The Problem of Marxism

That guy doesn’t look so bad. But was he???

The spectrum of feels about Karl Marx runs approximately between:

(a) advanced meta-systemic thinker who was ethically driven to explore structural pathways that open into a post-capitalist civilization

(b) godless, immature reactionary whose misguided economic theories and Hegelian fantasies of predicting the future led directly to the greatest genocides in human history.

Was he either? Both? In-between? Something else entirely???

To be honest, I’m not entirely sure. I probably know a lot more about Groucho than Karl. It seems clear to me that most great thinkers are misunderstood by both their critics and their advocates — so I would not be surprised if the positions attributed to Marx turned out to be the opposite of how he is discussed both publically and academically. Like most people, I sort of skimmed the Communist Manifesto and mixed that with my personal experience of people who like to rant about “Marxism.”

Add a dash of horrible crimes and dehumanizing environments generated by authoritarian regimes who have called themselves Marxist, Communist or Socialist. But then, maybe, counterbalance that with a dash of Dalai Lama, Martin Luther King, Bernie Sander and Richard Wolff. And maybe Star Trek? That’s quite a melange!

Did I carefully read and re-read Das Kapital or Marx’s later notebooks? 

Of course not.

However, I am interested in a number of topics that I associate with Marx. I would like to have a deeper understanding of how numbers enter the economy and what it means to generate profit. Clearly, certain “computations” or “exchange procedures” produce predictable results — quite regardless of the morality and free choice of individuals — when you run them millions of times. There is a collective drift to any type of economy or social system. What is the inevitable drift of modern economies? We know they have alleviated poverty and stimulated much technological innovation but they also seem to have caused forms of poverty, extreme inequality and retarded lots of technological innovations. How should that be evaluated? Which things should be included in the evaluation?

What are the consequences of different ways of redistributing profits? And who should get to decide? Is private corporate ownership, boards of directors and cabals of major shareholders not suspiciously similar to dictators, aristocrats and centralized administrators? Where is there no work-democracy?

I am also curious about the optimal threshold at which something should be considered public. The problem of the Commons haunts me. I am very suspicious about the way in which the original laws granting a few years of copyright to innovators has become bloated and extended into a corporately-controlled, financialist betting-market of “intellectual properties.” Does the internet need to be socialized at this point? Under what conditions of public use and need do we decide that the means of production can no longer be simply used for private enrichment? How big is too big?

And because I think societies should be socialist enough to maximize multidimensional individual liberty, I also wish I knew more about how socio-economic change actually happens. If it is the case that the transformation into a truly new, benign, dynamic GameB economy first requires a stable, up-to-date, antifragile mixture of socialism and capitalism — how we even make that simple, preliminary shift? Surely, the outdated, self-serving, neoliberal centrist institutions are not going to relinquish their widely exaggerated profits and legislative control just to satisfy the needs and demands of the citizens? Especially if they can keep the citizens highly polarized on cultural issues and deluded by unstable, mass events in an area of inadequate sensemaking…

I’m willing to bet that these few areas of my thinking could be clarified, positively or negatively, if I understood more about Marx’s thinking. It’s only a question of how much time and energy I am willing to put into such a task.

At the moment, I am willing to chew on philosopher Martin Hagglund’s summaries of Marx, both his explicit and implicit thought, in the book This Life. That may at least take me on further step in my understanding. I will start by probing Marx and end up back at Hagglund.

The Critique of Capitalism

So we are dealing with a transcend-and-include critique of so-called “capitalism.” That is to say that Marx appreciates the modern economy and wants it to fulfill its destiny, make good on its promises & overcome its inner structural contradictions. I think Marx likes the freedom that technological innovation provides. He is interested in the value of individual time that comes along with the shift from slavery to wage-labor. He seems to agree that free agents exchanging quantified goods and services is an excellent way to decentralize social decision-making. And he wants people to do meaningful work, largely decided upon by workers themselves, that creates general prosperity. So far, so good.

Again, I’m citing the bits that I might be able to get behind in order to sympathetically explore his technical critique of how modern economies operate independently of individual choices and morals.

That technical critique seems to begin with the question of profit. It is actually a disarmingly simple inquiry. How does profit enter the economy? Where does it come from? Essentially — why doesn’t the amount of wealth at the end just equal the amount of wealth that went into the process? How does the equation produce MORE?

The process of capitalism involves initial investors taking a risk incentivized by the possibility of getting more than they put in. The process they set up looks like a bunch of folks doing work to turn a bunch of stuff into products or services and then convincing someone else to buy it or rent it. They recoup their investment, keep investing in materials, pay wages, pay taxes, and pocket all the extra. If there is enough extra then they hire lobbyists and politicians to start distorting the legal system in their favor.

Where in this process does the profit enter?

According to (my admittedly poor grasp on) Marx, the profit cannot really enter though the stuff. The materials and infrastructure get used up and need to be replenished. It comes in & goes out without gaining intrinsic value. The 10 items I need to make the widget all just go into the widget when it leaves. A balance. Probably less than a balance because of waste, inefficiency, depreciation. It probably takes me 10 of “materials” in order to end up with a product that contains only 8 of the materials. The rest I have to clean up and discard.

Does the extra come from the consumer? Well, not if he pays what the product is worth. That would be kind of a flat transaction. If I give you 100 credits for 100 credits worth of beans then… we should break even. Admittedly, this is contextually dependent because I have to want beans and not be able to get them easily in some other fashion. However, that doesn’t necessarily refute Marx — it just means that you have to do the calculations relativistically (just like in physics).

So the extra could appear when we charge the customer (a little or a lot) more than the product is worth. Worth to the general economy. If the price exceeds the value without driving off the consumer then there can be profit.

The other place we can get extra is from the worker. And let’s just say that we mean all the workers. The boss is also a worker, etc.

Workers trades labor-time for credits. He or she is converting some of their (supposedly) free-time into labor-time and, through contracts and laws, receives back the value of their time. This is roughly how wages work. And Marx, like the other classical economists, is thinking of a generic quantity (the averate socially necessary labor time) rather than the specific details of how much any one person can get done in an hour.

The extra could enter here.

If an hour of your time is worth 20 credits (on average) and I agree to pay your 15 credits per hour then I’m getting more than I’m paying.

Nothing too weird or radical about all that. Of course if you “have to” make a profit then you have to be paying less than you are getting. Undervaluing is the key to have an excess of value at the end. If I pay a little than things are worth then I end up with a little more at the end.

Totally reasonable. That’s business. But what does it mean overall and in the long term? It means that profit is basically directly proportion to underpaying workers OR screwing the customer. Profit enters the equation if the administrators of the capitalist process pay people less than their time is worth AND/OR charge willing customers more than the objective value of the item.

More profit, under capitalism, means that workers and customers are getting more undervalued. That’s the radical sounding conclusion. And it doesn’t seem too far off the mark. The GDP and Wall Street seem to go up while proportional wealth of individual citizens declines.

Now, a shrewd observer will of course notice that you can sidestep this criticize by doubling down on the subjective theory of value. You just say that nothing has any real value except for what people are willing to do for it. And then there is no gap between what you get paid and what your time is worth. There is no gap between what you pay and what the service is worth. Essentially, no one can ever get screwed if use a kind of postmodern flatting of all value into subjective determinations.

That’s been the governing logic of the modern economy for a century or more. Infinite horizons for profit and the biggest corporations in the world are advertising agencies (Google, Facebook, etc.) who help other corporations to deliberately manipulate your subjective willingness to pay.

That shift can obviously go a long way. However, it doesn’t actually eliminate the problem of objective value. There are only so many actual resources that we can process into goods and services. There are only so many hours in a day for workers to work. There are negative material and spiritual consequences in increasingly unequal societies. There are all kinds of “external costs” that don’t get paid. It is also the case that large capital enterprises still behave as though they are trying to exploit the workers and consumers. Why else would you close an American factory and move to another country where it is legally permissible to pay workers much less for their time?

As a result, we see capitalism blossom into hybrids of socialism-capitalism. A successful battle was waged to get weekends, non-toxic working conditions, legal protections for workers and customers, etc. These are ongoing and shifting conditions. Freedoms tend to start receding as soon as people stop fighting for them.

WHAT ELSE IS POSSIBLE?

At the beginning of the 21st century, the argument is usually between Nordic style capitalism in which profits are redistributed to benefit the freedom of citizens and American style capitalism in which profits are redistributed to create a class of wealthy elites who capture the mainstream media and legislatures. Both systems (and in fact every nature) are a mixture of socialism and capitalism with different degrees of success. Both of them require capitalism to thrive in order to have the profits in order redistribute.

This is where Hagglund tries to extend Marx. He thinks that, although a smarter redistributive “socialized” capitalism is a good, pragmatic and moral shift, nonetheless it still relies on the same basic calculation. And that calculation, in keeping with the rest of Hagglund’s philosophy of finite time, is that the profit for the overall economy are always proportional to the amount of average freetime being converted into labor-time and then undervalued. He would like to flip that. Why could not wealth be calculated by the amount of labor-time that is converted into free(dom) time?

Of course, Hagglund does not provide a metric to convert this into quantities….