Marxist analysis of current "inflation"

[Schizophonia]

I was going to make this a response to @Daniel Balan's topic, but in the end I'm going to make it a topic.

I thought it would be good to do a little propaganda 😏

 

1)Lowest production :

The production/import of certain raw materials, particularly gas and grain, has declined since the war in Ukraine, since these are the world's leading exporters.

We could do a Marxist analysis of the war in Ukraine, the management of covid etc but that would be a topic in itself.

2)Structure of interdependence of the capitalist system :

Theoretically, this should only be correlated with a slight increase in overall commodity prices. But the structure of the capitalist system implies that if one market player fails, it risks dragging the rest down with it.

If your baker neighbor loses his job for whatever reason, it's not just "no big deal because it's just less bread"; in a planned economy, yes, having fewer baguettes wouldn't be too much of a problem, but since we're in a market economy, that we exchange capital and not production goods you're dependent on his purchases from you (let's say you produce photocopiers) and therefore on his wages.
This means that during a recession, due to a stock market crash, a drop in production of certain commodities, etc, capitalist systems get stuck in vicious circles.

This is the theory of "Commodity fetishism" proposed by Marx, 

There is a divide between use value and market value. This means that, through a domino effect, as explained above, and of course, speculative bubbles in certain commodities, while the means of production (labor, available resources) haven't changed that much, we end up with outlandish price increases.

Real estate is one of the best examples; there has never been so little real estate built due to demographic stagnation, and even if that were the case, it doesn't require that many resources, especially with modern methods, and there are a lot of vacant homes; so logically, real estate should never be so cheap, but for the reasons mentioned, the opposite is happening.

 

 

3)Distribution of wealth :

Due to an unequal redistribution of wealth, inflation is difficult to cope with for a significant part of the most disadvantaged population. Some market's players to gorge themselves and even increase their incomes because, in a way, inflation serves their interests (for example, small producers are more expensive than large agri-food groups, which are often less ethical about their production, the way they pay and treat their employees, etc; because, precisely because they are large groups, they are the ones who can own the best means of production ("socially necessary labor time" in Marx) and therefore ultimately offer the best prices; these large groups are therefore the ones who will generally be favored first, hence capitalism's tendency to generate monopolies, and so as i explained especially in times of crisis).

The capitalist world is full of people who own more than they produce, and vice versa, because given (I'll come back to this in the next point) that capitalism is no longer fundamentally about the exchange of goods/services, with a concrete use value, but about the exchange of commodities, of capital; then there is a dissociation between the use value of an object and its market value.
This dissociation create the possibility, and this is what the entire capitalist system revolves around, of "surplus value"; literally "more than (true) value", the difference between use value (and we could say labor, the resources including human resources necessary for its constitution) and market value.

And because of that, for certain reasons the people who produce goods with a real use value and which will be distributed, who produce labor value as Marx would say, do not recover the equivalent in purchasing power, in capital; And vice versa, there are people who don't provide that much labor, but because they "own" (hence the fact that private property is fundamentally theft in Marxist theory) or are friends/relatives of those who own the goods of production (including labor) find themselves in a position to have a purchasing power greater than the actual labor they provide.

Added value can be excessively absorbed by those who have the most control over the production and distribution chain, and missed by those who are not in a position of power, even when they are the ones producing the goods and services in question.
Because in a capitalist system, those who are privileged are not the producers, but those who own the means of production and the capital in general for whatever reason.
This is what we call having capital. Capital is a value that you possess independently of what you produce and which often allows you an exponential capacity for the accumulation of this same capital (if you own an apartment, you want to rent it to someone and take advantage of the fact that they need an apartment to generate surplus value; you haven't produced anything, there is no labor value, you have just taken advantage of having capital that they don't have, which will allow you to have even more now, in a virtuous circle (for you ) if you will).

Karl Marx divided people in two categories called the Bourgeoisie (capitalist class, to be less "anachronistic")and the Proletariat (worker, performer...)
This divide isn't about purchasing power; a baker (I'll come back to this) is technically a bourgeois/capitalist as Marx understood it, because he generally owns his means of production (one could call it a "small agricultural bourgeoisie").
An insurer who earns €5,000 a month by basically ripping off his old folks lol is still, in some way, more a proletarian; why does his insurance company agree to employ him even though he earns a lot and is easily replaceable ? because his boss earns EVEN MORE. There is more added value made by his work, he is "employed".

As I saw on a Marxist YouTube channel in my country, so I'm going to repeat it eheh, we can imagine a graph with an abscissa axis "Capital/Labor" (Capital on the positive part, and Labor on the negative part, for example) and an ordinate axis "Top manager/Executive" (Idem).

If you are a farmer (bottom right of the graph), you exploit your employees; but at the same time, you are dependent on and therefore exploited by all the structures that distribute your production (agri-food industry, retail establishments, etc.).
Which means that, well, farmers often earn a poor living, even though they are capitalists and, despite everything, terribly useful to society and work a lot; lots of farmers kill themselves because of that.

And vice versa, the insurer I mentioned is useless; in fact, it is closer to the proletarian class, but is a higher-ranking executor.
It is subservient but still better placed in the capitalist structure; we could place it at the top left of the graph.

What happens is that the further you are to the top right of the graph (basically beyond the downward diagonal), the more you tend to earn more than you are actually worth, and the free market and private property are in your interest.
The further you are down the diagonal, to the bottom left, the more you are exploited.

If there are people who are French and want to know more about the graph :

 

4)Debt : 

In a planned economy, to carry out a project, the state could just asks to some people to work on it, but since we are in a market economy the state, or a private agent, has to pay, so if it desires a product in the long term, it will be forced to take out "loans" with interest.

You can buy a kilo of potatoes, because in a market-based system you "earn money" and this "money" corresponds more or less to what you have produced (even if it is false, as we have seen, but we will take it like that because it is convenient), but obviously if you need to house yourself, you do not produce the equivalent of a house per month, so you cannot buy a house with a monthly salary, and at the same time you need, ofc,  it so in this operation you will need a mortgage.
But the bank produces nothing/does not increase production; it serves no purpose; it is an institution that profits from the neoliberal production and distribution system, having stolen trillions from various states over the last century. The interest payments on the US debt alone in 2023 were $1 trillion, do the math.
And that's just the public debt. 
To give a concrete and conventional example, when you have your house built, the bank loan you need is just an excel file.
This doesn't mean there are more workers available, more farmers and land to produce food for these same workers, more trucks, more workers and resources to build these same trucks ans so on.

Do you see the magic trick ?

But the capitalist system is twisted in such a way that you have to resort to a "banker" to "lend you money," with "interest," to get the right to have your house. and because of that a whole structure that basically does nothing apart, lives off spoilation, and not just a little, can survive.

So to summarize : Lower production + capitalist system structure that sets off vicious chain reactions, monopolies, and an unequal redistribution of wealth.

Edited Thursday at 12:23 PM by Schizophonia

[Daniel Balan]

@Schizophonia This is great analysis. 

And finally, you laid down that French cocaine you were doing when you wrote that post where you advocate for Leo to delete the forum😎🤣

[Daniel Balan]

So basically inflation happens when we the westerners are less productive than we used to be. Because our work produces less business, the money become more weak. 

Plus the public debts that actually rebuilt the west after ww2. You got the present day situation.

[Schizophonia]

18 minutes ago, Daniel Balan said:

@Schizophonia This is great analysis. 

 

Thanks

Quote

 

And finally, you laid down that French cocaine you were doing when you wrote that post where you advocate for Leo to delete the forum😎🤣

Tbh i am regularly on coffee and nicotine (wape) lol.

I wrote this topic on that combo. 

16 minutes ago, Daniel Balan said:

So basically inflation happens when we the westerners are less productive than we used to be. Because our work produces less business, the money become more weak. 

Plus the public debts that actually rebuilt the west after ww2. You got the present day situation.

In reality productivity has still increased despite demographic stagnation, rising oil prices etc.
You can ask ChatGPT; a modern American produces on average as much as four Americans in 1950, thanks to technological progress.

Yet there is still, and even more, food stress, housing problems, etc.
Food and housing quality haven't improved, except maybe now there's optical fiber lol.

So, in reality, these are structural problems: inequality, spoiling through the debt system, and contradictions of the capitalist system.

 

Edited Thursday at 12:34 PM by Schizophonia

[Daniel Balan]

@Schizophonia I also believe that the reason the money has devalued greatly since WW2 is because back then the world's population was a bit above 2 billion people. Now we are past 8 billion. In my eyes this is the biggest reason why money lost value. Because there is a much larger pool of people that need resources such as food, housing, petrol, clothes, energy etc, thus all the prices have gone up, because of the 4 times increase in demand. In my book overpopulation is the nr.1 reason for inflation. 

 

[Daniel Balan]

7 minutes ago, Schizophonia said:

 

Tbh i am regularly on coffee and nicotine (wape) lol.

I wrote this topic on that combo. 

 

I've read a lot of your posts since I'm on the forum but the topic you made where you told Leo to delete the forum and to kill his father was the most jaw dropping topic I've seen since I'm here. I have some friends in France that always do cocaine there and I thought you must have done some French cocaine when you wrote that topic. I said that because you usually post great stuff. But that post was out of this world 🤣😎