Marx and Automation

[LBird]

ALB wrote:

Alan Kerr wrote:

@ LBird,No the alternative is not just democracy as such. The alternative to the market is in Marx’ Capital here.http://www.econlib.org/library/YPDBooks/Marx/mrxCpA1.html#I.I.133

As elaborated on in this article "A World Without Commodities" in this month's Socialist Standard:http://www.worldsocialism.org/spgb/socialist-standard/2010s/2017/no-1357-september-2017/world-without-commodities

Thanks for the link, ALB,I can find mention of 'everything is social instead of individual', 'members', 'common holders of the wealth and resources of society', 'social relations', and,

SPGB article wrote:

This is what Marx sketches in his next example, where he describes an ‘association of free men’ who are ‘carrying on their work with the means of production in common’ so that the ‘labour-power of all the different individuals is consciously applied as the combined labour-power of the community’.

Yeah, 'association', 'production in common', 'combined' and 'community'… all fine.The only thing that I can't find is the word 'democracy'. Going by Alan's definition, these words and terms are just paying lip-service to 'social' concepts, because without the inclusion of Marx's democratic political underpinnings, the words are politically meaningless.Without any mention of democratic socialism, as the politically-binding method for all these social concepts, we're left, indeed, with Alan's trio of individualism, elitism or chaos, as our political choice of organising 'social', 'community', 'members', 'production in common', etc.That's my point. Alan seems to have confirmed what I thought that he meant, and you appear to be also confirming this lack of 'democratic socialism'. Unless you don't agree with the article, of course.Am I missing something?

[robbo203]

LBird wrote:

ALB wrote:

Alan Kerr wrote:

@ LBird,No the alternative is not just democracy as such. The alternative to the market is in Marx’ Capital here.http://www.econlib.org/library/YPDBooks/Marx/mrxCpA1.html#I.I.133

As elaborated on in this article "A World Without Commodities" in this month's Socialist Standard:http://www.worldsocialism.org/spgb/socialist-standard/2010s/2017/no-1357-september-2017/world-without-commodities

Thanks for the link, ALB,I can find mention of 'everything is social instead of individual', 'members', 'common holders of the wealth and resources of society', 'social relations', and,

SPGB article wrote:

This is what Marx sketches in his next example, where he describes an ‘association of free men’ who are ‘carrying on their work with the means of production in common’ so that the ‘labour-power of all the different individuals is consciously applied as the combined labour-power of the community’.

Yeah, 'association', 'production in common', 'combined' and 'community'… all fine.The only thing that I can't find is the word 'democracy'. Going by Alan's definition, these words and terms are just paying lip-service to 'social' concepts, because without the inclusion of Marx's democratic political underpinnings, the words are politically meaningless.Without any mention of democratic socialism, as the politically-binding method for all these social concepts, we're left, indeed, with Alan's trio of individualism, elitism or chaos, as our political choice of organising 'social', 'community', 'members', 'production in common', etc.That's my point. Alan seems to have confirmed what I thought that he meant, and you appear to be also confirming this lack of 'democratic socialism'. Unless you don't agree with the article, of course.Am I missing something?

 Can this be moved to another as it seems to be off topic here

[robbo203]

Michel,   With all due respect, I dont think you have really addressed the points I raised. Let me try to summarise the argument I presented earlier in opposition to your basic thesis that the labour theory of value has been marginalised because there is a growing divergence between, on the one hand, value  – and the falling costs of production – and, on the other, prices which have steadily risen as a consequence of this “creative power” you refer to that the capitalists wield in their lust to “accumulate profit”. (Incidentally, since capitalists have always and everywhere striven after increased profits, it is not clear to me why this particular approach of arbitrarily raising your prices away above the falling costs of production should have only come into fashion now in this “post industrial, post modern society” we are supposed to be living in) 1)            With regard to the empirical data to support your case, I am not asking for detailed evidence. Something as simple as a large scale study comparing wage rates and prices over a fairly long period of time, will do. The sole piece of evidence that Steve San Francisco presented in support of your argument is not really satisfactory since the firms engaging in price mark ups that the study refers to covered only 40% of all sales. What about the other 60%? I have never denied that some commodities could sell at prices above their notional value but the corrollary of that is that other commodities must sell below their value.  Moreover, I presented other evidence pointing to“seven categories of goods and services that are comparatively cheaper today than they were 10 years ago. All figures are based on a BLS comparison of like products and services from August 1998 and August 2008.”   These include phones, electronics, footwear, new vehicles, toys, apparel, watches” (http://www.bankrate.com/finance/personal-finance/7-falling-price-tags-1.aspx) 2)           You state that there is “no governing law that says the sum total of prices must equal the sum total of values”.  Indeed, you state that since some prices have no value in them at all it cannot possibly be true the total sum of prices must equate to the sum total of values. But this is based on a misunderstanding of the labour theory of value.  I will simply quote here from the SPGB’s pamphlet on Marxian economics which deals with this very point:  Under capitalism nearly everything is a commodity, or takes the form of a commodity, is bought and sold. This qualification is necessary to counter the argument often advanced against the Labour Theory of Value that some things that are bought and sold either are not products of labour or sell at prices quite out of proportion to the amount of labour embodied in them, e.g. land and objects of art. Land, under capitalism, has a price which, in its pure form, is merely the capitalisation of its rent. Land has no value as it is not the product of human labour. Paintings and antiques are indeed products of human labour but are not really commodities because they cannot be reproduced; the concept of "socially necessary labour" therefore has no meaning with reference to such articles. One silly objection is: why is a lump of gold from a meteorite valuable, when there is no labour embodied in it? Actually, this is a confirmation of the Labour Theory of Value since its value is the same as that of gold produced under normal conditions. If gold were to regularly fall from the skies then its value would drop to what is needed to collect it”. 3)           You failed to respond to my point that “If capitalists can just arbitrarily raise their prices or keep their prices high in the face of declining unit production costs then why don’t those capitalists that provide the inputs upon which other capitalists depend to manufacture their commodities, likewise raise the prices of THEIR commodities so that the unit costs of production of those other capitalists, instead of falling will be rising”.  If all capitalists, including those who produce intermediate goods as well as those who produce final goods, are able to just arbitrarily raise their prices, then this obviously negates the claim you make about prices in general steadily rising despite the falling costs of production (which would not be falling after all, in relative terms, since the prices of inputs would also be rising!)   4)           Since the costs of production include the wages bill that employers face, this would suggest a fall in the cost of production in the face of steadily rising commodity prices would translate into a steady fall in the pruchasing power of the working class.  In other words that the workers would be gettting poorer and poorer.   But this is not the case – at least not over the long run.  Over the long run workers’ living standards have generally risen.  Growth in living standards at the moment may be sluggish and even negative but this is less to do with capitalists arbitrarily raising prices in the face of falling production costs, than with the weak position of workers in today’s economic climate 5)           Relatedly I have asked you several times to explain what would be the point in a business raising its prices so high that it will deter customers from buying its product and encourage them to look to other suppliers.  Businesses will tend to pitch their prices at a level at which which they can feel reasonably confident that their product will be sold and that places a very significant limit on how much they can raise their prices.  Your response to this is to suggest that capitalists will tend to resort to price fixing, limiting competition between themselves whereby they seek to undercut each other in a price war.  But even if this were the case – and there are all sorts of barriers that make this difficult, though not impossibile, to achieve – this would still not get round the basic problem.  If some companies raised their prices then consumers, if they continued to purchase those commodities at the same level as before, would have less money available to spend on other commodities.  In other words, the market demand for those other commodities would fall and so the companies producing these commodities would be obliged to reduce prices to attract more custom.  Its a case of swings and roundabouts There are a number of additional points I could make but I think this will suffice for the moment.  I would greatly appreciate it if you could deal with what I have presented here on a point by point basis

[Alan Kerr]

@ LBird, You left some more comments. Thank you. Here’s the answer. Very broadly, *we can think of just 3 ways* to organize production. 1) Crusoe’s island 2) prison labour 3) market. Of course new society must grow food, make clothes… abundantly. Fail here and all reverts back to capitalist society. That or a commissars’ prison labour-camp. The one way to solve capitalist-scarcity is Crusoe’s way–full scale. Here once more is link to Crusoe’s way–full scale. http://www.econlib.org/library/YPDBooks/Marx/mrxCpA1.html#I.I.133 You did look to see if 1) Crusoe’s way–full scale is also, what you mean by socialist democracy? You see how the producers both own and control the means of production? Plus there we have “… in essence the production relations in a new socialist world…”(MIKE SCHAUERTE This month’s Socialist Standard) Now if what you mean by socialist democracy is Crusoe’s way–full scale then what? Then very broadly, *we can think of just 3 ways* to organize production. 1) Crusoe’s island 2) prison labour 3) market. Or are you sure that, there is an option 4), socialist democracy versus Crusoe’s way then what?  Then please prove it. Thank you. 

[LBird]

Alan Kerr wrote:

@ LBird,You left some more comments.Thank you.Here’s the answer.Very broadly, *we can think of just 3 ways* to organize production. 1) Crusoe’s island 2) prison labour 3) market. ….Now if what you mean by socialist democracy is Crusoe’s way–full scale then what? Then very broadly, *we can think of just 3 ways* to organize production. 1) Crusoe’s island 2) prison labour 3) market.Or are you sure that, there is an option 4), socialist democracy versus Crusoe’s way then what?  Then please prove it.Thank you. 

It's not a 'proof', Alan, but a political definition. That is, a starting point, a foundation of building a new society, democratic socialism.If you want to define 'democracy' (a social concept about power) as 'Robinson Crusoe' (an individual concept about solipsism), then I think that we don't share the same politics.It would probably be better, for common understanding, if I call the new society 'democratic socialism', and you call it 'Robinson Crusoe socialism'. Then everyone reading will be clear about your view of 'power' as a individual property, and my view of 'power' as a social property.It's politically important that we expose our political axioms to the common gaze.

[Alan Kerr]

@ALB Thank you, 1) Yes do please bring letter here. We need to look at it again. “must be a copy somewhere.” 2) I had more than just some sympathy for those poor but wrong-headed Luddites 3) Yes your link here is useful http://www.worldsocialism.org/spgb/socialist-standard/2010s/2017/no-1357-september-2017/world-without-commodities

[Alan Kerr]

@ LBird,“Let us now picture to ourselves, by way of change, a community of free individuals, carrying on their work with the means of production in common, in which the labour power of all the different individuals is consciously applied as the combined labour power of the community. All the characteristics of Robinson’s labour are here repeated, but with this difference, that they are social, instead of individual.”(Marx)

[Anonymous]

robbo203 wrote:

Michel,   With all due respect, I dont think you have really addressed the points I raised. Let me try to summarise the argument I presented earlier in opposition to your basic thesis that the labour theory of value has been marginalised because there is a growing divergence between, on the one hand, value  – and the falling costs of production – and, on the other, prices which have steadily risen as a consequence of this “creative power” you refer to that the capitalists wield in their lust to “accumulate profit”. (Incidentally, since capitalists have always and everywhere striven after increased profits, it is not clear to me why this particular approach of arbitrarily raising your prices away above the falling costs of production should have only come into fashion now in this “post industrial, post modern society” we are supposed to be living in) 1)            With regard to the empirical data to support your case, I am not asking for detailed evidence. Something as simple as a large scale study comparing wage rates and prices over a fairly long period of time, will do. The sole piece of evidence that Steve San Francisco presented in support of your argument is not really satisfactory since the firms engaging in price mark ups that the study refers to covered only 40% of all sales. What about the other 60%? I have never denied that some commodities could sell at prices above their notional value but the corrollary of that is that other commodities must sell below their value.  Moreover, I presented other evidence pointing to“seven categories of goods and services that are comparatively cheaper today than they were 10 years ago. All figures are based on a BLS comparison of like products and services from August 1998 and August 2008.”   These include phones, electronics, footwear, new vehicles, toys, apparel, watches” (http://www.bankrate.com/finance/personal-finance/7-falling-price-tags-1.aspx) 2)           You state that there is “no governing law that says the sum total of prices must equal the sum total of values”.  Indeed, you state that since some prices have no value in them at all it cannot possibly be true the total sum of prices must equate to the sum total of values. But this is based on a misunderstanding of the labour theory of value.  I will simply quote here from the SPGB’s pamphlet on Marxian economics which deals with this very point:  Under capitalism nearly everything is a commodity, or takes the form of a commodity, is bought and sold. This qualification is necessary to counter the argument often advanced against the Labour Theory of Value that some things that are bought and sold either are not products of labour or sell at prices quite out of proportion to the amount of labour embodied in them, e.g. land and objects of art. Land, under capitalism, has a price which, in its pure form, is merely the capitalisation of its rent. Land has no value as it is not the product of human labour. Paintings and antiques are indeed products of human labour but are not really commodities because they cannot be reproduced; the concept of "socially necessary labour" therefore has no meaning with reference to such articles. One silly objection is: why is a lump of gold from a meteorite valuable, when there is no labour embodied in it? Actually, this is a confirmation of the Labour Theory of Value since its value is the same as that of gold produced under normal conditions. If gold were to regularly fall from the skies then its value would drop to what is needed to collect it”. 3)           You failed to respond to my point that “If capitalists can just arbitrarily raise their prices or keep their prices high in the face of declining unit production costs then why don’t those capitalists that provide the inputs upon which other capitalists depend to manufacture their commodities, likewise raise the prices of THEIR commodities so that the unit costs of production of those other capitalists, instead of falling will be rising”.  If all capitalists, including those who produce intermediate goods as well as those who produce final goods, are able to just arbitrarily raise their prices, then this obviously negates the claim you make about prices in general steadily rising despite the falling costs of production (which would not be falling after all, in relative terms, since the prices of inputs would also be rising!)   4)           Since the costs of production include the wages bill that employers face, this would suggest a fall in the cost of production in the face of steadily rising commodity prices would translate into a steady fall in the pruchasing power of the working class.  In other words that the workers would be gettting poorer and poorer.   But this is not the case – at least not over the long run.  Over the long run workers’ living standards have generally risen.  Growth in living standards at the moment may be sluggish and even negative but this is less to do with capitalists arbitrarily raising prices in the face of falling production costs, than with the weak position of workers in today’s economic climate 5)           Relatedly I have asked you several times to explain what would be the point in a business raising its prices so high that it will deter customers from buying its product and encourage them to look to other suppliers.  Businesses will tend to pitch their prices at a level at which which they can feel reasonably confident that their product will be sold and that places a very significant limit on how much they can raise their prices.  Your response to this is to suggest that capitalists will tend to resort to price fixing, limiting competition between themselves whereby they seek to undercut each other in a price war.  But even if this were the case – and there are all sorts of barriers that make this difficult, though not impossibile, to achieve – this would still not get round the basic problem.  If some companies raised their prices then consumers, if they continued to purchase those commodities at the same level as before, would have less money available to spend on other commodities.  In other words, the market demand for those other commodities would fall and so the companies producing these commodities would be obliged to reduce prices to attract more custom.  Its a case of swings and roundabouts There are a number of additional points I could make but I think this will suffice for the moment.  I would greatly appreciate it if you could deal with what I have presented here on a point by point basis

 The example that he has used to prove his argument in regard to the 99 cents store, contradicts his own arguments because that enterprise is able to sell at a low price and produce high profits because they buy their commodities in large quantity from manufacturers that produce in large quantity too and the employee receive small salaries. Their profits is more than 100% They are like Costco and Smart & Final who also buy in large quantity from large producer of commodities, and they are able to produce large amount of commodities because they are using modern technologyThis report from The Economist contradicts his arguments in regard to the car industry because the Chinese capitalists are not selling cars in North America, but they are selling a lot of cars in Latin America due to the fact that the price of their cars is cheaper than the US and European cars, and many taxis drivers in the Caribbean are just buying Chinese cars based on  the price of the commodity, and additional features such as taxation and importation fees are not added to the commodityhttp://www.eiu.com/industry/article/1052164689/chinese-cars-in-south-america/2014-08-18He is surprised of the large amount of profits produced by the capitalists, but that is not new, the main purpose of the capitalist is to produce profits, without profits capitalism will collapse

[Anonymous]

Robbo203,my 2 cents, feel free to ignore since you were asking michel and if you think it matters who answers instead of the quality of the answer.

robbo203 wrote:

…If gold were to regularly fall from the skies then its value would drop to what is needed to collect it”.

Water regularly falls from the sky. So then bottled water which cost $2-$5 each should not exist by your theory.  Doesn't the existence of a robust market for bottled water kind of disprove your theory. 

robbo203 wrote:

…3)           You failed to respond to my point that “If capitalists can just arbitrarily raise their prices or keep their prices high in the face of declining unit production costs then why don’t those capitalists that provide the inputs upon which other capitalists depend to manufacture their commodities, likewise raise the prices of THEIR commodities so that the unit costs of production of those other capitalists, instead of falling will be rising”.  If all capitalists, including those who produce intermediate goods as well as those who produce final goods, are able to just arbitrarily raise their prices, then this obviously negates the claim you make about prices in general steadily rising despite the falling costs of production (which would not be falling after all, in relative terms, since the prices of inputs would also be rising!)  

They do, but what happens is someone in the supply chain buys out the full supply chain.  Nike pretty much owns and controlls the entire supply chain for their shoes and invests (owns stock in ) the rubber companies for the shoe rubber, the textile companies for the shoe canvas, etc. in modern capitalism, the manufacturer is easily replaced and easily owned, but the customers are a finite limited resource.  If a rubber company asks for too much then nike just starts a new rubber company that it owns to compete with the old rubber compay.  Nike can not start a new customer base easily because of brand loyalty and fights for its customers.  other times the consolidation of supply chains is done by some middle agent in the supply chain like two companies own 95% of the soft drink market in the USA and just have different labels on different soft drinks that pretend to compete in the market place. 

robbo203 wrote:

…4)           Since the costs of production include the wages bill that employers face, this would suggest a fall in the cost of production in the face of steadily rising commodity prices would translate into a steady fall in the pruchasing power of the working class.  In other words that the workers would be gettting poorer and poorer.   But this is not the case – at least not over the long run.  Over the long run workers’ living standards have generally risen.  Growth in living standards at the moment may be sluggish and even negative but this is less to do with capitalists arbitrarily raising prices in the face of falling production costs, than with the weak position of workers in today’s economic climate

The graph in wikipedia shows clearly GDP and median houseold income are not closely related in the way you suggest. https://en.wikipedia.org/wiki/Standard_of_living_in_the_United_States not sure if that's what you mean.  Just guessing on interpretations.

robbo203 wrote:

…5)           Relatedly I have asked you several times to explain what would be the point in a business raising its prices so high that it will deter customers from buying its product and encourage them to look to other suppliers.  Businesses will tend to pitch their prices at a level at which which they can feel reasonably confident that their product will be sold and that places a very significant limit on how much they can raise their prices.  Your response to this is to suggest that capitalists will tend to resort to price fixing, limiting competition between themselves whereby they seek to undercut each other in a price war.  But even if this were the case – and there are all sorts of barriers that make this difficult, though not impossibile, to achieve – this would still not get round the basic problem.  If some companies raised their prices then consumers, if they continued to purchase those commodities at the same level as before, would have less money available to spend on other commodities.  In other words, the market demand for those other commodities would fall and so the companies producing these commodities would be obliged to reduce prices to attract more custom.  Its a case of swings and roundabouts

NO those companies would NOT be oblidged to reduce prices to attract more customers. YES, those companies would be obliged to invest money in an advertising campaign. I know. I've worked for those companies on advertising campaigns and as a consultant.  A new media campaign is the last and final gasp before a company finally goes bankrupt and gets bought and consolidated by it's competitors. they also routinely hire more new employees before they get bought out or go bankrupt.  It's something we in america learn to look for in applying for a job to try and guess how solvent the company is and if our boss is going to pay our salary or not.  Advertising didn't really exist in Marx time the same way it does today.  But your making another argument about swings and round abouts and it's maybe similar to the argument about leaches draining a person dry.  if one leach sucks all the blood out of a person then the other leaches have less?  isn't the total number of leaches limited by the total blood capacity of a town?  Well yes, that's true but all the leaches still try to suck the person as hard as they can anyway.  maybe the person survives or maybe gets drained. it sort of depends on how evenly the leaches match the people as to what happens.  Like what if everyone gets 10 leaches, 1 for food, one for housing, one for education, one for entertainment, etc. that actually means some of the people will be small children who starve and lose the ability to focus on their education, or people in alaska who don't go outside much, etc.  america has a 1 in 5 rate of child hunger.  https://en.wikipedia.org/wiki/Food_security#Food_security_in_the_USreally you want to think of customers as a resource in capitalist economics.  Like you can overfish a bay and end up with too few baby fish and too many fishing boats with no fish left to catch.  that sort of thing happens all the time in capitalism.  Also in capitalism some company will charge too much for bottled water and then some other people have no money left for food.  But the labor theory of value doesn't think such a thing is possible? I don't know how does the labor theory of value explain a overfishing? it seems like over fishing should be impossible in captialism according to marx theory of labor value.In general you're falling for the capitalist pre-conception of a perfectly efficient capitalist market.  Very very few markets in capitalism are anywhere close to "perfect".  there's lots of invalid assumptions built into capitalisma and socialism like "the perfect information" about the market price is needed as an assumption. There are significant barriers to entry in many markets.  Most significantly, both capitalst markets and socialist production theory can not explain the existence of an ever growing advertising industry that  he capitialism of the past is a fiction of today because  "The advertising industry is the global industry of public relation and marketing companies, media services and advertising agencies – largely controlled today by just a few international holding companies (WPP plc, Omnicom, Publicis Groupe, Interpublic and Dentsu). It is a global, multibillion-dollar business that connects manufacturers and consumers.[1]The industry ranges from nonprofit organizations Fortune 500 companies.Revenues of U.S. advertising agencies (more than 65,000 advertising businesses employing more than 248,000 employees) were $166.8 billion in 2014. [1] In 2016, global advertising sales reached $493 billion.[2] For 2017 it was estimated that digital ad sales were first to surpass the TV market."https://en.wikipedia.org/wiki/Advertising_industry

[LBird]

Alan Kerr wrote:

@ LBird,“Let us now picture to ourselves, by way of change, a community of free individuals, carrying on their work with the means of production in common, in which the labour power of all the different individuals is consciously applied as the combined labour power of the community. All the characteristics of Robinson’s labour are here repeated, but with this difference, that they are social, instead of individual.”(Marx)

Yes, Alan, I know Marx's views about 'the democratic control of production by the direct producers' quite well.But I'm asking you about your views.Or are you interpreting Marx to be arguing for a 'Robinson Crusoe' society?It's an easy question to answer, really. Do you think that there is a fourth alternative, 'democratic socialism', to the three that you outlined earlier – individualism, elitism or chaos?If you are arguing for individualism, and calling it 'Robinson Crusoe socialism', that's fine by me – I just disagree with you politically, if that's the case, because I'm a 'democratic socialist', as I think Marx was. If you disagree, too, about Marx and democracy, that's OK by me.

[robbo203]

LBird wrote:

Alan Kerr wrote:

@ LBird,“Let us now picture to ourselves, by way of change, a community of free individuals, carrying on their work with the means of production in common, in which the labour power of all the different individuals is consciously applied as the combined labour power of the community. All the characteristics of Robinson’s labour are here repeated, but with this difference, that they are social, instead of individual.”(Marx)

Yes, Alan, I know Marx's views about 'the democratic control of production by the direct producers' quite well.But I'm asking you about your views.Or are you interpreting Marx to be arguing for a 'Robinson Crusoe' society?It's an easy question to answer, really. Do you think that there is a fourth alternative, 'democratic socialism', to the three that you outlined earlier – individualism, elitism or chaos?If you are arguing for individualism, and calling it 'Robinson Crusoe socialism', that's fine by me – I just disagree with you politically, if that's the case, because I'm a 'democratic socialist', as I think Marx was. If you disagree, too, about Marx and democracy, that's OK by me.

Once again – this seems off topic as far as thsi thead is concerned.  Try another thread or start up a new one

[alanjjohnstone]

Quote:

Water regularly falls from the sky. So then bottled water which cost $2-$5 each should not exist by your theory.  Doesn't the existence of a robust market for bottled water kind of disprove your theory.

Where i live water can fall from the sky and flood streets and turn lazy streams into raging torrents. For the lucky rural person they have huge storage jars to catch the rain and their well-water levels are replenished keeping it free.  Sadly many in the city cannot store water and rely upon municipal water pipes which is metered and we are charged for monthly. The quality and purity of this water is very highly suspect thus there is indeed despite water from the sky an enormous demand for treated bottled water. In fact, most districts possess water dispensers slot-machines ..in exchange for a few coins UV treated water is dispensed to fill up your bottles.There is indeed a big demand for bottled water despite heavy rains but for good reasons.But, yes i am always amazed why people pay for bottled water especially in Scotland when i visit. The tap water there is lovely. Little need to chill even in Summer.I can only put it down to the power of advertising and, of course, the well-known Scot's sugar addiction (even put lemonade or Irn Bru in the whisky) when it comes to marketing flavoured fruity-water.

[moderator1]

Reminder: 1. The general topic of each forum is given by the posted forum description. Do not start a thread in a forum unless it matches the given topic, and do not derail existing threads with off-topic posts.

[robbo203]

Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:

Robbo203,my 2 cents, feel free to ignore since you were asking michel and if you think it matters who answers instead of the quality of the answer.

robbo203 wrote:

…If gold were to regularly fall from the skies then its value would drop to what is needed to collect it”.

Water regularly falls from the sky. So then bottled water which cost $2-$5 each should not exist by your theory.  Doesn't the existence of a robust market for bottled water kind of disprove your theory. 

No – why should it? I live near a spa town which manufactures bottled mineral water.  Quite apart from the extraction process there is the purification process that figures in the costs of production.  This is not to mention the cost of the bottles themselves and transportation costs

Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:

robbo203 wrote:

…3)           You failed to respond to my point that “If capitalists can just arbitrarily raise their prices or keep their prices high in the face of declining unit production costs then why don’t those capitalists that provide the inputs upon which other capitalists depend to manufacture their commodities, likewise raise the prices of THEIR commodities so that the unit costs of production of those other capitalists, instead of falling will be rising”.  If all capitalists, including those who produce intermediate goods as well as those who produce final goods, are able to just arbitrarily raise their prices, then this obviously negates the claim you make about prices in general steadily rising despite the falling costs of production (which would not be falling after all, in relative terms, since the prices of inputs would also be rising!)  

They do, but what happens is someone in the supply chain buys out the full supply chain.  Nike pretty much owns and controlls the entire supply chain for their shoes and invests (owns stock in ) the rubber companies for the shoe rubber, the textile companies for the shoe canvas, etc. in modern capitalism, the manufacturer is easily replaced and easily owned, but the customers are a finite limited resource.  If a rubber company asks for too much then nike just starts a new rubber company that it owns to compete with the old rubber compay.  Nike can not start a new customer base easily because of brand loyalty and fights for its customers.  other times the consolidation of supply chains is done by some middle agent in the supply chain like two companies own 95% of the soft drink market in the USA and just have different labels on different soft drinks that pretend to compete in the market place. 

 I dont  believe this is correct.   I stand to be corrected but I believe that Nike outsourced shoe production a long time ago .  I recall reading something about this in Naomi Kleins book,  No Logo.  In any event strictly speaking no single  business can possibily own its "full supply chain" given the integrated complexity of modern day production.  Even with the very largest business you can think of there comes a cut off point beyond which it is dependent on inputs that  derive from beyond its domain of ownership and control Quite apart from anything else this does still does not get round the problem Ive raised.  If producers of final goods can just arbitrarily raise their price then why cannot producers of intermediate goods also do that? Insofar as they can also do that then this invalidates Michel's argument  about falling production costs because the production costs would be rising in this case , not falling  

Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:

robbo203 wrote:

… 5)           Relatedly I have asked you several times to explain what would be the point in a business raising its prices so high that it will deter customers from buying its product and encourage them to look to other suppliers.  Businesses will tend to pitch their prices at a level at which which they can feel reasonably confident that their product will be sold and that places a very significant limit on how much they can raise their prices.  Your response to this is to suggest that capitalists will tend to resort to price fixing, limiting competition between themselves whereby they seek to undercut each other in a price war.  But even if this were the case – and there are all sorts of barriers that make this difficult, though not impossibile, to achieve – this would still not get round the basic problem.  If some companies raised their prices then consumers, if they continued to purchase those commodities at the same level as before, would have less money available to spend on other commodities.  In other words, the market demand for those other commodities would fall and so the companies producing these commodities would be obliged to reduce prices to attract more custom.  Its a case of swings and roundabouts

NO those companies would NOT be oblidged to reduce prices to attract more customers. YES, those companies would be obliged to invest money in an advertising campaign. I know. I've worked for those companies on advertising campaigns and as a consultant.  A new media campaign is the last and final gasp before a company finally goes bankrupt and gets bought and consolidated by it's competitors. they also routinely hire more new employees before they get bought out or go bankrupt.  It's something we in america learn to look for in applying for a job to try and guess how solvent the company is and if our boss is going to pay our salary or not.  

 If a company X prices a good at twice the level that company Y prices more or the less the same good then its fairly obvious that customers are going to switch loyalty from X to Y.  Of course , X is not "obliged" in some legalistic sense to reduce its prices.  It is quite at liberty to continue to pigheadedly charge above the going market rate but then customers too are not obliged to contnue loyally buying from X.  The likelihood is that they will forsake X for Y in their droves You then assert that a company like X, though it is not obliged to reduce its price, is neverthelss obliged to  "invest money in an advertising campaign" – presumably to convince custuomers that while they are paying above the going rate for more or less the same prpduct they are still getting value for money.  Again, they are not "obliged" to engage in advertising.  You might say instead it would help their cause if they did advertise .  But advertising costs money and the higher you want to raise the price of your commodity above the going market rate the more money you are going to have to splash out on advertising to convince people that they are getting "value for money".  This  puts a rather different complexion on Michels claim that capitalists can just arbitrarily raise prices to whatever they want in the face of falling production costs. He overlooks the hidden costs  and risks of raising your prices in a competitive market I would also add that advertising is a zero sum game.   To simply retain their same market share,  businesses have to spend more on advertising because other businesses are spending more on advertising.  .  They have to run faster and faster simply to stand still to coin an expression

Steve-SanFrancisco-UserExperienceResearchSpecialist wrote:

Advertising didn't really exist in Marx time the same way it does today.  But your making another argument about swings and round abouts and it's maybe similar to the argument about leaches draining a person dry.  if one leach sucks all the blood out of a person then the other leaches have less?  isn't the total number of leaches limited by the total blood capacity of a town?  Well yes, that's true but all the leaches still try to suck the person as hard as they can anyway.  

 Whether or advertising existed in Marx's time is irrelevant to the point being made.  If  a company X puts up the price of its commodity and its customers continue to loyally buy this commdity from C to the same extent as before then the opportunity costs of their decision to do so is that they will have less money to spend on other commodities.  Meaning the market demand for other commodities will diminish to that extent.  This reduction in market demand means that the businesses supplying these commodities wil have to adjust prices downwards accordingly

[Alan Kerr]

@robbo203@Michel Luc Bellemare@LBird Robbo203 Robbo this is absolutely on topic Marx and Automation “Every child knows a nation which ceased to work, I will not say for a year, but even for a few weeks, would perish. Every child knows, too, that the masses of products corresponding to the different needs required different and quantitatively determined masses of the total labor of society. That this necessity of the distribution of social labor in definite proportions cannot possibly be done away with by a particular form of social production but can only change the mode of its appearance , is self-evident. No natural laws can be done away with. What can change in historically different circumstances is only the form in which these laws assert themselves. And the form in which this proportional distribution of labor asserts itself, in the state of society where the interconnection of social labor is manifested in the private exchange of the individual products of labor, is precisely the exchange value of these products.” https://www.marxists.org/archive/marx/works/1868/letters/68_07_11-abs.htm  Very broadly, *we can think of just 3 ways* to organize production. 1) Crusoe’s island 2) prison labour 3) market. Ways to organize production are not “isms” at all. Yes, they do cause “isms” to flare-up. But no they are rather ways to switch social labour from weaving to tailoring and so forth. We cannot possibly get away from this sharing of social labour in proportions that change all of the time. Michel Luc Bellemare Michael you forget this. You want it that price signals never played a role here or GREED has pushed them aside. Then how come this present way to produce works at all? At this point, your case falls down. @LBird LBird if your ship sinks and you wash-up all alone on an island then you will need Crusoe’s way to organize production–small scale. If you wish to replace capitalist production then you will also need Crusoe’s way but–full scale. Either way you cannot get away from switching your labour between making different things in proportions that change all the time with needs ways and means… This is all absolutely on topic Marx and Automation. Either way you must save and not waste labour hours. We’re not fussed over using different names are we? Not so long as what we mean is clear?

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