Thursday, October 16, 2008

It ain't socialism

Whatever it is, all this frou-frou about "nationalizing" the banks, it ain't socialism.

We have to look at the production relations, how individual people relate to each other to produce and consume the physical necessities of life. When the first phase of this crisis is over, the production relations will not change: people will be employed by the owners of the means of production, and the owners will still make a profit. We will still pay rent to a landlord or a mortgage — with interest — to a bank.

Our government is owned by capitalists, i.e. the owners of capital. They write the campaign donation checks, they provide employment to our elected officials after their terms are over. All that's happening is that capitalists are resolving the crisis by transferring wealth from the people to the capitalists. They sucked out the people's ownership of stock — concentrated in pension plans — in the last bubble; in this bubble they sucked out the value of people's homes. There's nothing left to suck out except people's actual productivity, which will now be sucked out directly with taxes. That's what Ponzi schemes bubbles do: transfer wealth from the people to the capitalists. Even the most moral capitalist must participate; if the guy in the next bank has found a scheme to extract wealth from the people, I have to participate too regardless of the long-term risks or he'll crush me in the short term.

The game is just beginning. The financial crisis is, by itself, a fake crisis. We have so far lost nothing but money. We haven't lost any human life or productivity, as we might to an epidemic; we haven't lost any physical infrastructure, as we might to a hurricane or earthquake.

I think it was Kurt Vonnegut who used the baking a cake analogy to describe financial crises: We have flour, eggs, sugar, milk; we have bowls and spoons and a working oven; we have a cook who knows how to bake a cake and the time to do so. But we have run out of ounces and pounds. Money isn't a concrete thing with intrinsic value; it's an abstraction, the unit of measurement of value.

Capitalism is not about producing goods and services that have value. Capitalism is about producing goods and services that have value to individuals with money. If the mass of ordinary people have no wealth and no money, then it is unprofitable to produce what they need, no matter how much they need it. When money moves from the people to the capitalists, we are implicitly deprecating the needs, wants and values of the people and elevating those of the capitalists.

An honest Randian will say, "Yes, so what?" If people have no money, if the capitalists do not value their labor sufficiently to give them money, then it would be a sacrifice — to be condemned and abhorred above all else — to meet their needs. Fortunately, committed Randians are rare (and honest ones even rarer).

The next phase of the game, which will play out over the next ten years (and most sharply in the next two to four years), will be more concretely real to the masses of people. The capitalist class is in chaos, and the result of this chaos will be refocusing production to restore profitability, i.e. producing that which has value to the people with money. Since the great mass of people have no money, the capitalists will scale back production (and maintenance of the productive infrastructure) that meets the people's needs; they will refocus production on what meets their own needs. Since the capitalists themselves are in chaos, it will be difficult to determine even what meets their own needs, and production will fall even further.

It is in the next phase that we'll see an impetus towards real socialism: socializing the production of those goods and services that meet the physical, material needs of the masses of people: food, housing, clothing, education, and medical care, putting the production and consumption of these elements on a cost basis, not a value basis.

No matter how bad things get, the capitalists will bitterly resist, with every fiber of their being, with every weapon at their disposal (including the police and the army), socializing the production of the masses' necessities and putting their production and consumption on a cost basis. The value of these necessities is practically infinite, and it is only by controlling these necessities that capitalists can persuade ordinary people to work long hours and transfer the surplus value of their work to the capitalists: Without "work or starve" the capitalist class has no raison d'etre, it has no justification for being a class.

But without socializing these basic needs, millions of people will starve and die, and the rest will live in abject poverty while the capitalist class lives in unparalleled luxury. We need look no farther than just outside our own borders to see what happens when we fail to socialize basic production: the typical third-world economy with a minuscule privileged capitalist class, a tiny middle class serving their needs, and the great masses of people laboring in sweatshops for a meager living to earn those capitalists their luxuries and privileges.

This outcome can occur, and our size and history is no guarantee that it will not.

19 comments:

  1. But u c didn't like Communism just make the whole issue sharper?
    I mean u replace Capitalist work or starve with what Lenin told which is-
    "No work-no bread," and people who wasn't ready to go all happy clappy and dig a canal for the state as 'social parasites.'
    People meant nothing- their labor had no value, cos the state could compel them to do it for nothing, which meant the most useless things got built.
    Now we get lots of economic details in Communistic thinking, u studied all this and know it, me, no, someone like me can not, but this is ok anyhow, cos all talk about people owning the means of production is just a smokescreen for the transfer of economic and political power from Capitalists to the middle class who in the form of state ownership expressed thru the party become the new masters. The working people remain just that, only now they slave even more cos in their name- basic moral laws was annihiliated with individual rights in a shift from a individualist philosophy (though based on greed), to a collectivist philosophy (based on altruism).
    Think about that, me whole view states that Communist economic theory is just babble to justify swapping one ruling caste for another. Claims to morality, claims to fairness, what is ever fair and moral in this world?
    That's just me reaction to any discussions of Communistic economic theory- which in itself i don't very much understand at all, but then i claim it's irrelevant anyhow. I do the same with Islam by the way, i claim theology is irrelevant, it's just a excuse to transfer power from one section of society- the secular elite, to the mullahocracy; Again, claims to moral reform etc being a joke when compared to the tectonic power shifts below the surface.
    Now this crisis, of course, socialization of banks is not Socialism cos the banks remain in private ownership, it's more like agressive capitalism or a new capitalist tax on working people, we just pay up more to maintain the staus quo. Any talk of clauses in the bail out agreement targetting to big bosses and their rich ways was just a emotional sop to main street. And the cost of this in the uk? It's more than in America, it's $4,000 per person, in America it's only $2500. But i don't think it means UK is more 'socialist' cos exactly like u told- this isn't Socialism.
    Jasmine

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  2. This post u done is just beautiful, simple, logical, frames it with everyday examples, with a little more education and not so reliant on just me "A" level i could get it.
    Ok, now i got a question, if that's ok. Capitalists u are telling got a problem right, cos if people got no money thuly no one can buy, so they don't produce nothing. What would i do if i was a Capitalist then and no one wants to buy me fridges, or me tv's? Simple, i start to build radars instead of tv's, tanks instead of cars, assault craft instead of luxury yachts and if i own the government (like u told in ure post), then i already got a buyer.

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  3. Ok we come to the next bit, Randians are saying like this if i can put it in me own words, "People in Bangladesh or Ethiopiyyah, or winter quake victims in north of pakistan, cos they got no money to pay for all what they need, don't get it, cos only money gives value to services."
    Is that what they are telling?
    I think this is nonesense, cos there is not only one kind of value, value is social, moral, political- and this is what really moves a country internally. IF u view "value" multi dimensional way u invest in people and they become consumers. If u don't, then they are never going to pay for the services u can potentially provide.
    Look at the Marshall plan or Japan after world war 2, or investing in free education, doesn't a doctor or engineer (who got educated for free by the state) not just produce more-but consume more also, than the poor farmer he might otherwise have become?

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  4. Ok, here another then, think about this...... is there anything good about the economic global crisis?

    Yes.
    Why? Cos it effects countries. Who? America, Russia, China- all. How? Cos it is showing all countries are interlinked and co-dependent. So?
    So they got to now understand that trashing one country effects urself also and if u think of it logically- then war is no longer really possible for commercial gain or for markets or for wealth-power.
    Is any countries outside of that?
    Yes.
    Who? Iran and some oil producing theocratic states.
    Potentially, who can benefit the most if this lesson is learned?
    America, EU, Russia and China as well as Pakistan and India- all of who don't seem quite to have got this just yet.

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  5. ok, last and final, u know u told about no guarnatee it won't happen again, huh, it's always happening in American history. Now most persons think of the Great Depression of 1930's (this is when all the soil went like after the yearly rains like what is happening in Sindh Province if u know which is why everyone is going to Karachi side), anyhow, this whole crisis happened six times since the American Civil War! It's not new.

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  6. I mean u replace Capitalist work or starve with what Lenin told which is-
    "No work-no bread," and people who wasn't ready to go all happy clappy and dig a canal for the state as 'social parasites.'


    I understand what you mean here, but consider my earlier post on Communism and totalitarianism.

    Did Lenin really say this? We have to be skeptical about everything; the western media and intellectuals lie like cretinists when it comes to communism and socialism.

    But Lenin probably did say that. But... keep in mind the specific historical circumstances: pre-revolutionary Russia was a desperately poor place to begin with, and Russia had just been devastated by first WW-I and then the civil war -- and the White Russians were aided and abetted by the West, including the US.

    "No work, no bread" was required by the immediate material circumstances; there's no need at all to appeal to ideology.

    And even under desperate circumstances they still managed to vastly improve medical care, emancipate women, and redistribute wealth considerably more equitably than before.

    People meant nothing- their labor had no value, cos the state could compel them to do it for nothing, which meant the most useless things got built.

    Here I think you're relying on bullshit Western propaganda. Russia transformed itself from a supine backwater to a world superpower: You don't do that by building the most useless things.

    basic moral laws was annihiliated with individual rights in a shift from a individualist philosophy (though based on greed), to a collectivist philosophy (based on altruism).

    A few problems here. First, there is no such thing as a "basic moral law."

    Second, if we substitute ordinary moral intuitions for "basic moral law", in what sense does an individual exercising his ability to exploit other individuals not annihilate those ordinary intuitions?

    Third, collectivist philosophy is not based on the sort of "altruism" that Rand and other Libertarian types caricature. Altruism means sacrificing only exploitation in favor of the mutual benefit of individuals. There is no "good of society" apart from the good of the individuals who make up society.

    me whole view states that Communist economic theory is just babble to justify swapping one ruling caste for another. Claims to morality, claims to fairness, what is ever fair and moral in this world?

    Not much, but shouldn't we try to do better?

    The whole point of Mao Zedong's cultural revolution -- or so I'm told; I'm just beginning my own investigations -- was precisely to struggle against some Chinese Communist party members' attempts to reinstate capitalist-style ruling-class exploitation. Sadly, Mao lost.

    And even if you're right, if there's no possible hope but to replace one form of oppression with another, then we might as well find a way to be the oppressors, no? '-)

    I do the same with Islam by the way, i claim theology is irrelevant, it's just a excuse to transfer power from one section of society- the secular elite, to the mullahocracy

    But I think the theology is relevant. The "Islam is a religion of peace" apologists are just bullshitting us, presenting a mask over the underlying misogynist, violently ignorant theology.

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  7. Capitalists u are telling got a problem right, cos if people got no money thuly no one can buy, so they don't produce nothing. What would i do if i was a Capitalist then and no one wants to buy me fridges, or me tv's? Simple, i start to build radars instead of tv's, tanks instead of cars, assault craft instead of luxury yachts and if i own the government (like u told in ure post), then i already got a buyer.

    Um... yes. Did you notice that the Pentagon just slipped an extra $400,000,000 into their budget?

    Randians are saying like this if i can put it in me own words, "People in Bangladesh or Ethiopiyyah, or winter quake victims in north of pakistan, cos they got no money to pay for all what they need, don't get it, cos only money gives value to services."
    Is that what they are telling?


    That's pretty much my reading of Rand, yes.

    I think this is nonesense, cos there is not only one kind of value, value is social, moral, political- and this is what really moves a country internally. IF u view "value" multi dimensional way u invest in people and they become consumers. If u don't, then they are never going to pay for the services u can potentially provide.

    That's the theory of consumer capitalism, yes. But... capitalism tends to always reduce the focus to short-term gains. When you have a ton of surplus wealth being wasted, wasted I say! by mere consumers, someone is going to figure out a way of taking it from them, with little thought of what will happen 10-20 years down the road. Hell, the market will just magically fix it, right?

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  8. Cos it is showing all countries are interlinked and co-dependent. So?
    So they got to now understand that trashing one country effects urself also and if u think of it logically- then war is no longer really possible for commercial gain or for markets or for wealth-power.


    So the rich of all these countries can now work together to oppress the poor.

    Class trumps everything: sex, race, religion, sexual orientation, even nationalism.

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  9. Um... yes. Did you notice that the Pentagon just slipped an extra $400,000,000 into their budget?

    Sorry about that, I skipped a few 0's: They slipped in an extra $400,000,000,000.

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  10. Where's that $400bn figure coming from? According to this the defense budget increases by $68bn from 2008 to 2009.

    Not that that isn't a significant increase and a problem, but when you appear to be pulling figures out of your arse it makes your argument look weak.

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  11. Er, Elise, why don't u just check what he told that's why ure mum bought u ure computer.
    Needless to say what he told is spot on.

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  12. OK then, see can i make some more comments and stuff (if u don't like u can delete of course).

    1)Viewing Communist excess out of military-economic or social chaos sounds very similar to the economic-security argument Taliban used to justify no education for girls. Both could have been ideaolgical. In Communism's case- of course, yes, I reserve me judgement and me mind is totally open on it. I think this is a bigger question maybe, i think Communists in 2008 should come to terms with the mistakes of the past and condemn it, cos we got no associations and carry no guilt anyhow on that.

    2)Yes, there was great stuff Communist achieved, especially smashing religion and emancipation of women. But what was the status of women actually- really, in society? U ever seen the movie "The Inner Circle," look how women was treated, as dogs to party members. Patriarchy is clever, it takes many forms like a dangerous, magical snake.

    3) Yes, u mentioned good stuff, but what about the famines caused by shutting down local food suppliers as they nationalized and stopped even the small traders come to Moscow? People was starved. Then we get really bad stuff like the Volga famine. Was it a natural famine? What about when they killed all the Kulaks, can u have a natural exterminations of class enemies? Where did it start and why, this is they key? Was it in Marx and Engels? Did Lenin even understand Marx and Engels and the nuances?

    4) Useless stuff was done like mines in Kolyma dug in the wrong places (by gulag labor so it didn't matter), there was the White Sea Canal which was dug wrong way, all made possible by the purges and regimenting of society, so if it's labor u don't pay for, no need to worry. That's me point. But as u said, i totally agree, could u industrialze a peasant country without mistakes? No way. And if not industrialization then now Russia would be the breadbasket of a Nazi Empire, Britain a little fiefdom maybe, America isolated or ran by pro nazis as a colony, in short- hell on earth. Communism almost done the impossible, at cost, yes at cost, but it prevented greater misfortune. Right plan at the right time not neccesarily done in the right way- but vital, is that fair comment? It did work out, ure right and look what the Soviet Union became, Russian Federation, what would the Nazi Empire have become, and yet right wing writers in America compare Soviet Union with Nazi Germany, but for me, again, like u- whatever mistakes was made- there is no comparison. So me position is pro soviet actually, which i why i read and read and wanted to study History at university (this was me dream).

    4) No basic moral laws? Sorry, i don't understand that bit.
    I think i get the second bit- surely any exploitation is a violation of basic moral laws therefore Communism if it stops exploitation is basically moral?
    That would definetly be the case, see, what i am telling is that Communism has the potential to be very moral. It hasn't historically been so overall, but there was times and places when it was. And it could be if done in a way where patriarchy and power don't corrupt it. We agree on that. But to appeal to morality and stuff to then impose a system that is immoral-one that breaks moral laws by exploitations of personages buy other means- this is unacceptable to me, and i think u to. It could only be a betrayal of real revolutionaries- who seem to be the first to go when patriarchy corrupts the party.

    6)See, i think we can actually have a moral order in the sense that the oppressed are on top, so i am not so cynical to think it's not in human nature- cos human nature is good mostly, it's just i don't want more manipulation of people to create a moral order, like in "The Handmaid's Tale," like in me country now, this is how they get the power-and keep it. But a true moral order, yes, it's worth fighting for.
    The essence of me true moral order is not that the 'good' rule and smash evil. What is good? What is evil? Concepts like 'enemies of the people,' are very clear. Anyone who hurts others, exploits, terrorizes, bullies, all this bad stuff- they are going to find out they are faced with bigger bullies- us, the state, the movement, the AK 47 pointing straight in their face.
    All these criminals and gangsters and hoodlums- they won't last about 2 days. Yes, we have to be the one's on top if it comes to that.
    What are we doing? Liberating people, from drug lords, from religious fools, from gangs. U know when Mao set it all straight- when his soldiers marched into Peking and the first thing he done was to shoot all the drug lords. See, that is most surely the right policy. I wouldn't even hesitate to sign those orders, and as for religious gangs and nazi gangs also, i would do it double quick. So we can think in terms of not just is morality possible or desirable, but as revolutionary morality as the basis of society.

    Can I leave u with one final thought, cos i hope ure not angry and stuff with what i wrote, like i told, just delete if u don't like, but me thought is this, as a Pakistani i mean....
    'how much in political islam is really a frustration with capitalism and with materialstic immorality that could be rechannelled into a progressive ideaology if the right personages emerged?'
    In fact Larry, knowing me own people and what they continue to suffer and how they are cheated- the potential is enormous, truly enormous.

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  13. Where's that $400bn figure coming from?

    Hearsay. Your number sounds more accurate.

    when you appear to be pulling figures out of your arse it makes your argument look weak.

    Relax, it's just a comment.

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  14. Viewing Communist excess out of military-economic or social chaos sounds very similar to the economic-security argument Taliban used to justify no education for girls.

    The difference, of course, is that the hypocritical Taliban argument is false-to-fact.

    Patriarchy is clever, it takes many forms like a dangerous, magical snake.

    I understand. Still, the communists that I know are 100% dedicated to absolute gender equality, absolute racial equality, and are committed, militant, no-bullshit atheists.

    what about the famines caused by shutting down local food suppliers as they nationalized and stopped even the small traders come to Moscow? People was starved. Then we get really bad stuff like the Volga famine. Was it a natural famine? What about when they killed all the Kulaks, can u have a natural exterminations of class enemies? Where did it start and why, this is they key?

    You're right: It's key to understand where it started and why, and also to understand what really happened. Again I urge you to skepticism about the facts.

    I haven't even started studying the history of the Soviet Union, so I don't know what the facts are.

    But even so, worst case scenario and its all true, no communist I know thinks mass starvation is a good thing. Whatever has to be done to prevent recurrence must be done.

    Even communists I know who generally admire Stalin still sharply criticize his dogmatism, inflexibility and overcentralization. It's notable that Mao Zedong made considerable theoretical and practical advances in these areas.

    Again, however, keep in mind that the Soviet Union was the first time socialism was ever tried, and they knew they had to replicate 200 years of capitalists growth in 10-20 years before they did in fact face war from the west.

    Useless stuff was done like mines in Kolyma dug in the wrong places (by gulag labor so it didn't matter), there was the White Sea Canal which was dug wrong way, all made possible by the purges and regimenting of society, so if it's labor u don't pay for, no need to worry.

    Again, skepticism. But worst case scenario: a) this is a problem to be fixed and b) communists did not invent the idea of making useless stuff with cheap labor.

    Can I leave u with one final thought, cos i hope ure not angry and stuff with what i wrote

    Let me say it again, Jaz: Your comments are always smart, thoughtful and incisive. You are both open-minded as well as honest, pull-no-punches and very sharp. These are qualities I admire greatly.

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  15. Fair enough - it was a minor point, although it seems to be the same point in principle that you're making in your "Don't like" post.

    Taking a step back to the whole post, it seems to be rather underminded by "If the mass of ordinary people have no wealth and no money, then it is unprofitable to produce what they need, no matter how much they need it.", since the mass of ordinary people don't have no wealth.

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  16. the mass of ordinary people don't have no wealth.

    They have a lot less now than before, and they're going to have less and less as time goes on.

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  17. They have a lot less now than before, and they're going to have less and less as time goes on.

    I just don't see any evidence for this. Historically median worth has increased, despite bursting of bubbles. Why on earth do you think that's suddenly going to change?

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  18. I could be mistaken. Do you have the statistics?

    I'm not an economist, so I don't have the data at my fingertips. But inflation-adjusted median income has, AFAIK, been slipping, and savings are near zero. The only thing I can think of to account for median wealth rising is home prices, but since that wealth is increasing without any increase in the physical value of the assets, the statistic sounds misleading.

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  19. I tried to find them before posting the last comment, but my google-fu is failing me. I can't find anything post 2004 for the US, but until then it had been rising. Of course it will have come down in the last year, but there have been pretty extraordinary events, which suggest that it isn't a change in the long term trend.

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