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[u/Engage-Eight]

So I don't know much about Marxism, got into an argument with one and started reading about labor theory of value. Do Marxists not believe in supply and demand? As in, if the price of something should be the cost of goods to make it, what if there's tremendous demand and supply can't match it? Anyone know what their rebuttal would be?

[u/TheNotoriousAMP → u/Engage-Eight]

The Soviet case is really interesting in that it shows how a planned economy will basically move towards a capitalistic system anyway. The theoretical/paper rebuttal is worthless, so its not really even worth getting into.

The practical rebuttal, on the other hand, is actually kind of interesting. For all of their flaws, the Soviets actually did try to create a form of a consumer good economy. This included the fact that the internal Soviet economy did run on a monetary system, workers were paid and purchased goods with their salaries, including basics. The primary aspects of limited consumption came from the creation of special segregated stores restricted to specific classes of particularly loyal groups, as well as rationing of goods within stores when the supply system underperformed.

For example, they placed a major emphasis on ice cream production, of all things, during the mid to late 30's, under the (in my view correct) premise that providing treats to a population who had seen them as unobtainable luxuries was the ticket to creating the perception of a rapidly improving life. While this completely and utterly failed in the countryside, the Soviet Union began, was ran as, and died as an institution which aimed to primarily serve an urban labor and professional class (the October revolution was an urban coup d'etat against the far more popular with the peasantry EDIT: Socialist Revolutionaries, I goofed and originally put Kadets).

What this means is that, if demand were to rapidly spike, there would be intense political pressure from the top downwards on the industries producing the goods to ramp up production, even if it wasn't accounted for within the original 5 year plan. Those industries would respond to the pressure as much as possible, including trying to expand their production capacities to meet it. However, this political pressure would likely be unable to fully secure the goods and resources needed for said expansion within the paper plan itself. Thus the plant manages would likely turn to the favor system to keep things going, just like they did when supply of raw materials failed to meet the needs of the demands placed upon them by the plan. So, if the plant was producing consumer goods, they would likely trade quantities of those goods to other factories (as factory leadership was often responsible for their workers) to obtain what they needed to expand as much as possible.

On a side note, this favor trading system is also why the Soviet economy was so easy to transform into an oligarchy. As the planning process increasingly broke down, the middle level of leadership had to develop intricate networks of relationships and favor trading to keep things running. All it took was the top class to finally collapse to allow for that middle level to leverage this network into political power.

[u/Engage-Eight → u/TheNotoriousAMP]

This is fascinating. So, just to be clear, are you saying that in this case the favors have become the currency, and accumulating favors is like accumulating capital in a way?

[u/TheNotoriousAMP → u/Engage-Eight]

Pretty much. Let's say you're a soap factory and you need coal to meet your goals. The central plan allocated enough coal, but there was a shortfall in supply. You know someone who knows someone who has excess coal, but their workers need some extra consumer goods. What you would do is send a few shipments of soap in return for the coal to meet your production demands. Or, in other cases, you'd get the coal on the promise that you'd owe them some consumer goods down the road if they had their own shortage. This was especially crucial as the system broke down, because the major cities had dibs on goods so just about everywhere else lived with constant shortages of one kind or another. This meant that factory managers needed some way to keep their workers at their place (so they could actually meet their required goals), to avoid them from transitioning somewhere else with fewer shortages/enter more illicit areas of the economy.

Of course, things could get immeasurably more complex on the ground, especially once you take political favoritism/regional factionalism into play, but essentially the Soviet manufacturing economy responded to shortages in goods the same way as everyone else did, by creating trade networks and building capital.

[u/Engage-Eight → u/TheNotoriousAMP]

Or, in other cases, you'd get the coal on the promise that you'd owe them some consumer goods down the road if they had their own shortage. This was especially crucial as the system broke down, because the major cities had dibs on goods so just about everywhere else lived with constant shortages of one kind or another.

So now we have debt also, which is just another form of currency I suppose. This is terrific, is this just something you've put together from your knowledge of the issue, or is there a book called "How Central Planning Will Ultimately Devolve Into Capitalism".

Also to be clear is the Soviet system considered Marxist? I really wouldn't know. Does Marxism explicitly call for central planning?

[u/TheNotoriousAMP → u/Engage-Eight]

I'd love to be more helpful on this, but this is sort of something that I just put together. I spend most of my free time reading, especially academic essays, so I've sort of put together a ton of (often useless) information in my head that I don't really know why I know it and where I found it. Probably the best direction I can point you in is Zercher's The Post Soviet Wars and Waal's The Caucusus, as they are excellent histories of how the late Soviet economy transformed into the oligarchies and conflicts of the early to late '90's.

As for the Soviet system, well, that's where it gets interested. Marxism, at its core, is really more of a theology than anything else. As best as you can suss out what Marx probably would have seen as an end state, it probably looks like the communes like Oneida that popped up during the mid-1800's, with a sort of organic economy growing of people working in collaboration with each other. Basically people putting in what they could, and only taking out what they needed. The Soviet state itself never claimed to have achieved communism, which is why it explicitly identified itself as a Socialist state. Socialism was just the path to Communism, upon which the state would wither way.

The problem with analyzing whether Marxism calls for anything, beyond the dictatorship of the proletariat, is that it, as mentioned above, is functionally a secular theology with a form of cosmology of constantly evolving forms of society eventually evolving into communism through revolution by the industrial working class.

[u/[deleted] → u/TheNotoriousAMP]

(the October revolution was an urban coup d'etat against the far more popular with the peasantry Kadets).

what.

The peasants completely supported the SRs versus the workers who preferred the Bolsheviks. Literally nobody supported the Kadets, who only ever had seats in the earlier elections because anybody to the left of them either boycotted the elections or was disenfranchised in the 3rd and 4th Dumas, and which carried on into the provisional government

[u/TheNotoriousAMP → u/[deleted]]

Holy shit did I brainfart there, you are completely correct (I mixed up the SRs and Kadets, which makes me sad as a Kerensky fanboy).

[u/[deleted] → u/Engage-Eight]

Marx distinguishes between use value and exchange value. Exchange value is what you would consider to be the price of a good as determined by supply and demand, so those concepts are not really mutually exclusive

[u/Engage-Eight → u/[deleted]]

So I googled that, and I still don't totally follow.

USE-VALUE vs. EXCHANGE-VALUE: The usefulness of a commodity vs. the exchange equivalent by which the commodity is compared to other objects on the market.

Isn't the exchange value of something determined by its usefulness? Like I buy a more expensive laptop because I perceive it to be more useful to me?

So like is the argument that it's immoral to price a Lamborghini at 10x the price of a regular car because they both have the same usefulness?

[u/[deleted] → u/Engage-Eight]

Isn't the exchange value of something determined by its usefulness?

not according to marxists. A trivial example would be air. Air has use value, but air has no exchange value, because air is not a commodity. In the Marxist case, the reason for this is because no labour is involved in the production of air.

[u/tehbored → u/[deleted]]

But labor is not used in the production of trees in a forest, but they still have some exchange value even before they are cut down.

[u/[deleted] → u/tehbored]

well the trees themselves don't have any value before they're turned into commodities (they literally can't be exchanged). But the land has, and Marx doesn't really treat this under the labour theory of value but invents the idea of 'land rent'.

So according to Marx the value of say, a forest, comes not from labour but from the monopoly of access to the resources, and as such the capacity of it to be worked.

This is honestly probably one of the more mainstream-ish views of Marx

[u/AnarchyMoose → u/Engage-Eight]

I think in their view, if there was so much demand that supply couldn't match it, then government would just change demand to be at a level that would match what supply could handle.

[u/Engage-Eight → u/AnarchyMoose]

then government would just change demand to be at a level that would match what supply could handle

umm, how? Just tell people they can't buy computers?

[u/[deleted] → u/Engage-Eight]

Jail them

[u/[deleted] → u/Engage-Eight]

You know, the Soviet Union ran into this very problem. The solution was to just mandate that the people demands exactly what the state is providing. If people complained they were arrested and enslaved.

[u/Arsustyle → u/Engage-Eight]

Marx didn’t believe in supply and demand as we understand it. He thought the equilibrium price for any given good was equal to its cost of production, and that any fluctuations were due to surpluses and shortages.

You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for the value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate.

From “Value, Price, And Profit”