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The Forum > Article Comments > Capitalism may be unwell but it is not dead. > Comments

Capitalism may be unwell but it is not dead. : Comments

By John Passant, published 30/12/2008

Workers can build on capitalism and create a new world where the economic crisis is consigned to a museum and war and want becomes a memory.

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Colleagues

The debate about the state and its role has blossomed.I would have liked it on my blog, where the article first appeared. (enpassant.com.au).

Tthere are a range of other articles on that site - Overpopulation, Israel, From Howard to Rudd, Is Obama just a competent George W?) also worthy of picking apart.

I have an old fashioned view - the labour theory of value. Here are these workers creating value in society and then all these parasites fight over it - rentiers, financiers, shareholders, the state, and of course capitalists. In addition, the creators of the wealth, workers, also fight for a share of their own creation. So all these groups battle it out for a bigger share for themselves.

But the surplus itself comes from the exploitative relationship between those who own the means of production and those who sell their labour power. So the state, rentiers, financiers etc do not contribute to that process of value creation (and either do capitalists in a more general sense since it is human labour which creates value) but rather are dependent on it. The way this is often presented in mainstream discussions is to talk about the real or productive economy.

So the state for example, like financiers and rentiers, must ensure that the productive but exploitative relationship between labour and capital and the creation of surplus value continues and flourishes. That does not make the state anti-capitalist. Indeed I would argue it is an integral part of capitalism.

Anyway, I'll try to clarify my thoughts and put something on my blog that is simple and lucid but necessarily simplistic since there are books and books on this issue and 1000 words is hardly enough to scratch somewhere near the surface, let alone make real contact. (Did I mention my blog Is En Passant with John Passant at enpassant.com.au)?
Posted by Passy, Friday, 2 January 2009 5:01:45 AM
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Passey: I think that the value of labour theory needs modification in the light of technology.
Imagine a spectrum:0=hunter gatherer 10=Androids/Robotics doing all meaningful work.
I reckon we are at about 8 right now.
When we get to 10 then there is *no* value to labour at all.
In short: When we get *really* good at production, the only problem left is distribution. How to distribute the goodies? Only folks with capital and land will own the means to wealth. Workers will be increasingly disempowered.
Plumping up hugely profitable "industries" such as banking and insurance is one way to spread out the wealth generated by mines, farms and factories, but this is surely not sustainable!
I really hate the "two ways" argument! Name calling is a silly distraction from the real issues.
Posted by Ozandy, Friday, 2 January 2009 2:26:18 PM
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Ozandy

There still has to be human intervention to turn the factory on, the androids on, repair them etc. Somewhere there ill be human involvement. That human action creates the value.

You also said: "I really hate the "two ways" argument! Name calling is a silly distraction from the real issues."

What do you mean?
Posted by Passy, Friday, 2 January 2009 4:22:46 PM
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The labour theory of value has been refuted so many times, I wouldn’t be prepared to discuss it unless you first (a) show that you understand the arguments and (b) refute them, which you haven’t done yet. Also, how do you refute the impossibility of economic calculation under socialism?

To all the ‘blame capitalism’ school: try answering specifically:
• did the state decide to go to war? Yes.
• did the state forcibly expropriate the funds from the American population? Yes.
• did the state also use its control of the money supply to inflation-tax the population to pay for it? Yes
• does the state pay the public and private soldiery? Yes
• is it the state that is the source of all the funds going to private interests such as Haliburton? Yes
• could those interests get those funds without the state’s activities? No.
• would the war have existed without the state? No.

• If those private companies decided by themselves, without the backing of the state, to go to Iraq and make lots of money providing those services, would it have worked on the basis of profit and loss? No. It would have resulted in loss and bankruptcy.

The entire profit and viability of these ventures comes from the initiative, authority and force of the state.

The idea that we are seeing the state serving capitalists has the facts precisely back-the-front.

War does not create wealth: it destroys it. The wealth that the Haliburtons of this world obtain, which we see, is the wealth of capital being consumed, which we don’t see.

That capital is confiscated through taxation and inflation by the US government from its owners – workers and capitalists - back in the USA, and funneled through the state into the hands of the politicians, bureaucrats, soldiers and companies who profit from the war.

What we are witnessing is a forcible redistribution of wealth to political favourites - exactly what the socialists want the state to have the power to do more of, without restraint.

The libertarian argument has enormous explaining power.
Posted by Diocletian, Friday, 2 January 2009 8:14:12 PM
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But the Marxian arguments a revolt against reason and evidence:
• Confusion over semantics – using terms to mean their opposites – calling every kind of forcible statist folly and abuse of individual freedom and private property by the name “capitalism”
• Circularity – “It is, because it is, because it is.”
• Ignoring the glaringly obvious facts
• Assuming a conspiracy theory without evidence
• Relying on theories refuted over 120 years ago.

Mil_observer's argument
• merely asserts there is a ‘false distinction’ between private capital and state force, but doesn’t say why
• immediately contradicts himself by asserting the distinction he says is false
• asserts that the arguments appeal to faith and ideology.

If anyone thinks the distinction between private capital and state force is false, let him try not paying his taxes and see what happens.

Why cannot we all agree that such state actions should be abolished? Why does that not answer your objections to the war in Iraq? Answer please.

By the way guys, since you’re wrongly using the word capitalism to mean fascism of various species, what word do you use to describe a system of social co-operation based on private property, individual freedom and responsibility, sound money, and little or no taxation or government?
Posted by Diocletian, Friday, 2 January 2009 8:16:57 PM
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First, I don't have dogmatic faith in Marx or Lenin. I have optimism about the future and the ability of workers to create a new world.

Second, the labour theory of value has been challenged, but not undermined. This is neither the time nor the place for a discussion of matters such as marginal utility theory or the transformation problem.

Third, Diolectician draws a false distinction between the state and capital. He also ignores the idea of imperialism. Iraq to my mind can only be understood in that context. (And yes, Lenin's theory of imperialism is wrong, but he added to our knowledge and we can build on that to understand imperialism today and fight against it.) But Diolectician is right to say that I have merely asserted some "truths" rather than argued for them. I'll try to draw my ideas together about the State and put something on my website (enpassant.com.au).

Fourth I am a pamphleteer, as one of my friends calls me. My arguments are aimed at a wide audience, (maybe I'll get there one day!) so the ideas have to be expressed in terms many can understand. OLO and my site are not just or even a forum for intellectuals.

Fifth, we seem to have become mired in questions of the state rather than the economic crisis per se. Perhaps we could return to the wider question, which as far as I can tell seems to have two camps - no regulation (with Diolectician at one end of that arguing for no state) and the regulation group who seem to argue that the crisis would not have occurred if there had been better financial regulation.

I think there is something more fundamental going on, something to do with low profit rates. I'm chasing up some figures on that but can't remember where I read them Oh well...

And yes Diolectician, I did teach tax law at the ANU between 89 and 96.
Posted by Passy, Saturday, 3 January 2009 7:28:44 AM
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