[Wellsy]

Art is a terrible exemplar in the matter of surplus value. Though for all that labor they should be compensated as a laborer, a distinction purposely muddied to frame a capitalist as one of the workers contributing to value and side stepping any issue of profit derived from surplus value from surplus labor.
https://kapitalism101.wordpress.com/2014/05/03/on-labor-as-the-substance-of-value/

ater in Chapter 1 of Capital Marx explores the exchange of other non-produced goods:

“Objects that in themselves are no commodities, such as conscience, honour, &c., are capable of being offered for sale by their holders, and of thus acquiring, through their price, the form of commodities. Hence an object may have a price without having value. The price in that case is imaginary, like certain quantities in mathematics.”

(As an aside I find it amusing that Marx uses such strange examples of non-commodities here like conscience and honor. Clearly it is hard to find examples of non-produced exchangeable goods! Perhaps a modern-day example might be a politician who sells his “loyalty” to the capitalist class or an athlete who sells his “like-ness” to advertisers.)

In discussing rent we decided that rent was a derivative category of value production and that therefore Marx was justified in theorizing rent after he had formed a theory of commodities. Here we have a different matter, “imaginary value”. The first thing we might note is that since conscience and honor are not products of labor they are not freely reproducible and thus do not respond to the laws of supply and demand, or socially necessary labor time, the typical forces by which prices are established. This is a good reason to exclude them from the class of goods that we are considering since this sale of conscience or honor does not follow any predictable economic logic. Rather, the price of conscience or honor would be whatever the two parties of the exchange decide upon at the moment. We draw no further conclusions or laws from this.

If we were to use these exchanges to construct a theory of value we would end up with an indeterminate, nihilistic theory of value in which values are merely whatever people decide they are in the moment, with no law-like regulation by the production process. (This is, of course, the direction that BB and his ilk would like to move value theory, into a nihilistic, hedonistic terrain where value is whatever an individual decides it is leaving us unable to make any theories about social structure, class, or production relations.)

But it is not the fact that we can deduce no laws from it that Marx excludes imaginary value from the central focus of a theory of value. Instead it is because such exchanges are an entirely irrelevant and peripheral phenomenon in our society. The nihilistic, indeterminate logic of “imaginary values” does not extend into the realm of commodity production. So there is no reason to bend the laws of commodity value to fit into the arbitrary whims of those who sell conscience and honor. On the other hand, the basic category of value (and money!) extends over all exchangeable goods. Because commodity production dominates all production and exchange, the exchange of “imaginary values” takes the form of commodity exchange, even though it is not commodity exchange proper. To win the loyalty of a Cardinal in medieval Europe a king would need ply the Cardinal with political favors. To win the loyalty of a politician in a capitalist society one must give her money. Thus the price of loyalty takes the form of commodity exchange even if it is not commodity exchange proper.

By “form of commodity exchange” I refer to a class society in which most people must buy their subsistence and sell their labor power in the market because they are divorced from the means of production. Labor is organized through commodity exchange and money stands as the universal measure of value. The exchange of products of labor take the form of market exchange. The exchange of non-produced things, like honor and conscience, also take the form of commodity exchange, even though they are not commodities.

Though BB does not bring up the topic at this point we might also mention the exchange-value of produced commodities that are not freely reproducible. A one-of-a-kind work of art like a Picasso painting is a commodity but it cannot be reproduced. Thus it does not respond to the pressure of socially necessary labor time. The exchange-value of a Picasso is a reflection of whatever someone is willing to pay for it at the moment, much like honor and conscience.
Marx excludes non-reproducible commodities from his analysis for the most part as well since they are peripheral to capitalist production. However, like imaginary value, when we look at non-reproducible commodities we see that they take the form of commodity-exchange because that is the dominant form of social labor in our society.

[ckaihatsu]

Picasso could buy some paint and canvas, hire an assistant to clean his brushes, create a masterpiece, sell it for a million dollars, and all the profit was created from exploiting his assistant because of surplus value.

Picasso paid for the paints, brushes, canvas, studio, advertised his paintings and found the buyer, had all the creative ideas that provided the value to the product, provided a job for the assistant, but its the assistant who is being ripped off.

Imagine showing up to a job and doing absolutely nothing to create the company or its products or its customer base, supply chain logistics etc, then signing a contract to work for the company that has already been established for you like a money-making gift appearing magically out of thin air and then complaining you're being exploited. Sure maybe if the boss treats you like crap you can be exploited, otherwise STFU.

In the Picasso example the 'labor' involved is *minimal* since all that's outsourced is the task of the cleaning of the brushes. Doubtlessly the assistant's wages wouldn't be too much, and the revenue stream easily covers it.

For the more *conventional*, everyday example of a *company*, it's certainly not that the company has been established for 'you', the employee -- so *this* line of argumentation sounds much more like *marketing*.


philosophical abstractions

Spoiler: show

labor and capital, side-by-side

Spoiler: show

material-economic exploitation

Spoiler: show

Spoiler: show

[wat0n]

In your example, @Unthinking Majority that painting being presented as a Picasso is not one, because Picasso did not paint it. If it is sold as a Picasso painting, that would be fraud even under a capitalist system. People have been prosecuted for this before.

Not if Picasso had the idea, and all the assistant did was to actually paint it. In fact, it's how it works in other art industries too, like comics/manga - authors will often just provide a draft and hire assistants to finish the drawings, it is then not fraud for assistants not to get authorship.

Art is a terrible exemplar in the matter of surplus value. Though for all that labor they should be compensated as a laborer, a distinction purposely muddied to frame a capitalist as one of the workers contributing to value and side stepping any issue of profit derived from surplus value from surplus labor.
https://kapitalism101.wordpress.com/2014/05/03/on-labor-as-the-substance-of-value/

...And then Marxian theory is in fact useless to understand the role of reputation, even though it definitely has economic importance.

[Wellsy]

...And then Marxian theory is in fact useless to understand the role of reputation, even though it definitely has economic importance.

This is a big vague but one point besides the significant incompleteness of Marx’s capital, the point is what relevance should reputation hold in the early analysis of what is taken to be fundamental to the economy.
Reputation can have economic influence as do many social factors, but it’s not foundational to any theory.

http://www.socialisteconomist.com/2017/12/on-relevance-of-marxs-capital-for-today.html?m=1

It is because of this, of course, that Capital is often dismissed as reductive or no longer relevant––or in need of add-ons and work-arounds. The careers of a sizable number of academics and public intellectuals are built on such projects. But there is less here than meets the eye.

In the first place, the book is entitled Capital for a reason. It’s not entitled Everything You Need to Know about What Takes Place within Capitalism, or even Everything You Need to Know about Capitalism. It focuses specifically on capital––the process in and through which value “self-expands,” or becomes a bigger amount of value. It is about how that self-expansion is produced, how it is reproduced (renewed and repeated), and how the whole process is reflected, imperfectly, in the conventional thinking and concepts of economists and business people. There’s a crucial difference between having a specific focus and being reductive. I don’t think Marx wrote or suggested anywhere that the process of value’s self-expansion is the only thing that matters or that other processes can be reduced to it. It does affect a lot of other things, sometimes in crucial ways––and this is perhaps the main reason that a book on Capital is mistaken for an Everything book––but to recognize the interrelationships is not to reduce these other things to the self-expansion of value.

Of course, there is some sense in which any book with a specific focus “leaves out” or “overlooks” other things, but we don’t normally complain that a cookbook leaves out or overlooks instructions for changing the oil in your car or any analysis of international politics. The charge that Capital “fails” to discuss many aspects of capitalism and what takes place within it seems to me to be similarly inappropriate and unfair.

So I would simply ask should reputation be relevant to such an analysis ? I don’t see it as significant or essential classical political economists.

The other side however is if one is interested in what way is it approached?
I would worry if one should try to subsume the social under quantitative analysis as is a concern when reputation is considered capital. I think we were once at loggerheads because you phrased ones own training and education to earn a higher wage as human capital to acquire a greater profit and I thought this destroyed the distinction between being a worker who earns a wage to survive and a capitalist who invest money to make a profit, more money. While of economic significance, it doesn’t mark it as capital and thus reinforces the earlier point of it being irrelevant to Marx’s initial work although useful insights may be made. So in a sense I agree with you, Marx’s own analysis doesn’t deal with reputation even if we might speculate its role in his theory of the state planned for a later work. Although it doesn’t mean such works cannot be appropriated within a Marxist analysis, as a theory of knowledge and method is possible through Marx’s example which is based on appropriation and critique of expert understanding rather than merely an external school of thought.

https://www.ethicalpolitics.org/ablunden/pdfs/social.pdf

Human Capital

Human capital is another fad term which, while describing human beings as a form of money, aims to encourage companies to enhance the quality of their labour force and governments to take action to improve the quality of the available pool of labour. Slave-owners doubtless well understood that their slaves were human capital and in their case the observation would have been true, since slaves were owned as private property, used in the expansion of capital and bought and sold on the market. What precise benefit is supposed to follow from encouraging modern capitalists to adopt this attitude escapes me. But although there is such a thing which we could legitimately call “human capital” it is not this which is usually referred to as “human capital.”

When directed at employers, “human capital” is taken to mean the skills and knowledge of their employees. But this is not capital; this is the property of the employees. To suggest that it is capital, and that employees are not entitled to take it with them when they go, and offer it for hire to another capitalist is both deceptive in relation to the employer and naïve in relation to the employees. The employer has use of the human energies belonging to the employee for the term of the wage contract in the same way that the employer has use of land belonging to the landlord for the period of the lease, but the employer does not own the land, it is not part of their capital. The skills and knowledge of employees is part of labour-power.

Now what is part of capital are the various relationships within a firm which are not portable for the employees individually when they leave. The most significant of this human capital is the specific weight of skill, knowledge, reputation and loyalty which adheres to a company and survives the departure of any and even all of their employees. This is an asset, owned by capital, generally-speaking associated if tenuously with their brand name, and which can be bought and sold. But although attached to a brand name it resides only in the mass of employees, that is, it belongs to the subject, the company.

Even in this usage the term remains a semantic paradox, but if we allow latitude for the idea of a type of capital referring to the form in which capital is temporarily invested which is capable of being put back into circulation, in contrast to finance capital, industrial capital and so on, then this is a legitimate usage of the term “human capital.”

Now, when the term is used in addressing governments, this becomes an absurdity. Improving the health and education of the residents of a locale is supposed to increase the “human capital” of the locale. It does increase the quantity of labour-power available for sale, but labour-power is a different kind of commodity. Why is it necessary to describe saleable skills as “capital” when they are the property of a person whose means of production is the private property of some company?

Like nature, a skilled, loyal and healthy workforce may be a precondition for the accumulation of capital, but it is not capital. Many other conditions are necessary for the accumulation of capital. For example, should we count as human capital the low standard of living of a neighbourhood which will provide employees at low wages, the presence of gangs of racist thugs that can be used to intimidate workers, perhaps the defeat of a recent strike creates “human capital” by creating a tendency towards compliance in the labour force? Well obviously yes; these are human capital in exactly the same way as trade qualifications and supportive families, in fact ignorance may be a human trait more conducive to the accumulation of capital than trade skills.

If people want to say to the government: “As well as providing good infrastructure, tax-cuts, anti-union laws, and lucrative government contracts, you ought to be providing a compliant and skilled workforce for business to employ,” then say so. One of the trends in the “knowledge management” industry, an off-shoot of the “human capital” industry, actually proposes that the appropriate metaphor for “knowledge management” is mining, that is, that employees should be treated like dirt. [source] One of the things that all these trends have in common is that they address themselves to companies and governments, that is, people dedicated to serving capital, and say “Look, this is a form of capital, too; you should care about this!” while people know perfectly well that they are human beings not capital, are perfectly sick of being treated as commodities by their bosses, and do not need to have their bosses given any encouragement in that regard. And yet these trends all think that they are doing something very progressive. But Dracula is already in charge of the blood bank and telling Dracula that the air and water and human life are also forms of blood does not help.

[ckaihatsu]

(Again.)

[Picasso] provided a job for the assistant, but its the assistant who is being ripped off.

In the context of the artist's studio, the cleaning of the paintbrushes is a *must*, a social necessity that's akin to doing-the-dishes for a *chef*.

That *is* labor, since the artist wouldn't want to interrupt *their* personally favored activity, to tend to the mentally-numbing but logistically-necessary in-house chore.

*Without* that labor, as anywhere else, the (studio) workplace would cease production and would grind to a halt, due to a lack of productive implements, clean paintbrushes.

How much value, in wages, does the brush-cleaning assistant *get* from the revenue that they helped to enable? What proportion *should* they get, of the net income?


[11] Labor & Capital, Wages & Dividends

Spoiler: show

---


Also, from my post-scarcity / post-capitalism 'communist supply & demand' FAQ:

[T]he premise from the beginning, [was] that what everyone would *rather* be doing with their time is to write poetry, star in movies, do pleasant things, become university professors, use iPads in hipster ways, and strive for celebrity status.

So, to wrap up, the 'labor credits' method would enable a beer-for-dairy *ratio* of beer-production hours to dairy-production hours, so as to effectuate the inter-locality collectivist production of *both* beer and dairy, for *everyone* in both localities, indefinitely. This step-up in coordination would probably not have had sufficient social 'synergy' for its realization *without* the mechanism of the labor credits, hence their (hypothetical) existence and usage.

https://web.archive.org/web/20201211050 ... ?p=2889338

[Rancid]

What are we discussing?

[Wellsy]

What are we discussing?

How I got surplus dick and everyone else only got necessary dick.

Or rather the contentious issue of value existing and machines only increasing use values but do not produce surplus value in themselves. The significance of which plays a substantial part in many takes on economic crises emerging from a reduction in workers compared to machines in production reducing surplus value and thus creating a tendency for the profit rate to value not just in long term cycles but in the overall trajectory of capitalism which cannot expand indefinitely.

To sum up, both theoretical an empirical investigation has provided substantiation for the thesis that the crises’ ultimate cause is the tendential fall in the average rate of profit. Wage movements can explain neither the crisis nor the cycle. The explanation is to be found in Marx, not in Keynes. But, internal critique aside, one should be aware of each of the two views’ political and ideological ramifications.

If lower wages determine crises, higher wages are the way out of crises. And if higher wages determine crises, lower wages are the way out of crises. Crises are at least in principle avoidable. If they are not avoided, it is because ‘mistakes’ have been made in wage, fiscal, monetary, etc. policies or because labour has not been able to impose better work and living conditions on capital. The reformist matrix of this redistributional view is clear: if the system is reformable, a different system is not needed.

However, if crises are a constant feature of capitalism, we need a theory that theorizes their unavoidability, their necessity. This is exactly what the Marxian explanation does by focusing on the decreased production of (surplus) value due to technological innovations and concomitant rising value composition of capital as the ultimate cause of crises. Given that this is a constant of capitalism, the necessary, constant and unavoidable way capitals compete with each other, crises are unavoidable. Stated differently, in the former case (basically, a Keynesian perspective), if crises can be avoided, the system does not tend objectively and necessarily towards crises.

The possibility is created to conceptualize capitalism as a system being or tending towards growth and equilibrium (even if at a level lower than full employment). In the latter (Marx’s) case, the system tends towards crises through the economic cycle. In the former case, the system is inherently rational (it tends towards equilibrium and growth) and Labour’s fight to supersede it is therefore irrational. Labour is deprived of the objective, rational base for its fight. This fight becomes a pure act of volunteerism. In the latter case, the system is irrational and Labour’s fight to abolish it is then both rational and the conscious expression of an objective movement, the tendency the system has to supersede itself. The choice of a crisis theory rather than another is an individual one. But, given the different class content of the different theories, this choice places the individual theorist on one side rather than another in the struggle against capital.

‘The return from the grave, or Marx and the present crisis’. G. Carchedi, Amsterdam, March 12, 2009

[wat0n]

@Wellsy I would say it is important for an economic theory to explain why does reputation matter. For example, why do borrowers known for defaulting on their debt pay higher interest rates?

[Wellsy]

@Wellsy I would say it is important for an economic theory to explain why does reputation matter. For example, why do borrowers known for defaulting on their debt pay higher interest rates?

It’s not that its unimportant in itself or simply irrelevant but it is a phenomenon to be explained later after other basic ones are laid out I would say. You’re right that one wouldn’t directly find an answer/theory/analysis in Marx.

[Truth To Power]

You're being *ridiculous*, TTP, by denying that people make *investments*, of *capital*, for *returns on investment*.

No. That is not related to anything I said. You simply made it up.

As I proved to you, it is precisely because their capital investments -- not any increased contribution by labor -- increase value production that they yield a return on that investment.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

Here you're effectively denying that equity capital exists *altogether*.

No. That is not related to anything I said. You simply made it up.

I already explained to you, very clearly and patiently, in simple, grammatical English, that because you are a Marxist, you will say, do, and believe anything whatever in order to avoid knowing the fact that investment in productive capital causes the increased value produced, not any increased or "surplus" value of labor. Watch as you prove me right:

Does Abby receive a *profit*, or a *wage* -- if she's the one investing her own capital, for the initial oven, pizza ingredients, and wood, then she's the one enjoying *profits*, from the $1000 revenue, due to her investments.

Right. If she is self-employed, as described, then the profits are her wage.

If Abby is an *employee* of Ben and she does the same workday, she will *not* be allowed to handle the new daily revenue of $3000 per day, because her employer and husband Ben is the one who put up the $300 for the new electric pizza oven. She will *not* receive $400 in wages per day, nor *triple* that, due to the revenue tripling, because the $400 / $1200 number -- for profits -- is attributed wholly to the technological benefit / improvement of the *electric* oven, producing three times as many pizzas as Abby's original wood-fired oven.

Right. If she and Ben are the proprietors of the pizza shop, their wages increase with the added production of value that Ben's purchase of the new oven caused. If she is Ben's employee, she is paid the market wage both before and after Ben provides the new oven, and has no claim to more than that as a result of Ben's investment. Ben's investment is what caused the increase in value produced, not Abby's labor, so it is not "surplus labor value." It is value Ben created by his investment in the electric oven.

Ben has an interest in receiving the $1200 in profits every day, and seems to value Abby's labor in making pizzas as being *slave* labor

No; of course as a Marxist, you have to resort to bald, disingenuous falsehoods because you have no facts or logic to offer, as I have already explained to you so very clearly and patiently, multiple times. Slave labor is labor compelled by force. No one is forcing Abby to work for Ben. He has simply offered her access to an economic opportunity she would not otherwise have, and, being incomparably more honest and intelligent than any Marxist who ever lived, she has voluntarily accepted that offer.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

since there's no mention of how she'll be compensated for her daily pizza-making labor using the new electric oven paid-for by Ben.

No, that is just another bald falsehood from you. If she is Ben's employee, she is being compensated at the wage she voluntarily accepted. Why would Ben pay her more for making pizzas than for chopping wood and tending the fire, when making pizzas is easier, and she would rather do that than chop wood and tend the fire anyway?

*Abby* has an interest in continuing to work on the older, original *wood-fired* oven, since she at least *owns* that oven herself, and can make her original $400 of profits per day from the revenue of $1000 per day -- instead of allowing Ben's hostile-takeover and her own enslavement to the electric oven, for the sake of Ben's profit-making.

No. That is just an absurd and disingenuous Marxist fabrication on your part, which proves my previous statement is objectively correct: as a Marxist, you will say, do, and believe anything whatever in order to avoid knowing the facts of objective physical reality that prove your beliefs are objectively false and evil.

There is no "hostile takeover" or "enslavement" by Ben. Those are just more outright Marxist fabrications on your part. You simply made them up. Whether Ben and Abby are the proprietors of the pizza shop or Abby is Ben's employee, nothing has changed except that Ben's contribution of the new oven has increased the value of what Abby's labor produces. Indeed, Abby would rather make pizzas for her wages than chop wood and tend the fire whether she and Ben are the proprietors or Ben is her employer.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

Your *land* fixation aside,

I will continue to identify the most important relevant facts of objectively physical reality and their inescapable logical implications.

the author here is simply noting that *other* assets and resources, like laundromat machines, function *the same way* as land and all types of *rentier* capital

No. The author is not "noting" any such thing because it is self-evidently false and absurd. He is just deliberately LYING about it. He is just another lying Marxist LIAR who has realized that if he wants to defend Marxism, he has no choice but to LIE. The laundromat machines indisputably DO NOT function the same way as land and other assets owned through privilege because use of the machines, unlike the land, is an opportunity that is provided by the machines' owner, and would not otherwise have been available. As your posts prove over and over again, Marxists will say, do, and believe anything whatever in order to avoid knowing that self-evident and indisputable fact of objective physical reality.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

-- which are all *non-productive* of commodities,

"Commodities" is an irrelevant Marxist anti-concept. The laundromat machines produce the value of convenience that the customers willingly pay for. Land provides access to the services and infrastructure government provides, the opportunities and amenities the community provides, and the physical qualities nature provides at that location. It is not the land but the landowner who is not providing any of those things to the production process.

and are a *cost* to both wages and equity capital.

That is nothing but absurd, anti-economic gibberish -- i.e., Marxism. The things workers and investors in producer goods choose to spend their earned income on are not "costs" to wages or "equity capital" (which is another Marxist anti-concept).

In other words the mechanical service of *clean clothes* is a *must* for workers and executives alike, and is therefore a non-productive *cost* to the entire *pre-existing* economy -- a *drain* on the pre-existing pool of wages and equity capital, both.

That is nothing but more absurd, anti-economic Marxist gibberish, as proved above.

Land, and *all other* asset and resource classes, are all *rentier* capital, and do *not* involve value creation at all.

I just got through proving that claim is objectively false and absurd. Ben's contribution of the oven increased the value of pizza creation by $2K/day. The land was already there anyway; the oven wasn't. You just have to refuse to know that self-evident and indisputable fact of objective physical reality because you have already realized that it proves your bliefs are false and evil.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

Paying for the labor to transform raw land into *usable* land -- as with landscaping -- turns the land into a commodity with *exchange value*, 'land', or 'real estate'.

No, that is objectively false, disingenuous, and absurd Marxist filth. The land must already have been usable before it could be transformed. That is why raw, unimproved land has (often astronomical) exchange value. Duh.

Don't you understand what it means when you constantly have to resort to baldly and objectively false claims?

Renting out pre-existing assets like land, houses, cars, and washing machines, means that material-economic *services* *are* being rented-out, for revenue, but nothing *new* (commodities) is being produced.

Unlike the land, the houses, cars and washing machines were not "pre-existing"; that is nothing but another bald falsehood from you. They had to be produced before they could be rented out. The land did not.

As a Marxist, you will say, do, and believe anything whatever in order to avoid knowing that self-evident and indisputable fact of objective physical reality because you have already realized that it proves your beliefs are false and evil.

Raw land itself *has no value*,

That is another bald and absurd falsehood. Unfortunately, forum rules forbid identification of your statement for what it indisputably is.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

because it can't be readily used as an 'automatic' resource, like sunshine.

No, that is just false. It has value to the precise extent that secure, exclusive tenure offers advantageous access to the services and infrastructure government provides, the opportunities and amenities the community provides, and the physical qualities nature provides at that location.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

Once *labor* is applied, the land can then be transformed into a *usable* parcel of land, or 'real estate'.

No, it must self-evidently and indisputably already be usable before anyone can apply labor to -- i.e., use -- it.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

Yes, capital had to be invested, for the making of the usable land, the auto-service washing machines, or the privately-owned factory infrastructure.

No. The land was self-evidently and indisputably already there, ready to use, without the help of the owner or any previous owner. The washing machines, factory, etc. were not.

Don't you understand what it means when you always have to resort to bald, absurd falsehoods?

Now guess which of these investments actually produce *new commodities* -- is it the [1] land, the [2] washing machines, or [3] the factory -- ?

All of them contribute to value produced. The owners of the washing machines and factory contribute them to production, as they would not otherwise have been available. It is just the land's owner who doesn't contribute, but merely pockets the value of the services and infrastructure government provides, the opportunities and amenities the community provides, and the physical qualities nature provides at that location, while contributing nothing himself.

[ckaihatsu]

@Wellsy I would say it is important for an economic theory to explain why does reputation matter. For example, why do borrowers known for defaulting on their debt pay higher interest rates?

It’s not that its unimportant in itself or simply irrelevant but it is a phenomenon to be explained later after other basic ones are laid out I would say. You’re right that one wouldn’t directly find an answer/theory/analysis in Marx.

*Credit scores* aren't *economic*, as much as they're *financial*, meaning the terms of use of pre-existing capital, as loans. Loans are clearly *secondary* in valuation, and depend entirely on the success or failure of the extension of credit to the borrower.

US sub-prime mortgage collapse of 2008

In early 2009, Citigroup dumped more than $700 billion worth of impaired assets into bad bank Citi Holdings.[12] By 2012, the Citi Holdings bad bank represented 9% of the total Citigroup balance sheet.[13][14]

In March 2011, Bank of America segregated almost half its 13.9 million mortgages into a bad bank composed of risky and worst-performing "legacy" loans.[15]

https://en.wikipedia.org/wiki/Bad_bank

[Truth To Power]

land --> world war PATH UP A HILL:

land - flat, terrain, landscape

asset / resource ('rentier' capital) - built-up non-commodity-productive infrastructure, like a raised area or building foundation, or building

natural monopoly - like a 'rooftop' zoned area on top of that building that supports a single tree and its fruit

market failure - like a skylight or defined area above and/or *around* that tree, that 'removes' it from the open air and most day-to-day market trading

statism - bureaucratically-consciously 'finds' all such trees and their fruit, to administer over all of them in the general interests of the trees' owners

economic nationalism - broader nationalist consciousness / sentiment, expressed as 'monetarism' / strong-currency-values economically, and at the economic expense of rival empires over colonies and territories

currency devaluations - increasing inter-imperialist competitiveness, over a shrinking remainder of market share

trade war - aggressive currency devaluations, for imperialist-type market share, leading to inevitable geopolitical tensions and conflict

hot war - military mobilizations, sustained sites of conflict

world war - theaters of warfare, and international treaties kick-in, resulting in Orwellian super-states of international authoritarian coordination, for endless, destabilizing warfare on foreign (or domestic) populations.

Marxism - anti-economic gibberish consisting of an elaborate superstructure of anti-concepts contrived to prevent use of valid concepts that could aid economic understanding

[wat0n]

*Credit scores* aren't *economic*, as much as they're *financial*, meaning the terms of use of pre-existing capital, as loans. Loans are clearly *secondary* in valuation, and depend entirely on the success or failure of the extension of credit to the borrower.

Lending and borrowing are quite evidently economic decisions. Major ones at that.

Why do credit scores exist?

@Wellsy seems to be spot on in suggesting Marxian theory doesn't really have an answer.

[Rancid]

Why do credit scores exist?

To force people into the credit system. There is money to be made on interest.

[ckaihatsu]

Lending and borrowing are quite evidently economic decisions. Major ones at that.

Why do credit scores exist?

@Wellsy seems to be spot on in suggesting Marxian theory doesn't really have an answer.

Borrowing and lending is *speculative*, *financial* activity, and is certainly not the same thing as *liquidity* / cash itself.

Fictitious capital (German: fiktives Kapital) is a concept used by Karl Marx in his critique of political economy. It is introduced in chapter 25 of the third volume of Capital.[1] Fictitious capital contrasts with what Marx calls "real capital", which is capital actually invested in physical means of production and workers, and "money capital", which is actual funds being held. The market value of fictitious capital assets (such as stocks and securities) varies according to the expected return or yield of those assets in the future, which Marx felt was only indirectly related to the growth of real production. Effectively, fictitious capital represents "accumulated claims, legal titles, to future production"[2] and more specifically claims to the income generated by that production.

Fictitious capital could be defined as a capitalisation on property ownership. Such ownership is real and legally enforced, as are the profits made from it, but the capital involved is fictitious; it is "money that is thrown into circulation as capital without any material basis in commodities or productive activity".[3]

Fictitious capital could also be defined as "tradeable paper claims to wealth", although tangible assets may themselves under certain conditions also be vastly inflated in price.[4]

In terms of mainstream financial economics, fictitious capital is the net present value of expected future cash flows.[5][6]

https://en.wikipedia.org/wiki/Fictitious_capital

[ckaihatsu]

land --> world war PATH UP A HILL

Marxism - anti-economic gibberish consisting of an elaborate superstructure of anti-concepts contrived to prevent use of valid concepts that could aid economic understanding

To *me*, the point of Marxism is that it gets at the *components* of how political-economy actually works, so in that sense it *does* reflect the functioning -- or *malfunctioning* -- of the capitalist economy. Here's my own take on the core components of political economy:


Social Production Worldview

Spoiler: show

[wat0n]

To force people into the credit system. There is money to be made on interest.

There is money to be made in business. But no one forces you to take big loans...

Borrowing and lending is *speculative*, *financial* activity, and is certainly not the same thing as *liquidity* / cash itself.

Except that it isn't. It's not when you get a loan for a degree or a mortgage for a home. It's not when governments borrow either.

[Rancid]

There is money to be made in business. But no one forces you to take big loans...

Yea, but if you have no credit score, in many cases, you cannot even rent an apartment.

[ckaihatsu]

land --> world war PATH UP A HILL

...Was also going to add that this 'path-up-a-hill' approach is meant to be congruent with an empirical *statistical [1] landscape*, so that any / all added [2] 'mounds' on top of the land itself are materially *rentier capital* (non-commodity-productive) -- and such investments enable [3] 'natural monopolies' (read: *specialization*), which are synonymously [4] 'market failures', must be rescued by [5] statism, implying national [6] economic nationalism ('monetarism'), and later [7] currency devaluations for retaining national market share, leading into [8] trade war, and [9] hot war, finally cascading into [10] world war.

So, statistically, the 'hilltop', reached by whatever upwards path, is meant to be an 'optimization potential', though the most socially *destructive* one possible, world warfare.

[ckaihatsu]

Borrowing and lending is *speculative*, *financial* activity, and is certainly not the same thing as *liquidity* / cash itself.

Except that it isn't. It's not when you get a loan for a degree or a mortgage for a home. It's not when governments borrow either.

Except that it *is* -- ever hear of *credit ratings agencies* -- ?

As long as there's a *chance* that the loan won't perform there's financial *risk* there (*arguably* so, though, overall, given near-infallible government intervention in the markets to *underwrite* any emergent financial sinkholes -- 'bad banks' and 'zombie corporations').