Help! I am trying to understand basic socialist theory!!!

"The transition from a period of upswing to downswing is rooted in the accumulation process itself. As capital accumulation proceeds, and the mass of capital grows in relation to the labour which set it in motion, the rate of profit will tend to fall. This is because the sole source of surplus value, and ultimately of all profit, is the living labour of the working class, and this living labour declines in relation to the mass of capital it is called on to expand. Of course, this tendency can be, and is, overcome through an increase in the productivity of labour. However, within a given regime or system of production there will come a point where no further increases in productivity can be obtained, or they are so small that they cannot counter the tendency of the rate of profit to fall. At this point, the curve of capitalist development begins to turn down."---WSWS

The above paragraph is the reason given for the structural vulnerability of the capitalist system. I would love to comprehend it but my tiny pea brain has trouble getting around mathematical concepts. Can anyone elaborate on this paragraph or direct me to a link that might help me understand it?????

Thanks,

La Bear (potential socialist) :P

Humans are lazy so the productivity suffers.

that's why China has such possibility as a capitalist society. But not to be confused with democracy.

But the more money the capitalist pigs make (and keep), the less there is for the workers, and therefore they will less enthusiastic about working, in general.

You can stave the deline off by pressing people to work harder for less, or by optimizing the process, but eventually you can no longer tweak the system or squeeze more blood out of the workers, and the system collapses.

I think it says that the amount of capital (money) continues to accumulate year-by-year but the number of workers stays about the same. So the per cent return on money invested continually declines; therefore, the rate of investment declines.

But I could be wrong.

There are probably more current and comprehensible reasons for turning in a progressive direction.

the labor theory of value, specifically an application of the law of diminishing returns as it manifests in Marxist economic theory. Try Googling "Labor theory of value" in quotes.

Let me also say that these 19th century economic theories are of largely historic interest in their original form.

it is a social relation.

money is a commodity.

This is socialism in it's most basic form.

Almost every economy has taken Socialist ideas to some extent or another. From Public Safety, Utilities, Transportation, Healthcare, and loads of other activities.

But the fact is, and I'll probably get flamed for this, the most basic Socialist ideal is the Equality of Income.

Another very basic concept is the collective ownership of Real Property as opposed to Personal Property.

The reality is that we already don't have total freedom of use for all Personal Property. Your umbrella is "yours" however you are not permitted to smash me over the head with it. Your dinner is "yours" but you are not permitted to poison it.

OTOH we use Police and Military to defend Real Property "Rights" to collect rent and often expel people from said property.

It's not a simple bridge to cross psychologically as well as intellectually.

Communism: From each according to his ability, to each according to his need.

Socialism: From each according to his ability, to each according to his work.

I should have just stuck to what you said anyway.

Even the most ardent capitalist admits that certain essential goods won't be provided by the market. National defense, fire protection and police protection are the most obvious. Those are public goods - that is goods that an individual can't be excluded from using and that do not diminish from one person using them. Just because there are a handful of items that are best funded through public financing and universal distribution is no justification for socialism in other aspects of our lives.

I also think that there are other things just as vital that are not currently covered under that that need to be; health care, basic nutrition and affordable housing for example.

:shrug:

What does a fire department produce?

http://william-king.www.drexel.edu/top/prin/txt/marx/marx7.html

& the following page, too. (Click the "Next" button at the bottom.)

But be forewarned: Though I agree entirely with the WSWS analysis (& very much liked that Nick Beams piece you're quoting), I don't really think the argument can be taken as a rigorously mathematical one. I'm pretty comfortable with mathematical arguments, & am completely sympathetic to the Marxist viewpoint - but even I'd concede that this is somewhat "pseudo-mathematical."

:)

...but people will come running to us after a few years of Neo-CON Theocratic Hell. You can, no pun, bank on it.

:-)

This was written before globalization. As competition increases profits will shrink because there will be increased competition for labor to produce goods for market. The underlying belief is labor is the source of all wealth since the materials of the earth are free. The value of materials being the labor to mine them. Once all the labor available is employed the only further increase in wealth is through productivity. But (this is before the technology of today) increases in productivity are limited. Once this limit is reached profits will again become too slim for companies to stay in business.

None of this works because it assumes an economy can be confined to a single country. Most socialists today believe in "managed capitalism". That is in the form of government legislation to protect unions, minimum wage, layoff compensation, unemployment pay, vacations, working hours, overtime pay etc. With the growth of multinational corporations and their almost total control of governments, even these modest conditions are impossible to maintain.

You need to investigate Marx's theories. Of special interest are the terms: "commodity", "crisis", "use-value", "value", "abstract labor", "concrete labor", "relations of production". It's actually a very large subject with alot of prepatory investigation necessary to even begin to understand it.

Mainly you need to know what dialectics are in order to decipher Marx. Then you need to understand his materialism (in the philisophical sense) to see why he places emphasis on certain things. After understanding the terminology and the basic concepts you'll be ready to begin reading. Or you could just dive in and see what you can get out of it. I myself found that I didn't understand most of what I read until I met someone who could explain it to me.

perhaps this page will help: http://www.marxists.org/glossary/terms/c/r.htm

go down to where it starts talking about "Crisis of Capitalism"

there should be a way to find more terms here

it's not a coherent argument. it's not your "pea brain" that's the problem. if anything, the reason you don't understand this nonsense is that you are actually using your brain effectively.

the conclusion is also contradicted by abundant empirical evidence. i'd say some non-capitalist economic systems displayed a fair bit of structural weakness over the last 15 years though.

http://www.cheniere.org/correspondence/062603.htm :-)

Here is a one-stop shop for Marxist writings:

Foundations of Marxism

We are here to give you a starting point, a grounding in what Marxism is about. You may like to get started with a short document that explains the fundamental concepts of Marxism. For a basic idea, a Marxist has a certain kind of practice, a way of living and working, that we call being a Communist. A Marxist's thought is based on this lifestyle, a science of logic called Dialectics.

http://marxists.org/subject/students/index.htm

Here is the Michigan Socialist website, our own DUer MSchrader is a good one to tap for info:

http://michigansocialist.net/news/

Here is the PWW, I like the hardcopy better than the web version:

http://www.pww.org/

eom

over many important issues. on most big issues, most economists agree. the reason you think otherwise is that you can always find one or two 'experts' to take the opposing point of view. it's kind of like finding one or two doctors who thinking smoking, or obesity, or an all-twinkie diet are not bad for you. unfortunately, Bush has made a practice of hiring this sort of economist.

The theoretical serious economists who are actually interested in how capitalim and/or economy generally works tend to agree with Marx' basic analysis (but not allways political conclusions), so there is consensus of a kind (raving libertarians excluded).

Then there is the much more usual kind, pragmatic economists who's job is to blather and sucker people to make more money for themselves: "The second half is going to be strong, buy buy buy!" OK, strong consensus here too. ;)

But if you wan't to start understanding anything, economy included, study anthropology and sociology. IMHO Capitalist-Marxist philosophical axis of materialism is basically flawed, the theory is not general enough to say the least.

I've got a Ph.D. in economics, and spent 7 years as an economics professor at a rather well-known university. And, I have never met a "theoretically serious economist" who agrees with Marx's basic analysis.

And, I generally don't call stock brokers economists. They are indeed hucksters who don't know jack about predicting the market (which is essentially unpredictable).

Marx's basic analysis, or at least were sympathetic to it & took it seriously. Who were Paul Baran, Harry Braverman, Harry Magdoff, Paul Sweezy? Who are Douglas Dowd, Samuel Bowles? Wasn't Thorstein Veblen strongly influenced by Marx?

Your never meeting an economist who agreed with Marx might easily reflect things other than the validity of Marx's ideas. For example, there probably is a strong selection process operating against Marxists in academia - as there would be anywhere in US society. It's doubtless not a smart career move, to articulate sympathy with radical left ideas in university environments.

Marx's thought encompassed much more than just an approach to economics. It was also an approach to history, sociology, & philosophy. Many of his far-reaching ideas could easily have merit, even if, say, the labor theory of value doesn't qualify as "hard science."

Here is an example of a Marxist idea that is pretty far-reaching: his notion of historical materialism. In this model, he describes society as a kind of triple layered entity. The bottom layer is the material means of production. The middle layer is the sum of social relations defined by how each social class connects to the production scheme. The top layer is what he called the "superstructure." This refers to all the religious, educational, legal, & cultural influences that jointly serve as a kind of superego for society. Marx's idea about the superstructure is that these influences all serve to legitimize & maintain the prevailing social order, in one way or another (or else they'd come in conflict with it, & the conflict would have to be resolved, leading again to a superstructure in tune with the social order).

What this means is that the economic system itself - in our case, market capitalism - penetrates into every aspect of social existence. It's not something remote & abstract that just makes trade deficits & employment figures jump around. Rather, when you see a movie or watch TV, when you attend classes at a university, when you check the columns that the Washington Post has printed today, when you put on a tie -- most of what you are seeing is various expressions of a capitalist ethos. You are constantly seeing, in a sense, commercials for, odes to, & affirmations of the capitalist system.

Chomsky gets a lot of credit for having figured out that basically what the media does, is line up with state power. This is a good explanation of why some stories get emphasized, while other very similar stories are ignored. (A Democratic congressmen whose female intern dies - BIG story. A Republican congressman whose female intern dies - NO story.) However, as good as Chomsky's insight here is, it's really just an application of Marx. Things work this way because capitalism penetrates into journalism, & selects those stories for emphasis which are most helpful to capitalism. (Your not knowing any Marxist economists might well be another example of the same thing.)

Most of them professors. ;-)

may well have some merit. I don't know. But, his basic analysis of economics just falls short. I think he was an amazing thinker, brilliant, ahead of his time. But his economic analysis just doesn't stand up to modern scrutiny. Doesn't mean he got everything wrong; and some of his ideas can be translated into modern economic language. Look at De Janvry's neo-Marxist work on development for example. But, taken as a whole, his analysis is just not accepted by modern economists.

Of the economists you name above, only Samuel Bowles seems to be currently active at a research university. Though I had not heard of him before, I read his CV and he certainly qualifies as a serious and competent theoretical economist. What I didn't see in his list of publications was an obvious defense of Marxian economics. But, I'm interested to have a careful read of some of the titles I saw listed. Are there any works of his in particular that you suggest?

I don't really think there is, as you suggest, a strong selection process against Marxists in academia. I know of several very famous Marxists professors in other fields, Stanley Fish in Literature for example. What wins in academics is to a large extent how well you can defend your ideas. And Marx's economics is pretty hard to defend rigorously.

I think just the opposite.

The only Marxists I've ever met face to face in my life (and that includes trips behind the iron curtain) were professors at US universities. I went to a small private college and every single history professor (all five of them) were Marxists.

Currently I handle retirement plans for professors at the little 2-year junior college in town, and there are proud Marxists there of all places in the english and history departments.

I attribute it in part to people who just like that twinkle in the eye they get when they shock people, and some to college students who were taught Marxism in college as we all were, but instead of going on to get a job and seeing how silly the whole thing was, instead they get a master's degree, then a job as a grad assistant, then an instructor, then they get their doctorate and work as a professor having spent their whole career high in the clouds of academia without ever getting into the real world.

Marx' notion of the basic nature of capital is so deeply embedded in almost all economical theories, that it isn't even recongnized as Marxist. :)

and that's what this is getting at.

It's been a long time since I dealt with Marxist theory, but I suppose I should bone up on it, since it's coming back with a force, thanks to current economic conditions. Shades of the '30s...

I don't buy it, though. I don't buy laissez faire capitalism, either,
but at least that's based on observable reality.

Marx seems to have completely misread just what the industrial revolution was all about, and spent far too much time timing how peasants gleaned grain, rather than dealing with how capital actually flows and how "labor" isn't just manufacturing production. "Property" isn't just real estate any more, either, nor is income "rent.".

He has a very valid point that the accumulation of "capital" (i.e "wealth") often starves the hoi polloi, steals the fruits of labor's efforts, and destroys markets for goods, but he misses that that's not necessarily the primary reason for the business cycle, or even larger cycles of social and economic rise and fall. And, that's not an absolute for capitalism, just an often observed effect of its application. He also completely misses the evolution of ideas that capitalism forces, and focuses entirely on the many negative aspects, ignoring the problems of socialism. Neither -ism is a panacea, but both have some positive aspects. And many negatives.

So far, economics is still the "dismal science" and the is no Grand Unified Theory of economics that actually works to the benefit of everyone. Modern theory isn't much better than 18th or 19th century theory, and the application in the better managed societies is entirely pragmatic. Take bits and pieces from everyone, see what works, and you get modern mixed economies. For better or worse.

Given current circumstances, I'm happy to jump on some aspects of the Socialist bandwagon to counter the Enrons and MIcrosofts of the world, but I'm not so sure what I'd do if the Revolution really came.

That paragraph is pretty dense. It refers to a point of diminishing returns in increases in productivity. Well, duh! Productivity cannot increase forever, and certainly not at the same (or ever-increasing) rate(s).

However, understanding socialism can be a whole lot easier than parsing Marx.

Ever been on a camping trip in a group? Usually, that's socialism. There's no need to "prove" the structural vulnerability of capitalism there either.

Because it neglects to factor in that social inequities are not always to blame for criminal activity or corruption--it neglects human ambition: if we had Marx's system today, it'd be a tossup between those who enacted the system and the stifled Napoleons as to who would put the rest of society below themselves. Ambitious people are always there, and if being an entry-level brigand didn't pay significantly better than same-wage potato picking, it would certainly be more fun. So a few get on top, carrot-and-stick the rest, and we're right back where we started.

Of course, no social system has a good answer for the above. But that Karl Marx's ideas would "fix" things makes no sense. To fix corruption and social inequity, you'd have to fix human nature. Maybe you could improve things, but you will never fix them. Is it better than capitalism? I don't know, it's never worked for any period of time. A few of its principles have done well.

marxism is based on the concrete analysis of concrete things. Dialectical Materialism is not Hegel or Dialectical Idealism. It is based upon concrete material reality and it is virtually the only systems of thought like that. Any other analysis you can find will be based upon ideology and metaphysics. These ideologies give ideas like "human nature" inordinate amounts of importance and even when there observations cannot be impeached the way in which they make sense of them are based upon ideology.

You're recycling old and tired criticisms of a system that you don't fully understand.

Capitalism sucks!

A little socialism never hurt anybody.

...and avarice at the expense of your fellow man. Maybe I should read the 10 commandments again or the teachings of Jesus, Buddha, and Mohammed instead of Socialist theory. They probably provide the best moral compass to determine how far off course our political/economic system has become.
I remember Tao teaches that when the ruling class gets too greedy and self-centered, the society they control will collapse or revolt.
Personally, I don't mind it when some people earn a ton of money. But I don't like it when they don't give enough back or insist on extreme levels of compensation that are totally out of line with their contribution (think American CEO's).
I think anytime a society has to start killing people in order to better itself, than it is way off track. It seems our Fortune 500 ruling class has decided that killing (ie: Iraq war) is OK in order to increase profits in the global market.
:shrug:

This is basic Marxian economic theory -- the theory of the tendency of the rate of profit to fall (sometimes abbreviated to TRPF on e-mail lists and discussion boards).

The basic explanation goes this way:

Suppose you own factories that employ 20,000 workers, and make products exclusively for a market of up to 100 million people. Each worker makes $40,000/year; annual upkeep on the factory is $200 million. Every year, you produce, on average, 20 million products. You charge $10,000 for your product, and it has an average "lifespan" of 8-10 years.

Annual cost of labor: $800 million
Annual cost of upkeep: $200 million
Aggregate costs: $1 billion

Aggregate "best case" revenue: $200 billion

Total "best case" profit: $199 billion

In the first and second years, you sell all (20 million units) of your product. In the third year, you sell 19 million units. In the fourth, you sell 18 million. In the fifth, you sell 16 million units. In the sixth, you sell 13 million units. In the seventh, you sell 10 million units.

By the seventh year, you can figure that you have sold to everyone who wants your product.

First year sales: 20 million
Second year sales: 20 million
Third year sales: 19 million
Fourth year sales: 18 million
Fifth year sales: 16 million
Sixth year sales: 13 million
Seventh year sales: 10 million

Total sales hitherto: 116 million

(Note: This assumes that some people will buy another unit of the product before the "lifespan" of the one they previously bought has expired.)

Now, back to these numbers:

Annual cost of labor: $800 million
Annual cost of upkeep: $200 million
Aggregate costs: $1 billion

Let's look at the rate of profit.

First year profit: $199 billion
Second year profit: $199 billion
Third year profit: $189 billion
Fourth year profit: $179 billion
Fifth year profit: $159 billion
Sixth year profit: $129 billion
Seventh year profit: $99 billion

As you can see, the rate of profit falls as the market is saturated. As more and more people buy your product, there are less and less people to whom you can sell. If, in a self-contained market such as this, you have every person possessing your product -- especially if the product's "lifespan" has not expired before reaching a point of saturation (which is where overproduction comes in, but we'll get to that later) -- then there is no one to whom you can sell. The general tendency of the rate of profit to decline continues from here, as the number of people replacing their old product with a new one slows to a relative trickle.

For the capitalist, they must at this point choose one of two ways to resolve the situation: 1) increase productivity (usually through downsizing); or, 2) find new markets in which to sell the product. However, neither of these are not real resolutions. Rather, they simply reset the hands of the clock -- stretching out the point at which saturation (overproduction) is reached.

For a more detailed and philosophical explanation of the Tendency of the Rate of Profit to Fall, go to this link:

http://www.marxists.org/glossary/terms/f/a.htm#falling-rate-profit

Martin

For the capitalist, they must at this point choose one of two ways to resolve the situation: 1) increase productivity (usually through downsizing); or, 2) find new markets in which to sell the product.

Yup, those are indeed the only two ways: nobody ever resolves that situation by e.g. improving their products so that customers would want to replace them already before the old version is worn out or even develop completely new products to sell. It just doesn't happen, so Marxian economic theory really makes sense. :-)

.

And is, apparently, a better shot.

Back to the ocean with you, Harpie.

Martin

I hope you don't have a high opinion of your rejoinders. :)

I hope you don't have a high opinion of your rejoinders. ;-)

Martin

.

There is no guarantee that others are going to rush out and buy it. When an auto company comes out with a new line of automobiles (every year), do you rush right out and get the newest one?

No? Didn't think so.

But then, it's not like you actually disproved the argument. Improving a product or developing completely new products is a form of "finding new markets", since you have more or less a new product to sell that is different from the old product. Admittedly, you're competing against yourself; but I'm sure you'll resolve that with some book-cooking and ficticious capital.

So, back to the drawing board with you.

Martin

But then, it's not like you actually disproved the argument. Improving a product or developing completely new products is a form of "finding new markets"

Your argument was exactly this:

For the capitalist, they must at this point choose one of two ways to resolve the situation: 1) increase productivity (usually through downsizing); or, 2) find new markets in which to sell the product.

So that's finding new markets for the product, that product, the same product, not a newly developed product, so new products wasn't an option according to your argument.

You may now continue the stubborn victory claiming... :eyes:

You forget the capitalists in all this. You forget that all of this translates into human terms -- more specifically, into class terms. That's why the quote you use kills you:

"For the capitalist,..."

For the capitalist, an improved product yields a new market. For the capitalist, a new product yields a new market.

Why do you think that the auto companies create new car models and new designs every year? It is because it opens new markets ... and, thus, slightly mollifies TRPF. And, again, such a rapid attempt at new markets can only yield a finite set of results. So, we end up at the original formulation.

"For the capitalist, they must at this point choose one of two ways to resolve the situation: 1) increase productivity (usually through downsizing); or, 2) find new markets in which to sell the product."

And, yes, I will continue "the stubborn victory claiming". I am entirely justified in doing so.

Martin

For the capitalist, they must at this point choose one of two ways to resolve the situation: 1) increase productivity (usually through downsizing); or, 2) find new markets in which to sell the product. However, neither of these are not real resolutions. Rather, they simply reset the hands of the clock -- stretching out the point at which saturation (overproduction) is reached.

So, if you pretend now that developing completely new products is part of the "finding new markets for the product", what's the relevance of the saturation (overproduction) supposed to be?

Maybe you should have written it in the original Klingon instead of trying English, so it wouldn't need so contorted interpretations to force it to make sense. :-)

The fact that you cannot see the relationship between the two amazes me. Perhaps I should have said "find new markets in which to sell products", instead of limiting myself to simply speaking about one particular product. I guess that what happens when I try to translate three-dimensional thought into two dimensions.

Maybe instead of attempting to zing me with your penknife-like wit, you should try learning a little more about economics.

Martin

Perhaps I should have said "find new markets in which to sell products"

...but then it would have had a quite different meaning and it would have made sort of sense, and then what would have been left of the uniquely Marxist economic theory...?
:think:

and then what would have been left of the uniquely Marxist economic theory...?

Everything. And, at this point, it does not amaze me that you would not understand that. :crazy:

Martin

For the capitalist, they must at this point choose one of two ways to resolve the situation: 1) increase productivity (usually through downsizing); or, 2) find new markets in which to sell the product. However, neither of these are not real resolutions. Rather, they simply reset the hands of the clock -- stretching out the point at which saturation (overproduction) is reached.

...and after being pounded with common sense and translated from Marxish to English, it has been reduced to about

"the capitalist can't keep selling the same durable product to the same people but must find new markets for it or develop new products"

So that's "everything" of Marx's economic theory. Gee, that Marx was smart: nobody else had ever figured that out. :crazy:

Only people who like to god-build indulge in such nonsense. If you had ever bothered to read Marx's Capital, you would know that much of what Marx quotes and writes about (in a sometimes polemical, sometimes laudatory, way) is Adam Smith's Wealth of Nations. What Marx elaborated was a method by which to understand how things such as LTV (the Labor Theory of Value), TRPF (the Tendency of the Rate of Profit to Fall), COOP (the Crisis of Overproduction) and such all fit together.

So that's "everything" of Marx's economic theory. Gee, that Marx was smart: nobody else had ever figured that out.

First of all, no, that's not "everything" of Marx's economic theory. It is only one element of capitalism's dynamics -- as analyzed by Marx. If you ever bothered to take off the beer goggles and read Marx, you might know that.

Martin

astrology, breatharianism etc.: the defenders' arguments always finally boil down to "if you just studied it for five years, you would see that it's correct". :-)

If you ever bothered to take off the beer goggles and read Marx, you might know that.

All you have to do is open your eyes and take a good look around. And, yes, if you'd bothered to ever read about what Marxism is -- instead of parroting what Tailgunner Joe, Raygun and Poppy told you -- you would know that.

Martin

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And, yes, when you speak about issues of which you have no knowledge, you do sound like the ignorant FReeper types.

You're the one who had to give up trying to use concrete arguments about what happens or doesn't happen in the real world according to Marx's theories and move completely to that desperate "you're wrong because you're wrong and you're republican because I say so" type, just like the freeper types or actually any True Believers who can never admit being wrong about anything.

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maybe he needs "new product" ;-)

There, I said it.

But my dad can still whoop your dad.

...in a Great Leader and his ism is a crutch for the immature minds.

you are even weaker for snipping against MS and not being able to counter what he said with anything substantial

Have a wonderful night, tho :hi:

you would have to retool your factory. Wow I think you've figured out how to save Ford Motor Co! :eyes:

A wholly new product like the PC, for example, sets up the process all over again.

Continued innovations within such a product can account for a general cycle of rise and fall for companies competing therein that will sustain a group of competitors over time without collapse. Remember Betamax? Many, many Betamax owners rushed out and bought VHS. Ditto for VHS owners to DVD players--the product has basically the same purpose, but further innovation leads to a rejuvenation of the market's demand. Or ask all those record-nazis if they are the majority, or if most switched to CDs? Each product has the same exact purpose, but a small innovation brought on demand on a vast scale.

This is all in the same market, of course. So the market can be rejuvenated as perpetually as the human mind can innovate on existing products. Karl Marx's biggest blindspot was human ambition an restlessness. Guy had some neat ideas, though.

Like your partner, acerbic, you miss the entire human factor in all of this. In a given market, there are only a finite number of people to whom you can sell. Thus, the rate of profit will continue to fall as production exceeds demand. How many rapid changes can you make before the market is so saturated -- and you are so overproduced -- that no one can or will buy your product?

Marx took what you call "human ambition an (sic) restlessness" into account. The problem for you, though, is that he took it into account fully -- that is, he also took into account the extent, the limits, of "human ambition an (sic) restlessness", as delineated by the limits of class society.

Martin

This is an internet forum, no need to (sic) me to death. Too much trouble to edit. :)

Marx could never completely wrap his clever brain around a classless society because such a thing cannot exist given human nature. You will have an ambitious group who will carrot-and-stick a lazier but larger group and everything goes back to the way it was, no matter what system, economic or social, is put in place. Don't go Straussian on me and bring up philosopher kings, because that level of idealism is too much for me to bear.

Check this out: radios and television sets. One does not preclude the purchase of the other. So both continue to be sold, usually by the same company, to one market. Innovations may continue in both, but instead of one replacing the other, both continue to be bought. Television sets were an innovation that allowed the previous comparable product to still be purchased, but created its own production/profit cycle to boot.

A whole new product. A whole new possibility for innovation. So each time a new product crops up, the cycle that you describe can be created again. The production/profit cycle won't lead to some across-the-board impasse just by itself.

Marx could never completely wrap his clever brain around a classless society because such a thing cannot exist given human nature. You will have an ambitious group who will carrot-and-stick a lazier but larger group and everything goes back to the way it was, no matter what system, economic or social, is put in place. Don't go Straussian on me and bring up philosopher kings, because that level of idealism is too much for me to bear.

Gee, jpgray, if it's soooo hopeless out there -- if there's no chance at fundamental change in society, if humans cannot progress beyond the lower animals -- then why don't we all just support our Boy Emperor, hold hands and all walk into the barbaric abyss together? :eyes:

Check this out: radios and television sets. One does not preclude the purchase of the other. So both continue to be sold, usually by the same company, to one market. Innovations may continue in both, but instead of one replacing the other, both continue to be bought. Television sets were an innovation that allowed the previous comparable product to still be purchased, but created its own production/profit cycle to boot.

A whole new product. A whole new possibility for innovation. So each time a new product crops up, the cycle that you describe can be created again. The production/profit cycle won't lead to some across-the-board impasse just by itself.

Yeah, and?... I hope you don't think this is a refutation of Marx. Just because a new product is created doesn't mean that TRPF ceases to exist. In fact, the opposite is the case. Go look at the rate of profit for these industries; you'll see how TRPF comes into play -- even with all the great and wonderful innovations.

Martin

The whole thing will turn back around. A problem with Marxist economic theory is there will be no final crash. There won't be any moment where everything redlines. Just as there won't be any moment when all the workers unite and create a classless society--it's impossible.

However, there are good ideas that come from Marxism. Admitting we will never be perfect is no reason not to do as well as we can with what we have. That's why I want Bush gone. If I was a MA Brahmin, I could probably care less about Bush.

Somebody above talked about the necessity of public goods, such as fire departments, etc. If you have all one or the other, capitalism or Marxism, you have a crappy system.

The whole thing will turn back around. A problem with Marxist economic theory is there will be no final crash. There won't be any moment where everything redlines. Just as there won't be any moment when all the workers unite and create a classless society--it's impossible.

So, jpgray, I asked before: "Gee, jpgray, if it's soooo hopeless out there -- if there's no chance at fundamental change in society, if humans cannot progress beyond the lower animals -- then why don't we all just support our Boy Emperor, hold hands and all walk into the barbaric abyss together?"

From your response, quoted at the top, the answer is "yes". Obviously, there was no need for all the twaddle in between.

Martin

...the PC is saturated and no new versions to replace the current product.

I do think the Plasma HDTV is a wonderful improvement on the old TV. Plus, it has planned obsolescence because the plasma gas leaks out over time and is irreplaceable. Very smart.

Personally, I would buy the LCD HDTV which doesn't have the same problem.

But some products do saturate because they are sooooo generic. Like toilet paper and toothpicks. I wonder what the NEW toilet paper would be like if they invented it??? Any ideas? Ick.

Never mind. I'm turning into Rosanna Dana. Time to go to zzzzzzzzzz.
:crazy:

At least they were in my economics course, where we were taught that a competitive market eventually yields no profit or very little profit.

who thinks they understand marxism. It is a completely different way of looking at things.

You look at things metaphysically. You see things as eternal and unchanging, i.e. capitalism, human nature, hierarchy. Things are static the only change is a change of quantity, time isn't accounted for. You can't explain changes in quality. Dialectics can. Dialectics sees the world as constantly changing, things are in constant movement. Where your metaphysics sees things as isolated dialectics sees things in relation to other things around it and these relationships are contradictory. Metaphysics sees one aspect of a picture dialectics sees the whole picture.

Capitalism has not always been. Capitalism is a relation of production not merely the trade of goods for money or other goods. Money is not capital it is a commodity. Capital is a social relation. Not only do you not understand marxism, you don't understand capitalism.

If the capitalistic crisis wasn't a reality explain the great depression, explain what is happening right now. The cycle of boom and bust is inherent in capitalism. What Marx has done is explained how and why something that no one else has done. Some have explained how, but never why. If you can give a system of analysis as all encompassing that is constantly being reinforced by the realities of the situation, then I'd like to hear about it.

You're wondering why you don't see it? Maybe it's because you're in the US where looking at the world like this is strictly proscribed. Perhaps it's because you've never really investigated the subjects you're talking about. Not merely to the point of being able to excercise your sophistry, but to the point of understanding. Any economics class you take is going to steer you in the wrong direction, this is obvious. So obviously it would be stupid to attempt to use modern "economics" to analyze marxism as half of its purpose is to hide reality not elucidate it.

Basically read Kapital.

Capitalism is a new name for it. So to would Marxism be a new name for it. It's just something inertial in us that doesn't respond to any abstract ordering of our affairs. :)

primitive cultures, although more or less extinct today, did not have the same kind of hierarchy and greed now associated with "human nature". Did human nature change? No, social relations changed.

In my senior English class in high school we read through Marx. The teacher wanted to make the classroom a microcosm of his ideas, and I got in the way like no other back then too. I was the lazy crime lord that wasn't supposed to exist. :)

It's obvious that you really tried to understand his ideas. Maybe that's why you come off as not knowing anything about marxism.

"Unless you have investigated a problem, you will be deprived of the right to speak on it. Isn't that too harsh? Not in the least. When you have not probed into a problem, into the present facts and its past history, and know nothing of its essentials, whatever you say about it will undoubtedly be nonsense. Talking nonsense solves no problems, as everyone knows, so why is it unjust to deprive you of the right to speak? Quite a few comrades always keep their eyes shut and talk nonsense, and for a Communist that is disgraceful. How can a Communist keep his eyes shut and talk nonsense?

It won' t do!

It won't do!

You must investigate!

You must not talk nonsense!"

if it isn't saturation?

Are we just waiting for a new product to come out and everyone will start buying?

.

:-)

it's all capitalist frivolity....consume in order the waste...make a system that fuels its own balloon, and when they stop buying, the wall comes tumbling down....sounds great. Relive the Great Depression!

...POSSIBLE or not and there are only the choices of cutting costs or finding new markets for the product.

RE-VALUING life over property is the only way we'll ever get away from the model that makes people like George Bush and his buddy Ken Lay desired and forgiven for their hateful ways of expansion of the corporate way.

The normal state of things in a mature market is a state of equilibrium. This means that supply and demand are in relatively stable balance, prices are stable, labor supplies are stable, and profits are stable. This is the normal course of events for about three-quarters of our economy most of the time.

Consider the dry cleaners, super markets, restaurants, clothing stores, accountants, law firms, medical practices, printers, painters, and on and on. Consider even most large companies. Their businesses are mostly in equilibrium most of the time. They may vary by a few percentage points each year, but not by all that much.

However, a portion of the economy--the high rollers--are focused on ginning up the process and achieving faster and higher returns than the norm. So they will push the system to its limits in an effort to achieve increased productivity, larger sales, higher margins and greater returns. They will attempt to drive the system to instability.

Normally this only works by focusing on niches spawned by new products or new markets. So in a typical, stable economy, the cycles of boom and bust for the economy at large are relatively minor.

Sometimes, however, there are innovations of such a sweeping nature that they bring about huge cycles of expansion followed by cathartic plunges.

That's where Marx is sort of right, but for the wrong reasons. It's not because capital expands beyond labor's capacity to provide a decent rate of return (which is his argument). That's really not possible, because capital must always find a place to be put to work, and will always find a return, even if it is not at the expected rate. And that rate of return will always be accepted by most investors as adequate because it is the "going rate."

But he is sort of right in a broader sense. During a boom caused by some new innovation that dramatically increase productivity (the auto, the airplane, the TV, the microwave, the computer, word processing software, the internet), there is a pronounced pattern in capitalist economies. Profits increase slowly at first, then more rapidly. Hope rises. Expectations increase. Management sets higher and higher targets. Investors expect more and more returns. Initially they are achieved. There is heightened optimism. But eventually the innovation reaches its stage of maximum impact. The rate of growth peaks. Investors worry. Growth peaks. People start selling. And when growth ceases, the effect upon those overblown dreams of an ever-increasing profit stream is so traumatic that there is a collapse of confidence and a rapid downward spiral.

At each stage optimism--fueled by human nature, a/k/a greed--is killed off by its own unreasonable expectations. In other words, you can't keep growing something at a faster and faster pace forever. Nor can you even keep growing forever. There are realistic limits.

However, even in such conditions, absent horrendous economic management (read Bush tax cuts for the rich), equilibrium will again be achieved and stability will resume, allowing the system to return to normalcy and again seek out the next stimulative innovation.

What is important to remember about the current situation is that--in the absense of any big new innovation--we will not see a return to the giddyup years of the Clinton era. We will instead see a return to the norm of slow and steady growth. That is, if this freaking moron in the WH isn't permitted to turn it into a depression by continually taking money out of the public sector and away from those who would spend it, and awarding it to those who will merely hoard it.

This is not just about the last decade. There has been a constant downward pressure on compensation, downsizing, etc. for the last 30 years, which has been translated into capital accumulation.

I work in the corporate world and the pressue to extract blood from stones continues. I don't see anyone in the management world who's prepared to say, "oh, well, looks like we've reached market equilibrium. I think a nice 2 or 3 percent return on investment would suit us nicely for the next few decades".

Now that's a pipedream.

"That's where Marx is sort of right, but for the wrong reasons. It's not because capital expands beyond labor's capacity to provide a decent rate of return (which is his argument). That's really not possible, because capital must always find a place to be put to work, and will always find a return, even if it is not at the expected rate. And that rate of return will always be accepted by most investors as adequate because it is the "going rate."

I'm not sure I'm understanding you right but you seem to be (partly) speaking about boom bust cycles. Above it seem's to me that you are not speaking about _capital as means of production_ but _financial "capital"_ in non-productive casino economy, money. The math (and details) of Marxist value theory goes over my head, but I'd imagine the boom, hyping of value and building balloons and bust, when superfluous financial capital (of no real value) is nulled, is not inconsistent with the theory. The big bust comes when there is no more places for financial capital to seek positive returns on short term and even the safe havens for maintaining value are few or non-existant.

The bigger the boom, the bigger the bust, so I don't think we'll see a return to growth in any short while but all the debt dollars overflowing the market with bubbles everywhere must get rid of before new cycle can begin. I think Marx would say the same thing, can anyone confirm?

PS: of course my own prediction is that in the coming years the whole capitalistic system will collapse, but that's beside the point for now.

www.thelongdetour.com

So far, I find this history/analysis of the Left and socialism in America very helpful in my developing understanding of socialism.

One of the themes in the book (I'm only a couple chapters in) is that socialism's goal during the height of industrialism in America was to make capitalism more humane and egalitarian.

That still resonates with me, even if my "pea brain" can't quite grasp all the finer points of economic theories.

(loosely paraphrased)

"I've always been supportive of free trade in the past. But things are going too far. The rate of American productivity has never been higher. But as we get more productive we lose more jobs and most people are making less. What the hell is going on here?"

Hollings is a capitalist Democrat. He and Byrd see the system they believed in going out of control now, and the balance swinging wildly in the direction of killer markets.

He made this point this last year while fighting against the most recent fast-track "free trade" scam that was pushed through Congress. Basically made the point that when left to its own devices, unregulated markets push conditions for labor down.

You don't have to be a rocket scientist to see what's happening to capitalism. You only have to take a good, hard look ... and think. Apparently, Sens. Hollings and Byrd are light years ahead of some people here at DU (whose usernames I will not mention -- just look for the folks I've argued with).

Martin

Apparently, Sens. Hollings and Byrd are light years ahead of some people here at DU (whose usernames I will not mention -- just look for the folks I've argued with).

...but the reality is that pointing out the stupidity of Marx's theories does not equal being a repuke who defends unfettered capitalism: there's a a whole lot of middle ground between those extremes but some who are blind can't even imagine that others can see. :eyes:

Between capitalism and socialism -- just as there was no middle ground between slave society and capitalism. You may like to play around and think there is, but you are wrong. Defending capitalism is defending capitalism -- whether it's fettered or unfettered is a question of degress within that fundamental reality.

And the stupidity pointed out here does not pertain to Marx's theories (or my explanation of them). So, that kinda narrows it down.

Learn to think. Stop letting the capitalists think for you.

Martin

...totally Marxist or totally capitalist. How totally detached from the real world and how totally conveeenient circular "logic" to use for your ranting that anyone who disagrees about that very claim is a totally capitalist pig.

Keep it up, you really give the appropriate credit to Marx's rationalism...

So you claim that all societies and all people are either totally Marxist or totally capitalist.

In their fundamentals, the societies can only be capitalist or socialist. There are differences by degress, but those are only degrees.

The fact that you cannot see that is why you're not doing to well and have to resort to petty ad hominem.

Martin

...and now you say "There are differences by degress" (sic) which according to normal English language means that there is middle ground, but you still continue to claim at the same time that your "There is no middle ground" statement is correct. :eyes:

This is what I wrote. Pay close attention to the last section.

Between capitalism and socialism -- just as there was no middle ground between slave society and capitalism. You may like to play around and think there is, but you are wrong. Defending capitalism is defending capitalism -- whether it's fettered or unfettered is a question of degress within that fundamental reality.

Do you see it? Do you see that last part of the statement?

Here, I'll make it so you can.

Between capitalism and socialism -- just as there was no middle ground between slave society and capitalism. You may like to play around and think there is, but you are wrong. Defending capitalism is defending capitalism -- whether it's fettered or unfettered is a question of degress within that fundamental reality.

Can you see it now?

Martin

Because the moderators don't bother with your yap attacks, I'll just answer them so that you may understand...

It has been shown several times in this thread that you don't have a leg on which to stand. All you have left is invective and ad hominem. Be forthright, gracious and magnanamous and ... walk away.

Martin

All you have left is invective and ad hominem.

That really happens to apply to a poster here... just one of the numerous examples:

parroting what Tailgunner Joe, Raygun and Poppy told you
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=104&topic_id=37412&mesg_id=40648&page=

Is this the best you've got? I am so disappointed. That quote doesn't even come close to ad hominem. Not by a long shot.

Martin

Of course, somebody who in reality likes what Tailgunner Joe, Raygun and Poppy told wouldn't consider it such...

Of course, you keep repeating your accusation that I use invective and ad hominems but you can never provide a single direct quote of where I allegedly did, so I indulge you and finally provide you with one: you're a liar and a troll. There. Now run to the moderators, full of glee with your succesful stubborn baiting.

I don't run to the mods when confronted with an antisocialist troll. I fight them.

Of course, you keep repeating your accusation that I use invective and ad hominems but you can never provide a single direct quote of where I allegedly did...

Actually, I can name two direct references in this subthread:

1. "How totally detached from the real world and how totally conveeenient circular "logic" to use for your ranting";

2. "The moderators don't bother with your yap attacks".

Invective and ad hominem.

Son, you seriously need to do some growing up politically. Until then, don't try to run with the big dogs.

Martin

..."you're a rightwing republican if you don't believe all Marxist stupidity" yapping I took before your baiting succeeded. You're a worthless little troll.

Following the global economic crash of 1929-1930, Keynes set out on a mission that he described as "saving capitalism from itself". He realized that avarice and greed and selfishness had completely corrupted the system, and given the lessons of Russia less than one generation earlier, he did not want to see the same phenomenon take place in England.

Sadly, some 70 years later, we are simply re-learning the lessons that history so tried to teach us before. There is no such thing as a "free market", and unfettered markets do NOT bring prosperity to all. The key is not in adopting one system over another -- just look at the injustices that took place in Soviet Russia that weren't too different than life under the Czars -- but rather coming to certain realizations. One is that we are all in this together, and the health of a society as a whole is no better than the lowest elements of that society. Another is that we do a lot better in the long run if we work collectively rather than driven purely by self-interest. These basic truths make the need for strictly regulated markets to be apparent for maintaining basic fairness -- and anyone who refuses to acknowledge this is deluding themselves, IMHO.

I used to refer to myself as a socialist, until I realized that the problem wasn't the SYSTEM, but rather the nature of human beings in general. Now, I'd be more interested in just finding the best way toward a more egalitarian society than ideologically promoting one system over another.

Have you had some sort of major change of heart, in recent months?

Here in one paragraph, you're supporting the idea of working collectively, & stressing the need for strictly regulated markets. You're also warning about being "driven purely by self-interest." These things of course sound like the guy who some months ago described himself as a Democratic Socialist.

Yet in the next paragraph you "used to refer" to yourself as a socialist, & you're assigning TOTAL responsibility for social outcomes to human nature, & saying that the SYSTEM structure doesn't much matter.

Now, I know of course that you know both sides of these debates very well. But with all respect, there are a few things here that seem a bit unfair to me. One is that you used the USSR as an illustration of how socialism can fail, too. This is not an entirely fair example of what socialism's limits or forms might be, anymore than Indonesia, Haiti, or Turkey would be entirely fair examples of how capitalism has to be.

Another point - the need for regulated markets: I agree that capitalism with regulated markets seems to work well- while it lasts. But the problem is that sooner or later, under capitalism, some bigger players will always become powerful enough, to move to undo the regulation. If there were really any way to guarantee that the regulation would stay in place, that would be one thing. But there isn't. I know you know this argument, too. Has something in recent months caused you to see this sort of mechanism as less of a danger?

I still believe in many of the ideas of Democratic Socialism to achieve positive ends. Perhaps I should have said that I do not believe socialism to be an infallible system, so that all of our faith should not be placed in it to cure our ills.

That probably doesn't ring the same as my original statement, but it's a better interpretation of my thoughts on the subject.

As for the argument between human behavior and the "system" -- it's an age-old one. In every major failing of the "system", however -- whether we're talking about Soviet Communism or capitalism circa 1929 (or today) -- that failure has come about because of the belief of an influential group of people that the SYSTEM will solve all of society's ills. In this sense, the market fundamentalists (a la Hayek and Friedman) are as wrongheaded as the Bolsheviks were.

Economics is a science based on mathematical trends and models. There has not yet been a system invented for measuring human behavior mathematically -- it is the perpetual "monkey wrench" in the system. For that reason, it is important to not look toward the system (the "ism") as being some sort of savior, for it never will be.

As for the regulation part -- as a society, it's all we have to help "direct" human behavior. Whether you are talking about socialism or capitalism or communism, there is regulation -- and the possibility that such regulation will be twisted by a few to work toward their advantage at the expense of the many. The best bulwark to this is a well-informed populace, something that does not exist in our society.

As for my "transformation", I would not call it such. Like I said above, I still believe in many of the ideas of Democratic Socialism. But I do not believe it to be "the way", in any manner -- and I recognize the real solution over the long term to be a change in the basic perceptions of human beings from one of wholly short term self-interest to one of communal awareness and interconnectedness.

and therefore cannot be left to its own devices, like gravity, to keep our behavior under control.

But I wouldn't say that we need any 'basic perceptions' change. My sense is that the amount of pro-dog-eat-dog propaganda they feel the need to bombard us with is a sort of reverse measure of how naturally cooperative and connected we are.

Perhaps I'm overly hopeful, but I'd say our greatest need isn't stronger or more widespread feelings of community, but stronger and more widespread feelings of agency--we need the feeling that we can fight city hall if we choose to do, that we can change our lives for the better simply by choosing to do so and being willing to work at it til it's done.

..the labor theory of value, and compare it to the subjective theory of value.

In order to "succeed," profits must not only be there but INCREASE over time. Since there's only so much wealth in society, (and it comes mostly from LABOR), at some point, the system can't produce more profit, so it collapses like a huge Ponzi scheme.

and thus subject to Jean Baudrillard's 4 stages of the image:

Progression of the "image":

1. it is the reflection of a basic reality.
2. it masks and perverts a basic reality.
3. it masks the absence of a basic reality.
4. it bears no relation to any reality whatever: it is its own pure simulacrum.


The financial markets of the U.S. are in stage 4, as is most academic theory and social institutions in the U.S. and Western civilization. Computers and such have abstracted money so much that it is now nothing more than a temporarily deferred sign for another form of money. Only rarely is it converted into the "labor" it was originally meant to represent, and thus we have a major disconnect between the financial markets and the "real" economy.

This theory applies to pretty much any system of signs (the media for instance?)..have fun.

The work of Walras, Jevons, and Menger rendered the LTV obsolete over 100 years ago.

It is really one of the easiest theses of marxist economics to
understand, yet I didn't find a simple explanation among all the
posts.
The thesis: in the course of capitalist development the average
rate of profit (return on capital) will exhibit an objective tendency
to decline.
The reasoning is as follows: Let's say the average rate of return
was 15%. Part of this profit will go into consumption by capitalists
themselves. We know those people can consume like there is no tomorrow, but even they would be hard-pressed to consume more than a
third of their profits. The remaining 10% will go back into capital
stock in the form of investment. It results in 10% increase in total
capital. If the next year the production level, productivity, and
exploitation rate remained unchanged, the average rate of return on
capital would deminish by 10%.
Obviously, to keep the rate of return constant capitalists have to
either increase the production or, alternatively, increase their share
of the profits. The second approach has an obvious limit imposed by
the need for sustenance and reproduction of the workforce. Although,
it must be said, that it still seems to be a method of choice
presently, as capitalists noticed that this limit is not reached
yet, at least in the developed countries.
Short of increasing the rate of exploitation, the only way to maintain
the profits is to increase production of value. Since the only source
of value is labour, it can be achieved by either increasing the
workforce or by increasing the productivity (or a combination of both). At early stages of capitalism workforce expansion could be
easily accomplished through pauperization of rural population and
turning it into proletariat. It's still operational in developing
countries such as China and India where over 80% of population still
live in countryside. In developed countries the most recent expansion
was done by massively driving women into the workforce. Another
viable approach, of course, is employing migrant labourers, either
legally (like Germany did with Turkish workers) or semi/il-legaly
as US does with Mexican/Chinese/... workers. Finally one can increase
workforce by expanding production abroad into underdeveloped labour
markets. All that will buy capitalists some time but also has its
obvious limits, ultimately imposed by natural population growth (which
is rarely exceeds 1.5% a year and often becomes negative in most
developed countries).
After those limits are reached, productivity growth remains the only
mechanism for sustaining the profit rates. It is true that Marx
failed to forsee the explosive increase in productivity which took
place over the XX century. He could be forgiven for such lack of
insight, as nobody else living in mid XIX century could and did pre-
dict the technological and scientific revolution which occurred
during the following century. Capitalists, of course, are quick to
take all credit for those achievements, and proceed to conclude that
research and innovation will guarantee that productivity continues
to grow without any limitation, thus making capitalist economic
system indefinitely sustainable. Marxists disagree, saying that Marx
was right in principle, even if off with his timing by a couple of
centuries, and ultimately the productivity too will have to face its
natural limits.
All that doesn't even touch on other limitations to growth rates, such
as destruction of the environment, which nobody could forsee even
50 years ago.