ASSA 2022: part two – the heterodox

In this second post on the annual ASSA economics conference, I look at the papers and presentations made by radical and heterodox economists.  These presentations are mostly under the auspices of the Union of Radical Political Economics (URPE) sessions, but the Association of Evolutionary Economics also provided an umbrella for some sessions.

The mainstream was focused on whether the US and world economy were set to recover strongly or not after COVID; whether the hike in inflation would eventually subside or not and what to do about it.  The heterodox sessions were more focused, as you would expect, on the fault-lines in modern capitalist economies and why inequality of wealth and income has risen.

Interestingly, this year most heterodox presentations came from the post-Keynesian framework and not from Marxist political economy.  The most interesting paper came from Al Campbell of Utah University and Erdogan Bakir of Bucknell University.  Bakir looked at the dynamics of US recessions since 1945 through the prism of the Kaleckian profit model. Now I have discussed the difference between the profit models of Kalecki and Marx on many occasions on my blog.  Bakir and Campbell’s paper outlines the macro identities in the Kalecki model.  But put simply, both aggregate models can be reduced to this simple formula: Profit = Investment + Capitalist Consumption 

But this is an identity: total profit must match total spending by capitalists (investing and consuming) by definition.  It is assumed that workers spend and do not save their wages.  As Kalecki put it: ‘workers spend all they earn, while capitalists earn all they spend’. 

This sums up the difference with Marx.  Kalecki argues the direction of causation in the identity is from investment to profit, while Marx argues that the direction of causation is from profit to investment.  Kalecki starts with investment as given and capitalists invest to ‘realise’ profits.  Marx starts with profits as given and capitalists invest or consume those profits.  Kalecki in true Keynesian style reckons capitalist economies are driven by aggregate demand and capitalist investment is part of that demand, so profits are merely the ‘residual’ or result of investment.  In contrast, Marx reckons capitalist economies are driven by profit, which comes from the exploitation of labour power, providing the profits for investment.  Kalecki removes any semblance of Marx’s law of value and exploitation from his model; for Marx it is paramount.

In my view, this makes a fundamental difference because the Marxist theory of crises under capitalism depends on what is happening to profit, in particular, the rate of profit.  For Marx, crises are caused by a lack of surplus value extracted from labour; for Kalecki, they are caused by a lack of demand for investment goods from capitalists and consumer goods from workers.

But it is still the case that the macro identity of both models is the same.  The Bakir-Campbell paper starts from there and “analyzes the components of the Kaleckian profit, as distinct from its determinants.”  Using US national income accounts Bakir and Campbell delineate how much goes to different sectors of the capitalist class ie how much to bankers, shareholders and to capitalists and in interest, dividends and capitalist consumption.

Table 2 from their paper shows that the share of the proprietor’s income in profit was, on average, 47.6% during the Golden Age (I-IV) and dropped to 34.4% under the period of neoliberalism (VII-XI). The share of undistributed profits also dropped rather substantially from 17.4% during the Golden Age to 10.3% in the neoliberal period. The share of rental income also declined from 13.8% to 9% between these two periods. The share of net interest payments and net dividend payments in profit, however, increased substantially in the neoliberal period compared to the Golden Age: from 10% to 28.7% for net interest payments and 11.2% to 17.6% for net dividend payment. “The data confirm that neoliberalism has involved a substantial redistribution of income from enterprises to rentiers and shareholders. To the extent that this redistribution reduces the savings of enterprises, it discourages investment.” 

In other words, there is good evidence that capitalists switched more of their profits out of productive investment to make more profits from financial speculation in the neoliberal period.  This explains the decline in productive investment growth and the expansion of finance.  Unfortunately, using the Kalecki model, Bakir-Campbell hide the Marxist cause for this switch; namely a falling rate of profit in productive sectors.  But as they say, the determinants of profitability was not the purpose of the paper.

In another paper by Bakir and Campbell, the authors consider the role of increased debt in promoting and supporting that increased rate of profit. In this presentation, Al Campbell argued that finance was not a parasite on the productive sector as economists like Michael Hudson argue; it was worse than that!  That’s because it slows productive accumulation.  If it were just parasitic, why did the strategists of capital let debt in all its forms expand during the neo-liberal period?  Neoliberalism cannot be reduced to so-called ‘financialisation’; neoliberalism had many different features, all aimed at raising profitability at which increasing credit/debt play an important role, but at the expense of productive investment.  So it is a reformist illusion that capitalism can return to the Golden Age of fast growth in investment and production by controlling or curbing debt.

Another theme in several papers on the slowing pace of investment and productivity in modern capitalist economies was the Keynes-Kalecki view that it was due to the reduction in labour’s share of national income, so that aggregate demand growth slowed. Thomas Michl of Colgate University reckoned that the wage share regulates labor-saving technical change and employment regulates its capital using bias. So secular stagnation under neoliberal capitalism has been driven by a combination of diminished investment and reduced worker bargaining power more than by slower technical change and population growth. This increases the profit share and so reduces the rates of technical change, capital accumulation, and population growth.  Again, this is a theory that is the opposite of Marx’s.

Similarly, Carlos Aguiar de Medeiros and Nicholas Trebat argue, ‘based on classical political economy and the power resources approach’ that “the key factor behind the increasing wage and income inequality of this period was the decline in workers’ bargaining power., rather than globalization or technical change.  It is surely correct that the demolition of trade union power in the neoliberal period had an important effect on reducing labour’s share in national incomes.  But it does not follow that reduced labour share was the cause of crises in capitalist production post-1980 as post-Keynesians argue when they refer to ‘wage-led economies’.

Another variant of this post-Keynesian analysis of capitalist crises was presented by John Komlos of Munich University.  Starting from accepting Keynes’ view that “I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight.”, Komlos reckoned that the pandemic slump was so severe because the capitalist economy was already fragile. So it took just a ‘black swan’ event like the pandemic to tip it over.  The idea of black swans, or ‘unknown unknowns’ on the extreme of the probability spectrum was offered as an explanation of the Great Recession by some back in 2008-9 following the view of financial analyst Nassim Taleb that chance rules.  At that time I argued that the black swan explanation of slumps (ie chance) could not explain regular and recurring crises (each time were they by chance?).

But what to do about avoiding or ameliorating slumps under capitalism.  A very popular policy alternative has been taken up in heterodox circles, namely more government spending and even permanent budget deficits financed by money creation as per Modern Monetary Theory (MMT).  MMT found some support in the heterodox sessions.  Devin Rafferty of St Peters University reckoned that the heterodox economist Karl Polanyi and MMT would agree on the process by which money is created as well as on the mechanisms that regulate its value. Polanyi would have embraced the MMT policy measures of a ‘job guarantee’ and ‘functional finance’ —the two staples of the MMT approach–which he believed would foster international peace, national liberty, and individual freedom.  I think this tells us something about Polanyi’s form of Marxism and MMT.

Much more critical of MMT was Brian Lin of National Chenghi University.  Lin argued that public investment by state enterprises would be much more effective in avoiding slumps than MMT. State investment “is more a timely creation of advanced institutions for sustaining worldwide economies than a politico-economic phenomenon like the MMT”. It would be far better for a country to adopt a decisive policy of nationalizing private companies with financial difficulties instead of issuing more money for the unemployed.  Lin’s view came in for heavy criticism by some attendees who reckoned state companies were bureaucratic and inefficient compared to the private sector and could not be relied on.  Lin did not respond with the Chinese model as the success story for public investment but, of all countries, state enterprises in Sweden!

However, when it came to investment solutions for so-called Global South, the idea of expanding public development banks was supported.  Gaëlle Despierre Corporon of the University of Grenoble reckoned such institutions “can give a positive impulse to the global relations between the South and the North and become dynamic institutions able to provide new perspectives for long-term development financing and ensure the coherence of the global system.”  So apparently, the public sector can work globally but not nationally.

That brings us to the rising global inequality of wealth and income – an important subject, ignored at this year’s ASSA by the mainstream, but taken up in a paper by Victor Manuel Isidro Luna of the University of the Sea. He pointed out that the majority of the countries of the world are not catching up consistently with the affluent countries. So ‘between country’ inequality has surged.  In particular, between the richer and poorer Latin countries, there remains “an unbridgeable gulf”.   The poorer countries globally were handicapped by a reliance on short-term foreign portfolio investment and longer term by FDI which were controlled by the richer countries.  This left poorer countries in the grip of the richer.  So open markets cannot be the development model for the poorer countries.

‘Within country’ inequality was also discussed in some sessions.  Some Norwegian economists reckoned that labour income is the most important determinant of wealth, except among the top 1%, where capital income and capital gains on financial assets were more important – pretty much as you would expect in a capitalist economy.  Alicia Girón on UNAM Mexico also confirmed that the recent rise in inequality is associated with rising asset valuation as opposed to capital accumulation both globally and within countries and is not driven by potentially spurious factors such as demographic changes and growth. In other words, for the top 1% gain mostly from rising property and financial asset prices. 

One of the major new financial assets for the rich has been the emergence of crypto currencies.  Using the Marxist conceptualization of money, Julio Huato of St Francis College argued that the buyers of crypto currencies were not getting some great decentralised money asset but still dependent on the state “which they imagine to have escaped.” Edemilson Parana of the Federal University of Ceara reckoned that Bitcoin would be unable to establish itself as an alternative to the current monetary system as it does not meet elementary requirements of money. Despite its declared search for a substitution of world money, for monetary stability against the supposedly ‘inflationary’ state money and for ‘depoliticization’, decentralization and deconcentration of monetary power, what is empirically observed is precisely the opposite: low volume and range of circulation, great instability against state money, transactional (economic, ecological etc.) inefficiency and greater relative concentration of political and economic power among its users. In the end, the non-fulfilment of the radical neoliberal aspirations of Bitcoin shows that the attempt by its creators and enthusiasts of emptying money of its social content, i.e., to ‘neutralize’ it, in capitalism, is not feasible.

Finally, there was the elephant in the room – China.  Surprisingly, there was not much on China in the heterodox sessions except on the inequality of income.  To be more exact, in one study it was found that China’s ‘global middle class’ (ie equivalent in income to Europe’s middle class) had grown very rapidly, from 2% of the population in 2007 to 14% in 2013, and further to 25% of the population in 2018.  This middle class was predominately urban, largely resides in China’s eastern region, and mainly depends on wage employment for income. A distinct ‘business’ middle class exists, but is relatively small.

Financialisation in the advanced capitalist economies through the Kalecki paradigm, doubts about MMT and cryptocurrencies, studies on rising inequality – these were themes of heterodox sessions.

32 thoughts on “ASSA 2022: part two – the heterodox

  1. Thank you for the report. From the tone of your report it appears that the radical and heterodox economists have gone backwards. But that is to be expected from those who mix advice for capitalism with criticism of it, rather than being unadulterated critics, and this on the eve of what could be the most turbulent period for global capitalism in a generation.

    The Bakir-Campbell paper is of interest no pun intended. I cannot agree with the table they provide. Their interest calculations according to NIPA Table 1.13 is way off. If anything according to Line 8 in the Table, netted off interest has actually fallen as a share of National Income, which is to be expected given the low interest rates over the past decade or so.

    What they are confusing is an actual restructuring of the US economy since 1980 because of the crisis of profitability and its bastard child, inequality. This restructuring is vividly described by Table 1.13. Domestic Business’ share of National income has fallen from 78.6% in 1980 to 75.7% because inequality has raised the household sector from 8.1% to 12% (take note when you compare the size of the US economy to China’s). Within that, Corporate Business has fallen from 61.6% to 56.1% of National Income because non corporate has risen from 16.9% to 19.7%. Now it can be said that given the rise of Hedge Funds and Private Equity, both lodged in the non-corporate sector because their legal identity is that of partnerships, we could say that the rentier class has grown. But this is not the whole story. True these partnerships often purchase corporations in order to convert their equity into debt and thus an intermittent profit stream into a constant interest stream, but they still manage their assets as capitalist proprietors. What their actions do achieve, as Marx pointed out in Volume 3 is to improve the rate of profit by often removing less profitable capital from the calculations by converting it into debt. For that reason alone, the non-financial corporate pre-tax rate of profit remains the most important profit metric in the economy.

    Finally, it is worth adding that the share of non-financial corporate income as a share of National Income has fallen from 56.9% to only 48.3% but that is largely due to the distortions found in the financial sphere such as the income of FED banks and owner occupier rents (the biggest class of Rentiers at nearly 10% of National Income, sorry can’t resist being sarcastic about all this infatuation with Rentiers.) Thus the contraction of the non-financial corporate sector is more a function of the inflation of National Income due to duplicated (imputed) sales.

  2. Michael
    Congratulations on the blog. I made my registration in December last year, and I am following your comments because I wanted more information about the WAPE2021 Forum. I participated in the Forum in the opening panel and coordinated another on Brazilian development.
    I wanted a comment from you on the unorthodox work post of the annual meeting of the American Economics Association (ASSA). I’m referring to the comparison you made about Kalecki and Marx’s dynamic approaches when commenting on the work of Al Campbell and Bakir. In particular, I would like you to resume the comment on the differences in the models because It seems to me that there is an element missing. I understand that Marx focuses on the process of capital rotation, showing the contradictions that are present in this movement and its reproduction. To this end, it formulates an abstraction placed on the level of capital in general. That’s where it shows the origin of the profit, as we know. In Kalecki, the formulation follows a totally different path. The starting point is the principle of effective demand in which the primacy of spending over income is established. The autonomous decisions are these spending decisions, both for workers and capitalists. However, neither workers nor capitalists decide when they will receive monetary income, so we are talking about the plan of the plurality of capital, where there is competition. In the case of workers, the real income depends on the movement of prices of products that enter your consumption basket; in the case of capitalists, it depends on an aggregate process of functioning of the economy, which will indicate what fraction of the monetary profits each capitalist will receive in return to their investment expenditures. And from this return, there is the decision of how much to spend for own consumption and how much to spend to accumulate. I understand that these models are not comparable, although they are compatible. They have distinct levels of abstraction and different temporalities. Marx’s temporality is the time of capital rotation. Kaleckian temporality is given by the effectiveness of the consequences of spending decisions. These themes are somewhat pacified in Brazil and do not produce essential debates. In the Brazilian Society of Political Economy, there have been no relevant debates between Marxists and Kaleckians for a long time. If you can, make a comment. Niemeyer

  3. Thanks, Michael. At the very end you mention a study about China’s “global middle class.” Could you provide a link or at least the authors and title?

    1. Inequality, the Structure of China’s Economy on the Consumer Side and Implications for Domestic Demand Terry Sicular
      University of Western Ontario No paper Im afraid, but it may be on his website.

  4. Hi Michael Directly after the Kalecki formula you say: But this an identity: Should this read: But this is an identity: Or something else? Dave

    On Fri, 14 Jan 2022 at 11:09, Michael Roberts Blog wrote:

    > michael roberts posted: ” In this second post on the annual ASSA economics > conference, I look at the papers and presentations made by radical and > heterodox economists. These presentations are mostly under the auspices of > the Union of Radical Political Economics (URPE) sessions, ” >

  5. “Finally, there was the elephant in the room – China.”

    Apparently, there’s a conspiracy theory going on among the Western Marxists that state the Chinese saved capitalism from collapse during the Asian Tigers’ Crisis of 1997-2001 and the financial crisis of 2008. To square that circle, they use the Trotskyist theory of “Stalinism”, which states that a bureaucratic elite can betray and usurp power from the proletariat after a communist revolution.

    The problem is that not only Stalinism is not a theory (Trotsky was not worried about laying new theoretical foundations to Marxism; to him and the others there was only one theoretician: Marx), but it was proven to be false: Trotsky affirmed Stalin was a capitalist agent and that he would surrender and then even ally with Hitler right before WWII happened in Europe. It turned out not to be the case: Stalin proved to be a genuine Bolshevik, loyal and committed to save the Revolution to the end. WWII ended with the complete destruction of the Third Reich (the name Hitler used to denominate the Weimar Republic during his dictatorship) and the rise of the USSR as a world superpower.

    To save face, the Trotskyists then came out with the theory of “degeneration”, which stated that, yes, the USSR was a proletarian State, albeit a degenerated one.

    The theory of degeneration, which then postulates an intermediate post-capitalist ruling class – the so-called “Stalinist bureaucracy” – stuck in the West and is used even by the Marxian (although, to be fair, the Marxian at least correctly identify China as a step closer to socialism).

    There’s is a problem with this “theory”: not only it can be easily debunked empirically, but there’s also a much simpler explanation for the contradiction that arises from the coexistence of capitalism and socialism. The explanation is simple and elegant: the Western proletariat is not the vanguard anymore.

    By inverting the roles, it becomes much easier to explain the actual state of things. The Western working classes rejected Marxism, and adopted a position of the “Aristocracy of the Working Class”, which made then degenerate into a reactionary, fascist global force. As the West continue to deindustrialize, it continued to de-proletarianize, instead becoming a land of white collar, other non-productive functions and the lumpenproletariat (which, as Marx well stated, is a very reactionary class). Meanwhile, the world’s proletariat accumulated in East Asia – particularly, China. Since China now has the greatest proletariat, and the proletariat is the only revolutionary force possible in capitalism, that means it is China, not the West, which is now the vanguard of the socialist revolution.

    That’s why, for example, the Western Trotskyists supported the liberal counter-revolutionaries in Hong Kong some years ago, only backing out when it became clear the counter-revolution was about to be defeated. That’s also why some Western Marxists are calling for a “revolution” in China against the “Stalinist bureaucracy”. Behind all this, is the failure to admit the West has suffered not only economic, but also intellectual degeneration (which is a normal historical process that happens to all great civilizations/empires when they start to decline; this is not a jab at the Western peoples as human beings) – human beings are not naturally intellectual, they must be raised and socially sustained as intellectuals; with economic declines comes intellectual decline (even though I consider the rise of the Marxian a recovery, albeit minuscule and shy, of Western Marxism).

    1. If there’s ever anything to make one wear the label of “western Marxist” with pride, it’s the fact-free ramblings of VK.

      1. “Conspiracy theory” of Western Marxists? VK has yet to even identify a single western Marxist, much less provide any evidence that there is faction, group, school with any consistent analysis that makes his characterization anything more than a convenient, ideological distraction.

      2. Please identify what actions China took to save capitalism as a whole from the Asian financial crisis, and please tell us how such actions, if taken, advanced the cause of socialism? China’s actions during this period were basically to reduce the international profile of its currency; to prevent expanding trade in the currency markets of yuan/renminbi. This did have a salutary benefit in that it prevented devaluation of the yuan, and the flooding of oversaturated markets with China’s exports, thereby worsening the situation of the “Asian Tigers,” but that’s a long way from being a pillar of salvation. VK wants it both ways– China as the embodiment of socialism and at the same time the savior of capitalism. Doesn’t work that way, but it certainly is a testament to VK’s ability to reconcile contradictions in his/her own mind, and/or the importance of gymnastics to his/her version of non-western Marxism.

      3.”To square that circle, they use the Trotskyist theory of “Stalinism”, which states that a bureaucratic elite can betray and usurp power from the proletariat after a communist revolution.” Wasn’t exactly a “theory.” Trotsky saw the rise of Stalin and the bureaucracy as the result of defeat of the revolution across Europe (and Asia), coupled with the extreme backwardness of the society the Bolsheviks conquered. Of course, to recognize those specific characteristics of Trotsky’s analysis, one first has to recognize that the Russian Revolution was not a “communist revolution,” but a proletarian revolution propelled by the very uneven and combined development of global capitalism reflected in the Russian economy. This is more than a mere technicality. It meant a) the RR would not survive without a expanding revolution in the advanced areas– proven to be correct; b) the revolution triumphant would face all the problems of social development supposedly resolved by the bourgeoisie, and would have to act analogously to that class in the interim.

      4. I’ve searched, not google, but the Marxist Internet Archive, and haven’t been able to turn up any documentation for the claim that Trotsky identified Stalin as a capitalist agent. If VK has such documentation, let’s see it.

      5. Trotsky identified the intrinsic and irreconcilable conflict between the USSR and Nazi Germany well before WW2 and was steadfast in his assertion that capitalism with Germany at the tip of the spear was a mortal threat to the Soviet Union, even with Stalin and his supporters in charge. After the Molotov-von Ribbentrop pact, Trotsky maintained his position of defense of the USSR and advised many, frequently, that such a pact was a) a tactical maneuver (of dubious worth) b) in no way changed the inevitable coming conflict.

      6. Stalin, loyal and committed Bolshevik? Sure thing. After all, he remained the only one of the original party who wasn’t a fascist, right? The rest? Just fascists in disguise. Sure he was a loyal Bolshevik, doing what Bolsheviks did in 1917, right? Subordinating the outbreaks of revolution to the limits of “bourgeois democracy,” which led to a series of triumphs in Spain, Vietnam, France etc. and thereby pre-empted WW2. Right? Oh, that didn’t happen. Never mind.

      7. “To save face, the Trotskyists then came out with the theory of “degeneration”, which stated that, yes, the USSR was a proletarian State, albeit a degenerated one.” Contrary to VK’s disorganization of history, the analysis of the degeneration of the revolution into a transitional moment currently dominated by bureaucratic deformity precedes WW2, and even the popular front. Trotsky first refers to the dominance of the bureaucracy as symptomatic of the degeneration of the party and revolution in 1929. He then returns to this theme in his 1933 essay on the nature of the Soviet bureaucracy and the obligation to maintain defense of the USSR.

      8. “here’s also a much simpler explanation for the contradiction that arises from the coexistence of capitalism and socialism. The explanation is simple and elegant: the Western proletariat is not the vanguard anymore.” That sure is simpler. So the Western proletariat was the vanguard of the revolution before WW2, according to VK’s retelling of history, which would require one to then critically analyze the tactics of the 3rd Intl in China, Spain, France, Germany, the UK, right, since somehow this vanguard, led by the true Bolshevik Stalin produced nothing but defeat after defeat in the midst of revolutionary circumstances.

      9. But enough of history, let’s move on: .

      “The Western working classes rejected Marxism, and adopted a position of the “Aristocracy of the Working Class”, which made then degenerate into a reactionary, fascist global force. As the West continue to deindustrialize, it continued to de-proletarianize, instead becoming a land of white collar, other non-productive functions and the lumpenproletariat (which, as Marx well stated, is a very reactionary class). Meanwhile, the world’s proletariat accumulated in East Asia – particularly, China. Since China now has the greatest proletariat, and the proletariat is the only revolutionary force possible in capitalism, that means it is China, not the West, which is now the vanguard of the socialist revolution.”

      Wow. Now at least we know why western Marxists are so non-revolutionary– it’s because the western proletariat is fascist. No kidding? Strip my gears and call me shiftless. Workers in France taking over the petrochemical plants in 2009– fascists; workers in Italy taking over the plants in Turin in the hot autumn? Fascist. Amazon workers struggling to organize? Fascists. Oh, and you western African-American workers who organized DRUM and LRBW? Sorry, you live better than most in the world; you’re fascist too. And BTW, why did you even bother organizing DRUM, when that period was the “golden age” for US capitalism’s domination? When that period was the period when incomes of black workers were experiencing rapid gains?

      So meanwhile what makes VK think that since the course of development propelled the “western” working class (including that of non-western Japan, I presume) to being an “aristocracy”– that same fate DOES NOT await the workers of China, Thailand, Vietnam? Because there’s nobody left to super-exploit? Please, if there’s enough super-exploitation to support capitalist development in the world and maintain capitalism as the dominant mode among about 80% of the world’s population, there’s enough super-exploitation to “bribe” the Chinese working class, which BTW, has been shrinking for the last decade or so.

      10. Full disclosure: I am not now, nor have I ever been a Trotskyist. I am however a Marxist.

      1. “I’ve searched, not google, but the Marxist Internet Archive, and haven’t been able to turn up any documentation for the claim that Trotsky identified Stalin as a capitalist agent.”

        Of course it isn’t in the Marxist Internet Archive. That would be very embarrassing.

        The letters are in Trotsky’s archive, but the excerpts I took are from Losurdo’s “Black Legend” (a book which I think doesn’t exist in English in a formally edited and properly translated edition).

        We should not deify Trotsky, Lenin, Luxemburg et al as theoreticians. Doing so would heavily distort the true historical context of their writings. The evidence is plenty and is decisive: what Kamenev, Zinoviev and Trotsky had in common was the fact that their prestige rested only on the fact they were Lenin’s protégés. They were “the intellectuals” of the Bolshevik Party: all theory, but no popular support. In fact, Kamenev was only in the picture during 1924-1926 because he was literally at the right place, the right time, when Lenin died (commanding the Party in Moscow). Stalin represented the will of the vast majority of the Bolshevik Party from the very beginning, and there was absolutely no chance any of the other three (or, for that matter, eve Bukharin, after 1926) could succeed Lenin.

        Stalin took power because he was the majority, not vice versa. Trotsky’s critique of the “dictatorship of the apparatus” meant absolutely nothing: everybody knew there was an apparatus in the USSR, he was merely stating the obvious (as Kaganovich plainly admitted). The problem wasn’t the apparatus, but what could you replace it with: the USSR was in plunged in absolute poverty and absolute ignorance; even organizing a simple village election was a herculean task because there weren’t enough literate people to carry them on. There was no way an apparatus would not emerge in the USSR, Trotsky was not a visionary for pointing that out (and here I’m still talking about the 1920s, when he still had some concrete influence within the USSR proper).

        The writings of Trotsky after Lenin’s death had one decisive background: he wanted to rule the USSR. He was not interested in theory, but in power. The legitimacy of his hypothetical power (i.e. an ultimate victory over Stalin) rested, ultimately, on a world revolution to be ignited in Germany, but that shouldn’t obscure us from the historical context of the writings. Contrast that to the writings and speeches of Zinoviev, whose legitimacy to power in the USSR rested purely on his claim to be the closest to Lenin, therefore his dynastic successor (he was the one who immediately popularized the term “Leninism”).

        There’s no reason to think Trotsky wouldn’t kill Stalin and exterminate his followers had he taken power in the USSR. He was the one, after all, who unceremoniously crushed the Kronstadt Rebellion. There’s is no reason to think Stalin patented the practice of brutality in early 20th Century Russia/USSR; violence against counter-revolutionary act was enshrined in the Soviet Constitution since its first version (see the creation of the Cheka).

        “Please identify what actions China took to save capitalism as a whole from the Asian financial crisis […]”

        I don’t think China saved capitalism. I said there’s a conspiracy theory running among some modern-day Western Marxists and even some Marxian that states the Chinese elite saved capitalism from ultimate collapse during 1997-2008. This conspiracy theory is substantiated with the Trotskyst category of “Stalinism” or, more specifically, “Stalinist bureaucracy”.

        Note that I never said the Marxian came from Trotskyism. They couldn’t have, as, by the time they were in an embryonic stage (the 1970s), Trotskyism had already degenerated into a sect, completely incapable of making any new concrete analysis of reality, let alone a new theory. What probably happened was that, even if small and decadent, Trotskyism remained highly prestigious among the Western Marxists in general, which spilled over to the Marxian (who came from Western Marxism). But I’m a historian and not the family therapist, so that doesn’t matter; what matters here is that the Marxian certainly use the category of Stalinism/Stalinist bureaucracy as a useful theoretical tool to explain the anomalous presence of China since the 1990s, not because they have any inherent sympathy for Trotskyism. The same applies to the “Soviet theory”, which, in Marxianism, is merely another abstraction for the (true) dictatorship of the proletariat (as opposed to the “fake” versions of the USSR/China).

        The rise of Marxianism is the ultimate archaeological and documental evidence of the collapse of Western Marxism. Marxianism was a movement that arose in the First World since the 1970s, but shined and rose to prominence in the 21st Century. It is a contradictory movement, because, on one hand, it goes back to the origins – i.e. Marx – in order to correct the endless distortions to his work made in the West since really the end of the 19th Century (the so-called Neokantian reaction within the SPD) and, on the other hand, it is the first Western Marxist branch to openly admit to be a strictly academic entity (i.e. no revolution here, only professors doing their jobs).

        “So meanwhile what makes VK think that since the course of development propelled the “western” working class (including that of non-western Japan, I presume) to being an “aristocracy”– that same fate DOES NOT await the workers of China, Thailand, Vietnam?”

        This is obviously my guess. It is recurrent among some Postmodern (who are all Western, some of which came from Marxism) the conspiracy theory which states Marx’s theory was only valid for 2nd Revolution-style capitalism, i.e. industrial capitalism, but not valid for today’s services/ideas/white collar capitalism.

        My take is we could easily invert this logic: instead, Marx’s theory is correct and the West is simply not the vanguard of socialism anymore. By logic, that means the West is now the rearguard or, worse, the reaction.

        And we have concrete examples of both: the German proletariat (allegedly, the most enlightened proletariat, the vanguard) became the Nazis in order to crush the Soviet proletariat (reaction) in 1941-1945. Before that, during the 1920s, the Comintern enshrined the Soviet model by complete accident, as the revolutions in the West failed spectacularly one after the other (rearguard). The rise of the Comintern is evidence the Western proletariat had already been relegated to the rearguard since the 1920s, not the inverse (i.e. that the Soviet proletariat “corrupted” the Western proletariat, leading it to wrong tactics and strategies). The pattern is clear here: the Western proletariat, after becoming the rearguard, tends to continue the movement and become the reaction, not the vanguard.

      2. “But I’m a historian and not the family therapist”

        Okay, historian…

        1. “The letters are in Trotsky’s archive, but the excerpts I took are from Losurdo’s “Black Legend” (a book which I think doesn’t exist in English in a formally edited and properly translated edition).” Provide the reference in its original language, and the references to the specific letters.

        2. ” Kamenev, Zinoviev and Trotsky had in common was the fact that their prestige rested only on the fact they were Lenin’s protégés. They were “the intellectuals” of the Bolshevik Party: all theory, but no popular support.” Get your history straight. Trotsky was never a protege of Lenin and was immensely popular, so popular he was elected to head the Petrograd soviet twice. And you contradict yourself– here you say Trotsky was ‘all theory, but no popular support;’ there you say of Trotsky “He was not interested in theory, but in power.” Which is it? And why would one preclude the other?

        3. “The writings of Trotsky after Lenin’s death had one decisive background: he wanted to rule the USSR. ” Which writings? Please provide references of writings, and examples from those writings by Trotsky, not about Trotsky.

        4. ” He was the one, after all, who unceremoniously crushed the Kronstadt Rebellion.” No. Trotsky was not “the one.” The suppression of the Kronstadt rebellion was a party decision presented to the Petrograd soviet which enacted a resolution calling for the suppression of the rebellion. Tukhachevsky was one of the leaders of the assault..

        5. “German proletariat (allegedly, the most enlightened proletariat, the vanguard) became the Nazis in order to crush the Soviet proletariat (reaction) in 1941-1945.” That is not accurate. The German workers didn’t become Nazis in order to crush the USSR. Nazi-ism was not a movement of the German workers, but of the petty bourgeoisie who were supported by the bourgeoisie precisely because the Nazis were strikebreakers, anti-communist, and anti-working class. Upon taking power, the Nazis embarked on expelling and criminalizing any organization of the working class, and forcing workers to join “substitute” Nazi organizations.

        6. “”But I’m a historian and not the family therapist” Right. Your history is the one where the left in the US violently suppresses the civil rights movement, the anti-war protests, and endorses the war against the Vietnamese– exactly the reverse of the actual events. You might want to consider a career change.

      3. @ Anti-Capital #2

        I think we should stop right here. You’re degenerating to ad hominem attacks and I don’t want this blog to descend into chaos. This will be my last reply to you.

        1. The entire book is about how Stalin was demonized, but I want you to pay attention to chapter 2.10, the paragraphs ranging from footnote 269 to 283. Trotsky ultimately calls Stalin a “transmission device of imperialism”.
        See also Trotsky’s letter from 9 September 1939 (quoted by Losurdo in chapter 1.2, up to footnote 35), where he analyzed that the “Soviet aristocracy” (i.e. Stalinism) was inherently incapable of waging a war, therefore would adopt a posture of “Après moi, le déluge”, i.e. it would leave the USSR to its fate while fleeing to some capitalist nation.
        I recommend you reading the entire book. It’s not a great book for historians, but informative to the laymen. All the citations are from the Spanish e-book edition.

        That Trotsky thought Stalin and his clique were secretly imperialists doesn’t matter in History. What matters is the logic behind it, which I’ll explain at #2

        2. By the time of Lenin’s death, Leningrad and Moscow already were bubbles. They had the prestige and invited deference from the Soviet proletariat, but didn’t matter in the great scheme of things anymore. The reason for that is very simple: the Bolsheviks were extremely successful in the creation of a centralized State. The process was still ongoing in the years after Lenin’s death, but was inexorable. There are many evidence of this, but I will just leave the most illustrative: against the majority of its base, the RKP changed its prestigious name to VKP(B). Most of the Russian personnel of the RKP became the personnel of the USSR, thus depleting the “Russian” party apparatus. In other words, the Bolsheviks were successful in making the Russians from the RKP to become Soviets, or, in concrete terms, the Russian party became the All-Union Party, while the Communist parties from the other republics retained their national identities.

        Stalin was able to subdue both Leningrad and Moscow to the central authority in the aftermath of Lenin’s death. The fact that the capital of the USSR was Moscow didn’t matter for the Russian cause, as many people may think. It made, however, the recalcitrant behavior of Leningrad (which still supported Zinoviev) more and more anomalous and provincial; there was some attrition but the whole issue was solved peacefully in Stalin’s favor.

        3. His whole writings. Trotsky’s writings only make sense if you realize he wanted to return to the USSR (as its ruler). His whole theory on how WWII would break out rested on the assumption WWI scenario would repeat in Russia: Stalin and Hitler would destroy each other creating another revolution in the USSR. Yes, Trotsky didn’t want power for power’s sake: he wanted the international proletarian revolution (Permanent Revolution); but to get there, he was convinced he had to take power in the USSR. To state otherwise would mean accusing him of being an idealist, which he wasn’t.

        4. He gave the ultimatum. You know that, because it is a public and notorious fact.

        5. Nazism had ample popular support in Germany. There’s absolutely no evidence of significant popular revolts in Germany against WWII. The German Communists (the ones killed) were an insignificant minority.

        6. The anti-war movement in the USA was organized by a loose and headless combine which would later call themselves “the New Left”. The CPUSA and the Socialist Party supported this movement, but I know for sure at least the CPUSA was Stalinist at the time (which would make them Eastern Marxist, not Western Marxist). They called themselves “New Left” for a very objective reason: the “Old” Left was supporting the war (see the involvement of the AFL-CIO in the war). The Vietnam War marked the death of the traditional, trade-unionist left in the USA; it lost the war literally, not just figuratively.

        Yes, the AFL-CIO always was a reactionary union movement, but the problem is that what the unions were the base of Western Marxism. It was the unions who blocked the revolutions in the West in the aftermath of October 1917 and gave it its indelible social-democratic, gradualist (evolutionist) aspect. With the demoralization of the union movement in the USA, it was a matter of time before (Western) Marxism fell with it.

      4. Suit yourself. There’s nothing ad hominem in pointing out that your rendering of history is, when not distorted, inaccurate to the point of lacking any but tangential contact with actual events.

        1. I’m aware of Losurdo’s Stalin. Identifying Stalin and the policies adopted during that period as “transmission belt of imperialism” — Trotsky used the term “transmission belt” in the copies I’ve read– is not the same thing as accusing Stalin as being a conscious agent of capitalism. There were and are those who maintain that Stalin himself was an agent of the Okhrana, the Tsarist secret police. Trotsky did not base his social critique of the direction of the SU under Stalin on that basis.

        2.It’s hilarious and pathetic that “historians” dismiss the role of Stalin as a “transmission device” of imperialism, while at the same time giving full faith and credit to that exact charge when raised by Stalin against all the old Bolsheviks, with the addition that same old Bolsheviks and those recruited by the old Bolsheviks like Tukhachevsky were slandered as “fascists.”

        3. Losurdo’s contributions to the history of the post-Lenin USSR are on a par with those of Grover Furr. Among other brilliant conclusions, Furr concludes that Trotsky must have been collaborating with fascists outside the USSR because Stalin, in one or more handwritten comments, writes that Trotsky a fascist. Now that’s quality history for you, isn’t it?

        4. Kronstadt? Really? Again? Trotsky issued the ultimatum? Trotsky was responsible for executing the policy of the Bolshevik Party as approved and enacted by the Petrograd soviet. That makes him not “the one,” but a representative of the party, or if it makes the point less objectionable, the representative of Lenin who himself attacked the rebellion without hesitation, equivocation, or mercy, identifying the rebels with the Whites.

        5. There is a difference between producing a critique for the purpose of aggrandizing personal power to rule, and producing critiques in order to further a social revolution. If Trotsky’s critique of the failures of the 3rd Intl in its every intervention in social struggle amounts to a need or program for personal power, then we should find in those critiques the sacrifice of that social revolution in the service of personal needs. I challenge anyone to produce evidence of that in Trotsky’s writings on the struggles in Germany, Spain, Britain, France, the US, the Soviet Union. Did Trotsky as a revolutionist advocate the overthrow of the bourgeoisie? Of course. Did he advocate the overthrow of the Soviet Union? No, he did not. He didn’t even advocate a “political revolution” to purge the USSR of the rule of the Stalinists” until several years after his exile.

        6.. Nothing cements the non-historical basis of your arguments like your inaccurate descriptions of the “New Left.” The “New Left” as such predates the struggle against the Vietnam War in the US. The “founding document” of the “new left” is generally considered to be the Port Huron Statement of 1962. The “new left” distinguished itself from the “old left” by a) eschewing socialist ideology in favor of “participatory democracy” b) ignoring, where not expressly opposing, the organization of, and into, a political party c) concentrating on “community organizing” of the poor, of minority populations, as opposed to class based, workplace centered. At the moment of “emergence,” the new left distinguishes itself not from the AFL-CIO, which never amounted to a “left” in the US, given that its very formation was based on anti-communism, but from the CPUSA and the, pardon the expression, “stalinist baggage” that made the CPUSA worse than irrelevant, as well as the other socialist parties. The driving force behind the “new left” is the civil rights movement, the coincidence and overlap of this emerging struggle with the issues of poverty, police brutality, and US imperialism.

        7. The AFL-CIO supported the Vietnam War. No kidding. Almost everyone supported the “limited war” in Vietnam, until the US lost control of the battlefield, and the war overwhelmed the mythology of “freedom.” But the AFL-CIO leadership, bureaucracy, office holders were not the “old left,” having expelled its “left” organizers, radicals, communists, decades before, and having failed in its Operation Dixie, and before that, failed to protect, defend, much less advance the strike wave of 1946. Contrary to your distortions, the “left” such as it was by the 1960s was not responsible for, nor did it support the war in Vietnam; nor did the old, new, or middle-aged left ever support violent suppression of the civil rights movement. The AFL-CIO, as non-left as it was, never endorsed suppression of the civil rights movement.

        8. “Yes, the AFL-CIO always was a reactionary union movement, but the problem is that what the unions were the base of Western Marxism. It was the unions who blocked the revolutions in the West in the aftermath of October 1917 and gave it its indelible social-democratic, gradualist (evolutionist) aspect.” I wish you could name those Western Marxists “based” in the AFL-CIO. That’s 1. As for 2. The unions were not alone in their resistance to revolution post 1917. First and foremost among the gravediggers of the revolution, as Bordiga called Stalin, where the Communist Parties. Those parties destroyed social revolution in Spain, Germany, France, China, Vietnam etc. and post WW2 continued that tradition in France, Italy, Portugal Chile, and South Africa.

      5. I mostly agree with Anti-Capital’s comments but I have a different take on the New Left. I was part of it, peripherally, and as I remember the factor that distinguished Old from New Left was support for the Democratic Party. Both the CP and SP were deeply embedded in the DP, despite their many differences. But for the New Left in the early 60’s the DP was the party of Jim Crow and the Vietnam War, so working in it was out of the question.

      6. You’re using a Postmodern approach of History (a methodology and a philosophy of History which I disagree with). Small events and individual rationalizations don’t matter in the great scheme of things in History. It doesn’t matter what Trotsky’s personal intentions were, but what in fact did happen in the real world and how it affected the course of History. Like I said: historian, not the family therapist.

        Yes, Trotsky ultimately obeyed the VKP(B)’s decision on Kronstadt. He was the ultimate party line follower (a factor which ultimately destroyed him). But he was the People’s Commissar for War, therefore the authority on the situation. More importantly, there’s no evidence he agreed with the sailors’ requests and there’s no evidence he followed the Politburo’s determination against his will. All evidence indicates he was 100% in favor of crushing the rebellion violently.

        Stalin also did all the things that mattered in the great scheme of things under the orders of the Politburo. It doesn’t change responsibility. But that’s a legal argument, not a historical one. The historical argument is that the Bolsheviks, ultimately, needed to create a strong, highly centralized government so that they could industrialize and catch up with the West. When this process reached its maturity, the new structure certainly helped Stalin, but it was not Stalin who created the logic of the sociometabolical reproduction of the Soviet State.

        The ultimate evidence Stalin didn’t create the Soviet State as it became known after the 1930s comes from the fact that Trotsky didn’t even consider Stalin as a serious factor during the Interregnum phase (1924-1926). Indeed, if you read his first writings after Lenin’s death, you can see he completely ignores and dismisses Stalin, focusing on Zinoviev and Kamenev instead (the lords of, respectively, Leningrad and Moscow). Another evidence no one could see Stalin coming is the very fact that Zinoviev and Kamenev took Stalin as a “junior partner” to form the infamous Triumvirate. This Triumvirate was formed because Zinoviev and Kamenev saw the greatest menace to their rule in Trotsky, not Stalin.

        To be fair to Trotsky, it never crossed his mind to do a military coup (which he could do, as People’s Commissar for War up to 1926) to take power forcefully. This accusation was never made by even his most bitter enemies. When there was tension and pressure was made for him to step down as Commissar, he did so relatively easy. It is a myth (and here I agree with Losurdo’s critics) that there was an organized Trotskyist conspiracy to take down the USSR. There was will among some random admirers, who took the struggle against Czarism in 1905-1917 as inspiration to do their series of terrorist attacks, but not an organized terrorist organization operating under Trotsky. Terrorism was engraved in Russian culture by 1917; indeed, the SRs assassinated a series of Bolshevik leaders in 1918, including an almost successful attempt to murder Lenin.

        Trotsky’s capitulation in January 1926 essentially ended all hope he could have of ruling the USSR. Whatever happened after that, it is just sectarian struggle and ex post facto mythology that still fascinates the far-leftist sects in the West.

        The letter of September 1939 is clear: Trotsky interpreted the USSR as a degenerated bureaucracy that would quickly capitulate to Hitler’s Germany during the first days of war, fleeing while leaving the Soviet people on its own fate, like a normal Eastern European banana republic. This is a logical conclusion of his theory, not an accident. And he was ultimately wrong, as Germany was subjugated and partitioned by the USSR after the end of WWII. In fact, the result of WWII would please him, as it is no secret that the Holy Grail of the “permanent revolution” supporters of the Bolshevik Party was Germany, regardless of their internationalist rhetoric. History proved them wrong, as the sovietization of Germany wasn’t the end of History.

        There was, however, on person who saw Stalin’s rise to power: Lenin. The excerpt is famous, so I’m not reproducing it here. The explanation for that is simple if we analyze it historically: the Bolshevik Party was founded as a vanguard, elite party, of intellectuals. The only bridge between them and the Russian people was Lenin, who had both the qualities of the intellectual and the party worker. That meant Lenin was the only one who knew everything that was happening in the new Soviet State. He did the heroic stuff and the tedious, bureaucratic stuff. That’s why he realized the Orgburo was essential, but not the others. When he died, so did the glue that united the base of the Bolshevik Party and its elite. Here I recommend you to read the “cave episode”.

        Ultimately, after Lenin died, there was nobody who could see Stalin was at the right place, the right time, in that new State architecture. They were intellectuals living in their ivory towers. Power rested on who could appoint people to offices of the State, not on who had the best speeches or who could speak the most languages. Trotsky was the last remnant of the romantic era of the Bolshevik Party, the last “heroic” Bolshevik, who preached for revolution in the West at any cost, without rest. The problem was that capitalism had stabilized by 1926, ending any hope for revolution in the West. Trotsky already was a living fossil by the 1930s.

        It is a complete myth Stalin “betrayed” the Revolution. Ultimate evidence of the fact is in the fact that, once finished with “Trotskyism”, he also crushed the “rightist deviation”, whose strongest proponent was Bukharin. Was he really a “transmission belt” of imperialism, he would certainly have caved in to Bukharin’s ideas, which would inevitably had converted the USSR into what we call today a “Third World Country”. Bukharin’s ideas would essentially condemn the USSR to agrarian nation status for decades to come, which would certainly play into the capitalist hands. Bukharin thesis was proved wrong the by the immense success of the first Five Year Plans, i.e. the 1930s.

        You’re wrong about the New Left. It is consensus that the New Left was never a unified movement. There is no manifesto of the New Left. It was a headless movement (which ultimately determined its defeat).

        There was only one agenda that unified the New Left: stop the Vietnam War.

        The only other aspect you could take from the New Left is that they all considered the traditional left – which, yes, most Americans at the time considered as Marxism – as outdated, i.e. there was an Old Left, which they were replacing, of which Marxism was the main base.

        The Vietnam War represented the collapse of the Western Left. It paved the way for the unification of conservatism and the rise of Neoliberalism. The Left (and, with it, Western Marxism), would never recover. It doesn’t matter here if the AFL-CIO was against violent repression of the protests; intentions mean nothing against actions. It actively supported the Vietnam War and that’s the historically relevant fact.

      7. This is getting ridiculous These comments are long and not do with economics . Take this thread elsewhere because any further discussion on this topic will not be approved

      8. ”This is getting ridiculous These comments are long and not do with economics . Take this thread elsewhere because any further discussion on this topic will not be approved” Moreover, to paraphrase George Bernard Shaw, neither true nor interesting.

    2. “…….(even though I consider the rise of the Marxian a recovery, albeit miniscule and shy, of Western Marxism).

      What you say before your parentheis is no secret among (anti-imperialist-actual marxist) Western marxists. But what you leave in parenthesis is critical for socialism–and humanity–everywhere. Neverthelesss the massive degradation of labor (here in the US) has produced some class consciousness, and with that a grounded revival of the long co-opted peace and civil rights movements, It’s miniscule, but so are sparks.

    3. It’s a bit ironic to say the least how all these anti “Western” sentiments in here are expressed in a “Western” language, utilizing “Western” technologies, relying on “Western” archives and documentations.
      But the main absurdity of such pedestrian, uninformed essentialization about a supposed “Eastern” or “Western” essence is an amnesia of how in 21st century all we’re living is one big contaminated wretch of a global village, moving everyday one step closer to our “Sixth Extinction.”

      When Perry Anderson wrote his short book on “Western Marxism” he characterized it as a result of the failures of revolutions in the West.
      Yet despite such defeats of revolutionary movements in the West, as far as a project of democratic Socialism and a bottom-up path to Socialism in concerned, there are still plenty of ideas and notions to be learned from such setbacks: namely in the works of Antonio Gramsci and the debates it has generated; mainly the contributions of Althusser and Nicos Poulantzas.

      Neither an Instrument nor a Fortress
      Poulantzas’s Theory of the State and his Dialogue with Gramsci
      Panagiotis Sotiris
      https://brill.com/view/journals/hima/22/2/article-p135_7.xml

      Last but definitely not the least, below is one the latest products of “Trotskyist” “Western” Marxist school of thought,
      Enjoy

      Revolution
      An Intellectual History
      by Enzo Traverso
      https://www.versobooks.com/books/3871-revolution

  6. The data published by Oxfam France show the indecent enrichment of the largest French fortunes, all with public money. I think the time of economists went to Marx’s thesis. Enough of conversation, we must all pass the action.

  7. OK, getting back to “economics,” the “ABC” of Marx’s work, or at least the VPP, as in Value Price and Profit and other works holds 1) that wage increases will not trigger price increases 2) that as capital accumulates, commodity prices will fall, in tandem with the decline in unit values. However, recent events flip that script on its head: wage increases are closely associated with price increases (which is not to say the wage declines are not also linked to price increases) and capital accumulation has also been accompanied over the long term with general price increases.

    For example you can look at the US Surface Transportation Board’s recent study of railroad freight rates 1985-2019 (see https://www.railwayage.com/regulatory/happy-new-year-stb-releases-a-new-rate-study/). Rates decline steadily to 2003-2004 and then turn up, while the net wages and benefits for railroads increased, despite the dramatic decline in employment, and that the rate of accumulation is dramatically higher in the 2004-2019 period than the rate of the previous 15 years 1989-2004. As a result, railroads have been able to sustain an adequate rate of return to support capital needs, and railroads have been able to improve their operating ratios (the portion of revenues consumed in labor costs). On the face, this apparently refutes Marx’s claims. So what gives?

    And I hope we don’t resort to “monopoly pricing” to explain this.

    1. The state of passenger service in the US, however profitble (and it shoud be given the dismal state of cars service, and tracks. My experience is limited to being a passenger… You seem to know what you are talking about regarding freight trains. This is not the first time you have had recourse to them in defending the profitability of US capital. But what is the state of railway workers and their union? Both among passanger trrain crews seem abismal, mirroring the miserable conditions generally among most service workers in the US. But what’s your point? …In a nut shell.

      1. correction in the abysmal last sentence. It should read The state of the the former seems abysmal, probably reflecting the state of the latter.”

      2. I’m not “defending” the “profitability of US capital” any more than I’m defending the heliocentric nature of the solar system. Both exist. Both require explanations that are in accord with the laws of motion of their respective environments, one physical, the other social.

        My point is exactly what I said it was: how can we explain the persistent decline in unit rates for rail freight rates (specified in my previous message as freight, not passenger) by “capital improvements” and “productivity gains”– the usual “Marxist” explanations, while the same or increased capital improvements and productivity gains correspond to increasing unit rates?

        If someone wants to offer the other “usual” “Marxian”– increases in either the rate of surplus value, or increases in relative surplus value, then we need to see the wage + benefit number decline as a percentage of the total value-time, as a percentage of the working day value– which value per the labor theory of value can only be increased by the number of hours spent in production or by the decline in the wage as a portion of the working day.

        While railroad employment number, particularly in train (conductors an alike) and engine (locomotive engineer) service have declined precipitously since WW2, compensation aggregates are greater than they were in 1985. So how can there be an increase in the relative surplus value?

        Ton-miles per employee per employee hour have soared, but aggregate hours have not soared. So where is the increase in profits coming from? If productivity, that is to say, unit output per labor-hour CANNOT increase value, as Marx (rightly), why did rates decline and then turn upward.

        Those are the issues, and they go to the very heart of Marx’s ambiguity in explaining relative surplus value and then using that relative surplus value itself as an explanation; they go to the heart of issues of the declining rate of profit; and the existence of an average rate of profit, which average seems to be conspicuous only its absence.

        Those are issues that Marx leaves unresolved throughout Capital, and in his Economic Manuscripts.

        I know exactly what I’m talking about in both freight and passenger railroad operations, having spent 45 years in both

        That’s my “nutshell.” If you have no answers to the points, there’s no shame in that; every time I think I have the answer, something occurs to reimpose the question.

      3. Thanks; one element I find very interesting is that rates start going up coincidentally with the start of the oil price blowout. US railroads introduced oil price surcharges to offset those price increases.

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