In "Towards a New Socialism", Cockshott speaks in the first chapter about surplus value and describes it with a graph detailing wages/profits in the UK during the early 80s. Maybe I'm missing something here, but I haven't yet read him even mention costs of actually maintaining of a particular business. I imagine if you took those things into account the "actual profits," while not negligible, would be a lot less. How would this even work in a socialist economy ?
I'll keep reading of course but this is an area of interest for me and if anyone has any input, that would be great
What are these actual costs of running a business? Suppose the business has to pay rent. Do you think paying rent is part of actual costs? Surely there is work in creating and maintaining a building, but rent pays for more than that. Indeed, even land with nothing on it is worth something in the market. You can't get a proper view of exploitation by analysing the costs of a business in isolation from everything else, exploitation is something done by the collective of capitalists and landlords to the collective of workers.
Christian Miller
That is overhead, which is paid with capital. I cannot recall off-hand how Cockshott explained it.
You have stumbled upon one of the contradictions of capital that have become startlingly apparent in this century: the falling rate of profit. Systemically, it requires an ever-increasing amount of capital to generate the same return on investment. This results in generally lower profit margins for businesses that are unable to compensate by way of economics of scale. Currently, owing to the falling rate of profit, business expenses are high enough that so-called entrepreneuers are at an insurmountable disadvantage when in competition with established businesses with enormous reserves of capital to invest.
Thank you for responding. Is there any kind of list of such contradictions that I can read and investigate ?
Jose Torres
Here is a short list intended for a lecture that I borrowed. It is not an exhaustive list, but theorists tend to disagree about others.
• Large-scale production based on alienated labor: production is on a massive scale, yet workers have no control over what is produced and to what ends it is used. • Capital-labor relationship: capitalist profts are based on the exploitation of the working class. Capitalists need workers to create their profts so workers have power too. • Competition between capitalist states: Capitalist production is organized on the basis of competition between rival capitals. Historically this has created imperialist wars between capitalist states. • Competition turns into monopoly: market imperatives force capitalists to maximize profts by cutting costs and increasing productivity. Free market competition turns into monopoly as unsuccessful businesses are swallowed up by successful ones. • Crises of overproduction: economic booms lead to overproduction, commodities go unsold, production is reduced with workers losing their jobs, there is even less purchasing power, and a vicious cycle ensues leading to a recession. • Responses to the crisis can exacerbate the problem: public spending may lead to infation and a decrease in real wages. Capitalists may buy up surpluses for their own consumption but it means that they are not reinvesting in production. • The tendency of the rate of proft to fall: Investment in means of production is often in labor saving technology but surplus value creation is based on the exploitation of workers. Investing in new technology which enables it produce more efciently and sell more cheaply thus, at least temporarily, stealing a march on its rivals. But once the use of the new technology is generalized the temporary advantage is wiped out and the overall rate of proft is reduced.
Some of these are fatal contradictions (eg. the tendency of the rate of profit to fall and the relationship between labor and capital) while others are merely unpleasant aspects of the system that get resolved internally by means of war or state suppression of dissent.
Xavier Phillips
Anywhere else I would assume you're just having a giggle, but every single point of yours is just flat out wrong. That isn't a contradiction. No, they're based on selling a desirable good or service to those who want it. The need for land and resources exists under every system that could possibly exist. Being "swallowed up" usually means that government regulations have made the cost of running a business prohibitively expensive. It's rather insane that the solution to "monopolies" is to simply give the "People's Working Party of People Workers" a monopoly on everything in the country.
It's not even worth continuing. Actually put some critical thinking into what you read, instead of taking the words of an unemployed idiot like Marx hundreds of years ago at face value. For shits and giggles, you might even try applying for a manufacturing job. You don't have to actually take the job (since I know you people have some kind of phobia against actually working), but they generally will take you on a tour of the facility, so that you can learn how any sort of manufacturing process actually works. That in itself would give you a more informed view than Marx ever had.
I would add that the centralization of capital and mass production lead to its own peculiar contradictions which exacerbate the tendency to overproduce due to the inability to change production lines once the process has begun. This is why a lot of older car manufacturers suffered during the 2nd half of the 20th century. The Japanese attempted to solve this contradiction by developing methods of production that attempted to rationalize the process until circulation of goods was complete.
That's how profits are realized but not what profits are based on. Try again. You missed the entire point. The engine of the capitalist mode of production requires profit which requires expansion. This can occur either intensively or extensively. For industrial capital to sustain continued growth means acquiring new sources of raw materials and even labor, which meant the incorporation of large territories into the global capitalist economy, which at many points required the integration of pre-capitalist economies by force. Once integration had occurred there was no point in maintaining large garrisons and imperial relationships since it proved cheaper to grant these territories independence with the knowledge that they would be driven by economic necessity to remain tied into the global market. The centralization of capital into trusts and joint-stock companies does not require any government intervention. Modern industry's absorption of capital and labor previously dedicated to artisan production occurred due to market competition. It's a logical consequence that the absorption of small-scale production by modern industry would be followed by the absorption of modern industry by a planned economy. You probably shouldn't have even posted here, then. The irony here is that the "idiot" Marx predicted a lot of trends that weren't fully evident until 50 or 100 years later. You haven't even reached the insights attained by people in the mid 19th century. 1. You're probably a 20 year old college student who never held a real job in his life. 2. Management typically doesn't give out free tours to every swinging dick who applies for a job, and even if they did learning the process takes much longer than a short tour.
Logan Butler
Let's try that again. Productivity is high compared with 50 years ago, and 50 years ago was high compared to what had been 50 years ago, and we're talking about productivity in the broad sense of expanding the scope of what we can do with work and technology to modify what we find in nature. You agree with that? But this we in we can, humanity as whole, doesn't have this power by everybody having an equal say. Nor should it be that way, or should children have the same say as adults and should lay people have the same say as experts? But this difference in power of decision-making is virtually nowhere due to actual differences in skill and knowledge. Anecdotes that seem to support the meritocratic myth are blown out of proportion by vested interests. Decisions about the layout of cities and energy usage aren't made by experts either. The word of top mathematicians who work as climate scientists counts for virtually nothing compared to what big oil companies with billions to spare want from politicians.
Take a look at somebody who cleans the street. Let's make it easy for you, so let's say that person is not somebody who would have really flourished in a different society. Let's say he isn't even average, he's a bit dumb while still being a functional adult. You compare the current GDP of the nation he lives in to where it was 30 years ago, when his dad had the same job. Let's say the GDP quadrupled. Does this mean he can have the same standard of consumption as his dad while working only 1/4 of the time or work as long and get four times the stuff, does he have a choice to work half as much and get twice as much stuff as dad? If the answer is no (and it is no), then what's the point of that measure? It is not a useless measure for everybody, it is useful for a particular group (a minority) that has a particular view of the world as a consequence of how they "make" their living.
What the other guy means by contradiction here is the gap between what is going on in society currently, and what is technically possible in terms of quality of life right now. Not this memey luxury space communism bullshit, no technical miracles assumed. Assume zero technical inventions. What increase in quality of life could be like, if only the rules of society changed.
