How physics is validating the Labor Theory of Value

he was a hippie too.

You know, I can't really tell, did libertarianism pass its zenith and become just really dull sophistries that have nothing to do with reality, or did I just grow up, get smarter, and realize that is all it was the entire time?

Einstein's 'Why Socialism' article demonstrates that even smart guys can end up with wacko conclusions if they start with the wrong presuppositions. Here's just one off the wall example:

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Man can find meaning in life, short and perilous as it is, only through devoting himself to society.

Blah, blah, blah. Devoted to society? He wasn't even able to be devoted to his first wife.

But, being the intelligent dude he was, he does accurately describe one of the big problems with socialism:

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The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?

Hasn't been done. Won't be. AND - even better yet - where it is attempted - you'll find that it is the intelligentsia who are running the show. Intelligence finds a way to cheat the system - in capitalism, socialism, or any other ism.

All pigs are equal, but some are more equal than others.

This

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Blah, blah, blah. Devoted to society? He wasn't even able to be devoted to his first wife.

is a strawman. refute his point please.

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Hasn't been done.

actually it has

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Won't be.

that's a big claim. care to substantiate?

socialism can easily be run without the centralized bureaucratic measure that took place in the USSR. there were even plans to do this in the USSR during the 30's.

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AND - even better yet - where it is attempted - you'll find that it is the intelligentsia who are running the show. Intelligence finds a way to cheat the system - in capitalism, socialism, or any other ism.

Third world revolutions with proletarians as a minority forming states with educated, class conscious marxists leading the helm? I had no idea. Honestly, if the USSR did decentralize power to the soviets before industrialization was complete, the country would instantly halt its progress towards socialism. It would be run by poor peasants angry at the kulaks for their poverty and the west for intervening in the russian civil war.

There was a unique reason why the USSR's government functioned the way it did, and it is not at all representative of socialism.

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Man can find meaning in life, short and perilous as it is, only through devoting himself to society.

That's as metaphysical as it gets. What a man of deep faith.

My devotion to society motivates me to explode marxist myths. Or at least engage them, but not destroy. Marxist thought needs to be around just to demonstrate man's vast capacity for folly.

But lest we stray too far afield:

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There is a tendancy to think that rich people owe their wealth to intelligence or effort, but physics tells us no. Given a market economy, then the laws of chance mean that a lot of money will end up in the hands of a few people.

Um, no. Given the assumptions of the article, the only thing that physics tells us is that some people will end up with lots of money, and lots of people will end up with some. It doesn't - it can't - approach the causal issues involved. It is not necessarily random that some people end up with money - intelligence and effort are not completely reliable indicators of who ends up with wealth, but neither is their correlation completely random.

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That's as metaphysical as it gets. What a man of deep faith.

When we ponder the meaning of life, we do not accept that we exist to survive. Instead we find our own purpose, and it is always through our membership in society. Humans are incredibly social, and it's of little surprise we must find happiness through that characteristic.

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My devotion to society motivates me to explode marxist myths. Or at least engage them, but not destroy. Marxist thought needs to be around just to demonstrate man's vast capacity for folly.

My devotion to society motivates me to explode lolbertarian myths. Or at least engage them, but not destroy. Lolbertarian thought needs to be around just to demonstrate man's vast capacity for folly.

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Um, no. Given the assumptions of the article, the only thing that physics tells us is that some people will end up with lots of money, and lots of people will end up with some. It doesn't - it can't - approach the causal issues involved. It is not necessarily random that some people end up with money - intelligence and effort are not completely reliable indicators of who ends up with wealth, but neither is their correlation completely random.

Where did this come from? Your quote isn't even in einstein's article.

Anyway, the point of the sentence was that 'work hard, get rich' is a myth and it's simply a fact of the market that a few people will own nearly all the wealth, regardless of any effort or intelligence involved. He's speaking effectively.

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If 'money' is equated with 'energy', and energy is equated with 'heat', as you model suggests, then the Laws of Thermodynamics say that 'heat' travels to the areas of 'lesser' heat. That is, heat travels to the areas that are cold. If this were applied to money, would it not suggest that money would flow from the rich to the poor? This doesn't happen of course, because those with money have various social/cultural devices that ensure that as much of their money as possible, stays within their immediate control. This behaviour, does not represent that described by the model of physics as such. The bourgeois, by their hording of their wealth, are actually preventing natural entrophy from taking place. The Socialist Revolution of course, removes this barrier to entrophy, thus ensuring the re-distribution of wealth.

That is not quite how thermodymamics works at the microscale. In a gas the energy of individual molecules is not all the same. Some have more energy and some have less. The statistical distribution that results is the Gibbs Boltzmann distribution which is roughly speaking a negative exponential distribution. A relatively few molecules have significantly more than the average energy. This distribution of energy turns out to be the entropy maximising distribution. What Yakovenko has demonstrated is that this is also characteristic of the distribution of money in a simple commodity exchange system. He goes on to show that in real capitalist economies money distribution is actually more uneven than this --- the capitalist class have significantly more money than would be expected under a maximum entropy distribution.
There is thus some extra factor --- income from capital --- that produces this indequality.

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Um, no. Given the assumptions of the article, the only thing that physics tells us is that some people will end up with lots of money, and lots of people will end up with some. It doesn't - it can't - approach the causal issues involved. It is not necessarily random that some people end up with money - intelligence and effort are not completely reliable indicators of who ends up with wealth, but neither is their correlation completely random.

I was applying the principle of Occams razor. If a simple explanation explains the data, there is no need for a complex one. The distribution of income among those who earn income from selling commodities ( including labour power ) is adequately modeled on the assumption that the monetary exchanges are random.

Ian Wright has extended Yakovenkos work to see what happens if you allow the hiring of labour in the model. His model is again very parsimonious -- ie, very simple indeed. It generates the 'super thermal' component of the income distribution as soon as you allow the hiring of wage labour.

Gas molecules may be intelligent. The clever ones may end up with more energy. But since we can explain the gas laws without assuming intelligence, physicists have not felt compelled to attribute the Gibbs Boltzmann distribution of energy to cleverness on the part of some molecules. Your attribution of wealth distribution to cleverness has no additional explanatory power.

The 'objective' labour theory of value is nonsense, it comes from classical 'costs of production' price theory. Prices are in fact exchange ratios established by subjective preferences. Kevin Carson has written on this: http://www.mutualist.org/id56.html

Price is determined by supply and demand, but cost of production (i.e. labor) determines the relation of supply and demand. Subjective preferences have nothing to do with the LTV, as subjective preferences do not have the ability to determine the cost of labor (i.e the living standard and the cost of the means of subsistence), which is why the marginal theory of value is compatible with the LTV. They have nothing to do with each other, and marx acknowledged that the nature of demand is outside the realm of political economy.

How the hell can you be a communist if you do not believe in the LTV? You can only make moral arguments for socialism that way, which doesn't fly anywhere.

It's good to read a modern parallel between Marx's science and modern sciences in other disciplines. That such parallels can be found (what an interesting article!) proves a lot of what Hegel’s and later Marx’s and Engels’s thought about the unity of science. Modern chaos theory was, in many important respects, anticipated by Marx and Engels and Marx's theory of History embodies a lot of the ideas which would later put to rest Heisenberg’s silly uncertainty principle when chaos theory matured. Statistical regularity allows Marx to use classes as an explanatory tool and cancel out the random activities of individuals. Just as the movement of groups of particles is perfectly regular while individual motions are unpredictable. Similarly the phenotype of an organism feeds back onto the genotype, meaning that the collective entity - the organism can condition the nature of the genes of it's descendants in a way which is not random. By the way, I think that Einstein's valiant refusal to accept the uncertainty principle is to be commended as unconsciously in line with Marxist thought. A good book you can get for free which deals with this subject is 'Reason in Revolt'. Google it!

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Also a good read: Farjoun & Machover - Laws of chaos: http://207.45.187.42/%7Ewright/fm.pdf

link is broken , anyone got another ?

On the one hand, the market and physics do not seem to be things which can readily be declared connected.

However, on the other hand, it does seem from this article that the market does follow these physical principles very closely which, in itself, gives some credence to ideas presented using thermodynamics to explain happenings in the market.

In any event, very good article.

"The great bulk of the population, the working class and petty bourgeois, follow a Gibbs-Boltzmann income distribution."

If I am understanding this correctly, this is an extraordinarily important proposition, because it implies that income polarization will exist even in the working class and petty bourgeois if market principles are applied.

This vindicates Lenin's arguments against the Narodniks in "Who Are The Friends Of The People" that market-led farming would lead to income polarization.

Suggesting that without a plan of some kind, you will end up, through the market, with a separation into classes again eventually, at least at the level of income, and one could predict in a system where income grants access to the means of production that this would then give preferential access to those with more incomes, regenerating the class system.

My question is, if the market generates a Gibbs-Boltzmann income distribution, and the plan avoids this, where along this spectrum does Participatory Economics lie? Can a participatory plan avoid market polarization?

The argument nowadays is that the labour theory of value is no longer valid because of perfect competition. It only 'applies on monopolies". Nowadays, according to critics, businesses pass on to a vicious cycle of viability and bankruptcy. My argument is that there is no such thing as perfect competition nowadays. We are dominated by illegal cartels where producers clandestinely or by codes meet together and impose the same prices on their products. Oil producers agree on high oil prices. The oil price increase in the 70s was made possible by oil cartels. We are helpless consumers. Nobody can compete by imposing lower prices because he or she would be pushed out of these vicious cycles by unfair competition, that is competition by cartels. My 1 cent opinion.