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Anonymous asked in Social ScienceEconomics · 2 months ago

What did Karl Marx mean by his concept of "capitalist communism"?

Following Marxist theory, capitalists earn their riches by extracting surplus value from the surplus labor of their employees. And constant capital plus variable capital is equivalent to the cost of production.

However, when capitalists invest in constant capital by upgrading to the latest machinery and raw material, their profits don't decrease, they increase and still yet, the number of workers they employ diminishes. If their profits increase while reducing their number of hands, doesn't this threaten the validity of Marx's labor theory of value?

Marx attempted to answer this very criticism with a theory of "capitalist communism", from my understanding it is the ratio of society's average profit rate to the total surplus value. But I don't really understand how this answers the increase in profit based on investment in constant capital. Can anyone explain this?

5 Answers

  • Anonymous
    2 months ago

    Don't fall for the newspeak of those who say "value" when they mean "price".

    Added "value" means nothing when your prospective customers don't have the money to buy your product.

    If your investment in machinery/automation brings more profit to you, that is mainly because your competitors who need more personnel than you do cannot afford to charge prices as low as yours.

  • 2 months ago

    I don’t think Marx ever referred to ‘capitalist communism’. Those are two completely incompatible ideas. 

  • Oiy
    Lv 7
    2 months ago

    If the corporation is belonging to the workers, the ratio. would be one. (Ricard Wolff) Cooperative Business. In constant capital, only the workers are active to the changes.

  • Anonymous
    2 months ago

    You are right to identify the problem as being in Marx's labour theory of value. 

    We need to understand why this is wrong first and foremost, because Marx's entire theory rests on this foundation, and crumbles without it. 

    (Marx thought of himself first and foremost as an economist. Yet it was the economics faculties which were the first to reject his theory, in the 1870s. It lives on, not in economics departments, but in the economically illiterate faculties such as sociology and history.)

    If the labour theory of value were correct, it would mean that if you dig a gold mine at a cost of $1 billion dollars in labour, and dig up only one ounce of gold, then the value of that gold would be (at least) the value of the labour that went into producing it, namely $1 billion. 

    But that's wrong, isn't it? 

    And if you were out walking the dog in your leisure time, and kicked a stone that turned out to have an ounce of gold in it, then the value of the gold would be (at least) the value of the labour that went into it - nothing. 

    But that's wrong, isn't it? The theory is wrong. 

    And if the LTV were correct, the value of a Van Gogh painting would be frozen in time as at when he last took his brush off the canvas - ceased his labours on it. 

    But that's wrong. Something, not being labour input, is causing the prices to rise. 

    It is simple stupidity for the Marxists to keep insisting, as an article of faith immune to rational disproof, that the value of all production is imputable to the labour, and only the labour factors of production, despite the entire theory being so easily and trivially disproven. 

    (The theory of marginal utility provides the true explanation of value. In short, it is nonsense to talk about the value of whole entire abstract collective aggregate classes of things, such as "labour" (all the labour in the world), or "capital" (ditto), or "the global order", or "the proletariat", or even "bread". The reason it's nonsense, is because *no-one* is ever faced with the problem of valuing such great monolithic collectivist agglomerations. It never forms a subject of human action, which is what economics is tasked with explaining.)

    In reality, the price of bread, or gold, or labour, is determined not by coming up with some theory of the value of all the bread, or gold, or labour in the world, but by the valuations that individual buyers and sellers attach to individual units of bread, and for all other economic goods whatsoever. 

    This being so, it is no answer by the Marxists to the disproof of their garbled assertions, to shift to a new garbled assertion about "capitalistic communism", which a) doesn't make sense, and b) leaves you to try to construct their argument for them, themselves having vacated the field. 

    Capitalism *by Marxist definition* means the private, and communism or socialism the public, ownership of the means of production. Therefore the term 'communistic capitalism' is a contradiction in terms. 

    This means that it does NOT explain the alleged increase in profit based on investment in constant capital. 

    Moreover capitalism is not just a system of increasing profit. It's a system of profit AND LOSS. There is nothing about the nature of capitalism per se, that means that ANY investment is necessarily going to result in increasing profit. 

    It might. But it might not! That's the whole point!

    It's not something that academics can just pull out of their backside.  The economist, as economist, does not know. If he did, he'd go and invest his own money and take the profit himself. It is the function of the *entrepreneur*, not the economist, to judge whether the future combination of products, will produce a profit. And he does so at risk of loss!

    Most of the companies and businesses that existed when I was a child NO LONGER EXIST. 

    So much for Marx's theory. And the workers are RICHER, not poorer, DESPITE, not because of, the interference of the state in behalf of "labour", which in any event contradicts Marx's theory. 

    Marx's theory completely fails to explain, and to understand, the actual machinations of capital and capitalism, because the labour theory of value, and his exploitation theory of labour, are fundamentally mistaken, and this invalidates his economic theory. In reality, labour benefits from employment, and takes the first fruits of the production earlier in time, leaving the entrepreneur to take later in time a profit OR A LOSS IN WHICH THE LABOURER DOES NOT PARTICIPATE. 

    For an excellent clear article on this, google "mises profit loss mont pelerin"

    For a very readable, comprehensive total demolition and explosion of Marx's theory, read:

    1. Theory and History

    2. Epistemological Problems of Economics, and

    3. Socialism

    all by Ludwig von Mises. 

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  • Anonymous
    2 months ago

    KARL MARX suffered from a skin disease that can cause severe psychological effects such as self-loathing and alienation, according to a British dermatologist.

    The father of communism's life and attitudes were shaped by hidradenitis suppurativa, said Sam Shuster in the British Journal of Dermatology. One of its symptoms is alienation - a concept that Marx, a martyr to boils and carbuncles, put into words as he wrote Das Kapital.

    The condition was described as early as 1839 by a French physician, Alfred Velpeau. But, Professor Shuster says, ideas crossed the Channel less readily than wine, and the true condition of Marx, then living in London, was never diagnosed.

    Hidradenitis suppurativa is a disease of the apocrine sweat glands, found in the armpits and the groins. The skin in the affected areas shows a mixture of blackheads, lumps that look like boils, spots and leak pus.

    Doctors and Marx, who was born in Germany, called them "furuncles, boils and carbuncles".

    Nina Goad, of the British Association of Dermatologists, said: "It is fascinating to discover that such an influential figure suffered from [hidradenitis], especially considering how it might have affected his work."

    In other words, don't take any of his psycho-babble seriously. His theories led to the killing of over 200 million people and are still haunting people in Cuba and North Korea to this day.

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