Money in Communism - A marginalist approach - a possible critique to Marx

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Apostolis Xekou...
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Jun 16 2013 01:30
Money in Communism - A marginalist approach - a possible critique to Marx

Hello everyone, I am working on creating a new currency/ies as a way to help people deal with the capitalist crisis.
I am generally influenced by Marx's theory of exploitation, and the notion that workers do not control the products of their labor.
Because my previous knowledge was mostly mathematics, I ended up creating a marginalist model of the economy.

The main point of the model is that exploitation arises because workers do not have the money at the time that the factory needs to be created to build it themselves and thus have to accept the conditions of the capitalist.

In my opinion, this is in contrast to Marx which specifies that the origin of exploitation is private property of the means of production. The fact that the means of production are owned by capitalists is because they have a lot of money.

This distinction is inessential in capitalism because there is a continuous cycle of transformations from money to means and to money etc. but it is essential in a communist society in which money exist.

By Communism, thus, I refer to a system where all the means are controlled by worker councils but which uses money and the market to exchange commodities.

In such a case, people that have money at a specific time will dictate whether a new factory will be created or not by lending money to the corresponding worker cooperative. Thus communism will have little difference to the current capitalist system, the capitalist class will emerge from the workers to exploit them. The capital class in this case is not the owners of the means of production but the owners of lots of money, ie promises by the workers that they will produce what the capitalists want, when they want it.

It is because of this that I am working on a new definition of money ( a sophisticated barter network) that tries to block the ability of money to self-replicate.

I am interested in critiques from Marxists. I understand that this is going to be a bit difficult because of the different frameworks (marginalist / theory of value) but the basic ideas are quite simple.

redsdisease
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Jun 16 2013 03:45
Quote:
a communist society in which money exist.

eek

Apostolis Xekou...
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Jun 16 2013 10:00

Have you looked at this ?

In my opinion, there will always be scarcity, so there will always be a need for money.
The main problem in a society where resources are scarce is how it finances Capital, MoP.

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Khawaga
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Jun 16 2013 14:31

And some people will always be out of money in such systems.

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Agent of the Fi...
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Jun 16 2013 15:19

There's enough food produced to make every single person on this planet overweight, yet billions still go hungry and half of that food becomes wasted. Is it scarcity or capitalism?

radicalgraffiti
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Jun 16 2013 16:17

the idea that money is a sensible way to deal with scarcity is pure ideology.

Apostolis Xekou...
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Jun 16 2013 16:41

@radicalgraffiti
It is true that money is one way of dealing with scarcity. I would like to hear about other ways of distributing resources to the people and start criticizing specifically the things one doesnt like.

Qualities of a distribution system are:
a) distribute according to the effort spent
b) give incentive for workers to create useful things for others
c) distribute things according to the needs of the people , possibly in contrast to a)
d) security qualities:
1) whether it allows classes to emerge again

e) bureaucracy/decentralization qualities: (probably part of d) too)
1) does it require a centralized mechanism to handle the distribution?

We cannot forget that the problem of distribution is a tricky one and we must think things carefully.

@agentFI
Scarcity is not in the food produced, it is in the fact that most of us would prefer not to work.
Even if we worked 1 hour per day for our basic needs, there would still be a need for money or another distribution system.

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Jun 16 2013 22:15

Hi there. If there's going to be a decent discussion about your ideas, we're going to need a lot more detail than what you gave us, because as it is nobody has enough information to understand what your vision is.

Apostolis Xekou...
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Jun 17 2013 01:46

First, I hope that the people who downvoted my reply not to be anarchist communists or council communists, because then it would seem that they reject their own ideas. Both propose their own kind of distribution and in my reply I accept both as possible solutions, even if I might criticize them.

After having a thorough read of the article I mentioned in a previous reply, I have a better understanding of how Marx thought of labor-checks, as conscious enumeration of value by the workers, instead of being controlled by the value law of capitalism.

I want to make 2 remarks.

Firstly, the statistically average labor time required for a production process will not correspond to the price set by the councils. Prices will continue to be determined by supply and demand despite having the councils as intermediaries in the decision of the prices.

In that sense, a market will continue to exist, there will be an exchange value of commodities.

Secondly, there is a problem with those ideas and that is complexity.

How will prices be determined? Will workers accept the prices and decide to work on these prices? What happens if consumers change preferences? Prices will have to change too. That requires that worker delegates continuously agreeing on new prices. This is inflexible. Even if Russia didn't have democracy, nor socialism, it is important to incorporate some of the problems that were found there.

There are some anarchist schools that have this critique on state communism/capitalism but it holds in the same way with council communism.

It is important though to note that having a market doesn't lead to capitalism. The market can act as a tool for information propagation of the needs of the people and as a means to find the value(in the marxist sense) of a commodity. The problem with capitalism is not the market.

It is the currency system or rules of the market that leads to the social relations in the factories. It is the same currency system that leads to the means of production owned by the capitalists and thus lead to exploitation.

The main problem ,thus, that I want to solve is find a correct currency system. We need to build a market that blocks the circular transformation of money to capital goods , to commodities through the exploitation of people back to money and so forth. The rules I propose require marginalist technical knowledge, I will post the document when I finish it.

If the labor-checks proposed by the council communists are not transferable, then that market will not lead to capitalism as well. If on the other hand they are transferable, then this is an example in which workers own the factories but capitalism still exists, thus providing evidence that the problem with capitalism is not originating in the private ownership of the means of production.

As I said in my previous reply, I am not a market fundamentalist. If other solutions are proposed, I will analyze them on an equal ground.

radicalgraffiti
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Jun 17 2013 02:46
Apostolis Xekoukoulotakis wrote:
@radicalgraffiti
It is true that money is one way of dealing with scarcity.

no it is not, no one has ever decided to implement money in order to deal with scarcity, rather scarcity is a post facto justification for money, and a bad one if you consider the results in practice.

Apostolis Xekoukoulotakis wrote:
I would like to hear about other ways of distributing resources to the people and start criticizing specifically the things one doesnt like.

Firstly you appear to be assuming a separation between those with the resources and the people.
For things for which demand exceeds production there is rationing, everything else can be taken freely.

Apostolis Xekoukoulotakis wrote:
Qualities of a distribution system are:
a) distribute according to the effort spent
b) give incentive for workers to create useful things for others
c) distribute things according to the needs of the people , possibly in contrast to a)
d) security qualities:
1) whether it allows classes to emerge again

e) bureaucracy/decentralization qualities: (probably part of d) too)
1) does it require a centralized mechanism to handle the distribution?

We cannot forget that the problem of distribution is a tricky one and we must think things carefully.

@agentFI
Scarcity is not in the food produced, it is in the fact that most of us would prefer not to work.
Even if we worked 1 hour per day for our basic needs, there would still be a need for money or another distribution system.

it is is fundamentally to communism that production and distribution are arranged "from each according to ability, to each according to need" that is to say people do things they are suited to, and revive from society what they need in the broadest sense. There is no attempt to "distribute according to the effort spent" not only is it impossible to calculate how much effort any one made, but such such attempts hinder peoples creative abilities and discourage innervation.

Apostolis Xekou...
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Jun 17 2013 03:08

A small response:

1) Artificial scarcity is not the same with natural scarcity.
2) I do not assume a separation or the opposite.
3) It seems you have chosen c) as the definition of communism even though Marx speaks of 2 different levels of communism. (read the article)

Most importantly, political and economic theory is not something we should treat the same way some people treat the bible.

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Jun 17 2013 06:13

Hi again. smile I'm still not quite sure what you're proposing. Is it different from what's usually called market-socialism (sometimes also called mutualism)?

Quote:
If the labor-checks proposed by the council communists are not transferable, then that market will not lead to capitalism as well. If on the other hand they are transferable, then this is an example in which workers own the factories but capitalism still exists

I think what you mean by non-transferable is that the buyer uses the labor-check to purchase something, but the labor-check does not transfer to any seller -- but instead becomes void after being used once to purchase something? Meaning there is no way to make profit? If that's the case, then this is at least one major difference from market-socialism / mutualism. Sounds more like collectivism.

Apostolis Xekou...
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Jun 17 2013 13:27

This is the group I participate to:
Open Value Network

I haven't posted my proposal to that group either but you can understand the context.

@ultraviolet

Before proposing something, I start by saying that Mutualism leads to Capitalism. But despite what others might say, it is not the existence of the market that makes it capitalist but the currency they use to value commodities.

A critique of Proudhon by marx can be founded in the article i linked. I agree with that critique by Marx.

But when David Adams talks about council communism, he tries to differentiate the conscious set of prices from councils to that of the market mechanism. Here is where I say that the prices of products will still be affected by market forces. The only way to avoid that would be to have forced labor.

It is only then that I point out that there is nothing wrong that there exists a market (conscious or not) in council communism. Marx by proposing the use of labor-checks is a market reformist, not a market abolitionist. Of course, in Marx's market there is no commodity fetishism.

>>I think what you mean by non-transferable is that the buyer uses the labor-check to purchase >>something, but the labor-check does not transfer to any seller -- but instead becomes void after >>being used once to purchase something? Meaning there is no way to make profit? If that's the >>case, then this is at least one major difference from market-socialism / mutualism. Sounds >>more like collectivism.

You are correct. But the use of this kind of currency, labor-checks is proposed by Marx and Council communists, not me.

In my opinion, there are some technical problems with labor-checks, how they are issued, who verifies the production output of each factory, double spending. So there could be multiple frauds with labor-checks.

I will also propose a different scheme so that there is no profit. The reason of this post was to understand the views of Marxists toward money. After reading David's article I think I have a pretty good grasp now.

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Jun 17 2013 17:11

If a society is using these non-transferable labor checks, how can it be ensured that the labor-checks are non-transferable? What's to stop the person who works in a store from taking some (or all) of the labor-checks that people have handed in to buy things, and using those labor-checks again? I know they aren't supposed to do that, but how could it be prevented? (And if it can't be prevented, then profit from sale - and hence capitalism - can't be prevented.)

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Jun 17 2013 17:36

Apostolis Xekou,

My main issue with these schemes is that they are unimaginative. Basically these schemes assume that work and the rest of life ought be separated. This is most apparent when you speak of labour-vouchers. Basically, such a society must determine what activities receive credit and which don't, this is fucked up and not communism, even if some old beard said it was sometime ago.

Example;

I work two hours producing widgets and receive two labour vouchers, later, when I go home, I end up helping an elderly neighbour with their chickens for three hours and receive none. This is justified by some weird arbitrary idea of what work is and what it isn't.

As a communist, I aim for a society that has no such boundaries between work and life. I call these schemes, Parecon among them, unimaginative as they struggle to see past the fog of capitalism, still stuck in its absurd understanding of what is productive and what is not. To me, such designations have never been clear.

Apostolis Xekou...
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Jun 17 2013 18:20

@ultraviolet

You are right. So even if labor-checks are theoretically correct, practically they have problems.
The rules of a scheme need to be able to be easily checked, otherwise it is of no use.

@bozemananarchy

You are right as well. That of course doesn't mean that a scheme shouldn't exist.

Furthermore, a scheme doesn't need to be formal, it could be informal or some parts formal while others informal. There are people in the Open Value Network that emphasize this opinion.
My effort is to make sure that we don't have capitalism. Other than that, many complementary forms of organization are possible.

@ultraviolet

My effort is in creating a scheme to be used from the internet. It needs to be tested and checked.
I have already found "security-cheating" holes in my scheme as well, so I'll need to work on it. When I finish it, I'll post it in the Open Value Network.

Apostolis Xekou...
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Jun 17 2013 18:44

@bozemananarchy

In communism there will be a change on the notion of the individual and on the notion of society or community.
People will find happiness in helping others.
Thus we agree on that. My opinion though is that some parts of individualism will still exist and I wouldn't like a world which rejects individualism.

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Jun 17 2013 19:10

But what is the connection between individualism and money? Surely you can have the former without the latter.

Apostolis Xekou...
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Jun 17 2013 19:38

Would you like to share how this would happen?

example:
1) If you want to go to buy a t-shirt with a special logo that doesn't exist, who would create that t-shirt for you?
2) if people need m amount of violins but the people that like working in violins are less than required, how will the m violins be built?
2) the same for any product, food for example.

Will someone be able to convince a person to build something for him without something in return for all the spectrum of production needs from luxury products to food?

radicalgraffiti
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Jun 17 2013 20:32
Apostolis Xekoukoulotakis wrote:
A small response:

1) Artificial scarcity is not the same with natural scarcity.

money enforces artificial scarcity and worsens situations of natural scarcity

Apostolis Xekoukoulotakis wrote:
2) I do not assume a separation or the opposite.

For a society to be communist their cant be a separation between the people who make decisions and the people who live with them. so the question is how do we share this amongst our selves, not how do we decide who to give this stuff to.

Apostolis Xekoukoulotakis wrote:
3) It seems you have chosen c) as the definition of communism even though Marx speaks of 2 different levels of communism. (read the article)

Most importantly, political and economic theory is not something we should treat the same way some people treat the bible.

firstly i don't really give a shit what marx defined communism as, i am not a marxist and although he was a significant contribute the communist movement he was also massively wrong about some stuff, he is not some profit dictating the true vision of communism that all communists must follow, and its hilarious for you to appeal to his authority in that way then say (correctly) that political and economic theory shouldn't be treated as religion.

radicalgraffiti
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Jun 17 2013 20:35
Khawaga wrote:
But what is the connection between individualism and money? Surely you can have the former without the latter.

personally i think money hinders individuality and turns it into a superficial commodity, simply a matter of consume choice and wealth

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Jun 17 2013 21:57
radicalgraffiti wrote:
Khawaga wrote:
But what is the connection between individualism and money? Surely you can have the former without the latter.

personally i think money hinders individuality and turns it into a superficial commodity, simply a matter of consume choice and wealth

Yup, that's what I think as well. Without money we can actually truly explore our individuality. Money is a straightjacket.

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Jun 17 2013 22:15

Your obviously making a leap of faith to say that we would be abandoning individualism if we also abandon money. How does money make us any more individualistic? Because it separates us from each other? That's not individualism. That's isolationism. It's a-social. And it's misery.

I think it's pretty obvious by now that what your advocating sounds much like self-managed capitalism. When you say...

Apostolis Xekoukoulotakis wrote:
First, I hope that the people who downvoted my reply not to be anarchist communists or council communists, because then it would seem that they reject their own ideas.

...its just completely laughable. We reject our own ideas? You sound like another poster that was here briefly (forgot his/her name) that kept saying the same thing. And we was engaged in the most longest and ridiculous debate that went nowhere. If it was our idea, there would be unanimous agreement, but there isn't. So it's telling a different story from what you imagined. You might perhaps want to re-evaluate what you think is the anarcho-communist idea.

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Jun 18 2013 00:19
Apostolis Xekoukoulotakis wrote:
.
I have already found "security-cheating" holes in my scheme as well, so I'll need to work on it. When I finish it, I'll post it in the Open Value Network.

Post it here on Libcom, too, please. About how much longer until it will be ready? (Is it a matter of days, or weeks, or months?)

As much as many of us on Libcom.org might not like it, I think it's naive to assume that post-revolution all communities in the world will decide to abolish money, at least not in the first generation or two. I think we can expect to see a diversity of implementations of classless, egalitarian, non-hierarchical, directly democratic, self-managed systems. A number of those will probably utilize some sort of currency system. It's unlikely we'll be able to, through debate alone, convince each of these societies to go totally moneyless. (That's something that's more likely to happen with time; as the years go by those societies may decide to change if they observe that things are going better in the moneyless societies.) What we have a much better chance of doing is convincing those societies which are firmly decided on using money to at least use it in a way that ensures currency is non-transferable and thus does not allow for profit or accumulation. If someone can figure out a way of doing that, then that's a good thing.

Apostolis Xekou...
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Jun 18 2013 01:13

People like to talk about Communism and moneyless societies when they can't really have a conversation that accepts different views. This is not only a problem of libcom.org . It is a problem of all organized political groups. Other views are considered hostile. This is rampant to all groups ranging from leninist to anarchist.

In my opinion those groups will lead nowhere since they don't respect basic human rights. It is a pity that libcom continues this bad tradition.

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Jun 18 2013 07:15

So just because people disagree with you we "don't respect basic human rights?" You are a bit full of yourself; have you considered that people might have considered this quite a bit, discussed it several times already on this very site? Your view is something that I see from the right; if you disagree you are oppressing them, an authoritarian for pointing out problems and logical inconsistencies. There are plenty of discussions here about communist society with people disagreeing quite considerably. But nah, don't try to read anything, just call everyone closeted Stalinists.

yourmum
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Jun 18 2013 12:01

"The fact that the means of production are owned by capitalists is because they have a lot of money."

lol. no, its because the means of production are capital that capitalists have a lot of money.

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Jun 18 2013 15:03
Quote:

People like to talk about Communism and moneyless societies when they can't really have a conversation that accepts different views. This is not only a problem of libcom.org . It is a problem of all organized political groups. Other views are considered hostile. This is rampant to all groups ranging from leninist to anarchist.

In my opinion those groups will lead nowhere since they don't respect basic human rights. It is a pity that libcom continues this bad tradition.

So confused here. . .

It would seem people have engaged with you, most of us quite respectfully and calmly. Its obvious that your ideas are out of step with a lot of folks here, but no one is asking you to leave or stop engaging in the conversation, rather, you continue to be offered important critiques to your ideas. Critiques, when delivered calmly and respectfully, should only strengthen an argument that has merit.

If those critiques continually weaken it, and the defence of those ideas begins to fall-back on personal attacks, then this is a great sign that you need to at least go back and do some reconsidering of your original argument.

To be clear, your personal attacks so far are;
-The opposing posters don't even understand their own viewpoint so their arguments are invalid
-The opposing posters are authoritarians with no respect for humanity

The former personal attack was trotted out by yourself almost immediately and it is indeed, offensive. Its somewhat surprising that me, or anyone else cares to continue this unpleasant interaction.

I for one will have to withhold responding to the counterpoint (the one that wasn't a personal attack) until you publicly consider your own part in derailing the shit out of your own thread with your personal-attack crutch.

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Jun 18 2013 21:44

I think that in society that emerges from capitalism through a proletarian social revolution, i think there would be certain things that would likely be high priorities of the movement. to begin with, an expansion of systems of social provision, such as comprehensive free health care, child care, a richer system of education to provide better prospects of development of personal potential, and a variety of other things. on the other hand human culture has developed to the point that people want a wide variety of things, and there are variations from person to person, community to community, what people want. So the idea is in part to eliminate deprivation & insecurity, & to expand positive freedom.

That said, I agree that scarcity is inevitable. We don't want to do any more work than we have to. So there is going to be a finite pool of work hours & a finite pool of various skills available. So we want to ensure that the work we do is not wasted but accurately reflects the desires of the people. I do think this would require some system of prices to encapsulate actual social opportunity costs, which depend on what the real preferences of people are.

But I don't see why this has to be a market system. Apostolis, have you read work on participatory planning, such as The Political Economy of Participatory Economics, by Albert & Hahnel? They propose a way to obtain accurate social opportunity costs without market exchange. Their full proposal would also have roughly equal remuneration (share of the social product) per hour of work, for that portion of production distributed to workers for their effort, akin to Marx's labor time proposal in Critique of the Gotha Program.

In their proposal we can think of the social product as being divided into sections, a section that is provided as a free public good via systems of social provision, and additional output distributed based on personal consumption entitlements, where these are acquired in various ways, such as direct public allotment for children, for work effort, etc. But their proposal is for a planned economy, not a market economy.

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Jun 18 2013 22:33

hi syndicalistcat. my question for you is the same as it was for apostolis. how to ensure the currency (or labor-cheques or whatever you want to call it) is non-transferable? i.e. that the currency used to purchase something cannot be used again by the whoever collects the currency after purchase.

if this can't be prevented, then there will be profit, and capitalism.

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Jun 19 2013 01:24

there doesn't really need to be currency. you could have something like debit cards. anyway, the key issue is really how production orgs gain control over means of production. for a new dominating class to emerge they'd need to have some way to gain control of means of production. if the social planning process allocates these only to self-managing worker production organizations in the context of a socialized economy, well, how can some new dominating class emerge?

to put this another way, profit can only emerge if there is already a class division in control over means of production. that's because profit assumes that someone other than the workers or the masses own the means of production, that there is a minority class who have a class monopoly over the means of production & can thus force workers to agree to only receive part of the revenue from sale, wages, and the difference between money costs & revenue is where profits lie.

In a self-managed market cooperative society, there is not profit in this sense but there is the problem that worker owned firms will be driven to seek surpluses to survive. the worker firm receives the surplus but is forced thru competition to re-invest & thus to seek surpluses, and inequality will emerge between more and less successful competitors. If the means of production are not collective private property of workers but of the society, and there is no such competitive dynamic, then the situation is different.

i think in the early phases of the revolutionary transformation there is likely still to be currency, and probably also still elements of market exchange. that's because the masses will deal with those things first that seem to people to be the main evils of the present society. so this means replacing the state with some new more direct form of governance, worker takeover & collective management & re-organization of industries, dealing with pollution, ensuring people's needs are met, and so on. it's necessary to keep in mind the mass struggle context of this transformative process.

in the Spanish revolution of 1936, we know that the CNT unions during the summer of 1936 began moving to end market competition and merge the various firms, driving towards a planned economy as a goal. A goal that was thwarted by the Popular Front collaboration.

but if you want to not have any price system, well, I think there's no way to have an effective economy on that basis. the society will need a measure of social opportunity costs to be able to distribute resources for effective outcome.