When does 2+2 not equal 4?

In capitalist schools, we are taught that two plus two always equals four. But Marxism, and science in general, points to a different, more dynamic result, one that more accurately reflects reality. The difference can help us better assess economic statistics and the world as a whole.

Let’s take a simple example. What do we get if we combine two two-quart containers of water? “Four quarts!” we may have learned. But water, like everything else in the universe, is matter in motion. Some of it is constantly changing form. Even as the two containers are combined, some water will evaporate. Accurate measures will repeatedly, positively indicate that adding two quarts and two quarts of water does not yield four.

For cooking purposes, the difference may not be critical. For scientific purposes, the difference can be critical. Even for cooking, if the water is left to sit a while, enough evaporation will occur as to possibly affect a recipe’s outcome. And let the container sit long enough, and two plus two quarts of water will equal zero. On the other hand, add two plus two measures of some radioactive minerals, and the result can be a whole lot more than four, if critical mass is exceeded.

Let’s apply some of that lesson to economic statistics. For most capitalist economists, gross domestic product — the dollar value of all goods and services produced in a country — is the best, most general indicator of an economy’s performance. The Commerce Department reports that U.S. GDP was $9,872.9 billion dollars in 2000, rising to $10,208.1 billion in 2001. But household income fell and unemployment rose between 2000 and 2001, as did child poverty, hunger and imprisonment rates. Doesn’t add up.

In both 2000 and 2001, over $300 billion was spent on pervasively-damaging tobacco products, plus several hundred billion more on health care required as a result of smoking and chewing. Both expenditures were added to GDP. Shouldn’t they have been subtracted? The cost of existing housing rose, and was added to GDP — shouldn’t it have been subtracted? Or consider that the U.S. government now spends over $1,000 billion every year on arms, wars, union-busting, and prisons — shouldn’t these be subtracted, not added to GDP? We think so.

In a welcome development in China, the state today is experimenting with “Green-GDP” accounting. Environmental and some other costs of production are being subtracted from GDP. This points the way to more accurate social accounting, and a rejection of the profoundly misleading GDP arithmetic that the U.S., World Bank and IMF have tried to impose on China.

Or consider the fable that a dollar is equal to a dollar. A corporation’s capital, for example, is defined as its stock plus its debt. Through pension funds and mutual funds, workers’ savings are largely channeled into corporate stocks or risky debt; the leading Wall Street families prefer to hold capital in the form of “senior” debt, which has priority over all other company’s obligations.

If the corporation runs into problems — and that happens all too often these days — the pension fund’s holdings can evaporate overnight, and the worker’s dollar is suddenly worth a dime. Wall Street’s dollar, on the other hand, gets repaid with interest, or at most suffers a minor trim. A dollar is not a dollar.

Behind the teaching that a dollar is a dollar, or that two plus two equals four, lies the idealist assumption of absolute values. But there is no such thing. Both physical and social reality consist of ever-changing, ever-contending forces. The more scientifically we assess those contending forces, the better we can point the way for the working class to change reality in its interest, and that of all oppressed.

In the meantime, PWW readers who excelled in arithmetic may find they need to refine their answers. Readers who did not do so well in Mr. Joyce’s class can feel more confident in reaching scientific answers — not only to two plus two, but to the bosses’ accounting as well.

The author can be reached at economics@cpusa.org.