David Harvey’s Anti-Capitalist Chronicles: The Value of Everything

This is David Harvey and you’re
listening to the Anti-Capitalist Chronicles, a podcast that looks at
capitalism through a Marxist lens. This podcast is made possible by Democracy at
Work. It’s very easy when we start to think about the economic situation to
get very pessimistic to get overwhelmed, as it were, with the idea that there are
no alternatives. Margaret Thatcher’s famous phrase, TINA (“there is no
alternative”) hangs over us all of the time. But, I want to start to open a
pathway towards the discussion of alternatives, and not by myself
necessarily proposing something which is a radical departure, but by taking up
some of the questions which are currently being posed within the field
of economic theory and actually more generally in society as a whole. And the starting point here is: let us talk a little bit about the nature of
“value” and what “value” is about, and how we understand a term like “value.” In
recent times there has been a reemergence of interest in that question and there is a book by Mariana Mazzucato which is called The Value of Everything. It’s
an attempt to introduce the question of “how do we value things?” into the field of
economic theory. Now, the question of value actually in economic theory goes
back a long way. It was a really hot topic amongst the classical economists
like Adam Smith and Ricardo and the like, and at that time there was a general
drift towards what was called the “labor theory of value,” saying that the value of
commodities is fixed by the labor which is congealed within them.
And that therefore there is a labor theory of value which underpins
price formation. So, this idea was quite strong in the Classical period. It
ran into certain moral dilemmas, however, because it became clear that if labor
was at the origin of value, then there was an issue because the laborers who
created the value were receiving very little of it. And this seemed to be
morally wrong – if not a bit absurd – that those who created the value should have
so little of it, and those who didn’t create the value took all of it. This
led to a certain kind of interest, saying: “Well, there should be a
mechanism set up whereby the laborers should receive a goodly part of the
value which they themselves created.” Of course, this was in part the sort of
philosophy that under underpinned some utopian attempts during the early 19th
century. One thinks of Robert Owen, for example, who took the view that
“yes, workers deserved to gain back much of the value which they themselves
produced” and Robert Owens attempts to create forms of organization that
allowed that to happen, which was significant. Other economists of that
time – the Ricardian socialists for example – and somebody like John Stuart
Mill, took the view that “well, maybe you couldn’t reorganize production, but maybe
you could set up redistributed mechanisms whereby some other value
which is produced, and which was flowing around in society, could be redirected –
perhaps by state interventions, and the like – so that the working populations
received far more of the value which they themselves created.” So the value
theory at that time contained a whole set
of technical dilemmas, and at the same time the whole set of moral dilemmas. There was therefore a serious debate on the labor theory of value, and the
significance of the labor theory of value. This in a sense got terminated,
from the middle of the 19th century onwards, by a general drift away from any
kind of allegiance to the labor theory of value, and saying the value was
actually created – or measure of value – was arrived at by a very different
mechanism, and very different means. And in a sense value was fixed by people’s
choices, by people’s desires and wants and needs, so it was fixed in the
market. So that there was an abandonment of the idea that value underpinned price,
to the idea that actually price determined value; and so that if
something was of a high price then it obviously was of high value. Therefore, the debate about who-should-get-what would disappear because the
market would take care of that problem. Now, this has raised questions today, and and in this book by Mariana Mazzucato she puts it this way,
and I read it to you: “If bankers, estate agents, and bookmakers claim to create
value rather than an extract it, mainstream economics offers no basis on
which to challenge them, even though the public might view their claims with
skepticism. who can gainsay Lloyd Blankfein when he declares that Goldman
Sachs employees are among the most productive in the world? Or when
pharmaceutical companies argue that the exorbitantly high price of one of their
drugs is due to the value it produces? government officials can become
convinced (or ‘captured’) by stories about wealth creation, as was recently
evidenced by the US approval of a leukemia drug treatment at
half a million dollars, precisely using the ‘value-based pricing’ model pitched by
the industry – even when the taxpayer contributed $200 million dollars
towards its discovery.” So the analysis of value, says Mazzucato, has all sorts of implications. Adam Smith looked on bankers as if they were unproductive. Essentially said they’re parasites who kind of live off the value created by
others. I mean, bankers – if you have a labor theory of value – it’s hard to see
how bankers can be producing value. Actually, Mazzucato tells me something
that I really didn’t know: before the 1970s, financial services were not
included in the calculation of gross domestic product (GDP). In other words, they were considered as adding nothing to the total value of gross domestic product.
Only after 1970 did they get included and now of course they’re considered to
be great value producers. So, do financiers produce value? This starts to become a very important kind of question. Right now in Britain, for
example, it’s become a huge question because since the 1960s onwards Britain
has attached its economy, in many ways, to the activities of the City of London. And
the City of London doesn’t produce value in the classical kind of sense, but it
produces value in the sense that its financial services become critical for
the economy. So the growth of financial services in London has really
underpinned the whole position of the British economy. It is clear that
from the 1960s onwards, public policy in Britain was attached to protecting the
financial services as the productive center and productive core of the
British economy against other forms of activity. So, for example, as early as the 1960s when faced with a problem
of the value of the pound sterling, the only thing the government could do was to raise the interest rates. And if you raise the interest rates, then what
this does is to improve the value of the pound sterling and protect the pound
sterling against speculation in international markets. So in
protecting the pound sterling by raising the interest rates, however, you put a
burden on British industry. In other words, British industry suffered in a double sense that first its debt payments were now higher, but secondly
also a strong pound made exports much harder to procure, because the value of
the pound was high and that, therefore, the value of British goods was priced
out of international markets. So that public policy over the interest rate was geared to protecting the the City of London as opposed to protecting British
industry. So British industry tended to decline in waves and and phases from the
1960s onwards because the the City of London was being favored. We’ve now
got a situation where Britain decided in a referendum they were going to leave
the European Union. This then raises the question: if you leave the European Union,
what happens to the City of London? Do you protect the City of London, or do all
of the financial services go off to Frankfurt, or Paris, or Amsterdam, or
anything else? And in fact it begins to look as if financial services are gonna
disappear from Britain. In which case, what was once the core of the British
economy is going to be take a pretty hard knock from Brexit, and at the same
time the British economy has not done very well in terms of protecting its
manufacturing base. So what is going to happen to the British economy in Brexit if it’s most productive sector – well, supposedly most productive sector – is
going to, you know, just disappear? So this is…but that rests on the
assumption that the City of London is doing productive things, and that
therefore what the City of London does is productive of value, in the Lloyd
Blankfein sense. But what happens if you kind of said “well actually, financial
services are parasitic. They’re parasitic on the real economy. And shouldn’t we
actually reconstruct the real economy in Britain?” Yeah, so you can see where the
debate might go, and how difficult it might be. And this kind of question is the big question: Are financial services productive value? And if they are productive of value, then in what sense can they be seen as productive, and in what ways are our public policy to cultivate financial services
as opposed to abandoned public services relative to what might be called the
real economy? In other words, what’s the relationship between Wall Street and
Main Street between the City of London and the sort of pathways in
Manchester and Liverpool? So this is the dilemma which currently exists. Now in the midst of this, we’re having a bit of debate about how to value things in
general. In economic terms, for example, let us look at something like mergers
and acquisitions. Firm A decides it’s going to require Firm B. How does it
value Firm B? Well it’ll add up all of its assets, all its liabilities, and it
will do a technical kind of job of that kind. But at the end of the
day we’ll also add in something which is called “goodwill.” Now, exactly what is
goodwill? Goodwill means that the reputation of the firm being acquired is
such that the brand name is something. Let’s suppose you’re acquiring something
called Nike, for example. Well, brand name of Nike is hugely significant. Let’s
suppose you’re acquiring something called Yves Saint Laurant. Well, that has
significance, too, because it has a certain cache, and you know, and the like. So there comes a point where the value of a firm is its
tangible assets in its material assets, plus something which is immaterial. And immateriality then, is difficult to assess. How much is it worth in the market? How
much is it worth to you to acquire a firm with a name brand like Nike or Yves
Saint Laurent? And that then becomes a real, real difficulty. But it doesn’t actually
deter anybody, because along come the accountants – the famous “accountants” who are supposedly expert on these kinds of things – and they put a number on that. And
they kind of say this is worth X million dollars or X, you know. But nobody knows
exactly where that number comes from. But everybody believes the accountants,
because they’re reputable accountants and everybody, then the
merger takes place, and the goodwill is supposedly purchased for whatever figure
it is, but then what happens afterwards when you find out actually there’s not
as much goodwill there as you thought there was. Well, we’ve seen several mergers and acquisitions which have gone very badly
wrong over the past few years because the goodwill was not really there, and
the goodwill turned out not to be worth as much as anybody thought. This all
then also says, at a certain point, at at what point we say: “you know,
the goodwill is something which actually should be determined in the market.” And I
came across this a lot just recently by going back and looking at the value of
housing. Now, the value of housing isn’t very interesting. Now you could look at it and say: “how much does it take to build this house?” and you can add up all
of the costs, and you can add the profit, and all this kind of thing, and say “the
house is worth, you know $20,000.” Or “$200,000,” say. But then it turns out that
it’s in a prime neighborhood and the value of the land is quite high, so you said “well, actually it’s worth $300,000 because the land is actually worth a $100,000.” But then you kind of say “but this isn’t a prime neighborhood” and it
has a name like “Chelsea” or it has a name like, you know…sort of the “Upper
West Side” or a “Upper East Side” or it has a telephone number which is a much
highly regarded telephone number, so you add another $100,000 onto the
price of the house, and so the thing that actually cost, say $200,000
to build, ends up being worth $500,000 because you’ve
got all these extra things which you’re adding on in terms of its reputation. And,
actually, the housing market works that way a lot. And what we’ve seen in San Francisco, and what we’ve seen in New York, and all the rest of it, is a lot of
the value of the housing is given by this reputational value. By brand name
value. Then, there’s an interesting kind of question, which happened in 2007-2008, when the housing market froze. At that point you, couldn’t sell anything.
And at that point, the actual sale value of house was zero. Because nobody would
buy it for anything. So what happens under those circumstances, when you go and ask the question: what’s the value of all of
these mortgages? Which are sort of stacked away in financial institutions
or have been passed on to people in terms of collateralized debt obligations?
When actually, there’s no market for those housing there? Well, I went and
looked and asked what happened to all of the housing which was held by
Lehman Brothers or in Bear Stearns, and people put an arbitrary value on it. They
kind of said: “well, if the market revives, then these houses would be worth – if
there was a market – so much, so and so and so on so much.” And a lot of people put money value on a house which didn’t actually exist because
there was no market for it at that particular moment. Now the market
is revived since, and we’ve gone back and, you know, a lot of things have happened
ever since. But at that moment, actually, the value of housing and the value of
those mortgages was close to zero. Now, what what this is suggesting is that
price and value are not the same thing. That, therefore, we need some better way
to talk about value. And there’s a way of talking about value which starts to
actually argue that the value in the value-price relation is a complicated
relation, and we need to revive some sort of questions about it. Because actually,
in the market right now, in most mergers and acquisitions, and in the
assessment of housing values and all the rest, we’re seeing this arbitrary
component. This immaterial component which also carries over to commodities
themselves because there is something called “branding value.” What’s the value
of the brand name? And if you can establish a brand name and get it to be sort of a certain brand, then you can actually charge a monopoly price
for it. So that there’s a lot going on in the market right now which is about
immaterial values which have a sort of a resonance with the nature of the price.
This therefore means that even contemporary economics is working in a
field where expected values, expectations and the like, are actually the
immaterial “base,’ if you like, of a materiality which is the market exchange
process. And that therefore you cannot actually calculate prices simply on the
basis of what it costs to produce a Nike shoe. If a Nike shoe, you
know, I mean…how much of the the value of a Nike shoe is actually given in the
market? And how much of it is given by the amount of labor which is involved in
its production? And all of the production costs which can be added up? This is actually, then, the big conundrum which contemporary
economics is having to look at and is opening up that question of what and how
is value constructed? Now, Marx of course had a lot to say about value theory – and
I’m not going to go into that here – but what I want to do is to say that,
perfectly reasonably, people are asking: How come these things have a certain
value? How come the value of a drug – Mazzucato kind of says here – the
value of a drug is arbitrarily arrived at in terms of its value in terms of
saving a life? How do you value a life, and saving of a life? How do you say,
therefore, this drug should be worth $1 million dollars a pill because it saves one life? Is that what human life is worth? And so we’ve got these questions which are arising internal to the dynamics of contemporary capitalism.
And I want to argue that that argument which is going on, and which is beginning to be opened up into terms of how we value things and why we value
things in the way we do, that that opens up a big arena of debate in which, it
seems to me, an alternative to capitalist valuation schemas, it has to
be arrived at. Because an alternative to traditional valuation schemas has
already opened up. It’s already opened up in terms of “brand name,” it’s opened
up in terms of “goodwill,” in mergers and acquisitions, it’s opened up in terms of
what happens in the course of a crisis, it’s opened up even in an area like housing. Where the valuation of something is arrived at by a very particular kind
of process, and there are standard procedures where housing value is
determined – but nevertheless there’s an arbitrary component – and we see
immediately that the valuation put on a house in, say, 2006, is completely different from the valuation that will be put upon it in 2009. And when that collapse of value occurs, that then affects the price, and it means
that if somebody’s holding a mortgage on that which is a certain kind of price – and the price is not there – then you have a major crisis on your hands of
valuation. So I want to argue that there’s a crisis of valuation widespread
in our society right now and into that comes back, actually, the moral question
that the Ricardian socialists were often pretty- that if value is produced in a
certain kind of way, then why are the direct producers of that value not
rewarded? Why, if value is not produced in financial services, if value is not
produced by marketing gimmicks and all the rest of it, if value is not
produced by advertising, and so on… if all of those are parasitic activities, then
why are we not actually valuing the people who actually create the real
things that we really need to survive at a different, decent level of living in
contemporary times? In other words, this question is opening up, and it’s opening
up where I think common sense looks at it, and people kind of say, commonsensically:
“look, I’m working very, very hard at producing X, and I’m getting very little
for it, and I am looking at a situation where this person is, you know,
making out like a bandit.” The Lloyd Blankfein’s of this world are
making out like bandits on the basis of an economy where they are actually a
parasitic as opposed to producing value. and what Mazzucato does is to say:
“look, we have this problem!” And I’m going to read you the famous quote that comes from “Big Bill” Haywood, founder of the United
States’ first industrial union. He says this: “The barbarous gold barons–they did not find the gold, they did not mine the gold, they did not mill the gold, but by some weird alchemy all the gold belonged to them.” Now that, it seems to me, to be
the problem, which you know. Mazzucato is no raving radical. She’s
attempting to bring back a debate on the value theory, and I think this debate
opens up the possibility for many people on the left to actually say what is
valuable in our society. What do we value? And how can we actually make sure that
that value resides with those who are really creating it, as opposed to those
who are posturing as if they create it when really their activities are very
parasitic. So, we’ll come back to that, and how Marx looks at that question in a
later session. Thank you for joining me today, you’ve been listening to David
Harvey’s Anti-Capitalist Chronicles, a Democracy at Work production. A special thank you to the wonderful Patreon community for supporting this project.

81 thoughts on “David Harvey’s Anti-Capitalist Chronicles: The Value of Everything

  • Michael Hudson talks about the financial services being included in the GDP, and how that has skewed our perception of the health of our economy.

  • wow another one already? whats up with this is david harvey gonna be doing a video every day now? i hope so im ready for that

  • no matter what we need a new political and economic system. corporations reduce labor costs above all others, and pay little to no taxes, often getting "rebates" on taxes they ended up not paying๐Ÿค”๐Ÿคจ๐Ÿคฌ. what happens when factories are automated and powered by renewable energies (self sustaining independent of the electrical grid)? free labor and power and fewer jobs for a growing population. (tho the rich are actively reducing the population (pre meditated murder), through neglect (no healthcare, no living wages) and war.) our healthcare system is the third leading cause of death in america. the poor are being culled/purged so the rich can have ever more power and money. u.b.i. (with rentier control) and direct democracy would "solve" our "problems". but we the poor will have to take it from the rich. they wont willingly give up all the money and power. start with international work stoppages/strike/yellow vest movement. if that fails, calculated force and violence must be utilized.

  • This is 'Merica where profit is supreme and any attempt to deprive the corporate person citizen (the corporation as viewed and constructed by our Federal Courts, a person with full rights superior to those of mortal flesh and blood citizens) of their constitutional and civil rights is seen as a campaign of domestic terrorism and criminal conspiracy, a violation of Federal law.
    So, we have arrived to this divide. The mortal flesh and blood are but regarded as consumption units. We are now losing our right to elect our government and so, soon our right to vote as voting is viewed as an unnecessary expense.

  • Capitalism is like a wealthy but mentally ill old uncle . Everybody in the family knows about his illness, but few want to talk about it. They all want to be included in his will, and hope he doesn't change it leaving his fortune to the Scientologists.

  • You can help us keep this podcast going! Become a patron of Anti-Capitalist Chronicles and support the project: https://www.patreon.com/davidharveyacc

  • The value of those mortgages, at 17.06, would be the money lent to the banks at no interest to cover their losses plus the money spent by the Private Equity Firms to buy the houses 'en bloc' and the loss of tax value on the capital gains potential lost.
    Luckily for our economy our President Obama did not saddle it with the cost of keeping residents on their homes and so allowed the economy to regenerate through destructive construction inflicted upon the those who cheated the banks.
    Mad yet? This is the propaganda we have been fed incessantly. Think!

  • The capitalism's core engine is the " monetary system " which can be manipulated in a sinister way, to give artificial value to everything according to their agenda so that the elite like parasites can exploit the humanity. instead humans need to abolish monetary system and replace it with" defining real needs- doing real work-production-fair distribution/ meeting the needs system"

  • Guy is clueless. Housing crisis is caused by land. Supply of land is fixed, whereas demand isnt. Need LVT to fix that. The price of the pharmaceutical comes from the fact that they have a patent, which is a monopoly granted by the power of the state… wish we had a free market. And brands are not monopolies, people choose to buy Nike. If u dont like it, dont buy it.

  • This seems to tie in with David Graeber's BS jobs. The BS jobs thing is more than just an entertaining novelty to let us laugh at those jobs. It's an indicator of growing problems in capitalism, and the free market and money system, and its inability to value things correctly. As well as its inability to deal with automation.

  • If financial services were productive, then they would represent a constant percentage of GDP, or lower. But instead they have grown as a percentage of GDP.

  • I often wonder what is value creating activities. For example, you mentioned advertising. I think that you can sell your product or service without advertising, but you would not sell as much of it. Therefore, you get a classic trade off equation. You can advertise up to a point and get a return on that advertising. If this is the case, then you can say the people doing the advertising are adding value. However, after that point, you eventually lose money on every dollar spent on advertising. It's a balancing act that companies need to figure out. I'd say overall though, advertising is a value added process.

    When it comes to financial services, this is a lot harder. I mean you can say with certainty that they 'enable' the creation of value, as without their capital, the borrower couldn't start their own value creation process (such as buying requisite manufacturing equipment). The question is, is this necessary? Is there an alternative way to have people get capital without financial services? Yes, there is, which is generally considered equity. People have the option to finance their new value creation process through equity, but many of them cannot (for a myriad of reasons). As such, there is a demand for these other financial services (lenders basically). If a lender enables a group of people to create value where once they could not, you can argue that yes they do add value, because no value would exist otherwise. As such, they should be compensated just like anyone else who contributes to the value creation process. If there we no risk, then we wouldn't need lenders, but there is risk.

    The equity part of financial services is even harder in my opinion. Like the lenders, you can argue that without them the value creation process would not have started due to lack of capital (start up costs). Also like with lenders, you can see how one can eliminate the other. You don't need equity investors if you have lenders for your capital needs. I don't see how you get rid of BOTH lenders and equity investors however. To do so would significantly reduce the amount of people contributing value to the economy as a whole. There would be a large pool of people who could be working, but aren't because they don't have the prerequisites. Worker cooperatives and/or employee stock options can be a solution, but it is not a comprehensive one due to the way our system is currently set up (particularly with income and wealth inequality so great).

    I think about this a lot because I want to start my own worker cooperative one day, and I realize the problems of startup costs. It's hard to ask your potential employee/owners to give you thousands of dollars and work for free for several months. Most people cannot even deal with a $400 emergency expense. As such, I am afraid these financial services are required, and therefor not fundamentally parasitic. They add value because they enable the value creation process to start where it normally cannot.

  • Big Bill Haywood, the late 19th Century, and early 20th Century, anarcho-syndicalist labor leader and organizer. Leader of the IWW, or the "Wobblies."

  • Dr Harvey; Excellent conversation. Central bankers and fiat money do not hold up well when looked closely upon. Parasites and war mongers. We all will wish we had did more critical thinking as the next major (surprise) 2008 type melt down occurs; and occur it will prior to the American elections in 2020. The American government can not even pass a simple audit and has spent at least 22 trillion more then the 21 trillion national debt they claim. The government says everything is secret and that in itself means our democracy has failed and is not democracy at all. We the People need these types of conversations and will have them after the fact; once it is too late most likely. Prepare while we still have the appearance of a viable economic system. The green American paper blood money is worth at least only 1/2 what we suppose and in reality that is way to rich of a evaluation. Hyper Inflation is coming as is the collapse of the American paper dollar. Worthless. No More War. No More War. No More War.

  • A large and essential part of the parasite's value is in it's control of
    the economic nervous system, in that it directs the financial brain to
    understand that it, speaking of the parasite, is indispensable and in
    fact critical for the host's survival. Well we know from nature what
    happens to hosts that become controlled by the parasite that lives off of them…

  • Currently a cow is worth .40 a pound on the hoof. In a store it's much more than that. How is a farmer supposed to make a living in todays economy?

  • What if "value" was based on how much of earth's resources are used. The more it destroys the planet, the more it should cost.

  • Steve Keen points out how the Naturalist economists say that value is the free gift of nature through "the land". He goes on to explore the origin of value as the free gift of sunlight.
    In this way he seeks to unify economics with Newtonian physics – and is not doing too badly at that. Certainly, there MUST be a component of entropy at the root of "value".
    However, the value dynamic is conducted in the context of a massively complex system – the ecology.
    If we are to look for the structural components of ecology, we can be well served to look more closely at entropy, and the processes which determine potential energy and energy discharge.
    All living things create for themselves a degree of potential energy – sufficient to sustain discharge in the task of obtaining more potential energy (consider, as an example, the fat-store in an animal as potential energy).
    You may consider these stores of potential energy as anti-entropic "bubbles" arising around each specific life. The net effect is a permanent delay in discharged entropy which defines the entire ecosystem.
    Can it be said: That "value" is that which contributes to the delay of entropic discharge?
    This may be cast in the context of the individual entity, the social entity(in the case of social animals), and the ecological entity (habitat).
    I would argue that any attempt to define "value" will fail if it does not have very clear definitions for these 3 contexts (individual/social/ecological) The individual is relatively easy, the social is horrendously corrupted by notions of "nations", and the ecology is a purely chaotic entity.
    As a first step, I see the perversion of the nation-state as an "economy" defined by a "currency" needs to be collapsed into the real social units of the default tribal social entity. The place to start here is "Dunbar's Number". Once that is understood, we might then look to Maslow's pyramid to begin the analysis before we look at tribal aggregation, and ultimately, the economic role of the ecology.
    We have a long long way to go.

  • Most value of is based on potential ability to generate money. What value YouTube produces? Or website like Yahoo!? Or Instagram? Facebook? On the internet value is measured by clicks, likes, subscriptions, not even actual $.

    Have you noticed that nowadays you can't pay for your tangible things in the store without giving your phone # and email address? We're becoming commodity, our information is commodity, our ranking on internet, on YouTube is our value. If you don't have followers on Facebook, YouTube- you have no value as mean of potential earnings generator!

  • It is like the unemployment numbers. The math is always shifting to the benefit of elites, both political and economic. Though never done before, Reagan started including active military as employed, when they were not part of the free market economy. Things like this keeps accurate economic comparisons from being done from one generation, to another. The best is adult participation in labor, not unemployment.
    The stock market is a defacto pyramid scheme, never based on actual productivity. If so, it would have little value. It currently does not reflect our current economy. It never has.

  • I don't doubt value has a subjective basis, or that people work in an effort to secure their own best interest. Unions and democracies are examples of individuals working toward similar goals for their own good). It is part of my own makeup from Humanism and Existentialism (the one belonging to the other to Sarte..even Sarte eventually followed Camus to Anarchism, even if they never spoke again). I remain an individualist (more from Neitzsche than Stirner) because of it. Even our social nature and inclinations toward altruism has a basis in self due to motivational aspects and notions of meaning or importance (importance meaning value). Maslow's hierachy of Needs is a decent illustration of a large part of human nature. Imagine that and along side it a hierarchy of values from your life to liberty to your wife to your car to your family heirloom ring…only it isn't static, and we find ourselves constantly jockeying those values in order to adapt in a changing world…some of it inevitable, some of it manufactured by new products to replace the old. This is a sort od representation of universal values vs personal values. Even materialism is a means to an end for the self…security from the elements. Happiness. Comfort. Capital fails because its focus is the atttainment of power of top of power…using means to aqcuire more means with no real end defined, while there are only so many assets to be had, so many resources to exploit. The earth isn't infinite in its supply of these things.

    This seems like long winded description of a historical Red Herring away from that which creates value: labor. Even ideas are fruits of labor, but not by oneself. They are built from a collection of knowledge that spans history and transcends cultures and nations. No one can own the fact that 1+1=2, why should anyone be able to own knowledge when it universally valued and collectively created? If labor produced nothing, there would be nothing to value. If we didn't value our own effort, then we are the equivalent of mindless slaves.
    The greatest difference between socialism and capitalism isn't value, it is the fact that the properieter and producer are not the same person(s) in capitalism like they should be (in libertarian socialism). This means worker cooperatives and self-employed entrepeneurs. As long as the division of labor is used in place of one's responsibility to labor on their own ideas (which exponentially multiplies output far beyond what even the owner, who is likely less skilled than his employees, could earn on their own) the division of the fruit of that labor will produce such that no one feels their labor has value, and they will simply give up due to the meaninglessness of their work and become children of the welfare state (Marx).
    Ironically, the concept of goodwill goes hand-in-hand with another Kantian idea, that is "people should not view others as mere means to an end, but rather as ends unto themselves." This means that morality cannot be separate from economics. In what other sphere is character revealed than the use of power? The state justice system exists to impose order and justice precisely because the system itself produces injustice and must be controlled. Aristotle summed this up: "Poverty is the parent of revolution and crime" (survival is a greater need than remaining civil…and no system at all can exist without the most fundamental piece from which all else is built: the citizen).
    The same problem exists everywhere. It is the same problem that had existed all throughout human history. We try to use authoritarian means (god, the state, etc) to achieve libertarian ends. And just like Marx pointed out that capitalism has within itself its own destruction, so too does any form of authoritarianism. Like the French revolution (or even modern yellow vest movement or occupy wallstreet), people will get fed up.
    The state and god (and money, for that matter) are only ideas. They have power because the majority believe in them. Parties have the dual power of creating like- minded people while simultaneously keeping them divided. And they are both (god and state) very much like Tolkien's One Ring: everyone wants it, and it has a tendency to corrupt those that obtain it (see Stalin's doublethink on withering away the state while strengthening the dictatorship). Authority is belief in concentrated power that is rarely in the hands of everyday people. The top-down approach is contra personal liberty (why "state socialism" fails). And no one will want to wait 500 years while the rest of the world struggles to follow suit (vanguard parties).
    Even the most hardcore capitalist will make the claim that they are entitled to what they earn…meaning, they believe they have labored for it (though even rights are ideas you have to believe in, and are hardly furnished by nature..the reason i found myself in the Left Libertarian field is because the people determine rights, either directly through active participation, or passively through acquiescence or capitulation to their leaders…regardless Hume was correct on this). The problem is that to hire others to do it for you means you aren't earning it per se…what you own earns it for you. Sort of like there being no difference between attacking a slave (his property) and attacking his master. That labor and the thing acquired be equal to the same thing (i labor to acquire x). Is it any wonder that capitalism has always needed the state to keep the economy functioning and the state stocked to keep the hopeless from revolt? The state needs funds as well. Capitalism supplies it via taxes. The state is an inherent part of capitalism and vice versa, social democratic policies, to property rights, to economic regulations. Without the one, the other cannot exist. And both are just different religions.

  • You don't need an economics degree to figure out that most of it is just psychological manipulation designed to exploit people.

  • Love the channel and message here, but I really think you should take a different angle… All too often, a government law or here, some weird accounting practice is blamed on capitalism. I don't think people will buy into this argument.

    The free market just says: value of something is whatever people will pay for it. I understand the idea of production value, but think of all the Nike-like brands out there, who have the same product quality and employees, but cost maybe 1/10th the price, because no one wants to buy them. And in this regard, why should Nike simply pay out value-added-branding to the employees? Wouldn't this create inequality with all the other employees of no-name brands who do the same work as Nike employees?

    Take Coca-Cola, I don't see a way to argue that a new low-level employee in the company should be granted Name-Brand rights.

    Again, I'm sorry… I like your criticism, but the arguments should be better, and without envy if possible?

    For example, it's very easy to argue that capitalism is terrible because the work I put into creating sneakers is not appreciated by the market – therefore kill the market and Nike with it. Such an argument will (probably?) not be liked by the audience.

  • How about we talk about the use-value of everything and just leave the value of everything aside for a moment.
    Too often the field of economics is bent on understanding value and entirely forget what happens to use-value.
    What happened that there are no tailors, blacksmiths, weavers, tanners, no more highly skilled workers who produced use-values before everything became a value?
    When these occupations became standardized and routined and began to disappear from society, the necessaries of life for the worker was substituted for the use-values of the capitalists. The use-values of these independent producers lost their value in society. Everything that is a use-value today is a social product of the capitalist, a unit of value. But everything that was a use-value in the past before the change over in production to machinery and automation was a value-in-use. Before mechanical industry took over the work and the worker, they were a total package, a value-in-use, and together, they worked directly in a material interaction with nature. After the change, the work and the worker shrunk into a value unit and the environmental relation of work, hidden and concealed separated from the worker. Products of all kinds became equally, value units, and this fact turned all the different skills of workers into a quantity of value of products. Within this social process the quality of work, the worker, and the subject of work, is in the form of labor as value. We end up with a social system of products relating to each other with a capitalist instead of workers relating to each other in a social system of production. Use-value disappeared because the labor in them became value. Value in everything versus a value-in-use for society.

  • We don't need 19th century theory to figure out how things are valued. It's always a consensus with nature valued at zero. No need for theory EVER. Look at the world. Do an analysis. Who gives a sh*t about the ideas about reality when reality itself is being ignored.

  • One salient thing the professor leaves out: the City of London is an independent entity like the Vatican. It cannot be hurt by Brexit or be moved from Britain because it is its own entity. Rothschilds have it set up this way. Why is the left so ignorant?! Basic fact, professor. Brexit does not hurt Britain. The EU hurts Britain because it forces immigration on them. The left has no reason as to why they are against Brexit. Moreover as you just noted the finance industry is NOT productive and it will not hurt the British economy. That's already been hurt. What the Brits should do is force the City of London to finance its industry, like it should were it actually productive. Very disappointed in these professors. Professors Bunk.

  • The question right now for the world is survival. We are at a precipice of complete environmental collapse. At this point, the system is completely overtaken by greed instead of survival, comfort, health, and concern for the future. Our entire value system is driven by consumption instead of conservation. Its never too late to change, but the consequences a delaying grow worse every day.

  • Concerning the ยฝ million dollar pill…

    If you are uninsured the price is expected to be nonnegotiable.

    If the government picks up the bill, by current law, it is not allowed to negotiate the price even if it subsidized the research…

    If the cost is picked up by the insurance companies, they will negotiate a much, much lower price from the pharmaceuticals and turn around bill the government full price, making a tidy profit.

    You call this a health care system?

  • Good video. Thankyou. The big question for me is the unquestioning, and the rigging of the entire system. You are correct, imo, in questioning the system, but what about the rigging? Your analysis of whether the game is tenable is pertinent, but what if the referee is bent?

  • I believe there is a confusion between value and price in this lecture . Value is an objective quantity when the effect of supply and demand is ignored intentionally. When you apply the supply and demand to value quantity , it turns into price . Goodwill is not a value related concept . It exist only as a price related concept .

  • Very important debate this. The value of a product for a user, the market value of the product, and the cost of production of the product. For a product to be both sellable and producable, the price has to cover the cost of production, while at the same time not exceeding the value for the user. If the market value is above that range, the potential buyer will stop buying, and if it's below that range, the seller will stop producing. Financial services are not productive, but are extracting the wealth others have produced through speculation. A functioning society therefore needs to place restrictions on such activities to make them less profitable.

  • IMO, only soil/minerals, water, air, sunshine, organic life, knowledge and labor have any intrinsic value. It is from the first five that something is virtually created from nothing. Value is added with knowledge and labor. Capitalism and fractional reserve banking has tried to adopt this "something out of nothing" ethos but with abject failure and horrible sociological/ecological consequences.

  • we're turning kids into slaves just to make cheaper sneakers
    but what's the real price because the sneakers dont seem that much cheaper

  • Many Marxists and most economists get it half wrong because they refuse to recognise spiritual value (honesty, kindness, trust, love) which have enormous importance in society. There is material value which is fundamentally the cost of getting thermodynamically free energy. Spiritual value is not founded on anything so quantifiable, and is partly socially determined and flexible or adaptive. Any economics which does not recognise spiritual value (like neoclassical economics and neoliberalism more broadly) is going to be destructive to society. Marxists and socalist broadly do have a spiritual underpinning, but they need to be open and honest about this, and draw from their basically correct moral positions (helping the poor, providing material, economic and spiritual justice for all, running counter to competitive market political mechanisms).

  • Financier value is both material and spiritual: materially financial services lubricate the economy, and partly fuel the economy (through credit money). But spiritually the finance sector must forgive debts which they know cannot ever be repaid (a spiritually motivated policy because it addresses financial oppression and injustice), currently that does not happen, and is the core rot within modern capitalism. I would also add that another spiritual function is to NOT loan to criminal or polluting and other socially and environmentally destructive enterprises.

  • I can adapt and develop non-arbitrary a flexible (to include levels of intangible fators) inspired by the the Black & Schols Nobel PRice formule used to calculate the dinรขmic price of stock each Option & futures contracts as ground-line a good reference to calculate the relative and dinรขmic value of various sited things. It will requere solid atemporal assumptions and adaptations. Legal action will pursed if this suggestion of mine (w/c still considers other issues), is stolen and used w/out my participation on it. I welcome partners. Many eyes will be watching eagerly for any slipage…

  • During the depressions of the 20's and 30's FDR taxed the rich to invest in infrastructure and other consumer goods manufacturing industries so people could get jobs. He was called a socialist and his policy helped America to turn the table. Rather tan write off debts, tax the rich to invest for the people.

  • I like this alot since he goes in to detail about the systems. Though, I don't know about the rest of you, but I feel like I'm in Jurassic Park and listening Dr. John Hammond in the park's main lounge.

  • You know what does not have value? Overintellectualizing very simple questions while ignoring the most salient facts, such as: Who prints the damn money? Well the parasites do. Who finances gold production? Well the parasites do. So whoever is putting up the money in the private money system is establishing the value based on the fact that they put up the money and who will get what. The same could be said for the state, if it puts up the money, say in a mixed system like China. Value is entirely arbitrary but reasoned in every case. I fail to see the need for normative theory in these matters. These patriarchally created edifices exist in fact to assert their own value when indeed a feminist thinker who eshews normative theory of any kind would and does consider such thought edifices to have no or little value indeed. In short, I could hear the parasites laughing all the way through people's attempts to reasonably explain their parasitic behavior. Better look to nature for the answers.

  • Totally irrelevant argument! The value of anything is not static but determined by numerous competing factors such as cost of material, cost of labor, supply and demand, utility (meaning the use to which it can be employed)… theses factors are constantly fluctuating and the only determinant of value is a competitive (ie Functioning) marketplace. Any service (including finance) is only productive as to the benefit it brings to the purchaser… as determined by the market… if the market is not functioning (Ie not competitive) any product or service can be considered parasitic.

  • this my dear friends is the reason for the failure of marxist communism in a nutshell. PRICE DISCOVERY. Right now in the capitalist west, parasites, (gold hoarders, bankers, and warren buffets), contain the thing men value the most who are capitalists, MONEY. They assign its value through the system of price discovery through arbitrary means of capitalism. Find the unit to purchase, when the perceived value is low, and sell high, thus parasitism in its glory. In the Soviet Union, what you had was a group of Bolsheviks at the top, gaining all the wealth of an entire country, stolen from the previous autocrats, the Tzars. The Bolsheviks operated exactly like the previous leaders, by stealing from the peasants they had not yet murdered, and gave everyone what they deserved, that is almost nothing. The highest pay in that period was college professors, because the Bolsheviks valued knowledge above all things. If you went into a restaurant in Soviet Russia, you could grow spiders webs on your hands and face waiting for service. Thus the waitress made the same, whether she served you or not. Thus the failure of universal monetary payment to all whether working or not, like our blacks are proposing for the United States. Everyone gets 1000 dollars a month, and then you have no value in anything, except drugs, and medical care, and medical care will continue to reduce to those in need, because they don't pay for what they get, seeing money value deteriorate. more later on marxist failures and reality.

  • If only our overlords would let the economy be capitalist, but every tiny tyrant has the urge to pull the levers in whichever way helps them get reelected.

  • Communism is common owned production for use
    Capitalism is private owned production for exchange
    In one word, communism is the commons.
    In one word, capitalism is the markets.
    Money only exists to make exchange of commodities easier.

  • I'm finally reading "A Brief History of Neoliberalism." It's clear, comprehensive distillation that is still relevant almost 15 years later. Wish I'd read it sooner! Is a sequel in the works?

  • Bourgeois economists and the capitalists themselves betray what they really think about value production when they relocate jobs in cheaper places. If profit isnโ€™t created by extracting surplus value from labor, then why seek cheaper labor and materials elsewhere? To increase the relative surplus value!

  • Wow. What a pitiful, poor old deluded Marxist. He says a bunch of interesting โ€” if rather obvious โ€” things, and then desperately tries to jam some idiotic Marxist solution to it. Of course. Sad stuff.

  • Hahahahahaha. Marxist comes to the conclusion that Marxist theory is nonsense and in essence not more than the stupid faith that ALL IS LABOUR…โ€ฆ.. AND WORKERS MUST BE PAID WELL….AS I HAVE SAID MANY TIMES: HEGEL IS SUPERIOR TO MARX AND NOT VICE VERSA.

  • David Harvey, could you wear my company's logo on your jacket during your shows if we pay you handsomely for it? We believe that our brand is valued very highly by the consumer and by wearing our brand you can increase your viewership by at least 20%.

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