Saturday, June 28, 2008

Evo Morales: A Call for Socialism?

From the June 2008 issue of the Socialist Standard

On 21 April, 2008, President Evo Morales of Bolivia delivered the opening address to the Seventh Session of the U.N. Permanent Forum on Indigenous Issues in New York. His speech included the following passage:

"If we want to save the planet earth, to save life and humanity, we have a duty to put an end to the capitalist system. Unless we put an end to the capitalist system, it is impossible to imagine that there will be equality and justice on this planet earth. This is why I believe that it is important to put an end to the exploitation of human beings and to the pillage of natural resources, to put an end to destructive wars for markets and raw materials, to the plundering of energy, particularly fossil fuels, to the excessive consumption of goods and to the accumulation of waste. The capitalist system only allows us to heap up waste. I would like to propose that the trillions of money earmarked for war should be channelled to make good the damage to the environment, to make reparations to the earth."

Despite the striking anti-capitalist content of most of this passage, the last sentence reveals that Morales does not have a clear conception of the socialist alternative. He still thinks in terms of the money system.

The accurate way of posing the problem focuses not on the waste of money but on the waste of real resources of all kinds – the waste of nature and its bounty, of human life and labour, of knowledge and its potential. True, money represents or symbolizes some – far from all -- of these real resources, but in a very inadequate and distorted manner. To substitute the symbol for the reality is a mystification.

Nevertheless, I would like to argue that Morales is a good deal closer to a true understanding of socialism than most of the so-called "left" in Latin America or elsewhere. The very fact that he is addressing a world forum about the future of the species and the planet suggests that he is seeking an alternative at the global rather than national level. Although nationalization forms part of his domestic policy (the oil and gas industry in Bolivia was nationalized in 2006), he does not equate nationalization with socialism.

The model of the ayllu

In a number of interviews Morales has been asked what he and his movement – the Movement for Socialism (MAS) – understand by socialism. Thus, Heinz Dieterich of Monthly Review (July 2006) asks him what country the socioeconomic model of the MAS most closely resembles. Brazil? Cuba? Venezuela? Morales does not like the way the question is put. ("[Socialism] is something much deeper. … It is to live in community and equality.") He talks instead about the traditional peasant commune or ayllu of the indigenous peoples of the Andes, based on communal landholding and "respect for Mother Earth." He himself grew up in an ayllu of the Aymara people in Oruro Province; in some parts of Bolivia such communities still exist.

In another interview, to journalists from Spiegel, Morales says: "There was no private property in the past. Everything was communal property. In the Indian community where I was born, everything belonged to the community. This way of life is more equitable." As the World Socialist Review, published by our companion party in the United States, comments: "This is more than just a variation on the leftist copout that socialism is a goal for the distant future; it is, on some level, an acceptance of it as a real alternative to capitalism" (See here.)

Rejecting vanguardism

Another indication that Morales is closer than most of the "left" to a genuine understanding of socialism is his opposition to the Bolshevik idea of the "vanguard party." The MAS, he tells Dieterich, "was not created by political ideologues or by a group of intellectuals, but by peasant congresses to solve the problems of the people." It has always rejected the pretensions to "leadership" of Leninist groups of different varieties -- followers of Stalin, Trotsky, or Mariategui (a Peruvian Bolshevik who has had great influence on the left in Latin America).

Of course, Morales is not only a thinker with more or less clear ideas about capitalism and socialism. He is also head of the government of an underdeveloped country that has to operate within the parameters of a capitalist world. As such he is no position to realize his more far reaching aspirations. At most, he has been able – like Hugo Chavez in Venezuela – to divert some of the proceeds from the sale of oil and gas to making some improvement to the life of the impoverished indigenous communities.

The fact remains that an internationally known figure has stood up at the United Nations and called upon the world community to bring the capitalist system to an end. Morales' concept of socialism may be less clear than we would like, but it does at least bear some relation to the real thing. Viewed from the time when the UN and its specialized agencies are converted into the planning and coordinating centre of world socialism, this will, perhaps, be regarded as a milestone in its history.

Stephen Shenfield

Tuesday, June 24, 2008

Labor Theory of Value

The article below is one part of my introduction to a book I have translated entitled Marx's Theory of the Genesis of Money by the Japanese Marxist economist Samezo Kuruma. My discussion of the labor theory of value below is part of my overview of Kuruma's book so it might be a bit difficult to follow, but I think it more or less stands on its own. — MS

The labor theory of value presents its own difficulties, certainly, but they do not stem from the unfamiliarity of the theoretical question itself. That question, which economists prior to Marx had already pondered, basically comes down to identifying the factor that commodities have in common which determines their "exchange-value" or "worth." The Classical school of political economy, starting with Adam Smith, arrived at an answer in asserting that the level at which a commodity will be exchanged is generally determined by the quantity of human labor necessary to produce it.

Marx adhered to this labor theory of value, but had a far more precise understanding of the labor that is the "substance" of value, defining it as the quantity of abstract human labor socially necessary to produce a commodity.[1] Yet, perhaps because the merits of the labor theory of value were so clear to him, Marx did not belabor his own explanation of it in Chapter 1 of Capital, where he simply says: "If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labor" (Capital vol. 1, p. 128). It is this common trait among commodities—as the product of labor—that Marx identifies as the basis of their value.

This matter-of-fact conclusion may seem less than convincing to many readers, given the existence of phenomena that run directly counter to the labor theory of value. There are commodities, for instance, that are the product of little or no labor, yet fetch higher prices than labor-intensive ones; we also know that commodities have other factors in common, whether it be their physical attributes or more abstract qualities such as being desired objects. This all contributes to the impression that Marx is engaging in some sort of intellectual sleight of hand, where he limits his discussion to commodities that are the product of labor and then "discovers" that labor determines a commodity's value. Eugen von Böhm-Bawerk, an early critic of Marx, described his intellectual foe as "one who urgently desiring to bring a white ball out of an urn takes care to secure this result by putting in white balls only." Subsequent critics, following Böhm-Bawerk's lead, have seized on this apparent flaw at the basis of the labor theory of value in an effort to discredit Marx's entire critique of political economy. However, this idea that Marx's logic is circular overlooks important premises of the labor theory of value—which are firmly rooted in reality.

One key premise is the vital need, in any form of society, to produce material wealth. It is the continual production of that wealth, via human labor, that sustains any society and its members. "Every child knows, " Marx wrote to his friend to Ludwig Kugelmann in the summer of 1868, "that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish" (Marx, 1988, p. 68). We also know that under capitalism the bulk of this crucial material wealth takes the form of "commodities" (i.e., products bought and sold on the market), which Marx points out in the first sentence of Capital: "The wealth of societies in which the capitalist mode of production prevails presents itself as an immense accumulation of commodities" (Collected Works vol. 43, p. 125). It is the commodity in this fundamental sense, as the capitalistic form of material wealth (= products of labor), that Marx analyzes in the first chapter of Capital—rather than the "commodity" in the purely formal sense as anything that is bought and sold. From this perspective, it is quite natural for Marx to identify labor as the factor that commodities have in common which determines their value.

Marx raises a second important premise of the labor theory of value in that same letter, pointing out to Kugelmann that "every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society's aggregate labor" (Collected Works vol. 43, p. 68). What Marx means—for it is doubtful that even the most precocious child would use those exact terms—is that there is an obvious need, again in any social form, to allocate the total labor of society to the various spheres of production in line with the products required (just as there is a need to then distribute those products throughout society in one way or another). The labor theory of value takes this reality as its starting point and seeks to explain the distinctive manner in which labor is allocated (and products distributed) in a capitalist society. Specifically, the theory explains what regulates the exchange of commodities that mediates this allocation of labor. Here, just as in the case of the commodity in the "fundamental" sense, the reality of labor and its foundational role in any form of society is premised.

Those who overlook these two important premises are likely to view the idea of labor as the "substance" of value as a circular argument—an empty assertion. Not surprisingly, Marx's opponents have aimed much of their criticism at the supposed inadequacy his "proof" of the labor theory of value in Chapter 1. In his own day, Marx encountered similar criticism and derisively wrote of how "the chatter about the need to prove the concept of value arises only from complete ignorance both of the subject under discussion and of the method of science" (Collected Works vol. 43, p. 68). The "subject under discussion" he is referring to is the need in any society for labor allocation and product distribution, while the "method of science" involves explaining the specific way that is carried out in the case of capitalism. The "proof" of the labor theory of value—although the term seems somewhat inappropriate—is thus found within the aforementioned premises, which is why Marx adds that "even if there were no chapter on 'value' at all in [Capital], the analysis I give of the real relations would contain the proof and demonstration of the real value relation" (Collected Works vol. 43, p. 68). We need, then, to understand the nature of the commodity analyzed and appreciate what the labor theory of value actual sets out to explain, in order to properly understand that theory.

Once equipped with that basic understanding, it should be clear that the labor theory of value cannot be refuted by simply noting the existence of other "commodities" that are not the product of labor. Not only is such criticism entirely beside the (theoretical) point, it does not adequately acknowledge that Marx was well aware of the existence of such "formal" commodities. Already in Chapter 3 of Capital, for instance, he mentions that "things which in and for themselves are not commodities, such as conscience, honor, etc., can be offered for sale by their holders, and thus acquire the form of commodities through their price" so that "a thing can, formally speaking, have a price without a value" (Capital vol. 1, 197). And later Marx analyzes commodities that lack intrinsic value, such as land or interest-bearing capital. However, in the case of these "formal commodities" there is often an indirect relation to the concept of value, so they cannot not be adequately explained until value has been elucidated via the analysis of the commodity in its fundamental sense.

Marx ridiculed those who expected him to explain everything at the same time, noting that "if one wanted to 'explain' from the outset all phenomena that apparently contradict the law, one would have to provide the science before the science" (Collected Works vol. 43, p. 68). Many of the doubts of Marx's impatient critics—who he describes as "clinging to appearances and believing them to be the ultimate"—are answered later in Capital, at a different stage in his analysis of capitalism. If Marx had followed his critic's advice by attempting to explain every sort of commodity at once, rather than drawing a distinction between the commodity in the formal sense and the commodity in its fundamental sense, his analysis would not have advanced very far: he would never have been able to explain how commodity exchange is regulated (thereby mediating the allocation of labor and distribution of goods); nor would he have been able to elucidate the concept of money. We would have been left with nothing more than a description of the commodity as a something with a price attached.

A quick look at some of the alternatives to the labor theory of value, to conclude this section, further underscores the strength of Marx's position. There is, for instance, a common view that the value of a commodity is determined by supply and demand. This factor does of course account for fluctuations in the prices of commodities, as Marx readily accepted, but it does not explain why the price of a particular type of commodity will tend to fluctuate around a certain level.[2] Another erroneous theory of value is the idea that that a commodity's value is the sum of the value of the materials and wages expended on its production plus average profit. This is clearly a tautological theory that fails to explain what determines the value of those component elements. Finally, there have been theories where value is in the eye of the beholder, so that it is explained as the fruit of subjective evaluations on the part of buyers and sellers. Fanciful scenarios have been thought up to "prove" this assertion, such as the story of a man dying of thirst in the desert who would gladly exchange a fistful of diamonds for a glass of water. However, even if this factor accounts for the high price of some rare item or work of art, it does not tell us much about the continual production (= reproduction) that is the basis for the continued existence of any society or the specific reality of capitalist commodity production. In sum, these "alternatives" to the labor theory of value do not adequately address the theoretical question at hand regarding how commodity exchange is regulated.

[1] Marx also distinguished between various usages of the term "labor." He drew a distinction between the "concrete labor" that creates a commodity's use-value and the "abstract labor" that produces its value; labor in an active state in the labor process ("living labor") versus labor embodied in the commodity as a result of production ("dead labor"); as well as drawing a distinction between "labor" in all of those senses and the concept of the "labor-power" (or the capacity to labor), which the worker sells as a commodity on the labor market in return for a wage and whose value is determined by the value of the commodities that worker must consume to reproduce that capacity to labor. In contrast, Smith and Ricardo had used the blanket term "labor" to refer to all of these different cases.

[2] Marx offers the following insight on supply in demand in his pamphlet Wages, Prices and Profit:

"Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they will never account for that value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or the other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that value, we have, therefore, nothing at all to do with the temporary effects on market prices of supply and demand." (Marx, 1996, pp. 26-27 — Marx's emphasis)

Sunday, June 22, 2008

Power and Privilege

And this man wants to be president. From MSNBC :

Senators John McCain and Barack Obama released their Senate financial disclosure statements on Friday, revealing that Mr. McCain and his wife had at least $225,000 in credit card debt…The bulk of the McCains’ obligations stemmed from a pair of American Express credit cards that are held in Cindy McCain’s name. According to the disclosure reports, which present information on debts in a range rather than providing a precise figure, Mrs. McCain owed $100,000 to $250,000 on each card.

Unlike the millions of Americans who can’t afford to pay their bills, because wages haven’t risen in years, and are using their credit cards just to get by, Cindy McCain’s:

filing, however, indicated that she had substantial holdings in property and stocks - including shares in Anheuser-Busch, which this week became the target of a takeover bid that is expected to send its value climbing. Her land holdings included parcels in Arizona and California, one of which was sold last year for a profit of more than $1 million.

In other filings, the McCains have reported total household assets of $24.6 million to $39.5 million. In recently releasing a summary version of her 2006 tax return, Mrs. McCain reported income that year of more than $6 million, some $300,000 of which was derived from her salary as the chairwoman of Hensley, which was founded by her father.

But here’s the punchline courtesy of Huffington Post:

In fact, according to a prior disclosure form filed in May that was provided to The Huffington Post, a significant amount of the McCains’ credit card debt is being held by American Express at an interest rate of zero percent.

I’m sure that has nothing to do with the fact he’s a US senator. Mavericks don’t need to pay their bills.

-From our friend at Marx and Coca Cola

Friday, June 13, 2008

Democracy – and ‘democracy’

From the Socialist Standard, November 2004.

The nature and meaning of democracy in society has recently become a topic of major interest in the media. Not only are we repeatedly reminded that the 'war on terror' is being waged to defend 'our' democratic rights and freedoms, but more recently the issue acquired unexpected notoriety when supporters of the 'Countryside Alliance' tricked their way into the debating chamber of the House of Commons. Although a great embarrassment to the 'security forces' and the government and a mild source of amusement to the rest of us, it did trigger a debate, however brief, on the role of parliament and what constitutes a working democracy.

The first moves towards control of parliament by means of elected representation emerged in England in the 17th century, as parliament attempted to expand its authority at the expense of the king. The electorate was limited to the small minority, who regarded it as imperative that they capture exclusive political power to pass laws that would safeguard their land and property interests from the 'propertyless masses'.

Their purpose was to exclude ordinary people who might voice views dangerous to the propertied class or pass laws detrimental to their interests. The control exerted over parliament became a reflection of the property relations in society; a role that parliament has successfully fulfilled, largely unchallenged, to the present day.

As capitalism emerged as the dominant social system, competition and the misery of working people intensified, so worker organisations struggled against laws that hampered their ability to defend themselves and improve their conditions. The 'Anti-Combination Laws' that made unions illegal were repealed in 1824, although it wasn't until the depression of the 1870s and the Trade Union Act of 1871 that legal protection was granted to union funds. Later, peaceful picketing was allowed. Likewise, the struggle to achieve universal suffrage was slow, driven by overcrowding, excessive hours, child labour, dangerous working conditions and dire poverty. It took the Reform Acts of 1832, 1867 and 1884 to expand the franchise, but even by 1900 only 27 percent of the male population had the vote and it would take a further 30 years before full adult suffrage would be conceded to working people.

By the end of the 19th century the political debate influenced by worker organisations centred on whether the state should become involved to help the poor or whether traditional laissez faire – the notion of individual self-help – should prevail. Collectivism – the view that the state must improve things for the poor – gradually emerged and led to the development of what we know now as the welfare state in the twentieth century.

This summary raises two important issues. The first is that whilst parliamentary government still operates to protect property, the concessions and the elbow room that have been won in capitalist democracy are important and of value to working people. Rights to organise politically, express dissension and combine in trade unions, for example, are valuable not only as a defence against capitalism, but from a socialist viewpoint are a platform from which socialist understanding can spread, while the right to vote the means by which socialism will be achieved.

Chartists storming Westgate Preston  1842

For the Chartists, winning the vote was part of a wider struggle for
social change – a class struggle.Hence their fierce suppression by
the 'authorities'.

Not enough

At the same time we must recognise that genuine democracy is more than these freedoms and the right to vote. Whilst 'one person one vote' is an essential ingredient of democratic society, democracy implies much more than the simple right to choose between representative of political parties every five years. The Chartist movement, in the 19th century, saw that gaining the right to vote was meaningless unless it could be used to effect 'change'. But today exercising our democratic right to vote for a conventional political party does not effect change. It amounts to little more than making a selection between rival representatives of power and class interest whose overarching function is to protect private property and make profits flow. It is representative government where all the representatives support obedience to the capitalist system.

Some exponents of modern democratic theory assert that ordinary working people should only be 'spectators' but never 'participants'. They hold that while we may busy themselves on the fringes of political issues, ordinary working people must be excluded entirely from any involvement in deciding economic matters; for this is where the real decisions that effect our lives are made. This is where the interests of the capitalist class have exclusive decision making authority.

Milton Friedman in his Capitalism and Freedom, for instance, tells us that capitalism and democracy are inseparable. He assets that far from being its antithesis, profit creation is actually the very embodiment of democracy and any government that restricts the market is pursuing an anti-democratic policy. He argues that the real issues, including the distribution of resources, social organisation and the economic sphere in general must be excluded from public debate and left to 'free market forces' or removed from public scrutiny altogether and made secretly. He predictably concludes that government should limit its involvement to the protection of private property, law enforcement and to a policy of limiting all political debates to minor peripheral issues. Not surprisingly, capitalist democracy is one where the political agenda is dominated by trivial and often insignificant debate between political parties with the same class based convictions.

Manufacturing consent

Other exponents of capitalist democracy go still further, for they assert that to keep democracy 'healthy' (by which is usually meant working in the interests of capital), public opinion must be moulded and manipulated to encourage obedience – to "manufacture consent". Ordinary working people are to be targeted with propaganda and 'public relations' exercises to induce acceptance of things that are contrary to our interests. The effectiveness of this propaganda is illustrated by the widening gap between people's preferences and government policy which often result in the quiet acceptance of, say, unpopular cuts in social spending or policies clearly incompatible with their interests. It is hardly surprising that working people become increasingly disillusioned with 'democracy' and politics and register their frustration by declining participation in elections. We start to believe that if our vote is so ineffective in changing things there can be little point in casting it. We become exactly what our master class wants us to be, obedient and silent.

Clearly, 'democracy' under capitalism is different from the generally accepted meaning of the word as a situation where ordinary people make the decisions that shape their lives, frequently summarised as being the 'rule of the people.' But democracy is not simply about 'who' makes decisions or 'how' the decisions are to be made. It is an expression of the social relations in society. If democracy means that all have equal opportunity to be heard, then this not only implies political equality but also economic equality. It further presupposes that people have individual freedom. A genuine democracy is therefore one where people are free and equal, actively participating, without leaders, in co-operative discussion to reach common agreement on all matters relating to their collective as well as individual requirements.

A genuine democracy complements equality and freedom and is therefore incompatible with capitalism. We are told we have 'equality,' but how can this be when the majority are compelled to sell their labour power to a minority who have the wealth to purchase it? Likewise, we are told we are 'free' but in reality our only freedom is to sell our labour power to someone who is 'free' to buy it – or not, as the case may be. If we choose not to exercise this freedom then we are 'free' to go without or even starve. It is quickly apparent that in capitalism freedom is an illusion because freedom cannot exist when the conditions for the exercise of free choice do not exist. In capitalist democracy freedom has become a commodity strictly limited to the amount that can be purchased by a given wage or salary. In the workplace our 'work' organised under a strict division of labour is often tedious and repetitive; we have become an appendage to a machine or computer in industry organised on a strictly 'top-down' chain of authority – more fitting to a tyranny. This is what freedom means under capitalism.

The vote as weapon

The realisation that genuine democracy cannot exist in capitalist society does not alter the fact that the elbow room already secured by struggle can be turned against our masters. The right to vote, for instance, can become a powerful instrument to end our servitude and to achieve genuine democracy and freedom. Working people with an understanding of socialism can utilise their vote to signify that the overwhelming majority demand change and to bring about social revolution. For while democracy cannot exist outside of socialism, socialism cannot be achieved without the overwhelming majority of working people demanding it.

A genuine democracy can flourish only in socialist society. Socialism will liberate the productive forces within capitalist society by bringing the means and instruments of producing life's necessities into common ownership, thereby destroying the economic foundation upon which class distinction and social discrimination rest. It will replace production for profit with production for need, where money, exchange and the market will all become obsolete. The democratic organisation of socialist society will necessarily require the full participation of all free and equal people, without leaders, to vote and decide on the issues that determine how the welfare of all can best be served. It will end forever the degradation of wage slavery, hierarchy and coercion and provide the economic basis for free people to become creative, unfettered to express their diverse and individual talents and be fulfilled as human beings.

Today, we must view with suspicion attempts to further restrict or limit our legal rights by carefully considering the motives that lie behind such moves. For we need to use these rights to organise and spread socialist understanding so a socialist majority can capture political power, end capitalism and establish socialism. Only then will we have genuine freedom and a genuine democracy.


Sunday, June 8, 2008

The Social Ideology of the Motorcar

Victorian bicycleThe motorcar is a perfect example of how production for profit alters the entire world in the image of the commodity, potentially even at the expense of future human life on earth. A foldable 8-page booklet that you can print at home on both sides of 2 sheets of paper (and staple twice in the middle fold between pages 4 and 5) was created in .pdf format for your interest. You will be able to download the 4 .pdf files at the end of this short introduction. It is Andre Gorz’ brilliant 1973 critique (originally in French) of the ideology of the motorcar, the prime example of capitalist individualism and mass consumption at the terrible expense of the quality of human life. It is, in this author’s opinion, one of the finest political articles ever written of an anti-capitalist nature. This author has produced it to hand out to fellow bicyclists at Critical Mass events, or simply to hand out to pedestrians he passes while on his bike. It concludes with a brief paragraph penned by this author to point newcomers to this website and thus to socialist ideas. Members and non-members alike (especially fellow cyclists!) are strongly encouraged to print this up in your home and to hand out to random fellow citizens.