What is capitalism? 1 of 2

[gulbirk]

I thought capitalism was strictly defined as an economic system in which people (individuals) have right to private ownership.

[wordscontrolminds]

Intelligent, and sexy! Do you play the piano too? Im wondering if you could take the algorithm of Capitalism and transform it into a piano piece? Im presuming it would eventually play itself out in chaos?

[1080portal]

nice ending lol

[cyberlibertarian]

I think that you made a big error, Capitalism is not about equal exchange but about creating win-win situations. Let me give you an example: You wouldnt trade 1 coin for 1 coin just like it. But you would trade that coin for a product you value, The same applys to your trading partner. So a trade only takes place if both partners think they are making a win. Secondly the market (everyone) is subjective, So a trade looking "equal" to you may look "unequal" to me.

[blackmichael75]

@cyberlibertarian You're not taking into account the following things; deliberate exploitation, class, and unequal power relations.

[3dd656]

I'd like to point out that saying that money creates greed is like Christians blaming satan on all their temptations. It's jsut an excuse to blame something other than themselves for what was born from themselves.

Also, the U.S. doesn't have a capiltalism economy. There is too much government involvment for that. Capitalism can only have little to no government involvment in the economy. Thus, M-C-M really begins to take away from the capitalism.

[brendanmcooney]

@3dd656

How could you have the type of greed we see in our society without money? Money is an abstract measure of social power and we all must work for it in order to survive.

Given my definition of capitalism (the self expansion of value thru the exploitation of wage labor) we definitely do have a capitalist economy. The degree of state involvement in this process has no bearing on the capitalist nature of production.

[3dd656]

@brendanmcooney Except, no. You cannot use that as your argument as to what our economy is; that would be like me using the mud pie argument. In actaul capitalism, the economy is controlled completely by the traders. IF the traders fail to bring in good, then the economy faces a recession. While what the U.S. has is more of a merchantilist economy. That is one in which state/federal government has control of the goings on of the economy. While it has both so to speak, it's more so Merchantilist.

[brendanmcooney]

@3dd656. How is that like the mudpie argument? I'm saying that the state's relation to the economy does not alter the laws of motion of capital as I've laid them out here. It only effects the division of surplus value amongst the capitalist class.

[3dd656]

@brendanmcooney except that would not actaully be capitalism.

[SecularNumanist]

herp derp, mudpie

[arzoyan]

The fundamental principle that we need to grapple with is this , Humanity cannot be treated as batteries of energy so a few can enrich and empower themselves the consequence is a world of war,poverty,exploitation,envio­­­rnmental destruction and many other terrible ongoing challenges, or We share the earth for all generations to come in harmony and cooperation for our material and emotional needs, We need to understand our common source and our common destiny , our common humanity as one

[pewterbot9]

After viewing your 2-part lecture "What is Capitalism?" I'm hooked! Your lecture was lucid, informative, and captivating. I will soon view all your other talks. I am so glad to have found your videos, Brendan!

[studentofsmith]

So merchants transported commodities from where they were plentiful, and therefore least needed, to where they were scarce, and therefore most needed. Sounds like a valuable economic service to me.

[binhthanhvo]

I agree for the most part with your account of the transformation of the merchant class into a capitalist class, but I had to LOL when you said at a certain point in history that merchants began to look for a "magic commodity" to continue M-C-M'.

[sagitarian000028]

I love it when people say corporations are a great thing to democracy and they say corporations are privately owned and should and should not be owned by the government.To me corporations are like tumor growths to national democracy they spread and take controle of a system and establish their own rule. killing the concept of the country and they themselves become kings. If we are concerned about big government beconcerned about the ones that are not democratically elected

[theoneiros1]

@sagitarian000028 What is the difference between a government and a corporation? Is the state not the most extreme example of corruption perpetrated under the veil of legal fictions and limited liability?

[ass1609]

Why does this dude have to go every corner of his house to record this video lol. gd video btw.

[MrEverpresent]

I just compared wikipedias entries on LTV, marginalist theories etc and I noticed that for every marxist theory there is a large section devoted to 'criticism'. The other economic theories lack such sections. Strange isnt it? There is truly an ideological battle going on here.

[brendanmcooney]

I fear that Austrians colonized much of wikipedia before the marxists got to it. When it comes to cyberspace the left has been slow to figure out how to make itself relevant sometimes. I hope that this video series can counter that.

[jacobsiwers]

i hate how you take such short clips but you still have to read what your saying... its annoying.

[Elzon1]

This video is too long to define what capitalism.

Capitalsim- an economic system based on private ownership of capital.

Thats capitalism, no more, no less.

[brendanmcooney]

that's like saying a baseball player is someone who plays baseball. The question is "what is baseball?"

Capital is more than just means of production. It is means of production in a commodity economy that become a process of self-expanding value thru the exploitation of wage labor. The particular form of ownership of the capital is not what defines. It is the self-expansion of value.

[Elzon1]

"that's like saying a baseballe player is someone who plays baseball. The question is "what is baseball?"

Well, its not exactly like it considering I am not focusing on any individual or set of individuals. But yes, if someone doesn't know what baseball is they may be curious to what it is.

Capital- assets available for use in the production of further assets.

Yes, capital is only the means of production. How can you exploit machinery?

[Elzon1]

And yes private ownership of capital is the ACTUAL definition of Capitalism, that is my point.

[brendanmcooney]

What about state ownership of capital? Is that not capitalism? I think capitalism is much more complicated than just who owns capital. If capital exists in society then you have capitalism regardless of who owns it.

[Elzon1]

State ownership of capital is socialism I believe (looks up socialism). Ah yes, here we are:

Socialism- an economic system based on state ownership of capital.

Well, if you are actually talking about the word Capitalism, it really is just the private ownership of capital. However, what I think you are really talking about are things like "capitalistic ideals", the monetary system, macroeconomics, etc.

[brendanmcooney]

State ownership of capital is state capitalism. Obviously these terms are defined different ways by different people. The important thing is to know what the significance of a definition is.

By defining capitalism as a system in which production for the expansion of capital dominates all social production we can understand a lot about modern society. This definition does not require the capital to be owned by individuals.

[brendanmcooney]

I am not using that definition of capital as it is not historically specific enough to deal with the matters I am interested. See my video "what is capital".

In a capitalist society those "further assets" are commodities w/ values. The expansion of value as an end in itself is what capital is. This very different than the use of means of production in other historical periods.

[Elzon1]

I think I know what is happening here...

There are many, many misconceptions out there in the world (especially on T.V. AND THE INTERNET) where people mistakenly define things incorrectly. Capital would be just one example:

Capital- assets available for use in the production of further assets.

I find it funny when people say special interests are in with government and call it capitalism when its actually corporatism.

[brendanmcooney]

There were different definitions of capital prior to the TV and the internet. I am using Karl Marx's definition which is very different than that used by neoclassical economics (the one you are using.) The neoclassical definition is not historically specific enough for the things I am interested in discussing: the expansion of value through wage labor.

W/ your definition there is no difference between General Motors and an Aborigine's spear.

[Elzon1]

You might want to be careful with Karl Marx, seeing as communists do not accept the idea of private ownership (which is why pure communism doesn't work out). I use the simplest and purest definition of the words, I don't add any ideals or ideas to them.

"W/ your definition there is no difference between General Motors and an Aborigine's spear."

If by that you mean private ownership then yes thats capitalism.

[brendanmcooney]

"You might want to be careful with Karl Marx". OK, I'll be careful. Thanks for the warning.

"I use the simplest and purest definition of the words, I don't add any ideals or ideas to them. "

You use a specific definition that corresponds to a particular world-view.

"then yes thats capitalism." This then reveals the meaningless of that definition and the need for a different one that distinguishes the unique qualities of value-expansion in modern society.

[Elzon1]

I also realize that people on the internet continue to attempt to make up new definitions of capitalism, socialism, and communism. They try to (mistakenly) make it out to something it is not. There can be many reasons for it, but mainly its due to the conditioning from various sources of information they have been exposed to. I used to see capitalism in a very negative light when I was younger (early, early teens) until I actually looked up the definition of the word :P

[brendanmcooney]

Again. This is not a new definition. It is actually older than the definition you are using. Looking up the definition of a highly-debated word in a dictionary doesn't prove that one definition is better than another.

I used to think that private ownership of capital was capitalism when I was younger. But then I read some books.

[Elzon1]

Just looked up what you meant by a definition of the word capitalism by Karl Marx. However, he never used a different definition of capitalism.  He did however use phrases like the capitalistic system and the capitalist mode of production. Like I said both of these are add-ons to the word capitalism and as such are only from a certain perspective. I see he does in fact use a made up definition of the word capital as well.

[brendanmcooney]

I would be careful with what you read about Karl Marx on the internet. Misrepresentations abound. That's why I do this video blog, to straighten people out. My definitions are not made up by me. They do not come form 2 minute google searches. They are the result of a long study of Marxist theory, and a long process of trying to figure out how to explain these concepts in clear terms.

[Elzon1]

Please provide a better source as to show your watchers the true writings of Karl Marx. I am sure they would like this and please put a link in the description please. My definitions didn't come from 2 minute google searches either, they came from Webster's New World Dictionary. I have studied capitalism, socialism, communism, corporatism, ect. for around a decade now.  I use the basic definitions of these words now to keep common ground with everyone. However, they don't want to :(

[Elzon1]

It seems people have various ideas about these words now as well as beliefs. When you try to point out the obvious (or reality) they tend to tense up and become defensive. It also seems they have created different hybrids of ideas and beliefs so as to seem more advanced or have a "higher base". It seems that people ar trying to replace definitions with ideas, ideals, and beliefs. However, they can avoid the truth so much as they can avoid gravity/the physical laws.

[brendanmcooney]

The truth is that if we say that there is no qualitative difference between Ford and a spear then we have a definition that is not very useful, which overlooks important social distinctions, which throws the baby out with the bath water.

Production has not always been production for the sake of quantitative profits. This is unique to capital. Capital is an historical, not universal, phenomenon. you can define it differently but to do so deprives your definition of any usefulness.

[brendanmcooney]

See my video "annotated bibliography".

[Elzon1]

I also see Marx cannot seperate the idea of economy and the monetary system (which he doesn't mention often enough).

Economy- the system of production and distribution and consumption

Money- the most common medium of exchange

[brendanmcooney]

? You can't have generalized production for exchange without money. They are inherently inseparable.

Doesn't mention the monetary system often enough? How about vol. 3 of Capital?

See my video "what the hell is money?"

[MrEverpresent]

Millionthusername: "Free humans own themselves, any justly acquired property, and the fruits of their labor acquired through voluntary exchange."

Humans in a capitalist society are free (and condemned) to sell their labor power. A very narrow sense of freedom indeed!

I recently read Mann his sources of social power where he clearly shows that wage labor is rare in history. Although he ignores primitive accumulation in his work, he's very convincing.

[cherylwens]

If you're hungry, would you browse around restaurants before deciding what to eat or would you go to the government and ask for meals? Capitalism = the freedom to produce. It also allows people the freedom to be stupid, as most Americans are.

[MillionthUsername]

You don't trade "labor value". You trade for the product you want.

Economic value is subjective.

Labor, of itself, is irrelevant to price.

[MillionthUsername]

And there can be no "unequal exchange" unless you're talking about force or fraud. A willing buyer and a willing seller exchange for their mutual benefit. People do not trade unless they want what they are buying more than what they are selling (they "sell" money to buy a product).

You seem to be claiming that traveling the world to provide a market for goods is a bad thing. Amazing.

Trade is not exploitation.

[brendanmcooney]

Nowhere in this video do I say that exploitation comes from unequal exchange or trade. If you want to argue against that idea then find a video that makes that argument and leave your comments there. Otherwise watch this video and leave comments that relate to it.

[MillionthUsername]

@4:09 "I could sell a commodity for more than it's worth...more than it's labor value."

@ 4:27 "When one person profits from an unequal exchange he attracts others into that industry."

@4:40 it "trades at its value again" (presumably the "real" value based on labor.)

So now you say that profit from "unequal exchange" above "labor value" is NOT exploitation?

Why is "exploitation" a tag? Where did the profit come from? Was it not from exploiting labor?

Isn't this what you believe???

[MillionthUsername]

@4:42 you begin talking about merchants who travel in order to buy for "less" so they could sell them at home for more.

Then you say "if they couldn't find 'unequal exchanges', they made them in the form of theft."

Are you not saying that 'unequal exchanges' are exploitative? If not, why would you liken those exchanges to theft?

Maybe you are not sure what you believe? I don't know. It seems that you are the one who needs to watch your video again to see what you believe.

[brendanmcooney]

Unequal exchange is a means of appropriating value through exchange. But a developed competitive market makes it impossible for that to be a steady source of profit. Even more important, the total social capital can't grow from unequal exchange since by definition value is just being moved around, not expanded. The total social capital must expand in order for capitalism to survive. Thus a source of profit must be found that doesn't violate the laws of exchange: this is the sale of labor power.

[brendanmcooney]

You have missed the main points of the argument. Exploitation occurs when labor power trades at its value. Labor power has a use-value & an exchange value. It's exchange value is its wage, determined by the cost of the means of subsistence (though class struggle can drive wages above or below their actual value). It's use-value is that labor power creates value. There is no necessary correlation between the price of labor power and the value it creates. This is where exploitation happens.

[MillionthUsername]

"Exploitation occurs when labor power trades at its value"

This is hilarious!

There you go again - "exploitation" occurs when people trade.

Trade is not exploitation. Trade is mutually beneficial and is essential to civilization.

Don't tell me I misunderstood. I quoted you and the exact times you made the quotes.

Then you just said it again.

It is clear that the trumpeting of "exploitation"

has nothing to do with economics. The things you are saying are not economics.

[brendanmcooney]

Are you trying to understand or are you trying to twist my argument into a strawman that satisfies your preconceptions of exploitation? If the latter is the case then there is no point in me trying to explain my argument.

Labor power has a use-value and an exchange value like any other commodity. A worker can be paid the value of its labor but create more value in production. Thus there is exchange of equivalents yet still exploitation. You have to understand the dual nature of labor power.

[MillionthUsername]

"Thus there is exchange of equivalents yet still exploitation. You have to understand the dual nature of labor power."

You take an exchange and insert "exploitation".

Again, this is not economics. It's a tool for agitation in the service of a political philosophy which denies human rights.

The "exploitation" claim is baldly inserted into a free economic exchange in order to manipulate the hearer.

There is no "dual nature of labor power" with respect to value. Value is subjective.

[brendanmcooney]

"You take an exchange and insert 'exploitation'."

No, that's not my argument. That's you changing my argument so that it fits YOUR understanding. It is impossible to have a conversation that way. I don't know what else to say if you keep changing what I've said.

"Value is subjective."

Value is objective. How's that for a come-back? Almost as lame as just writing "value as subjective" as if that is an argument. It's not. It's a substitution for engaging in an actual discussion.

[MillionthUsername]

There's no point in talking to someone like yourself since there is no common ground and no way to establish it. There is no rational basis for saying that a voluntary exchange is "exploitation". It has to be inserted. And we both know why you insert it: It's the basis of your belief system.

You want to abolish property and liberty and free exchange so you have to make everything "exploitation". It is impossible to dissuade you from that since it is not rational to begin with.

[brendanmcooney]

I have clearly given a rational argument for the dual nature of labor power, how the value of the wage and the value created by labor are different. You have not actually responded to that argument. Instead you keep trying to say that I think exploitation comes from exchange. I have repeated that this is not the case. An exchange is a moment of equality. The exploitation happens in production, though it is made possible thru the exchange of labor power.

I want to abolish liberty? Wow.

[MillionthUsername]

"I want to abolish liberty? Wow."

Wow indeed!

See if you can follow along:

1) Exploitation is immoral.

2) Normal economic activity (buying and selling, hiring) is "exploitation".

3) In order to be "moral" we must abolish normal economic activity.

Gee, how should we go about abolishing "exploitation"? Tell us. I'm sure you have some

ideas, don't you?

Doesn't it require revolution? Doesn't it require seizing the "means of production"?

Or maybe you're the only pacifist communist?

[brendanmcooney]

So liberty=private property and exploitation?

Normal economic activity=normal for a capitalist economy?

And you put "means of production" in quotes because you don't think they exist?

Still, no response from you on the dual nature of labor power. You appear to be trying to change the subject.

[MillionthUsername]

I'm changing the subject? You never answered my first post. You simply denied that you imputed "exploitation" to trade. You demonized merchants for buying and selling!

No, trade is normal for CIVILIZATION. So is employment. Capitalism *is* liberty. It's private property and free enterprise. The only way to argue against it is to argue against man's rights.

Free humans own themselves, any justly acquired property, and the fruits of their labor acquired through voluntary exchange.

[brendanmcooney]

I still deny that I've ever said exploitation happens through exchange. If I've ever given that impression than I am sorry. I have been as theoretically consistent as I know how. I will not repeat myself again. If you want to argue against someone who thinks profit comes from exchange then go find someone else.

Employment is normal for civilization? Really? Find examples of wage labor in all prior human civilizations.

As for your other "comments": rhetoric without arguments will be deleted.

[MillionthUsername]

"Find examples of wage labor in all prior human civilizations"

Gee, I dunno. How about the Bible: "The laborer is worth his wages." Various parables of Jesus regarding wages, investments, etc. Yes, previous civilizations have had money and trade and employment and division of labor.

You demonize trade blatantly in this video and then claim that you don't. Explain how the merchants who bought and sold did anything wrong. They spent money and time to find useful goods to sell back home!

[Elzon1]

@brendanmcooney

He didn't say wage labor, he said employment.

Employment- the act of giving someone a job.

Job- a specific piece of work required to be done as a duty or for a specific fee.

You don't need to have wage labor in order to have employment.

[brendanmcooney]

wage labor and employment are the same thing. If i hire you to do something i must pay you for it. If I am an employer and you are an employee this means that you are selling your labor to me. There is no other way to define "employment".

Perhaps you are referring to paying a self-employed person for the product of their work? This is not employment. It is the purchase of a commodity from a self-employed person. But that person, in turn, employs himself.

[PolemicalCommentary]

Use value is subjective, Exchange value is objective. Source of a lot of straw man arguments thrown at LTV...

[MrEverpresent]

Indeed. It is possible to construct the following ratio: the number of critical comments of Marx his points / the number of the critics that has read Marx in an attentive way. Maybe there is also "a law" in the vain of Marx conceivable.

[MrEverpresent]

Note the sarcasm...

[Aliothemage]

Actually both moving of commodities AND lending money DOES create value. With merchants they put in the work of finding cheap commodities and transporting them. That does take work and it does hold value so it IS creating value.

Lending allows a person to make 10 bucks by buying a sewing machine and making clothing in the time it would have taken them to make 1 dollar with just needle and thread. In this way that loan DID create value.

[Aliothemage]

Also, you are using the labor theory of value which is completely bunk.

Commodities do NOT hold value according to how much work it took to make that commodity. They hold value according to how much value the product holds for the consumer and how available that product is to that consumer. This is why breaking rocks all day, while it takes a lot of work, hold very if any value and so you would pay a rock breaker little to anything for all his hard work.

[brendanmcooney]

your comment contains several misunderstandings about the LTV. I hope to soon complete a series of videos explaining the LTV better so that I can better respond to common errors like the ones you have brought up.

1stly, merely positing a different value theory does not make the LTV "bunk".

2ndly the LTV doesn't claim that any and all labor has value. It describes the way in which the comparison of private labors in the market take the form of exchange value.

[Aliothemage]

I'm not "merely positing another value theory" I am using what is accepted by all mainstream economists in the last couple centuries.

The Labor theory of value is flawed because it doesn't matter if some one puts a million hours worth of labor into a product, all that matters is how much demand there is for the product and how much supply there is of it. These are not theories they are the LAWS of supply and demand.

[Aliothemage]

It doesn't make much sense to talk about capitalism using terms that have been obsolete in economics for 2 centuries. The only ones who still use LTV are Marxists and their theories have been disproven long ago.

[brendanmcooney]

What does it mean to disprove Marxist theory? Can you actually cite one of these disproofs?

[brendanmcooney]

Again, you should understand the theory before you accept it as false. The LTV does not negate the laws of supply and demand. It doesn't say that a product has value if there is no demand for it. It attempts to explain supply and demand. Supply and demand are the mechanism by which the law of value operates.

Most mainstream economists know nothing at all about the LTV. They can't articulate even a passing criticism b/c they have been trained in a completely different theoretical tradition.

[Aliothemage]

"Can you actually cite one of these disproofs?"

Can you cite a disproof for the "Expanding Earth Theory"? Not off hand because it was debunked long ago. I'll guarantee you there are plenty of criticisms of LTV in old economic journals but I'm not going to bother finding you one because no mainstream economist gives it any credence any more. If you think we should go back to that, fine, but you need a strong argument for what is wrong with the current use of Marginal Utility instead.

[Aliothemage]

"The labour theories of value (LTV) are economic theories of value according to which the values of commodities are related to the labour needed to produce them."

But obviously commodities are not assigned value by how much labour was needed to produce them because if company X uses 10 units of labor to make a widget while company Y uses 100 units of labor it doesn't matter to the consumer does it?

[Aliothemage]

Also, if product X held 10 units of "utility" for a consumer and product Y held 100, again it wouldn't matter to the consumer is product X took way more labour to produce.

If you are making an economic argument not using the marginal utility theory of value than you need to explain why first because it is by far the most widely used approach to economics. So explain to us why the amount of labor put into the creation of a product actually matters.

[brendanmcooney]

I have been explaining that for over a year now. That's what my videos are for: they are an attempt to demonstrate the explanatory and descriptive power of the LTV, a power quite lacking in MU which does not explain any of the social antagonisms or dynamism of a capitalist society.

[Aliothemage]

"MU which does not explain any of the social antagonisms or dynamism of a capitalist society."

But that's the point, economics is about explaining how markets work, not about "social antagonisms". Marxism in general isn't about economics, it is about ethics. It uses a lot of economic terminology but it's true goal is to make a system that is more "just" in their opinion than free markets are. I'd be perfectly happy to talk about the ethical aspects of capitalism, but that's another issue.

[brendanmcooney]

Marxism is not a theory based on ethics. It's multidisciplinary. It says that an economy is a system of social relations- relations between people as they organize their labor process and distribute the fruits of this labor. Thus we must understand social relations and history in order to understand economics.

[tbk9742]

I would argue that all economics are based in ethics (of a Deluezeian or Nietzscheian type anyway) And I think that the power change evident in a pre- to capitalistic society is evident of this change as well. It seems to be the denial of a link between ethics and economics that leads to our continued subjection to powers of destructive economics. But you really seem to know what your talking about. I wonder where you were educated or what you do....

[brendanmcooney]

When ethics proceed theory we get ideology. It's fine to make an ethical argument. Marx does this. But the ethical argument is proceeded by an empirically-driven theory. If people don't like the theory they need to argue against the theory not the ethical conclusions.

[tbk9742]

Wow. So not to flatter you too much, but where do you teach or what do you do? I feel like I just learned more about philosophy than in undergrad.

[brendanmcooney]

Of course not. The price is what matters to the consumer. But what determines the price? I know... "subjective consumer choices...". But this doesn't tell us anything. Consumers can't pay any price they want. Sellers can't charge any price. A seller must reproduce the cost of production and realize an average price. A consumer must measure prices against an income. Here we already see that market decisions relate back to production- to profits and wages.

[Aliothemage]

"But what determines the price?"

Supply and demand, as any modern economist would explain. All consumers have different levels of demand for commodities and those with the highest demand will buy it at the higher prices but to maximize profit sellers will lower prices until selling more would not improve profits or until his supply started to run low causing him to keep prices high enough that he could maximize both his sales and price.

[brendanmcooney]

Like I said, Marx, Ricardo, Smith... all the classical economists fully understood supply and demand. But they didn't think supply and demand were enough to explain the relative prices between commodities. They only explain the fluctuations of price around an equilibrium price. Once this equilibrium price is reached supply and demand have canceled each other out. We still don't know why pencils are worth less than cars. To that we need a theory which explains supply and demand itself.

[Aliothemage]

"A seller must reproduce the cost of production"

What? No they don't. A seller will sell at the highest price consumers are willing to pay, regardless of the cost of production.

"I have been explaining that for over a year now."

Ok, I'll try and give your other videos a look before we continue, can you point me in the direction of the first video that would be appropriate for me to watch?

[brendanmcooney]

If a seller is to continue production they must at least pay back the cost of production. If they are to have an incentive to produce they must at least make average profits. If they can't make back this cost of production plus average profit they will be forced to make their production more efficient so that they can produce at the socially necessary labor time. Thus market exchanges become regulators of the social labor process. Thus the social labor process regulates exchange.

[Aliothemage]

"market exchanges become regulators of the social labor process"

The Logic works for this.

"Thus the social labor process regulates exchange"

But not for this. Commodity price determines if a certain combination of labor and resources are worth expending to make and sell that commodity. Labor doesn't determine prices because the labor itself doesn't add value. That's why a widget that took 5 labor hours to make is just as valuable as one that took 10 labor hours to make.

[brendanmcooney]

Market exchange cannot regulate the social labor process unless prices have a relation to labor time. Otherwise market signals can't reallocate labor.

[brendanmcooney]

I have read some of these criticisms and I have read MArxist rebuttals and I have never been convinced that anything in Marx's economic theory has been disproved.

I don't think I can summarize my entire critique of MU in one comment box. To say that consumer choices regulate prices is to ignore the wider social context of market interactions. The market regulates a social labor process. Market signals reallocate labor time. This can only happen if value relates to labor.

[Aliothemage]

"Market signals reallocate labor time. This can only happen if value relates to labor."

But it is the value of the product that is determining how much value the labor has. A person who spends 10 hours of making a widget will soon be looking for a new job if his neighbors all make widgets at 1 per hour of labor. This doesn't mean the amount of labor done effected the value of the commodity, this was the value of the commodity determining whether a person is spending his time effectively.

[brendanmcooney]

So in your example of changing productivity you directly use the sort of example Marx uses in explaining socially necessary labor time. If you are going to critique the theory it would be good for you to understand it so that you don't make yourself look ignorant. Private labors are compared in the market- prices converge around socially necessary labor time. They aren't fixed to private labors no matter how more or less productive they are.

[brendanmcooney]

Let the record show that yet another person who claims to know so much about the LTV and its supposed "debunking" does not understand basic things about the theory and cannot cite any actual "proofs" of this debunking.

I would be happy to cite plenty of critiques of MU:

Hilferding's last chapter in his reply to Bohm-Bawerk, "The Subtle Anatomy of Capitalism" by J. Schwartz. Numerous essays by Maurice Dobb. Schwartz and Hunt's Econ book. A. Shaikh has some essays on his website. etc....

[Aliothemage]

I never claimed to know the LTV extensively, just like I don't bother to know about the "Expanding Earth Theory" since the experts haven't considered either idea seriously for centuries. And of coarse it is easy to find critiques of the modern theories, economists and scientists spend more time critiquing their strongest ideas than they do on criticizing obsolete ones. I'll go about the work of finding a critique of the LTV when you do the same for the Expanding Earth Theory, lol.

[brendanmcooney]

The difference in your expanding earth analogy is that there has remained a strong and vibrant tradition of value theory over the last century. Just because you aren't familiar with it doesn't mean that it doesn't exist. You or anyone else merely saying that a theory is debunked doesn't make it true. Yes many people make this claim, but few actually know what they are talking about.

[Aliothemage]

"there has remained a strong and vibrant tradition"

Really? When was the last time a Marxist, or any Communist economist won the Nobel for economics? Any in the last 30 years?

"prices converge around socially necessary labor time."

Not really; it doesn't matter if it takes me 2 times as much labor to make a commodity as my competitor, I will still have to sell my product for the same as his to get it sold.

[brendanmcooney]

The nobel prize in economics was created by the Chicago-school. Of course they don't give awards to Marxists.

"I will still have to sell my product for the same as his to get it sold. " That is exactly what socially necessary labor time means! You are making the same argument Marx does! At last we agree on something.

[Cjohnsonmyer014]

with 100 dollars you could by 20 or 30 gallons of Orange Juice

[xylian112]

Brilliant video, cheers :)

[superkako85]

waaaw leiste a marx (el capital) tendrias que leer al che guevara tambien

waaaw you read marx you should read che gevara too

Saludos desde Argentina

[Guevaristas]

the capitalist would argue that's, "value" is a purely subjective thing?

[Guevaristas]

'Thus the amount of money Im paid doesnt necessarily correspond to the amount of value I produce. If it did the capitalist wouldnt be making a profit.'

B.C.

"value I produce"? Value meaning money meaning profit for the capitalist? Workers pay does not necessarily correspond to this value? That is the imbalance?

[brendanmcooney]

If it understand your question...: The value of a production=v+c+s. V is the workers wage. C is the cost of raw materials, machines etc. (the products of past labor) and s the surplus value (profit) produced above the cost of the wage. The worker produces enough value to reproduce the value of their wage and the capitalist's profit.

[Guevaristas]

Thanks for your answer Comrade. Conceptually im getting, i think.

Would agree the worker is exploited twice:

1. once, in relation to being paid by the hour, but producing more value than that wage?

2. When the capitalist sells the commodity produced by the worker, they mark the price up?

[brendanmcooney]

At this level of abstraction we assume that commodities are sold at their values which means that profit is equal to s. There is no marking up prices above their values. It cost the capitalist c+v to make the commodity but its full value is c+v+s. S is profit.

[KagarBeardtooth]

Wrong. Value is subjective.

[brendanmcooney]

Wow. What a brilliantly articulated argument.

[KagarBeardtooth]

Indeed.

[giorgioxyzb]

A piece of software that takes one day to make has at least the value of the goods that are needed to keep your programmer alive for one day. Plus of course the value of the office, computer, and other things that the programmer needs in order to work. This is not subjective: programmers cannot

produce above a certain speed or using obsolete computers: you simply won't get your product (e.g. Windows Vista) on your PC.

[KagarBeardtooth]

Time is not subjective; value is.

[giorgioxyzb]

I do not know what to do with a statement that is not supported by an argument.

[KagarBeardtooth]

My point was that your argument isn't valid.

You have no argument other than that of conflating time with labor in the sense that both of them are supposedly objectively measured. Value is a completely subjective phenomenon; time is objectively measured. To attempt to portray value as being objective by using the term "labor-time", thereby attributing the objectivity of time to labor also, is completely fallacious for the above reason.

[giorgioxyzb]

My argument is that if you pay a worker less than he or she needs

to survive you will have no worker and therefore no commodity.

What is contradictory about this reasoning?

[giorgioxyzb]

You are free to subjectively value a new car, say, 2 $. But then you have to find someone who can produce a car and sell it to

you for that price. Can you do that?

[KagarBeardtooth]

Of course not. Nobody concedes completely in trade. It is common knowledge that if someone bids too low for something, then someone else can bid higher and gain the sale. The buyer and seller each have their own valuations of the object that conflict, and the compromise that they reach is the selling price

[KagarBeardtooth]

Ah, sorry about that. I didn't see your second initial comment.

Your argument still implies rigid proportional prices and objective value. You imply that there is a set price for everything else in the market that is required to sustain the worker, which is not true

[giorgioxyzb]

What I mean is that prices have to be adjusted in some way so that the price of one commodity (the car) has to cover (at least) the cost of the labour (the commodities that a workers need for their living) that goes into making it.

The nominal prices of commodities are irrelevant, but they need to ensure that the above constraint is satisfied, otherwise

the system stops working.

This means that, even though prices can fluctuate, there are some objective constraints to them.

[giorgioxyzb]

I was not implying that there is a rigid set price, but there is an objective lower limit to price: no matter how little you want to pay for an item, you cannot go below a certain price.

[KagarBeardtooth]

True, but innovation and inventiveness frequently lower the price floor. Price ranges aren't eternally set.

[giorgioxyzb]

If I understood it correctly, the labour theory of value does not speak of eternally set prices (or values behind them) but of the average quantity of labour needed for a unit of product at a given point in time in a given society. This corresponds

to the available technology and the average productivity

of the workers.

[giorgioxyzb]

Of course, values and prices of commodities change over time

but at a certain point in time they are relatively stable.

[giorgioxyzb]

Given a sufficiently short period of time, with values of

commodities relatively stable, you must have the constraints

I was mentioning above, e.g. if a car requires

X man days to make then its value is (at least) equivalent

to that of the commodities needed to support these workers

for X days plus the value of raw materials and of machine

consumption.

If prices did not reflect these constraints, we would have no

cars, because workers would simply not be able to show

up at work.

[KagarBeardtooth]

Yes, this is all true. Labor must also be added into the cost of producing commodities, which also translates into the price of the commodity. However, you must understand that labor is also valued subjectively.

[KagarBeardtooth]

Like I said, nobody concedes completely when trading freely. Therefore, a deal is not made unless both parties are sufficiently satisfied.

[giorgioxyzb]

Yes but this explains nothing about the reasons that make us

perceive certain prices are more "just" than others.

See the example of 100 $ for a gallon of orange juice

in a previous message.

How does your definition of value as something subjective explain the fact that most (sane) people perceive paying

100 $ for an orange juice as "way too much"?

[KagarBeardtooth]

Of course it does. People don't pay $100 for orange juice because they don't value orange juice more than all of the other things that they could buy with $100. The man charging $100 would have no choice but to lower his price or receive no business.

[giorgioxyzb]

> they don't value orange juice more than all of the other things

> that they could buy with $100..

and why is that?

[KagarBeardtooth]

I can't give a blanket response that would be any more accurate than the one that I gave before because, as I said, value is subjective. The reasons are different for every person. But then again, who knows? Maybe somebody REALLY wants some orange juice and is willing to pay $100 for it.

Ultimately, something can only cost as much as somebody is willing to pay for it, and something can only be bought for as much as someone is willing to sell it for.

[giorgioxyzb]

This seems circular reasoning to me. I give up.

[KagarBeardtooth]

It's not, but whatever.

[xlightwavex]

ah excellent video so far

sounds like presant day inflation

human labour

heres ;your raise o minimum wage went up your making more now o prices when up your makeing the same now

you want another raise what you just got one

[brendanmcooney]

again: how do you explain monopoly pricing?

[Individualistico]

What do you need explained about it?

[brendanmcooney]

Do both sides benefit from an exchange when one party has total monopoly over the selling of that commodity and can charge monopoly prices?

[Individualistico]

Of course. Why would that change just because someone has monopoly pricing power? You're still not going to buy the product unless you value it more than what you're giving in exchange for it. Otherwise, you would hold on to the thing that is more valuable to you.

[brendanmcooney]

Then how is that a useful definition of value? Most people resent monopoly pricing because they sense that the product has a "real value" lower than the monopoly price. In fact if the monopoly was taken away the value would approach that real value and people wouldn't think they were getting "ripped off". Isn't there an inherent appeal to a fair price when we make statements like "ripp off", "great deal", "bargain", "price gouging", etc.?

[Individualistico]

I would be upset if I had to pay $100 for a gallon of orange juice. It wouldn't be upset because I thought there was some objectively property price of orange juice. I don't think there's any such thing. I would just be happier to pay a lower price.

This would create an opportunity for competing products to come to market, which would cause the orange producers to lower prices.

And how does a monopoly come to be? By government intervention. It's not capitalism that brings coercive monopoly.

[Individualistico]

It doesn't make any sense to say that something has some objectively calculable value. The degree to which something is valuable comes down to personal decision. What I value, you may not. What I value more, you may value less. I may be willing to pay more for something than you're willing to pay because I value it more than you do - and vice versa.

[brendanmcooney]

yes. You've written that over an over again on several of my videos for several days now w/o contributing anything new to the conversation. Find something new to say or stop posting comments. It's clear that you don't understand much about the LTV and are not interested having a discussion or learning more. You are here to be a repetitive gadfly, or I think they call it "Troll" nowadays.

[Individualistico]

You can't "sell a commodity for more than it's worth." No one will buy something from you that is worth to them less than they're paying for it. Any time someone buys something, they're getting something worth more to them than what they're giving away in exchange for it - otherwise they wouldn't make the trade.

[brendanmcooney]

Then how do you explain monopoly pricing (since that's what I was referring to here)?

[Individualistico]

There are so many false premises you have. Exchanges are never equal, if you mean that equal value is being exchanged. People don't make a trade unless they value what they're getting more than they value what they're receiving. This holds for no matter how low or how high prices are.

[arcticmunchy]

A great video 5 stars.

I like your presenting skills

[Edgrot]

Wow I can't believe the people your brain warping.First I will say your half right.However where your very much confusing people is your describing a unchecked Facist rule.Don't like that well maybe you want socialized Capitalisim where everyone is poor.What you fail to inject is Free trade. Facism and Socialisim are all forms of capitalsim.Yet you clearly miss the right version or the idea that the elite manipulated the fall of free trade for Facism.Your intel but your missing part of the info.

[brendanmcooney]

I'm not talking about fascism at all. i am talking about the way in which capital circulates in any capitalism society, regardless of the nature of the capitalist state. I am describing "free trade". When capital moves freely people are exploited. "maybe you want socialized capitalism..." Here i am not making any arguments for any alternative economic system (though i do think that there are many viable alternatives to capital) but merely seeking to explain capitalism.

[really12345]

I have to agree with brendan.

he is just explaining simple commodity exchange. Aristotle went through the same process his POLITICS.

Anyways, It sounds like you are reading straight from CAPITAL but I haven't found any credit that you given to Marx.

[brendanmcooney]

the goal of my videos is to explain marxist economic theories in common everyday languange which i state in my channel description. I don't feel it is important to talk about marx himself that much because in this day and age people's brains shoot smoke and turn off when you mention Karl.

[EZLNCombatant]

I like your argumentative way to distinguish and describe your opinion. Intellectual! Very nice. Thank you.

[MopacMurtaza]

Capitalism, is exploitation, and slavery, just like a pyramid, where all the value that comes out of hard work goes to the top of the pyramid, even though the dont lift a figure!

[eskimofinn]

Wonderful Thank you - I look forward to part two!

[poppopbeat]

way to break it down!

love and solidarity

[nickglais]

Another good one