exmarx posted:

Raskolnikov38 posted:

if I have to see that meme one more time

Lightning Knight posted:

https://twitter.com/grindingpoet/status/1253759688166068227?s=21

mila kunis posted:

can someone explain 'the transformation problem'. please don't flame me for being a dumbass


if my understanding is correct, what is said is the labour theory of value falls apart because say for a product A:

- company X uses fixed capital (raw materials, etc) worth 10 labour hours, and labour time of 90 hours

- company Y uses fixed capital worth 90 labour hours, and labour time of 10 hours


say the rate of surplus value is 50% - the labourer works 5 hours to sustain himself, and 5 hours of surplus labour in a 10 hour workday.

Say each labour hour is worth 10 dollars.

then:

On the market, each company's good is theoretically valued the same - 100 labour hours * 10 = 1000 dollars.

Company X spends 100 dollars for fixed costs, 450 dollars for labour. And earn a profit of 450 dollars.

Company Y spends 900 dollars for fixed costs, and 45 dollars for labour. And earn a profit of only 45 dollars.

This is supposed to be silly for some reason and should explode the labour theory of value, but I don't quite understand why.

One of the reasons I read is that capital intensive should do better than labour intensive ones, but surely the rise of China is a huge glaring counterpoint to that?

Secondly, don't socially necessary modes of production between firms in a society tend to converge towards the ones that yield the most return to the capitalist, so company Y would be out competed eventully and there wouldn't be these wildly differing modes of making this product out in the wild?

Lumpy posted:

I think the reasoning goes something like this:

Both company X and Y start off spending 100 dollars for fixed costs, 450 dollars for labour and earn a profit of 450 dollars.

Company Y then does something clever and can spend 150 for fixed costs and only 350 dollars for labor and earn a profit of 500 dollars. Company Y using less labor makes more profit. Checkmate lib.

mila kunis posted:

that seems to be the opposite of my understanding here. by spending more on fixed costs versus exploiting labour, company Y would be be reducing their profits. since they pay the full face price on fixed costs, but can pay labour half of the value they produce.

exmarx posted:

punk rebel ecks posted:

This is an actual major factor that doesn't get discussed when people advocate for leftist governments taking over. They much more often than not get coup'd by the military due to the military largely siding with the right. Such as in Bolivia and Thailand. One of the major factors of Venezuela still standing is because the military leans overwhelming pro-PSUV.

AnimeIsTrash posted:

I hope lady juche destroys america

Shear Modulus posted:

the generals and officers are rightwing but the troops plainly loved bernie

punk rebel ecks posted:

This is an actual major factor that doesn't get discussed when people advocate for leftist governments taking over. They much more often than not get coup'd by the military due to the military largely siding with the right. Such as in Bolivia and Thailand. One of the major factors of Venezuela still standing is because the military leans overwhelming pro-PSUV.

Dreddout posted:

Presumably if america gets to the point of instability that foments a leftist insurgency a lot of the troops would be among that insurgent faction

It's almost like the government is trying to get this to happen with vet benefits getting cut and poverty/homelessness on the rise

Lumpy posted:

I sort of oversimplified, but yes. That's the gist. Like I said, as your costs move more and more towards fixed costs, your rate of profit falls.

Why?

If you bought 1000 in capital equipment, and did nothing with it, you'd have 1000 in capital equipment. No value is created, because there is no labor transforming that capital into a new commodity. As companies automate, they get closer and closer to this idealized situation. If you could buy the "BallPointPenOmeter 2000™" that would simply have ballpoint pens fall out of it when you held the button on it down, the price of ballpoint pens would effectively be zero, since you could produce an infinite amount for the fixed cost of the machine. If I had to put materials in to the machine, the cost of pens would simply be the cost of the materials, since anyone can make as many pens as they want for the fixed cost of those.

EDIT: the capitalist dream is to reduce labor costs by _less than_ the increase in capital costs. This doesn't work LONG TERM for the reasons above, and because as you automate, you reduce the socially necessary labor time to create your product, which reduces its value, and reduces the exploitation you can pull off. In the sort term, you can increase profit via automation, but this is not stable.

Ferrinus posted:

from my VERY limited understanding, the transformation problem is: what if there are two DIFFERENT products, one of which requires much more variable capital than the other? why aren't the most labor intensive industries also the most profitable? (or are they?) (or does the race to the bottom you describe here mean it's a moot point?)

Lumpy posted:

Ah, I wasn’t clear on that in the original post. I thought it was two firms in the same industry.

mila kunis posted:

can someone explain 'the transformation problem'. please don't flame me for being a dumbass

Algund Eenboom posted:

Homeless Friend posted:

uncop posted:

To understand the transformation problem, it'd serve you better to look at Ricardo rather than at Marx. It arises from when you one hand claim that value is average market price (actually "price of production", but average market price should be the same if average supply and average demand are assumed to be equal) is labor-time, but on the other hand claim that market competition equalizes profits. Both claims could only be true at the same time if all enterprises used (proportionally) equally as much labor-time to produce their equal profits. If two different industries that employ very different amounts of labor for an equal amount of product in terms of money also gain the same profit, then logically either the different kinds of workers' time has added different amounts of value or the products haven't been sold anywhere near at their values.

The transformation problem was read into Marx because economics interpreted him as basically a ricardian economist bent on fixing the issues in Ricardo's formulation, and a huge weight was put on Marx's formula in Capital vol. 3 where he develops a ratio between constant capital (non-labor commodities in production) and variable capital (labor power in production) and produces a seemingly unfinished mathematical formula using those variables to explain how industries with different ratios unequally share value produced in order to equally share in profits. The issue Marx left for those interpreting him as that sort of ricardian is that he left no explanation as to how these values that should be converted into average prices can be known in the first place, and why should anyone care to know them.

You may have noticed a difference between Ricardo's formulation and Marx's formulation. Namely, for Ricardo value was average market price, while for Marx value is not average market price and average market price is only arrived at through transformation of value. Actually Marx identified even *more* transformations concrete labor has to go through: first into abstract labor-time (how much socially perceived labor is in that specific type of actual labor), then into a sum of money, and finally into the average price of a product of industry. But he regarded them as objective transformations that can be taken as given in society rather than mathematically solving every step somehow.

I find Fred Moseley's argument that there is no transformation problem at all left in Marx very convincing. The mass of output prices minus the mass of input prices in the whole economy during an analytic examination period is just immediately the mass of value produced, the transformation from numerous kinds of concrete work to money has already been done by society. We have the tables on how many hours of concrete labor of each type industry has employed. We have the tables on how much money each industry has invested in what. We have the tables on how much the products of industry sold for. Marx has simply laid out a claim that the numbers in those tables should be approximately convertible to one another using certain mathematical formulas, and a claim that if they indeed are convertible as expected, then his theoretical law of value is in action in the economy, with all its implications like the tendency of the rate of profit to fall and so on.

smarxist posted:

"low organic composition" industries (large amount of labor power [farming etc]) should have HIGHER PROFITS than "high organic composition" industries (large amount spent on raw mats and means of production [tooling])

Top City Homo posted:

could be a social liberal or a liberal socialist

Any case he sucks

dex_sda posted:

lol what a waste of 30 bucks

Ferrinus posted:

am i crazy or should we not be calling industries with more workers and less machines "high organic composition" since more of their composition is literally composed of organisms

Raskolnikov38 posted:

if I have to see that meme one more time

punk rebel ecks posted:

So what your guys's opinions on Rojava and libertarian socialism? Does is it seem like a realistic alternative to push left wing politics as an alternative to liberalism and social democracy?

mila kunis posted:

this was helpful, thank you

i dont want to poo poo up this thread too much, do you have pms or some way to contact you if i got further questions

Ferrinus posted:

ask them in here imo

dex_sda posted:

not the best thread for this question

personally I am partial to anarchist thought and have seen many examples of it successfully implementing socialist ideas in small scale but I have to admit there are legitimate questions. first off, it requires a bigger buy-in from the population, and sowing those ideas takes time - not ideal when faced with counter-socialist enemies that will try to gently caress you over. second, who knows if the egalitarian way to do governance works at nation-state scale, poo poo has not been attempted (zapatistas and rojava are the biggest and while they aren't small, they aren't that big either). some stuff does need bigger centralisation (crisis response) and it's a balancing act that looks like it works in ~1 million population states, but could very well topple over as it grows.

finally, it's hard to say if it's realistic as a way to push it. it's way more revolutionary-minded than lib/socdem thought, even if it doesn't go as far as ML.

That said I'm optimistic about it, there are pockets of it growing successfully. How has Rojava handled the coronavirus situation, I'm curious? I know the Zapatistas did very well.

punk rebel ecks posted:

Good post.

Rojava is a good indication because it worked with 2 million people, but yeah scale is important. The issue is that much like Zizek, Chris Hedges, and Adam Curtis point out is that the Left doesn't really have an alternative to Capitalism. And any attempts tend to hop back to statism, even in Venezuela which tried cooperatives but stopped due to meandering results (the reasons why can be disputed).

And yeah I don't see an official Socialism thread so I assumed this was it from reading the OP which just lists left wing literature. It has a strange thread title.