Explaining economics simply

[ALB]

We've been told to start a separate thread on this.

Is this the sort of thing people have in mind here:

http://www.theguardian.com/lifeandstyle/2013/aug/31/ask-grown-up-pocket-…

Or they could get together to establish free access and so the need for money and bringing about the end of value (real revolutionary socialism).

[Brian]

If the first sentenced  was amended to read, "You are given £1 a week because the people who 'imagine they' look after you think that's fair."  It provides a simple explanation on how class conflict comes about but the article requires further development on explaining value within capitalism.As for bringing the end to value in socialism that's for another thread.

[ALB]

Surely you were not expecting Robert Peston to explain value within capitalism, were you?Anyway, as value is an expression of a social relationship (between people organised in separate units producing goods and services for sale) once this social relationship is ended (through the establishment of the common ownership and democratic control of the means of production by society as a whole) value disappears. Simple. Anybody can understand that, can't they?

[Brian]

ALB wrote:

Surely you were not expecting Robert Peston to explain value within capitalism, were you?Anyway, as value is an expression of a social relationship (between people organised in separate units producing goods and services for sale) once this social relationship is ended (through the establishment of the common ownership and democratic control of the means of production by society as a whole) value disappears. Simple. Anybody can understand that, can't they?

Nice one!  Now have a bash at explaining value within capitalism – simply – and if you can follow on from where Robert Preston left off by simply explaining the value of labour power it would be great.  Or is it necessary to explain use and exchange value before we head down that road?By the way don't worry about proofreading I'll take care of that.  Lol.

[Anonymous]

Brian wrote:

By the way don't worry about proofreading I'll take care of that.  Lol.

You certain about that?  You'll need to get used to proofreading your own posts first   It's Robert Peston…

[alanjjohnstone]

And in the blue corner, the Guardian presenting the case for capitalism… http://www.theguardian.com/business/economics-blog/2014/jan/06/capitalism-bright-future-innovation-hope?CMP=fb_gu

[twc]

1.  SPGB Object and Declaration of PrinciplesThe SPGB Object and Declaration of Principles are the most concise, and correct, account available of Marxism and, indirectly, of Marxian economics.2.  The Ragged Trousered Philanthropists The most direct introduction to [quasi-]Marxian economics, for a century now, is found in:“The Ragged Trousered Philanthropists”, Robert Tressell [or Robert Tressall, in the original edition].Chapter XV.  “The Great Money Trick” — in the original, heavily modified (Jessie Pope), 1914 edition [Grant Richards]Chapter 21.  “The Reign of Terror.  The Great Money Trick” — in the restored (F. C. Ball) 1955 edition [Lawrence and Wishart].The “The Ragged Trousered Philanthropists” is available on the web from Project Gutenberg, Amazon Kindle and Apple iBooks, etc.  The original version is a free download.  A free audio stream is available from LibriVox.3.  Reading Marx’s Capital with David Harveyhttp://davidharvey.org/reading-capital/This video course of twenty-five 90-minute lectures is the best comprehensive companion and introduction to reading Marx’s Capital yet produced.  Each video may be streamed live for free over the web.In addition, the audio track of the whole course, but only the video track for the Vol. I lectures, may also be downloaded for off-line indefinite playing on your computer, tablet or mobile phone.David Harvey is frank about personal misgivings he holds on such central aspects of Capital as Marxian dialectics and the Marxian materialist conception of history.This turns out not to be a damning impediment, since David Harvey makes it clear what he considers Marx to be doing whenever he states his disagreement or misgivings.  In other words, the student who wants to discover Marxian dialectics and the materialist conception of history at least glimpses what these conceptions may imply, and can formulate his/her own evaluation.No lecturer can be criticized for dutifully exposing, as clearly as he can, his own disagreements with the author he is discussing.  In actuality, David Harvey handles the dialectical passages reasonably well, partly because he, perhaps alone among academics, has regularly read and lectured on Marx’s Capital annually [sometimes twice or thrice annually] over the past 40 years, so that he is thoroughly familiar with its content and has absorbed almost into his bones Marx’s methodology.What is amusing to those who’ve read Hegel, is that Harvey praises Marx’s methodology, but disparages Hegel’s, while remaining blithely unaware of the Hegelian roots of the Marxian methodology he is carefully explaining to his class.The strengths of the video course are David Harvey’s expository skills and his pleasant personality—important if you plan to keep his company for over 40 hours.The weaknesses of the video course derive from vestiges of David Harvey’s still half-jettisoned Leninism.  Socialists should have little difficulty in detecting these.  They do not diminish the overall quality of the course, for which (in any case) there is no equal out there.In addition he has a habit of waffling on at times, but even this typically turns out to be fine [like a comedic interlude in Shakespeare] to divide up the more difficult bits.The strengths of the theoretical political economy are David Harvey’s insistence on returning at all times to anchor all theoretical issues upon Marx’s graphical representations: Marx’s C—M—C and M—C—M formalism, and the Volume. II reproduction formulae.As a student, you will encounter Marx’s graphical representations so often and explore them so thoroughly that they become constant companions.  You could not possibly complete the course without understanding Marx’s theory of capitalist social reproduction, and the inherent weak links in that process — the weak links that capitalist society is daily compelled to overcome, and typically organizes itself to smooth over, or lurch into crisis.If any student doubts determinism, they should be left in little doubt, after comprehending this course, that capitalism must survive deterministically.  And, despite David Harvey’s expressed doubts, they should be left in little doubt that social being determines consciousness.The weak points of David Harvey’s theoretical political economy explanations are probably not important for a first course on Marx’s Capital.  But they are vitally important for a second course.David Harvey makes heavy weather of the Volume II reproduction schema — the crown jewels of the Volume.Worst of all, he fails to repel the total demolition job of 30 years of Sraffian friendly fire aimed at exorcising the central Marxian concept of value completely out of the body of Marxian economics.  If the Staffians were correct, there is no point in studying Marx’s Capital at all.[David Harvey’s naive flounderings in defence of Marxian value are on a par with LBird’s, and are quite impotent to reinstate value where it belongs.  Students who want to comprehend value as the central Marxian concept of capitalism should eventually read Andrew Kliman’s “Reclaiming Marx’s Capital”.]4.  SPGB Talks and the Socialist StandardFinally, the huge repository of SPGB talks and Socialist Standard articles on Marx’s Capital, clearly presented in the SPGB’s consistent century-long tradition, holds countless lucidly simple introductions.

[LBird]

twc wrote:

David Harvey’s naive flounderings in defence of Marxian value are on a par with LBird’s…

Yeah, thank god we have your concise and clear expositions on both 'value' and 'science', twc.

[Young Master Smeet]

I think the simplest way to get "Value" across is to say that at any given time there is only so much human effort available to get things done.  That leads to the Robinson Crusoe example (OK, technically at this point it's only labour, not Value, but it is the necessary precursor to explaining that the amount of labour in a given product is the only universal comparable characteristic on which to base exchange judgements).TBH, it's normally the audience who make it over complicated by starting to split hairs, or introducing complex concepts that have been universally assimilated (things like barter lead to money and that sort of thing).

[LBird]

Young Master Smeet wrote:

TBH, it's normally the audience who make it over complicated by starting to split hairs, or introducing complex concepts that have been universally assimilated (things like barter lead to money and that sort of thing).

Yeah, you're right, but that happens because the 'audience' doesn't understand the terms/phrases/concepts that are being used to explain 'value', for example (but this applies to all of Marx's ideas). So, they 'split hairs', or introduce 'complex concepts' (but these are often simpler, in fact, for the audience) in a (usually) forlorn bid to try to understand what they're being told.IMO, it's better to start with concepts/ideas/things that they are already familiar with, and once they've got the jist of the method and its underpinnings, then move on to introduce the more unfamiliar Marxian concepts.After all, anyone can understand that if their telly is in bits scattered across their living room floor, then the picture reception by their TV will be terrible!These examples from real life can be given endlessly [please try this for yourselves at home, at this point, comrades], until we generalise from these to give them more 'complex' names: 'bits' are 'components'; telly is 'structure'; and 'picture reception' is an 'emergent property'. After lots of example of all sorts of bits, things made of bits in a particular arrangement, and the effects they then (and only then) produce, we will have prepared for the $64,000 issue.It can't be predicted that hydrogen and oxygen, when combined in a specific chemical relationship, will produce wetness for humans. We could tell the story of the bourgeois firefighters who didn't believe in 'components/structures/emergent properties', and simply poured hydrogen and oxygen onto the raging house fire. We will even predict that the fire didn't go out. This example will go with a bang.Then when we say commodities are related to each other within a socio-economic structure, and this specific structure produces the dangerous emergent property of 'value', they will at least have a chance of getting a 'hook' into what we're saying.

[ALB]

I haven't followed David Harvey's apparently very popular lectures on Marx's Capital but I have read a couple of his books and some of his articles. In one of them (an introduction to a new edition of the Communist Manifesto, I think) he suggests that at one time Russia wasn't capitalist (even if it wasn't socialist either).I can't see how anybody who denies that  post-1917 Russia has always been capitalist can claim to understand Marx's concept of "value" since the production and exchange of commodities never ceased to exist in Russia.Marx saw "value" as emerging wherever there were separate(d) producers producing for the market. Under these conditions products assumed the form of commodites having a "value" which was a reflection of them being produced by separate producers who exchanged them with each other. So "value" is an expression of this particular social relation between producersI'm not sure why Harvey thought that at one time Russia's wasn't capitalist. Either because he thinkst that "value" didn't exist there or because he thinks that "value" could exist in a non-capitalist context. Both of which are mistaken and would show that he hadn't understood Marx's concept of "value".

[Young Master Smeet]

LBird wrote:

Yeah, you're right, but that happens because the 'audience' doesn't understand the terms/phrases/concepts that are being used to explain 'value', for example (but this applies to all of Marx's ideas). So, they 'split hairs', or introduce 'complex concepts' (but these are often simpler, in fact, for the audience) in a (usually) forlorn bid to try to understand what they're being told.

Yes, they are simpler, because they are part of the obviousnesses of everyday life. To take a non-economic example.  Someone had to invent the paragraph.  If you told people that it was the joint work of Bob Para and Andy Graph, they'd be confused, since paragraphs are so natural to anyone used to reading or writing.  So to if you pulled out a copy of Locke and showed them the very sentence that introduced to the world the concept they cite as if they thought of it for themselves, they'll look a bit confused.  That they might not understand the sentence from Locke, or see how it relates to the concept they've just expressed is neither here nor there.that's what I meant by 'complex ideas' some very complicated economic theories are widely held (if not thoroughly understood), and appear natural. Sometimes we can't get our ideas across by simplifying them, because they conflict with these widely held beliefs: both sides of an exchange gain (so exchange isn't equal) people exchange naturally.  I own what I create.  I own myself (bleagh).  Supplly and demand.  People just pay what they believe it is worth. etc.What everyone can understand is the slice of the cake analogy.  That's why liberal ideologues like to deny that there is a cake.

[Anonymous]

David Harvey lectures are very good, and he is a miracle of the American society,  but in certain conceptions he is mistaken.The best exposition about Marx's economic and socialism is the book written by comrade Adam, that book should be as a textbook for the study group of the Marxist-Leninist Parties. .To say that the Soviet Union was not a capitalist society is a lack of understanding of what value is

[twc]

Yes, “The Alternative to Capitalism” by Adam Buick and John Crump [now available on Amazon/Kindle] is the best comprehensive book-length introduction to capitalism and socialism, and says all that is necessary about Marxian economics at the introductory level.However, I was thinking of the body of Marxian economics itself, as encapsulated in Capital, for which there is ultimately no genuine alternative but to dive into Capital, and then, from that springboard, read as many popularizations as you can, as critically as you can, until you’ve had a surfeit.David Harvey may save some students from drowning.BeginningsIt is not that Marx was unaware of the difficulty that confronts the student at the beginning of any science, since it is precisely at the beginning of a science [as Hegel was first to demonstrate to the world] when indeterminacy rules supreme.  All of the scientific categories are here newly born, freshly minted, and they commence their life’s journey as abstractions, not besmirched by actuality — all potential and none actual.That potentiality, the tiny acorn that will eventually grow into a spreading oak, is what makes the beginning of science so fabulously unsullied.  Pristine science lacks, in its naive purity, the concrete determinations that only come with its maturity. If you can, you should never cheat yourself of that scientific baptism of fire — that journey into the unknown that takes you on the thrilling ride from the abstract to the concrete.  For that journey is but the journey of every process, from birth to death or to renewal in an other, just like that of our own lives.For Hegel, as for his avowed student Marx, that journey — from pure abstract potentiality into impure concrete actuality — is the life history of a science, developing its abstract self out of its concrete other, ever building upon its abstract foundation by concrete determinations, converting the indeterminate into the determinate.  That is Hegel.  That is life.  Grasp it!To develop science otherwise, is to want maturity before childhood — to demand the science before the science.  Worse, it is to confront the science as a fixed and static thing, that can be grasped in its immediacy, and so mistake the science for something complete at birth [ab initio].To develop the science on Hegel’s lines is to consciously recognize science as a process.  Closure, if it comes at all to the science, cannot be already in place at the dawn of morning, or we have no living process.  As Hegel poetically put it — Minerva’s owl [wisdom] only spreads its wings at the dusk of evening.Marx was openly conscious of the difficulty of all beginnings, just as the Socialist Party is openly conscious of the difficulties it faces at the dawn of the activity needed to bring about socialism — where all its activity appears abstract and still unformed because it is as yet unpropitious to realize its abstract theory as something formed in actuality.  That’s why we need science to comprehend our still abstract position.Marx expressly warns his reader of the difficulty, stating in one of the prefaces his agreement with the geometer Euclid [according to Proclus] who is supposed to have said something like — “My dear Pharoah Ptolemy of Egypt, I’m afraid learning is going to be as difficult for you as it is for everyone else: there’s no royal road to learning”.Learning is ActiveIn vulgar terms, there’s no substitute for head down and bum up.The medieval geometers considered that, by the time a student showed that he comprehended Euclid’s fifth proposition [the opposite angles of an isosceles triangle are equal] — the pons asinorum or bridge of asses — the student had grasped the necessary rudiments of how to think geometrically.  That is the precondition.What Thomas Kuhn clarified to the world is the generality of this process of learning.  By working through a science’s paradigm examples, the student learns how to think in that science.  That is the precondition.Simplification!My opposition to developing Marxian economics differently from Marx, either methodologically or terminologically, is that we thereby indulge the fantasy of someone who can’t comprehend Marx in Marx’s own terms.The earliest “simplified ” re-interpretation of Capital was provided by the Russian Dmitriev [1897], who was implicitly hostile to Marx, although that significant observation somehow got lost over time.Dmitriev successfully re-interpreted Capital mathematically along input–output lines, as later adopted by Leontief, whom Adam rather admires.So far, at the beginning of Dmitriev’s re-interpreted Marxian science, well before it has worked out its mature determinations, the Russian’s simpler re-interpretation of Marx lurks deceptively innocent — so insightful and so helpful.But Dmitriev’s re-interpretation of Marx develops into maturity over the next century, and takes on a life of its own, based upon its own simple-to-understand Marxian foundation.Dmitriev influenced overtly hostile Bortkiewicz [1906–07] who influenced totally sympathetic Sweezy [1942] and Sraffa [1961], who influenced the great historian of the labour theory of value Meek, and through controversy, Samuelson, who influenced Steedman [1977] who influenced a whole generation.  The rest, as they say, is history.That simple innocuous easy-to-understand re-interpretation of Marx exploded into a powerful maturity that proved conclusively thatMarxian value was, at best, a redundant economic category, because physical input-output quantities suffice to specify prices and that values actually came out in the wash, sometimes embarrassingly as negative quantities;Marxian value was incoherent because the rate of profit could be positive when the rate of surplus value was negative, etc.When Minerva’s owl eventually flew at dusk, not much remained of Marx’s Capital.  Dmitriev had dropped a cuckoo into the Marxian nest, and the Marxians kept on feeding it.We really need to tread carefully when simplifying Marx — reducing him to us rather than extending our reach to him.Whenever we find ourselves in violent disagreement with Marx, we might pause to consider the possibility that the error may be our own.  Come back to him tomorrow.  Marx thought long and hard about capitalism [and, of course, socialism] more deeply than most of us are ever likely to.At the very least, Marx demands to be understood before he is dismissed or simplified.

[LBird]

Young Master Smeet wrote:

Sometimes we can't get our ideas across by simplifying them, because they conflict with these widely held beliefs.

I disagree with you, here, YMS. Everyone can understand that a disassembled TV spread in pieces across their lounge carpet will not produce a picture. That is the intial basis for the eventual understanding of 'value'.

[Author]

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