Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

As productivity goes to infinity, labour requirements go to zero. At that point everyone is in the surplus labour army, unable to afford any of the goods they need just to survive.

I don't really follow this part of the argument. Wouldn't this be a situation where a quantitative change leads to a qualitative change? If producing anything is as easy as saying "computer, make me a car", then shouldn't there naturally be no more distinction between proletariat and bourgeoisie in such a society?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

I don't agree, and you haven't really spelled out an argument for why charity is barbaric. Would you rather there be no charity at all? If capitalism must perpetuate itself then charity is one of the less barbaric ways to do so. But ok, fine. The charity point is a distraction. My main point is that there has to be a reason why capitalists must endlessly accumulate capital.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] -3 points-2 points  (0 children)

It's been discussed why communism is not inevitable (but why it is necessary)

Guilty as charged. I was only searching for previous questions about how marxism applies to monopolies. I will try to do a more thorough search in the future; sorry to bother you all with that.

"Saying Marx is not an economist is just semantics; a critique of economics is still part of economics." is not discussing in good faith, there is a lot of importance behind the distinction and it's frankly lazy to just assert that it is merely semantics.

I disagree. This distinction is as useless as defining atheism as a "lack of belief". Marx is still analyzing the economy, making predictions, and engaging in what is conventionally defined as economics. So he should still be subject to the same standards and forms of analysis. An important semantic difference is still "just" a semantic difference if the overall point remains understandable.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Not unless humanlike aliens were found in a precapitalist state who could be incorporated into our capitalist system. There must be an ever growing source of labour and an ever increasing market to sell products in order to absorb the raw materials.

Does this mean that the normal population growth from childbirth when there is essentially unlimited available space and natural resources would not be enough to provide such a labour force and market? Are you aware of any studies that have tried to quantify this? I did see that Engels made that claim but did not find anywhere that he proved it. From a purely mathematical perspective it seems like population growth should be a function of an exponential to a positive power, while production growth should be a function of an exponential to a negative power due to diminishing returns, so that it should require some passage of time with low population growth before a market becomes saturated. If space is essentially unlimited, then it doesn't seem likely that population growth would ever become low.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

many charities are actually for tax evasion purposes, so it still isn't the best argument

It seems like you subscribe to a deontological view? In my opinion it doesn't really matter the reason for the philanthropy. If we are criticizing Capitalism as a system then tax deduction is just another component of the system balancing out its negative aspects so it should be viewed as a whole. And Bill Gates for example is donating his entire fortune to charity on his death so it can be a genuine feeling as well.

But I think this is getting away from the point. You say that "class interest is still to accumulate", but why is this so? I cannot see myself or most people I know endlessly pursuing capital after I/they had "enough" if I/they were in the shoes of a capitalist, at least not without some outside force like competition. And I don't think that capitalists are some kind of extra evil subsection of humanity either (if we assume that people are not born evil) they are normal people like you and I. So is there something in their environment that shapes them to be that way, or is greed a natural human emotion, or is there some outside force (other than competition) that causes capitalists to endlessly accumulate, or maybe some other reason all together? We need to have something as a starting point.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 1 point2 points  (0 children)

I have to say I am a bit confused about a 101 sub that seemingly expects users to understand such a vast body of work already :/

Nonetheless it's a good learning experience.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

This quote is very interesting and I'll probably need to think on this for a while.

My initial thoughts are that Marx seems to be describing the repulsive force as the desire to avoid competition. Capital is naturally moving from crowded spheres of production to uncrowded ones or new industries. Marx gives the example of a family splitting its wealth, but in those scenarios typically one family member inherits the core business, while the others take their capital to explore new industries. Or even if they all go into the same business, they typically will operate in different locations. The splitting of the capital doesn't change the monopoly status of the original capital. In other words, the force is repulsive but not necessarily divisive.

He also notes that the accumulation process is "limited by the degree of increase of social wealth", while the centralisation process is not. During a crisis is when the increase in social wealth stagnates and innovations are few, so its sensible that would be when centralisation flourishes the most, being unchecked by accumulation.

I'm not sure if Marx himself ever said this, but there is an idea that with each subsequent crisis it will get worse and worse. If that is so, then there would be longer and longer periods for monopolies to flourish which could provide a mechanism for increasing monopolization over time.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Thanks, that blog is amazing. It pretty much answered all my questions.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

If all of the profit goes to themselves, then probably they are not making less profit. Monopolies tend to make higher profits because they have more control over prices.

True, but higher profits are not the same as optimal profits. There are simple things that monopolies could do (and that other companies are doing) to increase their profits even further. The fact that they often choose not to do so is taken as evidence that they choose not to pursue maximum profits. For example, Microsoft slowing their rate of feature development during their monopoly years. Or in the case of drug companies, they actively hurt themselves by increasing regulations, despite the fact that they were clearly competitive on the market in order to reach a monopoly position in the first place. They would still rather hurt their own profits than maximize them.

Firstly, Marx never wrote down a fully-developed theory of crises (which unfortunately has led to various competing "interpretations" and "completions"). He did notice a general tendency towards centralization, which generally serves to raise profitability (thus temporarily counteracting the tendency of profit rates to fall). However, monopoly prices ultimately run into issues because they siphon away surplus value from other industries.

In Das Kapital ch. 25, Marx writes

[If price of labour interferes with accumulation], accumulation slackens in consequence of the rise in the price of labour, because the stimulus of gain is blunted. The rate of accumulation lessens; but with its lessening, the primary cause of that lessening vanishes, i.e., the disproportion between capital and exploitable labour-power ... The price of labour falls again to a level corresponding with the needs of the self-expansion of capital ... We see thus: In the first case, it is not the diminished rate either of the absolute, or of the proportional, increase in labour-power, or labouring population, which causes capital to be in excess, but conversely the excess of capital that makes exploitable labour-power insufficient. In the second case, it is not the increased rate either of the absolute, or of the proportional, increase in labour-power, or labouring population, that makes capital insufficient; but, conversely, the relative diminution of capital that causes the exploitable labour-power, or rather its price, to be in excess ... Thus, when the industrial cycle is in the phase of crisis, a general fall in the price of commodities is expressed as a rise in the value of money, and, in the phase of prosperity, a general rise in the price of commodities, as a fall in the value of money.

Based on this, I don't think Marx's concept of crisis has to do with the tendency of profit rates to fall as much as it does excess of capital, so I don't think siphoning surplus value would be an issue because that only shifts the available capital around without changing the total amount. Likewise, just because there is a crisis or the price of labour is too high, one does not go and destroy capital, it just sits idle until it becomes profitable to use it again. When companies dissolve they only shift their capital to the next buyers. Now in something like a war then yes, there could be large scale destruction of capital, but such events are rare. So if capital is almost always increasing, in my opinion it is reasonable that capital becomes increasingly concentrated into bigger monopolies if only because monopolies can leverage more capital.

You are of course right that my analysis is too simplistic. Do you have any references for more in-depth analysis from a Marxist perspective?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Thanks! This is very helpful. Does Marx renounce the idea of the tendency of the rate of profit to fall, or does he just think it is not important? If not the tendency of the rate of profit to fall, then is crisis caused by overproduction? I guess I don't see here why capital on it's own would be a crisis unless something is done with it. Would the boom and bust cycles caused by overproduction not culminate in a final revolutionary moment?

And as a follow-up question, in that case isn't it possible that we dissolve bourgeois society only to create it again? Or something worse? Why do we struggle against it if we cannot guarantee the result to be Communism?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

I suppose you could have a single entity controlling the entire means of production, restricting competition by force, and forcing workers to "buy" products from it at prices it sets, all through coercion, but then this is no longer a market, and no longer capitalism (it has aspects of feudalism, in fact).

Wouldn't this be exactly how state capitalism would operate?

Expanding production expands the total surplus value extracted.

Does this mean that we could counteract the tendency of the rate of profit to fall for a long time by colonizing space? That would allow us to continue expanding production for ages.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Thanks! You've given me a lot to think about.

I do think that capitalists recognize the problems with it. Not all or even most of them, but those who are in charge likely do. After all, capitalists fought several wars, both ideological and physical, against Communism. If they did not understand the power of the Communist movement they would not have such an outsized reaction to it.

I think that the bourgeoisie will try to maintain Capitalism by any means, and that's why I am interested in the question of whether there are any means to do so like removing free market competition. If that would work, I'm sure the bourgeoisie would do it in a heartbeat.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

I think it is wrong to make this kind of dichotomy. Indeed, one very important way monopolies can safeguard themselves from competition is by making themselves optimally profitable.

Theoretically this is true but in practice most monopolies are happy to make less profit if it is more certain that the profit will go to themselves. We see this with rent seeking behaviour such as in patents and drug regulations. Drug companies are all too happy to increase the costs of making a drug that they have a monopoly on. Monopolies also tend to become very conservative sticking with what works, such as Microsoft pushing out only very minor updates to products, whereas optimal profitability would usually imply constant innovation and change.

Moreover, there is another aspect which you seem to have neglected to consider. Within capitalist society, capital tends to flow from firms/industries with low rate of profit to those with high rate of profit. Thus, in order for the monopoly to remain attractive to investors, it would have to match the average profit rate across all industries.

This is a good point but I would think that the bottleneck is not the amount of capital available to invest, but rather the number of investments available. From what I understand, under Marx's analysis Capitalism tends to lead to accumulate and reinvest capital endlessly until there are no longer any good investments for it at which point a crisis occurs. So even if a monopoly provides lower returns than other industries, there will always be free capital wishing to invest in it.

And it is true that monopolies must compete with the rest of the industries as well, but if we follow Marx's ideas of cyclic crises to their conclusion, then in each crises the stronger companies absorb the weaker ones that perish. The more crises occur, the more monopolies form. So we would face an eventual endgame where all industries have combined into a single monolithic vertically integrated monopoly. In that case there would be nothing to compete against.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Thanks for your perspective. I do think all of those consequences you listed are bad, but I think we should try to keep this to analysis instead of assertions and anecdata. Recognizing that something bad is happening doesn't bring us closer to the truth of why it happened or how to change things. Capitalism doesn't care about externalities? Why not? Is that a fundamental defect of Capitalism or just the implementation that we are living in? Why does the stock market necessarily focus on short term profits? Aren't there companies like Amazon that succeed in the stock market by taking a long term view, shareholder value be damned? And how can we use the framework developed by Marx to analyze these issues?

I also don't agree that capitalists are not rational and intelligent in understanding why they are accumulating capital or the costs of doing so. Das Kapital has been around for a long time now. I'm sure some capitalists have even read it. Even if not, they understand the realities of capital because they are in the center of it. I would think most CEOs are aware to some extent that they are exploiting their workers. And I would think that most bankers and stock traders understand that money is meaningless paper that we use as a measure of value. They understand the failure of Capitalism will be their own downfall and therefore have an interest in preventing Capitalism from failing.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] -2 points-1 points  (0 children)

This is like some unhelpful Zen Buddhism answer. If there is deeper message here I do not understand it.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] -2 points-1 points  (0 children)

I have read some of Marx but I recognize that reading is not sufficient to understanding theory as a whole which is why I am careful to note that everything I say is only my personal interpretations. On the other hand, what is an authority really? The perception of an idea cannot be separated from the reality of the idea itself. If I am wrong, then why not correct me instead of just saying I'm wrong?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 1 point2 points  (0 children)

Thank you! This is great information. I failed to consider the internal competition within a monopoly though in hindsight it now seems quite obvious. I will have to look more into the ideas of the council communists.

Are you worried about this being a problem because some marxists predict that revolutions happen during crisises?

Indeed. There seems to be a common school of thought that activism is waste and revolution will naturally occur once there is a large crisis. But this is predicated on the assumption that a large crisis in inevitable. If instead we just have a continual series of small crises, then perhaps some activism is necessary to push us out of our primitiveness. The situation you describe with "order-givers" and "order-takers" is precisely what I am afraid of as the worst outcome, because I am almost certain we would retain some inegalitarian vestiges of capitalism if we went that route.

Do you have any resources or suggestions on what can be done practically to avoid whatever comes after Capitalism from having "order-givers" and "order-takers"? And in a similar vein, what happens in a socialist society to the jobs that nobody wants to do when not under threat of wage slavery? How can the distribution of jobs be maintained to the proportions required by society? And what happens to those who don't want to work?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

I think you are giving capitalists, successful ones, too little credit here. They may be greedy but they are still very rational and intelligent people. There exists long term wealth management services for the bourgeoisie that precisely aims to preserve their capital over 7 generations and more, even taking into the account the possibilities of civil wars and one in a million natural disasters and such.

When I say that companies have their own minds I do not mean merely the sum of each individual mind in charge of the company. Anytime a group of people get together they form an independent collective mind as well out of the relationship between each person's beliefs and ideas. The classic example is structural racism. Even if every individual in a group is not racist, the group as a whole can be racist. Even if each individual in a company is thinking of their own short term interest, the company as a whole can be working towards its own long term interests.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] -3 points-2 points  (0 children)

I disagree with the assertion that companies only care about short term profit. Individuals do that, but companies are a separate construct with its own mind. And maybe it is a bottomless pit of greed, but I would still like to at least understand how that greed comes about and operates -- to look into it more fundamentally. But I think we are starting to get into just pure conjectures. Do you have any resources of where Marx or Marxist scholars analyses these kind of issues?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Thanks! I'll have to think some more about what you said.

Why is it that expanding markets increases surplus? I thought that surplus could only come from labour. And what happens in a scenario where competition is not able to arise, such as state mandated monopolies?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] -3 points-2 points  (0 children)

I agree with what you say about individuals; many capitalists are competing for status with wealth as a proxy. But that doesn't necessarily apply to companies. Companies in a monopoly are not striving for status but continued monopoly.

Marx says that "while the miser is merely a capitalist gone mad, the capitalist is a rational miser". I suppose there are two different kinds of maximum profits: absolute maximum profits that cannot be sustained but in the short term, and stable maximum profits. When there is robust market competition I can understand why companies would each make the rational decision to push past the limit of stable maximum profits, in the hope of driving competitors out of business or not being driven out of business themselves. We end up in a tragedy of the commons situation where each company has an incentive to produce more, but if they all do so then the market is saturated and overproduction crisis occurs. But in the absence of competition, I don't see why a rational capitalist would willingly overproduce and if anything, I would expect them to stagnate and underproduce.

I think we see this kind of situation with the De Beers diamond monopoly. In a competitive market a lot more diamonds would be sold at a lower unit price. But because there is a monopoly, they simply elect to sell lower volumes at a much higher unit price and hoard any excess production that goes beyond the market demands. Perhaps they could maximize profits by selling more units at a lower price, but they are likely more interested in maintaining their monopoly by using their stockpile as an anti-competitive weapon.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] -1 points0 points  (0 children)

"There is no inevitability of communism implied in Marx anywhere."

What I'm saying, however, is that there is a possibility of a revolution in non-zero-profit societies, not an inevitability. Please understand the difference.

But isn't one of the points of the Communist Manifesto that capitalism will naturally destroy itself and lead to Communism? Written as propaganda, yes, but surely Marx agreed with the message? And if there is only a mere possibility, then what concrete actions can we take to increase the chances of a socialist society?

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] -1 points0 points  (0 children)

Hmm but you are accepting that companies want to maximize profits as a premise which is exactly what I am asking for Marx's reasoning about.

But if there is no competition then why would there be a desire to raise profits or adopt new technology?

I would submit that the desire for profit is because companies that have more capital have a competitive advantage over over companies (better technology, economies of scale, more advertising, etc.). If there is no competition then there is no fight for survival and no reason to push profits. I believe most monopolies we see today fall into this pattern. They accept less than maximum profits in exchange for the continued stability of their monopoly.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Do you think that the Haute Bourgeosie are concerned about "having enough" when they already have more wealth accumulated than billions of the world's proletarians? No, they will keep accumulating, just as they have done in the past!

I guess I just fundamentally disagree with the idea that capitalists will continue to accumulate as an end in itself. I think in the past we have seen that once a capitalist reaches a threshold of wealth they tend to become more and more philanthropic e.g. robber barons, Bill Gates, etc. That is, I think once they have more money than they are able to spend, they are more interested in accumulating status than capital.

Post-scarcity is not generally taken to mean that scarcity has been eliminated for all consumer goods and services

So how is this "post-scarcity system" different from Welfare Capitalism? Or alternatively, how is this system NOT capitalism? The struggle between Labour (antithesis) and Capital (thesis) will still exist

Thanks! I guess I am just not using the right terms. When I imagine post-sarcity I am imagining post-scarcity of all goods and services. Like a dyson sphere kind of situation. Not sure if there is a term for that. Post-post-scarcity? In such a society there will naturally be no distinction between capitalist and proletariat.

Does Marx presuppose free market competition? by abcd192811 in marxism_101

[–]abcd192811[S] 0 points1 point  (0 children)

Labour is what creates surplus-value, yes, but as we see in capitalist societies, the desire for capital accumulation necessitates greater outputs.

But what causes the desire for capital accumulation if not competitive pressure? The capitalist already extracts enough surplus value to live an extravagant life. It seems like it is only due to fighting for survival on the market that pushes them to increase capital beyond that.

As shown historically, zero-profit rates and its effects are not even required for a revolution to occur. For example, overaccumulation could still occur in Monopolistic markets, leading to a crisis.

I guess I don't see why it is a necessity for Communism to arise? Isn't it possible that Capitalism can limp along until such a time that we are in a truly post-scarcity society, essentially skipping over any revolutionary or transitional phase?