The Value of Everything. Making and Taking in the Global Economy. By Mariana Mazzucato. Allen Lane. 384 pages. £20 (hardback)
She begins with a brief history of national accounting, and how the question of the productive boundary – what is and is not a productive endeavour – gets brought into measuring these accounts. She notes that how we define this productive boundary shapes how we assess economic performance. She gives examples of difficulties: cleaning up pollution caused by industry adds to the productive side of the economy, but is actually correcting a major damage caused by cost saving by another firm. She notes that there is no economic accounting for housework and child rearing. She also points out that despite the role of the state in investing and driving innovation, the state is seen as inherently unproductive.
Her goal is not to define a new way of looking at value, but to open up the debate on why a theory of value is needed. She notes that the current orthodoxy, marginal utility theory (which essentially sees value as deriving from how useful the next additional unit of a good is, rather than how useful a good is in itself). Essentially, as she notes, this resolves into saying that the value of a good is whatever anyone is prepared to pay for it (and thus any good or services anyone pays for is productive). As a theory it abolishes any standard of value to measure prices by (it doesn’t allow for the concepts of bargains or rip-offs) and justifies the idea that markets are the most efficient measure of demand.
As she notes, marginal utility theorists maintain there is no unemployment, just a rational choice between income and leisure. As there is no measure beyond the market, it means that financial industries, that were once considered unproductive and merely distributive of wealth, can claim to be part of the productive economy. She passes into a quick mention of the idea that banks create money, with the added and helpful twist that sees that alleged ability deriving from the near monopoly of banks created by the state licensing system. This means, in effect that it isn’t private banks creating money, but the state.
She also gives a brief schematic account of the labour theory of value, and an account of Marx’ place in the history of the discussion of what is productive. She gives one of the better accounts of Marx’ theories you’ll likely find in any popular economics book. Marx noted that any activity that generates a surplus value for a capitalist was productive. What Mazzucatto misses in her account, is that Marx was clear that this was productive for capitalists and within a capitalist economy. This ‘valuable, for whom?’ is missing in most of her account, although she clearly gives hints that she would rather see a system of value accounting that gives a positive role to the state.
Her perspective is broadly Keynesian, seeing the struggle between the rent seeking of finance and the productive capacity of industry, and siding with productive capital. One aspect of her narrative that seems to undermine her case for stricter financial regulation, is that she recounts how the banks broke out of their previous regulated regime, and basically forced deregulation. Where there are profits to be made, they will be sought.
This is a useful read, and an opportunity for socialists to get involved in a debate about ensuring that the best way forward is to put an end to economic value through common ownership and the production of an abundance of wealth for use rather than exchange. We would still need mechanisms to assess resources and effective use, but we wouldn’t need a singular measure of personal wealth like a private market economy requires.
PIK SMEET
Bigger Shares
What’s Yours Is Mine: Against the Sharing Economy. Tom Slee Scribe. £9.99.
The Sharing Economy (with capitals) is Slee’s term for what some people call, among other terms, peer-to-peer platforms. Customers and suppliers are able to get in touch with each other by means of the internet and smartphone apps, with the platform company taking a cut of the price paid.
Airbnb, which is probably the best-known example, probably sounds like a reasonable idea, allowing people to rent out spare rooms to short-stay visitors. But in fact it has evolved into something quite different: most lets are of whole houses or flats and are made by landlords who own several properties. They do not need to worry about health and safety regulations or providing fire extinguishers. Those who lose business to them are not big hotel chains like Hilton but small independent hotels and B&Bs. There are even cases of tenants being kicked out because the owner can make more money from short-term lets via Airbnb. (For some other examples of bad experiences as visitors or landlords, see airbnbhell.com.)
Besides property letting, the other main area of the Sharing Economy is transport, primarily Uber. Earlier ride-sharing apps have fallen by the wayside, being unable to compete. Grandiose claims about the amounts Uber drivers can earn have been discredited, and they in fact earn little more than most taxi-drivers. They do not have to worry about providing access for blind passengers or those who use wheelchairs. As part of the gig economy, drivers are not paid when off sick and have to provide their own insurance; moreover, they do not undergo proper screening by Uber.
Slee says he wrote this book because ‘the Sharing Economy agenda appeals to ideals with which I and many others identify; ideals such as equality, sustainability and community.’ But capitalism undermines these ideals: even the Linux operating system, for instance, is now a commercial undertaking and is ‘no longer subversive’. Ideas of openness have led to powerful institutions backed by venture capital and dominated by Silicon Valley. Digital markets often result in a ‘winner-takes-all’ situation, with one massively powerful company in each area (Amazon, for example).
This book gives a clear and well-argued account of various aspects of the Sharing Economy, how the profit motive pervades most areas of life and how attempts to get round it can just lead to yet more profit-based industries.
PB
Moneyless
A World Without Money or Politicians. By Colin Walpole, 2017. Order through
Amazon.I had two reasons to buy this. Colin is my old 'boss.' I helped him, in my ery small way, develop rugby union - his favourite sport - in a local city. Ex-pat that he is, he brought rugby union with him to Denmark and developed a very decent side. The other reason is clear enough: the SPGB has put a similar argument: a moneyless society of democratic control by the world's people.
Colin's booklet does not quote Marx, economics, anything. He makes observations, discusses thoughts, that he has had for years. That might make the booklet refreshing for many who might be bored by quotes from the Grundrisse.
Colin states his thoughts a few pages in. Get rid of a money economy and replace politicians by a direct democracy: 'I've convinced myself that money gets in the way of self-fulfillment'.
Colin rips into money. If you don't have it, you'll do everything to get it. If you have it, life is easy and swell. This, though, is a weakness in the booklet. Capitalist society appears as a mass collection of commodities, to quote Marx (after all), where one – the money commodity – allows the exchange of all commodities because it is regarded as a universal equivalent. To attack capitalism, you must see it as a social relationship based on minority ownership, with majority exploitation: profits, rent and interest for the few; wage slavery for the rest. A class system with a class struggle.
I am certain people will enjoy this booklet: for one thing it shows workers are able to develop revolutionary ideas without a Leninist Party.
G.T.
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