Marx’s concept of socialism — Peter Hudis

Marx of course supports collective ownership of the means of production. But by this he does not mean simply transferring ownership deeds from private to collective entities, but rather ensuring that the working class owns and controls the means of production. He makes this clear in writing, “When one speaks of private property, one is dealing with something external to man. When one speaks of labour, one is directly dealing with man himself. This new formulation of the question already contains its solution” (MECW 6: 281). The abolition of private property is a step towards liberation only if it leads to the transformation of human relations at the point of production.

This is further underscored by Marx’s statement, “Private property is thus the product, the result, the necessary consequence of alienated labour” (MECW 3: 279). It may seem that Marx has it backwards. Does not private ownership of the means of production cause workers to become alienated from their labour? His point is that so long as workers are alienated from the very activity of labouring, an alien group or class must exist that compels them to labour. Private property in the sense of class property—of a class other than the workers controlling the means of production—will continue to exist so long as alienated labour exists.

This emphasis on the priority of social relations of production over property forms carries through all of Marx’s later work, especially Capital. He there reiterates his early criticism of the notion that collective or state-owned property represents the new society:

Capital … now receives the form the social capital … in contrast to private capital, and its enterprises appear as social enterprises as opposed to private ones. This is the abolition of capital as private property within the confines of the capitalist mode of production itself. (Marx 1981: 567)….

Marx views "public" or "social" as the opposite of "private," that is, worker control and not state control, as is often misconstrued. This did get misconstrued in the supposedly necessary "dictatorship of the proletariat" as a transition phase, or perhaps better hijacked than misconstrued.

Monthly Review

Marx’s concept of socialism

Peter Hudis

Peter Radford on corporations

Most theories of the firm within economics pick up the narrative with the existence of the corporation as a given. They then bend over backwards to retro-fit this highly centralized pseudo economy into the larger free market narrative preferred in all major textbooks. In so doing they blithely ignore Alfred Chandler’s famous explanation for the rise of modern business organization, which he argued became possible “only when the hand of management proved be more efficient than the invisible hand of market forces”.

Chandler, being a historian rather than an economist, was more interested in reality than in hypotheticals. He understood and tried to explain the actual landscape of large-scale business. I have always wondered what would have happened to economics had it absorbed the true gist of the challenge issued by Coase in 1937. The impudence of that challenge has never been fully understood. Coase asked simply: “why do firms exist?”. After all if market forces are as supreme as the textbooks tell us, there is no room for business organization at all. We ought be able to accomplish all our transacting through a web of contracts in the open marketplace.

Indeed the most common response of economists to the challenge represented by business organization is to argue that a business organization is simply such a web of contracts. In this view we can continue to ignore any oddities of business organization since it is indistinguishable from the market. In this view the firm exists at a “nexus of contracts” and has no special attributes that cannot be negotiated and contracted for in the marketplace.

Except this is not true....

The key to understanding corporations is to separate the economics from everything else. We need to do this because the economics, as expressed in various theories of the firm, are usually entirely idealized and bear no resemblance to reality. Economists, as usual, love to theorize about things that don’t exist but which they wished did exist....

Corporations, far from being products of the free market, are actually franchises of the state. They are sub-contracted jurisdictions.

To be a corporation is to possess a charter from the state. That charter brings privileges not available to non-corporations. The most notable privilege is that the corporation is recognized as a distinct legal entity separate from any “natural” person who may be associated with it. And because the corporation is brought into existence prior to it being populated or animated by any natural person, it is not owned by any of them. It is unowned. In this sense it is akin to a nation state, the church, most universities, and, at least here in the US, most towns, It would be odd to describe any of those bodies as being owned by the people who animate them. Yet we routinely talk of firms being owned by stockholders. It is this misattribution of ownership that leads most economists astray in their theorizing...

Peter Radford explain why this is important and what problems misunderstanding engenders.

The Radford Free Press
Who “Owns” a Corporation?
Corporations Cont’dPeter Radford

Chris Dillow — Markets need Marxism

All this poses the question. Why, then, haven't we seen state help to create what Robert Shiller has called financial democracy?

It's certainly not because of a commitment to laissez-faire: the massive implicit subsidy to banks tells us that the state is very happy to intervene in the financial system.

Instead, the answer was pointed out by Marx: the state serves the interests of capitalists, not the people. And financial capital would rather financial markets consisted of rent-seeking than of enhancing aggregate welfare. Crony capitalism has encouraged financialization (pdf), not financial democracy. 

In this sense, a well-functioning market economy requires that the state be freed from the grip of capitalists. In some respects it is capitalism that is the enemy of a market economy, and Marxism that is its friend.

Stumbling and Mumbling
Markets need MarxismChris Dillow | Investors Chronicle

Steve Roth — Thinking About “Assets” and Ownership

Purely “real” or nonfinancial assets have no such offsetting claims on other balance sheets. In theory, they represent direct claims on real goods.
That seemingly simple distinction, though, is far from simple when you start exploring it carefully.

To that end, consider the fundamental nature of “claims,” hence the nature and import of “ownership” and “property rights.” Full credit here to Matt Bruenig, who delivered the Aha! understandings for me on these topics — clear and (mutually) coherent definitions and explanations for concepts I’d been worrying at for years.

Mostly simply, ownership is an exclusionary legal claim. Ownership says you may have a picnic on your front lawn — which seems inclusionary, but that’s only meaningful because you may exclude anyone else from doing so. And you may invoke violence (farmed out to the police) to enforce that right of exclusion. As Matt has said so well, a modern ownership claim is best viewed as a violence voucher issued by government.

This imparts a decidedly sinister aspect to the lefthand side of balance sheets — a tally sheet of violence vouchers?…

So now to return, with that understanding, to the notion of real vs financial assets. In large, in aggregate, in the big national or global picture, both types of assets ultimately constitute claims on real goods. Someone holding zero real/nonfinancial assets but significant financial assets can make an immediate and successful claim on a new Maserati — a very “real” good. Everyone else is excluded from claiming that Maserati.
If this exclusionary notion is safe, in a very real sense your “real,” “nonfinancial” asset claim is actually offset by a liability — on the (EverybodyElseIn)TheWorld balance sheet. Call the entry “Stuff that we’re excluded from touching.” If all those exclusionary claims wall off AllTheGoodStuff with violence, we’re talking a very real liability indeed — even though this imaginary World Balance Sheet doesn’t, and practically probably can’t, exist.

This notional balance sheet may seem crazy and outlandish to us. But our ownership, property-rights, and “asset” structures do and have seemed equally outlandish to other cultures:

…fee-simple ownership is not the only basis for ownership and possession of land. Many eastern cultures and tribal cultures throughout the world follow the “communal property system” in which ownership of land belongs to the entire social/political unit, like the tribe, families, bands, and nations.

From the inside, ideologies always look like common sense.

Asymptosis
Thinking About “Assets” and Ownership
Steve Roth

Pravda — The Large Families that rule the world

Something to think about. Piketty's dynastic wealth?

Pravda
The Large Families that rule the world

(h/t Don Quijones at Raging Bull-Shit)

David Graeber — Two notions of liberty revisited - or how to disentangle Liberty and Slavery

Some background on the development of the concept of liberty in the West. We need to examine the concept of liberty-freedom closely in light of the current conflict in economics over the market state based on the right to unlimited acquisition of property and the welfare state based on the distribution of property between private use as "utility" advocated by neoliberalism and public use for public purpose advocated by social democracy. These are based on two different notions of freedom, the first being the master of oneself and the second that of the citizen of a polis.

Resilience

Two notions of liberty revisited - or how to disentangle Liberty and Slavery
David Graeber

Matias Vernengo — What makes capitalism capitalism?

Are you sure you know? Take the test.

Naked Keynesianism

What makes capitalism capitalism?

Matias Vernengo