Spain 1936-1937: Libertarian Socialism & Its Demise

[TheStatutoryApe]

The modern example that I can think of is institution of intellectual property rights. Since under capitalism, one must make profit, part of human knowledge is claimed as private property, limiting access to information which is so important for scientific and technological development of society. Such kind of contradictions, according to Marx will lead to the necessity of new kind of social organization that will resolve the contradictions of previous one.

I have some rather strong opinions on intellectual property rights and I would agree that it seems a sort of 'necessary evil' for a capitalistic model. I have no qualms with the idea of giving individuals temporary rights to the product of their intellectual labours, excepting most scientific and academic material (but this digresses into opinions on the place of academia in society where I am certainly very "socialist"), but the influence of corporatist self interest has unfortunately, in my opinion, perverted the purpose and intent of intellectual property laws. I have ranted on this at length in other threads and it would be another digression so I will not treat you to it here.
Suffice it to say that I am mostly in agreement on the potential detriment posed by the fiction of intellectual property.

If so, you maybe interested in Lewis Mumford's two volume series “Myth of the machine”, especially his first volume “Technics and Human Development”. He was a big fan of Neolithic society, that meant for him non-hierarchical democratic society for human needs. All societies after that (except maybe Greek polis and medieval craftsmen) he sees as mega-machines - machines that use humans as its components.

Thank you. I'll have to try to remember to look into it. There are so many good books to read and so little time. :-/

I see several problems in labour theory of value:
1)Assumption of perfect competition. In modern society perfect competition does not exists. Oligopolies , big governments, dual labour markets, wars – all have its influence.

I do not see "perfect competition" as a practical possibility, only an abstract guiding principle, and modern corporations have grossly unhinged any idea of "perfect competition". As noted in previous posts I am skeptical of the role of large publicly traded corporations in a stable model. I am considering the possibility that these corporations are an element in the evolution towards a more socialistic model but I am unsure of how to express this at the moment so I will leave it for now.

Now regarding capitalist thought that you have mention. I believe you are referring to a mainstream neoclassical economics (correct me if you meant something else). The problems with it and its “subjective value” are similar to the problems of labour theory of value.

I actually possesses only the very basics of formal education in economics. I am posing primarily my own ideas and interpretations based on my limited education and could not rightly source you on their provenance. It may create stumbling blocks in communicating ideas but I have faith that you can consider the ideas I express based on their own merit and that I can consider and understand yours.

1)Assumption of perfect competition, see above.
2)Value is utility that suppose to represent pleasure and pain. But it has even more problems than labor values. First, it is even difficult to think about units of pleasure and pain. Jevons, neoclassical economist, says: “A unit of pleasure or pain is even difficult to conceive.” Second, how does one measure human desire? Neoclassical economists understand this, that is why they switched to 'revealed preferences'. Since one cannot measure utility, neoclassical economists assume that the fact that people buy something means it has utility, and amount of utility is measured by how much money one spends on it. This is what Robinson says:

“Utility is the quality in commodities that makes individuals want to buy them, and the fact that individuals want to buy commodities shows that they have utility.”

So one can see that this is a circular argument. We suppose to explain prices from utility, not the other way around, to calculate utility from prices and then using it to explain prices!

3)Anyone who ever opened book in introductory economics would see the supply and demand curves. Mainstream neoclassical economists assume supply and demand function are independent of each other. But in reality they are not. This is from the book of Bichler and Nitzan “Capital as Power”:
“The basic reason is that any change in the supply price of a given commodity redistributes income between buyers and sellers of that commodity. This redistribution in turns shifts the respective demand curves of those buyers and sellers. And since different buyers have different preferences, the redistribution of income works to alter the overall market demand curve. This simple logic implies that movement along the supply curve are accompanied by shifts of the demand curve – leading not to one, but multiple equilibria.
Neoclassical economists solve this problem by making two assumptions. First, they ask us to forget about the liberal ideal of individual freedom and think of all consumers as drones, each one identical to the 'representative consumer' and therefore possessing the same set of preferences. Second, they ask us to farther believe that these drones have a mental fix, such that the proportion of their income spent on various items is independent of their income level (a consumer spending 30 per cent on food when her annual income is $10,000 will also spend 30 per cent on food when her income is $10 million). These two assumptions – known as the Sonnendhein-Mantel-Debreu conditions – indeed imply that redistribution of consumer income leaves the market demand curve unchanged. But since these assumptions are patently impossible, they also imply that neoclassical consumer theory has practically nothing to say about any real world situation.”
So much for “subjectivity of the value”.
4)Equilibrium. Because of the problems above, given the market price, the question, is this price in equilibrium ,as far as I know, no one was able to answer.
5)Supply & Demand and price setting. It is not clear that supply and demand directly govern price setting. Gardner Means in his work notes that many prices are rigid, he calls them “administrative prices”.

So you can see that there is problem with notion value generally.

I am not sure that I see this as any problem with the subjective interpretation of value. The fact that any model attempting to define or measure value, even as a dynamic factor, is ultimately flawed and weak would only seem to reinforce a subjective interpretation.

 

[Galteeth]

I have some rather strong opinions on intellectual property rights and I would agree that it seems a sort of 'necessary evil' for a capitalistic model. I have no qualms with the idea of giving individuals temporary rights to the product of their intellectual labours, excepting most scientific and academic material (but this digresses into opinions on the place of academia in society where I am certainly very "socialist"), but the influence of corporatist self interest has unfortunately, in my opinion, perverted the purpose and intent of intellectual property laws. I have ranted on this at length in other threads and it would be another digression so I will not treat you to it here.
Suffice it to say that I am mostly in agreement on the potential detriment posed by the fiction of intellectual property.


Thank you. I'll have to try to remember to look into it. There are so many good books to read and so little time. :-/


I do not see "perfect competition" as a practical possibility, only an abstract guiding principle, and modern corporations have grossly unhinged any idea of "perfect competition". As noted in previous posts I am skeptical of the role of large publicly traded corporations in a stable model. I am considering the possibility that these corporations are an element in the evolution towards a more socialistic model but I am unsure of how to express this at the moment so I will leave it for now.


I actually possesses only the very basics of formal education in economics. I am posing primarily my own ideas and interpretations based on my limited education and could not rightly source you on their provenance. It may create stumbling blocks in communicating ideas but I have faith that you can consider the ideas I express based on their own merit and that I can consider and understand yours.


I am not sure that I see this as any problem with the subjective interpretation of value. The fact that any model attempting to define or measure value, even as a dynamic factor, is ultimately flawed and weak would only seem to reinforce a subjective interpretation.

I think this is the inherent flaw in communism as a theory, or in other words, the value of the idea of private property. Even given a communism where everyone had idealistic motivations, there is still the problem of resource distribution and utilization. On what basis does the collective make these decisions? Most communists or collectivists would say via democratic means, but it seems unlikely that even ideally motivated people have the intelligence to structure organization in such a way. An economy is very similar to an eco-system; it is evolved, not designed. Although price and supply/demand are imperfect tools, they create a dynamic interaction which creates the "spontaneous order" of the society/societies. No doubt such is imperfect, but at current levels of intelligence, it does not seem likely that a central decision maker (even if such is the sum product of a series of collectives) could do better. The collective process lacks the dynamic mechanism that is necessary.

 

[vici10]

I do not see "perfect competition" as a practical possibility, only an abstract guiding principle, and modern corporations have grossly unhinged any idea of "perfect competition". As noted in previous posts I am skeptical of the role of large publicly traded corporations in a stable model. I am considering the possibility that these corporations are an element in the evolution towards a more socialistic model but I am unsure of how to express this at the moment so I will leave it for now.

The idea that corporations are an element in the evolution towards a more socialistic model is bizarre one for me. Personally, it more looks like in the direction of Jack's London “Iron Heel” of Oligarchy than any kind of socialist model.

I am not sure that I see this as any problem with the subjective interpretation of value. The fact that any model attempting to define or measure value, even as a dynamic factor, is ultimately flawed and weak would only seem to reinforce a subjective interpretation.

I thought you meant neoclassical utility, since it suppose to represent human desire and perception and hence inherently subjective. But it appears that you meant something else. I went in some length
in my previous post about neoclassical utility, because it is a basic block of modern economics. And economics became modern day religion. It is built on foundation of sand, but plays very big ideological role. Its ideas penetrate everywhere. And it is quite clear whose interests it tries to justify. It is not an accident that University of Chicago ( home for free-marketers such as Milton Friedman and co.) was founded on donation of Rockefeller. Rockefeller later said that it was his best investment that he ever made.

Anyway, I am in agreement that value cannot be measured, even if there is such a thing. And the fact that capitalists constantly do it, we do see prices, capitalists do accumulate, they measure each others capital very precisely, makes one wonder, what do they actually measure, what do they accumulate and what is capital?

The question is "Are they forced to work?" If people are capable of producing their own cloth and clothing and find that the value of their own labour without the factory and machines is greater than the potential value of the product of their labour in the factory then the value of the factory and its machines are necessarily lacking. I may create a factory with machines for producing cloth and clothing but if it is slow, consumes great resources, and the product is of marginal quality then there is no reason for anyone to work for me or purchase/consume my product. If, however, the people see greater value in my factory's production of cloth and clothing than in their own efforts its value increases.

While land itself may be finite its potential value is not necessarily finite.

I see there is a bit of confusion here. Marxists do not argue against use of machines, quite the opposite way around. Automation reduces amount of hard labour, which is a good thing, reduces time that people need to spend for satisfying their basic needs and can devote rest of the time for more creative endeavor and self-fulfillment, not under capitalism though.

The problem is not that resources are finite. There are probably enough resources for satisfying everyone's need. The problem is who controls these resources. Even if resources were infinite but they would be under control of small group then this small group can dictate any conditions to the rest of population and workers are forced to work under those conditions. Creation of any kind of material product demands access to materials.

Theoretically, if person creates some machine by his own labor and shares it with workers, who share their labour with creator of the machine and produce something useful and divide it under everyone's agreement, then I do not see anything bad in it. This is an idea behind workers cooperatives. The problem that it is not how it works in reality. The question is who has more power and who can change market conditions in one's favor. In reality corporation is much more powerful than a single worker. That is why he has to work under its conditions. To match workers power with power of corporation they try to organize trade unions. Capitalists of course hate it, because it reduces their power. And history of England, US and other capitalist countries full of such kind of struggle.

P.S Regarding workers cooperatives, do you know former and present laws regarding them in different states? I heard from one guy who tried to organize workers cooperatives in US, that in some states cooperatives cannot be organized legally. Although it was some time ago, and I do not know how true it is.

 

[Galteeth]

P.S Regarding workers cooperatives, do you know former and present laws regarding them in different states? I heard from one guy who tried to organize workers cooperatives in US, that in some states cooperatives cannot be organized legally. Although it was some time ago, and I do not know how true it is.

In a sense. Not so much that they are illegal per ce, as that the regulations are designed towards more conventional ownership schemes, making it very difficult to organize in such a way and meet all the regulatory requirements.

 

[Al68]

The modern example that I can think of is institution of intellectual property rights. Since under capitalism, one must make profit, part of human knowledge is claimed as private property, limiting access to information which is so important for scientific and technological development of society.

This is simply not true, the opposite is true. IP rights are given in exchange for making the information public knowledge. Making the details of inventions public knowledge, along with providing incentives to invent, is greatly beneficial to society. The same goes for copyrights. This is an argument for, not against, IP rights.

Since values should explain prices, I do not see any evidence that this is how capitalists set up their prices.

Because it's not. Capitalists don't "set up prices" at all in a free market. "Market price" is determined by supply and demand, and is the price that strikes the perfect balance between profit margin per item and quantity sold to maximize overall profit. It isn't decided by sellers at all. Sellers set their prices by trying to estimate the actual market price because they want to maximize their profit.

So there are problems with labour theory of values and if it is not true that products are exchanged according to labour values, then the claim that capitalists are rich because of their labour is also collapses.

Except that no one is making such claims the way you state them.

A common theme in the writings of Marx (which I am familiar with) is a gross misrepresentation of capitalism and a pretense of complete ignorance of classical liberalism.

From the very start, Marx presents ignorant and delusional versions of reality, along with grossly faulty logic, and a complete disregard for the individual personhood of humans, and then builds upon those foundations.

Simply put, not a single person on this forum is advocating anything like the version of capitalism described by Marx, so arguing against it is a fruitless strawman argument.

 

[Unity1888]

I apologize if this has already been answered/discussed on this thread, but I didn't see anything while skimming over the replys.

Who exactly enforces the democratically elected decisions in libertarian socialism/anarchism. For instance, say everyone in Country X votes that all land is considered free and that no one can lay claim to it. Then a few years down the road, I decide that I really like a particular spot and want to stay there without letting anyone else have access to it. I decide that I will still participate in society and that something like shunning won't bother me. How does the society of Country X gain the access of their resource (the land) back?

 

[Al68]

I apologize if this has already been answered/discussed on this thread, but I didn't see anything while skimming over the replys.

Who exactly enforces the democratically elected decisions in libertarian socialism/anarchism. For instance, say everyone in Country X votes that all land is considered free and that no one can lay claim to it. Then a few years down the road, I decide that I really like a particular spot and want to stay there without letting anyone else have access to it. I decide that I will still participate in society and that something like shunning won't bother me. How does the society of Country X gain the access of their resource (the land) back?

They would have to "lay claim" to it, then use force to defend that claim. Imagine that.

 

[Galteeth]

They would have to "lay claim" to it, then use force to defend that claim. Imagine that.

Any anarchist society is contingent on all members being anarchists.

 

[TheStatutoryApe]

I apologize if this has already been answered/discussed on this thread, but I didn't see anything while skimming over the replys.

Who exactly enforces the democratically elected decisions in libertarian socialism/anarchism. For instance, say everyone in Country X votes that all land is considered free and that no one can lay claim to it. Then a few years down the road, I decide that I really like a particular spot and want to stay there without letting anyone else have access to it. I decide that I will still participate in society and that something like shunning won't bother me. How does the society of Country X gain the access of their resource (the land) back?

People need a place to live, do their work, and what have you. Unless you tried to take it from someone else why would anyone care if you decided that you like this certain spot and wanted to live there?


And sorry, I forgot about this thread. I will maybe try to come back to it a bit later.

 

[Al68]

Any anarchist society is contingent on all members being anarchists.

That would depend on how "anarchist society" is defined, but certainly a socialist society cannot exist unless every member is voluntarily socialist, or if force is against those who don't "volunteer".

That's the beauty of classical liberalism. Every economic transaction is mutually voluntary. Force is not used to coerce or prohibit transactions. This is true of "socialist" transactions as well as "capitalist" transactions. Classical liberalism, or libertarianism, doesn't tell people whether to engage in socialist or capitalist transactions, each person is free to do either or both as they choose.

 

[TheStatutoryApe]

The idea that corporations are an element in the evolution towards a more socialistic model is bizarre one for me. Personally, it more looks like in the direction of Jack's London “Iron Heel” of Oligarchy than any kind of socialist model.

Admittedly I have not thought of this idea much since I originally posted it. Basically corporatism seems a capitalist form of hierarchical collectivization. It is capable of bringing a massive amount of resources under its collective command and strategically wielding them to a greater benefit. Most large corporations are publicly traded (so multiple citizens 'own' part of the corporation) and most often give workers stock options so that the workers may be part 'owners' of the corporation as well. It would seem to be a step in the direction of socialism but I have yet to conceive of how the transition would occur short of government take over, which isn't unknown in more 'socialist' societies.

I thought you meant neoclassical utility, since it suppose to represent human desire and perception and hence inherently subjective. But it appears that you meant something else. I went in some length
in my previous post about neoclassical utility, because it is a basic block of modern economics. And economics became modern day religion. It is built on foundation of sand, but plays very big ideological role. Its ideas penetrate everywhere. And it is quite clear whose interests it tries to justify. It is not an accident that University of Chicago ( home for free-marketers such as Milton Friedman and co.) was founded on donation of Rockefeller. Rockefeller later said that it was his best investment that he ever made.

Anyway, I am in agreement that value cannot be measured, even if there is such a thing. And the fact that capitalists constantly do it, we do see prices, capitalists do accumulate, they measure each others capital very precisely, makes one wonder, what do they actually measure, what do they accumulate and what is capital?

I think that utilitarianism makes a good case for value but it would seem too abstract and philosophical to be of practical economic use. It perhaps generates some principles for considering how to perceive value but provides no objective means of assessing it.

I see there is a bit of confusion here. Marxists do not argue against use of machines, quite the opposite way around. Automation reduces amount of hard labour, which is a good thing, reduces time that people need to spend for satisfying their basic needs and can devote rest of the time for more creative endeavor and self-fulfillment, not under capitalism though.

The problem is not that resources are finite. There are probably enough resources for satisfying everyone's need. The problem is who controls these resources. Even if resources were infinite but they would be under control of small group then this small group can dictate any conditions to the rest of population and workers are forced to work under those conditions. Creation of any kind of material product demands access to materials.

Theoretically, if person creates some machine by his own labor and shares it with workers, who share their labour with creator of the machine and produce something useful and divide it under everyone's agreement, then I do not see anything bad in it. This is an idea behind workers cooperatives. The problem that it is not how it works in reality. The question is who has more power and who can change market conditions in one's favor. In reality corporation is much more powerful than a single worker. That is why he has to work under its conditions. To match workers power with power of corporation they try to organize trade unions. Capitalists of course hate it, because it reduces their power. And history of England, US and other capitalist countries full of such kind of struggle.

I am not making an argument that Marxism takes issue with machines. I am attempting to point out the continued 'value' of the machines. The value of the factory would seem to be that it amplifies the value of the work of the individual labourers. In embracing machines and factories Marxism would seem to recognize this fact but for some reason it seems to maintain that the value comes from the workers who use the machines and the labour that went into those machines is apparently 'dead'.

P.S Regarding workers cooperatives, do you know former and present laws regarding them in different states? I heard from one guy who tried to organize workers cooperatives in US, that in some states cooperatives cannot be organized legally. Although it was some time ago, and I do not know how true it is.

I believe that state laws may limit the types of contracts that one may enter into. One should be capable of creating a corporation that works on the same basic principles as a workers cooperative but the contracts would have to be modeled after a capitalist form. I would imagine that there are issues of legal rights and liabilities that can not simply be reassigned through contract.

 

[Galteeth]

That would depend on how "anarchist society" is defined, but certainly a socialist society cannot exist unless every member is voluntarily socialist, or if force is against those who don't "volunteer".

That's the beauty of classical liberalism. Every economic transaction is mutually voluntary. Force is not used to coerce or prohibit transactions. This is true of "socialist" transactions as well as "capitalist" transactions. Classical liberalism, or libertarianism, doesn't tell people whether to engage in socialist or capitalist transactions, each person is free to do either or both as they choose.

The left anarchist criticism would be that voluntary exchanges under capitalism are not truly voluntary since property laws and other legal advantages given to the ownership class result in an injust property distribution that people would not "agree to" unless the private property rights were defendable by force.

 

[vici10]

Admittedly I have not thought of this idea much since I originally posted it. Basically corporatism seems a capitalist form of hierarchical collectivization. It is capable of bringing a massive amount of resources under its collective command and strategically wielding them to a greater benefit. Most large corporations are publicly traded (so multiple citizens 'own' part of the corporation) and most often give workers stock options so that the workers may be part 'owners' of the corporation as well. It would seem to be a step in the direction of socialism but I have yet to conceive of how the transition would occur short of government take over, which isn't unknown in more 'socialist' societies.

There is a grain of truth in what you are saying. It is a fact that Soviet union took US corporations as an example for its industrialization. That is why Soviet Union is considered by some not really socialist. For some people it would sound strange,but the Electrification (GOELRO) and the first five year plan happened with a big involvement of General Electric (The official agreement between GE and USSR was in 1928, the official recognition of Soviet union by USA happened later in 1933) . And it is not strange. A poor country, devastated by WWI and Civil War, with 90% of the population being illiterate peasants and big foreign debt, with foreign intervention armies on its territory,including USA, did not stand a chance to make successful industrialization alone. They needed technology, they needed engineers and skilled workers that they did not have and they needed peace. General Electric provided a huge loan to the USSR, and sent its engineers, its turbines. Soviets borrowed not only machines but also a method of organization, capitalist method of organization of industry. It seems to me the five year plan structure itself was meant to coincide with the five year loan and credit agreements the Soviets had with foreign investors including GE, IGE, RCA, International Harvester etc. And Soviet Union had to pay these loans with the only thing that peasant country had, grain. This is partly a reason for starvation that happened in some areas such as Ukraine for example. Gerard Swope, the president of GE at that time, in his autobiography said that Stalin made payments punctiliously and that this deal was the most profitable that GE ever had.

So, Soviets borrowed not only machines but also a capitalist method of industrial organization.
Technology is not neutral, in the sense that one can organize production in different ways. One can have an assembly line where every worker performs one simple repetitive task most of his waking hours, his humanity is reduced to that of a robot, even if he would get good wages.
Or it can be organized for the benefit of worker and society, similar to GE pilot project or Volvo project of workers self-management in late 60s, beginning 70s, both were abandon probably because they provided to much power to workers and hence cannot exist in capitalist society. I believe MassInertia provided a link to workers self-management in GE pilot project earlier in the thread.

You noticed correctly that big collective organization “is capable of bringing a massive amount of resources under its collective command and strategically wielding them to a greater benefit.” Jack London in its “Iron Heel” noticed it as well, that is why he considered small business owners fighting corporations as being “machine breakers” similar to English Luddites.
But you should note that being a big collective organizations is not enough for being socialist. Collectives existed before. Two things are important in such collective organization for being socialist.
Workers self-management and control over industrial process. Saying that workers have stock options in modern corporations does not prove much since it does not give workers real control over how and what should be produced. Another thing is a purpose of production. In capitalist society production is just a side effect of accumulation for accumulation sake. If accumulation would be possible without production it would be so. One can see it in financialization of capitalism and recent events.
In socialism, production serves two purposes: satisfying people's needs, hence they should have a say in what should be produced, second is in satisfying human desire for creativity, Veblen calls it “the instinct of craftsmanship”, that is why workers should have a say, how they work is organized and should have an access to mean of production.

I think that utilitarianism makes a good case for value but it would seem too abstract and philosophical to be of practical economic use. It perhaps generates some principles for considering how to perceive value but provides no objective means of assessing it.

I am not making an argument that Marxism takes issue with machines. I am attempting to point out the continued 'value' of the machines. The value of the factory would seem to be that it amplifies the value of the work of the individual labourers. In embracing machines and factories Marxism would seem to recognize this fact but for some reason it seems to maintain that the value comes from the workers who use the machines and the labour that went into those machines is apparently 'dead'.

It seems you talk a lot about 'value' without proper defining the term. It is a source of a misunderstanding and confusion. Neoclassical understanding of value as utility that is measured in utils is logically impossible and contradictory as I have shown before. Marx's labour values also have problems. If you talk about practical use, i.e. prices, then the question is what do they reflect, what do they measure, what is capital and what do capitalist accumulate?
And again why do you think that Marx thinks less of the workers labour that produces machine than a worker using a machine? Both produce a product that embeds the workers labour and hence it is 'dead ' by definition since the product is not a living being.

I believe that state laws may limit the types of contracts that one may enter into. One should be capable of creating a corporation that works on the same basic principles as a workers cooperative but the contracts would have to be modeled after a capitalist form. I would imagine that there are issues of legal rights and liabilities that can not simply be reassigned through contract.

Ok, I see. So the state is biased toward workers forms of organization, kind of discrimination. It is not surprising, considering whose interest the state serves.

 

[mheslep]

[...] And it is not strange. A poor country, devastated by WWI and Civil War, with 90% of the population being illiterate peasants and big foreign debt, with foreign intervention armies on its territory,including USA,

The US WWI expeditionary force into Siberia was hardly 'army' sized, and I see no evidence the USA interfered with Russia's recovery (unlike the Japanese, etc)

American Expeditionary Force (Siberia)
In July 1918 President Woodrow Wilson decided to intervene in Russia and ordered eight thousand AEF troops to Siberia to protect U.S supplies along the Trans-Siberian railroad. Chaos and uncertainty prevailed in Russia at this time. The Russian tsar had been overthrown by the revolution led by Alexander Kerensky in February-March 1917 (eventually to be ousted by the Bolsheviks in November 1917), raising Wilson's hopes for democratizing Russia and spreading capitalism. After the fall of the tsarist government the U.S. recognized the Russian Provisional Government, providing it with money and aid. Railroad officers, skilled technicians under the Russian Railway Service Corps, and railway equipment were sent to assist in operating the Trans-Siberian railroad. Control of the railroad was extremely important because it served as the only major logistics and communication line across Russia. The eastern port of Vladivostok held more than $1 billion of Inventory of the United States Army supplies and material that had been sent to Russia as support for that country's eventually unsuccessful war effort. [...]
Commander of the U.S. forces in Siberia was Major General William S. Graves, a training officer in California. Graves' orders (an aide memoire drafted by Wilson) instructed him to facilitate the safe exit of the forty-thousand-man Czech Legion from Russia, guard the nearly $1 billion worth of American military equipment stored at Validvostok and Murmansk, and help the Russians organize their new government.
The first troops arrrived in Vladisvostok in August 1918 and Graves followed in September. Japan also sent seventy thousand troops to protect supplies and communication and destablize the Russian government as a means to acquire Siberian and Manchurian economic resources. Conditions were extremely chaotic along the railroad as a result of the Russian civil war. An agreement to operate the railroad was reached by the Allied governments participating in the Siberian intervention in November 1918. It was implemented in April 1919. Three countries, Japan, the United States and China, were given a sector of the railroad to guard.

The end of World War I in November 1918 did not mean homecoming for the AEF forces in Siberia. Wilson wanted to pursue a "wait and see" policy until the Paris peace conference concluded before deciding which of several Russian governments to recognize and whether to withdraw the AEF from Vladisvostok. The AEF spent two years in Siberia hampered by larger Japanese and Cossack forces, unclear and incomplete instructions, and Graves' own commitment to strict political neutrality.

http://www.oac.cdlib.org/data/13030/p2/tf7489n8p2/files/tf7489n8p2.pdf

 

[TheStatutoryApe]

It seems you talk a lot about 'value' without proper defining the term. It is a source of a misunderstanding and confusion. Neoclassical understanding of value as utility that is measured in utils is logically impossible and contradictory as I have shown before. Marx's labour values also have problems. If you talk about practical use, i.e. prices, then the question is what do they reflect, what do they measure, what is capital and what do capitalist accumulate?

As I said earlier I believe that value is subjective. As such it is not a thing that can really be easily defined and quantified, if it can be at all.
A price theoretically reflects the 'value' of the product. In reality it is probably about as reflective of the value of a product as the odometer reading in someone's vehicle is reflective of the trip they just took.

And again why do you think that Marx thinks less of the workers labour that produces machine than a worker using a machine? Both produce a product that embeds the workers labour and hence it is 'dead ' by definition since the product is not a living being.

I saw a value judgement here

According to Marx "dead labor" by itself cannot produce wealth. There is always a need for "live labor" to use the means of production to create wealth. But the result product is usually mostly owned by owner of means of production ("dead labor").

The idea that the means of production, or "dead labour", does not create wealth. It would seem to place a higher value on the labour of the worker who uses the means of production than those who produced them.
If all "dead labour" means is that the product of labour is not a living being then it would seem a poor and hardly useful term. My interpretation was that "dead labour" means the labour has no further value, it is no longer doing anything. It would seem a more logical interpretation than pointing out the obvious fact that 'things' are not living beings.

Ok, I see. So the state is biased toward workers forms of organization, kind of discrimination. It is not surprising, considering whose interest the state serves.

While there may be states with biased laws I do not think there is a general bias. It is a legal issue. By common law all contracts must meet certain guidelines. Certain types of contracts must also meet further guidelines. These guidelines are typically set for the purpose of equitable disposition of any contract. If you have no worry about being sued then they are pretty much irrelevant, you can do what ever you want.

 

[vici10]

According to Marx "dead labor" by itself cannot produce wealth. There is always a need for "live labor" to use the means of production to create wealth. But the result product is usually mostly owned by owner of means of production ("dead labor").

The idea that the means of production, or "dead labour", does not create wealth. It would seem to place a higher value on the labour of the worker who uses the means of production than those who produced them.
If all "dead labour" means is that the product of labour is not a living being then it would seem a poor and hardly useful term. My interpretation was that "dead labour" means the labour has no further value, it is no longer doing anything. It would seem a more logical interpretation than pointing out the obvious fact that 'things' are not living beings.

Maybe the confusion is coming from the word 'wealth'. And probably it is a wrong word in my sentence “ 'dead' labour by itself cannot produce wealth”. I did not want to use word 'value' since we did not give a definition to it, but word 'wealth' is also ambiguous. What Marx meant is that capitalist cannot accumulate without 'live labour'. I shall explain it a bit more.
According to Marx's theory of value, value of the product consists of three parts: the value of the part of the machine that machine passes to the product (depreciation of machine), the value of raw materials and the value of human labour (one can think of it as depreciation of labour in human being). So, there is not much difference between machine and human being, both pass value on to its final product. Why does then Marx separate between 'dead labour' and 'living labour'? Because according to Marx the capitalist does not have much control over prices of machines and raw materials, since under perfect competition, all capitalists pay the same market price for them. The only way to accumulate for a capitalist is not to pay the full price for labour. Only in this case he can accumulate. So capitalist forces workers to work longer hours than it is needed for their 'reproduction' (to live). So this is of course power struggle between workers and capitalists. As long as capitalists have more power than workers, capitalists can accumulate. In this point in the book Marx gets into the history of workers struggle for shorter working day and why capitalists opposed it. In my opinion, labour theory does make sense from this point of view.

In socialism there will be no accumulation (in the capitalist sense), but this does not mean that the new products will not be created or machines will not produce useful things.
'Dead labour' also has a meaning in Marx's theory of alienation. In short, the worker is alienated from the object he produces because it is owned and disposed of by another, the capitalist. But I will not go into it.

I think that utilitarianism makes a good case for value...

Why do you think so? Just because utilitarianism is a standard dogma? Why can it not be another thing such as power for example? Maybe by prices and market capitalization capitalists really measure their power between themselves. For example, monopolist or oligopolist can charge higher prices, hence prices may reflect the amount of their power. Also, since power is a relative thing what is important is not “maximization of profit”, since it is difficult to calculate , but beating the 'market average'.
Also capitalists constantly discount in their prices the power of the state, wars, elections and other political events. Government bonds for example may reflect the power of the state and are used by capitalists as a benchmark.
Another thing, what do capitalist accumulate? If one thinks that money is just an equivalent to an amount of different goods that one can buy, to satisfy one's desires, then one should wonder why the rich capitalists accumulate so much money. No one can consume alone or with their families such kind of amount. Maybe it is more correct to think that money and prices reflect power and that power is what is being accumulated?

 

[Al68]

The left anarchist criticism would be that voluntary exchanges under capitalism are not truly voluntary since property laws and other legal advantages given to the ownership class...

Classical liberalism, unlike some historical forms of capitalism, doesn't involve any legal advantages being given to anyone. And property rights aren't the product of legislation.

And I'm using the word "voluntary" to mean the absence of force and fraud, not the absence of circumstances that make a specific exchange to someone's advantage. Obviously, every exchange is to the advantage of both parties involved, or it simply doesn't occur in the absence of force.

 

[Al68]

P.S Regarding workers cooperatives, do you know former and present laws regarding them in different states? I heard from one guy who tried to organize workers cooperatives in US, that in some states cooperatives cannot be organized legally. Although it was some time ago, and I do not know how true it is.

I've never heard of any laws that placed any restrictions on employee ownership or control of any company or organization in the U.S. That "one guy's" claim sounds like complete crackpottery to me. It doesn't even make any sense.

 

[Galteeth]

Classical liberalism, unlike some historical forms of capitalism, doesn't involve any legal advantages being given to anyone. And property rights aren't the product of legislation.

And I'm using the word "voluntary" to mean the absence of force and fraud, not the absence of circumstances that make a specific exchange to someone's advantage. Obviously, every exchange is to the advantage of both parties involved, or it simply doesn't occur in the absence of force.

A very specific example that a left anarchist might use would be that of someone who inherits a great deal of land and then charges large fees for its use. The force comes into play in the sense that if someone found this agreement unacepptable, and tried to use the land without full payment, they would be subject to the use of force to remove them.

 

[Al68]

A very specific example that a left anarchist might use would be that of someone who inherits a great deal of land and then charges large fees for its use. The force comes into play in the sense that if someone found this agreement unacepptable, and tried to use the land without full payment, they would be subject to the use of force to remove them.

Are you referring to force being used to remove someone for simple trespassing? That's a different issue, and I don't think that's what you meant.

In your example, there is no agreement between the parties to be found "acceptable" or not by anyone. There is presumably only an offer by each party, each unacceptable to the other, and no agreement made. This is the nature of liberty, each party has 100% power over the agreements actually made.

As far as someone claiming ownership of most or all unused land, that just isn't how property rights work in classical liberalism. Property rights are only recognized for land that is currently (within some time period) being used. Unused land that is claimed must be used within a reasonable period of time, or someone else is free to claim it. This is how property rights worked in common law historically, and in the U.S.

 

[TheStatutoryApe]

According to Marx's theory of value, value of the product consists of three parts: the value of the part of the machine that machine passes to the product (depreciation of machine), the value of raw materials and the value of human labour (one can think of it as depreciation of labour in human being). So, there is not much difference between machine and human being, both pass value on to its final product. Why does then Marx separate between 'dead labour' and 'living labour'? Because according to Marx the capitalist does not have much control over prices of machines and raw materials, since under perfect competition, all capitalists pay the same market price for them. The only way to accumulate for a capitalist is not to pay the full price for labour. Only in this case he can accumulate. So capitalist forces workers to work longer hours than it is needed for their 'reproduction' (to live). So this is of course power struggle between workers and capitalists. As long as capitalists have more power than workers, capitalists can accumulate. In this point in the book Marx gets into the history of workers struggle for shorter working day and why capitalists opposed it. In my opinion, labour theory does make sense from this point of view.

There are a few problems with this. Part of it is that there are middlemen being injected into the scenario; people who built the factory but do not own it, people who built the machines but do not own them, ect. It is much easier to convince a proletariat that they are being used and exploited when you are pointing to a fat cat at the top of a several tiered hierarchy, to well separate them from the worker, who supposedly does nothing but make a profit. The vast majority of business owners though are people who worked hard and built their business themselves. Point to a man who put together his own business, works 60+ hours a week, and risked much of his own livelihood over the last several years to make his business successful so that he can give jobs to people like those you are talking to and the argument that this man is simply stealing from the value of their labour to turn a profit is suddenly going to look a lot less convincing.

So the argument seems to be that "the capitalist" merely steals profits from their workers because they do not really do anything of much value themselves. This based on the idea that the value of the product comes from the resources, the machines, and the workers and that's it. If this were the case though, as I already pointed out in another post, then the workers have no reason to work for the owner of the means of production. All they need to do is acquire resources and tools for doing the same work on their own and the value of the factory and machines owned by "the capitalist" becomes nil. Since we have people working in factories though it would seem to be the case that "the capitalist" is adding value to their work and the profits taken from the business by the owner are, in what ever fashion, earned and not stolen from the workers who are obviously making more money working for the factory than they would have on their own.

There is also an issue with the idea that machines require much in the way of "live labour" to produce wealth though I would not expect Marx to have been all that visionary in the area of robotics and automation. An issue with worker controlled factories is that it very likely would wind up holding back progress since progress in technology for manufacturing means less need for labour which would mean fewer jobs and it would not be in the best interest of the workers to put themselves out of jobs.

Why do you think so? Just because utilitarianism is a standard dogma? Why can it not be another thing such as power for example? Maybe by prices and market capitalization capitalists really measure their power between themselves. For example, monopolist or oligopolist can charge higher prices, hence prices may reflect the amount of their power. Also, since power is a relative thing what is important is not “maximization of profit”, since it is difficult to calculate , but beating the 'market average'.
Also capitalists constantly discount in their prices the power of the state, wars, elections and other political events. Government bonds for example may reflect the power of the state and are used by capitalists as a benchmark.
Another thing, what do capitalist accumulate? If one thinks that money is just an equivalent to an amount of different goods that one can buy, to satisfy one's desires, then one should wonder why the rich capitalists accumulate so much money. No one can consume alone or with their families such kind of amount. Maybe it is more correct to think that money and prices reflect power and that power is what is being accumulated?

I see money simply as a means to an end. People acquire money to obtain those things that they need to survive and beyond that to obtain things that increase their 'happiness' and general 'fulfillment'. You might call that "power", the power to obtain those things which one needs and desires. In this way utilitarianism seems a proper philosophy of value. A thing is as valuable as people perceive its utility or ability to increase their sense of well being. In this way any price tag is merely a guess at how 'valuable' a thing is since its value will differ from person to person. I once purchased over one hundred dollars in used books, over thirty of them. I received months worth of enjoyment from them. They were apparently far more valuable to me than to other people since they were all rather low priced.

 

[Galteeth]

There are a few problems with this. Part of it is that there are middlemen being injected into the scenario; people who built the factory but do not own it, people who built the machines but do not own them, ect. It is much easier to convince a proletariat that they are being used and exploited when you are pointing to a fat cat at the top of a several tiered hierarchy, to well separate them from the worker, who supposedly does nothing but make a profit. The vast majority of business owners though are people who worked hard and built their business themselves. Point to a man who put together his own business, works 60+ hours a week, and risked much of his own livelihood over the last several years to make his business successful so that he can give jobs to people like those you are talking to and the argument that this man is simply stealing from the value of their labour to turn a profit is suddenly going to look a lot less convincing.

So the argument seems to be that "the capitalist" merely steals profits from their workers because they do not really do anything of much value themselves. This based on the idea that the value of the product comes from the resources, the machines, and the workers and that's it. If this were the case though, as I already pointed out in another post, then the workers have no reason to work for the owner of the means of production. All they need to do is acquire resources and tools for doing the same work on their own and the value of the factory and machines owned by "the capitalist" becomes nil. Since we have people working in factories though it would seem to be the case that "the capitalist" is adding value to their work and the profits taken from the business by the owner are, in what ever fashion, earned and not stolen from the workers who are obviously making more money working for the factory than they would have on their own.

There is also an issue with the idea that machines require much in the way of "live labour" to produce wealth though I would not expect Marx to have been all that visionary in the area of robotics and automation. An issue with worker controlled factories is that it very likely would wind up holding back progress since progress in technology for manufacturing means less need for labour which would mean fewer jobs and it would not be in the best interest of the workers to put themselves out of jobs.


I see money simply as a means to an end. People acquire money to obtain those things that they need to survive and beyond that to obtain things that increase their 'happiness' and general 'fulfillment'. You might call that "power", the power to obtain those things which one needs and desires. In this way utilitarianism seems a proper philosophy of value. A thing is as valuable as people perceive its utility or ability to increase their sense of well being. In this way any price tag is merely a guess at how 'valuable' a thing is since its value will differ from person to person. I once purchased over one hundred dollars in used books, over thirty of them. I received months worth of enjoyment from them. They were apparently far more valuable to me than to other people since they were all rather low priced.

The basic point though is correct. At a certain point, the accumulation of wealth is driven by a desire to compete with others. People judge their wealth not by an absolute standard, but relatively against the wealth of others. A poor, modern American might look like a king to a darkages peasant.

 

[Galteeth]

Are you referring to force being used to remove someone for simple trespassing? That's a different issue, and I don't think that's what you meant.

In your example, there is no agreement between the parties to be found "acceptable" or not by anyone. There is presumably only an offer by each party, each unacceptable to the other, and no agreement made. This is the nature of liberty, each party has 100% power over the agreements actually made.

As far as someone claiming ownership of most or all unused land, that just isn't how property rights work in classical liberalism. Property rights are only recognized for land that is currently (within some time period) being used. Unused land that is claimed must be used within a reasonable period of time, or someone else is free to claim it. This is how property rights worked in common law historically, and in the U.S.

Well, left anarchists use the marxist critique of capitalism, but come to slightly different conclusions. Note I am not supporting the argument per ce, just explaining it. The other conversation about marxist theory of value is directly relevant to your question. The basic idea has to do with why the classic liberalist conception of property leads to the abuses of capitalism, and since the left anarchists use marx to formulate their answer, you'll have to look that up, because I am not familiar enough to adequately summarize the position.

 

[TheStatutoryApe]

The basic point though is correct. At a certain point, the accumulation of wealth is driven by a desire to compete with others. People judge their wealth not by an absolute standard, but relatively against the wealth of others. A poor, modern American might look like a king to a darkages peasant.

I do not disagree that the sheer desire of competition is a motivating factor for persons when evaluating their relative fulfillment but even then the money itself is not the object, it is only a medium. Things certainly are not the only objects of desire. Even a certain occupation may be an object of ones desire which, if it is a job with limited demand, requires competition and necessarily denies the same opportunity to others if one succeeds in obtaining it.

 

[Al68]

The basic idea has to do with why the classic liberalist conception of property...

Humans claiming property isn't a "conception" of classical liberalism, but an observation. The concept of claiming property has been around as long as humans have. It's something that humans do naturally, ie in the absence of political power.

And Marx wasn't against this concept of property, in fact he advocated the same concept of claiming property, except the property is claimed by the state, or the equivalent of the state, instead of by the person who's labor created or improved the property.

This concept of people claiming the product of someone else's labor as their property has also been around for a long time. It's used to be called theft and slavery. Now it's called socialism.

 

[vici10]

The vast majority of business owners though are people who worked hard and built their business themselves. Point to a man who put together his own business, works 60+ hours a week, and risked much of his own livelihood over the last several years to make his business successful so that he can give jobs to people like those you are talking to and the argument that this man is simply stealing from the value of their labour to turn a profit is suddenly going to look a lot less convincing.

What you are saying is maybe very true for small business, but it is wrong for the big corporations. It is true that vast majority of businesses in USA are small, but they are not those who control the most of the wealth, big corporations do. Big corporations can be approximated by those in Fortune 500. And the tendency to concentration, the wealth increase of big corporations relatively to average firms is growing, meaning their power over society is increasing.

The graph below shows the increase of wealth of big corporations relatively to average one. The graph is taken from the book of Bichler and Nitzan “Capital As Power”, page 320.
http://bnarchives.yorku.ca/259/"

The explanation of Bichler and Nitzan how they calculated the graph is as following. The ratio – Differential Capitalization is computed in three steps: first, by calculating total capitalization of top 100 firms divided 100, then by calculating the average capitalization of a listed company, and finally by dividing the first result by another. It seems that from 1950's to 2000 the ratio had fivefold increase. The problem of such calculation is that it only includes listed companies, and excludes non-listed companies. Majority of non-listed companies are relatively small in size and hence Differential Capitalization underestimates the power of big companies. To get around this, Differential Net Profit is calculated that is based on net profit and that includes all corporations listed and unlisted. The computational steps are similar. From 1950's to 2000 Differential Net profit has a nineteen-fold increase. In 1950s the typical big corporation 1667 times more powerful than average US firm. In 2000 this ratio had risen to 31325.


To make things clear, I should notice that Marx separated between money that is used for consumption and between money that its only use is to bring more money, i.e accumulation. Marx called capital only money that are used in accumulation for accumulation sake. In this light small business owners can be seen as similar to managers in big corporations, which are salaried workers. Marx thought that small business owners will join proletariat since they will be squeezed by big corporations.

So the argument seems to be that "the capitalist" merely steals profits from their workers because they do not really do anything of much value themselves.

Yes, the counter question is what is so useful done by absentee owners, such as shareholders and investors that in majority cases do not have any clue about industry that they are investing in. Their only work is just shifting money which is mostly done by hired managers anyway. About separation between business and industry I recommend a book by Thorstein Veblen “Absentee Ownership, Business Enterprise in Recent Times: The case of America”. And since it is Physics Forums, for some it maybe interesting to read Veblen's “The Engineers and the Price System”, http://socserv.mcmaster.ca/econ/ugcm/3ll3/veblen/Engineers.pdf"

Since we have people working in factories though it would seem to be the case that "the capitalist" is adding value to their work and the profits taken from the business by the owner are, in what ever fashion, earned and not stolen from the workers who are obviously making more money working for the factory than they would have on their own.

So, you say that the fact that workers work in the factories proves that capitalist do not steals from them. This argument does not seem very logical to me. In the same way one can argue that since peasants in the Middle Ages tolerated landlords, the landlords did not steal anything from the peasants but opposite to it. By allowing peasants to use their land for a tribute, landlords “create jobs” and peasants would not die from hunger, and therefore would be much better off. The only thing is unclear what kind of labour did landlords perform.
Personally, I think, in both cases it is a power relationship in the societies, in the Middle Ages between landlords and peasants, in capitalism between workers and capitalists.

There is also an issue with the idea that machines require much in the way of "live labour" to produce wealth though I would not expect Marx to have been all that visionary in the area of robotics and automation. An issue with worker controlled factories is that it very likely would wind up holding back progress since progress in technology for manufacturing means less need for labour which would mean fewer jobs and it would not be in the best interest of the workers to put themselves out of jobs.

It is interesting that you noticed it. According to Marx, the increased automation will reduce need for human labour and hence will inevitably reduce capitalist profit. Marx called it a tendency of “rate of profit to fall”. And according to Marx, this will lead to collapse of capitalism, since profitability and development of production forces will contradict to each other.

As large-scale industry advances, the creation of real wealth depends less on the

labour time and quantity of labour expended than on the power of the

instrumentalities set in motion during the labour time. . . . Human labour then no

longer appears enclosed in the process of production – man rather relates himself to

the process of production as supervisor and regulator. . . . He stands outside of the

process of production instead of being the principal agent in the process of

production. In this transformation, the great pillar of production and wealth is no

longer the immediate labour performed by man himself, nor his labour time, but the

appropriation of his own universal productivity, i.e. his knowledge and his mastery of

nature through his societal existence – in one word, the development of the societal

individual. . . . As soon as human labour, in its immediate form, has ceased to be the

great source of wealth, labour time will cease, and must of necessity cease to be the

measure of wealth, and the exchange value must of necessity cease to be the measure

of use value. . . . The mode of production which rests on the exchange value

thus collapses.
(Karl Marx, Grundrisse der Kritik der politischen Oekonomie
)

It seems the only way to keep capitalism going will be “strategic sabotage” (in Veblen terms) of industry by capitalists, not allowing productive forces to develop fully. For many, it will sound counter-intuitive, but it is not really so and if I will have more time later, I may explain it more, although Marx's quote above give some explanation.

Regarding the issue that workers will hold development of technological progress since they will be out of jobs, there are several issues here to consider. First, the idea that people need “jobs” to live is recently new idea that exists only within capitalism. And yes, you did notice the paradox of capitalism, by producing more, by introducing automation that suppose benefit humanity, workers deprive themselves of livelihood. That is why the whole idea of market, that workers have to sell themselves, goes in opposition to benefit of society. Personally, I see workers control over factory as a transitional step from capitalism to communism.

I see money simply as a means to an end. People acquire money to obtain those things that they need to survive and beyond that to obtain things that increase their 'happiness' and general 'fulfillment'. You might call that "power", the power to obtain those things which one needs and desires. In this way utilitarianism seems a proper philosophy of value. A thing is as valuable as people perceive its utility or ability to increase their sense of well being. In this way any price tag is merely a guess at how 'valuable' a thing is since its value will differ from person to person. I once purchased over one hundred dollars in used books, over thirty of them. I received months worth of enjoyment from them. They were apparently far more valuable to me than to other people since they were all rather low priced.

Most people think about money as you think, i.e. as means of satisfying their everyday desires such as food, home, hobbies etc. But capitalists see money differently, for them this is the means to measure each others power. Otherwise it would be difficult to explain why they pursue endless process of accumulation. No one can consume such amount of money.

 

[Al68]

So, you say that the fact that workers work in the factories proves that capitalist do not steals from them.

No, the fact that the word "steal" does not mean "paying a mutually agreed upon price" proves it.

The word "steal" does, however mean to take involuntarily, which is what Marx advocated doing with the product of each individual's labor.

 

[TheStatutoryApe]

What you are saying is maybe very true for small business, but it is wrong for the big corporations. It is true that vast majority of businesses in USA are small, but they are not those who control the most of the wealth, big corporations do. Big corporations can be approximated by those in Fortune 500. And the tendency to concentration, the wealth increase of big corporations relatively to average firms is growing, meaning their power over society is increasing.

This is an issue of corporatism. You, and/or Marx, seem to conflate corporatism and capitalism to the point that you seem to refer only to owners of corporations as capitalists. I would think the fact that the average business run in most any capitalist system is a small business should be evidence enough that capitalism is not corporatism.

To make things clear, I should notice that Marx separated between money that is used for consumption and between money that its only use is to bring more money, i.e accumulation. Marx called capital only money that are used in accumulation for accumulation sake. In this light small business owners can be seen as similar to managers in big corporations, which are salaried workers. Marx thought that small business owners will join proletariat since they will be squeezed by big corporations.

Small business owners are capitalists. They like owning and running their own businesses. They do not like corporatism, you are correct, but that does not mean that they will be happy to give up their businesses to 'the people'. Small business owners, and even workers, like to "accumulate" because they can then use that accumulation of wealth to retire and no longer have to work or they can pass on that wealth to their children to allow them greater advantage than they would have had otherwise.

Yes, the counter question is what is so useful done by absentee owners, such as shareholders and investors that in majority cases do not have any clue about industry that they are investing in. Their only work is just shifting money which is mostly done by hired managers anyway. About separation between business and industry I recommend a book by Thorstein Veblen “Absentee Ownership, Business Enterprise in Recent Times: The case of America”. And since it is Physics Forums, for some it maybe interesting to read Veblen's “The Engineers and the Price System”, http://socserv.mcmaster.ca/econ/ugcm/3ll3/veblen/Engineers.pdf"

Again, conflating corporatism and capitalism. You only want to talk about share holders and investors it seems. You want to push the goal posts so far back that we are only discussing that very small percentage of fat cat investors who 'do nothing' and profit off the backs of their workers. I can say that employers train their workers to do better work but you will only say that "the capitalist" hires people to do this. I will say that the business owner looks for and hires the [hopefully] best people for a job and you will say that "the capitalist" merely hires people to do this for them. No matter what I say that a business owner does to add value to their business and hence the work of their employees all you will do is say that "the capitalist" just hires someone to do that for them. All I am left with eventually is that these people invest the money to make these things happen and you will ask why they should be the ones to control that capital and why they should be "accumulating wealth" off of the work of others. But you have only gotten to this point by refusing to discuss the fact that this does not reflect the vast majority of "capitalists" but only a small percentage. And of course you will argue that this small percentage are in control of the majority of "capital" but this is still arguing against a system by ignoring the vast majority of it so you can compound the evils of that small fraction. I can certainly argue against communism by pointing to the various "communist" regimes that history has seen but its a poor argument and so I do not do it.

So, you say that the fact that workers work in the factories proves that capitalist do not steals from them. This argument does not seem very logical to me. In the same way one can argue that since peasants in the Middle Ages tolerated landlords, the landlords did not steal anything from the peasants but opposite to it. By allowing peasants to use their land for a tribute, landlords “create jobs” and peasants would not die from hunger, and therefore would be much better off. The only thing is unclear what kind of labour did landlords perform.
Personally, I think, in both cases it is a power relationship in the societies, in the Middle Ages between landlords and peasants, in capitalism between workers and capitalists.

You ignore the whole logic of my argument and somehow make capitalism out to be akin to feudalism. In a modern capitalistic system individuals are all capable of owning their own land and owning 'means of production'. If a person takes a job they are not indentured. They may leave their job and go to another. A person can even choose to work for themselves or be completely autonomous, growing their own food and such, if they so choose. So, like I said, the only reason for a worker to work for a factory or other business is that it is more profitable for them to do so then their alternatives. Perhaps they possesses few skills, perhaps they do not yet own land or even desire to own their own land, and the factory provides them with more than they can provide themselves without the factory.

It is interesting that you noticed it. According to Marx, the increased automation will reduce need for human labour and hence will inevitably reduce capitalist profit. Marx called it a tendency of “rate of profit to fall”. And according to Marx, this will lead to collapse of capitalism, since profitability and development of production forces will contradict to each other.

It seems the only way to keep capitalism going will be “strategic sabotage” (in Veblen terms) of industry by capitalists, not allowing productive forces to develop fully. For many, it will sound counter-intuitive, but it is not really so and if I will have more time later, I may explain it more, although Marx's quote above give some explanation.

This does not seem very likely as there are plenty of fruitful and productive businesses that have reduced the need for labour. If you mean that a person will no longer have the ability to garner wealth and so will no longer be a consumer, dropping profits for the businesses that no longer need them that also seems flawed. There will always be positions available requiring human labour and various means of making money. All that is potentially sabotaged is the ability for workers to find a job and stay with it for the rest of their lives. People need to be flexible and educated and not feel as though their job (which may well be outmoded) is their right.

Regarding the issue that workers will hold development of technological progress since they will be out of jobs, there are several issues here to consider. First, the idea that people need “jobs” to live is recently new idea that exists only within capitalism. And yes, you did notice the paradox of capitalism, by producing more, by introducing automation that suppose benefit humanity, workers deprive themselves of livelihood. That is why the whole idea of market, that workers have to sell themselves, goes in opposition to benefit of society. Personally, I see workers control over factory as a transitional step from capitalism to communism.

People have always had to work whether it be for someone else or for their own selves. People will continue to need to work. Even if the future brings a situation where people can have all of their needs met without needing to hold a job most people will need an occupation to be fulfilled as individuals. If people are not capable of owning property and accumulating resources to this end I am unsure how else it would be accomplished.

Most people think about money as you think, i.e. as means of satisfying their everyday desires such as food, home, hobbies etc. But capitalists see money differently, for them this is the means to measure each others power. Otherwise it would be difficult to explain why they pursue endless process of accumulation. No one can consume such amount of money.

Its not so different as you think. As I noted in a previous post this seems just another means to fulfillment as many people find fulfillment in competition and achieving successively greater accomplishments which tends to result in the accumulation of wealth. The wealth itself is not the goal, only a medium. As well this wealth is obviously not "consumed" but neither is it stuffed away under a mattress doing nothing. For these people continue "competing" and "achieving" that wealth needs to be invested, it needs to be doing something. So it is put back into the economy to the benefit of the "score card" as well as others in the form of loans for homes, loans for businesses, jobs, ect. Many of these people also donate to charity or start their own charitable foundations.

 

[vici10]

TheStatutoryApe,

in order not to go into cycles, I would like to comment generally on points that you have made in your posts. If I misrepresent your views please correct me. It seems that you think that small business owners are capitalists and ideal society would be small businesses competing with each other in perfect competition. Government role would be preventing big corporations coming into existence, since it seems that you are aware of the fact that perfect competition leads to monopolies, because the natural goal of any business is to eliminate competition and become a monopoly in its market. You may say that majority of small businesses do not want to become monopolists and their goal is to make end meets or just live comfortable life offering a reasonable service to community. It may very well be so, but logic of the market is not so obliging to such intentions. Either they would have to expand or they would be constantly threatened by whose who will and eventually will have to stop to be small businesses.

On another issue, you seem to have a patronizing view of those who work for wages. That the fact that some people are workers says something on their inability to manage and hence they cannot collectively manage themselves and have control over their work, hence they need 'entrepreneurs' and democracy at workplace is impossible. I hope I misunderstood you, otherwise it is similar to claims of slave owners and aristocrats that slaves or peasants cannot manage themselves and need more educated , better human beings such as owners and aristocrats to manage them.

I think it is important to look at reasons why corporations have appeared. Was it inevitable for preservation of capitalism?

The rise of corporation related to the emergence of large-scale industry, but it maybe that the corporation emerged not to enable large-scale industry but to prevent it from becoming excessively productive. The main argument is as following: until population is expanding faster than productivity, the main concern of individual firms is just satisfying soaring demands. So sales can grow at maximum potential without threatening profitability. With improving technological advances productivity grows together with slowing of population growth. So industrial system become 'inordinately productive'. If competitive production will continue at previous level industry will generate much more output that it can be profitably sold, bringing prices down and business enterprise to halt. At this point there is a need for a modern business corporation. The need to reduce competition suicidal for profitability, one would need to decrease number of firms and the most effective method was merger. This is how modern corporations appeared and saved capitalism from collapse.

One can look in history of US to see illustration to it. Between 1790 and Civil War population growth at average was 3% annually. Between Civil War to turn of the century it fell to 2.2%. Between turn of the century and great Depression it fell to 1.6%. In the same time labour productivity increased. In manufacturing, the growth of output per employee rose from less than 0.5% in 1860 to over 3% in the turn of the century. Volatility was quite high before modern corporation established fully and integrated with government. You can look at graph previously in the thread, https://www.physicsforums.com/showthread.php?t=393906&page=8", discussion between mheslep and me.
To reduce such a danger during 1890s US saw widespread incorporation of business firms, rapid growth of stock and bond markets and expanding use of credit as a form of ownership. Firms were turned into corporations and investors into absentee owners. However excess capacity is still remains a problem and seems to be a permanent problem of capitalism and hence industrial limitation remains a business necessity. You can see several waves of merges that followed, the last one is on the global scale.
So you can see, that corporation was historically necessary for survival of capitalism. Without it the centrifugal forces of competition and excess capacity would probably killed capitalism long time ago. That is why Marx and other socialist thinkers, concentrated their analysis of capitalism on a corporation as a central building block.

Now returning back to modern small businesses. I tried to find statistics regarding how long small businesses survive. For US, it seems to be difficult to find correct statistics, there are several that contradict to each other. The answer from U.S Department of Commerce, the Census Bureau is
https://ask.census.gov/cgi-bin/askcensus.cfg/php/enduser/std_adp.php?p_faqid=7059&p_sid=ATtIH61k&p_created=1211995268&p_sp=cF9zcmNoPSZwX3NvcnRfYnk9JnBfZ3JpZHNvcnQ9JnBfcm93X2NudD0mcF9wcm9kcz0mcF9jYXRzPSZwX3B2PSZwX2N2PSZwX3BhZ2U9MQ!&p_search_text=Business%20Dynamics%20Statistics"

The Census Bureau does not have statistics on business failure rates. Our Statistics of U.S. Businesses (SUSB) program provides annual data for all U.S. paid employer firms, including establishment (single physical location) births and deaths.

In the past, Dun & Bradstreet produced Business Start and Failure reports. These were discontinued in early 2000's.

I have problem to find original Dun & Bradstreet report but found citation from this site. I do not know how accurately it quotes the report, but it what I got

http://www.moyak.com/papers/small-business-statistics.html"

According to Dun & Bradstreet reports, "Businesses with fewer than 20 employees have only a 37% chance of surviving four years (of business) and only a 9% chance of surviving 10 years." Restaurants only have a 20% chance of surviving 2 years. Of these failed business, only 10% of them close involuntarily due to bankruptcy and the remaining 90% close because the business was not successful, did not provide the level of income desired or was too much work for their efforts. The old adage, "People don't plan to fail, they fail to plan" certainly holds true when it comes to small business success. The failure rate for new businesses seems to be around 70% to 80% in the first year and only about half of those who survive the first year will remain in business the next five years.

I do not know how accurate Dun & Bradstreet reports are and why they were being discontinued. Hence I looked at Statistics Canada:

In any case small businesses are under stress of competition, many of them fail. Since people have to borrow money to open business, they are indebted to the banks. In recent times especially, many relay on credit cards. Banks usually like to be sure that business will be successful and will grow, hence there is pressure from banks on small businesses to grow.
A lot of small-business job growth has also been driven by the decision of big businesses to outsource many tasks that they used to do in-house. So jobs haven’t been so much “destroyed” and “created” as they have been shifted from one company to another. So being dependent on banks for loans and corporations for jobs, small-business owners are not really independent and free working for themselves. The are servants for corporations, in many cases even worse off than salaried managers at corporations, since they have to take risks.

Despite all these things, many Americans still believe in the myth of small-business owner, free-market, autonomous consumer, hate government intervention and are longing for old good days of equal opportunity. Such kind of believes serve capitalist class very well for preservation of the capitalist system.

 

[Galteeth]

TheStatutoryApe,

in order not to go into cycles, I would like to comment generally on points that you have made in your posts. If I misrepresent your views please correct me. It seems that you think that small business owners are capitalists and ideal society would be small businesses competing with each other in perfect competition. Government role would be preventing big corporations coming into existence, since it seems that you are aware of the fact that perfect competition leads to monopolies, because the natural goal of any business is to eliminate competition and become a monopoly in its market. You may say that majority of small businesses do not want to become monopolists and their goal is to make end meets or just live comfortable life offering a reasonable service to community. It may very well be so, but logic of the market is not so obliging to such intentions. Either they would have to expand or they would be constantly threatened by whose who will and eventually will have to stop to be small businesses.

On another issue, you seem to have a patronizing view of those who work for wages. That the fact that some people are workers says something on their inability to manage and hence they cannot collectively manage themselves and have control over their work, hence they need 'entrepreneurs' and democracy at workplace is impossible. I hope I misunderstood you, otherwise it is similar to claims of slave owners and aristocrats that slaves or peasants cannot manage themselves and need more educated , better human beings such as owners and aristocrats to manage them.

I think it is important to look at reasons why corporations have appeared. Was it inevitable for preservation of capitalism?

The rise of corporation related to the emergence of large-scale industry, but it maybe that the corporation emerged not to enable large-scale industry but to prevent it from becoming excessively productive. The main argument is as following: until population is expanding faster than productivity, the main concern of individual firms is just satisfying soaring demands. So sales can grow at maximum potential without threatening profitability. With improving technological advances productivity grows together with slowing of population growth. So industrial system become 'inordinately productive'. If competitive production will continue at previous level industry will generate much more output that it can be profitably sold, bringing prices down and business enterprise to halt. At this point there is a need for a modern business corporation. The need to reduce competition suicidal for profitability, one would need to decrease number of firms and the most effective method was merger. This is how modern corporations appeared and saved capitalism from collapse.

One can look in history of US to see illustration to it. Between 1790 and Civil War population growth at average was 3% annually. Between Civil War to turn of the century it fell to 2.2%. Between turn of the century and great Depression it fell to 1.6%. In the same time labour productivity increased. In manufacturing, the growth of output per employee rose from less than 0.5% in 1860 to over 3% in the turn of the century. Volatility was quite high before modern corporation established fully and integrated with government. You can look at graph previously in the thread, https://www.physicsforums.com/showthread.php?t=393906&page=8", discussion between mheslep and me.
To reduce such a danger during 1890s US saw widespread incorporation of business firms, rapid growth of stock and bond markets and expanding use of credit as a form of ownership. Firms were turned into corporations and investors into absentee owners. However excess capacity is still remains a problem and seems to be a permanent problem of capitalism and hence industrial limitation remains a business necessity. You can see several waves of merges that followed, the last one is on the global scale.
So you can see, that corporation was historically necessary for survival of capitalism. Without it the centrifugal forces of competition and excess capacity would probably killed capitalism long time ago. That is why Marx and other socialist thinkers, concentrated their analysis of capitalism on a corporation as a central building block.

Now returning back to modern small businesses. I tried to find statistics regarding how long small businesses survive. For US, it seems to be difficult to find correct statistics, there are several that contradict to each other. The answer from U.S Department of Commerce, the Census Bureau is
https://ask.census.gov/cgi-bin/askcensus.cfg/php/enduser/std_adp.php?p_faqid=7059&p_sid=ATtIH61k&p_created=1211995268&p_sp=cF9zcmNoPSZwX3NvcnRfYnk9JnBfZ3JpZHNvcnQ9JnBfcm93X2NudD0mcF9wcm9kcz0mcF9jYXRzPSZwX3B2PSZwX2N2PSZwX3BhZ2U9MQ!&p_search_text=Business%20Dynamics%20Statistics"


I have problem to find original Dun & Bradstreet report but found citation from this site. I do not know how accurately it quotes the report, but it what I got

http://www.moyak.com/papers/small-business-statistics.html"

I do not know how accurate Dun & Bradstreet reports are and why they were being discontinued. Hence I looked at Statistics Canada:

In any case small businesses are under stress of competition, many of them fail. Since people have to borrow money to open business, they are indebted to the banks. In recent times especially, many relay on credit cards. Banks usually like to be sure that business will be successful and will grow, hence there is pressure from banks on small businesses to grow.
A lot of small-business job growth has also been driven by the decision of big businesses to outsource many tasks that they used to do in-house. So jobs haven’t been so much “destroyed” and “created” as they have been shifted from one company to another. So being dependent on banks for loans and corporations for jobs, small-business owners are not really independent and free working for themselves. The are servants for corporations, in many cases even worse off than salaried managers at corporations, since they have to take risks.

Despite all these things, many Americans still believe in the myth of small-business owner, free-market, autonomous consumer, hate government intervention and are longing for old good days of equal opportunity. Such kind of believes serve capitalist class very well for preservation of the capitalist system.

I think it is ironic that one of the biggest killers of small business is excessive regulations that were often intended to correct the evils perpetuated by some large corporation.

 

[mikelepore]

According to Marx's theory of value, value of the product consists of three parts: the value of the part of the machine that machine passes to the product (depreciation of machine), the value of raw materials and the value of human labour (one can think of it as depreciation of labour in human being). So, there is not much difference between machine and human being, both pass value on to its final product. Why does then Marx separate between 'dead labour' and 'living labour'? Because according to Marx the capitalist does not have much control over prices of machines and raw materials, since under perfect competition, all capitalists pay the same market price for them.

I think something is still missing here, in the part about "not much difference between machine and human being, both pass value on to its final product". Variable capital needs to be explained here. The buildings, machines and tools (which Marx calls constant capital, the fixed type) and the raw materials and supplies (which Marx calls constant capital, the circulating type), just pass their value onto the product. The situation is very different with labor, which Marx calls variable capital. What the worker sells to the capitalist isn't labor but labor power, which means the ability to perform work. After the capitalist has already become the legal owner of the worker's mind and body, what was formerly labor power becomes labor, which is the work that is actually performed. When labor power becomes labor, it undergoes an expansion in value. This expansion is the source of the surplus value, which includes the capitalist's profit.

For example, suppose the capitalist invests $10 in materials and the wear-out of tools, plus $15 on labor power. Suppose the labor converts those materials into a product that sells for $100. The labor gave the work-in-process a value-added of $90, because the labor changed the $10 materials into a $100 product. But the worker only got paid $15. The labor power with a value of $15 underwent an expansion into labor with a value of $90. The worker's wage is the fraction 15/90, or about 17 percent, of the wealth that he or she produced. Therefore, the source of the capitalist's profit is explained as an expropriation from the worker.

 

[Al68]

After the capitalist has already become the legal owner of the worker's mind and body...

What situation are you referring to here? If you pay someone to mow your lawn, are you then the "legal owner" of their mind and body?

Are you using the word "capitalist" to mean slave owner here?

Although Marx used the word capitalist (translated) very differently from the way the word is used by others, he didn't use it to mean "legal owner of the worker's mind and body". He used it to mean employer.

 

[mikelepore]

There are several ways in which Marxian theory identifies employment as a form of slavery.

One is the fact that the means of production are the means of life. For the capitalist to own the industries is similar to being the legal owner of all the oxygen in the world; he can dictate the conditions under which other people may survive, if he chooses to grant them permission to survive. But you selected an example, having someone mow the lawn, that may not display the usual kind of class dependency, unless the worker is in a repeating pattern of mowing many lawns in lieu of his family being hungry and homeless. (Your example of mowing the lawn also doesn't illustrate the more common feature in which the workers are there to produce a product that the capitalist will sell at a profit.)

Secondly, the employment relation has nearly constant demographics. People who are born into the working class and who are fated to stay there forever, must, in order to survive, seek and obtain employment by a certain other people who were born into the capitalist class. The injustice of this demographic rule may not be apparent because economic class isn't worn on our faces. If there were a law requiring all brown-eyed people to become the servants of all the blue-eyed people, otherwise they must starve, the same sort of dependence on accidents of birth, then the injustice of the institution would be recognizable to everyone. But economic class rule based on generations of inheritance of property often seems easier to explain away as being normal.

An additional characteristic of wage-slavery is the asymmetric requirements of the two parties to the employment relationship. When a large company employs a particular worker, the capitalist has only chosen to send a small fraction of his money to a remote location, has hired hands to perform all of the management, and the capitalist doesn't have to hear another word about it until his dividends arrive in his mailbox. But the worker, whose capacity to work is coincident with his mind and body, must deliver his entire self to someone else's facility, to be subject to minute control of his whole organism by someone else.

Finally, when the worker sells himself on the labor market, his price is determined by social factors that are mainly external to himself, just as the price of a sack of potatoes is driven by society-wide external factors. The experience for the worker is like being blown around in a hurricane by the forces of supply and demand, although there is a public pretense that the worker has "participated in a contract negotiation" (in which he wasn't allowed to change a single word of the contract). But capitalists will only employ workers when it is known in advance that those workers will produce an amount of wealth that far exceeds their own price as the commodity labor power. This is a major feature that defines all forms of slavery, not the situation of being legally prohibited from walking out, which chattel slavery imposed. This more essential feature of slavery is to have people perform work only to receive back a small fraction of the wealth that they have produced, and systematically to yield up the lion's share of their product to the ruler.

A good introduction to these existential characteristics of the capitalist system is Marx's "Economic and Philosophic Manuscripts of 1844", online at marxists.org.

 

[mheslep]

Does anyone actually propose the above has any connection with reality? 'Minute control of his whole organism'? 'Fated to stay' in the 'working class'? Looking for a job a akin to being 'blown around by a hurricane'? Really?

 

[Office_Shredder]

One is the fact that the means of production are the means of life. For the capitalist to own the industries is similar to being the legal owner of all the oxygen in the world; he can dictate the conditions under which other people may survive, if he chooses to grant them permission to survive.

People can live without modern industry. Sure, it's not a modern life, but that's kind of the point. Also, if everyone decides to cut themselves off from modern industry, the capitalist dies too (to continue the metaphor)

When a large company employs a particular worker, the capitalist has only chosen to send a small fraction of his money to a remote location, has hired hands to perform all of the management, and the capitalist doesn't have to hear another word about it until his dividends arrive in his mailbox.

Or until the company fails because he had no oversight of the whole operation. Seriously, if you just gave someone money and sat on your butt waiting for the payday, your butt's going to get pretty sore waiting.

But the worker, whose capacity to work is coincident with his mind and body, must deliver his entire self to someone else's facility,

So if you can telecommute you're no longer a slave? What about flex hours?

to be subject to minute control of his whole organism by someone else.

Lol wut. This isn't even worth responding to

But capitalists will only employ workers when it is known in advance that those workers will produce an amount of wealth that far exceeds their own price as the commodity labor power.

If companies never lost money this would be absolutely true. So yeah, there's no flaws in the argument I guess.