Cooking the Books 2, Obituary
Some capitalists have been philosophising recently on their favourite subject — money. One-time investment banker Matt Levine titled his ‘Money Stuff’ column in Bloomberg News (24 November) “Leave the Gold in the Ground”.
Gold is no longer used as the currency — what Marx called the ‘money commodity’ — as it was for millennia. It is, however, still a store of value. ‘Even now’, Levine pointed out, ‘gold is an important reserve asset, and people hold it in their financial portfolios in the form of gold futures, gold exchange-traded funds, etc’. What is being traded are titles to the ownership of gold. Those who buy and sell these are speculating on how the price of gold will move in the future. The gold itself is stored underground in a safe vault. When these titles are exchanged what happens is just that an entry of who it belongs to is changed in a database. The gold stays where it is.
Levine discusses the case of a group of capitalists who, noticing this, have come up with the idea of selling titles to gold that is still in the ground. They are either fools or knaves as they are assuming that unmined gold in the ground is as valuable as gold bars in a vault. But, of course, it is not. Unmined gold has no value precisely because it hasn’t been mined, though the land under which it lies will have a price based on what royalties might be received were it to be mined. Gold bars in an underground vault have value only because they have been mined, refined, made into bars and transported, their value reflecting the amount of labour that has had to go into doing all this.
What is perhaps surprising is that this is the explanation put forward in a news site for capitalists, surprising because it is an application of the labour theory of value that pro-capitalist economists teach is nonsense. After noting that ‘that modern finance creates layers of abstraction on top of real-world activity, and sometimes those abstractions become unmoored from the reality’, Levine applies this not just to titles to gold but to the shares in any business. As an example he takes Amazon:
‘A share of Apple Inc. stock encapsulates all of the labor and creativity that went into inventing the iPhone and manufacturing it and selling it and building app stores and everything else; all the factories and offices and decades of decisions are all reflected in the tradeable electronic token that is a share of stock’.
Another capitalist who has been philosophising on money is the richest person in the world himself, Elon Musk. Fox News reported him as telling a business forum on 17 November:
‘“If you go out long enough, assuming there’s a continued improvement in AI and robotics, which seems likely, the money will stop being relevant at some point in the future,” Musk said. He added there will still be constraints on power, such as electricity and mass. “The fundamental physics elements will still be constraints, but I think at some point currency becomes irrelevant,” Musk said’.
Musk seems to be embracing here the FALC — Fully Automated Luxury Communism — thesis. Improvements in AI and robotics will certainly make socialism easier but it is not that which will make money irrelevant. What will is only the conversion of the means of production from the private property of the few into common property of all. And that doesn’t have to wait for ‘full automation’, nor will it come about automatically through advances in technology.
Kenneth Alaric Best, who has died after a short illness, joined the Party in 1972 and soon after became a self-described hooligan in Bolton branch, after which he was a founder member of Lancaster branch. His merciless wit as a speaker, honed at a time when adversarial debate was considered a martial art, often left opponents feeling like they’d been machine-gunned. A smart and iconoclastic thinker, he ranged restlessly into all areas of socialist theory. People who spent time with him needed to stay on their toes, because he had little patience for those who couldn’t keep up.
But he also knew how to put the ‘social’ into socialist, with ganja-fuelled parties at his house after every public meeting, which is undoubtedly the reason why Lancaster meetings were so well-attended in the 1980s and 90s. He was an entertaining raconteur with a natural comic timing, and could make even young children laugh. He had a never-ending store of very funny and often salacious stories, sometimes at the expense of other Party members.
Bolton-bred, he spent his formative years in the fire brigade, then later became a computer engineer who embodied the Silicon Valley philosophy of ‘move fast and break things’, running several successful computer businesses. These commitments sadly caused him to drift away from Party involvement in his later years.
Our sympathies go to his wife Kay and children Jo, Jamie and Bill.
PJS
DAP adds:
Ric Best was the first Party member I ever met – it was early 1987 and a meeting in The Liverpool Pub in the business district of the city where what was to become Merseyside Branch gathered. Ric was studying for his Master’s degree in Electrical Engineering at the University as a mature student, and I was a young politics undergraduate. We were different but got on, as we both liked debating. Ric told me he had joined the SPGB as the Party case was the best means he’d ever come across for winning arguments. I can testify that this is something he pursued with great vigour as many other students at the University at the time still vividly remember (as would our political opponents).
Ric was also a great advocate of democratic participation and all it implied. He claimed many times that the best weapon the Party had in its armoury was that it was scrupulously democratic and could – and should – attract people on that basis, being the most democratic political organisation in existence.
There is little doubt Ric was one of the Party’s great ‘characters’ – an overused word perhaps, but rarely more appropriate, and those who knew him will miss him and the energy he somehow imparted wherever he went.