Monday, July 30, 2018

Socialist economics part 3

part 1
part 2


A socialist economy is a temporary and unequal (but less unequal than capitalism) economic system where people receive not just their cost of living, but the more-or-less full value their labor. From this position, we can begin to work towards the precursors of a communist economy discussed in part 2.


We presently have a capitalist economy. We want to get to a communist economy, i.e. "from each according to his ability, to each according to his needs." How do we get from point A to point B? And how do we get there without just destroying everything and starting over from scratch, from an subsistence agrarian economy?

We have to start with a bit of theory: Marx's distinction between labor and labor power. Labor is the actual production* that a person performs; labor power is the ability to do that actual production. Labor power requires labor: a person must eat food, live in a house, wear clothes, drink water, dispose of their waste, etc., and people (usually other people) must use their time and effort to produce all of these requirements. Critically, an hour** of labor power takes less than an hour of labor to produce. Surplus labor, then, is the difference between the labor a person can perform and the labor required to generate the ability to perform that labor.

*There's considerably more theory underlying this paragraph, but I think we have a good enough starting point.

**I'm being deliberately vague about my units, but "hour" is sufficient to get the idea across.

The fundamental pillar of capitalism is that the capitalist pays "fair market value" for a worker's labor power, i.e. the social cost of the worker's ability to work, and receives all the labor thus created. The surplus labor is the ultimate source of the capitalist's profit.

Therefore, socialist economics must start by undermining this fundamental pillar of capitalism: a worker should receive, at a first approximation*, the value of their labor, not the cost of their labor power. If I work eight hours to produce stuff for other people, I should receive stuff — including the food, shelter, etc. that I need to generate tomorrow's labor power — that other people expended eight hours to produce.

*Marx offers a more detailed accounting in Gotha ch 1.

Marx claims (again in Gotha) that this change, from a worker receiving the cost of their labor power to receiving the value of their labor, is not enough. A worker who can worker longer with more intensity, or who is privileged to produce more desirable goods will receive more than a worker who cannot work as long, with as much intensity, or who is condemned to produce less desirable goods. Marx argues that this inequality is temporarily unavoidable, because we start with a capitalist economy. However, Marx argues we absolutely should not accept this temporary measure as our ultimate goal: it is just the platform to begin to dismantle "the enslaving subordination of the individual to the division of labor."

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