Theft or exploitation?- a review of Stolen by Grace Blakeley — Michael Roberts

I think that there are at least three things going on, first involving property as theft through forcible enclosure of the commons, regardless of whether this is made legal by institutions controlled by the thieves as a veneer. 

Secondly, I believe that the classical view of value as produced by labor is essentially correct, regardless of the controversy over the statement of it, which is largely semantical. These differences led to distinctions that distracted enough from the actual issue to allow the neoclassical identification of value and price and the marginalist theory of value creation implying just deserts based on relative marginal utility, productivity, and contribution. 

The marginalist model assumes relatively free markets in everything, which is unrealistic. The standard retort is "government." Of course, it is true that "government" is a key factor owing to the asymmetrical distribution of power based on institutional arrangements that the ownership class, including the top managerial class, controls.

This veneer of legitimacy enables the extraction of surplus value from workers along the lines that Marx set forth. This was a characteristic of the transition from the agricultural age in which feudalism workers were either slaves or serfs and the beneficiaries were the landlords.  After the transition to the industrial age characterized by the dominance of industrial capital, workers were supposedly "liberated" from unpaid work in the case of slavery or underpaid work in the case of serfs and tenant farmers. Marx attempted to show how surplus value was still expropriated through creation of surplus value in monetary production and its distribution to the owners of the means of production, the capitalist class.

Michael Roberts' post is a short view of UK political scientist and economist Grace Blakeley's new book, Stolen, which focuses on financialization. The so-called profit created through financialization is different from the first two factors, enclosure of the commons and extraction of surplus value.

This third factor is rent extraction after enclosure and the subsequent legal institutionalization of private property and also after the expropriation of surplus value in the monetary production process. The rent extracted by finance is in addition to the former two, redistributing income upward. Michael Hudson is the go-to economist on this subject, and he is a Marxism economist if not a "Marxist," where "Marxist" signifies an ideologue. Similarly with David Graeber, the author of "Debt: The First 5000 Years."

So it is necessary to distinguish all three factors in exploring inequality as apparently excess skewing of distribution toward the top, exceeding reasonable individual contribution given a social environment in which the relationships of elements of the system are as important in analysis as the elements and may be more significant at the macro scale.

This is the basis of economic rent — land and natural resource, rent from real goods production in a monetary production economy,  and financial rent from finance and fintech — and it should be taught in Econ 101 rather than using wildly unrealistic gadgets as teaching tools to promote an ideology that underpins the status quo. The newly published MMT textbook is a good start in this direction, laying down the basics needed for correct analysis of how a modern monetary economy operates in tandem with finance, along with its opportunities, challenges, and limitations and constraints.

Michael Roberts Blog — blogging from a marxist economist
Theft or exploitation?- a review of Stolen by Grace Blakeley
Michael Roberts