Marx mentioned, "the theory of surplus population and surplus capital," parenthetically, in the Grundrisse and "surplus population and surplus capital" in his 1862-63 draft of Capital. Although it isn't certain what theory exactly he was referring to, the phrase reappears, in reverse order, in chapter 15, section 3 of volume III of Capital, "Surplus Capital alongside Surplus Population," indicating internal contradictions of the law of the tendency of the rate of profit to fall.
Saturday, October 30, 2021
(Hence the correctness of the theory of surplus population and surplus capital...)
A. Liinwood Holton, Jr. RIP
Abner Linwood Holton, Jr. has just died at age 98 at his home in Kilmarnock, Virginia, near Richmond. There is a certain irony in this as a Republican, Glenn Youngkin, is likely to be elected governor of the state in three days, and Holton was the first Republican to be elected to that position since Reconstruction, which ha managed to do in 1970. He defeated the pro-segregation Byrd Machine that had run the Democrats and the state since the 1930s. That machine had supported massive resistance to integrating schools in Virginia after the 1954 SCOTUS Brown vs. Board of Education ruling that mandated such integration. Holton, a supporter of Eisenhower for president in the 1950s, would end that mass resistance, implement a clean water initiative, and introduced various other essentially progressive reforms, relying on the support of more moderate Dems in the legislature to do all this.
As it was, after George McGovern ran as the Dem nominee for president in 1972 during Holton's term, the Byrd Machine would largely move into the GOP, and Holton would be succeeded by Mills Godwin as govenor, who had preceded him as a Democrat, but succeeded him as a Republican. Holton's obituary noted that the Virginia GOP has drifted rightwards ever since he left office.
Coming from a coal mining business family in far southwestern Virginia and a WW II veteran, Holton was a classic moderate "Mountain Valley" Republican. His move to integrate schools would be symbolized by him personally walking one of his daughters into a majority Black school in Richmond while he was governor. Another of his daughters, Anne, would marry current Sen. Tim Kaine (D-VA), who was Hillary Clinton's running mate in 2016, and Holton supported him and Clinton also.
A poll out two days ago has Youngkin leading former Dem governor Terry McAuliffe 53-45%, and I think that Youngkin will win solidly this coming Tuesday, as I noted in a recent post here, and may also sweep the other top positions, with the GOP retaking control of the House of Delegates, while the State Senate remains in Dem control, not up for reelection right now, fortunately. It seems that some people die at moments of their own choosing, and it may be that Holton has passed before having to see this outcome, even as he was the first GOP governor in the state for nearly a century. But, as we all know, the Republican Party stopped being the party of Abraham Lincoln some time ago, and in this age has been taken over by RINOs accusing people like Holton of being such. Perhaps he simply did not wish to see the triumph of a new and even worse version of this breed taking power in the state, people whom old Harry Flood Byrd would probably approve of with pleasure.
Wednesday, October 27, 2021
"Lump" and "labor" are two words...
From: Tom Walker
Sent: October 27, 2021 3:49 PM
Subject: Lump of labor fallacy
I just came across your article, “Examining the Lump of Labor Fallacy Using a Simple Economic Model,” from November of last year on the St. Louis Fed website. I have done quite a bit of research on this topic and I was dismayed to see the old canard of a fallacy recycled without any attention to the documentation refuting the perennial fallacy claims.
You state that “the ‘lump of labor’ fallacy is evident in many people’s thinking” but you present no evidence. Do you have any evidence? I suspect you don’t. Did you look for evidence? Or is “economic education” a matter of taking inference for evidence?
Instead of evidence, you insinuate that anyone who has “felt threatened by new technology or the entrance of new people into the labor force” believes the fallacy. In case your reader has overlooked that inference, you then make your point explicit with the statement, “[t]hese fears are rooted in a mistaken zero-sum view of the economy...”
I could eviscerate your ‘page one’ propaganda piece point-by-point but presumably you were simply making an “easy to read” version of what you had been taught and had never really thought about or questioned. Instead I am attaching two of my articles that examine the fallacy claim in historical context in hopes of furthering your economic education. I would be very interested to hear your response to the points I raise about the alleged fallacy in these publications.
PS: to quote FRB senior advisor Jeremy Rudd, "I leave aside the deeper concern that the primary role of mainstream economics in our society is to provide an apologetics for a criminally oppressive, unsustainable, and unjust social order"*
À la recherche du socially necessary labour temps perdu
From the analysis of exchange-value it follows that the conditions of labour which creates exchange-value are social categories of labour or categories of social labour, social however not in the general sense but in the particular sense, denoting a specific type of society.
The specific type of society Marx had in mind was, of course, capitalism. The exercise of searching for terminology that wasn't there focused my attention on passages that otherwise might appear more than a bit obscure. Back in July, I identified the section titled "Necessary labour. Surplus labour. Surplus population. Surplus capital." as "the topsy-turvy concept of socially necessary labour time in embryo!"
A month later I noticed that Engels, in discussing the analytical importance of socially necessary labour time, had stated it, "already contains in embryo the whole capitalist form of production, the antagonism between capitalists and wage-workers, the industrial reserve army, crises." It's a chicken and egg question as to which embryo contains the other in embryo.
Whenever I make an earth-shattering, original discovery, I am prudently suspicious that I have only learned something I hadn't known was common knowledge in the specialized literature. It turns out that only a handful of writers have touched on the connection between Marx's category of socially necessary labour time and the fragment on surplus population and surplus capital. Fabian Arzuaga's "Socially necessary superfluity: Adorno and Marx on the crises of labor and the individual" contains the most extensive discussion of the topic. I highly recommend.
Tuesday, October 26, 2021
Is Virginia 2021 Election Going To Look More Like 1980, 1994, 2010 Or None Of The Above?
In Virginia there is an election for governor, lieutenant governor, attorney general, and the whole House of Delgates, while the State Senate with a slight Dem majority is not up for election, is a week from today on Nov. 2, although early voting has been going on for some time. The latest polls show a dead heat for governor between Dem Terry McAuliffe, who served previously to the current Dem governor, Ralph Northam, and "outsider GOP businessman, Glenn Youngkin, 46%-46%. House of Delegated currently 55-45 Dem-GOP, but Dems only took majority in 2019, and it would take only six seats to switch back to switch back party control of it. I fear the energy is on the GOP side and that as in 1980, 1994, and 2010, the GOP will do better than expected with a bigger turnout than reportedly apathetic and complacent Dems. I fear a combination of what went down in those three years, plus some new local bad stuff. While it is not all of it, part of what is going on is a drag from declining support for Biden at the national level.
The 1980 comparison looks more like relevant to the national issues: many are now comparing Biden to Jimmy Carter, who may be "beloved" now, but got clobbered by Reagan, with the Dems unexpectedly losing the Senate, with some longstanding Dem senators losing unexpectedly, such as George McGovern of SD and Gaylord Nelson of WI, who had founded Earth Day ten years earlier. Carter had lost standing on foreign policy with the Iran hostage crisis and also on the economy with rising inflation associated with surging oil prices. Well, Biden has taken a big hit on the messiness of the US exit from Afghanistan, even if it was the right thing to do, although he does not seem to be hurting for his failure to renew the Iran nuclear deal, which I consider to be something much worse. And indeed inflation is up, with oil and gasoline prices a major part of it, with consumers always paying much more attention to gasoline and food prices (which are also up) than justified by the percentage of spending they take up. But people see them and feel them, and I hear people especially complaining about gasoline prices, which have been especially shooting up just in the last couple of weeks.
Curiously in other ways the economy is looking pretty good. The unemployment rate in Virginia is down to 3.8%, with only two other periods briefly seeing lower than that, right around 2000 and just before the pandemic hit at end of 2019 beginning of 2020. People are quitting jobs to look for others, the state's budget is in surplus, the Dow Industrial stock average just hit another record high. But somehow an inflation rate of 5% after years at 2% has the economy as Number One issue in VA, with people unhappy about it, this not helping McAuliffe at all.
The comparison with 1994 is less obvious, although one comparison regards lying about the economy by the GOP. Newt Gingrich and crew had unanimously opposed the Clinton tax increase, and they ran on it, predicting that it would bring about a recession. Of course there was no recession, although I have never to this day heard Gingrich or any of them admit that, or to the extent they do they claim the only reason there was no recession was because they took control of the House of Representatives in that 94 election.
As it is Youngkin ads mentioning the economy, while accurately noting the high gasoline prices and increased inflation also add false claims that the economy is losing jobs and the budget is in deficit. They are not being seriously or effectively challenged on these false claims.
Of these three, although there are these apparent similarities between Carter and Biden, I think the 2010 election offers closer comparisons, and also involve specifically Virginia issues, although some of these could go national in 2022 or even 24, and the GOP hopes so if they bring victory next week here. The pandemic issue is probably a wash and has slipped to third place, with the economy in second place. It is what has moved into second place that has me bothered and worried: education.
The big issue in 2010, although there was a subtext of anti-Obama racism, was "Obamacare," the ACA. We then saw the Tea Party showing up at town hall and county board meeting and local meetings by Congressional reps engaging in disruptions and complaining about all sorts of supposedly terrible things about ACA, all of which were just plain false. One of these was the ludicrous "death panels." claim. This was so off the wall it is not even worth discussing other than to note it is a long time since anybody has mentioned that. None of those who were yelling and screaming about that then has a word to say about it now, when indeed ACa has become quite popular as people figured it out. It was always known the pieces of it were individually popular, but putting it all together and calling it "Obamacare," well, then it was unpopular. The other big item regarding it was simply the charge that it was "socialism" or "bringing socialized medicine," which was always absurd given that it was originally a proposal that came out of GOP think tanks like the Heritage Foundation to contrast with single payer. Indeed, it was partly because of its supposed GOP support, with Romney putting a version of it into place in MA as governor, that he pushed it. But they all opposed it, like the GOP and tax increases in '94, then lied about it, and got away with it, taking Congress that year, both houses.
So the hothouse issue being wildly misinterpreted but has the GOP troops out in full frenzy while Dems wallow in thinking that Virginia has "become a Blue state," is indeed K-12 education and local school boards, with several issues showing up there. As in 2010 with the Tea Party we have had groups of loud and disrupting people showing up at school board meetings, in many places repeatedly, and making various demands. In contrast to 2010, some of these people have engaged in threatening the lives of school board members and harassing them at their homes. AG Garland has suggested the FBI should investigate these death threats, but Youngkin ads suggest this is the FBI "suppressing free speech of parents." The issues complained about have included Criticial Race Theory (not taught in the schools, but it must be banned according to Youngkin), mask mandates, although Youngkin has not pushed on that one much, and then supposed dirty books in libraries, with Youngkin having an ad showing a mom complaining about such a book that upset her daughter without naming the book (which turns out out to be Toni Morrison's Beloved), and then keeping trans students out of bathrooms. Polls show public support for mask mandates, but the CRT matter and this trans one seem to be getting mileage with female independent voters in the suburbs, the ultimate swing voters.
It does not help that there has just been a case of a "boy" who supposedly was wearing a skirt sexually assaulting a girl in a high school bathroom in Northern Virginia, with him being found guilty just today, with him apparently having done it at another school as well. Not clear he is actually trans, but the claim is he is "gender fluid," and the GOP and Youngkin are just running hard with this one, pounding it hard in ads.
Then we also have McAuliffe blundering in their second debate and saying "I oppose parents telling schools what to teach." As it is his statement was completely reasonable and defensible in context, but the Youngkin people have taken that statement and put it into the most frequently played ads. It has gained traction by dominating the conversation and forcing McAuliffe to run ads defending his record on education. This is dominating the discussion, not the good record on mandates and Covid of Gov. Northam, not how Youngkin resembles Trump, or how Youngkin opposes abortion, all of which a majority of Virginians aupposedly agree with him on. But nobody is paying attention.
And Youngkin is pulling off a delicate balancing act. Despite separating himself a bit from hardline Trumpism, such as accepting that Biden won in 2020, much to Trump's annoyance, he has managed to retain the support of the Trumpist base, who are really keen on winning after losing control here and not winning a statewide election since 2009. They are forgiving him for his minor indiscretions and all hot for him, worked up by all these cultural issues of race and homophobia, etc. But he has also been managing to come off as at least a semi-moderate, the outsider businessman who can appeal to moderate suburban voters around Richmond (perhaps the bottom line key) as well as in Northern Virginia, especially those independent female voters who somehow seem to be taken by this education push, even if the details of all that are as ridiculous as the Tea Party whines about ACA in 2010. So, I am worried.
Sunday, October 24, 2021
Does economic growth cause unemployment?
Usually, a question in the title of an article is a teaser and the answer is almost always "no." Not in this case. The standard argument is that economic growth is necessary to create jobs and that unemployment results from the slowing or interruption of growth.
Even advocates of degrowth or a steady-state economy assume a positive connection between growth and employment. Advocates prescribe reduction of working time as a means to mitigate job losses that would otherwise result from productivity gains.
In chapter 25 of Capital, volume one, however, Marx claimed that the same factors that spur economic growth also stimulate an expansion of the population supplying labour power and the "industrial reserve army." He proclaimed the growth of the surplus population relative to employed labour to be, "the absolute general law of capitalist accumulation."
That, of course, was just an assertion. Defenders of the conventional view argue that Marx either didn't explain a mechanism for his "absolute general law" or if he did it was either wrong or incoherent.
I don't want to pretend expertise on whether Marx's theory stands up to rigorous critique. I sort of suspect every economic theory has a crack in it. That's how the light gets in.
What I want to do instead is suggest that there was a more compact version of Marx's surplus population argument in the Grundrisse that hasn't been refuted because it has mostly gone unnoticed.
This argument is developed in the "three fragments on machines" that I have mentioned several times, including my recent post, Wealth is leisure. Leisure, wealth. It is a macro-economic argument based largely on Dilke's in The Source and Remedy of the National Difficulties with one fundamental modification: the highlighting of unemployment as both a condition and a result of capitalist accumulation.
Marx's subtle refashioning of disposable time into the precondition of the accumulation of wealth set the stage for that transformation. Marx's distinction between necessary labour and disposable time is trans-historical. It applies to all societies at all times -- not to mention the plant and animal kingdoms. Simply put, as a rule people don't automatically stop working the minute their basic needs are met.
Capitalism's distinctive contribution to that natural dynamic is to categorize the products of the additional time spent working as tribute due to the owner of the means of production. Never mind whether that is fair or just. It is a fact.
Given that the time spent working beyond what is necessary for the workers' subsistence accrues to capital, the incentive is for capital to either extend the working day or reduce the time -- or both -- required to produce the workers' subsistence.
The amount of surplus labour (disposable time) that could be produced by that method would be very limited if there was only a "certain quantity of work to be done" or a certain number of workers to do the work. Therefore it is imperative for the expansion of capital to expand the population of workers by drawing more of them into the labour force. That is, capital creates more surplus labour by creating more necessary labour and the means of subsistence for those workers (because the additional workers also need to eat, etc.).
Where does the surplus population ("which is useless until such time as capital can utilize it") come in? I will expand on this point in future posts. It is a simple concept but a difficult one to grasp. What capital does in its relentless pursuit of "the superfluous" (surplus labour, surplus value, disposable time) is invert the relationship between the necessary and the superfluous.
In this upside down relationship, the performance and realization of surplus labour becomes a condition for the performance of necessary labour. Labour necessary for subsistence can only be performed if it produces a surplus for capital. "The relation between necessary and surplus labour, as it is posited by capital, turns into its opposite." The worker doesn't get any dinner until capital eats the dessert.
Why is that so difficult to grasp? I suspect what happens is that 'common sense' rejects what appears to be an irrational conclusion: "If everybody worked, there would be more total output and if capital simply received the same proportion of a larger output, it would have more -- right? So Marx must be wrong."
The problem with the 'common sense' rejection of Marx's surplus population argument is the unwarranted assumption that capital would get the same proportion -- or any proportion at -- of the additional output. The 'common sense,' 'rational' objection is simply illogical. It would contradict the premise that what capital receives is the surplus above what is necessary.
But there is still much more to be said.
Saturday, October 23, 2021
No Covid-19d-19 Here Or in North Korea: Turkmenistan
Yes, Turkmenistan is among the few nations on the planet claiming to have not had a single case of Covid-19, along with the DPRK, aka "North Korea." The October 16 Economist reports, after noting the arrest of Nurgeldi Halykov, who reported that the British ambassador got it, who was, of course, arrested:
"Social-media networks and news websites are blocked. Police surveil mobile phones that can circumvent such censorship, Turkemenistanis cannot even access Zoom."
Thursday, October 21, 2021
Wealth is leisure. Leisure, wealth.
Once they have done so - and disposable time thereby ceases to have an antithetical existence - then, on one side, necessary labour time will be measured by the needs of the social individual, and, on the other, the development of the power of social production will grow so rapidly that, even though production is now calculated for the wealth of all, disposable time will grow for all.
Tuesday, October 19, 2021
Why The Late Janos Kornai Did Not Get The Nobel Prize
Apparently yesterday Janos Kornai died in Budapest at the age of 94. He was the greatest analyst of the socialist system there was. Indeed, his personal life saw the full history of it in in his native land of Hungary, where, being Jewish, he barely survived the Nazi period there, with that inclining him to support the Stalin version of centrally planned command socialism, which took control of Hungary by the end of the 1940s. But as the 1950s proceeded he began to see its problems and his PhD defense in 1956 just prior to the Hungarian uprising against Soviet rule that year was a major public event that led to him spending time in jail and then a long period in trivial jobs, after having held some highly responsible positions earlier in the 1950s.
This period led him to privately study broader economics, including what was going on in the West. This led to two great books. The first in 1971 dealt directly and critically with established western economics, Anti-Equilibrium, identifying problems with general equilibrium theory that are now so widely recognized they are in textbooks, things like externalities and informational asymmetries. The latter followed by one year Akerlof's publication in the QJE of his lemons paper, which earned a Nobel Prize. But Kornai was ahead of him and independent of him, but, well.
The more important book, the one he really should have gotten that trip to Stockholm to shake the hand of the Swedish monarch, was his 1980, The Economics of Shortage. This reflected him being brought back into a position of more responsibility and respectability, especially during a period when Hungary under Janos Kadar pursued its market socialist "goulash communism." The key Nobel-worthy idea in that book was that of the "soft budget constraint," another item now in textbooks. He noted that if a firm is state-owned it may not feel pressure to be efficient as it can count on the state to bail it out if it gets into trouble. Of course this idea is relevant far beyond market socialist systems into lots of actually existing market capitalist systems where large corporations can get the political system to bail them out, even though they are privately owned. This is a form of rent seeking, and arguably Kornai should have shared the prize with the late Gordon Tullock and Anne Krueger, who actually coined the term "rent seeking."
As it was, a post on Facebook by Kornai's former coauthor, Gerard Roland, reports that in the late 1990s he was indeed apparently on track to get that visit to Stockholm. But he did not get it. I am going to report from private information that why that did not happen was because of his personal relationship with the then dominant figure of the econ Nobel committee, Jurgen Weibull. Apparently Weibull was married to Janos's daughter, and just about at this time when he was a leading candidate to get it, that marriage broke up in a bad way, and apparently this led Weibull to turn against Kornai for the prize.
Kornai wrote much else, including probably the definitive analysis of socialist economies in his `1992 The Socialist System, written after the end of the Soviet system, including in Hungary. More recently he publicly opposed the anti-democratic tendencies of the Orban government in Hungary, and denounced it as an unacceptable "U-turn" against democracy and human rights. It is ironic that his death followed an election in Hungary where Orban's opponents appear to have finally agreed to unite to overthrow Orban. That may or may not happen, but I can appreciate that the declining Kornai might see this as a time to finally check out, may he RIP.
I am going to add here something possibly inappropriate, but, well, it is an old joke about Janos Kadar, a man who imprisoned and then later elevated Kornai, the "goulash communism" leader who played a dicey game with the Soviets, pulling as far away from them as possible while still kowtowing to them.
So, Kadar meets with some high Soviet official. This official asks him:
"Comrade Kadar, what do you think of Policy X?"
"Well, Comrade Soviet Official, Marx said..."
"Excuse me, Comrade Kadar, but we want to know your opinion of Policy X."
"Well, Comrade Soviet Official, Lenin said... :
"Excuse me, Comrade Kadar, but we want to know your opinion of Policy X"
"Well, Comrade Soviet Official, I can provide that, but I want to assure you that I completely disagree with that opinion."
Anyway, again, RIP Janos Kornai.
Sunday, October 17, 2021
Bad Biden Foreign Policy
I have posted on this previously, but not for awhile. The main meme is that for reasons I mostly do not get, Biden has been carrying over a lot of bad Trump foreign policies. Some of them I understand for political reasons, even when they damage the US and world economies. But others seem to be just plain stupid. I am not sure who in his admin are behind these failrures: SecState Blinken? NSA Sullivan? Of course in the end this stuff comes down to Biden himself, someone with much greater foreign policy experience than those two or anybody else in the admin. So failures really come down to him.
The worst, although it gets little news attention, is Iran. Biden ran on getting back into the Obama-negotiated nuclear JCPOA deal. He should have done so quickly. Yes, there were timing details to negotiate, but apparently those were negotiated. Somehow somebody decided that they should push for crap that Trump wanted but which was dumped when the deal was originally negotiated with great effort, stuff like missile restrictions and Iran support for groups abroad. Anybody who knew anything about this, like me, knew that this stuff was still non-negotiable. So why on earth Blinken et al insisted on Iran caving on any of this was utterly insane and stupid. They could have gotten this deal early, and it would not have triggered anywhere near the negative response the pullout from Afghanistan got (which I supported, but there was no way that was going to happen without a lot of bad publicity and damage in the polls, which has happened). He could have done this cleanly early with minimal fuss. But, no, and now it looks not to be done anywhere in the foreseeable future, and Iran has now accumulated nearly enough U fuel to make a bomb. And I read the admin is now looking to Israel for advice on this? This is a serious and massive failure on Biden's part. I do not agree with Hannity that he is outright senile, but this border line there, really seriously awful and stupid.
Another is the trade issue. Yeah, this is complicated, and I get that Biden is being domestically political. So Obama and Biden negotiated the anti-China TTP, but Trump pulled out, and Hillary would have also, under domestic pressure. Now China is asking to join this actually existing trade group, with the US unbelievably stupidly out. So indeed many in the Dem Party are protectionist, especially those associated with AFL-CIO. And Biden is very close to this faction. But steel tariffs hurt autoworkers in Ohio, with the shutdown at Lordstown partly due to Trump's steel tariffs. But the idiot workers there still supported Trump for standing up for them or whatever. So in OH it is steel producing Youngstown and Cleveland versus auto producing Lordstown, Akron, and Toledo, but no way any of them will not support protectionism and Trump. So why does Biden support this idiocy? I think in the end it is Pennsylvania, his home state, which is the ultimate steel producing state, with no autos. So, in political terms understandable given what a key state his original home is.
There is much more unfortunately.
Monday, October 11, 2021
Bad Reporting On Latest Sveriges Riksbank Prize In Memory Of Nobel
So the recipient are half of it to David Card for his 1994 study with the late Alan Krueger, who committed suicide not too long ago, on minimum wages, and how raising them might actually sometimes increase employment. The other half was split between Joshua Angrist and Guido Imbens for developing econometric techniques for studying natural experiments, such as differences in differences, with a 1992 paper on compulsory education by them cited. Card and Krueger also used this.
Anyway, I learned of the award on the radio this morning at 9 AM, CBS News, not a cockamamie outfit usually. The report stated (roughly) "Three American labor economists received the Nobel Prize for studies of immigration and its effects." That was it, their names were not provided. As it is, Card has done some such studies, and when I began guessing who it might be, his name was on my list. But the others were David Autor and George Borjas, even though the latter's studies on the subject disagree with the former's such studies. But they committee has given contradictory awards before, e.g. Mydal and Hayek, not to mention Fama and Shiller. So, it was not out of the question.
But clearly they were way off on several counts. I know immigration is a hot issue, so any mention of that in the awards apparently got the attention, even though, heck, the minimum wage is also a pretty big and current issue. What can I say, but more evidence of further decline in the quality of media in general, not just the increasing insanity happening on a lot of social media. When the regular media cannot get simple things right, what hope is there for the social media?
Friday, October 8, 2021
The Passing Of Peter Flaschel And The Bielefeld School Of Macroeconomics
German economist Peter Flaschel died yesterday at age 78. I am not sure precisely of what, although it was not Covid-19. He had been in declining health for some years, with a heart problem at least. Roberto Veneziani, from whom I learned the news, said that Peter "sounded tire" when he spoke with him a few days ago. Ironically he spoke with him to tell him I had accepted for publication in the Review of Behavioral Economics a paper they coauthored with two other economists on the economics of the pandemic. I knew and liked Peter a lot, although I had not seen him for a full decade, last when I spoke at Bielefeld University where he was located. Indeed, his death I think means the end of what I had labeled "the Bielefeld School of Macroeconomics," although this did not catch on all that much. But I know that Peter, who may have been the central figure of this group, appreciated my labeling it as such and trying to bring some attention to them.
Indeed, I think they deserved more attention, which they got very little of in the US. Various of them published quite a few books over the years, where their approach got laid out most fully. But their articles did not show up in US journals, and to some extent I think they may have partly brought this obscurity on themselves. In particular, while some like me saw them as having affinities with Post Keynesian economics, they themselves disdained the PKs for not being sufficiently mathematical. And, with a few exceptions, most of the Post Keynesians in their various sub-varieties and camps, seem to have ignored the Bielefelders, to the extent they were even aware of them. Some of this may have also had to do with nations as well, with PKs mostly in US, UK, and Italy, although also in Australia, while the Bielefelders were heavily in Germany, with outposts in Japan, although some people at the New School in the US, and also in Australia.
So who else besides Peter was part of this group? One was Reiner Franke, who was with Peter at Bielefeld for a long time, but then moved to Bremen. Another was Willi Semmler, who long split his time between Bielefeld and the New School, not quite sure what his status is with all that. But he was the main US link. Then there was Toichiro Asada at Chuo University in Tokyo and the late Carl Chiarella of the University of Technology in Sydney, Australia. I knew/know all of these. Carl in particular, whose PhD was in Applied Math and served for awhile as coeditor of the highly mathematical Journal of Economic Dynamics and Control was one who was especially critical of what he considered the low mathematical content of much of Post Keynesian economics. Peter himself had an undergrad degree in math, and also shared this view. Just to note the Bielefeld connection, both Asada and Chiarella spent a lot of time visiting at Bielefeld and working with Peter on joint projects as well as with some of these others.
So what is the Bielefeld approach, and why do I respect it a lot? Well, it combined Marx, Schumpeter, Keynes, Metzler, and Goodwin to generate fairly complicated models that combined both long-run growth dynamics with short-run cyclical fluctuation dynamics. Their models easily produced various complex dynamics, including such things as chaotic dynamics, which I have long been interested in. They never went along with rational expectations or any of that stuff. I always thought their models were both realistic and intellectually sophisticated. But as noted, they did not publish articles in some journals that might have gotten them more attention, especially the Post Keynesian ones that I think might have taken them. And books, well, it is easy to ignore books, no matter how good they are. So I think their very appealing approach in my view just did not get the attention it deserved
And now it probably will not any further, as probably its key and central figure still at Bielefeld is no longer with us. As it was in recent years he had become involved with some younger economists, especially Veneziani, who is at Queens College in London. Some of their work with various coauthors has in fact moved back more to a directly Marxist approach, with this very much the case for Peter's last book out in 2018 with Roberto and some others from Elgar, Value, Competition, and Exploitation: The Marxian Legacy Revisited. Anyway, I shall miss him, a good man and a fine economist.
Thursday, October 7, 2021
The Origin Of The Terms "Socialism" and "Communism"
This is one of those rare times when I post here about my academic research, but on this matter, well, I think this is of broader interest than than the usual obscuranta that I usually study academically.
So, my wife, Marina, and I, were asked to contribute to a "Handbook on Comparative Economics." We were supposed to have sent in our chapter by the end of September. There will be a conference on this around Oct. 18 in Trento, Italy, neither of us will make, although we have committed to presenting there.
I am not going to describe what our paper is supposed to be about, which it will deal with, oh matters of how to do comparative economics. But while writing this paper we got distracted by certain foundational issues that we, authors or one of the most widely used comparative economics textbooks in the world, thought we knew the answers to. But we did not, and I note that my wife was one of those rare people in the old USSR who was allowed to visit the Marx-Engels archives that are still there in Moscow. No, we should have known this stuff, but we did not, and our textbook contains errors on this matter,
So indeed, the issue is as the title of this post puts it, what were the origins of these widely used terms: "socialism" and "communism"?
In our textbook we erroneously identified the "utopian socialist," Robert Owen, as the person who coined the term. He indeed picked it up within a year of its coinage and spread it in 1835 as part of his effort to develop trade unionism in the UK. But he got it from Pierre Leroux, who nternwrote about it in 1834, although reportedly he was talking about it two years earlier, and there are claims it was around even earlier. But he was the first to put it in print, with a Christian and utopian overlay on it, generalized sharing. He was a follower of Saint-Simon, who was not much of a socialist, despite everybody from Marx to Hayek labeling him as such (long part of our paper). Marx much admired Leroux, although he rarely cited him in his writings. But when he first got to Paris he sought him out, and would later put him on the Executive Committee of the First International. Later in his life, Pleroux would become mayor of his hometown (sorry, not sure its name) in France, where, apparently there is a statue of him.
Which brings us to the more controversial term, "communism." The hard fact is that neither me or Marina knew the origin of this term. In our textbook we labeled it (accurately) as having come out of France somewhere between the late 1830s and the early1840s. We both sort of thought that maybe was Proudhon who originated it. I have not read his work in great detail, but I think he used the term. Of course, this makes things complicated, especially for someone so official as Marina was in the old days of the USSR, with her special access to the original texts of Marx and Engels. But even she thought it was Proudhon who might have originated it. But, fortunately our joint doubt on the matter, with in fact that neither of us really knew the answer, led us to be vague in our textbook, simply attributing the origin accurately, if ignorantly, to French radical movements of that period.
So, in fact, while somehow both Marx and Engels never mentioned Pleroux in print, Engels in his notes to the "official" 1888 English translation of the Communist Manifesto, actually provided a footnote on who originated the word, "communism." It was yet another utopian socialist, Etienne Cabet, who advocated "Icarian" communities, and put forth the term in his book on this, published in 1840, although apparently he put it out in 1839, from whence it spread. He competed with Fourier, who inspired the Transcendentalist Brook Farm in MA, and Owen, who organized New Harmony in IN, for starting utopian communities in the US, where, well, land was inexpensive, In the end 140 such communities were founded, some of which, such as New Harmony, survived to become just regular towns in the US. Anyway, as a final irony, a utopian community inspired by the communist Icarain Cabet in California, which he had a hand in, had as one of its more prominent participants a relative of Pleroux.
Which leaves us with a further old and not regularly remembered point: back in those days there was no clear distinction between these two terms, "socialism" and "communism," with this there in the Communist Manifesto. Indeed, many think that Marx defined pure communism in his 1875 Critique of the Gotha Program. But in fact when there he laid out as an ultimate goal "from each according to his ability, to each according to his needs" as well as the famous "withering away of the state," in fact he claimed he was describing the "higher stage of socialism," no mention of "communism."
Tuesday, October 5, 2021
Will Krysten Sinema Change Parties?
I have resisted posting something like this, but while I have yet to see anybody else suggest it, this possibility has been on my mind now for several days.
We have never seen to my knowledge a senator refuse to offer their views on possible resolution of a major disagreement involving money. The contrast to Sen. Sinema is her associate in the Senate in blocking various Dem initiatives (including undoing the filibuster, which would really open things up), Joe Manchin of WV. For how annoying he may be, at least we understand that he comes from one of the most pro-Trump states in the country, as well as the state being the heart of coal in the nation, so no surprise he resists limits on fossil fuels. So, no surprise he is resisting. But he art least actually provides numbers he wants and seems to be open to negotiation to come to a conclusion.
But Sinema is playing a game never seen before, ever. She says nothing. Apparently last week she had four private meetings at the White House with President Biden, yes, four. Apparently he tried really hard to get her to the Manchin stage, actually saying a number, much less details of what she would like to see removed from the current $3.5 trillion (over ten years) reconciliation bill. She may have hoped the House would pass the hard infrastructure bill, which she supports, so she and Manchin would have been in a position to either cherry pick details or outright block the soft reconciliation bill. I am unclear how much of her unprecedented behavior is a matter of ignorance and stupidity or something else.
So, here I am worrying about the something else. She was originally a Green, supporting Ralph Nader in 2000 when his campaign probably put Bush in instead of Gore. So, she has been drifting to the right, with this buzz about her personal life that got mocked on SNL last Saturday. So now we have this spectacle of her refusal to even meet with AZ voter groups has led to her being "harassed" as Fox News is now huffing and puffing about. Poor thing, people filming her in a restroom and confronting her in various public places. Poor thing.
Well, I am now getting suspicious of what she is up to here with all this, whether it comes before or after whatever resolution of all these big policy debates comes about, not to mention the matter of the debt ceiling issue, which would easily be handled if the filibuster would be shut down, which she could decisively support. But, hey, McConnell is looking at polls that suggest that if a failure to raise the debt ceiling leads to a major economic crash, a majority of voters will blame Biden and the Dems.
So we get reports that rather than meeting with AZ voters who supported her, much less saying a single word about a number or details on the reconciliation bill that might lead her to support it, she has been meeting repeatedly with various corporate funders giving her money and urging her to at least modify if not just outright oppose the reconciliaton bill. What does this mean?
I fear this is a prelude to a cataclysmic move: Sinema changing parties to the GOP. This would put the GOP in charge of the US Senate, with Mitch McConnell in charge there. This would be the end of basically anything Biden or other Dems would like to do at all in the Congress. Sinema already is more popular in the GOP than she is with Dems. With piles of corporate money, the GOP in the Senate would welcome her munificently and reward her greatly. But while this might make her a short-term star, AZ is changing, and Dems will make sure this is the last term she serves in the Senate if she follows through on this, and may well do so anyway through the primary process if she stays with the Dems while continuing to behave as she has been recently.
I was a bit skeptical of the Global Forum on Democratizing Work. It seemed to me that rushing into an online conference was perhaps a bit over ambitious and misdirected for a relatively new initiative that arose out of a collective letter to the editors of newspapers.
Anyway, I attended three session today, two of them for their entirety and I was not disappointed. I mean my skepticism was not disappointed. A session on working time presented some fascinating accounts from a gig worker, an academic, and an organizer but then simply neglected to open up the hour and a half session to questions and discussion from the audience. Who did they think we were, chopped liver? The session I only attended briefly had an interminable power point slide show, narrated by a coughing, monotone old coot. The third session was on "No Bosses" and featured Michael Albert promoting his most recent book and pontificating about how a future society would operate.
Albert has it all figured out, So, when I asked him a question about whether leisure would exist as a benefit in his new model economy or would become a central organizing principle, he confessed he didn't understand the question and went on to explain about how leisure was interchangeable with income as remuneration for work. So you can work more and earn more income or you can work less and earn less income but have more leisure. In other words, the income/leisure trade-off of vulgar neo-classical economics would become a reality.
I pushed the button to allow my webcam and microphone to be activated and nothing happened. Then I got a message telling me my webcam and mic would be turned on when they got to my question (which they already had). After several more minutes of being ignored, I posted a comment about the undemocratic moderation. That got a response and they let me say my piece. I was brief (I hope) I explained how historically the movement for emancipation of work had centered around the concept that "real wealth is leisure" going back to William Godwin and that Marx had analyzed surplus value as the appropriation by the owners of capital of the workers' "disposable time" -- that is the time left over after the worker had produced sufficient value to cover the cost of subsistence. I thanked the moderator and panelists profusely for giving me the opportunity to follow up on my question and explained that part of what I intended with my intervention was to "break the fourth wall" of audience passivity.
Albert replied with an appropriate anecdote breaking the fourth wall but then proceeding to make a straw man out of leisure, to extoll the pleasures of work in the emancipated society of his dreams and to gently gaslight me about relying on old authorities.
Which is all very good. I don't expect anyone to grasp immediately my radical point that no one really is interested in fantasizing about the glorious workhouses of the future. "Are there no prisons? Are there no workhouses," asked Scrooge after being shown two pauper children by the Ghost of Christmas Present. Truth is we have prisons and workhouses enough.
Eight and a half years ago, I wrote an essay titled "Labour power as a common pool resource." (a revised version of an Ecological Headstand post, "Labor is (not) a commodity") Inexplicably and annoyingly, common pool resource essay was behind an idiotic Captcha wall, so I just now reposted it to EconoSpeak. What I really need to do, though, is to write a new essay titled "Disposable time as a common pool resource," which recants and debunks that previous one. I have written a 10,000 word essay that presents the theoretical ground for that second essay and I am scheduled to present a conference paper in November, so hopefully I will have the skill, energy and perseverance to accomplish that task.
Labor as a Common Pool Resource
The everyday experience of working people, economic policies of governments, bargaining priorities of trade unions and theoretical models of economists refute the idealistic maxim that labor is not a commodity.
An early rationale for the proposition was given in 1834 by William Longson of Stockport in his evidence to the House of Commons Select Committee on Hand-Loom Weavers:
- …every other commodity when brought to market, if you cannot get the price intended, it may be taken out of the market, and taken home, and brought and sold another day; but if a day's labour is offered on any day, and is not sold on that day, that day's labour is lost to the labourer and to the whole community…
Longson concluded from these observations of labor's peculiarities that, "I can only say I should be as ready to call a verb a substantive as any longer to call labour a commodity."
Karl Marx was emphatic about the peculiar historical nature of labor – or, more precisely, labor-power – as a commodity. Rather than reject the label outright, though, he chose to examine it more closely. Marx observed that for labor-power to appear on the market as a commodity, the sellers must first be free to dispose of it (but only for a definite period) and also must be obliged to offer labor-power for sale because they are not in a position to sell commodities in which their labor is embodied.
Connecting Longson's observation to Marx's, it would seem as though, aside from moral strictures, one of the qualities that most distinguishes labor-power from other commodities – its absolute and immediate perishability – is what compels its seller to submit unconditionally to the vagaries of demand. To paraphrase Joan Robinson, the misery of being regarded as a commodity is nothing compared to the misery of not being regarded at all.
So if labor-power is not a commodity, or is only one due to peculiar and rather disagreeable circumstances, what is it, then? Consider the idea of labor-power as a common-pool resource. Labor-power can be distinguished from labor as the mental and physical capacity to work and produce use-values, notwithstanding whether that labor-power is employed. Labor, then, is what is actually performed as a consequence of the employment of a quantity of labor-power.
Human mental and physical capacities to work have elastic but definite natural limits. Those capacities must be continuously restored and enhanced through nourishment, rest and social interaction. "When we speak of capacity for labour," as Marx put it, "we do not abstract from the necessary means of subsistence." It is the combination of definite limits and of the need for continuous recuperation and replacement that gives labor-power the characteristics of a common-pool resource. As Paul Burkett explains, Marx regarded labor power not merely as a marketable asset of private individuals but as the "reserve fund for the regeneration of the vital force of nations". "From the standpoint of the reproduction and development of society," Burkett elaborates, "labor power is a common pool resource – one with definite (albeit elastic) natural limits."
"Common pool resource" is not the terminology Marx used; Burkett has adopted it from Elinor Ostrom's research. For Ostrom, common pool resources are goods that don't fit tidily into the categories of either private or public property. Some obvious examples are forests, fisheries, aquifers and the atmosphere. Relating the concept to labor is especially apt in that it illuminates, as Burkett points out, "the parallel between capital's extension of work time beyond the limits of human recuperative abilities [including social vitality], and capital's overstretching of the regenerative powers of the land." That parallel debunks the hoary jobs vs. the environment myth.
The basic idea behind common-pool resources has a venerable place in the history of neoclassical economic thought. It can't be dismissed as some socialistic or radical environmentalist heresy. In the second edition of his Principles of Political Economy, Henry Sidgwick observed that "private enterprise may sometimes be socially uneconomical because the undertaker is able to appropriate not less but more than the whole net gain of his enterprise to the community." In fact, from the perspective of the profit-seeking firm, there is no difference between introducing a new, more efficient production process and simply shifting a portion of their costs or risks onto someone else, society or the environment. The opportunities for the latter may be more readily available.
One example Sidgwick used to illustrate this was "the case of certain fisheries, where it is clearly for the general interest that the fish should not be caught at certain times, or in certain places, or with certain instruments; because the increase of actual supply obtained by such captures is much overbalanced by the detriment it causes to prospective supply." Sidgwick admitted that many fishermen may voluntarily agree to limit their catch but even in this circumstance, "the larger the number that thus voluntarily abstain, the stronger inducement is offered to the remaining few to pursue their fishing in the objectionable times, places, and ways, so long as they are under no legal coercion to abstain."
In the case of labor-power, "fishing in the objectionable times, places and ways" manifests itself in the standard practice of employers considering labor as a "variable cost." From the perspective of society as a whole, maintaining labor-power in good stead is an overhead cost. The point is not to preach that firms ought to treat the subsistence of their workforce as an overhead cost. That would no doubt be as effectual as proclaiming that labor is not a commodity. As with Sidgwick's fishery, a greater advantage would accrue to firms that didn't conform to the socially-responsible policy.
Ostrom explained the differences between various kinds of goods by calling attention to two features: whether enjoyment of the good subtracts from the total supply still available for consumption and the difficulty of restricting access to the good. Private goods are typically easy to restrict access to and their use subtracts from total available supply. Public goods are more difficult to restrict access to and their use doesn't subtract from what is available for others. Common-pool goods are similar to private goods in that there use subtracts from the total supply but they are like public goods in that it is more difficult to restrict access to them.
If it were merely a matter of selling to employers, then labor-power would have the uncomplicated characteristics of a private good. Working for one employer at a given time precludes working for another. Hypothetically, the worker can refuse to work for any particular employer thereby restricting access. But here we need also to contend with that peculiarity of labor-power noted by the silk weaver, William Longson that a day's labor not sold on the day it is offered is "lost to the labourer and to the whole community."
"If his capacity for labour remains unsold," Marx concurred, "the labourer derives no benefit from it, but rather he will feel it to be a cruel nature-imposed necessity that this capacity has cost for its production a definite amount of the means of subsistence and that it will continue to do so for its reproduction." This contingency and urgency of employment effectively undermines the worker's option of refusing work, so that in practice labor-power has the features of a common-pool good rather than of a private one. Collectively, the choice of refusing work is further weakened by competition from incrementally more desperate job seekers – a population Marx called "the industrial reserve army."
So is labor a commodity or is it not? The arch, paradoxical answer would be "both." Examined more closely, the capacity for labor – labor-power – reveals itself as a peculiar commodity that exhibits the characteristics of a common-pool resource rather than a private good. An actual Charter of Industrial Freedom must address these peculiar characteristics rather than bask contentedly in the utopian platitude that labor is not a commodity.
Saturday, October 2, 2021
The Open Access Movement In Academic Publishing
I apologize that I look like someone voting for 3.5 and then some time later saying that they only support 1.5, but I am not interested now in discussing that matter.
So, here I go. 1) I support Open Access in academic journal publications. 2) OTOH I grant that commercial publishers of academic journals should be able be able to demand payment for people accessing articles fully available in their journals, within "reason." 3) I agree that academic journals journals should allow authors to allow free access to their articles, but also that they may allow this not to be the case.
So, let me be more specific here. I have recently had a difficult situation regarding this. So awhile ago I was invited by someone I know I take seriously to submit a paper for a special issue in this issue, a 30-year retrospective on econophysics in the mostly physics journal, Entropy, published by mdpli.
I did not fully read the long pro-open access screed that accompanied this invitation, which came after the invitation from someone I knew personally. The publisher, mdpi, provided a very long proclamation explaining their support for the Open Access Movement, something I generally favor. Anyway, I poozed out on reading their long speech on this, so missed far down into it where they declared that any author publishing in their journal should agree to pay a sum defined in Swiss currency terms just below $2000. So when my paper was accepted after a long pile of mostly bs, I received an invoice for nearly 2K USD,, which I was unaware was coming due.
So there is this movement for open access that has become a very big deal in US academia. It involves academic library relations with major publishers of journals ans much else. It has led to my own uni, JMU, no longer accepting papers from a journal I used to edit, JEBO, a journal pubbed by "the evil empire," Elsevier. This decision by my uni's library meant that I got a 10 percent discount on the invoice that arrived on my desk to publish this paper, "Econophysics and the Entropic Foundations of Economics.".
I have very mixed feelings about all this. I have had journals offer me this option after they accepted a paper of mine to allow open access of my paper, if I would pay about 2k. But if I said no, then my paper would be published. When recently offered such option, I failed to accept them.
When rhis invoice came I complained mightily. Eventually they offered a large discount, and my uni paid for it. But I see a serious bottom line here: who is supposed to pay for all this,, authors or their bakers or others?
This is mostly a physics journal, and most of them have funds in their grants for publication costs. But most social scientists do not have such funds in their grants even when they have them. There is a serious bottom line here, and I do not think authors should be made to paid for this.
Friday, October 1, 2021
Thoughts on superfluous disposable time
The whole development of wealth rests on the creation of disposable time. The relation of necessary labour time to the superfluous (such it is, initially, from the standpoint of necessary labour) changes with the different stages in the development of the productive forces. … In production resting on capital, the existence of necessary labour time is conditional on the creation of superfluous labour time. 398 Grundrisse
It is a law of capital, as we saw, to create surplus labour, disposable time; it can do this only by setting necessary labour in motion. - i.e. entering into exchange with the worker. It is its tendency, therefore, to create as much labour as possible; just as it is equally its tendency to reduce necessary labour to a minimum. It is therefore equally a tendency of capital to increase the labouring population, as well as constantly to posit a part of it as surplus population - population which is useless until such time as capital can utilize it. 399 Grundrisse
Labour capacity can perform its necessary labour only if its surplus labour has value for capital, if it can be realized by capital. Thus, if this realizability is blocked by one or another barrier, then (1) labour capacity itself appears outside the conditions of the reproduction of its existence; it exists without the conditions of its existence, and is therefore a mere encumbrance; needs without the means to satisfy them; (2) necessary labour appears as superfluous, because the superfluous is not necessary. It is necessary only to the extent that it is the condition for the realization of capital. Thus the relation of necessary and surplus labour, as it is posited by capital, turns into its opposite, so that a part of necessary labour - i.e. of the labour reproducing labour capacity - is superfluous, and this labour capacity itself is therefore used as a surplus of the necessary working population, i.e. of the portion of the working population whose necessary labour is not superfluous but necessary for capital. 609 Grundrisse
Capital… presses to reduce labour time to a minimum, while it posits labour time, on the other side, as sole measure and source of wealth. Hence it diminishes labour time in the necessary form so as to increase it in the superfluous form; hence posits the superfluous in growing measure as a condition – question of life or death – for the necessary. 706 Grundrisse
The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active army of workers; during the periods of over-production and feverish activity, it puts a curb on their pretensions. The relative surplus population is therefore the background against which the law of the demand and supply of labour does its work. 792 Capital
What capital adds is that it increases the surplus labour time of the mass by all the means of art and science, because its wealth consists directly in the appropriation of surplus labour time; since value directly its purpose, not use value. It is thus, despite itself, instrumental in creating the means of social disposable time, in order to reduce labour time for the whole society to a diminishing minimum, and thus to free everyone’s time for their own development. 708 Grundrisse