Distinguishing social democracy

Distinguishing social democracy:

Under left-liberal (as opposed to soc dem) regimes, organized labor does not participate in mid- to longer-range socio-economic planning. However, left think tanks can contribute mid- to long-range planning analyses.

Conversely, there are a variety of ways in which business leaders contribute to public policy formation, because business (public and private, but not cooperative) is regarded by the lib-left govt as the engine of growth.

This exclusion of cooperatives from the field of perceived contributors to growth indicates that lib-left govts may also be distinguished from social democratic govts by an assumption that growth is a product of “efficient” social-hierarchy-inflating organizational forms.

In lib-left regimes, labor views its role, and the liberal government views labor’s role as (often obstructive) ballast to economic growth initiatives that are seen as the natural concern of business. That’s labor’s negative role. It’s not a leadership role.

Labor’s positive role in capitalist democracy thus largely devolves to delivering votes to the left-liberal govt, because although the lib-left does not regard labor as a central social or economic policy resource, as opposed to conservative govts the lib-left govt will not actively try to break organized labor and it may implement those modest proposals of labor that do not impede the business-driven growth planning.

Hence, with a range of ruling (capitalist) political perspectives that always preemptively block information from labor (except what little leaks obliquely through the market), we repeatedly sink into crisis cycles–crisis of profit begets > capital deregulation and overmobilization, working class overregulation, demobilization, and dispossession beget > speculative bubbles/primitive accumulation beget > underconsumption crisis begets > further primitive accumulation, repeat. We fixate on the speculative bubbles moment in the midst of all this autistic failure, hoard wealth, and laud ourselves endlessly for being such top-notch managers and philanthropistes.

This is why for Rawlsianism to work, socialist politics and the communist horizon must be more highly valued, and even defended– by liberals.
As far as I know, this seeming impossibility has only been (temporarily) accomplished in Scandinavia and Minnesota. (While Latin America leftists tried to forge a left-lib coalition from scratch, the US destroyed this effort and enforced conservative rule in Latin America, see Greg Grandin.)

In “Right-wing Rawlsianism: A Critique” (forthcoming in Journal of Political Philosophy) Samuel Arnold argues that if liberals agree that agency is the essence of justice, then liberals have to pick which side they are on–because economic democracy fosters more agency than Trickledown provides.

Arnold’s is a clever detonation of a bridge from liberalism to conservatism, using some of the bridge-builders’ own ideal theory tools. (Particularly with respect to Rawls’ difference principle: A liberal justice-maximizing directive to choose the political-economic system that maximizes the least-advantaged group’s expectations for an index of primary goods that include income and wealth, but also status (qua capacity for agency in the workplace and self-respect in society).)

Upon deriving the optimal realization of liberal justice (agency) in workplace democracy, Arnold concludes (p. 32),

Milquetoast liberal egalitarianism is unstable: liberal egalitarianism must move far to the left in order to avoid being jerked far to the right.”

We need to keep heaping on the demonstrations that economic democracy fosters more agency than GDP/GNP tumescence.

For one example, insofar as political-economic systems can be said to have intentions, how plausible is it that capitalism does not intend to support social pathologies (Arnold, p.29)? Studies of primitive accumulation, the WEB DuBois tradition, socialist feminists, Harvey et al have a lot to say about how capitalism “intends to” (is built and maintained to) and does depend upon and support social pathologies. This approach apprehends the connection between economic (eg. workplace) tyranny and racism, sexism, colonialism, etc., for a powerpunch assertion that inequality is both fundamental to capitalism (even if it is shifted around across some social groups, over time and space) and fatally (from the perspective of justice) undermines agency (power to).

…& on the matter of historical-materialism’s putative incapacity to deal with difference (from a postmodern POV), from Arnold (p. 29):

Patriarchy, discrimination against the weak or the different, pressure to conform, and countless other social practices that prevent people from realizing their full agential potential: how long can these pathologies withstand the countervailing winds of a social democracy, with its democratic workplaces, its flattened division of labor, its robustly egalitarian public institutions?”

Primitive Accumulation, Negative Externalities and Growth

Over the years, Stefano Bartolini has modeled economic growth, showing that whereas most models of economic growth feature accumulation and technical progress as engines of growth, a third engine is needed to ensure self-perpetuating economic growth. History, the theory of Polanyi & Hirsch, and Bartolini’s models suggest that third engine is 2 negative externalities that combine to drive growth: 1) positional externalities, and 2) externalities that reduce social and natural capital.

Pagano 1999 defined a positional good: consumption by an individual of a positive amount of a positional good involves the consumption of an equal negative amount by someone else. Power and status are fundamental positional goods; others include education and housing.  The positional goods/services/externalities theoretical tradition extends from Veblen 1899/1934 and Hirsh 1976. In addition to Bartolini, Robert H. Frank (“Falling Behind”) has continued to explore this tradition as well as Bowles and Park 2002, Schor 1998, and Corneo and Jeanne 2001.

“Industrial revolutions are the paradigmatic example of this (Growth as Substitution) mechanism: they are the most striking processes of labor supply and accumulation increase because they are the most striking processes of social and environmental devastation recorded by economic history” (Stefano Bartolini, “Beyond Accumulation and Technical Progress: Negative Externalities as an Engine of Economic Growth.” 2003: 9).

Williamson 1995, Krugman 1995, and Bartolini et al have shown that the transition to an industrial economy has always been associated with explosive growth in the labor force participation rate.

Such growth-propelling negative externalities are discussed within the Marxist tradition as primitive accumulation. To further explore: The relationship between primitive accumulation and other capitalist strategies of promoting profit-restoring growth to the point of increasing contradiction / social and environmental irrationality.

Bartolini’s growth-model can better explain the failure of conservative economics’ predicted relationship between growth and happiness (Bartolini 2003). Inter alia, political scientist Lane 2000 shows that American growth is not associated with increased happiness.

Dean Baker’s Critique of Capital Rents

I think “The Rent is Too Damn High” is one of Dean Baker’s best arguments.

But still, Desai’s critical examination of the limitations of the conservative Anglo interpretive and political tendency applies. She recalls the limited sociological imagination that emerged in Britain in response to the Great Depression:

“(During the Great Depression) the ‘responsible and judicious’ British intellect saw the new political task and sought to harness all its native (liberal and individualist) resources to its fulfilment…Thus in Britain, as Elizabeth Durbin has shown, the newly founded microeconomics was used to justify state intervention so as to increase social welfare and the Fabians, who constituted a distinct segment of the new intellectual stratum and who had already examined and rejected Marxism, used it in their theory of ‘rents’ and ‘unearned incomes’ to justify socialist goals” (Desai 1994: 47).

What it Means to Close Economic Models

In this Pilkington interview, Varoufakis elaborates his comparison of the classical political-economic perspective on social value with the marginalists’ view of asocial utility. He explains why neoclassical (and Austrian?) economists have to close their models to create a methodological individualist analysis, and why that construction cannot represent economic activity, or predict economic system decline.

The Politics of Western Bank Failures

“Public money and public institutions are bailing out a private banking industry that is not solving its own problems… Fundamentally this is a struggle to take a crisis caused by the business community and the governments they support and make the mass of people pay for it. That’s what austerity means. And the real test here is whether the mass of people will absorb it and accept it” –Richard D. Wolff, “The Mating of Our Dysfunctional Political-economic Systems.”

This is a great interview on the repeated political failures in the wake of the failure of economic leaders.

Iceland’s president Olafur R Grímsson: “The difference is that in Iceland we allowed the banks to fail. These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.” Quoted in “Iceland Exits Recession” (Dec 2011).

"Markets" are Confident When They’re Flaunting Moral Hazard

 “In Italy, the key programmatic points were listed last summer in a letter (meant to remain secret!) from the European Central Bank to the Berlusconi government. To restore market ‘confidence’, it was necessary to proceed rapidly down the road of ‘structural reforms’, an expression now used as a synonym for social devastation: in other words, wage cuts, attacks on workers’ rights over hiring and firing, increases in the pension age, and large-scale privatization.” –Marcello Musto, discussing the replacement of elected governments with technocracies, on the occasion of the bank failures. 

“Restore market confidence”–this causal explanation and imperative begs for a new, blistering Marxist critique.

How does an institution “gain confidence”? Well, there actually is a small group of “confidence”-craving humans behind the institution. We’ll call them the Confidence Men. Recall “effective demand,” which means that the market most certainly does not register billions of preferences. The market registers the preferences of whomever holds the majority shares in it, that is, whomever has the most control over the wealth, however this Confidence-man minority commandeered that wealth, which is certainly not by abstaining from any of the following: exploitation, dispossessing others, despoiling nature, maintaining totalitarian work conditions, corrupting politics, and generally abusing power. It is this small group of effectively-sociopathic Confidence Men that demand that their staff in governments reassures them that it’s all for them, by for example, transferring the massive costs of their confidence schemes and failures to the rest of society.

David Harvey on crisis-explanation points from The Enigma of Capital.

What’s the alternative to endlessly pouring money down the black hole of “restoring market confidence”? The state could transfer the task of supplying credit to responsible, accountable institutions, such as cooperative credit unions or national banks.

We are considering undertaking a study of the responses to the initial 2007-2008 financial crisis voiced by prominent members of the North American left, looking not to out poor responders, but to name reliable commentators who had the political literacy to know that in a crisis you forward alternative policies, rather than join the conservative drumbeat for TINA policies (like bailouts). There’s been much recent  handwringing (by leftists trained in econ) about economic illiteracy on the left. Arguably, political-economic illiteracy is the problem we need to be wrestling with.

Richard Peet takes a small stab at it in his article “Contradictions of Finance Capital” (Monthly Review 12/ 2011):

“Finance capitalist agents exercise power by controlling access to the markets through which capital accumulations become investments, directing flows of capital in various forms—as equity purchases, bond sales, direct investment, etc.—to places and users that are approved by the financial analytic structure of the Wall Street and City of London banks and investment firms. 

The gaze of the “investment analyst” representing the “confidence of the market” is the active form taken by the financial capitalist interest, although “investor confidence” is presented as somehow neutral and technical, in the best long-term interest of everyone—“professional economics” is to blame for this misrepresentation

The accumulation of surplus in the relatively few hands of the super-wealthy intensifies the financial component of capitalist growth and increases the power of the financial capitalist class fraction over not just the industrial fraction, but everyone else as well. Control over investment capital and financial technical expertise gives finance capital and its banking representatives tremendous power—over policy making, over economies, over employment and income, over advertising and image-production…over everything. Production, consumption, economy, culture, and the use of environments are subject to a more removed, more abstract calculus of power, in which the ability to contribute to short-term financial profit becomes the main concern” (Peet).

Radicalized Keynesian Paul Krugman has been a great chronicler of the various grotesque, pathetic exploits of the undead Confidence Fairy.

Most recently, from Krugman’s “The Austerity Debacle” (1/29/2012):

“How could the economy thrive when unemployment was already high, and government policies were directly reducing employment even further? Confidence! ‘I firmly believe,’ declared Jean-Claude Trichet — at the time the president of the European Central Bank, and a strong advocate of the doctrine of expansionary austerity — ‘that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.’

 Such invocations of the confidence fairy were never plausible; researchers at the International Monetary Fund and elsewhere quickly debunked the supposed evidence that spending cuts create jobs. Yet influential people on both sides of the Atlantic heaped praise on the prophets of austerity, Mr. Cameron in particular, because the doctrine of expansionary austerity dovetailed with their ideological agendas” (Krugman, explaining how it came to be that the British conservative government’s obliging extension of capitalist class warfare resulted in that country’s economic decline).

 Don’t be fooled by the cuteness. She’s undead, and she’ll destroy your economy.

The Revolution Will Not Be Pomo-icized

Why Critics of Economics 
Can Ill-afford the “Postmodern Turn”
Yanis Varoufakis (University of Athens and University of Sydney)
Reposted from Post-autistic Economics Review 2002 Issue 13.

 The dissident’s nightmare 

 It is a sad irony when the activities of dissidents help shore up the establishment they set out to subvert. The point of this piece is to warn the ‘economic’ dissident: Beware the Postmodern Turn! The argument will turn on the thought that postmodern criticisms of economics serve the twin purpose of (a) releasing pent-up frustration with the profession while, at once, (b) reinforcing its ideological backbone.

 Every era has a tendency surreptitiously to guide young dissidents toward a specific ‘umbrella movement’; one that ends up shaping their milieu. Existentialism, structuralism, neo-Marxism, etc. have given their place, in our era of devalued political goods, to Postmodernity and Deconstruction. Without wishing to discuss the ‘postmodern condition’ generally, I shall concentrate entirely on its likely effects on the struggle to ‘civilise’ economics. In this regard, the problem with postmodern thinking is that it stands no chance of success.

 Postmodernity’s criticism of grandiose Theory may be terribly satisfying to those who adopt its grandiose pronouncements. However, the satisfaction at having lambasted all Theory is momentary and the ensuing subversion short-lived. To paraphrase Marx, the subverters will be, eventually, subverted and, tragically, the neoclassical establishment will come out stronger and better equipped to obfuscate social reality than ever before.(2) If I am right, the task of the PAE movement must be to clear the way for radical criticism that avoids the postmodern trap as resolutely as it opposes economic autism. 

Dissidents or the economists’ handmaidens? 

 Modernity marginalised Religion, but retained religious transcendence by worshipping Theory. Economics emerged as the highest form of this secular creed and enchanted all of its practitioners; free-marketeer and protectionist, liberal and Marxist, Keynesian and monetarist. It now seems that some economists are breaking ranks; joining the ‘other’, the postmodern, side which defines itself in anti-theoretical tones that exude an atheist’s anti-religious fervour. The danger is that the legitimate anger of students (which has given rise to the PAE movement) will draw them to an apostasy without a future. For despite its considerable oeuvre, postmodern criticisms of economics are doomed to shrivel and be absorbed by mainstream economics; the predator turning into unsuspecting prey. I risk this prediction for two reasons.

 First, postmodernists allow economics to parade as equally scientific as the natural sciences (albeit on the grounds that no discipline is truly scientific). They are right of course to think that all theory resembles religion, since it also seeks to give meaning to the practices and expectations of whole communities. However some theories are capable of transcending religion and approaching objectivity better than others. Nature’s habit of working independently of our beliefs about it means that the natural scientist can devise experiments which have the power disinterestedly to discard falsity and thus forge knowledge and progress. Society, on the other hand, is corrupted to the very marrow of its bones by our collective beliefs about it, and can therefore provide no objective test of social theory (the latter being part of the very web of beliefs that society is made of). Thus social theory, unlike thermodynamics, is condemned to remain untestable, and stuck in the realm of opinion. Economics valiantly attempts to extricate itself from this fate with a touching commitment to mathematics but, sadly, it only ends up as a religion with equations.

 Postmodernity errs in thinking of this as the inevitable failure of all Modernist enterprises. It lambastes economists’ churlish reliance on an Outer Wall of Algebra and an Inner Wall of Statistics but overlooks their success at never even coming close to the nature and the dynamics of contemporary capitalism, thus shielding the latter from rational criticism. But such is the fate of all idealisms which give language an existence independent of the material conditions of social life and reproduction. If only postmodernist critics understood theology and mathematics a little better! Perhaps they would have recognised in economics the greatest proof that Modernity is saturated with its negation.

 Which brings me to the second part of the argument: Postmodernity not only lets neoclassical economics off the hook but, more worryingly, reinforces it copiously before dissolving into it. Consider what the postmodern rejection of metanarratives means at the individual level: It means the loss of any capacity to scrutinise one’s private urges rationally on the basis of some collectively constructed notion (or metanarrative) of the Good. Stripped of those capacities, the individual fragments into a community of selves, a bundle of ordinal preferences, and ends up with no one self whose preferences those are.

 In this Empire of Ordinal Preference the only possible data that social theory can go to work with are the differences in individual whims and freely-chosen identities. These data are then, courtesy of their ordinal properties, impossible to compare across persons (for this would require a metanarrative) or procure a view of capitalism as a system. Thus in a fully-fledged postmodern schema, social relations are confined to interplay, voluntarism, tolerance and exchange; society is the playground where the latter unfold; and discussions of the General Will, exploitation and developmental freedom make no sense. Does this all sound familiar?

 If it does, the reason is that neoclassical economics went down that alley decades ago. The asymptotic limit of postmodern fragmentation is the neoclassical general equilibrium economic model. Both Neoclassicism and Postmodernity espouse a radical egalitarianism which is founded on the rejection of any standard or value by which either individual action or the institutions of late capitalism (e.g. the labour and capital markets) can be subjected to rational criticism. In short, whereas the problem with modernist mechanism was that its view of our world excluded value from the outset, the problem with Postmodernity is that it ends up having no view of the world and becomes easy-pickings for a similarly viewless/valueless tradition, one which bears the additional weaponry of intricate mathematics and endless econometric ‘evidence’.

 For Oscar Wilde the supreme vice was shallowness. For Postmodernity it is the New Jerusalem. Its playfulness allowed it to thrive in the friendlier waters of literary and cultural studies at a time when ‘margins’ were becoming central and classical stuffiness was going out of fashion. But now postmodernists have entered shark-infested territory. Neoclassical economics, another purveyor of shallowness, threatens to bend them to its will,(3) gain strength from them and subsequently reinforce hierarchies more oppressive and totalising than those the postmodernists set out initially to dismantle. 

When the IMF dictates its policies to some hapless Third World country, there is a strong whiff of the radical egalitarianism shared equally between general equilibrium and Postmodernity. The same whiff accompanies, and legitimises, the inexorable devaluation of political goods, the vulgar commodification of human bodies and values, the impossibility of conceptualising freedom-from-the-market, the depiction of Central Banks as ‘independent’ only when under the thumb of financial capital, the confusion of liberty with the freedom to exploit and to demean and, above all else, the portrayal of coercion as tâtonnement. Thus Postmodernity unwittingly blows fresh wind in the sails of neoclassicism, the undisputed champion of the deconstructed human agent. While warning us correctly that new authoritarianisms will be born when we get caught up in our own rhetoric, it offers no resistance to the current authoritarianism of neoclassical economics and, more so, the socio-economic system that it serves.

 Conclusion: The dissidents’ dilemma 

 When a fresh wave of criticism is unleashed, it picks up along the way pre-existing discontents, hitherto bopping along hopelessly near the surface, and propels them toward the shores of exposure and respectability. Lonely dissidents suddenly find a new ‘movement’ that will have them. New hope of escaping obscurity is thus born.

 In recent years many dissident voices had to adapt themselves to postmodern-speak in an attempt to be ‘included’ on the postmodern bandwagon. The PAE movement must release such voices from this obligation. Social criticism of economics must reclaim an awareness that to reject the scientific status of economics is not to reject science in general or to espouse postmodernism.

 Indeed irony and ambiguity were utilised, long before Postmodernity, by thinkers eager to come to what a more confident past once knew as the truth. To re-establish irony, ambiguity and indeterminateness in the discourse of economists would be a triumph of the spirit. But it would not be a postmodern turn. For the latter has no monopoly on an appreciation of the radical indeterminacy of social processes (as Hegel would be all to eager to remind us) or the importance of not taking our selves, and our theories, too seriously. On the contrary, Postmodernity undermines itself by offering Modernity’s most awful purveyor another means of extending its dominance.

 So, we have arrived at the dissident’s dilemma. The postmodern kernel within neoclassical economics forces a stark choice: Submit to homo economicus and model our messy world’s dynamic as if a series of suburban disputes between postmodern neighbours. Or, seek an historically-grounded understanding of how systematic patterns of power and economics are the joint products of the continual feedback between technological developments and evolving social formations. The difference between the two options is not theoretical; it is ideological. The postmodern turn will be chosen by pseudo-dissidents whose prime interests lie in acquiring a chic image; one that the self-effacing postmodern criticism is good at imparting. The less-fashionable option of working towards historically-grounded knowledge will appeal to the truly ‘unreasonable’ dissidents; those driven by an unbending commitment to a rational transformation of society.

 Notes
1. Department of Economics, University of Athens, 8 Pesmazoglou Street, Athens 10596 and Department of Economics, University of Sydney, Sydney, Australia. Email: yanisv@econ.uoa.gr
2. Recently, Routledge published a volume on the nexus of Postmodernity with economics edited by Jack Amariglio, Stephen Cullenberg, and David Ruccio (2001). The following thoughts have been extracted from my review of that book (forthcoming in the Journal of Economic Methodology)
3. Courtesy of a more sophisticated take on the same type of philosophical shallowness.
 References
Cullenberg, S., J. Amariglio and D. Ruccio (2001). Postmodernity, Economics and Knoweldge, London and New York: Routledge
Varoufakis, Y. (2002). ‘Deconstructing Homo Economicus?’, Journal of Economic Methodology, forthcoming.

The reason why political economists see idealist postmodernism as superficial and epiphenomenal is because there’s no ontological depth to idealism, see the critique in critical realism & Bhaskar.  In a 2-D world of epistemological surface viewed from different points on that surface, liberation looks methodological individualist, methodological instrumentalist, and in methodologically-imposed equilibrium. But that is exactly what bondage looks like in a critical realist, historical materialist world of ontological depth.

A further note to self–explore this hypothesis:
The Kantian rejection of ontology and elevation of epistemology does not solve the problem of human reflexivity, when studying social relations.

Coming attraction:

Though engaging or convincing postmodernists is not germane to my life’s intellectual (or otherwise) projects (I’m simply not in that social location–though I am in that geographic location.), I’ll post notes on Zizek, Badiou & Agamben’s niche efforts to explain leftist traditions to postmodernists. Unlike other leftists, I don’t mind the Z-B-A niche. There’s a real problem in the Anglosphere with superficially-liberatory postmodern misunderstandings and distortions of leftist thought that bolster the hegemony of ideological conservative economics and the adoption and diffusion of neoliberal governance. …Just as there’s the persistent problem of the neocon swerve (from a leftist base) within the Anglo-American Zionist intellectual community. Where there’s network, status- and/or resource-access incentive, humans are great at rationalizing, even if it is ugly; and how they do it, how they are motivated, and the demonstrable telos of those rationalizations are of some interest.

Throwing off the Yoke: CED, currency, credit access

‎”A map of the world that does not include Utopia is not worth even glancing at.” 

Oscar Wilde (1854–1900)

Establishing a local currency, together with taking over credit union boards (to gain access to credit), can provide the complement to Community Economic Development (social enterprises including cooperatives, and social enterprise networks) to fortify the working class against capital strike, blackmail and dysfunction.

Common Good Finance in Ashfield, Massachusetts.

“We need to re-democratize the monetary system, to have a set of alternatives for issuing credit outside the banking oligarchy. Alternative currencies can play a vital role in that”  
Josh Ryan-Collins, the New Economics Foundation.

This Guardian article, “Currency stays close to home,” reviews the successful rise of the local chiemgauer currency in Rosenheim-Traunstein, Germany. The chiemgauer was designed and operates to stimulate spending in the local economy, as well as to provide a work-around (or strategic counter to) financial capital illiquidity.

Yes! Magazine covers local currency innovations in “Dollars with Good Sense: DIY Cash.”

Other promising social movement initiatives that OWS has opened up space for:

Revoke corporate personhood.

Worker occupation of enterprises.

“Long Shadows” by Josh Ritter (video by James Holland)



Note on UK cooperatives:

 There are some quite big co-ops in the UK. They’re not perfect, and still run on similar lines to normal corporations. On the other hand they are far better than corporations, treat their workers better (who after all are technically the owners of some of them – others are owned in theory by shoppers) and tend to take social responsibility quite seriously. Executive pay, while still too high, is far lower than comparable private companies.

 Along similar lines, Building Societies in the UK were owned by customers (so essentially non-profit) and for the most part were run fairly well. They offered a better service, better rates and were fairly conservatively run. They were famirly limited in the activities they were allowed to engage in. They were strictly a consumer financing deal (mostly houses). Most of them were force-privatised by the conservatives, but the remaining ones have mostly weathered the crisis fairly well. In comparison to their private breathren, none of whom now survive. The bank which endured the bank run in the UK, Northern Rock, was an ex building society.

 W. L. Gore and Associates is perhaps an example of an interim culture existing in the US. Far far from perfect, but hints of what might be nonetheless.

Economic Value: A Sociological View

I think one of our problems right now is that we don’t know how to think about value. There is an excess of  hurried, automatic, breathless dismissal of Marx’s classic political-economy theory of value, including by Marxists and other leftists; but I think we ought to stop for a moment, and reconsider the common-sense dismissal we’ve arrived at, at this point in history. It’s blinding us to things we need to think about.

I think we’re missing Marx’s point about value, which perhaps requires a sociological perspective (and, Varoufakis, is not incompatible with theories of value that recognize entrepreneurial activity as the locus of value in an economy). Paul Burkett (Marx and Nature 1999) is one of the clearest contemporary writers on the Marxist understanding of value.

Simply, economic value is a social product, created through creative, reflexive, semi-deterministic/semi-voluntaristic relational, social (human) work upon nature.  Value isn’t something that is made within the capitalist market, when profits are realized in the sphere of circulation. That production-circulation separation is maintained through money, so that value can be controlled by capitalists–but price and value cannot be identical. Value is a product of creative, active human relations. Price is a product of capitalist control of value.

That economic value is produced by creative, active human relations is why capitalists are always trying to privatize, to mine the public and the commons–there’s value in them thar human creations.

People, even leftists, who are overly trained in marginalism and other modern conservative economics get caught up in the price calculation mode, and so sometimes fail to see that people coming together to build alternative economic institutions is creating value, and creating independence from capitalist coercion. Didn’t capitalists once create institutions that afforded them independence from the feudal value system, when the contradictions of that feudal system created crisis?