robbo203
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Marcos wrote:In regard to price, there are many commodities that their prices have been decreased like in the case of electronics, a few months ago the price for a 4k television was over 5,000.00. and right now some 4k tv cost around $500.00,
Yes, this is why I think Michel's whole argument is highly dubious. He talks of prices steadily rising , boosted by the "creative power" of the capitalists (meaning, marketing or branding) to revalue commodities upwards, while the costs of production have been steadily declining. That just doesnt make any sense. The figures dont add up. Since the wages of workers are a signifcant component of these costs of production that would suggest workers' earnings are dropping (which is not true – they have actually slightly increased in recent decades). But if the purchasing power of workers is diminishing how are those commodities going to be sold if businesses insist on steadily raising their prices? The reality is more complex. Some prices have been rising in relative terms – particularly for status goods – but other prices have been falling in these terms due to falling unit production costs and the competitive need for busineses to attract more customers by undercutting each other pricewise. The rise in prices of status or Veblen goods is a reflection of a secular trend in contemporary capitalism towards increasing inequality in the distribution of wealth and income, Veblen goods (which is really what Michel is talking about) are different from ordinary commodities in that increased prices (which the rich can afford anyway) is precisely what induces them to buy more of these goods, Its a way of differentiating them from the riff raff – us workers – who cannot afford such things. Marx's labour theory has not been marginalised as Michel claims. It is the circumstances that have changed but the theory allows us to understand what is going on behind these changes. The rate of profit – not the the same thing as the mass of profit which can increase with increased output despite a fall in the rate of profit – has been declining in the long run but at the same time the share of social wealth appropriated by the capitalists has been increasing. Most of the value of productivity gains over the last few decades has gone to the top 1 per cent. There is a lot of money swilling around in their hands but they find it increasingly difficult (relatively speaking) to productively reinvest it. Which is why some big corporations are sitting on big piles of the stuff and why you find an increasing tendency for the super rich to splash out on the unproductive consumption of status goods like posh houses and fancy yachts
Vin wrote:Came across this left forum – http://hollaforums.com/section/activism. Dicussions about Labour time vouchers and 'value'. Thought some members might be interested.Vin, I tried joining it but repeatedly found the sign-in facility temporarily disabled. Did you have any luck joining it?
MBellemare wrote:An ideologue, is one who, with tooth and nail, defends his or her own ideology by professing all other forms of thought as totally false, misunderstood and lacking in comprehension. Marx is still valuable, I never said he wasn't. Much of what I say is grounded in Marx. I simply think that what Marx saw as an exception in 1867, is now paramount in post-industrial, post-modern society. His law of value, and the fundamental basis of his whole theoretical apparatus as being founded on quantifiable labor-time is now marginal. It is has been pushed to the capitalist periphery such as India and China, while American Capitalism, functions increasingly on a post-industrial, post-modern basis, i.e., arbitrary/artificial constructions of value, price and wage. This is why Bernie Sanders states, without fully knowing why, capitalism is rigged, the whole system is rigged where the same people lose all the time or most of the time, while the same select few always win. It is rigged because even if workers get higher wages, capitalists can recoup their loses by arbitrarily raising prices a few percentage points above any wage increase. And presto! the workers lose again, even while, superficially winning a pay raise. As a result, capitalists appease workers by giving them pay raises (they are happy) and appease their capitalists stock holders by increasing profits, via a slight price increase that off-sets any pay raise, slightly increasing profits via small increments. Of course, this sort of system cannot continue indefinately, hence, the ever-increasing debt-load workers have to carry. But hey! capitalism is still intact! To quote Guy Debord " society has gone from being, to having, to appearing".Two good examples are the automobile industry and the North American Housing Industry: Today, no-one can truly afford a new car, in North America, but everyone can LEASE a new car, making it look as if one owns what one does not actually own. Moreover, one can LEASE a luxury car, a Mercedes, a BMW, a JAGUAR etc., via reasonable inflated monthly payments, making it look as if one is a massive success, despite the fact that, in reality, one, at best, only owns the steering wheel, or the key-chain. I ask how did this happen, when production costs for automobiles, have been steadily decreasing for roughly a century. And according to Marx, price should be decreasing as well, accordingly. The only plausible answer is that price have not been decreasing but increasing. But the opposite APPEARS to be the case because of all sorts of creative financings and leasing going on (A different type of mortgage). So yes! more people are driving and seemingly "buying" cars (The American Dream is Still IN TACT) , but they, in reality, own less and less of the cars they seemingly "buy" and drive because, in truth, the majority of North Americans citizens, do not in fact "buy" brand-new-automobiles anymore, they RENT/LEASE them. The majority of North Americans cannot afford new Cars, because prices are outlandish and out of whack, out of the realm of their real salaries, but they drive new cars because of creative financings. The truth is that behind it all, the majority of these new cars, with "SOLD" written on them, still belong to the car-companies and their dealerships. So leasing a new car, looks like real ownership, feels like real ownership, looks like real ownership to others, eventhough in reality it is not! In a world of arbitrarily-constructed values, prices and wages, debt-management is key. its all about managing debt, i.e., different types of mortgages, and one's ability to unleash capital, i.e., borrow. The same logic applies to the North American Housing Market. No one actually owns a house anymore, because, housing prices are out of whack and outlandish, despite building costs for new homes steadily decreasing over the last 50 years. And according to Marx, prices should as well have decreased in the housing market in the last 50 years, but they have not. In truth, WE PAY MORE FOR LESS. And this applies across many spheres of production. But via creative financing, more people than ever can seemingly borrow, thus more people then ever can seemingly "buy" a house, a MCMANSION in fact. However, how much of that MCMANSION do most people actually own, maybe, if thing are slightly good for a few years, the FRONT DOOR. A house mortgage is a fancy term for a rent-to-own scheme. Thus, North Americans rent from the BANKS the houses they seemingly appear to OWN and hope to eventually own outright on fine day, but they do not in truth currently own. (The American Dream is DEBT-RIDDEN). Moreover, add property taxes onto this and we, in fact, rent the land from the city and the house from the banks. Why is this? because values, prices and wages are no longer founded in production, i.e., real expenditures of quantifiable labor-power within the production sphere, but upon ideological nonsense, unfounded capitalists desires and network-power. What I am describing as post-industrial, post-modern capitalism, is far-more dangerous, far-more crazy, than Marx ever concieved. At least, Marx had sound economic laws to corral capitalists and explain values and prices. For Marx, everyone was subject to such economic laws, which limited behavior and instilled a sense of fairness across the sum of social reality. In constrast, Post-Industrial, Post-Modern capitalism is in effect lawless, extreme and fundamentally unfair. And even worst, for those who lack power and network-support. Its scary because when values, prices and wages are arbitrarily-determined, the working population, can theoretically lose everytime and indefinately, the game called post-industrial, post-modern capitalism. In fact, its not even a game, as games have set rules, which every player, regardless of social standing, must follow. Post-industrial, post-modern capitalism, is theoretically a free-for-all, where "whatever one can get away with in the market-place" is valid and legitimate, once normalized. And things can get very chaotic, alienated and violent, because it is a lawless free-for-all. The truth is that I wish Marx was completely right, because, what he described in DAS CAPITAL was an ordered economic universe, understandable, rational and scientifically sound. The Capitalism we live in now is opaque, confusing, odd, seemingly irrational and unscientific, without order and sound judgements. And the only logical principle I have been able to extract from this nonsensical capitalism is the logical principle: "To maximize profit by any means necessary, at the lowest financial cost, as soon as possible". From this logical principle, stems all the nonsense the post-industrial, post-modern capitalism generates. In post-industrial, post-modern capitalism, there are even super-profits to be extracted from all sorts of human suffering and disasters!This is all very impressionistic, Michel , but can you give any hard emprical evidence to back up what you are saying? For example , you talk about automobiles and say "production costs for automobiles, have been steadily decreasing for roughly a century. And according to Marx, price should be decreasing as well, accordingly". You say on the contary that the prices have been increasing and are now "outlandish". But according to the evidence I presented earlier the prices of new automobiles ARE decreasing in relative terms (allowing for inflation) along with a number of other categories of goods, due to increasing producitivty. True, there are some goods where the prices have gone up relatively speaking for various reasons – like branded goods . The direct costs of producing these goods may have fallen due the production being relocated to low wage economies in the Third World but, I suspect, you neglect take into account the increased costs of marketing these goods in an increasingly competitive global market Then you talk about the North American Housing Market. "No one actually owns a house anymore, because, housing prices are out of whack and outlandish". I am not too familiar with the US figures but what is the differnece between now and, say, fifty years or 100 years ago? You make it sound like there was some golden age of working class housing in the past when everyone owned their own home and things have just deteriorated since then. In continental Europe for example there has long been a tradition of renting accommodation and the greater emphasis on purchasing a home is a relatively new development Finally you go on about that these super profits that the capitalists procure today in our so called post-industrial postmodern world due to the outrageous price mark ups and price gouging they engage in today though you dont quite explain what stopped them from engaging in mark ups on the same scale in the past. It seems to me your basic mistake is to assume that profits are made at the point of sale rather than at the point of production (the Marxian explanation) and again you dont explain where all this additonal purchasing power is supposed to come from to afford these outlandish price increases. If the answer is workers getting more into debt then all this really boils down is a redistribution of surplus value from the industrial capitalists to the financial capitalists. It doesnt in itself neceesarily mean an increase the total amount of surplus value generated in the economy As I said before the long term evidence seem to point to the rate of profit gradually declining, not rising . See the link I posted earlier http://weeklyworker.co.uk/worker/1126/rate-of-profit-continues-to-fall/.. How would you respond to this point?
J P Morgan wrote:Can you recommend an article, or provide a link, that gives the Marxian explanation of the bank rate. I'd be obliged.Came across this http://www.worldsocialism.org/spgb/socialist-standard/1960s/1967/no-751-march-1967/money-nothing
J P Morgan wrote:Can you recommend an article, or provide a link, that gives the Marxian explanation of the bank rate. I'd be obliged.Try the search facility at the top right hand corner. It comes up with some stuff but I am not sure if that is what you are looking for. Good luck
MBellemare wrote:Yes, Steve San Francisco, you are banging your head against a wall, a certain wall of ideologues, trapped in the past. Semantics and the ignoring of concrete facts as somehow illigitimate, is the last resort of an outdated argument backed-up against the wall, a dying argument. So don't fret too much about it, this is how new paradigms come to the foreground. To be positive and optimistic, one can only hope on this forum, that some, who are truly interested in furthering knowledge, will examine the evidence objectively. The fact is that Marx's analysis cannot fully explain the post-industrial condition. He is helpful in pointing in the right direction and offers good insights, but cannot explain a litany of post-modern, socio-economic phenomena, which are out of reach of Das Capital. So let me quote, the American, philosopher of science, Thomas Kuhn, who can incapsulate how these issues with Marx and his ideologues will be resolved:Michel I hope this is not an endorsement on your part, as an anarchist, of Steve San Francisco's ludicrous statement:Capitalist call that a store and it fits the definition of "an immense accumulation of commodities". Socialist call it a store and it fits the definition of "an immense accumulation of commodities". As an anarchist, I take it you would agree that the kind of society we are all looking toward – socialsm – would indeed entail the complete disappearance of all commodity production – of buying and seling – however much we might disagree on how to get there On the question of examining the evidence objectively I am very keen to do precisely that. Ive cited some evidence already that seems to call into question your central thesis that Marx.'s Labour Theory of Value has been effectively marginalied by modern or, should I say, post modern developments. I am not convinced by your argument but I am open to persuasion. I think the argument you have presented thus far is too one sided and fails to see the wood for the trees, In relative tems, though some prices have risen sharply, for reasons such as branding (although I think you overlook the costs of marketing which have also to be factored into the equation), others have fallen as you would expect with rising industrial productivity and declining unit costs (adjusted for inflation) Could you perhaps address some of the concerns that I raised in post 129?
Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:robbo203 wrote:robbo203 wrote:MBellemare wrote:I never said Marx's critique is no longer valid, I said it is marginalized, i.e., that capitalism functions according to a different, post-modern, post-industrial logic, that no longer holds scientific quantification of labor-power as first and foremost, but merely as a secondary minor consideration. What was in Marx's time an exception, i.e., the arbitrary construction of values, prices, and wages, where no labor-power is found, is now primary. That is all I've said. Marx readily admits that value and price can be dreamed-up and applied to thing. I merely state that now this sort of thing is primary to any quantifiable theory/law of value. By doing this, I can rightly explain from a post-industrial, post-modern point of view, why prices are rising as production costs drop, why there is ever-increasing financial inequality, why there is an ever-increasing debt load dropped upon the working population. Mr. San Francisco, supplied some excellent statistics, which prove my thesis, concerning arbitrary, artificial mark-ups, that continually rise, over the last 40 years.Michel Something does not quite add up in this argument you present of steadily rising prices and falling costs of production. Another forum user here, Steve San Francisco, comes to your aid by presenting the following evidence: “According to economists Jan De Loecker of Princteon University and Jan Eeckhout of the University College London, this basically describes the US economy since 1980. In a recently released paper, De Loecker and Eeckhout analyzed the balance sheets of listed companies from 1950 to 2014. (In 2014, these firms accounted for around 40% of all sales.) They found that average markups, defined as the amount above cost at which a product is sold, have shot up since 1980. The average markup was 18% in 1980, but by 2014 it was nearly 70%." However such evidence hardly clinches the argument for the obvious reason provided in the quote itself – that the firms concerned account for only 40% of all sales. We do not know what the situation is regarding firms accounting for the other 60% of all sales. It is quite conceivable that the former have been able to substantially raise their prices because of the changing pattern of supply and demand but at the expense of the latter, perhaps because relatively greater productivity in the latter sector has greatly increased the output of goods there bringing about a fall in their relative prices. In fact, according to this article I came across, there are “seven categories of goods and services that are comparatively cheaper today than they were 10 years ago. All figures are based on a BLS comparison of like products and services from August 1998 and August 2008.” These include phones, electronics, footwear, new vehicles, toys, apparel, watches” (http://www.bankrate.com/finance/personal-finance/7-falling-price-tags-1.aspx) So the picture you present is somewhat misleading – some businesses or industries may have been able make substantial mark-ups but only because other businesses of industries have not been able to do so. So what you have in fact is a shift in the overall pattern of demand from the latter to the former, relatively speaking.
Can anyone provide some data concerning the average mark up for industry as a whole not just a select number of businesses, as in the above quote, that account for only 40 per cent of total sales?
Gee, those are some pretty well funded researchers that came up with the 40% figure. I don't think any data that comprehensive and consolidated exists outside of deep capitalist HQ information vaults.
So essentially what this boils down to saying is that there is no hard emprical eviidence to back up the claim that businesses across the board can just arbitrarily mark up their prices in the face of (allegedly) falling production costs and this rather calls into question Michel's whole thesis that Marx's theory has been "marginalised" by the supposed ability of modern day businesses, using their "creative power" to enhance the value of commodities, in general, way above their abstract labour content. Some commodities may well sell above their value in the Marxian sense but the logical corrollary of this is that others sell below their value since the total sum of values must in the end equate with the total sum of prices
Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:No. That's not what Marx or I meant in every case that we use the phrase "immense accumulation of commodities". I'm refering to a region of space like a store where an immense collection of things like toasters and blenders (aka commodities) are accumulated. You could define "an immense accumulation of commodities" with geography and a map in the lexicon of discusstion that's relevant and I'm using. Capitalist call that a store and it fits the definition of "an immense accumulation of commodities". Socialist call it a store and it fits the definition of "an immense accumulation of commodities".I feel like I am banging my head against a brick wall here. You clearly dont understand what a "commodity" is if you think a non market socialist system of production is one in which there will be "an immense accumulation of commodities". Everyone, apart from you, seems to understand that socialism in the Marxian senses entails the abolition of commodity production. Your eccentric interpretation is something that is unique to you alone, dont bring Marx into the picture. He would have guffawed heartily at such an example of profound ignorance on the subject Incidentally "toasters and blenders" are emphaticaly NOT "aka" commodities. They only become commoditiies when they are produced for the express purpose of being sold. This is so basic and elementray I have no idea why you can't seem to get your head around it
Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:I think Robo203 can speak for himself. But I'll wager 1 hour of yout time reading on a topid the other chooses based on Robo203's sole determination of whom he feels owes whom an hour reading. for his service as judge Robo203's can also add an hour of time and any reading comprehension quizes to the wage and he gets to choose the topic the loser has to read. Care to put your means and abilitiy where your mouth is? If you're more than just an angry idiot then put up or shut up and let robo203 decide in his sole discretion and at his sole judgement criteria who he wants to spend an hour of time reading what. That would be the socialist way if you can see past your preconceptioins to recognize it and not get all scardy cat of an hours time lost having to think and answer a few simple reading comprehension questions. You accused me of caliming I know more than Karl Marx? So socialist defer to elites and prestigious figures to settle arguments? what difference does it make if I know more than Karl Marx except for offending your religous veneration of him which I don't think he would have wanted anyway. I want you to consider the phrase "I stand on the shoulders of genious" and consider what that might mean. I read a few marx books and summaries in college long ago and it had a profound effect on me, but clearly wasn't relevant or actionable so I didn't get much value from practicing it or talking about it most of the time. I have spent a lot of time studying human behavior in capitalist markets, usually on the inside doing some horibble job to survive making presentations for the very worst of capitalist because you got to pay the rent. Speaking of which I need a roommate now and I have one of the last rent controlled wharehouse bohemian room shares in SF that I'm renting at an incredibly low price because that's the law, and I completely approve of the law and my rent control and you have me all wrong because of your preconceptioins. Political Economic is just part of what I study and it was just part of what Marx studied. I have come after marx and my genious is added to his not in competition with his genious. Please don't apply the law of competition to me and marx because that's a capitalist way of thinking.Could you please stop wandering all over the place and address the argument in a simple straightforward fashion. I find your style f argumentation distracting and frustrating, frankly
robbo203 wrote:MBellemare wrote:I never said Marx's critique is no longer valid, I said it is marginalized, i.e., that capitalism functions according to a different, post-modern, post-industrial logic, that no longer holds scientific quantification of labor-power as first and foremost, but merely as a secondary minor consideration. What was in Marx's time an exception, i.e., the arbitrary construction of values, prices, and wages, where no labor-power is found, is now primary. That is all I've said. Marx readily admits that value and price can be dreamed-up and applied to thing. I merely state that now this sort of thing is primary to any quantifiable theory/law of value. By doing this, I can rightly explain from a post-industrial, post-modern point of view, why prices are rising as production costs drop, why there is ever-increasing financial inequality, why there is an ever-increasing debt load dropped upon the working population. Mr. San Francisco, supplied some excellent statistics, which prove my thesis, concerning arbitrary, artificial mark-ups, that continually rise, over the last 40 years.Michel Something does not quite add up in this argument you present of steadily rising prices and falling costs of production. Another forum user here, Steve San Francisco, comes to your aid by presenting the following evidence: “According to economists Jan De Loecker of Princteon University and Jan Eeckhout of the University College London, this basically describes the US economy since 1980. In a recently released paper, De Loecker and Eeckhout analyzed the balance sheets of listed companies from 1950 to 2014. (In 2014, these firms accounted for around 40% of all sales.) They found that average markups, defined as the amount above cost at which a product is sold, have shot up since 1980. The average markup was 18% in 1980, but by 2014 it was nearly 70%." However such evidence hardly clinches the argument for the obvious reason provided in the quote itself – that the firms concerned account for only 40% of all sales. We do not know what the situation is regarding firms accounting for the other 60% of all sales. It is quite conceivable that the former have been able to substantially raise their prices because of the changing pattern of supply and demand but at the expense of the latter, perhaps because relatively greater productivity in the latter sector has greatly increased the output of goods there bringing about a fall in their relative prices. In fact, according to this article I came across, there are “seven categories of goods and services that are comparatively cheaper today than they were 10 years ago. All figures are based on a BLS comparison of like products and services from August 1998 and August 2008.” These include phones, electronics, footwear, new vehicles, toys, apparel, watches” (http://www.bankrate.com/finance/personal-finance/7-falling-price-tags-1.aspx) So the picture you present is somewhat misleading – some businesses or industries may have been able make substantial mark-ups but only because other businesses of industries have not been able to do so. So what you have in fact is a shift in the overall pattern of demand from the latter to the former, relatively speaking.
Can anyone provide some data concerning the average mark up for industry as a whole not just a select number of businesses, as in the above quote, that account for only 40 per cent of total sales?
Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:robbo203 wrote:Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:. Capitalism in the form that you and marx understood has already ended.Really? The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,”1 its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.(Capital vol 1 ch 1) Has this ended?
When all you have is a single limited theory of socialism, then any “ immense accumulation of commodities,” looks like capitalism to be stamped out. I think the hypothetical general store is an "immense accumulation of commodities". So the theoretical socialist general store is capitalsm becuase inside of it is an immense (indead unlimited) accumulation of commodities, by your own logic.
What on earth are you talking about? I can make no sense of this response whatsoever. How is it the case that "by my own logic", socialism too will exhibit an "immense accumulation of commodities"? You apprently do not understand what a commodity is. It is not an object or good providing use value per se. Rather , it is good that is specifically produced for sale on a market. What characterises capitalism is that most goods are produced for same. i.e. there is generalised commodity production. In socialism there are no commodities whatsoever. There are goods providing use value, certainly, but these goods are not bought and sold. They are not commodities.That is because socialism is not a market exchange economy. Market exchange implies private or sectional ownersjip of the mean of wealth production but in socialism those means are owned in common, by everyone. If you own something you dont need to exchange something else for it in order to gain the right to access to the thing in question, That is why in socialism there will be no commodities and, therefore, "immense accumulation of commodities"
Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:. Capitalism in the form that you and marx understood has already ended.Really? The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,”1 its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.(Capital vol 1 ch 1) Has this ended?
MBellemare wrote:I never said Marx's critique is no longer valid, I said it is marginalized, i.e., that capitalism functions according to a different, post-modern, post-industrial logic, that no longer holds scientific quantification of labor-power as first and foremost, but merely as a secondary minor consideration. What was in Marx's time an exception, i.e., the arbitrary construction of values, prices, and wages, where no labor-power is found, is now primary. That is all I've said. Marx readily admits that value and price can be dreamed-up and applied to thing. I merely state that now this sort of thing is primary to any quantifiable theory/law of value. By doing this, I can rightly explain from a post-industrial, post-modern point of view, why prices are rising as production costs drop, why there is ever-increasing financial inequality, why there is an ever-increasing debt load dropped upon the working population. Mr. San Francisco, supplied some excellent statistics, which prove my thesis, concerning arbitrary, artificial mark-ups, that continually rise, over the last 40 years.Michel Something does not quite add up in this argument you present of steadily rising prices and falling costs of production. Another forum user here, Steve San Francisco, comes to your aid by presenting the following evidence: “According to economists Jan De Loecker of Princteon University and Jan Eeckhout of the University College London, this basically describes the US economy since 1980. In a recently released paper, De Loecker and Eeckhout analyzed the balance sheets of listed companies from 1950 to 2014. (In 2014, these firms accounted for around 40% of all sales.) They found that average markups, defined as the amount above cost at which a product is sold, have shot up since 1980. The average markup was 18% in 1980, but by 2014 it was nearly 70%." However such evidence hardly clinches the argument for the obvious reason provided in the quote itself – that the firms concerned account for only 40% of all sales. We do not know what the situation is regarding firms accounting for the other 60% of all sales. It is quite conceivable that the former have been able to substantially raise their prices because of the changing pattern of supply and demand but at the expense of the latter, perhaps because relatively greater productivity in the latter sector has greatly increased the output of goods there bringing about a fall in their relative prices. In fact, according to this article I came across, there are “seven categories of goods and services that are comparatively cheaper today than they were 10 years ago. All figures are based on a BLS comparison of like products and services from August 1998 and August 2008.” These include phones, electronics, footwear, new vehicles, toys, apparel, watches” (http://www.bankrate.com/finance/personal-finance/7-falling-price-tags-1.aspx) So the picture you present is somewhat misleading – some businesses or industries may have been able make substantial mark-ups but only because other businesses of industries have not been able to do so. So what you have in fact is a shift in the overall pattern of demand from the latter to the former, relatively speaking. You see, this is the problem that I have with your whole argument. You seem to think you can just arbitrarily or “creatively” push up your prices but the purchasing power of the consumer is not infinite and the law of opportunity costs intervenes to balance things out. If our consumer has to buy your product at a higher price then she is left with less money to spend on other things. It’s as simple as that. So if she has less money to spend on other thing the businesses producing those other things will struggle to sell these things at the same price as before. In short, they will be obliged to reduce their price to attract buyers Another thing. You talk about production costs falling in recent years and the prices of goods steadily rising. Let’s look at this more closely. Now production costs (by which I take you to mean UNIT production costs), have indeed fallen across large swathes of industry and this is largely because of rising productivity brought about by technological innovation. Marx refers to this as the cheapening of the prices of commodities. This is part of what makes for the increased standard of living. Because prices are cheaper, workers are more able to afford them or to stretch their money wages further to buy things they could not previously buy. In America for example there has been a significant increase in productivity in recent years. According to Gillian White: “When you look at the relationship between worker wages and worker productivity, there's a significant and, many believe, problematic, gap that has arisen in the past several decades. Though productivity (defined as the output of goods and services per hours worked) grew by about 74 percent between 1973 and 2013, compensation for workers grew at a much slower rate of only 9 percent during the same time period” (Gillian B White Feb 25, 2015, “Why the Gap Between Worker Pay and Productivity Is So Problematic”, The Atlantic) The point I am making here is that the costs of production which you say has been falling includes, of course, the wages bill that businesses have to cover. But wages have not fallen but grown albeit only slightly. Workers may be relatively poorer vis a vis the capitalists today but, in absolute terms, their living standards have gone up slightly. Why is this? Well, one reason is their increased productivity which translates into increased output which in turn brings about about a relative cheapening in the price of commodities. How else would you explain the slight increase in their real wages over this extended period? However, your whole argument hinges on the claim that prices have risen vis a vis real wages which would mean that the standard of living should have steadily fallen over this whole period. But that has not happened – in fact the reverse is true – which strongly suggests that there is something seriously wrong with your theory. You are not taking into account the increased output and the effect this has on prices What the gap between increased wages and increased productivity does help to explain is the increased level of inequality between the working class on the one hand and the capitalists on the other. But remove from the equation the factor of increased productivity (and hence increased output overall) then any increase in wages received by the workers would simply signify a decline in the share of the social product appropriated by the capitalists – and, of course, vice versa. Marx explains this in Value Price and Profit: “The aggregate demand for commodities would, therefore, not increase, but the constituent parts of that demand would change. The increasing demand on the one side would be counterbalanced by the decreasing demand on the other side”.Meaning that if capitalist increased their share of the social product this would tend to be reflected in an increased in price in the kind of commodities capitalists typically purchased such as luxuries but the flipside of this would be a lowered demand, and therefore a lower price, for “necessaries” – the sort of commodities that workers typically purchased Perhaps, it is the former type of good, or what I would call “status goods”, that your theory of rising prices versus falling production costs is based upon. We talked earlier of Naomi Klein’s book No Logo. But Klein herself makes a clear cut distinction between what she calls, on the one hand, “big box” outlets like Walmarts whose whole approach is selling as cheap as possible, buying in bulk and employing economies of scale and, on other, businesses like Nike who go in for branded products (though Nike itself , I believe, does not own any factories itself and outsources its production to subcontractors in the Third World). It is in the case of branded products such as Nike trainers that your argument is (half) correct. The Third world sweatshops that produce branded products like Nike trainers are notorious for the very low wages they pay their workers and there is a constant downward pressure to reduce wages even lower in a race to bottom with multinational corporations ever ready to switch to whichever supplier can come up with the lowest cost. But you are mistaken if you think that is the end of the matter and that everything over and above the low wholesale price charged by the subcontractors, reflecting its low production costs, is consumed by the businesses concerned as pure profit. What you overlook is that the production costs of the subcontractors supplying this branded goods and passed on to a corporation like Nike are not the only costs born by the latter. There is also the massive and increasing costs of marketing and branding the goods in question which is why these companies are so insistent on looking out for cheaper suppliers. They want to divert as much of their financial resources into marketing and branding their products and that too is a cost that eats away at their profits. The mark-up figures quoted above probably do not take into account these kinds of overheads but only direct production costs Finally you paint a generalised picture of steadily declining production costs and steadily rising commodity process and suggest that this has somehow marginalised Marx’s Labour theory of value. Well, no, it does not because all that that does on the face of it is suggest that the rate of surplus value – s/v – otherwise known as the rate of exploitation, has increased and to understand that you would be obliged to fall back on precisely that theory However, I would point that there is also the rate of profit to take into account (which is not the same thing as the rate of exploitation – namely, s(cc + v) – and there is quite a lot of evidence to suggest that, if anything, there has been a long tendency for this rate to decline. See for example this article http://weeklyworker.co.uk/worker/1126/rate-of-profit-continues-to-fall/. I don’t quite know how that would fit in with your suggestion that there is an ever growing volume of profit accruing resulting from the capitalists arbitrarily raising their prices using their “creative power”, notwithstanding the decline in production costs, but it would be interesting to see how you square this particular circle
theneilkirk wrote:Thank you.Dave, I did manage to speak with Rob and Mandy at the stall and am keen to meet up more.Robin, you really tested my Afrikaans there, but I managed without Google Translate! But I'll stick to English if you don't mind; I can't say 'ek kan die taal praat' any longer, I'm afraid to say. I was born in Vereeniging but moved to Germiston to start school and lived around that area for nearly 20 years. Small world… Where are you based now?Hi Neil, Im based in Southern Spain now – in the Alpujarras, south of Granada. Actually, some of the landscape around here reminds me of South Africa. Very rugged. You almost expect a troop of baboons to come over the top of the cliffs sometimes and maybe the odd leopard. Gawd, I remember Vereeniging and of course Germiston where I was born. We lived in Klippoortjie in Germiston not far from the lake and I recall there was a series of gruseome murders that took place around the lake back then – a serial killer or something. I guess you probably went to Germiston High, eh? Anyway have fun on the forum. Its good to have new faces and yes, as you say, what a small world it is! Cheers
theneilkirk wrote:Hi, As a new member of the forum, I wanted to introduce myself.My name is Neil, I’m 35 and I live and work around Canterbury. I’ve lived here 10 years and am originally from South Africa (I hold dual citizenship). In my day job, I am a Project Manager in software and technology development for a global telecommunications company. In my spare time, I enjoy running and have recently completed a Foundation Degree in Sports Science. I have applied and am hoping to become a member of the SPGB.Hoe gaan dit , Neil? Ek is ook van Suid-Afrika – van die stad Germiston – alhoewel dit baie jare is, was ek laas daar. Welkom by die forum. Robin
