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A “Convoluted Mess of Nonsense”

A response to James Heartfield’s review of The Failure of Capitalist Production

Andrew Kliman

Platypus Review 73 | February 2015

I HAVE RELUCTANTLY DECIDED TO RESPOND to James Heartfield’s review (Platypus Review #70) of The Failure of Capitalist Production because more than a few people seem to think his review is a serious and interesting engagement with my book. I want to explain why it is not.

My task is made somewhat easier because I need not deal with the self-contradictory character of Heartfield’s review. Philip Cunliffe’s critique of it in the Platypus Review (#72) deals with that problem quite well. I will instead focus on empirical issues, because my book is principally a detailed analysis of data pertinent to an understanding of why the Great Recession erupted. (Although space constraints force me to disregard some of the review’s theoretical and empirical criticisms, I do not accept any of them.)

I agree with Brendan Cooney when he commented that the review is a “convoluted mess of nonsense” and that “Heartfield has misunderstood almost all of the main arguments of the book.” The chief thing he has misunderstood is that the book is a discussion of the “Underlying Causes of the Great Recession” (as its subtitle says)—which is a topic almost entirely absent from Heartfield’s review—rather than a part of what he calls “the extensive literature on American decline.”1

My main aim, however, is not to complain about Heartfield’s review per se, but to protest against the fact that the debate over the causes of the Great Recession has in general failed to adhere to proper intellectual standards. To take just one of many other examples, the geographer David Harvey recently published a draft paper which takes issue with the “single causal theory of crisis formation [that] many Marxist economists like to assert.” He alleges that “Andrew Kliman has been most strident in his claim that the crisis (the crash of 2007–8) had nothing to do with financialization.”2 But he provides no evidence that I have ever made such a preposterous claim, stridently or otherwise, and my book (which he cites) explicitly says the opposite: “a financial crisis triggered the recession, and phenomena specific to the financial sector (excessive leverage, risky mortgage lending, and so on) were among its important causes.”3

I think Anatole France was correct. The “majestic equality” of laws which “forbid the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread” is actually a parody of equality. By the same token, a process which allows a more dominant school of thought to level a host of egregiously incorrect criticisms against a less dominant one, and “allows” the latter school to devote much, if not most, of its limited time and resources to defensively replying to this host of unfounded criticisms, is actually a parody of pluralism and scholarly dialogue.

This is not a case of an “aggrieved author” taking umbrage at “bad reviews.” The chief victim of the failure to adhere to proper intellectual standards is the public. A process in which the protagonists say what they want, while the reader bears the burden of sorting it all out, is a woefully inadequate method for getting at the truth. Left to their own resources, readers generally lack the expertise—and especially the time needed to gain the expertise––to separate fact from fiction, sound argumentation from appealing storytelling. They need the assistance of publishers, editors, and the scholarly community at large. But they aren’t getting it. Thus, the public is left unprotected against manipulation and the pull of preconceptions and dominant discourses. It needs to register its protest, too; otherwise the problem will persist and probably get worse.

The “Productivity/Compensation Gap”

Heartfield’s key empirical claim is that “wages … stagnated while productivity climbed” in the U.S. from the early 1980s onward, and that this means there was a “fall in the workers’ share of output.” For added effect, the review reproduces a scary-looking graph, a variant of the so-called “productivity-compensation gap.” However, as I have explained elsewhere, that gap and variants of it are just extremely misleading factoids that are produced by researchers who adjust for inflation in an inconsistent manner.4 They do not mean that workers’ share fell, contrary what has been claimed by Doug Henwood, the “authority” to whom Heartfield appeals.5 To draw that conclusion is to “lie with statistics.”

Figure 1 shows the trend, or more precisely, the lack of any trend, in employee compensation as a share of output (net value added) in the U.S. corporate and total business sectors between 1970 and 2007. The employee-compensation and output data come directly from the U.S. government, without any adjustment. (The “net” in “net value added” means “after depreciation”; depreciation is excluded because, as Dean Baker puts it, “[n]o one eats depreciation,” neither workers nor business owners.)6

1-Kliman-comp-share

Figure 1. Employee Compensation as Share of Net Output, U.S. Corporate and Business Sectors

Although compensation of employees includes the pay of CEOs and other top corporate executives—most of which is arguably profit in disguise—makes extremely little difference. I have estimated that rising compensation of executives in “the 1%” depressed other employees’ share of business-sector output by only 0.6 percentage points between 1979 and 2005. Even a wildly unrealistic assumption about the growth in the executives’ pay relative to the growth of their total income results in a decline of less than one percentage point.7

So much for the mythical fall in workers’ share of output.

But what about the supposed fact that compensation received by employees has failed to keep pace with their productivity? Well, the fact that the compensation share did not trend downward means that compensation and output rose at the same rate, which in turn means that compensation per hour of work and output per hour of work rose at the same rate. But “productivity” is just another word for output per hour of work. So hourly compensation and productivity rose at the same rate. The gap did not increase.

That is the case when we use the plain dollar figures, as I have done here, and it is also the case when we adjust for inflation in a consistent manner. The supposed increase in the “productivity/compensation gap” results from inconsistent inflation-adjustment; one price index is used to “deflate” the productivity figures but a different price index is used to “deflate” the compensation figures.

Imagine that output is originally $100 and workers get $60. In some later year, output is $300 and workers get $180. The workers’ share is 60% in both cases; it does not fall. Yet if we take the latter year’s numbers and deflate (divide) output by a price index that has doubled but deflate compensation by a different price index that has tripled, we get $300/2 = $150, and $180/3 = $60. Voila! We have created a “productivity/compensation gap” that the Henwoods and Heartfields can use to tell us that the workers’ share fell from 60% to 40% ($60/$150).

Following my exposé of this “gap,” my editor at Truthdig contacted several left or liberal critics of my work. None of them identified any error in my analysis, but none of them were willing to speak on the record! Such is the left wing of capital’s attitude to getting at the truth.

Unfounded Accusations of Misconduct

The really disgusting aspect of Heartfield’s review consists of his unfounded accusations that I am guilty of grossly unethical manipulation of data. He claims that I have “doctor[ed] the figures on pay” and have “massage[d] the statistics on the rate of profit” in order to “to make it look smaller.” Given that these allegations are not accompanied by any evidence, the Platypus Review should not have allowed them to be published.

I did not “massage” statistics on the rate of profit. The government does not publish any rate-of-profit statistics. So there is no pre-existing data series that I cleverly “massaged” or “adjusted” Everyone who produces a data series that they call a “rate of profit” has constructed this ratio, using other data series (on profit, capital, etc.). The U.S. government does not say which way the rate of profit should be constructed; “rate of profit” is just not one of its national accounting concepts.

And while Heartfield claims that “one cannot help but think that the real importance of the adjustment that Kliman makes to the rate of profit is to make it look smaller,” there certainly is a way to avoid thinking such a terrible thing. One could have believed me when I wrote that “I knew that proponents of the conventional [Left] wisdom mis-measure the rate of profit” before doing my empirical research, “but I had no reason to believe that their measures were overstating the rise in profitability instead of understating it.”8 In other words, I had no reason to think that the trajectory of the “massaged” (i.e., correctly measured) rate of profit would contradict rather than reinforce their claims.

If I am guilty of “doctoring” the figures on pay, then so is the U.S. government’s Bureau of Economic Analysis (BEA) and so are the national accounting agencies of all of the other governments that follow the standards laid out in the international System of National Accounts (SNA). The figures for employee compensation I used came directly from the BEA. I did not “doctor” or adjust them in any way, and I did not concoct my own “expanded definition of wages.” Heartfield may not like the fact that “the inflated cost of health insurance and other elements of the so-called ‘social wage’” (e.g., the portion of Social Security benefits paid for by a tax on employers) are parts of employee compensation, but the SNA and the BEA say that they are.

And they are correct. One may think that a dollar of health-insurance benefits, or a dollar of Social Security benefits, fails to provide employees with as much subjective utility as a dollar of cash wages received immediately, but that is irrelevant. The purpose of the national accounts is to track where the dollars go, not to measure utility. The dollars in question go from employers to employees. That is, an extra dollar that a company spends on “inflated … health insurance,” or an extra dollar that it pays in Social Security tax, reduces its profit by a whole dollar, just as an extra dollar of cash wages does! It is not really profit. The people who “doctor the figures on pay” are those who exclude the benefits component of employee compensation in order to wrongly make it seem as if the slow growth of cash wages received immediately means that workers’ pay has stagnated. Workers are paid health-insurance benefits and Social Security benefits funded by the tax on employers.

Value and Exploitation

Heartfield devotes almost a thousand words to a discussion of the temporal single-system interpretation (TSSI) of Marx’s value theory. The whole thing is just a display of fake erudition. He literally has no idea what he is talking about.

According to Heartfield, a “long-defunct[!] school of ‘neo-Ricardians’” tried to solve the alleged inconsistency in Marx’s theory “using a ‘single-system interpretation,’” according to which “there was no ‘transformation’ of values into prices, but that all values are already prices.” Even worse, he claims that TSSI supposedly tries to explain the fact that “inputs are not equal to outputs.” He claims that the TSSI attributes this inequality to “depreciation of capital goods” and the fact that “the value of the goods that make up the production process [sic] changes over time in the production process.” According to the review, the TSSI thereby “demotes exploitation as the main difference in the value of inputs and outputs.” (This is a reference to the fact that, in Marx’s theory, workers’ surplus labor is the sole source of the surplus-value that causes the total value of output to exceed the total capital that was advanced to produce it.)

All this would be side-splittingly funny if it were in an F-minus freshman essay. But it was deemed worthy of publication in the Platypus Review; and a goodly number of people seem to think that Heartfield’s review is a serious and interesting response to my book. This is just a sad sign of the decrepit state of Marxist thought today—especially insofar as the critique of political economy is concerned. (I doubt that the Platypus Review would publish a piece that mistook Adorno for a brand of hair spray; Heartfield’s errors here are hardly less elementary.)

When the TSSI says that the values of inputs and outputs can differ in Marx’s theory, it is referring to per-unit values. For example, the value of a pound of coal used as an input into the production process can differ from the value of a pound of coal that emerges as an output of the process. This has nothing to do with what causes the total value of output to exceed the total value of inputs. Thus, the TSSI neither contradicts nor “demotes” Marx’s exploitation theory of profit. In fact, the TSSI is the only interpretation that preserves this crucial facet of Marx’s theory. All simultaneist (atemporal) interpretations actually imply that surplus labor is not the exclusive source of profit, as Roberto Veneziani was forced to concede in a 2004 paper in Metroeconomica (the flagship journal of the “long-defunct school of ‘neo-Ricardians’”).9

Investment

Heartfield claims that we now have a “risk-averse capitalist class.” In light of the frenzied speculation that culminated in the biggest financial crisis since 1929, this is simply preposterous. He tries to dig himself out of the contradiction between the facts and his theory by claiming that what I regard as “a sign of excessive risk-taking is in fact a symptom of risk aversion.” This may seem like sophisticated dialectic, but it is equally preposterous. He swallows whole the Federal Reserve’s self-serving “saving glut” explanation of the U.S. home-price bubble, ignoring the facts that saving did not exceed productive investment globally and that, in the U.S., productive investment substantially exceeded domestic saving.10 No risk-averse behavior there. But even if there had been a saving glut, no one forced anyone to speculate in risky mortgage-related securities instead of parking savings in T-bills, money-market accounts, and under mattresses. A “risk-averse capitalist class” would have done the latter. It’s that simple.

Heartfield contends that “Kliman…claims that what is important is not the cost it would take to replace the capitalists’ assets but their historical cost. But capitalists use different ways of reckoning their investments in different circumstances; sometimes one way, sometimes another.” This is not correct. Capitalist firms use different ways of reckoning the value of their assets. The assets’ replacement cost is indeed one way to value them. But investment (the advance of capital) is an entirely different matter. Imagine that a company spent $100,000 on a computer system ten years ago, and imagine that the exact same system could be replaced for only $2000 today (not that any company would want to do such a thing). It is certainly legitimate to say that the current value of the company’s existing computer system is $2000 (assuming that it has suffered no wear & tear). But it is completely illegitimate to say that the company invested $2000 when it acquired the computer system ten years ago. It invested—forked over—$100,000.

And this brings us to the “dirty little secret” of the rising-rate-of-profit camp. When it tells us that U.S. corporations’ “rate of profit” substantially rebounded under neoliberalism, from the early 1980s until the Great Recession, it is not actually telling us that there was a sustained rise in the corporations’ rate of return on investment, i.e., their profit as a percentage of the amount of money they forked over to acquire their assets. The facts are clear. There was no such sustained rise. What the rising-rate-of-profit camp is actually telling us is that there was a rise in profit as a percentage of the amount of money that the corporations would need in order to replace all of their assets today. So what? It has never been made clear why this matters or whether it matters. I do not think it does.

“Good” and “Bad” Capitalists?

Heartfield reproduces a graph that depicts a decline in work stoppages. He claims that it “shows that the ruling class substantially defeated the challenge of organized labor in the 1980s.” Actually, the graph shows that the number of work stoppages began to fall long before the 1980s. There were 412 stoppages in 1969. By 1980, there were only 187. Thus, well more than half of the total fall in work stoppages between 1969 and today occurred before the supposedly watershed event—the smashing of PATCO (the Professional Air Traffic Controllers Organization) by the Reagan administration in 1981.

Heartfield’s error is no accident. An entire chapter of my book is devoted to exposing a wide variety of similar errors—i.e., attempts to postdate to the 1980s economic changes that actually began in the 1970s or earlier. In every case, the effect of the postdating is to wrongly make it seem that the turning point in recent U.S. economic history was the 1980s, when the “bad” (neoliberal) wing of capital beat out the “good” (Keynesian-statist) wing and supposedly ushered in a long-run expansionary phase of capitalism on the backs of the working class. (Heartfield even has the audacity to refer to “the recovery of capitalist growth in … the first [decade] of the twenty-first [century],” as if the Great Recession never occurred.) And this story enables the Left to console itself with the idea that its isolation and irrelevancy are due to the alleged smashing of the working class rather than to its own errors, attitudes, theories, and so on.

Theory and Empirical Evidence

Heartfield writes, “What in Marx is an expression of the accumulation process [i.e., the tendency of the rate of profit to fall] becomes the primary driver, in Kliman’s theory, which claims that the falling rate of profit ‘produced a persistent fall in the rate of capital accumulation.’” This is ridiculous, for two reasons. One reason is that what he calls “Kliman’s theory” is not theory at all. It is an empirical finding. It cannot be dismissed by counterposing it to “another” theory that one prefers. Heartfield does nothing to call the finding into question.

The other reason is that Heartfield’s understanding of Marx’s theory of capitalist accumulation is abysmally poor. Marx clearly argued that “the rate of profit [is] the stimulating principle of capitalist production, the fundamental premise and driving force of accumulation,” that “the rate of accumulation falls with the rate of profit,” that “the accumulation of capital in terms of value is slowed down by the falling rate of profit,” etc.11 There is nothing inconsistent about claiming that capital accumulation that has a labor-saving bias produces a tendency for the rate of profit to fall, but that the fall in the rate of profit in turn tends to retard capital accumulation. This isn’t even remotely paradoxical. Heartfield wants us to have to choose between these two claims, but we don’t have to. Marx was describing what is now called a “negative feedback loop,” in which the initial stimulus produces a reaction that in turn lessens the stimulus. For another example, consider a fall in temperature that triggers a thermostat to switch the heat source on, which in turn raises the temperature. If the process Marx described is inconsistent, then so is a thermostat.

Heartfield writes, “That increased productivity, by cheapening the means of subsistence, makes it possible for capitalists to pay their workers less and increase exploitation, which was so central to Marx’s theory, does not feature in Kliman’s.” Here again, we have an empirical finding wrongly characterized as theory in order to improperly dismiss it by counterposing it to “another” theory that one prefers. And here again, Heartfield gets Marx’s theory wrong. Neither in reality nor in Marx’s theory is there any automatic cause-and-effect relation between the cost of reproducing workers’ ability to work (labor-power) and the wages and benefits they receive. The cost of reproducing workers’ ability to work is one thing that influences how much they are paid, but certainly not the only thing. For instance, Marx argued that, “Apart from violent conflicts as to the rate of wages … a rise in the price of labour resulting from accumulation of capital implies” either that “the price of labour keeps on rising, because its rise does not interfere with the progress of accumulation” or that “accumulation slackens in consequence of the rise in the price of labour, because the stimulus of gain is blunted.”12 If the process of capital accumulation and “violent conflicts” affect wage rates, then the cost of reproducing workers’ ability to work is clearly not the sole determinant.

Conclusion

Heartfield’s misrepresentation of these empirical findings as theoretical claims is connected to the fundamental problem of his review. He wants to depict me as having told a story that he can oppose by telling a different story and by pointing to distortions in mine. Thus, his review is chock-full of complaints that I put too much stress on one thing but too little on another; that I ignore certain alleged facts and dismiss others; that I underestimate this, fail to understand that, and miss out the other.

But my book is actually a detailed analysis of data, not a story. This does not mean that I necessarily got everything right; I may have made computational and interpretive errors. (I may also have looked at the wrong phenomena, but the phenomena I looked at are those that my opponents look at; I argued that they misunderstand these phenomena, not that they should have looked at other ones.) Yet the fact that my book is a detailed analysis of data rather than a story does mean that Heartfield’s “stress-related” criticisms are completely irrelevant. For example, I found that U.S. corporations’ rate of profit fell and never recovered in a sustained manner under neoliberalism. This finding cannot properly be challenged by pointing to factors which affect the rate of profit that I failed to stress, ignored, or whatever—because there are no such factors! The trajectory of the rate of profit was the net result of everything that affected the rate of profit, that is, everything that affected profit and everything that affected capital investment—all tendencies, countertendencies, institutions, accidents, etc.

Thus, irrespective of how much or how little a particular factor was explicitly discussed in my book, its influence was fully taken into account because the data reflect its influence. The net result of the operation of all of these factors was that the rate of profit fell and never rebounded in a sustained manner. |P


  1. See James Heartfield, “The failure of the capitalist class and the retreat from production,” Platypus Review #70 (October 2014). Available online at: /2014/10/26/the-failure-of-the-capitalist-class-and-the-retreat-from-production.  

  2. David Harvey, “Debating Marx’s Crisis Theory and the Falling Rate of Profit.” Available online at: http://davidharvey.org/2014/12/debating-marxs-crisis-theory-falling-rate-profit/  

  3.  Andrew Kliman, The Failure of Capitalist Production: Underlying Causes of the Great Recession (London: Pluto Books), 2012, p. 6.  

  4. Andrew Kliman, “Were Top Corporate Executives Really Hogging Workers’ Wages?” Truthdig, September 18, 2014. Available online at: http://www.truthdig.com/report/item/were_top_corporate_executives_really_hogging_workers_wages_20140917.  

  5. Doug Henwood, “A Return to a World Marx Would Have Known” New York Times, March 30, 2014. Available online at: http://www.nytimes.com/roomfordebate/2014/03/30/was-marx-right/a-return-to-a-world-marx-would-have-known.  

  6.  “Wages as a Share of Net Output, not Gross.” Center for Economic and Policy Research, September 14, 3013. Available online at: http://www.cepr.net/index.php/blogs/beat-the-press/wages-as-a-share-of-net-output-not-gross.  

  7.  Kliman, “Were Top Corporate Executives Really Hogging Workers’ Wages?”  

  8. Kliman, The Failure of Capitalist Production, pp. 5–6.  

  9.  Roberto Veneziani, “The Temporal Single-system Interpretation of Marx's Economics: A Critical Evaluation,” Metroeconomica vol. 55, no. 1, pp. 96–114.  

  10. Kliman, The Failure of Capitalist Production, pp. 44-5. Note also that neoliberalism and financialization did not cause productive investment to fall, or financial payments and acquisitions to rise, as shares of U.S. corporations’ profits (see Andrew Kliman and Shannon D. Williams, “Why ‘financialisation’ hasn’t depressed US productive investment,” Cambridge Journal of Economics, 2014. Available online at: http://cje.oxfordjournals.org/content/early/2014/09/23/cje.beu033).  

  11. Karl Marx, Capital Volume III, Ch. 15. Available online at: https://www.marxists.org/archive/marx/works/1894-c3/ch15.htm.  

  12. Karl Marx, Capital Volume I, Ch. 25. Available online at: https://www.marxists.org/archive/marx/works/1867-c1/ch25.htm.  

19 comments

  • Posted 4 years ago

    THESES ON KLIMAN’S THEORY OF CAPITALIST CRISIS

    1. Though he would appear to be unaware of it, Andrew Kliman’s account of the capitalist crisis in his book, were it accurate, would not be a demonstration, but a refutation of Marx’s theory of the falling rate of profit.

    2. Marx’s theory is that the dynamic of accumulation is the production of relative surplus value, whereby the increased productivity of labour cheapens the means of subsistence so that workers are paid less and a greater share of the total output falls to the capitalist class. The accumulation of capital, then has as its foundation the increase of surplus value relative to the workers’ consumption, the value of labour power. But, says Marx, the increase in surplus value gives rise to a fall in the ratio of profit to the total capital advanced. This is because a greater share of the surplus must be invested in means of production to achieve the increase in labour productivity, so that over time the ratio of the surplus to the capital invested in both wages and means of production falls.

    3. Andrew Kliman claims to have demonstrated an empirical fall in the rate of profit, and that this demonstrates the rightness of Marx’s theory. But he also claims to have demonstrated empirically that the value of labour power, the value of workers’ compensation has been constant, from the 1970s right up to 2007. These two ‘findings’ cannot be reconciled with Marx’s theory of accumulation. If the rate of profit is falling, and the value of labour power is constant then profit rates are not falling because of the accumulation process, otherwise labour power would be falling, too. Were Kliman right about the empirical evidence, then he would have demonstrated that Marx’s theory was wrong, or at least that the empirical fall in the rate of profit was not due to the accumulation process.

    4. Kliman largely misunderstands Marx’s theory. Kliman thinks that the rate of profit determines the rate of investment. But Marx thinks the opposite, that the rate of investment determines the rate of profit. Marx does think that in an economic crisis the rate of profit falls so low that further investments become impossible. But there are no permanent crises, which are by definition singular events, so Kliman’s claim that the low level of profit is the cause of a low level of investment turns Marx’s theory that the rate of accumulation determines the rate of profit on its head.

    5. Kliman largely misunderstands Marx’s method. Marx saw capitalism as a dynamic system that revolutionised the means of production – so much so that it undermined its own basis. As Marx explains it, it is the dynamic of capital accumulation that throws up the barriers to its further development. Kliman, contrariwise separates out the limiting factor (the falling rate of profit) and makes it an independent variable unconnected to the accumulation process.

    6. Kliman insists against all the evidence that the defeats of the labour movement, and the international left in the 1980s had no consequence for the balance of power between the classes. He insists that there was no substantial recovery of capitalist accumulation from the profound recession of 1982 and that the defeat of the working class did not lay the basis for that recovery.

    7. In fact the suppression of wage inflation was – as is universally understood – the basis for the recovery, as capitalism expanded extensively drawing billions of additional workers into its orbit on reduced incomes. In the US alone the workforce expanded by 46 per cent, drawing 46 million additional workers, immigrants and women into the workforce between 1983 and 2007. The European Union expanded its workforce similarly through growth in immigration, recruiting women, and incorporating the ten former East European states into its labour force. In China and the former USSR market reforms increased the workforce by millions, as did the recruitment of rural peasants into capitalist production in India and the Far East. To imagine that there was no dynamic towards the extensive growth of capitalism in the 1990s, consequent upon the defeats of the labour movement and left in the 1980s is to stand outside of history.

    8. The capitalist recovery of the 1990s did have serious deformities that would undercut its expansion and give rise to the crisis of 2007. But Kliman’s attempt to force these events into a classical Marxist theory of the accumulation crisis are mistaken. Contrary to Marx’s theory, the economic dislocation of 2007 does not come after a period of intensive growth, where capital outlay on means of production outstrips outlay on wages. Rather the preceding growth period is one of extensive, job-rich growth, where outlay on wages far outstripped investment in new technologies.

    9. The current economic crisis is largely an effect of the capitalists’ subjective retreat from production. The resolution of the preceding economic crisis was so damaging to the internal coherence of the capitalist elite that they have recoiled from developing the productive forces, through new investments or technological innovations, in particular where these would seem to threaten social upheaval. The low rates of investment come about because of this retreat from production, not because of a classical overaccumulation crisis.

    by James Heartfield on February 8, 2015 7:11 am
  • Posted 4 years ago

    Thanks James for breaking your arguments down. Let us be clear that these are your arguments. I’m not yet convinced that you represent Kliman’s arguments accurately. In fact I suspect you are engaging in ventriloquism. I’m trying to get my head round this.

    by Ian Abley on February 8, 2015 8:14 am
  • Posted 4 years ago

    Ian I will respond to James’s statements to help you make sense out of his unwarranted use of Marxian jargon as an appeal to authority, and more criticize his misunderstanding of Marx and lacking crisis theory. I hope Kliman will also approve of this defense of his theoretical approach to crisis.

    (1) –
    (2) Basically James is appealing to Marx’s theory which about comes down to this: that with increasing productivity and then falling prices, it becomes cheaper to reproduce a worker because the commodities they buy with wages can fall in prices.
    Therefore wages can fall while the working class receives the same living standards as before.
    -James is wrong to present this as if Marx was making a teleological statement; but rather, showing how this phenomena is possible. Teleological explanations are in opposition to Marxism as dialectical materialism.
    -James then tells us that with more profit, profit will be greater in relation to pay to labor and that capital -can- (he says will) accumulate more capital.
    (3) James then says that because what Kliman claims contradicts (2), in the instance of falling wages and simultaneously a falling profit rate, then this means that: “These two ‘findings’ cannot be reconciled with Marx’s theory of accumulation”.
    When really they cannot be reconciled with James’ teleological “Marxism”.
    James says that: ” If the rate of profit is falling, and the value of labour power is constant then profit rates are not falling because of the accumulation process, otherwise labour power would be falling, too.”
    his spoon-fed-Marxism cannot understand how a rate of profit could fall when one of the categories of the denominators stays constant while the other grows!
    The only thing Kliman breaks from is James’ vulgar teleology and confusion.
    (4) and (5) The rate of profit is something that is one, a major indicator of the profitability of investments, and is also a record of investments in which profitability is tracked. Investment grows the level of constant capital, and within the context of Marx (which includes some things stay constant something which James is not cluing you in on) more investment makes the ROP fall. And in turn makes profitability of investments fall. Hence the reason why Marx saying that “capital is its own barrier” . And hence Kliman is in line with Marx in contrast to James’ confusion
    (6) (7) and (8) strict data disagreements masked in leftist pride and Marx terminology with “outstripped” as a mystical crisis causing metaphor.
    (9) and finally the grand crisis theory is: their “subjective retreat” because the crisis was “so damaging” that they wont invest. In short James says that: “The low rates of investment come about because of this retreat from production”. -so, in other words, his theory is that: they are not investing because they are not investing. And his causality for the theory is whimsical and more teleological explanation of reality.

    All together he mis understands Marx I would like to see him produce a passage where Marx directly states that wages MUST fall in order to make the ROP fall. In all the examples ironically for James it is held constant.

    Thanks,

    by Bryce Edward on February 9, 2015 4:01 am
  • Posted 4 years ago

    James if we wanted to reread the assertions you’ve already made we’d go back to your original piece. Can you address some of Kliman’s points? You can start with Figure 1. on the “Productivity/Compensation Gap.” How does that square with your 7th “thesis”? Are you saying that the govt figures for “US employee compensation as a share of output (net value added) in the U.S. corporate and total business sectors between 1970 and 2007” do not take into account the 46% expansion of the workforce btwn ’83 and ’07?

    I’m sure you know that appeals to things being “universally understood” sets off red flags (not the good kind).

    by Michael Dola on February 9, 2015 11:57 am
  • Posted 4 years ago

    Michael, if you can identify any points in Kliman’s article, I would be happy to reply to them. As I was reading it, it seemed that invective was doing most of the heavy lifting (‘abysmally poor’, ‘disgusting’, and so on). Furthermore, Andrew Kliman insists, in the third paragraph, that his main aim is not to reply to my points (but David Harvey’s he says), so it is not easy for me to see what points I should reply to.

    You draw attention to my point 7. There, I point out (as I said in my original article) that there had been a marked increase in the workforce between1970 and 2007.

    Replying to me on 29 October, Andrew Kliman said: “I’m also saying that the 47% rise in employment to which he refers was not due to the smashing of unions and falling wages as he alleges. It was due mostly to normal population growth and also to the influx of women into paid employment that had already been occuring for decades.”

    But population growth in the US between 1983 and 2007 was not 47 per cent but 29 per cent. Further, a considerable proportion of that population growth was due to immigration, rather than nature, because the US could recruit cheap labour from abroad once it had deregulated its labour markets. It could also recruit more women into the workforce, who, on the whole, are paid less than men. Those changes are exactly the ones we are talking about, but, predictably, Andrew’s metier is to explain away any new material and insist that nothing has changed.

    In any event it would not help to say that the 47 per cent expansion of the workforce was of no account. Plainly it is of account. Putting a further 46 million people to work represents a substantial increase in the mass of surplus value, which simply does not register in Kliman’s account, but plainly is the condition of a marked extensive growth. If her were to look at it he would see that this was not just a US experience, but a worldwide one, that represents a considerable expansion of the wage-labour-capital relationship.

    Bryce Edward says that my argument that the rising organic composition of capital, in Marx’s theory, ought to be coeval with a fall in the value of labour power is ‘teleological’. But it is not, it is just Marx’s theory. As Marx explains the capitalists do not invest in new technology to make reduce labour time, but to increase surplus value, by cheapening the value of labour power.

    Bryce Edward’s point was shored up by Andrew Kliman on 9 February, who protested “Heartfield insists that, in Marx’s theory, there IS an automatic cause-and-effect relation between the cost of reproducing workers’ ability to work (labor-power) and the wages and benefits they receive. How is that reading the text properly?”

    Well, the scare word ‘automatic’ was Andrew Kliman’s not mine, but Marx himself is pretty clear:

    “The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article.”
    https://www.marxists.org/archive/marx/works/1867-c1/ch06.htm

    I don’t want to put the point rudely, but it does rather appear that Andrew Kliman’s knowledge of Marx, and of the US economy is not as profound as he thinks.

    by James Heartfield on February 11, 2015 11:00 am
  • Posted 4 years ago

    Well, Heartfield clearly doesn’t know the difference between wages and the value of labor-power. Yet he’s some sort of authority on Marx. Nuff said.

    by Andrew Kliman on February 11, 2015 5:57 pm
  • Posted 4 years ago

    What is Marx contemplating in Volume 1, Chapter 25, Section 1?

    “If the quantity of unpaid labour supplied by the working class, and accumulated by the capitalist class, increases so rapidly that its conversion into capital requires an extraordinary addition of paid labour, then wages rise, and, all other circumstances remaining equal, the unpaid labour diminishes in proportion. But as soon as this diminution touches the point at which the surplus labour that nourishes capital is no longer supplied in normal quantity, a reaction sets in: a smaller part of revenue is capitalised, accumulation lags, and the movement of rise in wages receives a check. The rise of wages therefore is confined within limits that not only leave intact the foundations of the capitalistic system, but also secure its reproduction on a progressive scale.”

    Rate of Profit = Surplus Value / (Constant Capital + Variable Capital) = S/(c+v)

    Surplus Value created from the quantity of unpaid labour supplied by the working class.

    Variable Capital being wages.

    by Ian Abley on February 12, 2015 6:41 pm
  • Posted 4 years ago

    Hi Ian,

    He’s saying that when there’s a lot of profit, so that an uptick in the rate of accumulation (investment) occurs, this leads to an increased demand for workers, which causes wages to rise (NB–even if there’s no change in the cost of reproducing workers, i.e., the value of labor-power) and causes the rate of surplus-value (s/v) to fall. But there’s a negative feedback effect. If wages rise too much and profit falls too much, less of the surplus-value will be reinvested (“a smaller part of revenue is capitalised”), so accumulation slows down and this process eventually puts an end to the raising wages (all else equal). So the rise in wages is “confined within limits” that keep the rise from threatening the system and from halting the ongoing growth of capital (“reproduction on a progressive scale”).

    He doesn’t mention the rate of profit here. But you’re right: variable capital, not the value of labor-power, is in the denominator of it, and variable capital is the amount of money capital laid out in wages; it’s not the value of labor-power. Though the latter is one of the things that affects the size of the former.

    Note that Marx’s argument is the opposite of the “wage-led growth,” “Fordist,” and underconsumptionist stuff now popular on the left–the notion that you can make the capitalist economy grow faster by paying the workers more. He says that higher wages aren’t a cause of faster growth, but an effect of it, and that the wage increases cause growth to slow down because they cut into profit.

    by Andrew Kliman on February 12, 2015 8:12 pm
  • Posted 4 years ago

    Andrew

    Thanks.

    It is conspicuous that Mark Carney at the Bank of England is telling both the Confederation of British Industry and the Trades Union Congress that wages need to rise. As housing costs in rent and mortgages (despite 0.5% base rate) continue to become increasingly burdensome in Britain wage inflation is not keeping up. That is a peculiarity of Britain’s housing market, and the South East of England in particular. I think the impact of housing costs would not be the case in Spain, Ireland, or America. Housing costs in Britain (and the Housing Benefits Bill of £26 Billion) must have an impact in Britain.

    Variable Capital (v) is wages in the productive process, and most people try to pay either their rent, or attempt to buy a house.

    But where are societal welfare benefits for housing costs accounted for?

    Presumably societal welfare benefits like housing subsidies, unemployment relief, and healthcare schemes are from taxation on the employer, serving to reduce Surplus Value (S). But I may have that wrong.

    Housing costs from wages or subsidised from taxation are paid either to landlords or mortgage lenders. They may affect both the numerator S and the denominator v.

    I was wondering whether the rising cost of housing as part of the reproduction of the workforce is similarly “confined within limits” that keep the rise from threatening the system.

    In the 1840s to the 1860s housing costs were minimised, as were wages. Today if we can afford to pay the rent or mortgage, perhaps with the aid of Housing Benefits, our living standards are better. Is it correct to say that in Britain the costs of reproduction is not being minimised?

    by Ian Abley on February 15, 2015 7:07 am
  • Posted 4 years ago

    Hi Ian,

    Who directly pays a tax is frequently different from who ultimately (directly or indirectly) bears the burden of the tax. The latter is the relevant issue here. The key issue is this: if a certain program did not exist, would workers’ pay be higher, so that they could purchase the stuff (housing, food, etc.) with cash? If so, the difference between the hypothetical pay and the actual pay is variable capital, paid indirectly by employers.

    I’m not sure of the ins and outs of the UK system. In the US, unemployment insurance is paid for by a tax on employers. Some employers also pay (partly or fully) medical insurance benefits to employees, and employers pay half of the taxes for their employees’ Social Security (pension) and Medicare (medical insurance for retired workers) benefits. All of this is part of compensation of employees, as I discuss in the article. Other benefits are funded out of general tax revenues, not special taxes on employers or employees, such as housing assistance (which is not a big item), cash welfare assistance, and food assistance. Indigent people, the majority of whom are probably not employed, receive the lion’s share of this. I wouldn’t count most of it as variable capital. However, as a first approximation, it’s not a terrible idea to assume that the capitalist class pays for these benefits, though I’d be reluctant to say that it comes out of company profits. A better analysis would look at pre- and post-tax incomes, and try to apportion tax burdens and benefits among the classes, though the data really aren’t sufficient for that.

    I don’t really understand the question about minimizing the costs of reproducing workers’ ability to work? Are you asking whether UK workers are paid more than the value of their labor-power?

    by Andrew Kliman on February 16, 2015 9:18 am
  • Posted 4 years ago

    Above, James Heartfield wrote, “Michael, if you can identify any points in Kliman’s article, I would be happy to reply to them. … it is not easy for me to see what points I should reply to.

    Okay, I’ve done his work for him. Here are 38 points in my article that he should reply to. A reply to even 25 or so would be welcome. I want to know whether he accepts that the points are FACTUALLY CORRECT, and if not, why not. I don’t care about anything else.

    (1) the book is a discussion of the “Underlying Causes of the Great Recession” (as its subtitle says)—which is a topic almost entirely absent from Heartfield’s review—rather than a part of what he calls “the extensive literature on American decline.”

    (2) a process which allows a more dominant school of thought to level a host of egregiously incorrect criticisms against a less dominant one, and “allows” the latter school to devote much, if not most, of its limited time and resources to defensively replying to this host of unfounded criticisms, is actually a parody of pluralism and scholarly dialogue.

    (3) the so-called “productivity-compensation gap” … and variants of it are … extremely misleading factoids that are produced by researchers who adjust for inflation in an inconsistent manner.

    (4) They do not mean that workers’ share fell, contrary what has been claimed by Doug Henwood, the “authority” to whom Heartfield appeals. To draw that conclusion is to “lie with statistics.”

    (5) Figure 1 shows the trend, or more precisely, the lack of any trend, in employee compensation as a share of output (net value added) in the U.S. corporate and total business sectors between 1970 and 2007.

    (6) Although compensation of employees includes the pay of CEOs and other top corporate executives—most of which is arguably profit in disguise—[that] makes extremely little difference.

    (7) But what about the supposed fact that compensation received by employees has failed to keep pace with their productivity? … hourly compensation and productivity rose at the same rate. The gap did not increase.

    (8) Heartfield … claims that I have “doctor[ed] the figures on pay” and have “massage[d] the statistics on the rate of profit” in order to “to make it look smaller.” … these allegations are not accompanied by any evidence ….

    (9) I did not “massage” statistics on the rate of profit. The government does not publish any rate-of-profit statistics. So there is no pre-existing data series that I cleverly “massaged” or “adjusted”

    (10) And while Heartfield claims that “one cannot help but think that the real importance of the adjustment that Kliman makes to the rate of profit is to make it look smaller,” there certainly is a way to avoid thinking such a terrible thing. One could have believed me when I wrote that “I knew that proponents of the conventional [Left] wisdom mis-measure the rate of profit” before doing my empirical research, “but I had no reason to believe that their measures were overstating the rise in profitability instead of understating it.”

    (11) The figures for employee compensation I used came directly from the BEA. I did not “doctor” or adjust them in any way, and I did not concoct my own “expanded definition of wages.”

    (12) Heartfield may not like the fact that “the inflated cost of health insurance and other elements of the so-called ‘social wage’” (e.g., the portion of Social Security benefits paid for by a tax on employers) are parts of employee compensation, but the SNA and the BEA say that they are.

    (13) an extra dollar that a company spends on “inflated … health insurance,” or an extra dollar that it pays in Social Security tax, reduces its profit by a whole dollar, just as an extra dollar of cash wages does! It is not really profit.

    (14) Heartfield devotes almost a thousand words to a discussion of the temporal single-system interpretation (TSSI) of Marx’s value theory. … He literally has no idea what he is talking about.

    (15) According to Heartfield, a “long-defunct[!] school of ‘neo-Ricardians’” tried to solve the alleged inconsistency in Marx’s theory “using a ‘single-system interpretation,’” according to which “there was no ‘transformation’ of values into prices, but that all values are already prices.” [This is incorrect for several reasons.]

    (16) Even worse, he claims that TSSI supposedly tries to explain the fact that “inputs are not equal to outputs.” [This is incorrect.]

    (17) He claims that the TSSI attributes this inequality to “depreciation of capital goods” and the fact that “the value of the goods that make up the production process [sic] changes over time in the production process.” [This is incorrect.]

    (18) When the TSSI says that the values of inputs and outputs can differ in Marx’s theory, it is referring to per-unit values. … This has nothing to do with what causes the total value of output to exceed the total value of inputs. Thus, the TSSI neither contradicts nor “demotes” Marx’s exploitation theory of profit.

    (19) In fact, the TSSI is the only interpretation that preserves this crucial facet of Marx’s theory. All simultaneist (atemporal) interpretations actually imply that surplus labor is not the exclusive source of profit, as Roberto Veneziani was forced to concede in a 2004 paper in Metroeconomica (the flagship journal of the “long-defunct school of ‘neo-Ricardians’”)

    (20) Heartfield claims that we now have a “risk-averse capitalist class.” In light of the frenzied speculation that culminated in the biggest financial crisis since 1929, this is simply preposterous.

    (21) saving did not exceed productive investment globally and that, in the U.S., productive investment substantially exceeded domestic saving.

    (22) neoliberalism and financialization did not cause productive investment to fall, or financial payments and acquisitions to rise, as shares of U.S. corporations’ profits

    (23) even if there had been a saving glut, no one forced anyone to speculate in risky mortgage-related securities instead of parking savings in T-bills, money-market accounts, and under mattresses. A “risk-averse capitalist class” would have done the latter.

    (24) Heartfield contends that “Kliman…claims that what is important is not the cost it would take to replace the capitalists’ assets but their historical cost. But capitalists use different ways of reckoning their investments in different circumstances; sometimes one way, sometimes another.” This is not correct. Capitalist firms use different ways of reckoning the value of their assets. … But investment (the advance of capital) is an entirely different matter.

    (25) Heartfield reproduces a graph that depicts a decline in work stoppages. He claims that it “shows that the ruling class substantially defeated the challenge of organized labor in the 1980s.” Actually, the graph shows that the number of work stoppages began to fall long before the 1980s. … well more than half of the total fall in work stoppages between 1969 and today occurred before the supposedly watershed event—the smashing of PATCO (the Professional Air Traffic Controllers Organization) by the Reagan administration in 1981.

    (26) Heartfield’s error is no accident. An entire chapter of my book is devoted to exposing a wide variety of similar errors—i.e., attempts to postdate to the 1980s economic changes that actually began in the 1970s or earlier. In every case, the effect of the postdating is to wrongly make it seem that the turning point in recent U.S. economic history was the 1980s, when the “bad” (neoliberal) wing of capital beat out the “good” (Keynesian-statist) wing and supposedly ushered in a long-run expansionary phase of capitalism on the backs of the working class.

    (27) Heartfield even has the audacity to refer to “the recovery of capitalist growth in … the first [decade] of the twenty-first [century],” as if the Great Recession never occurred.

    (28) Heartfield writes, “What in Marx is an expression of the accumulation process [i.e., the tendency of the rate of profit to fall] becomes the primary driver, in Kliman’s theory, which claims that the falling rate of profit ‘produced a persistent fall in the rate of capital accumulation.’” This is ridiculous, for two reasons. One reason is that what he calls “Kliman’s theory” is not theory at all. It is an empirical finding.

    (29) It cannot be dismissed by counterposing it to “another” theory that one prefers.

    (30) Heartfield does nothing to call the finding into question.

    (31) [Contrary to Heartfield,] Marx clearly argued that “the rate of profit [is] the stimulating principle of capitalist production, the fundamental premise and driving force of accumulation,” that “the rate of accumulation falls with the rate of profit,” that “the accumulation of capital in terms of value is slowed down by the falling rate of profit,” etc.

    (32) There is nothing inconsistent about claiming that capital accumulation that has a labor-saving bias produces a tendency for the rate of profit to fall, but that the fall in the rate of profit in turn tends to retard capital accumulation. This isn’t even remotely paradoxical.

    (33) Heartfield wants us to have to choose between these two claims, but we don’t have to.

    (34) Heartfield writes, “That increased productivity, by cheapening the means of subsistence, makes it possible for capitalists to pay their workers less and increase exploitation, which was so central to Marx’s theory, does not feature in Kliman’s.” Here again, we have an empirical finding wrongly characterized as theory in order to improperly dismiss it by counterposing it to “another” theory that one prefers.

    (35) And here again, Heartfield gets Marx’s theory wrong. … in reality [and] in Marx’s theory … [t]he cost of reproducing workers’ ability to work is one thing that influences how much they are paid, but certainly not the only thing.

    (36) For instance, Marx argued that, “Apart from violent conflicts as to the rate of wages … a rise in the price of labour resulting from accumulation of capital implies” either that “the price of labour keeps on rising, because its rise does not interfere with the progress of accumulation” or that “accumulation slackens in consequence of the rise in the price of labour, because the stimulus of gain is blunted.”

    (37) If the process of capital accumulation and “violent conflicts” affect wage rates, then the cost of reproducing workers’ ability to work is clearly not the sole determinant.

    (38) Heartfield … wants to depict me as having told a story that he can oppose by telling a different story and by pointing to distortions in mine. Thus, his review is chock-full of complaints that I put too much stress on one thing but too little on another .… But my book is actually a detailed analysis of data, not a story. This … mean[s] that Heartfield’s “stress-related” criticisms are completely irrelevant. For example, I found that U.S. corporations’ rate of profit fell and never recovered in a sustained manner under neoliberalism. This finding cannot properly be challenged by pointing to factors which affect the rate of profit that I failed to stress, ignored, or whatever—because there are no such factors!

    by Andrew Kliman on February 17, 2015 12:28 pm
  • Posted 4 years ago

    Andrew

    I am asking whether British workers are paid more in wages than the value of their labour-power?

    It had never occurred to me that was even a question.

    I had assumed it was rather the case that workers everywhere in aggregate are necessarily paid less in wages than the value their labour-power creates, for otherwise there would be no surplus value.

    Now you have me thinking that the answer might depend on the boundaries of the system being thought about, and the role played by investments overseas. In other words that living in a developed but imperialist nation allows for a higher standard of living among a significant stratum of the population.

    I think I take your point about welfare benefits mostly being part of variable capital, so that variable capital within the production process is wages which are (pay plus direct and indirect benefits). For those on benefits who are not productively employed, their benefits are a diminution of the potential fund of surplus value in the form of taxation. Hence the immediate motivation for employers to want to cut benefits to the unemployed.

    by Ian Abley on February 17, 2015 3:42 pm
  • Posted 4 years ago

    Heartfield should be ashamed of himself. Wasting Kliman’s time, not to mention the time of the rest of us, with his inaccuracies and ignorance. The inaccuracies and ignorance have been amply demonstrated in Kliman’s response and those in the comments here. The worst of it is that Heartfield lacks even the common decency to retract his false statements. We know that he wants to make everything seem to be a matter of opinion, because that plays into the hands of charlatans like him, but this is really too much. No, it’s not the case that everything is a matter of opinion. Heartfield is just plain wrong about the facts. He ought to just slink away with his tail between his legs.

    by Anne on February 17, 2015 5:11 pm
  • Posted 4 years ago

    Ian,

    Terminological problems.

    The value created by labor obviously exceeds the sum of value workers are paid for surrendering their ability to work (labor-power). But the value created by labor and the value of labor-power are different things.

    I was asking whether your question was this: is the sum of value that UK workers are paid for surrendering their ability to work more than the cost of reproducing their ability to work? I.e., are their wages and benefits in excess of the value of their labor-power. (Note that the value created by labor doesn’t enter into the question.)

    by Andrew Kliman on February 17, 2015 5:20 pm
  • Posted 4 years ago

    Andrew,

    I am embarrassed I do not understand, and thank you for your patience.

    How can wages and benefits be in excess of the value of the labour-power of British workers?

    I can hold the prejudice that some people are paid well to afford a good standard of living, even though they create little value. But that is not your question to me.

    Clearly I am struggling with the concepts at stake – the meanings and relationships of terms. Should I go back to read The Failure of Capitalist Production? Or is there a more basic reading of Marx I need to grasp that you expect your reader (me) to possess?

    I write and read building specifications for a living, so I must be able to achieve a terminological appreciation.

    by Ian Abley on February 18, 2015 7:19 pm
  • Posted 4 years ago

    Hi Ian,

    Marx defines “value of labor-power” in chap. 6 of vol. 1 of _Capital_, but the issue is quite simple and easily clarified.

    The VLP of a “day” of labor-power is the amount of money needed to reproduce labor-power (worker’s ability to work, including perpetuation of the working class) for a day. The amount the worker is paid (using variable capital) to surrender her labor-power for a day (i.e., her wages + benefits) depends on the VLP, but is potentially higher or lower, because it’s affected by many other factors, as I’ve explained in response to Heartfield. The amount of new value the worker creates during a day’s work is something different from, and almost always much more, than both of the 1st 2 things.

    E.g., daily value of labor-power daily = $160, daily wages + benefits = $200, daily amount of new value created = $400.

    I thought you might be asking whether the 2d happens to be bigger than the 1st, on average, in the UK.

    by Andrew Kliman on February 18, 2015 8:03 pm
  • Posted 4 years ago

    Andrew

    While on my way to work in London I can see homelessness, low paid work, plenty of suits, and an abundance of prosperity. The talk of abstract terms and averages is hard to reconcile with that. But you have done it above. I went to David McLellan’s The Thought of Karl Marx for some help, but you have said it. Thank you.

    Is it legitimate to think of terms like this:

    Daily Value of Labour Power = Subsistence Minimum for Reproduction, which is cheapened by advances in productivity in production globally
    Daily Variable Capital = Wages + Benefits, which employers will try to reduce to Subsistence, but which affords consumption when raised
    Daily Total Value Created = Daily Variable Capital + Daily Surplus Value + Some Taxation
    Daily Surplus Value = The gain in the production process which employers try to turn into profit, a proportion of which they hope to reinvest.

    It is of course entirely possible for some companies to pay Wages that are below the Daily Value of Labour Power when the state provides Benefits through redistributive taxation schemes in the aggregate of the economy. But in aggregate those Benefits either add to the Variable Capital term, or have to be taxed out of Value Created, reducing Surplus Value.

    So yes… In Britain many people are paid more in (Wages + Benefits) than the Subsistence Value of Labour Power. On average, consumption is higher than the Minimum required for Reproduction. In Marx’s day that was different.

    by Ian Abley on February 20, 2015 1:56 am
  • Posted 3 years ago

    What Andrew Kliman is saying, if I am following, is that “wages + benefits” (all denominated in the unit of account in force) over any time period chosen for a specific working class **may** very well exceed the total money expended in actual or imputed purchased goods and services by those receiving the above “wages and benefits” to reproduce the use of their vendible labor-power (including the regular perpetuation of the working class). Quite what the actual causes of that possibility/actual state of affairs for a particular working class are or can be, I would like Andrew to clarify. 🙂

    by STAVROS N KARAGEORGIS on March 22, 2016 12:03 am

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