workers worsened). There are even some progressive aspects to the way capitalism stimulates new “wants” to expand its markets.

The higher standards of living which have been achieved involve an increase in people’s expectations and their determination to defend the greater dignity that they have won. It is sheer arrogance to condemn all this as “consumerism”. People will revolt when they find that the existing social order cannot provide them with what they want, not when some “radical” persuades them that they shouldn’t want it. Now that living standards are again starting to decline, we will see whether the generation that was brought up on “consumerism” will put up with more or less shit from capitalism than their parents did in the last Great Depression. From general attitudes towards “authority” etc, it seems likely that the “consumerist” generation will be more ready to revolt, not less.

At least Malcolm Fraser’s proposal to reduce living standards by cutting real wages is more democratic than the “radical” attacks on consumerism. Why can’t the radicals who oppose “wasteful consumption” settle for demanding a general wage cut? This would leave people free to choose for themselves without manipulation what they regard as necessary and what “wasteful” items they could do without.

Of course I’m not saying we’ll all still have private cars after the revolution despite the various social problems that go with them. We’ll have helicopters.and spaceships. (“We want bread and roses too…”)

14. f) Technocratic Priesthood

The very term “priesthood” evokes images of barbaric societies in which the mass of the population were ignorant of natural phenomena and paid homage to a minority elite who were sufficiently literate to be able to pass on knowledge about the seasons, tides and other matters essential to production as well as culture.

To believe that such a priesthood rules society today, requires considerable imagination. It is perfectly obvious that power in our society is held by capitalists and stems from their wealth and not from any monopoly of technical knowledge. In the more backward capitalist countries like the Soviet Union and China, one might confuse the ruling Party bourgeoisie with a priesthood because of superficial resemblances in forms of organisation and alleged service to a “Marxist-Leninist” religion. This may have something to do with the survival of more backward semi-feudal relationships. But there is clearly nothing “technocratic” about it and the interrelationship between wealth and power and the role of managers and bureaucrats is quite similar to more advanced Western capitalist countries.

Scientists and engineers are employed by the ruling class and work for wages like the rest of us. They too have no monopoly on technical information, which is widely diffused among the literate population and can be readily acquired in libraries and even newsagents. The mythology about a “technocratic priesthood” is most widespread among liberal arts graduates who have gone through school and university doing only “humanities” courses and have thus been denied the basic technical education which is acquired by most school and University students in our society.

There is no excuse for this one-sidedness however, since any literate person can pick up the fundamentals of modern technology by just browsing through the “How and Why” type of childrens’ encyclopaedias readily available in every newsagent.

Nuclear power is held up most often as an industry where the dangers of a “technocratic priesthood” are greatest. In fact it is the most publicly regulated industry with the least initiative in the hands of technocrats. The whole technology down to blueprints and detailed engineering reports is completely in the public domain and there is no mystery about it whatever.

The average worker today has far more grasp of basic industrial technology, and is given a far more “theoretical” education than in earlier times. If some liberal arts graduates feel left behind and overawed by modern technology, they would do better to learn something about it than to continue writing speculative nonsense about a “technocratic priesthood”.

15. g) Centralisation

Socialists have always welcomed the centralisation of capital as a progressive development paving the way for Communism. In everyday practical terms, most people understand that the big multi-nationals have more “enlightened” management, produce better products and pay better wages than the smaller “sweatshops”, that supermarkets are a better place to do one’s shopping, that family farms are on the way out and so forth.

But many “radicals” actually stake their hopes on retarding monopolisation, propping up the small businessmen, shopkeepers and farmers against the multi-nationals and so on.

Fundamentally the complaints about “centralisation” reflect an awareness that wealth and power in our society is concentrated in the hands of a very tiny elite, but with a conservative reaction to try to turn the clock back, instead of pushing forward to socialism and communism.

But in its most absurd form, we even get complaints about the large scale and “centralisation” of the means of production themselves, and not of their ownership. Thus in arguments about nuclear power, we are told to beware of oppression by the controllers of big, centralised power stations. Apparently the theory is that if all power comes from a central source we have less control over our destiny than if we have smaller, local power stations. Taken to an extreme, some people are mad keen on windmills, solar panels, methane generators etc and hope to combine these with vegetable plots, mud brick construction and what have you to create a life style in which one can escape the clutches of capitalism as completely as possible by avoiding all buying and selling and isolating oneself from the market economy.

While I have no objection to other people tinkering with such things if they really want to, personally I prefer being able to obtain electric power at the flick of a switch and without tinkering with anything. This does not “alienate” me in the slightest and I am quite sure most people feel exactly the same way. We have simply never felt oppressed by power stations (except by the bills which are of course much lower than they would be with less centralisation).

It is difficult to even imagine how centralisation of power stations could be used as an instrument of oppression. Is it suggested that in a crisis the embattled bourgeoisie might take refuge in the power station and threaten to turn it off if we didn’t return to wage slavery? On the contrary, they seem concerned to ensure that “essential services” are not disrupted during major strikes. In any case the electricity grid that links power stations in every industrialised country is about as “decentralised” as one could ask.

It is hard to imagine a more direct reversal of traditional socialist attitudes towards the implications of large scale industry. The point is not to refute this wooly thinking about “centralisation” but to ask what process of mental atrophy could produce such patent nonsense, repeated so often with such authority?

The only answer I can see is that the extinction of Marxism by revisionism during the period of capitalist re-stabilisation has been so complete that most “radicals” have never even heard of Marxist views and have had to re-discover for themselves all the pre-Marxian socialist theories. (This certainly seems to have been the case with the “New Left” that grew up in the middle sixties, even when Marxist phrases were used.)

16. h) Unemployment

It is a well known proposition of Marxism that as capitalism develops with an increasing organic composition of capital, the size of the industrial reserve army increases and this is particularly manifested in mass unemployment during crises.

The obvious conclusion is that capitalism should be abolished so that people are not “employed by” capital but instead “employ” means of production to satisfy their own requirements.

Instead we have extraordinary proposals from “radicals” to freeze technological development, or at least control and retard it, so as to “safeguard jobs”. The whole trend of most “left” analysis of technology and unemployment involves an acceptance of capitalist irrationality as permanent, and a willingness to restrict the growth in productive forces and therefore living standards so as to adapt them to this irrational economic system (without mass unemployment).

Surely the most elementary socialist consciousness would involve welcoming Labor saving technology and demanding its speediest and widest adoption. If the social and economic system can’t cope then that’s its problem! It is very strange to see “socialists” arguing that since capitalism can’t cope with new technology without unemployment, we should keep the capitalism, but do without the technology. Yet that is exactly what is implied when people complain about Labor saving technology. They are even prepared to put up with having to work longer hours to produce fewer goods, just as long as they can keep their precious capitalism!

Ricardian economics long ago accepted that the introduction of new technology can be against the real immediate interests of workers who lose their jobs because of it. But its a long way from there to adopting a program that tries to inhibit new technology. In fact it has always been when technological change is most rapid that the scope for expanded capital accumulation is greatest and new jobs are created soaking up the reserve army and raising wages. Stagnation simply means a larger and larger reserve army.

Actually most remarks about technology are prefaced by a reference to “the current economic climate”. This reflects awareness that technological change and the accompanying destruction and creation of jobs is a permanent factor of capitalism, both when there is “full employment” and when there is mass unemployment.

Obviously the fact that mass unemployment suddenly started to develop throughout the Western world a few years ago cannot be attributed to any equally sudden change in technology and must be attributed to the particular stage in the capitalist business cycle that was reached then. So why do people persist in blaming a process of technological change that has been going on all the time?

It can only be because they don’t want to face up to the implications of capitalism as the source of our problems. Its easier to fight “the machines” than “the bosses”, or at any rate it is more respectable to do so.

17. Let us now review the major “radical” trends and their attitudes to these issues.

18. The ideology of the “soft technology” trend is well expressed in the journal Resurgence whose Editor Satish Kumar has summarised its aims thus:

“The breaking down of our over-large and over-centralised political and economic structure into smaller autonomous units in order that institutions should become responsive to the needs and desires of everybody and that everyone should thus feel involvement with and responsibility for the conduct of affairs.” (“Time Running Out? Best of Resurgence”, Prism Press 1976)

The belief that smaller autonomous units guarantee responsiveness to the needs and desires of everybody is somewhat quaint in view of the history of feudalism. Nevertheless, in one form or another, this whole approach is still extremely popular in “left” circles. It seems that Marxism never did defeat anarchism after all.

Although many adherents of this trend are very nice, gentle people who would probably find themselves on the right side of the barricades if it came to that (even if only as stretcher bearers), the ideological content of this trend is undiluted reaction against modern society.

The best known exponent of this trend is E.F. (“Small is Beautiful”) Schumacher, whose social views are not radically different from B.A. Santamaria’s and are based on the same papal encyclicals (ibid p103). But Resurgence points out Schumacher should be paired with Professor Leopold Kohr in a “Kohrmacher”, like the “Chesterbelloc” of the last generation’ (an interesting comparison with another pair of religious medievalists)(ibid p1).

To show just how openly reactionary this trend can be, without the admiring disciples even noticing, we need not consider the promotion of Zionist kibbutzes as a model for the new society (p108). Let us just take an article by Professor Kohr on “The Economics of Progress” (p18).

Kohr starts with a conversation between two college professors discussing how to wash their shirts, and also “plumbing, floor polishing and cooking, glorying in the fact that progress had so simplified matters that all these things could now be done by themselves”.

But one of them sighs and declares:

…fifty years ago we would have had maids. Instead of having to wash, plumb, and cook like unspecialised pioneers, we might have been better engineers and economists. Moreover, our shirts would have looked pressed, and our meals have tasted better. And instead of discussing housework at a party of scholars, we might have discussed our subjects.

According to Kohr:

“The experience of the two professors is shared by an increasing number of people. On one hand, we witness the gigantic pace of progress and continuously rising output figures. But on the other hand, we have the strange feeling that, instead of getting ahead in life, we have to give up every year something we could afford when, according to living standard experts, we must have had less”.

To support this conclusion, Kohr notes that:

“When I was a student in the early 30’s, I drove a racy sportscar”. (During the Great Depression).

Now as a University Professor he rides a bus.

“And the income classes above me have fared still worse… Mr Dupont had to abandon his palatial residence.. Now it is a museum…Where are the people who have become richer as a result of Mr Dupont having become poorer? On the contrary, most seem to be carried along the same road: downhill… Those who previously drank wine with their meals now drank water, and those who had maids now have none.”

“As to maids, it is frequently said that their disappearance is precisely a sign not of decline but of rising standards. For maids of former days are now housewives or businesswomen. Quite. But why should maids have aspired to these higher levels except in the hope of having maids themselves?…

“And workers seem to have fared only outwardly better. True, they have record incomes and record quantities of goods to spend them on. But if all is taken into account, can they really be said to be better off than workers of earlier times? They can write and read. But what is their main literature? They can send their children to college. But what has college education become under the levelling impact of intellectual mass production made necessary by the unprecedented numbers of those now able to afford it?…With so many other workers going to school, higher education, already intellectually sterile, seems without added material benefit, having become the competitive minimum requirement for almost any job.”

(Exactly the same point is made by Braverman, but dressed up as “Marxism”)

“As a result, what has actually risen under the impact of the enormously increased production of our time is not so much the standard of living as the level of subsistence. We swim in more water, but we are still in it up to our necks, In addition, along with the rising water level, many who previously enjoyed the luxury of the dry shore, are now up to their necks in water too”.

(Braverman makes a similar point to this too).

“…the problem is…no longer how to foster growth, but how to stop it..”

The above is not a distortion of Professor Kohr’s views, but an accurate picture of the introduction to an article that goes on with the usual theme of the need for smaller, more decentralised communities.

It is perfectly clear what section of society this “aristocratic socialism” speaks for – that part of the financial aristocracy being ruined as the proletarianisation of society proceeds (just as the old feudal socialism spoke for the declining feudal aristocracy).

To his credit, Professor Kohr does not attempt to conceal this in the slightest. But why are his views, or those of “Kohrmacher” nevertheless perfectly respectable in “left” circles?

Since a critique of Braverman’s romanticism necessarily includes a critique of this even more reactionary opposition to modern society, I will leave the matter there.

19. A second major trend, which may be called “Luddite” has closer connections with genuinely working class and socialist movements, and is in part a theoretical reflection of the ideas naturally arising in the course of trade union struggles to safeguard the rights of workers affected by automation.

This trend is not opposed to modern technology in itself, and emphasises the benefits that could flow from it in a socialist society. But it has a negative attitude towards the introduction of new technology within capitalist society, seeing this as a means of doing workers out of jobs and strengthening capitalist control.

The question “For Whom?” is repeated continuously and with enormous self-satisfaction as though it throws some penetrating light on the issues at stake, although in fact it obscures the question “What are the social implications?”. Since the answer to “For Whom?” in capitalist society is naturally “For them” (the capitalists), it is rare to find people who ask this question actually in favour of any new technology being introduced now.

20. Typical of this genre is a pamphlet called “Computers vs Journalists who wins?” (40 cents from Box 175, P.O. 367 Collins St Melbourne 3000)

Under the subhead “Problems, Problems, Problems…” we read:

“Sub editors are particularly affected, as the new technology not only means removal of some existing skills, but makes it more difficult to perform many traditional ones. ‘Casting off’, or determining the length of a story, can be done automatically by computer, making redundant a skill acquired over a long period by subs…The skill in writing a headline, which “fits” will be greatly de-valued because the computer can reject those which “bounce” before they are set in type.

Some subs will welcome the job of casting off, or headline counts being made easier, but by transferring the skills involved from men and women to a computer the human component involved in the highly-skilled task of good sub-editing is weakened”.

The appeal here is unmistakably conservative. One can imagine similar warnings about moveable type being addressed to monks in defence of their highly skilled craft copying manuscripts (which was indeed completely destroyed by the new technology).

It has not even occured to the writer that it might be an advance for a machine to do routine counting operations while the human sub-editor concentrates on the content of the material sub edited. Obviously one should fight for people whose skills have been made obsolete by new technology to be re-trained, re-employed and not to suffer in the slightest. But this preference for human labour when something can be done as well by machine is really quite different, and quite reactionary. It means using people like machines.

The conservatism involved is made quite explicit when the pamphlet quotes approvingly from an agreement between the Swedish Unions of journalists and Graphic Workers, recommending similar agreements between Australian unions:

“GF and SJF agree that the introduction of the new technology shall not affect the traditional basic principles of a division of labour among the categories of employees concerned. Thus, mechanical production tasks fall to the lot of graphic workers, while journalistic tasks are the domain of the staff members. Special importance must be attached to the workload of the staff, which must not be increased in such a manner that creative journalistic work is made to suffer. Nor may the tasks of graphic workers be made to include functions embracing journalistic work of a creative or decision-making nature”.

This desire to preserve “the traditional principles of a division of labour” against a new technology that tends to break down those divisions can only be called reactionary. Why shouldn’t journalists set their own copy? Why shouldn’t printers’ jobs include work of a creative or decision making nature?

The other side of this coin is attempts to prove that a new technology is deepening the division of labour and therefore should be opposed, when in fact like most new technology the actual effect is to break down that division.

Word processing is a classic example. No serious person could argue that a typewriter with editing and correcting features is in itself worse for humanity than one without these features (although some people have tried). Yet from all the “left” literature on the subject, one would think that the main social impact of word processing under capitalism would be to reduce the status of typist/secretaries to the level of the typing pool, and reinforce the division between “executive” and “clerical” Labor.

Naturally some reactionaries will try to take advantage of any change in work methods to make things worse for the workers by introducing typing pools and what have you. Although it is easier to maintain word counts and so forth with a word processor, there is nothing inherent in the technology that would make it easier for bosses to impose typing pools and other worse conditions on the workers, and in fact they have not been successful in doing so.

While word processors are still new and expensive, there is some tendency to try and achieve maximum utilisation of the machine and so attempt tighter control over the Labor using it (especially since such intensification of labour is feasible in the present economic climate of increasing unemployment). But the inherent trend of the technology is in the opposite direction (as will become clear, when word processing keyboards and VDUs become cheaper than electric typewriters and replace them on a one for one basis – with a separate printer shared between several typists).

The actual impact of word processing has been and will be to reduce the total requirement for typing Labor, especially by eliminating the repetitive typing of similar documents with minor variations (“personalized” form letters with different addresses, revised drafts etc). These are precisely the applications where typing pools have been common, and they are being eliminated, so typing pools must be declining.

The jobs previously done by “secretaries” are now being done by smaller numbers of “administrative assistants” on the one hand, and word processors on the other. This elimination of the Executive’s personal secretary/body slave is a clear-cut upgrading in job status (except for the Executive’s some of whom are complaining) and a break down in the division of Labor. As has already happened with printers and journalists, the next logical step is for all “word originators”, whether “Executives” or not, to do their own typing, since no special manual dexterity is required with the new machines and the difference in wage levels does not “justify” specialisation. These trends will be accelerated, with similar impacts on the Labor presently required for filing and other clerical work, as communication between word processors on different desks, and direct access to mass data storage is developed. Even for purely “typist” Labor in typing pools, the use of a machine with editing and correcting facilities is a clear upgrade in job function.

People who are afraid to confront bosses with the simple demand that there be no intensification of Labor under cover of the new technology will rationalise this fear by pretending that the new technology, rather than the bosses, are the source of the pressure for Labor intensification. But most workers know how to fight such pressures and have been successful in doing so (although the degree of Success or failure always ultimately depends on the state of the Labor market and the ease of transferring between jobs, hence on the overall economic climate, rather than on the militancy of struggle in individual workplaces).

This awareness that one’s fate is bound up with that of all other workers develops in the proletariat and helps develop its consciousness as a class for itself. It seems to be sadly lacking in many “left” writers about the “Labor process” who picture the class struggle as unfolding in particular workplaces rather than on a national scale, and seem to be under the illusion that workers are tied to their particular employers for life.

21. Leaving aside the overall struggle for a new society, even within capitalism, the natural reaction of socialist toward new Labor saving technology should be to demand its speedy introduction and a share of the benefits. Thus the earlier replacement of handicrafts by machine industry prompted agitation for a shorter working day in the factories, and so should the latest stage in automation promote agitation for a shorter working day.

Instead we have the modern Luddites repeating the mistake of the earlier Luddites who tried to prevent the new machinery replacing handicraft Labor in the.first place. An attempt as futile as it is reactionary.

22. This term “Luddite” is not used here simply as a form of abuse. It is admitted by representatives of this trend themselves, despite the whole history of scientific socialism since the Industrial Revolution. Here is Chris Harmon of the UK Socialist Workers Party in a pamphlet titled “Is a machine after your job? New Technology and the Struggle for Socialism“. (p21)

“… the Luddites were a group of workers suffering from miserably low wages and facing a destruction of their jobs by new working methods. Their attempts to fight back by destroying machines may not have been successful (although they did succeed in holding down a bigger army than the Duke of Wellington had in the same years to fight his war against the French in Spain).

“But the result of their failure was not something good. It was grinding desperate poverty for hundreds of thousands of people, enduring for a whole generation…

“…Our response has to start from the same suspicion of the way the new technology is being used that motivates those who simply say “No”. We are on the same side as the Luddites, not against them .”

The “microprocessor revolution” promises (not “threatens”) to have as big an impact on the Labor process as the development of automatic machinery in the earlier industrial revolution. Just as the dexterity of human fingers was for most purposes replaced by machinery, so now some higher functions of control and supervision will also be replaced (although not yet much in the way of actually creative intellectual processes). It is truly amazing that instead of the further development of Marxism, which based itself on a theoretical comprehension of the social consequences of the age of machinery, we should see a revival of earlier and cruder varieties of socialism that have long been discredited in favour of Marxism, by the history of modern society.

Once again, since a critique of Braverman’s romanticism necessarily embraces a critique of modern Luddism, I will leave the matter there. But I should stress that this “theoretical” difference does put me on the opposite side to modern Luddites on strictly practical questions. When they are agitating against the introduction of word processors, I would be agitating for workers to demand their immediate introduction and refuse to operate obsolete typewriters that haven’t got all mod cons.

23. Before turning to Braverman and romanticism, it may be worth pointing out the important differences between the Liberal and Social Democratic defence of modern technology and economic growth on the one hand, and the Marxist view on the other, since so far we have been mainly talking about the similarities.

Both the similarities and differences are made clear in an article on “Technology and the Left” in the CPGB organ Marxism Today of May 1979. Here Ian Benson, a British Labor Party and trade union activist, makes much the same criticisms of “romanticism” and the CPGB’s line (similar to the CPA’s), as would be made by Liberals on the one hand and Marxists on the other.

24. After quoting Lenin’s analysis of the socialisation of Labor, Benson argues:

“From this perspective the simple classification of technology into exploitative and non-exploitative is seen to contribute little either to the raising of the cultural level of mankind or the solution of the political problems of establishing democratic control over the means of production.

The defence of particular skills amounts to an attempt to freeze the existing division of Labor, and defers the satisfaction of material and cultural needs by the rest of the population which would be met by automation. The principled opposition to centralisation on the grounds of the alleged greater democracy of decentralised production, is both contrary to the need for further integration of the world economy as a prerequisite for the breakdown of skill, class and national barriers, and offers nothing to solving the problem of establishing democratic control over the economy as a whole.

A socialist technology policy with these ends must be based on an analysis of the constraints on the development of science as a productive force, “preparing the ground for the dissolution of human alienation”.

This whole approach is so foreign to the romantic outlook that dominates most “left” thinking that people replying cannot even grasp what is being said. Consider this from a reply titled “What Type of Technology do we want” by Dave Elliott in the same issue of Marxism today:

“…Benson believes that science and technology somehow develop independently from other forces in society. They are “neutral” resources of knowledge and techniques which can be applied either to the benefit of society generally (under socialism) or for the benefit of a few (under capitalism).”

Manifestly Benson does not believe that at all.

He quite clearly treats technology as a positive force which pushes society forward and helps transform it from capitalism to socialism. This is a view common to Social Democrats and Marxists. But it is so unthinkable to romantics that the worst accusation they can fling at the pro-technology camp is that we view technology as merely neutral, which we do not!

I have seen numerous articles loftily criticising the “old fashioned”, “economic determinist” and “simplistic” view that technology is neutral and that a socialist society could simply take over the previous technology and apply it to more humane ends. This “neutral” view is often attributed to Engels, Lenin and Stalin although Marx and Mao are often claimed to have been more sympathetic to the romantic school. But I have hardly seen any material directly confronting the “unthinkable” explicitly pro-technology view which was in fact articulated loud and clear by Marx as well as the rest.

What this “criticism” proves is simply that the critics are quite ignorant of the views of their opponents, let alone being in a position to advance on those views from a more comprehensive understanding.

It is rather like accusing atheists of the Protestant heresy because we will not pray to the virgin Mary, when in fact the problem is even more serious!

26. The differences between the Marxist and Social Democratic approaches to the social implications of modern technology are made clear when Ian Benson proceeds “Towards a Socialist Technology Policy”:

“It should call for the removal of all barriers to the full development of science and technology in the interests of society, through a programme of radical institutional, scientific and political reforms.”

Benson then outlines a program of reforms to promote “re-skilling,”Democratic Control”, “Social Ownership”, “Development of Science” and “Socially Useful Production” – all with the aim of “liberation of science”.

What this omits is precisely the Marxist concept that the main “institutional” barrier to the full development of science and technology in the interest of society, is the capitalist mode of production based on commodities and wage labour itself. This has been obsolete since the age of electricity (never mind micro-electronics) and needs to be swept away by revolution (not reform).

Social Democrats share with Marxists the fundamental concept that the development of the productive forces, modern technology and economic growth, is the positive dynamic factor which pushes forward the transformation of social relationships. But they stand this conclusion on its head by calling for reforms to push forward new technology and economic growth (which are dynamic and pushing forward spontaneously anyway), instead of concentrating on the obsolete social relations which are the passive factor that has been left behind and is acting as a brake on further progress. In fact in an era such as this, where the social relations are obsolete, it is precisely by social revolution that the productive forces can be unleashed for further and more rapid development (and in the act of social revolution, the relations of production temporarily assume the role of the most active dynamic factor).

Although the terms “productive forces” and “relations of production” have been turned into an almost meaningless cliche, once grasped, the concept is almost tautologous in its simplicity.

27. Economic growth, and especially technical progress, is essentially cumulative. New developments, even if quite useless, or only capable of being used in a harmful way, always add to the range of possibilities open and never shut off possibilities that were open before. We still spend most of our waking hours “Making a living” and our social relationships are formed in the course of doing so. It is hardly surprising that the continuous opening up of new ways of making a living should continuously leave behind and render obsolete the old social relationships founded on the basis of obsolete ways of making a living.

28. The whole point about the productive forces being the active dynamic factor, is that they have an in-built tendency to develop spontaneously, which the relations between people do not.

Whenever an enterprise improves its production technique, or an individual worker improves his or her lot (eg. by obtaining a more responsible position), there is a development of the productive forces. But it is not automatically accompanied by any corresponding change in social relations. Under capitalism such developments are proceeding spontaneously all the time, indeed they are a necessary condition for the expansion of markets and the possibility of re-investing surplus value in the expanded reproduction.

29. The social relations of production can get left behind as the productive forces develop, so that today for example, we still have essentially capitalist relations between people, based on commodity exchange and wage labour, which were appropriate to the petty production of the middle ages but are no longer compatible with large scale machine industry (let alone being compatible with the latest developments).

30. Just as the institutions of slavery and serfdom once held back the further development of the productive forces and had to give way against the slave and surf revolts, so the institution of wage labour is now holding things back and giving rise to revolts. Eg. apart from the obvious contradictions between capitalism and economic growth expressed in business crises, there is the day to day stifling of the enormous creative energies of the workers themselves, which could be unleashed in a system where they had an interest as masters of production, instead of a direct interest in sabotaging it and “conserving” their jobs. Then scientific and technical innovation would not only be unhindered by mass unemployment and crises, but would be the conscious activity of the majority instead of the province of “management control”.

31. It follows from this analysis that the critical task facing society is to smash the obsolete social relations as the only way to liberate the productive forces or “liberate science” as Benson puts it.

32. Quite politically conservative people like businessmen or revisionist party bureaucrats can contribute to social progress by developing the productive forces, but only revolutionaries can tackle the central issue of overturning the obsolete social relations.

33. Therefore in every society in transition from capitalism to communism, whether a capitalist society like Australia or post-Mao China, with the bourgeoisie in power, or a socialist society like Mao’s China, the central political issues are often expressed in terms of whether to focus on developing the productive forces or on transforming the relations of production

34. The representatives of the old capitalist relations, the bourgeoisie, the conservatives, whether they be “businessmen” or “party officials” share much the same rhetoric in calling for “hard work” to “make more cake” and in dismissing the workers struggle to transform social relations as an interference in that process. It is interesting to note how Ian Benson appeals to both the Czechoslovak Communist Party Program of Dubcek’s time, and the “four modernisations” stuff coming out of China today, in support of his views. The only difference between Social Democrats and Liberals in this regard is that Social Democrats place greater stress on making necessary concessions to the workers: “share the cake more equally and don’t waste it”.

35. In opposition to the Malcolm Fraser’s and Hua Kuo-feng’s, the representatives of the new communist relations of production the proletariat, the radicals, raise the question of “all power to the cooks”. This (after a certain amount of cake-mix spoiling due to confusion among the cooks), is the only way to really transform cake production.

36. Unfortunately the Marxist analysis of forces and relations of production can only be grasped by the majority in communist society where the majority of humanity are consciously engaged in changing themselves. If it was the dominant view, even among the “left”, and did not have to continuously fend off assaults from reaction, Luddism, romanticism and Social Democracy, then we would have already have had the revolution.

ending the groundhog day of educational reform

Some notes on a talk given by Noel Pearson on the launch of his book, Radical Hope, in September, 2011 :

Bringing Explicit Instruction to remote aboriginal schools in Cape York, Queensland

Primary school education was the hardest domain for us to penetrate. NAPLAN results over the past 3 years provided useful evidence to break out of failing education programmes. We could say to professional educators: “We can no longer leave the future of our children in your hands”. We could end the groundhog day of educational reform

The grandmothers in Cape York are more literate than their grandchildren. The Missions had succeeded in teaching children to read and write in their own indigenous language. Over the past 40 years indigenous children have become illiterate in both their native and English language

We arrived at the conclusion that in the Reading Wars, the Explicit Instruction / Phonics side of the war was correct.

MULTILIT (Making Up Lost Time in Literacy) and all Explicit Instruction programmes have their genesis in Direct Instruction, an American programme developed by Professor Siegfried Engelmann at the Universities of Illinois and Oregon. In early 2009 we visited the USA and subsequently formed a partnership with the American National Institute of Direct Instruction.

We established this programme in two Cape York primary schools: Aurukun and Coen. The programme consists of Class and Club. Class is the western curriculum. Club is indigenous culture.

The compulsory school day runs from 8:30 to 2:30. This is followed by a voluntary programme which runs from 2:30 to 4:30.

The new programme commenced on January 28, 2010. The first few months were marked by chaos, controversy, revolt and alarm. But eventually things settled down. There were 65 kids in the Time Out room one week. Then there were 3 kids the following week. This transition marked school acceptance of the new programme.

There is regular coaching of teachers in the required methods every 3 months. Each week there are mastery tests of the previous 5 or 10 lessons. Students do not move to the next level unless they achieve a 90% achievement score.

Every Tuesday morning there is a conference with coordinators in the USA with the Principals of Auruken and Coen. The operating assumption is that if the student has not learned then the teacher has not taught. There is no alibi for the teacher. The Principals main task is to lead instruction.

When kids experience success, then behaviour changes and interest engages.

Aurukun was possibly the worst school in Queensland. In 2009 police were called to the school 160 times, for a school of 230 students. The attendance rate was 30%. We are now 18 months into this educational reform.


Welfare System
The welfare system must be reformed from unconditional welfare to conditional welfare. Parents must meet four conditions to continue receiving welfare:
1. send children to school
2. children free from abuse or neglect
3. meet housing tenancy obligations
4. don’t break the Law

The welfare system has been funding dysfunctional lifestyles. The Commonwealth government has been paying for people’s drug habits. There has been unconditional financing of dysfunction. Welfare is not a wage, it is social assistance which comes with conditions.

Trust Accounts
Trust accounts were created to cover educational expenses (uniform, tuckshop, equipment, computers). The money comes from the parents. They are completely voluntary.

At Coen there was a 100% signup to the trust accounts. The trust accounts now contain $1500 per child and over 1 million dollars in total. The swift uptake of trust accounts persuaded us that parents care deeply about their children’s education.

We use DIBELS (Dynamic Indicators of Basic Early Literacy), which is more informative than NAPLAN, to assess the progress of students. This tells us that:
– the top 30% is progressing at double mainstream speed
– 50% are progressing at above mainstream speed
– poor attenders continue to have poor results

Lack of Support from Education Department Bureaucracy

A Cairns Principal who was prepared to run a Direct Instruction stream was banned from visiting Aurukun by the Department!!

What sort of teachers are required for Direct Instruction?

The DI programme has been described as “teacher proof”. For Pearson the biggest surprise was that they are making progress with the stock, standard issue Queensland trained teacher. As long as the teacher is amenable to the program there are good results. However, teachers college has not taught these teachers how to teach reading!

audio: Noel Pearson: Radical Hope (the above notes are made from this extract)
video: Radical Hope Book: A Talk by Noel Pearson (the whole talk including an informative Q&A session)

obama’s canberra speech

So, Asia and the contradiction between the USA and China is becoming the new focus of world politics? (@ 24:20 he starts his emphasis on the importance of Asia and the Pacific)

update (21st November):
Remarks By President Obama to the Australian Parliament (full text)


Our new focus on this region reflects a fundamental truth — the United States has been, and always will be, a Pacific nation. Asian immigrants helped build America, and millions of American families, including my own, cherish our ties to this region. From the bombing of Darwin to the liberation of Pacific islands, from the rice paddies of Southeast Asia to a cold Korean Peninsula, generations of Americans have served here, and died here — so democracies could take root; so economic miracles could lift hundreds of millions to prosperity. Americans have bled with you for this progress, and we will not allow it — we will never allow it to be reversed.

Here, we see the future. As the world’s fastest-growing region — and home to more than half the global economy — the Asia Pacific is critical to achieving my highest priority, and that’s creating jobs and opportunity for the American people. With most of the world’s nuclear power and some half of humanity, Asia will largely define whether the century ahead will be marked by conflict or cooperation, needless suffering or human progress.

As President, I have, therefore, made a deliberate and strategic decision — as a Pacific nation, the United States will play a larger and long-term role in shaping this region and its future, by upholding core principles and in close partnership with our allies and friends.

Let me tell you what this means. First, we seek security, which is the foundation of peace and prosperity. We stand for an international order in which the rights and responsibilities of all nations and all people are upheld. Where international law and norms are enforced. Where commerce and freedom of navigation are not impeded. Where emerging powers contribute to regional security, and where disagreements are resolved peacefully. That’s the future that we seek.

Now, I know that some in this region have wondered about America’s commitment to upholding these principles. So let me address this directly. As the United States puts our fiscal house in order, we are reducing our spending. And, yes, after a decade of extraordinary growth in our military budgets — and as we definitively end the war in Iraq, and begin to wind down the war in Afghanistan — we will make some reductions in defense spending.

As we consider the future of our armed forces, we’ve begun a review that will identify our most important strategic interests and guide our defense priorities and spending over the coming decade. So here is what this region must know. As we end today’s wars, I have directed my national security team to make our presence and mission in the Asia Pacific a top priority. As a result, reductions in U.S. defense spending will not — I repeat, will not — come at the expense of the Asia Pacific.

My guidance is clear. As we plan and budget for the future, we will allocate the resources necessary to maintain our strong military presence in this region. We will preserve our unique ability to project power and deter threats to peace. We will keep our commitments, including our treaty obligations to allies like Australia. And we will constantly strengthen our capabilities to meet the needs of the 21st century. Our enduring interests in the region demand our enduring presence in the region. The United States is a Pacific power, and we are here to stay.

Indeed, we are already modernizing America’s defense posture across the Asia Pacific. It will be more broadly distributed — maintaining our strong presence in Japan and the Korean Peninsula, while enhancing our presence in Southeast Asia. Our posture will be more flexible — with new capabilities to ensure that our forces can operate freely. And our posture will be more sustainable, by helping allies and partners build their capacity, with more training and exercises.

We see our new posture here in Australia. The initiatives that the Prime Minister and I announced yesterday will bring our two militaries even closer together. We’ll have new opportunities to train with other allies and partners, from the Pacific to the Indian Ocean. And it will allow us to respond faster to the full range of challenges, including humanitarian crises and disaster relief.

Since World War II, Australians have warmly welcomed American service members who’ve passed through. On behalf of the American people, I thank you for welcoming those who will come next, as they ensure that our alliance stays strong and ready for the tests of our time.

We see America’s enhanced presence in the alliance that we’ve strengthened: In Japan, where our alliance remains a cornerstone of regional security. In Thailand, where we’re partnering for disaster relief. In the Philippines, where we’re increasing ship visits and training. And in South Korea, where our commitment to the security of the Republic of Korea will never waver. Indeed, we also reiterate our resolve to act firmly against any proliferation activities by North Korea. The transfer of nuclear materials or material by North Korea to states or non-state entities would be considered a grave threat to the United States and our allies, and we would hold North Korea fully accountable for the consequences of such action.

We see America’s enhanced presence across Southeast Asia — in our partnership with Indonesia against piracy and violent extremism, and in our work with Malaysia to prevent proliferation; in the ships we’ll deploy to Singapore, and in our closer cooperation with Vietnam and Cambodia; and in our welcome of India as it “looks east” and plays a larger role as an Asian power.

At the same time, we’ll reengage with our regional organizations. Our work in Bali this week will mark my third meeting with ASEAN leaders, and I’ll be proud to be the first American President to attend the East Asia Summit. And together, I believe we can address shared challenges, such as proliferation and maritime security, including cooperation in the South China Sea.

Meanwhile, the United States will continue our effort to build a cooperative relationship with China. All of our nations — Australia, the United States — all of our nations have a profound interest in the rise of a peaceful and prosperous China. That’s why the United States welcomes it. We’ve seen that China can be a partner from reducing tensions on the Korean Peninsula to preventing proliferation. And we’ll seek more opportunities for cooperation with Beijing, including greater communication between our militaries to promote understanding and avoid miscalculation. We will do this, even as we continue to speak candidly to Beijing about the importance of upholding international norms and respecting the universal human rights of the Chinese people.

A secure and peaceful Asia is the foundation for the second area in which America is leading again, and that’s advancing our shared prosperity. History teaches us the greatest force the world has ever known for creating wealth and opportunity is free markets. So we seek economies that are open and transparent. We seek trade that is free and fair. And we seek an open international economic system, where rules are clear and every nation plays by them.

In Australia and America, we understand these principles. We’re among the most open economies on Earth. Six years into our landmark trade agreement, commerce between us has soared. Our workers are creating new partnerships and new products, like the advanced aircraft technologies we build together in Victoria. We’re the leading investor in Australia, and you invest more in America than you do in any other nation, creating good jobs in both countries.

We recognize that economic partnerships can’t just be about one nation extracting another’s resources. We understand that no long-term strategy for growth can be imposed from above. Real prosperity — prosperity that fosters innovation, and prosperity that endures — comes from unleashing our greatest economic resource, and that’s the entrepreneurial spirit, the talents of our people.

So even as America competes aggressively in Asian markets, we’re forging the economic partnerships that create opportunity for all. Building on our historic trade agreement with South Korea, we’re working with Australia and our other APEC partners to create a seamless regional economy. And with Australia and other partners, we’re on track to achieve our most ambitious trade agreement yet, and a potential model for the entire region — the Trans-Pacific Partnership.

The United States remains the world’s largest and most dynamic economy. But in an interconnected world, we all rise and fall together. That’s why I pushed so hard to put the G20 at the front and center of global economic decision-making — to give more nations a leadership role in managing the international economy, including Australia. And together, we saved the world economy from a depression. And now, our urgent challenge is to create the growth that puts people to work.

We need growth that is fair, where every nation plays by the rules; where workers rights are respected, and our businesses can compete on a level playing field; where the intellectual property and new technologies that fuel innovation are protected; and where currencies are market driven so no nation has an unfair advantage.

We also need growth that is broad — not just for the few, but for the many — with reforms that protect consumers from abuse and a global commitment to end the corruption that stifles growth. We need growth that is balanced, because we will all prosper more when countries with large surpluses take action to boost demand at home.

And we need growth that is sustainable. This includes the clean energy that creates green jobs and combats climate change, which cannot be denied. We see it in the stronger fires, the devastating floods, the Pacific islands confronting rising seas. And as countries with large carbon footprints, the United States and Australia have a special responsibility to lead.

Every nation will contribute to the solution in its own way — and I know this issue is not without controversy, in both our countries. But what we can do — and what we are doing — is to work together to make unprecedented investments in clean energy, to increase energy efficiency, and to meet the commitments we made at Copenhagen and Cancun. We can do this, and we will.

As we grow our economies, we’ll also remember the link between growth and good governance — the rule of law, transparent institutions, the equal administration of justice. Because history shows that, over the long run, democracy and economic growth go hand in hand. And prosperity without freedom is just another form of poverty.

And this brings me to the final area where we are leading — our support for the fundamental rights of every human being. Every nation will chart its own course. Yet it is also true that certain rights are universal; among them, freedom of speech, freedom of the press, freedom of assembly, freedom of religion, and the freedom of citizens to choose their own leaders.

These are not American rights, or Australian rights, or Western rights. These are human rights. They stir in every soul, as we’ve seen in the democracies that have succeeded here in Asia. Other models have been tried and they have failed — fascism and communism, rule by one man and rule by committee. And they failed for the same simple reason: They ignore the ultimate source of power and legitimacy — the will of the people. Yes, democracy can be messy and rough — I understand you mix it up quite well during Question Time. (Laughter.) But whatever our differences of party or of ideology, we know in our democracies we are blessed with the greatest form of government ever known to man.

So as two great democracies, we speak up for those freedoms when they are threatened. We partner with emerging democracies, like Indonesia, to help strengthen the institutions upon which good governance depends. We encourage open government, because democracies depend on an informed and active citizenry. We help strengthen civil societies, because they empower our citizens to hold their governments accountable. And we advance the rights of all people — women, minorities and indigenous cultures — because when societies harness the potential of all their citizens, these societies are more successful, they are more prosperous and they are more just.

These principles have guided our approach to Burma, with a combination of sanctions and engagement. And today, Aung San Suu Kyi is free from house arrest. Some political prisoners have been released, and the government has begun a dialogue. Still, violations of human rights persist. So we will continue to speak clearly about the steps that must be taken for the government of Burma to have a better relationship with the United States.

This is the future we seek in the Asia Pacific — security, prosperity and dignity for all. That’s what we stand for. That’s who we are. That’s the future we will pursue, in partnership with allies and friends, and with every element of American power. So let there be no doubt: In the Asia Pacific in the 21st century, the United States of America is all in.

Still, in times of great change and uncertainty, the future can seem unsettling. Across a vast ocean, it’s impossible to know what lies beyond the horizon. But if this vast region and its people teach us anything, it’s the yearning for liberty and progress will not be denied.

It’s why women in this country demanded that their voices be heard, making Australia the first nation to let women vote and run for parliament and, one day, become Prime Minister. It’s why the people took to the streets — from Delhi to Seoul, from Manila to Jakarta — to throw off colonialism and dictatorship and build some of the world’s largest democracies.

It’s why a soldier in a watchtower along the DMZ defends a free people in the South, and why a man from the North risks his life to escape across the border. Why soldiers in blue helmets keep the peace in a new nation. And why women of courage go into brothels to save young girls from modern-day slavery, which must come to an end.

It’s why men of peace in saffron robes faced beatings and bullets, and why every day — from some of the world’s largest cities to dusty rural towns, in small acts of courage the world may never see — a student posts a blog; a citizen signs a charter; an activist remains unbowed, imprisoned in his home, just to have the same rights that we cherish here today.

Men and women like these know what the world must never forget. The currents of history may ebb and flow, but over time they move — decidedly, decisively — in a single direction. History is on the side of the free — free societies, free governments, free economies, free people. And the future belongs to those who stand firm for those ideals, in this region and around the world…

ILO admits that capitalism is in deep shit

The economic slowdown may entail a double-dip in employment …

The next few months will be crucial for avoiding a dramatic downturn in employment and a further significant aggravation of social unrest. The world economy, which had started to recover from the global crisis, has entered a new phase of economic weakening. Economic growth in major advanced economies has come to a halt and some countries have re-entered recession, notably in Europe. Growth has also slowed down in large emerging and developing countries

Based on past experience, it will take around six months for the ongoing economic weakening to impact labour markets. Indeed, in the immediate aftermath of the global crisis it was possible to delay or attenuate job losses to a certain extent, but this time the slowdown may have a much quicker and stronger impact on employment. After the collapse of Lehman Brothers in 2008, many viable enterprises expected a temporary slowdown in activity and so were inclined to retain workers. Now, three years into the crisis, the business environment has become more uncertain and the economic outlook continues to deteriorate. Job retention may therefore be less widespread.

Moreover, government job- and income-support programmes, which proved so successful in cushioning job losses and supporting job retention practices in firms at the start of the global crisis, may be scaled down as part of the fiscal austerity measures adopted in a growing number of countries. Lastly, and more fundamentally, while in 2008-2009 there was an attempt to coordinate policies, especially among G20 countries, there is evidence that countries are now acting in isolation. This is leading to more restrictive policies driven by competitiveness considerations, and job retention measures could fall victim to it.

The latest indicators suggest that the employment slowdown has already started to materialize (Chapter 1). This is the case in nearly two-thirds of advanced economies and half of the emerging and developing economies for which recent data are available. Meanwhile, young people continue to enter the labour market. As a result, approximately 80 million net new jobs will be needed over the next two years to restore pre-crisis employment rates (27 million in advanced economies and the remainder in emerging and developing countries). However, in light of the recent economic slowdown, the world economy is likely to create only about half of those much-needed jobs. And it is estimated that employment in advanced economies will not return to its pre-crisis levels until 2016, i.e. one year later than projected in the World of Work Report 2010.

… exacerbating inequalities and social discontent …

As the recovery derails, social discontent is now becoming more widespread, according to a study carried out for the purposes of this Report (see special focus on social unrest in Chapter 1). In 40 per cent of the 119 countries for which estimates could be performed, the risk of social unrest has increased significantly since 2010. Similarly, 58 per cent of countries show an increase in the percentage of people who report a worsening of standards of living. And confidence in the ability of national governments to address the situation has weakened in half the countries.

The Report shows that the trends in social discontent are associated with both the employment developments and perceptions that the burden of the crisis is shared unevenly. Social discontent has increased in advanced economies, MiddleEast and North Africa and, albeit to a much lesser extent, Asia. By contrast, it may have stabilized in Sub-Saharan Africa, and it has receded in Latin America.

… and further delaying economic recovery

The worsening employment and social outlook, in turn, is affecting economic growth. In advanced economies, household consumption – a key engine of growth – is subdued as workers become more pessimistic about their employment and wage prospects. Indicators for the United States and several European countries suggest that workers expect stagnating or even falling wages. The uncertain demand outlook, combined with continued weaknesses in the financial system of advanced economies, is depressing investment in all countries, including in emerging and developing economies which rely primarily on exports for growth and job creation

In short, there is a vicious cycle of a weaker economy affecting jobs and society,
in turn depressing real investment and consumption, thus the economy and so on…
World of Work Report 2011

living with offence

Kindly Inquisitors: The new attacks on free thought (1993) by Jonathan Rauch

Frances Widdowson published a review (The Kindly Inquisitors), some time ago, of this book on her blog. I haven’t read the book but I like her review. These brief notes are based on her review.

In our civilised democratic society (not Iran, China, North Korea etc. where different forms of Fundamentalism are the main problem), the modern day equivalent of the Inquisition are the philosophies of Egalitarianism and Humanitarianism

ie. the principle of the Inquisition was that people with wrong or hurtful opinions ought to be punished for the good of society

Egalitarianism – the beliefs of all sincere people deserve equal respect
Humanitarianism – one must never offend

Taken separately and in particular when combined these outlooks undermine the pursuit of scientific truth by introducing a variety of mental and ideological barriers to free and open discussion. This is explained more in the review.

It is essential to learn the hard discipline of living with offence that will inevitably follow from this approach rather than fudging the quest for truth out of fear of offending others or being offended ourselves. Words might offend but as long it remains just words then we need to accept it and either argue back or move on, not try to censor it and to reject philosophies which attempt to censure open, vigorous discussion

the times they are a-changin’

Bob Dylan captured the mood in 1963 with “The Times They Are A-Changin’“. Well, once again in 2011, The Times They are A-Changin’.

An economic crisis which began in earnest in 2007-08, an economic crisis that never went away despite governments throwing trillions of dollars at it. Now, with Occupy Wall Street spreading around the world more and more people are realising that the capitalist system doesn’t have all the answers.

In 2011, revolution breaks out in the Middle East and spreads like wildfire to overthrow one tyrannical regime after another. In Tunisia, Egypt and Libya the tyrants have fallen. That is a great beginning but it is only the beginning …

The property question. Before the crisis no one was talking about it. Now, everyone is talking about it. Put these two things together. (1) Increasing wealth inequality (2) Economic crisis, high and rising unemployment. This makes for a toxic mix for the ruling class. They are not coping.

“… the top 1% of Americans own 42% of the financial wealth in this country. The top 5%, meanwhile, own nearly 70%.”

See this and other charts which reveal the extent of unemployment, corporate profits, income inequality, unequal debt and tax distribution and Bank behaviour (CHARTS: Here’s What The Wall Street Protesters Are So Angry About…)

Where did the “We are the 99%” slogan come from?

David Graeber is the guy who thought of it:

Someone—this time I remember quite clearly it was me, but I wouldn’t be surprised if a half dozen others had equally strong memories of being the first to come up with it—suggested, “well, why not call ourselves ‘the 99%’? If 1% of the population have ended up with all the benefits of the last 10 years of economic growth, control the wealth, own the politicians… why not just say we’re everybody else?” The Spanish couple quickly began to lay out a “We Are the 99%” pamphlet, and we started brainstorming ways to print and distribute it for free.
On Playing By The Rules – The Strange Success Of #OccupyWallStreet

The slogan was in the ether just waiting to be born. World events, the economic crisis, the bailout of the Banks, the escalation of wealth of the top 1%, the workings of capitalism guaranteed that a slogan like this would come forward and flourish.

Pics from We are the 99 percent

Yes, indeed, the times they are a-changin’

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
Then you better start swimmin’ or you’ll sink like a stone
For the times they are a-changin’

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who that it’s namin’
For the loser now will be later to win
For the times they are a-changin’

Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside and it is ragin’
It’ll soon shake your windows and rattle your walls
For the times they are a-changin’

Come mothers and fathers
Throughout the land
And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is rapidly agin’
Please get out of the new one if you can’t lend your hand
For the times they are a-changin’

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times they are a-changin’
The Times They Are A-Changin’

steve jobs: capitalist entrepreneur

Steve Jobs’s range of achievements is impressive: the Apple computer, the NeXT computer, Pixar and then his return to Apple to lead development of the iPod, iPhone and iPad. eg. Tim Berners Lee spoke very highly of NeXT and used it to develop much of his world wide web technology.

Many people love his products (hi pat!) because they enabled them to make use out of computer technology that they could not achieve through the relatively clunky alternatives provided by Bill Gates and others.

I’ve been thinking about Jobs from the POV of how his talents would have played out, if at all, in another type of society, call it socialist or post-capitalist. It has been an interesting thought experiment for me. Jobs definitely did have a dark side as well as being quite talented in certain respects (and not talented in other respects). I’m interested in the question of creativity in the development of computing and in this case what type of creativity Jobs had and how that played out in our current social system.

Of course it’s trite to say that Jobs had a dark side. Everyone has a dark side. The political point is that the focused ruthlessness he directed against some others and institutions was magnified and rewarded by the capitalist system. From my reading (see references below for more detail) Jobs as a capitalist personified was worse than some of the others. Marx’s fundamental point about commodities is very relevant here. In pursuing commercial success in perfection in things Jobs treated many people badly.

It’s clear that much of what Jobs achieved was achieved by his partners. Wozniak did most of the work in developing the Apple computer. In Wozniak’s words (recent interview) it was he who worked in the famous Silicon valley garage while Jobs worked out of his bedroom, making phone calls, doing the marketing.

The same is true for the development of the WIMP interface (Windows, Icons, Menus, Pointers). The fundamental work here was done by teams led by Doug Engelbart and Alan Kay and made available for free for others to use. Jobs could see the potential and developed it commercially.

The truth of the matter is that the fundamental developments in both computing hardware and software were given away by the real pioneers of the computing revolution. Their motivation was that of scratching a personal itch, of immersing themselves in the exciting possibilities of a new technology and what could be achieved with it. The names of those pioneers are less well known than the names of those who converted their spirit of freedom into commercial success.

Jobs said about the Mac development:

“I don’t think I’ve ever worked so hard on something, but working on Macintosh was the neatest experience of my life. Almost everyone who worked on it will say that. None of us wanted to release it at the end. It was as though we knew that once it was out of our hands, it wouldn’t be ours anymore. When we finally presented it at the shareholders’ meeting, everyone in the auditorium gave it a five-minute ovation. What was incredible to me was that I could see the Mac team in the first few rows. It was as though none of us could believe we’d actually finished it. Everyone started crying.” [Playboy, Feb. 1, 1985, source, my emphasis]

The words I have bolded sums up the dilemma of creative people who decide to become highly successful under capitalism. Once the interesting, creative process is completed then you have to do the hard work of promoting and selling your product in a highly competitive market. Clearly Jobs was very good at the latter.

Anyway, here are some interesting quotes and references I have discovered in my search for the real Steve Jobs:
Richard Stallman:

“Steve Jobs, the pioneer of the computer as a jail made cool, designed to sever fools from their freedom, has died”

Eric Raymond: On Steve Jobs’s passing

Commerce is powerful, but culture is even more persistent. The lure of high profits from secrecy rent can slow down the long-term trend towards open source and user-controlled computing, but not really stop it. Jobs’s success at hypnotizing millions of people into a perverse love for the walled garden is more dangerous to freedom in the long term than Bill Gates’s efficient but brutal and unattractive corporatism. People feared and respected Microsoft, but they love and worship Apple – and that is precisely the problem, precisely the reason Jobs may in the end have done more harm than good.

The Eric Raymond article links to a very interesting NYT article titled Against Nostalgia by Mike Daisey but unfortunately it is now hidden behind their firewall.

There were some correct criticisms of Eric Raymond’s dismissive attitude to China’s sweatshops at reddit.

What Everyone Is Too Polite to Say About Steve Jobs


Advisor Says We Face a Worldwide Banking Meltdown

Dr. Robert Shapiro who advised Presidents Clinton and Obama and who currently advises the IMF predicts a cascading meltdown of the World’s banking system starting with Sovereign debt in the Eurozone, affecting the UK then finally bringing down the global banking system.

Watch the video to the end since Shapiro has the final word against the others who are saying it can all be prevented. He points out that there is no credible plan to avert the sovereign debt crisis in Italy and Spain.

discuss: wealth tax

On the Keynes thread, Arthur initiated a wealth tax discussion and provided some wikipedia links:

On the need for a positive program I would suggest a separate topic on “wealth tax”. Wikipedia has some good starting points which link to useful statistics:







Unlike the usual Keynesian stuff, reformist proposals for wealth taxes have the benefit of actually providing a plausible solution to budgetary crises and sharply raising the property question since revolutionaries can propose steep progression from the insignificant rates currently contemplated to actual expropriation.

Major arguments against are:

1. High cost of administration (but this cost is necessary to facilitate future expropriation by having detailed records of ownership etc).

2. Capital flight, which leads directly to other “antiquated” demands from the Communist Manifesto like confiscation of the property of emigrants and rebels.

different takes on the Wall Street protest

Seven hundred arrested in Wall Street protest. I went to the Occupy Wall Street site with hope but quickly became disillusioned. Leadership is hard but for a movement to promote itself as “leaderless” is sad and to hear people in the video clips argue the case for no leadership is torture.

On the other hand, the We are the 99 percent blog format is great. Each blog post is from a person describing their situation, how they are being screwed by the system. Read some of these stories. The format is simple, effective, hard hitting. The capitalist system is broken for a growing number.

This page from the Occupy Wall Street site outlines various “demands”, from Day 5, brainstormed like confetti without any analysis or overall direction. At the end we were told: “Our use of the one demand is a rhetorical device. This is NOT an official list of demands“. In the paragraph immediately preceding this obsfuscation we were further enlightened: “We speak as one”. I read this a few days ago. On revisiting the page now I notice that some of the contradiction has been removed.

This Spiked article, Is this Monty Python’s Occupy Wall Street?, lampoons the whole thing as ridiculous (subtitle: “The surreal protests in New York’s financial district will certainly leave the system shaking. With laughter”). And certainly some aspects of the protest are ridiculous. For example, the reluctance to use megaphones or microphones apparently because they represent hierarchy. People speak and those that hear them repeat their words so that those further away can hear. There is always a new creative twist to dysfunctional ultra democracy.

Following the 700 arrests on the Brooklyn Bridge there was more publicity and some trade unions, such as the Transport Workers Union, joined in the protest. Can “Occupy Wall Street” become a movement? Hippies at one extreme, disciplined trade unions at the other. But of course similar alliances were formed in the anti-Vietnam war protests. The protest is spreading.

The lack of correlation between The Tea Party / Republicans and Occupy Wall Street / Democrats is an interesting one. Given the underlying reality that The Democrats are in bed with Wall Street then they can’t really incorporate this protest into their agenda so it is an embarrassment to them. In one sense the protest represents an end to the dream that formerly iconic progressive Obama can fix America. (Why Occupy Wall Street and Democrats aren’t natural allies)

It is becoming obvious that the system is broken, that the crisis is only beginning. Hence, despite the non leadership this remains a protest that has attracted widespread support, including sympathy from the media. One Guardian reporter concluded:

This city is chocka-block with Job’s comforters who purport to share the protesters’ disgust with high finance and unjust wealth distribution – and then bash them for their lack of focus. But the protesters understand something they do not: there is no Mubarak to be toppled, a single source of injustice that can be stamped out if only we all band together. There is only a diffuse political and economic system in which they – and, if you believe the slogan, 99% of us – are net losers; and before it can be redressed, it must first be exposed
Occupy Wall Street: more than the sum of its demands

This is a beginning. The transition from no leadership as a virtue to the real need to figure out how the system is broken and whether it is even possible to fix it is underway.