Tag Archives: economics

Wolff in Sheep’s Clothing

by Anne Archist, who apologises for the terrible pun in the title.

Lately I’ve been following Professor Richard D. Wolff’s “online classes” on Marxian economics (I’d recommend that people who follow The Great Unrest should skip over the “intensive introduction” course, because the applied course basically covers the same things anyway, and unless you’ve never encountered Marxist thought before, you’ll probably find he moves slowly a lot of the time even in the latter course).

He’s an interesting figure, and probably one of a handful of Marxists in history to have been educated at Harvard, Stanford and Yale (although he says his teachers, with the exception of one Marxist, never had any interest in or knowledge of Marx’s ideas, and that he essentially studied Marx in his own time). Wolff makes several points that set him apart from standard ‘Marxist’ academics – some of which are more significant or original than others – which I’ll summarise and address here; please do look into his work if you’re interested in hearing his own words or taking the ideas further. A side note: apparently his interpretation of Marx comes via Reading Capital – a book which is only partially available in English, though Wolff is fluent in French, so may have read the original – and many of the following ideas may therefore have come from Althusser or his students, for all I know.

Labour-Centric Analysis

The major point of departure that separates Wolff from a lot of other Marxist theorists or Marxian-influenced economists is that he conceives of class in terms of relations to surplus-labour rather than relations to the means of production. Rather than building up an analysis which includes concepts like the social relations to the means of production, or the labour theory of value, he uses an arguably simpler conceptualisation: “‘productive’ labour is required to live but it also produces a surplus; in our society many people carry out ‘productive’ labour but do not distribute the surplus themselves, allowing those who do distribute it to appropriate a portion of it for themselves without carrying out any labour”.

When I first heard this I thought it was just a strange and idiosyncratic way of explaining classical Marxist economic theory (particularly the critique of ‘bourgeois economics’ in Capital). After thinking about it some more and seeing how the analysis was applied, I realised that it actually has some major conceptual differences (even if they can be shown only to be differences of emphasis or explaining the same thing in different terms, which I’m not sure of). For instance, Marx’s theory of exploitation is generally taken to rest on the labour theory of value, whereas Wolff’s version of exploitation doesn’t even seem to require asking the question of what causes things to have the value they do; this question was a concern for bourgeois economics but shouldn’t necessarily be one for someone criticising capitalism (remember: Capital was Marx’s critique of already-existing economics, not a critique of capitalism).

Another example: the concept of economic democracy is quite widespread among socialists (to the point that Peter Tatchell, who nowadays tends to steer clear of socialistic language, issued a call for economic democracy), but the link between it and the labour-theory-of-value construction of Marxist theory has often been tenuous or indirect; the steps from demands about the distribution of property to demands about economic decision-making processes have rarely been well articulated. Wolff’s presentation of Marx’s argument makes this immediate and obvious – economic democracy is equivalent to the demand that the surplus should be distributed by those who produce it, an issue directly addressed by Wolff’s notion of class.

Exploitation and Surplus Production

According to Wolff, exploitation is merely what happens when one person labours so as to produce a surplus – that is, produces more than the labourer needs to sustain themselves – enough, in fact, to sustain other people too – and someone else appropriates and distributes that surplus rather than the worker distributing it themselves. Exploitation, then, is not about someone receiving more than they have contributed, as Roemer would have it (Roemer has offered different definitions of exploitation, but at least one of them amounts to “consuming more than you produce”). This is important because it heads off a serious problem with Roemer-style definitions, which is that they identify children, disabled people, pensioners and others who do not work as exploiters; on the contrary, Wolff identifies them neither as exploiters nor as exploited.

On Wolff’s view of things, these people are allocated (and consume) a portion of the surplus, but the important factor is not that they are consuming it but that someone else is allocating it. This seems to fit with a relatively superficial and intuitive exploration of human emotional and moral reaction – namely, we begrudge people who take things (that we have not offered) from us and give them to others, even if we believe that the others receiving them should have them. An example: If you were planning on buying someone a book as a present and someone else stole some of your money, bought the book with it, and then gave it to the person, you would be justifiably upset and morally offended by the thief’s behaviour, even though the endgame is the same.

Another advantage of this way of looking at things is that it illustrates an important continuity between capitalists and government officials which is often assumed by Marxists but rarely explained; both take part in the appropriation and distribution of surplus they have not themselves produced. Capitalists appropriate surplus in the form of profit (in fact, capitalists can appropriate surplus without making any profit, since  on Wolff’s view surplus must also be used to pay for ‘unproductive’ labour such as that performed by security guards), and the government (at all levels) makes decisions about taxation and spending which represent a further form of appropriated surplus. The state retains a unique position within the economy, however, in that it is capable of extracting surplus from more than just workers within capitalist relations – as well as ‘productive’ employed workers, it also claims taxes from capitalists, self-employed workers, ‘unproductive’ employed workers, etc.

The Feudal Home

Following on from the above points, Wolff also identifies husbands in the traditional family structure as exploiters within the home (whether or not they are exploited outside the home). Production takes place within the home as well as outside it (for instance, the wife transforms raw food into cooked food), and the wife produces a surplus for the husband (she cooks dinner for both of them, not just herself).  Specifically, he argues that the class structure within the traditional family household is essentially a feudal one, for two reasons.

Firstly,  the wife is not owned by the husband like a slave, does not contract her labour for pay like a capitalist worker, and does not distribute the surplus herself as in the communist and ancient modes. Wolff seems to function on the assumption that there are only five modes of production, so if you eliminate four then whatever you are analysing must be the fifth. Secondly, the marriage ceremony is apparently itself derived from a feudal ceremony in which the serf and the lord pledged to ‘love, honour and obey’ one another (I haven’t been able to verify this, and would be interested to see a source and read more).

Now, personally I’m not entirely convinced by this. That one ceremony grew out of another is an interesting and potentially informative historical fact, but it certainly doesn’t establish that both ceremonies establish the same ‘surplus relations’ (if you’re not convinced by that, consider the fact that Wolff has to refer specifically to “traditional” marriage because other modes of production exist within married households – therefore the exact same ceremony can be used to set up multiple different class structures). As for the other reason Wolff gives, it’s a bit of a stretch to suggest that there can only be the five modes of production that Marx discusses, and even if you do so, you could eliminate feudalism first on the basis that the woman is not ‘tied to the house’, or something similar, and therefore conclude by elimination that it was another mode of production.

The Revolution on the Home Front

I don’t have a concrete suggestion at the moment for what kind of class structure we should consider traditional families to have, but it seems to me that it may be more enlightening to identify it as a patriarchal mode distinct from the others, as some socialist-feminists such as Delphy have done. At any rate we can conclude that the family unit, though it operates in a society we consider to be ‘capitalist’, actually traditionally operates according to another economic model (and very rarely, if ever, operates according to the capitalist one – modern exceptions generally operate on the communist or ‘ancient’ modes). What is of great historical importance regarding this analysis, as far as Wolff is concerned, is not necessarily what the mode of production within the family should be called, but rather that it has changed and is continuing to change.

The ‘traditional’ marriage or family was much more common two centuries ago (though other forms existed even then), but the USA (and many countries) has seen a solid and consistent decline in the number of people living under this kind of arrangement for the last half-century. Some of this has been in the form of rising demands for sharing the burden of housework within marriages, but it has also taken the form of rising numbers of ‘single-person families’, groups of friends sharing houses (and the housework), etc.

In addition to this change, the labour force and the person-hours at the command of the market has swelled with increasing numbers of women who traditionally would not have worked, or would have worked less, or would have been self-employed, etc – this has taken place over a longer period, of course, and is perhaps more of a varied and complex picture, but it is a real change nonetheless. Wolff argues that these changes are important historical shifts – a class revolution, according to Marxian analysis – that have passed the left by, and that the political fallout of this is that the (religious) right have seized on them and used the negative aspects (like increasing levels of social alienation and isolation, or women’s low pay and harassment at work) to push their own agendas.

Immediate Alternatives

What should the left be doing? Wolff is less precise on this point, as are so many academics. His strong point is analysing what has happened and what is happening, not what should happen next. Nevertheless he has some comments on this topic, which tend to contradict or bypass much accepted Marxist doctrine; rather than dealing with demands on the state and suchlike, he harkens back to early socialist and classical Marxist ideas.

The first suggestion is that the left should aim to make explicit to people the class shift that has taken place within the home, and that Marxist theory can understand both what was going on before and what happened to get to where we are now (and perhaps why it happened); this, he argues, would put us in a much stronger position to argue to working women that they should oppose exploitation (in the Wolffian sense) on the job as well as in the home. This would raise class consciousness and have a kind of detoxifying effect concerning people’s fears around Marxist theory and concepts like class struggle or revolution.

Wolff’s other major suggestion is that the left should take a more sustained and pro-active interest in cooperatives (and presumably communes). Rather than seeing a society which has an essentially monolithic capitalist culture and structure, he sees a world in which many class relations co-exist, intertwine, intermingle and contradict either other (such as the working-class husband who is an exploiter at home despite being exploited on the job); therefore he places less of an emphasis on ‘overthrowing’ or ‘abolishing’ capitalism in the sense that is common in the Marxist left today. This also links back to some criticisms he makes of Marxist figureheads such as Lenin and Trotsky with regard to their Marxian economic analysis, which he considers to have been poor at best due to their failure to properly change relations to the surplus (he considers the USSR to have been a kind of state capitalism because the state extracted and distributed surplus in basically the same way as private capitalists do).

A specific consequence of this is that he considers it a high priority to relate to forms of producing (at home and at work, presumably) which avoid the extraction and distribution of the surplus by another party or a minority of producers. His proposals are vague at best, and shouldn’t be taken as a solid political programme, but he seems to suggest that socialists and the labour movement should get behind cooperative enterprises partially for obvious reasons that this would be free of exploitation and show that it is possible to produce without capitalist arrangements and so forth.

An interesting elaboration on his thoughts on cooperatives involves an argument that attributes at least a portion of capitalist hegemony to the extraction of the surplus; specifically, if private companies can extract a surplus from their labourers and accumulate vast amounts of wealth in this way, they gain more control over the media, political campaigns, lobbying, etc. If, on the other hand, workers enter into cooperative enterprises and deny capitalists this surplus, that surplus stays within the working class, both diminishing the wealth available to the capitalists to carry out a programme of class struggle against workers and increasing the wealth available to the workers to carry out a programme of class struggle against capitalists.

Conclusion

In short, Wolff has some original ideas, an interesting spin on old ideas and some interesting analysis gained by applying old methods to current and historical events. I’d recommend that people interested in Marxist class analysis, whether or not you are a Marxist yourself, take a look at him and his interpretation of Marx. It’s certainly made me re-think my understanding of Marxian economics and given me a useful new tool to my belt of Marxian interpretations, analyses and concepts.

Leave a comment

Filed under Economics, Liberation issues, Marxism, Political Strategy, Reviews, Uncategorized

New Year, New Labour

by Anne Archist

Labour are trying once again to re-invent themselves; 2012 has already seen a new attitude that amounts to exhuming the short-lived corpse of Blue Labour.

The media identified prior ‘re-launches’ under Miliband’s stewardship in June of last year and November of the year before, not to mention that his election as leader was itself supposed to de-toxify the Labour brand after the Blair-Brown years. Each previous attempt also utilised Maurice ‘The Baron’ Glasman’s “if you can’t beat them, imitate them” logic; this time, though, the leadership’s ‘Kinder, Küche, Kirche’ ideology has been dressed up in Beveridge’s old clothes, saved for just such an occasion.

The Baron was disappointed to learn that Jon Crudas had skipped Sunday service.

Blue Labour is enough to make a Marxist miss Brown Labour. At least Gordon ‘Golden’ Brown realised it was “the economy, stupid” and had some tentative ideas what could be done about it – The Baron would rather have us believe that modern society’s inexorable autosarcophagy can be stemmed by getting more bums on pews at St Saviour in the Marshes. Liam Byrne is the whipping-boy tasked with the triumphant fanfair, and is at least an improvement on Glasman. The Baron wrote and said the sorts of things that would make you choke on your bourbon biscuit in shock as you casually perused the Guardian website over a cuppa. Byrne is the kind of character who might make you emit involuntary Marge Simpson impressions, but not cough up crumbs and hot tea over your keyboard.

The big news is that Labour are “reclaiming [Beveridge’s] vision, learning from his political courage, understanding what has gone wrong in recent years as well as what has worked”; they must “become the radical reformers again”. Like a student who forgets to attach their essay to the e-mail, Byrne seems to have all-too-conveniently left out the details. There are hints at what the new approach to welfare policy might be, and some of them aren’t pretty.

Encouragingly, Byrne savages the current system’s treatment of the ill and disabled, and ends on a high note: “Beveridge’s first principles are the right place to begin”. But the warning signs are all there, and we have come to expect no better from ‘triangulated’ Labour: “Beveridge would have wanted determined action from government to get communities working once again, not least to bring down that benefits bill to help pay down the national debt”, “He never saw unearned support as desirable”, so “let’s restore the idea of ‘something for something’”.

Image

Now, as it happens, although Liam Byrne was neither born nor elected in my local area, he was educated here in his adolescence. I would like to think, then, that having experienced a world where around 30% have no qualifications, unemployment has frequently hit 10% or higher (with youth unemployment particularly high and a relatively high number of people never having worked), there is a high measure of overcrowding and 30% live in council housing, Byrne might have some understanding of the problems facing – and generally the lives of – those who rely on the welfare state in some form.

On the other hand, Byrne also sat on the committee that drafted legislation penalising phone usage by drivers, and then got a fine and points on his license for… yep, you guessed it, using a phone while driving. Perhaps, then, it would be too much to expect of him. While paying lip service to the content of Beveridge’s skilful and considered (though still imperfect) report, one gets the impression that Labour are more keen to vicariously cash in on its kudos than to implement its ideas as policy. This impression is all the more forgivable in light of New Labour’s record, and especially given the continued influence that Glasman’s ideas exercise over the party leadership (despite the formal dissolution of the Blue Labour project after the aforementioned ugly comments made by The Baron himself).

It would be a massive coup if Labour could produce something like the Beveridge report these days. Of late, state-commissioned research has been getting more slapdash and significantly shorter, with all of the loss of detail, balance and elucidation that implies; consider the 2010 Browne report into Higher Education, a total wash-out weighing in at only a nominal 60 pages (which is misleadingly high considering that ~5 pages of that are taken up by appendices and references, and the report itself contains more blank space and pictures than your average colouring book). The 1963 Robbins Report into Higher Education, to put that into perspective, had 335 pages. Obviously I’d rather give the number of words since this is a better standard of comparison, but this is difficult for technical reasons and you get the picture at any rate.

Beveridge struggles to find anything of any intellectual merit in the Browne Report.

It’s not just a question of the length of the report and the level of detail and the development of the logic that was possible as a result. It’s also a question of the mind and principles behind the recommendations; the principles were laid out honestly, the best practical application was explained meticulously and with sharp insight. As Liam Byrne points out in his article, the general public responded so positively that there were queues to buy the report. Beveridge strips his subject matter bare and builds his thought process up in a clear and honest way that can be followed by anyone inclined to do so, rather than filling the text with jargon or tacitly presupposing a narrow ideology. If every report were like the Beveridge report, bureaucracy would not be such a bad thing.

Labour have two choices. They could attach a dynamo to Beveridge’s coffin and prove themselves partially useful by forcing him to spin – with a bit of luck they might be able to power a constituency office with the electricity generated. Alternatively, they can take the challenge seriously and commission talented intellects to conduct a wholesale enquiry into the modern benefits system and its intersections with other areas of state and market activity. Taking this route would mean considering not only issues like the incentives provided by child benefits, but also the relationship between wages and benefits in their various forms, the future of social housing stock, the feasibility of full employment (which Beveridge assumed in his report), etc.

While it may not be immediately apparent, these questions are vital to understanding why the benefits system works as it does, and how it might work differently. The level of benefits or the conditions associated with them do supply incentives to act in one way or another, but they do not do so in a vacuum. The consequence of a particular policy (setting a threshold just so, or banning this type of person from receiving that payment) depends hugely upon other social variables that exist alongside the benefits system but are not themselves part of it. Even Byrne’s colleague Diane Abbott made this point effectively when she noted that the housing benefit bill “reflects a conscious political decision by successive governments to subsidise (mostly) private landlords rather than invest in affordable council housing”.

While we’re looking at benefits from different angles, let’s also remember that there are more things in heaven and earth, neoliberal, than are dreamt of in your economics. It shouldn’t be a surprise if someone values 15 hrs of their time more highly than the £15 difference it would make to their income. We should re-evaluate which factors are taken into consideration in determining payments and how – should 2 friends living together get any more or less than 2 partners living together? We should be clear about what sort of behaviours we are incentivising or penalising and why – do we want less children (say, for environmentalist reasons) or more (to counteract the aging population and pay for their parents’ pensions and healthcare, perhaps)?

If a re-examination of the welfare state dodges problems like this then it will have ensured its irrelevance and its inferiority to the original. In fact, it’s tempting to suggest that Miliband might as well just re-publish and re-read the original Beveridge report in its entirety and apply the principles and arguments laid out in it to the contemporary situation, since it’s difficult to imagine the modern Labour party producing or commissioning anything of great positive significance.

Byrne hits the nail on the head when he says that what is needed is radicalism, though I doubt he has the stomach to put this concept into action – healing the malaise of the welfare state may mean rebuilding the entire taxation system from the ground up, ensuring structural full employment, introducing a universal minimum income (like that proposed by the Green Party), or other wholesale changes to basic components of our economy and society. Byrne is all bluster, but calling his bluff could yield real fruit.

1 Comment

Filed under Current Affairs, Liberation issues, Political Strategy, Satire, Uncategorized

The Return of History

by nineteensixtyseven

The recent issue of the New Left Review contained an interesting paper by Michael Denning, ‘Wageless Life’ which aims to ‘decentre wage labour in our conception of life under capitalism’ by stressing the point that ‘capitalism begins not with the offer of work, but with the imperative to earn a living.’ In other words:

‘Unemployment precedes employment, and the informal economy precedes the formal, both historically and conceptually. We must insist that ‘proletarian’ is not a synonym for ‘wage labourer’ but for dispossession, expropriation and radical dependence on the market. You don’t need a job to be a proletarian: wageless life, not wage labour, is the starting point in understanding the free market.’

‘Proletarianisation’, thus, was a definite historical process which, if we follow E.P. Thompson, disrupted the moral economy of pre-capitalist formations and which has, as Marx put it, ‘pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment.”

What caught my attention most, however, was the historical analysis of the construction of ‘unemployment’ as a concept, and especially the comment that the ‘modern notion of unemployment depended on the normalization of employment, the intricate process by which participation in labour markets is made ordinary.’  This was by no means an even process, as a transitional craft consciousness remained as workers struggled against their separation from the means of production and the imposition of more authoritarian forms of socialised factory production on the one hand, and attempted to prevent the entry of unskilled and female workers to the labour market on the other.

The concept of unemployment itself also evolved from a symptom of idleness and individual failure to a more contingent phenomenon to be ‘insured’ against through contributory National Insurance.’ When the Great Depression exposed the limitations of this view it was then reconceptualised in terms of aggregate demand and integrated into the macro-economics of Keynesianism.

It struck me, of course, that this normalization of employment paralleled the normalization of the capitalist mode of production as the ‘natural’ state of affairs.  This, too, was an uneven process as the peasantry clung to pre-capitalist economic relations.  Indeed, upon the outbreak of the Spanish Civil War in 1936 the reaction of peasants in some areas was to insist on the return of 19th communal forestry rights perceived to have been stolen from them in the act of enclosure.

This more generalised normalization of capitalism was reflected in the evolution of economics. The classical economists, including Smith and Marx, were all political economists in the sense that their analysis of ‘economics’ was synthesised with a wider view of society and the line between micro and macro was barely pronounced. Moreover, the classical school was predicated on variations of the labour theory of value, conceiving of value as a creation of production.

The labour theory of value had obvious political connotations and was of course developed into the basis of Marx’s argument for the exploitative nature of capitalism. More fundamentally, Marx exposed the social relations concealed in the commodity and transcended classical political economy by revealing the historical nature of these relations of production. Hilferding expressed the significance of this well in his response to Böhm-Bawerk that ‘the demonstration of the historic transitoriness of bourgeois relationships of production signifies the close of political economy as a bourgeois science and its foundation as a proletarian science.’

For the neoclassical school, however, value was not a product of objective social relations but was subjective in character. That is to say, as Mandel puts it, neoclassical economics and the theory of marginal utiltiy start ‘from individual consumption rather than social production’ and therefore:

‘whereas Marx and the classical economists start from the social character of the act of exchange, and regard exchange value as an objective link between owners (producers) of different commodities, the marginalists start from the individual character of needs, and regard exchange-value as a subjective link between the individual and the thing.’

In other words, the micro-economic and subjectivist starting position of the neo-classical theorists of marginal utility conceals conceals the true nature of the commodity as a product of definite social relations. These relations are presumed a priori and are thereby naturalised. It need not be added that these theorists had no theory of crisis until it took Schumpeter to recognise the systemic nature of capitalist crisis and internalise it as a positive- ‘creative destruction.’

The main issue with the subjectivist turn in economics was that it was essentially static. No system of thought which abstracted itself from the social character of the economy could integrate a conception of development, for history is in essence the product of social agents acting in aggregate. Perhaps this suited the post-1848 generation well, withdrawing to mathematical models in imitation of the fin de siècle retreat into the realm of the unconscious; the Austrian school of Carl Menger sharing a commonality with Vienna’s most famous father of psychoanalysis.

The fundamental point is that history, then and now, is dangerous and that is why the bourgeoisie were so keen to abstract from it or indeed have it declared ‘ended’ with the fall of the Berlin Wall. The knowledge that everything is potentially transitory is the elephant in room for any upholder of the status quo, whether in the 19th century or now.  Simply put, the idea that the current system had a beginning suggests the possibility that it also will end.  The symptoms suggest themselves.  9/11 has confounded the Hegelian unfolding of liberal democracy and September 2008 discredited the purveyors of neoliberalism theology. As Alan Greenspan’s mental universe imploded in front of Congress, commentators grasped around for some historical anchor to prevent them from drowning in the relativistic void resulting from postmodernism’s myopic destruction of the grand narrative.

Humanity faces huge choices as we enter the second decade of the 21st century. Economic and environmental catastrophes are not mere discourses and history has not ended so let us return to a critical engagement with the world around us as a prerequisite for changing it.

2 Comments

Filed under Economics, History, Marxism