Thomas Piketty explains why the world is ripe for ‘participatory socialism’ — Marcus Baram interviews — Thomas Piketty

Transcript of an interview about Thomas Piketty's latest book,  Capital and Ideology.

Fast Company
Thomas Piketty explains why the world is ripe for ‘participatory socialism’
Marcus Baram interviews Thomas Piketty

Media, Democratic Establishment Panics as Sanders Predicted to Sweep All 50 States — Alan Macleod

Has socialism's time come? Capitalists freak out at the prospect of a Bernie administration.

Interestingly, what this shows is that an economic system is a policy variable in a social system.

Mint Press News
Media, Democratic Establishment Panics as Sanders Predicted to Sweep All 50 States

Alan Macleod

Politically Motivated Attempts to Own or Disown China as “Capitalist” — Peter Cooper

There are often attempts in the west to depict China as capitalist rather than socialist. After decades of China going from strength to strength on macroeconomic criteria – and in view of its undeniable achievement in reducing poverty at a rate unmatched in recorded human history – some on the right wish to deny that this could have been accomplished through socialism and so instead claim China to be capitalist. At the same time, there are those on the left who wish to distance notions of socialism from China’s economic system and especially its record on human rights....

Heteconomist
Politically Motivated Attempts to Own or Disown China as “Capitalist”

Peter Cooper

Michael Roberts Blog: blogging from a marxist economist — Minsky and socialism

Minsky’s journey from socialism to stability for capitalist profitability comes about because he and the post-Keynesians deny and/or ignore Marx’s law of value, just as the ‘market socialists’, Lange and Lerner, did. The post-Keynesians and MMTers deny/ignore that profit comes from surplus value extracted by exploitation in the capitalist production process and it is this that is the driving force for investment and employment. They ignore the origin and role of profit, except as a residual of investment and consumer spending.Instead they all have a money fetish. With the money fetish, money replaces value, rather than representing it. They all see money (finance) as both causing crises and, also as solving them by creating value!

In my view, far from Minsky providing the “necessary ingredients to a to a rethinking of Marxian theory of capitalist dynamics and crises”, as Bellofiore argues, Minsky’s theory of crises, like all those emanating from the post-Keynesian think tank of the Levy Institute, falls well short of delivering a comprehensive causal explanation of regular and recurring booms and slumps in capitalist production. By limiting the searchlight of analysis to money, finance and debt, Minsky and the P-Ks ignore the exploitation of labour by capital (terms not even used). They fail to recognise that financial fragility and collapse are triggered by the recurring insufficiency of value creation in capitalist accumulation and production.

Moreover, by claiming that capitalism’s problem lies in the finance sector, the policy solutions offered are the regulation and control of that sector, rather than the replacement of the capitalist mode of production. Indeed, that is the very path that Minsky took: from his socialism and ‘’socialisation of investment’’ in the 1970s to ‘stabilising finance’ in the 1990s.

Michael Roberts Blog — blogging from a marxist economist
Minsky and socialism
Michael Roberts

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

What Xi Jinping thinks about development economics — Andrew Batson

Must-read.

Note: Xi Jinping was trained as a chemical engineer.

Andrew Batson's Blog
What Xi Jinping thinks about development economics

Andrew Batson

Franz Oppenheimer — The Law of Transformation and Social Market Economy Oleg Komlik

Oppenheimer’s Law of Transformation can be read as the paradox of cooperative economics and it refers to macro-social dynamics: the beginning of a cooperative group endeavor will end up in a capitalist calculation enterprise or cease to exist as long as the macro-social conditions are based on capitalist monetization and accounting. Knowledge is about predictability and wisdom is about outcome: the later Kibbutzim were from the Oppenheimer viewpoint a survival mechanism which will be inevitably followed by economic means of privatization.

This is another must-read. It's hardly an accident that this knowledge is again coming to a head after having been known at least since Marx & Engels as conditions that led to the previous two world wars are being recreated. I already said some time ago that WWIII has already begun. It just hasn't gone viral yet.

The problem is institutional, and it goes back 5000 years as the post describes. There seems to be no way out as long as money is used to produce commodities in order to make more money (Marx's M-C-M'). The problem is that money not only buys commodities but also result in asymmetric power through asymmetric control of the means of production. Oppenheimer’s nLaw of Transformation suggests that this cannot be remedied in a monetary production economy through co-ops.

Is there another alternative? Our resident Libertarian-Austrian commentator keeps reminding us of the economic calculation problem and socialist calculation debate that suggests not. Socialist experiments to date have not scaled. Franz Oppenheimer suggests that that even limited-scale attempts have ultimately transmogrified into capitalism.

I have suggested that two things are needed for a genuine transformation. The first is an observation that Karl Marx made in Preface to A Contribution to the Critique of Political Economy:

Just as one does not judge an individual by what he thinks about himself, so one cannot judge such a period of transformation by its consciousness, but, on the contrary, this consciousness must be explained from the contradictions of material life, from the conflict existing between the social forces of production and the relations of production. No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.
Mankind thus inevitably sets itself only such tasks as it is able to solve, since closer examination will always show that the problem itself arises only when the material conditions for its solution are already present or at least in the course of formation.

While I agree with the highlighted text, I would dispute the assertion of materialism. Materialism is the ontological underpinning of naturalism as the methodology of science as "true knowledge vs. opinion" in the ancient Greek sense of episteme vs. doxa that underlies the Western intellectual tradition.

As R. Buckminster Fuller pointed out, the wealth of humankind includes not only material wealth but also "metaphysical" wealth in the form of knowledge. While the former is finite, the latter is potentially infinite. In addition, to this there is also "spiritual" wealth in the form of everything that distinguishes humans. Fundamental to this is the ability to know and appreciate universality, where worldly knowledge is only a part of the story and not the greater part either. In addition to the cognitive faculties are the affective faculties, linked by the volitional faculty.

Thus, the second factor that comes into play in social transformation is the "spiritual" dimension, which can be considered either metaphysically or humanistically. For present purposes, the distinction can be disregarded, important as it may be otherwise. The important factor is that humans can not only know universally but also feel universally.

The level of collective conscious is revealed by the level of universality that the members of a society exhibit in behavior, culture and institutions. The present day level of collective consciousness is based on self-interest and this is reflected socially, political, and economically. Meher Baba elaborates on this in "The New Humanity." Some argue that this is just human nature, so get used to it. Others assert that the level of consciousness is malleable. Bucky Fuller showed that increasing electricity use has a profound effect, on one hand. On the other hand, raising the general level of education also affects the collective consciousness positively.

At a deeper level, the wisdom traditions of the world have asserted that consciousness can be transformed directly and have provided instructions on now to do so. These are being adopted increasingly.

For a transition away from predatory capitalism, two factors are needed. The first is a shift in the mode of production, which may be happening with the transition from the industrial age to the knowledge age. Dealing with climate change is also going to be a game-changer. The second is a transformation of the level of consciousness through a "spiritual awakening" such as has been suggested as coming in The Fourth Turing, for example.

Anyway, there is a lot to chew on in this post.

Economic Sociology and Political Economy
Franz Oppenheimer — The Law of Transformation and Social Market Economy
Oleg Komlik | founder and editor-in-chief of the ES/PE, Chairman of the Junior Sociologists Network at the International Sociological Association, a PhD Candidate in Economic Sociology in the Department of Sociology and Anthropology at Ben-Gurion University, and a Lecturer in the School of Behavioral Sciences at the College of Management Academic Studies

The debt delusion — Michael Roberts [book review]

Michael Roberts reviews and critiques The Debt Delusion by John Weeks.

Michael Roberts Blog — blogging from a marxist economist
The debt delusion
Michael Roberts

Michael Roberts Blog— Understanding socialism

Michael Roberts comments briefly on Richard D. Wolff's two new book, Understanding Marxism and Understanding Socialism.

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.

Actually Existing Socialism In A Capitalist Setting? — Robert Vienneau

Elements of a post capitalist society are and have been developing in actually existing capitalism. This post points out a couple of examples....

This is what a transition from one dominant mode of production to another would look like in an evolutionary setting rather than a revolutionary one. In the gradual approach, different alternatives can be tested and developed based on learning instead of imposed.

Thoughts On Economics
Actually Existing Socialism In A Capitalist Setting?
Robert Vienneau

Why is “millennial socialism” on the rise? Because liberalism is failing — Lea Ypi

Should be "neoliberalism" instead of "liberalism."

Good article on the paradoxes of liberalism.

New Statesman
Why is “millennial socialism” on the rise? Because liberalism is failing

Lea Ypi | Professor of Political Theory at the London School of Economics and Political Science

Paul Cockshott — What then is the escape from capitalism?

What then is the escape from capitalism?

What would be the essential features of a socialist economy, one the would be really achievable?

Exactly the right question. It's not just about there but getting from here to there. The former is utopian, the latter involves being realistic. This is not primarily a theoretical question but a practical one.

Marx concluded that capitalism is based on a monetary production economy, and that monetary production economies tend toward capitalism, as China suggests after the introduction of "market socialism" and "socialism with Chinese characteristics."

What would a socialist economy look like then? Paul Cockshott explains Marx's view on this based on "labor credits" as the unit of account. He also explains why he believes that the economic calculation problem that Ludwig von Mises advanced no longer applies owing to technological innovation.

This also has interesting implications for the MMT job guarantee that anchors the value of a currency to an hour of unskilled labor based on governments' power to set the price it is willing to pay in a market, provided the government is sovereign in its currency and has a monopoly on currency issuance. Currency sovereigns have monopoly power, hence, are price setters rather than price takers, regardless of whether they chose to use it.

Paul Cockshott's Blog
What then is the escape from capitalism?

Paul Cockshott

Robert Paul Wolff — "The Future of Socialism" (article)

I  (Tom Hickey) recommend reading this paper now that "socialism" is the new buzz word. You may recall Professor Wolff from The Poverty of Liberalism, In Defense of Anarchy, and A Critique of Pure Tolerance (with Herbert Marcuse and Barrington Moore, Jr.), which were popular at the time of the "countercultural revolution" in the Sixties and Seventies. He also published scholarly works on Emmanuel Kant and Karl Marx. He blogs at The Philosopher's Stone, which I follow and occasionally offer comment.

In what follows, I propose to take as my text a famous statement from Marx’s A Contribution to the Critique of Political Economy—a sort of preliminary sketch of Das Kapital—and see what it can tell us about the capitalism of our day. I shall try to show you that Marx was fundamentally right about the direction in which capitalism would devel- op, but that because of his failure to anticipate three important features of the mature capitalist world, his optimism concerning the outcome of that development was misplaced. Along the way, I shall take a fruitful detour through the arid desert of financial accounting theory.

Here is the famous passage, from the preface of the Contribution, published in 1859:

"No social order ever disappears before all the productive forces for which there is room in it have been developed, and new, higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society."

"The Future of Socialism"
Robert Paul Wolff | Professor Emeritus, University of Massachusetts Amherst
Published in Seattle University Law Review [Vol. 35:1403-1428]

Robert Paul Wolff — A WORD OF CLARIFICATION

On the historical meanings of "socialism."

See my comment there.

The Philosopher's Stone
A WORD OF CLARIFICATION
Robert Paul Wolff | Professor Emeritus, University of Massachusetts Amherst

Michael Roberts — MMT, Minsky, Marx and the money fetish

This is a good historical backgrounder and it should be read for that reason alone. But Michael Roberts also brings up other issues that follow upon this history that are relevant to the current debate, at least some of which that have been brought up previously in the comments here. Highly recommended.

As Maria Ivanova has shown, there remains a blind belief that the crisis-prone nature of the latter can be managed by means of ‘money artistry’, that is, by the manipulation of money, credit and (government) debt. Ivanova argues that the merits of a Marxian interpretation of the crisis surpass those of the Minskyan for at least two reasons. First, the structural causes of the Great Recession lie not in the financial sector but in the system of globalized production. Second, the belief that social problems have monetary or financial origins, and could be resolved by tinkering with money and financial institutions, is fundamentally flawed, for the very recurrence of crises attests to the limits of fiscal and monetary policies as means to ensure “balanced” accumulation.

None of the ‘money fetish’ schemes have worked or will work to get the capitalist economy going. Instead such measures have just created financial bubbles to the benefit of the richest. That’s because these “tricks of circulation” are not based on the reality of the law of value.

Now that we are in the midst of a debate over capitalism and socialism, these issues are coming to the fore. Michael Roberts provides perspective from a Marxian POV.

We are going to hearing a lot of Marx as this debate unfolds and also learn about the rich history of socialist thought. Here is a quick reference on socialism.

Michael Roberts Blog
MMT, Minsky, Marx and the money fetish
Michael Roberts

Barkley Rosser — Who Is Really A Socialist? [Updated]

Barkley Rosser either makes a bad mistake in starting with Marx's definition of "socialism" as state-ownership of the means of production as exclusive, or he is carrying water for the ownership class that uses this arbitrary definition to demonize the opposition to its rent-seeking and parasitic rent extraction, e.g., by socializing negative externality, the result of which is now climate change. I suspect that he was shooting from the hip and shot himself in the foot instead of hitting his target. Disappointing for a smart guy. On the other hand, I often disagree with his analysis when it exceeds the scope of his field, which is economics within the scope of the conventional approach to it. Such is the case here, in my view, although he does bring it non-economic factors.

Wikipedia:

Socialism is a range of economic and social systems characterised by social ownership and workers' self-management of the means of production[10] as well as the political theories and movements associated with them.[11] Social ownership can be public, collective or cooperativeownership, or citizen ownership of equity.[12] There are many varieties of socialism and there is no single definition encapsulating all of them,[13] with social ownership being the common element shared by its various forms.[5][14][15]

Socialist systems are divided into non-market and market forms.[16] Non-market socialism involves the substitution of factor markets and money with engineering and technical criteria based on calculation performed in-kind, thereby producing an economic mechanism that functions according to different economic laws from those of capitalism. Non-market socialism aims to circumvent the inefficiencies and crises traditionally associated with capital accumulation and the profit system.[25]By contrast, market socialism retains the use of monetary prices, factor markets and in some cases the profit motive, with respect to the operation of socially owned enterprises and the allocation of capital goods between them. Profits generated by these firms would be controlled directly by the workforce of each firm, or accrue to society at large in the form of a social dividend.[26][27][28] The socialist calculation debate concerns the feasibility and methods of resource allocation for a socialist system.

Socialist politics has been both internationalist and nationalist in orientation; organised through political parties and opposed to party politics; at times overlapping with trade unions, and at other times independent and critical of unions; and present in both industrialised and developing nations.[29] Originating within the socialist movement, social democracy has embraced a mixed economy with a market that includes substantial state intervention in the form of income redistribution, regulation, and a welfare state. Economic democracy proposes a sort of market socialism where there is more decentralized control of companies, currencies, investments, and natural resources.

In particular, critics of "socialism" that charge it is a failed system that history exposes as inferior ignore a factor that I regard as the most salient one, namely, the ferocious opposition and actual violent attacks of the capitalist, so-called liberal order  (read "bourgeois liberal" plutonomy)  on any hint of social power and control that would limit the power and control of the privileged elite and which imposes a dictatorship of the ruling class through their minions, behind a facade of representative democracy. In the US, for instance, the a bipartisan establishment is rife with corruption, much of it legalized.

Economists simply are not in a position to hold themselves out as experts capable of commenting definitively on these matters since they have put so many relevant factor beyond the scope of their subject matter. The result is an economics devoid of connection with reality.

In the real world, capitalism has been linked historically with imperialism and colonialism. Neoliberalism can be viewed as joined at the hip with neo-imperialism and neocolonialism. Neoconservative and liberal internationalism/interventionism are both based on "spreading freedom and democracy" which is equated with economic liberal as bourgeois liberalism, which is liberal chiefly in the sense that powerful elites are enabled by capture of the state to extract rent without limitation and to do so globally, backed by a powerful military and control of the global financial system.

This is becoming especially important now that "socialism" is becoming a hot topic and economists think that they are are in a position to be best informed about it and comment on it. That is not necessarily so. Very few have the breadth and depth of knowledge of Michael Hudson, for instance.

Socialism involves not only economics, but also other fields such as political theory, sociology, anthropology, history, general systems theory, psychology, and philosophy.

Oh, and did I forget physics, you know, like neoclassical economics is trying to imitate? See Albert Einstein, Why Socialism?

Is genuine socialism best characterized in terms of government that is actually "of the people, by the people and for the people" rather than being controlled by a ruling class and operated for special interests as a representative democracy under capitalism and the way the US was really organized under the Constitution?

Econospeak

Who Is Really A Socialist?
J. Barkley Rosser | Professor of Economics and Business Administration James Madison University

UPDATED

Yves Smith weighs in here. Useful in my view, but also incomplete. She also ignores the political aspect of external pressure, including threat of force and actual force, that I brought in above. It is very difficult to disentangle the social, political, financial and economic, especially when it involves key international and geopolitical input. Characterizing "socialism" based on such historical examples is naive, in my view.

For example, is Venezuela a "failed state" entirely owing to "socialist" policy or in part, even great part, owing to US pressure since Chavez, including a former coup attempt. Moreover, the sorry state that Venezuela was in prior to Chavez and which underlay his rise was a result of the comprador government that served as US puppet, a state to which is the US is working reestablish there. Simlarly, a great deal of Soviet and Red Chinese policy was a response to pressure, threat of force and actual application of force from the "free world" dominated by "capitalism" as the mortal enemy of "socialism"

Moreover, "capitalism" and "socialism" are such high level abstractions they are difficult to define technically in a way that can be measured quantitatively. And quantitative modeling is a sine qua non of science these days. Otherwise it is speculative in a way that is undecidable on data-based evidence. However, to reduce the problem to what is measurable often excludes material factors that are relevant. So the end-result is based on opinion, which famously suffers from cognitive bias, including ideological bias.

Peter Cooper — MMT and Capitalism from a Marxist Standpoint

A perennial question for Marxists is how to overturn capitalism. Will institutional changes that improve the lot of workers but fall short of ending capitalism immediately help or harm this cause? To the extent that social struggle is a learning-by-doing process, it may be that the securing of small gains can whet the appetite for more significant gains and that institutional reforms of a transformational nature can place revolution on a more secure footing if and when it does occur. But there is also the possibility of complacency in which workers come to tolerate capitalism so long as their own situation is not so dire.

The increasing prominence of modern monetary theory (MMT) has once again brought the perennial question to the forefront for some socialists. Is knowledge of MMT going to make it easier to extend the life of capitalism? What should a Marxist make of the theory?

In my view, there are several aspects to consider:

• the correctness of MMT;
• the broad analytical applicability of MMT;
• the implications of MMT for capitalism....

heteconomist
MMT and Capitalism from a Marxist Standpoint
Peter Cooper

Brett Samuels — Buttigieg: The word 'socialism' has lost its meaning

Trump showing his age in denouncing progressive proposals as "socialist"?

Presidential hopeful Pete Buttigieg (D) on Sunday dismissed President Trump's efforts to portray Democratic policy pitches as "socialism," arguing that the term no longer carries negative connotations.

“I think he's clinging to a rhetorical strategy that was very powerful when he was coming of age 50 years ago, but it's just a little bit different right now," Buttigieg, the South Bend, Ind., mayor who has launched an exploratory committee to run for president, said on CNN's "State of the Union."

"Today, I think a word like that is the beginning of a debate, not the end of the debate," he added.…

Many on the right agree that socialism equates with collectivism as opposed to liberalism grounded in individualism. Hayek popularized this view in The Road to Sefdom.

But that was then, not now.

For many people now, "socialism" chiefly implies "not-capitalism," with capitalism being equated with neo-feudalism. "Socialism" is no longer characterized as state ownership in many people's minds but rather as public policy that is rights-oriented rather than market-determined.

Socialism is increasingly being viewed as real democracy — government of the people, for the people, and by the people, rather than an elite privileged with power through ownership of real and financial assets and the influence it involves.

As Pete Buttigieg observes, now it's the beginning of debate and no longer the summary end of it. The frame is shifting.

The Hill
Buttigieg: The word 'socialism' has lost its meaning

Brett Samuels

David F. Ruccio — Socialism and exploitation

The older generation may not like it but the world they created and are trying to passing on, or pass off, is being rejected by the younger generation, which favorable to socialism. Why is that?

What is capitalism? Favoring capital (ownership) over labor (people) and land (environment). 

What is socialism? Favoring labor (people) and land (environment) over ownership.

No-brainer unless you have been brainwashed by ownership.

Occasional Links & Commentary
Socialism and exploitation
David F. Ruccio | Professor of Economics, University of Notre Dame

See also

"Every single policy proposal that we have adopted and presented to the American public has been overwhelmingly popular, even some with the majority of Republican voters."

Common Dreams
Ocasio-Cortez Says Trump Attack on Socialism Shows President ‘Scared’ of Popular Progressive Policies

Jake Johnson

Matias Vernengo — On the crisis in Venezuela

The numbers are from the World Bank Development Indicators up to 2016, and then I use the IMF estimates of growth (actually decline) from the World Economic Outlook database. So this is a brutal collapse, something the US government is doing, even at the price of some costs to local refineries, in order to promote regime change in Venezuela. Whatever your views on Maduro and the Chávez period, note that the US is fine with Saudi Arabia. Trump and Dems before too. And remember that Obama tightened the embargo as one of his last measures. Double standards are incredible, and difficult to defend....

Naked Keynesianism
On the crisis in Venezuela
Matias Vernengo | Associate Professor of Economics, Bucknell University

See also

The tell.

Only Tulsi Gabard passes the test with an unconditional answer. Bernie waffles and the rest are silent so far.

In These Times
Where Are Democratic 2020 Hopefuls on the Trump-Backed Coup Attempt in Venezuela?

Marco Cartolano