Thread by @ArbitraryDesign

"Inflation, or Capital’s Flight Forward" by Kommunistisches Programm libriincogniti.wordpress.com/2020/12/01/kom…

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “What is meant by inflation?” #SelfEducate #SolidarityNotCharity

KommProg: “In order to conceptualize this general phenomenon of today's capitalism with the help of Marxist value theory, one must first of all clarify exactly what is meant by "inflation"." #SelfEducate #SolidarityNotCharity

KommProg: “The well-known bourgeois definition, which describes inflation as a permanent increase in the price expression of commodities, is completely useless." #SelfEducate #SolidarityNotCharity

Ha! I have to agree with that, it is so widely accepted that it brings to mind one of my favorite quotes from Bertrand Russell.

“The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widely spread belief is more likely to be foolish than sensible.” :)

KommProg: “It overlooks the fact that price hikes (e.g. price hikes of means of livelihood through market power) and inflation (deterioration of the value of the money-commodity) are two fundamentally different things that must not be mixed up." #SelfEducate #SolidarityNotCharity

KommProg: “If the price expression of commodities increases, it is not at all possible to determine at first glance which side of the equation has changed." #SelfEducate #SolidarityNotCharity

KommProg: “It is not obvious whether the commodities have become more expensive or the money-commodity has become more valueless." #SelfEducate #SolidarityNotCharity

Look at the mobile phone. Over the last 30+ years the cost of technology has plummeted. However, the new iPhone 12 Pro Max is USD$1549. How does that make any sense? Anybody?

KommProg: “The use of the popular concept of inflation therefore from the outset fails to provide clarity on key distinctions. With it, it is completely ignored that three causes are reflected in the price expression of commodities." #SelfEducate #SolidarityNotCharity

KommProg: “Two tend to raise the price; one to lower it: 1. The increase in the price expression of commodities through price hikes (dearness), which do not affect the value of the money-commodity." #SelfEducate #SolidarityNotCharity

KommProg: “2. The increase in the price expression of commodities through reduction of the value of the money-commodity (inflation). - It will later be shown why only this process can correctly be described as inflation." #SelfEducate #SolidarityNotCharity

KommProg: “3. The lowering of the price expression of commodities through reduction in the value of commodities as a result of the development of the productivity of labour." #SelfEducate #SolidarityNotCharity

KommProg: “This is illustrated by an example: If the inflation statisticians find that commodity X costs 5000 currency units and 10 years later the same commodity X costs 6000 currency units, .............

...........it is at first not possible to determine whether the commodity or the yardstick by which it is measured, namely the money-commodity, has changed." #SelfEducate #SolidarityNotCharity

We know of two major changes in the money-commodity. In 1933, the exchangeability of gold was changed from $20 to $35 an ounce, and in 1971 the direct international convertibility of the United States dollar to gold was cancelled.

Since 1971, governments around the world have printed money at will.

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “It is both possible that the value of the yardstick money-commodity has fallen, and that the price of the commodity has risen." #SelfEducate #SolidarityNotCharity

KommProg: “In the first case, the price of the commodity would have to be expressed in a larger quantity of devalued currency." #SelfEducate #SolidarityNotCharity

KommProg: “The problem becomes even more complicated when the development of productivity is taken into account." #SelfEducate #SolidarityNotCharity

KommProg: “According to Marx, the following relation applies: "The value of commodities is inversely related to the productive force of labour"." #SelfEducate #SolidarityNotCharity

KommProg: “For through the development of productive forces, a commodity with the same use-value can be produced in a shorter period of time and consequently has a lower exchange-value because it requires less labour time." #SelfEducate #SolidarityNotCharity

In other words, the "socially necessary labour time" has been reduced, and hence the value.

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “In our example, if the inflation statisticians find that the price expression of commodity X has not changed, they would have to conclude that there has been no inflation. And indeed, such nonsense can often be read." #SelfEducate #SolidarityNotCharity

KommProg: “On the other hand, with knowledge of the Marxist theory of value, it is quite clear that there may well have been inflation." #SelfEducate #SolidarityNotCharity

KommProg: “Through the development of productivity, the value of commodity X will fall, but at the same time the value of the money-commodity may decrease, with the result that the price expression remains unchanged." #SelfEducate #SolidarityNotCharity

KommProg: “And indeed, it is precisely at the heart of any inflation today that, despite constant increases in productivity, prices continue to rise just as steadily." #SelfEducate #SolidarityNotCharity

KommProg: “However, before this "permanent inflation" can be discussed in more detail, it is necessary to understand the basic elements of Marxist monetary theory.” #SelfEducate #SolidarityNotCharity

KommProg: “Theory of money with Marx” #SelfEducate #AbolishSurplusLabour

KommProg: “Money is a necessity of the capitalist mode of production. Without money, the produced commodities cannot circulate." #SelfEducate #AbolishSurplusLabour

KommProg: “By contrast, a socialist/communist society, i.e. the community of associated producers, which produces products for immediate social needs rather than commodities, does not need money because there is no market where the value embodied in commodities must be realized."

KommProg: “There is simply no commodity production here. Rather, everyone produces and everyone receives what they need, because everyone performs immediately socially necessary labour." #SelfEducate #AbolishSurplusLabour

"because everyone performs immediately socially necessary labour" <= interesting expression. Anybody?

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “In the capitalist mode of production, however, labour is expended "privately"." #SelfEducate #AbolishSurplusLabour

KommProg: “Whether the labour expended thus was also socially necessary only becomes apparent when the commodity proves itself on the market and finds its buyer." #SelfEducate #AbolishSurplusLabour

KommProg: “Only by the sale on the market can the value embodied in the commodity be realized. This happens when it is exchanged for an equivalent value." #SelfEducate #AbolishSurplusLabour

KommProg: “A general equivalent, which is exchangeable for all commodities, is therefore necessary for the functioning of the capitalist mode of production." #SelfEducate #AbolishSurplusLabour

KommProg: “The general equivalent, namely the money-commodity, now has several functions to fulfil: 1. Measure of values, respectively yardstick of prices: Only the presence of a money-commodity makes it possible to make the value of commodities visible through a price."

KommProg: “Value is not something externally observable in commodities. Therefore, each commodity must be provided with a price expression. This requires a measure of value." #SelfEducate #AbolishSurplusLabour

KommProg: “For example, if I know that the commodity X is worth 5000 monetary units (Euro, Dollar, Yuan, Pound etc., the name is unimportant), I am by no means smarter, as the measure of value is not defined, ......

..........for value can only be defined by value, by another carrier of value, by another commodity." #SelfEducate #AbolishSurplusLabour

KommProg: “We need another commodity, one that is exchangeable for all others: gold." #SelfEducate #AbolishSurplusLabour

KommProg: “The expression that the commodity X costs 5000 grams of gold means that both magnitudes of value are the same, since equal amounts of socially necessary labour are required to produce them." #SelfEducate #AbolishSurplusLabour

KommProg: “The general money-commodity gold already plays a double role here: On the one hand it provides the commodity with a price expression and on the other hand it defines the measure of value." #SelfEducate #AbolishSurplusLabour

KommProg: “On this Marx: "As measure of values and as yardstick of prices, money performs two quite different functions. It is measure of values as the social incarnation of human labour, it is yardstick of prices as a fixed metal weight. ....................

.......As measure of value it serves to transform the values of the colourful different commodities into prices, into imagined quanta of gold; as yardstick of prices it measures these quanta of gold.”” #SelfEducate #AbolishSurplusLabour

KommProg: “In order to serve as "measure of values" - as the title of the first section of chapter 3 in the first volume of "Capital" states - theoretically no gold at all needs to have been produced." #SelfEducate #AbolishSurplusLabour

KommProg: “One only needs to know how much it costs to produce one weight unit of gold and already the value of an unlimited mass of commodities can be measured: ..................

................"Since the expression of the values of commodities in gold is ideal, imaginary or ideal gold suffices for this operation"." #SelfEducate #AbolishSurplusLabour

KommProg: “2. Money as means of circulation: For the exchange of commodities on the market to factually take place in capitalist society, money must be available to function as means of circulation." #SelfEducate #AbolishSurplusLabour

KommProg: “Now, for this, ideal money is by no means sufficient. The quantity of required means of money depends on the quantity of commodities and the velocity of circulation of money." #SelfEducate #AbolishSurplusLabour

KommProg: “Marx develops the following overall formula for this: "If we now consider the total sum of money circulating in a given time period, we find that, for any given velocity of circulation of the means of circulation and payment, it is equal to the sum of commodity .....

.....prices to be realized, plus the sum of the payments falling due, minus the payments which balance each other out, and, finally, minus the number of circuits wherein the same piece of money serves alternately as means of circulation and payment."” #SelfEducate

KommProg: “For circulation one needs real money: "To function as money, the gold must of course enter the commodity market at some point. ................

............This point lies at its source of production, where it exchanges itself as an immediate product of labour with another product of labour of the same value."” #SelfEducate #AbolishSurplusLabour

KommProg: “The further functions of money, which Marx examines, but which need not be reproduced here, are, incidentally, the tasks of hoarding respectively of world money." #SelfEducate #AbolishSurplusLabour

KommProg: “It is therefore to be noted that money is a commodity and as such a carrier of value. Money by contrast does not immediately represent labour time." #SelfEducate #AbolishSurplusLabour

KommProg: “Marx himself clearly rejected this notion:
"The question as to why money does not immediately represent labour time itself, so that, for example, a paper note represents x hours of labour, quite simply comes down to the question as to why, on the basis of .........

.....commodity production, the products of labour must constitute themselves as commodities, because the constitution of the commodity includes its doubling into commodity and money-commodity."”#SelfEducate #AbolishSurplusLabour

KommProg: “3. Money as means of payment and thus basis of credit: With the further development of commodity production, the purchase and payment of commodities can be separated in time." #SelfEducate #AbolishSurplusLabour

KommProg: “With this change in exchange relations, money also acquires a different determination, it becomes a means of payment." #SelfEducate #AbolishSurplusLabour

Marx: "However, with the development of the circulation of commodities, relations develop which separate the alienation of the commodity from the realization of its price in time. It suffices to indicate the simplest of these relations here. One type of commodity requires .....

...longer and the other a shorter period of time for its production. The production of different commodities is linked to different seasons. One commodity is born in its marketplace, the other must travel to a distant market. Thus, one possessor of commodities may act as ....

....seller before the other as buyer. In the case of constant recurrence of the same transactions between the same persons, the conditions of sale of commodities are governed by their conditions of production." #SelfEducate #AbolishSurplusLabour

KommProg: “But it is only at the point in time of payment does money factually function as means of payment; before that, it is only ideal means of purchase (as promise of money by the buyer), but as such causes the sale of the commodity." #SelfEducate #AbolishSurplusLabour

KommProg: “As long as the various claims of the producers balance each other out, money need not factually be available as means of payment either, because it only functions ideally as money of account or measure of values." #SelfEducate #AbolishSurplusLabour

KommProg: “On the other hand, the means of payment is the starting point of credit, because the now arising relation between creditor and debtor is the basis of credit money." #SelfEducate #AbolishSurplusLabour

KommProg: “Money as means of payment and purchase is replaced by the debt certificate (e.g. the bill of exchange), which in turn serves as means of payment." #SelfEducate #AbolishSurplusLabour

KommProg: “The possessors of commodities are transformed from buyers and sellers to debtors and creditors, they buy without selling, the equivalent is thus not the social guarantor of value, but the private guarantee of the buyer, e.g. the bill of exchange." #SelfEducate

KommProg: “This bill of exchange itself becomes money, it can circulate and act as money until the day it is redeemed." #SelfEducate #AbolishSurplusLabour

KommProg: “It, which is basically only an order for future production, can even circulate absolutely in place of money, as dead stock, as far as claims and debts offset each other and thus balance each other out." #SelfEducate #AbolishSurplusLabour

"as dead stock" <= Ha! :)

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

What happens if that so-called "future production" is never realized? Anybody?

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

Is that in a nutshell why government/State debt continues to rise? Anybody? After all, the State is the "national capitalist".

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

The State continues to borrow against the future production which it can never realize, because the need for socially necessary labour, value itself, is disappearing before our very eyes.

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “Credit is granted to the capitalist in two forms. With commercial credit, the capitalists grant each other credit by means of bills of exchange." #SelfEducate #AbolishSurplusLabour

KommProg: “The bill of exchange itself usually represents commodity capital, thus value." #SelfEducate #AbolishSurplusLabour

KommProg: “It mediates the exchange of commodities and therefore remains within the limits posited by production itself, by the price sum of commodities, namely those already existing, those produced in the past." #SelfEducate #AbolishSurplusLabour

KommProg: “Furthermore, the volume of this commercial credit and the displacement of money by it depends on the phase of the business cycle and the relation between production and consumption, etc.; .......

..............a limit, therefore, which is posited by the development of the capital relation itself." #SelfEducate #AbolishSurplusLabour

KommProg: “The money or banker’s credit proper helps to break these limits. Now the banker becomes the mediator between lender and borrower." #SelfEducate #AbolishSurplusLabour

Once capitalists mediated between themselves. Now the banker. Interesting. Anybody?

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “The periodic releases of money capital in the reproduction process of capital allow him to appear as a collector and lender of capital himself." #SelfEducate #AbolishSurplusLabour

KommProg: “Money credit makes capital definitively independent of the mass of circulating money, that is, money in its original determination and limitation by its immanent commodity character, by creating new money and thus at the same time ...............

...........advancing the transition to independence from the commodity inherent in money as money - and here already from the money-commodity (gold) itself too." #SelfEducate #AbolishSurplusLabour

Ha! I now understand the Nixon shock and the reasons for it. en.wikipedia.org/wiki/Nixon_sho…

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

Credit and money in the commodity-form were no longer compatible with the capitalist mode of production.

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “The bank credit proper is indeed based on the reserve funds that necessarily arise in the reproduction process of capital, but by freeing itself from productive capital, which is its starting point, and by becoming independent in banker’s credit - ........

............supplemented by the savings of all other classes - it also overcomes the economic limits inherent in its origin as hoard or reserve fund." #SelfEducate #AbolishSurplusLabour

KommProg: “From this brief characteristic of credit, it is therefore important to note that we are dealing here in terms of genesis with two basic forms of credit: (a) commercial credit, arisen from the temporal separation between sale and purchase, ............

.....the two sides of the exchange process of the commodity, and thus from the function of money as means of payment, whose representative is the bill of exchange; ...............

..............(b) bank credit, arisen from the periodic fallow and release of money capital in the process of circulation of capital – i.e. arisen from the hoard - of which the banknote is the representative." #SelfEducate #AbolishSurplusLabour

"the hoard" at one point was a commodity, i.e. gold, now it is the cost of printing money.

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “However, with the possibility of discounting the bills of exchange at the banks - the banks buy the bills of exchange on deduction of interest - the boundaries between commercial and banker’s credit become blurred." #SelfEducate #AbolishSurplusLabour

Hmmm, well that would explain "Fannie Mae" and "Freddie Mac" debacle. Anybody?

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

KommProg: “What is now important and characteristic of banker’s credit is that the banks by no means lend "excess" or "free" funds. Instead, they lend out promises of payment which are credited to the bank customer as sight deposits." #SelfEducate #AbolishSurplusLabour

They lend against the illusion that there will always be a growing amount of socially necessary labour time. Combine that with the fact that the State continues to print money again that same illusion. Anybody?

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour

For reasons that I cannot explain, this came to mind =>

"And stop apologizing for the things you've never done
'Cause time is short and life is cruel but it's up to us to change
This town called malice"
-Paul Weller

The illusion that there will always be a growing amount of socially necessary labour time, the creation of value, is just an illusion. Nothing more. Anybody?

#SelfEducate #SolidarityNotCharity #AbolishSurplusLabour #AnarchoCoalitionism

Attempting to create equality within the capitalist mode of production, the need for socially necessary labour time is pointless, because the need for that socially necessary labour time is disappearing before our very eyes.

#SelfEducate #SolidarityNotCharity

"So much controlled by so few
Stumbling from one disaster to another
I've heard it all so many times before
It's all a dream to me now"
-Blue Rodeo :)

KommProg: “They [banks] now lend far more than they manage through deposits. They thus "create" scriptural money." #SelfEducate #AbolishSurplusLabour

KommProg: “Simplified, this process of money creation can be described as follows: If a bank receives a deposit of, for example, $1,000, it does not need to hold the entire quantity of money as a reserve for crediting, as this would correspond to 100% coverage." #SelfEducate

KommProg: “For normal banking activities, for example, a coverage of 10%, i.e. $100, is sufficient. The remaining 900 dollars, which the bank received through the deposit, can be granted as credit." #SelfEducate #AbolishSurplusLabour

KommProg: “If the borrower uses the credit for a transfer to another bank, this bank can lend the 900 dollars received, taking into account a reserve of 10% (90 dollars), again as a credit of 810 dollars etc." #SelfEducate #AbolishSurplusLabour

KommProg: “The possibility for banks to create scriptural money is based on the fact that deposits and withdrawals roughly balance each other out and that a cash reserve kept as small as possible is sufficient for the banks to function." #SelfEducate #AbolishSurplusLabour

KommProg: “Another possibility for creating credit consists in banks setting up credit balances of the same amount among themselves." #SelfEducate #AbolishSurplusLabour

KommProg: “Through various technical processes, the banks thus create money - and indeed real money, provided that it can be used for every purchase and payment transaction in the country." #SelfEducate #AbolishSurplusLabour

KommProg: “They create paper money because its circulation ultimately depends on the good management and solvency of the banks and not on the proper value of the general equivalent." #SelfEducate #AbolishSurplusLabour

KommProg: “It represents state paper money, because in all developed countries all major deposit banks are linked to the central bank by a dedicated system that ensures that scriptural money is backed by banknotes issued by the central bank." #SelfEducate #AbolishSurplusLabour

KommProg: “In the course of the development of cashless payments, not even these paper signs are necessary." #SelfEducate #AbolishSurplusLabour

KommProg: “Everything here is essentially a matter of movements of various accounts, on which the corresponding sums are only recorded." #SelfEducate #AbolishSurplusLabour