Home > political-economy > Like What, Exactly? (3)

Like What, Exactly? (3)

1937 – The 9th Party Congress was called the "Rally of Labour" (Reichsparteitag der Arbeit). It celebrated the reduction of unemployment in Germany since the Nazi rise to power.

1937 – The 9th Party Congress was called the “Rally of Labour”. It celebrated full employment in Germany since the Nazi rise to power.

Part Three: Conceived in Nazi Germany, Born in the USA

The search for a solution to the financial crisis

You probably are not aware of this, but in 2008-2009, when the world market faced its darkest hours of the financial crisis, the attention of many mainstream economists, who were desperately looking for a way out of that mess, turned to the halcyon years of the early Nazi regime. Yep, that’s right — economists scrambled to study fucking Nazi economic policies. Most Marxists don’t realize this, but the template for their cherished “social state” was the Nazi policies of the Great Depression.

Really, I am not making this up. Have a look at this quite interesting article from the New York Times in 2009:

“Every so often, history serves up an analogy that’s uncomfortable, a little distracting and yet still very relevant. In the summer of 1933, just as they will do on Thursday, heads of government and their finance ministers met in London to talk about a global economic crisis. They accomplished little and went home to battle the crisis in their own ways. More than any other country, Germany — Nazi Germany — then set out on a serious stimulus program. The government built up the military, expanded the autobahn, put up stadiums for the 1936 Berlin Olympics and built monuments to the Nazi Party across Munich and Berlin.”

Of course, people can’t eat roads, tanks and monuments, so the author of the article, David Leonhardt, pointed out that this Nazi fascist state spending did not “trickle down” to the working class. He writes this off to the lack of working class bargaining rights:

“The economic benefits of this vast works program never flowed to most workers because fascism doesn’t look kindly on collective bargaining”

Although Leonhardt blames the problem on the lack of collective bargaining rights, think about this: if all this social spending was going into production of roads, tanks and monuments, what additional means of consumption resulted from the spending? None. Even if there had been collective bargaining rights, Nazi spending would not have resulted in additional means of consumption, because there would have been no additional means of consumption available over which to bargain.

Now hold that thought — we will return to it later.

How Nazi Germany economic policies jumped the pond

Leonhardt continues:

“But Germany did escape the Great Depression faster than other countries. Corporate profits boomed, and unemployment sank …”

The response of the economy to this entirely unproductive fascist state spending was so effective in increasing profits and reducing unemployment that it drew the attention of the acknowledged godfather of American fascist state economic policy, Lord John Maynard Keynes himself. Leonhardt cites Harold James, an economic historian:

“… the young liberal economists studying under John Maynard Keynes in the 1930s began to debate whether Hitler had solved unemployment.”

Note that James does not say Keynes’ came up with an idea on how to end unemployment, Keynes and his team of economists wondered if HITLER had figured it out. And note what Hitler had figured out:

“Corporate profits boomed and unemployment sank” [without] “economic benefits [flowing] to most workers”

In other words, Keynes’ economics team debated whether Hitler had figured out how to increase profits without increasing wages. This is because, despite the common misconception on the Left, the level of capitalist employment depends not on wages, but on profits. The capitalist mode of production is driven by profits, not wages or so-called ‘demand’. If you want to reduce unemployment, you have to figure out how to stimulate profits. Hitler’s economic policy team had figured out how to increase profits and so drive down unemployment. And how did they increase profits? By fascist state spending on roads, tanks and monuments. This spending had the effect of increasing profits without in any fashion adding to the production of wage subsistence goods.

How Hitler’s policies worked, and Keynes’ interest in those policies, is not a secret: IT IS ON THE PAGES OF THE FUCKING NEW YORK TIMES!

Moreover, right now you can go to Marxists.org and see how Keynes described what Hitler’s economic policy team discovered. His essay is called, “The General Theory of Employment, Interest and Money” and is considered the founding document of the Keynesian school. It is necessary to remember that Keynes is only putting into theoretical terms, the already existing actual practice of the fascist state. He is not creating this theory out of his head in some profound insight of pure genius. So why has this fact not been acknowledged by Marxist academics today?

Keynes’ distillation of Nazi economic policies

The heart of this document, which is almost never mentioned by economists (not to mention dumb Marxist academics), is to be found here. Keynes states his argument in a straightforward manner befitting a person who had only contempt for the working class:

“Though the struggle over money-wages between individuals and groups is often believed to determine the general level of real wages, it is, in fact, concerned with a different object. Since there is imperfect mobility of labour, and wages do not tend to an exact equality of net advantage in different occupations, any individual or group of individuals, who consent to a reduction of money-wages relatively to others, will suffer a relative reduction in real wages, which is a sufficient justification for them to resist it. On the other hand it would be impracticable to resist every reduction of real wages, due to a change in the purchasing-power of money which affects all workers alike; and in fact reductions of real wages arising in this way are not, as a rule, resisted unless they proceed to an extreme degree. Moreover, a resistance to reductions in money-wages applying to particular industries does not raise the same insuperable bar to an increase in aggregate employment which would result from a similar resistance to every reduction in real wages.

“In other words, the struggle about money-wages primarily affects the distribution of the aggregate real wage between different labour-groups, and not its average amount per unit of employment, which depends, as we shall see, on a different set of forces. The effect of combination on the part of a group of workers is to protect their relative real wage. The general level of real wages depends on the other forces of the economic system.

“Thus it is fortunate that the workers, though unconsciously, are instinctively more reasonable economists than the classical school, inasmuch as they resist reductions of money-wages, which are seldom or never of an all-round character, even though the existing real equivalent of these wages exceeds the marginal disutility of the existing employment; whereas they do not resist reductions of real wages, which are associated with increases in aggregate employment and leave relative money-wages unchanged, unless the reduction proceeds so far as to threaten a reduction of the real wage below the marginal disutility of the existing volume of employment. Every trade union will put up some resistance to a cut in money-wages, however small. But since no trade union would dream of striking on every occasion of a rise in the cost of living, they do not raise the obstacle to any increase in aggregate employment which is attributed to them by the classical school.”

Quite simply Keynes is stating here that inflation — the persistent depreciation in the purchasing power of state issued currency — can produce the same results as Hitler’s monument building. According to Keynes, workers were so dumb they would only look at the nominal wage in their paychecks, but fascist state monetary policy could inflate nominal wages away; the workers would not even notice this depreciation in what their wages can buy — and even if they did they would soon give up and stop resisting it.

Was Keynes right? Well, it is important to realize that since Keynes’ time, even the theoretical clarity among the most advanced sections of the working class has declined to such an extent Bernanke no longer find it necessary to conceal that he is trying to create inflation to depreciate our paychecks. However, the real point of this exercise is not how we have been dumbed down by the fascist state over the years so that we no longer even recognize we are being shit on. The point of this exercise is to demonstrate, in a fashion Marxist academics like those of the underconsumptionist school can’t deny without exposing themselves as fascist sympathizers, that all Keynesian policies are fascist and were fascist from their very inception. The link between Keynesian policies and the policies of Hitler fascism are so well documented, it is no longer a matter of debate — it has now become the starting point of the debate over policies in the present crisis.

See, for instance, How did Nazi fiscal policy work? by Tyler Cowen.

Or this scholarly paper: “Employment, the Keynesian Theory and the Phenomenon of Nazism” by Eleftherios Giatrakis.

Or this one for the NBER: “Did Economics Cause World War II?” by Robert J. Gordon.

And then there is also this one for the NBER: From Great Depression to Great Credit Crisis: Similarities, Differences and Lessons by Keynesians Almunia, Bénétrix, Eichengreen, O’Rourke and Rua.

What are the authors of each of these papers trying to understand? Go back to the earlier discussion of the secret of Hitler’s success in reducing employment according to Leonhardt:

“The economic benefits of this vast works program never flowed to most workers, because fascism doesn’t look kindly on collective bargaining. But Germany did escape the Great Depression faster than other countries. Corporate profits boomed, and unemployment sank …”

Since the fall of unemployment was tied not to the increase in the wages of the workers, but to the rising profits of corporations, this implies the real interest in early fascist policies by the authors of the above papers is how to boost profits — in other words, the problem of the present crisis is the problem of how to increase the mass of profits, a classical problem of Marx’s theory.

The Obama stimulus package and “full employment”

When the Obama administration was confronted by reporters in the early days of the crisis, one of the questions raised was why the administration was so reluctant to reduce hours of labor to address rapidly rising unemployment. The Obama administration was trying to push its huge $800 billion stimulus program through Congress at the time. Although Obama predicted this huge program would hold down unemployment and ultimately bring the economy to “full employment”, it was massive, wasteful and costly. Facing reporters at the time, Obama economic adviser and former Treasury Secretary Larry Summers had this to say:

“I think we got the Recovery Act right. The primary objective of our policy is having more work done, more product produced and more people earning more income. It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.”

Reducing hours of work could have been accomplished immediately and would have not cost a single dime of government spending. However (and this is the point) reducing hours of labor would not have added to the profits of corporations, it would have reduced them — the Nazi success lay precisely in reducing unemployment by increasing profits. This is why at the height of the financial crisis economists cracked open their books and began to bone up on the Nazi experience. Since Keynesian policies have only ever been a derivative of Nazi policies, Keynesians were forced to returned to the source, so to speak.

Now, to be honest, I should also explain that Keynesians were so desperate they also cracked open Das Kapital. Brad DeLong, spent a period of time poring over Marx’s 1851 essay, “Reflections on Money”. As he observed, however, Marx’s theory did not support the Keynesian school’s argument and in fact Marx ridiculed policies much like the ones Keynesians proposed:

“The Birmingham men, 122 who want to do away with the inconveniences of money by putting large quantities of money into circulation, or by lowering the standard of money’, are of course fools. Proudhon, Gray and others who want to retain money but in such a way. that it should no longer have the properties of money, are also fools. Since it is tit the money market that the entire crisis erupts and ill the features of bourgeois production recur as symptoms, which, it is true, become incidental causes, nothing is simpler to understand than the fact that it is money that narrow-minded reformers who stick to the bourgeois standpoint want to reform. Because they want to retain value and private exchange, they retain the division between the product and its exchangeability. But they want to modify the token of this division in such a way that it expresses identity.”

Marx did not think very highly of simpletons like these:

“They deal with everything in monosyllables and this constitutes their specific talent. The monetary system and the entire present system are in their opinion as straightforward and as stupid as they themselves are …”

Hilariously enough, after reading Marx’s statement, DeLong, ever the simpleton, wrote:

“Why he is opposed is really not clear to me…”

Carchedi debunks the Keynesian economic argument

As the data from Hitler’s Germany confirms, fascist state economic policies do not work by “expanding demand”, but by expanding profits. This should be clear now with the publication of Guglielmo Carchedi’s essay, “Could Keynes end the slump?” Carchedi’s argument is critical to understand because it debunks the common assumptions regarding how Keynesian fascist policies work. In his essay, Carchedi explains the results of his theoretical and empirical work:

“The thesis that state-induced redistribution and investment policies, possibly through state borrowing, could start a sustained recovery, provided the scale is sufficiently large, is not only theoretically invalid but also empirically unsubstantiated.”

Unfortunately, having shown that Keynesian (fascist state) policies do not work by redistributing income nor by direct state investment, Carchedi left the critical question unanswered:

“How did Nazi-style policies work to reduce unemployment and boost profits?”

It is not enough to explain how Keynesian policies don’t work, Carchedi had a responsibility to explain how they have actually worked for 80 years. Despite this major flaw, however, Carchedi does at least provide us with a clue how Keynesian policies might have worked during this period: the only way the policies could work is if they enabled the fascist state to destroy the excess capital in the economy.

“Then, if either pro-labour or pro-capital anti-crisis policies are impotent against the slump, the crisis must run its course until it itself creates the condition of its own solution. This is the destruction of capital. Only when sufficient (backward) capitals have been destroyed (have gone bankrupt) can the more efficient productive units start producing again on an enlarged scale.”

For some still unexplained reason Carchedi never follows up on this clue as to how fascist state spending might be involved in the actual destruction of capital. But the conceptual problem he appears to have encountered in this regard may be indicated in the very paragraph in which his solution is presented — he seems to think fascist state intervention in the economy is preventing the destruction of capital:

“It follows that, if these policies at best postpone the explosion of the crisis, they also postpone the recovery.”

Carchedi’s argument is that fascist state policies somehow delay the destruction of capital; so it never occurs to him these policies might accelerate this destruction. In truth, fascist economic policies systematized the destruction of capital itself by diverting economic resources into entirely unproductive state consumption like military spending, road construction and so forth as Leonhardt noted. To what productive use were the autobahn, the military, Nazi stadiums and monuments going to be put? And, today, how is it not possible to see that Washington defense spending on a scale equal to the gross spending of all other countries combined is nothing more than the destruction of capital on an unimaginable scale? By itself, the US accounts for 28% percent of a paved roads on the planet — how is this not the destruction of capital?

Carchedi rightly states the recovery of profits requires the destruction of capital, but then he ignores how this destruction is being accomplished. Having proven Keynesian policies don’t work the way Keynesians says it does, he simply leaves it at that, never investigating whether by some off chance it works the way he says it has to work in order to be official policy for 80 years.

Now think about this: if the fascist state unproductively spends $100 and the increase in productivity is 5%, the loss in real output over 10 years is $165; and over 80 years it is $5,414.63. The more capital is destroyed unproductively by the fascist state, the greater the loss of real output over the same period. The higher the increase in productivity, the greater the loss of real output over the same period.

Declining wages and slowing “nominal economic growth”

Thus we get this paper on the negative effects of Nazi spending on the German economy:

“The implementation of the Nazi ideology into agricultural institutions and the suppression of private consumption had a stronger impact on German food production and consumption than has hitherto been thought. We argue that the reforms of agrarian institutions reduced the growth of total factor productivity in German agriculture between 1933 and 1938 considerably. This exacerbated the restrictive effects of prioritizing the armaments industry to the detriment of the consumer goods industry and private consumption. As a consequence of less efficient food production and of consumption constraints, German consumers were forced to a diet and thus to a material standard of life that were much more frugal than national income figures suggest.”

Along the same lines, Tyler Cowen noted:

“McDonough indicates that economic growth in the Nazi 1930s was due primarily to arms spending, or again it was not real economic growth at all. This piece has much useful detail on private German consumption during the era and again the conclusions are pessimistic. Of course employment rose dramatically but it does not seem that real (non-militaristic) consumption and output did very well. There was militaristic make-work, based on transfers from one group to another, but with few accompanying economic benefits.”

These are interesting conclusions, not because it supports my view, but because it supports the view of most of the Left that despite increasing fascist state spending, deficits and GDP, the real wages of workers, and economic performance generally, has been declining for forty years. People wants to ascribe this decline to so-called “neo-liberal” policies in Washington, but evidence from Nazi Germany shows the decline in real wages is a necessary feature of fascist state spending itself.

The nominal growth in Gross Domestic Product is an illusion having nothing whatsoever to do with the real increase in the consumption of society. Spending $4.5 billion on a Nimitz-class aircraft carrier shows up in GDP, but puts no food on the tables of the working class. The labor that goes into the production of the aircraft carrier, however, is a very real expenditure of human brain, muscles and time. The labor is — by definition — unpaid labor and cannot be compensated for since the labor itself produces no real commodity. But the fact that the labor is uncompensated is only the beginning: the expenditure itself reduce the possibility of future output as well, since this labor expenditure cannot reenter the process of capitalist reproduction.

The two arguments presented here, taken together, show that neither the increase in employment or the increase in GDP have anything whatsoever to do with an increase in the material wealth of society. In fact, it is likely the opposite is true: the more employment and GDP increase, the further into poverty and misery the great mass of society descends.

The emergence of the American fascist state

What I have introduced above might only be considered indirect evidence that the fascist state in its entirety must be abolished and with it all existing economic relations bound up with the fascist state. I began with the curious interest of economists in the economic performance of the Nazi regime itself after the outbreak of the financial crisis and traced that interest to Keynes.

I followed this to a collection of scholarly works by economists on this subject and to Carchedi’s recent work showing Keynesian policies don’t work the way they are commonly described.

Finally I showed how, from the data of the Nazi regime itself, that fascist state policies had the same results we have experienced for more than four decades: declining real wages and increasing poverty, side by side with growing debt and government expenditures.

But nowhere in this mass of indirect evidence have I shown that, in fact, the fascist state in Washington is pursuing the exact same policies as the Nazi state in the 1930s.

That DIRECT evidence can be found here. This book is a collection of materials produced by the discussion of the Truman administration in the 1940s following the end of World War II. The collection was pulled into book form with an introduction by Paul Nitze, cold warrior in a succession of administrations. The topic under discussion is National Security Report 68. Wikipedia describes NSC-68 this way:

“National Council Report 68 (NSC-68) was a 58-page top secret policy paper issued by the United States National Security Council on April 14, 1950, during the presidency of Harry S. Truman. It was one of the most significant statements of American policy in the Cold War. NSC-68 largely shaped U.S. foreign policy in the Cold War for the next 20 years, and involved a decision to make Containment against Communist expansion a high priority. The strategy outlined in NSC-68 arguably achieved ultimate victory with the collapse of the Soviet Union and the subsequent emergence of a “new world order” centered on American liberal-capitalist values alone. Truman officially signed NSC-68 on September 30, 1950.”

The date Truman signed the document is especially significant — only a few months earlier conflict began in Korea, initiating six decades of military adventures. The book includes details of plans for the near total militarization of the US industry for the purpose of rapidly expanding the US military — an extremely lucrative development for American capital. Indeed, Nitze and the other authors explained the economic benefits of this buildup:

“With a high level of economic activity, the United States could soon attain a gross national product of $300 billion per year, as was pointed out in the President’s Economic Report. Progress in this direction would permit, and might itself be aided by, a build-up of the economic and military strength of the United States and the free world; furthermore, if a dynamic expansion of the economy were achieved, the necessary build-up could be accomplished without a decrease in the national standard of living because the required resources could be obtained by siphoning off a part of the annual increment in the gross national product.”

Surprisingly, in the thirty years the report has been available, not a single Marxist scholar has published a study on it or the impact this initiative had on the operation of the capitalist mode of production. Mind you this document has been the core policy of the American fascist state from 1950 until the fall of the Soviet Union. During that time the number one policy goal of Washington economic policy was “full employment”.

By “full employment” Washington meant the maximization of the employment of labor power for purpose of a highly profitable aggressive military expansion. Employment was not a “right” as most Marxists seem to think; it was a requirement imposed on the population by the fascist state. The purpose of this imposition in the US was the same as it was in Nazi Germany: military expansion and corporate profit.

This is why, even in the present crisis, as employment plummeted millions of workers were dumped into the streets in a matter of months, the policy of the Obama administration still stressed: “more work done, more product produced and more people earning more income”.

Marxists academics appear to have no clue about the significance of this document, preferring simply to describe it as a plan for containing the Soviet Union. But there is a problem with that explanation: the Soviet Union has been gone for twenty years. If, as some argue, NSC-68 was just some sort of “emergency measure” dictated by the “Soviet Threat”, why does Washington still continue to insist on “full employment”?

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  1. Chris Wright
    January 9, 2013 at 3:30 pm

    “In truth, fascist economic policies systematized the destruction of capital itself by diverting economic resources into entirely unproductive state consumption like military spending, road construction and so forth as Leonhardt noted. To what productive use were the autobahn, the military, Nazi stadiums and monuments going to be put? And, today, how is it not possible to see that Washington defense spending on a scale equal to the gross spending of all other countries combined is nothing more than the destruction of capital on an unimaginable scale? By itself, the US accounts for 28% percent of a paved roads on the planet — how is this not the destruction of capital?”

    This is a rather peculiar argument. You are aware of how utterly dependent commercial transportation is on roads, right? Commercial vehicles, most notably trucks, rely on this vast network of roads. They have almost nothing in common with monuments and the Autobahn, aside from being produced out of tax money. And further, this tax money was at one point wages and gross profits, redirected into the state and then back out to private corporations (construction companies), with the result that this money returned to wages and profits. At best you are discussing a detour of money in this instance. It is not even like the production of military goods, as far as that goes, since it is crucial to commercial transport capital, which is productive capital since transport is necessary for the commodity to reach the market for exchange or after the exchange to reach the consumer (UPS, FedEx handle this on both ends.)

    Further, if we take your argument seriously, then cars bought by people who themselves do not engage in productive labor do not constitute part of the realization of value because the end consumer is part of the faux-frais of capitalist production. And this every time a lawyer, a doctor, a banker, a bank teller, a call-center employee for a credit card company, etc. buys a car, that is effectively fictitious because it does not contribute directly to dept 1 or dept 2.

    • January 9, 2013 at 4:21 pm

      “if we take your argument seriously, then cars bought by people who themselves do not engage in productive labor do not constitute part of the realization of value because the end consumer is part of the faux-frais of capitalist production.”

      Actually, this is exactly the argument Kurz made, and one I happen to agree with.

  2. Chris Wright
    January 10, 2013 at 2:59 pm

    Ok, so let’s take it a step further.

    In the case of the early automobile industry, at least until the 1930’s, very few actual workers were able to buy cars. Cars were largely purchased by the upper and middle classes and only with the development of suburbanization, which expanded dramatically during and after WWII, did people engaged in what you would describe as “productive” labor constitute a large part of those consumers.

    As a result, we can say that since the end consumer was not generally a “productive” laborer, not only did the majority of cars built not produce surplus value (I am going to leave aside for the moment the physicalist assumptions about “value” understood in this way, which is in complete contradiction to Postone’s conception of “value” which you address here http://pogoprinciple.wordpress.com/2012/09/20/value-and-the-demise-of-capitalism-reconciling-postone-and-kurz/), we can’t even really say they were valorized at all.

    This would entail that not only the value produced by the car companies, but potentially all of the materials (the iron, steel, glass, aluminum, rubber, etc) and machinery used in the production of the cars sold to “unproductive” individuals were not valorized either. Or, possibly, that it was valorized since it would at least then be a movement from Dept 1 to Dept 2, but simply that the majority of it functioned at a complete and total loss from the point of view of the automobile manufacturers.

    We could say the same with the commercial airlines, since a large part of their riders are business travel people, and thus a substantial part of the income of the airlines is from unproductive labor and a share of the surplus value. This was even more lopsided when the airline industry started, since popular non-commercial travel only took off in the 1970’s. So the industry grew on fictitious capital, predominantly.

    Then there is the confusing matter of companies like UPS and FedEx. It would seem that a large part of their activity it utterly unproductive. I don’t think I even need to detail how hard it would be to disentangle that.

    Obviously, I find it somewhat difficult to believe that industries could be built on unvalorized labor, otherwise I would not point this out.

    Now there are certainly issues here then in how one understands things such as the relationship of value to price and surplus value to profit, and what constitutes “productive” labor.

    For example, to the best of my knowledge Marx is not of the opinion that a commodity needs to be a physical object. In fact, in Theories of Surplus-Value, Marx is quite explicit as to whether or not the labor of a clown could be productive. At issue was whether the clown hired himself out directly, and this his labor was consumed directly by the purchaser (a butler is in fact in the same situation) or whether the clown sold his labor to a “clown company” for a wage and this company then sold the services of the clown to consumers. The former was not a productive laborer and the latter is a productive laborer because what the latter produces is the capital-labor relation. Nowhere in Marx’s discussion did the question of who bought the services of the clown from the clown company come up.

    Why should it? Because the revenue stream is not from another “productive” capital or from workers?

    • January 10, 2013 at 5:12 pm

      Value — socially necessary labor time — is always and everywhere the labor time required to produce the labor power of the workers and nothing else. This, however, is not the aim of capitalist production. Capital’s aim is always and everywhere to produce a surplus over this value. This mean that in all circumstances capital is always confronted by the necessity that the very production of surplus value threatens the existence of the mode of production itself. Which is to say, at any moment the valorization process itself will stand revealed as fictitious in its entirety — that even activity you and I might agree appears entirely productive of value on the surface is suddenly and irreversibly shown to be without any value at all.

  3. Chris Wright
    January 10, 2013 at 3:15 pm

    Kurz is quite clear that a new period of growth is technically possible and what would be required:

    Kurz http://www.principiadialectica.co.uk/blog/?p=6116
    In the past , this constant diminution of value was always relative. Of course, with a standard of productivity always higher, the individual product could represent always less abstract labour and thus less value. But by the reduction of corresponding price , more and more old de luxe commodities have entered mass consumption – production and markets have increased.
In this manner , the relative diminution of the social substance of value by the individual product could nevertheless lead to an absolute growth of the global mass of value, because the increased social production mobilized globally more abstract labour that it was made superfluous in the fabrication of individual products. 
It is to this that is linked the mechanism that Marx calls “relative surplus-value”.

    Kurz http://www.principiadialectica.co.uk/blog/?cat=48
    Today, it is asserted that there is a great structural crisis, the crisis of an accumulation model, but from which a new model will develop. But the precondition for that would be that on a new scale, real labor, the use of labor-power, is absorbed. It’s doubtful whether new sectors like biotechnology or microelectronics are in a position to substantially absorb abstract labor on a large scale. My thesis is, that the abstract use of labor-power, which the valorization process requires for its reproduction, will not occur at the necessary level. Furthermore, a large part of the labor processes that have been generated are based upon an anticipated valorization. The deficit flow between China and the USA, but also within Europe show that the real use of abstract labor at the necessary scale no longer exists.

    Thus Kurz does not say that the increase in productivity, which is essentially permanent and thus does not go backwards, absolutely means that a new period of expansion cannot develop. He is betting it will not be overcome because the existing technologies (and the labor processes) seem to not be able to mobilize that much labor. All this means, however, is that (and on this I completely agree) each crisis capital successfully escapes only poses the same problem again on a higher level, making the next overcoming that much more difficult.

    • January 10, 2013 at 5:01 pm

      By and large, if you agree with what you have written in these two comments, then we have no conflict here. I do have some minor differences, but on the scale of things I would accept most of what you said.

      However, I do need to note that the over-riding demand on existing political relations at the moment is the pressure to create work — full employment — something that is fairly unprecedented in the history of the mode of production, and did not even exist at all prior to the Great Depression. This indicates the shelf life of capital is approaching its end. Further, in this crisis, the tools employed by the fascist state for ensuring the constant and sufficient increase in employment of labor power has failed miserably.

      We are not simply experiencing the momentary general failure of capital to expand the employment of labor power, but the permanent and absolute failure of the mode of production to expand independent of fascist state intervention. And, we have not simply experienced the permanent and absolute failure of the mode of production to expand independent of state intervention, but the permanent and absolute failure of the mode of production to expand even with this intervention. I think this speaks to an emergent crisis that Marxists would rather not discuss, since it renders their entire model of transition obsolete.

      The problem here between us is that most Marxists do not understand that value itself is an absurdity.

    • January 10, 2013 at 6:47 pm

      Also, as a Marxist, I think your focus should not be on whether a period of growth is “possible”, but whether it is possible to end capitalism and the state and what this might entail. We can pretty safely leave to the capitalist class and the state the problems of keeping this filth going.

  4. Chris Wright
    January 17, 2013 at 1:50 pm

    On this last i in fact whole-heartedly agreed. I had the unfortunate need to dissociate myself from a project that went from a critique of capital to a political project of “creating a renewed period of capitalist accumulation on a basis more amenable to the overcoming of capital”, i.e. building a new epoch of accumulation that would create a vital workers’ movement like the old one. Needless to say, this approach is both indicative of a complete misapprehension of capitalism and makes us an aide-de-camp of the capitalist system. Never mind that no one would listen to their recommendations, but such are the hubristic fantasies of University of Chicago graduates.

    I have only made an issue of the necessity of collapse because I I am uncertain of collapse or the overcoming of capital. As for what it will entail, aside from some generalities are crucial to the critique of capital rather than to its reform, I don’t know. Do you?

    • January 18, 2013 at 9:39 pm

      “I am uncertain of collapse or the overcoming of capital. As for what it will entail, aside from some generalities are crucial to the critique of capital rather than to its reform, I don’t know. Do you?”

      As it happens, I do. Ha!

      I think there are four significant trends at work in the world market today of which we should be aware:

      First, it is clear that the state today is the manager of the total national capital, and that the world market is characterized by the relations between national capitals. Although this fact is resisted by some, Marx’s theory suggests this state of affairs cannot be reversed — even if we wished — but must be transcended. We are not going back to the days before the rise of the fascist state, but must go forward to abolish it.

      The second significant trend has been the decline of labor force participation globally. A declining share of the age +15 population is actively employed. And this has accelerated in this crisis. This is an expression of what Marx called a tendency toward the creation of a population of superfluous workers, secondary to the falling rate of profit. This process cannot be reversed either, I believe.

      A third significant trend is the expansion of the state and the financial sector as a share of the economy. The state has emerged as the national capitalist, but this has led to a blossoming of the state itself, with little or no benefit to society at large.

      Fourth has been the emergence of the United States as the dominant fascist state within the world market. The US is now benefiting from the concentration and centralization of capital at the expense of other national capital and at the expense of the global working class.

      Based on this, I think communists need to think in terms of measures that are “a means of entirely revolutionizing the mode of production.” We have to look no further than the measures that capital is already forcing on nation states by its own development. Capital is already breaking down the borders between nations and undermining the national economic policies of the various states.

      First, we should be insistent in our demands for the freest possible movement of labor, commodities and capital without national interference. Our goal should be to strip nations states of their capacity to interfere with or retard the development of the productive forces.

      Second, national economic policies of the various national state should be replaced simply by a general reduction in hours of labor. This measure accomplishes three things: 1. it addresses the intolerable unemployment facing many workers especially in less advanced nations; 2. it increases the cost of employing labor and forces capital to substitute labor saving technologies in place of labor power; 3. it increases the access by the mass of society to non-labor and the enjoyment of self-activity outside labor.

      Beyond these three effects, reducing hours of labor also adds pressure on nation states, who employ excess labor power thrown off by capital in the form of armaments industries, military adventures, etc. It also must stifle the growth of the financial sector and speculative frenzies produced by a growing mass of excess capital.

      Third, to accelerate the destruction of finance capital by the working class requires a coordinated rejection of debts accumulated by nation-states, whose service is being imposed on the working class population. This capital is wholly unproductive, fictional and must be devalued on any account. By rejecting all state debts, we only accelerate the process of devaluation of this entirely fictional capital and the banksters who enrich themselves on it.

      Fourth, to accelerate the destruction of the empire organized around Washington, we must demand all states end their military treaties with the US and force it to remove all troops from their soil. Wherever the working class gains political power, it must end these treaties and renounce the state debt.

      A fifth measure is incumbent on the working class itself: it must reject all form of nation-specific organization and refashion itself as a directly global movement. Nation-states and the political struggle at the level of the nation-state has no relevance to the working class any longer. The working class faces a global capital organized particularly in the form of a cabal of central banks that coordinate their attacks on the working class. The working classes of the various nations risk being isolated and squashed by coordinated interventions as can be seen in Greece, Spain, etc. Meanwhile, within each country, their organization are being destroyed and reduced to an appendage of their various national states. To fight this global capital, the working class must itself become a global movement of the oppressed.

      There are other, subsidiary measures that can be taken, but I think these four are the most important.

  5. Chris Wright
    January 19, 2013 at 12:02 am

    “First, we should be insistent in our demands for the freest possible movement of labor, commodities and capital without national interference. Our goal should be to strip nations states of their capacity to interfere with or retard the development of the productive forces.”

    “Our demands”? Freest movement of labor and capital? How are these “demands” different in a way from those of so-called neoliberalism? It has the same demands.

    “Second, national economic policies of the various national state should be replaced simply by a general reduction in hours of labor.” And who will impose this? Demands are inherently political insofar as they are addressed to the state, even negatively. To whom do you think we should address these “demands”?

    “…requires a coordinated rejection of debts accumulated by nation-states…” Again, who is coordinating? Who is rejecting?

    “…we must demand all states end their military treaties with the US and force it to remove all troops from their soil….” Again the demanding, but now we are to command other states?

    “…it must reject all form of nation-specific organization and refashion itself as a directly global movement.” And who will tell “it” to do so? You and I? Why should “it” listen?

    • January 19, 2013 at 11:58 am

      Let’s separate some things here:

      First, I think we have to answer these questions as if the working class really holds power starting tomorrow — which is the sense Marx used in the Communist Manifesto. In such a case what policies would this new working class power have to pursue to advance the development of the productive forces, and which must take place whether this class holds power or not? These compose the first four measures (although, I must concede you are square on target by questioning the use of the term “demand”).

      Second, in the first three measures I limited myself only to those things which must on any account take place, i.e., even if we assume only the normal working off the capitalist mode of production: nation-states and national economic policy are obsolete even if the working class does nothing; hours of labor must be reduced either by reducing hours of labor or by unemployment; and state fictitious capital must be devalued either through crisis of conscious action. The only question here is whether this will be done in a fashion that serves the capitalist class or the working class. For example: Either way hours of labor will be reduced, but it does not have to happen through unemployment.

      The fourth measure is the only explicitly political measure, but it will be forced on nations because Washington likely will not sit by and let countries renounce their debts and endanger profits by reducing hours of labor.

      The fifth measure is not a matter of telling anyone anything. It is a recognition by us that this is now the real and necessary framework for any effective struggle. Over time, the working class will likely come to this conclusion on its own and we should encourage it whenever it happens.

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