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Re: Marxian classes and principles

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  • thekoba@aztec.asu.edu
    ... Gates personally is not the master of Bush. Bush also is a member of the imperialist grand bourgeoisie. Not every president has been, but all in the past
    Message 1 of 26 , Jan 8 6:22 PM
      >You have failed to demonstrate how the president is subordinate to
      >the "imperialist grand bourgeoisie". He's elected for a four year
      >term, can be removed only in the most extreme scenarios, and has the
      >power of the military at his disposal.
      >
      >Consider a power struggle between George Bush and Bill Gates. Gates
      >could certainly withold funds from Bush's re-election campaign in 2
      >years, finance an opponent, or run against him. He could even buy ad
      >time to run anti-Bush ads (though not as easily under the
      >recent "Bipartisan Campaign Reform Act"). But that's about it, and
      >it does little to help Gates any time soon.
      >
      >On the other hand, the Bush administration could put Gates out of
      >business virtually overnight. Take away his wealth by taxation or
      >fine. Nationalize the operating system software industry. If he
      >mounts any kind of armed resistance, the Military can be sent in to
      >crush it. Hell, under the PATRIOT act Bush could simply declare
      >Gates a suspected terrorist and hold him incommunicado indefinitely,
      >or even execute him.
      >
      >All of this is so because to a large degree the public DOES NOT
      >accept initiation of force by private citizens like Gates, yet DOES
      >accept initiation of force when commanded by government leaders like
      >Bush.
      >
      >Bush clearly has greater power than Gates, and will win any power
      >struggle. In that context, it is silly to refer to Gates as a master
      >of Bush.

      Gates personally is not the master of Bush. Bush also is a member
      of the imperialist grand bourgeoisie. Not every president has been,
      but all in the past century have been subservient to it and have been
      voted into office through the direction of the media and campaign
      finances based on their known loyalty to this class. Could a president
      suddenly decide he or she didn't want to be loyal to this class? Of
      course this could happen. If it did, the media would turn against him,
      as would Congress (composed of similar class members and lackeys), the
      Supreme Court and ultimately the military. That president would be
      impeached or overthrown. Politicians are beholden to the imperialist
      bourgeoisie, not the reverse.

      >> This is entirely true. Nonetheless the benefits or pursuing
      >aggressive
      >> class struggle ultimately outweigh the harm that aggression causes.
      >
      >I do not see convincing evidence of that.

      That classes succeed in their aims by so doing is proof of that.

      >> I would agree that such a contract would be wise if the roads were
      >> to be made private property, but then, this would restrict the road
      >> owner's right to do as he pleases with his property. Do I object to
      >> that? No. But it would infringe on the road owner's property
      >rights.
      >
      >No, it would not. Voluntarily contracted obligations are not an
      >infringement of rights. "I agree to do X, Y, and Z in return for the
      >current owner (in this case the government) selling me the road" is a
      >fair contract. If the owner didn't want to do X, Y, and Z as
      >specified in the contract, he shouldn't have bought the road.
      >
      >This is the primary reason that most such roads would be purchased by
      >homeowner's associations. The implicit contracts existing with
      >current roads are such that ownership is naturally most beneficial to
      >the property owners served by the road.

      If one can purchase property only if one agrees to use it a certain
      way, a portion of that property right is retained by the seller, and
      only a portion of the property right is purchased. If the road is
      completely owned by a private party, he or she can do what he or she
      likes with it--destroy it, charge extreme tolls, charge no tolls, fail
      to maintain it, etc. If the new owner of the road is required to
      maintain it by contract and to charge as fees and tolls no more than
      110% the cost of maintenance, that "owner" is in fact no more than a
      contractor-for-life. The real owner remains the public, and therefore
      the government, because it retains the right to control how that road
      is maintained and what fees can be charged. It seems, therefore, that
      you do not in fact advocate privatizing the roads only the maintenance
      contracts of them.

      >Military imperialism, or the trade and economic specialization
      >between nations that you also call "imperialism"? The former is not
      >inevitable, and where it occurs is to be opposed but is not a
      >consequence of capitalism as communism was forcibly imposed on a
      >number of "client states" of the USSR shortly after WWII. While the
      >latter form is an inevitable consequence of capitalism, you have
      >failed to demonstrate that it is harmful to human happiness. In
      >fact, absent military force it is quite easy to demonstrate that it
      >increases human happiness. Absent military force, the
      >supposedly "exploited" contries are free to NOT trade at all. By
      >agreeing to trade, they are agreeing that they are better off by
      >trading than by not trading.

      In fact it is inevitable that military force is used on those who
      refuse to trade when the [economic] imperialist powers think it
      worthwhile. You may not approve of it, but it happens every time.

      >Taxes are extortion, not bribary. :-) They are harmful to be sure,
      >but in a predictable and relatively evenhanded, well documented way
      >that interferes far less with development and property rights than do
      >widespread requirements for bribes and policy exceptions whose size
      >vary by the day and the mood of the bureaucrat. Campaign
      >contributions are a form of bribary, but one which is significant
      >only to those already relatively wealthy.
      >
      >In other words, an American of average means can purchase a small
      >plot of land and in most cases have the title to that plot justly
      >enforced, while only paying predictable extortions proportional to
      >the size of the property (commonly called "property taxes"). He does
      >not have to make any campaign contributions to do so.
      >
      >The average citizen of a kleptocracy can do no such thing. First of
      >all, the bribes required to "process" such a transaction are very
      >large in proportion to the value of a small plot of land. And even
      >if the right bribes are paid for the transfer of title to occur, the
      >rights of the small landowner are not enforced consistently unless
      >more (unpredictable) bribes are paid. Confiscation by bureaucratic
      >fiat (for the benefit of the wealthy who have paid other bribes, of
      >course) is quite commonplace.
      >
      >As a result, the average citizen of a kleptocracy has little
      >incentive to accumulate any property whatsoever. As a result, they
      >don't. Economically what this does is artificially create a steep
      >economy of scale in the ownership of property -- it's relatively easy
      >on a proportional basis to acquire and maintain ownership of a lot of
      >property, but relatively hard to acquire and maintain ownership of a
      >little property. This in turn creates a stark divide between the
      >wealthy, who own a lot, and the poor, who own (essentially) nothing.

      This is absolutely untrue. There is a large petit-bourgeoisie in
      every capitalist third world country. Sure they pay some bribes
      that Americans might not, but they generally pay smaller taxes.

      >Unfortunately, the first world capitalist states are becoming more
      >like the third world kleptocracies by the day. Nominal tax rates are
      >generally falling, which is a good thing, but unpredictable
      >regulatory "takings" and "policy exceptions" and "environmental
      >impact assessments" are becoming far more commonplace. The
      >difference between first and third world property rights from the
      >perspective of the average citizen is still quite significant, but
      >much less stark than it once was. The resultant shrinkage of what is
      >commonly referred to as the American middle class is a clear warning
      >of what is to come if such policies continue.

      The disappearance of the American "middle class" has a lot more to
      do with shipping jobs overseas for cheap labour than with any
      domestic tax policy or bribery problem. In other words it is
      [economic] imperialism that is destroying our own middle class.

      >We could argue endlessly about the definition of capitalism. I argue
      >that capitalism definitionally requires consistent protection of
      >property rights under the rule of law and in actual practice. This
      >is not the case in the third world kleptocracies, hence I do not
      >consider them capitalist.
      >
      >Suffice it to say that I am not advocating the form of government in
      >place in most third world countries, whatever you choose to call it.
      >Arguing a comparison of the achievements of such societies is
      >pointless.

      I would certainly not contend that you are ADVOCATING the third world
      "kleptocracies", merely that their development is the logical result
      of the capitalist system, given sufficient time to evolve. That you
      are fighting against these bad results is praiseworthy, but they are
      in fact the result of capitalism.

      >> >I have yet to hear of a country where the rule of law and equal
      >> >respect for property rights was actually implemented that the
      >result
      >> >has not been both prosperity and ingenuity. But I'll admit I'm no
      >> >expert on the developmental history of the world.
      >> >
      >> >--Jason Auvenshine
      >>
      >> I am not aware of any country in which that which you call the rule
      >> of law and respect for property rights was actually implemented
      >period.
      >> Arguing about the result of that would be on par with arguing about
      >> angels dancing on the head of a pin.
      >
      >In absolutely perfect terms, no.
      >
      >But in relative terms it definitely has, and when it has the results
      >have been consistently good.

      No, the result of the societies that are in any way close to what
      you advocate has been imperialist [economic and military] plunder of
      the third world.

      --Kevin
    • auvenj <auvenj@mailcity.com>
      ... not ... in ... value . ... be, ... of ... rate ... in ... to ... the ... proletariat. If we can t agree on definitions then we can t have a productive
      Message 2 of 26 , Jan 9 9:33 PM
        --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
        > >OK, well at least now our difference is clearly defined. You do
        not
        > >include a rate of return sufficient to induce a decision to invest
        in
        > >the cost of capital, rather you label such a return "surplus
        value".
        > >This is what I thought the communist position would turn out to
        be,
        > >but wanted to be certain by getting a complete definition. Such a
        > >position is consistent with my understanding of the labor theory
        of
        > >value. I hope my position is also now clear -- by including a
        rate
        > >of return in the cost of capital, the expected surplus value would
        in
        > >fact be zero over the long run. But as returns to capital are
        > >specifically what you wish to exclude from necessary value, for me
        to
        > >use a term like "surplus value" as I define it would be
        > >counterproductive.
        > >
        > >"Returns to capital" and "surplus value" are thus equivalent.
        >
        > No, I thought I made it clear that surplus value was only part of
        the
        > returns to capital. Necessary value is the part that goes to the
        proletariat.

        If we can't agree on definitions then we can't have a productive
        discussion. Let me try it again in more concrete terms. You've
        defined surplus value as follows:

        Surplus Value = Market Value - (Wages + Overhead)
        Shorthand: sv = mv - (w + o)

        Right away we have to qualify this equation with some assumptions,
        only one of which we've touched on previously:
        ASSUMPTION1: Equation represents expectations for decision making
        purposes, since the costs/values are determined at different times
        after the decision to produce has been made. Once production occurs,
        the actual values probably will be different from expected values.
        But it is the expected values which affect decision making.
        ASSUMPTION2: All variables in this equation are based on common
        units, for purposes of discussion these can be units of time only if
        we assume a certain production rate. If we assume we're talking
        about one year, and producing "widgets", then "Market Value" is
        really the expected market value of all the widgets produced in the
        year, "Wages" is the wages expected to be paid to the workers in the
        year, etc.
        ASSUMPTION3: For discussion purposes only, we assume a single
        machine is used in the production of the widgets.

        Now, you have stated that cost of capital is included in overhead.
        So:
        Overhead = [A bunch of other stuff not germain to discussion] +
        Capital Cost
        Shorthand: o = x + cc

        This also necessitates we make another assumption explicit:
        ASSUMPTION4: In a capitalist system, the owner of the capital
        expects to receive both the Surplus Value AND the Cost of Capital,
        whereas the workers expect to receive only the Wages. In a communist
        system, the owner of the capital is the collective, all returns are
        expected to be received by the collective (workers), and you have
        defined Surplus Value to be zero.

        Plugging expanded overhead back into the surplus value equation:
        sv = mv - (w + x + cc)

        So far so good. Here's where we run into our little disagreement.
        You claim that capital cost is only the amount invested in the
        equipment divided by its useful life. So you would define:
        cc = Cost of machine / Life of machine
        Shorthand: cc = Cm/Lm

        However, I wish to add the additional cost of a rate of return
        sufficient to induce a capital owner to invest. The capital owner
        expects to get his principle investment back + a rate of return that
        is at least as attractive as current consumption. So I would define:
        cc = (Cost of machine / Life of machine) + Market Rate of Return on
        Investment.
        Shorthand: cc = Cm/Lm + R

        My formulation requires the specification of another assumption,
        however it is one that can be proved with economics:
        ASSUMPTION5: The Market Rate of Return on Investment will converge
        to the average rate of return required to induce an owner of capital
        to invest that capital rather than consume it.
        One thing to be absolutely clear about in my formulation:
        Cm/Lm is return OF capital
        R is return TO capital

        Plugging this all back in we have:
        sv[Kevin] = mv - (w + x + Cm/Lm)
        sv[Jason] = mv - (w + x + Cm/Lm + R)

        At this point I believe all relevant independant variables are in
        explicit terms: their economic definition is clear and they do not
        contain any subcomponents of relevance to the discussion.

        From the above formulations two things should also be clear:
        CONCLUSION1:
        sv[Jason] = 0
        If you claim sv[Jason] is not zero, what additional economic
        component is there that is not represented in my equation for sv
        [Jason]? It will need to be defined explicitely in economic terms.

        CONCLUSION2:
        sv[Kevin] = R
        Again, if sv[Kevin] does not equal R, what economic component other
        than R are we talking about?

        Just to be sure we're clear, let's try this with some fictional
        numbers in a capitalist system.
        Expected market value of a certain number of widgets produced in a
        year is $400.
        mv = 400
        Wages for workers to run a widget-making machine are $180/year
        w = 180
        Other (non-capital) overhead costs involved with producing the
        widgets are $20/year
        x = 20
        A $1000 widget-making machine with a 10 year life that can produce
        the assumed widgets in a year has an investment cost (to avoid the
        contentious term "capital cost") of $100 per year.
        Cm/Lm = 1000 / 10 = 100

        At this point we can calculate sv[Kevin]:
        sv[Kevin] = 400 - (180 + 20 + 100) = $100

        To calculate sv[Jason] we have to know one other item, the rate of
        return required to induce a capitalist to invest, "R". The economic
        derivation of R is fairly long and involved, but the end result is
        that over the long run it is the same formula as sv[Kevin]:
        R = mv - (w + x + Cm/Lm) = 400 - (180 + 20 + 100) = $100
        (This is a 10% return on the original $1000 investment)

        In simple terms, this is as stated becuase if the rate of return
        required to induce investment were LOWER than what is left over after
        wages, overhead, and principle costs are covered, more capitalists
        would be induced to invest in widget production, thus increasing
        supply and driving down the market value. The converse would be true
        if the rate of return required to induce investment were HIGHER than
        the formula: fewer capitalists would invest in widget production,
        thus constricting supply and increasing market value.

        So, plugging R into my version:
        sv[Jason] = mv - (w + x + Cm/Lm + R) = 400 - (180 + 20 + 100 + 100) =
        0

        Is it now clear why I consider the terms "Surplus Value" and "Returns
        to Capital" to be equivalent?

        --Jason Auvenshine
      • thekoba@aztec.asu.edu
        ... Any R is compensated by Cm/Lm. The Cm/Lm covers the cost of the initial investment. These terms refer to ACTUAL values, not EXPECTED values. If the
        Message 3 of 26 , Jan 10 8:00 AM
          >
          >--- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
          >> >OK, well at least now our difference is clearly defined. You do
          >not
          >> >include a rate of return sufficient to induce a decision to invest
          >in
          >> >the cost of capital, rather you label such a return "surplus
          >value".
          >> >This is what I thought the communist position would turn out to
          >be,
          >> >but wanted to be certain by getting a complete definition. Such a
          >> >position is consistent with my understanding of the labor theory
          >of
          >> >value. I hope my position is also now clear -- by including a
          >rate
          >> >of return in the cost of capital, the expected surplus value would
          >in
          >> >fact be zero over the long run. But as returns to capital are
          >> >specifically what you wish to exclude from necessary value, for me
          >to
          >> >use a term like "surplus value" as I define it would be
          >> >counterproductive.
          >> >
          >> >"Returns to capital" and "surplus value" are thus equivalent.
          >>
          >> No, I thought I made it clear that surplus value was only part of
          >the
          >> returns to capital. Necessary value is the part that goes to the
          >proletariat.
          >
          >If we can't agree on definitions then we can't have a productive
          >discussion. Let me try it again in more concrete terms. You've
          >defined surplus value as follows:
          >
          >Surplus Value = Market Value - (Wages + Overhead)
          > Shorthand: sv = mv - (w + o)
          >
          >Right away we have to qualify this equation with some assumptions,
          >only one of which we've touched on previously:
          >ASSUMPTION1: Equation represents expectations for decision making
          >purposes, since the costs/values are determined at different times
          >after the decision to produce has been made. Once production occurs,
          >the actual values probably will be different from expected values.
          >But it is the expected values which affect decision making.
          >ASSUMPTION2: All variables in this equation are based on common
          >units, for purposes of discussion these can be units of time only if
          >we assume a certain production rate. If we assume we're talking
          >about one year, and producing "widgets", then "Market Value" is
          >really the expected market value of all the widgets produced in the
          >year, "Wages" is the wages expected to be paid to the workers in the
          >year, etc.
          >ASSUMPTION3: For discussion purposes only, we assume a single
          >machine is used in the production of the widgets.
          >
          >Now, you have stated that cost of capital is included in overhead.
          >So:
          >Overhead = [A bunch of other stuff not germain to discussion] +
          >Capital Cost
          > Shorthand: o = x + cc
          >
          >This also necessitates we make another assumption explicit:
          >ASSUMPTION4: In a capitalist system, the owner of the capital
          >expects to receive both the Surplus Value AND the Cost of Capital,
          >whereas the workers expect to receive only the Wages. In a communist
          >system, the owner of the capital is the collective, all returns are
          >expected to be received by the collective (workers), and you have
          >defined Surplus Value to be zero.
          >
          >Plugging expanded overhead back into the surplus value equation:
          >sv = mv - (w + x + cc)
          >
          >So far so good. Here's where we run into our little disagreement.
          >You claim that capital cost is only the amount invested in the
          >equipment divided by its useful life. So you would define:
          >cc = Cost of machine / Life of machine
          > Shorthand: cc = Cm/Lm
          >
          >However, I wish to add the additional cost of a rate of return
          >sufficient to induce a capital owner to invest. The capital owner
          >expects to get his principle investment back + a rate of return that
          >is at least as attractive as current consumption. So I would define:
          >cc = (Cost of machine / Life of machine) + Market Rate of Return on
          >Investment.
          > Shorthand: cc = Cm/Lm + R
          >
          >My formulation requires the specification of another assumption,
          >however it is one that can be proved with economics:
          >ASSUMPTION5: The Market Rate of Return on Investment will converge
          >to the average rate of return required to induce an owner of capital
          >to invest that capital rather than consume it.
          >One thing to be absolutely clear about in my formulation:
          > Cm/Lm is return OF capital
          > R is return TO capital
          >
          >Plugging this all back in we have:
          >sv[Kevin] = mv - (w + x + Cm/Lm)
          >sv[Jason] = mv - (w + x + Cm/Lm + R)
          >
          >At this point I believe all relevant independant variables are in
          >explicit terms: their economic definition is clear and they do not
          >contain any subcomponents of relevance to the discussion.
          >
          >From the above formulations two things should also be clear:
          >CONCLUSION1:
          >sv[Jason] = 0
          >If you claim sv[Jason] is not zero, what additional economic
          >component is there that is not represented in my equation for sv
          >[Jason]? It will need to be defined explicitely in economic terms.
          >
          >CONCLUSION2:
          >sv[Kevin] = R
          >Again, if sv[Kevin] does not equal R, what economic component other
          >than R are we talking about?
          >
          >Just to be sure we're clear, let's try this with some fictional
          >numbers in a capitalist system.
          >Expected market value of a certain number of widgets produced in a
          >year is $400.
          > mv = 400
          >Wages for workers to run a widget-making machine are $180/year
          > w = 180
          >Other (non-capital) overhead costs involved with producing the
          >widgets are $20/year
          > x = 20
          >A $1000 widget-making machine with a 10 year life that can produce
          >the assumed widgets in a year has an investment cost (to avoid the
          >contentious term "capital cost") of $100 per year.
          > Cm/Lm = 1000 / 10 = 100
          >
          >At this point we can calculate sv[Kevin]:
          >sv[Kevin] = 400 - (180 + 20 + 100) = $100
          >
          >To calculate sv[Jason] we have to know one other item, the rate of
          >return required to induce a capitalist to invest, "R". The economic
          >derivation of R is fairly long and involved, but the end result is
          >that over the long run it is the same formula as sv[Kevin]:
          >R = mv - (w + x + Cm/Lm) = 400 - (180 + 20 + 100) = $100
          >(This is a 10% return on the original $1000 investment)
          >
          >In simple terms, this is as stated becuase if the rate of return
          >required to induce investment were LOWER than what is left over after
          >wages, overhead, and principle costs are covered, more capitalists
          >would be induced to invest in widget production, thus increasing
          >supply and driving down the market value. The converse would be true
          >if the rate of return required to induce investment were HIGHER than
          >the formula: fewer capitalists would invest in widget production,
          >thus constricting supply and increasing market value.
          >
          >So, plugging R into my version:
          >sv[Jason] = mv - (w + x + Cm/Lm + R) = 400 - (180 + 20 + 100 + 100) =
          >0
          >
          >Is it now clear why I consider the terms "Surplus Value" and "Returns
          >to Capital" to be equivalent?
          >
          >--Jason Auvenshine

          Any R is compensated by Cm/Lm. The Cm/Lm covers the cost of the initial
          investment. These terms refer to ACTUAL values, not EXPECTED values.
          If the actual values fall substantially below the expected values, the
          business often fails, as has often been the case.

          What if the surplus value is at too low a rate to be attractive (e.g.
          for $1000 investment, investor gets back $1010)? If it is anticipated,
          the investment does not happen. If not, the investor may lose interest
          and sell. Nonetheless, that $10 is surplus value, because if the
          investment does happen, the investor gets that money.

          In the same way, if both the anticipated and actual return is very high
          (e.g. for $1000 investment, investor gets back $10,000), and that investor
          was very greedy and would only have invested if the return was at least
          $5000, the surplus value is still $9000, and not $5000, because all
          $9000 goes to the investor. The other $4000 doesn't just disappear.

          --Kevin
        • auvenj <auvenj@mailcity.com>
          ... and Returns ... initial ... values. ... the ... Actual values are what you get when the period under consideration is complete. However, only expected
          Message 4 of 26 , Jan 11 10:10 PM
            --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
            > >Is it now clear why I consider the terms "Surplus Value"
            and "Returns
            > >to Capital" to be equivalent?
            > >
            > >--Jason Auvenshine
            >
            > Any R is compensated by Cm/Lm. The Cm/Lm covers the cost of the
            initial
            > investment. These terms refer to ACTUAL values, not EXPECTED
            values.
            > If the actual values fall substantially below the expected values,
            the
            > business often fails, as has often been the case.

            Actual values are what you get when the period under consideration is
            complete. However, only expected values can be used by real human
            beings to make decisions, because it is impossible to know what the
            actual values are until after a decision to produce has been made.
            It is the decision to invest (or not) and produce (or not) which is
            of consequence. The outcome of a particular decision is important
            insofar as it may influence expected values for the future.

            > What if the surplus value is at too low a rate to be attractive
            (e.g.
            > for $1000 investment, investor gets back $1010)? If it is
            anticipated,
            > the investment does not happen. If not, the investor may lose
            interest
            > and sell. Nonetheless, that $10 is surplus value, because if the
            > investment does happen, the investor gets that money.
            > In the same way, if both the anticipated and actual return is very
            high
            > (e.g. for $1000 investment, investor gets back $10,000), and that
            investor
            > was very greedy and would only have invested if the return was at
            least
            > $5000, the surplus value is still $9000, and not $5000, because all
            > $9000 goes to the investor. The other $4000 doesn't just disappear.

            No, of course it doesn't disappear. But if $5000 was required to
            induce the investor to invest, and the investment actually returned
            $9000, then the value returned to the investor above and beyond what
            which was required, "surplus" as most people would define it, was
            only $4000.

            "Surplus" is generally recognized as unnecessary, something that
            doesn't have to be there to get the desired output.

            You define any return to an investor above the amount originally
            invested as "surplus". But to do so assumes a communist system. In
            a capitalist system, a return on investment is NOT surplus, because
            if the return is not there then the investment won't be made and the
            product cannot be produced.

            The same allegation can be made against me -- that I assume a
            capitalist system by including returns to capital in the cost of
            capital. This is also true, because under communism a return on
            investment is ineed "surplus". But I'm not the one who chose to use
            a term with implied conclusions like "surplus value" in the first
            place. This is also why I proposed the accommodation that "returns
            to capital" R be accepted as equivalent to "surplus value" sv[kevin].

            If you'd like to argue the point that one of the _benefits_ of
            communism is that under such a system returns to capital are surplus,
            that is a reasonable approach and we can have a discussion of that
            point. However, to use a term like "surplus value", define it in
            such a way as to assume a communist system from the outset, as you
            have done, and then presume to have a discussion about the merits of
            communism vs. capitalism utilizing this definition of surplus value
            is a faulty logical procedure. You have assumed your conclusion that
            returns to capital are surplus in your definition of terms, which is
            circular reasoning.

            To make this more concrete, consider two factories each making
            circular plastic parts (wheels for simple toy cars...whatever).
            Factory A has a circular mold into which molten plastic is poured and
            then the circular pieces are ejected after the plastic has
            solidified. Factory B has a circular cutter which cuts out the
            circular pieces from solid square sheets of plastic. Of course,
            simple geometry dictates that circles do not cut from square sheets
            of plastic without also leaving some plastic behind. From the
            perspective of Factory A, the plastic left behind by Factory B's
            cutting process would seem to be "surplus". After all, Factory A
            leaves no such plastic and is able to produce the same circular parts
            as Factory B. Yet from the perspective of Factory B, the plastic
            left behind is not "surplus" at all -- it is an absolutely necessary
            part of Factory B's production process even though it may simply be
            discarded as waste once the circular pieces have been produced.

            The manager of Factory A and the manager of Factory B cannot have a
            productive discussion about the relative merits of their differing
            production processes if they assume from the outset that any plastic
            remnants are defined to be "surplus". The two managers need to
            discuss matters such as total material input costs, capital costs,
            labor costs, energy costs, maintenance costs, etc. in order to
            determine which process is really more efficient. Certainly, the
            manager of Factory A can cite as a benefit of his process that it
            generates no plastic remnants, thus reducing the amount of plastic
            required to produce a given number of circular plastic parts to its
            absolute minimum. But it may well be that the energy costs of
            melting the plastic, and the cleaning/maintenance costs of the molds
            incurred by Factory A far exceed the costs of Factory B's process
            even when the cost of the discarded plastic is included. The two
            managers will never find out which process is superior if the
            discussion starts out with the assumption that any plastic left
            behind is "surplus" and thus any process which generates them is
            definitionally inferior to any process that doesn't generate them.

            I hope you can see how our situation mirrors that of the two factory
            managers. To be useful, our discussion must utilize terms which do
            not presume a conclusion to our disagreement from the outset.
            If "returns to capital" still seems too presumptuous to you, perhaps
            the term "value paid to investors beyond their original investment"
            is acceptable to you? I'm open to suggestions, but we cannot simply
            presume that such value is EITHER surplus OR necessary in our
            definition of terms.

            --Jason Auvenshine
          • auvenj <auvenj@mailcity.com>
            ... causes. ... It proves no such thing. The fact that rapists succeed in their aims by holding a knife to their victim s throat doesn t prove that the
            Message 5 of 26 , Jan 12 9:15 PM
              --- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
              > >> This is entirely true. Nonetheless the benefits or pursuing
              > >aggressive
              > >> class struggle ultimately outweigh the harm that aggression
              causes.
              > >
              > >I do not see convincing evidence of that.
              >
              > That classes succeed in their aims by so doing is proof of that.

              It proves no such thing. The fact that rapists succeed in their aims
              by holding a knife to their victim's throat doesn't prove that the
              benefits of doing so outweigh the harm that it causes. Success in
              one's aims is entirely independant from whether or not those aims are
              beneficial or harmful.

              > >No, it would not. Voluntarily contracted obligations are not an
              > >infringement of rights. "I agree to do X, Y, and Z in return for
              the
              > >current owner (in this case the government) selling me the road"
              is a
              > >fair contract. If the owner didn't want to do X, Y, and Z as
              > >specified in the contract, he shouldn't have bought the road.
              > >
              > >This is the primary reason that most such roads would be purchased
              by
              > >homeowner's associations. The implicit contracts existing with
              > >current roads are such that ownership is naturally most beneficial
              to
              > >the property owners served by the road.
              >
              > If one can purchase property only if one agrees to use it a certain
              > way, a portion of that property right is retained by the seller, and
              > only a portion of the property right is purchased. If the road is
              > completely owned by a private party, he or she can do what he or she
              > likes with it--destroy it, charge extreme tolls, charge no tolls,
              fail
              > to maintain it, etc. If the new owner of the road is required to
              > maintain it by contract and to charge as fees and tolls no more than
              > 110% the cost of maintenance, that "owner" is in fact no more than a
              > contractor-for-life. The real owner remains the public, and
              therefore
              > the government, because it retains the right to control how that
              road
              > is maintained and what fees can be charged. It seems, therefore,
              that
              > you do not in fact advocate privatizing the roads only the
              maintenance
              > contracts of them.

              The new owner is bound by a contractual obligation, and in that sense
              is a "contractor for life". Many new homes are built with CC&R's
              that require the owners to keep the property up to rather strict
              aesthetic standards. The principle is the same. In this case, the
              property owners served by the road bought their property with an
              (admittedly implicit) contract with the government that they would
              have access to their property via the road. It is the current
              owner's (government's) responsibility to uphold that contract, and
              insure that it is upheld by any successor owners.

              That the existance of such implicit contracts makes unattractive the
              purchase of many if not most existing government roads by entities
              other than those directly benefitting from their existance and upkeep
              is my whole point.

              Your objection to private roads boils down to nothing more than an
              assumption that the new property owner can violate at will the
              implicit contract you made with the government when you bought your
              property. Selling single-access roads without the contract would
              amount to a breach by the current owner, which is not what
              Libertarians such as myself advocate.

              Thus "privatizing the roads" amounts in practice to transferring both
              ownership and responsibility for most existing roads to entites owned
              by those who benefit from the roads most directly -- those who rely
              on the raod for access to their property. More importantly, it also
              means that the government does not build any new roads.

              I always find it curious how fixated people are on the topic of road
              privatization. To my knowledge, no Libertarian ever ran for office
              stating that the first thing he or she planned to do upon being
              elected and assuming office is privatize all of the roads. Private
              roads are indeed implied by libertarian principles, and I am
              confident that the concept is workable. But it's something that
              would be done later rather than sooner. We'd start privatization
              with such obvious targets as the Post Office and Amtrak, move on to
              Social Security, as well as the banking, health care, and insurance
              activities currently engaged in by the government. If we got through
              all of that and were still in office, then maybe roads would be on
              the agenda.

              > In fact it is inevitable that military force is used on those who
              > refuse to trade when the [economic] imperialist powers think it
              > worthwhile. You may not approve of it, but it happens every time.

              Because the initiation of military force has always been viewed as
              acceptable, particularly by the politicians. That is precisely what
              I am attempting to change.

              > >As a result, the average citizen of a kleptocracy has little
              > >incentive to accumulate any property whatsoever. As a result,
              they
              > >don't. Economically what this does is artificially create a steep
              > >economy of scale in the ownership of property -- it's relatively
              easy
              > >on a proportional basis to acquire and maintain ownership of a lot
              of
              > >property, but relatively hard to acquire and maintain ownership of
              a
              > >little property. This in turn creates a stark divide between the
              > >wealthy, who own a lot, and the poor, who own (essentially)
              nothing.
              >
              > This is absolutely untrue. There is a large petit-bourgeoisie in
              > every capitalist third world country. Sure they pay some bribes
              > that Americans might not, but they generally pay smaller taxes.

              You missed the forest for the trees. Taxes are both proportional and
              predictable. Bribes are much less predictable -- they depend on the
              daily whim of bureaucrats and politicans rather than a public
              deliberative process like legislation. They are also much less
              proportional -- often a flat "fee" is required to get something done
              regardless of whether your income/investment is large or small.

              It is reasonable to invest capital knowing that a certain percentage
              will be confiscated by taxation. You simply figure it as a cost in
              your decision making. It is much less reasonable to do so when
              bribes are required, because you don't know what it will take in
              advance, making it hard to determine whether or not the investment
              will be profitable. Furthermore, it is much more likely that a large
              investment will be profitable than a small one, simply because bribes
              will take a smaller percentage.

              The "large petit-bourgeoisie" you speak of are not actually so. When
              and if such people of average means acquire property that is of value
              to the very wealthy/kleptocrats, it is simply taken, perhaps after a
              small (proportional to wealth) bribe is paid by the person who wants
              it. The petit-bourgeoisie "own" what they own only simply because it
              is not of interest to the wealthy and powerful. There is little to
              no upward mobility as a result. As I said, sadly this practice is
              increasingly becoming the case in the first world capitalist
              countries as well.

              > The disappearance of the American "middle class" has a lot more to
              > do with shipping jobs overseas for cheap labour than with any
              > domestic tax policy or bribery problem. In other words it is
              > [economic] imperialism that is destroying our own middle class.

              Such is the leftist party line. Economic data do not appear to
              support this contention. The median wage in this country has tracked
              relatively close to inflation for decades. It outpaced inflation a
              bit from WWII until the early 70's, then inflation outpaced it a bit
              for a while in the late '70s and early '80s, but then it outpaced
              inflation again throughout much of the '90s. Where we are now in
              terms of gross earnings for the average worker is better in real
              dollar terms than where we were several decades ago. Furthermore,
              real household income has risen substantially over the same period
              due to increasing numbers of dual income households. However, there
              is a stark difference in the amount of taxes paid by the average
              worker/household. The combined impact of payroll tax, sales taxes,
              federal, state, and local income taxes, property taxes, and excise
              taxes hit the average worker at combined rates exceeding 50%. Prior
              to and shortly after WWII the combined rates were 25% or less.
              Simultaneously with the tax increases on the middle class, the
              government has subsidized both the poor and the very rich -- the poor
              with increasing "free" services, direct and indirect cash payments,
              and the very rich with corporate welfare and the ability to shut out
              competition with burdensome red tape that constitutes barrier to
              market entry.

              It is an economic fact that taxing something results in less of it,
              and subsidizing something results in more of it. Quite predictably,
              we've seen a shrinkage of the middle class. Concurrently we've seen
              a growth in the numbers of the poor, and in the magnitude (if not raw
              numbers) of the very rich.

              Certainly, some middle class folks such as factory workers lose their
              jobs and become impoverished because it's cheaper to hire someone
              overseas. On the other hand, our economy seems to keep producing
              many jobs that replace ones which were lost, on pay scales that are
              comparable. The key difference between the new jobs and the old ones
              is that the new ones require increased skills. Most of the folks I
              hear whining about losing their job to cheaper labor simply don't
              want to invest the time and money to improve their own skills. In a
              society which produces rapid technological progress (a very desirable
              thing, I hope you agree) it is simply not reasonable to expect to go
              to school, learn a job, and then do that job and be paid well at it
              until you retire. Yesterday's skills simply aren't as economically
              valuable as today's skills, whether those skills are found locally or
              halfway around the world. Once you factor in relative skills, the
              real results on middle class incomes from "globalization" are
              miniscule.

              --Jason Auvenshine
            • thekoba@aztec.asu.edu
              ... Actual values of the past can be used to predict expected values of the future (combined with other anticipated factors), and they are the only means by
              Message 6 of 26 , Jan 12 9:51 PM
                >Actual values are what you get when the period under consideration is
                >complete. However, only expected values can be used by real human
                >beings to make decisions, because it is impossible to know what the
                >actual values are until after a decision to produce has been made.
                >It is the decision to invest (or not) and produce (or not) which is
                >of consequence. The outcome of a particular decision is important
                >insofar as it may influence expected values for the future.

                Actual values of the past can be used to predict expected values of
                the future (combined with other anticipated factors), and they are the
                only means by which the performance of the economy can be evaluated.
                Expected values induce investment, but actual values show whether or
                not surplus value has accrued.

                >No, of course it doesn't disappear. But if $5000 was required to
                >induce the investor to invest, and the investment actually returned
                >$9000, then the value returned to the investor above and beyond what
                >which was required, "surplus" as most people would define it, was
                >only $4000.
                >
                >"Surplus" is generally recognized as unnecessary, something that
                >doesn't have to be there to get the desired output.

                I differ with you on that point. The fact that it all comes back
                shows it to be surplus. To illustrate this point, consider the
                same greedy investor, only this time let's make him overly optimistic.
                He invested $1000 expecting $10,000 to come back, thus meeting his
                threshold of $5000. But let's say this time he was unjustified,
                and only $4000 came back. By Jasonian rules, he's lost $1000,
                but most people would say he made $3000. He may sell out and
                invest elsewhere, but he still accrued $3000 of surplus value.

                >You define any return to an investor above the amount originally
                >invested as "surplus". But to do so assumes a communist system. In
                >a capitalist system, a return on investment is NOT surplus, because
                >if the return is not there then the investment won't be made and the
                >product cannot be produced.
                >
                >The same allegation can be made against me -- that I assume a
                >capitalist system by including returns to capital in the cost of
                >capital. This is also true, because under communism a return on
                >investment is ineed "surplus". But I'm not the one who chose to use
                >a term with implied conclusions like "surplus value" in the first
                >place. This is also why I proposed the accommodation that "returns
                >to capital" R be accepted as equivalent to "surplus value" sv[kevin].
                >
                >If you'd like to argue the point that one of the _benefits_ of
                >communism is that under such a system returns to capital are surplus,
                >that is a reasonable approach and we can have a discussion of that
                >point. However, to use a term like "surplus value", define it in
                >such a way as to assume a communist system from the outset, as you
                >have done, and then presume to have a discussion about the merits of
                >communism vs. capitalism utilizing this definition of surplus value
                >is a faulty logical procedure. You have assumed your conclusion that
                >returns to capital are surplus in your definition of terms, which is
                >circular reasoning.

                In the first place, it is Karl Marx who deserves credit for this
                analysis, not I, though I have the privilege of defending it in this
                forum. Your use of the term R in the equation is nothing but double-
                dipping. Sure, the capitalist expects a return, but the return R
                is not consumed but goes as surplus value to the capitalist. It is
                this use of the term R to add a cost to the equation which does not
                in fact exist that is circular reasoning.

                >To make this more concrete, consider two factories each making
                >circular plastic parts (wheels for simple toy cars...whatever).
                >Factory A has a circular mold into which molten plastic is poured and
                >then the circular pieces are ejected after the plastic has
                >solidified. Factory B has a circular cutter which cuts out the
                >circular pieces from solid square sheets of plastic. Of course,
                >simple geometry dictates that circles do not cut from square sheets
                >of plastic without also leaving some plastic behind. From the
                >perspective of Factory A, the plastic left behind by Factory B's
                >cutting process would seem to be "surplus". After all, Factory A
                >leaves no such plastic and is able to produce the same circular parts
                >as Factory B. Yet from the perspective of Factory B, the plastic
                >left behind is not "surplus" at all -- it is an absolutely necessary
                >part of Factory B's production process even though it may simply be
                >discarded as waste once the circular pieces have been produced.
                >
                >The manager of Factory A and the manager of Factory B cannot have a
                >productive discussion about the relative merits of their differing
                >production processes if they assume from the outset that any plastic
                >remnants are defined to be "surplus". The two managers need to
                >discuss matters such as total material input costs, capital costs,
                >labor costs, energy costs, maintenance costs, etc. in order to
                >determine which process is really more efficient. Certainly, the
                >manager of Factory A can cite as a benefit of his process that it
                >generates no plastic remnants, thus reducing the amount of plastic
                >required to produce a given number of circular plastic parts to its
                >absolute minimum. But it may well be that the energy costs of
                >melting the plastic, and the cleaning/maintenance costs of the molds
                >incurred by Factory A far exceed the costs of Factory B's process
                >even when the cost of the discarded plastic is included. The two
                >managers will never find out which process is superior if the
                >discussion starts out with the assumption that any plastic left
                >behind is "surplus" and thus any process which generates them is
                >definitionally inferior to any process that doesn't generate them.
                >
                >I hope you can see how our situation mirrors that of the two factory
                >managers. To be useful, our discussion must utilize terms which do
                >not presume a conclusion to our disagreement from the outset.
                >If "returns to capital" still seems too presumptuous to you, perhaps
                >the term "value paid to investors beyond their original investment"
                >is acceptable to you? I'm open to suggestions, but we cannot simply
                >presume that such value is EITHER surplus OR necessary in our
                >definition of terms.
                >
                >--Jason Auvenshine

                The analogy of the plastic parts is quite plainly inapplicable. Unlike
                the plastic of the analogy, the R term is not wasted. It goes back
                to the investor. As I have told you repeatedly, the cost of the
                initial investment is covered by the capital over useful life portion
                of the equation. Anything over and above that is surplus value,
                regardless of how little or great the threshold needed to induce
                investment. If it all comes back, it's all gain for the capitalist,
                wealth obtained without work, hence surplus value.

                --Kevin Walsh
              • thekoba@aztec.asu.edu
                ... That most people prefer to get sex in some other way than rape shows that this is not the case, but those who obtain economic success find class struggle
                Message 7 of 26 , Jan 13 12:25 AM
                  >
                  >--- In azsecularhumanists@yahoogroups.com, thekoba@a... wrote:
                  >> >> This is entirely true. Nonetheless the benefits or pursuing
                  >> >aggressive
                  >> >> class struggle ultimately outweigh the harm that aggression
                  >causes.
                  >> >
                  >> >I do not see convincing evidence of that.
                  >>
                  >> That classes succeed in their aims by so doing is proof of that.
                  >
                  >It proves no such thing. The fact that rapists succeed in their aims
                  >by holding a knife to their victim's throat doesn't prove that the
                  >benefits of doing so outweigh the harm that it causes. Success in
                  >one's aims is entirely independant from whether or not those aims are
                  >beneficial or harmful.

                  That most people prefer to get sex in some other way than rape shows
                  that this is not the case, but those who obtain economic success find
                  class struggle useful, and it is backed by at least the threat of force.

                  >The new owner is bound by a contractual obligation, and in that sense
                  >is a "contractor for life". Many new homes are built with CC&R's
                  >that require the owners to keep the property up to rather strict
                  >aesthetic standards. The principle is the same. In this case, the
                  >property owners served by the road bought their property with an
                  >(admittedly implicit) contract with the government that they would
                  >have access to their property via the road. It is the current
                  >owner's (government's) responsibility to uphold that contract, and
                  >insure that it is upheld by any successor owners.
                  >
                  >That the existance of such implicit contracts makes unattractive the
                  >purchase of many if not most existing government roads by entities
                  >other than those directly benefitting from their existance and upkeep
                  >is my whole point.
                  >
                  >Your objection to private roads boils down to nothing more than an
                  >assumption that the new property owner can violate at will the
                  >implicit contract you made with the government when you bought your
                  >property. Selling single-access roads without the contract would
                  >amount to a breach by the current owner, which is not what
                  >Libertarians such as myself advocate.
                  >
                  >Thus "privatizing the roads" amounts in practice to transferring both
                  >ownership and responsibility for most existing roads to entites owned
                  >by those who benefit from the roads most directly -- those who rely
                  >on the raod for access to their property. More importantly, it also
                  >means that the government does not build any new roads.
                  >
                  >I always find it curious how fixated people are on the topic of road
                  >privatization. To my knowledge, no Libertarian ever ran for office
                  >stating that the first thing he or she planned to do upon being
                  >elected and assuming office is privatize all of the roads. Private
                  >roads are indeed implied by libertarian principles, and I am
                  >confident that the concept is workable. But it's something that
                  >would be done later rather than sooner. We'd start privatization
                  >with such obvious targets as the Post Office and Amtrak, move on to
                  >Social Security, as well as the banking, health care, and insurance
                  >activities currently engaged in by the government. If we got through
                  >all of that and were still in office, then maybe roads would be on
                  >the agenda.

                  Maintaining contracts as a perpetual condition of property ownership
                  does in fact transfer only part of the property. Just as the home
                  owner's association retains part of the property and some control
                  over it, so would such an agreement for road maintenance. Calling it
                  private ownership with such severe restrictions would be disingenuous.

                  >> In fact it is inevitable that military force is used on those who
                  >> refuse to trade when the [economic] imperialist powers think it
                  >> worthwhile. You may not approve of it, but it happens every time.
                  >
                  >Because the initiation of military force has always been viewed as
                  >acceptable, particularly by the politicians. That is precisely what
                  >I am attempting to change.

                  Lot's of luck, but I doubt you will be able to do so without yourself
                  engaging in force.

                  >You missed the forest for the trees. Taxes are both proportional and
                  >predictable. Bribes are much less predictable -- they depend on the
                  >daily whim of bureaucrats and politicans rather than a public
                  >deliberative process like legislation. They are also much less
                  >proportional -- often a flat "fee" is required to get something done
                  >regardless of whether your income/investment is large or small.
                  >
                  >It is reasonable to invest capital knowing that a certain percentage
                  >will be confiscated by taxation. You simply figure it as a cost in
                  >your decision making. It is much less reasonable to do so when
                  >bribes are required, because you don't know what it will take in
                  >advance, making it hard to determine whether or not the investment
                  >will be profitable. Furthermore, it is much more likely that a large
                  >investment will be profitable than a small one, simply because bribes
                  >will take a smaller percentage.

                  Bribes are, in fact, predictable, once you've gotten to know the
                  country and the bureaucracy, and people do manage to do business and
                  reap huge profits in such environments.

                  >The "large petit-bourgeoisie" you speak of are not actually so. When
                  >and if such people of average means acquire property that is of value
                  >to the very wealthy/kleptocrats, it is simply taken, perhaps after a
                  >small (proportional to wealth) bribe is paid by the person who wants
                  >it. The petit-bourgeoisie "own" what they own only simply because it
                  >is not of interest to the wealthy and powerful. There is little to
                  >no upward mobility as a result. As I said, sadly this practice is
                  >increasingly becoming the case in the first world capitalist
                  >countries as well.

                  That is quite simply false. The only block to upward mobility of
                  the third world petit-bourgeoisie is competition from multinational
                  capital.

                  >> The disappearance of the American "middle class" has a lot more to
                  >> do with shipping jobs overseas for cheap labour than with any
                  >> domestic tax policy or bribery problem. In other words it is
                  >> [economic] imperialism that is destroying our own middle class.
                  >
                  >Such is the leftist party line. Economic data do not appear to
                  >support this contention. The median wage in this country has tracked
                  >relatively close to inflation for decades. It outpaced inflation a
                  >bit from WWII until the early 70's, then inflation outpaced it a bit
                  >for a while in the late '70s and early '80s, but then it outpaced
                  >inflation again throughout much of the '90s. Where we are now in
                  >terms of gross earnings for the average worker is better in real
                  >dollar terms than where we were several decades ago. Furthermore,
                  >real household income has risen substantially over the same period
                  >due to increasing numbers of dual income households. However, there
                  >is a stark difference in the amount of taxes paid by the average
                  >worker/household. The combined impact of payroll tax, sales taxes,
                  >federal, state, and local income taxes, property taxes, and excise
                  >taxes hit the average worker at combined rates exceeding 50%. Prior
                  >to and shortly after WWII the combined rates were 25% or less.
                  >Simultaneously with the tax increases on the middle class, the
                  >government has subsidized both the poor and the very rich -- the poor
                  >with increasing "free" services, direct and indirect cash payments,
                  >and the very rich with corporate welfare and the ability to shut out
                  >competition with burdensome red tape that constitutes barrier to
                  >market entry.
                  >
                  >It is an economic fact that taxing something results in less of it,
                  >and subsidizing something results in more of it. Quite predictably,
                  >we've seen a shrinkage of the middle class. Concurrently we've seen
                  >a growth in the numbers of the poor, and in the magnitude (if not raw
                  >numbers) of the very rich.
                  >
                  >Certainly, some middle class folks such as factory workers lose their
                  >jobs and become impoverished because it's cheaper to hire someone
                  >overseas. On the other hand, our economy seems to keep producing
                  >many jobs that replace ones which were lost, on pay scales that are
                  >comparable. The key difference between the new jobs and the old ones
                  >is that the new ones require increased skills. Most of the folks I
                  >hear whining about losing their job to cheaper labor simply don't
                  >want to invest the time and money to improve their own skills. In a
                  >society which produces rapid technological progress (a very desirable
                  >thing, I hope you agree) it is simply not reasonable to expect to go
                  >to school, learn a job, and then do that job and be paid well at it
                  >until you retire. Yesterday's skills simply aren't as economically
                  >valuable as today's skills, whether those skills are found locally or
                  >halfway around the world. Once you factor in relative skills, the
                  >real results on middle class incomes from "globalization" are
                  >miniscule.
                  >
                  >--Jason Auvenshine

                  The facts do not bear out your taxation hypothesis. The upper brackets
                  of the income tax were reduced substantially 20 years ago. Any "shrinking"
                  of the middle class since that time can't have been due to overtaxation.
                  The real difference between old and new jobs is that the new jobs are
                  parasitical, largely consisting of shuffling papers and herding electrons.
                  They only manage the wealth of the transnationals, not creating any.
                  Other new jobs are largely in the low-paid service sector.

                  --Kevin
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