> Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?
It's a pretty well written piece. I think people from all perspectives should take careful note of what he is actually advocating: discussing and figuring out the mechanisms of what a modern society should like rather than blindly following an agenda.
That said, this is a 70+ year old article, based on ideas and problems at the time. Capitalism will make people stop working and be less productive? If anything we worry about the opposite problem. College will only be a means to a career? Today academia is powerful and a political force unto itself. And we have so many welfare programs and safety nets and worker protects than Einstein was even able to dream about in 1949. In a way, we are living in a world he was advocating for.
If it was written today, I have no doubt Einstein would still care about inequality and education and politics and common "workers" enjoying life. But I also don't think I would see him caring as much about Marxism and the labor theory of value specifically as a mechanism for understanding it anymore.
> Capitalism will make people stop working and be less productive? If anything we worry about the opposite problem.
Well, unemployment is kind of a requirement of capitalism. You can't have the labor force calling the shots, it eats into profits. From the article:
> There is no provision that all those able and willing to work will always be in a position to find employment; an “army of unemployed” almost always exists.
He's being generous here, it's not just that an "army of the unemployed" almost always exists, it's a goal. Captains of industry in the current low-unemployment environment have been saying the quiet part out loud, that we need to increase unemployment. There's generally a target of 5% unemployment, which means capitalism has built-in waste.
> Well, unemployment is kind of a requirement of capitalism.
Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights. Outside of a few niche organizations that benefit from economic distress, I think you will find a general S&P 500 consensus that low employment is a good thing for their stock prices.
> There's generally a target of 5% unemployment, which means capitalism has built-in waste.
That's because, in a free society, we have discovered that it's better to get people new and better jobs than be shackled to a milling machine from childhood.
> Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights. Outside of a few niche organizations that benefit from economic distress, I think you will find a general S&P 500 consensus that low employment is a good thing for their stock prices.
If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs. Of course, very high unemployment is not good for capitalism, nobody was arguing this. But very low unemployment below some threshold is also bad. Marx explained this, but if you do not believe him, capitalists themselves and their theorists say exactly the same thing, but with more gentle and less direct words: https://www.investopedia.com/insights/downside-low-unemploym...
Capitalism is a system in which those who control capital wield the most power, but without cheap enough labor to work the capital for a profit, capitalism will by definition give way to something else.
Realize capital has no market value without labor to work it. This goes for real estate too, which workers require to rest themselves just in time to return to work to turn a profit for those that control capital.
This is a warmed over version of labor theory of value which is at its core wrong. Value is entirely subjective and contextual, and utility is not a function of labor inputs.
Moreover high wages simply encourage innovation in labor saving devices and techniques. Tight labor markets aren’t the capitalists enemy. It’s no different than other input costs in some sense.
No, that doesn't sound right. The LTV says that commodities have an intrinsic value, and regardless of what their price is, the value of those commodities is determined entirely by the socially necessary labor time that went into producing them.
Um, no that's not correct. It's true that the origin of the labor theory of value is philosophers like Locke arguing that labor is the source of all value, but in the context that Marx was writing, Smith and Riccardo had popularized the notion that the market value of a good was proportional to the amount of aggregate labor that went into it. To his credit, Marx demonstrated that the market value of a good was not actually proportional to the amount of labor that went into it but he didn't abandon the idea that value of a good was somehow proportional to the labor used to make it.
Marx:
"Let us now take two commodities, for example corn and iron. Whatever their echange relation may be, it can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron, for instance 1 quarter of corn == x cwt of iron. What does this equation signifify? It signifies that a common element of identical magnitide exists in two different things, in 1 quarter of corn and similarly in x cwt of iron. Both are therefore equal to a third thing, which in itself is niether the one nor the other. Each of them, so far as it is exchange-value, must therefore be reducible to this third thing.
[...]
As use-values, commodities differ above all in quality, while as exchange-values they can only differ in quantity, and therefore do not contain an atom of use-value.
If then we disregard the use-value of commodities, only one property remains, that of being products of labour."
In other words, Marx excludes use-value (what normal economists call "utility") as being a factor in the price of a commodity, apart from needing to exist at all (he reduces its relationship to a boolean relationship,) and makes it a function of labor quantity. This is so central to his argument that it comes up in the first few pages of Capital.
Marx always begins describing things in Das Kapital simplifying, and then, in later chapters, expanding the model, concluding that in fact it was more complex than was previously presented. The market value of some item would be proportional to the labor only if you consider an isolated industry as an almost closed system, like Marx did in the first book. At the third book, Marx shows that competition and search for profit would produce a force that equalizes the profits for several industries. In the end, prices cannot anymore be explained by the "value" of the product expressed in labor: several goods will be sold above or below their "value". Even if this value is still the origin of the surplus value that creates profit and growth in the capitalist economy.
Marx theory of value is much more elaborated than the one from Smith and Ricardo, and most arguments against it, are in fact arguments against naive and simplified versions of the theory.
I'm not certain of your point? Marx admits that LTV doesn't explain prices much earlier than the third volume; it's cental to his whole point, that the difference between the 'value' of a good and what a capitalist is able to sell it for represents exploitation. That's not a straw-man and asu_thomas was wrong to suggest it was.
No, this difference is the surplus value, which is part of the value of the good for Marx. If you remove the surplus value, you get the production cost. Marx does not argue that the "value" is just the production cost, it is certain that in a capitalist economy, which was what he was analyzing, the surplus value is part of the value, otherwise profit and growth would be impossible. Marx repeats in several parts that he considers in the model that all goods are sold exactly by their value, which for all goods, the surplus value is included. But later, Marx acknowledges that in fact, prices for each good cannot be explained solely by value (production cost + that surplus value) and that this simplified model needs to disappear when you take into account a model with several different industries competing.
But I do no not agree exactly with asu_thomas that the labor theory of value is so unimportant for marxism and I think you are right in questioning the affirmation. But I think you mixed a little the value theories from Smith and Ricardo and from Marx in your interpretation (the first two are the ones that do not consider this "surplus value" in the value and try to explain the capitalist profit as coming somehow from the labor of the capitalist or from other effects in the market and environment). And I also do not agree that the marxist theory of value is debunked and so easily dismissed. Certainly it is not a mainstream theory, but there are still marxist economists nowadays between the heterodox ones.
Actually he makes it a function of socially necessary labor time. Although I don't buy into labor theory of value, I think the "socially necessary" part is a pretty important part.
By the way, what is "his argument?"
Parent didn't say it isn't central to one of Karl Marx's many arguments, but rather that it's not central to Marxism, which is far greater than Karl Marx. Marxism is an intellectual tradition largely concerned with critiquing Marx's work just like we're doing here.
>but without cheap enough labor to work the capital for a profit, capitalism will by definition give way to something else
Demonstrate why this is true. What _exactly_ about the definition "private ownership of capital" necessitates that capitalism must give way if capital cannot be worked for profit by cheap labor?
> Capitalism is a system in which those who control capital wield the most power
Capitalism has no concern about power. It only speaks to ownership rights.
And, as an aside, what you are envisioning clearly puts the power in the hands of labour. As you said: "Realize capital has no market value without labor to work it."
“Ownership rights” are power. Capitalism evolved through the mercantile class under pre-capitalist systems leveraging their then-current power to force changes in the system which durably transferred power from the land-tied aristocracy to themselves.
Surely it is people that are entirely about power?
> “Ownership rights” are power.
Perhaps, but capitalism only describes one of many different ways of organizing ownership. It is not about ownership in and of itself. It turns out that we already have a word for ownership: Ownership. We came up with another word, capitalism, because it means something else.
> Surely it is people that are entirely about power?
Most people are in part interested in power and some people are entirely interested in power, but capitalism is entirely a system engineered for distributing power for the benefit of a particular class.
> Perhaps, but capitalism only describes one of many different ways of organizing ownership.
Capitalism implements (not describes) one particular way of organizing ownership, chosen for the effect it has on the distribution of power in society.
> but capitalism is entirely a system engineered for distributing power for the benefit of a particular class.
A previous commenter postulated a hypothetical world where capital only has value when labour is utilizing it. It in no way violated capitalism, but clearly labour holds the power in that world. After all, labour could just not use the capital and then take it from the dumpster after it gets thrown away for being worthless.
It is possible other worlds could see capital that is not dependent on labour and use that to take power, perhaps, but that's beyond the topic of capitalism. Nothing in capitalism says that there must be capital that is utilizable without labour.
> Capitalism implements (not describes) one particular way of organizing
ownership
Huh? Words can't implement anything. Only people can implement something.
If we were talking about the word “capitalism”, it would be in quotes; that’s how you make use/mention distinctions in English. “Capitalism” is a word, the thing it describes is capitalism, which is a system, which implements a design that people have made.
Indeed, capitalism does not implement capitalism, capitalism is the product of what people implemented. And when we talk about capitalism we are talking about a word that describes that.
> In what world do you think the people who own everything don't also have all the power?
A world where "Realize capital has no market value without labor to work it" is true cannot see power reset in the hands of those with capital as it asserts that capital has no value without labour, which means that labour holds all the power.
I don't know what world that was meant to refer to. It did not specify, nor was it it written by me in order to specify now. You may have accidentally pressed the wrong reply button?
> You cannot decouple ownership from politics.
That may be true, but the concept of ownership doesn't come from capitalism. Socialism, for example, also describes ownership. You cannot couple ownership with capitalism.
> A world where "Realize capital has no market value without labor to work it" is true cannot see power reset in the hands of those with capital as it asserts that capital has no value without labour, which means that labour holds all the power.
Yes and no, the capitalist needs the labour for their capital to be worth anything, but likewise the Labor needs the tools the capitalist owns to multiply the value of their labour.
Since capital gives control of the state (indirectly) the state tends to also support capital which then has a monopoly on violence and can coerce labor through means that the labour itself doesn't have. Historically this has come about in the police engaging in union busting (an example of how capital is power).
> but likewise the Labor needs the tools the capitalist owns to multiply the value of their labour
Labour doesn't need to multiply its labour, though. Labour remains valuable no matter what.
> Since capital gives control of the state (indirectly)
The state is just people. In a world where capital is worthless without labour, I assume that labour makes up the majority of the population – why would a small group of people sitting on capital that does nothing and is worthless have more power than the majority of the populace who actually bring value to the table?
> which then has a monopoly on violence
In a world where capital is worthless without labour, who, exactly, is going to enact that violence? You need labour to bring the violence...
Maybe, but for a somewhat tortured example: if you're a programmer with domain knowledge of a specific application then your value there might be worth $150k a year. If that's taken away from you and you have to learn a new domain then your value might be only $80k per year. If even a computer to work on is taken away from you then your labor is only worth minimum wage.
Painfully tortured, indeed, but let's try to work with it:
In this world of which we speak, if you take the labour away from the computer then the computer becomes worthless. At which point you can then you can collect the computer from the dumpster to then build yourself back up to being worth $150k per year plus the return on capital value.
Clearly labour holds the power in this world. It can completely destroy the capital owners. The inverse is not true.
Capitalism doesn't have to be concerned with power for it to result in those with capital holding the most power. 'Rights' that are only available to those with capital aren't really rights at all.
Likewise, math doesn't have to be concerned with resulting in CSAM material being distributed electronically. But it has resulted in that.
What is the takeaway here? Are you suggesting that we should rid the world of math because it might accompany something not liked? Indeed, no more math, no more electronic distribution of CSAM material. Problem solved?
Rights and ownership are defined and maintained by a state. A state is a monopoly on violence, not by right but by power. In other words, power precedes rights and ownership.
Additionally, capitalism is defined by relations to capital, not by relations to mere property. Big difference.
This is not really true. "Power" in a social context proceeds from social relationships. A king only has power if people buy into the idea that he has power. In other words, any power beyond individual brute force is a social construct. Even the idea that the state has a monopoly on violence is a social construct, (and is often not true, even in practice.) So social power depends on the ideas that people in a society hold generally, such as ideas about rights and ownership. So it's often those ideas that define the power relationships in society rather than the other way around.
Wrong. A king only has power insofar as a people exist to buy into the idea that he has power, hence why kings required armies from the start. As we know, kings did not exist prior to farms that needed protection. This is not a coincidence. Only from the circumstances of material preconditions could such divine rights even be imagined, whether it be kings or founders of PayPal.
Materialism is one reason why I believe Marxism is worth defending.
That's revisionist history. A king only has power insofar as a people exist to buy into the idea that he has power, hence why kings required armies from the start. As we know, kings did not exist prior to farms that needed protection. This is not a coincidence. Only from the circumstances of material preconditions could such divine rights even be imagined, whether it be kings or founders of PayPal.
Utter nonsense. Kings and the like could not exist until agricultural societies needed armies to protect them from invasion. Only from within such material circumstances and relations could divine right be wrought on a public imagination, whether it be monarchic kings or founders of PayPal.
And this is why materialism, Marxism or possibly otherwise, is worth defending.
While that may be true, capitalism does not concern itself with power or class or anything like that. It is narrowly focused. It is not some catchall term for anything you happen to observe alongside the ownership rights it speaks to. It's okay to use other words.
Capitalism has consequences like math has consequences.
I guess that's true, but what does that really mean in practice? CSAM, at least the digital kind, is a consequence of math. Are we supposed to brush it aside because "Oh, that's okay, it's just math!" or are we supposed to get angry with math and push for a math-less world? What is the takeaway here?
Moreover, while (digital) CSAM is, indeed, a consequence of math, if you see a problem with CSAM, why not just call it as such? Why try to obscure what consequence you encountered by calling every problem that might come from math, math?
> If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
How so?
There could be 0% unemployment and anyone could find another job easily, but the other job could pay less, or have less flexibility, or be in a less convenient location, so you still prefer the job you have now.
Suppose unemployment is low because prices are high, so no one can afford to go without a job and will take jobs under unfavorable terms in order to make rent.
> There could be 0% unemployment and anyone could find another job easily
Technically, 0% unemployment would mean that you can't take another job, as you transitioning into another job would create frictional unemployment, which would mean that the unemployment rate would not be 0%.
In practice, somewhere around 3% is usually considered full employment. The 3% are those in the process of changing jobs.
> Technically, 0% unemployment would mean that you can't take another job, as you transitioning into another job would create frictional unemployment
Transitioning to another job only creates frictional unemployment if there is a period where you are out of work but looking for work. Otherwise (e.g., if you find a new job before leaving) if you have a break from work as part of transition, it creates a frictional exit from the labor force, not frictional unemployment.
But 0% unemployment is hard to imagine if employers can terminate workers without first finding them acceptable replacement employment.
It comes down to profit. Costs (like labor wages) cut into profits. Capitalism could hypothetically support a high thriving-wage for all workers and still create profit for the owners, but historically the owner intentionally depresses wages so that the owner's profit portion is larger.
High unemployment creates conditions favorable for the owners. It creates leverage for the owners to coerce the workers into accepting lower wages. A scenario where the state offered full employment as a competitive labor market to the private sector would force the private owners to raise their wages. Then they would have to deal with how they want to approach their profit situation. They'd probably just raise prices of their products. But in the end, the owner is making the decision on what the prices would be. Not the employees.
The way it does this isn't by paying workers more than competitors do for the same work. It's by charging customers less than competitors do, which actually selfishly benefits them by increasing their market share, but also distributes more wealth to workers because you can buy more for the same dollar (or the same amount of stuff and add to your savings or pay down debt).
What prevents this is uncompetitive markets, which are occasionally found as a result of natural monopolies, and more commonly found as a result of regulatory capture.
Are people really confusing unemployment with no job vacancies?
You could have 100% employment, and still have people looking to hire. If there are 1000 people in a population who all work, it doesn't mean none of the businesses are looking to hire
That would still require the employer to have a monopoly on jobs.
Unemployment is very frequently caused by people who can command wages well above subsistence level preferring to go unemployed while holding out for a wage consistent with their skills, even if there are a zillion subsistence-level jobs they could take in an instant if need be.
Wouldn’t that depend on the social safety nets in place? Say unemployment in Europe versus the US. Also nothing stopping a terminated person from seeking other employment opportunities.
You know that the basis of all production the most labour intensive industries are not in Europe or US. But in third world countries. Its where you find most factories, mines, farms... You know why the industries migrate there? Because there is very little social safety and labour is cheap. When we talk about capitalism, we need to remember that it is a global economic system.
Labor is cheap in those places because cheaply sold labor is a better deal for residents than subsistence farming; over time, the labor gets less cheap as living standards increase for those places.
It's obviously possible to take that observation too far, and to excuse all sorts of abuses. But the underlying phenomenon seems to square pretty well with what we know about living standards over time worldwide.
Very low unemployment (aka labor shortage) is bad for business owners, not capitalism. There is a difference. Capitalism is a system that everyone plays a role in in benefits from; it's not a group of people.
One could consider labor shortage good and healthy for capitalism itself, since it increases worker wages and thus builds political support for the capitalist system.
> the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
They would have to offer higher wages and not just "industry average", like we saw during the pandemic. Then the planned economy folks decided that was the exact moment the free money faucet had to be cut off.
We just experienced this though and it wasn't good for their stock price. Low unemployment means they have to pay their workers more to hire or retain them. More expense means they either need accept making less (bad for stocks) or raise prices to make as much money, which could be bad for business.
People may work hard for a number of reasons of which unemployment is only one - more money, a promotion, personal interest in the outcome (e.g. scientist), personal work ethic, you like this job more than other jobs (job preference due to management, coworkers, location, job type).
Once again Marxism oversimplifies the world and ignores a lot of nuance.
This is not true for most people where I live. I live in a third world country. Most workers are just trying to survive. You know that the basis of production and where you find the most labor intensive industries is not in Europe or USA. These industries, the mines where metal is extracted, farms where lot of the food in produced, are all in third world countries. Why Siemens move their factories to third world countries instead of their own country in Germany? Because labour is cheap. Ask any worker that work in these places if he work by personal interest or ethics. They are just trying to survive. They have families and all possible jobs pays little and requires a lot of effort.
Perhaps you see this as an oversimplification because you are looking too near home in a biased position. The number of countries considered "rich" and "developed" is a minority. Capitalism is a global system.
I live in a developing country right now where jobs are plentiful. Employees jump from employer to employer for more money.
So while I don’t doubt the situation is different in your country, the fact that different situations exist would argue that it is an oversimplification.
> If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
This seems to envision that nobody can find new kinds of useful work or otherwise work for themselves, which is odd when you're on a site where most of the people work in jobs that did not exist if we turned the clock back just a few decades and quite a few people are their own bosses.
It’s not about nobody. Individuals can escape the intention. Statistically though you can have a target achieved by slowing the economy, as evident in the current situation. Of course, if the goal is not optimisation of output but of it’s distribution (with different views on what is the proper objective) then capitalism is only different to socialism in terms of definition of that objective. But similar to how we never achieved true socialism, we have never achieved true capitalism either, so I am wary of discussing on the merits of each theory on the basis of the pitfalls of their application. We still need a proper descriptive theory of our experience and socialism inadvertently is better at forming the initial angle of attack, giving a more articulate basis of discussion in terms of distribution rather than output.
What gets called capitalism are basically imperfect, socially evolved things that have survived and worked well enough to survive. There are definitely rent-seeking parasites out there, but some of them are like the Kim family in NK.
I mean, you can say the same about Socialism, even if you avoid the nationalistic flavors thereof. It's not like Russia, China, Cambodia, etc. were peaceful and it's odd that you point to the reaction to those via CIA regime change without mentioning why they might be worried about Socialist revolutionaries to begin with. Che wasn't any too peaceful, either.
> If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
What is the capitalist class in this case? In a perfect world this would be done by beatings and imprisonment, right?
> Of course, very high unemployment is not good for capitalism, nobody was arguing this.
It's not good in socialist or communist countries either. Or is that a uniquely capitalist problem?
> But very low unemployment below some threshold is also bad. Marx explained this, but if you do not believe him, capitalists themselves and their theorists say exactly the same thing.
Yes, that's what we're all agreeing on. It's not saying "Marx said it's bad, thus he was right about everything"
What is the substance of your post? What are you trying to say? Because it sounds like you're agreeing with capitalism but under the guise of supporting Marx
And the US politics would be better off if politicians didn't need to worry about their decisions causing the stock markets, and with it people's pensions or healthcare, to tumble.
401k, HSAs etc are the stranglehold on US politics.
> "Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights."
This was extremely powerful @legitster. For some reason this cleared up economic theory to me. These threads get lost in worker rights, but, that has nothing to do with capital. Capital is about ownership rights. You should be allowed to own things and means to your own production. Socialism is about taking these rights away, the debate is which.
That seems like poor representation of socialism. Socialist policies typically increase worker rights. You could see that as merely taking away rights from existing capital-owners, but it seems to me that it's clearly a case of competing needs. Any rights you give to a worker is necessarily a restriction on their employer.
yes, you're right. that's what we call "class conflict", it just means that different groups of people have different, conflicting interests based on their relationship to the work
> Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights.
That's not quite complete. To have capitalism, you also need labor to leverage capital. Capitalism requires the ability to extract money from the labor of other people.
If every company was worker owned, you could still have a market economy and private property, but it wouldn't be capitalism anymore.
> If every company was worker owned, you could still have a market economy and private property, but it wouldn't be capitalism anymore.
That's not correct. If every company was worker owned as long as the goods and services produced are traded on the open market as an exchange of value, that would still be capitalism. If "worker-owned" actually means government owned, however, then you're correct. Capitalism requires private ownership of the means of production.
> If every company was worker owned as long as the goods and services produced are traded on the open market as an exchange of value, that would still be capitalism.
No. We had "exchange of goods on an open market" long before we had capitalism.
> If every company was worker owned, you could still have a market economy and private property, but it wouldn't be capitalism anymore.
Again, says who?
Depending on your definition of capitalism, corporate charters pre-date capitalism! Corporate charters were rights granted by governments to pursue economic activity. What we define as the introduction of "capitalism" was the granting of individuals without nobility the rights to corporate charters.
Today, a corporation is still a government defined-entitity for the purpose of generating economic activity.
That's actually basically how the economy of Yugoslavia worked, worker's self-management [0] being the key term. You had worker-owned coops competing on the market.
If the labor supply increases, new enterprises will be able to hire and grow. This will shrink the labor supply and increase the price of labor.
The only time there are massive shifts are when some sizeable factor creates a disruption. Sometimes that’s technology advancement.
Other times it’s a policy change due to government intervention. The area where I live used to be the textile capital of the world until a policy change shifted all of it overseas and gutted the entire area.
And now that same area is thriving after years of being destitute. Old mills converted to fancy apartments. Old train tracks used to ship product converted to bike trails. Thriving tech community.
It ebbs and flows. But nobody making centralized decisions would have made the choices that led to it.
Economics doesn’t guarantee absolute efficiency just a reasonable approximation of efficiency.
Moderate unemployment is one such inefficiency, but so is misallocated labor. A worker moving to a higher paying job is hypothetically a more optimal allocation of resources because they can only be paid more if they are creating more value. However, the real world is messy and therefore the price signaling around pay isn’t perfect just as stock pricing isn’t perfect either…
The bizarre thing is in practice capitalism works so well despite these issues even before you consider government intervention, monopolies, incentives misalignment etc. However at some point it’s less about the system than the people operating it.
>The bizarre thing is in practice capitalism works so well
Does it? It's exacerbating environmental destruction, it creates all manner of bullshit jobs that are an epic waste of human potential and it has created a massive underclass who can't even afford the roof over their head.
I dont think this economic system will be looked upon fondly in 500 years any more than we're impressed with the divine right of kings.
That massive underclass existed long before capitalism. Agrarian societies have had poor people going back longer than recorded history, they also generally had slaves and or some form of serfdom.
Humans also caused massive environmental devastation going back to the Stone Age and across all economic systems. In the Americas only 1 in 6 mega fauna species alive 50k years ago survived to 10k years ago. In Australia it was 1 in 8.
Things have gotten worse but that’s less that individual humans have become more destructive, it’s mostly the simple fact there are more humans.
In theory a better option could exist we haven’t actually implemented anything better, humanity has tried many systems not just feudalism, communism, and capitalism and it’s the clear winner by the overwhelming majority of metrics. Mercantilism, tribalism, etc all have some upsides for some segment of the population but don’t result in nearly the same levels of widespread prosperity.
What we consider extreme poverty was normal throughout most of the globe and most of human history.
At least initially feudalism was economically worse than the the Roman imperial system in terms of output per person. It’s stable politically, but not objectively better.
Output increased overtime as technique and technology continued to improve, but that’s not a function of the feudalism specifically.
The USSR suffered from the resource curse towards the end. Its an affliction that has destroyed many economies of all stripes. It's the same reason why most of Africa is an economic basket case.
The USSR was instrumental to mankind becoming a spacefaring species. The US wasnt even interested until the USSR started and lost interest once they landed a man on the moon and declared that they had "won" the race. Were they still around space exploration probably wouldn't have stalled.
They were also instrumental in keeping the US government in line. US elites were terrified that the USSR and domestic communists might join forces to overthrow them. Elite fear of communists is why people in the 1950s could easily afford college, medical care and a roof over their head and why they were guaranteed a job doing something meaningful like building a dam or a bridge.
You're probably right that it's better that our finest minds are dedicated to making people click on ads and take out loans, though. This truly is the pinnacle of civilization. You have a whole computer in your pocket. You might have been able to buy a house in the 1950s and not be bankrupted by medical bills, but you couldn't play flappy birds.
You’re incorrect in terms of the space program. The US and Great Britain etc where very interested in rocketry and therefore spending significant sums before Sputnik. Which is how the US was able to launch a satellite in 1958 a year after Sputnik.
You don’t go from knowing nothing about rockets to launching a satellite in a year.
Further, the US slowed down but didn’t abandon its manned space program. It was spending a frankly crazy amount of money on a publicly stunt to get people to the moon, but we’ve continued to invest in the space program over the long term. Actually going past the moon requires long term habitation in space thus the interest in space stations.
everybody was interested in rocketry ever since V2s demonstrated that a good rocket made a good weapon.
The US wasnt particularly interested in space exploration unless the USSR did it first though.
Just like the UK wasnt interested in setting up an NHS until it became glaringly evident how well the soviet NHS (also called the NHS) worked and the US won't set one up even though ~70% of the population want one.
Yes, I'd much rather be subjected to clicking on ads and playing flappy bird than being kept behind a wall and standing in bread lines in the Soviet Union.
It's not waste unless you think of humans as little units of work, like a resource to be mined.
People complaining about a problem doesn't mean it is a problem. I want cheaper milk, I complain about the price of milk, but the price is probably correct and that's for me to grumble about.
"Captains of industry" want a pool of unemployed people they can pick from. If the pool is dried then that's fine. It's not a sign that capitalism has failed.
I think the implicit argument here is that "capitalism" means "rule by those who own capital." Hence a lack of unemployed people, which would hurt the captains of industry, _would_ be a failure under that definition of "capitalism."
If by "capitalism" we merely mean things like a market economy with property rights, then the question would be what to call a system that has this but where workers, rather than captains of industry, have more power? Whatever we want to call _that_ system, it doesn't currently exist, and we've seen that any moves in that direction are very strongly resisted (c.f. return to office policies driven by captains of industry freaking out).
> I think the implicit argument here is that "capitalism" means "rule by those who own capital."
what "rule" ? - capitalism doesn't set out to "rule" by anyone, it's been a system of owning capital (to put it very simply / abbreviated) for as long as I've known it. I would call myself a "capitalist" (in that i ascribe to it, used it to pull myself out of poverty) but i do not believe in anyone having "rule" over me, especially not my employers. As a sound bite: "freer the markets, freer the people".
> Hence a lack of unemployed people, which would hurt the captains of industry, _would_ be a failure under that definition of "capitalism."
Ok, I could argue "maybe not", but why would we be arguing under that definition of capitalism? Is it not the same as "well my definition of capitalism is that everyone gets ponies and candies, so if you have rotted teeth, that's a failure of capitalism, under that definition."
I'm saying this in jest but for a real reason, why would we "just pick a definition of capitalism and argue why it fails" ?
> If by "capitalism" we merely mean things like a market economy with property rights, then the question would be what to call a system that has this but where workers, rather than captains of industry, have more power?
Capitalism. I'll assume by "power" you mean things like bargaining power for salary negotiations, benefits, etc, which is what unions do.. then yes, by definition, the seller (union) has capital (labour) that the buyer (whatever boogeyman you want) will have to negotiate for. The alternatives are to take it by force, which goes both ways, and ends in eternal conflict or a ruling power (this time real "rule" not phoney "he gave me a job" rule.)
> Whatever we want to call _that_ system, it doesn't currently exist, and we've seen that any moves in that direction are very strongly resisted
I strongly resist the rise in milk prices as well. It's a natural thing to resist having to pay more for the same services, because one seems to be losing something for no reason.. that's not to say it's a bad thing. Milk is expensive, people have real needs.
The only way to supress the complaining is by 1. convincing people that's what they really want, or 2. beating / forcibly supressing that. CCP for example, does both, by attributing anything to nationalism and/or xenophobia - because it works and keeps the populace not demanding more power from the government.
> (c.f. return to office policies driven by captains of industry freaking out).
I would fathom that it's less "captains of industry wanting to enslave the common people like you and I" and more "commercial real-estate no longer has as much of a purpose and people do not want to be left holding the bag"
> what "rule" ? - capitalism doesn't set out to "rule" by anyone, it's been a system of owning capital (to put it very simply / abbreviated) for as long as I've known it.
It seems clear to me that those with a great deal of capital have far more influence over what laws get passed and enforced than those with less capital. And that many laws benefit those with more capital, often at the expense of those with less. I'd call that "rule."
If you need someone else to force something they don't want to do (get a certification) you negotiate with the entity who has the monopoly on violence to maybe consider your recommendations. Then you need to wait for an opportunity (a mishap in the field, someone got their toe cut off) the monopoly of force might want to act on. Then you can offer a solution (a certification program) supported by your prior negotiation that makes the monopoly on violence mandate a requirement (your proposal).
The result is that you now offer a service and a mandatory certification and your competitors must go through you to be able to offer the service to anyone else or face the monopoly on violence.
There doesn't have to be any exchange of funds or favors. You simply offer the confused representative of monopoly on violence a solution, all you need is to sell it well.
> those with more capital have far more influence over what laws get passed and enforced than those with less capital. And that many laws benefit those with more capital, often at the expense of those with less.
This is called corruption and crony capitalism, and it happens far less than you might think in the western world, and the effect is far greater in socialist and communist countries, or countries that don't respect capitalist fundamentals.
You can have power and rule over people without the need for a free market
Seems very unclear to me. If it were true then rich tech firms and banks wouldn't constantly be treated like piñatas by governments, who very much enjoy fining and regulating them despite their protestations.
This is the problem with socialist theory. It's full off assertions that in reality lots of people don't agree with or which are clearly untrue, über they're taken to be axiomatic.
Corporate CEOs do go to jail, there are numerous famous examples just from recent history. Elizabeth Holmes, the Enron guys, Sam Bankman-Fried.
If your post was true then these rich people would have just lobbied to change the law in their favor and won.
But yeah mostly governments prefer to take their money for vague crimes that don't even apply to individuals at all, and then leave them to earn more. Much better for the coffers that way.
Property rights and a market economy are not sufficient for capitalism.
For capitalism you also need to leverage the work of others for your own profit, i.e. wage labor. Syndicalism, for example, also allows for private property and a market economy. It's not capitalism, though.
Worker exploitation is a core principle of capitalism.
>as long as you're not breaking laws, you'll be fine.
My expectation is that this would most likely be nearly impossible without money and therefore work, because you can't live on land you don't have the rights to. From a quick search, you can legally camp in national parks in the same spot for up to 2 weeks before you have to move at least 25 miles. And of course, there are legal restrictions on hunting and fishing that (I expect) would be make feeding yourself impractical.
But that's besides the point. It's still exploitation even if other options are merely much more difficult/annoying/painful and not impossible.
Im my opinion, all employees in a business should receive about the same amount of money. Either someone is doing a necessary job and thus contributing just the same as everyone else, or that job is not necessary and then there is no need to pay someone to do it. There can some variance in the distribution and that might even be useful in some sense.
That said; I'm a syndicalist. I think that the people working in business should own that business. That way there's no issue of exploitation.
The capitalist model of economic progress allows too much inequality to creep in, something that in the long run is harmful for any society. It also allows of an unreasonable compounding of slight initial differences that then will explode into the madness we see today, where some individuals have more economic power than hundreds of millions of others - now that is unfair.
when marxists say "exploitation" it's just a mathematical fact, not a value judgement. it just means that workers, systemically (that is, it doesn't make a claim about any individual worker), don't get ownership over the full value that they produce. this must be true if you really think about it, otherwise there would be no reason to own a company that you aren't also a normal worker in
> don't get ownership over the full value that they produce.
But the value is subjective. A few lines of code is not valuable to me, no matter what context, so I am happy to trade it for a salary.
If I dig a hole for someone, someone agrees to pay me $50 for it. I value the $50 more than the cost of labour to do the hole. Me making holes is no value to me, and infact it's a good workout, so if they didn't pay me to do it I'd just go to the gym and do the same movement for free.
To them, it's probably the start of a fence or a clothesline or something that solves a real problem for them. Much more valuable than $50
on an individual level maybe it's (partially) subjective, but marx is concerned with the systemic level. he's talking about the industries which really drive the economy
i don't think there's ever been a successful attempt to reduce macroeconomics down to the microeconomics level. basically, the system as a whole cannot be calculated by summing up a model of all the individual behaviors, it doesnt work that way. there have been several broadly successful macroeconomic models
steve keen talks a lot about this same type of stuff and he's very much not a marxist, if you want a different perspective on it
No, it's not zero sum, it's possible to destroy value, i.e. 1+1 could equal less than 2. And it's also possible to create value, i.e. 1+1 could equal more than 2.
In the extreme case even literal bars of gold can become worthless after a few seconds of 'work', e.g. if someone throws them into an active volcano. After which no human individual or group would derive anything from it.
It's impossible for humans nowadays, but it is practically possible; one only needs enough delta v, which requires energy. There's certainly enough energy in existence to throw the Earth into the sun.
Yes, obviously this is absurd. But I'm just extrapolating your argument to make an argument: It is silly to expect any economic theory to account for throwing the Earth into the sun. But its also silly to expect an economic theory to account for other absurd behavior, like throwing gold into a volcano.
Every economic theory relies on simplified models of human behavior. Humans behaving irrational is not usually part of those models; the ways humans can behave irrationally is infinite - not useful for a model.
If not, have you completely misunderstood how easily this can be accomplished?
Raising an example that is not practically possible at all, by any dictionary definition of 'practical', such as moving the entire Earth into the Sun, and trying to confirm it meets that criteria by saying maybe in the very distant future it could be is just bizarre.
The latter is literally dozens, if not hundreds, of orders of magnitude harder to accomplish than the former. So even in some incredibly distant future where that would become 'possible', it would still not be practical in any sense that HN readers of 2023 would understand it.
If not, you have completely misunderstood the purpose of an argument reductio ad absurdum.
The point is not whether is is currently practical of if it will be practical at some point.
You are demanding that an economic theory makes sense of one particular, nonsensical human behavior. That demand is ridiculous; no economic theory tries to model irrational human behavior.
A reductio ad absurdum argument does not apply here because I, nor anyone else here, has ever claimed that economic theories have to satisfy all potential possibilities arbitrarily far into the future. In fact no one in this comment chain has even raised the mention of it other than you.
Have you completely lost track of the conversation? At best, it seems like an argument against the imagined thoughts made by yourself.
Well, you seem to make the argument that economic theories have to "satisfy all potential possibilities arbitrarily far into the future" because otherwise they are a "pretty dumb theory".
Or how is throwing gold into a Volcano any different from throwing the Earth into the sun, other than one being possible right now and the other maybe possible in the future? Both are pretty irrational and arbitrary actions.
> Or how is throwing gold into a Volcano any different from throwing the Earth into the sun, other than one being possible right now and the other maybe possible in the future?
The present day versus the far future is a very important difference, in addition to the several dozen or hundreds of orders of magnitude. Do you not understand how the normal person perceives possibilities in relation to time, or what orders of magnitude are?
Anything that is reasonably possible to do by a single individual right now, circa Sept. 2023, with normal single human adult scale resources, needs to be taken into account by any economic theories. If it's to gain credibility from the HN readerbase over the predominant theory.
If someone spending a few hours of effort could cause a theory to do the equivalent of a divide by zero then it's a dumb theory and close to zero passing readers will take it seriously.
If you have a valid economic theory, it doesn't matter if we apply it at 50BCE or if we apply it in 3000CE. Either an economic theory is able to explain a given economic situation and make predictions, or it is not.
> Anything that is reasonably possible to do by a single individual right now
Economic theories don't usually depend on the concrete specificity. Moreover; economic theories actually often pose the question "What if this thing that was not possible before suddenly becomes viable".
> divide by zero then it's a dumb theory and close to zero passing readers will take it seriously.
That might be a bad example; regular math doesn't do divide-by-zero, but we still use it very much.
> you can go into the woods, hunt and fish, and build your own shelter. as long as you're not breaking laws, you'll be fine.
That's a big no-go in almost all European nations. Fishing and hunting is always regulated, requiring permit and all the bureaucracy leading up to that.
Not an option for most - if any - nation on earth.
> If work was owed to the state (or syndicate),
That's neither what syndicalism proposes nor what I talked about.
If an owner of capital, i.e. a capitalist, makes money from a combination of his own efforts & automated systems (physical or software) he has invested in, by your definition he is no longer a capitalist. Ergo, your definition is either wrong, or at best incomplete.
If you make money on your own, from no capital inherited except what society has given you and you don't ever have any employees, only making profit from your own labor, then yes; that's not a capitalist.
How does that demonstrate that "my" definition is wrong or incomplete?
Because in the example I gave, you’re not making profit from your own labour, you’re also “exploiting” machines and software. How does this not meet the generally accepted definition of capitalism (a system in which private individuals or businesses own capital goods)?
Because the generally accepted definition of capitalism isn't "a system in which private individuals own capital goods".
(Software and machines are means of labor [0]. They are not workers and they don't receive wages.)
That's a widely held misconception. We had economic systems with "private individuals owning capital goods" before and we didn't call them capitalism. [1]
One central characteristic of capitalism is wage labor. If you don't make profit from leveraging disparages between wages paid and profits made, you're playing capitalism, but some other kind of game.
From your own link: "Capitalism is an economic system based on the private ownership of the means of production and their operation for profit". You're talking about something else.
Being "based on" means that private ownership and operation for profit are necessary conditions. It doesn't mean that they are sufficient; i.e.just because you have private ownership and operation for profit doesn't mean you have capitalism. We had private ownership and operation for profit long before there was capitalism, in systems that are not capitalism. (This is the modal fallacy)
The second error is closely related. Not everything that has private ownership and operation for profit is capitalism. It could be Syndicalism, for example, which also has private property and operation for profit. (This is the fallacy of faulty generalization)
So the first sentence of the wikipedia article you linked about capitalism is now wrong, based on 2 other wikipedia articles? I don't think this is a productive direction for discussion tbh.
> So the first sentence of the wikipedia article you linked about capitalism is now wrong
No, it's not wrong, the articles is perfectly fine and they don't contradict each other.
The phrase "Capitalism is based on private ownership and operation for profit" is absolutely true. But the conclusion you're drawing from these sentences is wrong.
If I say "Crêpe is a dish based on flour and eggs" that doesn't mean that if I have flour and eggs I have a Crêpe - because to prepare Crêpe I also need other stuff.
If I say "Crêpe is a dish based on flour and eggs" that doesn't mean that everything made from flour and eggs is a Crêpe - because there are many things made from flour and eggs that are not Crêpe.
Labor doesn't operate like that. If we wake up one day and suddenly need a ton of labor, we don't need idle worker. We can reassign active labor, like in World War II.
Also, it's weird to casually call people becoming homeless and starving and dying due to lack of work "slack". I'm sure the people desperate for money see that as a crisis more important than whatever abstract system crisis you are imagining.
The 60's were an era of labour shortage in the UK. Recently some British towns had a labour shortage, such as Reading. This means that garbage collection jobs pay well, which is a good thing for those that want to work and be home in time to collect the kids.
A labour market should have people dropping out for having babies, going to education, sickness, looking after elders of the family, going on adventures and self improvement, for example people that want to write their own app/book.
People who are not actively looking for work are not included in employment numbers (at least in the US). People voluntarily taking time away from working are not the reserve army of labor that our policies create to suppress worker power.
This is a nonsensical understanding of employment! The reason there are unemployed people is a combination of transit times (if you lose your job as a programmer tomorrow you don't want to be allocated to a job as a hairdresser just because that was the next slot that opened up temporarily) and because some people would like to work at a specific job but can't get one right now, and would rather live off savings or welfare for a while rather than compromise (e.g. jobbing actors).
Attempts at full employment were tried, it resulted in dead economies. This stuff is basic!
I would counter that you have a nonsensical understanding unemployment. You are imagining that everyone unemployed is so by convenient choice and voluntarily holding out for something that meets all their preferences. That is not true.
Socialism doesn't require forcing programmers to be hairdressers. That's a huge strawman.
Mostly that's actually indeed the case, because of how statistical agencies define employment. People who are so terrible at work that they can't get a job anywhere eventually give up looking and fall out of the workforce entirely, so don't count as unemployed anymore (arguably they should).
For the rest, sure, there are some who search but cannot find work. But what that usually means is they can't find work that matches their specialism. Maybe they could go stack shelves for a bit, but if your prior work was as a senior lawyer it makes sense to take the time to find a job that matches your skills.
Fair point, although I found in the discussion that zero percent unemployment was considered bad, whereas, as I see it, there are always people dropping in and out of the labour market. My point was that not everyone works all the time.
I think worth noting 5% unemployment doesn't necessarily mean an "army of the unemployed", by which I take you to mean a sliver of downtrodden persistently unemployed people.
It's a metric taken by sampling the population and asking if they're looking for a job at that moment. It could equally be every worker looking for a job 2.5 weeks out of the year.
It's obviously somewhere in between those extremes but picks up a lot of the latter as seasonal workers shifting to where there's demand.
Engels' concept of the reserve army of labor does not refer to a specific group of persistently unemployed people, but to the idea that there must always be some significant number of people who are unemployed. In other words, a statistical unemployment rate of 0% is not possible under capitalism. This is simply because if there was 0% unemployment, it would be impossible for businesses to hire anyone without poaching from another business. According to the law of supply and demand this would result in wages rising rapidly and without bound, much as the price of bread does during a famine, until it was impossible for businesses to make any profit.
"According to the law of supply and demand this would result in wages rising rapidly and without bound"
No it doesn't. Having to poach employees to increase your labor pool doesn't mean that you are willing to raise wages without and bound. A food crisis is where an inelastic demand meets a hard supply limit, so prices can go up dramatically, but they don't go up infinitely, not even in a famine.
Supply and demand does not allow for unbounded rises in prices because demand is never infinite. Rather, prices go up to the highest amount demand will allow for. For things like food for which demand is inelastic, prices can go up pretty high and people will eat into their savings if they have to, but labor will more likely be limited by the marginal productivity of individual workers.
> Supply and demand does not allow for unbounded rises in prices because demand is never infinite. Rather, prices go up to the highest amount demand will allow for.
Generally, yes, but it's not an absolute.
Each time an employee is poached for more money, that person has more money to spend; done frequently enough, this will increase the velocity of money and cause general inflation or even hyper-inflation.
I'm only speaking hypothetically because folks are talking about 0% unemployment.
Milton Friedman's "natural rate" of unemployment is basically "the rate capitalists are gunning for" in an attempt to suppress wages. Quite a bit below full.
I don't see anything in that link about increasing unemployment in order "suppress wages". Milton Friedman's comments are about monetary policy. Unemployment can be decreased by increasing inflation, but Friedman thinks thats a bad idea. He not arguing that anyone should "gun" for that unemployment rate, but rather that it should be accepted as the "natural" result of an elastic market.
>This is simply because if there was 0% unemployment, it would be impossible for businesses to hire anyone without poaching from another business. According to the law of supply and demand this would result in wages rising rapidly and without bound, much as the price of bread does during a famine, until it was impossible for businesses to make any profit.
You can tell from ideas like this that Engels never had to work a day in his life. Not everyone is going to instantly switch jobs when they hear about a slightly better one. And I thought capitalists were the ones that supposedly treats humans as mindless automatons.
If you're going to assume spherical cows like that, all businesses would already make 0 profits due to competition. In a hypothetical capitalist world with 0 unemployment, employers wouldn't poach anyone unless if they think that it would be a profitable decision. We'd have higher inflation, but that's not really the end of the world if everyone is employed. More importantly, our economy would stagnate due to not having any slack, but that's the to occur in any non-capitalism system that has 0 unemployment.
College has become mostly just that, a means to a career. It's even begun to wear that out and at higher levels become a means to a career in Academia. That's ultimately the beginnings of a massive ponzi scheme, it is now considerably detached from pure pursuits of knowledge, it's now become cannibalized for pursuits of funding.
It's less of a Ponzi scheme and more of a gamified, time and treasure expensive hazing ritual whereby the sheepskin "proves" "quality" and some measure of aptitude, intelligence, baseline of problem-solving ability, and ability to finish something. It has been and is also 4-N years of extended adolescence. And in the distant past, when universities were more selective and cheaper, it's where people often met their spouses.
How else should we prepare people for the various workforces: knowledge work, financial services, skilled trades, etc.?
Universities fear 2 things: bad publicity and losing accreditation. Perhaps accreditation orgs such as ABET (in the US) need to get off their collective, perfunctory rubber-stamping posteriors and ensure financial and fiduciary stewardship are occurring, and that a university doesn't become tantamount to a white-collar human trafficking recruiter demanding the life savings of their victims on the vague promises of a bright future.
The academic tracks are like a pyramid scheme: professors need graduate students, who then become professors who need graduate students, who become professors who need even more graduate students.
This was successful as we forced more and more young adults to go to colleges, but that growth is slowing while the academic tracks are still multiplying, which means there are PhDs and grad students who are very upset that their expensive pieces of papers will never get them the tenure job they thought was guaranteed. So we have very angry academics teaching our young adults -- and that's NEVER gone badly.
I'd argue that the evidence of "aptitude, intelligence, baseline of problem-solving ability, and ability to finish something" has much less value now.
University is more of a vocational college now - there are specializations for most things, and if you didn't choose the right specialization and are trying to break into a field it's much harder to do so given that there are other people with better education. Because the general university education has become so ubiquitous just having a degree has much less power now.
That's a shame that it's still and increasingly a one-way, expensive, usually water-down, specialization guessing game without trials of what's on the other end.
Also, an increasing requirement in some fields of a Master's or PhD is doubling down on the filtering system. That started to be a thing in the 2000's.
The irreducible question is: What should be done to fix or replace it? Fixing it with a fundamentally better alternative seems superior than the continued gamification of USN&WR pole positions. Also, college tuition needs upper limits because too many universities are tantamount to international labor human traffickers.
I posit there ought to be cheaper undergrad colleges that are more rigorous, more practical, and more of a funnel filter. That is, the prestige isn't derived from acceptance but filtering for excellence like some professional postgraduate degrees. You can go through various paths and retry as many times as you'd like. The point would be specific, strategic preparation of students rather than grade inflation, honor code proctor-less examinations, partying, and endowment and CIP embiggening at the expense of student debt peonage.
This is kind of my point. In 1949 when Einstein wrote this, the US state colleges were little more than vocational schools. He was advocating for a world ruled by academic achievement, kind of unaware of the brave new reality it would come with.
If it didn't come from Einstein, nobody would even pay attention. It just states the same gains and problems everybody knows (and did know by decades at that time), and restates the large showstopper without going into how to solve it (what nobody knows how even today).
It's a really good piece of popular communication. He was very good at that. And the situation didn't change much since then (at least the things he describes). So yeah, if you don't know a lot about the subject, the article is for you. Just don't expect to learn anything deep.
Most people don't know anything about the subject. People in this thread are likely far more educated than average on the subject, but I'm still seeing a lot of comments from people who don't understand the basics of labour theory.
Federal expenditures as a function of GDP were ~12% or so in 1950 (ie, coming down from the war). They are 25% or so now, 20% before covid. I’d imagine the states are about the same.
Yes, capitalism makes people less productive. Wall Street? The richest of the rich get rich by playing games with paper, not by doing something useful to society. Look at all the stupid skyscrapers in NYC that were simply built to launder wealth, aren’t occupied, and are beyond the means of 99.99% of US citizens, yet the dominate the skyline and shade the public parks. Capitalism is designed to have lazy winners.
> Capitalism will make people stop working and be less productive?
\aside: Adam Smith in The Wealth of Nations has a story about men who worked themselves into the ground, because they were paid by-the-piece (not per hour). They needed to be protected from themselves. (The psychological mechanism wasn't speculated, but I suspect maybe competition rather than greed.)
I would say that Marx and labor theory of value are still relevant as mechanisms for understanding capitalism. According to Marx, Capitalism is a mode of economics that has unleashed the productive forces, but its internal contradictions give rise to increasing crisises. There is a constant downward pressure on labor costs versus rising costs of living.
Crisis has been averted multiple times, and the productive forces continue to be unleashed. To prevent total collapse, concessions like welfare have been made.
However, there is a real possibility of potential growth being stifled by self interests of powerful economic actors. This bleeds out now into identity politics as people view the liberal system as incapable of providing the growth and future they thought would be delivered. Either unprivileged groups want to be paid high wages or the privileged groups want to protect their high wages from being cut down. This is a form of class warfare that isn't too different from what Marx observed in his days.
This still is far away from achieving the socialist mode of production where the workers become the planner and rulers of the economy to further unleash the productive forces.
Marxism is kind of like the chiropracty of economics. Just because Marx can explain everything and point out contradictions doesn't mean they are true.
QoL is still in an upward climb. Average lifetime working hours is still marching down. We've peaked out on literacy and child mortality and preventable diseases with available technology.
You have to ignore 120 years of intellectual progress on economics to still want to apply labor theory of value to problems. There may be a day when we can achieve some semblance of a "socialist" mode of production - but I can almost assure you it will not be from people following Marx's flawed analysis. It will be from people who understand either classical or keynesian economics, or whatever new understanding come from it, and apply them towards actual functional policies.
I mean, just look at actual literacy stats and you will find we have a ways to go on this. A frankly absurd number of people in the UK are functionally illiterate. Same in France.
Yet there are drug and mental health crises, and there are families whose quality of life hasn't improved since the last recessions. I don't believe that progress is so neatly linear, and the Hegelian philosophy behind Marx attempts to capture that, IMO.
Labor theory of value does have issues, but I don't think it can be so neatly dismissed either as alternatives appear to have vague criteria for what contributes to value.
Value being subjective and fluid is exactly what makes modern society function. I may value having lots of children. You may value not having lots of children. Expecting there to be an objective universal value on everything is a fool's errand.
I trade my time at work to sit at a comfy desk and type for money, and that is work. And I will negotiate for more time and money so that I may spend more time lifting heavy things at a gym. Funnily enough that is leisure and it costs me money. It is in the asymmetry of needs that we create excess value by working for each other taking care of the things they do not want to do for themselves.
Labor theory makes no sense in how people actually choose to go about their lives. Which is why modern economics is so focused on how to just maximise as much generic utility out of a market. And it is usually Marxists who are actually the most obsessed about counting up the little green slips of paper that don't mean anything.
You reference Hegel, but it is specifically his idea that progress is inevitable. Which is exactly why I reject Marx. Marx believed that making functioning plans was useless since progress was inevitable once unleashed. But Marx was a leech who counted on his friends for his subsistence and others to actually test his ideas. Progress is only made by intentional and planned efforts to deal with problems rather than just criticize and shake your fist at society.
> Marx believed that making functioning plans was useless since progress was inevitable once unleashed.
Marx believed that planning out the detailed structure of a future utopian society, in the tradition of Owen or Fourier, was useless. And he was right. Societies are not and have never been the product of intentional design: no individual has the necessary power, no group has the necessary agency. They're the accretion, year after year, of millions of independent agents doing the best they can with the constraints the past has imposed on them. We can adjust the constraints, to some extent, and maybe aim, very imprecisely, at some desired end state, but we don't get to skip straight there.
Okay, but this is not at all what Marx himself said. Marx was philosophically opposed in all of his writings to answering even the most basic questions about what a communist economy/government would look like. In his mind he was only proclaiming the inevitability of such a system. In fact, he regularly dismissed anyone who asked these types of questions as serving the bourgeoisie.
But it turns out that, after a socialist revolution, who is going to make the bread and who is going to distribute it is not a problem that will inevitably be solved.
> Okay, but this is not at all what Marx himself said. Marx was philosophically opposed in all of his writings to answering even the most basic questions about what a communist economy/government would look like. In his mind he was only proclaiming the inevitability of such a system.
No, the point is that he's not talking about a particular system. The famous soundbite from The German Ideology:
> Communism is for us not a state of affairs which is to be established, an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence.
Communism, for Marx, is the thing that beats capitalism, and he's only willing to make claims about it that he thinks follow from that. He believes it will lack the features of capitalism that undermine its long term stability, and do a better job than capitalism of accomplishing the things that a mode of production needs to do to win out over others (namely, producing things), but anything more than that cannot be predicted decades-to-centuries out. Things will need to be administered, but they're not going to be administered by him, or in circumstances he can predict.
Consider feudalism. An educated Frenchman in 1700 could reasonably think that feudalism was on the way out, that it would probably mean the displacement of the aristocracy by the emerging bourgeoisie, that it would not have a patchwork legal system built out of a thousand years of accumulated hereditary agreements and local precedent, that it would professionalize government to some degree, that it would do a better job of maintaining a professional military, and so on. But they had no chance whatsoever of predicting the structure of the Federal Reserve, and it would be insane of them to claim otherwise.
Consider that Marx wasn't Marxist-Leninist although I think he was pro state. Anti-statist socialists like Kropotkin thought about some kind of decentralised planning. You could even have market as a distribution mechanism, but without capitalism through some variant of market socialism or market Anarchism.
> But it turns out that, after a socialist revolution, who is going to make the bread and who is going to distribute it is not a problem that will inevitably be solved.
Marx was, I think, of a very different mind about revolution than many of his later followers: I suspect that to Marx, a “socialist revolution” was more like the Industrial Revolution and less like the French (or, perhaps more to the point, Russian) Revolution.
Marx wasn't against providing concrete steps addressing coherent real issues adapted to the conditions in particular places (see the program for the German Communists that is often presented as an appendix to the Communist Manifesto). But the utopian end-state society was, in Marx’s view, rather far off.
This is exactly right, and Marx opposed revolutionary efforts in pre-industrial Russia (e.g. the Russian Revolution). He did advocate Russian support of revolution in Germany, but saw no use in revolution in pre-capitalist society.
> Marx believed that making functioning plans was useless since progress was inevitable
You're taking ideas out of your pants and putting on Marx's mouth. At least be honest and say you never read him and hate his ideas without knowing what they are.
I find the subjective argument too abstract for practical use. All the subjectivity in the world must come to head with reality and how it can be enforced in reality. I am of the opinion that logistics wins wars, and labor theory of value, with its flaws, is able to provide a sense of direction for me to act on. Maybe I can bet on an asymmetry of needs with someone wanting to raise a family with me if I was unemployed and they did all the work, but I have the impression that a partner would appreciate me being able to help with the work too.
Labor theory of value is incredibly easy to dismiss. Value is about what people will pay for things, not how much work they took to make. Bam there we go.
You just dismissed you incorrect idea of labor value theory. Go back to read about the subject. To "disprove" Marx you should at least read his damn book and show that you know what you're talking about.
this is a typical misinterpretation of the labor theory of value. it's not the silicon valley "I Am Adding Value" SaaS ideal.
the free market assigns the value created by laborers. it's as simple as that. the buyer wouldn't get this value in their life, at a price the market decided they pay, without the work of the laborer. the value wouldn't be created without the laborer, or any of the capital or tools that it took to create labor (since labor created the capital and the tools). much like machines, it's labor all the way down.
I didn't misinterpret shit. The amount of work something takes too create has very little to do with its value. Labor theory of value would be a joke if it wasn't so popular for some reason. Instead it's actively disinforming people
> it's labor all the way down
This is completely orthogonal to value. Sure things wouldn't exist without people to make them. That doesn't mean that the labor it takes to make something constitutes its value.
if you actually look at the inputs and outputs of entire industrial sectors, rather than individual firms, you generally find a very high correlation between the price of labor as input and the price out the output of that sector. like >96% for the uk as found by cockshott and cottrell in their 1995 paper
This kind of shallow dismissal could only be posted by someone who hasn’t spent much time thinking about economics, or thinking about why Marx remains one of the most relevant and influential theoreticians amongst people who do spend a lot of time thinking about economics.
For a start, Marx understood well that the price assigned to a commodity by a market and its value were often out of sync. If you’re confused about the difference between those things, think about Dogecoin as a particularly extreme example.
This kind of shallow dismissal of my shallow dismissal of a frankly idiotic idea that doesn't deserve a deeper dismissal could only be posted by someone who hasn't spent much time thinking about economics, or thinking about why Marx was popular not for his economic thoughts but for his sociological/political ones. Someone being popular doesn't make them right, but Marx was right about many things. Just not about labor theory of value.
> This kind of shallow dismissal of my shallow dismissal of a frankly idiotic idea that doesn't deserve a deeper dismissal
The labor theory of value was accepted wisdom prior to the late 19th century: it originates with Adam Smith and David Ricardo. It's wrong (or more accurately, not a good conceptual framework) but it's not obviously wrong, let alone "idiotic".
This is misleading. Adam Smith presented this as a possible solution to an economic paradox at the time. But later philosophers came up with much better solutions:
There's no reason to believe that Smith wouldn't have latched onto the much better solution. So being hell-bent on the incomplete answer from the 1700s is a unique peculiarity of Marxist theory.
> But later philosophers came up with much better solutions
Yes, later than both Smith and Marx. Marginalism didn't go mainstream until the 1890s, though the necessary pieces were there waiting to be assembled from about 1870.
How much is a glass of water worth? Should it change if it takes me 5 seconds or 5 years to procure? Using labor theory to assign value makes no sense and is not a workable model for anything for anything other than justifying Marx's own circular logic.
Marx discusses how skill (and factors like machinery, etc) factors into value in Capital vol 1. The idea isn't that any labor on any endeavor creates value at a constant rate across all individuals and all time.
Marx has some concept of "socially necessary" labor, but it doesn't really make sense because it wants to treat skill as some kind of simple multiplier as if we can assume that a modern doctor's labor is some simple multiple of a random medieval peasant's labor in diagnosing an illness, which is just a silly and oversimplified model.
Honestly it reminds me of like Marx's non-rigorous "eh whatever" approach to dividing by zero in his mathematical work. While one can define division by zero in non-standard analysis, that involves some actual rigor in how your treat it according to your definitions, not just shrugging your shoulders and doing it.
What you're getting at vis-a-vis highly skilled labor is known in Marxist economics as the labor reduction problem, and it's complicated (enough so that I wouldn't do it justice trying to elaborate the approaches in the time I have to respond). Marx died with it unsolved and it's a matter of discussion to this day. But you're conflating that problem with the concept of socially necessary labor, which is different and actually addresses the problem you posed (in Capital Vol 1, in the difficult early chapters). In order to produce value, the labor must be socially necessary, and the labor of any number of unskilled workers towards a highly complex problem (eg, treating a rare cancer) would not be socially necessary. It doesn't even have to be that complex. I don't have the skills necessary to make a wedding cake, and any attempt I make to do so would be so inept that it wouldn't be socially necessary labor.
Can't speak to the division by zero, but it doesn't come up in any of Marx important work. His mathematical manuscripts don't have any significant relationship to his work on political economy.
I mean, economics is a mathematical profession. It's hard for me to take his storytelling about things like the freedom of hunter-gatherers and such seriously when I know he wasn't rigorous in the things that are easier to check. Never mind the, err, implementation problems in basically every attempted revolution until somewhere around the point where the Nordic states found a way to subsidize it with resource extraction and found a voluntary version.
It strikes me as incurious to dismiss an entire field of thought because there were errors in a mathematical manuscript, especially when you clearly don't understand the fundamental concepts (I don't mean this as a dig. You just haven't learned them.). Marxism isn't the writings of a long dead guy in England in 1860. It's a living, breathing school of thought that's evolved significantly since then. What you're doing is akin to finding an error in Smith or Ricardo's [edit: unpublished manuscripts, not completed work] work (of which there were many) and using those errors to dismiss all of orthodox economics.
The revolutionary approaches have not succeeded thus far, granted. There is a branch of Marxism about revolution, but what we're talking about here is a description of capitalism. Marxist revolutionary activities have nothing to do with how potent that analysis is.
I spend a lot of time thinking about economics, and spend a lot of time surrounded by people who also spend a lot of time thinking about economics, being an economist. The labour theory of value, along with every other objective theory of value, was abandoned by economists more than 100 years ago, because it failed to explain how and why economic agents assign value to economic goods, which is what economists are interested in.
No it's not. For one, it can only assign values to things which are actually exchanged. When you look at things on the scale of states, this isn't always a possibility. You can't put the ISS on craigslist and see what it sells for.
Are you arguing that Germany is not a capitalist country? I was collectively speaking about the capitalist world.
> How can y'all be so damn certain you're the best in the world when five minutes worth of Googling is enough to completely destroy all your arguments?!
Uhhhh, maybe read the comments a bit more clearly before jumping in. Do you always just jump in on random threads to say Americans are dumb?
> Are you arguing that Germany is not a capitalist country? I was collectively speaking about the capitalist world.
Even then, assuming we're not just talking about the US, it's a stretch to say "we" peaked out. We have a lot to do before anyone can make that claim, the problem is that in most countries politicians have been bought off by rich elites to lower taxes and reduce public spending (which has been done especially to education as that's the easiest), so there is no tax base left to fund what needs to be done.
> Uhhhh, maybe read the comments a bit more clearly before jumping in. Do you always just jump in on random threads to say Americans are dumb?
Germany like many other Europeans would absolutely be considered a socialist country by most US standards (holding no distinction between socialism and social democracy).
This is a big part of the confusion, intentional as far as I can tell, generated by people trying to eliminate taxed, regulations, and worker protections in that they can flexibly do things like point out how Sweden is wonderful and has no minimum wage, so we should do that too, when the reality is inverted with successful universal collective bargaining guaranteeing everyone much better wages -- something that would probably get the national guard rolled out if US workers pushed for presently.
Specifically for the US and Germany literacy results, I see a difference between these and past methods of measuring literacy. In the first link, the most basic sample question required the user to interpret a simple table. The second and third level questions required users to navigate websites, including a task of finding the correct link to navigate to the correct page of a site.
I think this establishes a great point that we have an ever changing society with growing demands, where we now need to consider much more than just reading words. Internet literacy is a huge barrier, and it’s great to see it getting measured and accounted for as countries continue to adapt education to the changing times.
>You have to ignore 120 years of intellectual progress on economics to still want to apply labor theory of value to problems. There may be a day when we can achieve some semblance of a "socialist" mode of production
What an absolute load of crap. Economics as a whole is barely a science, at best a toy, and that multiple pathways exist is not an indictment of any theory. Marx's observations hold true all these years after, alongside the progress we've had.
You clowns would take a system as complex as, oh, simply the whole of human activity and try to reduce it to a few simple laws. Sorry, despite what you learned online, "supply and demand" is not a fundamental law of the universe. This is not physics. There are no simple answers. There aren't even proper answers. Every school of economics holds on barely by a thread. "Assuming a rational actor" is the "assume a spherical cow in a vacuum" of liberal economics.
I do not agree with the upper comment that economy is not a science. It is just a human science, where you could have different schools of thought based on different philosophies. But praxeology is indeed an example of something that is not science, as it rejects the scientific method and the empirism.
If economics is a science, how do you run an experiment?
Let’s say you want to see how phenomenon X scales as a function of population, and create a model X(p)
How do you set up N identical scenarios and, ceteris paribus, vary the population? You cannot.
Two separate nations are distinct systems. Setting up 2 identical factories next door, one with 100 staff and one with 1000 staff would be a monumental waste of effort, and what if the geographical separation, or airflow, or cloud cover, or… affected the experiment?
Let’s say you run a single economic experiment. How do you reproduce it? How does your counterpart reproduce it?
You do not create experiments. You create models that try to explain the world and check your model predictions and what happens in the world. When the two disagree, you update the model and try to explain what went wrong. As you cannot make experiments to check, it is inevitable that you will end with more than one model for different school of thoughts. As is in all academic disciplines that are part of humanities. This is not like in the natural sciences where you can agree with a single model. Nonetheless, this is better than having no empirism or scientific method at all and having models built based on some logical axioms treated as the ultimate truth, as some unscientific parts of the economy do.
Moreover, in the natural sciences, you also cannot perform experiments for some parts of cosmology, for example. Nonetheless, you keep creating models in the hope that they would allow you to discover and predict more things and to interpret better the universe. If they do, your model clearly shows some benefits, even if in the future with more powerful technology, it could be disproved. Economy do not need to be so different than this.
>Nonetheless, this is better than having no empiricism or scientific method at all and having models built based on some logical axioms treated as the ultimate truth
Like theories built on mathematics or logic?
Don’t get me wrong, I’m not shilling Austrian economics and I disagree with most assumptions of pure rationality, but I think an axiomatic approach to human decision making is not necessarily a bad thing. I’m sure preferences and biases have some mechanism we can quantify and explain from first principles.
It seems the many of the only people who really read and understood Marx looked at it and said “well ok, I’m going to be one of the capitalists, and this is actually good.”
There are actually planned economies in our system, Einstein would have been shocked by Walmart. I recommend “People’s Republic of Walmart” by Phillips and Rozworski if you want to read about it.
The labor theory of value is bogus, though. A doctor doing work on their own car and a mechanic diagnosing their own illness are both worse off than if they exchange their labor with each other, even if Marxist thought wants to equate their labors.
That's not quite right, there are several things Marx offerred that could be tested.
Such as, the most capitalist countries would be the first to fall to communism. Except they didn't the only countries that have ever fallen to communism were Monarchies ruled by an absolute divine monarch.
Or after a revolution, the institutions of religion and the state would wither away. Which Russia is getting close to going back to a sort of Theocratic-Facism, and the CCP may not be quite yet ready to dissolve.
I could bust out my old copy of the communist manifesto to check any more predictions he made, but at the end of the day Marx did offer falsifiable theories, it's just that it turns out anywhere Marxism could be falsified it was. If only he hadn't tied it to something as concrete and objective as economics and instead something more relative and cultural.....
> the only countries that have ever fallen to communism were Monarchies ruled by an absolute divine monarch.
If anyone is wondering why US/corporate empire spent so much blood & treasure, political capital, and moral high ground on sabotage & slaughter in places like Vietnam, Guatemala, and Indonesia - here's the answer. It was due to mortal fear that one of these third world socialist/communist popular movements might actually succeed. (That and plain old short-term business interests)
See: The Jakarta Method, The Devils Chessboard, The Brothers, etc.
> Such as, the most capitalist countries would be the first to fall to communism
He has so far been right in that, insofar as there is any progress in that direction, in that the progress from the capitalism Marx wrote about to the modern mixed economy in the advanced economies is an evolution toward communism implementing several of the elements of the program Marx laid out for the early stages of such a transition. The Leninist attempt to bypass market capitalism on the road to communism consistently, everywhere attempted, either got stuck in state capitalism durably, got stuck there until collapsing totally, or migrated from there toward market capitalism, failing entirely to bypass it on the road to communism.
Marx was talking about where progress toward communism would happen, not where people calling themselves Communists would succeed in taking power and fail to make any more progress toward acheiving communism than, in the best cases, getting a bit closer to where thr capitalist economies of Marx’s time were starting from.
- Why are you mentioning Russia? You do realize they've been capitalist for 30 years now, and that it's transformation to a more fascist state happened in those decades?
- Do you think Cuba was a monarchy, ruled by king Batista, before it fell to communism?
> anywhere Marxism could be falsified it was
Ironically, this is a falsifiable statement. One of the key predictions of Marx is that under capitalism, wealth and property would be concentrated in an increasingly smaller group over time. I would not consider that one as having been falsified.
> I could bust out my old copy of the communist manifesto to check any more predictions he made
That's not a great source for predictions, tbh. It's more of a pamphlet aimed at workers, not so much a theoretical analysis of capitalism or communism. In all fairness though, the books you'd have to read for those predictions are super long and dry, and honestly who has time for that?
It's a lot easier to argue against Marx than against Marxism, just as it's a lot easier to argue against Darwin than evolution. Marxism as a school of thought has evolved quite a bit since Marx, who any non-crank would admit was wrong about a host of things.
Marxism is largely descriptive, and so many people claim that it cannot be falsified. But there are ways you could falsify Marxism:
- Capitalism could mediate class conflict out of existence
- Capitalism could grow indefinitely without producing business crises
- Wages across the world could become roughly equal in terms of purchasing power, regardless of the country, without an economic crisis.
Now, these would have to happen in the actually existing world, and as such I can see the resistance to labeling them as falsifiable. So how would you falsify orthodox economics?
I thought value wasn't price? The way to salvage labor theory is really to turn it into macroeconomics where the labor value is amortized, which does restrict it as an applicable theory.
Labor Theory of Value: The value of a commodity can be objectively measured by the hours of socially necessary labor required to produce it.
So the "value" of a commodity is fixed at the time of production.
But what is "value"?
It's not the utility ("use value").
It's not the market price, which changes over time.
Marx and others try to map "value" to price (Transformation problem) and try to measure exploitation of workers using profits based on selling prices, so there's an attempt to consider this "value" as the correct, instrinsic worth of a commodity.
Consider a brand-new in-the-box iPhone. It has a fixed labor-theory-value, yet its price and worth go down every year as new models come out.
How does labor theory of value help to understand this?
Mainstream economists had moved to a subjective value model even before Marx's death. See the "Marginal Revolution".
This explains that the value of the old model iPhone is reduced because it is less useful than competing newer models, reducing the demand for the older model.
Yet according to labor theory of value, its value is determined by its production.
Thus "value" is best understood as a measure of a cost of production, not as a measure of the "worth" of a commodity.
> An hour of labor can produce wildly different amounts of value with different tasks, skill, materials, and especially capital equipment.
This is what I mean when I say "you should understand the labor theory of value before critiquing it." Capital goods are labor. They represent the accumulated labor required to produce them. If producing something requires a large amount of capital goods, then the labor that went into producing those capital goods is incorporated into the value of the product. You can apply a similar argument to acquired skills, etc.
Yes, "dead labor" if I recall Marx's term, embodied in the capital good - the useful part is the recognition that capital is simply the saved surplus value from previous work, applied to magnify current work.
But trying to apply the labor-value this way just further illustrates the mistake in asserting you can attribute value to the hours of labor in a finished good.
If no shovel is available, the value of a hole is the labor required to dig it with bare hands.
But if shovels are available, the value of the hole is the value of the labor of digging the hole plus the fraction of the labor embodied in the shovel that was consumed in digging the hole.
But if you introduce power tools, the value of the hole is the fraction of the labor of the construction and maintenance of the power tool that was consumed, plus the labor of the operator.
There is no rational way to form an equivalence of these things, except if you consider them costs of the hole, rather than the value of the hole.
Those different "hours of labor" whether current or past have different values based on how they are applied (utility value) rather than just "labor hours".
And then as a bonus, the hole has the same utility value regardless of how it was dug.
I think we agree that labor is a source of value - discovering, creating, transforming inputs to add value - and capital is surplus value from previous labor.
I think we disagree that socially necessary hours of labor is a useful "objective measure" of the value of the product.
I think too many variables have to be hand-waved away by that "socially necessary" qualifier, such that it completely hides any value (ahem) of the measure.
We've identified that we have to qualify socially necessary labor hours by
- average skill and diligence of the workers currently available in the region
- efficiency of the production processes for this item and all capital goods and materials used in production
- level of technological advancement for all of the above
- availability of competing products
That's a very abstract measure casually described as hours of labor, and seems to have little descriptive power, much less predictive power to help decide what will be worth producing. Frankly, I'm not sure if it can be calculated at all for any commercial product.
"The value of a commodity can be objectively measured by the hours of socially necessary labor required to produce it."
Can anyone cite the hours of socially necessary labor required to produce any single product? (See "I, pencil" for an example of the complexity)
Agree on the first three of your four bullet points. You're kinda missing the point on that last one: if you can correctly identify the value of the labor (again, including capital goods) that go into making a product, then what you have is the minimum value that a product will sell for in the long term. And, importantly, in a free market the price of the good should tend to be around that value. I kind of alluded to it in my previous post but didn't quite spell it out completely I think. Effectively, it is the value at which you get zero profit from the sale.
All else being equal, competitors will not be able to go any lower either (until and unless they gain some technical advantage) without selling at a loss. Exactly as you point out: there are various factors that can reduce that value - Marx points this out as well of course and I think it's sort of meant to be among the main contributions capitalism makes to historical economic development. But, for any interval of time over which there are no major technical advancements in the industry in question, in theory at least (i.e. in a more-or-less "pure" market with rigorous competition) the price of the product on the market will approach the point at which profit is minimized i.e. the value of the labor required to produce the good.
Looked at another way: the real value of capital goods (in an economic sense, anyway) is not in the production they enable, but that they allow for more efficient use of future labor time. If, and only if, the savings a capital good provides in labor time to produce a product, is greater than the value in labor required to produce the capital good in the first place, is it "worthwhile" to produce the capital good and put it to use.
You might hire someone with a sophisticated ditch-digging machine to dig your ditches for you, but would you still do it if you knew that producing that one ditch-digging machine took 500 men working 10-hour days for a month? And it was only good for digging 10 miles of ditches before breaking? Probably not, and the labor theory of value does a good job explaining why, IMO.
All that said, of course that's not at all how our market functions especially nowadays, and there is a Marxist approach to analyzing that as well - but that's out of scope of this thread.
There is the notion of "socially-necessary labor" and the amount of that required to produce a thing does depend on the capital goods available to the people doing the work (that is, the technological sophistication and level of economic development). The expectation is that it will go down the higher the economic development. This can even make things that previously weren't worth doing before, worth doing now, because their value in labor is finally less than their use value.
In principle market forces are supposed to drive down prices, are they not? Absent collusion and corruption, etc., we would expect the price of a good to be very close to the cost to produce it. This is what pro-capitalist, pro-market economists keep telling us, anyway - and that is at least the theory. But that cost to produce it is exactly the capital used in the production plus the labor applied to that capital. But if capital is just the product of labor, then in fact the cost to produce the item - and thus the price I will expect to pay in a competitive market, does in fact correlate quite well with the labor that goes into production.
I believe you’re mudding the argument with unrelated statements I didn’t make: brain surgeons working on a farm.
It’s simply: a worker who participates in the productive chain with labor can’t benefit from the value added by said labor. If thousands of iPhone are assembled by the worker, but said worker can’t afford even ONE iPhone, implicitly this means we value the worker 1/100000 of an iPhone.
If you think this is fair and proportional compensation, ok, but that’s an opinion. It’s not a natural law. I don’t think wage stagnation and pornographic profit margins are fair.
We may have more programs by volume but the barriers to entry and weird-ass financial requirements to keep benefits often drives the outcomes those programs are notionally intended to address. The social safety net today is significantly less functional than it was 30 years ago.
It's a pretty well written piece. I think people from all perspectives should take careful note of what he is actually advocating: discussing and figuring out the mechanisms of what a modern society should like rather than blindly following an agenda.
That said, this is a 70+ year old article, based on ideas and problems at the time. Capitalism will make people stop working and be less productive? If anything we worry about the opposite problem. College will only be a means to a career? Today academia is powerful and a political force unto itself. And we have so many welfare programs and safety nets and worker protects than Einstein was even able to dream about in 1949. In a way, we are living in a world he was advocating for.
If it was written today, I have no doubt Einstein would still care about inequality and education and politics and common "workers" enjoying life. But I also don't think I would see him caring as much about Marxism and the labor theory of value specifically as a mechanism for understanding it anymore.