On Postone’s concept of the hollowing out of working society – XXIII
![](http://web.archive.org./web/20210418151608im_/https://therealmovement.files.wordpress.com/2021/01/e-daily_gr-900x600_c.jpg?w=900)
If I don’t get pushback on this post, I will be very surprised for the simple reason that I am about to make a number of what may be considered highly controversial arguments. However, each particular argument will be grounded in statements I have already made in the course of this series. Thus, as controversial as this arguments sound, they should follow logically from the statements I have already made.
Below I again present the last chart from the previous post that tracks combined federal, state and local government spending relative to aggregate United States gross domestic output from 1860 to 2020, according to http://www.usgovernmentspending.com.
It is important to understand that, as I stated in the previous post, I am assuming that all of this federal, state and local spending consists of unproductive consumption, which is to say the state produces no commodities of its own; it is a parasite on society at large. According to Marx and Engels, the economic actor in question must come into money by selling a commodity. State expenditures, however necessary some might consider them, fall under the same category of transfers as quit-rent-corn and tithe-corn the peasant produced for the feudal lord and the parson. As Engels clarified, “To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.” Clearly, taxes and other like state revenue do not fall in this category.
Based on all of this, I have concluded that state revenue and expenditures should not be treated the same way as other elements of United States gross domestic product.
Let me take this one step further and suggest that all federal, state and local government spending is superfluous and involves the expenditure of superfluous labor time — as now shown in the chart above.
This means, we now have a real theoretical problem with the historical data. The data we have been relying on assumes that state expenditures should be added to aggregate output of the national economy. However, we know that, in Marx’s labor theory of value, superfluous labor “does not count as labour, and therefore creates no value.”
Which means, and as Chart 3 above shows, federal, state and local government expenditures do not add to the value of United States gross domestic product, but actually subtracts from United States gross domestic product. This is because, not only does the state not add any new value to circulation, it unproductively consumes some definite portion of the existing value already in circulation.
But here is where it gets a bit tricky, because, as we saw in an earlier post, beginning in 1933, Roosevelt’s fascist AAA program basically started paying our poor, historically doomed dirt farmers for labor time that produced no value at all, i.e., superfluous labor time, as a means of exiting the Great Depression.
It is only natural to ask if this bizarre change in behavior on Washington’s part had any effect on how United States GDP is calculated according to Marx’s labor theory of value. Not surprising, we find out that it indeed does have an affect on how federal state and local expenditures are calculated, as is shown in the chart below.
![](http://web.archive.org./web/20210418151608im_/https://therealmovement.files.wordpress.com/2021/01/snltgdpgold24d.jpg?w=914)
I was looking at historical data on United States GDP and it occurred to me that all of the data before 1933 is suspect, perhaps before 1971 as well. The problem is the way they account for state expenditures in those numbers. Marx’s labor theory of value would count those expenditures as destruction of value, but the Bureau of Economic Analysis, which compiles the figures for United States gross domestic product, counts government expenditures as additional value.
This essentially mean that labor theory differs from bourgeois simpletons in that before 1933 state expenditures count as a drag on the output of the national economy, since these expenditures add nothing to national output and only unproductively consume real capital. Before the breakdown of production based on exchange value this destruction simply would not appear as anything other than a loss of potential GDP in the same way that any unproductive labor time would not be counted in a market exchange. It would, for all intents and purposes, fall under the heading of superfluous labor time, as a portion of labor time that created no value.
But what about after 1933 — after FDR issued Executive Order 6102?
I’m glad you asked, because then it starts to get a bit complicated.
After the breakdown of production based on exchange value, federal, state and local government expenditures are immediately captured as a portion of superfluous labor time that, while still superfluous and creating no value, nevertheless has a price denominated in debased valueless state-issued currency. In other words, this labor time would appear as a component part of GDP under the same heading as the excess unmarketable crops of our poor,. historically doomed dirt farmers that also had no market price prior to the AAA, but acquired a price denominated in the same debased fiat under FDR’s AAA program.
Despite the fact that labor time expended by public employees and vendors in the state sector create no value, this expenditure would appear to have a price denominated in currency and be counted as an aliquot part of gross domestic product of the United States, just as the excess output of the dirt farmers.
So, we get this really bizarre inversion in our chart where, for instance, World War One, located toward the middle of the chart, appears as a rather sharp decrease in U.S. gross domestic product because of the volume of military expenditures, while World War Two appears on our chart as an even sharper increase in gross domestic product, because of the much greater volume of military expenditures just two decades later.
In both case, the expenditures have no value and unproductively consume existing value, but in the second case, the grisly business of war appears for the first time in human history as a ‘productive’ activity, productive of profit to the extent an ever growing mass of excess capital and an ever growing surplus population of wage workers can be set in motion by state expenditures.
January 31, 2021
Rick Kuhn on Henryk Grossman on Karl Marx on the break down of production based on exchange value…
There is this game called Chinese Whispers (not to be confused with the Trumpian China Virus), better known to American children as Telephone. According to Wikipedia, the game appears in countless cultural iterations around the world:
Marxists have a name for this game too.
They call it Marxism.
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