The Putsch of January 6, 2021

Normally, after my draft returns from the editors, I make a few last-minute changes, sometimes correct factual errors, and then send it back for final editing and posting. In this post, my deadline for the initial draft was Jan. 4. I considered updating the draft to cover the events of Jan. 6 but it was clear that would involve changes way beyond the usual last-minute updates I sometimes have to make. I therefore decided to leave the post as is, minus some minor editorial changes, but add this special section. The following post should be read as a description of the U.S. political situation on the eve of the attempted putsch of Jan. 6. There will be more on this subject in next month’s post.

After the the Electoral College elected Joseph Biden and Kamala Harris to the presidency and vice presidency of the United States on Dec. 14, Trump appeared to be out of legal options in his attempt to cling to office. But there was one more legal hurdle to clear before the presidential election was formally complete. This was the counting of the electoral vote and announcement of the results to a special joint session of the House of Representatives and Senate by the president of Senate, which was Trump’s vice president, Mike Pence.

At this point, if a member of the House mounts a challenge to the electors of a given state and is backed by a member of the Senate, both houses of Congress have to vote on the challenge. If the challenge is approved by both chambers, the electoral vote of that state is declared invalid. This year, a number of extreme right-wing Republican congressman and some senators announced that they would indeed mount such challenges in a series of swing states that were carried by electors pledged to the Harris-Biden ticket.

Such challenges, though they have occurred occasionally, have always been overwhelmingly voted down. This year, it was clear that the challenges would also be defeated. First, because as far as the Senate is concerned, they did not have support of Republican leader Mitch McConnell, and second, because the Democrats have a majority of the House of Representatives. Trump not only would have had to overcome McConnell’s resistance but split off some Democrats in the House to have any chance of prevailing.

But Trump hoped that the Electoral College vote could be nullified on Jan. 6, which would then move the election to the House of Representatives where Trump would be “elected” to a second four-year term. Or perhaps Trump hoped Vice President Mike Pence could simply announce that not Biden-Harris but Trump-Pence had carried the Electoral College.

When Pence tried to explain to him that the vice president has no such power under the U.S. Constitution, Trump was reportedly enraged and came to view Pence, who had hoped before the Nov. 3 election to become Trump’s anointed successor in four years, as a traitor just as Trump views so many other high officials who have come and gone over the last four years.

With time rapidly running out, Trump decided to play one final card. In the preceding weeks, thousands of MAGA supporters had arrived in Washington waiting to act on the president’s command. On Jan. 6, the command came. As the two houses of Congress were convening in the Capitol to carry out their ceremonial function of certifying the presidential election, Trump addressed a crowd of assembled fascists, some armed with guns, in front of the White House. He announced that they would march to the Capitol. Trump, however, instead of joining them retreated to the White House to watch the show on TV. The fascist mob not only marched to the Capitol, it stormed the Capitol.

Normally, the Capitol is well guarded by the Capitol Police, Washington, D.C., police, and National Guard forces ready to be deployed in case of trouble. But strangely enough, on this particular day the Capitol Police were hardly visible while Trump made sure the National Guard would be kept well away from the Capitol as the fascist mob arrived and, with little opposition from the “forces of law and order,” stormed the building.

Senators and congresspeople, terrified for their lives, had to be removed from the chambers and hidden in safe places as hundreds of fascists rampaged through the Capitol complex and vandalized offices of congressional leaders. Vice President Mike Pence, now viewed as a “traitor” by the mob and in fear of his own life, had to be moved to a “secure location.”

There has been more than one occasion, both in the United States and in other capitalist countries, when the “forces of law and order” have been strangely absent as right-wing mobs assaulted and sometimes murdered left-wing demonstrators. But this was the first time in U.S. history where the United States Congress, one of three co-equal branches of government under the U.S. Constitution, has received similar treatment. For five hours, the mob controlled the Capitol.

Prominently displayed among the rampaging mob was the flag of slavery itself, aka the Confederate or the Rebel flag. One of the rioters, called “insurrectionists” by much of the media, wore a black hoodie with “Camp Auschwitz” printed on it. And, yes, there was a report of at least one Israeli flag as well. Supporters of the Holocaust and of Al Nakba — the brutal expulsion by U.S.-supported Zionist settlers in 1948 of the Palestinian people, who were suppose to pay with their homeland for the unspeakable crimes carried out by German imperialism against the Jewish people of Europe, were now in control of the U.S. Capitol under the banner of slavery. To add to the show brought to you by that master showman himself, Donald Trump, pipe bombs were found at headquarters of both the Democratic and Republican National Committees in Washington.

Hours went by before the National Guard finally arrived — according to some reports summoned by Mike Pence from his “secure location” and not by Donald Trump. Trump finally told his supporters to go home, though it wasn’t until the following day that he condemned the violence. The mob, with very few arrests, then returned to the rat hole out of which they had emerged.

The shaken congresspeople and senators then returned to the Senate and completed their constitutionally mandated business in the wee hours of the morning of Jan. 7 certifying the election of Joseph Biden and Kamala Harris. Some but not all the senators and congresspeople withdrew their objections in light of the day’s events. In the House, a majority of the Republicans voted to uphold the challenges. Among the senators that did not withdraw their challenges were Ted Cruz of Texas and Josh Hawley of Missouri. Both men have presidential ambitions and hope to inherit Trump’s MAGA base and ride it all the way to White House.

For now, however, the tide is going the other way. On Tuesday, the two Democratic candidates in the special Georgia election, an African American and a Jew, were victorious, handing the Democrats a narrow control of the U.S. Senate thanks to Vice President Kamala Harris’s tie-breaking vote. It was a bad day in more than one sense for Mitch McConnell, who will now be the Senate minority leader.

As I write these lines, the political situation remains fluid in Washington. The problem is that under the U.S. Constitution the putschist president, who is arguably guilty of insurrection and sedition, retains the full powers of the presidency including his role as command-in-chief of the armed forces until noon Jan. 20. Normally, this would be merely a technicality. But could Trump backed by men like his former defense intelligence chief under Obama and former national security adviser under Trump himself, General Michael Flynn, attempt another, perhaps even more dangerous, coup? There are fears that he might also start a war, most likely with Iran but possibly other countries as well.

To prevent this, a new impeachment of the president or the invocation of the 25th Amendment, which requires the support of the vice president and a majority of the cabinet plus two-thirds of both houses of Congress, is being discussed in Washington to formally remove Trump from office.

Assuming we get to Jan. 20 without further disasters, the question that will be raised is whether the events of Jan. 6, though a regrettable event, arose merely from the accidental election of a man absolutely unqualified to be president, or are the events, though they have accidental features, rooted in the irreversible economic decline of U.S. capitalism? That is the question I will be exploring in the following blog post and the ones to follow.

Trump’s End Game

As the final weeks of his term run out, Donald Trump continued to break the unwritten rules of the U.S. presidential transition. Instead of congratulating Biden and Harris on their more than 7 million popular vote victory, Trump refused to concede the election. Even after the Electoral College formally elected Joseph Biden and Kamala Harris as president and vice president of the United States, respectively, on Dec. 14, Trump still refused to concede. Instead, Trump backed a series of lawsuits aimed at throwing out the election results and nullifying the Dec. 14 vote.

However, the Republican Party leadership has not gone along with Trump’s desperate maneuvers when it counted. Republican state officials and legislatures in swing states carried by Biden-Harris did not appoint Republican electors to the Electoral College. Instead, they certified the victory of the Democratic Party electors. Republican federal judges, including the three Supreme Court Justices appointed by Trump, threw out lawsuit after lawsuit filed by Trump’s die-hard supporters. And finally, Senate Majority Leader Mitch McConnell, in what Trump must view as the ultimate act of betrayal, acknowledged Biden and Harris as the president-elect and vice-president-elect of the United States.

Under the U.S. Constitution, the Dec. 14 Electoral College vote left one final step before the presidential election of 2020 is formally complete. That is the counting of the electoral votes by both houses of Congress on Jan. 6.

In the past, this event has not even made the news. But not this time. Up to now, it was always considered a purely ceremonial affair. The vice president, who is under the Constitution the president of the Senate, formally announces the votes of the Electoral College electors to both Houses of Congress.

At that time, any member of the House of Representatives can challenge the legitimacy of the electors in any U.S state. If the congressperson is joined by any senator, both houses of Congress must meet and vote on the challenge. For the challenge to work, both houses of Congress must vote to accept the challenge. While there have been occasional challenges by congresspeople and a few senators in the past, they never came close to success.

A few far-right Southern Republican congressmen indicated they would challenge the Biden-Harris electors in the swing states on Jan. 6. Then, on Dec. 30, Josh Hawley (1), a Republican senator from Missouri, announced he would challenge the pro-Biden-Harris electors in the swing states where the vote was close.

Hawley at 41 is young by the standards of U.S. presidential politics. His move seems calculated to position himself as the successor to Donald Trump as the leader of the U.S. far right. If Trump, who will be 78 in 2024, again runs for president — and this depends among other things on the state of Trump’s physical and mental health at that time — Hawley’s action makes him an obvious candidate to be Trump’s running mate. But if Trump does not run in 2024, Hawley will be a leading contender to inherit Trump’s cult-like MAGA (2) following and use it to mount a presidential bid of his own. Other Republican senators who have their own presidential ambitions, or who fear pro-Trump challengers in future primaries, announced that they would join Hawley in challenging the legitimacy of some of the pro-Biden-Harris electors.

Republican Senate Leader Mitch McConnell, soon to turn 79 and having no presidential ambitions of his own, did not want any Republican senator to challenge the Democratic electors. McConnell just wants the messy presidential transition of 2020-2021 to be finally over and Trump to be gone. Then he can spend the final years of his political career doing what he does best — using his considerable political power to uphold the class interests of the owners of capital and land.

Trump made one last attempt to drum up support for his increasingly desperate last-ditch attempts to cling to office or failing that lay the foundation for a new presidential run in 2024. Last summer, Trump and Congress between them allowed the CARES Act with its expanded unemployment insurance and eviction moratoriums to run out. While eviction moratoriums were extended, the extra $600 in unemployment insurance was not. As the year end approached, even regular unemployment insurance and the extended eviction moratorium was due to expire.

With the bitter cold of winter settling in over much of the U.S. and the COVID-19 pandemic continuing to accelerate, with U.S. total deaths now exceeding 340,000 and rising, millions of people in the most powerful imperialist nation in the world faced the prospect of homelessness and destitution. While Wall Street sees this as more of an opportunity to increase the rate of surplus value than a problem, there was concern in financial circles that the U.S. and global credit system would face the prospect of a major deflationary shock if unemployment payments and eviction protections were suddenly terminated. Such a shock would trigger a potentially disastrous “double-dip” recession upsetting the confident predictions of a stellar year for profits by Wall Street economists for 2021.

The Democrats and Republicans in Congress had to come out with something to stave off a massive social crisis combined with and intensified by a double-dip recession. And they did. The Democrats and Republicans agreed on a bill which includes new tax breaks and other goodies for the rich but also extends unemployment insurance and eviction protection (3) by a measly 11 weeks — essentially through the winter. Included in the package was a small $600 check — good for about half a month’s rent — to be mailed to all working-class and lower-middle-class Americans. Wall Street, seeing that the Democrats and Republicans between them are doing exactly what it wants them to do, continued its bull run.

But then Donald Trump as part of his last-ditch attempt to cling to office, or perhaps more realistically lay the basis for a 2024 campaign, announced he might veto the bill or simply refuse to sign it unless the “stimulus check” was increased to $2,000. Wall Street, however, and its bought-and-paid-for economists such as Democrat Larry Summers believes that this would undercut the historic opportunity to slash wages — and thereby increase the rate of surplus value. Summers and other Wall Street economists believe that there shouldn’t have been any stimulus check.

Trump decided to make even more problems for the Republicans “who had betrayed him” by failing to take the extraordinary measures that would have been necessary to steal the presidential election. He vetoed the huge “defense” bill sacred to Democrats and Republicans alike. He complained about a provision, actually part of international treaties, that protects Internet companies from being sued for actions of Internet users such as posting copyrighted material. He also made known he was unhappy about a provision that removes the names of Confederate war “heroes” from military bases. In response, the Democrats and the Republicans united to override Trump’s veto, which they can do with a two-thirds’ vote in both chambers of Congress.

However, Trump’s demand to increase the “stimulus checks” from $600 to $2,000 was extremely popular among virtually all Democratic and Republican voters who are not themselves capitalists or pretty close to being capitalists. Given a choice of receiving either amount, who wouldn’t choose the $2,000? This forced the Democrats in the House to pass a bill increasing the checks from $600 to $2,000. The Democrats figured that the Republicans would kill the bill in the Senate anyway so no actual harm would be done to the interest of capital, which they like the Republicans serve.

Also, the House Democrats hoped that this move would lead to the victory of the two Democratic Senate candidates in the Jan. 5 special election in Georgia. Mitch McConnell would then have his title changed from Senate majority leader to Senate minority leader because the Democrats and the Republicans would then have 50 senators each, with Vice-President Harris, as president of the Senate, having the tie-breaking vote. McConnell’s power over the Senate would then be reduced.

Horrified by the possibility of his political power being cut, McConnell was forced to introduce a bill in the Senate that would increase the checks from $600 to $2,000. But there was a catch. He included two “poison pills.” One was a provision to remove the liability protection for “harmful postings” enjoyed by Internet companies; the second was a proposal to launch an investigation into the alleged election fraud by the Democrats in the 2020 election. He was confident that the two poison pills would ensure the bill’s defeat.

The Trump-Sanders bloc for $2,000 checks

Now it was Bernie Sanders’ turn to intervene. The “democratic socialist” senator from Vermont and other progressives announced their support of Trump’s proposal to increase the stimulus checks from $600 to $2,000. Sanders proposed to his fellow Democrats that they refuse to vote on overriding Trump’s veto of the “defense” bill until Mitch McConnell removed the two “poison pills” from the bill that now included an increase in the size of the stimulus checks to $2,000. With this change, Sanders would gladly have seen the mammoth “defense” bill pass, though no other country is even remotely in a position to attack the most powerful imperialist country in the world.

This is Sanders’ idea of “democratic socialism” in action. The only problem is, it didn’t work. The Democratic senators, with only five exceptions, went ahead and voted for the override of Trump’s veto without demanding that McConnell remove his “poison pills.”

With Jan. 6 past, Trump is finally out of legal options, no matter how far-fetched, to remain in office beyond Jan. 20. That leaves the actual transfer of presidential power from Donald Trump to Joseph Biden at noon EST on Jan. 20. In a sense, however, there is one more date that must be cleared before this transition is finally over, though you won’t find it on a standard calendar. That date is the 18th Brumaire. (4)

On Dec. 18, in a White House meeting, Trump reportedly considered a plan to declare martial law in the “swing states” and seize the voting machines. Martial law would be declared, election results would be thrown out, the Constitution temporarily suspended, and the elections re-run, this time under conditions that would ensure a victory for Donald Trump.

This proposal was supported by Trump’s first national security adviser and former head of the Defense Intelligence Agency under Obama, General Michael Flynn. It was, however, vehemently opposed by such veteran reactionaries as Trump’s chief of staff Mark Meadows, a former far-right North Carolina congressman and head of the Koch brothers-supported House “Freedom Caucus,” and even Rudy Giuliani, the former racist Republican mayor of New York City.

The top Pentagon brass is reportedly not happy about being drawn into presidential politics, which they see as below their station in life. The generals announced that they take an oath of loyalty to the Constitution and not to the president or even to the country. Clearly the generals want no part in the coup that Trump is rumored to be considering. Without the support of the Pentagon generals, such a coup has no chance of succeeding.

But that raises an interesting question. Anybody who knows even a little about the U.S. constitutional system knows it is the Supreme Court that has the last word on what is and is not constitutional. But if the generals take an oath to uphold the Constitution and the president gives them an order such as seizing voting machines and declaring martial law to overturn the results of a constitutionally mandated election, isn’t it the generals and not the Supreme Court who have the last word in deciding what is and what is not constitutional?

Like a garment ripping and revealing the underlying skin that is normally hidden, the current U.S. political crisis caused by Trump’s refusal to play by the normal rules of a presidential transition, an important truth about the real nature of the State is revealed. In the final analysis, the state is an organization, to paraphrase Frederick Engels, of armed people along with such material extensions as prisons, jails and concentration camps. Or as Mao Zedong once put it, “Political power grows out of the barrel of a gun.” Today, the Pentagon generals judge that Joseph Biden and not Donald Trump is the constitutional president. But what about tomorrow?

This shows that the growing trend of imperialism in general and U.S. imperialism in particular towards Bonapartism will not end with the Trump presidency. As if to underline the point, President-elect Joseph Biden has nominated General Lloyd J. Austin III to be secretary of defense (war). When Trump nominated General “Maddog” Maddox to be secretary of defense — who he later fired — he broke with a long tradition of having civilians and not military men serve as head of the Pentagon war machine.

But now the very conventional Joseph Biden has followed in the footsteps of the very unconventional Donald Trump. Who knows, Biden must be wondering, what crises — financial, economic, political, medical-biological, climate or military-war — lurk in the future. Perhaps Biden wants to make doubly sure to keep the best relations possible with “the supreme constitutional judges” who work in the Pentagon.

After Trump

The end of the Donald Trump presidency opens up a new period in both U.S. and world politics. While the U.S. ruling class complained that Trump was a great divider, he was actually a great uniter. Trump’s extreme racism, combined with his appeals to ignorance, religious bigotry, and obstructionism united “black and brown” workers, many white workers, trade unionists, women who do not want to be confined to “traditional roles,” LGBTQ people, Muslims and Jews, artists, plus the men and women of science.

From the marches that began with AP’s announcement that Trump was the “president elect” in November 2016, the huge Women’s March in Washington and across the country on Jan. 21, 2017, the day after Trump assumed office, through the science marches, the marches against the “kids in cages,” and finally to the massive wave of multi-racial Black Lives Matter demonstrations, huge sections of the American people were united as never before against Trump and all he stood for.

While the ruling class claimed to be concerned that “Trump was dividing us,” it was this unity Trump was inspiring against himself that the ruling class feared the most. And it played a big role in the decision of a large part of the U.S capitalist ruling class to do what they could — which of course was considerable — to get Trump out of the White House through the 2020 election. The defeat of Trump is a positive thing insomuch as it will at least discourage the ruling class from supporting a similar reactionary racist adventurer in the future. This makes it unlikely they will be able to pan off Donald Trump as a “great president” like they have been able to do with Ronald Reagan, with the considerable assistance of Mikhail Gorbachev.

But the election of Joseph Biden has not provoked a similar reaction. On the contrary, there have been no demonstrations among progressives protesting the election of Biden, even though he has supported every war the U.S. has fought or even threatened to fight during his long political career, opposed school busing, single-payer health care as a right even in the very teeth of the global pandemic that has already killed hundreds of thousands of Americans, and in the past has supported cutting Medicaid and Social Security while always supporting the gigantic “defense” budget.

Attitudes towards Biden among those who opposed Trump have ranged from cautious support to skepticism and low expectations, to outright opposition on a small part of the “far left.” Biden will not bring the “progressives and the left” together, at least in the immediate future, the way Trump did. This is the reason why the U.S. capitalist class is united in its opposition to Trump’s last desperate attempts to cling to power.

Among progressives, attention is shifting to how much if at all Biden can be pressured into following a “progressive agenda.” His cabinet nominees are being scrutinized. So far, the reactions to Biden’s cabinet picks have been generally negative among progressives. Biden has been nominating many people of color and women in sharp contrast to Trump’s almost all-white and usually male picks. This shows the contrasting nature of the bases of today’s Democratic and Republican parties. But all the people nominated to powerful posts, regardless of their skin color and gender, have solid pro-capitalist, pro-war and pro-imperialists records. Biden’s emerging administration is a typical “Party of Order” administration, much like the Clinton and the Obama administrations before it, but with more female and brown faces appropriate for the changing racial composition and role of women in 21st-century American society.

Time to take a fresh look at Marxist theory

As we pass through the transition between the dying Trump administration and the incoming Biden-Harris administration, this a good time to take a fresh look at basic Marxist economic theory and how its relates to other economic theories gaining a following. Among progressives, the main alternative to Marxism that has emerged is Modern Monetary Theory. While the individual personalities of U.S. presidents can play an important role in the evolution of the political situation, far more important is the evolution of the economic situation.

It was the long-term decline of U.S. monopoly capitalism that made possible the rise to power of Donald Trump in the first place. And it was Trump’s failure to reverse this decline that was thrown into bold relief by his disastrous handling of the combined pandemic-economic crisis of 2020 that led to his downfall. And it will be the evolution of the economic situation that will — along with war — determine to what extent Biden and Harris will succeed, and for how long, in their program of “returning to normalcy” after the chaotic Trump years.

The problem

Of special interest in light of the present political situation is to what extent is Modern Monetary Theory and Marxism compatible, and if they are not compatible, why not? More importantly, since Marxism is not a religion but a science, to what extent is Marxist economic theory correct against Modern Monetary Theory? How you answer this question will greatly influence how you approach the rapidly evolving political situation.

This raises a question that has been of great interest to this blog. To what extent must money be a commodity such as gold? Modern Monetary Theory denies that money must be a commodity. MMT holds that if in the past gold was money, that was only because the state made it money by making taxes payable in it.

MMT teaches that there is no reason why money has to be a commodity. Money according to MMT can just as well be legal-tender tokens issued by the state. All the state has to do to make the tokens money is to create a demand for them by making taxes payable in them.

As we know, most but not all modern Marxists tend to agree with MMT that modern money does not have to be a commodity. If for the sake of argument we accept this claim, it raises the question to what extent the rest of Marx’s economic and indeed political theory is compatible with the economic analysis of Modern Monetary Theory.

Most but not all modern Marxists accept the view that at least since Nixon in August 1971 the convertibility by foreign holders of U.S. dollars into gold at a fixed rate ended and money ceased to be a commodity. These Marxists speak of “modern money” as non-commodity money. This opens the door to the leading anti-Marxist economic theory on the left, namely Modern Monetary Theory. For MMT supporters, this is a play on words. They explain that it is their theory that is modern, not today’s money.

According to MMT, money has never been a commodity except to the extent that the state made certain commodities money. The view that “modern money” is not a commodity is widely accepted among Marxists despite the continued obsession in the financial press with every fluctuation whether significant or insignificant of the U.S. dollar “price of gold.” This is true even though gold plays a very modest role in the global capitalist economy if we ignore its now contested monetary role. If MMT and most modern Marxists, as well as most bourgeois economists are right, fluctuations of the dollar price of gold have very little economic significance.

In 2005, Marxist economist Fred Moseley published a series of articles, entitled “Marx’s Theory of Money” and subtitled “Modern Appraisals,” on whether Marx’s theory of value requires that money be a commodity. By doing this, Moseley performed a great service. Moseley’s later book on the transformation problem, “Money and Totality” (2016, Haymarket Books), is largely a continuation of his articles on Marx’s theory of money published in 2005.

Closely related to the question of whether money must be a commodity is the transformation problem, which has in one form or another bedeviled first classical bourgeois political economy and then the Marxist critique of it for the last 245 years. The transformation problem deals with two questions: First, does a theory of labor value require that the sum total of prices of production equal the sum total of prices that directly correspond to labor values? And second, must the rate of profit in terms of labor values equal the rate of profit in terms of prices of production? This month, I deal only with Moseley’s approach to the first problem.

The transformation problem is generally of interest only to people who are deep into economic theory. However, as regular readers of this blog know, the question of whether money must be a commodity also has tremendous implications for crisis theory and the ultimate fate of the capitalist mode of production and thus modern society. What at first seems an abstract mathematical problem in no small measure holds the key to what lies behind and beyond the turbulent political events marking the transition between the Trump and Biden-Harris eras.

Moseley writes: “Marx considered his theory of money to be one of his main accomplishments and a significant advance over Ricardo’s theory and classical economics in general, which had simply taken money for granted, or explained the existence of money in ad hoc fashion, based on the practical difficulties of barter, unrelated to any theory of value. … According to my interpretation of Marx’s theory of money, Marx derived the necessity of money in a commodity (or market) economy from his fundamental assumption of the labour theory of value. … ”

If Moseley is right on this — and I strongly believe he is — then we can’t simply amputate Marx’s theory of money from his broader value theory without raising questions about other aspects of his value theory, including the all-important theory of surplus value. And since Marx’s theory of surplus value forms the foundation of Marx’s theory of exploitation and profit, we cannot amputate Marx’s theory of money without raising a question mark over the rest of Marx’s economic theory and the political conclusions that necessarily flow from it.

Therefore, before proceeding further, I want to take a broader look at what value theory is all about. It is a fact — not a mere theory — that a capitalist economy, and indeed any commodity-producing economy, is characterized by a deep division of labor. The producers work privately for their own account and not according to a common plan. All producers engaging in private labor are driven by pressure from other producers — competition — to maximize their wealth as much as possible. This is not because they are “greedy” but because they have no other alternative.

The producers working for their individual accounts have no way of knowing in advance to what extent, if at all, their private labor forms a part of social labor. They are therefore forced to exchange the products of their individual labor with other producers who are producing the products that each private producer needs to live and produce the next generation of producers.

Commodity production is only a phase in the history of production. We humans and our immediate ancestors over the last few million years have gradually differentiated from other members of the animal kingdom only because of our growing dependence on the use of tools to obtain the means of subsistence that like all other animals we need to live and raise the next generation. Leaving aside creatures like social insects that engage in what appears to be labor through instinct — actions programmed into their genes rather than learned — some other animal species engage in occasional acts of conscious tool using and even tool making. But no species has become dependent on conscious labor, defined as procuring from nature with tools, in the way our species has.

From the ape mind to the human mind

Combining Darwin with Marx and modern genetics, we now have a better idea of how our species emerged from the animal kingdom over the last few million years. There is nothing in the brutal process of competition among individual members of a species for survival and reproduction that characterizes the animal kingdom — called by Darwin natural selection — that selects for high intelligence. Brain tissue is extremely expensive in terms of energy consumption. Therefore, much like a capitalist “penny-pinching” accountant, natural selection actually “economizes” on brain tissue as much as possible.

At a certain point in the past, however, perhaps 2.5-3 million years ago, the occasional and sporadic acts of tool-making — the first tools being simply modified leaves and stems and much later modified stones made by our ape ancestors — led to a growing dependence by our ancestors on tool-making to obtain their means of subsistence. At this point, tool-making passed from being an occasional activity to a necessity.

The most desirable mates — the best food providers — were increasingly the best tool-makers and users. This changed the direction of natural selection from one of economizing on brain tissue to expanding it since the best tool producers and users tended to be the smartest tool users and makers. Brain tissue was still expensive, but it now paid for itself in a way it had not done before. The history of production — the material foundation of all human history to come — had begun.

From this point onward, the basic principle of historical materialism, alongside natural selection, began to guide the evolution of proto-human societies. This process was slow at first but over the last 15,000 years has rapidly accelerated. The basic law of historical materialism emerged that the social organization that encourages the greatest saving of labor measured in terms of time wins out over all rival social organizations. Those groups of proto-humans and — over the last few hundreds of thousands of years, full humans — that could produce a given product with less labor won out in the struggle with other human groups.

What is value?

When historians probe into relatively recent human history to explain how much certain products are worth in “today’s terms,” they frequently use the concept of translating prices in terms of past currencies into present-day U.S. dollars. But anthropologists who probe deeper into the past are forced to “value” the products of the past not in terms of U.S. dollars but of the quantity of labor measured in some unit of time that they believe it took the ancient society they are studying to produce these products. For example, how many years of labor did it take to build the Egyptian pyramids? Even bourgeois anthropologists, if not modern bourgeois economists, realize that labor is the essence of “cost.” The labor spent building an Egyptian pyramid could have been spent on something else such as, for example, producing more grain.

Today, under the current phase in the history of production that we call capitalism, the highest and final stage of commodity production when people refer to the value of a commodity in the everyday sense of the word they mean monetary value. For example, a pair of shoes is worth $50. Most people, embedded as they are in today’s capitalist relationships of production and exchange, don’t have a theory of value that goes beyond that.

The modern bourgeois economists with their marginalist theories of “consumer preference” also don’t think beyond this everyday concept of value. What they are good at is building models that express these everyday concepts in the language of mathematics. The economists put themselves in the position of a shopper in a grocery store who, for example, has $50 to spend. The shopper knows that if they spend $10 on oranges, they will have $10 less to spend on anything else. Will the shopper purchase five oranges and five apples or will it be one orange and nine apples, or maybe 10 apples and no oranges or 10 oranges and no apples? Every such shopper, assuming they have $10 to spend on fruit out of $50 allocated for groceries, is as Milton Friedman put it “free to choose.”

The classical economists penetrated deeper. They knew that before our shopper can purchase either apples or oranges, somebody had to engage in the labor necessary to grow and harvest the apples and oranges and ship them to the grocery store. If society spent X amount of labor — measured in some unit of time — growing, harvesting and shipping apples, it cannot at the same time expend the same labor growing, harvesting and shipping oranges.

The classical economists then realized that behind the money value of commodities, such as our apples and oranges, there lurked a given quantity of labor measured in some unit of time. Under the capitalist system — and any system of commodity production — the classical economists realized that it was labor once it is embedded in commodities that gives a commodity what we call value.

But that led to the question, what is the relationship between value as defined by the classical economists and value in the everyday sense we call price? The classical economists began with the assumption that the quantity of labor necessary to produce a commodity determined its price. Not necessarily the market price that is ever-changing according to supply and demand but rather the long-term, or “natural price, around which the market price fluctuates. Later on, the term “natural price” was replaced by “cost of production” or “price of production,” the term Marx eventually settled on.

The great English classical economist David Ricardo (5) took further than any other economist of the time the concept that it was the quantity of labor necessary under the prevailing conditions of production that determines the value of a commodity. Guided by his extremely logical mind, Ricardo persisted even in the face of the transformation problem, which created great, and what turned out to be fatal, difficulties for the Ricardian theory of value.

According to Ricardo, the value of a commodity is the long-term equilibrium price where supply and demand cancel out. This long-term equilibrium price is determined by the quantity of labor necessary to produce a given commodity of a given quality under the prevailing conditions of production. As labor productivity increases with the progress of human society, the values of commodities fall. Therefore, the wealth (accumulated use values) of society increases with the growth in the productivity of labor.

Ricardo’s quantity theory of money

Suppose gold, which Ricardo assumes is the money commodity, falls in value due to the discovery of rich new mines, all else remaining equal. This would create a disequilibrium because the prices of commodities would be measured in terms of gold. The prices of commodities will now be below their values. Capital, always in search of the highest possible profit, will then flow into the gold industry causing the production of gold to rise. The rise in the quantity of gold — money — will then cause the prices of commodities measured in terms of gold to rise until prices once again equal their values.

If the value of gold rises, everything else remaining unchanged, the reverse happens. Prices now rise above their values and capital will flow out of the gold industry into other more profitable industries until the prices fall back to their values. This will occur because as capital flows out of the gold industry, the production of new gold falls. Assuming a rising volume of commodity production — economic growth — the quantity of commodities other than gold will rise relative to gold, causing prices as measured in gold to fall. They will keep on falling until prices once again equal values. Ricardo assumed that this process was occurring constantly and with little friction.

This led Ricardo to what is now called the theory of the neutrality of money. This theory holds that any change in the quantity of money relative to commodities affects nominal prices and wages but will have little to no other effect on the real economy.

The quantity theory of money, Ricardo, and the fiasco of the ‘currency school’

After the death of Ricardo in 1823, Britain was shaken by the financial and economic crises of 1825 and 1837, which Marx considered the first crises of the relative general overproduction of commodities. Both crises featured drains of gold from the Bank of England, which forced the Bank to raise its discount rate to attract gold from aboard. During both crises, there was an acute shortage of money, a sharp rise of interest rates, a contraction of credit leading to a sharp drop in demand resulting in a slump in industrial production, and a contraction of employment leading to mass unemployment. This was not supposed to happen according to Ricardian monetary theory.

What had gone wrong? The Ricardo-inspired currency school blamed these two crises on the fact that prices in Britain were higher than the prices in other countries. This made British exports non-competitive, allowing cheaper imports to crowd out domestic production. The result was a balance of trade and payments deficit causing a gold drain, which then led to a credit crisis and fall in demand, industrial production, and employment.

Why crises occur according to the currency school

According to the currency school, the crises arose because the quantity of banknotes issued by the Bank of England exceeded the quantity of gold in the Bank’s vaults. This excess of banknotes caused prices in England to rise relative to Britain’s trade partners and competitors. To prevent a recurrence of similar crises in the future, the currency school advocated a reform that would strictly tie the quantity of banknotes created by the Bank of England to the quantity of gold in its vaults. If this were done, the currency school held, the prices of commodities within England would never rise above the prices of similar commodities in other countries. This would prevent future gold drains and a repeat of the crises of 1825 and 1837.

The Bank Act of 1844 created an empirical test of Ricardian monetary theory. The Bank was split into two departments, the Banking Department and the Issue Department. Under this legislation, the Banking Department acted much like a regular commercial bank that has no authority to issue its own banknotes. It took deposits and discounted bills of exchange. What the Banking Department could not do was to issue banknotes. If it had to redeem deposits or purchase bills of exchange with banknotes, it had to turn to the Issue Department.

The Issue Department had the right to print and issue banknotes. Under the Bank Act of 1844, to simplify a little, the Issue Department could not issue new banknotes unless it had the gold bullion to back them. If its gold reserve fell, the Issue Department was forced to cancel some of its existing banknotes. Therefore, the 1844 reform assured that no more banknotes could be issued and circulated than there was gold in the bank’s vaults. The authors of the reform reasoned there would always be just the right amount of banknotes to keep British prices in line with world market prices. Therefore, the currency school believed there would be no recurrence of the type of crises that had hit Britain in 1825 and 1837.

The Bank Act of 1844 was therefore the first attempt of many to follow to eliminate what Marx called crises of overproduction through reforms of the central banking system. Like all other such attempts that were to follow, the Bank Act failed. In 1847 — and again in 1857 and 1866 — the Issue Department was hit with massive bullion drains and the British economy was thrown into crisis with resulting mass unemployment. Fortunately, the Bank Act contained a loophole that allowed a suspension of the Act and the Issue Department to issue additional banknotes not backed by gold.

The public knew that in the absence of a Bank Act suspension there were only so many banknotes available to make payments and this quantity could not be increased in the absence of an inflow of gold. (6) As a result, as soon as a crisis broke out the demand for banknotes rose through the roof as debtors scrambled to obtain scarce banknotes from their debtors. Long lines formed in front of the commercial banks forcing them to call in their loans in the form of banknotes. Credit became paralyzed causing demand to violently contract and industrial capitalists to lay off their workers, resulting in massive unemployment.

Then the suspension of the Bank Act would be announced. The demand for banknotes would slacken and soon economic recovery would set in. Only on one occasion, the crisis of 1857, did the Issue Department have to issue additional banknotes not backed by gold, and then for only a brief time, to halt the crisis. The failure of the Bank Act to prevent crises — indeed, it made the crises much worse — implied that there was something fundamentally wrong with Ricardo’s theory of money.

While Ricardo’s monetary theories were failing in practice, his broader theory of value was also coming under attack, in part because of internal contradictions that Ricardo had been unable to resolve. The classical economists even before Ricardo were aware of the apparent contradiction between their theory of value based on the quantity of labor necessary to produce a commodity of a given use value and quality, on one hand, and the equalization of the rate of profit, on the other. Classical political economy had no concept of the division between constant and variable capital because of Adam Smith’s notion — accepted by Ricardo — that if you go back far enough what Marx was later to call constant capital could be reduced to variable capital or the means of subsistence consumed by the productive (of surplus value) workers. However, they were well aware that different types of capital had different durabilities and turnover periods.

Therefore, if “natural prices,” which Ricardo assumed were identical to values, were determined directly by labor values, the rate of profit would be higher in sectors of production that employed lower than average amounts of “durable” capital than it would be in sectors that employed large quantities of circulating capital. Yet the classical economists were also well aware that competition tends to equalize the rate of profit among all sectors of production. But this meant that profits could only equalize if prices are something other than proportional to labor values. The transformation problem was born. Faced with the transformation problem, most economists — but not Ricardo — retreated from the concept of labor value.

Faced with the transformation problem, Adam Smith assumed that the law of labor value operated only in a simple commodity economy where workers themselves owned their means of production. But according to Smith, in a developed capitalist economy, another theory was necessary to explain values or “natural prices” of commodities. Smith assumed that under capitalism the value of commodities was determined by the sum of wages, profits and rents, which determine the “cost of production” of commodities. Here Smith, faced with the transformation problem, retreated to a “vulgar,” cost of production theory of value. The cost of production of commodities was determined by their value. But what determined the cost of production of commodities? Why it was the cost of production of commodities. Smith’s circular reasoning did not satisfy David Ricardo.

Ricardo, who was far more consistent than Smith and hated the logical contradictions Smith was willing to live with, held to the view that labor value applied not only to pre-capitalist simple commodity production but to capitalist production. But what Ricardo could not do was to explain the contradiction between the equalization of profits and his law of labor value. Something was missing from Ricardo’s value theory. Ricardo himself realized it, but he could not explain what it was. Modern bourgeois economists who are interested in these things — a small minority — sometimes describe the Ricardian theory of value as a “93% labor theory of value.”

Ricardo’s futile search for an invariable measure of value

In wrestling with the contradictions of his theory of value, Ricardo discovered that changes in the rate of surplus value (to use Marx’s later terminology) would change relative prices. If the rate of surplus value due to a rise in wages fell, the cost price in “labor-intensive industries” — industries with a lower organic composition of capital than average — the cost price will rise more than in industries with a higher than average organic composition of capital.

This is true because “labor costs” — the price of labor power in Marxist terms — plays a more important role in determining the cost price in industries with a lower than average than it does in industries with a higher than average organic composition. As a result, the previous equal rates of profit will now be unequal because the rate of profit in the “labor-intensive” industries will now be lower than in the “capital intensive” industries.

In the event of a fall in the rate of surplus value — a rise in wages — capital will then flow from those industries with a lower organic composition of capital to those industries with a higher organic composition. This will cause prices of production to rise as wages rise in industries with a lower than average and fall in industries with a higher than average organic composition of capital. (7)

Only if wages rise so high that the rate of surplus value in Marxist terms falls to zero will the price of production equal prices that directly correspond to labor values. But in the real world, this is impossible because, as Ricardo as well as Marx knew, capitalism cannot exist without profit. Opponents of the Ricardian theory of value then pointed to this rule discovered by Ricardo himself as further proof that something other than labor value was determining the values, by which they meant the prices of production, of commodities.

Some modern Marxists — and we will see that Moseley is among them — concede that prices of production of individual commodities can deviate from their direct prices, to use Anwar Shaikh’s terminology, or “value-prices” to use Moseley’s terminology, with the sum total of all prices of production always equal to the sum total of all direct prices. But this opens up another can of worms, which Ricardo was well aware of.

What about the commodity whose value we use to measure the value of all other commodities, for example, gold bullion. Isn’t it also affected by changes in the rate of surplus value? Let’s assume that the industry that produces gold bullion has a below-average organic composition. Marx made this assumption not only for gold but for the extractive industries in general because the raw material, which counts as constant capital for Marx, is already in the industry’s ore. However, raw-material-bearing ores are the products not of human labor but nature. The value of gold-bearing ores is therefore exactly zero, according to both the Ricardian and Marxist theories of value.

Gold-bearing ores in Marxist theory represent not constant capital but “landed property.” Therefore, Marx assumed that the gold industry’s capital had an organic composition that is below average. Let’s assume this is the case. The price of production of gold will be below its value. Of course, this assumes that gold as the money commodity has a price. But if gold has no price, what is its form of value? It is nothing but the equations of exchange between gold and every other commodity except itself, which Marx called the expanded form of value. These are the equations of exchange where a particular commodity is compared successively with every other commodity. In the case of the money commodity, this means the price lists read backwards. To equalize the rate of profit of the gold industry with all other industries, gold must on average exchange with other commodities below its value. This will mean that the sum total of prices of production (8) will exceed the sum total of direct prices in direct contradiction, as we will see, with Moseley’s theories.

Ricardo wanted an invariable measure of value. But it turns out the exchange values of gold — all price lists read backward — far from being invariable vary with the fluctuations in the rate of surplus value. Gold is a variable not an invariable measure of value. Naturally, Ricardo’s opponents saw this as all the worse for Ricardo’s labor theory of value.

Ricardo’s only solution was to assume the durability and turnover of capital — the closest Ricardo got to Marx’s later concept of the organic composition of capital — was average in the gold industry. But there was no reason that Ricardo could give to assume that this had to be true or even likely to be true. And as we saw, Marx thought it more likely that gold production had below-average productivity of labor.

This is where Ricardo left value theory to his successors. And the only worthy successor to Ricardo in terms of value theory was not another bourgeois political economist but rather someone with a socialist critique of political economy named Karl Marx. After Ricardo’s time, his bourgeois successors moved away from the concept of labor value altogether, finally arriving at the modern marginalist theory of value.

Ricardo on the circulation of money

Ricardo assumed that the quantity of money in a country would always be fully employed. Capitalists get rich, Ricardo reasoned, by investing money in productive enterprises. It was not in the interest of the capitalists, he reasoned, to allow any of the money that passed into their hands to lie idle. Therefore, no significant portion of the money supply of a country would ever fall out of circulation, at least under normal circumstances.

Exceptional circumstances such as the current pandemic might cause money to pile up in hoards in the banks or elsewhere, but this would always be due to an external shock. Workers, of course, have no alternative but to quickly spend the full amount of their wages, since they live “from paycheck to paycheck.” (9) Therefore, no piece of money would linger very long in the pockets of either the capitalists or the workers. The only “normal” state of the currency, Ricardo concluded, was what was called “full circulation.”

Exceptional circumstances aside, the only thing that could lead to a change in the general price level would be a change in the relationship between the number of commodities on one side and the quantity of money on the other. This indeed is the basic underlying assumption of the quantity theory of money. In Ricardo’s time, there were no empirical investigations on whether the theoretical assumptions made by the quantity theory of money and its assumption of “full circulation” were true.

It wasn’t until well after Ricardo’s death that English economist and former Ricardo associate Thomas Tooke (1774-1858) came out with his “History of Prices,” published between 1838 and 1857. Tooke’s empirical investigations into the concrete history of prices and currency circulation convinced him that Ricardo’s assumption and the quantity theory school in general about a full circulation of money were incorrect.

Just like there is never really “full employment” of the workers, or the means of production, though the exact extent of both varies depending on the stage of the industrial cycle, the money supply is never “fully employed” either. To a lesser or greater extent, depending on the ever-changing relationship between the quantity of non-money commodities on one side and money on the other, there is always a reserve fund of money lying idle in the banks. Suppose after some years of business depression and low prices, economic activity picks up leading to both a rise in the number of commodities in circulation and a rise in the prices of the individual commodities. Suddenly more money will be necessary to circulate the total quantity of commodities in circulation. Where will the extra money come from?

If we assume that there is a lot of idle money, which indeed will be the case after several years of depression and low prices, there will be plenty of idle money that can be activated to meet the increased demands of circulation brought on by an acceleration of the pace of business and a subsequent rise in the prices of commodities. Therefore, Tooke found that the quantity theory of money school got things exactly backward. It was not a rise the quantity of money that caused a rise in prices; rather, it was a rise in prices that caused a rise in the quantity of money in circulation. Therefore, in the event of a rise in prices, there will be no need for an increase in the quantity of money before the existing money supply is “fully employed.” All that is necessary to enable prices to rise is to increase the number of times a given piece of money changes hands in a given period.

This, of course, shows that Ricardo’s assumption that the means of production are always fully employed was also mistaken. In modern language, leaving aside the effects of physical bottlenecks, according to Ricardo there should be no excess capacity. But in reality, there is always some excess capacity in a capitalist economy, with perhaps the exception of a full-scale war economy, though again just like the degree of unemployment among the workers, the degree of excess capacity of factory buildings, machines, and so on varies greatly according to the stage of the industrial cycle.

Now let’s leave behind the age of Ricardo, Tooke and Marx and move to the early 21st century and Fred Moseley. Moseley is interested in the question of whether it is necessary for money — in Marx’s theory of value and reality — to be a commodity produced by human labor and therefore having a definite labor as well as use value. For example, what would happen if prices and commodity circulation increased so much that all or at least most of the existing supply of money was fully absorbed into circulation? Would the state and the central bank be able to generate additional demand by issuing additional money by fiat without additional gold being produced as Modern Monetary Theory claims?

I will begin with Fred Moseley’s introduction to his collection of essays on whether non-commodity money is in accord with Marx’s theory of value or is possible. “In the first place, Moseley writes, “the prices of commodities (i.e., the exchange ratios between commodities and money) are determined by the relative quantities of socially necessary labour-time contained in the commodities and the money commodity.”

Moseley produces the following algebraic expression.

Pi = (1 / Lg ) Li

Moseley explains: “ … Pi is the price of each commodity, Li is the socially necessary labour-time contained in each commodity, and Lg is the labour-time contained in a unit of gold (i.e. the ‘value of money’).” For those of you still suffering from post-traumatic syndrome from your high school algebra classes, this expression assumes that the values of commodities are equal to the prices of commodities.

More precisely, Moseley is assuming that the value of a commodity is always exactly the same as the value of the piece of money (full weight gold coin) that is necessary to circulate it. Once we know that Moseley assumes the value of the total quantity of commodities that must be circulated in a given period and the turnover period of money is given, we know the monetary equivalent of labor time, or MELT, of the commodities that must be circulated. The implication is that whatever the quantity of monetary tokens measured in terms of pounds, dollars, and so on in circulation, they will always represent the monetary equivalent of labor time, or MELT, required to circulate the commodities. So why do we need to bring gold or any other form of commodity money into the equation when we can simply use the MELT embodied in the commodities that must be circulated?

However, for MELT to work, the capitalists must be able to always exchange the commodities for the other commodities needed to carry out the next cycle of production and for their personal consumption at their values. To achieve this, they must produce the commodities in the proportions that allow both simple and expanded reproduction to continue as well as ensure the exchange of commodities at their values. However, since there is no overall plan of production, how do the capitalists know what to produce and in what quantities? This is the question that MELT theory cannot answer. That is why we do not find the concept of MELT anywhere in Marx’s writings.

Moseley not only here but throughout his work has missed a crucial element of Marx’s theory of value. In Marx, all commodities represent definite sums of abstract human labor measured in some unit of time. This is true of the money commodity as well. Up to this point, there is no difference between the money commodity and all other commodities. But only the money commodity represents a definite quantity of abstract human labor measured in some unit of time that is directly social. As a result, it turns out that value — abstract human labor — must always be measured by the product of concrete labor that produces the use value of the money commodity measured in terms of its appropriate unit of measure. For example, the concrete labor that produces gold bullion measured in some unit of weight.

Therefore, money alone represents in a money-commodity economy the form of social wealth. Let that sink in since there will a lot more on this in coming posts. These are among the additional insights found in Marx but not found in Ricardo or Moseley. Marx was able to transcend the Ricardian theory of value, and if he had lived to fully complete his work would have finally put the transformation problem to rest. However, not only Moseley but all other MELT theorists remain trapped within a theory of value that is in crucial respects closer to Ricardo than Marx. This prevents them, just it did Ricardo, from completing Marx’s work and finding a correct solution to the transformation problem, as we will see in the coming posts.

To be continued.


1 Hawley is worth watching for other reasons. During the depth of the pandemic recession, he proposed that the government pay most of the wages of workers to prevent mass layoffs as was done in some European countries. Hawley has also enthusiastically supported the proposal, supported at least nominally by Democrats and especially Bernie Sanders to send $2,000 “stimulus” checks to working-class and lower-middle-class Americans rather than the $600 agreed to by the Democratic and Republican leaders. Some progressives hailed Hawley as a “populist” Republican that perhaps they can work with.

However, we should not forget that one of the things that distinguished the mass fascist parties in Europe in the 1920s and 1930s from traditional right-wing parties is that they mixed progressive-sounding and even socialist demagoguery with nationalist and racist demagoguery. The fascists were not simply extreme conservatives. The fascists had to do this because they were building a mass organization at whose heart was a right-wing militia designed to wage civil war on the workers’ movement. This is why the German fascists called themselves the National Socialist German Workers’ Party.

During the presidential campaign of 2016, Donald Trump did not go as far as the European fascists did with “socialist” demagoguery. However, he did promise to provide “great health care” for all and described himself as the only Republican who did not propose to cut Medicare and Medicaid. He also promised to launch a massive public works program to rebuild the infrastructure that would provide millions of jobs. Superficially — because of the lack of detail — this program did not seem too different from what democratic-socialist Bernie Sanders proposes if we subtract the racist and chauvinist demagoguery.

Once in office, Trump, however, supported the right-wing Republican program to “repeal Obamacare,” which would have thrown millions of people off health insurance, while his infrastructure program turned out to be a series of tax cuts and proposals to privatize highway and bridges — all standard GOP fare. The only thing he accomplished was the giant 2017 tax cut for the rich and a weakening of Obamacare. Trump’s program in practice turned out to be the traditional Republican program, not Bernie Sanders’ program.

However, with his back against the wall, Trump as part of a last-ditch attempt to hold on to office or perhaps lay the foundation for a new White House run in 2024 suddenly made a bloc with Sanders and proposed $2,000 stimulus checks rather than the measly $600 agreed to by the Democrats and Republicans.

Despite Trump’s flirting with some “progressive”-sounding social demagoguery, Trump did not build a fascist movement, though he did encourage the still relatively small fascist militias that exist in the U.S. today. However, could the much younger Hawley starting up where Trump left off attempt to build a full-fledged fascist movement around himself? This is something we will have to watch carefully in the years to come. (back)

2 MAGA stands for Make America Great Again. Trump supporters often wear baseball caps or shirts with MAGA printed on them. Therefore, Trump’s mass base of overwhelmingly white lower-middle-class and backward workers is often referred to by progressives and others as MAGA. (back)

3 Many renters have been unable to make their monthly rental payments due to COVID-induced mass unemployment. When renters are unable to make their rental payments, their landlords have difficulty making mortgage payments they owe to the banks. The banks, which form the pivot of the credit system, are then forced to carry non-performing mortgages. We saw what trouble non-performing mortgages caused back in 2008. On top of these debts, there was a large growth of corporate debt even before the COVID crisis hit. During the COVID crisis, the level of corporate debt has exploded.

During the upward phase of the current industrial cycle that will unfold during the first years of the Biden-Harris administration, assuming that the pandemic is brought under control, these gigantic debts will likely be “rolled over.” But once the resumption of normal business brings with it the inevitable overproduction that will cause the industrial cycle to once again approach the stage of crisis, these massive credit problems will explode. Exactly when this occurs and how great the devastation will be will also depend on the level of gold production during the current industrial cycle, at this point an unknown. But as the U.S. weather service likes to put it when they see a powerful storm developing in their computer models, “stay tuned.” (back)

4 The 18th Brumaire is the date on the calendar that temporarily replaced the Christian calendar during the French Revolution. On this date, Napoleon seized dictatorial power in a coup d’etat. Later, Marx ironically called Louis Bonaparte’s own coup d’etat the 18th Brumaire of Louis Bonaparte. (back)

5 Marx had great respect for Ricardo while holding his contemporary, Robert Thomas Malthus, who preferred a shallow and impressionistic approach to value and economic questions in general in contempt. Keynes, in contrast, greatly admired Malthus but disliked Ricardo. This should be kept in mind in evaluating attempts to marry Marx with Keynes, or in today’s terms Marxist theory with Modern Monetary Theory. (back)

6 Keynes hated the Bank Act and concluded that it wasn’t enough to get rid of the Bank Act. It was necessary to go further and abolish the requirement that the Bank be required to redeem its banknotes in a fixed amount on the demand of their holders altogether. Today, all progressives strongly reject the gold standard in any form though some reactionaries think it would be a good idea to restore it in some form. (back)

7 A relatively popular explanation of this is found in Marx’s “Value, Price, and Profit.” (back)

8 In the case of labor power, we must substitute the prices of production of commodities that constitute the real wages of the workers because labor power is not produced capitalistically and therefore has no price of production. (back)

9 Workers in Ricardo’s time weren’t paid in checks but packets of token money coins made of base metal. (back)