robbo203
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On the question of Marx’s definition of Marx’s definition of economics its worth reading Louis Dumont’s work From Mandeville to Marx: Genesis and Triumph of Economic Ideology
Dumont’s basic argument is that prior to capitalism, it was difficult if not impossible to distinguish a particular field of human activity one could label the “economy”. Everything was mixed up. We see this in the case of gift transactions which is often misconstrued to be “trade” when in fact it is more a moral transaction. The dynamic of the gift transaction is the complete opposite of a market transaction. It is about cementing social relationships not separating (atomising) individuals into buyers and sellers having opposing interests with respect to the price of the thing being sold
The rise of capitalism represented also the “disentanglement” and freeing up of the “economic category” from other dimensions of social reality. In so called mercantile capitalism we still see the subordination of the economic realm to the political realm. It is only with the emergence of classical political economy and the idea of the free market that you get a sense of economic realm as something separate and distinct from any other realm and subject to its own distinctive laws that define economics as a discipline. This was also coincident with the rise of individualism and Dumont’s more controversial thesis is that Marx took as his basic point of departure an individualist standpoint by positing the economic base as the decisive determining factor as far as the nature of society is concerned insofar as it presupposes the economy as a separate realm of activity subject to its own inner laws.
After all, you can’t posit a causal connection between base and superstructure unless the base is in some sense autonomous. But then again this is a rather crude and misleading characterisation of historical materialism which does not deny that the superstructure can impact on the base even if the base is decisive
So no I dont think one can talk about a “socialist economy”. In socialism, we will return to a state of affairs in which the different aspects of human relationships will all be seamlessly intertwined . Terms like “moral economy” or “gift economy” hint at this but even these are not quite satisfactory since they still seem to imply of some sort of “economy” as the basis of society
Yes I agree with you Alan – 100%. It seems very odd to hire a firm to clean HO particularly if there are members willing and able to come to HO to do the work. Though its many years since I last visited the place it is a fantastic asset which should be made more use of and in many more diverse ways. When last was there a BBQ , Music night or second hand book sale/exchange there?
The carpet must be a bit lumpy. There seems to be quite lot on the subject here. A quick vacuuming uncovered.
Ha Ha nice one Matt. No I was thinking back to the thread – cant locate it anymore unfortunately – concerning whether the case for socialism was also a moral one and not just a matter of class self interest. I take the view that is both and endorse Engels comment about the need for a “class morality” but others must have been taking a contrary view arguing that morality has nothing to do with establishing socialism
On the question of human beings as being “inherently greedy” and harbouring “insatiable wants”, I think one needs to understand that this has not been a particularly dominant theme in the history of economic ideas – at least not in the naïve form I refer to below. It certainly appears in precursors to the Neoclassical Marginalist revolution like Hermann Gossen in the 1850s who had an almost fanatically religious attachment to the idea of maximising one’s self interest (in fact he saw egoistic impulses as a “natural law” designed by god which humans have a moral duty to conform to)
The concept of “Homo Economicus” – Economic Man – was really ushered in or popularised by Alfred Marshall , a leading economist in the second generation of neoclassical economists. However, like the utilitarian J S Mill, he considered that self interest strictly related to the economic sphere of life and did not deny that human beings were subject to “higher motives” – altruism – in other parts of life. Marshall defined economics as the “study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing”
Marshall’s “Economic Man” was subjected to criticism from people like Thorstein Veblen and other humanistic economists and from then on you find a subtle shift in the way economics approached the problem of human motives , pioneered by economists like Wicksteed and Lionel Robbins . The ends (whether these be altruistic or egoistic) were effectively separated and distinguished from the means of realising those ends with economics being purportedly concerned only with the what are the most effective means by which human beings realised their ends. Even someone solely motivated by altruistic concern for others still had to make wise economic choices in order to best realise his/her objectives. In this way the caricature of the “Greedy Man” was replaced by another caricature “Rational Man” – though one could argue that the latter is just a way of camouflaging, rather than banishing, the former. It is still “self-interested” insofar as it treats other people as a means to realising your ends rather than an end in themselves
So the basic argument becomes this – that in making economic choices we always face “opportunity costs”. If I want to go for a swim this afternoon I cannot at the same time go for a stroll in the park. The opportunity cost of my decision to swim is that I forego a stroll in the park. Similarly if a particular society wants to develop its agricultural sector, say, this may require having to divert resources from some other sector(s) of the economy and so on. Thus, the concept of “scarcity is built into the very definition of opportunity costs which any kind of society must face. This is a truism but I dont think this particular concept of scarcity in any way undermines the case for socialism which depends on our ability to produce enough to satisfy our reasonable needs. In the latter case we are talking about a quite different definition of scarcity which socialists argue is no longer applicable given the development of a productive potential to sustain a socialist society
Which brings me to a final point – it might be slightly misleading to just baldly portray contemporary economics as having as its basic assumption that “people’s wants are insatiable”. This could be misconstrued as suggesting that my particular want for something e.g a cone of ice cream – is “infinite”. Obviously this is a caricature and an Aunt Sally argument and in fact, flatly contradicts the “Law of diminishing marginal utility” in contemporary mainstream economics itself. In other words, for every additional ice cream I consume I derive less utility or pleasure until eventually eating another ice cream might even become a disutility – I might become sick at the very thought of it – meaning very clearly that my demand for ice-cream is definitely not insatiable! Nor is contemporary mainstream economics saying that it is
Rather, the argument is that as the marginal utility of a good falls with each additional unit of that good consumed, the consumer switches his/her desire to some other good depending on the marginal rates of substitution. (MRS). The point being that there is no end to the variety of goods that could potentially provide a substitute for ice-cream. Indeed, this argument is employed in “indifference theory ” in conventional economics to analyse consumer behaviour
It is pretty easy to knock down the Aunt Sally argument referred to above but more problematic when it comes to dealing with the so called “Greedy Person” argument in this wider context of what modern economic theory is actually saying.
For this we need a more sophisticated nuanced approach which recognises that human behaviour is always a dynamic mix of both self interested and altruistic motives and will be so even in socialism. That approach will also need to make a distinction between “needs” and “wants”, in my view, something that has long been a cornerstone belief in humanistic economics in its debate with conventional mainstream economics. Sometimes “wants” will have to be sacrificed in order that “needs” be met – not least in a world in which we face growing environmental constraints.
All of which, of course, brings into focus the question of morality which, unfortunately, some comrades tend to want to brush under the carpet as being irrelevant to the socialist project.
Hi David
Some commentators have argued that Marxist economic theory and Marginalist economic theory do not so much contradict as complement each other in the sense of each having a quite different focus – macroeconomic or microeconomic – and on this basis have sought to integrate one with the other. I’m not sure this is theoretically possible. However I wouldn’t entirely throw the baggage of Marginalist thinking out of the window. Some of its key concepts such as the law of diminishing marginal returns and marginal rates of substitution have merit and can serve as a heuristic for conceptualising how a socialist system of production could be organised.
It is also important to grasp that there are different schools of thought associated with modern economic theory. We tend to think of the theory as a development out of the neoclassical Marginalist revolution of the late 19th century which replaced the labour theory of value of classical economists and Marx with a subjective theory of value. But it is really only the Austrian school of economists represented by people like Von Mises who are thoroughgoing subjectivists and who would argued that price is entirely determined by subjective values – or utility/use value. That is to say, they are confusing/conflating use value and exchange value
Certainly a commodity must have use value in order to be a commodity at all as Marx himself point out. Subjective valuation certainly influences the demand for a good but it cannot explain the ratio in which goods exchange in the long run because an increased demand for a good under capitalism induces an increase in supply so that in the long run supply and demand tend to equilibrate. That being so, why does a car consistently and in the long run sell at a price way above, say, a bicycle? There is a limit to how far you can reduce your price and stay in production. This is determined by your cost of production – an objective consideration. . In capitalism, production grinds to halt if there no profit forthcoming and profit after all derives from the difference between costs and revenue. Meaning prices have to be pitched above your costs of production for production to continue under capitalism. An objective constraint!
The major problems with the subjective theory of value are as follows
1). Your subjective valuation of a commodity means nothing unless you have the purchasing power (objective) in the form of money to influence its price.
2)The theory is based on circular reasoning in that it asserts that utility (subjective valuation) determines price but price also determines utility (e.g. increases the desirability of a commodity through a reduction in its price).
3), the theory is contradictory with the regard to the role of money. Is the marginal utility of money subject to diminishing returns and what does this mean for the marginal utility of other commodities?
Hi Schekn
It strikes me that what we are looking at here with respect to tackling climate change is reminiscent of what the biologist Garret Hardin wrote about in his famous essay in the 1960s on the “Tragedy of the Commons”. Hardin’s basic thesis was seriously flawed. In practice, actually existing Commons do not generally result in serious environmental degradation since they are often quite closely monitored and subject to stringent rules to prevent overuse and destructive exploitation.
More to the point, Hardin’s diagnosis of the problem was misplaced. It was not the fact that there was a commons to which the herders could gain free access that was the root cause of the problem of overgrazing. Rather it was the fact that the cattle herds were privately owned by herders in competition with each other that locked them into the destructive logic whereby each herder benefitted exclusively from the addition of one more head of cattle to his/her herd but where the environmental costs of each additional head of cattle were externalised and shared by all the commoners. This gave each individual herder a built-in incentive to add to his/her herd resulting in generalised overgrazing.
The same kind of logic applies in the case of tackling climate change. The trillions of dollars needed to tackle climate may well be less than the costs of inaction but as a long as each capitalist state is seeking to externalise the costs of tackling climate change – get others to bear to more of the burden of these costs so as not to impair its own economic prospects in its competition with others – inaction will result. States will only be dragged kicking and screaming into action as things get generally worse and the action they take will probably be too little too late.
That is the tendency of capitalism – to get away with what is minimally required. It is why citing Hardin’s model (but correcting its faulty reasoning) might be a useful approach to encouraging environmentalists to taking more seriously what socialists have to say
Hi David,
I dont think there is any problem with communicating personally with members of the EC although I am curious as to why you might want to. As Alan suggests, there is nothing special about EC members and we dont put them above anyone else. You are quite at liberty to communicate with anyone in the SP, we are a party of equals.
I would just make one small observation though that some individuals, because of their personal circumstances, might be a little reluctant or anxious about having their names made too public – perhaps because of family or job reasons. This is understandable. I remember when I worked in the civil services many years ago I discovered to my horror that my many letters to the local press had been monitored over several years by Personnel (they actually kept copies on file). Because of this I was actually required to give a firm assurance on leaving the job that I would not disclose any information relating to this establishment (amusing since I was merely a lowly “clerical officer”) It is quite conceivable that such information could have been passed on to future would-be employers asking for references (in my case that actually did happen when I applied to another branch of the civil service two or three years later! They had a record of my political activism which had been transferred from my original workplace).
I dont want sound overly conspiratorial or whatever but these things can and do happen and so we have to be a bit sensitive to the concerns of particular comrades in the organisation. Personally I dont give a fig now if the powers-that-be know of my activities, – sod ’em! – but others might be a bit more concerned
No doubt if you wrote to the Gen Sec the information you require would be communicated to you in personal correspondence (it appears in minutes of the EC meetings anyway to which all members have access) Alternatively, this forum could reinstate the old messaging facility to facilitate communication between individuals
Hope this helps
Best regards
Robin
JD Wetherspoon’s boss, Tim Martin, has pledged to slash the price of lagers, spirits, wine and cider if the UK leaves the EU, after shaving 20p off a pint of ale to illustrate the Brexit benefits.
Seems like a case of free advertising for a political cause combined with a case of free advertising for a commercial venture. A cynical exercise which we can take with a pinch of salt
If Martin is genuine in his claim in wanting to shave 20p off a pint of ale “to illustrate the Brexit benefits” what’s to him doing the same thing now?
I totally understand your wish to start building the socialist system right now. This kind of position, “we just need to sit tight and WAIT until the rest of the humanity automagically come to realize the socialist values as theirs own”, it is a bit frustrating.
Hi Schekn
I dont think anyone here is suggesting we sit back and wait for people to become socialists. Nor is I being suggested that you cant make lifestyle changes in the here and now even if that in itself is not going to be enough to do the trick. This is not an either/or thing
The idea you put forward of using canteens is OK, I guess. Maybe food consumption in a socialist society will become more of a social activity. A sort of “people’s eating halls” sort of thing. I imagine there will also be a lot more in the way of growing your own food in socialism too and I am all for encouraging these sort of developments right now as a way of helping to shift ideas
But at the end of the day we still plausible model for the allocation of resources in a socialist society and I believe this has to be firmly based on the concept of a self regulating system of stock control using calculation in kind. I think this is what is basically being discussed in this thread
Hi radu62s
Just to take up your point:
You mention “self regulating system of stock control” as a mechanism to balance supply and demand in the socialist economy. This is a system to replenish the shelves. In Capitalist economy “pricing” is the mechanism to balance supply and demand. If the supply is low the price goes up and reduces demand. Demand means “willingness and capacity to pay” not “need for product”.
But “replenishing the shelves” is precisely what “balancing supply and demand” entails. You are organising the supply of particular products in a way that meets the physical demand for them as represented by the rate at which these items disappear, or are removed, from the shelves.
I cannot stress enough that ANY kind of technologically advanced mass society – including capitalism itself – depends on this mechanism of a self regulating system of stock control. Capitalism would pretty soon collapse if it sought to dispense with it. It would have no way of effectively organising the physical production and distribution of goods to where they are needed without this capacity to monitor stock levels and transmit information to the suppliers of the goods in question.
In capitalism though, as Alan had pointed out, the demand for goods is based not so much on what people may actually want or desire but rather on what they can afford. That is to say, on their “effective demand” to use the jargon. It is purchasing power that constrains what you may want to purchase but that there is a further point to be made here which is that that what you may want to purchase (irrespective of whether you can afford to purchase it) is deeply conditioned by the very nature of capitalist society and its expansionist dynamic
In other words, capitalism has a material incentive to generate what Marcuse calls “false needs” via such mechanism as advertising and by extension, perpetuate scarcity in the form of “artificial scarcity” by means of which it retains its ideological hold over individuals (see for example, https://www.academia.edu/30288232/Herbert_Marcuse_and_False_Needs_-_Appearing_Soon_in_Social_Theory_and_Practice_)
Hi radu62s
I think you have to make a distinction between the mechanism for matching supply and demand and the motives of “consumers” in a socialist society with respect to what and how much they might demand
Despite your claim that “there is no working mechanism to balance supply and demand” there must certainly is! The outlines of such a “working mechanism” is already fully evident in the physical distribution of finished goods, raw materials, machinery and so on, between production centres and distributions centres within capitalism today. The mechanism is called a self regulating system of stock control. As the stock of baked beans on the shelf of your local supermarket declines over time this is monitored and at some point when the supply falls below a certain threshold this triggers a fresh order to the suppliers so that stock on the shelves can be replenished. These days the entire process is largely computerised with bar codes and so on to identify particular items. Socialism will make full use of this mechanism. The big difference is that money accounting of any kind will completely disappear from the picture. The only form of accounting there will be is calculation in kind (e.g. how many cans of baked beans there are on the shelf) which is something we already do alongside monetary accounting under capitalism.
The other argument you make really falls under the heading of the human nature argument that is often raised against socialism. You say
If I can get anything, why not get a new pair of socks or a new shirt every day to avoid washing them. Actually I know somebody that wears new socks every day, never washes them.
I for one find your example quite extraordinary. The idea of purchasing 365 pairs of socks seems to be a case of self indulgence on quite an epic scale. I dont know how much socks costs in your part of the world but here in Spain the cheapest pack of 3 pairs might cost 8 or 9 euros in a supermarket. So your friend spends about 1000 euros on socks every year. That is 1000 euros he or she is unable to spend on other things he or she might want. Or is your friend only greedy when it comes to socks but not say, shirts, since her or she is apparently consciously cutting back on his/her ability to buy more shirts? It strikes me that he or she is either enormously wealthy or eccentric in the extreme. Or both
99.99 per cent of people even under capitalism just dont behave in this manner. Have you been to one of those restaurants where you can eat as much as you want for a fixed price? Do you gorge yourself to point of vomiting then start all over again? No of course you dont. Almost everyone easts to point where their appetite has been sated and no more
There is a larger point to be made here. Socialism is not just about bringing the means of production under common ownership. It is also about a fundamental change in values and culture based on the recognition that we all depend on each other. The very freedom that we will experience in socialism – free access to foods and services and free voluntaristic labour – is conducive to encouraging cooperation in a way that is simply not possible under capitalism. You cannot impose socialism from above. People have got to want it and understand what implies. If everyone engaged in the kind irrational “greedy” behaviour you allude to this would jeopardise the very existence of socialism itself.
Would the very people who had striven to bring about socialism want to undo everything they had fought so hard to achieve? Of course not. Ideas do not come from nowhere. They spring from the kind of society in which we live. Capitalism, because of its own inner expansionist dynamic based on market competition, needs to foster ideas that encourage people to consume more – to consume for the sake of consumption itself – since increased profits through market sales depend on this. It also needs to foster the notion that people are inherently greedy and care only about themselves. This is part of its aparatus of ideological justification. It has the effect of atomising and disuniting people and hence disempowering them. Its a case of divide and rule.
Socialism presupposes a fundamental change in the way people relate to one other and a fundamental change in the values they hold which in and of itself render the kind of human nature arguments people now raise against socialism, utterly obsolete
It always amazes me how sections of the media accused the Russian state of meddling in the US elections but when Trump meddles in the affairs of other countries as with Brexit…
Either we disregard completely the borders of nation states (the preferred option) or stop resorting to double standards
I guess insofar as the demand for certain goods and services that persistently outstrip – which are likely to be on luxury end of the product spectrum because of the way the production priorities of a socialist society are likely to skew the allocation of resources in favour of satisfying basic needs – then probably some sort of rationing will be introduced for these goods and services which will operate alongside free access for other goods and services. There are of course a great many different kinds of rationing procedures one could chose from. I have my own preference which basically involves the grading of housing stock as a criterion for priority access t rationed goods. Its what I call the “compensation model of rationing” (compensation for the some people having to put up with relatively crappy housing for the time being)
Subhaditya,
I am not quite sure what to make of the scenario you paint. How you would come to be the “allocator” of these scarce goods and services you refer to, in the first place? That presupposes private property inasmuch as you have the right to exclude others from the goods and services they need at your whim – or include them on condition that they perform certain sexual services for your benefit.
So we are not really talking about a system of common ownership are we? In such a society if you are so desperate for sex you may well find you are gonna have to drop the kind of sexist attitude that regards the “ladies” as a peice of meat that can be exchanged for some good you are in a postion to “allocate”.
Hi radu62s
To take up your various points…
democracy is a very difficult environment to work within. I am an advocate of democracy, I want the society to work democratically but it does not happens naturally. It takes a lot of effort for a small organization to function democratically, but how about an ecosystem with a large number of organizations where personal ego and views on issues conflict?
We would say a socialist society would be a polycentric society which would operate democratically at different levels – global, regional and local – depending on the nature of the decision to be made. See here https://www.worldsocialism.org/spgb/socialist-standard/2010s/2019/no-1379-july-2019/socialism-and-planning-what-can-work/
cooperatives are the best economic entities to support a socialist society. Even they exist, they never reached a level to make an impact. The total cooperative’s share of economic activity in UK’s economy is less that 1%. It should be at least 10-20% to have a real impact.
Cooperatives are geared to producing or distributing goods for market sale and as such are subject to the need to secure profits. In other words, they dont actually function outside of the capitalist economy but are part of it. Yes there may be some benefits to workers working in cooperatives under capitalism such as a relatively more congenial working environment and also having more of a say in the running of the business. However, and paradoxically, the more successful cooperatives become, the more they tend to converge with their more conventional mainstream competitors in outlook, organisational stucuture and ethos as the case of Mondragon demonstrates . See for example this critique from Libcom which you can download https://libcom.org/library/myth-mondragon-cooperatives-politics-working-class-life-basque-town
How would you balance supply and demand of goods and services in society? How would you determine who produces what, so everybody can have enough? – whatever solutions you may propose, and I am quite interested to hear them, they would need to be tested in the real world on pilot communities.
Actually, the mechanism for matching supply and demand in a socialist society does not need to be tested because it already functions in capitalism – a self regulating distributed system of stock control using calculation in kind. The differnee is that socialism will dispense with monetary accointing and use only calculation in kind. See this https://www.worldsocialism.org/spgb/socialist-standard/2010s/2019/no-1380-august-2019/socialism-and-planning-part2-feedback/
