Monday, October 25, 2021

Capitalism Is Violence: Notes From The Edge Of The Narrative Matrix — Caitlin Johnstone

 Some Marxism without mentioning Marx.
Capitalism Is Violence: Notes From The Edge Of The Narrative Matrix
Caitlin Johnstone


Ahmed Fares said...

I see Caitlin has been watching Richard Wolff videos. In the second link on her page ('fraction of the wealth they generate'), she links to a Wolff video where he analyzes a car company like General Motors. He mentions that managers like purchasing managers and sales managers are necessary to the working of the firm, but they, like the shareholders, add no value but rather take from surplus value.

This is worse than I thought. Until I watched this video, I had no idea that Wolff thinks that everyone who is not on the shop floor is not adding value.

The managers part is at around the 5-minute mark:

Richard Wolff on Capitalism

Ahmed Fares said...

Further to my comment and on entrepreneurship, I was reading an interesting article yesterday. Here is a quote (bold mine):

An entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change. Entrepreneurship is the process of discovering new ways of combining resources. When the market value generated by this new combination of resources is greater than the market value these resources can generate elsewhere individually or in some other combination, the entrepreneur makes a profit. An entrepreneur who takes the resources necessary to produce a pair of jeans that can be sold for thirty dollars and instead turns them into a denim backpack that sells for fifty dollars will earn a profit by increasing the value those resources create. This comparison is possible because in competitive resource markets, an entrepreneur’s costs of production are determined by the prices required to bid the necessary resources away from alternative uses. Those prices will be equal to the value that the resources could create in their next-best alternate uses. Because the price of purchasing resources measures this opportunity cost— the value of the forgone alternatives—the profit entrepreneurs make reflects the amount by which they have increased the value generated by the resources under their control.

source: Entrepreneurship

I would suspect that Richard Wolff would say that the increase of twenty dollars of value belongs to the workers also. I would then assume that in a society where the value of ideas always belongs to the workers is a society where these ideas never make it to the shop floor, which explains why socialist societies are not very good at innovation.

The lack of incentives is the major flaw in socialism.

S400 said...

The entrepreneur increase the value for itself while others will see a decrease of purchasing power as the jeans is over priced based on monopoly forces.

The lack of incentive to work together for a common good is a major flaw in capitalism.
Every time there is a larger pay off in capitalism it’s due to groups working together which gets extracted to a few based on some dubious theories of ownership and and labour value. It’s possible to do so based on power structure in a rigged system lacking transparency.

NeilW said...

It all becomes clear once you realise that profit is the wages of capitalists and interest the wages of bankers.

Both do a job. One organises the efforts of others, the other provides liquidity services so that entrepreneurs can spend cars and houses without selling them.

The problem with Marxists is that their entire world view is based upon the idea that labour is fungible and everything optimises to the lowest skill level. Otherwise the 'socially necessary labour time' doesn't work.

Unfortunately the real world is going the other way - optimising to the highest skill level amongst people who are very difficult to be replaced. And that's because we're not all alike.

Similarly appealing to marginal theory to justify entrepreneurship doesn't hold either. Markets don't even get close to optimally allocating resources because firms work on a mark up basis, and any market require about 20% spare capacity before the threat of failure starts to bite.

Peter Pan said...

Wolff has explained how worker co-ops can hire their own management. He used Mondragon in Spain as an example.

Peter Pan said...

This is worse than I thought. Until I watched this video, I had no idea that Wolff thinks that everyone who is not on the shop floor is not adding value.

They're not adding value since they aren't producing the commodity. Having to hire managers, accountants, payroll clerks, janitors, etc. increases overhead.

According to Marxist theory, GM is not appropriating the labour surplus of these ancillary workers.

Ahmed Fares said...

re: Mondragon in Spain

Like other European companies, Mondragon is exposed to fierce competition from developing world competitors with lower labour costs. Its response has been to set up factories – or buy companies – in other parts of the world. There are now 94 subsidiaries producing goods from Vietnam to Chile, Morocco and Russia.

Workers at these, however, are not co-op members (fewer than half of Mondragon's workforce are members) – meaning they are also raw-blooded capitalists, living off the labour of others.

Mondragon is aware of the contradictions of preaching about co-operatives while behaving like a capitalist.

source: Mondragon: Spain's giant co-operative where times are hard but few go bust

Richard Wolff didn't mention that in his videos about co-ops where he mentioned Mondragon.

Ahmed Fares said...

More on Mondragon,

(bold mine)

Despite its many virtues, Mondragon is not utopia. In the course of our visit, three issues came to light that brought this truth home.

The first, and most troubling, was the issue of international workers who are not members of the cooperatives. As with many successful firms, regardless of structure or industry, much of the growth in recent years has come from international markets, which now account for 70 percent of Mondragon sales. This has necessitated hiring new workers in those new markets. Few, if any, of these new workers have been offered membership in the cooperatives. As a consequence, they do not participate in the benefits of worker-ownership. While they are reportedly treated well they do not participate in the governance of the firm and are not eligible for many of the other unique benefits of the cooperatives.

The most compelling reason we heard for why these international workers are not also owners is that there is not a culture of cooperatives in these foreign markets and Mondragon does not believe in, or have the capabilities for, proselytizing the cooperative form. Admittedly, it might also be against their economic interest to include more worker-owners in the confederation. But whatever the motivation, the net result is to create a set of second-class citizens on whose backs the growth of the firm now depends.

Ahmed Fares said...

I forgot the source on my last comment,

Mondragon through a Critical Lens

Peter Pan said...

I remember Wolff talking about Mondragon's operations in China. Workers there simply prefer being told what to do. There isn't a universal desire among the working class to go the WSDE route.

Richard Wolff is criticized from the (Marxist) left for his ideas. Worker co-ops have to operate within the realities of the market. This means they need to compete and grow. Successful co-ops can then be bought out.

Peter Pan said...

Note that multi-tiered workforces are a thing in the US auto industry. The corrupt unions are not above dividing their own membership, pitting new workers against those with seniority.

S400 said...

The problem with the swiping argument that profit is wages is that it has hidden assumptions about high efficiency among those who is considered “high skilled” and therefore their share should be _much_ higher. The assumptions also gives; Is not they will not use their skills. It’s just a story made up by the very same who consider themselves high skilled. Its 1800 thinking where you worship the “genius”.

“High skilled” may instead have seen the flaw in the system, the opportunity in power structures, the lack of transparency where you are able to actually see if there are real efficiency at the personal level, not just in the aggregate output level which include the work force.
That is what makes them the possibility to take out much more than others and also not be scrutinized of their efficiency compared to output.

They are the ones putting up the rules of what is considered effective and efficient and what is high or low value creation and of course it’s their ego who makes them think this is a natural law.

Once you move away from that made up ego thinking you realize that there’s a only 24 hours a day and people want spare time, and want to do something meaningful during that which in most cases requires a certain level of income, and that what is meaningful is quite similar amongst people too, hence the cost for spare time is equal but but the economic reality to for fill it is not.

S400 said...

Should say “If not higher share, they will not use their skill”