We haven’t been comparing value to value: Kliman is right, but it is worse than that…
While I’ll admit to be skeptical about this, I have forgotten how important the distortions of fiat currency play out in the economy. We compare dollars prior to Bretton Woods and then the Nixon conversation to fait currency, we moved into a different game. A game of monetarist distortions. The reason is that “money’s” third function according to classical economics no longer applies to modern currency in a real way: it is not based by something with value outside of the promise of the state. While inflation and deflation are still a problem in commodity-backed currency, fiat currency distorts this furtherer. This makes the income inequality debate really painful because even when we adjust for inflation, we are not adjusting as compared to the value a commodity.
I think a lot of reasons we as leftists miss this is that fiat currency problems seem to obsessions of the right–gold standard talk is like that of Ron Paul. The reasons why neo-liberals oppose the gold standard is obvious in this light: it makes it harder to destroy symbolic value to create new space for the declining rates of profits. Real value is destroyed more quickly and the deprivations of the market hit in much more obvious and rapid cycles while favoring the habits of the investor class.
As the tweet master and blogger Marxist Jehu has pointed out to me:
If you plot nominal GDP as a function of the price of an ounce of gold since 1929, Kliman’s numbers will look much different. There are two things to remember:
1. Value can only be expressed in a material that itself has value, a commodity. In 1929 GDP was measured in a dollar based on gold.
2. Moving out from 1929, you have to compare nominal dollar prices to those same prices divided by the price of an ounce of gold.
Once you do this Kliman will see that gold GDP shrank from 1971 to 1980. The stagflation was actually the second 20th C. depression. Expansion began again in 1980, as gold prices fell. Also he will see we have been in a depression since 2001. The crisis of 2008 was the collapse of the mechanism by which labor power was being devalued. Between 1971 and 1980, wages measured by the gold prices, fell to 10% of 1971 level, before recovering to 40% in 2000. In this crisis, labor power has been devalued to about 3% of 1971 levels.
Also, once it is understood that the dollar is not money, it will be obvious the global economy is being managed directly by DC. And, it has been since 1945. The dollar effectively give DC control of all exchange wherever it is used as medium of circulation — international trade. Much of the surplus value derived results from DC’s exploitation of the national capitals of other nations.
Tell Kliman to plug his raw dollar numbers into gold prices and notice the significantly altered results of his analysis. Capital went off of the gold standard in 1933 because it allowed labor power to be continuously devalued as H. Grossman predicted it would need to.
I will pass this on to Dr. Kliman, but I am also pondering the real implications of this myself. To be a communist one needs to consider the philosophical, anthropological, and economic battles one is facing without obscurity. Fait currency is an obscurity.