Probably the salient point: "As Wolff has said: 'If you want to understand an economy, not only from the point of view of people who love it, but also from the point of view of people who are critical and think we can do better, then you need to study Marxian economics as part of any serious attempt to understand what’s going on. Not to do it is to exclude yourself from the critical tradition.'”I would add, at the very least. Marx and Engels, and subsequent Marxists and those influenced by Marx are still highly relevant and they are becoming more so as capitalism is more and more in crisis owing to neoliberalism, neoliberal globalization and the challenge of climate change. Change is coming.
Michael Roberts Blog — blogging from a marxist economist
Understanding socialism
Michael Roberts
The difficultly with approaching Marx today is twofold. First, he is lightening rod, so most things written are either by proponents or opponents.
Secondly, Marx was a philosopher in his own right and a public intellectual in this time as a journalist and writer of political tracts in the context of the contemporary debates. It would be a mistake to consider him either only from the point of view of economic or even as "an economist."
Marx lived before economics had become a separate academic discipline comparable to the present day. He was a philosopher, social and political activist, political theorist, historian, and one of the founders the disciplines that later became sociology and economics. In fact, when I was grad student in philosophy, I studied the aspects of Marx's contribution other than to economics.
This type of broad thinking falls largely to the philosophers that preceded him. Subsequent to Marx, the fields of knowledge became highly specialized and silos began to form.
23 comments:
Only thing you need to understand is that there is no replacement for commodity production. That leaves social democracy, "kinder/gentler capitalism", as possible reforms to the status quo.
Criticism is easy, fixing problems is harder.
If Wolff were raking in as much dough as Peterson, I'd be shitting on him too, just so you know.
Understanding socialism presupposes understanding profit
Comment on Michael Roberts/Tom Hickey on ‘Understanding socialism’*
“The New York Times magazine has described Richard Wolff as ‘probably America’s most prominent Marxist economist’.”
From the word prominent alone you know that you are out of science and in the midst of the usual journalistic propaganda hype. The applause troll Michael Roberts tries to arouses even more enthusiasm by quoting Wolff: “If you want to understand an economy, not only from the point of view of people who love it, but also from the point of view of people who are critical and think we can do better, then you need to study Marxian economics as part of any serious attempt to understand what’s going on.”
No, you don’t because Marx’s economics is refuted on all counts and Wolff only recycles long-dead stuff: “Wolff concentrates on Marx’s key discovery about capitalism, namely the surplus value, which is what employers appropriate above what they pay for wages.”
The fact of the matter is that Marx NEVER understood what profit ― the foundational magnitude of economics ― is.#1 Neither did his followers to this day.#2 The rectification of Marxianism consists of the replacement of the key-concept of exploitation by cross-over exploitation.#3
Wolff sticks to surplus value and this tells one that he is a rather feeble thinker. Marx got economics wrong, so he can safely be forgotten. Same for Wolff’s policy proposals which have no sound scientific foundations.
Oh no, says the philosopher Tom Hickey: “He [Marx] was a philosopher, social and political activist, political theorist, historian, and one of the founders the disciplines that later became sociology and economics.”
True, but irrelevant.#4 Marx’s economics is provably false = scientifically worthless and this makes it very probable that the rest of his intellectual output was also proto-scientific garbage.
Egmont Kakarot-Handtke
* Michael Roberts Blog
https://thenextrecession.wordpress.com/2019/12/06/understanding-socialism/
#1 Links on Karl Marx
https://axecorg.blogspot.com/2019/09/links-on-karl-marx.html
#2 Dear idiots, Marx got profit and exploitation wrong
https://axecorg.blogspot.com/2019/02/dear-idiots-marx-got-profit-and.html
#3 Capitalism, poverty, exploitation, and cross-over exploitation
https://axecorg.blogspot.com/2018/04/capitalism-poverty-exploitation-and.html
#4 Perhaps the debunker Miles Mathis is closer to the historical facts than the philosopher Tom Hickey: “In that sense, Marxism is probably the greatest propaganda success of all time. The smashing success of this early major psy-op has led to everything we have seen since, including the sharp rise of all forms of misdirection. The upper class discovered that most people could be fooled most of the time, and that this fooling allowed for complete control of society.”
http://mileswmathis.com/marx.pdf
Miles Mathis... google says he's a loon.
It's easy to debunk history. Believing that Pi = 4, not so much.
Bob
The crucial point with Marx/Socialism/Communism/Capitalism is whether Marx understood how the monetary economy works. This presupposes an understanding of the foundational economic magnitude profit. The point is that Marx and Marxians have NO idea what profit is. For the proof see
Profit for Marxists
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2414301
So, Marxianism is scientifically worthless for 150+ years. Maybe Marx is philosophically relevant, in any case, he is irrelevant for economics understood as science.
Note in passing that philosophy has degenerated much since the ancient Greeks and has become irrelevant itself. The practical proof is that philosophers readily board an aircraft that has been constructed by scientists/engineers but would refuse to board an aircraft that has been constructed by philosophers.
Now, the philosopher Tom Hickey claims: “I would add, at the very least. Marx and Engels, and subsequent Marxists and those influenced by Marx are still highly relevant and they are becoming more so as capitalism is more and more in crisis owing to neoliberalism, neoliberal globalization and the challenge of climate change.” The idea that philosophers or Marxists or economists can solve any of humanity’s problems is downright idiotic.
To repeat, Marx is scientifically irrelevant. And whether he gets many likes from folks like Richard Wolff, Michael Roberts, Tom Hickey and the brain-dead journalists of the New York Times is a scientific non-event.
The fact is that Marx got profit wrong and this he has in common with MMTers. The fact is that Marxians, MMTers, and philosophers like Tom Hickey are too stupid for the elementary algebra that underlies macroeconomics. The proof has been given elsewhere.
To expect from folks who cannot put 2 and 2 together a contribution to the advancement of science, culture, and civilization is the very definition of madness.
Egmont Kakarot-Handtke
Marx was concerned with the operation of individual businesses, hence the profit of the firm. He was looking at microeconomics. That being said, he wasn't an economist by today's standards.
Can science come to a conclusion that a relationship (employer/employee) is exploitative?
Parasitism in biology is the closest analogy I can think of, yet that is meant as a description of its function, than a value judgement.
As Wolff often says, to understand something you need to look at various points of view. Marxism is critical of Capitalism; that is a point of view, a perspective. There are several other points of view with regard to economics, it doesn't make them scientific. If it is value laden, it precludes it from being science.
Bob
You say: “Marx was concerned with the operation of individual businesses, hence the profit of the firm. He was looking at microeconomics.” and “Can science come to a conclusion that a relationship (employer/employee) is exploitative?”
Yes, Marx generalized what can be observed in a single firm, that is, methodologically Marxianism is one big Fallacy of Composition from Marx onward to retarded Marxians like Richard Wolff and the applause trolls of the NYT/econoblogosphere.
If one does not understand macroeconomic profit one cannot understand exploitation and cross-over exploitation.
Here is the abbreviated argument.#1
The business sector is split into two identical firms and firm 1 is supposed to cut the wage rate W1 arbitrarily by half. From this follows that the market-clearing price P declines if all other variables are unchanged. Firm 2 is affected because total income Yw falls and with it consumption expenditures C and the market-clearing price P.
The reduction of the wage rate W1 increases the profit of firm 1 and produces a loss in firm 2. When we look alone at firm 1 we see what Smith, Mill, Ricardo, and Marx have seen before, to wit, wages down ― profit up. This fits the time-honored stereotype of wages and profits as antagonists.#2
The error/mistake/blunder of economists since the Classics has been to generalize what is true for a single firm and this is known as Fallacy of Composition.
If profits have been zero in the initial period because of budget-balancing C=Yw then firm 2 makes a loss which is exactly equal to firm 1’s profit. By consequence, the arbitrary wage rate cut of firm 1 does NOT increase the profit of the business sector as a whole but only REDISTRIBUTES profit/loss between the firms that constitute the business sector.
Seen from the perspective of a single firm, the antagonism of wages and profits is absolutely real. This, though, is parochial realism. The complete picture reveals that firm 1 is better off to the disadvantage of firm 2 and the workers of firm 2 are better off to the disadvantage of the workers of firm 1 because at a lower market-clearing price they absorb a bigger share of output O with their unaltered income.
The situation of the business sector AS A WHOLE is unchanged and the same is true for the household sector AS A WHOLE. If there is exploitation it happens WITHIN the sectors. A partial wage rate change leads only to a redistribution of profits between the firms and of output between the workers. So, in real terms, the exploitation of the workers of firm 1 benefits the workers of firm 2. The capitalist class as a whole does NOT benefit from the exploitation by the owners of firm1 because the profit of firm 1 is exactly equal to the loss of firm 2.
So, Marx got the relationship between profit, exploitation, and class badly wrong. Marxians are for 150+ years now struck with the Fallacy of Composition. Not very smart these ‘philosophers, social/political activists, political theorists, and historians’. Time to bury them at the Flat-Earth-Cemetery in the dark corner that is reserved for the worst of all useful political idiots.
Egmont Kakarot-Handtke
#1 Capitalism, poverty, exploitation, and cross-over exploitation
https://axecorg.blogspot.com/2018/04/capitalism-poverty-exploitation-and.html
#2 Ricardo, too, got profit theory wrong
https://axecorg.blogspot.com/2018/02/ricardo-too-got-profit-theory-wrong-sad.html
Parochial realism is the perspective they are interested in. Marxists and business owners are not interested in macroeconomic explanations. Marxists want to do away with the system you describe, and business owners are concerned with their profitability, not anyone else's.
Given their specific agendas, they are following an internal logic. Science has role here, unless it can inform the Marxist how to get rid of Capitalism, or advise the business owner how to increase profit.
AS A WHOLE, the effect upon firm1 and firm2 is a function.
Just as the effect upon winners and losers in a lottery, is a function.
^science has NO role^
Bob
You say: “Parochial realism is the perspective they are interested in. Marxists and business owners are not interested in macroeconomic explanations.”
It is a matter of indifference what Marxists and business owners are interested in. The economist as scientist figures out how the economy works just like astrophysicists figure out how the universe works and it is a safe bet that they are not at all interested in what retarded flat-earthers think or want.
The first thing an economist is supposed to know is what macroeconomic profit is. Marx did NOT know it and this is why Marxianism is proto-scientific garbage to this day. Why folks like Richard Wolff, Michael Roberts, the journalists of the New York Times, or Tom Hickey are recycling Marxian proto-scientific garbage is at anybody’s guess. OK, the journalists are on the payroll of the Oligarchy. The others are perhaps only stupid. Anyway, for all of them holds Voltaire’s écrasez l'infâme,
Egmont Kakarot-Handtke
Marx was concerned with the operation of individual businesses, hence the profit of the firm. He was looking at microeconomics. That being said, he wasn't an economist by today's standards.
Umm, no. As an economist, as a philosopher, Marx was far more interested in the macro, not in individual businesses. For instance, Bill Mitchell often praises him as among the first to understand the role of aggregate demand.
If it is value laden, it precludes it from being science.
Then nothing is a science, because everything is value laden. Again a very anti-Marxist view.
Given their specific agendas, they are following an internal logic.
Marx / Macro is about how these agendas and logic add up, how they are subsumed in, presuppose a more universal logic. Science has every role here. Marxists used to - and still do call themselves "Scientific Socialists."
The problem is dogmatism and following Marx's superficial errors rather than his insights. E.g. his monetary theory was a mix of commodity theory and creditary theory, with the latter essentially predominant. But the first is more superficially attractive and easier, and his unquestionable errors are mindlessly followed. Such errors and misunderstandings had real world effect. The Keynesians and the New Dealers were to the left of the Marxists (outside of the Soviet Union), who allied themselves theoretically with the neoclassicals / right. And similarly to this day.
Marxism's belief that capitalism is exploitative, is rooted in micro. It's their raison d'être. It's central to their criticism. If they drop that claim, they lose their identity of being "marxist" critics. They'll just be regular critics.
The legacy of Marx's work is a dog and pony show. Richard Wolff is an economist according to his credentials, yet he's not doing the kind of work that Bill Mitchell has done. Some economists are researchers while others push agendas. Wolff is not here to advance science. Marx is not here at all.
It is a matter of indifference what Marxists and business owners are interested in.
Yes, but you have to answer their questions.
Question:
How do we eliminate unemployment?
If we eliminate unemployment, what will be the consequences?
EKH answer here:
MMT answer here:
Marxist economist answer here:
Austrian economist answer here:
Neoclassical economist answer here:
Limitations of science:
https://undsci.berkeley.edu/article/0_0_0/whatisscience_12
Science doesn't make moral judgments
When is euthanasia the right thing to do? What universal rights should humans have? Should other animals have rights? Questions like these are important, but scientific research will not answer them. Science can help us learn about terminal illnesses and the history of human and animal rights — and that knowledge can inform our opinions and decisions. But ultimately, individual people must make moral judgments. Science helps us describe how the world is, but it cannot make any judgments about whether that state of affairs is right, wrong, good, or bad.
Bob
You say: “… but you have to answer their questions. … How do we eliminate unemployment?.”
The matter has already been settled. For the axiomatically correct Employment Law see
Full employment through the price mechanism
https://axecorg.blogspot.com/2017/11/full-employment-through-price-mechanism.html
and for more details see cross-references Employment/Phillips Curve
http://axecorg.blogspot.com/2015/08/employmentphillips-curve-cross.html
Egmont Kakarot-Handtke
Bob: Again, we disagree, I say - and I think this is the usual view - that Marxism is more macro than micro. It's about classes of the whole society, the idea of exploitation is more represented in the individual firm than rooted in it.
Limitations of science:
That's some sort of positivism, analytic philosophy stuff. Stuff that was popular in the 20th century. Especially virulent in the postwar era. 1945-1970 or so.
There was a bit of that in Marx, but not much. He was German, not English! And of course there has to be, you have to be empirical once in a while, look at things that way. But Marx was rooted in classical German philosophy - and classical philosophy in general, which had recovered from such viruses millennia ago.
The point is that if you look at what you're saying when you're saying sciency stuff, you'll see that you're using normative, value, moral, aesthetic concepts incessantly and unavoidably. It's like saying you don't have eyes, because you never see them. Websites like that have not yet discovered that they have been "speaking prose all their life!"
Calgacus
Marx always claimed that he was doing science. Of course, he was NOT. He was a political agenda pusher.
Karl Marx, fake scientist
https://axecorg.blogspot.com/2017/08/karl-marx-fake-scientist.html
The same holds for Marxians to this day. And also for Walrasians, Keynesians, Austrians and MMTers.
This brings us back full circle to
Economics, philosophy, and the crapification of science
https://axecorg.blogspot.com/2019/11/economics-philosophy-and-crapification.html
and to
Economics ― the science that never was
https://axecorg.blogspot.com/2019/12/economics-science-that-never-was.html
To this day, Marxians are NOT doing science. Neither do the others. Economists are clowns and useful idiots in the political Circus Maximus.
Egmont Kakarot-Handtke
EKH:
If the matter were settled, I wouldn't have had to provide five places for five different answers.
Could this be settled if there were a technical debate free of politics?
Possibly, but I doubt such a thing would ever happen.
From https://axecorg.blogspot.com/2017/11/full-employment-through-price-mechanism.html
The fact of the matter is that overall employment INCREASES if the AVERAGE wage rate W INCREASES relative to average price P and productivity R. This is the OPPOSITE of what microfounded economics teaches.
If a job guarantee were introduced, as MMT proposes, would that not increase workers bargaining power, thus resulting in an average wage rate increase relative to productivity?
Calgacus:
If Marx were alive and researching the field, then he may be able to make it about macro. Would Marxists be interested, or fall asleep?
Instead there is Wolff, whose contribution as an activist is worthy of praise, but whose contribution to economics is zero. He likes to frame his narrative as if it had anything to with economics, but he isn't saying sciency stuff. It's a sprinkling of facts, with a heaping dose of value judgements.
Marxists are activists. Criticism of politically sensitive topics almost always comes from activists. And we need that sort of criticism, just don't conflate it with science.
Macro doesn't help workers. It's just a theory that can be used in many ways. The role of macro is to inform policies that could help workers. It can also inform policies that help business owners at the expense of workers.
The role of academics is to inform policy makers and the public. The role of activists is to encourage discussion and persuade the audience to their point of view. The role of mass social movements is to pressure politicians into enacting policy changes.
Science can only provide the tools for getting things done. With economics, there is an incentive to ensure that only certain tools are made available. Tools that by sheer coincidence just happen to benefit the interest groups that promoted their invention. No wonder they don't want any more inventions.
What I like about EKH:
Here is someone whose only agenda is to promote their own work. No ideology being pushed, from what I can see. In a word: science. In several words: the process of science.
Bob
You say: “If the matter were settled, I wouldn’t have had to provide five places for five different answers. Could this be settled if there were a technical debate free of politics?”
The matter IS settled. The problem is that the scientific mechanism does not work in economics.
Science is NOT an endless conversation and never-ending recycling of old arguments but eventually ends with the refutation of materially/logically inconsistent theories: “That the settlement of opinion is the sole end of inquiry is a very important proposition.” (Peirce)
Being incompetent scientists, i.e. being stupid or corrupt or both, economists simply ignore refutation. This defect is well known: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” (Morgenstern 1941)
This is the simple reason why you have to provide “five places for five different answers”. And this tells you that economics is NOT a science.
“There are always many different opinions and conventions concerning any one problem or subject-matter … This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides … was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other …” (Popper)
Walrasians, Keynesians, Marxians, Austrians, MMTers violate scientific standards. The “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel” is a fraud.
Stop blathering, apply the principles of science and your five places reduce to one. Simple.
Egmont Kakarot-Handtke
Dear Egmont,
you’re obviously very intelligent, why do you seem to be in a bad mood all the time? According to a well-known saying, I would characterize the general situation of humanity as «hopeless, but not serious». I want to help you to improve your theory by pointing out that you don’t really understand the implications of quantum mechanics, the Gödelian Incompleteness theorems and – most importantly! – Hegelian Dialectics. Philosophy on its own is inferior (<) to science + mathematics but philosophy + mathematics + science is superior (>)to science + mathematics..
So philosophy, according to you «has degenerated much from the ancient Greeks to the present and has become irrelevant itself». The practical proof is obviously that scientists/engineers (as opposed to philosophers) wouldn’t build nuclear power plants in earthquake-prone regions like Fukushima, Japan and blame the degradation of the natural environment resulting from nuclear bomb-testing and nuclear accidents on CO(2)-induced climate change. Oh wait, that’s not true, they actually would do this.
Your theory is interesting, but, like much of mainstream economics, it works only if people have opposite preferences (debt based consumerism versus profit seeking), which is a contradictious assumption to make about human nature. A relevant alternative to your economics could be built up on Aristotle’s Nichomachean Ethics complemented by Gesellianism, which doesn’t abstract from the power dynamics implied in commodity-exchange. Aristotle already clearly saw the difference between the necessary "economy" and the degenerate "chrematism" (capitalism).
Your beef with Hegelian Dialectics ist that on one hand, you don’t understand that the set of things which can be thought of without contradiction is only a subset of all possible things, and on the other hand, that the Kantian assumption that knowledge as such is limited is itself inconsistent. So you cannot blame the assumption of existing «real contradictions» solely on bad theorizing.
Because of the selective blindness in quantum mechanics, everyone needs to judge which information about reality is useful him or her. Therefore quantum mechanics (and thermodynamics) is limited by economics. In order to understand economics, you need to understand collective behaviour. Therefore economics is limited by mathematical set theory. In order to understand mathematical set theory, you need to understand formal languages. Therefore mathematical set theory is limited by mathematical logic. In order to understand mathematical logic, you need to have a grasp of the Law of Non-Contradiction and the Law of Sufficient Reason. Therefore mathematical logic is limited by systematical philosophical considerations (a fact well-known by supreme genius G.W. Leibnitz).
I recommend you to study «The two characteristics of an antinomy: self-reference and negation» by the mathematician Ken Kubota https://lists.cam.ac.uk/pipermail/cl-isabelle-users/2018-June/msg00048.html and my own humble contribution to science on my blog «Analytische Sozialkritik. Der Blog von Dr. Wintermute»: "Randomness and negative self-reference".
Kind regards,
Dr. Wintermute
I'd be angry too if my field of interest were bastardized as thoroughly as economics. And there's no hope of removing political agendas from it.
Fortunately, algebra and I do not get along.
Dr. Wintermute
Broadly speaking, economics is about how the economy works and NOT about how society or the human brain works. The economy is a sub-set of the universe and the subject matter is defined with phenomena like profit, income, price, output, saving, etcetera that do not appear in other sub-sets of reality like physics or biology.
Science takes the concrete form of a theory. The true theory/model is the humanly best mental representation of reality. Scientific truth is well-defined by material and formal consistency. “The chief demerit is inconsistency …” (Popper)
In this thread, we are concerned specifically with Marx’s economics. The proof has been given that Marx’s profit theory is false. Because Marx got the foundational concept of economics wrong the analytical superstructure of Marxianism is scientifically worthless.
This is the 150+ years overdue end of Marxian economics. Tom Hickey admits this but argues: “Secondly, Marx was a philosopher in his own right and a public intellectual in this time as a journalist and writer of political tracts in the context of the contemporary debates.” Yes, but this does NOT change the fact that Marx was a fake scientist and Marxianism is proto-scientific garbage.
What the philosopher Tom Hickey does is meta-communication. We are no longer talking about how the economy works but about the philosopher and agenda pusher Marx. Calgacus goes further in the wrong direction: “That’s some sort of positivism, analytic philosophy stuff. Stuff that was popular in the 20th century. Especially virulent in the postwar era. 1945-1970 or so. There was a bit of that in Marx, but not much. He was German, not English!” Perhaps this is good to know in a TV quiz.
You drive meta-communication even further away from the point at issue: “Your beef with Hegelian Dialectics is that on one hand, you don’t understand that the set of things which can be thought of without contradiction is only a subset of all possible things, and on the other hand, that the Kantian assumption that knowledge as such is limited is itself inconsistent. So you cannot blame the assumption of existing «real contradictions» solely on bad theorizing.”
I do not blame Marx or any other economist for bad theorizing, I blame them for being too stupid for the elementary algebra that underlies macroeconomics.#1 In fact, I prove it and the proof is a good as the proof of the Pythagorean Theorem and in any case vastly superior to your brain-dead off-topic meta-communication.
To make it concrete and politically relevant: Dear philosophers tell the econoblogoshpere which of the two macroeconomic relationships is true
a) (I−S)+(G−T)=0 (MMT, Keynesianism)
b) (I−S)+(G−T)=Q (AXEC)?
Equation b) boils down to Public Deficit = Private Profit and this gives one the life formula of present-day Capitalism. You certainly agree that one cannot find this enlightening formula that gives you the conditions of the breakdown of Capitalism in the works of the philosopher and political agenda pusher Marx nor in Hegel’s dialectic nor in Dr. Wintermute’s Analytische Sozialkritik.
Egmont Kakarot-Handtke
#1 The ancient philosophers were supposed to be proficient at math as the motto of Plato’s Academy testifies.
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