4. The Necessary Parasitism of Fascist State
In a recent interview, Saint Paul Krugman gave us this gem of bourgeois economic theory:
SPIEGEL: More stimulus also means more debt. Many European nations, as well as the US, are already drowning in debt.
Krugman: I’m not saying that I don’t ever care about debt, but not now. If you slash spending, you just depress the economy further. And, given the low interest rates and what we now know about long-run effects of high unemployment, you almost certainly actually even make your fiscal position worse. Give me a strong-enough economic recovery that the Fed is starting to want to raise interest rates to head off inflation — then I become a deficit hawk.
Saint Paul tells us in a depression such as the one we are now experiencing it is impossible to pursue the sort of austerity currently being visited upon the EU without rushing headlong into calamity. Better, he says, we should expand the debt of the already bloated public sector still further and worry about the consequences later. It never occurred to the interviewer from Spiegel to ask Saint Paul why the growth of capitalist economies is now chained to the debt of the public sector.
Robert Kurz had a few ideas on that subject.
3. A society suffocating under the manufacture of overwork
If you are a regular reader of this blog, you are familiar with one of my favorite quotes by that buffoon of fascist state economic policy, Larry Summers, who, in response to a question posed by a reporter on reducing hours of labor as a solution to the horrific unemployment that emerged in the aftermath of the so-called financial crisis, gave this response:
“I think we got the Recovery Act right,” Larry Summers, the president’s chief economic adviser, said in an interview. “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.”
Rather than reducing legally mandated hours of work by even one hour, and thereby reducing the need for wasteful and expensive fiscal stimulus by the fascist state at a cost of hundreds of billions of dollars in new public debt, Summers declared the incoming Obama administration was committed to creating more work, compelling more production and inducing more wage slavery, even if this commitment plunged society into bankruptcy. No matter what the cost, unemployment would only be met by an attempt to expand wage slavery still further.
Not one member of the Marxist academy made an attempt to explain why this obviously insane policy was nevertheless considered to be a necessary one by Washington.
Behind the Veil of the So-Called Financial Crisis: The growing domination of finance over productive capital
In Part 1 of his essay, Kurz explained why money and labor, although merely two poles of the same movement of capital, appear to have no necessary relation to one another. Along with this, Kurz explains, how interest yielding money capital, finance, appears to be the “true form” of capital despite actually being no more than the result of the surplus value created by industrial capital. Finance capital begins to imagine itself independent of productively employed capital, and capable of self-expansion independent of the latter — it emerges as an industry side by side with the production of shoes, houses, automobiles, etc.
This superficial appearance is as far as most commonly referenced analysis of the present crisis gets. Ask the typical CNBC talking head what happened in 2008 and you are likely to receive some variant of an explanation that takes the so-called “money economy” centered on Wall Street as something distinct and separate from the so-called “real economy” centered on Main Street. In fact, reality has becomes so incredibly distorted, that Wall Street now imagines itself to be the vital heart of the entire mode of production, pumping the life-giving credit throughout the world market that has now become critical for the functioning of real productive capital.
For instance, in 2008 we were told by Washington that the arteries of the credit system emanating from Wall Street were somehow “frozen” or “clogged” and that it was necessary to stuff still more worthless ex nihilo currency, created at a computer terminal, into these conduits in an effort to unclog them. This, we were told, was required, because the credit system, headquartered on Wall Street, was the heart of the “real” economy located on Main Street.
No one within the Marxist academy seemed to notice how bizarre this explanation was. Some idiot Marxist scholars, like Dumenil and Levy, immediately rushed to print with an extensive “explanation” of the financial crisis, as well as an exhaustive list of measures necessary to “restore the situation”, i.e., the golden age of the fascist state. Even among those Marxist scribblers, like Andrew Kliman, who rejected this argument, there was no attempt to explain how it was possible that Wall Street, which produced nothing and only oversaw the movement of fictional claims to future profits on actual production, could now be referred to as the heart of the global economy. No one even thought it necessary to explain how and when this shift in the center of gravity of the mode of production of a nation that was the single unchallenged global industrial superpower in 1945 took place, nor what this shift implied for the mode of production itself.
I have to apologize in advance, since this examination is somewhat dense in sections and long for a blog post. I will try to reduce the complexity of Kurz’s argument as much as possible and break it into a series of smaller posts. Feedback both on the accuracy of my presentation of Kurz’s argument and the subject itself is welcomed.
I spent the past week or so reading one of the most novel Marxist analyses of the so-called financial crisis I have yet come across. The really interesting thing about “The Apotheosis of Money”, by Robert Kurz is that, unlike most Marxist analyses, although it explains the so-called financial crisis of 2008, it was written in 1995. Thirteen years before the crisis, Kurz predicted a devaluation shock that will invalidate the bloated property claims of fictitious capital.
Of course, Kurz was not alone in this sort of thing — the bourgeois economist Hyman Minsky (pdf) was making a similar prediction. And beyond Minsky, there are writers who have predicted the imminent collapse of the financial sector for most of the past 40 years. This latter group — folks who are profoundly dissatisfied with fascist state monetary policy, like the financial guru John Williams — are mostly a group appealing to marginal capitalist elements and survivalists with libertarian or Austrian leanings. However, Kurz cannot really be compared to either Minsky or Williams, since he did not simply predict a money crisis, but the end of commodity production itself.
I find his argument interesting, because Kurz, in his analysis, seems to move along lines similar to Moshe Postone’s and against the sort of amateurish analysis that is typical of academic Marxism. Plus, he hits all the categories often missed by the typical Marxist argument. The aim of Kurz’s 1995 work was to demonstrate that there is a structural limit on the capitalist mode of production that would, in the near future, produce a catastrophic money devaluation shock, leading to the collapse of commodity production itself. In light of the so-called financial crisis of 2008, Kurz’s argument looks rather prescient. And it bears examination, because to support his prediction, Kurz takes us on a whirlwind tour through both the logical implication of the labor theory of value and developments within the capitalist mode of production over the last 80 years since the rise of the fascist state.
I am rereading Gerard Dumenil’s and Dominique Levy’s “The Crisis of Neoliberalism”, because, for some insane reason, I just want to be irritated beyond all tolerable limits. However, I am happy to say these Marxist professors have found novel approach to fixing capitalism — working people must be ready to make whatever sacrifices are necessary to save Mr. Moneybags from himself.
In the aftermath of the events of 2008, the British monarch shocked the bourgeois economics profession by asking them how they managed to despoil her wealth with their fumbling that led to this so-called financial crisis — in actuality it is a catastrophic failure of fascist state economic policy. Responses came from all directions in the economics profession, and (unsurprisingly) each response pointed fingers in every other direction.
What struck me at the time was this: not one communist activist out there stood up and confronted Marxist academics with an even bigger question: how could all of these academics without exception have missed the biggest depression in 100 years, which led directly to the catastrophic failure of fascist state economic policy? Thinking about the lack of accountability within the Marxist academy led me to write this post.
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There are a few true indicators that a discussion you might overhear is dominated by people who have no idea what they are talking about.
For instance, if you hear anyone mention the term “fiscal cliff” in a discussion, you can safely ignore anything they have to say about the present crisis. The term “fiscal cliff” is a marketing term employed to produce an emotional response — it is not a category of sober economic analysis. Also to be considered in this light are such terms as “debt limit”, “S&P rating”, “globalization”, “deleveraging”, “balance sheet recession”, “sequestration”.
To this, I want to add my own personal favorite: “Anti-capitalism”. If you ever hear the word, “anti-capitalism” or “anti-capitalist” from the mouth of a Marxist, you know he/she is a fraud. Feel free to tell them so. “Anti-capitalism” is one of those terms employed by Marxists who have absolutely no idea what a social revolution is. The term is a placeholder employed to define some vague post-capitalist society, the outlines of which are not at all clear to the person.