Re: [OPE-L] Keynes and Marx (German)

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Fri Jan 05 2007 - 03:52:07 EST






        In this context I think that whilst demands for a steeply progressive income tax and for a shorter working week are certainly in the interests of the working class, they suffer from the limitation of being much the same as what European Social Democracy has done in the past. British and Swedish social democracy both introduced steeply progressive income taxes. Chancellor Healey talked of squeezing the rich until the pips squeaked with his high rates of income tax. These income taxes even distinguished between 'earned' and 'unearned' income, taxing property income more steeply than earned income. French social democracy  since the 30s made the restriction of the working week a key plank of its program. The enactment of the 35 hour week in France was certainly a progressive step and we could argue for its extension across the continent. However unless it is combined with stringent controls on capital movement, there is no guarantee that it would reduce unemployment.


Progressive income tax is originally a Marxist demand. Equally, the demand for shorter working day is as old as the labour movement. European Social Democracy adopted, though emptied in many senses (see New Deal policy in the States), these demands under the enormous pressure of the Soviet Union and labour and socialist movements. Hayek was one of the first to recognise the danger of these demands for capitalist classes and for capitalist system as such. But I think that we have to take his observation that progressive taxtation leads to the rise of a middle class. What Hayek does not say explicitly but accepts imlicitly is that progressive taxation leads to the rise and strenthening of the middle class because of the way they have been implemented by social democracy who are as capitalist patriots as liberals and conservatives. Socialists and labour movement in future have not only formulate demands but also fight for the best way of implementation that accords to their interests.This has been neglected in the past. In short, I do not think that these demands are social democratic demands in essence. We do not need to distance ourselves from them. But we need to reformulate them under the new condistions in the 21st century. 


I agree that progressive income taxation was a demand originally raised by the Communists and then adopted by the social democrats. Under the existing capitalist order it is something we should favour. But what should be the tax system under socialism:


I would suggest that it would take the form of an equal duty of all to perform labour for the common good. Suppose the working day is 7 hours. The population would vote collectively on how much labour was to be devoted to the provision of free social services - education, care for the sick, perhaps water supply etc. Suppose it currently stood at 3 hours a day. People might vote should it rise by 5mins a day or fall by 5mins a day or stay the same. Suppose it were then adjusted to 3.05 hours. People would then only be paid for labour that they performed over and above these 3.05 hours.


But if you worked any time over and above your social duty of communal labour then you would be paid at parity, one hours work would yield one hour of purchasing power.


Note that this is no longer a progressive income tax but a flat social duty. The need for a progressive income tax disappears once labour is the only source of income.




        Instead of these sorts of measures we have to go back to Owen and focus on the basic wage/money relationship and attack the institutions of money and wage labour with the policies that we advance. Owen had the right idea in proposing labour vouchers since so long as workers are paid less than the value they produce all the other evils of capitalist society follow. This I believe has to be central focus of our popularization of Marxist political economy. We have to bring home to people how much they would benefit by were the full value they added by their labour to paid back to them. To give an idea of what it would mean, consider the fact that one hour of average labour in Germany currently creates a value of 32 Euro. This means that the purchasing power of a one hour labour token would be the same as 32 Euro, and that the average pay (before tax) would thus rise to the equivalent of 32 Euro per hour. How many people get paid that well today?


I do not accept this dichitomy you seem to draw here. We can put forward these demands and still go to Owen, Saint Simon, Fourier and Marx, and attack the institution of wage labour as such. We have to remain dialecticians and think in terms of the dialectic of reform and revolution in Rosa Luxemburgian sense. 


I do not agree with what you say about the demand that labourers should get the full value they add. I think this is illusionary just because it seems to rest on a concept of justice. This was the idea of neo-Ricardians and Proudhonists. From Marx's point of view this is wrong just becuase it does not take into account that means of production must always be improved and replaced. And it does not take into account that there will always be many other expenditures for infrastructure, transformation, communication leisure opportunities and so on to improve the public life. All these may amount to the reduction from the full value workers add.



Marx and the 19th century utopians were writing before the establishment of generalized pay as you earn income taxes and before the establishment of a welfare state. When I said that the purchasing power of an hour's labour in German should be equivalent to Euro 32, I put "(before tax)" in as a qualification. I am talking here only about the division of value between labour and capital before tax comes into account. Everybody is now used to paying income tax and so assumes that pre-tax and post tax pay are different. I argue above that in the long run we would want to see income tax replaced by a general obligation to perform a certain number of hours of work for the benefit of society, but in a transition period before the complete abolition of property incomes, and before money had been fully replaced by labour notes, then progressive income tax would persist.


You raise two types of deduction - deduction to replace the means of production, and expenditures on infrastructure communication leisure etc.


The deduction to replace the means of production is not a deduction from the value added by labour since the means of production pass on their own value to the product. Any socialist accounting system must take this into account and the labour time passed on by the means of production must be calculated as part of the value of the product. This part of the value of the product is then allocated as a depreciation fund to balance the labour expended to produce new means of production. It is not necessarily the case that the labour value of the new means of production has to be higher. We need not assume that a socialist economy will follow the tendency for the 'organic composition of capital' to rise that we see under capitalism. Obviously the means of production would no longer be capital so the term 'organic composition of capital', would not be directly applicable but the equivalent statistic would be the ratio of living labour to labour embodied in means of production.


It MIGHT be advantageous to raise this ratio, and that would probably be the case in relatively undeveloped socialist economies. But a source of funds for this could come from any voluntary savings that workers made with the state bank. On the other hand, technological improvements analogous to what Marx called 'cheapening of the elements of constant capital' would also come into play and allow improved means of production to be employed that embodied less labour than the previous generation.




It is a great pleasure to have these debates because they help us a lot to clarify our minds before the next final historical sturm.









        From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Dogan Goecmen
        Sent: 01 January 2007 21:28
        Subject: Re: [OPE-L] Keynes and Marx (German)




        I have difficulties to follow this logic. The way you make the point seems to put us before an alternative between Hayek and Keynes, between neoliberal parties and social democrats. But are these two positions (parties) real alternatives we have to accept? Or do we need to establish a third front that of real socialist movement based on Marx's critique of political economy. Think of Owen. He criticised Malthus and laissez faire policies. though he also developed ideas about how to reform capitalism in favour of working classes. Particularly, in his later writings he always referred to the concept of socialism to highlight the fact that there is a needs for essential change in the property relations of the means of production. The socialist and working class movement lost this last mentioned project just becase they thought capitalism was reforming itself and there was no need for revolutionary changes.






        In einer eMail vom 01.01.2007 22:10:14 Westeuropäische Normalzeit schreibt wpc@DCS.GLA.AC.UK:

                I would agree with the point that you make below about co-option, but in the
                process the interests of finance capital and the colonial bourgeoisie had to take second place.
                But you should not deal with the state in the abstract, abstracting from 
                real political parties, their class basis and their programatic aims. Keynes ideas
                provided to social democracy a form of political economy that enabled them
                to at least carry out some progressive measures. If you contrast the political
                economy of Macdonald to that of Atlee you can see the significance of the change
                brought about by Keynes.
                Paul Cockshott
                -----Original Message-----
                From: OPE-L on behalf of Dogan Goecmen
                Sent: Mon 1/1/2007 8:30 PM
                To: OPE-L@SUS.CSUCHICO.EDU
                Subject: Re: [OPE-L] Keynes and Marx (German)
                It is also necessary to take into account the circumstances of the  class
                struggle at the international level. Doing so, it is possible to  argue
                that the alliance you suggest was not directed against finance capital  but
                against the (revolutionary) socialist movement worldwide, at a time  when
                the USSR had defeated nazism and the communists in the countries  occupied
                by the Nazi army had been among the main forces that fought the  invadors.
                Communism all over the world and the Communist parties in many  Western
                European countries increased very significantly their political  influence.
                Thus, it was highly necessary for the capitalist class to coopt  their
                I find your remarks above extreemly interesting. This is exacly the point  
                that explains the success of Keynesianism. This is also the point I was trying  
                to make in the passage below.
                >> Der Keynesianismus, der ein englisches Produkt  ist, ist auch in
                >> diese Tradition einzuordnen und sein Verhältnis zum  Marxismus ist
                >> im Lichte dieser Entwicklung zu sehen. Seinerzeit  musste schon der
                >> zynische liberale John Stuart Mill, der zuerst die  in England
                >> geboren Idee des Sozialismus, zum Fremdkörper erklärte,  musste
                >> unter dem Druck der Straße, ohne seinen eklektisch liberalen  Geist
                >> aufzugeben, an Marxismus Zugeständnisse machen. Doch nach  der
                >> Oktoberrevolution half all das nicht mehr. Da musste  eine
                >> konservative Theorie mit einem linken 'Anschein' erfunden  werden.
                >> In der Wirtschaftstheorie entspricht der Keynesianismus  diesem
                >> Bedürfnis.



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