littlebabyjesus
one of Maxwell's demons
Hugely significant in that it extended capitalism. But today, who owns those shares, who controls the privatised utilities? And the destruction of social housing was a prerequisite for the housing bubble.
critique of loon theories around banking/money creation/the federal reserve
- Thread starter SpineyNorman
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Bernie Gunther
Fundamentalist Druid
Thing about council house sales specifically, and encouraging home ownership generally (there are some really interesting quotes from Franco's housing minister in something butchers posted a while back that I'll try to find), is that it creates a degree of alignment of ordinary people's economic self-interest against strikes or any other activity that risks their ability to pay their mortgage and council tax, and aligns those interests instead (in a minor way) with various elements of the bourgeoisie. Wanting their equity (along with the value of their pension pot etc) to stay buoyant.
love detective
there's no love too small
Loath as I am to give any kind of support to Dwyer - I think you've misunderstood (probably because of Phil's usual dramatic exaggeration of the scale of the development) the subtleties and implications of the tendency that's being described here
It's not about, as you state, that the core objective economic exploited condition of working class life is negated by things like workers' pension schemes and investments. Neither is it about ideological confusion, or anything to do with 'middle class'. Nor is it about ideological smoke aimed at persuading people to identify with capital's interests. It's merely an accurate observation that there is a certain amount of internalisation of class antagonism that exists today (in certain 'western' areas) that never previously existed in this way.
To ignore these developments and the various implications of them for class struggle in the here & now means there is less light being shined upon the various terrains in which that struggle takes place. And that can only benefit Capital.
littlebabyjesus
one of Maxwell's demons
I can't remember who said it, but in the US, as far back as the 1930s, it was observed that workers who own their own homes are less likely to go on strike.
littlebabyjesus
one of Maxwell's demons
I agree, but it shouldn't be exaggerated. Most people are more wage-earners than dividend reapers still.
Home-owning is perhaps the most pernicious of the developments, when it is combined with rising house prices.
love detective
there's no love too small
junglevip
Marijuana leads to heron
Bernie Gunther
Fundamentalist Druid
I'm hoping that someone a bit more coherent about this stuff can help me out here, but I want to say something like ...
Given that the valuation of people's homes as security for their credit cards is about the only thing keeping our economy going, and given that that value is largely fictitious (a 1-bed flat in Kensington is how many million?) being a home owner makes you complicit with that fiction (which is dangerously close to what phil is saying I know, but fuck it, I think he has a point somewhere amid the trolling on this occasion)
Given that the valuation of people's homes as security for their credit cards is about the only thing keeping our economy going, and given that that value is largely fictitious (a 1-bed flat in Kensington is how many million?) being a home owner makes you complicit with that fiction (which is dangerously close to what phil is saying I know, but fuck it, I think he has a point somewhere amid the trolling on this occasion)
littlebabyjesus
one of Maxwell's demons
Yes, fair enough. So you did.
littlebabyjesus
one of Maxwell's demons
I get the impression that a lot of people who were caught up in the mania of the boom are now starting to realise the consequences of that boom for, for instance, their children. A little like, perhaps, people now starting to realise exactly what it was they were selling when they were given their payoffs for their building societies being turned into banks.
It's a good example of how some of the consequences of Thatcher's policies are only now being seen in full.
That's the problem with phil. In between the trolling, he makes interesting points, and some of the things he argues he really does believe and are worth engaging with. Can be difficult at times working out which is which. Best just to argue with him about everything imo.
Where phil becomes interesting is along the lines.That's the problem with phil. In between the trolling, he makes interesting points, and some of the things he argues he really does believe and are worth engaging with. Can be difficult at times working out which is which. Best just to argue with him about everything imo.
"Capitalism is immoral." "What is the basis of morality without god?"
littlebabyjesus
one of Maxwell's demons
Actually that's the one topic he's exhausted me with. That and witches.
He does really believe the rational proof of god gumpf, though, which makes him interesting, psychologically speaking.
Embarrassingly still leaves me a fence sitter.
Bernie Gunther
Fundamentalist Druid
BNP/UKIP taxi driver: "my kids can't get a council house 'cos of all them immigrants"
Me: "so did you have a council house?"
BNP/UKIP taxi driver: "Yep, buying it was the best thing I ever did. Maggie was the best prime minister since Churchill" etc.
Me: "so did you have a council house?"
BNP/UKIP taxi driver: "Yep, buying it was the best thing I ever did. Maggie was the best prime minister since Churchill" etc.
You can lead a man to logic but you can't make him think.
goldenecitrone
post tenebras lux
I've met him. Flogged his house a few years back and moved out to Essex because London's a foreign country these days. Oh, and for the golf.
love detective
there's no love too small
He's well aware of the inherent contradiction he's got himself into with this - in that the foundation of his 'proof' for the fact that money doesn't exist, is exactly the same as he uses to 'prove' that god does exist.
In reality, the fetishisation of both religion & capital stem from the same process of alienation of human power/activity. And the externalising of that power through social processes & relationships, so that 'it' in turn stands above and in opposition to the human beings who provide the sole source of 'it's' power
As with the rational proof of god nonsense above - from as far back as Kant, this kind of proposition has been rationally rebutted, by
1. Using Reason to show that it's not morality that is derived from religion, but instead it's religion that is derived from morality , i.e. god's not necessary for morality as morality itself is based on, and produced by, human reason. Which opens up the concept (long before Feuerbach who is usually credited with it) of the human production of god, endowed with human engendered morality and being the outward projection of humans inward nature - which in turn leads to the problems of fetishisation & alienation per above
2. Using reason itself to rule out reason as a proof of god's existence
Kant said:
Kant said:
Kant said:
Pickman's model
Starry Wisdom
i think machiavelli, in the discourses, argues for religion being created by the state to justify its existence.
littlebabyjesus
one of Maxwell's demons
Good, clear explanations. And he makes a valid point about what he calls 'market socialism' in that the drive for expanding production for its own sake that the logic of capital and the profit motive demands would not be removed. It's a point that's been made on here, but I do think the profit motive is significantly changed by a cooperative structure. Dwyer has spoken of the internalising of the contradictions of capital caused by the existence within the same individual of both proletarian and bourgeois interests. In a coop, that internalisation is at its most complete, I would think - a synthesis, perhaps, of proletariat and bourgeoisie that abolishes both concepts and the contradictions between them. That's probably an idealisation of the process, but I think the essence of the idea is true, and that its real world consequences would be that the profit for profit's sake of capitalism would change in character to something more considered and benign.
I'm probably in the camp he calls 'market socialists' - with a big wedge of collective social provision and collective control of essential resources added to the mix. I do see some form of a mixed economy with a 'private sector' comprising cooperative worker-owned businesses as a workable structure that would provide a break from shareholder capitalism. And I see some forms of private property and market exchange mediated by money as part of that structure. I would also argue that as capitalism fails and the rate of profit tends towards zero, space opens up for the gradual replacement of capitalist investment with social investment, a first step towards which could be the setting up of state-backed mutual societies that would only lend money to businesses incorporated as cooperatives. Changing the nature of banking would be a part of the process - because changing the nature of the ownership of banks would be as important as changing the nature of the ownership of other businesses, and it could also be the lead step in starting the process of the mutualisation of the economy.
Cooperative, worker-owned businesses competing in a market are of course subject to market pressures, but as their ultimate responsibility is towards their workers, not shareholders, I would argue that their profit motive is very different in character - it isn't so much a 'profit motive' as a 'maximise the welfare of the workers within market constraints motive'.
What is missing from his analysis is an idea of what he would see as replacing capitalism. He rejects market socialism and advocates the destruction of the whole system of value abstraction, but he doesn't say what he would replace it with. Personally, I'm far more optimistic about the improvements that 'market socialism' would bring. I also dispute his idea that those organisations that are the least cooperative in nature will be those that succeed - there is evidence that changing the ownership of businesses so that they are worker-owned changes this 'race to the bottom' markedly, that improvements in production are achieved far more through investment in workers and improvements in working conditions. Increasing short-term profit at any cost is not the driving force behind cooperative businesses.
SpineyNorman
Inappropriate content removed
I've seen at least as much evidence of coops having, in time, to act in less 'cooperative' ways and internalise capitalist logic due to competition, which would back up the idea that the less cooperative ones would win out. Mondragon is a classic example of this, despite it always being used as an example of how much more efficient co-ops can be.
As for transcending value production, I've not had the chance to read it yet but this has been recommended to me as a decent attempt to sketch out how it might be done, based mainly on Marx's own writings.
As for transcending value production, I've not had the chance to read it yet but this has been recommended to me as a decent attempt to sketch out how it might be done, based mainly on Marx's own writings.
littlebabyjesus
one of Maxwell's demons
Well, looking at the wiki entry on Mondragon, it says wrt wages that:
Also, all workers actively participate in decision-making.
In that same wiki article, Chomsky is quoted as saying:
Which is certainly true. And John Lewis in the UK, a rather less cooperative structure than Mondragon, also exemplifies this. And yet, workers at these places, even though they are operating in competition with non-coops, are significantly better off and have significantly greater say over what happens in the workplace. Even where they are operating in competition with shareholder-owned businesses, they constitute a concrete improvement on those businesses.
I would argue that the more coops there are, the greater the scope there will be to advance non-exploitative practices. Where all businesses are coops, they will on average all be more cooperative, basically.
My other main point would be that whatever change you advocate, you have to be able to indicate a way to get there from here. I think I can do that wrt 'market socialism'. I'm not at all clear how those who advocate the complete transcendence of value production propose to get there from here.
One thing I disagree with Chomsky about is the necessity for a coop to make a profit to survive. It must make a profit to expand, but it can survive merely by breaking even. That is a difference. Within a capitalist system, businesses that merely break even are closed down. Within a cooperative system, businesses that merely break even have no reason to close down. In fact, given that there is no external capitalist to pay those profits to, a coop doesn't really make profits at all. Ultimately, if it does well in the marketplace, that results in its workers getting richer or it taking on more workers or both. A coop does not operate to the same profit motive as capitalist businesses.
To take the example of John Lewis, its constitution states that it must pay 50% of its profits to its workers in bonuses and that the other 50% must be reinvested in the business in ways that will benefit the workers. Not a penny of those 'profits' leaves the business, and the business is worker-owned. It's really not the same thing as the profit of a capitalist business at all.
Also, all workers actively participate in decision-making.
In that same wiki article, Chomsky is quoted as saying:
Which is certainly true. And John Lewis in the UK, a rather less cooperative structure than Mondragon, also exemplifies this. And yet, workers at these places, even though they are operating in competition with non-coops, are significantly better off and have significantly greater say over what happens in the workplace. Even where they are operating in competition with shareholder-owned businesses, they constitute a concrete improvement on those businesses.
I would argue that the more coops there are, the greater the scope there will be to advance non-exploitative practices. Where all businesses are coops, they will on average all be more cooperative, basically.
My other main point would be that whatever change you advocate, you have to be able to indicate a way to get there from here. I think I can do that wrt 'market socialism'. I'm not at all clear how those who advocate the complete transcendence of value production propose to get there from here.
One thing I disagree with Chomsky about is the necessity for a coop to make a profit to survive. It must make a profit to expand, but it can survive merely by breaking even. That is a difference. Within a capitalist system, businesses that merely break even are closed down. Within a cooperative system, businesses that merely break even have no reason to close down. In fact, given that there is no external capitalist to pay those profits to, a coop doesn't really make profits at all. Ultimately, if it does well in the marketplace, that results in its workers getting richer or it taking on more workers or both. A coop does not operate to the same profit motive as capitalist businesses.
To take the example of John Lewis, its constitution states that it must pay 50% of its profits to its workers in bonuses and that the other 50% must be reinvested in the business in ways that will benefit the workers. Not a penny of those 'profits' leaves the business, and the business is worker-owned. It's really not the same thing as the profit of a capitalist business at all.
SpineyNorman
Inappropriate content removed
Not sure that's true. Businesses that only break even cannot afford to take on new tech when competitors do, when to not take it on is to fall behind and do worse than break even. And of course this new tech usually means job losses. They need a capital fund - and this, combined with the inevitably lower rates of exploitation, gives capitalistic enterprises an edge.
And I'm not sure that it's any clearer how you would move from here to a 100% cooperative system given the combination powerful interests ranged against it and the pressures exerted on cooperatives by the coercive laws of competition, especially during a transitional period in which co-ops and standard capitalist enterprises compete with one another.
The most difficult obstacle is never working out how the system would work or even how it could, in theory, evolve from what we have now. The hard part is working out how you would manage to get those for whom the current system grants a huge amount of power to let you do it. They'd do all kinds of things - ranging from pooling resources to subsidise capitalistic competitors of especially successful co-ops so they could undercut them to the extent that they go out of business etc to outright sabotage, using their economic power to lobby for legislation that works against coops and so on.
I actually think that the kind of class movement you'd need to get anywhere with co-ops would need to be so powerful that you might as well use it to overcome market relations altogether. For me, that means a planned economy - one that could use the kinds of stock control/production software currently used by multinational corporations which are themselves planned economies - in many cases bigger than most national economies. You democratically decide what needs to be produced, with need, want, environmental concerns etc at the forefront in decision making (the means of doing this would have to be elaborated but I'd expect a combination of representative and direct decision making, depending on the importance of the decision being made - alternatives might be a choice between different plans that people could vote for - there's all kinds of ways this could work) and tasks are then allocated to different productive units that are run cooperatively - the plan decides what they need to make and the workplace decides how they're going to get their contribution to the plan done.
I think anything that attempts to get away from capitalism without using some form of planned economy is doomed to failure.
littlebabyjesus
one of Maxwell's demons
That would be where the mutual/state banks come in, no, providing the funds for new investment where they are needed. All things being equal, a coop has a competitive advantage over a capitalist business as it does not need to hand over money to external parties in the form of dividends. It may need to produce funds for future investment, but it doesn't need to produce funds for the returns on capital. Its driving force is the good of its workers, not the good of capital.
When I look at the likes of Mondragon or John Lewis, I see businesses for whom it is better to work than their capitalist competitors, and that within a system where they are very much the minority. I'm convinced that where there are far more coops in the market, the working conditions would be even more markedly better.
As for the problem of stopping capitalists from sabotaging a transition to coops, as I said above, the space for this could be provided by the failure of capitalism itself. The self-interests of those capitalists themselves could be to support the change to coops because the places where capitalist investment can produce returns for them are disappearing.
I think if you look at places like Japan, the problems of the stalled (although still very productive) economy and diminishing returns on capital are producing an impasse precisely because this kind of solution is not being tried. I also think that we may soon reach a point where the logic of capitalism to shift production away from richer countries will come full-square against the social problems this logic produces in those richer countries. Something will have to give. The political will to change could appear because it will have to appear in order to avoid societal breakdown.
SpineyNorman
Inappropriate content removed
Its driving force is value production, that's the problem. And the state banks - which state are we talking about? Only I'd not bet on the capitalist state taking the side of coops over private enterprise.
You're not really addressing the problems I've raised I'm afraid. How do you get more coops in the market? When there's relatively few of them they're tolerated - they're not a threat. You just watch what happens if it starts to look like they might become the dominant form. There'd be all out economic war against them and it would be incredibly naive to think that the state would do anything other than take the side of capital.
littlebabyjesus
one of Maxwell's demons
There have been times and places where the state has not sided full-square with capital. I would argue that post-WW2 UK is an example. It was widely believed that state-owned industry was the right way to go, and this was done - most of the country's heavy industry was nationalised. That isn't siding with capital.
I agree that when you look at the current political landscape, the will to attempt anything like this is nowhere to be seen. But that can change.
littlebabyjesus
one of Maxwell's demons
As I said above, I would see this process being driven by state-backed banks that only lend to coops. This isn't such a big step on from the ideas behind Germany's landesbanks. And yes, that would require a political will to move away from capitalist investment, and that political will does not currently exist. But we differ in that I could see that will developing as the current crisis deepens, which I am sure it will, and the capitalist model of investment fails.
Of course, such things are not simply granted from above by a benevolent political class. They must be demanded from below. But they must also be advocated. I think a coherent plan for a different future can work to galvanise pressure for change. I would argue that Marx's ideas did that, for instance. And the slow death of capitalism due to its own internal contradictions, which I think we may be witnessing, does open up space for this kind of thing, for 'market socialism' to become a powerful force for change. It is evolutionary, not revolutionary. It is a gradualist approach. But for me, that is a strength, not a weakness. And I think it could potentially have a strong, broad cross-class appeal to the '99 percent'.
littlebabyjesus
one of Maxwell's demons
Having said all of the above, I do take on board the point that you are not entirely switching away from the driver of production for production's sake by moving to coops. One potential mechanism to mitigate this would be the system of state-backed/mutual banking. It could provide a degree of central planning wrt the kinds of businesses that are invested in, and it would need to - its remit would have to be far wider than simply making money through loans, and there's no reason it couldn't be.
This may be an unpopular view on here, but I am skeptical of a system that is entirely centrally planned. Market mechanisms do provide a certain energy that allows an economy to thrive. They allow for differences in people's wants to be accommodated. Very hard to accommodate those differences, which are constantly changing, purely through central planning. I don't say this as an apology for the current system. Far from it. But I say it in order to explain why I don't necessarily want to see all markets abolished. A system in which aspects of the economy are left open to markets, where those wishing to enter those markets obtain their finance from banks that have a wider remit of regulating economic activity for the social good, provides a balance, I think, between the creative power of individual innovation and the collective need for socially responsible economic activity, while ensuring that ownership of the means of production remains in the hands of the workers.
This may be an unpopular view on here, but I am skeptical of a system that is entirely centrally planned. Market mechanisms do provide a certain energy that allows an economy to thrive. They allow for differences in people's wants to be accommodated. Very hard to accommodate those differences, which are constantly changing, purely through central planning. I don't say this as an apology for the current system. Far from it. But I say it in order to explain why I don't necessarily want to see all markets abolished. A system in which aspects of the economy are left open to markets, where those wishing to enter those markets obtain their finance from banks that have a wider remit of regulating economic activity for the social good, provides a balance, I think, between the creative power of individual innovation and the collective need for socially responsible economic activity, while ensuring that ownership of the means of production remains in the hands of the workers.
okay, I understand what it is you think is happening now.
THAT IS PRECISELY WHAT DOESN'T HAPPEN!!!!
Again, I ask you consider the four loans by four high st. banks, in urbantown. You can guess which bank people bank with.
bank A loans Alf £1000, Bank B loans Bertie £1000, Bank C loans Carolina £1000, Bank D loans Dominic £1000
Now, each bank's demand liabilities have risen £1000 (four thousand pounds have been created)
interbank flows = 0
Now Alf draws on his loan and pays Bob. Bertie draws on his loan and pays Charlie. Carolina draws on her loan and pays Dave. Dominic draws on his loan and pays Alexandra.
Net interbank flows = 0 (each bank has paid out £1000, and received £1000 so there is no change to their cash reserves)
Demand liabilities of banks: no change
No bank need take out any loan to 'fund' their lending. That's it! We simply have an additional four grand circulating in the system, and interest on four grand payable to the banks for the privilege of managing the process.
You must see that the nature of the process is that, to a very large degree, the clearing flows negate each other. As money loaned by one bank goes to another, so does money loaned by others flow to it. This is what allows fractional reserve lending to work in modern times. To the extent that they do not, that is where the interbank lending market features: it allows the banks to pool their cash reserves.
Of course, please observe that if all banks had to borrow in order to cover their demand liabilities, then they would all be stuck, as there would be no banks to borrow from. In fact what you describe LBJ is simply full-reserve banking without creation of new money.
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