Capitalist reality

Since its establishment capitalists have identified two key elements of class power: mobilization of public opinion and control of the State. The masters of capital have taught the working class a priceless lesson. You will not get what you want unless you mobilize in order to capture State power, i.e. power to turn the State into one whose dominant objective is to further the interests of the working population. It’s not impossible; it only looks that way. To secure class interests the goal is a political one.

At no point in history was capitalism able to operate "profitably" without first committing a massive theft of resources. In England this was termed The Enclosures and began when the wealthy wanted to export wool to Spain. They enclosed the commons where the peasantry traditionally could obtain wood and water and grow subsistence crops. This process continued and was repeated many times. The conquest of the Americas and Australasia can be interpreted as the greatest enclosure in human history. The Enclosures tells us: Private wealth comes from the enclosure of the common wealth via state intervention on the side of the incipient capitalist class. In other words, state sanctioned robbery for private benefit. The state is not a neutral actor. David Harvey calls this process "accumulation by dispossession." It goes on today all the time. Capital has always needed and used the state to fix the process in their favor and to murder and remove inconvenient people impeding the process of (as Marx termed it) primitive accumulation.

Knowing this is important when debating the right libertarians (or propertarians) about capitalism. Libertarians claim that what we have today is a form of corrupted capitalism. We just need to get the "state out of the way." We just need to get back the "genuine" capitalism of yore. But history shows us that that corruption was enabled by the state and christened the dawn of the capitalist era. The role of the state is key to the profitability of capital. There is no uncorrupted capitalist past to go back to. The modern day propertarian libertarians represent the interests of small capital, that is, the petit bourgeoisie. This pretty much explains their ideology. They oppose the power of big capital and its control over the state (that's where their program seems to coalesce with the reformist left). But their program is attached to a capitalism that never existed. It has never been the case that small capital was hegemonic. It is big capital that makes the rules by which the small capitalist plays. The libertarians use the language of "freedom" and "liberty" and individual entrepreneurship to build an ideological framework to build a mass base for what is really a reactionary program. They want a share of the action that big business enjoys. We are a cooperative species, living in communities and with complex social relationships. "Running our own lives" as a proposed response to social issues is the problem and can never be the solution.

It is true that with class societies such as slavery and feudalism, we were severely exploited and once capitalism emerged we became “free,” - free of what allowed us to live, land and tools. To survive, we were forced to become wage laborers.  In capitalism our capacity to work thus became a commodity, something bought and sold. The buyers, our employers, owned this capacity just as they owned the buildings, and like any privately owned property, the owners were legally free to use our labor power as they saw fit.

Our bosses hired managers who had one goal — to see to it that their companies made as much money as possible. Then the capitalists took the profits and expanded their businesses. To make these things happen, they did whatever they could to convert as much of our labor power as possible into actual work effort. Capitalists herded us into factories, so that they could watch us and make sure we worked with due diligence for as long as possible each day. Factory whistles told us when to begin and when to end our daily labors; failure to obey their commanding sounds resulted in us being disciplined or fired. The managers who observed us discovered that dividing tasks into simpler details made us more efficient. Why not, they reasoned, assign different workers to each detail, and in this way economize on skilled labor and lower the overall cost of producing a pair of shoes, a straight pin, or a piece of meat. When they had to, they hired women and children to do the least skilled jobs; they got the kids from orphanages when we wouldn’t send our children into the dark, satanic mills. Repetitive detail work lent itself to the introduction of machinery. Soon series of mechanically connected machines were  configured into assembly lines. These controlled more completely the pace and intensity of our work. In Karl Marx’s famous words, we became “appendages to the machines.”

The great capitalists organized the markets in which we toiled so that core firms—automobile manufacturing plants, for example—were surrounded by parts supplier plants—such as those producing automobile steering assemblies. The supplier companies delivered the parts “just-in-time,” that is, only when needed by the core companies, thus saving money on inventories, storage space, and, most importantly, our labor. Employers also used modern electronic technology and the enormous pool of underutilized labor worldwide to offshore and outsource as much production as possible to places with lower wages. They used their tremendous political power to get governments to do their bidding: through laws, subsidies, tax breaks, and austerity measures that raised our economic insecurity.

 In this richest of countries, nearly 28 percent of all jobs pay a wage that, with full-time, year-round work, would not support a family of four at the meager official poverty level of income ($23,021 in 2011). Wages have stagnated in terms of purchasing power for the past forty years; for production and nonsupervisory private sector workers they are barely higher today than in 1973. Fewer and fewer of us have pensions other than social security, which itself has become less generous. The same can be said for health care, paid vacations and holidays, and paid leaves, none of which are legally mandated. Unemployment and part-time work threaten all of us, and insufficient employment is made more likely both by the control mechanisms described above (for example, the job displacement effects of mechanization and outsourcing) and the greater likelihood of financial meltdowns in the global economy.

 Capitalists use whatever legal and political entities they can bend to their will. The powers of the U.S. government and most state governments are bought. This is also true for most governments in the world and those that don't knuckle under are subject to military attack carried out by state power; the  government provides public and private thugs for capitalist enforcement actions. Capitalism lives on exploitation, destroys in order to expand endlessly and devours mindlessly anything in its path in order to grow without bounds. Socialists challenge those who deny the existence of an economic class division. We are fundamentally and increasingly a world divided between haves and have-nots. We have resisted control when we could. But whether we did or not, our work became ever more controlled and stressful.

Adapted from here

LibCaps

Individualism, libertarianism, mutiualism
Capitalism’s problems are often isolated as single issues to obscure the flaws of the entire system. Capitalism is identified with private control of markets organized on  profit and loss economics.

Right Libertarians, or more accurately, Propertarians, espouse not liberty but wage slavery. Capitalism is capital accumulation. Capitalism breeds inequality

“From what source did profit originate?" Knowing this would certainly give us a better understanding of how our existing capital economy works and maybe how the economy might work under conditions of greater freedom.

Profit at its most basic is the difference between the money a business obtains from the sale of its products and the money it has to spend on producing them. Profit arises from capitalist firms employing wage labour selling goods but only having to pay their employees the value of their labour-power, which is less. The need to accumulate capital out of surplus value is the driving force of capitalism. It stems from the economic competition between enterprises which compels each enterprise to increase their market competitiveness or succumb to superior competition and go bankrupt. So, increasing the amount of capital at their disposal to invest in more productive technologies means increasing the amount of surplus value extracted from their workforce which in turn means, among other things, holding down their costs, including their labour costs i.e. our wages!

One of Marx’s crucial discoveries in the field of political economy was that the working class of wage and salary earners gets paid less than the value of the goods it creates, the difference being a surplus value which accrues to the owning class in the form of ground rent, interest and profit. Capitalism turned human labour power into a commodity – something bought and sold. When capitalists buy a worker’s labour they buy the worker’s capacity to work for a full day. Wages are set, however, like every other commodity, by the value of labour-power needed to reproduce them, which in the case of labour is the value of food, clothing, etc. needed to keep the worker in a fit condition to work. But the value of ‘labour power’ is different from the value created by the worker’s labour and this difference, called surplus value, belongs to the capitalist. The working day under capitalism therefore divides into two parts; ‘necessary labour’ when the workers actually earns what they are paid in wages, and ‘surplus labour’ which is the time spent producing ‘surplus value’ for the capitalist employer. The aim of capitalist production is the production of surplus value. The new value added by labour in the process of production to the previously existing value of the raw and other materials is divided into wages and surplus value, which goes to the capitalist employer and is the source of profit. Profits are made in the sphere of production but only “realised” in the market. What is so vital about profit that makes this necessary? It is the source of the capitalist’s capital. The more capital they can accumulate out of the profits accruing to them the more effectively can they compete–by investing in more productive technologies to undercut their competitors–and thus claim a larger share of the market for themselves. If they did not do this then their competitors would, and could knock them out of business. Economic competition between enterprises fuels the drive towards capital accumulation. This in turn necessitates profit maximisation which expresses itself as a continuous downward pressure on wages (reinforced by competition between workers on the labour market)

We’re the ones who build things, make things, provide services, make things work, provide the ideas. But though we build the world around us, it does not belong to us. Everything that has been built around us is the result of our work and yet we don’t work for ourselves. We produce not for ourselves, but at the behest’s and whims of others. The worker is compelled to labour for the purpose of producing something to satisfy the wants of others who, holding the things necessary for his life, thereby control him. He is, therefore, still a slave.We are the ones who are told what to produce, how to produce it, how much, and how fast.We are the ones who receive a paycheque, be it high or low, not for selling what we produce but for selling our power to work. With that paycheque we try to buy back what we make. The source of someone else’s profits comes from our work. Capitalism is based on wage-labour and if a theoretical non-capitalist market economy was a reality it would have to be based on self-employed farmers and artisans. It would also have to be an economy based on handicraft rather than industrial production.(The reason for this is that where there is industrial production the work involved in turning the raw materials into a finished product is no longer individual, but collective.)

This would bring some inevitable consequences.

Industrial production can produce goods at a lower cost per unit than handicraft production, with complete laissez-faire, competition would eliminate most of the independent, self-employed artisans. In other words, industry would begin to be concentrated into the hands of the firms employing industrial methods of production. With complete laissez-faire, competition would result in those firms which employed the most productive machinery winning out against those employing out of date and so less productive machinery. So, there would be a tendency towards a yet greater concentration of industry into the hands of the big firms. What about the displaced independent artisans and the members of bankrupt workers’ co-operatives, some may ask? How would they get a living? Would they not in fact be obliged to sell their skills to the firms that had won out in the battle of competition? But if wage labour appeared then so would profits and exploitation. If these profits were to be shared but the continuing competitive pressures would oblige them to give priority to investing them in new, more productive machinery so as to be able to stay in business and not go bankrupt themselves. So even if it were possible to go back to the sort of multi “free” market economy, the tendency would be for capitalism to develop again. Examples being the kibbutzim and the Mennonites communities which have begun to employ wage labour and orient their production towards making profits and accumulating these as new capital.

Private ownership originally meant the ownership of industry by private individuals. But, while this may have been the case in the days of Adam Smith, this hasn’t been the predominant form of ownership since the introduction and rapid spread in the second half of the 19th century of what in England was called a “limited company” and in America a “corporation”. A limited company is a separate legal entity in its own right. It is the company, the corporation, that owns the assets, the shareholders owning as a collective group not as individuals. This means that they are only personally liable, if the company goes bankrupt, for the amount of their shareholding, not their total wealth. Hence the name “limited liability company”. In the late 1860s, the 14th Amendment to the US Constitution recognised the slave as having human rights, the nascent corporate elite of the time had their lawyers stake a claim to the same rights with the Supreme Court. They fought and won, and the state henceforth recognised the corporation as a human being, a person in law, with the same right to life, liberty and property.

So, as well as private ownership it would be more accurate to speak of capitalism as nowadays involving company or corporate ownership. And, indeed, some in the anti-capitalist movement take this into account by talking of “corporate capitalism”. Which is OK as far as it goes. Only it doesn’t go far enough. The key features of capitalism is production for profit. The motive for producing things under capitalism is to make a profit. The “Profit System” is another very good name for capitalism But from another angle, capitalism could also be called the “Wages System”. The key market in capitalism is the labour market, where workers are forced to earn their living by selling their labour power to an employer.

Capitalism is an economic system where, under pressure from the market, profits are accumulated as further capital, i.e. as money invested in production with a view to making further profits. This is not a matter of the individual choice of those in control of capitalist production – it’s not due to their personal greed or inhumanity – it’s something forced on them by the operation of the system. And which operates irrespective of whether a particular economic unit is the property of an individual, a limited company, the state or even of a workers’ cooperative. The capitalist system is left unscathed. Nowhere is the market-driven profit system as such challenged. Nowhere is the “can’t pay, can’t have” society we have that consigns the greater portion of the population of the planet to lives of abject misery condemned. Capitalism is taken for granted and all that is being asked in the end is the end of corporations. It is just the demand for wider democracy and fairer trading conditions while allowing capitalism to carry on perpetrating every social ill that plagues us.

Let’s clarify what is meant by markets.

It was with the emergence of the capitalist system that society lost its direct control of its productive resources. In previous societies, it was often the case that production was at near maximum capacity given the technology and resources available and this determined what could be distributed. In times of good harvests the whole community could benefit in some shape or form. But with the development of the capitalist system this was eroded as what is produced depends crucially on what can be sold. This means that distribution through sale in the markets determines production and this is always less than what could be produced.

Capitalism is a market economy, but not a simple market economy. A key difference of course is that under capitalism production is not carried out by self-employed producers but wage and salary workers employed by business enterprises. In other words, by profits we mean income that flows to the owner of a workplace or land who hires others to do the work. In other words, under capitalism, the producers have become separated from the means of production. This makes all the difference.

Marx explained the difference when he said that what happens in a simple market economy is that the producers brought to market a product of a certain value which they sell for money in order to buy another product or products of equal value. The economic circuit is commodity-money-commodity (C-M-C), the aim being to end up with a basket of useful things. Under capitalism the economic circuit is different. A capitalist sets out with a sum of money which they use to buy commodities (factory buildings, raw materials, working skills) that can be used to produce other commodities with the aim of ending up, after these other commodities have been sold, with more money than they started off with. So the circuit is now money-commodities-more money (M-C-M+).

Capitalist exploitation occurs as a result of the normal operation of market forces. Capitalism is an economic system of capital accumulation out of profits. This is its dynamic. Profits are made by competing firms which, in order to remain competitive, have to re-invest most of them in new, more productive machinery and equipment. The result is the accumulation of a greater and greater stock of productive equipment used to make profits, or capital. Capitalism is the system of capital accumulation and is derived from the surplus value produced by the class of wage workers. It is the workers who produce the wealth, and the capitalists who make their profits from our unpaid labour.

Market capacity is inherently unpredictable. If too many goods are produced for a market and they remain unsold, a crisis and recession may occur with reduced production, increased unemployment, bankruptcies, and large scale writing-off of capital values. Despite the many attempts that have been made, no theory of economic management has ever been able to predict or control the anarchic conditions of the market system. This is rule by market forces which serve minority interests and which generate the insecurities, crises and conflicts that shape the way we live. The fact that we have great powers of production that cannot be organised and fully used for the benefit of all people has devastating consequences and is at the root of most social problems. In this way, the capitalist system places the production of goods and services, on which the quality of all our lives depends, outside the direct control of society. Capitalism cannot produce primarily to satisfy human needs as production is always geared to meeting market demand at a profit. This means that production is restricted to what people can pay for. But what people can pay for and what they want are two different things, so the profit system acts as a fetter on production and a barrier to a society of abundance. Wherever wealth is produced for sale on a market—wherever, that is, there is commodity-production—economic forces are unleashed which come to dominate production and orient it away from satisfying people’s needs. The operation of these laws means that production is not subject to human control, with the result that it is not human values that are paramount in society, but market values, commercial values, the cash nexus.

But the picture of capitalism is still not complete.

Capitalist investors want to end up with more money than they started out with, but why? Is it just to live in luxury and consume? It is possible to envisage such an economy on paper. Marx did, and called it “simple reproduction”, but only as a stage in the development of his argument. By “simple reproduction” he meant that the stock of means of production was simply reproduced from year to year at its previously existing level; all of the profits (all of M+ less M) would be used to maintain a privileged, exploiting class in luxury . As a result the M in M-C-M+ would always remain the same and the circuit keep on repeating itself unchanged. This of course is not how capitalism operates. Profits are capitalised, i.e. reinvested in production, so that production, the stock of means of production, and the amount of capital, all tend to increase over time . The economic circuit is thus money-commodities-more money-more commodities, even more money (M-C-M+-C+-M++). In order to make more money, money must be transformed into capital.

This is not the conscious choice of the capitalists. It is something that is imposed on them as a condition for not losing their original investment. Competition with other capitalists forces them to reinvest as much of their profits as they can afford to in keeping their means and methods of production up to date. They cannot act contrary to the inner nature of capitalism which requires the constant accumulation of capital and the opening of new markets throughout the world. And it cannot avoid that increasing productivity of labor which means more production for less expenditure of labour.

Libertarians claim we as workers enter a fee contract and “no one is forced to do anything.” – But what planet are they on. The working class is forced each and every day into wage slavery or does money in capitalism grow on trees and all people need to do it pluck it from the branches to pay for food clothing and shelter. No, we are, collectively, compelled under the threat of poverty to sell our capacity to work – our labour power – in order to get access to those things

In 1855, Frederick Douglas, a former slave, wrote:- “The difference between the white slave, and the black slave, is this: the latter belongs to ONE slave-holder, and the former belongs to ALL the slave-holders, collectively. The white slave has taken from his, by indirection, what the black slave had taken from him, directly, and without ceremony. Both are plundered, and by the same plunderers”.
He understood , why can’t others?

The modern slave-owner has no such interest in his slaves. He neither purchases nor owns them. He merely buys so much labor-power – physical energy – just as he buys electric power for his plant. The worker represents to him merely a machine capable of developing a given quantity of labor-power. When he does not need labor-power he simply refrains from buying any. Wage slavery is the most satisfactory form of slavery that has ever come into existence, from the point of view of the masters. It gives them all the slaves they require, and relieves them of all responsibility in the matter of their housing, feeding and clothing.

 Instead of the pressures that force people to sell their working skills to an employer, people in socialism will work as a voluntary expression of their relationship with others. Needs will replace the drive for profits and the dictates of the market in deciding what must be done. Instead of the authoritarian control imposed by boards of directors and their corporate managers, production units will be run democratically by the people working in them. Instead of the state and its government of people, in socialism, people will contribute to the decisions made democratically by the community. Wage slavery will be overthrown and labour power cease to be a commodity. The workers, being the owners of the means of production, will also be the owners of the wealth produced, each individually enjoying what they have collectively produced.

Wage slavery has become the only option for the majority to sustain itself. The capitalist system was created through acts of theft and murder. This reality is continually defended by theories of the ideal capitalist model claiming as you do to be a return to “economic justice”, which actually only seeks to legitimise the capitalist’s source of wealth and power – the exploitation of labour for the extraction of profit. It is hypocrisy.

Many libertarians and mutualists argue that ” wage isn’t slavery when free and just conditions exist.” Ah, if only that were the case. Workers sell their labour power to capitalist enterprises for a wage as stated above in earlier post . As a commodity, labour power has an exchange value and a use value, like all other commodities. Its exchange value is equal to the sum total of the exchange values of all those commodities necessary to produce and reproduce the labour power of the worker and his or her family. The use value of labour power is its value creating capacity which capitalist enterprises buy and put to work as labour. However, labour power is unlike other commodities in that it creates value. During a given period it can produce more than is needed to maintain the worker during the same period. The surplus value produced is the difference between the exchange value of labour power and the use value of the labour extracted by the capitalists. In capitalism, however,the wage-worker is a “free” agent. No master holds him as a chattel, nor feudal lord as serf. This modern worker is free and independent: he has choices. He can dispose of his services to this or that capitalist owner, or he can withhold them. But this freedom is ephemeral. He must sell his working ability to some one or other employer or face starvation. In a capitalist society workers have the option of finding a job or facing abject poverty and/or starvation. Little wonder, then, that people “voluntarily” sell their labour and “consent” to authoritarian structures! They have little option to do otherwise. So, within the labour market workers can and do seek out the best working conditions possible, but that does not mean that the final contract agreed is “freely” accepted and not due to the force of circumstances, that both parties have equal bargaining power when drawing up the contract or that the freedom of both parties is ensured. His slavery is cloaked under the guise of wage-labour.

When the worker has found an employer he receives in return for his labour a price known as wages which represents on the average what is necessary for his sustenance so that he can reproduce the energy to go on working, and also produce progeny to replace him when his working days are over. During the working-day the worker produces wealth equivalent to that for which he is paid wages, but this does not require all the time of the working day. In providing for his own keep he has also produced a surplus and this surplus belongs to the employer. This may eventually be split into profit to the manufacturer, rent to the landlord, and interest on capital invested by a financier. As capitalism develops the time in which the worker produces his own keep decreases while the surplus accruing to the capitalist increases. During this development the productivity of labor increases at an accelerating tempo: The worker continually produces more with less.

So when a man sells his labour power a number of hours for a certain wage, the amount of necessaries to produce his wages is always smaller than the amount of labour which the employer receives from him, the difference between what the worker receives as wages and what his labour power produces during his working time, constitutes the sole source of unearned income, i.e., capitalist profits. So profits exist because the worker sells themselves to the capitalist, who then owns their activity and, therefore, tries to control them like a machine.

Wage levels will vary with “the respective power of the combatants” as Marx puts it and in the long run this will determine the value of labour-power and the necessaries of life. From the point of view of wage-labour , wage levels and the value of labour-power depends on the balance of class forces, on what workers can actually get from their employers. As wages are also regulated by the relation of supply and demand, a surplus of labour power (the unemployed) is necessary to prevent wages swallowing up all profit. Therefore the unemployed army is a vital necessity to capitalist production, and there can be no solution under capitalism.

It would be wrong to confuse exploitation with low wages. It does not matter if real wages do go up or not. The absolute level of those wages is irrelevant to the creation and appropriation of value and surplus-value. Labour is exploited because labour produces the whole of the value created in any process of production but gets only part of it back. On average workers sell their labour-power at a “fair” market price and still exploitation occurs. As sellers of a commodity (labour-power) they do not receive its full worth i.e. what they actually produce. Nor do they have a say in how the surplus value produced by their labour gets used.

The worker goes into the labour market as an article of merchandise, and his wages, that is, his price, is determined like that of any other article of merchandise, by the cost of production (i.e. the social labour necessary), and this in the case of the worker is represented by the cost of subsistence. The price of labour power fluctuates by the operation of supply and demand. There are generally more workers in the market than are actually required by the employers, and this fact serves to keep wages from rising for any length of time above the cost of subsistence. Moreover, machinery and scientific applications are ever tending to render labourers superfluous, with a consequent overstocking of the labour market, decrease of wages, and an increase in the number of the unemployed. Under these conditions reelative poverty is necessarily the lot of the working-class.

We have the worker entirely dispossessed of the means of getting a living except by selling himself as an article of merchandise to the owners of the means of living. This is wage-slavery. While capitalists are as a class against the workers as regards the ownership of the wealth produced by the working-class, they, the capitalists, are also antagonistic to one another in the endeavour to get the larger share of the markets. It wasn’t just Marx but also Fourier who pointed long ago that this competition could only end in monopoly, and we do see concentration an going on in every branch of industry.

Many seek a capitalism with the rough corners smoothed out, the utopian aspiration of a tamed capitalism. What is really required is a fundamental change of the economic basis of society. Many seek an idealised world and call for governments not to interfere in the operation of the market, to let market forces operate unhindered – laissez faire – and that the detrimental effects of the capitalist system can be eliminated by taming global corporations. For as long as capitalism has existed state “interference” or state “intervention”, in the economy has always existed. A corporation-dominated government is really the logical outcome of a class-divided society where the state must serve the owning minority. Individualists attack socialism because they fear the whole of the wealth of society shall be owned by a number of persons incorporated into a State or a bureaucracy, instead of being, as at present, owned by private individuals. They maintain that the right of the individual is supreme, and condemn any action on the part of a State or collection of individuals, that interferes with their desires. But socialists are not statists, that if the working class was compelled to work for a State instead of for individual employers then wage-slavery is not abolished, but is intensified.The worker to-day, while compelled to work for an employer, still has some sort of a choice among those masters, but with the State as the only employer he is compelled to work for that employer and under all of that employer’s conditions, or take the only other alternative – starvation. State-capitalism or as some like to call it State Socialism) would intensify slavery, but state-capitalism is not socialism.

People completely misunderstand Marx if you believe that his solution was to have GOVERNMENT-OWNERSHIP of the means of production and his object was to simply just to REDUCE the power of the capitalist because he wished a mere re-distribution of wealth between capitalists and the working class. He stood for the the ABOLITION OF THE STATE and he stood for the ABOLITION OF CAPITALISM [not its replacement by capitalism in another form]. Critics of Marx should go to the source and forget what the state-capitalist Leninists or Trotskyists say and understand that Marx was in favour of the abolition of the state and its replacement by an “association of associations”, i.e. by a co-ordinated network of neighbourhood councils and producer-controlled production units. Marx  made quite clear when he says “The existence of the state is inseparable from the existence of slavery…”

What is called for is a community where each contributes to the whole to the best of his or her ability and takes from the common fund of produce what he or she needs. The Earth can no longer be owned; it must be shared. Its fruits can no longer be expropriated by the few, they must be rendered available to all on the basis of need. Power must be freed from the control of the elites and be redistributed in a form that renders its use participatory. That is “free economics”, that is “economic justice”. Production will be to meet human need, each person or group determining their own reasonable needs in a social context. There will be no buying or selling, but instead, plenty of giving and taking. Capitalism operates irrespective of whether a particular economic unit is the property of an individual, a limited company, the state or even of a workers’ cooperative”

Many have consistently failed to acknowledge or have dismissed as irrelevant the fact that the right of private property leads to control by property owners over those who use, but do not own, property (such as workers ). Free-market capitalist system leads to a very selective and class-based protection of “rights” and “freedoms.” For example, under capitalism, the “freedom” of employers inevitably conflicts with the “freedom” of employees. When stockholders or their managers exercise their “freedom of enterprise” to decide how their company will operate, they violate their employee’s right to decide how their labouring capacities will be utilised and so under capitalism the “property rights” of employers will conflict with and restrict the “human right” of employees to manage themselves. Capitalism allows the right of self-management only to the few, not to all. Bosses have the power, workers are paid to obey. Workers are subject to control from above which restricts the activities they are allowed to do and so they are not free to act, make decisions, participate in the plans of the organisation, to create the future and so forth. Thus we have “free” workers within a relationship lacking freedom. Representing employment relations as voluntary agreement simply mystifies the existence and exercise of power within the organisation so created. Libertarians are ignoring the vast number of authoritarian and co-ercive social relationships that exist in capitalist society.In the labour market it is clear that the “buyers” and “sellers” of labour power are not on an equal footing . Under capitalism competition in labour markets is skewed in favour of employers. Thus the ability to refuse an exchange weighs most heavily on one class than another and so ensures that “free exchange” works to ensure the domination and so exploitation of one by the other. Inequality in the market ensures that the decisions of the majority of people within it are shaped in accordance with that needs of the powerful, not the needs of all.

Kropotkin argued that “The modern Individualism initiated by Herbert Spencer is, like the critical theory of Proudhon, a powerful indictment against the dangers and wrongs of government, but its practical solution of the social problem is miserable — so miserable as to lead us to inquire if the talk of ‘No force’ be merely an excuse for supporting landlord and capitalist domination.”

To defend the “freedom” of property owners is to defend authority and privilege. Free exchange is NOT a revolutionary concept. Free access is revolutionary.

But just to make sure it is clearly understood that for socialists, the means and ends cannot be separated. The establishment of socialism can only be established by the working class when the immense majority have come to want and understand it. The machinery of coercion which is the State has to be taken out of the hands of the capitalist class by political action. Industrial democracy is a possibility only when the capitalist class have ceased to rule the State. The struggle for democracy is the struggle for socialism. It is not a struggle for reforms, for this or that political system, for this or that leader, for some rule change or other—it is the struggle for an idea, for a belief, a belief that we can run our own lives, that we have a right to a say in how society is run, for a belief that the responsibility for democracy lies not upon the politicians or their bureaucrats, but upon ourselves. At the moment a small group of people control all the wealth and property, and it is upon their interests that everything hinges. It is only by removing such people, and not by tinkering with the form that true democracy can be reached .

Until you support and work towards the society that is based upon the principle ”from each according to their ability, to each according to their needs”, then you remain fixated upon the status quo of a society constrained by artificial rationing through the market and money system, a “can’t pay - can’t have” society that is inherently co-ercive, that has police and courts and jails to ensure its continued existence. As oft quoted "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. ”

If libertarians seek real liberty then it is free access to goods and services which will deny to any group or individuals the political leverage with which to dominate others which has been a feature intrinsic to all private-property or class based systems through control and rationing of the means of life . This will work to ensure that a socialist society is run on the basis of democratic consensus. Free access to the common treasury and no monopoly of ownership , not even by the producers who call for ownership of their own product, (such as promoted by mutualists and syndicalists) can deprive individuals in society of common ownership of the means of production and distribution .

Goods and services would be provided directly for self determined needs and not for sale on a market; they would be made freely available for individuals to take without requiring these individuals to offer something in direct exchange. The sense of obligations and the realisation of universal interdependency arising from this would profoundly colour people’s perceptions and influence their behaviour in such a society.

Building a society that is based upon such a system of generalised reciprocity, that is truly a revolutionary concept .

According to von Mises, rational economic calculation is only possible on the basis of prices fixed by the free play of market forces. In other words, the only form of rational calculation that can be applied to the production of wealth is monetary calculation. Von Mises claimed that a socialist society was impossible because it would be unable to calculate rationally which productive methods to adopt. This argument merely amounts to the tautology that only a market economy is able to perform economic calculations couched in market prices’and that it is‘reading into socialism the functional requirements of capitalism.

In reality it is the wasteful, destructive and exploitative capitalist system that is incapable of rationally allocating resources.

Although, monetary calculation, will disappear in socialism this does not mean that there will no longer be any need to make choices, evaluations and calculations. In socialism it will be the use value of goods not be their selling price (nor even the time needed to produce them) but their usefulness. It is for this that they will be appreciated, evaluated, wanted and produced. So estimates of what is likely to be needed over a given period will be expressed as physical quantities of definite types and sorts of objects. The operational basis for this system would be calculation in kind (e.g. tonnes, kilos, litres) instead of monetary calculation.

Goods will be voluntarily produced, and services voluntarily supplied to meet people’s needs. People will freely take the things they need. Socialism will be concerned solely with the production , distribution and consumption of useful goods and services in response to definite needs . It will integrate social needs with the material means of meeting those needs .

Common ownership means that society as a whole owns the means and instruments for distributing wealth. It also implies the democratic control of the means and instruments for producing and distributing wealth, for if everyone owns, then everyone must have equal right to control the means and instruments for producing and distributing wealth.

Socialism will be a self-adjusting decentralised inter-linked system. A socialist economy would be polycentric , not centrally planned. It is not a command economy but a responsive one to provide for a self -sustaining steady- state society.

Capitalism differs from previous class societies in that under it production is not for direct use, not even of the ruling class, but for sale on a market. Competitive pressures to minimise costs and maximise sales, profit-seeking and blind economic growth, with all the destructive effects on the rest of nature, are built-in to capitalism. These make capitalism inherently environmentally unfriendly. The framework within which humans can regulate their relationship with the rest of nature in an ecologically acceptable way has to be a society based on the common ownership and democratic control of productive resources, freed from the tyranny of the economic laws that operate wherever there is production for sale on a market

We know that humans are capable of integrating themselves into a stable ecosystem. and there is nothing whatsoever that prevents this being possible today on the basis of industrial technology and methods of production, the renewable energies exist (wind, solar, tidal, geothermal and whatever ) but, for the capitalists, these are a “cost” which penalises them in face of international competition. No agreement to limit the activities of the multinationals in their relentless quest for profits is possible. Measures in favour of the environment come up against the interests of enterprises and their shareholders because by increasing costs they decrease profits. No State is going to implement legislation which would penalise the competitiveness of its national enterprises in the face of foreign competition. States only take into account environmental questions if they can find an agreement at international level which will disadvantage none of them. But that’s the problem, isn’t it? Competition for the appropriation of world profits is one of the bases of the present system. So it is the capitalist economic system itself which is responsible for ecological problems and the capitalist class and their representatives, they themselves are subject to the laws of profit and competition. Some future apologists of capitalism are promising us !

 In a stable society such as socialism, needs would most likely change relatively slowly. Hence it is reasonable to assume that an efficient system of stock control, registering what individuals actually chose to take under conditions of free access from local distribution centres over a given period, would enable the local distribution committee to estimate what the need for food, drink, clothes and household goods that would be required over a similar future period.

If people want too much? In a socialist society “too much” can only mean “more than is sustainably produced” . If people decide that they (individually and as a society) need to over-consume then i concede socialism cannot possibly work. But, as you say Max , under capitalism, there is a very large industry devoted to creating needs. Capitalism requires consumption, whether it improves our lives or not, and drives us to consume up to, and past, our ability to pay for that consumption. In a system of capitalist competition, there is a built-in tendency to stimulate demand to a maximum extent. Firms, for example, need to persuade customers to buy their products or they go out of business. They would not otherwise spend the vast amounts they do spend on advertising.

Another side of the consumerist argument is that in capitalist society a tendency for individuals to seek to validate their sense of worth through the accumulation of possessions. The prevailing ideas of society are those of its ruling class so we can understand why, when the wealth of that class so preoccupies the minds of its members, such a notion of status should be so deep-rooted within workers . It is this which helps to underpin the myth of infinite demand.

It does not matter how modest one’s real needs may be or how easily they may be met; capitalism’s “consumer culture” leads one to want more than one may materially need since what the individual desires is to enhance his or her status within this hierarchal culture of consumerism and this is dependent upon acquiring more than others have got. But since others desire the same thing, the economic inequality inherent in a system of competitive capitalism must inevitably generate a pervasive sense of relative deprivation. What this amounts to is a kind of institutionalised envy and an alienated capitalism.

Human behaviour reflects society. In a society such as capitalism, people’s needs are not met and people feel insecure. People tend to acquire and hoard goods because possession provides some security. People have a tendency to distrust others because the world is organized in such a dog-eat-dog manner.

In socialism, the notion of status based upon the conspicuous consumption of wealth would be devoid of meaning because individuals would stand in equal relation to the means of production and have free access to the resultant goods and services . Why take more than you need when you can freely take what you need? In socialism the only way in which individuals can command the esteem of others is through their contribution to society.

By the replacement of exchange economy (the market economy) by common ownership basically what would happen is that wealth would cease to take the form of exchange value, so that all the expressions of this social relationship peculiar to an exchange economy, such as money and prices, would automatically disappear. Goods would cease to have an economic value and would become simply physical objects which human beings could use to satisfy some want or other. What is meant by needs should not be understood as mere personal consumption. It should not suggest a rampant consumerist culture. Production for needs would include a wide range of considerations such as the need to protect and conserve the environment. In defining socialism we should emphasise that it will provide for one vital need in a way that is impossible under the capitalist system. This is the need of peoples throughout the world to bring the organisation of their community affairs under their own democratic control and to develop them in the interests of the whole community.

===========================================================
Money
The case that money IS essential if you value individual freedom couldn’t be further from the truth. It is only in a society where all people enjoy FREE ACCESS to goods and services which denies to any group or individuals the political leverage by which to dominate others. It has been a feature of all private-property or class based systems that through the control of and restrictions to the means of life, that people are controlled.

Böhm-Bawerk in “Marx and the Close of his System”, that the labour theory of value is wrong because Marx failed to take into account scarcity as a factor in fixing value which simply exposes his poor knowledge of what Marx has writtern. What he and Hayek want most to instil into the minds of the working class is that capitalist production and distribution of life’s necessities and wants is a natural and, above all, moral system. It is their “wet dream”.

Hayek may well criticise central planning basing his argument upon the Soviet Union but socialism ( real socialism and not state capitalism) is a decentralised society that is self correcting , from below and not from the top . Socialist determination of needs begins with consumer needs and then flows throughout distribution and on to each required part of the structure of production. Planning in socialism is essentially a question of industrial organisation, of organising productive units into a productive system functioning smoothly to supply the useful things which people had indicated they needed, both for their individual and for their collective consumption. What socialism would establish would be a rationalised network of planned links between users and suppliers; between final users and their immediate suppliers, between these latter and their suppliers, and so on down the line to those who extract the raw materials from nature. The responsibility of these industries would be to ensure the supply of a particular kind of product either, in the case of consumer goods, to distribution centres or, in the case of goods used to produce other goods, to productive units or other industries. Planning is indeed central to the idea of socialism, but socialism is the planned, but not Central Planning. The problem with a centrally-planned model of socialism was its inability to cope with change. It lacks any kind of feedback mechanism which allows for mutual adjustments between the different actors in such an economy. It is completely inflexible. We witnessed in Russia how it was unable to determine prices by central planning. Prices were set , re-set , fixed then re-fixed , plans were made then re-appraised , re-defined , changed and dropped. Free-Access Socialism however is a decentralised or polycentric society that is self regulating , self adjusting and self correcting. Marx saw communist administration as a federation of self-governing groups largely concerned with their internal affairs and collaborating for the comparatively few purposes that concern all the groups. Again, beyond those professors of economics to comprehend in their supposed critiques of Marx. Marx was not writing as a simple economist but was putting forward a “critique of political economy” , his main argument being that, whereas writers like Adam Smith and Ricardo regarded economic categories such as capital, wages, value, price, money, as eternal entities, natural features of human social existence, these were, in fact, categories of capitalism that will disappear when capitalism does.


===================================

Value
Work in socialist society would only be voluntary since there would be no group or organ in a position to force people to work against their will. Nor would there exist barter. Goods and services would be made freely available for individuals to take without requiring these individuals to offer something in direct exchange.

An effective anti-capitalist movement will have to be one that works for ending the impersonal economic mechanism that is capitalism by restoring control of production to society; which can only be done on the basis of the Earth’s natural and industrial resources having become the common property of all the people.

Marx does not by a single word claim for the workers “the full value of their labour.” Why not? Because, as he shows, “value,” in an economic sense, is a quality belonging to commodities only, and which, therefore, can only occur in a society where products are exchanged as commodities, the value of a commodity being measured by the socially necessary labour embodied in it. Labour being, therefore, the measure of value, can have no value of its own. But it is quite different with the labour-power of the workers. This labour-power in our society is a commodity has a value. And this value is determined by the quantity of socially necessary labour required for its production, maintenance, and reproduction, that is to say, required for the production, maintenance, and reproduction of the actually living labourer.

Take a wooden table, says Marx. It is just wood that human labour has turned into a table and taken to market. Wood + Labor = Table. Where is the mystery? When it gets to the market the table finds itself in the company of the stool and the chair. All three have use values, are made of the same wood, and may be in equal supply and equal demand - yet each has its own different price.

Why these different prices? Same wood, same demand, same supply. They are all the products of human labour. What is the difference between them that justifies different prices? The prices are reflections of the underlying values of the products. Could the values be different? What does Marx say determines value? It is the different quantities of socially necessary labour time embodied in the commodities.

The table, the stool, and the chair three "things" that are related to each other as the embodiment of the social relations and necessary labour of human beings that created them. Human social relations have been objectified as the relations between non human things. The chair is more valuable than the table but the reason is now hidden away from the perception of people.

"A commodity is therefore a mysterious thing," Marx writes, "simply because in it the social character of men's labour appears to them as an objective character stamped upon the product of that labour; because the relations of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour."

capitalist aren't greedy, they just have closed minds

Edward Conard, Mitt Romney's ex-partner in Bain Capital, is not merely a member of the 1 percent but member of the 0.1 percent, justifies his wealth and proudly defends Wall St. He presents the capitalist case that it was the poor people, and not the finance industry, who were responsible for the financial crisis and subsequent recession. That the ultra-wealthy are wealthy because they are smarter and work harder than everybody else, and that they are resented for their success. That the ultra-wealthy are being victimised by prejudice by the envious and jealous who want to impose more regulation and  higher taxes upon the hard-done-by capitalist.

Some capitalists try to argue that an individual's greed turns free-market capitalism into prosperity for all. The successful businessman is the hero, while the rest of us lesser mortals are deadbeat leeches, living parasitically from their superior drive, brains and skills and talents that lead to innovation. Profits are the reward for risk-taking. (hmmm...and follow the herd investment mentality is taking a risk). In fact we should all be very grateful to the mega-wealthy

But they are wrong. The rich are not more hardworking than the masses. They are not any smarter. Nor do people whose  business of extracting royalties and copyright fees or interest by moving rich people’s money around are in any way “job creators.”

When  Facebook goes public, Mark Zuckerberg he will be worth more than $17 billion. If Zuckerberg had never been born, would no one else have come up with the idea of Facebook? (oh, somone else did and thats why he had to pay compensation, wasn't it?)

Why do people try to maximise their incomes? The poor person wants more money in order to eat, a better house or a new washing machine. Even a comfortably well-off person may want an even better house or a servant to cook and clean . But what more does a really, really rich person — worth hundreds of millions — want that money can buy? What motivates him or her to go to work every morning - simply trying to accumulate even more. But, to be sure, it is not personal greed. It is simply the rationale of accepting an economic system that demands such a constant process of reproduction of capital and being unwilling to break with it.

just a matter of luck

"Capitalism is an extremely unfair and unjust economic system. It is unfair and unjust because, in order to do well in a capitalist system, a person must have a good mind, health, energy and enough emotional maturity and interpersonal skill to perform effectively in the workplace. And, in order to have those qualities, a person has to have had good parents, parents who have provided him or her with the nurturance, support, guidance, affirmation and discipline that people need in order to grow into healthy adults. If you had that kind of parents, you are lucky and you will be able to do well in our capitalist system.

If your parents abused or neglected you, if they discounted you, ignored you, if they were too busy, sick, self-absorbed, dysfunctional, overwhelmed, etc., to provide you with a good upbringing, you will not do well in our capitalist economy. You will not have the brainpower, health or emotional maturity to be able to do well. And whether or not you had good parents is a matter of luck. You didn't have anything to do with it. You are either the beneficiary or victim of something you had no control over."

Al Galves retired psychologist at
http://www.lcsun-news.com/las_cruces-opinion/ci_18539080

reforms to humanise capitalism

I find myself taking issue with the statement that “Chossudovsky demonstrates, that “world agriculture has for the first time in history the capacity to satisfy the food requirements of the entire planet, yet the very nature of the global market system prevents this from occurring…Famines in the age of globalization are the result of policy” [ http://dissidentvoice.org/2010/10/our-holocaustic-global-empire-wars-famines-slavery/ ]

The fact is that for several decades the world’s capacity to produce food has far exceeded the entire human population’s need for nourishment has been well known and documented . The problem has been much more fundamental than Chossuduvsky tries to present it. It is to do with the whole basis of capitalism. If you’ve got no money, or not enough money, you’re not part of the market. Food and farming policy has very little to do with meeting human needs, guaranteeing food security, providing high and consistent levels of nutrition and food safety. It’s all about profit: squeezing the maximum financial yield out of every link in the food chain to benefit a tiny number.This is no defence of the financial speculators but reminding ourselves that it is the system of buying and selling that results in food shortages. The poor simply do not constitute a market — there is no profit to be made out of selling food to the destitute, or from growing food for them. If the one dollar a day will not stretch to buying food, then too bad. Countries supposedly in the grip of famine hardly ever have an absolute food shortage, it’s just that the food available is sold to those who can afford to buy it or exported for consumption elsewhere.

The answer to the problems that global capitalism has engendered is not another policy that would still leave intact the basic structures and mechanisms of capitalism. Capitalism operates according to the rules of “no profit, no production” and “can’t pay, can’t have” and, as the world market system, is what is responsible for the desperate plight of most of the world’s population. Before anything lasting and constructive can be done about this, capitalism has to go. It is something much more far-reaching that is required , a rapid and radical change in the basis of world society that will make the Earth’s resources the common heritage of all humanity.

Too many try to control capitalism for the benefit of humanity, to humanise it. Like all reformers, they limit themselves to attacking features which they do not like and fail to realise that those features are integral to capitalism. What they are for is a more regulated capitalism. They merely want governments to intervene to try to control capitalism, to suppress its worst excesses.

Profits

Profit at its most basic is the difference between the money a business obtains from the sale of its products and the money it has to spend on producing them.

One of Marx’s crucial discoveries in the field of political economy was that the working class of wage and salary earners gets paid less than the value of the goods it creates, the difference being a surplus value which accrues to the owning class in the form of ground rent, interest and profit. Capitalism turned human labour power into a commodity – something bought and sold. When capitalists buy a worker’s labour they buy the worker’s capacity to work for a full day. Wages are set, however, like every other commodity, by the value of labour-power needed to reproduce them, which in the case of labour is the value of food, clothing, etc. needed to keep the worker in a fit condition to work. But the value of ‘labour power’ is different from the value created by the worker’s labour and this difference, called surplus value, belongs to the capitalist. The working day under capitalism therefore divides into two parts; ‘necessary labour’ when the workers actually earns what they are paid in wages, and ‘surplus labour’ which is the time spent producing ‘surplus value’ for the capitalist employer. The aim of capitalist production is the production of surplus value.The new value added by labour in the process of production to the previously existing value of the raw and other materials is divided into wages and surplus value, which goes to the capitalist employer and is the source of profit. Profits are made in the sphere of production but only “realised” in the market. What is so vital about profit that makes this necessary? It is the source of the capitalist’s capital. The more capital they can accumulate out of the profits accruing to them the more effectively can they compete–by investing in more productive technologies to undercut their competitors–and thus claim a larger share of the market for themselves. If they did not do this then their competitors would, and could knock them out of business. Economic competition between enterprises fuels the drive towards capital accumulation. This in turn necessitates profit maximisation which expresses itself as a continuous downward pressure on wages (reinforced by competition between workers on the labour market.)

We’re the ones who build things, make things, provide services, make things work, provide the ideas. But though we build the world around us, it does not belong to us. Everything that has been built around us is the result of our work and yet we don’t work for ourselves. We produce not for ourselves, but at the behest’s and whims of others. The worker is compelled to labour for the purpose of producing something to satisfy the wants of others who, holding the things necessary for his life, thereby control him. He is, therefore, still a slave.We are the ones who are told what to produce, how to produce it, how much, and how fast.We are the ones who receive a paycheque, be it high or low, not for selling what we produce but for selling our power to work. With that paycheque we try to buy back what we make. The source of someone else’s profits comes from our work.

Speculation is the use of money-capital, not to invest in the production of new wealth and new surplus value, but unproductively to try and swindle other capitalists’ out of their past profits. It’s a zero-sum game in which the total amount of profits remains the same but merely gets redistributed differently amongst capitalists depending on their speculative skills.

Individualists or Libertarians attack socialism because you fear the whole of the wealth of society shall be owned by a number of persons incorporated into a State or a bureaucracy, instead of being, as at present, owned by private individuals. They maintain that the right of the individual is supreme, and condemns any action on the part of a State or collection of individuals, that interferes with your desires. But socialists are not statists, that if the working class was compelled to work for a State instead of for individual employers then wage-slavery is not abolished, but is intensified. The worker to-day, while compelled to work for an employer, still has some sort of a choice among those masters, but with the State as the only employer he is compelled to work for that employer and under all of that employer’s conditions, or take the only other alternative – starvation. State-capitalism ( or as some like to call it State-Socialism) would intensify slavery, but state- capitalism is not socialism.

A proposal

Capitalism is in fact not just an exchange economy but an exchange economy where the aim of production is to make a profit .Profit is the monetary expression of the difference between the exchange value of a product and the exchange value of the materials , energy and labour-power used to produce it , or what Marx called “surplus value” . Defenders of capitalism never seem to ask themselves the practical question about what the critical factor determining a production initiative in a market system. The answer is obvious from everyday experience . The factor that critically decides the production of commodities is the judgement that enterprises make about whether they can be sold in the market .Obviously , consumers buy in the market that they perceive as being for their needs . But whether or not the transaction takes place is not decided by needs but by ability to pay . So the realisation of profit in the market determines both the production of goods and also the distribution of goods by various enterprises . In the market system the motive of production , the organisation of production , and the distribution of goods are inseparable parts of the same economic process : the realisation of profit and the accumulation of capital. The economic pressure on capital is that of accumulation , the alternative is bankruptcy . The production and distribution of goods is entirely subordinate to the pressure on capital to accumulate . The economic signals of the market are not signals to produce useful things . They signal the prospects of profit and capital accumulation , If there is a profit to be made then production will take place ; if there is no prospect of profit , then production will not take place . Profit not need is the deciding factor . Under capitalism what appear to be production decisions are in fact decisions to go for profit in the market . With the capitalist system , information is a contra-flow of information. It flows from producers, through distributors, to the consumer. This information is the prices of goods determined by the accumulating costs of production and distribution plus profit. Prices are increased in each part of production, from mining through industrial processing, manufacture and assembly, then accumulating further through distribution until the final price is passed on to the consumer.

The function of cost/pricing is to enable a business enterprise to calculate its costs, to fix its profit expectations within a structure of prices, to regulate income against expenditure and, ultimately, to regulate the exploitation of its workers. Unfortunately , prices can only reflect the wants of those who can afford to actually buy what economists call “effective demand” . - and not real demand for something from those without the wherewithal - the purchasing power - to buy the product (or even to express a preference for one product over another . I may want a sirloin steak but i can only afford a hamburger ) .

Socialist determination of needs begins with consumer needs and then flows throughout distribution and on to each required part of the structure of production
Socialism will make economically-unencumbered production decisions as a direct response to needs . With production for use , the starting point will be needs .
By the replacement of exchange economy by common ownership basically what would happen is that wealth would cease to take the form of exchange value, so that all the expressions of this social relationship peculiar to an exchange economy, such as money and prices, would automatically disappear. In other words, goods would cease to have an economic value and would become simply physical objects which human beings could use to satisfy some want or other. The disappearance of economic value would mean the end of economic calculation in the sense of calculation in units of value whether measured by money or directly in some unit of labour-time. It would mean that there was no longer any common unit of calculation for making decisions regarding the production of goods. Socialism is a money-less society in which use values would be produced from other use values, there would need no have a universal unit of account but could calculate exclusively in kind .The only calculations that would be necessary in socialism would be calculations in kind. On the one side would be recorded the resources (materials, energy, equipment, labour) used up in production and on the other side the amount of the good produced, together with any by-products. This, of course, is done under capitalism but it is doubled by an exchange value calculation: the exchange value of the resources used up is recorded as the cost of production while the exchange value of the output (after it has been realised on the market) is recorded as sales receipts. If the latter is greater than the former, then a profit has been made; if it is less, then a loss is recorded. Such profit-and-loss accounting has no place in socialism and would, once again, be quite meaningless. Calculation in kind entails the counting or measurement of physical quantities of different kinds of factors of production. There is no general unit of accounting involved in this process such as money or labour hours or energy units. In fact, every conceivable kind of economic system has to rely on calculation in kind, including capitalism. Without it, the physical organisation of production (e.g. maintaining inventories) would be literally impossible. But where capitalism relies on monetary accounting as well as calculation in kind, socialism relies solely on the latter. That is one reason why socialism holds a decisive productive advantage over capitalism by eliminating the need to tie up vast quantities of resources and labour implicated in a system of monetary/pricing accounting.

Socialism is a decentralised or polycentric society that is self regulating , self adjusting and self correcting , from below and not from the top . It is not a command economy but a responsive one . Planning in socialism is essentially a question of industrial organisation, of organising productive units into a productive system functioning smoothly to supply the useful things which people had indicated they needed, both for their individual and for their collective consumption. What socialism would establish would be a rationalised network of planned links between users and suppliers; between final users and their immediate suppliers, between these latter and their suppliers, and so on down the line to those who extract the raw materials from nature. The responsibility of these industries would be to ensure the supply of a particular kind of product either, in the case of consumer goods, to distribution centres or, in the case of goods used to produce other goods, to productive units or other industries. Planning is indeed central to the idea of socialism, but socialism is the planned (consciously coordinated and not to be confused with the central planning concept ) production of useful things to satisfy human needs precisely instead of the production, planned or otherwise, of wealth as exchange value, commodities and capital. In socialism wealth would have simply a specific use value (which would be different under different conditions and for different individuals and groups of individuals) but it would not have any exchange, or economic, value.

Since the needs of consumers are always needs for a specific product at a specific time in a specific locality, we will assume that socialist society would leave the initial assessment of likely needs to a delegate body under the control of the local community . In a stable society such as socialism, needs would change relatively slowly. Hence it is reasonable to surmise that an efficient system of stock control, recording what individuals actually chose to take under conditions of free access from local distribution centres over a given period, would enable the local distribution committee to estimate what the need for food, drink, clothes and household goods would be over a similar future period. Some needs would be able to be met locally: local transport, restaurants, builders, repairs and some food are examples as well as services such as street-lighting, libraries and refuse collection. The local distribution committee would then communicate needs that could not be met locally to the bodies charged with coordinating supplies to local communities. The individual would have free access to the goods on the shelves of the local distribution centres; the local distribution centres free access to the goods they required to be always adequately stocked with what people needed; their suppliers free access to the goods they required from the factories which supplied them; industries and factories free access to the materials, equipment and energy they needed to produce their products; and so on. Production and distribution in socialism would thus be a question of organising a coordinated and more or less self-regulating system of linkages between users and suppliers, enabling resources and materials to flow smoothly from one productive unit to another, and ultimately to the final user, in response to information flowing in the opposite direction originating from final users. The productive system would thus be set in motion from the consumer end, as individuals and communities took steps to satisfy their self-defined needs. Socialist production is self-regulating production for use. This would achieve a rhythm of daily production in line with daily needs with no significant growth. We are seeking a 'steady-state economy' which corresponds to what Marx called 'simple reproduction' - a situation where human needs were in balance with the resources needed to satisfy them. Such a society would already have decided, according to its own criteria and through its own decision-making processes, on the most appropriate way to allocate resources to meet the needs of its members. This having been done, it would only need to go on repeating this continuously from production period to production period. Production would not be ever-increasing but would be stabilized at the level required to satisfy needs. All that would be produced would be products for consumption and the products needed to replace and repair the raw materials and instruments of production used up in producing these consumer goods , a zero growth society operating in a stable and ecologically benign way.

For socialism to be established, there are two fundamental preconditions that must be met.Firstly, the productive potential of society must have been developed to the point where, generally speaking, we can produce enough for all. This is not now a problem as we have long since reached this point. However, this does require that we appreciate what is meant by "enough" and that we do not project on to socialism the insatiable consumerism of capitalism. Secondly, the establishment of socialism presupposes the existence of a mass socialist movement and a profound change in social outlook. It is simply not reasonable to suppose that the desire for socialism on such a large scale, and the conscious understanding of what it entails on the part of all concerned, would not influence the way people behaved in socialism and towards each other. Would they want to jeopardise the new society they had helped create? Of course not.
Humans behave differently depending upon the conditions that they live in. Human behaviour reflects society. In a society such as capitalism, people's needs are not met and reasonable people feel insecure. People tend to acquire and hoard goods because possession provides some security. People have a tendency to distrust others because the world is organized in such a dog-eat-dog manner. If people didn't work society would obviously fall apart. To establish socialism the vast majority must consciously decide that they want socialism and that they are prepared to work in socialist society. If people want too much? In a socialist society "too much" can only mean "more than is sustainably produced."
If people decide that they (individually and as a society) need to over-consume then socialism cannot possibly work. Under capitalism, there is a very large industry devoted to creating needs. Capitalism requires consumption, whether it improves our lives or not, and drives us to consume up to, and past, our ability to pay for that consumption. In a system of capitalist competition, there is a built-in tendency to stimulate demand to a maximum extent. Firms, for example, need to persuade customers to buy their products or they go out of business. They would not otherwise spend the vast amounts they do spend on advertising. There is also in capitalist society a tendency for individuals to seek to validate their sense of worth through the accumulation of possessions. As Marx contended, the prevailing ideas of society are those of its ruling class then we can understand why, when the wealth of that class so preoccupies the minds of its members, such a notion of status should be so deep-rooted. It is this which helps to underpin the myth of infinite demand. It does not matter how modest one's real needs may be or how easily they may be met; capitalism's "consumer culture" leads one to want more than one may materially need since what the individual desires is to enhance his or her status within this hierarchal culture of consumerism and this is dependent upon acquiring more than others have got. But since others desire the same thing, the economic inequality inherent in a system of competitive capitalism must inevitably generate a pervasive sense of relative deprivation. What this amounts to is a kind of institutionalised envy and that will be unsustainable as more peoples are drawn into alienated capitalism .
In socialism, status based upon the material wealth at one's command, would be a meaningless concept. The notion of status based upon the conspicuous consumption of wealth would be devoid of meaning because individuals would stand in equal relation to the means of production and have free access to the resultant goods and services . Why take more than you need when you can freely take what you need? In socialism the only way in which individuals can command the esteem of others is through their contribution to society, and the stronger the movement for socialism grows the more will it subvert the prevailing capitalist ethos, in general, and its anachronistic notion of status, in particular.

The main features of Socialism are really quite simple
Firstly , the new social system must be world-wide . The world must be regarded as one country and humanity as one people .

Secondly , all the people will co-operate to produce and distribute all the goods and services which are needed by mankind , each person willingly and freely , taking part in the way he feels he can do best .

Thirdly , all goods and services will be produced for use only , and having been produced , will be distributed , free , directly to the people so that each persons needs are fully satisfied .

Fourthly , the land , factories , machines , mines , roads , railways , ships , and all those things which mankind needs to carry on producing the means of life , will belong to the whole people .

The problem with a centrally-planned model of socialism was its inability to cope with change. It lacks any kind of feedback mechanism which allows for mutual adjustments between the different actors in such an economy. It is completely inflexible . Socialism does not necessary involve the creation of new layers of administrations but simply the transformation of them .
. Socialism would inherit from capitalism a complex worldwide productive network linking all the millions of individual productive units in the world (farms, mines, factories and so on ) into a single system. The links we are talking about are physical in the sense that one unit is linked to another either as the physical user of the others product or as the physical supplier of its materials, energy or equipment. Under capitalism such links are established in two ways: organisationally (as between different productive units forming part of the same private or state enterprise) and, above all, commercially (as when one enterprise contracts to buy something from, or to sell something to, another enterprise). In socialism the links would be exclusively organisational. We should be very wary of rejecting the structures or lines of communication left by capitalism. Sure, the internal structures of many organisations reflect their origin, but the decision-making processes inherited should surely be our first concern. Rather than re-inventing the wheel or developing new decision-making structures separate to and different from those of capitalism, we should by default use the existing systems, unless an alternative is clearly better. We should view capitalism's decision-making structures as a social tool developed by humans and currently used to smooth the operation of capitalism. But in the hands of a socialist majority, a switch will be flicked in this machine, and - with a some tweaking here and there - it will be available to help enable socialism.

Stock or inventory control systems employing calculation in kind are absolutely indispensable to any kind of modern production system. While it is true that today they operate within a price environment that is not the same thing as saying they need such an environment in order to operate. Most students of Logistics will be able to explain how unnecessary dollars and cents are for its operation. The key to good stock management is the stock turnover rate – how rapidly stock is removed from the shelves – and the point at which it may need to be re-ordered. This will also be affected by considerations such as lead times – how long it takes for fresh stock to arrive – and the need to anticipate possible changes in demand. The Just- In- Time systems are another tried and trusted tool of warehousing and supply chains which can be utilised . The existence of buffer stocks provides for a period of re-adjustment.

The “Law of The Minimum” formulated by Justus von Liebig can be applied equally to the problem of resource allocation in any economy. For any given bundle of factors required to produce a given good, one of these will be the limiting factor. That is to say, the output of this good will be restricted by the availability of the factor in question constituting the limiting factor. All things being equal, it makes sense from an economic point of view to economise most on those things that are scarcest and to make greatest use of those things that are abundant .( The claim that all factors are scarce because the use of any factor entails an opportunity cost and, consequently, need to be economised is not a very sensible approach to adopt. Effective economisation of resources requires discrimination and selection; you cannot treat every factor equally – that is, as equally scarce – or, if you do, this will result in gross misallocation of resources and economic inefficiency.)

In any economy there needs to be some way of prioritising production goals. We can apply Maslow’s “hierarchy of needs” as a guide to action. It would seem reasonable to suppose that needs that were most pressing and upon which the satisfaction of other needs are dependant would take priority over those other needs. We are talking here about our basic physiological needs for food, water, adequate sanitation and housing and so on. This would be reflected in the allocation of resources: high priority end goals would take precedence over low priority end goals where resources common to both are revealed (via the self regulating system of stock control) to be in short supply .

Cost-benefit analysis might be used with which to evaluate a range of different projects facing such a society using some sort of “points system”. Under capitalism the balance sheet of the relevant benefits and costs advantages and disadvantages of a particular scheme or rival schemes is drawn up in money terms , but in socialism a points system for attributing relative importance to the various relevant considerations could be used instead. The points attributed to these considerations would be subjective, in the sense that this would depend on a deliberate social decision rather than on some objective standard. In the sense that one of the aims of socialism is precisely to rescue humankind from the capitalist fixation with production time/money, cost-benefit type analyses, as a means of taking into account other factors, could therefore be said to be more appropriate for use in socialism than under capitalism. Using points systems to attribute relative importance in this way would not be to recreate some universal unit of evaluation and calculation, but simply to employ a technique to facilitate decision-making in particular concrete cases. The advantages /disadvantages and even the points attributed to them can, and normally would, differ from case to case. So what we are talking about is not a new abstract universal unit of measurement to replace money and economic value but one technique among others for reaching rational decisions in a society where the criterion of rationality is human welfare.

A broad picture of how production- for- use would operate in direct response to need can now be projected .
Needs would arise in local communities expressed as required quantities such as kilos , tonnes , cubic litres or whatever of various materials and quantities of goods . These would then be communicated according to necessity .Each particular part of production would be responding to the material requirements communicated to it through the connected ideas of social production . It would be self -regulating , because each element of production would be self-adjusting to the communication of these material requirements . Each part of production would know its position . If requirements are low in relation to a build-up of stock , then this would an automatic indication to a production unit that its production should be reduced . The supply of some needs will take place within the local community and in these cases production would not extent beyond this , as for example with local food production for local consumption .Other needs could be communicated as required things to the regional organisation of production. Local food production would require glass, but not every local community could have its own glass works . The requirements for glass could be communicated to a regional glass works . The glass works has its own suppliers of materials and the amounts they require for the production of glass are known in definite quantities. The required quantities of these materials could be passed by the glass works to the regional suppliers of the materials for glass manufacture . This would be a sequence of communication of local needs to the regional organisation of production, and thus contained within a region .
Local food production would also require tractors , for instance , and here the communication of required quantities of things could extend further to the world organisation of production . Regional manufacture could produce and assemble the component parts of tractors for distribution to local communities . The regional production unit producing tractors would communicate to their own suppliers , and eventually this would extend to world production units extracting and processing the necessary materials .
This would be the self-regulating system of production for need , operating on the basis of the communication of need as definite quantities of things throughout the structure of production . Each production unit would convert the requirements communicated to it into its own material requirements and pass these on to its suppliers . This would be the sequence by which every element of labour required for the production of a final product would be known .This system of self-regulating production for use is achieved through communications . Socialism would make full use of the means communications which have developed such as the existing system of information technology that can provide for instant world-wide contact as well as facilities for storing and processing millions of pieces of information .

capital confusion

A quick peruse of this mornings paper and i find capitalism confuses even itself .

The figures confirm that the UK had plunged into recession at the end of last year and with interest rates nearing zero, the Bank of England is moving towards buying assets with newly-created money to try and boost demand.
Both professional services, such as accountants and legal firms, and consumer businesses, such as hotels and restaurants, reported sharp falls in profitability and warned of plans to scale back investments and jobs. The numbers employed also declined at a record rate,
Companies selling to other businesses likewise saw record rates of decline in job numbers and profitability, with worries about the ability to raise funds for expansion.

The CBI's chief economic adviser, Ian McCafferty, said: "Consumers are clearly reining back their discretionary spending - postponing holidays, and spending less on leisure activities and personal care.Similarly, an already deteriorating demand for business services such as advertising, legal advice and temporary office staff has slumped in recent months .Jobs are already being lost at the fastest rate in over 10 years from the whole of the service sector, and firms' expectations suggest conditions will remain depressed for some time to come."

Bruce Stout, manager of Aberdeen Asset Management's £568m Murray International investment trust, said
"Political rhetoric claimed the nation had never been in better shape heading into a downturn - in reality it was the complete opposite Policymakers outwardly delivered assurances whilst internally they panicked. Interest rates were slashed to historic lows whilst simultaneously fiscal pledges and spending rocketed. The effects of such drastic measures have yet to be felt, but given the chronic state of the banking system and the sheer scale of debt outstanding, the UK economy is likely to suffer the worst recession of all G7 countries."

Professor Tim Besley states
"The idea that we can and should use short-term interest rates to quell asset booms or to curb lending practices is intellectually and practically suspect," he adds. "Put another way, all those charged with getting us out of this mess are now having to make it up as they go. And one obvious risk of throwing too many weapons at the credit crunch is that inflation turns negative for too long and we find ourselves in that very uncomfortable downwards spiral experienced by the Japanese throughout their lost decade. "

Alternative to capitalism

Posted here and plagiarised from here and here

The oldest existing socialist party in the UK has been propagating the alternative to capitalism since 1904. A Marxist-based ( but perhaps a William Morris - Peter Kropotkin amalgam , may be a better description ) organisation . It is a non-Social Democrat 2nd Internationalist , non-Leninist 3rd Internationalist , non- Trotskyist 4th Internationalist political organisation that is a formally structured leader-less political party .

Socialism is almost globally misunderstood and misrepresented. Socialism will be a basic structural change to society, and many of the things that most people take for granted, as "just the way things have to be", can and must be changed to establish socialism.

People tend to accept as true the things they hear over and over again. But repetition doesn't make things true. Because the truth and the facts often contradict "common knowledge", socialists have to show that "common knowledge" is wrong. That takes more words than just accepting the status quo.

Commodity production is organised within the constraints of the circulation of capital .This capital can accumulate , maintain its level or become depleted . The economic pressure on capital is that of accumulation , the alternative is bankruptcy . The production and distribution of goods is entirely subordinate to the pressure on capital to accumulate .Therefore the practical , technical organisation of production is entirely separate from the economic organisation of the accumulation of capital in which cost/price , value factors play a vital part. The economic signals of the market are not signals to produce useful things . They signal the prospects of profit and capital accumulation , If there is a profit to be made then production will take place ; if there is no prospect of profit , then production will not take place . Profit not need is the deciding factor .

This market system , involving the circulation of capital , generates commodity values which are brought into a relationship of exchange in the market , so that value , surplus to the value of labour-power , embodied in commodities is realised through sales . When enterprises calculate costs as a relationship of labour-time to output this is not with a view to passing on socially useful information about the organisation of production . They are calculating costs plus the average rate of profit . Through the exchange of labour- power for wages , capital is invested in the power of workers to produce goods . It is with active labour functioning as deployed capital that capital expands . Labour-power generates more values than it consumes . These surplus values belong to the enterprise in the material form of commodities which are then sold on the market . This is where capital realises its self-expansion and thereby accumulates . The market price of commodities produced must exceed the price of the materials and labour-power required to produce them . This is what costing is all about , it has nothing to do with the practical organisation of production In its overall effect the subordination of useful production to the accumulation of capital distorts and constrains social production . The market is at every point in the system a barrier of exchange between production , distribution and social needs . The circulation of capital confines useful labour within a self-enclosed system of exchange . Labour is activated by an exchange of labour -power for wages and this is determined by the capacity of the market to provide profit through sales .

In a socialist society, there will be no money and no exchange and no barter. Goods will be voluntarily produced, and services voluntarily supplied to meet people's needs. People will freely take the things they need.Socialism will be concerned solely with the production , distribution and consumption of useful goods and services in response to definite needs . It will integrate social needs with the material means of meeting those needs .

Common ownership is not state ownership. State ownership is merely the ownership by the capitalist class as a whole, instead of by individual capitalists, and the government then runs the state enterprises to serve the capitalist class. In the self-proclaimed "communist" states the state enterprises serve those who control the party/state apparatus. The working class does not own or control. It produces for a privileged minority.

Common ownership means that society as a whole owns the means and instruments for distributing wealth. It also implies the democratic control of the means and instruments for producing and distributing wealth, for if everyone owns, then everyone must have equal right to control the means and instruments for producing and distributing wealth.

The task of capitalist ideology is to maintain the veil which keeps people from seeing that their own activities reproduce the form of their daily life ,the task of Marxism is to unveil the activities of daily life, to render them transparent. As soon as people accept money as an equivalent for life, the sale of living activity becomes a condition for their physical and social survival. Life is exchanged for survival. Creation and production come to mean sold activity.As soon as people accept the terms of this exchange, daily activity takes the form of universal prostitution.

Capitalist ideology treats land, capital , and the products of labor, as things which have the power to produce, to create value, to work for their owners, to transform the world. This is what Marx called the fetishism which characterizes people's everyday conceptions, and which is raised to the level of dogma by Economics. For the economist, living people are things - factors of production -, and things live money - works, Capital - produces .When men refuse to sell their labour, money cannot perform even the simplest tasks, because money does not " work ". The notion of the "productivity of capital," and particularly the detailed measurement of that "productivity," are inventions of the "science" of Economics.

The production of surplus value is a condition of survival, not for the population, but for the capitalist system. Surplus value is the portion of the value of commodities produced by labour which is not returned to the labourers. It can be expressed either in commodities or in money , but this does not alter the fact that it is an expression for the materialized labour which is stored in a given quantity of products. Since the products can be exchanged for an "equivalent" quantity of money, the money "stands for," or represents, the same value as the products. The money can, in turn, be exchanged for another quantity of products of "equivalent" value. The ensemble of these exchanges, which take place simultaneously during the performance of capitalist daily life, constitutes the capitalist process of circulation. It is through this process that the metamorphosis of surplus value into Capital takes place.

The portion of value which does not return to labour, namely surplus value, allows the capitalist to exist, and it also allows him to do much more than simply exist. The capitalist invests a portion of this surplus value; he hires new workers and buys new means of production; he expands his dominion. What this means is that the capitalist accumulates new labour, both in the form of the living labour he hires and of the past labour (paid and unpaid) which is stored in the materials and machines he buys.

The capitalist class as a whole accumulates the surplus labour of society, but this process takes place on a social scale and consequently cannot be seen if one observes only the activities of an individual capitalist. It must be remembered that the products bought by a given capitalist as instruments have the same characteristics as the products he sells. A first capitalist sells instruments to a second capitalist for a given sum of value, and only a part of this value is returned to workers as wages; the remaining part is surplus value, with which the first capitalist buys new instruments and labor. The second capitalist buys the instruments for the given value, which means that he pays for the total quantity of labor rendered to the first capitalist, the quantity of labour which was remunerated as well as the quantity performed free of charge. This means that the instruments accumulated by the second capitalist contain the unpaid labour performed for the first. The second capitalist, in turn, sells his products for a given value, and returns only a portion of this value to his laborers; he uses the remainder for new instruments and labour.

If the whole process were squeezed into a single time period, and if all the capitalists were aggregated into one, it would be seen that the value with which the capitalist acquires new instruments and labour is equal to the value of the products which he did not return to the producers. This accumulated surplus labour is Capital.

In terms of capitalist society as a whole, the total Capital is equal to the sum of unpaid labour performed by generations of human beings whose lives consisted of the daily alienation of their living activity. In other words Capital, in the face of which men sell their living days, is the product of the sold activity of men, and is reproduced and expanded every day a man sells another working day, every moment he decides to continue living the capitalist form of daily life.

Matters little if capitalism is small or large - either way , it is based on robbery .

The choice of "good" or "bad" capitalism is little different than choosing between typhoid or cholera