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Withering away of money?

Dear Editors,

Responding to Max Hess's article 'Capitalist Money Madness' (Socialist Standard, April) a suggestion. Perhaps, a way a Socialist government (if there ever was one ) could bring about a moneyless economy is to print the stuff in abundance and pay it out in salaries and wages. Everyone would be employed in goods and services and use money to buy whatever they needed, or thought they needed. Meanwhile, everyone would be working to produce and provide the goods and services but no one would ever be without enough dosh to 'purchase' whatever they wanted because they would have access to as much of the stuff that they wanted.

Of course, in no time at all there'd be run-away inflation but it wouldn't matter if there were no money markets, exchange and financial institutions, there’d be no capitalist institutions because there would be nothing for them to do. As Max says, also no need for police, military, bankers, lawyers, prisons and prison officers...a whole swathe of jobs related to money, it's use and misuse.

People would soon realize that money isn't necessary to maintain an economy. It's just a method used by a profit system that was perhaps necessary in times past but now no longer appropriate, needed or wanted. They'd only need to continue doing what they always did and consume without the need to use paper and metal tokens to do it.

If other capitalist countries wanted to trade with Britain we'd provide them with goods and services in exchange for what we needed of theirs. Their workers would soon see what ours have got up to and would bring about the same change in their countries. When people see that they don't need money to maintain their standards of living and even raise them to heights only ever dreamed of they'd wonder why it was never thought of before.

Then they'd realize the great thievery that had been perpetrated upon them for centuries and resolve to never again allow capitalism to raise its fanged head again. Then, and only then, would a truly international common global economy evolve. Then, and only then, would mankind advance to the utopian world dreamt of by our ancestors .

Of course, things wouldn't run smoothly at first but society by its very nature is a moral system and just as today layabouts and petty thieves are disdained and rejected, so too in a sane socialist system dissenters would have no argument and find it hard going to feel self respect and acceptance.

Am I right or am I right ?
Leo Aliferis (by email)

Reply:You’re right that when people realise they don’t need money to maintain a very good standard of living, they’ll wonder why it was never thought of before. But that awareness can’t be achieved through a leftwing ‘socialist government’, which would have campaigned for, and been elected to, supervise capitalism — not abolish it.

In the highly unlikely event that such a government, led by a Trotskyist-style vanguard, sabotaged the profit-wages-money system by deliberately bringing about hyperinflation and economic chaos, the population would neither expect nor want this. All voters would then focus on is the ensuing financial turmoil and they’d be extremely alarmed by what was happening and they’d throw that government out of office at the earliest opportunity. Deliberately subjecting a pro-money population to economic chaos, as a means of supposedly leading them to socialist awareness, is doomed to fail.

Whereas, if a clear majority of the electorate vote for moneyless real socialism, because they have come to understand what it is and consciously want this system instead of capitalism, then there’d be no need to continue with a means of exchange. They would already “realize that money isn’t necessary to maintain an economy”. And after a clear majority of people have voted for real socialism in a general election, then plans and preparations to bring this about can be acted upon immediately without any widespread rejection and resistance that would be associated with trying to impose it on an unready and averse population from above.

Given the dire condition clapped-out capitalism is now in, and that we’re heading for a prolonged period of additional working class suffering and misery, mainstream party politicians will be trying harder than ever to dupe people into believing that money management offers the answer to alleviating and solving these capitalism-caused problems. They’ll want people submissively accepting worsening state-funded services. They’ll want those without jobs submissively accepting any low-paid work they are offered. They’ll want those with jobs submissively accepting pay restraint and cuts. They’ll want people turning against supposedly less-deserving recipients of welfare benefits.

We need to get people to completely reject this bogus capitalist agenda that managing money better is in our best interests. It isn’t. Abolishing money, and the capitalist system that requires it, is in our best interests.

We are not “all in this together”, as Cameron farcically states. Capitalists and their political stooges are in it for as much as they can get out of it. Everyone else is required to keep the pig trough as full as possible.  – Editors.

Declining rate of profit?

Dear Editors
The July edition of your journal contains a brief review of my recently published book Global Capitalism in Crisis: Karl Marx and the Decay of the Profit System. Although the book treats a great many issues of interest to socialists, the reviewer chose to focus on just one theoretical issue that I treat at some length in the book, namely, the specification of the wage bill of socially necessary unproductive labour (SNUL – in commerce, finance and the state) as a component of "constant capital" rather than as a part of surplus value or variable capital.

The reviewer is right to suggest that this approach is important to my analysis of the current global slump as rooted in the on-going displacement of living, productive labour from production (what Marx called a rising "organic composition of capital").However he or she implies that my empirical measurement of constant capital in the Marxian ratios for the average rate of profit and the organic composition of capital includes the costs associated with unproductive labour. This is not the case, as such costs are assimilated by me to the flow of constant capital rather than to the "capital advanced," i.e. to the constant capital stock. The magnitude of the constant capital flows does not enter into the measurement of either the average rate of profit or the organic composition of capital.

The main effect of treating SNUL costs as a component of the constant capital flow is that it removes these costs from the measurement of either aggregate surplus-value or aggregate variable capital, thereby allowing for more accurate measurements of Marx's key quantitative ratios. In my view, the assimilation of SNUL costs to surplus value or to variable capital (or to both) has been a key stumbling block in empirically evaluating Marx's law of the falling tendency of the rate of profit and to recognizing the centrality of this law to the dynamics of capital accumulation in the era of capital's decay.

Murray E.G. Smith (by email)

Reply: We certainly accept that some of Marx's writings on productive and unproductive labour are open to interpretation and were not fully worked out (e.g. the treatment of this issue is rather different in the Appendix of Volume I of Capital called 'The Results of the Immediate Process of Production' compared to the chapter in Volume 2 on 'The Costs of Circulation').

However, we get a strong sense that you are effectively redefining the rate of profit formula so that it might more easily show what you seek to prove and what others have failed to prove before you (that there is a pronounced and statistically observable long-term tendency for the rate of profit to fall in capitalism that will lead to the system's demise).

This attempt seems divorced from some of the realities of capitalism and misses much of what has underpinned political and economic debate in recent decades: namely that it is the rate of profit after tax that is key for investment decisions and that governments have been in a desperate struggle to the reduce the tax-take from profits for years. Indeed, taxes themselves are ultimately a burden on capital - from surplus value - as therefore is the state machine funded by them, and this is the important point we seek to emphasise. – Editors.

Capital – difficult?

Dear Editors
I’m all for anything that widens the attention to Marx. But is Capital really difficult – “most give up by chapter 3”, these “undeniable difficulties” referred to (Socialist Standard, July , Book Reviews), have I missed something? Marx himself does indeed say in the introduction that, excepting the subsections of chapter 1, the reader will have no reason to complain that it is difficult to understand – to learn anything new will have to be willing to do something on their own account.

After the materialist conception of history, commodity production, the source of profit or surplus value, the add-ons of absolute and relative surplus value and the simple relationships between constant capital, variable capital, surplus value, etc, Capital is a straightforward read and after about half way it broadens out into history, philosophy, sociology and wanders through all sorts of interesting perspectives.

I’m trying to think where the “difficulties” are, have I made assumptions where I should have found more meaning? To say that Capital is difficult must already put up a deterrent to would-be readers. But there are none that are not overcome by a few moments’ thought. But maybe it’s because today, if information is not transmitted by TV or DVDs and reading is only for trash newspapers and novels, that no one now simply lies back with a book, such as Capital, for just the sake of a good read. A good read is where you take your time, think about what’s on the page, even leave it for a while, come back to it, read it through, then read in parts picked either at random or of particular interest.

With a book like Capital, you can play with it, pick up on the secret of primary accumulation or the swindle of the national debt or the conditions of the working class in medieval times or contemporary times and so on.

I’ve just returned to Capital after thinking again about “most give up before chapter 3”. Well, even if that’s true, having got that far the basics are covered and the rest expands on that basis.

Please don’t continue this idea that Marx is difficult, it’s less difficult than a cookery recipe or flat-pack instructions. It’s a good read just taken as that but the explanations and ideas that come off the page are even now mind-blowing and change your own conception and perspective of the world around you. It applies not only to its time but to current events and explains these.

And if I want to know how much land the “free” peasants were entitled to, and how even that and the common was thieved off them in later times, it’s a history book in its own right. So where’s the problem, please explain.

Stuart Gibson, Dorset

Reply: The "undeniable difficulties" of the early chapters of Capital are so undeniable that, as you say, Marx felt it necessary to warn his readers of them in the introduction to his great work. William Morris, hardly an intellectual sluggard, said the book caused him "agonies of confusion of the brain". But the difficulties are mostly over by the end of the third chapter, and the rest of Capital is, we agree, fairly straightforward but rewarding reading - Editors.