Monopoly protections are inevitable in the evolution of capitalism, as Marx proved; therefore, a utopian notion of pure capitalism is of no concern in this discussion since we might as well debate how many angels can sit on the head of a pin. If you would like to debate the Marxian thesis of the inevitable tendency of capital to centralize, that would at least be an issue of theoretical interest; however, what this discussion has revealed is a deep intellectual dishonesty on your part. When you undertook to debate me on Marxism, my assumption was that you were doing so in good faith; what has become abundantly clear is that you know absolutely nothing about the labor theory of value yet you assume it is false beforehand. Intellectual honesty demands agnosticism about subjects with which one is unacquainted; therefore, what would have been the honest approach would be to say that you were interested in examining the arguments on all sides before coming to the conclusion that one side is mistaken and another is correct; this you certainly have not done. From the outset, you have proceeded under the assumption that Marxian theory is fundamentally mistaken even as you consistently have misrepresented that theory. I have had to correct your misconstruals innumerable times but nowhere have you admitted that you know nothing about the subject. In any case, I am still prepared to debate with even an intellectually dishonest antagonist but it seems important to indicate the fundamental mendacity which underlies your position. Leaving all that aside, I have little interest in debating the nature of socialism, first, because we cannot know in detail what socialism would be like, as Marx always insisted and, second, because, as I have repeatedly insisted, what is at issue is whether capitalism is even a possible option. What the labor theory of value demonstrates is that human civilization is doomed if capitalism is not abolished; this is not a moral thesis, but a scientific one. I am interested to rebut charges of logical inadequacy in the scientific claims of the labor theory of value; thus far, you have preferred to discuss socialism, a regime in which the law of value is abolished and, therefore, irrelevant to the theoretical adequacy of the labor theory of value. If you are interested in understanding how a socialist economy could function, in outline, I suggest you read Ernest Mandel’s “In Defence of Socialist Planning” which, obviously, you have not read, despite my previously having recommended it; your reading of that essay would allow us to bracket the secondary questions and proceed with the primary ones. 

In the Marxian system, the concept of monopoly refers to regimes of value, i.e., to obstructions of value-movements due to, e.g., preferred access, government intervention, natural impediments, market imperfections, etc.; to extend this concept to socialist society is illegitimate since there are no value relations in socialist society. 

With regard to economics, indeed I do argue against any economic theory that is predicated upon a vision of human actors as rational, self-interested agents; however, the conceptual inadequacies and reductive assumptions of neoclassical economics are really a secondary issue since what is manifest is that neoclassical economics is unable to explain the empirically observed phenomena predicted by the labor theory of value. However, to reject an economic theory predicated on a view of human beings as rational, self-interested actors is not to reject economic science itself but, rather, to reject one species of economic theorizing, i.e., subjective value theories; the Marxian labor theory of value, a more scientifically robust theory, i.e., a theory with greater explanatory power, has no need of a cardinal assumption of rational, self-interested agents — the theory works perfectly well without such theoretical enormities. But there is a deeper problem here as you seem unable to specify what you even mean by “self-interested”; are there logically possible actions which are not self-interested? If you reply that there could not be such actions, then the expression,  ”self-interested action” is synonymous with “action” itself; in this case, the concept of “self-interest” becomes meaningless because it has no conceptual opposite with which it can be contrasted, except for “non-action”; to assert that “all human actions are active” is to assert nothing. If, instead, your claim is that no human being ever acts to benefit others, although one might so act – a claim which is, at least, not tautological — then, the claim is false on its face. The way you define “utility” is similarly problematical; are there logically possible actions which individuals can undertake without the intention to maximize their own utility? If not, then the concept of “utility” is a mere synonym for goal-direction and, thus, when you say that all human action is utility-maximizing, all you are saying is that all human action is motivated by the strongest motive; such an assertion is essentially vacuous.

Marxists do not claim that human beings will “all of a sudden change their nature”; there is nothing to change in a nature which is defined tautologically. The substantive, non-tautological claims about human nature deducible from your discussion are merely false and, again, therefore, do not require any “sudden change”. To say that “some things will never change” is a mere assertion presented without argument or evidence or even content; we can thus safely ignore such vacuous hyperboles. Marxists have no dispute with a general notion of human betterment and socialism as a mode of production is meant to maximize human wealth and minimize drudgery; by abolishing the law of value, it will be possible to construct societies that are not riven by destructive economic crises, to take one example. But the notion of ” maximizing revenue” is not inherent to “human nature” since there were human societies for many thousands of years long before “revenues” appeared. Marx never claimed that capitalism did not have remarkable powers to create wealth, advance human knowledge and abilities, etc.; the Marxist claim is that, as capitalism evolves, capitalist relations of production eventually come into irremediable conflict with the forces of production and that the resolution of such a conflict requires a socialist revolution for humanity to survive at all. The basic formula of communism is “from each according to his ability, to each according to his need”; this has nothing to do with equal distribution as you mistakenly assert — is it too much to demand that you acquire a basic knowledge of your theoretical antagonist before you pontificate against it erroneously? In any case, you have presented no credible argument that there would be insufficient incentives within socialism for human beings to flourish; nor could you present such an argument since not only is your claim false with respect to what we do know about human possibilities, you could not know in advance what unforeseen potentials may emerge in future societies. In any case, the issue is entirely irrelevant as I have already indicated for the nth time, since what is at issue here is whether the capitalist mode of production can survive at all; as we know, it cannot, as the labor theory of value demonstrates.

Again, the labor theory of value does not claim that all goods have value; some goods have prices but contain no value and some of these are goods produced without human labor. These are elementary facts about the labor theory of value — facts of which you are apparently unaware, yet you have the audacity to argue against a theory of which you remain almost entirely ignorant. So, once again, I correct you: it is no argument against the labor theory of value to cite the existence of priced goods which are not the products of human labor, since the labor theory of value never claims that all goods sold on the market are the products of human labor. Show me anywhere in Marx’s writings where he says that virgin land cannot be sold because it is not the product of human labor. In the Marxian system, it is true that only human labor can produce value. The value of goods produced by large plants with few workers often possess greater value than goods produced by many workers; this is because the formula for the total value of a good is constant capital + variable capital + surplus-value. Obviously, goods which, for their reproduction, require large amounts of constant capital but few workers can have more value than goods whose reproduction requires many workers but little constant capital; constant capital is itself the product of human labor so the labor theory of value is not violated, under such conditions. All of this is elementary Marxian economics, so, to not understand this only underscores the intellectual mendacity which underlies your posture. I look forward to a substantive criticism rather than the usual nonsense. I also recommend that you acquaint yourself with the basic conceptual apparatus of Marxian theory before you boast to your readers that “people have not learned” when, in fact, it is only you who has displayed colossal ignorance at every stage of this discussion. I apologize for responding to you with such harshness and I mean no affront to your feelings or goodwill, but one has to draw the line somewhere. I hope we can pursue a productive exchange in the future.

Both the debate of Socialism and the Labor Theory is an important one…

We agree on patents except what you do not realize is a true Capitalist society would not have patents. Patents require a governing body that grants monopolies. What does government do under Socialism? It creates monopolies by absorbing all private property as the means of production. These two are very similar, in that they are a governing body creating monopolies. If you argue against rational self-interested human beings then you are arguing against all of the field of Economics. Self-interested does not mean that every action is greedy or that every action is selfish. This says that every action is maximizing their utility. If giving a charity money makes you happy then you will do it, it is not selfish but it is self interested. As in making yourself happy is an interest to yourself.

Of course, Marxism will call the above irrelevant and they will use their hand to shoe away the argument but Marxists believe that people will all of a sudden change their nature. Now I agree with you. Human nature is much shaped and formed by the institutions around them, but some things will never change. That is humans will always want to better themselves, and they will do this by maximizing revenue and minimizing costs. This is how inventions through division of labor as Adam Smith points out come about. As the person become specialized in maybe only turning a screw. He or she will figure out the most efficient way to get this done. The most efficient way to the individual is the highest level of productivity with the lowest level of work. If this is true then the whole idea of Socialism falls apart and your savior from Capitalism can no longer exist. Since everyone is going to be communally owning things, you will never everyone to work hard in order to prevent shortages. This is because people will not be working for their own benefit as they will be getting distributed the same amount of goods as everyone else. So of course you are going to call this irrelevant but that is not going to stop your failure to design a new system.

I think both the debate of Socialism and the labor theory of value is an important one. A man’s criticism are only as good as his solutions. You can cry foul all day long but if your own system does not stand up to the tiniest push then what have you accomplished. Even if you are right and Capitalism will fail, you still have not disproven the interventionist.

The labor theory of value, which I have already given the first criticism, is not the end all to end all. In fact, there are certain products that exist today that have no labor and still have value. These are land that has been untouched by humans.  Marx also says that only labor can increase value. If this way true then why are some goods made by one man turning on the power plant worth more than many workers on an assembly line?

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It is obvious that patents are granted as a means to allow capitalists to earn super-profits; there is no reason to take the arguments of capitalist apologists seriously with regard to the supposed necessity for patents as an incentive for investment — undoubtedly, capitalist investors do, indeed, require the guarantee of such monopolies as a condition for investment, but from this purely localized fact — a fact only about capitalism and about capitalists — nothing whatsoever follows concerning the sufficient conditions required for the pursuit of innovation in socialist society. It should go without saying that such monopolies, which redistribute surplus-value to capitalists, have nothing to do with socialism, which is about democratizing the fruits of innovation rather than siphoning off the fruits of the uncompensated labor-time of workers to a class of capitalists with a monopoly of ownership of the means of production — a class which acquired this original monopoly through force and fraud, as Marx showed in his chapters on primitive accumulation in the first volume of “Capital”. The inevitable collapse of capitalism has nothing to do with a lack of incentives for innovators, but is due, rather, to the crisis generated by the contraction of the mass of profit as a consequence of an inevitable tendency of the rate of profit to fall due to the increase in the organic composition of capital engendered by competition. Claiming that “the actions of man” are “rational and self-interested” is merely an assertion presented without argument. In fact, your assertion that man’s actions are “self-interested” is presumably a tautology (and, therefore, vacuous) since I take it that you are presenting a logical claim that all action is intrinsically selfish rather than an empirical claim about the nature of human actions. If you are presenting the logical claim, we can safely ignore it as a pure contentless vacuity; if you are asserting the empirical claim, it is false on its face. “Greed”, then, is not a fact about “human nature” but, rather, a trait engendered by capitalist social relations. In any case, the entire issue is irrelevant to the discussion at hand, which concerns the possible survival of capitalism, but for some unknown reason, you continue to insist upon discussing irrelevancies. 

It is not the incentive of “less work” which systematically engenders “shoddy goods” as a feature of capitalist production, but the incentive to cut costs — an incentive which is a life-or-death matter for capitalist enterprise, as follows inexorably from the labor theory of value. Your faith in the possibility of a reformed legal code is fatally compromised by the failure to recognize that in the capitalist mode of production, the state is controlled by the capitalist class. My claim that, in capitalism, there is a systematic incentive to commit fraud due to the need to cut costs in order to survive against competitors, like all my previous claims in this discussion, thus, stands unmodified; so does my claim that the material basis for this incentive disappears under socialism. In any case, a reformed legal code, even if such a thing were possible, will not prevent the collapse of capitalism; so, it follows that the issue is, ultimately, irrelevant to what we are committed to discussing — yet you insist on pursuing irrelevancies. Am I mistaken in thinking that your pursuit of digressions is a means to avoid discussing the real and substantive issues? My primary purpose here is to defend the labor theory of value against logical attack but you have retreated from such objections to pursue an argument about the supposed benefits of capitalism over socialism, a purely secondary issue irrelevant to the logical validity of the labor theory of value.

It is true that an increase in profits can lead to expanded investment or to higher wages; what is mistaken is that such conditions can be sustained, as Marx proved. In neoclassical economics, profits may equal zero in conditions of perfect competition, but neoclassical economics is of no concern to us because it cannot explain or account for the empirically confirmed phenomena predicted by the labor theory of value; therefore, the labor theory of value is the more powerful theory and in that theory, unlike in neoclassical economics, there can be profit even under conditions of perfect competition. We may, thus, ignore your original assertion, since it is of no theoretical interest with regard to the labor theory of value.

Regarding capitalism, I only follow Marx’s definition here and the term, “capitalism”, employed with his definition, accurately describes the mode of production within the societies under discussion; that this definition does not conform to the utopian fantasies of free-market libertarians is of no concern to us since what we are concerned to examine is the validity of the labor theory of value. However, Marx does demonstrate that even perfectly free markets will ultimately lead to a form of capitalism — monopoly capitalism — which must collapse; nevertheless, we need not be concerned with such theoretical abstractions since we shall never witness such a version of capitalism.

Human Nature

If it is true that people would invent things without profits then why does the government issue patents? It is a market invervention that grants a monopoly, much like Socialism, to those inventors? They would argue it was because no one would invent something, if they knew someone was going to copy it and resell it. If people had the desire to benefit others like this then Capitalism in your view would not fail. Capitalism is denounced due to its profit motive and it is exactly that, that you believe will lead to its downfall. You can not change the actions of man, which are rational and self-interested. Instead, all you can do is place man into a system in which his actions will bring benefits and realize his productivity capacity.  So the same people who think are greedy are going to be living in your system, no?

There are always the incentive for someone to do the least amount of work, therefore possibly leading to shoddy goods. That is why Capitalism needs a legal code that is freely adjustable. Hayek often believed that common law would do just this. So I am not saying that businesses in Capitalism will not have any incentive to make a shoddy good. I am saying that a legal code would. Under Socialism, what stops someone from making a shoddy good. If we assume that they are trying to do the least amount of work, then they could put the screw in wrong or not at all. What stops him I assume is the same that stops a Capitalist, a rule.

Back to profits and wages. If profits increase by 10%, then that is 10% more money that they can allocate to any part of their business. This could be opening up a new store, investing in R & D, and even raising the wages of the workers. Since competition drives these things to be the most efficient possible, then someone will come along and believe that they can invest a little more in employees. We can assume that the more the employeer pays the better qualified employees it gets. In order to compete the first business will have to raise wages. In Economics, profit is zero. I have mentioned this before. There is no surplus. The business produces at marginal revenue equaling marginal cost. That means that if revenue goes up, they do something else that will end up raising the cost. This is done by most of the time one of the three options I mentioned before.

Now on to your overarching thesis that Socialism should not be debate here because Capitalism will surely end. Everytime you bring it up you say “as we know it cannot.” We have never experienced Capitalism, we are in a current flux state of interventionism. Capitalism is complete and udder free-markets. This doesn’t mean everything is free, this means that all markets are free from government coersion. If you mean that today’s system of inteventionism will fail, then I agree with you but probably for very different reasons. It is important to note the specturm where you have Captialism ——-Interventionism ——– Socialism. We are moving from left to right. We are in motion towards Socialism. Therefore, for the current Inverventionists and Capitalists, you must justify your system of Socialism. This is because the Inverventionist could say so you have a problem with wages, let’s empower unions, thus is the case in Europe.

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Under socialism, there would presumably be many motives for individuals to pursue innovations; for example, intellectual excitement, the desire to benefit others, the desire to reduce one’s own workload, etc. Only an impoverished and reductive view of human beings presumes that the pursuit of monetary profit is the only motive. But, again, as I have asserted repeatedly, the issue is entirely irrelevant since what is at issue is the possible survival of the capitalist mode of production, not the benefits of socialism relative to capitalism. 

In socialism, there is no “central planner”; the plan of production will be a collective task. But, again, the issue is irrelevant to the survival of capitalism.

If there were no incentive for the capitalist to produce shoddy goods, they wouldn’t produce them, but they are produced all the time. It is well-known that capitalists have repeatedly sought to cut corners in production in order to reduce costs; their hope is that they will get away with it. This is how tainted beef gets sold, why coal-miners die in accidents, why many airplanes crash, etc. Their incentive is short-term profits or, even, more desperately, economic survival against competitors. It is no coincidence that capitalists very consistently fight (and have fought) safety regulations; why they do so is explained by the labor theory of value — they seek to reduce the deductions from surplus-value that the accompanying costs comprise and they do so for sound economic reasons. However, these reasons — not unlike the reasons behind  the production decisions which generate harmful externalities — are not “sound” from a social viewpoint; they are, in fact, socially damaging, i.e., socially “unsound”. What is important to emphasize here is that there is a systematic incentive under capitalism to commit fraud and this follows from the very nature of private ownership of the means of production. What is more, this systematic incentive is overcome when production is socialized. Personally, I would prefer not to live under conditions of the systematic aim to defraud me by all business owners and, indeed, by all individuals, as the capitalist system encourages; I have no doubt that many millions around the world, who do not already, will come to agree with me as capital embarks on even more aggressive attacks on workers in its current phase of decline. You may prefer to live in a world in which all individuals are encouraged to defraud you. But, again, this is entirely irrelevant, because the moral argument is entirely secondary here and ultimately a mere dispute over preferences. What is at issue is whether capitalism can survive at all; as we know, it cannot.

My claim was never that wages rises due to “feelings”; they rise, at the height of the business cycle, due to the increased power of collective bargaining among workers in conditions of labor scarcity. What the labor theory of value predicts is a secular trend of relative immiseration of the proletariat; absolute immiseration occurs in the wake of economic crisis. Both phenomena are entirely confirmed empirically. In the Marxian system, productivity of labor has nothing to do with demand; differing productivities of labor are merely functions of  differing quantities of socially necessary labor-time. This is how productivity of labor is defined within the Marxian theory of value. From that theory, predictions are deducible which can empirically confirm or refute the theory; the theory has been confirmed. In the Marxian system, it is understood that a rise in wages is always a deduction from total surplus-value, even if profit-rates are ascending. Therefore, capitalists have a systematic need to suppress wages as far as possible — which, historically, they have always sought to do — just as they routinely oppose (and have always opposed) the formation of labor-unions; they do so precisely because the wage increases sought by unions occur at the expense of capitalist profit. If wage increases did not threaten capitalist profits, capitalists would have no need to relocate factories to low-wage areas. It is true that the need of the capitalist class to reduce workers’ wages comes into conflict with the need of the capitalist class for a “class” of well-paid consumers who can, thus, buy more consumer goods, but such contradictions are the very stuff of Marx’s analysis of capitalism as a mode of production riven by contradictions; the contradiction can be understood as one between the needs of individual firms versus the needs of the capitalist class a whole — that is, every capitalist hopes that his competitors’ workers are as well-paid as possible, but wants his own workers to receive the smallest wages possible. The capitalist system has several mechanisms at its disposal to expand the reserve army of labor, one of which is the adopt ion of labor-saving technologies; however, the generalization of such labor-saving technologies suppresses the rate of profit — this is another contradiction within capitalism. But, with a large reserve-army of labor, capitalists are in a strong position to suppress the value of labor-power to the physiological minimum, or even lower; under such conditions, there is no necessity for a bidding war over labor-supplies amongst capitalists. Obviously, under conditions of labor-scarcity, the rise in wages will be regulated by the equalization of the rate of profit. What the Marxian theory of surplus-values shows is how profit is still possible under conditions of perfect competition.

Incentives, Incentives, Incentives

How would innovation work under socialism then? The entrepreneur would not be looking to make a profit so what incentive does he have to invent something?

In Socialism, production rests on the central planner. If the planner thinks that every American must own one car, he would make that to be true. He would produce precisely the exact amount of cars per American and no more no less. There are many problems here. First, how do you know that I only need one car? It is possible that I need two and nothing makes you morally superior. Second, once complete production of all cars is done, what do you do with the factory and labor then? Reallocate and to where? When I drive my car twice as much as you and I need a replacement faster, where do I go to get that if you reallocate? So it is more likely that Socialism will under produce. They might produce to the exact measurement that the central planner has prescribed but the central planner cannot have all the possible information for everyone.

There is no incentive for the Capitalist to produce shoddy goods. Do you think that every good that is produced today is saved by government intervention? Do you think the computer you have has positive and negatives and that the business planned all the negatives because they had an incentive to? If a company produced a shoddy good, you would not buy from them. For example, if McDonald’s were to put glass in everyone’s burgers then no one would go there anymore. That is how the market puts companies out of business. GM and Ford are good examples. They create crappy cars and people do not buy them as much as a superior good like Honda or Toyota. Is this because the government makes them? No, they do it on their own because people will always go for the better goods.

Wages do not rise because someone feels like it one day. Wages rise because of performance through productivity. The higher productivity a business has with its labor the more it will pay it’s people. That is why McDonald’s pays less than Olive Garden. If you were going to go to two restaurants 99 times out of 100 your bill at Olive Garden will be higher than your bill at McDonald’s. This is because people value Olive Gardens food higher, thus making their labor more productive. Labor is valued at a more productive wage, when the labor satisfies a larger demand. Marxists claim that business owners will suppress wages and watch their profits go up, then they will run into problems when there is no one to buy their products. Why would it be in the business owners interest to do this? Marxists might argue that it is to make more money for themselves. This does not solve the issue that if McDonald’s does this, then Burger King can come along and offer a slighter higher wage. This will result into a bidding war until those extra profits are gone. In Economics, this is called the perfect competition model and all profits go to zero. This is why someone who worked in 200o is better off than their family was in 1900. Productivity went up and so did their wages.

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As I stated earlier, the relative benefits of socialism vis-a-vis capitalism are entirely moot if capitalism must collapse; but, to briefly respond to your first question, under socialism, innovation would not be subject to monopoly ownership, for one.

Nor can there be, under socialism, crises of overproduction because there will be no value-production within socialism; thus, there cannot be a collapse of values as occurs within capitalism in a crisis of overproduction. Capitalism is the only mode of production in which there are crises of overproduction. Under socialism, there cannot be monopoly-price deviations from value because there will be no values to begin with. Therefore, the claim that starvation will likely occur in a socialist economy is deprived of substance.

What you ignore about fraud and shoddy goods is that, under capitalism, there is a systematic incentive for capitalists to defraud the public; there would not be this incentive under socialism since this incentive is only a feature of value-production and socialism is not a mode of production in which value-production takes place. With regard to “justice”, you merely beg the question. In any case, the version of capitalism you describe is a utopian fiction since it ignores the inbuilt tendencies, within capitalism, for capital to concentrate and centralize, thus undermining “free” markets. Again, any debate over the relative merits of socialism and capitalism is irrelevant — and doubly so if the version of capitalism being defended has never existed and never could exist. The question at issue is whether any possible reform is available to capitalism to prevent its inevitable collapse.

The inevitable collapse of capitalism is a complex question but the fundamental basis for this outcome is the tendential decline in the rate and mass of profit as the economy approaches total automation; the organic composition of capital continues to increase but the corresponding increase in the rate of surplus-value cannot keep pace with the fall in the rate of profit engendered by this tendency.

The readings I sent you do not contain the empirical data to which I was referring; they merely summarize the conclusions drawn from this data. The empirical data itself can be found in Ernest Mandel’s “Marxist Economic Theory”, among other sources.

As wages rise, they depress profits; the value of labor-power cannot rise to where there is no surplus-value because this would induce a capital-strike. As a historical trend, wages have remained at the value of labor-power. The value of labor-power has, correspondingly, continued to fall, due to increases in productivity of labor; this has meant a rising trend in the redistribution of (surplus-)value to capitalists from workers. Profits can rise as wages rise but the rate of the rise in profits slows as total-employment is approached, engendering rising wages, which eventually causes a contraction in investment; this engenders a crisis in overproduction and consequent unemployment. Alternatively, individual capitalists can adopt labor-saving technologies to boost their profit-rates but, when these innovations become generalized, the organic composition of capital in these sectors rises, leading to a fall in the rate of profit, a contraction of investment, and the inevitable crisis. So full-employment is unsustainable, as Marx showed in his discussions of the reserve army of labor.

I reject your Hypothesis

How does one democratize innovation?

There could be massive overproduction or underproduction. This is because since things will not be bought and sold there would be no prices. Without prices you do not have information. We know that when a product sells out in Capitalism that it is being under-produced. We know that when stuff sits on the self and we constantly have to lower the price we over produce. Advertising is actually not as wasteful as one might think. Advertising in fact is the tool of a competitive society. Under Socialism, without advertising, then you are allowing the government to monopolize production. In Economics, monopolies lower the production and raise the price in the free market. Without price production will probably be lowered since there are no competitive effects causing them to expand. This would cause massive starvation in the food industries.

It is true that in a free market Capitalist world, that someone could make shoddy goods that defraud the public. There are mechanisms for this too. Which is called information and advertising. Today, there are magazines out there like Consumer Magazine that gives us an unbiased view on goods. If someone is defrauded, they would be able to sue in the court system thus bringing in justice. They would also be able to contact organizations like Consumer Magazine and scare people from going there. This would put them out of business or make them investigate the problem whether it be an employee or an accident. Of course, this wouldn’t be widespread because competition will keep this in check. As in, if one company is making a shoddy product that someone else is buying then they are demanding that good. A entrepreneur will come in and realize he could make a product that is more efficient and isn’t shoddy. Competition does this all the time even when products aren’t shoddy. Dell vs. Gateway, McDonalds vs. Burger King, Ford vs. Chevy, etc. This is because there is no scientific way for someone to distugish Dell vs. Gateway. This is why a central planner under socialism wouldn’t know whether to make a Dell product or a Gateway product.

Yes, the problem of the central planner is important because you are advocating a move to Capitalism. Your sense of urgency to switch to Socialism would be not different then me saying that Socialism will cause society to regress in growth. You also have not said why Capitalism would collapse. The Marxist theory of the business cycle just says that we will continue to over produce and wages will not rise. In order to keep all businesses from going out of businesses they would have to do one of two things, raise wages or cut production. This explains why we will continue have recessions but doesn’t explain your doomsday.

Obviously, your definition of empirically confirmed and mine are different. Mine is that you go out  and using data and modern statistics with regressions or some other way to find a correlation. I scaned the readings you sent me but all I see is talking about the theories.

You said, “There cannot be sustained full employment under capitalism because full employment would result in a rise in wages.” Isn’t that what human history has done? The rest is you are assuming that profits cannot go up while wages go up. In fact they can and do therefore it wouldn’t hurt investment at all.

I do reject your hypothesis and it isn’t rejecting economic science. The truth is Capitalism has never truely existed in our economy, as long as their is government there is interventionism.

If Capitalism is not abolished, civilization will surely be destroyed…

It is certainly the case that central planning will face enormous challenges, at least at the outset; you can read a good discussion of how central planning could work in Ernest Mandel’s essay, “In Defence of Socialist Planning” published in “New Left Review”. I should add that centralized planning places no a priori limits on innovation; on the contrary, it democratizes both the development of innovations and innovation’s products. And, besides, there would be no crises of overproduction under socialism, or production of goods with inbuilt obsolescence, or wasteful advertising, or the pressure to produce shoddy goods to defraud the public, etc., etc. In any case, as I have already explained, capitalism has done — and inevitably does — a disastrous job of allocating goods to meet human needs because it is governed only by considerations of profit, leaving those to starve who cannot produce profits for capitalists.

But the difficulties involved in centralized planning are really irrelevant to the discussion at hand because what is at issue is whether capitalism can continue to function at all; the labor theory of value proves that if capitalism is not abolished, civilization will surely be destroyed. Since capitalism must collapse, socialism is the only hope for the survival of the human race. There is no avoiding this conclusion because the collapse of capitalism (or the destruction of humanity) is deducible inexorably from the labor theory of value and, as we know, the labor theory of value is the only logically coherent, correct, and empirically confirmed economic theory, vanquishing all theoretical rivals.

There cannot be sustained full employment under capitalism because full employment would result in a rise in wages. A rise in wages depresses the rate of profit which results in a contraction of investment, if no alternative means of depressing the wage is found. If investment contracts, this creates unemployment. So, in fact, a starving class is necessary for the functioning of capitalism. Charities can only go so far because if the poor could rely on charity, they could not be compelled to sell their labor-power to capitalists in order to produce surplus-value for the owners of the means of production; in any case, we know that enormous contributions to charities have done little, if anything, for many millions of starving individuals around the world.

But, again, the moral issue is really entirely irrelevant; even if I preferred capitalism to socialism — which is to say that even if I preferred to see many starve to seeing everyone well-fed — I would be compelled to recognize that capitalism must collapse; to reject this is merely to reject economic science.

The Central Planner Problem

A central planner would have no clue what I need. He is human, not god therefore not superior. Me and you met on facebook. I have no clue what your needs are and it would require many resources to see what you needs were. Even then you don’t even know your needs. 20 years ago most people didn’t know they “needed” an iPod. Under a socialist system, the central planner would have to know the iPod were going to be invented.

Under Capitalism, I believe that there is always near full employment. The unemployment you see mostly on the news is frictional, meaning people are changing jobs. If you are concerned about the plight of the few who are unproductive then that is what charities are for. There is a demand to help the poor that I am hearing from you. I know you are not the only one and a foundation could be started with you and their money.