The transitional society and profit

(from Communist Voice #22,. October 9, 1999)

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To: CVO circles
From: Pete Brown

RE: Mark's comments on Sal's comments of 1/15/99
Date: 1/19/99 (1)

. I thought Mark's comments on affirmative action and the struggle against discrimination were valuable tactical views on how to fight against capitalism, and against discrimination, and in fact (Mark's point) how to combine the two.

. On the transition from capitalism to communism: apparently Sal uses the term "socialism" the way other comrades use the term "transitional society." That's OK, as long as we all know what we're talking about. That in itself is not a point worth arguing about.

. But Sal's economic analysis of transitional society has another point about two meanings of "profit". One is just basic surplus value produced at the point of production. The other is money generated by bourgeois capitalism. Now apparently Sal's idea of transitional society is that in it profit-sense 2 will be restricted, while profit-sense 1 will still exist "so long as the economy was not totally stagnant."

. This point of Sal's may be related to a point I raised in our study group when we were discussing value and market price, price of production, etc. Marx's analysis seems to work pretty well when considering use-value goods that are manufactured -- shoes, shirts, cars, etc. But what about spheres of the economy which do not manufacture use-values; how are prices and profits determined there? It occurred to me there are very large segments of our economy that come under that heading, such as real estate, banking, stocks and bonds, etc. Are prices and profits in these spheres just arbitrarily set?

. An answer provided by other comrades was that, though these spheres may operate somewhat independently from the manufacture of use-values, ultimately the total amount of value (and hence of profits) in these spheres is restricted by the total amount of surplus value being extracted from workers at the point of production. I'd guess that when you go beyond that, that's when capitalism gets into generating inflation (price increases with nothing to back them up) and speculative bubbles. The bourgeois business writers themselves are constantly debating if stock market prices are "overvalued"; apparently they too feel that stock prices must be based on something real, that they cannot be arbitrarily set.

. Since these two kinds of profit, then, are in fact intimately connected, it's hard to see how you could restrict one while letting the other go on about its business. If capitalists were free to exploit labor, and produce profits thereby, it wouldn't take long for some of them to hit on the idea of loaning out money at interest to other capitalists who want to exploit labor. So it seems to me you'd have to restrict both forms of capitalist enterprise in order to move in the direction of communism. And ultimately, it seems to me, you'd have a society in which there was no profit produced at all -- no surplus value extracted. How can this be in a society that is "not totally stagnant"? It seems to me: in this society what's produced is only what's needed, but it's also recognized that the needs of the working class (which is now, everyone) are constantly expanding. And these expanding needs are actually planned, foreseen, in planning production.

. Of course there's still the question of how you do this. What kind of mix of political and economic measures and forms do you need to effect this? But it's also clear that any mix of such measures, considered abstractly, will eventually generate inertia and in time drag you back to capitalism. "Soviet power" is an example; a very good slogan at one time, but eventually it didn't mean much. So we get back to the point raised by Mark, and Phil, that the workers have to be brought into administering society more and more, regardless of particular forms. <>

(1) The overall title has been added by CV. Mark's comments being referred to are those of Jan. 17, 1999, which can be found on page 15. -- CV (Return to text)


The October 1999 issue of CV contained the following other contributions to this debate:
* Debating the significance of the state sector in the transition to socialism -- Iintroduction by Joseph Green
* On affirmative action and on the economics of socialism (an extract from Sal's report of Jan. 15, 1999 on the discussion of the Seattle Marxist-Leninist Study Group of Dec. 6).
* Two issues: affirmative action and the transition between capitalism and communism (A reply to Sal's report by Mark, Detroit, Jan. 17, 1999)
* State capitalism in the preliminary phase of socialism, by Sal, Seattle, March 1999
* State ownership is not sufficient to define the transitional economy (Reply to Sal) by Joseph Green, July 11, 1999


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