What is profit?

The logic of a reformist position must be the possibility of building capital given existing economic structures, i.e. of deriving "profit" without exploitation, and progressively taking over the economic world through this activity.

Now we see in Marx a very coherent systemic analysis for describing the nature of profit. It is based in surplus value, and this value is equivalent to unpaid labor, i.e. labor that is being essentially exploited, undervalued. I find it impossible to deny that this is a constant economic reality, and that major sector of capitalism are dependent upon this to reap high profits. We see in industry after industry a dependence upon clearly undervalued labor, meaning labor undertaken by a marginalized class or caste without political power to press for the prevailing wage of a work. This isn't what Marx means of course, but I think in some way there is a connection. Marx suggests that we might see a capitalism constantly thrown into crisis assuming rising rates of pay of workers. Political agitation by undervalued classes leads to an increase in the cost of labor, encouraging investment in labor-saving technology. Because surplus value is created by human labor, not machine costs, this drive ultimately cripples capital. However, one "out" is utilizing a reserve army of the unemployed, essentially marginalized groups. We see this constantly throughout the 20th century and before, and we see it today in the press for low-wage manufacturing.

I think we could see in a variety of industries and their history evidence to support this type of theory, that surplus value is ultimately stolen labor.

So the question, then, is if there is any other way to make profit, and hence to create genuine growth.

I'm not sure at all how to resolve this yet. On the one hand, Marx's argument is almost tautological. But it happens to very much resemble real social history.

A few points to consider.

It might be the case that Chayanov is correct, correct across all types of economies. That the principles he identifies as "peasant economics" are present universally- and that contemporary order simply regiments and concentrates them. In this case, we might see the extraction of surplus-value as equivalent to the self-exploitation characteristic of peasant economics. The only difference is that it is accomplished for the aggregate, taken away as "profit" or interest or rent. As surplus-value.

So we see then no contradiction in a program of social ownership of the means of production in a decentralized way. It is functionally peasant economics. The surplus is still made, i.e. self-exploitation occurs. It is simply deliberate, "conscious," undertaken with the intention of deciding collectively the use of the surplus. In this sense, there is no foundational disadvantage to a socially viable firm, because all we're doing is changing the point of control of exploitation. It's simply a political shift, but a deeply significant one. The scale is irrelevant in one sense- the mechanism is the same for a single proprietor, a factory, an investment pool, a nation, a global pool. The question is simply where is the point of exploitation and who decides the use of the surplus thus created.

This allows a very autonomist reading of the situation- the idea of Chayanov's self-exploitation imbedded in any moment of labor.

Two concerns.

What is the difference between technique and technology, meaning how do we read changes/improvements to the application of labor? Is this distinct? Is management technique labor or capital, and does it create surplus value?

Alongside this question, is it possible to create a permanent revolution in technique that allows continuous creation of surplus? Say, through consumer/capital goods, bricolage goods, prosumer organization? Goods that take on dual roles as capital tools (that then shift human labor and activity simply through use, without pay)? What does this create, a constant self-exploitation that allows the constant creation of value?

Is any unpaid activity, say in leisure time, exploitation? Say I volunteer my labor in my freetime, under conditions suitable to me, without pay and for enjoyment. This is a sort of exploitation, but for whose benefit? It isn't controlled by the market, by an employer. So what is it? Maybe this is a sort of foundation, collective self-exploitation as a source of value.

And maybe the "trick" is to create mechanisms for thise to transfer smoothly and cleanly into cooperative structures, shared structures. For a community of practice to become an economic agent without alienation. Forming coops out of clubs, essentially...

Conservative and liberal sexuality

Shared among conservative and liberal moralists is an assumption that sexuality is a natural ground for personal identity. This stems from a notion of human identity bound to universal experiences and possibilities, a sort of ontological egalitarianism. What does everyone care about? Food, water, shelter, sex, etc. Human identity based on a universal hierarchy of needs, defined and refined by biological arguments.

Even the conservative school of thought regarding sexuality is in fact thoroughly modern, thoroughly contemporary, in that it makes sexual identity and expression out to be a valid base for political activity.

The right blames the left for this, the left blames capitalism. Chicken and egg. Maybe class politics opens the whole thing up by expressing political identity in terms of class, in terms of what one does with one's body. Maybe such a thing is inevitable, given that all knowledge is definitely embodied, and so any politics that isn't simply lying to itself must include a deeply embodied aspect. And embodied knowledge very easily becomes construed as "natural" because it is to a very large degree immediate yet nondiscursive at least as we experience it day to day. Hell, maybe Descartes is ultimately to blame, or empiricists, or both.

The fact remains that a politics based entirely on the body is dangerous, for the simple reason that bodies are polydifferentiated, and tend towards clustering based on exclusion.That they tend towards a presumption of "natural" categories or "natural" points of interest, and so fall prey to an easy inertia, an easy ignorance of and apathy towards what could be, the possibility of change or innovation or transformation in the world. They individualize, and because the chief locus of political experience is a single and individual body, the power of action of any actor is reduced tremendously.

So rather than pick sides, it might be more significant to point out that a shared focus on individual bodily experience as the ground of human identity is itself dangerous and limiting.

A fundamentally different way of considering things might be to look towards a sort of joint identity- bodies and the collective expressions in which they engage. For instance, a business or workplace, a church, a union, a club, a local subculture based around a practice, etc.

Very brief comment on Christian fundamentalism

The logic of conservative religious attitudes towards pleasure might be given their most generous expression by summarizing them as follows: pleasure without commitment rewards/accommodates selfishness and individualism. pleasure with commitment allows you to form deep ties of creation with others, because it breaks down the division between self and other, by encouraging consideration of the other's well-being. If my experiences lead me to tie my pleasure to your pleasure, then we can create broader and more intensive projects. Commitment means that the range of those projects are extended in time, in intensity as well as extensity. You can trust me to be with you in the long-haul, so we can both conceive of our projects for living together, drawing upon our mutual reserves.
This logic is not limited to conservatism, we can build it with equal (actually greater) consistency from Spinozism. A body formed of two bodies* in perpetual contact has more power and more power of action than a single body.
If you want to be really funky about it, you can talk about the significance of mixing genders, as in having two different systems of sensual pleasure interacting. Hence the fundamentalist preference for heterosexual couples could be expressed as a directive to increase the qualitative difference in systems of pleasure within a couple. This is too generous though, since it misreads the actual nature of homosexual expression (though it might be the same reason it is poorly constructed in psychoanalysis).
Either way, there is a qualitative increase in powers of action.
Of course, this argument could be used to justify a polyamorous community as well. These don't seem to occur very often with much longevity though. The level of attentiveness possible between three people is more difficult than among two. The biology comes in here as well- takes two to produce offspring, and the production of young is a consistent enough "project" to form a sort of attractor.
So there's a good argument for commitment, based on its capacity to wedge open ontological narcissism (to be sloppy with words); and also on a Spinozist logic of expanding powers of action.

*and using Merleau-Ponty or Bergson, "body" means the broad level of kinesthetic and emotive/intellectual experience tied to and conditioning the flesh, body-image for instance

Marxism, short note

Marxism isn't incorrect when it defines the overdetermining logic of capitalism to tend towards declining rates of profit. We can see this, and we can see it in the behavior of major capitalist investors, constantly seeking new investment in morally despicable settings (most obviously in the current day, sweatshops in China).
But this alone, this exploitation of undervalued labor, couldn't account for qualitative increases in living standards, or real innovations in technology that do more or do otherwise than replace paid labor. And such innovations do occur, especially when they are tailored towards expansion of use by the customer. (In other words, when the product is at once a consumer good and a capital good).
The question then is how to account for these sources of innovation in a sphere autonomous to conventional capitalist logic of increasing the rate of exploitation through political intervention.
This is the failing of the Marxist framework of analysis, and the chief advantage of the anarchist. For while the anarchist frame has not succeeded in articulating a coherent, thorough analysis of this autonomous logic, it does at least maintain it as a perpetual question and intuitive point of reference and exploration. This is what we can offer, potentially.
It is at the same time that aspect of the existing economic organization of the world that we can develop towards a concrete transformation of the world, without slogans, without ideology and rhetoric.

aside1: the moralism of Marxist action and theory might have proved a bit too much of a weakness, or rather the failure to deploy moral arguments at the right levels. if the chief failing of the system is in fact a falling rate of profit due to reduced exploitation of labor, it makes little sense to morally damn every investor for seeking higher returns on investment in the absence of any better logic. do you want a 3% return or a 7% return? well, 7%, unless there's a good reason otherwise. without pointing out the good reasons...
it might also explain the greater willingness of larger investors to accept more liberal organization, bound to lower rates of abuse- they have so much invested that the long-term stability and growth that go along with these lower rates of abuse afford them far greater wealth that short bursts of high returns.

aside2: so how does one note returns based on genuine innovation or improvement against simple exploitation? might there always be a steady possibility of a 2% return, something small but constant? how do you tell the difference? maybe wolff knows by now, and maybe it's worth asking him. is there a different way to get returns on innovation, and is there a real way to differentiate in terms of investment besides simple SRI rules? can you tell if returns are based on some actual contribution to society, whatever that might mean, rather than simple exploitation?

[examples: the car. the bicycle. prosumer goods in general. goods that enhance the powers of action of their consumers]

Empire or Bricolage?

Our economy works by investing more money in the areas of highest growth, meaning the areas of economic development that have the highest returns on investments, make the most profit.
This means that the creation of high levels of profit will always be rewarded with increased investment.
The main way our economy generates profit, i.e. surplus revenue over costs, is by undervaluing labor and calling the savings profit.
We don't call it this, in fact it doesn't make sense in normal economics to even think in this way. Labor has the value at the pay people are willing to take for it.
This is the problem with economics. It blinds itself to the obviously political processes that create artificially low values for labor, values that are used to create large surpluses.
For example, the industrial revolution began through hooking unemployed workers desperate for a living to factory work in England. They took wages that were not high for their time or region, in fact they accepted relatively low pay and relatively wretched working conditions.
Now, why might a man do such a thing? The actual answer, known to any student of English history, is that a combination of political factors forced farmers from land, and the same farmers who became and whose children became underpaid workers in the new industrial mills. The main political interventions were the seizure of church lands in England and the eviction of peasants tied to those lands; the privatization of Scottish farmland that had historically been held by an entire family clan, and was only made possible through undemocratic changes in property ownership; and the seizure of common lands held for centuries by villages, shared by all members of village both as supplements for each and a safety net for the poorest among them.
These political interventions created the English worker, who was willing to work well below prevailing wage rates because he had no choice. Indeed, he was willing to work even in a factory, a singularly unnatural creation at the time, likened by many to organs of hell.

Skip ahead a bit to the current world economy. Pick up a business magazine, any business magazine. What are American businessmen talking about these days, what are they so enthusiastic about? Investment in Chinese manufacturing.
There is much talk of our transition to a service economy, but the truth of the matter is, we have simply expanded the bounds of our economy to include regions with artificially low wages. What do I mean by artificially low? Chinese wages are as low as they are because of political intervention by a totalitarian state. Sweatshop workers are created by the seizure of rural lands by local party officials, or as hidden people without legal status because of the Chinese restriction on child-birth, or through the vast network of Chinese prison factories. These are simply the worst cases- Chinese labor law is incredibly arbitrary (as one might expect in a totalitarian state) and workers aren't actually allowed much of the time to exercise simple rights of labor. For instance, walking off a job, or leaving a job if they aren't paid. Or seeking legal remuneration for failure to pay promised wages.
Even in the less morally questionable aspects, cheap Chinese labor is brought as rural workers who come to cities, work for far lower wages than city dwellers would take (or could survive on), and then go home to villages.

This is the basic pattern of capitalism as we live it, forgetting the rhetoric and pedantry that is promoted by rightwing and leftwing ideologues. Pockets of labor are undervalued through political interventions, even beyond the point of basic reproduction relative to local cost of living. The most profitable industries are those dependent upon this dynamic, those who can best exploit a broken pool of labor and extract the largest surpluses (i.e., pay the least for the most work).

The historic left busies itself with the reduction of inequality, meaning bringing these pockets of undervalued labor into an rough equality regarding labor markets, which tends to come with some level of political equality. Remember, since this mechanism begins with political assault, the undervalued labor pool generally has far more nebulous political rights than regular "citizens" (for example, see immigrants and pre-Civil Rights black workers in the US, and the restrictions and abuse of rural Chinese versus urban in the current era).

However, investment merely moves to find another pool of undervalued labor, and the cycle repeats itself. There is no conscious controller here to be addressed with demands of equality- the most egregious short-term profits can always be made by exploiting a brutalized labor force, wherever it happens to be. Are they immigrants beaten by police agents in Michigan? Are they black workers in pre-Civil Rights Carolinas? Are they uprooted peasants living under a central American dictatorship? Are they Chinese workers without political representation of any real sort, forced off land and forbidden even food rations or the right to officially rent a room in a city? It doesn't matter when and where. This method will always succeed in the short term.

It fails in the long term through political agitation on the part of undervalued laborers, as they develop the means to demand higher wages or better treatment, and in the process reduce profits of the industry employing them.

And so then the gaze of investment begins to move elsewhere, as profits reduce and hence investment capital begins to diminish.

Now of course we must remember that the same pool of labor that has worked to enhance its position can easily fall back into devaluation, and this is precisely what is happening in America today. Workers accept longer hours for less pay, and less control over their economic well-being.

So this mechanism doesn't actually elevate living standards on the whole in the long-run, though it does transform them, shift their mode of expression, and create dynamics of tremendous inequality. The living standards of most people in China have fallen tremendously in recent years, even as the cost of buying amorphous widgets has reduced for Americans shopping in big-box retailers. This isn't a net increase- it's a shift, one population enslaved for the benefit of another.

This is the economic logic of Empire, and it is this logic that governs our world.

However, we have of course had progress, based not on simple exploitation but rather on technical diversification of labor and tools. The two are not the same thing, though they might appear so on a balance sheet. This is the hope for humanity, for civilization, it always has been and always will be.

The question, then, the world-historic question, is this:

Is there an economic mechanism that generates innovation distinct from the economic mechanism tied to simple exploitation and extraction of surpluses from undervalued labor as profit? Is there another way to build an economy? What does it look like?

The answer is yes I think, but it appears very different from what we have come to accept as reasonable. If we became a society of innovators, of broadly educated tinkerers, what would our society turn into?

I will offer notes towards answering this question in the course of this writing.