 Okay, let's start a little bit. One of the things I always find interesting to do with Marx is to, you know, work on theoretical angle, but then have in mind some endpoint that one can get to try to do what he says he wants to do, which is to bring the theory to the surface to the point where it can explain what is going on in daily life around us. And the aspect of daily life that intrigues me right now are issues about regional development and what I would call the formation of regional value regimes. So I want to talk about that and talk about how one might get from the diagram of visualization and general circulation which we began with to the point of being able to interpret something of what is going on in terms of the formation and dissolution and reconfiguration of these regional value regimes. Now, there is a long history of this. I think one of the more interesting books about North American economic histories by Douglas North, who talks about region and section a lot, and effectively suggests that in the 19th century the United States was not one nation, country, or whatever you want to call it. It was in fact a whole series of regional economies, many of which were in the process of evolving distinctively in their own particular ways, not in very close relation with each other, and that there was therefore a kind of centrifugal force always at work in American economic history, which was some sort of separatism could set in, but at the same time there were relations between these regional economies. In a sense, I would interpret the 1930s as a moment when the regionalization of the American economy became a problem, and as a result began to see the knitting together of the various regions into a much more unified structure through many of the federal programs and interventions that occurred during the 1930s, and then of course during the 1940s you have the interstate highway system, and the really strong attempt to develop the American South in a different kind of way, and of course the American West which had been sort of an open frontier for capital accumulation earlier became a very significant center for further capital accumulation, particularly since it was so significant during World War II and the Pacific War. So what you see however is the evolution of these regional systems, and the evolution has various forms of crisis attached to it. So by the time you get to the 1980s you will find a language which is very familiar and popular press and everywhere else where people were talking about the Rust Belt and the Sun Belt, and everybody seemed to know what people meant by that and everybody understood it. What's interesting right now is we don't hear that language used so much anymore, partly because most of the Rust has been polished off a large part of the Rust Belt and other things have begun to happen and some of the Sun Belt has gone a little rusty, but nevertheless at that time in the 1980s there was a definite sense that the Rust Belt was in crisis, that regional system was in crisis, whereas the American South was not, so that again we have a notion of crisis which is not stuck in if you like a generalized crisis but which is a regional crisis which has huge impacts through the deindustrialization of much of the northeast and midwest during this period. And so if you look at the world you would actually see many regional varieties of this sort. Gramsci of course struggled all the time with how to integrate an understanding of northern Italy with what was going on in the Italian south and effectively saw these as two completely different labour regimes and class regimes and even cultural regimes, and yet they were all supposed to be part of what Italy was about and of course the migration streams and relations between them, but to this day that distinction still exists and in Germany the distinction between Hanover and Bavaria or the Ruhr and Bavaria is very strong and you have demands also for autonomy in Catalonia and you have it in Scotland so you just go around and you kind of see all of these different areas of capital accumulation which relate to each other in some way and are linked together if you like and it raises for me the question of is it possible to talk about a variety of value regimes instead of talking about just one single regime value. Now Marx tended to talk as if there were one single regime. The tendency in the Marxist tradition has never been to say well we can actually disaggregate value into regional value regimes. In fact there's a deep sort of resistance to that for a variety of reasons but it did seem to me that we have to find some way to get from the general dynamics of the circulation of capital to the existence of these geographical configurations, these spatial configurations and one of the ways in which it seemed to me useful to start to go about this is to go back to the way Marx talked about the value theory and derived the value theory in the first instance and I think here it's always important to remind yourself that Marx never started from an idea he always started from a material practice and that material practice was then analyzed and understood and through that analysis and that understanding some sort of general theoretical conclusions were reached which as I mentioned earlier on in the last time there is a then the question is how does this general law of capital accumulation assert itself in this case in space and time and in what ways does it assert itself that can actually help explain what is going on in these regional and inter-regional dynamics and the kinds of things we might we might look for. So this is if you know part of what I want to look at today but in looking at it then going back to the very origin Marx says that he wants to look at the act of exchange that's the act with which he starts the exchange of commodities and he dissects that and comes up with the notion of use value exchange value and value and and and so on but that exchange occurs in a particular institutional context and the institutional context is that of private property of individuals of what he calls reciprocal dependence where everybody is dependent on each other by the independent of each other as individuals but is also shaped by the ideal of a perfectly competitive capitalist economy in other words perfect competition is assumed and throughout Marx's capital many places both in capital and the grunderies Marx comments about what competition is for in his view competition does not create the laws of value it enforces the laws of value and it is the as an enforcer that Marx looks upon it and so the derivation of the law of value in the first few chapters of capital is predicated on the existence of an enforcement mechanism which is that of perfect competition but if we start immediately to question the question the issue of is there perfect competition in society then of course we kind of say well no there is not and there have been various times when people have talked about alternatives to perfect competition and those alternatives often carry with it the obligation to start to talk about an alternative value theory this is true for example in the case of Paul Sweezy and Baran and Sweezy when they were writing about monopoly capital in the 1960s in that text they said well capital is once upon a time competitive in the 19th century when Marx was writing it was competitive and about that along came the corporations and the corporations became more and more significant and eventually we approached a situation where monopoly is the order of the day and therefore we have an era of monopoly capital which and they were very direct about this demands an alternative value theory that is there have to be some serious modifications of the value theory to take account of monopoly now one of the things that I have with objections I have to Sweezy's kind of setting it up this way is the idea that capital was once perfectly it was reasonable to consider capital as being perfectly competitive because in the 1920s there were a whole series of discussions over something called monopolistic competition and monopolistic competition was characteristically spatial competition and spatial competition if it is monopolistic competition is not perfect competition now why do we call it call spatial competition monopolistic competition it's monopolistic in the sense that I occupy a particular place I am at this desk I have a unique location at this desk and if I am competing with others then I am competing over a certain space now how big is that space over which I am obliged to compete and in the 19th century when transport costs were extremely high most local producers were very much protected against competition so that if you were brewing beer or making bread or something like that you were even protected from competition from the next town over and since you were the only brewer or baker in town you could monopoly price your your bread and your beer and the like now the level of monopolistic competition depends very much on the nature of the commodity I mentioned sort of bread and beer because there you know those kinds of products where monopolistic competition makes sense but if you look at spices if you look at gold or silver or something like that then transport costs do not have the same impact on those matters you may account other forms of barriers to movement which would of course be tariff barriers tariff barriers or tolls on highways and all the rest of it and so the term laissez-faire comes from the 18th century which is a french term which kind of said get rid of all of the tolls and bridge tolls and road tolls and so on which were actually hindered free movement so that any hindrance to free movement then it creates monopoly spaces within which monopoly pricing can occur so if you go back into the 19th century when transport costs were extremely high what you then find is that monopolistic competition was actually really pretty foundational for much of what was going on in terms of capital accumulation but as I've suggested there are two features here one are the human barriers who tolls and tariffs and all the rest of it and the other is the spatial problem of the cost and time of movement and that cost and time of movement has over the history of capitalism been reduced dramatically dramatically of course during the 19th century with the coming of the railroads telegraph things of this kind even information about prices became very significant by the time the telegraph came it was possible for when the corn exchanges opened in London or Liverpool that they would have available to them the prices in Odessa and Buenos Aires and all the rest of it so that information was became much more freely available and therefore monopoly pricing was less likely to happen when you knew that what the price was in all those different parts of the world so information became terribly important at the same time as actually the capacity to move material goods and to move money around so the improvements in transport and communications have actually made a great difference and one of the big revolutions in transport and communications occurred in the 1960s early 1970s with containerization so that containerization reduced the cost so that you could then actually start to to create industrial structures in which one part of the car was made in brazil another part was made in thailand another part was was made in china and it was all assembled in detroit so so you could do that kind of thing but only after the actual monopoly situation of the of the special competition had been reduced by reductions of transport cost at the same time of course we've seen an incredible push mainly led by the united states to reduce tariffs and to reduce all impediments and barriers to trade so that again since 1945 in particular you had the general agreement on tariffs and trade gap to organization that was systematically trying to negotiate the reductions of tariff barriers on a worldwide basis this was then replaced by the wto which is a much more binding and kind of agreement which is doing the same kind of things and we've had all these different rounds the doha round and all the rest of it to try to press this even even further so that monopolistic competition from the spatial standpoint has become less and less significant and for this reason there is less and less monopoly i think available from the standpoint of actual production in space however that doesn't get rid of monopoly because it actually turns out the capitalists who are supposed to thrive on competition really love monopoly and they do everything they can to monopolize uh and therefore what we've seen in its place is the growth of of corporate monopolies and corporate monopolistic power and this corporate monopolistic power exists however in in a certain in configuration and it was interesting to go back and read uh say uh squeeze him baron and sweezy's book on monopoly capital published in 1966 because the characteristic monopoly uh corporations at that time were the big three uh auto producers in detroit and they were monopolistic in the sense that they controlled very large part of the market and they could engage in these they weren't exactly monopolist but they could do price leadership and all this kind of thing that were very familiar with what each other was doing and the baron and sweezy therefore the the the big three in detroit was a paradigm example of monopoly power uh in motion but notice something it was monopoly power within the united states market and only within the united states market and the interesting thing that this was also accompanied by the way in which actually the labor force was also protected from competition so that while capitalists were protected by high tariff barriers and and and high transport costs so it was the labor force protected against competition with other labor forces by high transport and labor costs and also by barriers to movement and so interestingly during this period of 1960s 1970s 1980s a whole series of books came out which were talking about the concept of for instance uh the english working class uh the german working class the french working class the italian working class and in a sense at that time you would say that labor was rather protected from competition from other labor forces that there was a certain kind of monopoly power that accrued to capital but there was also a certain monopoly of power that accrued to labor and of course this then led to a situation in which the value regime of the united states was very much about uh was very much led by uh a conflict between uh the the the sort of corporate capitalist big gun motor company auto companies and the like and and big labor so you had big capital and big labor kind of jostling with each other for privileges and power and you could say that during that period the united states formed a uh a value regime uh which was to some degree confined by uh by its borders by the protective aspects of its geographical position but you could say the same about the british situation as well that the british working class was uh i'm using british rather than english because you know there's an english side to it too but the british side is important the british working class was likewise protected the only only thing that was going on during this period which was weakening if you'd like the power of labor was was migration and it is a is a fascinating point that capital at that time uh the late 1960s went out of its way to try to induce more and more migration to come into the country i mean you know the kind of rhetoric we hear these days of keep them out you know was absolutely not the current at the time the reform in this country of the immigration act of 1965 brought uh immigration uh opportunities into into united states that have not existed before uh the germans went out and recruited uh turkish workers directly uh the french actually subsidized the bringing in of the magrabians and it was a french state subsidy to magrabian immigration and all of this had to do with trying to weaken the power of labor by uh importing immigrant workers to some degree to try to keep uh as it were invade the value regime and disrupt one of the conditions under which the value regime was uh was evolving of course this produced certain uh difficulties uh in britain for example drawing upon commonwealth labor a great deal of immigration was arranged and after this came a very strong movement within barely some elements of the working class that wanted to protect their monopoly position by becoming pretty anti-immigrant and of course this is the kind of thing you see now in the french working class many people who were in the communist party once have gone over to the marie lapin uh in britain that uh in the 1960s late 1960s 1970s uh there was a conservative politician who sounded far far worse than trump about uh you know he basically was talking about rivers of blood that would flow in britain if the immigration policies were continued uh and he got a lot of even though he was a conservative he got a lot of working class uh support so you have value regimes which were structured in a certain kind of way but they were very much built around the nation state with nation states in a sense uh trying to figure out how to work their labor market how to evolve their labor market are very different characteristics in terms of states of class struggle and organized power and and the like but then if you you you go to 20 years later you see a completely different scene you would not say the monopoly auto companies in the late 1980s were the three big detroit auto companies because you had the japanese uh you had the germans and you had uh soon after that uh you know koreans and now you've got the chinese and and and and the like uh nor would you say that uh big pharma and all the rest of it is now you know corporately bound by nation state boundaries so in a sense what we've seen is a transformation of the value regime from one that was really tightly confined in nation states with a great deal of variation the regimes within the nation states as occurred in the united states for example and to some degree in britain and many countries in europe so you'll see these these configurations and these configurations uh are actually very uh you know went went underwent a revolutionary transformation as it were uh through the period of 1970s and 1980s to to evolve a completely different value regime and this transition was engineered in part through the crisis of the industrialization of the rust belt the the industrialization of the of the sun belt and the development of the american west all of these kinds of things were were were were going on on now this uh situation is a i think uh one which which also then started to evolve of saying well is it is it possible that we can have just one value regime uh around around the whole world and this was if you like the job of some of the multinational institutions the imf the international bank of settlements uh the world bank to a lesser degree but uh but the like and and of course the wto uh and the attempt to reduce tariff barriers to the point and and reduction of transport costs to make actually uh something closer to a single value regime but a single value regime does not seem to have worked very well even if it ever came about which it which it really did not and i think that then what this meant was that the world started to be carved up into other kinds of regimes so you have european union uh you have uh nafta uh you have kafta you have the proposal on the the the pacific uh agreement and also the atlantic agreement and it seemed to me that this is actually a very interesting development in the global economy which we ought to look at uh more carefully because actually this development is not about free trade uh as it's generally uh presented in the press and elsewhere it's really about trying to secure uh certain parts territorial configurations which are can be part of some sort of coherent value regime uh the european union is an obvious example of that uh the european union uh is an attempt to build uh a structure and eventually will of course with a single currency and all the rest of it which is going to uh provide the possibility of uh a coherent value regime structure on a much more broader basis than than a single state the problem however with the european regime and i think this is very important is that within that regime there are hegemonic configurations and there's no question that the main beneficiary of the euro and the euro zone has been germany uh germany has managed uh to enhance its position very dramatically through the advent of the euro whereas southern european countries have essentially been drained dry of value so that the value regime in this case is of great uh advantage uh to to germany in particular the exchange rate of the euro is much lower than it would be if you were trading in german marks so that germany is favored in selling its high tech equipment to china and all the rest of it because uh because the euro is is kept down by the fact that they have countries like greece and and portugal and italy and all the rest of it within the euro but i wanted also to point out that one of the things that started to happen with the wto which i think is interesting is that the wto was something that was pushed very hard by the united states and it was pushed very hard to try to create a free trade regime which forced most countries to sign up to the wto on pain of being excluded uh from global trade so you find smaller countries were given the option of joining and being fleeced or not joining and being excluded so what do you choose i mean and so most of them chose to join and consequently started to get fleeced but actually one or two things happened which were highly negative for the united states several judgments from the wto came out against the united states and that led to uh the united states starting not to like the wto and actually very interesting in the senate approval of the wto legislation uh there was an interesting phrase in which it said the senate reserved the right to ignore any decision of the wto that the senate didn't like which is a fantastic way to actually uh you know ratify a treaty but they found several decisions which the doesn't like so the the the united states is not very happy with the wto so that's one of the reasons why the united states has proposed something like the trans specific agreement since that's in the news let me tell you something about what's involved in that um if i can find it which i wrote it down here the uh the main the main thing here is that uh this this uh this this agreement incorporates uh the number of countries the u.s. japan and canada and australia they're the main ones and then uh the smaller economies like mexico melasia chile vietnam and peru but they only account for eight percent of the activity within the proposed trans specific agreement now my argument here would be that the trans specific agreement is really an attempt by the u.s. to create a particular value regime that one that will stop the decline in its market share of global trade at others expense while counteract in any weakening economic growth and the profitability at home in 1985 economies in the proposed tpp countries accounted for 54 percent of world gdp by 2014 this had dropped to 36 percent this is a very serious drop-off from 1984 to 2014 the u.s. share of world gdp fell from 34 percent to 23 percent in the same period the u.s. share of world merchandise trade dropped from 15 percent to 11 percent so the the tpp is not some great free trade agreement arrangement but an agreement by a group of advanced economies with a fringe of developing countries who share in world gdp has been significantly declining to keep others out in particular to keep china out and to keep european capital out now i'm going to come back to this in a moment because one of the points about this agreement was that it does not in any way benefit labor in any of those countries all of the benefits of this agreement would flow to capital not to labor so when trump says he's going to dissolve this agreement he's actually dissolving something that will be of great benefit to us capital and guess who is stepping into the breach to say well if you're not going to do it we're going to do it china so china is stepping into the breach and kind of says we are going to set up a similar kind of trade trade zone so that so here you have here you have a very interesting geoeconomic geopolitical jousting going on to try and carve up the world into distinctive value regimes and in the case of the trans-pacific agreement clearly the united states would aim my suspect to probably the exactly the same role as china as as as germany did in the euro zone which is to use this as a way of absolutely sucking value out of those other regimes to the degree that it was able to to do so and i think again when we when we look at this uh i think uh the same would be said of many of the other agreements which the united states has tried to build since it became disillusioned with the wto it's negotiated things like uh the central america free trade association kafta uh it's already had a sort of bilateral agreement with chile which actually is is is a brilliant way to to to prevent the chileans from joining merco sewer which is the latin american rather weak version of trying to create a coherent value regime in the mainly in the southern cone so these these these processes which are going on in in the world right now are are dynamic and transforming and they're not all that they seem and i think particularly the way in which the trans-pacific agreement is being presented as something that was uh against the american worker well that's true but then uh the point was that it was all in favor of uh american corporate uh uh interests in the same way that the trans-european uh the european agreement was essentially designed to try to give american corporations easier access uh to the uh to the the eurozone now um let me go back then to however to the the the way in which we might interpret this in relationship to marx's uh theory of capital accumulation and and the like now he had uh come across this sort of uh questions at various point at various points uh in his analysis and then in volume one of capital uh he actually takes up uh the question of where uh of what happens when there's trade between different nation states and and here's and and he does the say a little bit the same in volume in volume two but let me read you a little bit of what he says um uh i mean marx had to recognize that the value of labor power varied from country to country and and it depended upon you put it this way the price and extent of the prime necessaries of life as naturally and historically developed the cost of training the laborers the part played by the labor of women and children the productiveness of labor it's extensive and intensive magnitude the more intense the national labor produces in the same time more value which expresses itself in more money the law of value he says is here modified by national differences in wages so he's clearly uh amenable to the idea that the law of value uh should be transformed uh and this law of value is modified by geographical variations in the length intensity productivity and porosity of the working day uh different productivities of labor according to natural differences cheap food from formal fertile land the different definition of necessities according to natural and cultural situation the dynamics of class struggles mean that the equalization of the rate of profit will not be accompanied by an equalization of the rate of exploitation between countries and here's his thing the favored country recovers more labor in exchange for less labor although this difference this excess is pocketed as in any exchange between capital and labor by a certain class and you don't have to think very far to guess which one one here says marks the law of value undergoes essential modification the relationship between labor days of different countries may be similar to that existing between skilled complex labor and unskilled simple labor within a within a country in this case the richer country exploits the poorer one even where the latter gains by the exchange now this is a very important idea there and it's this and it's like the theory of relative surplus value because in the theory of relative surplus value you don't have a situation in which the standard of living of labor is necessarily declining you can have a situation where the standard of living of labor is actually rising very slowly but the rate of exploitation is increasing even faster because again that's the point about relative surplus value that you're increasing the share of value produced going to capital and if there's a tremendous increase in productivity which increases that share very dramatically then part of that share can go to labor but the majority of it goes to capital so if you get say 100 dollars of surplus value worth of surplus value coming because of the increase in productivity you might allow 20 of it to go to labor but you still get the 80 that goes to capital so what marks is saying here this is the kind of relationship that can start to exist between richer and poorer countries and these are the sorts of special factors that prevent as he says any leveling out of values by labor time and even the even the leveling out of cost prices by a general rate of profit between different countries now the mechanism here is important and the mechanism that Marx is using to talk about this is the equalization of the rate of profit and one of the things that he does in the in the sphere of distribution is to start to say that the equalization of the rate of profit actually redistributes surplus value within the capitalist class among capitalist producers that it actually redistributes surplus value from those capitalists who are producing in labor intensive structures and i i.e producing a lot of value because a lot of labor is employed that that value much of that value is redistributed to those capitalists who employ very little labor but a lot of capital so capital intensive industries effectively get subsidized by labor intensive industries and if labor intensive industries are located in Bangladesh and capital intensive industries are located in the United States then you can see what the redistribution is going to be between nations and so Marx is actually using the same argument here as he does in the equalization of the rate of profit now you here have to put into a perspective some of the riddles that Marx is trying to resolve the first riddle which comes up in in capital volume one is this how does a system based on equality of exchange value equality of value in exchange actually end up producing a surplus value and this was his riddle i mean if everything exchanges at its value then where does the surplus value come from well his answer is it comes from the commodification of labor power and the fact that labor power is able to produce value and can be induced to produce more value than it itself has by having to work you know 10 hours a day instead of five hours a day and all the rest of it so that riddle is solved in volume one through a theory of exploitation of labor in volume one of capital at the point of valorization so you have that point of valorization in the general circulation of capital which has this riddle of how come you know surplus value is produced when without offending the the rule that everything should exchange at its value involved at the point of distribution however we now have another riddle which Marx has actually unraveled which is that the equalization of the rate of profit as a mechanism redistributes value from the labor intensive producers to the capital intensive producers and this redistribution also violates the the the rule that it can't you know that uh commodities should exchange at their value in fact what Marx does is to say they know commodities no longer exchange at their value they exchange at their price of production which is something different from from from value so there are two points in this general circulation process where there are major redistributions which occur the first one is from capital is from labor to capital and the second one is redistributions within the capitalist class and this redistribution is very significant because like I say it subsidizes capital intensive industries and thereby also by the same token as Marx is pointing out here it subsidizes uh the capital intensive uh countries so the inference I would make is that the social labor we do for others in one part of the world is different both qualitatively and quantitatively from that down in another and that in the event of systemic exchanges between different regional value regimes the social labor in one region may end up subsidizing and supporting the economy and lifestyle of another high value producing regimes by which we mean labor intensive production like Bangladesh may be supporting high productivity capital intensive regimes such as the US and this turns out to be a very common structural combination even within industrial structures the know-how and technology of the united states combines with the labor power of china or Mexico or Bangladesh to the relative advantage of the usa even as the actual producers receive some developmental benefits in other words it's not as if no benefits accrue to any of those countries like china Mexico or Bangladesh they get something they get there you know 20 percent or whatever it is uh but uh the other side of it is that of course uh the the the capital intensive part of the operation gets the 80 percent even more dramatically going back to the notion of anti-value and what I call the debt bottling plants of new york and London uh what they in fact do is produce anti-value and then they look for redemption of that value in the factories of Bangladesh and Xinjiang so this argument has I think some far-reaching implications for the way in which value uh gets produced and distributed within the global economy that its production point is not the same as its appropriation point and there are these redistributive mechanisms which are channeling more and more value to privileged sectors of the economy and I always thought it was very fascinating that uh and the hearings about what happened in 2000 the collapse of 2007 and 2008 they they hold Lloyd Blankfein who's CEO of Goldman Sachs to the uh to the senate committee to define the the bank's role and he was asked well what does the bank actually do and he replied that it was his mission was to do god's work and I always mystified me until I thought about this uh that I think he was thinking of a material as opposed to faith-based interpretation of Matthew 25 29 which says for unto everyone that hath shall be given and he shall have abundance but from him that hath not shall be taken away even that which he hath which is exactly what Goldman Sachs is about uh in material uh kind of kind of sense so this is the law of capitalist redistribution uh as it's laid out in effect in volume three of uh of capital now I'm suggesting then a certain plausibility about the existence of these regional value regimes and I would support this with the also with the following uh commentary that if you look at the way in which the global monetary system is set up there are distinctive currency regimes in the world and money is supposed to be a representation of value so the question would be how to import how to interpret all these different representations of value which are local and regional and all the rest of it how to interpret them in the absence of the idea that there are actually regional value regimes now Marx himself had a very interesting things to say about the the money structures again he does a good good analysis in volume one and he and he puts it this in the following way that he he suggests there's a big gap that exists between the global money commodities which is gold and silver and the many local fiat and paper monies that exist to facilitate ease of exchange and which are as he says an attribute proper to the state so these are state monies and then this is what he says when money leaves the domestic sphere of circulation it loses the local functions and falls back into its original form as precious metal in the shape of bullion in world trade commodities develop their value universally their independent value form thus confronts them here too as world money it is in the world market that money first functions to its full extent as the commodity whose natural form is also that directly social form of realization of human labor in the abstract its mode of existence becomes adequate to its concept thus the different national uniforms worn at home by gold and silver as coins are taken off again when they appear in the world market there is a separation between the internal or national spheres of commodity circulation and its universal sphere the world market and it's very clear that the true value of commodities lies on the world market and its most adequate money form of representation is gold so you have this idea that true value isn't is it going to be experienced in the world market I don't know and that true value is then represented by this one commodity in fact usually two gold and silver but for the sake of argument let's just say it's gold so what this is what leads Marx to sort of argue that value is singular and universal because it's universal to the world market and the justification for this is that it's only on the world market then that gold can perform its proper function which is as a material representation of value now remember value is immaterial it's a social relation it needs a material representation you cannot represent value by bits of paper because it's one immaterial representation representing another immaterial representation in which case you say what's the point the point for Marx was to say there had to be some material representation of value and that material representation was going to be gold but gold is totally inefficient with respect to the circulation of commodities therefore it became necessary for the state to come up with bits of paper and all the coins and all the rest of it and the imperative to reduce transaction costs led to the creation of lots of localized money which were mere symbols of value now the difference is that these forms other forms of money were open to human manipulation the state could just print more bits of paper or you know even worse if it's IOUs you could just write IOUs and spread them around any way you liked so there were lots of monies of account and and other forms of money which in Marx's view were totally unreliable as representations of value and particularly the complicated systems of debt and repayment which often involve no actual change of hands of money at all until some agreed upon date of settlement gold he says acted as a solid and reliable material pivot upon which all the other fictitious and otherwise uncontrollable forms of money turned so gold played this crucial role and and it was important because gold is a particular obviously non oxidizable metal and how it's you can I say it and it has all these kinds of qualities and the like but gold also most of the the gold in the world is already above ground it can't be augmented very much I mean it's it's it's really a very solid stable kind I mean if you want something of the sort that Marx is saying has to be there then gold is obviously the perfect representative of value the problem however with capitalism is that over time gold has become less and less relevant and actually was totally abandoned as a standard of value in the 1970s onwards now I think that this is a very very important moment in the history of capital the abandon of the metallic base to the to the global money system Marx actually argued on more than one occasion that gold could never ever be replaced it could never ever be abolished but plainly he was wrong it has been so we have a conundrum as it were then to say well what how does how does world money work in the absence of this material representation of value which is gold and how do we actually represent value faithfully when the only choices are all of these you know nutty money systems and local monies and and and debts and fictitious capitals and all the rest of it how do we how do we deal with that so value even on the world market is now represented by money forms that have no material commodity base and these money forms are obviously subject to you know human manipulation central banks engage in things like quantitative easing and they add zeros to the money supply at whim they're not constrained and and that's why the gold bugs still exist they kind of say you know the the ruination of capital has been the abandonment of the of the gold system but the gold system was abandoned for very good reasons that it was totally dysfunctional given the levels of growth and the rapidity of growth of world trade so the restoration of a gold standard would be disastrous but then at the same time you're facing potential disaster by having monetary forms which are subject to human manipulation which are supposed to represent value when you know on on on the world market now in a in a sense what happened of course is that one of these currencies became the global reserve currency and that was the US dollar but then there's a question of what does the US dollar represent and how much does the world actually accept the idea that the dollar should be the global currency in fact there are several different proposals about this market basket of currencies the world around and and so on and the IMF drawing rights and so on so there are various alternative proposals but in effect what we're saying here is that the US dollar is pinned to its total output of goods and services within the United States that that the material value which underpins the dollar is the material productivity of US economy so that's in effect what would what's you know people try to do is to suggest that that is the case now that requires that there be a central bank which recognizes that and in recognizing that is willing to avoid inflationary incidents and all the rest of it and what you see is something very interesting in US history is that after the abandonment of the gold standard in the 1970-73 period well 68 to 73 what happened at the end of the 1970s huge inflation inflation in the United States was up around 17 20 percent and everybody starts going crazy about the this inflation and they recognize that inflation is a big problem and they look back at by my republic and they looked at the German Buddhist bank which was kind of saying inflation no no we've been there we don't want to have anything to do with that so there was a scare at the end of the 1970s that this paper currency the US dollar which was now representing the value was out of control and it had to be brought back under control how is it brought back under control it was brought back by what's called the Volcker shock because what Volcker did was to simply raise the interest rates way up to about 19 percent something like that you know maybe not as high as that but very very high and and that of course immediately froze economic activity there was a recession unemployment in the country saw it in the early years the Reagan administration there was a Reagan recession which was engineered and it was precisely about breaking the inflation recycle suppressing wages and to suppress wages you had to suppress suppress the unions so they did you know the the pat co the air traffic controller strike and things like that and at the same time you started to loosen up the possibility of monetary consolidation at the global at the global level so since then in effect we've been at the mercy at the world central banks and what central bank policy is in terms of pinning down what is the representation of value on on the world market but at the same time as this is going on we actually see there is competition going on for for you know what would be the most significant currency to deploy at certain historical periods during the 1980s and 1990s by far the most productive economies at that time were those of Germany and Japan West Germany and Japan and therefore the deutsch mark on the yen people started to say I'd rather hold deutsch marks and yen than the US dollar because the US dollar is going to hell and so why should I hold that so what you then see is a sort of a sudden competition of regional currency regimes to say holding their hands up and saying hey I want to represent value in the world market and another said hey and then you get these negotiations complex negotiations about can a market basket of currencies work in which we have a composite way of valuing things in the world market but this is the situation but the fundamental thing I want to argue here is that if the currency regimes can be disaggregated and structured around value relations on a regional local basis then why would we say that that value cannot have the same configuration why would we not say that value can also be understood in terms of distinctive value regimes which are interaction are in interaction with each other and through interaction with each other are constantly hovering around the creation of some alternative general measure universal measure of value on the world market so this is the situation it seems to me that is you know very you know something that needs needs to be looked at the other thing that I would want to look at here is something which is takes us into a completely different territory you may remember that in the diagram I put up I had a kind of an area at the top which is called the production and human nature and at the bottom called the production of nature because it's fairly clear throughout the history of value regimes that the different free gifts of nature and of human nature have very distinctive regional variations that when capital began to become ascendant it was confronted with different configurations of for instance natural resource configurations it was it confronted different cultural populations with different skills aptitudes and the like and without going into this in any great detail I would like to suggest that at this point capital is actually going to be highly dependent upon these free gifts of nature and of human nature for its further development and for its further advancement and there are various ways in which we can set that up and the most interesting way for me is to actually go back to Marx's theory of rent because Marx has two theories of rent or not sorry he has he has three forms of rent but one of the forms is divided into two and this is the one I really want to look at which is the notion of differential rent differential rent arises because of certain advantages and in agriculture it's very clear of fertility and location that is that if you have a plot of land with you know which is excellent in terms of its fertility and its location you're going to get superior productivity from that land compared to everybody else in other words you're going to you're going to earn an excess profit and this is what Marx called differential rent because he said you know if you want to equalize conditions of profitability you cannot have a situation where certain plots of land have a permanent a permanent as opposed to a temporary form of excess profit in the theory of relative surplus value there is a temporary form of excess profit which arises because you have a superior technology but others can take a superior technology and adopt your superior technology and soon that form of advantage is is dissolved as other people catch up with their technologies but you can't do that with a piece of fertile land you I mean you can go and try and find a place that's equally fertile and a good location but by and large the the advantage of that fertility and location is a permanent advantage which Marx says well he's going to have to be taxed away by the landlord in order to create conditions of equal competition between all the producers on the land so this is the theory of differential rent one differential rent two arises not because of natural fertility and location but because investments in the land create an alternative kind of advantage that you drain field you fertilize the field you build infrastructures of certain kinds you change the location arrangements by building transport networks or something of this kind so if you start to look differential rent two becomes something which is actually created by investments created by fixed capital investments of an independent kind in the physical environment and that this is about then the production of nature but it's not only about the production of nature because these sorts of investments can also go to investments in population and these investments can be long lasting that is fields that were cleared in the middle ages are still cleared you know once they're cleared they're cleared and they can be kept cleared the original investment that goes into a lot of new york city was done in the 19th century it needs to be renewed but it's still with us and it's long ago been amortized in terms of its actual so in a sense it's become part of what we call second nature so the second nature becomes a source of differential rent and that second nature is something with that which is produced and it's produced by human beings and in particular the more capital became hegemonic the more it was produced by capital so capital actually produces the conditions of nature and human nature that are appropriate for its to facilitate further accumulation at a particular historical moment on the other hand what we also find is that those requirements and this gets back to use values the use values which it requires change depending upon technology once upon a time early on in capital access to a waterfall was terribly important this was a major form of power and of course that's where all the textile mills are and on the full line using the water resources so this became terribly important along comes the steam engine nobody's interested in waterfalls anymore so natural resources are not natural at all they're actually cultural economic technical appraisals and as technology changes so the demand and of access and the nature of resources changes uranium was not a sensible it's not an interesting resource until nuclear power came along so the resource base is constantly being changed both by the use value requirements of capital but it's also being changed by the way in which capital invests in actually creation of built environments and those built environments can also become barriers because once you've built them you have to maintain them and it becomes rather sclerotic so you often find capital prefers to move to greensfield sites rather than to older sites and in fact early capitalism was just like that it's no accident that early capitalism in Britain did not develop in the merchant cities of Britain places like Norwich Bristol and the like it did not develop there where did it develop it developed in little villages with names like Birmingham with names like Manchester Oldham or Leeds so it went to those places because it didn't like the monopoly power of the merchant capitalists in those merchant capitalist cities and it didn't like the guild organization of labour so it went to a green field site where it had none of those regulatory things and just got on with you know built its factories and all this kind of stuff with nobody interfering with them so that kind of thing is going on all of the time but this but here I want to suggest that actually value regimes are built they're not simply there and they don't simply evolve by accident they're they are built and they're built around the production of nature and the production of human nature and the production of human nature is actually also an investment one of the biggest advantages that the United States has had in world trade for the last two generations has been a vast investment in higher education that the vast investment in higher education and the development of the research universities has been one of the big competitive advantages which continues after all the investment has been long been gone in the 1960s even to the point right now where you're actually seeing this cutting back on higher education which is crazy but at this moment you see something else going on which is what are the Chinese doing investing vast amounts in higher education and and actually really trolling the world for talent to bring in other words they're doing very much what the US did in the 1960s and they're also doing it in terms of the integration of the whole of the US economy of the whole Chinese economy through the development of high speed train networks and high speed you know automobile highways and and infrastructures and all the rest of it in other words in other words you're making a value regime by conscious infrastructural investment and I think that this is a this is again something which is very you know very very significant to the understanding of how value regimes develop because the fact is that the value regimes which is already the value which has already been embedded in the land in the form of fixed capital investments in the United States is far far superior to anything you would find in Africa or anything you'll find in Latin America even though you know the New York subway is crappy and falling apart so these these kinds of these kinds of issues are about trying trying to create a nature and a human nature second nature and a human nature which is actually convenient to certain forms of capital accumulation the result is that competition between value regimes on the world stage is very much affected by the degree to which these forms of investment have all been made not just simply yesterday but over a long period of time that the evolution of global the global economy is actually taken up with what we were talking about last time which is about fixed capital investment going into the land building the land in a certain way so that you see perfectly well how capital can continue to accumulate on the basis of those free gifts and they're free gifts in the following sense they're not free gifts the capital because as Marx points out the differentials which are involved here the differential rents that could be captured become then the basis by which the Rontier class starts to justify its existence under capitalism because Marx had a problem about why would capital industrial capital tolerate having a Rontier class that was going to extract rents why would it do so and one of the reasons was that the extraction of differential rents by the mechanisms I've talked about actually equalizes the basis of competition between capital and prevents if you like the monopoly power of that those few producers who color the most fertile land in the best locations and who can therefore earn excess profits forever more attacks away those excess profits and that's fine the difficulty of course then with Marx's analysis is he presumes that because because there is a justification for these differential rents to be extracted you then actually legitimize a landlord class which doesn't sit there and say oh I'm only going to take that which would actually equalize the rate of profit for everybody I'm going to do my good job for for capital no they sit there and as an interest group they all actually take as much as they can and so we get the problem of the relationship then between Rontiers and industrialists which is a very important issue so that what's the conclusion then that I want to draw here I would want to draw the conclusion that value regimes are actively produced value regimes are constantly in transformation you can't isolate them into fixed territories except that yeah okay building you know NAFTA or building the eurozone does isolate a certain territory within which the value regime is protected to some degree but the world structure is such that differential and relative spaces of trade are such that you cannot imagine any of those value regimes being isolated and in fact what you'll find is that yeah the combination of say US know-how and Mexican labor doesn't preclude you know Chinese parts and African raw materials being also incorporated into a product which is made in Mexico and sold in the United States we know we get those kind of value chain structures which now now exist but that it is possible to recognize some of the modifications that Marx was beginning to introduce into value structures and those modern these modifications have to do with the way in which there are effective redistributions of value through the equalization of the rate of profit as well as redistributions of value through the exploitation of living labor in production and in that sense you can reconcile understandings of some of these competitions that are going on in terms of regional value regimes and these regional value regimes therefore can be embedded in the general theory of capital accumulation which Marx was was designing he hinted at various points as to how that could be done particularly in volume three of capital and points in the Grundresa but this is one of pieces of work that we need to do particularly in since his assumption that gold could never be replaced as the global money commodity plainly has not held up and but on the other hand the fact that it's not held up suggests that this is a center of weakness within the global economy which is something which we should be deeply concerned about as we go forward but I think I've said enough so well let's have some any comments or questions you might have there are other issues I might want to talk about but let's throw it open for some some questions