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Posts Tagged ‘Marxian’

I recently came across a quotation from Marxist historian JD Bernal‘s 1939 work, The Social Function of Science, which is often regarded as  one of the earliest works in the field of the sociology of science.

We now see that though capitalism was essential to the early development of science, giving it, for the first time, a practical value, the human importance transcends in every way that of capitalism, and, indeed, the full development of science in the service of humanity is incompatible with the continuance of capitalism.

Bernal was interested not only in science, but also on the impact of science on the world, and the relationship between industry and scientific research. I think these questions are important for scientists (both natural and social) to continue to ask. Today, the pharmaceutical industry is a clear example; the drugs that are researched and developed will be those that will be able to provide the highest returns, meaning that they treat people with money, even if there are other drugs that could improve more lives and to a greater degree in the third world.

And this is also related to the production of economic knowledge. As the American university becomes more of an embodiment of capitalism, the type of economic knowledge produced will tend to serve the interests of capitalists. Economic theories that challenge that status quo have struggled to find acceptance in universities, and the effects are obvious in policy realm as well. The financial bailouts and other policies of the Fed and Treasury are backed by neoclassical theory; certainly an economic theory emphasized the poor would prescribe very different policies.

As universities become more capitalist, they will seek to eliminate theories that challenge them. These changes will then undermine the university’s ability to understand and serve the poor in our society. Hence there does seem to be continued relevance of Bernal’s claim that “science in the service of humanity is incompatible with the continuance of capitalism.”

[The above structure of Photosystem I, from Petra Fromme’s lab at ASU, was determined using X-ray crystallography, a technique pioneered by Bernal]

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As an owner of several Apple products, I’ve been tracking the disturbing story of working conditions inside the Foxcomm factory in China, where the iPad is assembled. People tend to forget that the relative low cost of our electronics are not just the result of technology, but also of the continued exploitation of labor. According to an undercover report,

Liu had his most interesting chats with other workers during meals. Some told him that they envied workers who are sick. They get leave approvals and can get some rest. They also discussed about accidents in the factory: One worker got his finger cut-off during production. A few workers think that the machines are cursed. They believe it’s dangerous for them to use the machines.

Another worker spoke about one of the favorite activities in the factory lines: He likes to drop stuff on the floor. Why? Workers spend achingly up to eight hours standing up, so they feel that squatting down to grab a fallen object is the most restful moment of their working day…

According to one worker, they can’t live without these dreams. They dream of becoming rich one day. Some spend part of their salaries buying lottery tickets and betting on horse races.

Of course, these working conditions would be no news if it weren’t for the wave of suicides in the factory.

Apple as well as Foxcomm executives are responding as one would expect, with stress counselors, psychiatrists, and false promises. Oh, they’re even installing a nets as deterrents.

It’s obvious to anyone that these are band-aids and aren’t addressing the root problem. Of course, wage increases or better working conditions wouldn’t accomplish that either. The fundamental problem is that in industrial capitalism, workers are alienated from the fruits their labor. These psychological damanges should surprise no one, as Karl Marx saw this alienation as a systemic part of capitalism. The exploitation that inherently occurs along with it certainly reduces the workers’ material standard of living, but that’s only half the problem. The idea that these conditions are unique to Apple, Foxcomm, or China is simply naive.

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When I attended the fiscal sustainability counter-conference, much of the discussion was theoretical and technical and avoided normative or political conjecture. All of the panelists were aware of the political landscape for deficity dovery, and were even more aware of the implications of deficit reduction for the poor and unemployed. However, until reading Rick Wolff’s latest, I don’t think I really grasped the political meaning of the deficit debate and how skewed it is.

In today’s class-divided societies, classes differ over what governments should do and who should pay the taxes. Governments in such societies often turn to borrowing — which produces national debts — as ways to defer and postpone the political problems of resolving class struggles focused on the state…

Employers and employees struggle everywhere over what activities the government should and should not perform.  Employers want governments to support and enhance the profits they seek (build and secure the transportation and communication infrastructures they want, educate their workers, protect their markets, enforce their contracts in courts, etc.).  Employees, in contrast, want the government to support their incomes, families, and standards of living…

The two sides’ relative strengths — their organizations and resources — usually determine the patterns of government expenditures and what portion of the tax bill each side pays.  Rarely employers and employees agree on these contentious issues…

Governments fear the political costs of going so far in placating one side that they risk being ousted from power by the other side.  Borrowing thus eases their problems at least temporarily…

Of course, lenders to governments come chiefly from employers, not employees.  Lenders are, of course, complicit in building up national debts because they collect most of the interest payments from the borrowing governments.  From the employers’ perspective, the national debt often looks like an attractive lesser evil…

Lenders to governments understand that class struggles postponed may thereby be sharpened…

The lenders therefore began refusing to lend any more to Greece (or even to roll over debt coming due) or they demanded much higher interest rates.  In effect, lenders demanded that the Greek government either tax employees more or else cut government spending on employees to free up money to service Greece’s national debt…

The moral of the story of class struggles and national debts is this: government borrowing is capitalism’s very employer-partisan way out from a political dead end…Americans will confront the same basic situation as the immense and growing US national debt brings its lenders to a similar crossroads.

There’s a key difference between Wolff and the deficit dove crowd- the doves, drawing on Modern Monetary Theory, believe that there aren’t limits to government’s borrowing capabilities, at least not for advanced economies. Wolff, however, assumes that the deficit, and the debt in turn, will eventually reach a breaking point, even in the US, the reserve currency issuer. I’m not in a place to judge who is right here. However, I really like Wolff’s idea about viewing deficits as a way of deferring class struggle until the inevitable clash. It mirrors his argument about how consumer borrowing delayed class struggle over stagnating wages, and I think, helps us understand the present political economy.

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For the benefit of those who have not yet begun to follow his blog, here’s David Ruccio taking my bait on Sen’s recasting of Smith. I have just a small comment below.

Mainstream economists cite Adam Smith’s Wealth of Nations as the founding text of modern economics. But, as I’ve mentioned before, while they often cite the Wealth of Nations, they rarely read it, and they certainly don’t read it in conjunction with Smith’s other great book of moral philosophy, the Theory of Moral Sentiments.

That’s an error Amartya Sen sets out to correct—in his most recent “Manifesto”and as far back as his lectures On Ethics and Economics. Sen reads Smith against the grain of contemporary mainstream economic thought, both inside the academy (in the form of neoclassical economics, who celebrate free-market capitalism) and outside (for example, the views of right-wing politicians and bankers, who rail against any and all government interventions into markets).

And, for the most part, Sen gets Smith right: It’s important to read the Wealth of Nations in conjunction with and against the background of the Theory of Moral Sentiments. Capitalist markets operate not only on the basis of self-interest but other motives, such as humanity, justice, generosity, and public spirit. Smith was in favor of government programs, such as free public education and poverty relief (after discussing, in some detail, the mind-numbing drudgery of factory work), and suspicious of capitalists’ arguments that their projects were always in the public interest. He was opposed to colonial restrictions (although not against the civilizing mission, for the rest of the planet outside Western Europe, of capitalist markets). And so on.

That’s why Sen finds Smith’s vision to have “a remarkably current ring.” Capitalist markets need trust and sympathy, in addition to self-interest; capitalist markets create class divisions and are not an Eden of equal opportunity. It’s a testament to how much toward the authoritarian Right mainstream economic thought has moved—in terms both of celebrating free markets and of attempting to eliminate all other forms of economic theory—that Sen’s Smith appears downright progressive.

But, as Nick notes, there is much that is missing from or overlooked within Smith’s attack on mercantilism and celebration of the rise of commercial capitalism. And much that Marx was critical of when he read Smith in the British Museum and started to write Capital.

Let me mention two such criticisms. First, he took issue with the idea that there was a natural and universal “propensity to truck, barter, and exchange one thing for another.” Instead, Marx argued (especially in the section on commodity fetishism) that the set of characteristics that allowed human beings to engage in commodity exchange were a historical and social creation. There was nothing natural and universal about them.

Second, Marx criticized Smith’s theory of value. While Marx engaged Smith (and classical political economy generally) on the basis of the labor theory of value (which, of course, neoclassical economists rejected, in the late-nineteenth century), he showed that the adding-up theory of value (according to which wages, profits, and rents could be explained as the rewards to separate factors of production, labor, capital, and land) could not explain the origin of profits as surplus-value. Once Marx distinguished labor from labor power, he was able to demonstrate that wages came from necessary labor and the rest, profits and rent, from surplus labor. Capitalists appropriated surplus-value (some of which were then retained as profits, the rest distributed to landlords) for doing nothing. That became the basis of Marx’s theory of exploitation.

In general terms, Marx started his analysis where Smith left off, with the wealth of nations. Here are the first two sentences of Capital:

The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.

That’s the problem with Sen’s economic manifesto. He stops with Smith instead of starting there; he attempts to apply Smith to our times instead of developing a critique of Smith for our times. He wants to add trust and sympathy to unbridled capitalism, and not to take the next step—of understanding capital as a social relationship, and of abolishing it.

I’ll just add that most economists only use Smith as a philosophical, not methodological, starting point. Smith’s theory of value has virtually no bearing on the economics done today- it’s been replaced with a utility/profit maximization framework, which warrants a post for another day (hopefully Wednesday). Why bother with the critique when you’re not really bothering with the original text itself?

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This one is almost too easy. Krugman charges freshwater macroeconomists with epistemic closure. He writes,

Ask a grad student at Princeton or MIT, “How would a new classical macro guy answer this?”, and the student can do it; classes at freshwater departments teach real business cycle theory, and good students can tell you what it says even if their professors have a different view.

But students at freshwater schools — or, alas, many of their professors — can’t return the favor. It’s been painfully obvious since the crisis broke that people at Minnesota, or even many people at Chicago, have no idea what New Keynesian economics is all about. I don’t mean they disagree, or think it’s garbage, they literally have no idea what the concepts are. And that’s why they reinvent 80-year-old fallacies when they try to discuss the subject.

It’s interesting to ask why this sort of cocooning is a feature of the right but not the left. But it’s very real, and has a dire impact on economic as well as political discourse.

Of course, we can just as easily replace salt-water students in this analogy with students of heterodox economics/political economy, and freshwater economics with the whole mainstream. For instance, ask a post-Keynesian or a Marxian to hold court on IS/LM, and they can do it easily. This is not because these economists are heroic; instead, they realize that is essential to build a counter-theory by learning the original theory and its critique.

My course in Marxian political economy began with a reschooling in intermediate micro and macro- we actually learned this stuff better a second time by being forced to think critically about it. However, ask Krugman or his friends at Princeton and MIT about the starting point for Marx’s critique (hint: use-value versus exchange value) or Polanyi’s (hint: embeddedness) and I fear their eyes might glaze over. If the mainstream response to my argument is that the aforementioned critiques are not “serious economics,” well, we no longer have anything to talk about.

P.S. (private message for David Ruccio)- since I’ve dispensed with this one easily enough, hopefully you can take some time to follow up on my post re: Sen/Smith.

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Alan Greenspan will present a paper at Brookings tomorrow (I didn’t get an invite) on the causes of the financial crisis. According to the New York Times, Greenspan acknowledges that there was a bubble, but says that there would have been no way to identify it or pop it. Instead, he writes,

Unless there is a societal choice to abandon dynamic markets and leverage for some form of central planning, I fear that preventing bubbles will in the end turn out to be infeasible. Assuaging their aftermath seems the best we can hope for.

Isn’t this similar to the argument that Karl Marx made 160 years ago? Or Minsky 60 years ago?

Greenspan’s solution is certainly different, and he doesn’t believe that the contradictions that necessarily cause these bubbles will also cause capitalism to end. However, the diagnosis is distinctly Marxian/Minskyian. It certainly doesn’t seem Hayekian.

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Via Meteor Blades, Guernica has an article about how the social division of labor arose and how we might move beyond it as we recover from the current economic crisis.

Instead of putting forward, as so many of our elected officials, policy analysts, pundits, and journalists predictably do, a picture of our world that is essentially the same, except that it is somehow “green” and somehow peopled with college-educated or better “trained” workers, we need to focus our attention on the more pressing and more basic question of what kinds of work people should be expected to devote their lives to doing. The last time this question—the question of meaningful, satisfying, dignified labor—got a public hearing was in the nineteen sixties and seventies, with Harry Braverman’s Labor and Monopoly Capital being the intellectual high-water mark. What Braverman convincingly demonstrated is that there is nothing natural or inevitable about our system of labor; that it came about through conscious decisions made by industrial capitalists in the name of profit for them alone…

Rochelle Gurstein, the author, makes an explicit connection with this division and the beginning of environmental issues:

We must also keep sight of the historical fact that not only did monopoly capital and the division of labor emerge together in the last decades of the nineteenth century, but so, too, did those alarming “plague clouds” and a sun that was “blanched” rather than “reddened”—those first unmistakable signs of industrial pollution that John Ruskin decried in a lecture entitled “The Storm-Cloud of the Nineteenth Century” (1884). To address one of these historical developments without the other two is to ensure that we will never move beyond the narrow confines of current thinking…

The problem, however, is that our current way of thinking about jobs is deeply ingrained:

It is worth recalling the profusion of skilled practices that once existed…Over the last century and a half, however, the social division of labor penetrated ever more dimensions of daily life…Thus it has become increasingly difficult to imagine how to revive what has vanished both from practice and from memory, let alone how a world might come into being where the greater number of things we use or, better yet—to suggest the enormous change in consciousness that is required—things we enjoy using in our daily life are made by people who enjoy making them.

Is the organic and local food movement a good analogy for a way out?

It seems to me that a good starting point for how to bring about a similar revolution in thinking and practice when it comes to work is the principle that just as monoculture is disastrous for our health and security when it comes to food, lack of variety in work is just as disastrous for our well-being and happiness. The ideology of ceaseless economic growth, made possible by the division of labor that has filled our world with ugly things from the Styrofoam cup to smog in our skies, has always been vapid and destructive. Now, with the implosion of the global financial system, the American way of life as model for global expansion stands exposed as unsustainable as well.

There really are limits to our vision of what the world can look like in the future. It’s relatively easy to imagine what our world might look like in 5 years, but 50 years off is an entirely different story. Most people, myself included, get a headache when confronted with the issues presented by “futurists.” However, as cheesy as this sounds, (and copying from a World Social Forum’s slogan), another world is possible. Perhaps the co-op movement, which I am very excited about, holds some promise for a rethinking of the social division. Worker-led appropriation and distribution of surplus is radical enough, but what if the role of “worker” is rethought entirely as well? I’m not just talking about rotating folks through different assembly-piece jobs, but something deeper.

In this regard, I’m reminded of a recent episode of The Office, which has unintentionally uncovered a number of deep truths about work throughout its run. In this particular instance, a warehouse worker (the head of the warehouse), makes a suggestion about how to implement a new inventory system, including a sketch of how it would work. His boss scoffs (there’s also a racial tension, as the boss is white, but the warehouse worker is black), but the boss’ new boss is impressed and gives the warehouse head an office upstairs.

It’s a trite example, but it underscores the improtance of subsidiarity, that those closest to the impact of a decision should be involved in making it. In fact, deeper principles like subsidiarity or sustainability might provide the way forward for this rethinking. We don’t know what the world will look like in 50 years, but we do know the basic principles around which it should be structured. Better yet, we can apply these principles in a citizen-led movement that doesn’t require government policy, which Gurstein points out is quite tone-deaf to these concerns. That gives me some hope.

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