larry summers | The Real Movement

October 9, 2015

The hidden conflict within the fascist state for control of economic policy (4)

I have been going through this process in order to clarify for myself the logic of the current discussion of so-called negative interest rates — an oxymoron if ever there was one. This is part four of the series; part one, part two and part three can be found here. I hope it also will have some use to readers.

Part Four: The desperate search for an exit from failed monetary policy

“I think we got the Recovery Act right. The primary objective of our policy is having more work done, more product produced and more people earning more income. It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.” Larry Summers, Washington Post, November 8, 2009

“We didn’t think it would take that long.” Ben Bernanke, USA Today, October 5, 2015

The disappointment with the weak impact of counterfeiting the currency was admitted by Bernanke in a recent interview. This was not supposed to happen according to the dominant monetary theory, and Ben Bernanke in particular, where the prices of commodities are a function of the supply of currency in circulation. According to Bernanke’s “quantity theory of money”, the government had this technology, the printing press, which it could use to manage the US national capital. In fact, following the financial crisis, the policy rate went to zero without providing any real stimulus at all.

The chief economist of the Bank of England, Andrew Haldane, gave a speech in September on the problems faced by monetary policy. Although Haldane never mentions Larry Summers, his speech addresses the same concerns Summers raised in his own November 2013 “secular stagnation” speech. The problem is that monetary policy, on which the United States has relied since 1979, has run into a dead end, the zero lower bound. Had Washington not stepped in and provided a multi-year, multi-trillion dollar fiscal stimulus, capitalism likely would have collapsed. No one will admit it, but this is in fact what has happened after the 2008-2009 financial crisis.

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June 4, 2015

Husson’s and Treillet’s call for labor hours reduction: Important but seriously flawed

I just finished reading this article by Michel Husson & Stephanie Treillet on the significance of labor hours reduction, Liberation Through Vacation. I want to offer some thought on why I think it is, on the whole, as important as it is disappointing. I make these points, not because I disagree with what I think was the intended thrust of their article, but because certain folks will go after Husson’s and Treillet’s argument. For instance, A. Kliman has already taken David Graeber and others to task for their weak arguments on labor as just another attempt to rebrand social democracy. (See Kliman’s, Post-Work: Zombie Social Democracy with a Human Face?) My point here is to expose weaknesses in their argument because Husson and Treillet’s main thrust is, after SYRIZA’s election, the most important development to emerge from the crisis in 2015.

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May 16, 2015

The Myth of Secular Stagnation, Part One

What is behind the concern over secular stagnation? Is it possible to understand this concern within the context of the labor theory of value? I ask that because almost all discussion of secular stagnation takes place in the context of neoclassical/Keynesian theory. To answer the question, I will look at several papers and article on the subject written from within neoclassical/Keynesian theory that attempt to make sense of the problem.

My perspective, however, will be unique in relation to the writers, because I will argue that stagnation is not a symptom of capitalist crisis per se, but a symptom of increasingly ineffective fascist state management of national capitals. In my perspective, capital has already suffered the breakdown of production on the basis of exchange value. This occurred in the Great Depression and was irreversible. However, after that breakdown, the fascist state stepped in and assumed management of the production of surplus value. The subject of the discussion of secular stagnation is the increasingly ineffective system of state management of capitalist production, not the operation of national capitals, per se.

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November 5, 2014

Hours, Wages and Poverty: On the introduction to Kathi Weeks’ “The Problem with Work”

I have been spending some time reading Kathi Weeks, “The Problem with Work”, and find myself unable to get beyond this sophomoric statement in her introduction:

“I focus on the demands for basic income and shorter hours for two reasons. First, like the demand for living wages and others, they represent important remedies for some of the problems with the existing system of wages and hours. A guaranteed and universal basic income would enhance the bargaining position of all workers vis-il-vis employers and enable some people to opt out of waged work without the stigma and precariousness of means-tested welfare programs. A thirty-hour full-time work week without a decrease in pay [my emphasis] would help to address some of the problems of both the underemployed and the overworked. The second reason for focusing on these demands—which I think distinguishes them from many other demands for economic reform, including the demand for a living wage—is their capacity not only to improve the conditions of work but to challenge the terms of its dominance. These demands do not affirm our right to work so much as help us to secure some measure of freedom from it.”

I am not going to argue this passage characterizes the whole of her book, but I find it bizarre that a Marxist like Kathi Weeks considers a demand for a 30 hour week utopian. She seems to have no clue that there is a relation between hours of labor, on the one hand, and wages and prices, on the other. Moreover, she never mentions the connection between hours of labor, competition among workers and racism, misogyny, anti-migrant sentiments.

Coupling the demand for a six hour day with a demand for no decrease in wages or a demand for basic income actually shows why Marxists secretly fear the demand for fewer hours of labor is utopian: If there is the slightest danger the subsistence of the working class will fall if hours are reduced, no worker will ever support it. A very large section of the working class lives hand to mouth at a level where they would be homeless and hungry within a month. Another section would be in the same position within a couple of months, once they have exhausted the meager savings.

What compels the working class to sell their labor power is that they cannot live without doing this. But Weeks implicitly “admits” in her introduction that a reduction of hours will have a negative impact on their income, that it will further reduce their subsistence. How are you going to sell this “utopian” demand to the working class? Do you tell them that being idle, homeless and destitute is an improvement on their current position in society?

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January 19, 2014

Robert Kurz, David Graeber’s “Bullshit Jobs” and the collapse of capitalism

In section 3 of the Apotheosis of Money, Robert Kurz takes on a problem that has been discussed by Marxists for almost 80 years. The discussion is important because, I believe, its conclusions will have more to say about what a post-capitalist society actually looks like than any of the issues typically raised by the Left:

“it is clear that, taken as a whole, the share of those unproductive workers (viewed from the perspective of surplus value production) who only represent social consumption, that is, “overhead costs”, is constantly increasing.”

Another way to state this is that an ever increasing share of the total labor time of society is being wasted on unproductive labor — an issue raised by David Graeber in his recent essay, On the Phenomenon of Bullshit Jobs.

Kurz’s essay is significant to me, because if, as I think, communism is free time and nothing else, society seems to be preparing for just this possibility. The collapse of capitalism will likely appear, as it did in the Soviet Union, as a crisis in the form of massive unemployment, which locks billions out of the labor market, making it possible for the social producers to eliminate most work in a single stroke. The preparation for a society founded on free, disposable time for the many, who can use this free time for self-activity in whatever way they want, may just be taking the form of an ever increasing quantity of labor time that is being unproductively expended by capitalist firms.

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December 3, 2013

“Secular Stagnation” and capitalist destruction of the productive forces

Tyler Cowen has an interesting take on Larry Summers talk at the IMF on so-called “secular stagnation”. According to Cowen, if Larry Summers is correct, the economy is probably contracting.

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December 2, 2013

Crying Wolf over Deflation

ProSyn has a post today about why deflation poses such a mortal risk for the fascists. The post is written by Jean Pisani-Ferry, a French economist and public policy expert according to the Wikipedia. Being a public policy expert Pisani-Ferry has decided that a fall in the prices of commodities is bad for “the public” for several reasons: Read the rest of this entry »

September 10, 2013

Pushing On A String? – The logic of state management of capitalism

“‘Pushing on a string’ is particularly used to illustrate limitations of monetary policy, particularly that the money multiplier is an inequality, a limit on money creation, not an equality.” –Wikipedia

So here are the questions I have been contemplating for the past week or so: When simpleton economists suggest policies to manage “the economy”, what in their view do they think is being managed? How do they conceptualize both the “economy” itself and the tools they employ to manage it? What, if any, are the vulnerabilities (defects) of this form of management that is being expressed in the current debate among mainstream (neoclassical) economists? In particular, what are the choices being expressed in the debate over who should replace Bernanke as chair of the Federal Reserve Bank?

To be sure, I am not trying to offer a polemic against mainstream economics in this essay but to understand this policy in its own right, as well as to restate it in a form that is comprehensible within a labor theory framework as i understand that framework.

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August 20, 2013

David Graeber’s much needed discussion of “Bullshit Jobs”

There are interesting inversions in the results of labor theory, which, I think, most Marxists often do not grasp. For instance., labor theory suggests once wage labor emerges it already carries the seed of the principle “From each according to his ability, to each according to his need”. The complete detachment of labor from satisfaction of needs begins with detachment of the labor of the worker from the surplus product of her labor. If this is true, once wage labor emerges communism is the inevitable result of the development of the mode of production itself. By that I mean the realization of communism is nothing more than the culmination of the process whereby the worker is increasingly stripped of the product of her labor.

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August 4, 2013

Part 2: How Larry Summers proved Marx was right about everything — (And why this is not necessarily good news)

3. So here is my question

Why would Summers go to all that effort just to prove Marx had been correct all along regarding how the capitalist mode of production works. Why did Larry Summers set out to prove that the herald of the communist specter, the co-founder of Scientific Socialism and the arch-nemesis of the bourgeoisie was absolutely correct in his description of the difference between the way commodity money operates and the way valueless state issued pieces of paper function. Was it because of some intellectual curiosity about an obscure empirical observation that, even by Summers’ own admission, was no longer even relevant? Was it a platonic pursuit of truth?

Personally, I don’t know any communist who thinks the words “Larry Summers” should appear in the same sentence with the word, “truth”; and I am not buying that explanation either. The more likely answer would be that a proper understanding of how the mode of production works is necessary both if you want to accelerate capitalism’s development and if you want to devise effective policies to prevent it from collapsing.

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