Nobody can deny the importance of the sociological origin of theories and ideologies. When they are carried by a large number of overrepresented and vulgar minds, don’t let yourself be impressed by the semantic dressing, get out your best scientific and critical formation right away. Your status as a citizen and human emancipation are at stake.
Scientifically speaking, there is a Marxism before and after the demonstration of the Marxist law of productivity.
The elucidated Marxist theory for productivity allows the transition out of the CPM and into socialism to be conceived with the greatest flexibility required by historical circumstances through the logic of redistributive epochs. The essential thing is to always stay the course of human emancipation and equality.
The Battle of Ideas through theoretical practice and scientific praxis as taught by Althusser and Gramsci, as well as the class alliances and mass line exposed by Lenin and Mao are indispensable for the transition to socialism, both revolutionary and peaceful.
If equality is sacred, exclusivism, especially the racist-theocratic exclusivism of a “chosen race” is the worst crime against Humanity. When justice is denied, only the Law of Talion remains. This message of universal brotherhood has already been verified. One understands from now on the springs of it.
Table of contents
– The basic data concerning the problem of the economic calculation necessary to the transition from a mode to another.
– The “social surplus value”, the financing of the Social Security and more widely speaking the national and enterprise socialist accounting.
– The drifts through the so-called socialist market – i.e. socialist marginalism – of Liberman and Kantorovitch.
– Underlying thesis: Superiority of macroeconomic planning regardless of the mode of production.
– A word on the Keynesian Welfare State and on the economic regulation practiced by the European Social State.
– The conscious falsification of Ch. Bettelheim and the induced confusion of Paul Sweezy
A ) C. Bettelheim
B ) Paul Sweezy
– Conclusion.
Socialist accounting.
Appendix 15/07/2021 : Bourgeois economic modelling, Paul Romer, and the return of planning?
The basic data concerning the problem of the economic calculation necessary to the transition from one mode to another.
Any mode of production must reproduce itself in its natural and social space. Simple or stationary reproduction is the basis on which we can conceive the Enlarged or dynamic reproduction and the redistribution of the resources produced for both household consumption and productive consumption, or reinvestment. The space of social redistribution, and therefore that of resource allocation, is eminently political. It refers to class struggles or to decision-making in the framework of socialist democracy. The priorities of resource allocation can be determined by a class of owners of the means of production for its own benefit or collectively by the community for the benefit of the community according to two main principles: “from each according to his ability, to each according to his work”; then, at a more advanced stage: “from each according to his ability, to each according to his needs”.
Every system of social reproduction and redistribution is based on a certain form of exchange of all goods among themselves. This exchange, for example of A for B, implies an equality A = B and thus the possibility of establishing this equality on the basis of a common standard allowing the commensurability of goods between them. Rigorous economic calculation is thus the basis of the systemic coherence of any mode of reproduction and redistribution.
Only the exchange-value of labor power, determined as for any other commodity by what it costs socially to reproduce it, can play this role, because it is the only universal economic equivalent. Money is a practical mediation of exchange but must itself be defined according to the common standard of measurement, so it is only a general equivalent. Of course, any commodity can serve as a medium of exchange, whether gold or silver or shellfish or potatoes; each commodity can thus play the role of a particular equivalent. But this exchange between physical products is impractical.
What is actually exchanged under the guise of a commodity are the social relations of production and reproduction. This brings us back to the production function, which summarizes the components of the immediate production process – or micro-economic level. Contrary to bourgeois economic “dismal science”, this level is not sufficient to determine the exchange-value or the price of a commodity. Indeed, the exchange-value of a product from any of the immediate production processes can only be the sum of its inputs, including the surplus value extracted during the production process. In its most refined form, any production function: c + v + pv = p where the product p can be either a means of production (Mp) or a means of consumption (Cn), thus refers to the equilibrium of the system as a whole. In the first place to the general equilibrium, i.e. to the Equations of Simple Reproduction (SR) established by Marx – Book II – and brilliantly summarized by Bukharin. Otherwise, we would be confronted, just as are the Supply and Demand curves of the microeconomic market and the macroeconomic market – Léon Walras’ “market of the markets” – with a lethal problem, that of the contradiction between ex ante data and ex post data.
In your search for the equilibrium price of a product, you cannot legitimately establish the Supply curve by first giving scales of Demand in … prices. And vice versa. Then cross these two curves to obtain … the market price. Voilà! Nevertheless, this is what all bourgeois economists do every day. Mr. Jean Tirole, the worthy representative of stateless global capital, the worthy economist with three great ideas for three great disasters, so far – financial deregulation/subprime crisis; single contract/Job Act and Loi Travail ; imperfect competition corrected internally by Gafam and others according to their evaluations of consumer preferences. He even intends to stick to the microeconomic level only, since the national or multinational macroeconomic level inevitably refers to a certain degree of State intervention and therefore to the sovereignty of the people who could claim to regulate the Censitarian democracy exercised by the large shareholders of transnational firms…
Scientifically speaking, the only true general equilibrium is the one established by the Equations of Reproduction because it gives in a coherent fashion both the data in physical quantities and in terms of exchange-values or prices. This is because the exchange-value of any commodity, be it the commodity of human labor power, is based on a “material” vector, namely its use value. The Reproduction setup is as follow:
SI = c1 + v1 + pv1 = M1 (Mp)
SII = c2 + v2 + pv2 = M2 (Cn)
Here are SR Equations – both in quantities and in exchange-values:
M1 = (c1 + c2
c2 = (v1 + pv1)
M2 = (v1 + pv1) + (v2 + pv2)
The organic composition is: v/C where C = (c + v) ;
The rate of exploitation or, in socialist transition, of extraction of the “social surplus value”, is: pv/v.
When these fundamental ratios are identical in the two Sectors, the Equations of SR and ER remain perfectly coherent, which makes them an indispensable scientific reference model.
(Note that Marx often notes the organic composition as c/v, which prevents us from conceiving the law of productivity according to which these two ratios evolve in proportionally inverse proportions. Since organic composition links living labor – v in the numerator – to crystallized labor present at the beginning of the production process – necessarily including (c + v ) in the denominator -, it is indeed v/C where C = (c + v) that one should write. Moreover, in drafts that were not retained for Books II and III, Marx poses this crucial relation exactly in this way, but then abandons it. I personally believe that if he had had the leisure to write these two volumes of his Magnum Opus himself, he would have naturally ended up on this basis, which he first investigated. One needs only refer to the chapter “The last hour of Senior” in Book I to see this. In this formidable chapter, which constitutes an early and complete refutation of what would later become marginalism, Marx expounds the concept that each product coming out of the production process, i.e., of the production function, or each hour of the corresponding workday, contains a proportional part of (c + v + pv ). This highlights the nonsense that profit only emerges during the last hour of work, the 10th, 11th or 12th, a preposterous theory by which the English employers and their Cambridge academic epigones wanted to oppose the reduction of working time demanded by the workers. The Reduction of the Working Week – RWW – , a secular movement inherent to the CPM, whose main driving force is the search for productivity in the context of competition, has never ruined anyone. On the contrary, by sharing productivity gains more effectively, it has restored the stabilizing role of aggregate household demand. Apart from ideological considerations, this is what the history of the CPM shows, with the RWW always increasingly affecting the duration of working time, whether through the reduction of the retirement age, unemployment insurance, paid vacations, the length of the working week, sick leave or parental leave. This suggests a cumulative progression toward more free time which, combined with greater collective control of “social surplus value,” paves the way for the quiet transition to socialism. )
When these fundamental relationships change due to productivity, the SI and SII parametric data ensure that the rate of profit remains organically the same in both sectors. There is no need therefore to add an exogenous average rate of profit – but of course the volumes of profit are different. Indeed, productivity, which is a structural intensification of work, causes these ratios to evolve in inverse proportion on the basis of the same “v” in use value, but precisely not in the same number of physical workers. Indeed, for the same amount of work time and the same amount of – abstract – labor power, productivity increases the number of products resulting from the immediate production process for a proportionally lower unit price. Which enters the consumer basket.
As the more productive capitalist produces more products at a lower unit price, he will more easily conquer the available markets. This logic is at the basis of the main laws of motion of the CPM, namely the centralization and concentration of capital, both internally and externally – colonialism, neo-colonialism and imperialism.
Illustration. Here is what we wrote in Tous ensemble (1998):
“In each sector productivity involves the linkage in the opposite direction of v/C (where C = c + v) and pv/v. Assuming at the outset an SR system in which SI and SII operate according to the same v/C and the same pv/v, we would have in A:
c1:80F v1:20F pv1:20F = M1:120F
80Mp/80h 20Mp/20h 20Mp/20h = 120Mp/120h
c2:40F v2:10F pv2:10F = M2:60F
40Cn/40h 10Cn/10h 10Cn/10h = 60Cn/60h
Here a Cn is worth one Mp and the productive conditions being identical the work is immediately homogeneous work according to Emmanuel’s terminology (what Marx calls “abstract work”) and therefore immediately comparable. Let us show that the same is true when productivity differs from one sector to another, provided that the rule is respected.
Let us therefore consider the system SR A’ such that productivity would have deepened by 1/4 in SI; we would have:
c1:84F v1:16F pv1:20F = M1:120F
105Mp/84h 20Mp/16h 25Mp/20h = 150Mp/120h
c2:36F v2:9F pv2:9F = M2:54F
36cn/36h 9cn/9h 9Cn/9h = 54cn/54h (45Mp)
Here one Mp = 0.8F; one Cn = 1F; yet productivity, taking into account the SR adjustment (which I call the “SR Effect”), assures that it is indeed abstract and therefore commensurable work that is expressed by the values (expressed in francs); to convince oneself of this, it suffices to observe in particular the transformations undergone by v1 and c2 : doubts are dispelled when we distinguish the expression use value (“vu” in the form of concrete products Mp or Cn) from that of exchange-value (“ve”) of which it is only the support. (Let us add that from the point of view of value, and specifically in a capitalist society, this “SR Effect” does not even raise the questions posed by Sraffa concerning the expression of price of goods produced during “different productive periods”, nor even the cyclical ones of the impact of stocks on the selling price, because by definition, what is at stake in the systemic conditions demystified by the reproduction schemes – formalised by Bukharin -, is none other than the fate of the past labor revived or not by the living labor in a new productive cycle. On the other hand, a socialist society would try to integrate – or at least take into account – this “SR Effect” in its Reproduction Equations in order to avoid any unnecessary waste).”
Note that here, for the first time, everything is consistent in terms of quantities, exchange-values – and prices – and working hours. In fact, in a system respecting the norms of the Labor Code aimed, among other things, at eliminating unfair competition, one can even deduce on this basis, the number of physical workers involved.
The parametrically controlled changes of the exchange-values, implies that of the prices if one adds the Marxist monetary theory already announced in my Tous ensemble and developed thereafter among other things in my Synopsis of Marxist Political Economy . Thus from the SR Effect to the parametrically controlled changes of the exchange-values, thus of prices, one understands that the coherence of planning depends on the integration of the Marxist theory of productivity in the SR-ER Equations.
The SR Effect itself refers to an evolution of the social division of labor and its sectoral structure, namely the role of the primary, secondary and tertiary sectors. From the point of view of resource allocation, it is clear that planned qualitative growth refers to absolute data, so that the question arises of maintaining a proportional symmetry between the two main Sectors, as well as the question of the best possible « déversement » or reallocation of the labor force freed up by productivity over and above the recurrent cycles of the RWW.
The SR System of reproduction and redistribution is a true model congruent with the underlying Reality – Mp and Cn must necessarily be reproduced. It is perfectly coherent when its essential production relations, the organic composition v/C where C = (c + v) and the rate of extraction of surplus-value or of exploitation pv /v are identical in the two Sectors. This first concrete evidence, one which is far superior to the schemas of Supply and Demand and the general stationary equilibrium that follows, was the basis of the success of all modern planning systems, all inspired by Marx’s Simple Reproduction – SR. The Bolsheviks, and Stalin in the first place, relied on this Marxist scientific discovery to establish and correct their planning while betting on the highest possible productivity.
Indeed, if you introduce the theory of Marxist productivity that I have demonstrated, the coherence of SR – and therefore also of ER – remains in terms of quantities, exchange-values and prices. You can thus quietly proceed to the political determination of the investments. Knowing – a development that took time for our former comrades – that limiting oneself to reinvestment alone slows down potential growth, because this presupposes a modification of the underlying SR, involving for example the SR Effect. Growth literally takes off when socialist public credit is introduced. This is because public credit makes it possible to build on the initial SR and to magnify the possibilities of reinvestment. Indeed, since credit is an anticipation of growth, it is transformed in production into fixed and circulating capital and into variable capital – in the latter case, into the wage bill for nearly 60% on average.
Now, a socialist system will exercise particular surveillance to ensure the best “structure of v” – see on this, part 2 of my Book III – or, rephrased in another way, the “net global income” of households compatible with the possible optimum reinvestment of the available “social surplus-value”. In contrast, in the CMP this most advanced and egalitarian sharing of (v + pv ), allied to the recurrent cycles of RWW necessary to preserve full-time full employment as befits a citizen, and thus the right level of social contributions and taxation, constitutes the heart of the law of motion of the socialist/communist mode of production and of its march towards the greatest general human emancipation.
Given the duality of any commodity – including credit, not to be confused with money, which refers to the wage bill – in use value supporting an exchange-value, one condition should be self-evident: for socialist public credit to function, there must be either available stocks – hence an installed productive overcapacity – or access to external supply – hence the absence of a blockade – which also refers in the last instance, despite the temporary mediation of external balances, to the installed capacity for overproduction. In one way or another, an equilibrium remains an equilibrium, and the difference here again can only come from human labor.
To simplify, the CMP can absorb a strong SR Effect by making the proletariat pay for it and by favoring its false price equilibrium and its false Marginalist GDP growth. Joseph Schumpeter formalized this conception in his theory of “creative destruction”. In his Nietzschean version of “return” designed to prevent or delay historical becoming, he did so without illusions about the necessary overcoming of the CMP by a more advanced mode of production. In the same way, he had tried to transform the lethal Marginalist contradiction between microeconomics and macroeconomics into an ontological dichotomy, therefore beyond debate. But deep down, he knew perfectly well that the labor power secularly “liberated” by capitalist productivity implied a better sharing of wealth and a better structural equilibrium of the system acquired through the sharing of socially necessary labor or through a more than risky return to a new Nietzschean philo-Semite neo-corporatism. The hope of the possibility of such a return first led to the dismantling of the Eastern Bloc and the public enterprises and social services of the Western Welfare States. Today it tends to sink into an anti-China, anti-Russia and anti-State sovereignty hysteria, pushing for an impossible return to a New Cold War regulated by military and economic subservience within a NATO operating outside its geographical zone, via a new Cocom…
Socialism will be careful not to do this and, in any case, will avoid too large SR Effects which are detrimental to stable and harmonious growth as well as to an unnecessary waste of available resources. Similarly, according to the teachings of the ecomarxist theory, harmonious socialist growth will be all the stronger as food and energy surpluses will be assured. As everyone knows, the reproduction of Man in Nature and History is done by human work, which is an expenditure of personal energy then supplemented by machines and by technology. This basic fact applies even more to the modern economy, which is much more energy-intensive than classical industry.
If the Marxist law of productivity is ignored, then the quantitative and qualitative coherence of SR – and ER – takes a hit. This is known as the “problem of the transformation of exchange-values into prices of production”. This problem was invented by Böhm-Bawerk on the basis of the still Smithian and Ricardian drafts used for the writing of certain pages in Books II and III of Capital. Smithian because Marx, investigating the problem of absolute and differential rent of Ricardo, still uses the pre-scientific concepts of “complex labor” that can be decomposed into “simple labor”, for example, thanks to the pin factory, rather than the scientific concepts of “socially necessary labor” and “abstract labor” that he will develop later. Ricardian because he investigates the differences between the two rents – feudal and agricultural capitalist – without yet moving on to productivity, which he will not have the time to explain fully, even though he has given the essential elements, including in his critique of Torrens. I refer to my Tous ensemble or to my Book III Keynesianism, Marxism, Economic Stability and Growth – 2005 – for the details of the demonstration which implies the passage from absolute rent – linked to feudalism – to differential agricultural rent. The latter opens the way to the resolution of the Marxist theory of productivity as well as to the scientific conception of Ecomarxism.
Here is the false problem of transformation as presented in my Book III. :
“Let us summarize the case with an example. Following Marx, let us posit two capitals exhibiting two different c/v (incorrectly called here “organic composition of capital”) where
c + v = 100 in order to be able to compare their respective performance very quickly. M is equal to the value of the product. We thus have:
c 80 v 20 M 115 Profit rate 15%.
c 70 v 30 M 110 Profit rate 10
If we now call the rate of profit pv/c+v and the price of production pp, this is what we get after the “equalization” of the rate of profit. (Let us stress again that Marx unfortunately did not take into account here pv/v, the rate of surplus-value, which would have raised the question of the coherence of this specific presentation with the forms of extraction of surplus-value analyzed in Book I of Capital)
c 80 v 20 pv 15 pv/c+v 15% M 115 profit in terms of pp 12.5
c 70 v 30 pv 10 pv/c+c 10% M 110 profit in terms of pp 12.5
Obviously following this “equalization of the rate of profit” in terms of production prices (pp) the final product would be the same in M1 and M2, i.e. 112.5. If capital #2 represented land rent, then obviously, according to this version, capitalists in capital #1 would subsidize the agricultural sector simply because the “market” would force a movement of capital to capital #2 until equilibrium is reached. In this case, if the matter ended here, Böhm-Bawerk would be partially right. Indeed, if we use the same procedure for reproduction patterns (see the illustration below, on page 26) the inputs would be given in terms of value and the outputs, destined to become new inputs in the next cycle, would be given in terms of price of production. Note that if the supposed “market” operated at the level of prices of production, it would have to do so through exchanges at the level of the circulation and realization of the value of each product. However, if we try to trace each of these exchanges meticulously, emulating Marx’s method when he traced and synthesized Quesnay’s Tableau, we would quickly realize that the price of production is a mirage, namely that the “market” would operate twice! First, it would operate when one takes “empirically” the constant and the variable capital, for example c = 80 and v = 20. These amounts are obviously given in terms of value, which already implies taking into account the exchanges carried out on the market that are necessary to realize the values operating as inputs in the diagrams. To make use of the “market” to artificially achieve an equalization of the rate of profit, without changing the other variables, would thus be to use the market mechanism twice in a row, first internally and then, albeit inexplicably, externally. But Marx had warned that any final solution had to respect the law of value scientifically established in Book I of Capital, that is, a labor-oriented law of value that, unlike the version offered by Ricardo, was able to account for both constant and variable capital, while also offering a rational explanation of profit based on the extraction of surplus value. In other words, contrary to the partial investigations contained in the preliminary versions published by others and given for finished products, we need to re-establish some particular relations without which no Marxist law of value would be possible, and thus without which no rational political economy could be scientifically founded.”
It is therefore impossible to plan on the basis of SR-ER Schemes falsified by this exogenous average rate of profit that does not respect productivity. Everything will be distorted, in particular the adequacy of use-value and exchange-value of products as well as the famous “optimal proportion between sectors” that Stalin underlined in his brilliant essay on the problems of Soviet planning in 1952 (see Economic Problems of Socialism in the USSR ( 1952), https://www.marxists.org/reference/archive/stalin/works/1951/economic-problems/index.htm )
Let us summarize this incoherence by using the scheme of transformation in the framework of SR. Using Marx’s hypotheses, we would have different c/v ratios in SI and SII and an identical pv/v ratio in the two sectors, forcing the equalization of profit rates:
S I = c1(80F/80Mp) + v1 (20F/20Mp) + pv1 (20F/20Mp) = M1 (120F/120Mp)
SII = c2 (40F/40Cn) + v2 (60F/60Cn) + pv2 (60F/60Cn) = M2 (160F/160Cn)
After equalization – exogenous – of the profit rate ( pv/(c +v) ) we would have :
S I = c1(80F/80Mp) + v1 (20F/20Mp) + pv1 (40F/?) = M1 (130F/?)
SII = c2 (40F/40Cn) + v2 (60F/60Cn) + pv2 (40F/?) = M2 (130F/?)
We can see that this does not correspond to anything anymore. The SR is not respected either in physical quantities or otherwise.
It is the rather silly inscription of the schemes of the transformation by the equalization of the average rate of profit in the SR Equations. Of course, Marx would never pose the problem in this way himself, even if he insisted on the methodological rule of solving the problem in this framework, since it is the case presenting the systemic equilibrium in terms of exchange-value and use-value, which makes it the test case of internal consistency.
In his own example given above, Marx was not yet in the SR framework because he was trying to understand the relations between two firms or two subsectors belonging, of course, to the same sector, here Sector II of the Cn, but one belonging to the space of feudal land rent, the other to the legally dominant space of agricultural capitalism within a society imposing the mobility of capital in spite of many feudal survivals. This mobility imposes the equalization of the rate of profit, a fair proposition, but, as demonstrated in my Tous ensemble, this equalizing role operated by competition takes place at the very moment when the production function is set up – the acquisition of its components c + v – and not after. The rate of profit is therefore organically identical, at least as long as the parametric conditions of the SR-ER prevail. This is demonstrated by the law of productivity, without which it would not even be possible to pose the problem of a production process that produces more products in the same amount of time for a proportionally lower unit cost.
In fact, the agricultural differential rent leads to its general case, which is none other than the law of capitalist productivity. As long as feudalism retains certain legal prerogatives protecting its production space – farming, sharecropping, etc. – its extraction of surplus-value is based on the law of capitalist productivity. – Its extraction of surplus-value is based on absolute surplus-value, or feudal land rent, and thus on the duration of work. The peasants are then increasingly pressurized to ensure that this land rent is profitable enough; in fact, despite the legal and customs protections that remain, the products are sold on the same markets which will confirm the superiority of capitalist productivity. We have here a typical example of the coexistence of dominant modes and the slow or rapid decline of the subordinate mode, depending on historical circumstances. In France, certain legally protected survivals of feudal land rent – for example, to preserve the over-representation of the rural electorate – only disappeared after 1956 under the pressure operated by the GATT and the EU Common Agricultural Policy.
The presentation of ER in Book II of Capital will be the object of all sorts of attempts at reconciliation, but starting from the rate of reallocation of surplus-value – reinvestment of a part of surplus-value – to obtain a dynamic reproduction, which necessarily remains contradictory, as Rosa Luxembourg pointed out. As we can see, the question of the coherence of the SR-ER Equations rests on the demonstration of the Marxist law of productivity, which must first prove itself, as Marx indicated, in the framework of SR. This SR framework always remains underlying any choice of Enlarged Reproduction.
Without the integration of the Marxist law of productivity, every conceivable version is a failure. The most important ones were expounded by Paul Sweezy and Arghiri Emmanuel. (For the best examples of these attempts see Arghiri Emmanuel, A propos de l’échange inégal, L’Homme et la société, n 18, 1970, https://www.persee.fr/issue/homso_0018-4306_1970_num_18_1 . His contribution: https://www.persee.fr/doc/homso_0018-4306_1970_num_18_1_1347 ) At best we end up with the so-called “synthetic version of the law of value” – thus distorted – proposed by Tugan-Baranovsky and Bortkiewiz and then by Sraffa and by the verbose and inept neo-Ricaridians … hollow academic shatters, if ever there were some.
I have shown in Tous ensemble that the simultaneous transformation has nothing to do with Marx’s law of value, whose main scientific contribution remains to have revealed the anchoring in exploitation of the genesis of profit. In Tugan-Baranovsky and Bortckiewiz’s version, not only does the logic of the extraction of surplus-value disappear, but also the fundamental logic of the organically coherent SR in terms of quantities and prices. This “solution” is nothing but a vulgar sleight of hand that places the mathematical “model” above the Reality to be analyzed. Thus, by mobilizing the quadratic formalization, they decide to add a line to Marx’s SR Scheme corresponding to the Gold supposedly necessary for the exchange. There would then be as much Gold as the value of the products, and too bad for the rotations, which would please the Marginalists of the bourgeois textbooks as well as the ineffable Irving Fisher. However, by adding this line, they obtain as many equations as there are unknowns, which allows the solution. That’s it, the quadratic trick is done. Except that it does not correspond to anything anymore. Here is their illusory scheme:
c1 + v1 + s1 = c1 + c2 + c3
c2 + v2 + s2 = v1 + v2 + v3
c3 + v3 + s3 = s1 + s2 + s3
As a reminder, here are the scientific equations of the SR allowing the systemic equilibrium in quantities, exchange-values or prices, hours etc. :
M1 = c1 + c2
c2 = v1 + pv1
M2 =( v1 + pv1) + (v2 + pv2)
This simultaneous transformation flourished among bourgeois economists because it allowed them, with a rudimentary mathematical apparatus, to claim the scientificity of their approach – forgetting, of course, the necessary congruence between the Method implemented and its Object of investigation. Let us mention only Hicks who, despite Keynes’ contribution, reopened the way to neo-liberalism and to what Joan Robinson called the “Keynesian bastards”, including Samuelson, Solow, etc.
Sraffa is a special case in the sense that his matrices, based on the same method of simultaneous resolution, seek to rehabilitate the classical political economy of Ricardo, thus rehabilitating the role of human labor. His attempt was a complete failure because instead of deriving the rate of profit from the extraction of surplus-value in its productivity form, he gave an exogenous rate of profit harmonized by the simultaneous resolution. But Sraffa was not a dupe of his rearguard maneuvering, which aimed, like Keynes’s, to save capitalism from its own “animal spirits.” He says so openly when he states that his synthesis of the question set out in his Production of Commodities by Commodities is only a prolegomena – see: https://www.persee.fr/doc/cep_0154-8344_1976_num_3_1_895 . He would have done better to recognize that Marx was right about the extraction of surplus-value. His approach becomes perfectly pathetic the moment you realize that the “basket of commodities” necessary to produce the commodities is nothing but a vulgar instrumentalization of the really Marxist concept of socially necessary labor.
In short, the great priests’ work is always finalized to the occultation of reality in order to preserve the privileges of their classes, if not of their castes. I would only add that Sraffa’s interest in Ricardo, which he edited, came from a comment by Gramsci. From his jail, the founder of the Italian Communist Party had asked for books on Ricardo to elucidate the concept of “social demand” – which Marx used in his Parisian Manuscripts of 1844 and which would lead to the Equations of the SR-ER.
National accounting, based on the Net Material Product, used by Bolshevik planning to correct the discrepancies in economic growth due to the lack of knowledge of the theory of productivity, made it possible to avoid the worst excesses with exceptional results. These results were supported by the narrow wage scale and the institutional impossibility of banking-financial slippage, thus ensuring – in addition to political control – price stability.
In the beginning, public credit was not very developed, so that the Enlarged Reproduction was assured by the rate of reinvestment of social surplus-value. Again, the rapid industrialization desired by Stalin allowed for the “déversement” of labor and for the elimination of the perverse consequences of the SR Effect on such planned ER. In addition, the collectivization of land and the accelerated introduction of agricultural machinery into the countryside – via the State Tractor and Machine Stations, therefore non-mercantile – made it possible to effectuate very large agricultural levies on the harvests. The Trotskyist Isaac Deutscher estimated this amounted to almost 40% of the harvest, which was then sold abroad, taking advantage of the fact that the USSR still had access to the European financial system. Thus the collectivization-modernization of the countryside was carried out without sacrificing the peasantry, as was the case with the enclosures in England. On the contrary, it raised their standard of living (at least before the Nazi Eastern Plan and the Goebbelsian falsifications). On this subject, see the essential Gilbert Badia, Histoire de l’Allemagne contemporaine). The currency thus earned enabled Stalinist planning to accelerate its modernization by purchasing the technologies that were lacking and the services of the necessary foreign engineers. This did not go without a rigorous fight against sabotage.
The main attempts at correction before the Marginalist reforms imposed in the USSR in 1965-1967 are due to Stanislav Strumilin, a Bolshevik statistician well acquainted with his classics on planning, in particular those of Lenin and Stalin (see his L’economia sovietica, Editori Riuniti, 1961, and Strumilin, Il passaggio dal socialismo al comunismo, Enaudi, 1961)
Strumilin faces the problems presented by Bolshevik planning with common sense. Not possessing the theory of productivity, he tries to approach it through the theory of the centrally planned maximization of the reinvestment of the available social surplus-value. He did this by indulging in semantic gymnastics, which became worse when he tried to oppose the worst Marginalist drifts of Kossygin-Khrushchev-Liberman. He then looked for the right formula to retain the key idea of the Social Fund that Marx had analyzed in the Critique of the Gotha Program, by avoiding to speak of surplus-value, surplus etc., and choosing expressions like “surplus for the whole community”.
However, as G. Brassens said, “for the Great Manitou, the word does not matter”. Strumilin, a good statistician, had his reasons. Stalin had asked for the introduction of the highest productivity wherever possible, and this possibility had to be specified. This is a difficult thing, as we have seen, even if we stick to the Net Material Product. As a consistent statistician and a genuine Leninist insisting on “the concrete analysis of concrete reality”, he then posed the question of maximizing investments. For example, the country had been rapidly covered with railways and steam locomotives, but was now starting to develop much more powerful diesel locomotives. Was it wise to change all the steam locomotives as quickly as possible, knowing that while it was understood that accelerated socio-economic development would necessarily focus on the production of Mps for Mp – both for SI and for SII, according to Lenin’s specification, which he quotes in this regard – there were still a host of social priorities to be satisfied. It is understood that this problem is general, but it was lived in a more tragically heroic way by a society mobilizing itself, without a practical model of reference, to get out of the underdevelopment while respecting the greatest possible citizen equality under the circumstances.
Contrary to what the Nobelized pitre Kantorovich would later shamelessly do, Strumilin’s optimization has nothing to do with Pareto’s technical optimum, a micro-economic optimum that never succeeds in reconciling quantities and prices, nor with the optimum that Kantorovich would draw from bourgeois marginal productivity. Strumilin insists precisely on the macro-economic and on the social data – i.e., the social funds to be reinvested. His problem being the best allocation of the available resources or social surplus-value in the Enlarged Reproduction. Against all market automatism, one of Strumilin’s important contributions, reformulating in his own way Stalin’s emphasis on the use of the best possible productivity, was to underline the fact that science and technology are also material forces; moreover, he underlined that in practice, the introduction of more productive machines or methods brings into play the central allocation of resources. And therefore its optimization, since it involves the increasing technical training of workers, which is not done with a snap of the fingers.
In doing so, Strumilin is aware that, at least from a statistical point of view, productivity increases the number of products but not their unit price; he therefore tries to integrate this phenomenon in the most rational way possible into his empirical calculation by introducing the social cost of fixed capital. For if the circulating – or “used-up” – capital of the production function noted “c” passes pro rata into the value of the final unitary product – I have shown that this is the greatness of Marx’s chapter on “The Last Hour of Senior“, which anticipates all the lethal criticisms that can be addressed to Marginalism – fixed capital, “cf”, implies the investment of large sums of money. This problem remains an eminently political problem to be solved by socialist democracy: In view of the available social surplus-value – and the possible contribution of public credit to speed things up – which priorities are especially retained by the Plan, and at what rate of investment can they be achieved?
Of course, the problem can be solved by credit and by actuarial control of amortization, knowing that this anticipation by credit, duly controlled by the Plan, leads to a very powerful economic multiplier. But, in the end, the heart of socialist planning is the choice of priorities and the rhythm of Enlarged Reproduction in view of the greatest possible human emancipation and citizen equality.
At the technical level we will have understood that the fixed capital itself does not change anything to the productivity and to its relations since the circulating capital is a part of the fixed capital that passes little by little in the product. We understand, moreover, that the best macroeconomic competitiveness – mutualized social services mediated by common financing through social contributions – constitutes the best basis for the development of microeconomic productivity. Basically, if the choice of the Plan’s priorities refers to the Party and to socialist democracy, the technical problem that Strumilin poses refers to the role and management of socialist public credit.
This implies a socialist public bank whose offices are directly and functionally linked with the sub-sectors, branches and filières in such a way as to be able to grant the public credit necessary to complete or supplement reinvestment simply by modulating their prudential ratios according to the needs established by the Plan. In my Synopsis of Marxist Political Economy I show the harmfulness of the guiding interest rates of the capitalist central banks, which have no rational necessity whatsoever; they only embody the purely capitalist class mediation of private credit by ensuring the formally egalitarian access of all to credit – communism between capitalists – while the reality will favor the biggest players. This will only systemically aggravate the speculative tendencies of the CMP by promoting growth driven by individual profit alone in some sectors and parallel contractions in others.
This is the economic cause of capitalist economic crises, also known as Business or Trade Cycles. Long cycles are linked to waves of introduction and massification – F. Perroux’s term – of new sectors, whether intermediate or not, labor-intensive or not. This immediately raises the question of the possible “déversement” of labor from one sector to another – A. Sauvy -, hence of unemployment, which raises the question of the inevitable recurrent secular cycles of the RWW. With the Socialist Mode of Production, the underlying SR, which, I repeat, constitutes the only true quantitative and qualitative socio-economic equilibrium, informs the “proportional symmetry” between sectors to be maintained with the ER financed by reinvestment and/or by socialist credit to avoid cyclical and structural crises.
It is also clear that in a planned economy, once the introduction of new products and new industries, etc., has been decided, the problem of the exchange-value of the new products will be greatly facilitated. Here there will be no excess profits due to the oligopolistic situation, to captive markets or to marketting. On the contrary, the new social utility accounted for in the new product, etc., will simply be the sum of the exchange-value of the inputs as inscribed in the function of production – including the initial investment in fixed capital – to which will be added the organically identical rate of profit, although the volumes will vary according to productivity. And according to the reception by the consumers whose analysis will be part of the socialist management of the enterprises and of the Plan. This will involve upstream considerations for what concerns the choice of the products to massify or to produce, as well as those which pertain to all aspects of the Product Life Cycle of the commodities, including their maximum recycling compatible with the theory of Ecomarxism. This socialist accounting will be all the more facilitated, as we have noted above, by the reduced scale of wages, and by the non-speculative stability of prices. The reduced wage scale will, on the other hand, be based on the development of social services that contribute to the standard of living and to the structural elimination of fear of possible “rainy days”. One rallying cry of American industrial unions during and after the Great Depression was « Through no faults of our own ».
Strumilin will never cease to recall the need to respect “the surplus for the whole community” after 1965-1967. He also showed that the USSR did not lag behind the USA before 1965 (see his article in Novozilov-Strumilin, La riforma economica nell’URSS, Editroi Riuniti, 1969. ) And even before 1967, the USSR had a certain lead on the introduction of automation, which, on the contrary, in its early stages inspired much fear in the capitalist leaders.
After the Marginalist reforms of Khrushchev-Liberman, everything went from bad to worse, because – as Strumilin was aware – “the surplus for the whole society” was partly devolved to the enterprises, which increasingly resorted to material incentives – thus deviating the wage scale and mass consumption. This was compounded by regional devolution, which dealt a fatal blow to central reinvestment and its pace. This was aggravated by the use of socialist market prices – sic! – while fluctuating market prices were only tolerated until 1965 for agricultural cooperatives or kolkhozes. Even so, according to the effective Leninist-Stalinist method, their perverse effects were cushioned by the State’s use of tractors and machinery, thus reinforcing the dominant structure of the socialist production domain in its temporary coexistence with the residual elements of the market system. Of course, what was at issue here was not so much the price form as the town-country exchange and thus the distribution of social surplus-value. However, from a strictly economic point of view, a good part of the supply was assumed by the fully State-owned agricultural sector, the sovkhozes. (See Novozilov-Strumilin, La riforma economica nell’URSS, Ed. riuniti, 1969)
It is also worth noting the parcelling out of certain social services, health care, day care, etc., which were often entrusted to enterprises and production units in socialist societies. In the context of Marginalist “socialist” reforms, this decentralized system had disastrous economic and social consequences as the market increased the autonomy of enterprises. This explains, for example, the unenthusiastic lines that Simone de Beauvoir devoted to the treatment of old age and social security in the Eastern Bloc. (See her book La vieillesse, ed. Gallimard, 1970. See also: Roger Lenglet and Jean-Luc Touly: les requins de la fin de vie, Ehpad, pompes funèbres, tutelles, maisons de retraite, Michel Lafond, 2020, http://rivincitasociale.altervista.org/roger-lenglet-et-jean-luc-touly-les-requins-de-la-fin-de-vie-ehpad-pompes-funebres-tutelles-maisons-de-retraite-michel-lafond-2020/ )
Generally speaking, these essential services – Social Security – correspond to the organization of a part of the social surplus-value as it emerges from the development of the “structure of v” and therefore in the specific form that the “net global income” of households takes. At the end of the Second World War, the social security system based on full employment and social contributions, all sheltered by GATT tariffs, corresponded perfectly to a mixed economy framed in an advanced capitalist democracy that included the Economic and Social Council and collective agreements negotiated by strong unions. It remained to strengthen the existing specialized branches while developing free national day-care centers and a real care for the elderly. The triumph of monetarist neo-liberalism led instead to the dismantling of the Social State, with public enterprises and social services being conceived as new frontiers for the private accumulation of capital.
This is obviously not the only possible form of organization, but in my opinion, apart from its easy actuarial management based on contributions and the definition of anti-dumping, it is the one that offers the most transparent circuits of capital – in the generic sense. Moreover, it allows for equalization and the best treatment of citizens, for equal rights and with the same universal access throughout the national territory. This is so true that the dismantling of these services always deals a severe blow to the daily sense of citizenship, as demonstrated by the regional devolution of social responsibilities in the context of the Reagan reduction of central government transfers. The UK, the Netherlands, Belgium and Italy with their de facto anti-constitutional fiscal federalism are proof of this: citizen solidarity is disappearing, dividing peoples in favour of global speculative capital. France and all the other countries are following suit, albeit with greater difficulty for the time being, which would give us hope for a salutary reversal of this deleterious trend.
In short, with this part of the social surplus-value organized in the “net global income” of households and its circuits, we are dealing here with a form of institutionalization of savings whose circuit is different from the more immediate one pertaining to the “net individual wage” which goes directly into daily consumption. This saving should preferably be public and mutualized rather than private and dangerously invested in the stock market, which should be a matter of course for the socialist mode of production. It allows for the complete cycle of ER – the exchange of all its Mp and Cn – in the essential sense that this institutionalized saving allows for the financing of non-daily and/or durable goods and services that require sums more substantial than the ordinary shopping basket. Similarly, for individual savings – checking or savings accounts.
This is why these institutionalizations of savings act as powerful socio-economic stabilizers and contributors to the standard of living, which should not be confused with the “price level” or CPI and PPI. Today, in the West, they are nothing more than vulgar Fisherian indexes. If public social security is collectively financed and mutualized, its financing is much cheaper and this contributes to reinforcing the role of the individual wage by eliminating the fear of « rainy days ». The European public health system when it was dominant did cost 9% of GDP and covered all citizens. In contrast, the private American system did cost more than 15% of GDP while leaving more than 40 million citizens without coverage. Today, Obamacare, tailor-made for Big Pharma and the big private insurance companies, costs even more, around 20%, while still leaving 38 million citizens without health coverage and millions more with insufficient coverage. A simple appendicitis costs several thousand dollars. It’s even worse for the pension system. In both cases, the modest Medicare and Medicaid public plans, intended for the poorest, as well as the public pension plan, do not allow for a dignified life and retirement, forcing many workers and seniors to work longer and often in precarious conditions.
All this structurally increases the production costs of companies and degrades the level of macroeconomic competitiveness. A few years ago, GM and the American automobile sector had to be bailed out to the tune of tens of billions of dollars, in the US and elsewhere in the world, simply because automation and robotization had eroded a large part of the sector’s workforce, so that it was no longer sufficient to cover the cost of the pensions that had been negotiated and organized in in-house pension schemes. This is in addition to the severe blows inflicted by the stock market crises.
Similarly, from the production side, these essential public services, as well as universally accessible public infrastructure, strongly increase the macroeconomic competitiveness of the Social Formation while powerfully influencing the microeconomic productivity of enterprises. A non-corrupt and efficient public administration, good public infrastructure and public services are the best factors for the location of socio-economic and cultural activities. This obviously includes the energy and food surpluses necessary for flexible planning, and the quality of the environment.
One of the public forms of institutionalizing savings that seems to me to be the most rational and effective in the context of planning is Workers’ Funds. Once in place, they could take over the tasks of Social Security while acting as pools of public capital to be used for public investment in tandem with public credit in planned ER. One need only look at the supplementary pension plans to see the rapid pace of potential accumulation. And this is all the more true since the worker-contributors would have the assurance that their pension will not be gambled in the stock market but, on the contrary, that it will participate, at least in part, in supporting socio-economic growth with all the necessary public guarantees. Moreover, these Workers’ Funds would allow the socialization of private property, respecting, if necessary, the right of possession – as distinct to ownership -, including the promotion of cooperatives for small farmers, craftsmen and shopkeepers, which would also allow them to enjoy the RWW without harming their activities. Today these activities are suffocated by the credit crunch resulting from the logic of hegemonic speculative capital. These Workers’ Funds would thus contribute to structurally changing for the better the sociological bases and their electoral and cultural expressions. The time of Carmaux would have arrived !
In Tous ensemble I had proposed to transform the present tripartite socio-economic system – the capitalist industrial democracy as expounded by Darendorff etc., once endorsed by the Economic and Social Council – into a quadripartite system – State, employers and cooperatives, trade unions and managers of Workers’ Funds chosen by the base. A Productivity Fund, also financed by contributions, is also necessary to manage the inevitable company restructurings due to technical progress, etc. This management would be done with respect for the local, regional and national management of the employment basins, particularly between two cycles of RWW. All this is already exposed in my Tous ensemble freely available in the Books-Books section of my old site www.la-commune-paraclet.com
From a general point of view, the institutionalization of savings is likely to centralize social contributions – based on the definition of anti-dumping – when the age pyramid and macroeconomic competitiveness are less favorable. Thus, since the level of contributions weighs on production costs, it is not just a question of the ratio of the active to the passive population: at a good level of anti-dumping, this ratio may well be 1:1 or less. Indeed, pensions and unemployment insurance payments are part of the deferred salary logic, even if the social mediation used is part of a pay-as-you-go system.
Whatever form is chosen, the essential thing is to ensure the level of contributions compatible with full employment by making up for the shortfall with anti-dumping or, failing that, by resorting to a small surtax on imports. Anti-dumping or surtaxes – which are transitory while awaiting the necessary changes within the WTO, which require the unanimity of the member states – are powerful tools for relocating companies and jobs, and thus ultimately for the level of contributions and tax revenues necessary for the regulatory intervention of the State. Failing this, in the framework of the current definition of anti-dumping ratified by the WTO and all Western free trade agreements, we are witnessing a race to the bottom in terms of labor rights and environmental protection. This leads to a debilitating confusion between the costs of labor and the costs of production, thus favoring the generalization of precariousness and thus the accelerated disintegration of social services and residual environmental protections. The famous downward spiral so detested by workers and by the most sensible Keynesians is then set in motion. The various international tribunals included in these treaties to protect the rights of transnationals firms against the « regalian » pretenses of democratic States complete this sad free-trade framework.
The “social surplus value”, the financing of Social Security and more broadly the national and corporate socialist accounting.
I will limit myself to summarizing here the essence of my analysis set out in my essay: « GDP : a Marginalist narration tool against the welfare of peoples and the prosperity of Nation-States », May-24-2020, http://rivincitasociale.altervista.org/gdp-marginalist-narration-tool-against-the-welfare-of-peoples-and-the-prosperity-of-nation-states-may-24-2020/
As we have already said in terms of “economic calculation” – which Bettelheim considers possible on the basis of his imaginary, purely capitalist “value-form” – nothing is more erroneous than bourgeois and especially Marginalist accounting at the level of both the firm and the national accounts. In fact, the only capitalist accounting regulators are waste and the destruction of overproduction by crises or wars. Everyone remembers the Brazilian coffee used as coal in steam locomotives during the Great Depression. We now know the flaw in the system, namely the inadequacy of capitalist competition, that of the micro-economic “market” and of the macro-economic “market of markets” to simultaneously give quantities and prices by combining micro and macro-economic coherence. The logical contradiction of the ex ante and ex post data of any Supply and Demand scheme leads to random equilibria, always groping to the « right » level. In fact, from the point of view of the general macroeconomic equilibrium and of unmet basic social needs, this leads to a “graveyard equilibrium”. Indeed, regardless of the resulting human welfare, or respect for the environment, both of which are not part of the equations, an equilibrium will always be imposed but in an ex post manner by favoring the greatest possible private accumulation.
Referring to Marx’s SR-ER Equations, we understand that imbalance is inherent to the CMP. At the macro-economic level, it takes the form of SR effects, the cost of which is always borne by the workers. The firm will always seek the highest productivity to reduce the unit price of its products in order to better conquer the available markets and eliminate competition while “freeing” a maximum of labor, which Marx calls the Reserve Army of the proletariat. In this process, the productions chosen, as well as the technologies needed or those preferred and financed, will be influenced by the real or induced “needs” that are rooted in the income structure and in its more or less solvent subgroups. Bourgeois economics is ontologically speculative, it does not know how to reconcile micro- and macro-economics, it does not know how to distinguish between money and credit, between interest and profit, between classical interest always deducted from profit and speculative interest falsely erected by law as a legitimate rate of profit – e.g., the Volcker-Thatcher-Reagan counter-reform and then the repeal of the Glass Steagall Act in 1999, which led to the subprime and QE crisis. Through the systemic equality of the rate of profit imposed by productivity, this legalized usurpation leads to the cannibalizing of the real economy.
CFOs then replace CEOs, even in industry, so that production without a factory becomes a horizon, while buybacks are more useful for capital accumulation than productive investments. This perverse logic is supported by tax expenditures and by the philosophy of the Flat Tax … Indeed, it is enough to introduce purely speculative products into the system’s exchanges for everything to go irreversibly wrong. Without even provoking the purging of the system’s excesses, which was the function of cyclical crises in the framework of the fractional banking and financial system. Indeed, today, the prudential ratio is de facto replaced by recurrent bailouts conducted by the central bank and the Treasury, especially for the benefit of banks and companies considered – wrongly – “too big to fail”, a system that I named at its birth in 2007-2008 as the “credit without collateral” system. (See the International Political Economy section of www.la-commune-paraclet.com )
The reality gets worse at the level of national accounting. This Marginalist bourgeois accounting is based on the falsification of “value added”. We know that this is only the falsified rendering of the surplus-value which is at the base of profit as it emerges from the incessant fluctuations of supply and demand, and therefore always empirically apprehensible in an ex post manner only. This would be enough to disqualify any economic calculation based on such quicksand. By purely ideological and anti-scientific choice, Marginalist national accounting has chosen to consider “value added” only when it comes from the private sector. This leads to the nonsense – one has the right to call it asinine nonsense – conveyed by the GDP – and its declensions, see my essay mentioned above.
In fact, we evacuate the essential part of the production of wealth by eliminating from the calculation the whole State and public level, and in fact the level of macroeconomic competitiveness of social Formations – civil service, social security and public infrastructures, education, arts and culture, which are not part of the “market” – whereas it is on this competitiveness – location factors, etc. – that the best development of productivity is based. To give just one example, a wall-to-wall public health system integrating front-line clinics and preventive medicine and modern geriatrics would cost some 9% of GDP, compared to the 18-20% wastefulness of the American private system now emulated in the EU. The same argument applies to pensions, education, transport, social housing etc., etc.
The beneficial impact on the standard of living and directly on the cost of production is obvious. Well, public schemes, including the civil service, are counted as costs – and therefore as public expenditure that must always be reduced – because their goods and services are not traded on the “market” and therefore have no price, and therefore no “added value”! It is therefore understandable that, in order to boost marginal GDP, the more you privatize, the more your GDP should increase, no matter if the queues of public users, now transformed into customers, are getting longer everywhere, no matter if services are no longer offered in remote areas that are less profitable compared to central consumer areas and if the epidemiological framework is deteriorating to the point where more than 10 million citizens are delaying their health care in France and in Italy … However, as expected, this is counterproductive, since deregulation and privatization with its forceps restructurings and its preference for precariousness destroy the “global net income” of households along with its virtuous social circuits, including contributions and fiscal revenues. Now, this generalized precariousness is necessary to make figures according to the ILO unemployment standards for which one hour worked removes you from the lists…
Add to this the fact that marginalism does not distinguish between the real economy and the speculative economy, and that the latter, which turns round and round on itself by cannibalising the former, occupies an increasingly outrageous place in the “value added” that is accounted for. Today, counting only the de-compartmentalized banking and financial sector, financial speculation accounts for more than 9% of GDP.
With such accounting data, all socio-economic equations, especially those of growth, are distorted. This is particularly true for those concerning the role of economic multipliers which, despite the various Rogoffs, Akerlofs etc. of this poor world, are all the more powerful as they concern the public sectors. (See “THE BODY ECONOMIC: why austerity kills, by David Stuckler and Sanjay Basu, HarperCollins Publishers LTD, 2013. A critical review.”, https://www.la-commune-paraclet.com/Book%20ReviewsFrame1Source1.htm )
Socialist accounting is scientific because it is based on the law of value embedded in Karl Marx’s RS-ER Equations. We have seen above that the integration of the Marxist law of productivity preserves coherence both in physical quantities – Net Material Product – and in exchange-values and prices through the introduction of the Marxist quantitative theory of money and credit that I have developed – the distinction between money and credit, real and social wage masses, etc. – and that the socialist accounting is based on the law of value.
We still have to evacuate the false notion of “unproductive labor” that appears in some of Marx’s drafts unfortunately retained in Books II and III of Capital. By adopting this pre-scientific concept, we will end up falling into an accounting error similar to that of “added value” by creating a false dichotomy, here between material or tangible production – which Sraffa defined as one that you can kick … – and the intangible production of services etc. The reality is that concepts like simple labor, complex labor, unproductive labor are purely Smithian concepts that appear in the drafts where Marx is still analyzing the Smithian mental space. Similarly, the concepts of land rent and differential rent – which once demonstrated is nothing more than the law of capitalist productivity – are drawn from the mental space of Ricardo and Torrens. A real editor who knew Marx would not have taken advantage of old Engels’ fading vision to compose such editions of Books II and III.
Althusser was right and I then demonstrated that it was necessary to move, in order, to abstract labor, to socially necessary labor, and to labor that is always productive because of the social division of labor, including, for example, for public bureaucracy that would otherwise have to be assumed by individual firms with the problems that one foresees. For example, already in Adam Smith’s Wealth of nations, we are confronted with the “general interest” which, as such, cannot depend on the private sector. Smith goes further by encouraging discussion of the most appropriate taxation system then necessary: for example, it seems fairer to him to make the capitalists who profit from the increased mobility of goods by rail pay for it rather than all citizens indiscriminately. In the same drafts retained in Books II and III, Marx instinctively hastens to note that the work of a schoolteacher, which participates in the formation and training of labor power, cannot be called “unproductive” work. In the same way, while still analyzing in a pre-scientific way the supposed downward trend in the rate of profit – not to be confused with volumes – he hastens, in the next chapter of Book III, to analyze the counter-trends. In the Paris Manuscripts of 1844, when discussing prices that oscillate according to competition, whose fluctuations cancel each other out in the medium and long term, he had rightly deduced that, in this case, competition could not be the scientific cause of the exchange-value around which prices oscillated.
I have also noted the ontological relation between the micro-economic production function and the RS-ER Equations, namely the correspondence between constant capital “c” and Mp and variable capital “v” or Cn. This is why Marx, in synthesizing the Physiocrats, Sismondi’s Annual Income – which provides a parametric framework that can take the form of the cycle of reproduction rather than the epiphenomenal form of the calendar year – and Quesnay’s Tableau, retained only the two Sectors SI and S II.
But this in no way denies the complexity of the social division of labor. On the contrary, on this basis all economic activities can be grouped into sub-sectors subsumed under these two main Sectors with their branches of industry. Better still, statistical organizations can be deduced trans-sectorally, which allows us to plan various filières. Thus, the criticism that Hayek thought he could address to the method of simultaneous resolution proposed by Tugan-Baranovsky and Bortkiewiz and then by tutti quanti, according to which it implied a complete simultaneous resolution for the slightest exchange, making it mathematically almost impossible, is formally correct, but it has nothing to do with the Marxist RS-RE equations. Oscar Lange had solved the problem pragmatically by imagining a system of warehouses with shelves in direct communication with the socialist market enterprises; when the stocks decreased, the stores and warehouses would renew their orders – which I presume also implies some kind of quality control for unsold goods etc. The Incas did wonders across multiple time zones and climate zones with their incredible knotted bands – which took abacusses to a higher level … As we said, Lange was himself well-intentioned but unfortunately ended-up derailing everything with his socialist marginalism. (For a more thorough discussion see: « Another ineptitude on Marx’s circuits of capital and realization authored by G Dumenil and D Levy » , Dec 22, 2019-January 27, 2020, in http://rivincitasociale.altervista.org/another-ineptitude-marxs-circuits-of-capital-and-realization-authored-by-g-dumenil-and-d-levy-dec-22-2019-january-27-2020 )
In reality, a dynamic, qualitative and socially oriented growth, i.e. a form of ER must always be based on an underlying SR, if only to avoid the waste caused by SR Effects and to optimize the production anticipations operated thanks to public credit. We can therefore see how the false problem of the complexity of modern economies dissipates by itself, the only remaining difficulty being the trans-sectoral organization of the filières. Have you noticed how “complexity”, badly borrowed from a pitre like Prigogine and his new empiricist behaviorist « alliance » summarized by a simplistic passage from order to disorder and back to order, a mechanism that can sometimes be applied to natural science, is invoked to confuse things, especially in France? This problem of economic calculation can be easily solved by Marxist accounting, since any activity whatsoever will have its production function whose optimum will no longer be given by technical Taylorism but by productivity – technical optimization and exchange-value – while all the production functions are subsumed in their sub-sectors, industry groups and filières. We can even harness the exemplary power of barcodes, today’s chips and 5G, to track all exchanges and production of all goods and services, in real time. The predictive power of SR-ER is increased tenfold and statistics, in their restructuring into symmetrical sub-sectors in SI and SII and / or filières allow, if necessary, to correct the course along the way. The only concern was revealed by the control of the accounting data of the Allende government by the American multinationals, themselves linked to the CIA, which allowed the latter to disorganize all the logistics, thus putting the Chilean economy in crisis. Certain sub-sectors must therefore be protected and probably organized in an autonomous way.
In their internal division of labor, companies have their own private bureaucracies. Today, in the context of globalization – and with the global use of English – many parts of these private bureaucracies are privatized in order to reduce production costs. This is a curious trend, since it inevitably leads to the centralization-concentration of these services within new private enterprises. This contributes to the dismantling of the structures necessary for the general interest – if only Smithian – with the self-destructive effects we have already noted. As we can see, the outsourcing of bureaucracies and private services within public services remains the most rational choice from a socio-economic point of view. It remains to introduce these sectors correctly into the national accounts – and thus into the SR-RE equations – in a rational manner.
It has already been said that all economic activities have their production function, namely their investment in fixed and constant capital and in the wage bill. This wage bill not only reproduces the public goods and services that it itself needs, it also creates surplus labor that cannot be evacuated under the pretext that these goods and services have no “added value” since they are not exchanged on the market. The capitalist market does not summarize all possible exchanges and these goods and services are indeed exchanged between public administrations and their users. We must then take into account the specific form that their specific production function will take, which is then integrated into the SR-ER. First of all, if we have surplus labor, we have surplus-value, which here already prefigures within the CMP itself, the “social surplus-value”. The parametric logic of productivity allows us to assign to it a rate of profit identical to the other sectors.
It remains to understand how productivity is defined specifically in the production of intangible services. First, the logic of managerial technical optimization will be strictly applied, although this will include a buffer of over-employment to train young people arriving from schools on the job, in a practical way; this strategy then allows for a better redeployment of the labor force in the event of a “spillover” or « déversement » of the workforce into new activities. Secondly, since the services are largely defined in advance by rigorous standardized protocols – or SOPs – which nonetheless allow for any necessary corrections. On this basis, everything becomes calculable – including the ergonomics needed to avoid wearing out the workforce ….. In particular, the service offer can be judged according to the average queues of users.
Here again, the key is the concept of “social surplus-value” and its democratically decided social allocation according to the parametric data of the SR-ER – i.e., Marx’s Social Fund set out in his Critique of the Gotha Program.
The same reasoning applies to sports, culture and the arts, as well as to education and public health. Since social welfare sets the priorities for the allocation of “social surplus-value”, wealth cannot be evaluated by the unequal Marginalist GDP. A Cuban with Fidel, even during the hardest years of the Transition un Peace Time, had a higher standard of living than the American upper-middle-class. To realize this, one simply had to recalculate the value of free quality education – $40-50,000 a year at Harvard, etc. – health care, etc. – Unfortunately, the blockade severely slowed down the potential of the Cuban RS-ER. This was not the case in the USSR. In fact, despite Trotskyite nonsense, the first socialist homeland could not be summed up by the simplistic phrase “socialism in one country” since it had 15 republics covering more than half a continent! If Cuba had been able to generate food and energy surpluses, the constraints of American extraterritoriality, already diminished in the more flexible framework of current multilateralism, would no longer weigh so heavily. What remains is to avoid the decentralization and autonomization or devolution of the “social surplus-value” according to a reiteration of “socialist Marginalism” à la Liberman… (See the chapter on Cuban socialism in my Pour Marx, contre le nihilisme, as well as the section of the same name in my old site www.la-commune-paraclet.com )
The allocation of social surplus-value poses a residual problem that Strumilin attempted to address in his theory of maximizing allocation to produce the best possible socio-economic growth. Namely, the role of taxation – taxes and subsidies.
In fact, taxes and subsidies are specific modalities of the allocation of “social surplus-value” that a socialist economy well aligned with SR-ER – and socialist public credit – can ignore. But transitions are always historically and socially determined by class struggles and alliances. In addition to the deficient development of the Marxist theory of money and credit, Strumilin was confronted with mixed Soviet economies with a more or less developed mercantile sector according to the redistributive epochs experienced by the first socialist mode of production – namely, war communism, the NEP, the very effective Bolshevik-Stalinist planning and finally the socialist marginalism of Khrushchev-Liberman. The situation was further worsened from the point of view of socialist economic calculation by the absence of the Marxist theory of productivity, the Net Material Product allowing to control the SR-RE only in quantitative terms. Which, in reality, is already better than any capitalist system, given the stability of prices based on a reduced wage scale and the absence of private and speculative credit.
The mixed society that Strumilin had before his eyes thus included a mercantile sector under dominance. But this sector, varying according to the class struggle, somewhat distorted the perception of “surplus for the whole society” and caused deleterious economic effects on productive and household consumption. In this context, says Strumilin, the State can use a residual “price signal” and material incentives to change behaviour. With the Khrushchev-Liberman reform, this previously controlled policy took over and quickly destroyed the system from within. In the regime of dominance by the socialist mode of production – basically the State Sector – the taxes prevented the enrichment of the kulaks before their programmed social cancellation when the policy of land collectivization supported by the Tractor and Machine Stations took over. The practice continued but in a marginalized way in the mercantile sector, still tolerated with the kolkhozes. If Stalin had survived, the transition of the latter into sovkhozes would have been completed, a movement already set in motion by the increasing incorporation of the Tractor and Machine Stations into the kolkhozes themselves with their State-run economic logic. A disastrous backward step was taken with the reforms of 1965 and 1967. In the same vein, the subsidies are only corrective allocations of the social surplus-value.
There remains an important element of consumer “pricing” – politically shaped on the basis of exchange-values – which can hardly be eliminated by the socialist mode of production. Indeed, it is not conceivable, even with the great flexibility offered by good resource management informed by Ecomarxism, to have a general overabundance. This is not even desirable, contrary to the misconceptions of a communist society as a society of material abundance, which Strumilin also speaks for – he does not do so without criticism, because, he says, drinking all the vodka possible is not a great proof of abundance and refers rather to a general mismanagement…
We know that this idea of socialism-communism as a society of material abundance rather than as a society of general emancipation likely to erase all forms of alienation, including alienation from consumer products, comes from Léon Walras. In the first edition of his book Éléments, in which he sets up his sophistical axioms that allowed him to develop Marginalism, he stumbled over the concept of “scarcity” but he also emphasized in a footnote that scarcity is, in the final analysis, always a social production. Subsequent editions removed this footnote, which alone demolished all his pretentious, supposedly “scientific” apparatus.
Jean-Paul Sartre, probably did not have access to the first edition; in fact, he will dizzily take up this notion of scarcity to invert it into the notion of a society of material abundance under communism. The real Bolsheviks never thought in this way, and for good reason, the ethical-political and human development being their real objective. Finally, they were more in line with the old historian Ranke, for whom any epoch was potentially as close to God. All they had to do was to replace God, like Joachim de Flora, with consciousness and equality in order to find their way. And they demonstrated this perfectly by rapidly raising the standard of living of their fellow citizens. Mao proved this masterfully, since his Party had to govern a people of more than 600 million citizens at the time, marching towards a planned egalitarian development, which was constantly improved.
Once the Marginalist and alienating utopia of material overabundance has been eliminated and the concept of programmed allocation of “social surplus-value” according to precise social priorities has been re-established, the question of equal access for all citizens to the necessary or desirable products that are still produced in insufficient quantities remains to be resolved. The logic of prioritizing resources within the framework of the desired ER allows this problem to be solved in the long term; in the short term, given the institutionalized savings that complete the “net individual salary “, the products that are less immediately necessary and therefore less available will be given a higher price, allowing for a selection by the choice of consumers according to their desires and their possibilities. However, before moving to this stage of tax-driven consumption, the socialist State will ensure collective access. The typical example was that of neighborhood laundries and more recently that of libraries or public Internet cafés, which made it possible to organize mass access before moving on to individual consumption. Basically, better public access is always better and wastes fewer resources. Urban public transportation is a perfect example.
In any case, once essential services are assured, the socialist economy can consider the transition from massification of products and services to short runs or quality artisanal production. Massification will have priority in order to ensure the widest access, and the renewal of the parks will then be done according to a preference for quality, thus provoking a real accumulation of wealth. This is today the domain for antique dealers and the wealthiest. Moreover, as tastes change, the passage from private property to possession – and its transmission in the case of individual possessions necessary for the expression of one’s personality – nothing prevents the organization of non-commercialized exchanges between such products.
We have already stressed that the problem of maximization posed by Strumilin concerning fixed capital disappears with the development of public credit. The theory of productivity makes it possible to show that the constant capital “c” is the circulating part of fixed capital. It remains that this fixed capital must be invested and put in place at once. Without sufficient development of socialist credit, this will require such a mobilization of the available social surplus-value that it will force Strumilin, as a good Bolshevik statistician, to ask himself how best to proceed. The socialist public credit allowing to anticipate the necessary investments in addition to the social surplus-value available for the ER, the problem is reduced to a question of amortization in time, not in a Fisherian way – temporality regulated by risk preference and by the maximum expected profit – but in a socialist way: namely that the cost of public credit is almost zero since the socialist central bank only has to pay its administrative costs by working within the framework of planning, so that the rate of real amortization will depend on the installed production overcapacity and existing stocks as well as by access to the foreign market. The latter is mediated by the exchange rate, which refers to the rate of macroeconomic competitiveness.
The socialist temporality can be exploited by the public contributory systems financing social security through the Workers’ Funds, as we have seen above. These systems are based on the logic of the deferred wage, recognized as such and therefore managed by the workers, and are the exact opposite of the falsely universal contributory systems. The fact remains that in the context of the insertion of the national Social Security system into the still capitalist World Economy, this system has great advantages. In fact, not only does it ensure essential public social services on a mutualized basis, allowing for equalization according to the current wage scale, but, in addition, it allows for the reduction of production costs through the actuarial staggering of payments and through their functioning as institutionalized savings, allowing for productive investment and the smooth socialization of the Means of Production. We can prefer the system of « répartition » if we want by submitting the decisions to the social consultation of the actors in the framework of the Economic and Social Council integrated in the Planning. In any case, it would be a serious mistake, in my opinion, to underestimate the parametric role of the definition of the anti-dumping in force.
Of course, as long as the system is a hybrid one, both the accounting of firms and the national accounting should be dual, i.e. before tax and subsidies and after, in order to have a complete view of the SR-ER and its concrete evolutions.
The so-called socialist market drift – i.e. socialist marginalism – of Liberman and Kantorovich.
(See: MATHEMATICAL METHODS OF ORGANIZING AND PLANNING PRODUCTION*t L. V. KANTOROVICH Leningrad State University 1939, http://resistir.info/livros/kantorovich_mathematical_methods.pdf )
With Liberman – following Oscar Lange in a totally deviated manner – we are witnessing an inversion of the accounting dominance, the dominance of the centrally controlled Plan according to the data of the Net Material Product, gives way to the dominance of the market. The dominance of the Plan over the residual mercantile market had characterized all previous Bolshevik eras, including the NEP. As we have said, the centralization of “social surplus-value” allows for the optimal allocation of available resources for the retained expanded Reproduction according to its short-, medium- and long-term rhythm of unfolding. This centralization was destroyed by the autonomy granted to enterprises, a debilitating tendency further aggravated by regional autonomy. From then on, it was no longer a question of democratic socialist, and therefore administrative, decentralization, nor of optimizing the social division of labor, but rather of devolving an ever-increasing part of the social surplus-value.
The exemplary Bolshevik growth disappeared, as did the capacity to manage full employment through the labor «déversement » or spillover provided by the Plan, and regional disparities increased at a frightening rate. The Soviet civic unity perfectly combined with Bolshevik multinationalism gave way to a regional withdrawal on which the gravediggers of the USSR acted to dismember the country, which they are still trying to do today for the nationalities within the Russian Federation.
Above all, the agricultural supply was destroyed at the base – the USSR had to import more and more wheat and food – and the sometimes random supply of shops was cruelly manifested by the proverbial queues in front of the stores. This system of quasi-capitalist autonomy was nonetheless marginally controlled by the residual central command and control system, which took the form of the rushed production at regular intervals, to meet – or even worse to exceed – the Plan’s objectives, through all sorts of bad practices implemented by local mangers. Instead a good Plan would foresees the overproduction that is sometimes necessary thanks to the installed productive overcapacity and to allowed overtime; but it normally works according to standard norms – set by the Labor Code and by the production processes, let’s say by Socialist Taylorism, therefore concerned with the ergonomics, the health and the safety of the workers. This according to the credit needs which imply important mobilizations of resources but avoiding, if possible, the perverse effects on the SR-ER Equations, including the SR Effect and unemployment. The dead-line production rushes in this framework only produce additional chaos only aimed at rewarding managers driven by personal profit and that of their company.
These abuses were skilfully supported by the West when the pseudo Nobel Prize in the “dismal discipline” was awarded to the “mathematician” Kantorovitch. This was the coup de Jarnac. Now, Kantorovich’s maximization, which was very different from Strumilin’s Bolshevik macroeconomic maximization, was only a vulgar second-order re-edition of a micro-economic synthesis of Pareto’s technical optimum thanks to the use of micro-economic marginal productivity, that is to say, a vulgar logic of economies of scale and increasing and decreasing incomes, which did not even take into account Sraffa’s criticisms – see his two articles of the 1920’s on the subject. Nobody listened to him, or almost nobody, until 1965-1967. The pitre Kantorovich probably escaped the purge because of his contribution to the nuclear program. Then, with the Liberman-inspired reforms, his time came. In his case, if we except the dramatic but emblematic Chilean case after the assassination of S. Allende, it materialized about twenty years ahead of the new philo-Semite Nietzschean theories of Ludwig Mises and of the Chicago Boys.
This should prompt us to rethink socialist democracy and the role of civil society organizations, trade unions, intelligentsia groups, consumer groups organized within the framework of the Plan under the ultimate control of the People’s Assembly and the Party. The socialist constitution is not enough to prevent regression – see the recent changes to the constitution of Fidel and Che. It must still be supported by the organizations of the proletariat.
Hobbes asked: “what is a man worth?” i.e., in the emerging capitalist market with its devolution of the sovereignty of the peoples rooted in the deepest natural law, “il diritto delle genti” of Giambattista Vico, to monarchical, aristocratic or Censitarian rulers. Likewise, the Lockean State division of powers – executive, legislative and judicial – adopted by the capitalist USA with its political pluralism under the control of private property, has little to contribute to socialist democracy, which, in the period of transition, remains a dictatorship of the proletariat just as Western democracy is a dictatorship of the bourgeoisie, or in modern parlance the Rule of Law, in the precise sense that the Socialist Law or Constitution cannot be violated or circumvented. The bourgeoisie does not tolerate any infringement of the right of private property, in the same way Socialism will not tolerate any infringement of the right of collective or State property. Note that the term “dictatorship” as used by Marx, had none of the totalitarian connotations of modern Nazi fascist dictatorships.
Socialist democracy thus makes a greater place for the participation of citizens in the decision-making processes that really count and that are now under public, collective control. The force of socialist law is exercised above all in the Domain of socio-economic necessity, the place of which in everyday life will decrease as a result of the secular growth of productivity that will require a better sharing of the available working time among all citizens capable of working. The domain of socialist freedom, which allows the free development of emancipated personalities, can only expand. Without forgetting, however, Mao’s warning about the persistence of class struggle. So that Vico and Montesquieu’s insistence on the role of the groups within civil society in the defense of the institutions and the liberties of a given system keep all its value.
Representative democracy will remain in the form of democratic centralism for the Party, for the People’s Assembly whose representatives respect the socialist Constitution as direct representatives of the people and revocable at any time according to the principle established by the Paris Commune. The same goes for the local assemblies and neighborhood councils, etc. In fact, the most important bodies, apart from the Party which is the guarantor of the defense of the mode of production, will be those linked to industrial and social democracy – trade unions, workers’ delegates, etc. – to cultural and social democracy – media, dazibaos, arts and cultures etc. – and to the democratic instances of control – for example, the citizens’ complaint committees that can counter bureaucratic or apparatus authoritarian drifts in order to consolidate the socialist consensus, this before having to go to court. The Party must remain the ultimate guarantor of fundamental individual, social and civil socialist rights against any totalitarian drifting. In view of what has been said concerning the “inner self” of the Individual-citizens – their free will and therefore their personal responsibility – in my Marxist critique of the Freudian bourgeois psychoanalysis, a collection of neo-Nietzschean recipes aiming at normalizing the subordination of the Beings to the private property and to its privileges, this must imperatively respect the private life and the intimacy of the citizens, namely the field of exercise of their inner self. I believe that the stability of societies rests largely on this respect within the framework of non-totalitarian constitutions. (See my Book II.)
In fact, this socialist civil society had a greater place under Stalin than under the revisionist reformers and their hypocritical system of command and control coupled with the privileges of the elite of the State Apparatus and the Party, and more than emblematically with the under-representation of women. This is why, before the revisionists came to power with their growing inequalities, the Bolsheviks were able to ask enormous sacrifices from their fellow citizens as long as they were convinced that their leaders were going in the direction of socialist construction and the protection of the general interest. One anecdote is worth mentioning. When visiting factories, sovkhozes and kolkhozes, Stalin always asked the question at the outset: “Do you feel happier today compared to last year?” What better touchstone to check the adequacy of the Plan and its resource allocation? Imitate Koyré, conduct a simple mental experiment and imagine our Western leaders asking this question today to workers and agricultural laborers or even to the average consumer!
As we can see, overrepresentation is a crime against societies. Once these ideas become dominant, the slope to self-destruction is very steep. This is the destructive logic of exclusivism that Thomas Paine, then Marx and then myself afterwards – see in particular my Book II Pour Marx, contre le nihilisme – section Books – as well as the chapters on secularism in my essay Europe sociale, Europe des nations et Constitution, Jan. 14, 2004, section International Political Economy in my old site www.la-commune-paraclet.com . This is true in all societies regardless of their mode of production. This self-induced cretinism by self-selection and incestuous class and caste selection is, as we cansee, much more damaging than congenital cretinism. Only the respect of the Law of Large Numbers within the framework of a true democratization of the educational system can counteract it.
The same drifts in the allocation of resources under the pretext of decentralization and democratization dealt a fatal blow to the growth rate of the USSR’s planning and to the citizens’ standard of living. This is easy to understand, since in order to carry out this socialist allocation according to the priorities of socialist production – given by the improvement of the living standards of constitutionally equal citizens – it is necessary to pass through the Social Fund necessary for reinvestment, which Marx develops in the Critique of the Gotha Program and which I have reformulated as “social surplus-value’’. Now, this social surplus-value refers to the division between “capital” – in the generic sense here – and labor – and thus to the level reached by the “net global income” of households compatible with the growth rate of the ER, itself based on the level of microeconomic productivity and the level of macroeconomic competitiveness – and thus on the maintenance of external balances.
The reintroduction of the capitalist market – corporate autonomy, material incentives – distorted the economic calculation. Even more seriously, by supporting the autonomy of enterprises through regional autonomy, the optimization of the allocation of social surplus-value by the Plan was totally distorted. Administrative autonomy was confused with devolution of powers. Two great perversions followed. Since the Bolshevik legacy did not allow for openly questioning socialist equality, but being convinced of the superiority of the Marginalist “market”, one ended up replacing practical corrections on the basis of the SR verified by the Net Material Product – the Mp and Cn necessary – by a system of command and control, moreover perverted by the emphasis given to the new accounting in “prices”.
In this way, the good Strumilin, who had been trained under Lenin and Stalin, had no difficulty in showing the historically strong and unequalled Soviet growth rates – including in terms of machinery and automation – until 1965. After this date, which marked the reform based on Liberman’s Marginalist socialism and later aggravated by Khrushchev, the USSR would decay, fall behind and eventually deconstruct from the inside. This tendency was strongly aggravated by the overrepresentation from which it suffered, even after 1948. Khrushchev who was of peasant origin once said to Comrade Chou En-Lai of mandarin extraction: « You have betrayed your class of origin.» To what Chou answered with a sense of proud easy to guess that it was indeed true since both of them had done so. Basically Mao Zedong was right about the importance of the class struggle even during the transition against the so-called nonsense of the State – sic! – of the whole people.
To conclude this chapter, let us emphasize that Bettelheim’s fallacious “value-form” was fabricated to delegitimize the transition to socialism. It assigns a supposed impossibility of economic calculation to all the redistributive periods of the communist regime since the October Revolution, instead of pointing to the endless regression contained in the socialist marginalism imposed with the Kosygin reform of 1965 and, in an even more devious way, with the Khrushchev-Liberman reform of 1967. It is false to claim that money, which is only a means of exchange, or that the commodity, which is only a product to be socially exchanged because of the social division of labor, are both necessarily capitalist categories. To say this is nonsense calculated to prevent thinking about the exchanges inherent in the capitalist mode of production and thus to block the way to the socialist transition.
The real Marxists were not fooled, neither Mao nor Che. They knew that the essential part of the transition to socialism, despite the residual inaccuracies of the Enlarged Reproduction and therefore the inaccuracy of its economic calculation, was based on the practical correction through the physical quantities produced and especially on the use of the “social surplus-value”. The latter is no longer used for private accumulation, but to finance production to satisfy social and other priorities, established in common by socialist planning – and by its typical democratic decision-making process, i.e., democratic centralism declined not only by representative democracy, but also by industrial and social democracy, by participatory democracy and by democratic control bodies. They knew that the specifically socialist-communist affirmation of “social surplus-value” implied a parallel evolution of the “structure of v”, i.e., of the socially efficient sharing – social productive consumption and household consumption – of the sum (v + pv), i.e., of the fruits of living labor. They knew that in each epoch of more advanced or backward redistribution like the NEP, this sharing implied specific circuits of “capital” – a term taken here in its generic sense. The conception of a transition is the opposite of historical determinism in the sense that it tries to pick up the meaning of historical becoming. This is why the Bolsheviks felt that the process required a scientifically based class consciousness on which to build the persuasion of the representatives coming from and connected to the base. Mao called this the “mass line,” which is a far cry from voluntarism or imposition from above.
No one will be surprised, then, to see Che Guevara counter the hollow criticisms of a Bettelheim with an authentically Marxist-scientific and socially grounded approach. We owe to the great comrade Orlando Borrego Diaz, who participated with other Cuban revolutionaries and in close collaboration with Che, to the establishment of Cuban socialism. He contributed a magnificent book on Cuban planning and on the development of the Sistema Presupuestario de Financiamiento, which is nothing less than the advanced conception of the allocation of budgetary resources, and therefore of the “social surplus-value”, to the planned Enlarged Reproduction. This taking into account the State sector already largely abstracted from mercantile exchanges and the INRA, namely a part of the agricultural world that, for the sake of the class alliance following the example of the Stalinist model of the kolkhozes, could still transiently practice mercantile exchanges of their surpluses. Borrego gives here a good overview of the Apuntes written by the Che, which are still difficult to access today. It will be enough to read Che’s two articles, the one on the presupuesto from 1964 and the one on “Socialism and Man in Cuba” from 1965, to grasp the theoretical greatness of our great revolutionary figure. (See The Che Reader; see https://www.marxists.org/archive/guevara/1967/che-reader/index.htm which unfortunately does not provide a translation of the first text).
Here is a brief summary of Borrego’s relevant chapter. For Bettelheim, socialism supposes an immediate adequacy between productive forces and relations of production (which underhandedly amounts to invalidating the Leninist revolution according to the theses of the economic determinism of Longuet and the renegade II International). Thus the categories money, commodity – in fact the so-called “value-form” invented by Bettelheim – are intrinsically capitalist no matter what the relations of production. It is clear that since they survive in the USSR and since Bettelheim takes any exchange mediated by money – in fact a unit of account playing the role of a general equivalent given the social division of labor – for a capitalist exchange, any hope of transition is lost in advance.
Che answers by recalling that the transition being indeed a transition, it is advisable not to underestimate the role of the class consciousness and the one played by the planning budget, in other words by the class direction of the Revolution based on the socialist use of the “social surplus-value” while still surviving mercantile relations between State-owned industries and certain sectors of the agricultural NIRA, as it was the case in the USSR with the kolkhozes even before the surge of the Khrushchev-Liberman reform. We have seen above how this affected the problem of the adequacy of quantities and prices, thus the economic calculation in price. But Che brilliantly answers that this is subordinated to the planning budget that restores the balance of planning and the march of Enlarged Reproduction.
Che insisted on the modern management of enterprises; he also called for an analysis of the management methods of the MNCs nationalized by the new regime. As a good connoisseur of Lenin, he will also insist on the mediation advanced by the participation of the unions playing their double institutional class role. That is, the defense of the immediate interests of their members, “corporatist” defense within the CMP, concerning wages, labor standards, etc., but also the role of transmission of two-way socio-economic information between the management of the enterprise, the government, planning and the working class. Hence, the importance that Che attaches in the period of transition to the revolutionary ethic, less as a hollow and moralistic ideology than as the continuous dialectical formation of the revolutionary vanguard consciousness based on study and practice.
Borrego adds: “With this argumentation, Bettelheim totally denies the assumptions on which Che’s proposed system of leadership for the concrete conditions of Cuba was based, that is, the budgetary system of financing, and with that he considers valid only the system in vogue in the countries of the socialist camp: the economic calculation. However, Che considers that the proponents of the economic calculation have followed an incoherent line, since, on the basis of the Marxist analysis, they follow part of the road in search of the truth for the economic solutions of the transitional period; but there is a moment when they lose the sense of orientation and recognize as valid only the fundamental categories of capitalism, in order to give them validity in socialism, arguing that in this way a more accelerated and efficient development of the productive forces will be achieved in the new system.
They have never explained correctly, says Che, how the concept of commodity is maintained in its essence in the State sector, or how the law of value is used ‘intelligently’ in the socialist sector with markets having their own characteristics different from those of a strictly capitalist nature.” Tanslation, p 153 Orlando Borrego Diaz, Che, el camino del fuego, https://www.rebelion.org/docs/122158.pdf .
In fact, the pitre Bettelheim, operating a typical undermining work, was only talking about “economic calculation” to accredit its impossibility under socialism.
Underlying thesis: Superiority of macroeconomic planning, whatever the mode of production.
This thesis about the sovereignty of the Plan would be justified in two ways: first, by the compatibility of planning in any given Social Formation with many epochs of redistribution within the same mode of production; second, because the fascist Austrian-Jew Ludwig Mises, the damned soul of the philo-Semite Nietzschean reaction in economics and social science, the great inspirer of the Mont Pelerin Society and the Chicago School, hated the German war planning of the First World War and the United States planning of the Second World War, which led to the planning of the post-war reconstruction initiated in 1943. He hated these experiments almost as much as the State interventionism linked to Keynesianism, or as much as the Soviet planning. Since war mobilization could not tolerate the waste inherent in capitalism, these experiments had in fact demonstrated the superiority of planning in achieving the vital objectives that society set for itself. In contrast, for Ludwig Mises and the neo-liberals, no barrier should be placed in the way of the free play of the market, so that any interventionism that dared to discipline “its animal spirits” – as Keynes put it – would immediately be denounced by him and his direct or indirect followers as unnatural.
Indeed, the State or, in its socialist “overcoming” through the vertical and horizontal diffusion of decision-making power, a centralized organization exercises the Regalian powers necessary for the preservation of the Social Formation – national or multinational – which is the locus of the formation of the exchange-value and therefore the nature of the insertion of this SF in the World Economy. The first task of these Tegalian rights is to ensure security and universal access to the fundamental individual and social rights that constitute the material basis of common citizenship in spite of the ethnic, religious or class structure. Such an organization destroys at its base any racist or theocratic exclusivist or inheritance-based claim; in the face of common citizenship no caste, no self-elected group has any right to exist, except at the most in its private space, strictly abstracted from the public sphere.
The Austrian-Jew Ludwig Mises was indeed a fascist Jew, a philo-Semite Nietzschean of the worst kind, and an advisor to the Austrian Chancellor until he was forced to flee at the time of the Anschluss. And yet, he will never change his pathological and debilitating vision of the world. The noble goal of Politics would no longer be to ensure the greatest possible common good and human emancipation, but rather to maintain “whatever it takes” or, even worse, to forcibly “return” to the usurped domination and privileges of the few. Thomas Paine and Marx, among many others, not to mention the Christian Pythagoreans, have shown that no human equality, hence no form of democracy, is possible without the definitive overcoming of all kinds of Exclusivism.
Hegel spoke of the “cunning of Reason”. I deeply believe that the retrieval of this fascist pseudo-economist mush from the dustbin of history to prevent the egalitarian progression of the Social State – the Trilateral Commission with its will to put an end to the “rising expectations” of the workers or the fascist neo-Malthusian catechism of the Club of Rome and its supposed limits to growth, and therefore to its equitable redistribution – was necessary because too many people had not yet assimilated the lesson of the defeat of Nazi-fascism properly. Today, without even mentioning the criminal manipulations surrounding the Western management of Sars-CoV-2 – See the pitres J. Attali, Gates etc., – no one in his right mind can ignore the a-social and a-human inanity of these philo-Semite Nietzschean thoughts.
To realize the true content of this narrative, it is sufficient to read Mises’ book Socialism – https://mises.org/library/socialism-economic-and-sociological-analysis – which reiterates, without the slightest correction after 1945, the worst Nietzschean exclusivist and philo-Semitic eugenic regressions. It asserts the most outrageous Social Darwinism without hesitating to claim that the protection offered by social systems weakens Human Nature and that the public health system creates disease which would otherwise be a matter of Will – and I imagine of access to private health-care for those who can afford it. (pp. 475-476ff.) Not surprisingly, despite the defeat of Nazi-fascism, this type of holistic eugenics thinking spread before the end of Apartheid in South Africa with Jan Smuts. It is known that Israel actively collaborated with this regime as with all the fascist dictatorial regimes in the world, including that of Pinochet, in this case, among others, to illegally develop its nuclear arsenal.
Now, it is this irrational version of marginalism that has been at the forefront since the onset of the Volcker-Thatcher-Reagan neo-conservative counter-revolution of 1979-1981. This regression has now reached the stage of the hegemony of speculative finance, which turns round and round on itself while destroying the real economy, thus signalling the historical obligation to bury it definitively in order to return to a political economy compatible with Reason and with life in society, precisely that society which Thatcher claimed did not exist.
I have given a brief summary of this fallacious paradigm and of the need to change it in « The pseudo-economic science of the bourgeoisie = here is why we should quickly change economic paradigm » in http://rivincitasociale.altervista.org/the-pseudo-economic-science-of-the-bourgeoisie-here-is-why-we-should-quickly-change-economic-paradigm/
I note, for example, that within this fallacious paradigm it is not true that where there is a need, there will be a supply to satisfy it. This is only true when this demand is solvent. This is why, in addition to the enormous waste and environmental destruction that characterize capitalism, a large number of basic human and social needs are not satisfied in terms of food, water, health, education, housing or transportation, etc. No one will be surprised, therefore, to find in Ludwig Mises’s book cited above his eugenicist philo-Semitism, so snarling against the people and against the demo-cracy, vicious exclusivist defects that also concern his modern disciples, even when they dare to speak of the “Road to serfdom”, in fact apologetically so.
But who says socio-economic planning is opposed to the primacy of the Society conceived, following the example of the Nature, like a general condition of existence of the Individual and of the Species. It is known that it is the dominant position in the pre-State societies that preferred to over-develop the bonds and the social rituals or the episteme, to palliate the absence of technê. This remained the case in universalist State societies, and thus in some way concerned with the general good. The Ancient Greek City was not conceived outside a larger community, gathering around festivities such as the Olympic Games; it was not even conceived without relations with speakers of foreign languages or etymologically speaking “barbarians”, i.e. people whose language was not understood. The Pythagoreans, including Plato-Socrates in the Republic, logically start from universal categories, in particular that of Society as an organized expression of the human Species. This category allows them to understand the place of the particular in the general and in the universal, without which human thought could not take off, as the great epistemologist I. Kant will forcefully reiterate. Roman universalism, initially limited to the citizenship right in the City, will however be extended to throughout the Empire with Caracalla, also has its deep roots there and this will lead infallibly to the tendency to overcome internal limitations such as slavery, the circus and the killings, although they already were political – i.e., brute force – and non-sacrificial.
One will not be surprised therefore to see the social reaction expressed by Aristotle in his criticism of Plato’s Ideal City. Typically, against Society and the Human Species, he posits the family, in its sense of extended family including domesticity, as the starting point. In this sense, it is compatible with the tribe and the clan, moreover always patriarchal. To the egalitarian universalist conception already recognized from the outset between citizens or free men, it opposes the reactionary individualist reaction. The union of this regression with the biblical Exclusivism of the Old Testament was a catastrophe for the West that the First and then the Second Renaissance worked to erase by rediscovering the ancient classics through Arabic translations, before the advent of the French Revolution.
Thomas Paine clearly expresses this criticism of Exclusivism and anti-social individualism in his pamphlet Rights of Man directed against an Edmund Burke betraying the Revolution to put himself at the service of Tradition and the counter-revolution. Moreover, this book, like Babeuf’s texts, also presents the first modern version of the Welfare State or Social State. Marx was not mistaken, since this powerful pamphlet is one of the main sources of his criticism of Hegel’s philosophy of right, which will lead to the formulation of his Triptych of human emancipation, namely: religious by secularism, political by democracy and human by the recovery of Man by Man through socialism. In doing so, he will underline the fact that this march to the general human emancipation will not be done without the overcoming of the family as a place of patriarchal power. For the family, in its various historical forms, from the patriarchal family to the bourgeois nuclear family, transforms the household necessary for the reproduction of the worker as a member of the human species, into a fundamental crucible for the reproduction of social and gender hierarchical subordination. In the same breath, Marx struck the final blow against all forms of Exclusivism by formulating his Jewish Question integrated in the Holy Family. These texts are fundamental.
In the 1960s-70s-80s, under the impetus of the great Marxist Louis Althusser, a powerful Marxist anthropological movement flourished in opposition to bourgeois ethnology and anthropology. We know the links with the security and military apparatuses that these disciplines had to undergo, in particular at the time when the Western bourgeoisie embarked on its colonial adventure. The criticism was not long in coming. This movement claimed to continue Marx’s studies of pre-capitalist modes of production. These studies led to crucial notions, particularly useful for thinking about the transition from one mode to another. For example, the coexistence with dominance of the modes of production, the different forms of extraction of surplus-value – absolute, relative, productivity and social surplus-value – in given Social Formations, the insertion of its SFs in the Capitalist World Economy and so on. I refer, for example, to a useful synthesis once proposed by Aidan Foster Carter. (see Aidan Foster-Carter, “The Modes of Production Controversy“, https://newleftreview.org/issues/i107/articles/aidan-foster-carter-the-modes-of-production-controversy and “Articulation of modes of production: a comment on Aidan Foster-Carter“, https://www.researchgate.net/publication/288669508_Articulation_of_modes_of_production_a_comment_on_Aiden_Foster-Carter )
It should be noted that universalizing societies that put the Community and its needs in the foreground, of course within the framework of the reproduction of their class relations, relied on forms of State intervention or “planning” linked to the degree of development of their culture and their State. I refer again to Marx’s critical discovery recomposing Quesnay’s Tableau according to which the equilibrium of any socio-economic reproductive system involves, at least approximately, the best inter-sectoral equilibrium between Mp and Cn.
Without any intent to be polemical, I would highlight one here, that of the Babylonians, in particular, under Nebuchadnezzar II, the ancient destroyer of Exclusivism. He re-established the State and its socio-economic circuits, which included the restoration of the irrigation systems, the reorganization of the royal palaces as enterprises directly controlled by the State, the reorganization of the Temples, which were of course autonomous but functioned in agreement with the State, as well as the organization of the autonomous but subordinate artisanal and merchant space and of the international trade circuits. (See, for example, the beautiful study of Daniel Arnaud, Nabuchodonosor II, roi de Babylone, Paris, Fayard, 2004. See also the beautiful study by xxx demonstrating the organic link between economic calculation and the development of writing among the Sumerians and their successors).
Saladin would later do the same. The Mandate of Heaven in China was maintained at this price, and the development of the Mandarinate perfectly expresses the organizational, even Ethico-political, consequences of this conception. The establishment of the Roman Empire was done by usurping and distorting the Republic from its origin by the exclusivist and self-electing pretensions of the first Caesars. Its renewal was centered on a return to the Pythagorean inspiration of the beginnings. Vespasian and Titus reacted against the logic of Exclusivism which inflamed the Middle East. Marcus Aurelius sought tragically to defend the Roman universality under its tolerant polytheist form. Caracalla extended citizenship to the whole Empire. In the same anti-exclusivist logic, in France, Philip the Fair and his Legitimists later refused to accept the logic of the State within the State which disorganized the kingdom, and so on.
Pythagoras had in fact written the Constitution of the Italians – the inhabitants of today’s Calabria – which was to become the great scientific and organizational inspiration of the Roman Republic. Its transition to the end of slavery and its tortures was contained in germ in the Christian Pythagorean formulation, which also found support in the Egyptian contributions. The Good – in French Bien -, distinct from the utilitarian Good – or Bon -, replaces the authoritarian figure of the Father and his Law. To realize this, it is enough to pay attention to the similarities of the prosopopoeia of laws in the final Socratic cycle staged by Plato – Crito, Apology of Socrates, Banquet etc. – with that of Christ, bearing in mind the Myth of Er Pamphylian which closes the Republic. Joachim of Flora knew perfectly well what he was talking about, his conception of universalism going hand in hand with a wider human equality, naturally imposing a great social reorganization and a better redistribution of the community’s resources for the community, the whole replacing the previous narratives by a newly scientific approach.
In short, the most successful historical periods are always associated with an organized universalist expression and defended as such. And they seem, at least for societies with a predominantly agricultural character, to be periods of global warming, at least if we were to believe the historian Emmanuel Le Roy Ladurie, whose demonstrations are increasingly supported by irrefutable evidence.
It was the Calabrian abbot Joachim de Flora, born in the Byzantine-influenced City of Celico and raised in the munificence of the Arab-Norman court of Roger II in Palermo, who reformulated the aspiration for a New Order inspired by the Pythagorean theory of knowledge that had informed Plato’s Republic, during the aptly named First Renaissance. It is in his work that emerges the flagship conception of the secularization of the Spirit, in fact, in his way of seeing, that of the Consciousness with its diverse forms of intelligence, which inscribes the march of the human emancipation in History. This “epistemological rupture” will inform thereafter Spinoza and his Rosicrucian critic Leibniz, Giambattista Vico, Kant, Hegel, Marx, Lafargue and Gramsci while passing by G. Bruno and T. Campanella to quote only these few.
It is in his work The Ten String Psaltery that the community rule is formulated, requiring from each according to his abilities, while recognizing the equal dignity of all forms of intelligence, all equally necessary for the harmonious development of society, to each according to his work, to then pass, with the advent of the Third Age, to a redistribution according to needs. By force of circumstance, as will be the case with Communism for Marx, the springs of the transition to the Third Age will be analyzed, but this Age itself will only be glimpsed from the angle of the members of the New Order « singing Hymns » to Consciousness. However, it should be noted that for Joachim the structure of the Hymns themselves contained a summary of human becoming that was otherwise methodically laid out in his work. Neither Joachim nor Marx ever claimed to be psychic. Singing the hymns is then only an exact representation of the human beings of the Third Age cultivating their personality in complete freedom, which is indeed the horizon of the socialist Domain of Liberty announced by Marx. These needs having become those of human beings emancipated from all alienation. This was in addition to his adoption of the Benedictine motto Ora et labora, which applies to the whole community, including the Abbot.
Joachim, like Socrates-Plato, Giordano Bruno and Vico or Kant and Marx, was a first-class logician. He knew how to distinguish between distinction and opposition. Like any scientific mind, he started from the axiom of human equality, the equality of speakers without which, to put it in Hegelian terms, no interpersonal space and no scientific or other discourse would be possible. The Society and the Individual are dialectically linked. For him, as for Socrates-Plato, there is an ontological and epistemological difference between science and narration as well as between truth and lies. At most, before the advent of the scientific consciousness during the Third Age of Humanity – or, in illustrative terms, of the Holy Spirit illuminating all individuals alike, thus making the World transparent to Human understanding, which will thus be able to be read it like it would read an open book… – the Republic will have recourse to the Socratic “true lie”, namely to a scientific narrative put within the reach of all as a mass pedagogy, a narrative that creates social links and propels the Community in its march to the most complete emancipation possible.
He rightly conceived the original Christian message as a universalist-egalitarian attempt in this direction. He saw in it the Second Age of human history marked by the force of the example guiding the ecclesia or community. This Pythagorean reformulation thus replaced that of the Authority incarnated during the First Age, that of the Father and of the Law. Thus, in his work, Joachim sought to reformulate the Pythagorean-Christian synthesis into a general emancipation, the Age of the Holy Spirit or, in secular terms, of science and consciousness. He himself conceived his Order of Flora as the herald of this New Order – see the Figure “Progetto del Nuovo Ordine” in https://it.wikipedia.org/wiki/Liber_Figurarum and its commentary in my 2016 essay cited below.
On this basis, G. Vico invented the modern conception of History and its class struggles. He did it with his own method distinct from that of the so-called hard sciences in his book Scienza Nuova. Paul Lafargue showed to what extent Marx was inspired by it by giving it a scientific basis by substituting to the only philology his criticism of the classical political economy. In this way, the modern difference between the Dialectic of Nature and the Dialectic of History has its origin in Vico, which the Dialectic of the Whole unites to form historical materialism, as I demonstrate in my Methodological Introduction, in opposition to Hegel’s impossible “unity of opposites” or to the different theories of structures, superstructures and reflections.
All these eminently scientific minds abhorred anti-scientific narratives dedicated to the preservation of class domination and the subordination of consciences. Socrates had nothing but contempt for sophists. Kant, one of the true Fathers of the French Revolution, even more for paralogisms. In the demonstration offered in Plato’s Republic, Socrates makes a young slave find the double of the square thanks to dialectical maieutics, that is to say thanks to pedagogy, thus demonstrating the undeniable human equality beyond the hazards of life, for example those of war. Marx, for his part, scientifically demonstrated the role of ideologies in maintaining the superstructures of class domination. On this basis Gramsci, a great connoisseur of Vico, conceived his theory of counter-hegemony.
As far as social sciences are concerned, we should not underestimate the efforts that the enemies of equality and human emancipation deploy to block the way of Science, ontologically egalitarian as we have said, and in this different from technique. The haunting of the biblical exclusivist, racist and theocratic election is the worst formulation of this; it has, to my knowledge, no rival anywhere else as regards these indelible defects. From the very beginning of its narrative, its promised land is acquired by genocide justified by a god created for the purpose. This is done by mis-plagiarizing and especially by distorting the heritage of the Sumerians and of their envious and jealous Semitic imitators, the Akkadians. Naibonides tried, for example, to make a risky “return” to his lunar tutelary god, whereas the luni-solar and solar calendars had already been well established for a long time, and took refuge in Arabia, in Teima, near Medina. This heritage is found in the Muslim calendar, although the essential aspect of the universalist message of the prophet Mohamed was to put an end to the unbridled millenarianism that poisoned the original Pythagorean-Christian message by declaring this drift definitively closed, himself being the last prophet. In doing so, he reaffirmed the equality of all, against slavery and gender domination, which explains the meteoric spread of Islam at its beginning. Later, the Catholic Church was similarly forced to declare the era of miracles over.
Let us remember that no narrative can lead to any authentic socially oriented planning. I have therefore endeavored to clear the field of contemporary social science of the most serious falsifications, in particular those connected with the birth and hegemonic development of Marginalism. Marx himself had gone beyond the mystifications of classical political economy as expounded in a still pre-scientific way by the Physiocrats, by Sismondi, by Smith, Ricardo, Torrens or Quesnay etc., etc.
However, whereas classical political economy was motivated by a desire for scientific knowledge, Marginalism was born from the start – J. B. Say, Cournot, Walras, the Austrian School, Fisher and tutti quanti – as a conscious falsification of science in the economic and social field, namely a falsification directed against Marx’s historical materialism, in order to reinforce class domination. With Nietzsche this regression did not hesitate to imagine the “return” to the most barbaric inequality in a final effort to reverse the march of human becoming towards general emancipation. Heidegger went even further: as this human becoming had been objectively revealed by Vico on the basis of the data provided by philology, Heidegger simply proposed to falsify the etymology of the main concepts. It was necessary to prevent Faust, symbolizing the First and Second Renaissance as well as the Aufklärung, from dreaming of a renewal by undertaking the path of Ancient Greece to illuminate his lantern…
The charlatan Freud did the same by knowingly falsifying modern psychology and psychiatry to support the status quo and impose an artificial subaltern “normalization” of individuals. I have shown that all the founding myths of this Austrian-Jewish charlatan, who did not hesitate to falsify his clinical documents in order to give plausibility to his 5 supposed archetypes, are vulgar and venal plagiarisms turned upside down from the analyses of human becoming that Vico brings to light in his Scienza Nuova. All the bourgeois science followed this scheme, thanks among other things to the academic selection of class so dear to the clowns of the Austrian School.
I refer here, among others, to my essays and books, in particular:
A ) On Joachim : « Notes sur Joachim de Flore pythagoricien » présentées la Conférence organisée par l’association culturelle Gunesh, le 27 août 2016, dans http://rivincitasociale.altervista.org/notes-sur-joachim-de-flore-pythagoricien-presentees-la-conference-organisee-par-lassociation-culturelle-gunesh-le-27-aout-2016/ (Original : « Brevi appunti su Gioacchino da Fiore pitagorico » 27 agosto 2016, dans https://www.la-commune-paraclet.com/ItaliaFrame1Source1.htm#ITALIA et
« NOTA DEL 30 SETTEMBRE 2020. La chiave pitagorica della riformulazione di Gioacchino è data nel Salterio a dieci corde », dans http://rivincitasociale.altervista.org/nota-del-30-settembre-2020-la-chiave-pitagorica-della-riformulazione-gioacchino-data-nel-salterio-dieci-corde/
B ) On ontology, epistemology and the method in science see my Methodological introduction and my Synopsis of Marxist Political Economy, in the section Livres-Books of my old Jurassic site www.la-commune-paraclet.com
C ) On Nietzsche: « Nietzsche as a awakened nightmare » idem;
D ) On Heidegger: « Heidegger, the intimate corruption of the soul and of Human becoming », Idem
E ) On the charlatan Sigmund Freud and the bourgeois psycho-analysis, see the Second part of my Pour Marx, contre le nihilisme , section Livres-Books, idem.
In order to situate the overcoming of the capitalist mode of production and its possible transition to socialism, it will be useful to recall briefly the succession of the dominant fractions of capital that contribute to define the epochs of redistribution. These epochs aim at removing the structural contradictions of the CMP, among which first of all the adequacy of the productive forces, constantly evolving under the thrust of competition, with the relations of production, knowing that productivity, which “liberates” growing masses of workers, constitutes the main engine of the competition between capitalists. But this reserve army of the proletariat is not automatically absorbed by the various sectors and industries that make up the system. It happens, as it was the case after the Second World War, that the driving intermediate sectors – automobile and transport, domestic utilities, avionics, extension of the State bureaucracy linked to public services, etc. – can absorb this labor force, failing which the secular decrease of working time must necessarily take over to lift the contradiction between overproduction and under-consumption. Colonial and imperialist drifts do not allow us to resolve this contradiction, only to delay its effects. I have tried to reformulate this problematic by underlining the developments specific to the Keynesian Welfare State or to the European Social State resulting from the Resistance, thus from the planning made within the National Council of the Resistance in France, in my Book III entitled Keynesianism, Marxism, Economic Stability and Growth, 2005.
We thus pass from merchant capitalism coexisting with absolute monarchy – P. Anderson etc. – to banking capitalism and its Censitarian democracy, to industrial capitalism and its first popular conquests, including universal suffrage. Marx’s historical studies centered on the exemplary, almost logically linear, unfolding of events in France constitute the most beautiful demonstration of the method of historical materialism supported by the analytical grid offered by the critique of political economy – including Capital – to the study of history and class struggle.
Marx had also initiated the study of credit that was later elaborated by Paul Lafargue, Hobson, Hilferding and Lenin. He had emphasized the new dominance of finance capital – trusts and cartels – which went hand in hand with the passage from colonialism, requiring the acquisition of outlets and trading posts, to direct imperialist domination. After the end of the Second World War, it was international productive capital embodied by the multinationals that took over, imposing its world order – World Bank, IMF, GATT, etc. With the neo-liberal monetarist counter-revolution led by Volcker-Thatcher-Reagan, global speculative capital postulated for hegemony and imposed it legally with the abolition of the compartmentalization of the world of finance into 4 distinct pillars – depository bank, commercial bank, insurance and savings bank – with the repeal in 1999 of the Glass Steagall Act adopted by Delano Franklin Roosevelt’s New Dealers in 1933 as a response to the socio-economic chaos induced by the Great Depression.
This cycle of hegemonic speculative finance is now coming to an end. Like in the Twenties of the last century, capitalism is once again facing its fateful crossroads: will it lapse into Nietzschean philo-Semitic fascism, sacrificing the – formally – democratic classical liberalism that went hand in hand with the CMP from its inception, in order to save private property at any cost, or will it once again resort to increased State intervention to restore the balance of the system and save the CMP from its own “animal spirits” by reforming it democratically? This is what Keynesianism and the theory of European socio-economic regulation did, which at its best took the form of indicative and incentive planning implemented within a mixed economy thanks to the support of public credit and full employment.
A word about the Keynesian Welfare State and the economic regulation practiced by the European Social State.
Basically, these theories of regulation are based on a simple principle that took the pictorial form of the Keynesian hydraulic system, leading to the false image of “pump priming”. Given a set of interdependent variables, the system can be optimally managed by positing full employment as an independent and therefore determining variable. This is all the more true since full employment will finance the social security system. Part of the institutionalized savings thus constituted will become productive and will support economic activity by acting as a counter-cyclical lever, rather than dangerously feeding speculation as was the case during the years of Booms and Busts that led to the Great Depression. In addition, progressive taxation will make it possible to finance the social and productive intervention of the State, thus ensuring the macroeconomic foundations of microeconomic productivity through infrastructure and public services. Public credit, which allows for greater anticipation of productive investments, will further accelerate the process.
Above all, by proceeding in this way, the Anglo-Saxon Welfare State and the European Social State ensured two important points of support, firstly price stability thanks to the control of wage masses – equitable sharing of productivity gains organized by industrial democracy under the aegis of the Economic and Social Council – and by protecting them from the speculative contamination of private credit, given the role played by the public central bank in ensuring the public credit necessary for the financing of the State and public enterprises. Price stability was still supported by tariff barriers within the GATT – the best example being that of the Gallic CAP, which, before the Mansholt Plan, which was directly inspired by the Club of Rome, ensured a true “food sovereignty”, albeit based on the increased concentration of arable land.
One can recognize here the bourgeois attempt to instrumentalize, without saying so, the RS-ER and the circuits of capital highlighted by Marx: the intervention of the State rebalanced the quantitative and qualitative gaps verified by planning. Apart from Bismarck, we know today that Keynes was strongly inspired by Marx without saying so. In Great Britain, a school of backplanning developed. The principle taken from bourgeois historicism – Benedetto Croce, Collingwood, etc. – was simple: no one has a crystal ball, but in a relatively stable structure, which is the case of socio-economic systems, one can plan for the short, medium and long term on the basis of the study of its tendencies, even if it means readjusting one’s aim along the way in order to achieve the determined set of objectives as well as possible – see Note 9 of my Book III.
I have shown the flaw in this socially advanced system: it remains based on Marginalist theory and on the marginal productivity of capital. This is preserved by Keynes, who was in no way fooled by the logical flaws of Marginalism; he does so in order to preserve the foundation of capitalist society, namely determination by personal choice – according to the income structure, whatever Pigou may say. In this way, he attempted to legitimize the narrative of supply and demand. The free “market” and its ideology were thus saved by the intervention of the State and the conservation of full employment in a Social Formation allowing the internal parametric control of the formation of exchange-value and prices. To the great displeasure of some economists, including the great classical Walrasian economist – more August than Léon – Maurice Allais, the unravelling – sorry, “deconstruction” – of the Welfare State went hand in hand with the replacement of the GATT by the free trade ratified by the Uruguay Round, and with the end of public credit controlled by the public bank. Social rights were then slowly unravelled to avoid too strong a reaction from the working class.
Keynes, on the other hand, was ready to travel a long way on the road to reforms by contemplating, like Paul Lafargue, from whom he borrows the idea, of course without quoting him, the possibility of introducing a 15-hour week. I said in Book III that the great bourgeois Keynes, a trader directly connected with the Exchequer, which does not spoil anything, was very attached to his Norman noble ancestry. He was, moreover, closely connected with the Bloomsbury Circle. Basically, having studied Schacht but now aware of the horrors of the philo-Semite Nietzschean “return” set in motion by Fascism and Nazism, he was keen to preserve certain fundamental freedoms while following Lord Beveridge on the social level. In reaction to the Bolshevik Revolution, he had quickly understood the importance of including social freedoms among the fundamental ones.
This maintained civilizational substratum is likely to make the CMP move towards an ever more concretely egalitarian society. In short, what can be conceived as a slow but ineluctable peaceful transition to socialism. Keynes, who drew so much inspiration from Marx to arrive at his most advanced synthesis, which he formulated in his General Theory of Employment, Interest and Money, 1936, would no doubt be happy to learn that the Universal Declaration of Individual and Social Fundamental Rights – today dangerously trampled underfoot by the monetarist neo-liberals – was the fruit of the alliance that defeated Nazi-fascism, and that its drafting owes much to the efforts of Stalin and his diplomats. On the other hand, a René Cassin was busily engaged in giving an interpretation compatible with Leviticus, that sectarian copy of the Hammurabi Code. I note in passing that in this code marked a further step in civilization, the rule of justice “an eye for an eye, a tooth for a tooth” being susceptible of being transmuted according to the voluntary agreement between the parties to the conflict, which is no longer the case in the Hebrew text.
I would simply conclude by pointing out the disastrous inanity of Bettelheim’s “economic calculation”. Assuming that its “value-form” is reserved only for the CMP, it in no way allows the private and State actors of this Mode to manage it rigorously without a strong corrective intervention by the interventionist State. The recurrent crises of the CMP are its real economic calculation which permit to rebalance the Mp and the Cn in the general equilibrium… on the back of the workers. If you now understand that all micro-economic production functions can be reorganized within the two great sectors SI and SII – with their sub-sectors and branches of industry, and even their trans-sectoral inter-relations – and that privately pocketed surplus-value can be conceived as “social surplus-value” in SR-ER, then you will have understood that rigorous economic calculation only takes off on the basis of Marx’s law of value integrated into the Equations of Simple and Extended Reproduction. This is what explains the great success of planning systems, both those of the Social State and those of the socialist transition, in terms of growth and more egalitarian redistribution of collectively created resources.
Basically, this was already contained in the Paris Manuscripts of 1844, where Marx noted:
a ) that the oscillations of competition eliminate themselves in the medium and long term, so that competition cannot be the scientific explanation of “prices” or exchange-values, and
b ) that society had to ensure the reproduction of its members in Nature and History, which imposed a particular equilibrium involving productive consumption and social consumption, which Marx summarized by the concept of “social demand”. This concept, fully elucidated in a scientific way, is nothing else than the stationary equilibrium of SR and the dynamic equilibrium of ER. Without SR-ER no scientifically rigorous calculation is conceivable.
Regarding the transition to socialism, especially the peaceful transition, it is worth remembering that Lenin’s State and Revolution does not exclude it. Rosa Luxembourg and Gramsci, among others, have left us valuable analyses. By underlining the role of propagation of an alternative worldview, more modern and better in touch with reality, thanks to the Encyclopedia and its illustrative plates that opened the way to the Ideals of the French Revolution, Gramsci laid the first stone of his valuable theory of hegemony and counter-hegemony, thus completing the analyses of class position and consciousness. These theories need to be developed in the light of our present circumstances.
I have modestly attempted to do so, for example in the chapter entitled “Revolutionary Democratic Reforms or the Lamentable Rossinante of Reformism” in my Tous ensemble. As everyone knows, President Hollande was not the successor of the methodical and honest socialist Prime Minister Lionel Jospin. This forced me to return to my attempt at analysis by underlining what should be obvious to Marxists: indeed, if it is true that the direction is more important than the speed of the transition, the latter being subject to the state of the struggles and class alliances, the difference comes from the socialist authenticity of the parties and its leaders who guide the transition. What, for lack of turning in circle, necessarily refers to the scientific status of the Marxism and the socialist ideas which alone allows a citizen persuasion around an emancipating program.
The scientific method is also an advanced expression of democracy since criticism with the right of reply is open to all in order to better validate the results. From the beginning with Rousseau, Condorcet and so many others, the Republic recognised the crucial need for a secular national education, the citizen being led to make choices within the Polis. It is in this sense that “the people” are always right, out of all demagogy. Gramsci already said it in his own way when he initiated the Marxist study of judicial systems, leading to his analysis of the right of defense and the rigorous procedures of validation of evidence. If Marxism were not scientific as Marx claimed, then it would be of no interest to us … and to socialist planning (see « La marche à l’étoile … de minuit des philo-sémites nietzschéens actuels », http://rivincitasociale.altervista.org/la-marche-letoile-de-minuit-des-philo-semites-nietzscheens-actuels/ )
Above all, I have tried to expose and denounce the falsifications aimed at letting astray the march to the transition to socialism, in particular those put forward by Marginalist socialism, see: “Marginalist Socialism or How to Chain Oneself in the Capitalist Cave” in the International Political Economy section of my old site www.la-commune-paraclet.com .
The well-intentioned Oskar Lange tried to take literally the Walrasian claim, soon generalized among all bourgeois economists, concerning the scientific character of Marginalism, which had indeed to be asserted in order to counter the Marxist claim concerning the scientific and thus to the universal status of the Law of Value and of historical materialism. See on this subject the fundamental On the Economic Theory of Socialism, Oskar Lange and Fred M. Taylor, McGraw-Hill, 1964.
We have explained that, much to the dismay of the German historical economic school represented by Gustav Schmoller, not to mention the criticism of the Austro-Marxist renegades at the same time, this claim was based solely on the assertion that the capitalist acquisitive mentality was common to all times and places, including among societies practicing gift, counter-gift and potlatch. This shameless falsification will use class ideological selection through its bourgeois domination of schools and universities and generally of the teaching of sciences, including psychology. The aim was to impose this falsification as a new Creed in an attempt to create a dominant inter-disciplinary reinforcement, thus a Truth.
If marginalism was science, then the good Oskar Lange began to look for ways to apply it to promote socialism. He worked in a special transitional space developed by Stalin under the name of People’s Democracy. The Bolshevik leader did this on the basis of the elements provided by Gramsci for the transition of societies that had experienced a developed bourgeois democracy in contrast to Tsarist Russia. The Bolsheviks had taken a step backwards in the USSR by implementing the NEP in order to jump back into planning based on land collectivization, conceived as the most advanced class alliance possible between the proletariat in the cities and the peasants in the countryside.
The intellectual figure of Oskar Lange did much to legitimize the new People’s Democracies by signaling the rallying of the anti-nazi-fascist intelligentsia. Without Stalin’s death, the necessary rectifications would have been made on the basis of the material conditions necessary for a new socialist consensus. The opposite happened with Stalin’s renegade successors. This led to the open class betrayal initiated by Khrushchev and Liberman, a betrayal that eventually led, via Andropov and Gorbachev, to the internal destruction of the USSR … but not of China, which was still based on Chinese-style socialism and thus on the most extensive State control of “social surplus-value” and public credit possible under the circumstances. For a brief overview of Gramsci’s contribution see “Althusser, or why compromising compromises should be rejected” in Download Now, section Books of my old site.
We can now specify the basis of the conscious falsification carried out by Charles Bettelheim in his pretentious questioning of Soviet planning. Generically and in a typically underhanded way, it calls into question both Stalinist and post-Stalinist planning itself. His attempt to hide behind the importance of “superstructures” by trying to instrumentalize Mao Zedong only further reveals his falsifying maneuver since he knowingly ignores the highly scientific elements of Maoist criticism.
We will show that Paul Sweezy ended up being wrongly impressed by this clown, who strongly contributed to inspiring Fidel’s and Che’s distrust of the hollow academic discourses on the “law of value” and the so-called “value-form”. In doing so, true biblical stammering always true to itself, real scientific research on the law of value and socialist planning was evacuated from the universities and the Grandes Ecoles. Over-representation did the rest.
The conscious falsification of Bettelheim and the induced confusion of Paul Sweezy.
The theoretical antics of Ch. Bettelheim
The French-Jew Charles Bettelheim exposed the main arguments of his conscious falsification in his book Calcul économique et formes de propriété, Maspero, 1970. I have used here the English version Economic calculation and forms of property: an essay on the transition between capitalism and socialism, Monthly Review, 1975, because it seems interesting to read it in the light of the discussion with Paul Sweezy presented in the collection of articles entitled On the transition to Socialism, Monthly Review, 1972.
How does Bettelheim’s falsification work? He knows that the question of economic calculation in the sense of congruence between quantities produced and exchange-values or prices has been the Achilles heel of Soviet planning from the beginning. He knows that the origin of this problem is the criticism – by me shown to be THE original falsification imagined against Marxism and against Marx’s Capital – of Böhm-Bawerk according to which the law of value of Book I of Capital as well as the schemes of Simple and Enlarged Reproduction of Book II would be denied in a logically lethal way by Book III and its prices of production. According to the Austrian falsifier – and rightly so – one cannot have an ex ante scheme in exchange-value that leads to an ex post scheme in production prices, since in the next round of reproduction these production prices play the role of exchange-values. I have shown that this was a conscious falsification based on the choice of drafts made by the Austrian-Jewish renegades Kautsky, Bernstein and others who were retained to compose Books II and III of Capital after Marx’s death. The first published demonstration can be found in my Tous ensemble (1998)
This self-created problem is finally solved by the demonstration of the Marxist – and therefore scientific – law of productivity and by its coherent insertion in the Equations of Simple and Enlarged Reproduction. Everything then becomes coherent again in terms of quantities, exchange-values or prices, hours and numbers of physical workers used. Bettelheim knows that the problem of the transformation of exchange-values into production prices is not scientifically admissible; he knows from Althusser that Books II and III of Capital, unlike Book I, were not written as such by Marx himself. This heart of the problem he touches upon without insisting on it in a note and in half a line – p 27 and p 143 . This explains why the expression economic calculation appears in the text, without his pretentious and falsifying prose proposing the slightest attempt at economic calculation as such, neither capitalist nor socialist. A curious criticism of economic calculation, you will agree.
The clarification of this occultation concerning the problematic of the transformation of exchange-values into production prices gives us the opportunity to insist on a crucial point which concerns epistemology and method.
Here is the mystifying gibberish of Note 10 p 27 on the so-called problem of transformation: “The concept of ‘socially necessary labor time’ is only posed by Marx in the first volume of Capital and is only fully developed in the third volume: ‘it is there that we see that the equal participation of invested capital in the different branches of production (i.e., the equalization of the rates of profit) is the condition under which the labor expenditures made in the different branches are socially necessary (i.e., as long as the expanded reproduction of the capitalist relations of production is accomplished by the competition of capital in the different spheres of investment). “
Here is the mystifying gibberish on page 143: “In the above text, the expression ‘law of value’ is used in the traditional sense (i.e., in the narrow sense); it thus indicates the specific form that the law of the distribution of social labor takes according to the requirements of the reproduction and transformation of the relations of production in social formations where capitalist relations exist (formations in which the value-form is present in the production process itself, where ‘production prices’ play a role…).”
In 1970 Bettelheim, Christian Palloix and Arghiri Emmanuel had participated in an important debate “about unequal exchange” in the journal L’Homme et la Société n 18, 1970. (For the best attempts, all aborted, to solve the (false) problem of transformation, see Arghiri Emmanuel, A propos de l’échange inégal, L’Homme et la société, n 18, 1970, https://www.persee.fr/issue/homso_0018-4306_1970_num_18_1 . His contribution: https://www.persee.fr/doc/homso_0018-4306_1970_num_18_1_1347 )
The heart of the problem was the problem of the transformation of values into production prices. When this false problem is doubly dissipated by the unveiling of its historical genesis, i.e. the falsification of Böhm-Bawerk, and its logical sophism swept away by my theory of Marxist productivity, then the maudlin and mystifying theory of unequal exchange falls by the wayside and the comprehension of the mechanisms of the development of underdevelopment appears more clearly.
Arghiri Emmanuel may find it incomprehensible that the wage of a spaghetti worker is lower in Morocco than in Europe. This is not a case of theft demanding a moralistic reparation of better exchange terms, but an economic law that calls into question imperialist exploitation. Indeed, the exchange-value of currencies is formed in the Social Formation and international exchange as well as domestic exchange is done according to the exchange-value. This exchange-value implies both the micro-economic productivity and the macro-economic competitiveness within each of the considered SF. In fact, as the reproduction of labor power in Morocco or China costs less – for various reasons, therefore, the local production of Cn – the worker costing less but working on a similar or almost similar machine will produce volumes of profit that are otherwise greater.
This is where the logic of relocation and other offshoring and outsourcing lies. But rich countries control standards and patents, while subsidiaries of multinationals and transnationals firms work hand in hand to limit unionization in the host countries, while repatriating profits. If, in addition, these capital outflows occur in the presence of a weak domestic banking sector, which is subject, like public and private debt, to international banking and financial capital, itself subordinate to the Washington Consensus, then the development of underdevelopment can only accelerate. With their conditionalities, the World Bank and the IMF, and even the London and Paris Clubs, will be responsible for maintaining this tourniquet on the necks of the countries thus indebted. When, following the recipes of the Chicago Boys, countries produce in order to repay their external creditors first, the capital necessary for domestic investments will be lacking and the public debt will snowball with interest rates feeding on this rising of the “sovereign risk”. This Catch-22 is even more deleterious when public credit is also privatized.
In the journal cited, Arghiri Emmanuel supports his argument on the apparently logically impeccable demonstration of the impossibility of defending the Marxist thesis of equal exchange being made on the exchange-value basis since all the attempts to solve the problem of transformation that he laid out as a good connoisseur, have failed. And, in fact, before my demonstration, we had to recognize that Arghiri Emmanuel was formally right.
But only formally, since, and this is the meaning of Palloix’s article, at least in the long run, economic exchange can only occur by establishing the formal equality of A exchanged for B. From this point of view, even without asking the fundamental question that Aristotle poses and that Marx solves, namely how can one exchange a bed for a tripod, what is the necessary common standard of measurement, one can already understand that by modifying the terms of exchange without changing the conditions of production, notably the productivity and the coherence of the SR-ER in the dominated Social Formation, things will hardly change. At best, they will get worse by adding misunderstood monetary effects. In this discussion, Bettelheim also insists on exploitation, recognizing that unequal exchange without it explains nothing. But, as we can see, he was not unaware of the importance of solving the problem of transformation, which he nevertheless evacuates by speaking of the transition to socialism.
Rosa Luxemburg had also demonstrated the inconsistencies of the Enlarged Reproduction – ER – as presented in Book II of Capital published by Kautsky, Bernstein and others. This brought her into direct conflict with the Austro-Marxist renegades. According to her, the contradictions of the ER were in practice overcome by the transfer of the internal contradictions of the CMP to the outside due to its destructive dominance of other modes of production. This flight forward is at the heart of his theory of imperialism, which Lenin corrected. Nevertheless, in her The Accumulation of Capital, Rosa Luxemburg provides historical studies of great interest: for example, the opium trade organized by the British Empire to finance the famous “burden of empire”; opium was cultivated in India and sold in China thanks to the policy of opening up by the gun and the bayonet. It is a superb description that was later reformulated – e.g. by the excellent André Gunder Frank – to describe the logic of the triangular trade between Europe, Africa and the West Indies. (On Rosa Luxembourg see: Another ineptitude on Marx’s circuits of capital and realization authored by G. Dumenil and D. Levy, Dec 22, 2019-January 27, 2020/ in http://rivincitasociale.altervista.org/another-ineptitude-marxs-circuits-of-capital-and-realization-authored-by-g-dumenil-and-d-levy-dec-22-2019-january-27-2020/
However, even before we have the Marxist law of productivity that sends this false problem to the dunghill of history from which it should never have emerged, there remains an important scientific fact well known in science: the dominant theories are challenged both by the facts and by criticism while the emergence of the scientific alternative is not yet fully established. This was the case with Marx’s work, at least the one he published himself. This work unveils the “concrete in thought” of political economy, which gives it the possibility of scientifically proving the commensurability of commodities among themselves. This “concrete in thought” illuminates the past situation and at the same time allows for a better grasp of the present reality and a tentative conception of the future – for example, concretely, through planning. But there are still obscure points.
Science imposes then to take note of them without the least occultation. And to put the work back working table. This is, for example, what Paul Sweezy honestly did in the beginning with his American pragmatism. To induce the necessary scientific research, he published the main texts known at the time that dealt with the problem of transformation. Although he did not succeed in solving it himself, he nevertheless noted the grip on socio-economic reality and the coherence of SR when the organic composition and the rate of surplus value are identical in the two sectors Si and SII. What remains to be understood is what happens when this condition is not met. Rigorously, Sweezy retains the unquestionable Marxist idea of the extraction of surplus-value as the only rational basis for capitalist profit, which reaffirms the right of workers to the fruits of their labor, at least in proportion to the labor they provide. He then reformulates surplus-value as “Surplus” and attempts a Marxist interpretation of dynamic equilibrium by integrating what he can from Keynes, Kalecki, Steindl etc. Above all, he realizes that historical study is then necessary in order not to sink into the nonsense of Marginalist meta-magical equilibrium.
As a great epistemologist, Althusser went much further. He takes up the classics, including Marx’s Method, outlined in a few pages, but also the beautiful Marxist methodological study by Mao Zedong entitled On practice. On the Relation Between Knowledge and Practice, Between Knowing and Doing, July 1937, https://www.marxists.org/reference/archive/mao/selected-works/volume-1/mswv1_16.htm
On these bases, he wrote his essay “On the Materialist Dialectic: on the Unevenness of the Origins” (https://www.marxists.org/reference/archive/althusser/1963/unevenness.htm ). This fundamental essay summarizes in a way all his approach and adds to the modern contributions, in particular those of Koyré, the great critic of the “Baconian empiricism”. Following the indications drawn from Marx’s Method, he demonstrates the discovery of the “concrete in thought” of political economy, a discovery only glimpsed by Aristotle, Smith, Ricardo etc. and finally demonstrated by Marx. The question then becomes: how does the scientific method proceed from there to remove the blind spots that persist? This is the easiest part, since it is solved according to the syllogistic method: examination of the premises, major and minor, for their congruence with Reality; and examination of the logical conclusions and the inferences that follow from them. But how does one proceed when the “concrete in tthought” is not established in a sure way in the Universe under examination? By successive approaches Mao and Althusser answer, always identifying the problem better, without a priori. Althusser then tries to specify the degrees of this approach, P1, P2, etc. In my Methodological Introduction I proposed the proof by the puzzle: at some point, before the complete image – of a given universe – is reached, it is guessed. And from then on, the hypotheses become more pertinent to help complete the knowledge of this universe.
I would like to illustrate this by quoting Giordano Bruno’s The Supper of the Ashes, while discarding Th. Kuhn’s ideological mechanics with its substitutions of paradigms in time. The great Nolan, a great connoisseur of the leading Pythagoreans, including Philolaos, whose works were constantly circulated under the cloak in Southern Italy, and a great mathematician to boot, easily notes the lack of congruence of the theories of his time with the facts that are now better available. On this basis, he shows how Copernicus takes a step in the right direction, but only one step, the heliocentric system being part of a larger Reality that we must still try to understand without corseting it in a new Copernican paradigm. The most beautiful illustration I know of Bruno’s method is his systemic attempt, obviously inspired by Joachim de Flore’s Concordia, to put order into the astronomical knowledge bequeathed by the past, even under the garments of astrology and mythical stories. He bravely tries this adventure of systematization properly scientific in his On Compostion .
Schiaparelli and Flammarion will not do anything else but on the basis of more modern scientific knowledge. Modern astronomy remains indebted to Bruno, not only for his epistemological and methodological approach, but also for his way of conceiving life and consciousness in the Universe, even though Bruno does not limit these manifestations to what is nowadays called carbon-based life. Bruno was a materialist dialectician, he proceeded to the modern reformulation of the Pythagorean Monad which will inform Spinoza and against which the reactionary Rosicrucian Leibnitz wrote his Monadologie to trouble the waters, a work that Hegel pursued to be finally corrected by Marx. The corrections made by Marx completed the first great epistemological clearing initiated by I. Kant, who was able to distinguish between Pure Reason and Practical Reason by smoothing out his methods of investigation and exposition. In the end, it was enough for Marx to historicize this double method and its secular and Ethico-political anchorage (see the powerful though brief Kantian analysis entitled Foundations of the Metaphysics of Morals and its categorical imperative which, in the end, will be found in the first article of the first republican constitution affirming that the liberty of some ends where the liberty of others begins).
Lenin and Rosa Luxemburg, as well as all the true Bolshevik or Maoist Marxists, without excepting Che, had proceeded in a completely different manner than Bettelheim, that is, scientifically. It emerged that the Scheme of Simple Reproduction provided a scientific model congruent with the socio-economic reality in stationary equilibrium both in quantities and in exchange-values or prices by positing an identical organic composition and rate of exploitation in the two great sectors, SI, the Means of Production Sector or Mp, and SII the Means of Consumption Sector or Cn. Now, this Marxist feat no bourgeois theory is capable of matching it and thus of reconciling in a coherent way the micro-economy and the macro-economy. This is not a special situation, as Marx says in one of his investigative drafts. This coherence of SR remains true for RE and can thus be generalized, thanks to the Marxist law of productivity. I have thus shown that the real pitre Böhm-Bawerk was quite right in insisting on the lethal ex ante/post hoc contradiction, although, far from affecting Marx’s Marxism restored in its scientific character, it invalidates from the outset, “roots and branches”, all bourgeois economic theories, both the schemas of Supply and Demand and, consequently, the possibility of reconciling microeconomics with macroeconomics.
Thus Lenin had begun to investigate the question of the right proportion between the two sectors by posing the question of the development of Mp not only necessary to the SI sector but also to the SII sector. Bukharin provides the beautiful summary in three equations formalizing the Equations of SR. Rosa Luxemburg, attempting to elucidate Marx’s work for the SR, demonstrated the contradictions emerging from the publication of it by the pontiffs of the Austro-Marxist school. Stalin and Mao took up the problem again, insisting on the “right proportions” between SI and SII according to concrete determinants, including the state of the class struggle. We will come back to this.
Let us note already that this does not interest the verbose Bettelheim at all. He has given himself another mission, that of irremediably falsifying the debate. To fool his audience, he borrows a certain number of key concepts formulated thanks to the great Marxist Louis Althusser, but he empties them of their substance. Thus the concepts of forms of property and possession, of legal relations, of Social Formation, of coexistence under dominance of the modes in period of transition.
The typically “pitric” way – in the precise sense of the Marxist psychoanalysis I elaborated in my Pour Marx, contre le nihilisme – used by Bettelheim to do this, consists in evacuating all the dominant historical forms of extraction of the surplus-value which are however necessary to explain the specific difference that opposes the various modes of production.
Thus, absolute surplus-value based on the duration of work is the dominant form of surplus-value extraction in pre-capitalist societies whose technical innovations have a long duration and are therefore imperceptible from the point of view of the daily oscillation of exchange-values and prices; the relative surplus-value is decomposed into the conjunctural intensity of work, the proverbial “deadline rush” which exists in all modes, and the structural intensity, properly speaking productivity, which is the dominant form with the CMP and which gives it its revolutionary character; finally, by elaborating the concept of Social Fund proposed by Marx in his Critique of the Gotha Program, I proposed the “social surplus-value” as the dominant form of the socialist mode of production, a form that excludes more and more any direct exploitation of Man by Man by its socially determined nature. On this basis, the economic calculation can be rigorous for all modes and for their epochs of redistribution. I had pointed this out to historians by pointing out the necessity of reinterpreting the “constant prices” today determined in reference to a random base 100 at best established according to the empiricist method of J. Fourastié – labor of the laborer, mirrors etc. – in the light of the law of value exposed in my Synopsis of Marxist Political Economy.
Bettelheim, for his part, does not believe in the law of value. He only considers his shapeless magma given under the pseudo-philosophical guise of “value-form”. A serious student who knows something of Marx knows that the expression “value-form” is meaningless. Marx had laughed at the expression “value of labor ” by characterizing it logically as a “yellow syllogism”. One does not understand anything about the extraction of surplus-value by speaking, as Smith and Ricardo or Torrens etc. did, of the value of labor. The scientific concept is that of the “value of labor power”, sold on the market like any other commodity and which brings into play the crystallized labor present in the production process in the form of constant capital – c – and variable capital – v -, which allows the living labor carried by the medium “v” to generate surplus-value, which is the basis of profit. How the Althusserians allowed Bettelheim to expose himself in such an outrageous manner with so much chutzpah says a lot about the attitude of certain students in bourgeois schools who too often end up sinking – some unwillingly – into the most nihilistic, even obscurantist Marxology.
Once this sleight of hand has been accomplished, it remains for Bettelheim, in the usual way, to develop his initial falsification with plausibility. For this, he only has to draw some problems and ambiguities from the classics used as sources of the Creed, which are placed beyond any questioning. He will use Engels and Stalin.
Bettelheim begins by instrumentalizing a text by Engels from the Anti-Dühring in which Marx’s friend succinctly analyzes “the conditions necessary for the formulation of a plan of production in a socialist society” (p. 3). It is immediately noticeable that if he had logically begun with Marx’s analysis of the Social Fund – the social surplus-value – and its allocation for the enlarged Reproduction, his falsification would become impossible. In this Engelsian text, on the other hand, a conception of economic calculation on the basis of socially necessary labor time is developed, with the allocation of resources being made according to what society finds most useful – “social utility” – to satisfy its needs.
So far so good. Then Engels adds a sentence – here in italics – that explains why Bettelheim chose this test: “So, under the conditions assumed above, society will not attribute values to products either. It will not express the simple fact that the hundred square meters of cloth required for their production, say a thousand hours of work, in the shady and absurd form that they would be worth a thousand hours of work. Certainly, the society will be obliged to know even then how much work it takes to produce each object of use. It will have to draw up the production plan according to the means of production, of which labor power is a special part. In the end, it is the useful effects of the various objects of use, weighed against each other and against the amount of labor required for their production, that will determine the plan. People will settle everything very simply without the intervention of the famous “value” [5]. (https://www.marxists.org/francais/engels/works/1878/06/fe18780611ad.htm _
What does this mean? Allocation and economic calculation are done according to the socially necessary work, but what counts in the end is the social utility of the products? To understand Engels’ thinking here – in the context of Capital, to which note 5 of the Engels’squotation refers – it suffices to understand that the generic term “value”, naturally used by Dühring because it is so commonly used in capitalist society, is no longer useful, since the exchange-value of products will be over-determined by the allocation of resources to production and social reproduction according to the priorities collectively decided by society. This refers to the different parametric conditions under the socialist mode of production concerning the social purposes of resource allocation in the BR. It is enough to give a very simple example: the stability of the price of bread for decades in the USSR, which thus refers to the conditions of SR-RE exactly as Engels says, and not to an abstract concept of the “value” of things.
Does Bettelheim have something in mind? Absolutely, and in particular the question of the direct exchange of products between them, which he takes out of context in Stalin’s essential text The Economic Problems of Socialism in the USSR (1952), http://lesmaterialistes.com/problemes-economiques-socialisme-en-urss-staline-1952 The English version is available in www.marxsts.org )
Stalin addresses the essential theme for economic calculation in the concrete framework of the hybrid system that associates the State sector, including the agricultural sovkhozes, and the kolkhozes. The latter live under a different system of property-ownership and in their relations with the cities refuse the exchange in the form of “exchange of products” practiced in the State sector, preferring exchange in the form of sales and purchases.
This is the heart of the matter. In the earlier Soviet experiences within the State economic space the allocation of resources between Sector I and Sector II – and their sub-sectors, branches etc. – could take place through the transfer of quantities of goods and services necessary to satisfy the Plan and ensure growth. As is the case within a firm, the relationship between its departments is managed by internal accounting without the need for intermediation by money. Of course, a modern company implements millions of parts and products, but we recognize the underlying logic of the allocation by the Net Material Product with reference to the quantitative data Mp and Cn of the RS-ER.
Of course this does not remove the necessary equation between a product and its expression of exchange-value which is materialized during its realization by the exchange, whether it is an exchange product for product or mediated by a general monetary equivalent which must itself be transferred to a universal equivalent, that is to say the exchange-value of the labor power, not in abstract terms but such as it emerges from the upstream allocation of the resources to the production and reproduction. As Stalin and even more so Mao insisted, this allocation derives from socialist democracy and the state of the class struggle in a society on the way to socialist-communist transition.
In fact, as long as the Marxist theory of productivity was not developed and inserted in a coherent way in the RS-ER Equations, it is indeed the class struggle that supplanted, either by insisting on an allocation leading to the greatest progression of the equality of the living conditions of the citizens, or by slowing down a little this march to the Equality by operating a step backwards following the example of the NEP, in order to allow a more rapid accumulation of fixed capital.
Neither Stalin nor Mao were fooled. Stalin explains in his essential text of 1952 that the market exchanges in socialist society are not identical to those of the capitalist market societies, because if they coexist they are strictly subordinated and framed by the socialist planning. Exchanges themselves in the generic sense are necessary because of the Social Division of Labor and depend on the socialist allocation of Marx’s Social Fund, which I have called by its name “social surplus-value”. Indeed, contrary to some initial illusions of some Bolsheviks, surplus labor obviously does not disappear in a post-capitalist society, but it is no longer an exploitation because it does not represent a surplus-value pocketed by individuals. Better still, the extraction of “social surplus-value” refers to the Domain of Necessity which creates the material basis of the Domain of Socialist Liberty, notably thanks to the increase in free time.
The semantic difficulties of our great classical Marxists, do not change the fact that they remained consequent egalitarian Marxists although respectful of the historical march and of the most advanced epochs of redistribution possible according to the historical circumstances.
Stalin, for example, explains himself as follows:
“Those who say that as long as socialist society maintains commodity forms of production, all the economic categories of capitalism must be re-established in our society: labor power as a commodity, surplus value, capital, the profit of capital, the average rate of profit, etc., are also absolutely wrong.
These comrades confuse commodity production with capitalist production and believe that, as long as there is commodity production, there must also be capitalist production. They do not understand that our commodity production is fundamentally different from commodity production under capitalism. Moreover, I think that we must renounce certain other notions borrowed from Capital, where Marx analyzed capitalism, — and artificially attached to our socialist relations. I am referring, among others, to such notions as “necessary” and “surplus labor”, “necessary” and “surplus product”, “necessary” and “extra” time.
Marx analyzed capitalism in order to establish the origin of the exploitation of the working class, surplus value, and to provide the working class deprived of the means of production with a spiritual weapon to overthrow capitalism. It is understandable that Marx uses here notions (categories) that are perfectly suited to capitalist relations. But it would be more than strange to use these notions now, when the working class, far from being deprived of power and the means of production, on the contrary holds power and possesses the means of production.” (Idem)
Mao goes further, even adding that the class struggle does not disappear during the transition to socialism. With his great scientific frankness, going to the heart of the matter, he draws attention to the difficult problem of the right proportion between the economic sectors and the difficulties of defining it. See, for example, Points 7 and 8 of his critique: https://www.marxists.org/reference/archive/mao/selected-works/volume-8/mswv8_66.htm
For Bettelheim this would all boil down to this:
“According to Engels’ proposals, the categories of value and price should not intervene in the calculations necessary for socialist planning” (p 5)
One must dare to write such things, and when one dares to do so at this level, one does so with a clear consciousness of what s/he is doing.
If you still have doubts about Bettelheim’s strategy of deconstruction, it will suffice to note that he can refer to Engels in Stalin’s great text on the economic problems of socialism of 1952. In the writing of this fundamental text Stalin did not have the Marxist theory of productivity reintegrated in a coherent way in the Equations of the SR-ER; he still struggles a bit to express the difference between the surplus-value coming from the capitalist productivity and the social surplus-value coming from the socialist planning Modestly speaking there is a Marxism before and after the demonstration of the Marxist law of productivity:
“One refers to Engels’ Anti-Dühring,” writes Stalin, “to his formula that the abolition of capitalism and the socialization of the means of production will enable men to exercise their power over the means of production, to free themselves from the yoke of economic and social relations, to become the “masters” of their social life. Engels calls this freedom “understood necessity”. And what does “necessity understood” mean? It means that men, having understood the objective laws (“necessity”), will apply them consciously, in the interest of society. This is why Engels says that:
The laws of their own social practice, which hitherto stood before them as natural, alien and overbearing laws, are from now on applied by men with full knowledge of the facts and thereby dominated. (Anti-Dühring, p. 322, Editions Sociales, Paris, 1950).
As can be seen, Engels’ formula does not speak in favor of those who think that existing economic laws can be abolished under socialism and new ones created. On the contrary, it does not demand their abolition, but the knowledge of economic laws and their judicious application. It is said that economic laws are spontaneous; that the action of these laws is inescapable; that society is powerless before them.
This is false. It is to fetishize the laws, to make oneself the slave of these laws. It has been proven that society is not powerless before the laws; that it can, by knowing the economic laws and relying on them, limit the sphere of their action, exploit them in the interest of society and “tame” them, as happens with the forces of nature and their laws, as shown by the example cited above on the overflowing of great rivers.” http://lesmaterialistes.com/problemes-economiques-socialisme-en-urss-staline-1952
For Bettelheim the presence of money – which he confuses with credit – always implies capitalist market relations, although he knows that it is only a general equivalent, used as such in pre-capitalist societies. He sees in this the cause of the difficulties of planning by conferring on the epiphenomenon the role of the phenomenon – the equality of physical product and its exchange-value – which, in turn, is not within his grasp because it involves the scientific refutation of the false problem of transformation. He writes:
“When the intervention of money is necessary to make the economy work, the contradiction between “money” and “plan” constitutes only one of the forms within which the contradiction between market relations and planning relations, and therefore also, the contradiction between the law of value and the law of social direction of the economy, which is then manifest.” (idem, p 161. My translation.)
There, the trick is played. The law of value – or rather the infectious magma of its “value-form” without dominant historical forms – is no longer universal hence no longer scientific. It is relegated to being only a general law proper to the CMP in opposition to the Social Direction of the Economy and to its contradictions with any possible economic calculation, thus with any socio-economic rationality. Instead of recognizing that he does not know how to solve the problem of transformation invented by Böhm-Bawerk, he evacuates the law of value as a necessary source of any rigorous economic calculation whatever the mode of production. It is not surprising then that, despite the title, his book does not make the slightest attempt at economic calculation in a planned society. What, for example, Strumilin will try to do honestly, although in an erroneous way.
In the end, everything is implied, both the Bolshevik management and the Khrushchev-Liberman management, which it was fashionable to criticize at the time. In short, the worm being in the fruit … etc.
This attitude also makes him misunderstand the real nature of the effects of the socialist market economy put forward by the Soviet revisionists:
“As you will see, the following analyses, helping to sketch a line of demarcation between monetary and economic calculation and social calculation, make apparent the necessity and possibility of a “decentralization” of economic planning that is radically different from the pseudo-decentralization being implemented today in the countries of Eastern Europe. This pseudo-decentralization is, in fact, nothing more than the restoration of “market mechanisms” which implies the renunciation of socialist planning. (p xiii, idem, my translation)
The confusion is total between monetary expression and allocation of resources for production and reproduction. In fact, under the NEP, capitalist relations were tolerated, but under the strict dominance of the Plan, based essentially on public enterprises and on the centralization of social surplus value, which was then distributed according to the needs established by the Plan, and not by the market, which coexisted under dominance in certain places, for example in the kolkhozes. And it is this centralization of “social surplus-value” and its social allocation that makes the difference for all forms of planning with even a rudimentary understanding – with reference to the RS model – of the necessary proportions between the sectors. This then allows for all necessary administrative decentralization according to the circumstances. This is what, unlike the USSR, which fell under the Khrushchev-Liberman rule, characterized China even at the time of the greatest openings – carefully targeted to free zones and specific activities.
To conclude, without venturing too far against the fads of the times, he points to the Maoist critique of the importance of class struggle, which might have made sense if he had insisted on the difference between the capitalist economic calculation and the socialist political problem of the optimal allocation of resources in the expanded reproduction, which he does not do.
To venture a little would have shown the positive Marxist criticism of the great scientific Marxist Mao Zedong to Stalin’s great contribution as well as his negative criticism of those he called “revisionists”, Liberman and Khrushchev in particular.
Voir: ON STATE CAPITALISM , July 9, 1953, https://www.marxists.org/reference/archive/mao/selected-works/volume-5/mswv5_30.htm
Contradictions Under Socialism , April 5, 1956, https://www.marxists.org/reference/archive/mao/selected-works/volume-7/mswv7_466.htm
ON THE TEN MAJOR RELATIONSHIPS April 5, 1956, https://www.marxists.org/reference/archive/mao/selected-works/volume-5/mswv5_51.htm
Concerning « Economic Problems Of Socialism In The USSR » November 1958, https://www.marxists.org/reference/archive/mao/selected-works/volume-8/mswv8_65.htm
(See also Critique of Stalin’s, Economic Problems Of Socialism, In The USSR https://www.marxists.org/reference/archive/mao/selected-works/volume-8/mswv8_66.htm
On Khrushchov’s Phoney Communism and Its Historical Lessons for the World:
Comment on the Open Letter of the Central Committee of the CPSU (IX) https://www.marxists.org/reference/archive/mao/works/1964/phnycom.htm
But what is the usefulness of the class struggle for the socialist transition necessarily characterized by the Plan if one does not confront the general problem of the right proportions between the sectors within the framework of the allocation of the “social surplus-value”?
I had to note with great dismay after the writing of my Tous ensemble – a theory of productivity for the first time coherently reintegrated into the RS-ER Equations – that many Marxists had been disgusted by the hollow discourses on “value-form” of which Bettelheim is one of the leaders. Of course, I am not talking about the perfectly useless and often harmful Western academic Marxists. The Cubans – those of today would do well to reconsider … are a telling example.
Paul Sweezy’s theoretical concessions.
The sterilizing and pernicious influence of Ch. Bettelheim is verified by Paul Sweezy’s concessions to this pseudo-criticism of economic calculation without the slightest calculation… in the light of their academic exchanges that followed the Soviet intervention ending the Prague Spring and that were published in the collection On the Transition to Socialism in 1972.
Paul Sweezy begins by noting that “The less convincing aspect of the Russian argument – sic – is the claim that a counter-revolutionary situation was developing” (p. 3). However, Sweezy points out that the market socialism theorized by Ota Sik and implemented in Czechoslovakia as early as 1964 was centered on “the control of enterprises by the enterprises themselves” (p. 4) It preceded the Khrushchev-Liberman reforms and went in the same direction. Also says Sweezy, the economic aspect does not determine the armed intervention which would be rather due to a power struggle because the Czechoslovak leaders had shown “a great receptivity to the mood of the people; the old established leaders were taken by surprise and swept away before they could defend themselves. For the Soviet leaders and those of the other bloc countries, whose people were also in prison (and in the case of the Soviet Union had been there longer), this set a terrifying precedent” (p. 10-11). He adds: “There was another reason that could affect the Soviet leadership, which then held the dominant position in the bloc. With the growing importance of the market in the region, the magnetic force of the much stronger Western market was growing” (p. 11).
These criticisms had some truth to them. However, Sweezy says nothing about the real Hungarian counter-revolution, which was linked, as the archives show today, to the betrayal of Beria and many other overrepresented people whose primary loyalty was no longer to the USSR or to the Communist International, especially since 1948. It is known that Beria had concluded an agreement recognizing him as the leader of the USSR in exchange for the delivery of the Eastern bloc, a sinister project later carried out by Andropov and Gorbachev. In fact, the Prague Spring could not be summed up as a counter-revolution – in the last days before the intervention of August 21, 1968, some extremists had pushed the provocation to the point of calling for joining NATO – nor could it be summed up only as the damage caused by Ota Sik’s marginal socialism.
As Jean-Paul Sartre’s collection of essays entitled Le socialisme venu du froid, the Prague Spring aimed to establish a kind of socialist democracy by expanding the role of trade unions, pressure groups, academics, consumers and individuals in economic decision-making, and thus of the Plan. This would have given the regime a “human face” by correcting the excesses of the so-called “socialist market”. These drafts still deserve to be analyzed objectively under this aspect, since participation in the decisions of the Plan is the heart of the socialist democracy to be invented together with the development of socialist freedoms respectful of collective property and private possession. In fact, Brezhnev decided on military intervention only as a result of strong pressure from the leaders of the Eastern countries, in particular East Germany and Poland.
Nevertheless, Sweezy is excellent in his analysis of Gomulka’s Marginalist excesses in Poland. He writes: “The unrest began with the abrupt announcement on December 13, 1970, of a vast revision of the consumer price system. The prices of essential goods – food, energy, clothing – were raised, sometimes sharply; on the other hand, the prices of durable consumer goods – cassette recorders, radios, TV sets, washing machines, refrigerators, vacuum cleaners, etc. – were reduced, usually by 15 percent, and the prices of these goods were raised by up to 20 percent. – The prices of consumer durables – cassette recorders, radios, TV sets, washing machines, refrigerators, vacuum cleaners, etc. – were generally reduced by 15 percent or more. In general,” wrote James Feron of Warsaw, “the idea was to relieve some of the shortages of agricultural commodities – by reducing demand – by shifting household consumption to industrial goods” (New York Times, December 14).
This reform of the price system illustrates one of the great advantages of socialist economic planning while simultaneously demonstrating how such a system can be abused when it is under the control of an irresponsible bureaucracy” (p. 93)
For Sweezy shares Michal Kalecki’s opinion on the usefulness of the price signal in a planned economy. (p. 94) but he adds that the operation had been planned in secret, without consultation (p. 95) and that, in the end, given the tightness of the majority of salaries, such a price signal benefited the privileged part of the population. Not surprisingly, the sudden announcement of this reform provoked an instant uprising of the workers, primarily in the Baltic ports, especially Gdansk, Gdynia and Szczecin. (p 95) Gomulka was replaced, but market socialism with its suboptimal allocation of “social surplus-value” remained in place and the gangrene eventually led to the final rout – not without active interference from the CIA and the Vatican to the chagrin of real trade unionists like Kuron, nor without the increasing indebtedness in dollars under the guise of independence.
Despite this, Sweezy ends up getting sucked into Bettelheim’s empty rhetoric, which he ends up validating – also misunderstanding the ineptitude of the supposed “value-form” while calling for a more assiduous study of the problems of socialist transition.
Drawing on Baran – and, indeed, on the contributions of Althusserians to dominance coexistence – Sweezy had put his finger on the real problem of market/plan relations. He writes: “The question is not the more or less extensive use of the market but the degree of use of the market as a means of independent regulation” (p. 28). Then he gives in to casuistry: “Bettelheim has convinced me that my use of the couple “plan/market” formulated in my previous contributions during this exchange is confusing and must be abandoned” (p. 47).
However, Sweezy knows perfectly well the root of the problem of economic calculation, since one of his major contributions was to publish the main articles allowing to quickly identify the question of the – false – problem of transformation in order to stimulate research. He himself had not succeeded in doing so, nor had Einstein, to whom the problem had been put, which nevertheless gave rise to a fine defense of socialism in his essay Why socialism, published by Monthly Review in May 1949.
Sweezy had then sought a way out, which informed all his later work on the basis of the recognition of the surplus, which was sociologically observed rather than demonstrated. Or rather, partly demonstrated, since in the problem of the transformation of exchange-value into production price Sweezy recognizes that the transformation by the average profit does not logically hold as it is presented on the basis of Marx’s drafts retained in Book III of Capital. But since logically the genesis of profit presupposes its extraction through surplus labor, he concluded that the ex ante departure in value remained of primary importance. On this basis, we can understand how Bettelheim managed to embarrass him.
But there is something even more serious, and this brings us back to the essential question of the historical-logical scientific method used by Marx, which Sweezy neglects despite the contributions of the great Bolshevik revolutionaries and those of Gramsci and in particular those of Althusser. Thus Sweezy writes: “Historically speaking, (in classical Marxist texts) the proletariat was seen as a “new man” formed by capitalism and possessing the interest, the will and the capacity to overthrow the system AND to open the way to the construction of a new socialist society – p 50 above.
“I wrote this not as a result of research into the relevant texts but according to my general understanding of Marxist theory developed over many years. Whereupon I was challenged to support this interpretation, and I must confess that I was unable to do so.” p 113
There is much to be said about the emergence of the “new man” and about Soviet social engineering drifting towards the command-and-control economy after the reforms of 1965-1967. Every mode of production shapes a type of individual who belongs to one of the classes it implements. The times of redistribution, which call into question the broad legal relations and the politics in the classical sense of allocation of the resources of the Community, bring their political-cultural colorations. Gramsci conceived the Human Being as a “social and historical block”; Roland Barthes discouraged for his part on the “mille-feuilles” composing any individual personality.
Any dominant mode of production must tend towards a coherence between its relations of exploitation, its relations of distribution and its broad legal relations of redistribution – which is precisely the plan of the first three books of Capital, see my Methodological Introduction. When the internal contradictions of the modes of production undermine the relation between the development of the productive forces and the relations of production, voluntarism, the pseudo-moral dirigiste rigorism, seeks to regain control by attempting to artificially mediate these contradictions through their vertical control, rather than by making the necessary adjustments in the relations of exploitation and distribution.
Mao Zedong, for his part, implemented a genuine mass pedagogy that aimed precisely, on the basis of rigorous planning, to remove the underlying concrete contradictions in order to reinforce this forward march by operating on the political consciousness of citizens. Hence his insistence in his comments to the Stalinist planning on the “superstructures” that had to be seen, not in an exogenous way to the economic reality, but in an organic way with it. The Soviet Bolsheviks were concerned with class alliances; they knew that social consensus presupposes the trust of the people on the basis of respect for the law that applies equally to all. That is why they, and Stalin in particular, were careful to adapt the socialist constitution to the chosen era of redistribution. Mao insisted on the distinction between institutional process and mere constitutional superstructure, taking care to distinguish between antagonistic contradictions with class enemies and non-antagonistic contradictions within the people.
Mao had moreover known how to reconcile for his time the conditions in which his country poured and an appropriate socialist democracy: Constitution, recognition of national minorities, two-way plan also emphasizing the role of light industries, representative democracy – democratic centralism within the Party, elections for the People’s Congress, communes and district councils, trade unions and participatory democracy with various assemblies, criticism and self-criticism, dazibao and mass educational work, including through the mobilization of the Arts, culture, theater and traditional Opera, all crowned by the mass line always carefully cultivated by the Party and knowing how to combine the practice and scientific theory.
Few people take the time to really understand the prodigious democratic effort that this represented, beyond any cliché. The conditions are no longer the same, but the goals remain. Anyone interested in the problem of socialist democracy being congruent with a modern society in transition to socialism would do well to consider the distinction between the Domain of Necessity and the Domain of Socialist Freedom.
This is why Mao never tried to conceal the real obstacles, including scientific ones, to planning. For example, in his frank remarks about the trial and error of finding the right proportion between sectors, he also insisted that light industry should not be neglected. Hence he said we groped for an answer to the right proportion to give the Mp sector s for 8 years before we realised taht we didi not produce enough steel ourselves … « We worked on industry for eight years but did not realize that we had to take steel as the mainstay. This was the principal aspect of the contradiction in industry. It was monism.” (in Critique of Stalin’s Economic Problems Of Socialism In The USSR (marxists.org) ) This being said, for his part he had no doubt: “(1) The concentrated manifestation of constructing socialism is making socialist, all-embracing public ownership[6] a reality. (2) Constructing socialism means turning commune collective ownership into public ownership. Some comrades disapprove of drawing the line between these two types of ownership system, as if the communes were completely publicly owned. In reality there are two systems. One type is public ownership, as in the Anshan Iron and Steel Works, the other is commune-large collective ownership. If we do not raise this, what is the use of socialist construction? Stalin drew the line when he spoke of three conditions. These three basic conditions make sense and may be summarized as follows: increase social output; raise collective ownership to public ownership; go from exchange of commodities to exchange of products, from exchange-value to use value.” in https://www.marxists.org/reference/archive/mao/selected-works/volume-8/mswv8_65.htm .) Of course, direction is more important than speed.
The class struggle and its mass pedagogy change completely when science finally lifts the false contradictions arising from the false problem of transformation thanks to the insertion of productivity in the Equations of SR-RE. Conversely, before this is achieved, political mediations will remain artificial and dirigiste since they will not give a scientific resolution. They will at least be able to approach the right solutions by focusing on the maximum possible equality between citizens.
The new man of the Stalinist engineering was a revolutionary who knew how to be part of an egalitarian vanguard: thanks to this choice, based on the model of the SR and the concept of Social Fund – socialist absolute surplus value – he could introduce the highest possible productivity whenever possible and correct the discrepancies verified in the SR, giving priority to the physical quantities in order to rebalance the whole. On this basis, the great Marxist Stalin transformed his underdeveloped country into a superpower with only two Five-Year Plans. Thus, he was able to defeat alone the Nazi war machine in Stalingrad at the beginning of 1943, then to stand up to the American imperialism during the Cold War and its “push-back” impulses, endangering the simple “containment” that could be compatible with the Yalta agreements.
That of Soviet Marginalist socialism after 1965-1967 was a hybrid product sitting between two chairs and actively sawing off the socialist branch on which it was sitting, until the final betrayal. In the meantime, the hypocritical domain of a falsely “culturny” elite – very vulgarly overrepresented and stateless in reality, which took little time to put itself in the school of Gaïdar and Jeffrey Sachs to ruin the country. It happened very quickly. This “elite” imposed a communist catechism on the masses while reserving for itself the special stores and, in a perfectly emblematic way, propagating the ideal of the housewife… The New Man in these conditions does not magically lead, as Sweezy seemed to think, to socialist economic calculation, but rather suffers the effects of its tragic absence.
Thus we see the ravages of casuistry on the minds of well-intentioned people. Let’s reconstruct: under the smoky “value-form”, the transition to socialism would imply the end of the market and of money, both substituted by the Plan. Now, in addition to the fact that “one” does not know a socialist economic calculation – so much for Marx’s Social Fund within the framework of the RS-ER that all true Marxists know -, the presence of money would necessarily imply the capitalist restoration by a privileged social stratum that Bettelheim will ineptly designate as a “state bourgeoisie”. The Soviet leaders, for all their shortcomings, were corseted by the principles of the October Revolution and had to wait for the internal overthrow of the regime and of the mode of production to finally get their hands on the common goods personally. They could be managers but not owners. The expropriation of the masses was done under Yeltsin by imitating the French assignats, i.e. by first dividing up the enterprises etc. among all the workers to gain their trust but who were quickly reduced to scarcity and thus obliged to sell their shares, thus triggering the great mafia-like primitive accumulation of capital in the former USSR, the whole thing being mediated by the Treuhand in the Eastern bloc.
Gramsci had begun his disinterested analyses of the Marxism-Leninism starting from a precise point of view: As regards social science – he also knew the Scienza nuova of G. Vico well – it is not necessary to import old ideas and old methods to develop it, including to scientifically remove the contradictions that could remain. Science does not develop by importing unequal and obscurantist narrations. This is crucial. Althusser, as a great follower of scientific epistemology and method, reproposed the fundamental concept of ” concrete in thought ” that Marx had begun to develop in a draft of a Method that consisted of only a few fragmentary, but nonetheless fundamental pages.
As soon as the double dialectic of history – investigation – and logic – exposition – reveals the thought concrete of a discipline, it leads to its scientific status. This was the case in the passage from alchemy and phlogiston to chemistry; this was the case in the passage from biblical creation to the theory of evolution – Buffon, Cuvier, Lamarck, Darwin and above all Saint-Hilaire, whom Paul Lafargue rightly brought back to honor. And this was the case in the passage from classical political economy – Physiocrats, Sismondi, Smith, Ricardo, Torrens etc. – to Marx and his discovery of the genesis of profit, and thus of the commensurability of all commodities among themselves thanks to the theory of value. This commensurability is specified thanks to the precise historical forms that the extraction of surplus value takes in different modes of production, absolute value and cyclical intensity before the CMP, structural intensity or productivity as the dominant form with the CMP, and Marx’s Social Fund or “social surplus-value” necessary for the socialist allocation carried out by the Plan with the Socialist Mode of Production.
Add to this the development, under the impulse of Louis Althusser, of the theorization of the different modes of production initiated by Marx himself with his analyses of primitive communism, slavery, feudalism, capitalism and, in germ, of socialism. All this without underestimating – something the Bolsheviks never did – the brilliant analyses of the Russian mir that Marx initiated in his epistolary exchanges with Vera Zazoulitch and that permitted to conceive the necessary peasant/proletariat alliance to ensure and to accelerate the transition to socialism by taking into account its various Epochs of redistribution. These refer to the broad legal forms and therefore to the politics and class struggle to determine the allocation of resources and its priorities.
From his obviously undeserved position at the Ecole Pratique des Hautes Etudes, Bettelheim could not be unaware of these contributions. I conclude that he was a pretentious and verbose “pitre” in the analytical sense of the term. Here he is, thrown into the dunghill of history. He was not the only one.
I have already said that you would look long and hard for any indication of economic calculation in Bettelheim’s book, despite its title. In the same way, if “the value-form” were specific to capitalism, to avoid inducing the idea that socialist planning, intrinsically incapable of economic calculation, was inferior to market equilibrium and its random “invisible hand”, you might have expected a denunciation of the immense waste caused by a system of private accumulation and its general equilibrium always ex post. But no.
This remark is far from trivial, since the real critique of the capitalist market and its supposed equilibrium rests on the SR-ER Schemes that Marx derives from his critical study of Sismondi’s “annual income” and Quesnay’s Tableau, among others. Marx finally leads in his own brilliant way by noting that the equilibrium should be worth both in quantities – Mp and Cn – and in exchange-values or prices. The invisible hand of the market does not even attempt it and defers to an equilibrium induced by the meta-magic of the search for individual profit… And this is indeed what makes the incredible superiority of planning each time it is taken into account wherever it has been implemented.
Moreover, capitalist economic calculation is reduced to falsifications of the GDP and Fisherian indices such as the CPI. (See the following essay: : « GDP : a Marginalist narration tool against the welfare of peoples and the prosperity of Nation-States », May-24-2020, http://rivincitasociale.altervista.org/gdp-marginalist-narration-tool-against-the-welfare-of-peoples-and-the-prosperity-of-nation-states-may-24-2020/
The ontological non-respect of the true equilibrium both in physical quantities and in prices led capitalism to a series of cyclical crises – the expansion of one sector to the detriment of the others due to private choices of profit accumulation without concern for equilibrium and social demand – and structural crises which are linked to the capitalist contradiction par excellence which opposes the development of the productive forces to the relations of production by taking the form of overproduction and under-consumption.
In fact, the bourgeois critique of capitalism, which had to be rescued from “its own animal spirits”, as much that of Keynes as that of the theories of economic regulation, started precisely from this observation of a general price equilibrium always dangerously reached in an ex post manner at the expense of social needs, including essential needs, left unsatisfied because they could not be solved. This solution became very risky after the October Revolution. To rebalance things, these bourgeois reformists did not hesitate to invoke the intervention of the State to ensure full employment – hence effective demand – by intervening through public social services and State enterprises, while curbing financial speculation by partitioning the banking and financial sector into four distinct pillars, deposit banks, commercial banks, insurance and savings banks. To this was added the actuarial institutionalization of part of the household savings to finance public social services via social contributions.
It is not said enough that Keynes’s General Theory is based, without saying so, on the circuits of capital brought to light by Marx and on his knowledge – via Sraffa, and therefore via Gramsci’s correspondence – of the “social demand” that Marx would schematize in his Equations of the SR-ER. I have repeatedly emphasized the typically bourgeois way of editing works, in this case the complete works of Keynes. It was not until the publication of the last two volumes that this became apparent. Michael Roberts noted not long ago that Keynes’s aim was indeed to falsify Marx by hijacking him to save capitalism. He also used, without saying so, the call for the reduction of working hours, revived by Paul Lafargue, when he quietly contemplated the passage to a 15-hour week, thanks to the secular increase in productivity. ( See Economic possibilities for our grandchildren – 1930, https://www.aspeninstitute.org/wp-content/uploads/files/content/upload/Intro_and_Section_I.pdf )
Here is the beautiful quote from Michael Roberts: “Keynes’ ‘socialism’ was openly designed as an alternative to the dangerous and erroneous ideas of what he thought was Marxism. State socialism, he said, “is, in fact, little better than a dusty survival of a plan to meet the problems of fifty years ago, based on a misunderstanding of what someone said a hundred years ago.” Keynes told George Bernard Shaw that the whole point of The General Theory was to knock away the ‘Ricardian’ foundations of Marxism and by that he meant the labor theory of value and its implication that capitalism was a system of the exploitation of labor for profit. He had little respect for Karl Marx, calling him “a poor thinker,” and Das Kapital “an obsolete economic textbook which I know to be not only scientifically erroneous but without interest or application for the modern world.” ” in https://thenextrecession.wordpress.com/2019/06/05/keynes-socialist-liberal-or-conservative/ .
It is noticeable that the class concern always remains the falsification of the scientific law of value of Marx. All this while hiding the reversed plagiarism under the expression of a crusty form of academic contempt in order to follow the method of discrediting the opponent in order to elevate oneself.
The unfortunately well-meaning Oscar Lange believed that marginalism was scientific and that it could therefore be applied to all systems with some adaptations. It is true that his starting point, like that of Maurice Allais, was Auguste Walras’s letter to his son Léon reminding him that economics should also take social needs into account. This led to the splitting of the “dismal discipline” into two, economics and social economics. Schumpeter, also a conscious falsifier but without any hope of the survival of the capitalist mode of production, tried to turn this into an ontological dichotomy to prevent any investigation of the subject.
For the classical Walrasians, among others Lange or Allais, this took the form of a social framework made of objectives to be reached, with economic science then deriving the relevant scientific equations. In spite of my admiration for Maurice Allais and his valiant citizen campaign against the MAI and free trade, which would have been destructive without the adoption of his Community Preferences – or better still without the adoption of my new definition of anti-dumping – I was obliged to proceed to the demolition of this system since Allais opposed it to the RWW under the pretext that equilibrium in the labor market would be automatically achieved by the market and that the RWW was therefore harmful or at best useless… See my Note ** in my Book III, which also gives the real unemployment figures.
Lange was thinking in the context of planning under the control of the prices of a highly regulated market. The allocation of resources was done socially. Moreover, he tried to solve the problem of true physical equilibrium in this context. He did so in an ingenious and simple way: the products to be manufactured were determined by the Plan, their price by Supply and Demand, and the true equilibrium in physical quantities would be achieved automatically by the firms managing their shelves, i.e., by managing their inventories and sending out their orders as they came in. The system of stock management by the Incas with their cords is not without mathematical charm or efficiency. The ingenious system proposed by Lange was later adapted without mention by all corporate accounting, and was only recently perverted by the disastrous globalist just-in-time management.
In the same way, the formidable growth that went hand in hand with the indicative and incentive planning known as French planning is due precisely to the planning of priorities and thus to the partly state allocation of resources and physical quantities. It is also due to public credit, which made it possible to avoid the disastrous indebtedness of the state and public enterprises on the private financial market.
I have often emphasized the regressive exclusivist hatred of Ludwig Mises, the Chicago School and so many other neoliberals. The fundamental reason, as we can see, lies in the fact that Keynes recognized that, once the state had been allowed to intervene to ensure the well-being of its citizens, the capitalist mode of production would inevitably progress towards its overcoming by a system that could better reconcile overproduction and adequate consumption. The CMP in no way endorses the “end of history”.
Mises, Hayek, Friedman and so many others like them and their dupes preferred anomie – the anarchic freedom of capital and the Darwinian reign of brute force – even if it meant following Nietzche in the historical regression towards forms opposed to classical, formally democratic liberalism, in order to save private property per se and its most hateful privileges. No one better than these clowns would be convinced of the accuracy of Marx’s analysis; so they never stopped falsifying it by abusing their academic hegemony. Historical development shows scientifically that capitalism creates the proletariat and thus fatally its own gravedigger? It is then necessary to deny the human becoming, that is all. These clowns have played their last game since Volcker-Thatcher-Reagan and have lost miserably, both in terms of social impoverishment and logic, as well as in terms of the minimum level of ethical-political decency. They too will soon be consigned to the dunghill of history with their repugnant Exclusivism and their racist and theocratic apartheid of another age.
Conclusion.
Thanks to the work of the greatest modern epistemologist after Kant and Marx, Louis Althusser – who unfortunately did not have access to my re-establishment of the law of value by the theory of productivity reintegrated in the RS-ER Equations – the scientific re-reading of Marx is back on track. It invests the concepts of Social Formations, of insertion of the SF in the World Economy as well as the rediscovery of the problematic of the transition of the modes of production. (I quoted above the good summary provided by Foster Carter … )
I finally showed, following the great revolutionaries and Marxist theorists, how the theory of transition must be based on the dominant forms of surplus value. To do so, I have relied of course on the work of Karl Polanyi – empirico-historical typology of topologically apprehended markets, emporiums etc. – but above all on the works, particularly French, of the French economist, who has been working on the subject for many years. – but above all on the works, particularly French, which attempted to understand the coexistence of dominant modes of production. This also includes Gramsci’s analyses of counter-hegemony, which can only ever have one basis, science against diverse narratives, especially if the development of socialization is at stake, since science presupposes the equality of all speakers in its “interpersonal” space of exchange.
I have thus shown that “absolute surplus-value” is the dominant form of extraction – duration of labor – for all pre-capitalist modes of production, together with the cyclical intensity of labor. The MPC transforms the structural intensity that becomes the norm into productivity through the use of machines etc. Finally, the socialist mode of production does not suppress surplus-value and its extraction, which is the great mystification of Bettelheim and Sweezy, the latter however developing an idea of surplus in order to bypass the – false – problem of the transformation of exchange-values into production prices. The socialist mode of production transforms surplus-value productivity into “social surplus-value”. The extraction of social surplus-value remains but class exploitation disappears, at least when this form of socialist extraction becomes dominant. Except that this “social surplus-value” is allocated to reproduction – also using public credit – in order to finance the chosen social priorities rather than private accumulation.
Scientifically speaking and in fact all forms of surplus-value are always present in one way or another – duration and intensity, structural intensity or productivity, and social surplus-value – but the dominance of one of them characterizes a specific mode of production.
Note also that the schema of Capital – see my Methodological Introduction in the Book-Books section of my old website www.la-commune-praclet-com – develops according to a rigorous plan of exposition:
Book 1: the objective relations of exploitation materialized in the extraction of surplus-value and formalized in the labor contract
Book 2 : quantitative reproduction – Mp and Cn – and qualitative reproduction in corresponding exchange-values, formalized by the RS-ER Equations
Book 3: the social redistribution which informs the reproduction set up, thus the allocation of the resources of the Community for the Community. This is the definition of politics – and therefore reflects the state of the class struggle.
Book 4: the History of the disciple. That is to say, very precisely, the historical and logical unveiling of the “thought concrete” of political economy allowing to give it a scientific – and therefore universal – basis, thus allowing to understand all the modes of production. And not by reserving the “value” or the “value-form” to the MPC – the “value-form” is a “yellow syllogism” as Marx would say, because it is the use and exchange-value of labor power that we must speak about, taking into account the duality of any commodity – i.e. good or service exchanged because of the social division of labor.
It is therefore not only a question of capitalist exchange since the exchange-value is the property of the economy and therefore of the exchange resulting from the division of labor and it necessarily takes several forms which correspond according to the dominance of one of these forms to a specific mode of production. The exchange-value referring to human labor power allows to establish the commensurability of all commodities among themselves by resorting to the only universal economic standard of measurement common to all commodities, the exchange-value of labor power. Money is only a general equivalent that must also be explained by recourse to a universal equivalent, any commodity, e.g. potatoes or shells, can serve as a medium of exchange or as a particular equivalent, but this is not very practical, etc.
What is curious is that Sweezy, who published the key articles for understanding the problem of transformation and who, in desperation, constructed a concept of “economic surplus” and capital Monopoly with Baran etc., ends up obscuring this scientific problem in the discussion of economic calculation – i.e. the question of the control of the performance of the SR-RE and the social allocation of resources. At least, Sweezy’s surplus remains anchored on the idea of the prior extraction of surplus-value which is the basis of the workers’ and citizens’ social claims. It is not the surplus of Leibniz emanating from the sole contribution of the literates and which function is to to support them so that they can continue their work… As for Bettelheim, he was only a conscious falsifier who, evidently, worked according to the same method falsifying and distorting the impeccable scientific contributions of Althusser whose forms of surplus value and the coexistence to dominance of the modes of production they allow to explain to understand the socio-economic aspect of the transition.
Thus a mode knows several epochs of redistribution. For the MPC: liberal capitalism based on the individual wage only. The Social State implementing the “net global income” of households. The hegemony of speculative capital implementing a “return” to philo-Semitism Nietzschean, necessarily flickering, in the hope of saving private property per se without admitting a new epoch of redistribution through the RWW. That is to say, in the end, denying the alternative between the finally inevitable progression towards socialism – including tendentially via the 15-hour week that Keynes borrows without saying so from Paul Lafargue – or a return to barbarism.
The same is true for real socialism: in the USSR, for example, war communism; the Nep, that is, the Plan and the agricultural market, but with the allocation of the RS-ER given predominantly by the State, which refers to the dominance of “social surplus-value”; the Plan and the collectivization of land: apart from the kolkhozes, which continued to control their products, everything is nationalized and therefore social surplus-value is dominated by the Plan, which allows for a surge in growth and living standards. Then the regression of socialist marginalism, that is, the return to control by prices, in fact by the allocation of resources carried out autonomously by enterprises in competition with each other. This diminished the role of the central allocation of absolute surplus value and set in motion the use of undue material incentives. As a result, the scale of wages and statuses expanded beyond measure, which was never the case with Lenin, Stalin, Mao or Fidel and Che.
To this was added the autonomous control of public credit by the companies, which is the height of idiocy in view of the Enlarged Reproduction. And this was done under the guise of democratization through the decentralization-devolution of real powers, a devolution further aggravated by the autonomy of the republics and regions in addition to that of the enterprises, which completely distorted the optimum allocation of the Plan – which was now deconstructed into several poorly coordinated local plans – and destroyed territorial coherence and in part the real bases of socialist citizenship, namely the conviction of having the right to the same access to public services and collectively produced goods.
Citizenship rests in fact on this egalitarian access to public infrastructures and services and therefore on a democratic decentralization that takes place within the national framework of the Plan by involving the participation of workers in the decisions. At the local level decentralization is necessarily administrative, otherwise intolerable regional and local disparities are introduced. The historically recognized autonomies must, for example, impose a common national level for citizen access to goods and services, otherwise it is the deconstruction of the right that will be set in motion, as can be verified in the Netherlands, Belgium and Spain … We then witness the reappearance of regional disparities, with its share of social resentment, aggravated by the growing dispossession of essential citizen social rights.
In short, any economic Plan is superior to the random and post hoc equilibrium achieved by the “invisible hand” if only by its impact on the real equilibrium – quantitative and qualitative – of the SR-ER and by the maximization on this basis of the allocation of available resources, including public credit, for socio-economic growth.
The debate on the transition to socialism, well represented by Sweezy and Ch. Bettelheim, is totally off the mark because it emphasizes prices versus the Plan and draws the false conclusion that the “value-form” – the “yellow syllogism” according to Marx – is intrinsically capitalist, so that in order to overcome it, workers themselves must control the Mp and the production of their labor. (The illusion of the Small Independent Producers is only an illusion if it is not reorganized within a social division of labor planned by the whole community. Apart from the Proudhonian illusions, Sweezy then rightly asks: but what about the Yugoslav self-management going hand in hand with a strong market incentive, including foreign investments up to 49% in joint ventures with the power of control over production costs!!! )
This is a serious misunderstanding of the allocation necessary for dynamic growth – Expanded Reproduction – in any mode of production and in particular for the CMP and its socialist overcoming.
Moreover, one confuses reinvestment with new investments operated thanks to credit, which it is important to know whether it is public or private, since it is only an anticipation of new exchange-value to be created in production.
To confuse prices and the capitalist market itself is to be mistaken about the nature of exchange, which is not necessarily capitalist, since it necessarily follows from any social division of labor and thus from pre-capitalist exchange as well as from capitalist and socialist exchange. Such confusion amounts to a misunderstanding of the nature and role of resource allocation.
We have said that Marx’s analysis breaks down into a synthesis of Sismondi’s “annual income” operating as a simplification of the cycle of reproduction and Quesnay’s Tableau when he realizes that balanced reproduction is not only in prices but also in the quantitative supports – use values – of these prices, the Mp and the Cn that reflect the micro-economic production function, where c = Mp and v = Cn
This is the essence of why German war planning in 14-18 was so effective that it caused hysterical fear among Austrian and other overrepresented people, including Ludwig Mises. More than Keynes and as much as the Bolsheviks, in fact. Now, when this equilibrium given by the SR-RE equations goes wrong, it can be readjusted by the intervention of the state. This readjustment is then made in a targeted manner, therefore with full knowledge of the facts, on the industries to be favored, which implies compensating for the gaps in Mp or Cn. These gaps arise especially following the impact of productivity which destabilizes the Equations. This is especially true when the scientific vision of these Equations is replaced by the Marginalist narratives of the always ex post stationary and dynamic equilibrium.
Socialist accounting
State intervention, which is therefore exogenous to the capitalist market, takes place either through taxation and redistribution, or through public or private credit. Now, reinvestment can only ensure stationary equilibrium, but it does so by integrating a SR Effect – roughly, to simplify, the relation between c2 = (v1 + pv1) which must be able to be verified to ensure SR – that is, a change in the proportions between S1 and S2 in the event of the introduction of productivity. We said earlier that this SR effect provides valuable information on the sectoral structure and can only be mediated in absolute terms or by the sectoral spillover of labour “freed up” by productivity
Finally, the key to all planning is the knowledge of the SR-ER equations, the knowledge of the systemic impact of productivity and the primordial role played by public credit. Productivity continues to play a fundamental micro-economic role with the socialist mode of production, but it is subordinated to macro-economic competitiveness linked to the social allocation of resources under state dominance. Public credit has almost no cost, since a public bank does not have to pay profits to shareholders and only has to cover its administrative costs. By supplementing reinvestment, public credit gives greater flexibility and efficiency to the growth predicted by Expanded Replication and increases it tenfold through public economic multipliers. This is only partially true for military expenditures, part of which disappears from the reproductive circuits, especially if dual production is lacking – but they nevertheless ensure national defense and the supply of Social Formations.
Therefore, if technically one can regulate the economy, how is the specifically socialist transition made?
It is done by scientifically changing the micro and macro accounting – production function and SR-RE equations. This must include the socialist definition of GDP – which is split into both Net Material Product or NMP and the term exchange=value. This new definition of GDP includes what the CMP automatically excludes since it falsely insists on “value added” a very different concept from that of “surplus value”; in doing so, Marginalist GDP automatically excludes the economic contribution of collectively paid for public services, which are individually universal and “free”, on the grounds that they are not exchanged on the “market” and, therefore, have no price. They are therefore counted only as costs, namely their administrative and salary costs.
The new non-Marginalist definition of GDP would also include the circuits of reproduction, including reinvestment in the context of BR. This refers to the share of “social surplus-value” held by the firm itself, or, in the best case, going entirely to the state. It would include household savings institutionalized in social services – workers’ funds and productivity funds, etc. – minus ordinary operating costs, as well as personal savings for the financing of durable goods outside the daily consumption basket, and the impact of taxation, which requires a double micro- and macro-accounting before and after tax levies and subsidies. In this way, we keep track of true microeconomic productivity.
For the reconstruction of the non-Marginalist GDP I refer to my essay: « GDP : a Marginalist narration tool against the welfare of peoples and the prosperity of Nation-States », May-24-2020, http://rivincitasociale.altervista.org/gdp-marginalist-narration-tool-against-the-welfare-of-peoples-and-the-prosperity-of-nation-states-may-24-2020/
The extension of public social services is the first materialization of the transition from capitalism to socialism and it goes hand in hand with the development of the “net global income” of households and its three components, the individual wage, the deferred salary and the return to households in the form of guaranteed universal access to the share of taxes financing infrastructure and public services. This is why the “net global income” of households is diametrically different from the Marginalist “disposable income” which excludes everything that really contributes to maintaining the standard of living, e.g., free access to health care, education, etc. This “net aggregate income” of households is the result of the fact that it is the result of a combination of the three components. This “net global income” of households corresponds to the circuits of daily or institutionalized consumption. Social services are thus financed by the “deferred wage”, regardless of the mediation chosen, whether it be pay-as-you-go schemes or public or private contributory schemes. When they are collectively financed, their mutualization ensures a lower cost, of the order of half, in terms of GDP compared to private systems. T
he ideal is to negotiate a new definition of anti-dumping based on the “net global income” of households and adapted to protect the social and economic parametric conditions of the system and its economic calculation. Consequently also full employment and its virtuous circuits. The current definition endorsed in all free trade treaties and within the WTO automatically excludes any reference to labor rights, including the minimal ones recognized by the ILO, as well as environmental criteria, including, at the very least, the precautionary health principle. Such anti-dumping inevitably and by construction produces a global race to the bottom in social terms, leading to the accelerated dismantling of the Social State by substituting the cost of labor for the cost of production. However, we know that the WTO operates by unanimity, although it would be sufficient to adopt a rule of interpretation that would allow all existing treaties to be interpreted according to the concept of “global net income” of households retained nationally. That would be the end of the matter. However, it would be wise to anticipate the new definition with a small import surcharge that would be sufficient to make up for the shortfall in Social Security revenue, while maintaining contributions. This is possible since Social Affairs is an exclusive national competence within the EU.
Today, in order to maintain a degree of competitiveness, contributions – and therefore the quality of the services offered – are lowered, followed by wages, by imposing increasing precariousness. This undermines both contributions and tax revenues in a deleterious race to the bottom. When social security and public social assistance must be supported by an evanescent general taxation through the accelerated recourse to the casualization of the world of work, then it is indeed the philo-Semite Nietzschean return to the society of the new domesticity and the new slavery that is set in motion.
The second and more advanced materialization is the implementation of a Plan that would not limit itself to accompanying and regulating the capitalist market in the manner of Keynes. Keynes based this regulatory role on the independent variable of full employment, to which his entire system adjusts, both wages and profits, and therefore interest and money. The European social state conceived of regulation according to a short-, medium- and long-term master plan supported by public enterprises and by strictly public credit, which causes little or no debt – it is transmuted into the wage bill and fixed capital – except, in part, for military dependencies.
Once the essential public services, including culture and sport, have been provided, this field and thus the field of social added value is expanded. This is done by aiming at the greatest possible abundance – qualitative – so as to pass from the principle of each according to his abilities, to each according to his work, then to each according to his needs. See my contributions on Joachim of Fiore in the Italia section of my old site and more recently in the Culture section of http://rivincitasociale.altervista.org .
The question of abundance should not be understood stupidly in the bourgeois framework of “scarcity” – which even Walras recognized as socially constructed. But rather in the framework of “social surplus-value” as anticipated by the Social Fund of Redistribution that Marx analyzed in his Critique of the Gotha Program. It is especially materialized in the public services, therefore in the branches of the Social Security, in the culture, the transport, the housing etc. in short, in all the “social conquests”.
Here, authentic social abundance can be organized without any problem and without waste. For example, by nationalizing the entire health sector instead of its commercial management, which costs at least twice as much as the European public health system of the 1970s, which was very efficient at the time, and by setting up preventive medicine with front-line clinics and doctors’ offices assisted by front-line labs. The artificially created problem of emergencies would then disappear, as would that of the capitalist Ehpad. A new preventive medicine would be set up, taking care of the quality of life – with appropriate education including sport and dietetics etc. – in order to cure not only the diseases but also the illnesses. – A new preventive medicine would be put in place that would take care of the quality of life – with the appropriate education including sport and diet etc. – in order to cure not only diseases but also the standard of living of the people through the use of new citizen psychologies that would allow the emancipation of the citizens finally taking charge of their own body in relation with the social medicine thus reformed.
Today, the dismantling of the public health system with its accounting management and its staff cuts, makes medicine, especially in hospitals, more dangerous. The governments are obliged to finance defensive medicine – defence of doctors etc. – instead of preventive medicine. – instead of preventive medicine. See the definitive Marxist critique of bourgeois psychology and especially of Freud’s exclusivist, Nietzschean rabbinical charlatanism in my Book 2. See also: Health-care between cuts and corruption: a victim of choice for neoliberal and monetarist fiscal federalism, May 2016 -translated April 6, 2020 in http://rivincitasociale.altervista.org/health-care-between-cuts-and-corruption-victim-of-choice-for-neoliberal-and-monetarist-fiscal-federalism-may-2016-translated-april-6-2020/ )
This would leave the management of the immediate non-abundance for other consumer products, often given as luxuries. This problem exists in fact only through a question of access, for example for new products still in limited quantities or for imported goods requiring payments in foreign currency as was the case in Cuba with the dual currency. It should be noted, however, that in a socialist regime the exchange-value of new products is rationally fixed by the cost of inputs and by the organic rate of profit of the system, without any monopolistic private appropriation obtained by the market. The question of non-abundance is then settled by prioritization: new products – e.g. the Internet – in limited quantities and therefore first made available to the government and the public administration – efficiency, defense, etc. – and then to citizens collectively – e.g. the public service. – then of the citizens collectively – e.g. the Internet Cafés, or even before that, the neighborhood token laundries – then by personal purchases via the savings account allowing the purchase of durable goods.
In the Section For Cuban Socialism of my old website www.la-commune-paraclet.com , I proposed the creation of what is now called public digital money through a multifunctional card – which would extend in a socialist way the current function of the Cuban Libreta. But it is always necessary to distinguish rigorously between money and credit, otherwise there is a much greater risk than the one resulting from the falsifications of Irving Fisher, who speculatively confused the two and today materializes in liquidity and the QE of the capitalist central banks.
This would be based on the form taken for each era of redistribution by the structure of the “net aggregate income” of households. A checking account would correspond to the individual wage that must finance the daily personal consumption CHOICES; a savings account would allow an accumulation of households that would allow the consumption of durable goods that enter into and allow the realization of the reproduction cycles. This would allow – in a situation of full socialist employment – to manage without slippage the money supply and thus the inflation-deflations and, at least in part, the exchange rate. To this would be added the accounts corresponding to institutionalized savings, Workers’ Funds – the 5 branches of the Social Security system – and the Productivity Fund, the latter having to allow, if necessary, the necessary restructuring of enterprises within the framework of the management of employment basins between the recurrent cycles of the RTT v. All together.
To this would also be added the public credit that concerns enterprises and cooperatives and that would no longer be managed by the uniform central bourgeois interest rates but, within the parametric framework of the RS-ER Equations, thanks to the organic link of the offices of the public central bank with the sectors, the sub-sectors, the branches of industry and the sectors thanks to the modulation of their prudential ratios. This would facilitate the harmonization of the SR-RE quantitatively and by exchange-value-price according to needs, thus always maintaining the real equilibrium given by the Equations. With the 5G – I had once proposed the traceability by the wonderful barcodes – one can obtain an instantaneous and online idea of the evolution of the reproduction that can be adjusted immediately. Excepting however the sectors or part of the sensitive sectors to be protected from the interference of foreign services, in particular the sub-sectors of armaments and defense without excepting the strategic research.
We notice that reinvestment without credit only allows stationary reproduction – SR. Credit allows and accelerates Enlarged Reproduction. But if credit is an anticipation, there must be a material basis for this anticipation. This presupposes stocks – overproduction – or in any case an installed overcapacity of production that can meet the demands of the new industries that are being set up. Today, normal production is around 80% of installed capacity. This also implies access to foreign markets – which raises the question of macroeconomic competitiveness (as a reminder, productivity is microeconomic and concerns the production function). Indeed, macroeconomic competitiveness determines the exchange rate, sometimes with a modulation stemming from the suzerain status of certain reserve currencies, which is not without danger, as demonstrated by Triffin’s paradox, as well as by the inevitable drift of monetary empires towards a balance of payments based on the money printing press, which is increasingly taking precedence over the balance of trade, which in turn refers to the real economy. This drift leads to the abandonment of industry for services, in particular speculative services, whereas services should normally serve industry. The coherence and independence of the Social Formation are thus called into question, especially in the context of free trade and without recourse to the new definition of anti-dumping. It is therefore advisable to avoid the internationalization of one’s own national currency and to prefer bilateral credit lines to quickly facilitate trade. Indeed, it is not rational for a given country to have to trade, often in a subaltern way, with the US, or even with the EU, to earn the dollars needed to trade with third countries! While waiting for the democratic reform of the IMF and its Special Drawing Rights – SDRs – it seems to me preferable to resort to bilateral credit line swaps in central banks based on the prior negotiation of medium and long term import-export, knowing that these swaps could be multi-nationalized by the negotiated use of a basket of currencies, for example the one that informs the renminbi today. These swaps require a negotiation on the import-export to be covered, but not only do they cost nothing, but they can be set up very quickly.
Of course, any economy is a matter of transformation and therefore of available surplus energy and food. This is even more true for the modern economy which is more energy consuming than the classical industry. The demonization of CO2 is an absurdity that imposes all sorts of gymnastics to mitigate its costs. See: Paris Agreement, climate, decarbonisation and the problems with ETS = the climate crime against emerging countries and against the vast majority of humanity to be frozen at the unequal development-level of 1990, in http://rivincitasociale.altervista.org/paris-agreement-climate-decarbonization-and-the-problems-with-ets-the-climate-crime-against-emerging-countries-and-against-the-vast-majority-of-humanity-to-be-frozen-at-the-unequal-development-lev/
Finally, in order to fully grasp the socialist mode of production and its unparalleled contribution to human emancipation, we must follow Marx in distinguishing between the Domain of Necessity – collective ownership of the Means of Production and of « social surplus-value » and the obligation for all those who are able to work to work their fair share for a more or less equal wage and for the same access to public citizen services – and the Domain of Socialist Liberty where everything that is humanly and socially tolerable is permitted, except for calling into question the common bases of the Domain of Necessity. For this domain is the one that provides the material bases of the Domain of freedom and socialist emancipation, including the free time acquired by the recurrent cycles of the RTT. In my Synopsis of Marxist Political Economy, I said that the Ideal would be a libertarian Communism, hastening to underline that if the expression was redundant, it had undoubtedly its utility to better define the Domain of freedom and socialist emancipation.
Paul De Marco
Appendix 15/07/2021 : Bourgeois economic modelling, Paul Romer, and the return of planning ?
The Trouble With Macroeconomics Paul Romer Stern School of Business New York University Wednesday 14th September, 2016 in https://paulromer.net/the-trouble-with-macro/WP-Trouble.pdf
Paul Romer warns his bourgeois economic colleagues about the decoupling of their « dismal science » and Realty. Can you make sense of his article without having Marx’s Simple and Enlarged Reproduction Schemas in the back of your mind? Honestly? And he did not touch on « inflation » …
For sustainable finance to work, we will need central planning
Systemic guidance will help public and private sector investors to distinguish good from bad Max Krahé https://www.ft.com/content/54237547-4e83-471c-8dd1-8a8dcebc0382
Recently the Financial Times published this article. Quotes :« Tackling climate change requires transforming at least five provisioning systems: energy, transport, buildings, industry and agriculture. … Instead of waiting for the market to speak, a planning body — whose composition and accountability require careful consideration — should formulate plans for each of the five systems, which should then be translated into project-level criteria for sustainable investments. »
Note that planning should not be about financial sustainable investments and centered on 5 preferred sectors only. Social and environmental planning should involve all the sectors and subsectors given by Marx’s SR-ER Equations. But, one can only applaud to the discovery of the sectoral inter-relations. What about including a good human environment in the equations based on full-time full-employment? It would make everything else so much easier …