Price Systems

How would prices be established in the absence of a capitalist market?  This question has come up in the Who Needs the Owners? But What’s the Alternaitive?” thread.  Arthur pointed out proper discussion of this issue could get quite technical and therefore  deserves a thread of its own.

The question of pricing arose via comments from Jad, who has been arguing in favor of “technocracy” as an alternative to capitalism.

(It’s worth perusing that other thread in order to see how that discussion evolved, before jumping in here.)

I’ll republish the comment from Jad which prompted Arhur’s call for a new thread, followed by Arthur’s reply, and we can take it from there.

________________________________________

Jad:

Hi Again, A bit more on technocracy, after having looked at “Bright Future”.

I agree that the technocrats are hopelessly Utopian in that they offer almost no practical steps regarding how their proposed system can be arrived at, but I think a similar criticism could be made of Bright Future. In any case, I don’t think small doses of crackpot, utopianist speculation now and then do any permanent damage, so I thought I would offer some comparisons between the resource allocation model in Bright Future (BFM) and the Energy Accounting Model (EAM) model of the technocrats. ( By the way, although I’ve only been seriously investigating Marx for a couple of years and was in nappies in ‘68 when some of you folks were stomping the streets, unfortunately I no longer consider myself very young!).

In relation to the determination of what is produced, for both BFM and EAM, this is dependent on consumer demand. To measure demand, BFM would rely on things such as past consumer behaviour, consumer surveys and demographic predictions, whilst EAM emphasizes the electronic recording of all purchases made. There is no difference of any substance here. Of course, both EAM and BFM recognise that supply will never be perfectly matched to demand, due to changes in consumer preferences.

In relation to individual’s consumption rights, under EAM all individuals would have the same consumption entitlement (which is based on the premise that without the waste of private ownership aggregate supply capacity would exceed aggregate demand), whereas under BFM, initially at least, consumption entitlements would depend on the amount and quality of work performed.

I agree that EAM, whilst more communistic, is unrealistically utopian here in not recognising that it would take time for people’s consciousness to change and that it is not just the technical aspects of the production system that are relevant.

Both EAM and BFM see factors such as prestige, enjoyment and intrinsic reward as becoming more important than material reward as a motivating factor for work. The major difference between EAM and BFM is in relation to the pricing of goods and services. Under EAM the cost and price of goods and services is determined by the energy required for their production. Under BFM allocation of resources to production units is dependent on demand for consumer goods, and consumer goods are exchanged for work. I presume that the price of consumer goods would therefore be dependent on the socially necessary labor time necessary for their production, in an application of the labour theory of value.

I think the EAM method and theory of pricing is superior to BFM for two interrelated reasons.

Firstly, as automation increases under socialism, direct human labor will become less and less significant as a source of wealth and the labor theory of value will become more and more inapplicable or irrelevant. As Marx says in the Grundrisse:

“As soon as labor in the direct form has ceased to be the great well-spring of wealth, labour time ceases, and must cease, to be its measure”.

For instance, under BFM how would the labour of a worker who presses buttons in a factory to produce 1000 articles a day be compared to another who does more intricate work in an emerging industry to produce 1 article a day? Alternatively, what would the price of the former article be in terms of the latter? The calculations involved in disentangling the relative contributions of fixed and variable capital and in converting amounts of skilled to unskilled labour would be horrendous, if not impossible. And the more automated society became, the more pointless would such calculations be. Secondly, under BFM pricing there is no intrinsic link between price and the availability of natural resources. When human labour ceases to be a major constraint on productivity and wealth due to automation, the constraint that will remain is nature. As the major natural resource used in creating wealth is energy, I therefore think Energy Accounting makes sense as a determinant of price in the post-capitalist age.

Arthur:

Ok David McMullen and I now have somebody else interested in discussing price systems!

I think it would be very useful to discuss what Jad describes as the BFM and EAM price systems quite separately from both other issues regarding technocracy and other issues regarding “what’s the alternative?”.That discussion could get quite technical.

I suggest Jad’s last post and this should be moved to a new topic on “Price Systems”.

There’s also been some mention of the Austrian school recently and von Mises etc is likely to come up in that topic.

Meanwhile I’ll just provide a link to the specific chapter 14 in Notebook VII of Marx’s Grundrisse in which Jad’s quote can be found in the second subsection:
Contradiction between the foundation of bourgeois production (value as measure) and its development. Machines etc.

12 Responses to “Price Systems”


  1. 1 Jad

    For anyone interested in learning more about the Energy Accounting Model, here are some technocracy related sites which are more interactive than the “official” site (no endorsement is implied!):Technocracy Discussion ForumNetwork Of European TechnocratsTechnocracy PortalCommunist Robot

  2. 2 Jad
  3. 3 Arthur

    I agree with both Lupin3’s complaint/request and Bill Kerr’s response in:

    http://strangetimes.lastsuperpower.net/?p=199#comment-3254

    Responding here because in my view the issues Lupin3 wants clarified and presumably many of the topics in Bill’s glossary, are very much about price systems. Understanding the differences between overproduction and underconsumption and falling rate of profit and disproportion theories of capitalist crisis requires first understanding such concepts as exchange value, use value, price, wage, surplus value, profit etc that are fundamentally to price systems.

    These concepts are in fact difficult. The first 3 chapters of volume 1 of Capital are generally skipped over and/or misunderstood. Then the rest of Volume 1 gets read as a propaganda denunciation of capitalism and Volumes 2 and 3 get ignored as boring or incomprehensible (and both “Volume 4” and the Grundrisse are quite beyond the pale).

    I believe an essential starting point for actually understanding
    the first 3 chapters is, as mentioned by Marx, his earlier work:

    http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/index.htm

    I agree that the article Lupin3 linked is much easier to understand than anything Marx wrote and something at least as clear is needed now.

    http://www.marxmail.org/faq/overproduction.htm

    I also think it contains much that is consistent with Marx and correct.

    Unfortunately overall it just doesn’t get it right.

    The mechanism described, “inexorable consequence, a continuously worsening problem under capitalism” explains too much. It necessarily implies a permanent and final crisis whereas the most obvious feature of capitalist crisis is that they follow periods of prosperity and then boom and are preludes to depression and then another cycle of prosperity.

    The connection with the long run tendency of the rate of profit to fall is directly opposite to that hinted at by Marx. Specifically overaccumulation is generally at the old lower organic composition of capital (based on the illusion that everything can just keep expanding at the same rate, ignoring the limited effective demand for final consumption) and recovery after the crash includes switching to more capital intensive (higher organic composition) investments changing the proportions between the departments producing means of production and final consumption, that tends towards a lower long run rate of profit.

    As demonstrated by the comments immediately following the article, (and Lupin3’s remarks) that analysis only encourages confusion between overproduction and underconsumption and leads naturally to claims that the crisis could be overcome by raising wages if not for the political resistance of the capitalists.

    In fact wages are generally at their highest at the peak of a boom and part of the capital that has to get devalued during a depression is variable capital, ie wages (a difficult process even with mass unemployment – there is also a tendency for real wages and the value of labor power to rise with deflating consumer prices and resistance to actual wage cuts).

    Turning to the passage from the Grundrisse, I cannot paraphrase it but would add these notes.

    1. The products of commodity production necessarily and essentially have two intertwined aspects. In order for all the products produced in any period to be successfully exchanged they have to actually be useful, not superfluous as products to be consumed by the buyers (whether the buyer is a producer buying inputs for expanded reproduction with a growing GNP or a “final” consumer). They also have to be worth exchanging to the producers who are only producing them for the purpose of realizing a larger sum of money than they laid out earlier for the inputs used in production. Only the unity of these two aspects makes a continuous cycle of social production mediated by commodity exchange for money actually possible.

    2. If products are produced (eg auto factories) in larger quantities than are actually useful by those who might buy them. They cease to actually be useful as use values and cease to actually exchangeable as exchange values. Or at any rate they cannot be exchanged at a rate that recovers the expected surplus value.

    Above is not an account of overproduction crisies but an indication of the complex conditions required for a market economy to actually function smoothly, and hence of the potential for crises.

    Some specific points against the article explaining overproduction.

    1. A minor point. It accurately repeats Marx in describing the mechanism by which competition drives individual capitalist firms to introduce more modern technology. This account obviously needs updating since the emergence of monopoly capitalism towards the end of the nineteenth century. The current mechanism is more a matter of firms seeking to capture extra profit by continuing to sell at previously prevailing prices while introducing new technology that reduces their costs. The greater ability to “capture” such transitory extra profits under monopoly accelerates technical development compared with “perfect competition” while at the same time monopoly retards developments that devalue existing capital (until competition breaks through with massive devaluation and concentration of capital in crisis).

    3. “Profit correlates to “surplus value” which is only actually generated through the exploitation of labour in production.

    The second half is true, and true of all social formations from slavery onwards. It cannot explain phenomena specific to capitalism such as cyclical crises.

    The first half is only true as an average, a tendency “in equilibrium” (leaving aside issues such as rent and interest). Crises are about disequilibrium with fluctuations above and below average.

    The point of the passage from Grundrisse is that there is only a NECESSARY unity between exchange value and use value that would imply a corresponding relation between prices and values and enable surplus value to be realised as profits.

    ACTUAL unity is quite another matter and sometimes has to be forcibly reasserted by crises.

    The most striking thing about the cycle is the wild gyrations in prices and profits that ought to make it blindingly obvious that they do NOT in fact ACTUALLY correspond to anything resembling “value”.

    Turning to price systems. It isn’t optional to have a price system in a complex modern society. Nor is there any way to avoid shortages or gluts if prices do not in fact balance supply and demand.

    The necessary unity between exchange value and use value cannot be achieved automatically by wishing for it. Failure to achieve it necessarily results in inefficiencies.

    An important difference is that the inevitable differences between ex ante plans and ex post realities of social production for the account of the social producers only results in inefficiencies, but not in crises. The fact that a different book value has to be assigned to the means of production allocated to an enterprise to correct earlier mistakes in valuation or prediction is merely a useful signal about the importance of those mistakes. It isn’t a destruction of wealth for any property owner or a transfer of wealth from one property owner to another accompanied by upheaval.

  4. 4 Jad

    I have found David Harvey’s online video lectures invaluable for coming to terms with Capital, including the difficult first three chapters: http://davidharvey.org/ I am taking my time getting through them and am about half way through the book and lectures.

    A lot of stuff on the U and R thread is over my head, but I suspect that as automation increases and the organic composition of capital increases while the rate of profit declines, that capitalists rely more on extracting ‘superprofits’ by selling commodities above their value by being first into the market.

    Hence, the constant drive to innovate and the dizzying, frenzied pace of life under advanced capitalism.

  5. 5 patrickm

    I would think it isn’t possible to have functioning international price systems for the 21C (ones that make real ‘musical’ sense) with currencies free to relatively inflate and deflate with the speed of a 24hr electronic market, without it seems to me something ‘solid-ish’ holding the real trading all together, in effect laying down the beat like the constant comforting drum of a working engine on a ship.

    The U.S. dollar was and perhaps still is this ‘solid’ comforting sound because the U.S. economy was a real engine, but after the last thirty years worth of ‘solutions’ that kept the old clunker going it is not going to continue to be solid. What’s more I doubt that the Messiah can either at the London meeting or anytime after re-establish a consensus that it is ‘just because there is no alternative.’ So the potential for dramatic change is in the air.

    The ‘Titanic’ metaphor has big limitations, but it’s what I think about when I see Kevin 07 running around demanding that the orders of the new Captain be obeyed. He wants the engine restarted and the ship steered on the same course at a lower speed. This U.S. solution (a little more ‘regulation’ of the credit) is no solution at all because the underlying problem is the capitalist crisis of overproduction that the credit expansion has pushed from view for so long.

    I think that Geithner and Bernanke are ‘winging it’ in this crisis big time and that the solutions proposed by the Obama administration will not work. Almost all of the U.S. players might well be signing up because they have nothing else they can do but IMV the same does not apply to the major international players.

    Owning class ruling-elites from around the world are now heading for the lifeboats, even while it looks to the main stream media like they are heading for a group hug in London. True there is no alternative ship but this one is clearly sinking and national lifeboats are all that remains of this metaphor.

    The slow drift into protectionism is back on the agenda and the U.S. and still loyal others like Rudd are holding up the 1930s experience to remind everybody of just how bad that alternative is. The other big elites agree with this but they are trying to come up with new methods of having it both ways while not being side tracked from their agenda of demanding change from the debtor country whose sub-prime implosion obviously started this financial crisis.

    When I heard Geithner say if ‘we’ followed PM Rudd’s advice we would all be in a better place aand then I heard Obama say further words of praise I knew that they were glad to still have Rudd. What that actually means is that Geithner has been getting nowhere with his major counterparts who are to meet in London and is desperate. The big ones are not following! IMV Obama will not change the mind’s of the leaders either!

    The Chinese for example are not buying anymore short term thinking that somehow they will continue to do well if they just continue to buy U.S. treasury bonds and prop up the world’s debtors. They have their own troubles thanks very much.

    The next ‘solid’ is unknown so, ‘while all that is solid melts into air’ before our eyes, we are obliged to recognize the current period as an interregnum.

    The industrialized world is in a full blown capitalist crisis that will get worse because of the reality that the ruling-elites lack confidence in the old solid and no new solid is available to replace it yet.

    Markets that have now come over all dead like have done so for a very good reason. The current process looks to me like;
    Step 1 buy assets
    Step 2 ?????
    Step 3 Make profit!

    The capitalist boom being over many assets currently lie idle. That is there is plenty of stuff for sale with no immediate buyers in sight and whole markets for various assets are stalled. Markets frozen because owners and managers of capital are unable to make a reasonable guess at the price these assets can be subsequently sold for at for a profit.

    The financial markets for very good reasons are in a full blown crisis that politicians are trying to deal with by telling people how serious it is while instilling confidence. People listen respectfully and even wish the new ‘president of the world’ the very best and want him to succeed but then the owners and managers of capital, go back to step 2 and the paralysis takes hold again the only ones that are not paralyzed are those that are using capital that are not theirs. Government officials are not frozen.

    The Chinese have just announced that they want some big changes on the currency front. It would seem to be because the Chinese sensibly believe that Chinese sellers endlessly loaning to Western consumers is an utterly dopey way for the world to work and so the jig is essentially up.

    It might well have occurred to them earlier but as the paper they were being handed looked like a good IOU at the time everybody could just shrug and get on with accumulating vast wealth notably held as U.S. treasury bonds.

    The Chinese have just dramatically slowed up on the purchasing of U.S. treasury bonds that are now being bought by the U.S. Federal Reserve. That’s inflationary.

    The G20 leaders are meeting with a clear dispute unresolved and it is IMV un-resolvable at this stage. More credit expansion by the government as the U.S. and Australia would have it, or more caution as the Europeans would have it? Let’s see how the first stimulus worked out before we go further I think China will side with ‘German’ Europe. As Arthur said ‘It isn’t optional to have a price system in a complex modern society.’

    IMV pushing has come to shoving and will show up in London even though they do their best to smile and show unity. There will need to be many more meetings.

  6. 6 patrickm

    I remember twenty odd years ago the founder of Sony declared he had no idea how international investing made sense while currencies swung so wildly. The Japanese were at the time becoming ‘fabulously wealthy’ as their share market soared in a giant bubble and as the Yen soared against the other important currencies. The Japanese were thus able to buy assets all over the world. But the next day the asset was worth less than the day before and Japanese exports became unaffordable. Swings and roundabouts it seems.

    The thing was they kept buying but eventually a new ‘balance’ emerged. They bought assets, for example, to vertically integrate into their existing world leading business structures. If there was to be a lowering of Japanese trade barriers then the Japanese intended to own as much of that trade as they could. National policy was kept in mind by the private sector monopoly capitalists as the Japanese through the Ministry of Finance (MoF) and Bank of Japan (BoJ) leadership continued a ‘none to subtle’ strengthening of their particular form of state capitalism.

    Australian beef exports to Japan could be grown on Japanese owned stations butchered at Japanese owned Abattoirs transported in Japanese ships and sold in Japanese owned shops. Or Japanese tourists could arrive in Japanese airlines with Japanese tour companies and stay at Japanese resorts etc. Very sharp, nationality based, practices in the fishing industry was (from my own experience) the order of the day and ‘free markets’ were a joke to be systematically twisted. Business was war went the saying. The era of globalization and the collapse of imperialism, was in full swing.

    I mention this because nothing has appeared to change in the thinking of this owning class that has for some decades been dealing with the fact that their country, the second largest economy in the world, has been quietly managing a deep ‘structural’ recession. A deep crisis of overproduction for their unique form of capitalism has been struggled with and managed with plenty of ‘pain’ shared around.

    This nation of hard working savers has grown older while their once world leading factories quietly aged in the homeland. But Japanese financed factories were often the newest and best in China and the U.S. etc Japanese owning elites need a new global system but the hardworking Japanese workers are often surplus to requirement and are experiencing unemployment and the destruction of their retirement nest eggs as a reward for a lifetime’s work. They only work there.

    The U.S. ruling-elite would not tolerate Japanese car manufacturers simply smashing the U.S. auto industry with imports from Japan, so green field sites in the U.S. could be and were bought so now they are all U.S. jobs! Now Japanese owners have the most advanced auto factories and are driving their competitors to the wall in that market. When the overproduction shit hit the fan GM, Chrysler and Ford were the ones begging to be subsidized, and if they are subsidized it can only be at the expense of others.

    When their share market bubble burst the world’s second largest economy came even more tightly under the direct guidance and discipline of the BoJ and the all powerful MoF to sort out its financial affairs. The Japanese owning classes were stuck with massive quantities of productive plant etc, that was at that time cutting edge tech but with high price labor.

    The asset buying would also do perverse things to the balance sheets of the Japanese owners and accountants would if I recall correctly, get around the problem with very odd revaluations. But there was always a national policy and discipline functioning that is quite foreign to current US capitalism.

    The same thing now applies to China; Germany; Korea; and in a different way Russia just to name the first that jump to mind. The mighty U.S. model of capitalism is now right out of favor.

    That solid thing to date was the U.S. dollar (it played a required role that no other currency could play) but I think confidence in the U.S., for the future is gone and that ‘toxic’ valuations are now the principle feature of the U.S. economy as U.S. negotiators are going into a G20 meeting.

    When valuation is in doubt (price) no deal is done.

    Price in U.S. dollars was formally the best way to deal with the problem of agreeing on price between different currencies but now people are more than just doubting this will remain the case and they are now saying that it ought not to remain the case.

    IMV the world’s substantial owning elites will not follow a self-deluded spendthrift in Barack Obama who has as a solution empty speeches that amounts to cliché, cliché – and ‘I’ve got a big stimulus!’

    Obama and Kevin -we are all Keynesians now- Rudd, will not (imv) get the result from the London meeting that they want. But if the implications of this were to become apparent an immediate worsening of the situation would result. The London meeting will thus have to be a massive fudge presented to the media while Obama gets told to think again. The communiqué will thus have to be first rate waffle.

    But sophisticated observers ought to be able to see through it and it won’t take long for various markets, even as they start to be (or are) being manipulated in the manner that the MoF and the BoJ did for years with the Japanese markets, to again head south as they are forced to return to step 2???.

  7. 7 Arthur

    I agree with patrickm that US government fiscal and monetary policy makers are currently “just winging it” ie they dont actually have an analysis or policy yet. This is natural and probably unavoidable in a a fluid situation – and we certainly aren’t in a position to criticize it from our position of also not having an analysis or policy.

    Part of the confusion is that both their declaratory policy and public discussion among opinion leaders assumes the measures being taken and debated are about preventing a long recession or depression as well as short term firefighting to avoid a financial meltdown. I suspect they are actually focussed mainly on short term firefighting because the fire isn’t actually out and could flare up at any moment (eg East European government bankruptcies and the Chinese banking system itself is said to have at least as much “non-performing assets”, ie “toxic assets” assets as the US, concealed by even more systemic corruption).

    My guess is that they will try to do whatever it takes to avoid immediate financial meltdown. Whether they succeed remains an open question. But if they succeed that wont prevent either a deep depression or a bigger financial crisis later on.

    Also agree that pressures for protectionism are mounting. Its a prisoners dilemma game where all participants know the benefits of cooperation but are individually better off if they dont cooperate. Outcome has to be non-cooperation or changing the game.

    In principle changing the game is a possibility. Given elite agreement that protectionism would be a disaster for all in a globalized economy they could agree on establishing a viable multi-polar replacement for US financial hegemony, including an international currency and central bank with internationalization as well as nationalization of the financial system.

    That would tend towards international state capitalism presiding over a global economy in deep and long term depression.

    Certainly nothing much will happen at G20 or other confidence building public relations events and whatever gets announced on April fool’s day can be taken in the traditional spirit. But that doesn’t necessarily imply no agreements will be hammered out privately among the actual financiers as events unfold over time.

    It just isn’t possible to make reasonable predictions in this situation so we should not get sucked into punditry.

    Instead should focus on the basics eg from the Communist Manifesto:

    The Communists are distinguished from the other working-class parties by this only: 1. In the national struggles of the proletarians of the different countries, they point out and bring to the front the common interests of the entire proletariat, independently of all nationality. 2. In the various stages of development which the struggle of the working class against the bourgeoisie has to pass through, they always and everywhere represent the interests of the movement as a whole.

    The Communists, therefore, are on the one hand, practically, the most advanced and resolute section of the working-class parties of every country, that section which pushes forward all others; on the other hand, theoretically, they have over the great mass of the proletariat the advantage of clearly understanding the line of march, the conditions, and the ultimate general results of the proletarian movement.

    The immediate aim of the Communists is the same as that of all other proletarian parties: formation of the proletariat into a class, overthrow of the bourgeois supremacy, conquest of political power by the proletariat.

    The theoretical conclusions of the Communists are in no way based on ideas or principles that have been invented, or discovered, by this or that would-be universal reformer.

    They merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes. The abolition of existing property relations is not at all a distinctive feature of communism.

    All property relations in the past have continually been subject to historical change consequent upon the change in historical conditions.

    The French Revolution, for example, abolished feudal property in favour of bourgeois property.

    The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and appropriating products, that is based on class antagonisms, on the exploitation of the many by the few.

    In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property.

    Both points 1 and 2 imply a policy of opposing protectionism.

    The general direction has to be that pointed out in chapter 3 of Socialism: Utopian and Scientific – concentration of capital towards state capitalism.

    But, the transformation — either into joint-stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces. In the joint-stock companies and trusts, this is obvious. And the modern State, again, is only the organization that bourgeois society takes on in order to support the external conditions of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists. The modern state, no matter what its form, is essentially a capitalist machine — the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is, rather, brought to a head. But, brought to a head, it topples over. State-ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.

    This solution can only consist in the practical recognition of the social nature of the modern forces of production, and therefore in the harmonizing with the socialized character of the means of production. And this can only come about by society openly and directly taking possession of the productive forces which have outgrown all control, except that of society as a whole. The social character of the means of production and of the products today reacts against the producers, periodically disrupts all production and exchange, acts only like a law of Nature working blindly, forcibly, destructively. But,with the taking over by society of the productive forces, the social character of the means of production and of the products will be utilized by the producers with a perfect understanding of its nature, and instead of being a source of disturbance and periodical collapse, will become the most powerful lever of production itself.

    Active social forces work exactly like natural forces: blindly, forcibly, destructively, so long as we do not understand, and reckon with, them. But, when once we understand them, when once we grasp their action, their direction, their effects, it depends only upon ourselves to subject them more and more to our own will, and, by means of them, to reach our own ends. And this holds quite especially of the mighty productive forces of today. As long as we obstinately refuse to understand the nature and the character of these social means of action — and this understanding goes against the grain of the capitalist mode of production, and its defenders — so long these forces are at work in spite of us, in opposition to us, so long they master us, as we have shown above in detail.

    But when once their nature is understood, they can, in the hand working together, be transformed from master demons into willing servants. The difference is as that between the destructive force of electricity in the lightning in the storm, and electricity under command in the telegraph and the voltaic arc; the difference between a conflagration, and fire working in the service of man. With this recognition, at last, of the real nature of the productive forces of today, the social anarchy of production gives place to a social regulation of production upon a definite plan, according to the needs of the community and of each individual. Then the capitalist mode of appropriation, in which the product enslaves first the producer, and then the appropriator, is replaced by the mode of appropriation of the products that is based upon the nature of the modern means of production; upon the one hand, direct social appropriation, as means to the maintenance and extension of production — on the other, direct individual appropriation, as means of subsistence and of enjoyment.

    Whilst the capitalist mode of production more and more completely transforms the great majority of the population into proletarians, it creates the power which, under penalty of its own destruction, is forced to accomplish this revolution. Whilst it forces on more and more of the transformation of the vast means of production, already socialized, into State property, it shows itself the way to accomplishing this revolution. The proletariat seizes political power and turns the means of production into State property.

    So as well as supporting nationalization and internationalization of banking and finance we should also insist on the state directly taking over large scale industry and accepting responsibility for getting it moving again. They can only do so on the basis of “compensation” so the system is more clearly perceived as constrained only by the non-necessity of paying dividends and interest to purely parasitic rentiers who can be more easily expropriated when workers actually exercise their power to take control of the state.

    Although there has been no support for widespread nationalization for decades, such developments are a necessity for the system itself and will

  8. 8 Arthur

    [accidentally clicked submit – last sentence should continue]

    Although there has been no support for widespread nationalization for decades, such developments are a necessity for the system itself and will inevitably be taken by governments and become a focus of public debate.

    I also think we should highlight the immense amount of work still to be done in modernizing the developing world and vast scope for producing means of production and infrastructure there as well as preventing mass starvation.

    Likewise the absurd under investment in R&D despite science having itself already become the most productive force, responsible for ongoing growth in GDP but constrained by also devaluing existing capital.

    “Emergency” measures to soak up unemployment in education programs can lay the basis for the future massive expansion in R&D made possible by eliminating the purely capitalist necessity to preserve and increase the value of existing capital stock.

  9. 9 Arthur

    This passage from the Manifesto should also be pondered:

    We have seen above, that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy.

    The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.

    Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionising the mode of production.

    In short, the Communists everywhere support every revolutionary movement against the existing social and political order of things.

    In all these movements, they bring to the front, as the leading question in each, the property question, no matter what its degree of development at the time.

    Finally, they labour everywhere for the union and agreement of the democratic parties of all countries.

    The Communists disdain to conceal their views and aims. They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions. Let the ruling classes tremble at a Communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win.
    Working Men of All Countries, Unite!

    The “property question” is universally ignored by all the pseudolefts, who also naturally also oppose revolutionary changes in the existing order of the middle east (not to mention eastern europe, china, cuba etc) and also oppose union and agreement of all democratic parties.

    Economic crisis inevitably brings the property question to the front. Only measures that include despotic inroads into property rights can work and all such measures are untenable without going further.

    eg Liquidating the financial crisis requires reallocation of housing resources and finance which requires replacement of super funds by pensions etc etc.

    The ruling class will seek to mobilize the better off workers to defend their “savings” and “super” along with the wealth of the rulers. It is critical therefore to develop concrete proposals for demonstrating overwhelming majority will gain from expropriation and neutralize those who gain least or lose a bit from joining the reaction by demonstrating their livelihoods will be secure and they will have more chance of a place in the new society than of clinging on to the old.

    That implies concrete proposals for pricing rent, rates and purchase of homes and land, and also for savings.

    This is stuff workers already have to deal with so should be easier to get a grip on it than on how industry is financed. But its serious hard work side by side with self help measures for people losing jobs and homes or under pressure at work.

  10. 10 Glenn Poston

    At what point will inflation stop, or will it. This equation goes good with alot of thins realvant. t2=percent growth time / 70. I wish I knew the professors name which i heard this. Lift ticket in colorado cost 5.00 in 20s now its 40.00 or something like that so what will it be in 2020. Well its safe to say looks like it will never stop. Economics sounds easy but it sounds pretty stupid. Maybe its just me. I’ll probally sit on my death bed wishing i didnt waste my last breath talking about things in which we the peole have no say so. i fell as if im six years old taking orders from mom and dad. That I thoght was the whole reason that I could not wait until i got older. To actually choose my own distiny. In a sense I am but something holds me back. I just cant put my finger on it,without it slipping out of my hand as fast as i get it. Is it my own greed multiplied by everyones elses what about me aproach. Oh let us not forget Carl Sagan’s idea of how man should be. Again who really cares. Imean i can talk about it. Truly what can i do about it. If something sounds to good to be true. Is it really. I just……who cares right. Do as I say,not as I do. Daddy always told me that. Analogy, Im standing in quick sand the more I struggle the further i sink.

  11. 11 poton

    Jad, i would like to thank you for showing us technocracy. On may 31st at 3 p.m. listen to http://blogtalkradio.com/ the zeitgeist movement. Jacque and Roxane will be on.

  12. 12 Bill Kerr

    debateaCommunist thread on reddit: Communism is compatible with a price based market economy
    http://www.reddit.com/r/DebateaCommunist/comments/o5ixu/topic_communism_is_compatible_with_a_pricebased/

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