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MODERN MARXIST MONETARY THEORY. Further observations.

This is the second article on Modern Marxist Monetary Theory which looks more deeply and broadly at the dialectical interaction between legacy value and newly produced value. Legacy value refers to the monetization of sales revenue or c + v +s and not only value newly added or v + s. Sales prices always include depreciation or the preserved value passed over to the commodity, onto which is added the newly expended value.

From the 19^th Century, Marxists, including Rosa Luxemburg, were of the opinion that the restrictive consumption of the masses was the primary cause of lack of markets which explained the drive to acquire new markets in which to offload surplus commodities. Indeed there was a structural restriction, but not one caused by the limited consumption of the masses, but because of the limitation imposed on capital itself, namely that new value can only be circulated by value previously produced – legacy value (revenue). In a rapidly expanding world economy at the time, that is to say, with the rapid expansion of value in successive cycles of production, trailing legacy value became insufficient to circulate the new value. Thus what these theoreticians saw as a phenomenon of space was in fact a phenomenon of time, one of sequencing, thus more difficult to detect and understand. It was the old holding back the new in the absence of new credit. In order to present this observation starkly, the article does not expand on the issue of profitability and its effect on legacy value.

MODERN MARXIST MONETARY THEORY OR MMMT. THE ROLE OF LEGACY VALUE.

It needs to be pointed out for this article and the next, or at least made explicit, that the term legacy value comprises c +v + s and not only v + s or what Marx called gross income. In today’s SNA language, it refers to gross national income, which includes depreciation but which is not adjusted for inventory. Therefore the money supply comprising monetized revenue includes not only the depositing of wages, rents, interest, and taxes, in the banking system, but the accumulated depreciation funds as well.

IDENTITY POLITICS IS BLIND TO PROPERTY RELATIONS.

THE MATERIAL BASIS FOR UNDER-CONSUMPTIONISM AND HOW TO CRITIQUE IT

This article provides two views of productive and unproductive consumption (investment) as the driver of the economy. The one view is taken from Gross Output and the other from Gross Value Added (GDP). Without spoiling the plot, the contrast in views shows how important adopting the correct method is.

The article is the first download.

NOT SO MUCH OVEN READY AS READY MADE CURTAINS FOR MR JOHNSON.

The ONS released the rate of return for UK industry this week. This together with the ructions around the Prime Minister suggested this article.

Postscript. I should have added in this vein Bolsonaro is being investigated by a parliamentary committee in Brazil which is likely to indict him.

HOW ECONOMIES ARE BENT OUT OF SHAPE.

This article looks at the nature of money especially credit money and how fictitious capital has distorted economic behaviour.

ACADEMIC MARXISM WILL NEVER PROVIDE THE ANSWERS NEEDED TO FREE WORKERS.

This article was inspired by a debate on the Academia website around a conciliatory piece by Fred Mosely. This piece and most of the comments show that Academic Marxism plays the same role as the Young Hegelians did in Marx’s day. They treat Marxism as a theoretical science not a practical science geared towards action. As capitalism lurches from crisis to crisis they are content to debate each other and render Marx more profound, and through so doing, all they reveal is their irrelevance.

(Please note that Graph 3 is not drawn to scale due to its complexity. All three graphs are hand drawn as Excel does not provide a facility to manipulate both height as well as width in their bar graphs. Graph 3 is there for explanatory and discussion purposes to demonstrate alternative ways of reconciling economic and physical hours in the future.)

PAMPHLET, 3rd EDITION with added explanatory graphs.

I have decided to replace the 2017 edition of the pamphlet with a revised edition. It includes graphs to make Marx’s categories easier to grasp where needed. I have tried to leave the 2017 pamphlet as unaltered as I could, confining myself to adding a few comments here and there to bring it up to date. This pamphlet contains the same theoretical breakthroughs found in the original 1999 pamphlet, particularly on the USSR and profit. I continue to believe its explanations hold a high fidelity to that monumental work by Karl Marx, Das Kapital, which I have always viewed as not only a critique of capitalism, but as the indispensable primer for the economic organization of a future communist society. Finally, it is my sincerest hope that this pamphlet makes it easier to grasp the essential categories developed by Marx to describe the structure of capitalist production.

THE STATE STRIKES BACK.

A REPORT WHICH DEFENDS STATUES RATHER THAN BLACK LIVES.

This article is a riposte to the Report brought out last week by the Commission on Race and Ethnic Disparities. The oddity of this report with its recommendations to bolster the individual, is that it is set against a background of pandemic, which out of necessity, has fostered collective responses and collective recommendations.