Thursday 14 May 2015

Does Mitchell Accept the Labour Theory of Value?

"Pride goeth before destruction, and an haughty spirit before a fall." (Proverbs 16:18. KJV)

MMTers will need little background on Prof. Bill Mitchell.

For those outside Post-Keynesian economics: Mitchell is professor of economics at the University of Newcastle, director of the Centre of Full Employment and Equity -- CofFEE -- and a notable proponent of Modern Monetary Theory.

In a recent post ("The Existential Crisis of Labour-Type Political Parties", May 12, 2015), he writes (the long quote is fully justified):
"What this story tells us is that traditional notions of class conflict between Labour and Capital within the Capitalism production system are alive and well.
"Workers still want more for less and bosses want more for less. No matter how many people become self-employed as an act of desperation in economies starving for adequate spending, the principle remains the same – there has to be a surplus created and expropriated by the owners of capital.
"Capitalism hasn’t gone away no matter how it has morphed into some international global morass with financial capital now dominating over industrial capital.
"The fact remains that the dynamics of capital still drive the show. Every day, there is something happening that tells us how the struggle is ongoing.
"The desire for individual freedom to do what we want does not undermine the centrality of the state being our vehicle to discipline capital and prepare for some sort of post-capitalism evolution.
"Please read my blogs – We need to read Karl Marx and When the left became lost – Part 1 – for more discussion on this point.
"The idea that the ‘left’ and ‘right’ dichotomy, or working class versus capital etc are obsolete is rejected by the evidence.
"It is an idea that is propagated by those with a vested interest in developing the ‘free market’ myth where we are all, essentially, free traders and own-producers at heart who agree (aided by market forces) to specialise into labour suppliers or capital providers.
"The myth continues that we are all free traders – everything is voluntary and all exchanges are mediated by market prices which deliver equalised use values to each exchanger to be enjoyed upon completion of the same.
"The reality is different. Workers do not sell labour – they rather sell labour power (the capacity to work). That immediately invokes a managerial imperative.
"Why? Answer: because the use-value of the labour power is enjoyed (extracted) within the actual exchange (that is, while the workers are still at work). The use-value – the source of profit – is uncertain and a control function is indicated.
"Bosses have to control the realisation of that use value as production in an environment where the majority of workers would rather not be there. That is a very different dynamic environment to one where we go into a shop and buy a trinket to be enjoyed later.
"There are clearly complex layers over the basic capital-worker distinction and certainly these layers are exploited by the power elites to obscure them further (for example, gender, sexuality, race etc) but when push-comes-to-shove the struggle over the distribution of income arising from production is still highly significant."

Could you imagine the horrified look in the face of the Lord Keyneses of the world (both, the real one, and his amateurish "reincarnation") reading that? "We need to read Karl Marx"? Wasn't him, according to the real Lord Keynes, the author of an "an obsolete economic textbook which I know to be not only scientifically erroneous but without interest or application to the modern world"?

To add insult to injury, Mitchell's Wikipedia entry states:
"Mitchell was born to working class parents in Glen Huntly, Australia, in March 1952. The family moved to Ashwood, a new Housing Commission suburb in Melbourne, soon after."
Life has a way of humiliating the vacuously ignorant, to prove him wrong, whether he be dead or alive.

"Does Wray Accept the Labour Theory of Value?" July 17, 2014.

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