The Money Theory of the State (Merchant, 2021)

Reflections on Modern Monetary Theory

by Jamie Merchant, Feb 2021, Brooklyn Rail: Field Notes

“No domination is so easily borne, even so gratefully felt, as the domination of high-minded and highly educated officials.”

— Georg Friedrich Knapp¹

Kafka’s unfinished final novel, The Castle, can be read as a parable about the misrecognition of power. In the course of trying to discover if he has, or has not, been appointed as a land surveyor by the local authorities, the protagonist K. becomes obsessed with the authorities themselves, the officials of the great castle whose shadow looms over the village below. Its bureaucrats cut nearly superhuman figures, working tirelessly day and night on countless cases while keeping track of innumerable files with an otherworldly zeal that overawes K. and the villagers, who respect and even revere them. Over the course of the narrative, though, it becomes evident that all this strenuous paper-pushing might be completely pointless, directed to tasks they may never complete, involving problems and questions that cannot be resolved or perhaps never existed in the first place—including, probably, K.’s appointment. The officials might very well have no idea what they are doing, or they might be useless drones, working themselves to death toiling away in busy work that never goes anywhere. But for K. this is unthinkable. For their prestige flows from the impersonal rule of the mechanism, the calcified, methodical, formal procedures that, as in a cage, enfold and dominate the officials and the villagers alike. K. deploys his own formidable powers of reasoning to penetrate their mysteries in his quest to gain permission to enter the castle. But the more he learns, the more he calmly reasons and deduces the state of affairs with impeccable logic, the more transfixed he is by the officials’ cabbalistic aura, the more entangled he becomes in their byzantine networks of influence, and the more he effectively dominates himself.

A world without money: communism (Les Amis de 4 Millions de Jeunes Travailleurs, 1975-76)

Un Monde Sans Argent: Le Communisme was originally published in three parts, as three separate pamphlets, in France, between 1975-6. It was produced by Dominique Blanc, shortly after the dissolution of the Organisation des Jeunes Travailleurs révolutionnaires. The name Quatre Millions de Jeune Travailleurs was apparently ‘adopted’ from a 1971 PSU youth publication (Parti Socialiste Unifié – a French Socialist Party), presumably to satisfy French publishing laws, and texts continued to be published under this name through the 1970’s including the widely distributed tract A Bas Le Proletariat/Vive Le Communisme.

PDF: English / French

Get rid of work (Dauvé)

What follows is a long essay by the French communization theorist, Gilles Dauvé translated by Ediciones Inéditos. It is a long read, a read which varies in content and tone but a text which masterfully summarizes the communist critique of work. The original can be found here at Troploin. He also dutifully notes that without the abolition of work there can be no communist revolution or communism. We hope you enjoy reading this as much as we enjoyed translating it. ¡A la chingada con el trabajo!

Here you will find a lightly modified chapter 3 from the book “From Crisis to Communization” published in 2017 by Editions Entremonde.

False construction sites

In 1997, in the French department of Sarthe, some 20 workers were constructing a section of highway under the direction of an engineer employed by a large company, BTP. After two months the engineer was arrested: no one had ordered the work that was partially done, which with an initial financing, the false construction site manager had successfully hoodwinked both banks and public organizations. Between 1983 and 1996, Philippe Berre had been convicted 14 times for ordering false construction sites. In 2009, “The Beginning,” a film inspired by this whole adventure was released, displaying a population struck by unemployment which briefly found work and hope. Phillippe Berre was not motivated by personal gain, but rather by the need to do, to be of use, to reanimate a group of workers. In 2010, once again, he took on this role while helping those affected by Cyclone Xynthia.

We all know “rogue bosses.” Philippe Berre is a fictitious boss, an anti-hero for our times; at once a “manipulator of symbols,” an agile manager of human resources, at a crossroads between the automobile and the BTP (presented as the two principal employers within modern countries), wandering as a nomad on the highways, as mobile as the activities which he preyed upon, living on the ephemeral dreams that his dynamism created around him, an illustration of a fluidity without markers or attachments, where money flows but is not wasted, where success has no future, where one builds worthless things, where all appears as communication and virtuality. But is not a sense of reality which Philippe Berre is lacking, rather he lacks respect.

When a crook brings work, revenue, and thus some “meaning” to a community in perdition, even if it is a provisional and false meaning, this raises the question – what does production and work mean? The unemployed at Sarthe trusted Philippe Berre because he brought them some socializing, a role, a status, a sense of being recognized. What is useful? Useless? Fictitious? Real? What is profitable or not? Was this piece of highway more or less absurd than any “real” highway? What work is worthy of being qualified as “a waste”? Beyond the hard reality of work (it creates objects, creates profit and is generally onerous), what is the truth?

We Need Communism

 

QUESTION: Why do we need communism?

ANSWER: Because people need money

 

Simon Clarke’s Guide to Capital: All Three Volumes

Simon Clarke’s homepage / publications

Guide to Capital as doc / pdf

Books: Marx, Marginalism, and Modern Sociology / Marx’s Theory of Crisis  / Keynesianism, Monetarism and the Crisis of the State / One-Dimensional Marxism  / The State Debate

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Capital, volume 1, Chapter 1.

Background:

The first chapter of Capital is both the most important, in that it introduces the basic concepts of Marx’s theory of value, and the most difficult.

Marx first began to work out his theory of value in the Grundrisse (1857), but the discussion there is very convoluted and incomplete. The first version of Chapter One of Capital is to be found in the Critique of Political Economy (1859), whose first chapter is in many ways the best introduction to Chapter One of Capital. The discussion of the Critique differs in a number of ways from that of Capital:

1. In the Critique Marx does not make the fundamental distinction between value and exchange-value that is made in Capital
2. in the Critique the argument has a much more ‘Hegelian’ flavour: the argument is entirely formulated in terms of the development of the contradiction between (exchange)-value and use-value

• the logical and historical development of the argument are both present, but are separated: a logical analysis is followed by a historical one, whereas in Capital the two are more closely integrated
• Marx devotes much more attention to money in the Critique (and in the Grundrisse) than he does in Capital, (the discussion of money in Capital refers the reader back to the Critique)

1. The explanation of the theory of value in the Critique is rather different from that in Capital. In the Critique the discussion of commodity fetishism is more closely integrated into the discussion of the theory of value and it is clear that for Marx it is the ‘qualitative’ rather than the ‘quantitative’ dimension that is important: i.e. the theory of value is a theory of the way in which, through money and exchange, private labours are brought into social relation with one another. In Capital the exposition emphasises the quantitative dimension first: the theory of value as a theory of the ratio in which commodities exchange, before discussing the qualitative dimension.

The version of the first chapter of Capital in the English translations is a revised version that first appeared in the third German edition. In the first two editions the first chapter was shorter (roughly the first two sections of the later version and shorter versions of the third and fourth sections), and there was also an Appendix on ‘The form of value’ that was integrated into the third section in the rewrite. The change was made in an attempt to make the first chapter more comprehensible but it does introduce some differences in emphasis. (A translation of the first version of Ch. 1 and the Appendix is published, in a very tortuous translation, in Value Studies by Marx (A. Dragstedt, ed.). A much better translation of the Appendix has been published in Capital and Class, 4, 1978.)

Chapter One of Capital offers us a sociological theory of the market. Marx does not see the market simply as an institution in which individuals meet to exchange commodities, to be understood in isolation from the production of commodities, for exchange itself has implications for production. It is through the price mechanism that apparently independent producers are persuaded to produce in accordance with social needs: if too much of a commodity is produced, the price falls and less will be produced: producers will direct their labour into the production of other goods. If a producer is inefficient he or she will not get full recognition in the market for the work he or she has done, and so will be compelled to increase efficiency. Thus the market is the place in which the labour of individual producers is brought into relation with that of other producers, and so of society as a whole. The market is a particular way of allocating social labour, appropriate to a particular kind of society in which individuals work independently of one another to produce goods for the use of others. Thus the relation between individual producers in a commodity producing society is not directly recognised as a social relation – the producers do not get together to plan production as interdependent members of society. Instead the social relation between these producers takes the form of a relation between things, between the goods they exchange for one another. The exchange ratio, or exchange value, of commodities, is not, therefore, merely a relation between inanimate objects, but it expresses the relation between the labours of the individuals who have produced those commodities. This idea is the basis of Marx’s theory of value.

Money and Totality

Michael Roberts reviews Fred Moseley’s new book, Money and Totality, Brill, 2016

One of the major trends in the world economy in the last two years has been the collapse of the price of oil in world markets. From a peak of over $100 a barrel, the price plummeted to under $30 a barrel and is still only around $40. The explanation for this fall, as provided by mainstream economics, is simple. There has been a change in the supply and demand for oil. Economists then go on to discuss which is the more important factor: supply increasing or demand falling.

But this analysis of the price of a commodity and what is it is worth at the level of supply and demand – as taught in all economics textbooks in colleges – is superficial at best. There is a joke in financial investor circles, when discussing why the stock price of a particular company has suddenly fallen: ‘Well, there were more sellers than buyers’ – true to the point of tautology.

What explains why a barrel of oil is $40 and not $1? Why do 100 paper clips cost $1 and one car costs $20,000? In other words, we need to understand what something is worth in the marketplace beyond just supply and demand; we need a theory of value. From that, we can begin to explain the workings of a capitalist economy, where everything is produced for sale. And if we can measure changes in value we can begin to understand the laws of motion of a capitalist economy – and, Marxist economics would add, its key contradictions, because Marxist economics is not so interested in the changes in the price of one commodity as in the nature and causes of the overall trends and fluctuations in an economy. That is, macroeconomics – with a purpose.

Marxist value theory is based on the view that commodities are priced in the market according to the labour time expended on them. Actually, labour time is basic for all forms of social production by human beings. As Marx wrote,

Every child knows a nation which ceased to work, I will not say for a year, but even for a few weeks, would perish. Every child knows, too, that the masses of products corresponding to the different needs required different and quantitatively determined masses of the total labour of society. That this necessity of the distribution of social labour in definite proportions cannot possibly be done away with by a particular form of social production, but can only change the mode of its appearance, is self-evident. No natural laws can be done away with.¹

But Marx goes on:

What can change in historically different circumstances is only the form in which these laws assert themselves. And the form in which this proportional distribution of labour asserts itself, in the state of society where the interconnection of social labour is manifested in the private exchange of the individual products of labour, is precisely the exchange value of these products.

This is why Marxist theory of value applies to capitalism, not previous modes of social organisation.

Michael Heinrich Understands Marx

Michael Heinrich: Value, fetishism and impersonal domination

Public Discussion With Michael Heinrich

 

Michael Heinrich: The bourgeois state: class domination on the basis of freedom and equality

Traditional Marxism, the New Reading of Marx and the Critique of Capitalism