Calculation Problem Again

Justin Schwartz jschwart at freenet.columbus.oh.us
Mon Oct 31 21:23:22 MST 1994


On Mon, 31 Oct 1994 tgs at cunyvms1.gc.cuny.edu wrote:

> Justin,
> In my opinion, McNally's critique is much deeper than what you make it
> out to be.  Pro-marketeers make out the market as did Smith (and I admit I
> am not as versed about this subject as you are, but this is the way I feel,
> and if I'm caricaturing, I apologize in advance), as a unique registrar of
> supply and demand.

??? I don't know what this means.

  But what Marx discovered, as McNally points out, is
> that the market system's unconscious "rationality" in setting prices--where, as you
> yourself say, like on Dylan's Desolation Row, nobody had to "think to much"-- is
> based upon the commodification of human labor in the wage market.

McNally says this, but in the first place he offers no shred of argument
for it and in the second place it cannot be a correct reading of Marx,
whose account of the commodity relation and the law of value is in place
in C1, chaps 1-2, before wage labor is introduced. Of course the issue is
what's true and not what M thought.

Now Hayek and Mises argue that everything must be marketized, including
labor power, for markets to work at all, to cost accurately, etc. But this
is false. Markets don't give true prices; they ignore externalities, etc.
and don't reflect moral costs and considerations. Which is why even Hayek
would not countenance, say, a market in human beings. Anyway empirically
markets work OK without being global as in Hayek's u(or dis)topia. So the
claim that markets won't work without wage labor is so far unproven and
probably false.

 If you
> start monkeying around with this by freeing labor from commodification, you
> play havoc with this vaunted unconscious rationality--as my friend Richard
> Smith, of Solidarity, has shown in his many studies on China.

I'm publishing a piece of Richard and Nancy's in my collection Beyond
Communism and Capitalism (Humanities, forthcoming, plug plug). My main
complaint about it was that I did not find this very point substantiated.

 It is
> just such attempt to regulate the market which plays havoc with China's
> economy today, leads to the black market, etc.

So why does it work in Western Europe? I mean market regulation.

>
> It's just not so simple as you make out when you say that all we need is
> a big welfare state, labor rights, assumedly labor control over the
> goverment (HOw you'll get this through the Federalists, I'll never
> know--that's my cheap shot), etc.  That's a Rousseauvian notion: that we can
> be pure within the state, to exercise the political will to such an
> extent, that we can control the market and not let it take control of us.

Unfair to Rousseau, who insisted on a great measure of equality because he
knew that markets are corrosive and wild. As do I.

> The abstract state, which you would need in any case to have enough power
> to control the market, ends up being corrupted that market.  Look at Sweden, half
> a dozen other experiments in social democracy.

Firstly, Sweden isn't that corrupt. Anyway, question I have for McNally,
you, and all the anti-marketeers: what makes you so sure it is markets and
not class which does the dirty work in Sweden (such as its being done
there), China, etc/?

  As for producer capitalism
> staying pure within society itself; it doesn't.

I reject this characterization of market socialism. How'd you like
"democratic Stalinism" as a moniker for your own view?

  The more self-exploitative
> we are in our own firm, the more profit we all think we'll get; this leads
> to increasing hierarchy wihin the firm as the bastards who get things done
> are increasingly promoted or promote themselves.  they become a new
> capitalist class, all over again: a class is now in the saddle, as it corrupts
> the state.

This debate was gone over in nauseating detail by Schweickart and Arnold
(a right wing critic of MS, defending your side of the debate) in the
journal Economics and Philosophy in 1987. Schweickart won and Arnold
admitted as much. If you want me to post a summary with my own
contribution, I will. But you should check out some of this literature
yourself. A lot of this is old stuff.

Anyway, markets produce inequality and corruption and influence-peddling
will be a problem. (As if they aren't in planning!) But degeneration to
capitalism isn't a real concern.

>
> You say  you believe in the falling rate of profit.  How can this
> tendency be countered by market socialism?

I said I acknowledged the existence of an empirical tendency, not Marx's
explanation of it. Since I don't think value is causally efficacious, I
hardly could. I also do not ascribe to the ToRPtF the cataclysmic
consequences Marx suggests. So basically I don't think it's that big a deal.

  Can the market socialist state
> abolish the FRP via legislative fiat?  Hardly.  As profits decline,
> what incentive would be to serve the society, rather than get rich quick
> schemes, financial speculation, feeding off the trough of the market
> socialist state: precisely as the capitalists do today?

Better control over investment would enforce productive investment; the
absence of financial and speculative markets would limit possibilities for
a marker socialist 1980s.

 Even if you can
> find some ur capitalist society, perhaps in the 19th century, where
> profit does lead to efficient investment in useful production, you can't
> show me how this could occur today.

Look Tom, who got the burden of proof? Your side has to explain why we
won't end up with the debacle of Soviet planning, at least off the Marxism
list and when you are facing real people. Markets have problems. Planning
is worse. Show the contrary. You don't do it by pointing out that markets
have problems or by waving democracy as a magic wand. No one but the
converted will believe you. Pretend I am an ordinary worker instead of an
unemployed philosopher and explain to me why your future won't be like the
USSR, sans secret police.


--Justin


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