The Real Movement

March 14, 2015

Gold after the death of Marxism: A reply to George Caffentzis

This post is in response to a question posed to me on Ask.fm regarding George Caffentzis’s essay, Marxism after the Death of Gold:

“You’ve probably read this, and may have already addressed it on your blog, but in case you haven’t, I’d appreciate your thoughts.”

I am familiar with the essay in question and have written about it before. But I will return to it to provide an answer that takes into account my personal theoretical development since that time.

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George Caffentzis does something in his essay that Marxists occasionally (all too often?) do: Completely and baldly lie about Marx’s theory. This essay is founded on a lie that Caffentzis knows or should know is a lie. And the case does not look good here: Either Caffentzis does not know the premise of his essay is a lie and is therefore unqualified. Or he know it is a lie and is not to be trusted because his knowing distortion of Marx’s argument clearly has an agenda.

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March 13, 2015

Costas Lapavitsas and the growing desperation of the underconsumptionist school

In an interview with Jacobin, “Greece: Phase Two”, Costas Lapavitsas defends Yanis Varoufakis and, in the course of this defense, highlights the forces behind the increasing desperation of the Marxist underconsumptionist school:

“Let me come clean on this. Keynes and Keynesianism, unfortunately, remain the most powerful tools we’ve got, even as Marxists, for dealing with issues of policy in the here and now. The Marxist tradition is very powerful in dealing with the medium-term and longer-term questions and understanding the class dimensions and social dimensions of economics and society in general, of course. There’s no comparison in these realms.

But, for dealing with policy in the here and now, unfortunately, Keynes and Keynesianism remain a very important set of ideas, concepts, and tools even for Marxists. That’s the reality. Whether some people like to use the ideas and not acknowledge them as Keynesian is something I don’t want to comment upon, but it happens.

So I cannot blame Varoufakis for that, for associating himself with Keynesians, because I’ve also associated myself with Keynesians, openly and explicitly so. If you showed me another way of doing things, I’d be delighted. But I can assure you, after many decades of working on Marxist economic theory, that there isn’t at the moment. So yes, Varoufakis has worked with Keynesians. But that isn’t really, in and of itself, a damning thing.”

I guess I am not so much speechless that Lapavitsas said this as I am speechless that it is completely true. After 150 years, Marxists still have no other policy tools in their book bags except Keynesian ones; Marxist economists have yet to give birth to their own policy tools derived organically from the premises of labor theory of value.

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March 11, 2015

Pavlopoulos’ and Vassalos’ unscrupulous demand for democratic control of currency in Greece

Anti-euro advocates increasingly have to characterize the SYRIZA government as a failure. Thus, SYRIZA is trapped between bourgeois ideologues who spin its brief stint as government a failure and Leftists ideologues who do the same.

The problem: Dimitris Pavlopoulos and Yiorgos Vassalos argue that even the mildest Keynesian policies are not possible within the eurozone:

“If one thing has become clear, it is that the long-expected change of course in Greece and the EU more broadly, will not come just because SYRIZA has come to power. The question that emerges is whether things could have gone, and can still go, differently. Is it possible for a left government in an austerity hit country to apply even a mild Keynesian policy while remaining within the eurozone and the EU? The answer is simply NO!”

But it was already understood by most observers before SYRIZA won the election that Keynesian policies could not be successfully implemented within the eurozone. This problem has nothing whatsoever to do with SYRIZA, but with the structure of the eurozone itself, which essentially strips the nation state of its fiscal and monetary powers without creating an alternative authority to implement countercyclical policies during economic downturns.

The Left and SYRIZA already knew this before the elections and should not be complaining about it now.

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March 10, 2015

Capitalism Without A Capitalist: Why SYRIZA probably will fail

There are two absolutely essential essays drawn from post-war Marxism that are key to understanding why SYRIZA most likely will fail: The first is Robert Kurz’s “Domination without a subject” and Michael A. Lebowitz’s “What Keeps Capitalism Going”.

Kurz explains why what we call Marxism is a reductive critique of the concept of domination that is incapable of explaining “mature” capitalism:

“One of the favorite terms of leftist social critique, stated with all the thoughtlessness due to the obvious, is that of “domination”. The “rulers” were and still are considered in countless essays and pamphlets as malefactors of vast and universal but vague reach, in an attempt to explain the miseries of capitalist socialization. This framework is retrospectively applied to all of history. In the specifically Marxist jargon this concept of domination is extended by adding the concept of the “ruling class”. In this manner the understanding of domination acquires an “economic basis”. The ruling class is the consumer of surplus value, which it cleverly and perfidiously and, of course, violently, appropriates.

It is immediately apparent that most theories of domination, including the Marxist ones, display a reductive utilitarian approach to the problem. If there is an appropriation of the labor of “others”, if there is social repression, if there is open violence, it is for someone’s use and advantage. Cui bono—this is what the problem is reduced to. A consideration of this kind does not fit with reality. Not even the construction of the pyramids of the ancient Egyptians, which devoured a not-insignificant portion of the surplus product of that society, can be forcefully reduced to a perspective of (purely economic) benefit of a class or caste. The reciprocal massacre of the various “rulers”, for reasons of “honor”, remains notably outside of any simple calculation of utility.”

Lebowitz explains why a close reading of Marx will show capital “produces a worker who looks upon its requirements as ‘self-evident natural laws’?

“When we think about the dependence of the worker on capital, is it difficult to grasp why capitalism keeps going? After all, Marx not only proposed that capitalism “breaks down all resistance” he also went on to say that capital can “rely on his [the worker’s] dependence on capital, which springs from the conditions of production themselves, and is guaranteed in perpetuity by them” (899). Capitalism tends, in short, to produce the workers it needs.”

Both essays go a long way toward explaining why SYRIZA, although it now has in its hands management of the largest single employer in Greece, likely will never consciously exploit this position to advance the emancipation of society from labor.

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March 9, 2015

More MMT boilerplate on how to fix capitalism without really trying

Here is another silly attempt to fix capitalist crisis with money: “Why Understanding Money Matters in Greece” by Robert W. Parenteau. It is typical MMT nonsense:

“The modern state, then, imposes and enforces a tax liability on its citizens, and chooses that which is necessary to pay taxes. That means a state with a sovereign currency is never revenue constrained. In fact, the government has to first create the money before the private sector can find a way to get the money it requires to pay taxes and by government bonds. Taxes and bonds are therefore not really the source of government funding or finance.”

The standard MMT boilerplate thus argues the state creates money before taxing this money back into its coffers. It “creates” the paper first, and employs the paper to purchase “goods and services” from the private sector; then it taxes the private sector for more or less the full amount of its purchases.

“Taxes simply give value to money, as households and nonbank firms cannot create money – that is counterfeiting. Instead, they have to sell an asset or a product or a service to the government to get money, or they need to be beneficiaries of government corporate subsidy or household transfer programs to get money.”

So, when individuals and businesses do what the state does, print up a bunch of currency and spend it, this is ‘counterfeiting'; when the state does it to individuals and businesses — not so much?

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March 3, 2015

Capital in the 21st Century: Thomas Piketty’s homage to Michael Heinrich

Who can read Piketty’s gloss on Kuznets, Malthus and Ricardo in his introduction and not wonder if he read as little of them as he read of Marx?

I can imagine a replay of his New Republic interview:

INTERVIEWER: “Can you talk a little bit about the effect of Kuznets, Ricardo and Malthus on your thinking and how you came to start reading them?

PIKETTY: “Ricardo and Malthus?”

INTERVIEWER: “Yeah.”

PIKETTY: “I never managed really to read them. I mean I don’t know if you’ve tried to read them. Have you tried?”

INTERVIEWER: “Some of their essays, but not the economics work.”

PIKETTY: “I think, they are very difficult to read and for me they were not very influential.”

INTERVIEWER: “Because your book, obviously with the subject matter, it seemed like you were tipping your hat to them in some ways.”

PIKETTY: “No not at all, not at all! The big difference is that my book is a book about the history of capital. In the books of Malthus and Ricardo there’s no data.”

In his introduction to Capital in the 21st Century, Piketty characterizes Marx’s definition of capital as “infinite accumulation”. In fact, far from infinite, Marx characterizes capital as a “merely historical, transitory” mode of production. Where in Marx’s argument, covering three volumes, does Piketty find this characterization of capitalism as one of infinite accumulation? It is difficult to read Piketty’s characterization of capitalism in Marx and come away with any confidence in his characterizations of Malthus and Ricardo’s writings.

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March 1, 2015

Grexit is not the alternative the Left is looking for

The problem of the mass line

The first problem is raised by Grexit itself and its relation to the principles of a revolutionary or radical Left party. Stathis Kouvelakis makes a pretty good point in the video “Syriza and socialist strategy” at 43:00-46:00: a party may win an election not on its complete platform, but on one or two basic critical demands of the working class.

No matter what those working class demands are — and if even those demands may be based on conditions that are fundamentally at odds with what the party considers necessary — the party has won on them and not on its complete program.

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February 25, 2015

Pushing back on the push for Grexit

Paul Mason’s post today is a very good take on the problem SYRIZA faces: the push for Grexit is becoming overwhelming:

“The shock in Syriza’s upper echelons, symbolised by the expression on Alexis Tsipras’ face as he addressed the nation on Saturday, was real. It was the shock of realisation that, Germany was stronger than Italy and France combined, and that there really is no space inside the euro for a radical left government.

Since this realisation, many ordinary Greeks, and some previously pro-euro politicians and advisers, have come to the conclusion that Syriza should prepare Greece for a “controlled exit”. Instead of “we were kicked out”, it would be sold as “we escaped” – and I think however positively today’s deal is spun, the push for Grexit will grow stronger as constraints become obvious.”

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February 24, 2015

A reply to J: What if the capitalists don’t want to reduce hours of labor?

I received an interesting comment on my last blog post, that asks several important questions about the practical impact of reducing hours of labor:

Is it possible that capitalists will not automatically respond to a reduction in hours of labor by increasing investment in automation?
Does the decision to increase automation in response to a reduction of hours depend on the nature of the industry in Greece?
Won’t there be sectors where productivity cannot be substantially increased through automation?
Might capitalists instead decide to move their capital to places where cheaper labor power can be found?
Might a reduction in hours of labor reduce productivity by causing a labor shortage?
What if capitalist simply decide they cannot improve productivity by investing in machines and decide to move their facilities?

First, my argument on the effect of a reduction of labor on introduction of machinery is a long established observation dating back to the 19th century. This observation has been confirmed in empirical studies even in the period since the 2008 financial crisis. Reducing hours of labor must result in the replacement of labor by machines. I do not believe there is any credible evidence to the contrary.

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February 22, 2015

Grexit is not a fix for low wages and low labor productivity in Greece

I came across this post on the Lenin’s Tomb blog today. See if you can tell why I am tearing out my hair.

Syriza’s mauling at the EU negotiations:

“Syriza has been defeated in the first round of negotiations.

After a period of enjoyable defiance, during which they won the backing of the overwhelming majority of the Greek people – 80% according to a poll taken before the latest deal, published in today’s Avgi – they have come back with small change. Pushed to the point where they were at risk of a collapse of the banking system, and unprepared for a Grexit (and thus unable to use it as a bargaining chip), they accepted the most comprehensive drubbing.”

Yes, Grexit — a ridiculous term meant only to show how revolutionary one is. I cannot understand how people see Grexit as a bargaining chip or a threat to use in negotiations. I really don’t get that.

The only people who think Grexit is a good idea also think the problem in a crisis is that currency is over-valued. From that point of view — of Krugman and Keynesians generally — the euro as a currency is over-valued in terms of the productivity of labor in Greece.

The solution of these people is to exit from the euro, replace it with a currency the Greece government controls and allow that new currency to depreciate against the euro. If this neo-Drachma were allowed to depreciate in purchasing power by 50%, they argue, Greece goods would become relatively cheaper exports would rise, while imports from the euro-zone would fall as goods produced in the rump eurozone became increasingly expensive in drachma-terms. The net result is the expansion of the export sector at the expense of imports.

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