Pure Capitalism?

[tubeswell]

============================
MODERATOR'S NOTE:
This and the subsequent 15 posts were split
from the Qu'ran burning thread.

As far as I could tell, this post is the best candidate
to serve as the OP for this thread. As such, a copy of
this post still exists in the Qu-ran Burning thread, while
the subsequent related posts have been removed.

If anyone would like to see their posts moved or copied,
just let me or any other moderator know.
tubeswell, if you'd like a different title for this
thread, feel free to edit this post or notify a moderator.

Have a nice day!
--MM_Dandy

PS: Please bear with me as I seem to have misplaced
the original Qu'ran Burning thread. I will make all
attempts to have it restored as soon as possible.
============================

As another atheist, I say all religious doctrine printed material should not be burned, because as an environmental planner I say it will contribute further to greenhouse gas emissions, and what's more, if you burn 'em all, they will just print some more, which will require cutting down more trees that could otherwise be retained as living organisms to usefully sequester carbon from the atmosphere. As a person seeking enlightenment, I say religious people would be best to find their own path to self realisation, and one day (if they are lucky enough to live for a sufficiently long amount of time for it to happen) they may come through the eye of the needle of enlightenment and finally realise they don't need religious doctrine any more. However, as a parent I say that there's no point in trying to force them to give up their security blankets because that will lead to resentfulness and rebellion on their part, and frustration and agony and more grey hair and wrinkles on the part of the parent. And as a sociologist I say one day it will be important for the masses (in seeking their own enlightenment) to, of their own volition, rid themselves of their opium and get off their arses in the abattoirs, fish-mongering plants and pelting and tanning factories, and unite together and assert a new world order! (But please feel welcome to stay in electron tube manufacturing plants for many many years to come, because as a lover of tube geetar amps, I will continue to need tubes). As a pragmatic beneficiary of western capitalism, I say let capitalism run its course in the meantime because nobody has yet come up with a better idea, and it most assuredly will not fail until it fails completely and utterly. And (finally) as a naturally-occurring free yogi of the spiritual, I say everything has its day in the sun before it withers and falters and is supplanted by new forms of consciousness. !

[KLA2]

"It has been said that democracy is the worst form of government except all the others that have been tried."
- Winston Churchill

I guess that is partly true of capitalism. Pure capitalism does not work well, for the majority. A form of capitalism/socialism, with powerful oversight (generally, by a government) seems to work best. Kind of like what we have in Canada (none of whose banks failed, or had to be bailed out, in the recent meltdown.) :wink:

Hard to argue with the rest.

[tubeswell]

Pure capitalism does not work well, for the majority.

On the contrary, it works so well that none of the oppressed/alienated/opiated majority can find the resources, gumption, or anything much else that might otherwise motivate them to strive to change to an alternative system. The 'majority' are arguably barely in a position to be able to tenanciously cling onto the humpty-back camel of the capitalist economy.

A form of capitalism/socialism, with powerful oversight (generally, by a government) seems to work best.

Governments in capitalist states are arguably there to serve and perpetuate the interests which sustain their capitalist states, even unto the strategems of adopting so called 'socialist' tactics if merely in order to legitimate and validate the continued hegemony of their predominant prevailing interests. (That extends to allowing sociology departments to continue to exist within universities.) 'Socialism' itself is a construct of the capitalist world.

Kind of like what we have in Canada (none of whose banks failed, or had to be bailed out, in the recent meltdown.)

Ahhh, but the banks are still there today trading (just like they are in NZ), which merely illustrates that the governments of these states will go to great lengths within their power in order to preserve and perpetuate the underlying goal of pursuit of profit at all costs, and expropriation of surplus value. Just like our government recent bailed out yet another flailing speculative bunch of profiteers (which will only serve to encourage that sort of behaviour to continue)

http://www.odt.co.nz/news/business/1253 ... f-defended

What I (who have never invested in any finance company in my life because I've never been in a position of sufficient fortune to have had the ready cash to be able to indulge in speculative investment) desperately want to understand is, how my hard-earned taxpayer money is going to line the pockets of some greedy little wankers who will (as a result of the bailout) only continue to indulge in selfish squandering, when the govt on the other hand is cutting state services:

http://www.stuff.co.nz/national/educati ... stry-union

http://www.stuff.co.nz/national/politic ... ncy-review

http://www.3news.co.nz/Govt-to-cut-hund ... fault.aspx

(The only explanation I can come up with is one that further validates my hypothesis about the motivation of capitalist state government to perpetuate the capitalist economic system. i.e.; - they did the bailout to appease the credit raters at the world bank and IMF.)

But having mouthed off all that verbal diahorrea, I will continue to pipe the capitalist tune whilst the boat still floats. If there is any future social economic and political reform in the pipeline one day, I can't see it happening in the forseeable future. The mighty free-market ain't done with us yet. As I said, I doubt anything much will change until the system is totally and utterly spent and fails in abject and dismal fashion simply because there won't be any other direction for it to go in but down the toilet onto the shit heap. Let's hope that never happens in our's or our children's, grandchildren's or great grandchildren's lifetimes.

[Enzo]

And I thought this guy was a musician.

[tubeswell]

And I thought this guy was a musician.

That too, but every once in a while I rant like a raving lunatic. I s'pose the proper place for that is the enraged forum, but I have really moved well beyond being enraged to a kind of mildly apathetic detachment. In this instance I can genuinely say I blame religion for starting it, which brings us back to doh*. :wink:

* a double-blinding metaphor for finding my way back into the original topic of the thread, and being a muso into the bargain

[Halcyon Dayz, FCD]

I definitely prefer the other Terry Jones.

I guess that is partly true of capitalism. Pure capitalism does not work well, for the majority. A form of capitalism/socialism, with powerful oversight (generally, by a government) seems to work best. Kind of like what we have in Canada (none of whose banks failed, or had to be bailed out, in the recent meltdown.) :wink:

Social Capitalism or Market Socialism; what shall we choose? :D

Pure capitalism does not work well, for the majority.

On the contrary, it works so well...

There ain't no such thing as "pure capitalism".
Never has been.

[tubeswell]

Is anything pure?

[Мастер]

I definitely prefer the other Terry Jones.

I guess that is partly true of capitalism. Pure capitalism does not work well, for the majority. A form of capitalism/socialism, with powerful oversight (generally, by a government) seems to work best. Kind of like what we have in Canada (none of whose banks failed, or had to be bailed out, in the recent meltdown.) :wink:

Social Capitalism or Market Socialism; what shall we choose? :D

A form of capitalism/socialism, with powerful ovsersight by a government, like they have in Canada, like they have in India.

There ain't no such thing as "pure capitalism".
Never has been.

Yep, capitalistic societies tend to resemble what is depicted in Adam Smith about as much as communist societies resemble what Karl Marx wrote.

[KLA2]

Thanks, Mactep. :)

What the expert said, guys. :P

[tubeswell]

Its all relative. I remember getting right into Marx when I started my first degree, and that ruined it for me when I went on to pick up 101 micro and macro economics the following year. I knew very well what answers the economics lecturers were wanting in order to get As, even tho I had been studying far more sophisticated literature that screamed at me "Adam Smith was an oversimplified moron". However I managed to hold it together through that year to get A+ average for all my course work in 101 micro and macro economics, but by exams, I was so infuriated that I couldn't take the sham any longer and answered exam questions like "what are the main causes of inflation?" with answers like "bourgeoisie expropriation of surplus value from proles whose labour has been comodified, and thus who are alienated from their means of production, because only the bourgeoisie own the means of production etc etc' and other stuff out of grundrisse and the german ideology, instead of giving pedestrian answers like 'union worker industrial action' and stuff like that which the economics lecturers were adamant was the correct thing to say. To this day I still feel vindicated (even tho' they gave me a D for my exam results in 101 micro and macro economics.) Anyway when I finished that degree, there was not much work for graduates with sociology and anthropology majors, so I went back and did a degree in land use and environmental planning, where I found bucket loads of work that has kept me busy for the last 20 years, and my forward work programme is booked out until at least 2021. But I've been argumentative about the subject of capitalism ever since. I know damn well nothing is 'pure', and my question in that regard was rhetorical. Nevertheless you look at what is happening in the world and the economy etc and constantly test what you observe against your hypothesis and make of it what conclusions you may.

[Мастер]

Thanks, Mactep. :)

What the expert said, guys. :P

Not sure you read the whole thing - there's a part you would probably like, and a part you probably wouldn't!

[Мастер]

Its all relative. I remember getting right into Marx when I started my first degree, and that ruined it for me when I went on to pick up 101 micro and macro economics the following year. I knew very well what answers the economics lecturers were wanting in order to get As, even tho I had been studying far more sophisticated literature that screamed at me "Adam Smith was an oversimplified moron. "

Just out of curiosity, how much of Adam Smith have you read?

But, I take it then you approve of this sentiment, which is from Karl Marx?

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

[KLA2]

Not sure you read the whole thing - there's a part you would probably like, and a part you probably wouldn't!

Not sure what you are referring to.

To intelligently disagree with you, I would have to read a number of thick books (without pictures) and spend many more hours studying under university greybeards.

Or, have the brownshirts grab you, and beat you up until you confess you were wrong. :P

(Where are those guys when you need them?)

Seriously, Mactep, no argument here. 8)

[tubeswell]

Its all relative. I remember getting right into Marx when I started my first degree, and that ruined it for me when I went on to pick up 101 micro and macro economics the following year. I knew very well what answers the economics lecturers were wanting in order to get As, even tho I had been studying far more sophisticated literature that screamed at me "Adam Smith was an oversimplified moron. "

Just out of curiosity, how much of Adam Smith have you read?

Only the stuff that the economics lecturers determined that we should read. Exerpts from the wealth of nations

But, I take it then you approve of this sentiment, which is from Karl Marx?

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

I never said that at all. (Are you trying to put words in my mouth that were never there?) I was relaying my youthful encounters with literature on economics, which for me at the time was deeply significant. I know very well that Marx was a bigoted chauvinist and was writing from the perspective of his time and his own hang-ups. But it would be equally short-sighted to dismiss everything he wrote because of that. Some of the thoughts he had about how surplus value is extracted in the labour-commodity relationship go a lot further to explaining how inflation comes about, than ideas which seek to locate the cause of inflation in uncooperative workers who are making unreasonable demands on employers. When I went to school in the 1960s, anything red was forbidden, and the world was in the grip of cold war. Marx's ideas were certainly not on the school curriculum, which made it all the more intriguing when I eventually went to university and found this world of ideas that I never knew existed; which were suppressed in the same way that Stalinist Russia suppressed ideas which ran against the interests of those in power in that twisted little empire.

Am I a commie? Don't be ridiculous. In my previous job I worked as a manager in a international engineering and planning consultancy firm and my main client (that I brought into the company books) was in the company top 10. I made money selling my time (and the time of the 23 hungry mouths in my department who I was responsible for finding work for), purely through finding work, soliciting contracts, elbowing other consultants out of the feeding trough and dominating my clients. I doubled the number of consultants within my local area office and delivered all my profit targets and utilisation targets, not to mention having to oversee the management and delivery of al the contracts I had solicited, some of which I had to (successfully) negotiate contract variations for when crummy employees let me down. I know full well the lengths I had to go to to fight for the crumbs that were falling off the table. That was not easy. I frequently worked 80 hours a week 7 days a week to delivery my utilisation targets and the targets of my team. Within 18 months I had 3 trips to hospital in the back of an ambulance in the middle of the night, because I was one stressed little bunny wabbit.

But even all of that sweat and blood doesn't stop me thinking that Marx was on to something significant. Eat my shorts. I still maintain that Adam Smith, as innovative as his attempts to objectify economic relationships may have been in his day and age, cannot explain inflation as well as Marx can. Inflation per se, is when you sell something for more than what it cost you to make, and all other things being equal, the thing that is most likely to give, is the labour cost in that equation.

[KLA2]

Easy, Tubes. I assure you that most on this board will never treat you or your (intelligent, supported) opinions with hostility or contempt. Certainly not Mactep. Having some expertise in this field :wink: , however, he will ask intelligent, informed questions and “hold your feet to the fire” if you espouse unsupported or questionable opinions. As it should be.

I agree with you that all the great social philosophers and economists were some right and some wrong. How much may vary, especially in the context of their times.

Since this is not an area of expertise for me, I will shut my festering gob now. :)

PS: What flavour are those shorts?

[tubeswell]

My apologies. (Ranting again.)

[Мастер]

I never said that at all. (Are you trying to put words in my mouth that were never there?)

No, I just asked if you approved of the sentiment. I thought it was pretty obvious it was a question.

But, since the question "Am I a commie?" appeared later in your post, do you feel that people who agree with the sentiment I posted are commies?

Eat my shorts.

I guess we know what you're about then.

Inflation per se, is when you sell something for more than what it cost you to make

No, that is called profit. Inflation is when the value of money declines over time. I think before you analyse the causes of something, you need to know what it is.

[tubeswell]

I never said that at all. (Are you trying to put words in my mouth that were never there?)

No, I just asked if you approved of the sentiment. I thought it was pretty obvious it was a question.

But, since the question "Am I a commie?" appeared later in your post, do you feel that people who agree with the sentiment I posted are commies?

My pardon - forgive me - I thought you were attacking me. I can't be a communist because I don't have the strength of conviction to be one. I'm too complacent.

Eat my shorts.

I guess we know what you're about then.

Yes the Simpsons are one of my all-time favourite 'toon strips. (I guess that signifies something tacky about myself.)

Inflation per se, is when you sell something for more than what it cost you to make

No, that is called profit. Inflation is when the value of money declines over time. I think before you analyse the causes of something, you need to know what it is.

Profit and inflation are flip sides of the same coin. Why does the value of money decline over time? It doesn't just decline on a whim. The quest for profit drives inflation, because in order to continue to make profit in the face of competition, there is pressure to reduce the value of the commodities used in production. Labour is the most flexible of these commodities, because it is not a raw material, rather it is the work that is required to be applied to transform the raw material into some object of value. As such, labour can be co-erced out of people who have nothing else to sell but their ability (of lack thereof) to work, on terms which they have little to bargain with on pain of starvation. Therefore not only are they undervalued for the work that they do, but they also don't own the product of their labour. Yet the person who owns the means of production is at liberty to sell the product and to then keep a portion of the revenue for themselves and give the labourer a portion of the revenue, which amounts in reality to a portion which is less in value than the realised market value of the product which they produced. In that way surplus value is expropriated out of the labourer. Yet the labourer still may have to expend the payment for their labour on buying some of the product of their labour (from their employers) for their own consumption. But as they are paid less than what the market value of the consumable is, they can afford to buy less and less. Hence the value of money declines.

Well that's my take on it in simplistic (labourer and employer archetypal) terms. I am openly willing to discuss this at length. Its slowly coming back to me in dribs and drabs and its quite a lot of fun really.

[Мастер]

My pardon - forgive me - I thought you were attacking me. I can't be a communist because I don't have the strength of conviction to be one. I'm too complacent.

I'm not attacking anyone, I was just interested in what you thought about the quote I posted. Still am.

Why does the value of money decline over time? It doesn't just decline on a whim.

No, it doesn't decline on a whim - it usually declines because there is more of it.

The quest for profit drives inflation, because in order to continue to make profit in the face of competition, there is pressure to reduce the value of the commodities used in production. Labour is the most flexible of these commodities, because it is not a raw material, rather it is the work that is required to be applied to transform the raw material into some object of value. As such, labour can be co-erced out of people who have nothing else to sell but their ability (of lack thereof) to work, on terms which they have little to bargain with on pain of starvation.

So why does the ability of labour to get a good wage decline over time? If businesses have the ability to lower wages when they like, why don't they just do it straight away?

Therefore not only are they undervalued for the work that they do

Whether they're undervalued depends on what one considers to be the correct valuation. If one takes the view that the workers ought to receive 100% of the value of what they produce, then one is also taking the view that owners of any machinery or other type facilities used in the production process ought to receive nothing.

but they also don't own the product of their labour.

Agreed, they have sold their labour to someone else, and the product of that labour now belongs to someone else.

Yet the person who owns the means of production is at liberty to sell the product and to then keep a portion of the revenue for themselves and give the labourer a portion of the revenue, which amounts in reality to a portion which is less in value than the realised market value of the product which they produced.

That is generally how it works, assuming the person who owns the means of production has been successful.

In that way surplus value is expropriated out of the labourer.

This is certainly the Marxist intepretation. Other interpretations refer to the value received for the product, but not paid to the labourers, as returns to capital (machinery, buildings, the like, used in the production process). Marx's original version of all this has been criticised very heavily in recent years, as it contradicts itself. There is a modified version of Marxian economics out there that resolves the inconsistency.

Yet the labourer still may have to expend the payment for their labour on buying some of the product of their labour (from their employers) for their own consumption.

Yes. Put simply, they have to use their wages to buy stuff, and the price they pay goes partly to other labourers as wages, and partly to people who own capital as profit.

But as they are paid less than what the market value of the consumable is, they can afford to buy less and less.

Only if the proportion they are paid decreases over time. The two have nothing to do with each other. Workers can receive a proportion of the value of their products that is less than 100%, and that is increasing over time, decreasing over time, or staying the same over time. See example below.

Hence the value of money declines.

Workers receiving a lower proportion (in the form of wages) of the value of the product they produced is consistent with inflation, deflation, or neither. Here are three scenarios, and in each of them, workers are receiving a lower proportion of the value of the product than they used to.

Code: Select all

                 This Year
        Last Year   Scenario A         Scenario B         Scenario C
Price    $100          $120               $90                $100
Wage     $ 70          $ 60               $45                $ 50
Profit   $ 30          $ 60               $45                $ 50

In all three scenarios, workers are worse off than they used to be. Last year, they could buy back 70% of what they produced. This year, in each of the three scenarios, they can buy back 50% - much less than last year. And yet Scenario A has inflation, Scenario B has deflation, and Scenario C has neither inflation nor deflation. A decrease in the proportion of wealth paid to workers does not tell us, by itself, whether there is going to be inflation or not.

The track record in most industrial countries over the past couple of hundred years has been a massive increase in wealth; here is a statement to that effect from The Communist Manifesto:

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature's forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground -- what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

Wages have not gone down, down, down; rather, the proportion of value produced that is received by workers has tended to bounce around within a narrow range. Here is a graph showing what happened in the US, Japan, and Germany from 1960 to 2005:

http://en.wikipedia.org/wiki/Wage_share

Workers have tended to receive about the same proportion of the value of their production for a long time. However, since each worker produces much, much more than they used to (combination of accumultion of capital and technological progress), their wages have gone up dramatically. If they are driving to their places of employment in an air-conditioned automobiles, well, this is something their ancestors in 1700 did not do. There can be some argument about distribution of wages - should a CEO be regarded as a worker, receiving wages just like an assembly-line worker? But still, compare the lifestyle of the average worker in 1700 vs. the average worker in 2010. And yet, since 1700, there has been massive inflation in most industrial countries, much of it occuring in the 20th century. If inflation is driven by workers receiving crummier wages, then their should have been deflation, not inflation, during the industrial revolution.

The story of ever decreasing wages is (a) not true, and (b) has nothing to do with inflation anyway. Inflation does not seem to have been the main thing on Marx's mind, but certainly he recognized that inflation had something to do with the amount of money that is produced, a point of view shared by Adam Smith.

[tubeswell]

My pardon - forgive me - I thought you were attacking me. I can't be a communist because I don't have the strength of conviction to be one. I'm too complacent.

I'm not attacking anyone, I was just interested in what you thought about the quote I posted. Still am.

I guess Marx was fond of conspiracy and hated cartels

Why does the value of money decline over time? It doesn't just decline on a whim.

No, it doesn't decline on a whim - it usually declines because there is more of it.

Indeed. Commodity exchange and property go hand in hand with alienation and exploitation. The engine room of the economy. Its been a while since I got deeply into this stuff. I'll have to dig out some of my big ole table thumping text books of words and words without pictures for a few hours to really develop this argument.

The quest for profit drives inflation, because in order to continue to make profit in the face of competition, there is pressure to reduce the value of the commodities used in production. Labour is the most flexible of these commodities, because it is not a raw material, rather it is the work that is required to be applied to transform the raw material into some object of value. As such, labour can be co-erced out of people who have nothing else to sell but their ability (of lack thereof) to work, on terms which they have little to bargain with on pain of starvation.

So why does the ability of labour to get a good wage decline over time? If businesses have the ability to lower wages when they like, why don't they just do it straight away?

They would if they could, and attempt (through lobbying their political allies) to do so at every available opportunity by undermining work conditions.

http://www.eastonbh.ac.nz/?p=319

http://www.stuff.co.nz/business/3938395 ... o-bullying

http://teu.ac.nz/2010/08/unworkable-sic ... w-changes/

etc etc

Therefore not only are they undervalued for the work that they do

Whether they're undervalued depends on what one considers to be the correct valuation. If one takes the view that the workers ought to receive 100% of the value of what they produce, then one is also taking the view that owners of any machinery or other type facilities used in the production process ought to receive nothing.

Maybe all workers should have equal access to machinery and other types of facilities used in production as employers. Then employers could do more of their own work if they want to make something. I like artisan based businesses - the people are friendlier.

In that way surplus value is expropriated out of the labourer.

This is certainly the Marxist interpretation. Other interpretations refer to the value received for the product, but not paid to the labourers, as returns to capital (machinery, buildings, the like, used in the production process). Marx's original version of all this has been criticised very heavily in recent years, as it contradicts itself. There is a modified version of Marxian economics out there that resolves the inconsistency.

Again this is one I have to dig out my old text books for. I vaguely recall many lecture notes of contradictions in Marxist theory and neo-marxist re-casting of this stuff. Maybe people are too hard on Marx. He was just another dude trying to work out how to make the world a better place. Since you obviously have the answer at your fingertips, perhaps you would like to share the beneficence of your wisdom freely in this regard?

Yet the labourer still may have to expend the payment for their labour on buying some of the product of their labour (from their employers) for their own consumption.

Yes. Put simply, they have to use their wages to buy stuff, and the price they pay goes partly to other labourers as wages, and partly to people who own capital as profit.

I have no issue with working and paying for stuff - I've done it for decades. The issue I am wary about is the one-sided relationship between those who control the means of production and those who are coerced by them because they have little or no choice.

But as they are paid less than what the market value of the consumable is, they can afford to buy less and less.

Only if the proportion they are paid decreases over time. The two have nothing to do with each other. Workers can receive a proportion of the value of their products that is less than 100%, and that is increasing over time, decreasing over time, or staying the same over time. See example below.

Hence the value of money declines.

Workers receiving a lower proportion (in the form of wages) of the value of the product they produced is consistent with inflation, deflation, or neither. Here are three scenarios, and in each of them, workers are receiving a lower proportion of the value of the product than they used to.

Code: Select all

                 This Year
        Last Year   Scenario A         Scenario B         Scenario C
Price    $100          $120               $90                $100
Wage     $ 70          $ 60               $45                $ 50
Profit   $ 30          $ 60               $45                $ 50

In all three scenarios, workers are worse off than they used to be. Last year, they could buy back 70% of what they produced. This year, in each of the three scenarios, they can buy back 50% - much less than last year. And yet Scenario A has inflation, Scenario B has deflation, and Scenario C has neither inflation nor deflation. A decrease in the proportion of wealth paid to workers does not tell us, by itself, whether there is going to be inflation or not.

The track record in most industrial countries over the past couple of hundred years has been a massive increase in wealth; here is a statement to that effect from The Communist Manifesto:

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature's forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground -- what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

Wages have not gone down, down, down; rather, the proportion of value produced that is received by workers has tended to bounce around within a narrow range. Here is a graph showing what happened in the US, Japan, and Germany from 1960 to 2005:

http://en.wikipedia.org/wiki/Wage_share

Workers have tended to receive about the same proportion of the value of their production for a long time. However, since each worker produces much, much more than they used to (combination of accumultion of capital and technological progress), their wages have gone up dramatically. If they are driving to their places of employment in an air-conditioned automobiles, well, this is something their ancestors in 1700 did not do. There can be some argument about distribution of wages - should a CEO be regarded as a worker, receiving wages just like an assembly-line worker? But still, compare the lifestyle of the average worker in 1700 vs. the average worker in 2010. And yet, since 1700, there has been massive inflation in most industrial countries, much of it occuring in the 20th century. If inflation is driven by workers receiving crummier wages, then their should have been deflation, not inflation, during the industrial revolution.

The story of ever decreasing wages is (a) not true, and (b) has nothing to do with inflation anyway. Inflation does not seem to have been the main thing on Marx's mind, but certainly he recognized that inflation had something to do with the amount of money that is produced, a point of view shared by Adam Smith.

So the conditions of workers is generally improving-to-rosy is it?. Tell that to people in the third world who have to dig through scrap heaps for a living.

http://artsytime.com/life-in-slums-of-mumbai/

The reason conditions in Japan, UK, Europe, North America, Australia and New Zealand are better than they were 200 years ago, is that the people in these countries are riding on surpluses extracted from people in much poorer areas that they have created dependencies of.

(I will leave on one side the pending discussion of what is all this 1st world over-consumption doing to the planet's finite resources).

I have to dash off to work to grapple with environmental planning problems, but I am happy to keep discussing this. These ideas are complex and take time to work through. (Also my computer is getting close to the limit of handling these multi-quotes - we may need to split this into several strands I'll have a wee think about that)

[Halcyon Dayz, FCD]

But, I take it then you approve of this sentiment, which is from Karl Marx?

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

In the game Civilization IV that is the quote you get, narrated by Leonard Nimoy, if you invent Guilds.
That tech increases productivity.

So, booyah!

Maybe all workers should have equal access to machinery and other types of facilities used in production as employers. Then employers could do more of their own work if they want to make something. I like artisan based businesses - the people are friendlier.

The question remains, who's going to pay for all that stuff? (The machinery and facilities that is.)

Also, without industrial mass production as it's backbone the world economy couldn't possibly feed 7 billion people, let alone keep them in fineries.
Artisan based production is a luxury only the most productive nations can afford.
It's post-industrial.

So the conditions of workers is generally improving-to-rosy is it?. Tell that to people in the third world who have to dig through scrap heaps for a living.

Don't knock it. That's basically what I do for a living.
It's called recycling.
People always have made a living extraction valuable resources from stuff other people throw away.
When I was a little kid there still was a guy doing the rounds with an horse-drawn cart to collect potato-peelings for pigs-feed.
That's just not cost-effective anymore.
(Potato peels now become compost or bio-gas.)

The safety and health conditions of workers in the 3rd world suck, as does their pay.
But those are still better then 200 years ago.

The reason conditions in Japan, UK, Europe, North America, Australia and New Zealand are better than they were 200 years ago, is that the people in these countries are riding on surpluses extracted from people in much poorer areas that they have created dependencies of.

That is not the reason conditions are better, that is the reason they are better then they otherwise would be.
Which is still a lot better then 1800.

The main reason workers in the industrialised world are so much better off is because their productivity has increased by several orders of magnitude.

If you want to achieve global socio-economic justice don't go around knocking industrial production and the free markets.
Those are the engines that produce the wealth that will allows us to afford it in he first place.

[Arneb]

Halcyon Dayz, I get this nagging feeling that your screen title may not be totally appropriate.

[KLA2]

OK, gents, what is FCD stand for here? I Googled it; a long list of possibilities.

[Arneb]

Friend of Charles Darwin; we asked him that same question when he had his screen name changed.

[Мастер]

I guess Marx was fond of conspiracy and hated cartels

How do you feel about that?

No, it doesn't decline on a whim - it usually declines because there is more of it.

Indeed. Commodity exchange and property go hand in hand with alienation and exploitation. The engine room of the economy. Its been a while since I got deeply into this stuff. I'll have to dig out some of my big ole table thumping text books of words and words without pictures for a few hours to really develop this argument.

You might want to incorporate the amount of money, an idea wholly absent from the last post, into your ideas about inflation. It is present in both classical and Marxian theories of inflation.

So why does the ability of labour to get a good wage decline over time? If businesses have the ability to lower wages when they like, why don't they just do it straight away?

They would if they could

I agree.

and attempt (through lobbying their political allies) to do so at every available opportunity by undermining work conditions.

Absolutely, and labour groups have counter-lobbies. How has the relative power of these two groups been changing over time? How about the wages themselves?

Maybe all workers should have equal access to machinery and other types of facilities used in production as employers. Then employers could do more of their own work if they want to make something. I like artisan based businesses - the people are friendlier.

That's a whole different thing than inflation.

In that way surplus value is expropriated out of the labourer.

This is certainly the Marxist interpretation. Other interpretations refer to the value received for the product, but not paid to the labourers, as returns to capital (machinery, buildings, the like, used in the production process). Marx's original version of all this has been criticised very heavily in recent years, as it contradicts itself. There is a modified version of Marxian economics out there that resolves the inconsistency.

Again this is one I have to dig out my old text books for. I vaguely recall many lecture notes of contradictions in Marxist theory and neo-marxist re-casting of this stuff.

Much of that took place in the 1970s.

Maybe people are too hard on Marx. He was just another dude trying to work out how to make the world a better place.

Perhaps he was, but then again, maybe Adam Smith was too. I don't think that ought to make either immune from criticism. FWIW, apart from pointing out that some of his ideas were internally inconsistent, and that subsequent revisions of his ideas have attempted to repair them, I don't think I have criticised Marx at all.

Since you obviously have the answer at your fingertips, perhaps you would like to share the beneficence of your wisdom freely in this regard?

The answer to what? The causes of inflation, or how to make the world a better place? I have more to say about one of those than the other, and have in fact been discussing one of them. It's been pretty well received, wouldn't you say?

I have no issue with working and paying for stuff - I've done it for decades. The issue I am wary about is the one-sided relationship between those who control the means of production and those who are coerced by them because they have little or no choice.

It's up to you how you want to feel about the relation between workers and owners. But, it does not inevitably lead to inflation.

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature's forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground -- what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

So the conditions of workers is generally improving-to-rosy is it?. Tell that to people in the third world who have to dig through scrap heaps for a living.

http://artsytime.com/life-in-slums-of-mumbai/

Well, I'm glad you no longer feel that style of question is offensive. Rosy? That depends on your standards. Improving - well, last two years have been rough in many places, but longer-term, definitely. It's unfortunate I don't have a time machine, if I did, I would take you to China in 1950, and China today.

How well off do you think the grandparents of the people in your picture were?

The reason conditions in Japan, UK, Europe, North America, Australia and New Zealand are better than they were 200 years ago, is that the people in these countries are riding on surpluses extracted from people in much poorer areas that they have created dependencies of.

That's a pretty neat trick, they've managed to extract more wealth from these places than existed in the whole world in 1900. Can you provide some evidence for this? Maybe some numbers?

I'm not aware of any school of economics that denies the existence of a massive increase in the amount of wealth during the industrial revolution. Marx and Engles believed it:

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature's forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground -- what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

Were they wrong?

(I will leave on one side the pending discussion of what is all this 1st world over-consumption doing to the planet's finite resources).

I think that is an extremely important issue, but it doesn't have much to do with inflation.

I have to dash off to work to grapple with environmental planning problems, but I am happy to keep discussing this. These ideas are complex and take time to work through. (Also my computer is getting close to the limit of handling these multi-quotes - we may need to split this into several strands I'll have a wee think about that)