Some notes on Marxism and social emancipation (2)
The progressive reduction in socially necessary labor time
As Marx explains in chapter 15 of volume 3 of Capital, the cause of capitalist crisis is the reduction of socially necessary labor time brought on by the improvement in the productivity of labor. At the same time, capitalism tries to resolve the crisis by means that eventually only intensify the crisis: the further improvement in the productivity of labor, which must result in the further reduction of socially necessary labor time. For this reason Marx concluded:
“Capitalist production seeks continually to overcome these immanent barriers, but overcomes them only by means which again place these barriers in its way and on a more formidable scale.”
Ultimately, the very methods capital introduces to emerge from a crisis sets the stage for the next crisis. The proximate cause of the crisis itself is the fall in the rate of profit, so, naturally, Marxists spend an incredible amount of time trying to prove (see, Kliman, Carchedi etc,) or disprove (see Dumenil and Levy) this fall. It never occurs to these idiots that the fall in the rate of profit is itself only of secondary consequence, since it is only an expression within capitalist relations of production of a more fundamental process: the development of the productive forces of society and the consequent reduction in socially necessary labor time.
Since the fall in the rate of profit is only the specifically capitalistic manifestation of the later process, even in the absence of capitalist relations of production, this latter process must still be expressed. The development of the productive forces and the consequent reduction of socially necessary labor time not only causes crises in the capitalist mode of production, but also brought down the Soviet centrally planned economy. But not only this: even if we assumed a proletarian revolution in the capitalist countries, this revolution would immediately be forced to reduce hours of labor, no matter what its other professed aims.
The development of the productivity of labor and the reduction of socially necessary labor time is a material barrier limiting the work day no matter the relations of production that prevail in a given society. In a society where all needs of the community are satisfied within more or less limited condition — kinship, etc. — this limit was probably naturally apprehended simply as the point where the need for more labor ends. Similarly, in a communist society of the future the end of the work day appears as simply the end of the need for work.
The reduction of socially necessary labor time and the collapse of the Soviet system of production
However in both capitalist and Soviet centrally planned economies, where the aim of labor is not the needs of the producers but the production of a surplus product it is otherwise: The end of socially necessary labor time appears as an obstacle to the expenditure of surplus labor time. Certain Marxists academics, like David Kotz, want to deny the Soviet Union collapsed for the same reason US capitalism will collapse. In this argument, the Soviet Union did not collapse but was dismantled by the managerial elite who wanted to become capitalists.
“The received wisdom is that the pro-capitalist group was able to win for two reasons. First, it is alleged that the Soviet planned economy collapsed, leaving no alternative but to adopt capitalism. … However, there is no support in the historical record … As we show in Kotz and Weir (1997, ch. 5), the Soviet planned economy did not collapse. Despite some disruptions from economic reform legislation that took effect in 1988, real output and real aggregate consumption grew continuously from 1985 through the first half of 1990. At that point, although Gorbachev still held power in the Union state, Boris Yeltsin and the pro-capitalist coalition he led won political power in the Russian Republic of the Soviet Union and was able to use that power to begin dismantling central planning. That, along with other related developments, produced the first decline in output of the postwar period (at a 2.4% annual rate for 1990). The output decline accelerated in 1991 (to an estimated 12.8% rate of decrease) as central planning was fully dismantled and it became clear that privatization of Soviet industry lay ahead (Kotz and Weir, 1997, p. 75). The record shows that the Soviet planned economy did not collapse — it was dismantled through political means, as power shifted from Gorbachev to Boris Yeltsin and the pro-capitalist coalition.”
Okay fine — have it your way. So David, if the Soviet economy was not already headed toward collapse before Gorbachev and Yeltsin, what forced the reform effort in the first place?
In any case the collapse of the Soviet Union only prefigured the collapse of western capitalism. The Soviet system collapsed first not because it was less efficient, but because it was a vastly superior producer of social surplus. Marxist, like bourgeois economists, cannot get it through their thick skulls that what counts in a surplus producing system is not the production of material wealth, but social surplus. The lack of consumer goods on the shelves was not a testament to the inefficiency of the soviet system, but the way the system of surplus production at the expense of the mass of society worked.
“The real barrier of capitalist production is capital itself. It is that capital and its self-expansion appear as the starting and the closing point, the motive and the purpose of production; that production is only production for capital and not vice versa, the means of production are not mere means for a constant expansion of the living process of the society of producers.”
Social production and the material limit of the working day
Within the capitalist mode of production the only equilibrium point possible is that point where the labor time of society is equal to the value of the mass of wages of the productively employed workers. But this is also the point where the rate of profit is equal to zero. The capitalist mode of production, therefore, can only produce surplus value provided this surplus becomes materialized in an increased mass of productively employed labor power.
Each increase in the productivity of labor must be expressed in a corresponding increase in the mass of employed labor power. When this does not happen, or is only partially realized, capitalism suffers a crisis of a greater or lesser duration. The proximate cause of this crisis is the fall in the rate of profit, when the mass of surplus value cannot be realized as profit. Although the crisis appears to result from the fall in the rate of profit, the rate of profit falls because the expenditure of social labor has exceeded the needs of the producers — the duration of labor time is longer than is required to meet the needs of the mass of workers. But it is precisely this duration — in excess of the needs of the mass of workers — that constitutes the aim of capitalist production.
As I said in my previous notes both Marxism and bourgeois economists argue there is no material limit to the duration of socially necessary labor. While a material barrier to the limits of the labor day can be seen in each crisis, this limit is only a relative limit which must be overcome in the next phase of expansion. Carchedi gives voice to this argument in his essay:
“In fact, we have seen that state-induced capital-financed investment cannot restart the economy. At most, it can postpone the explosion of the crisis. 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.”
Carchedi’s argument appears to notice no material limits to the labor day, he places the entire weight resolving the slump on the destruction of capital. But why must this capital be destroyed in the first place? Because it is excess capital and can no longer function as capital within the existing limits of existing hours of labor, of course. According to this view, although the capital is excess in a relative sense, it cannot be excess capital in the absolute sense. This argument is only the Marxist variant of Say’s Law, which stated:
“It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value.”
In Carchedi’s variation of Say’s Law, the older less efficient capitals must give way to the new more efficient capital, but this having been accomplished capital is able to produce again on an enlarged basis. The problem with Carchedi’s argument here is that by production on an enlarged basis he means the production of surplus value. In the new conditions established by the new and more efficient capitals, there is a higher rate of surplus value — consequently the enlargement of the mass of surplus value requires an increased mass of variable capital. Which is to say, the increase in the productivity of labor must be offset by an increase in the mass of employed labor powers. The mass of productively employed workers must constantly increase if capitalism is to survive each crisis. Is Carchedi’s argument supported by empirical data? Has the mass of productively employed labor powers increased since the Great Depression? Marxists theorists like Carchedi, Kliman, Heinrich, Dumenil and Levy don’t even make the slightest find out whether the empirical data supports this argument.
We are, therefore, left not with a “Marxist multiplier” but the Marxist variant of Says Law: Capital is no sooner created than it finds a place in the system of capitalist production. The logic of this reasoning is stated this way by Carchedi:
“In fact, we have seen that state-induced capital-financed investment cannot restart the economy. At most, it can postpone the explosion of the crisis.”
In this argument, the fascist state can postpone the crisis by subsidizing older less efficient capitals and preventing their bankruptcies. Andrew Kliman continues in a similar vein:
“They intervene with policies that throw debt at the problems and ‘kick the can down the road’. So we don’t get a slump that’s anything like the depression. But we also don’t get a new boom like the one that followed the depression and World War II. The debt build-up prevents a recurrence of the massive destruction of capital value that occurred then – bankruptcies, falling asset prices, and so on.”
This is not Marx’s labor theory of value; it is Austrian school gobbledeegook.
Marxist and Austrian schools similarities
The state intervenes to prevent the necessary destruction of capital that would allow the capitalist production process to restart. Anyone familiar with Austrian economic theory will realize this is a variant of that theory — a theory that embraces Say’s Law as well. In Austrian economic theory Keynesian/neoliberal intervention of the state in the economy leads to malinvestment — the production of commodities for which there is no social necessity. In this Marxist variant of the same theory, state intervention prevents the destruction of the capitals creating the unnecessary commodities.
In both theories, the problem is presented exactly opposite the actual progression of the crisis: instead of the state intervention leading to a mass of superfluous capital and commodities as the Austrian and Marxist schools contend, a mass of superfluous capital and commodities requires the intervention of the state. In the crisis theory proposed by the Marxist academy Say’s Law is overthrown only to be resurrected as the infinite return of capital.
Capital, these Marxists concede, can have general crises of overproduction, but this crisis can never become absolute overproduction. It can never proceed so far as to cause not just a general crisis of overproduction, but an absolute overproduction (overaccumulation). When Marx himself proposed just this result:
“There would be absolute over-production of capital as soon as additional capital for purposes of capitalist production = 0.”
his argument is dismissed by Marxists as a thought exercise. For instance, Simon Clarke wrote:
“Marx makes it quite clear that this is a discussion of a purely hypothetical case, based on `the most extreme assumptions that might be made’ (ibid., 364), and one which conflicts with his earlier characterisation of the historical tendencies of accumulation, which are to create an `increased and even excessive working population available for exploitation’ and `a growing absolute mass of profit’ (ibid., 325), so that `nothing is more absurd, then, than to explain the fall in the rate of profit in terms of a rise in wage rates, even though this too might be an exceptional case’ (ibid., 347).”
I have looked for Clarke’s sources for this interpretation, or even some line of argument that approximates such an interpretation, but have not been able to find it in Capital. I can find no place where Marx states, or implies, absolute overaccumulation was a “purely hypothetical” line of argument. Unless I can be shown where Marx himself makes this concession, I continue to believe Clarke invented his interpretation out of whole cloth. There is no doubt Marx thought this was an extreme example, but this does not in the least imply it was not inevitable. It only suggest the event, if it should arise, is incompatible with the continued existence of capitalist relations of production.
And, yes, that means I think Simon Clarke is full of shit and distorting Marx’s argument, but he would not be the first in the Marxist academy to do so. The argument fits with the predominant Marxism ideology that sees the end of capitalism only being made possible by a political revolution. Capitalism, it is said, cannot collapse on its own, but endlessly returns until it is overcome by working class political action.
Fine. Well I hope that works for you guys — I am so sure any day now the working class will stop demanding jobs and demand an end to wage slavery.
Of course, Clarke is correct in one sense: absolute overaccumulation of capital does not result from a high demand for labor and high wages. Instead it occurs in conditions, as can be seen in Spain or Greece, where despite high unemployment, wages are “still too high”; when, despite massive depression, idled capital and steep unemployment, the basis for a return to profitability is still not achieved. Given the logic of Marx’s argument, it is no surprise to find Keynesian-style state intervention in the industrial economies occurs for the first time precisely in those conditions during the Great Depression, when the fall in the rate of profit never recovered.