Where the fuck is the ‘revolutionary subject’ in the European crisis? (2)

Why the working class is not effectively defending itself actually is not a question posed by this crisis. Rather the question is:

“So what else did you expect?”

No matter how the working classes of Europe responded to this crisis politically, they were already effectively rendered politically defenseless before the crisis by the very structure of the euro-zone, which stripped the fascist states of Europe of their monetary sovereignty. So even before this crisis erupted into the open, the member states with their overwhelming proletarian majorities were already effectively kneecapped and rendered toothless. The very structure of the EU was nothing more than an attempt to rob the working class of any means to defend itself in a crisis. With monetary policy centralized in the European Central Bank the member states must follow procyclical policies during economic downturns. Essentially, they have no choice but to reduce their expenditures when the euro-zone experiences a depression.

Back in the US … back in the US … back in the USSR

Moreover, despite effectively quashing working class suffrage, stripping the euro-zone working classes of a political instrument will have no influence whatsoever on the outcome of the crisis: European capital is finished in any case. To understand why this is true only requires us to realize we have been here before: the collapse of the Soviet Union. This might look like an overreach to you, but there is very little difference between what is happening today in the euro-zone and what took place at the end of the Soviet Union.

David M. Kotz in his study, “Socialism and Capitalism: Lessons from the Demise of State Socialism in the Soviet Union and China” describes how the Soviet working class responded to the collapse of the Soviet Union much as the working classes of Europe are responding in this crisis:

“For seventy years the system had effectively depoliticized ordinary citizens, who were allowed no power or autonomy in the system. While they had certain rights and benefits that stemmed from the socialist features of the system, they were passive recipients of those benefits. When the ruling party-state elite moved to dismantle the system in favor of capitalism, the depoliticized masses, who stood to benefit from the democratization of socialism but had no recent tradition of organization or activity in defense of their own interests, remained helpless observers while the elite battled over their future.”

This analysis can be picked up almost in its entirety and transposed onto European politics today, which consists entirely of a “depoliticized mass” passively enjoying the benefits of the social-democratic state, while the system is being dismantled by an elite gang of banksters, the ECB, EU and IMF officials.

As I stated above, the argument although containing interesting parallels, must seem like an overreach — a sort of overreach that tries to compare apples and oranges based on the fact they are both fruit, tend to be round and grow on trees. Can we make the case for more than just a distant resemblance?

Let’s try.

One of the most interesting aspects of the collapse of the Soviet Union was the fact that it collapsed at all. Just ask yourself: Did anyone in the Soviet Union think the Soviet Union would ever collapse? Was there a theory of the eternal return of the Central Plan to its point of departure? Did people assume the centrally planned economy would always find the basis for its continuation arising out of its own processes of reproduction? Did they think supersession of the centrally planned economy required a revolutionary subject? When they looked around, did they see a working class that was capable and willing to overturn existing relations? Did the state look less powerful than any ordinary capitalist state and its control of Soviet society any weaker?

In short was there any critic of the Soviet Union who did not assume, as is assumed in the case of European capitalism, that superseding the Soviet state required a political subject and a political revolution? Like European capital today, most critics of the Soviet Union saw no possibility that the Soviet centrally planned economy would collapse on its own, and without any political action on the part of the Soviet working class.

As a matter of fact, there was less cause to expect a Soviet collapse than there is in Europe today: The Soviet Union had no anarchy of production, no overproduction crises, no credit crises, no financialization, no deindustrialization, no off-shoring, no housing and asset bubbles — all of the symptoms of the anarchic capitalist mode of production with which we are familiar did not exist in the Soviet Union. There wasn’t even unemployment. Since all economic activity in the Soviet Union was planned for in advance, the very idea the centrally planned Soviet economy could collapse appeared entirely impossible — how could a planned economy collapse?

There was, it seemed, no “necessary” forces at work behind this collapse. There was a basis for a reasonable expectation that the Soviet Union would be able to continue indefinitely, albeit perhaps with declining performance, absent a political revolution by the working class. But it did not — it collapsed.

Humpty-Dumptski was pushed?

The idea a centrally planned economy could collapse is so counter-intuitive to some scholars they suggest the Soviet Union, like Humpty Dumpty, did not fall: it was pushed. Michael Lebowitz, for instance, set out the following thesis in his book, “The Contradictions of ‘Real Socialism'”:

“The relationship within “real socialism” between the vanguard as conductor and a conducted working class, however, did not only lead to the deformation of workers and those elements necessary for the building of socialism; it also created the conditions in which enterprise managers emerged as an incipient capitalist class, which was an immediate source of the crises of “real socialism.”

In a similar vein Kotz argues this “incipient capitalist class” directly acted to dismantle the Soviet centrally planned economy because only in this way could it attain the status of a conventional exploiting class:

“The Soviet model, despite its having given birth to a privileged ruling elite, did not create a system of exploitation that was viable over the long run.”

According to Kotz, the party-state elite moved to dismantle the SU to realize themselves as capitalist owners of property. Actors like Yeltsin cynically exploited the dissatisfaction of the masses against privileges of the elite not to end those privileges but to dismantle the Soviet system itself, to realize themselves as a new capitalist class:

“Thus, the mantra-like call for a free-market economy, initiated by the intelligentsia, was soon picked up by Boris Yeltsin and his associates as the way to simultaneously signal to the elite his plan to bring capitalism and great private wealth to the elite, while seeming to cater to the leveling desires of ordinary citizens (and ordinary voters).”

This is a far-fetched explanation to say the least, because Kotz doesn’t explain why or how the SU regressed to an inferior, less advanced, mode of production. Assuming the Soviet Union was a more advanced social system than western capitalism, which Lebowitz and Kotz do, this means a society deliberately discarded a more advanced instrument of production in favor of an inferior one. This is the problem with all theories of “restoration of capitalism” — they all assume society is taking a step backward without demonstrating how this can happen. I am sure many capitalists would not mind living in a feudal arrangement with their workers, but organizing this arrangement is impossible.

The state as a necessary form of surplus value

To understand what Lebowitz and Kotz propose: the US government consumes a mass of surplus value each year equal to about a quarter of US GDP. In theory, this could, if “privatized”, be an incredible mass of profit for the capitalist class amounting to four trillion dollars annually — easily more than the total profits of all US capitalist enterprises combined. However, any attempt to dismantle the US government and privatize this surplus value would bring capitalism to an end. The Federal government is not just a form of surplus value it is the only form this surplus value can take. Without the federal government consuming a quarter of US annual output unproductively, US capitalism would collapse. Lebowitz and Kotz are making a similar argument for the Soviet Union: that the wealth unproductively consumed by the Soviet state could be privatized. It is an interesting argument, but one that has to be demonstrated within the assumptions of labor theory.

The concept, however credible to us in the west, is on the level of managers of General Electric breaking up that corporation because they each wanted their own little entrepreneurial fiefdom. What mass of surplus value could these managers expect to realize in a fragmented Soviet capital that could not be realized as a whole? Who would seriously believe that dismantling the centrally planned economy and breaking up Soviet capital into pieces would produce more surplus value? A breakup of the Soviet Union’s centrally planned economy was nothing more than a recipe for exactly what happen: a tremendous and destructive economic implosion with unpredictable results — that included tens of thousands of nuclear warheads.

The USSR as a company town

Another, perhaps more promising, route of analysis is to describe the Soviet Union as what it was: a company town, a territory controlled by a single all-encompassing capital that ran both “the economy” and “the state” or, more accurately, fused both economy and state in itself. This opposing alternative argument to Lebowitz’s managerial counter-revolution assumes Soviet relations of production were then identical to any corporation, except the state itself is the capitalist. The superiority of this analysis is that we can then subject the collapse of the Soviet Union to labor theory analysis. This presupposes the state, acting as capitalist, is driven by the very same laws that drive any capital: the production of surplus value.

The objection to this argument by some was that the Soviet Union did not have commodity relations but this is not true. Labor power was a commodity and only labor power is necessary to constitute the capitalist mode of production. Others point to the absence of unemployment as evidence that labor power did not exist — this also is untrue. The Central Plan made unemployment unnecessary, since the division of the social work day was planned in advance. To constitute labor as labor power requires the division of social work day into necessary and surplus labor time — this division was achieved through the plan itself. It also requires that the aim of production was the production of surplus value — this was also established through the plan.

Moreover, to say the Soviet Union was a capital does not mean it was “capitalism”: A capital has none of the things normally associated with capitalism — e.g., exchange, money, competition, markets, etc. There is no exchange in a corporation, the movement of the social product is determined by a plan, not markets or competition. In GM, the engine and transmission plants do not sell their products to the assembly plant. The inner economic life of a capital is a negation of market relations found outside the capital. Its growth is also the progressive annulment of those market relations. In Soviet history this annulment of market relations is the starting point of industrial development, rather than its result. All the surplus produced by the single social capital immediately returns to it, rather than being shared between competing capitals. Monopoly on foreign trade reinforces this closed circle of reproduction.

This, I think, goes to explain why the Soviet Union was extraordinary in achieving very high rates of development. According to the secret files of the US State Department’s NSC-68, the speed of Soviet development, far from belittled, was considered itself a threat. The Soviet Union was able to allocates resources to development to a degree only seen in China today. Moreover, it did this without the many problems China is trying to address of accelerating asset appreciation and accumulation of entirely fictitious foreign reserves. Which is to say, the Soviet Union was likely the most efficient and productive capital operating in the world market ever.

Accumulation and the collapse of the Soviet Union

Surprisingly, this argument may actually appear to make Lebowitz’s argument more attractive than the so-called state capitalism advocates. It would seem that the very model the state capitalism advocates propose requires some external, political, cause to explain its demise. Lebowitz’s argument assumes the argument of the state capitalist school: an efficient mode of production capable of very high growth rates. If the cause of the Soviet Union’s demise is not to be found in this very capacity toward achieve very high rates of growth, it can only come from an external, political, source: the managers of the Soviet state machine.

If we are to avoid Lebowitz’s argument and the idea that the collapse of the Soviet Union was driven by forces external to the mode of production itself, we have to assume the demise of the Soviet Union resulted precisely from its capacity for growth, i.e., from accumulation itself. The rate of growth was a function of the rate of accumulation of surplus product of Soviet production. In the familiar model of the capitalist mode of production, this accumulation itself produces surplus capital and surplus labor power. This in turn leads to the further concentration and centralization of capital — but here is the theoretical problem: the Soviet capital was already a highly concentrated and completely centralized economic machine. Any further concentration and centralization required by the high rate of accumulation was impossible in a single all-encompassing capital. So how did the Central Plan resolve this?

One method would have been a reduction of hours of labor to reduce the production of surplus and slow the rate of accumulation. This solution, however, was precluded by the aim of the central plan, which was the production of surplus value, not the needs of the producers. The other method would have been to recapture the excess capital and labor power set free by the improvement in productivity in some fashion. We know from Soviet history that they never attempted to reduce hours of labor, and the massive implosion of the economy in the aftermath of the collapse of the Central Plan suggests they did not find a third way to address the problem. This would in turn suggest accumulation of excess capital and excess labor power themselves caused the demise of the Soviet Union, i.e., the production of surplus value ultimately was the only thing necessary to kill it.

The conclusion offered by labor theory, I think, is that the demise of the Soviet Union was already given in the fact that the production of surplus value was the aim of production. The Soviet state was not “dismantled”, it collapsed due to absolute overaccumulation — just as our more familiar form of capitalism will collapse. The last frantic moment of the Soviet managerial strata were spent trying to save it from collapse, not dividing up the means of production. If my hypothesis is correct, this would suggest the collapse of capitalism in the more conventional form we recognize in the West is as equally necessary as the collapse of the Soviet Union. The collapse of European capitalism does not require a political revolution, or working class political action in any form: the overaccumulation of capital itself will do it in.

In any case, whatever the Soviet Union was it wasn’t socialism as those initial communist relations of production are conventionally framed. It was clearly a surplus producing mode of production, and it clearly collapsed despite the efforts of the soviet state to save itself. Moreover this collapse came about despite the apparent lack of any spontaneous working class political struggle to topple the regime.

It is a question of what the proletariat is…

For this reason, I think there is much about the Soviet collapse that can explain how the euro-zone crisis is unfolding today. When the UBS analyst, George Magnus, asks “Why Are The European Streets Relatively Quiet?”, he is raising an important question of the role politics — the class struggle — plays not only in the euro-zone crisis, but ultimately in the demise of capitalism. The bourgeois class, much like Marxists, anarchists and libertarians assume as a matter of course capitalism can only be felled by the class struggle. Like all variants of communism today, the bourgeois apologists expect this class struggle to result from efforts to restore profitability in the face of a crisis of overproduction. And like all variants of communism, they are surprised and confused by the apparent lack of any effective resistance to austerity by the working classes of Europe.

There is, however, an important subtext to this discussion: Far from being threatened by the political struggle, the euro-crisis demonstrates the biggest threat to capitalist relations of production is the very effort that is now underway to restore profitability by reducing the wages and benefits of the working class, slashing its pensions and increasing hours of labor. The euro-crisis is being driven not by political resistance to austerity, but, surprisingly, by the lack of resistance, by the almost absolute subordination of labor to efforts to raise profitability. Despite this lack of effective resistance, the more the EU attacks the living standards of the working class, the more economic conditions actually deteriorate.

Why is this happening? In an advanced economy the subsistence of the working class is by far the largest consumer market for the output of capitalist production. It is impossible to impose a reduction of wages on the working class without immediately producing a depressive contraction. Capital, having destroyed all other classes and thrust them into the ranks of the proletariat, is now dependent on this ruined mass both for the production of surplus value and for realization of this surplus. While dependent on the working class for both the production and realization of surplus value, the aim of capitalist production remains the production of surplus value, whether or not this surplus can be realized within limits of exchange determined by the consumption power of the working class.

This leads to the rising organic composition of capital and the expansion of the world market, but it also leads to concentration and centralization of capital and the creation of a mass of excess capital and an excess population of workers. This crisis proceeds irrespective of the state of the class struggle between the proletarians and the bourgeoisie — just as a similar process developed in the Soviet Union despite the evident lack of class struggle there. Even in the absence of an effective class struggle, the history of the Soviet Union demonstrates the deteriorating conditions of the working class makes themselves felt on the operation of the capitalist mode of production as a general pressure.

In France, Greece and Spain, for instance, the more governments tighten austerity, the more economic activity declines, and the larger their deficits grow. In the capitalist mode of production labor power appears both as a constituent of capital and as a condition for its realization. It is not, as commonly portrayed by many communists, that the capitalist can increase his profit simply by starving the worker, or paying her less than the value of her labor power. Should the capitalist attempt to reduce the wages of the worker, he would simultaneously reduce his market for his commodities, which depends in ever-increasing proportion on the consumer power of the working class. Moreover, since the aim of the capitalist is to produce surplus value, even if he did not try to reduce wages he would face the same problem. The attempt to reduce wages is only a reflex of the overaccumulation of capital, not its cause. The so-called “underconsumption of the working class” is already given in the fact that the aim of capitalist production is surplus value. It presupposes that no matter what the subsistence of the working class it produces more value than this subsistence. Thus we find this admission by the bourgeois press in January:

“Sharp spending cuts and tax increases have long played a central role in the International Monetary Fund’s prescriptions for governments in financial distress — most recently for the struggling members of the euro area. Now, officials at the world’s primary arbiter of fiscal prudence are recognizing that such austerity can do a lot more damage than previously thought.

The first major indication of the IMF’s change of heart came in October. In its World Economic Outlook, the fund published research showing that back in 2010, when Greece and other European countries embarked on severe austerity programs, its forecasters underestimated the negative impact spending cuts and tax increases would have on the broader economy.

…

The authors focus on a number known as the fiscal multiplier — the amount a country’s economic output changes for each euro of change in government spending or revenue. They estimate that for European austerity measures started in 2010, the multiplier was significantly greater than one, meaning economic output shrank by more than one euro for each euro in deficit reduction. That’s much higher than the multiplier of 0.5 that the IMF and other forecasters typically used in 2010 and that had proven more or less accurate in the years before the 2008 financial crisis.”

In fact, the IMF study shows the reduction of fascist state spending by one euro produces about 1.70 euros of economic contraction. The real resistance of Europe’s working class to efforts to impose austerity is a material, not political resistance. It is a resistance that arises, as Marx suggested, not from what the working class thinks, but who they are. Even assuming there is no working class resistance to austerity, efforts to impose austerity on the working class must lead to the collapse of capital. In the capitalist mode of production it is the social producer, not the property owner, who is essential to the mode of production. In large part, the working class does not even have to fight to impose its will on the capitalist class, since it is itself the material precondition for the existence of capital. In the capitalist mode of production the number of laborers must always increase, while the number of capitalists must always decrease — this result always holds true no matter the outcome of the class struggle. This means the consumption power of society is increasingly determined by the consumption power of the proletarian mass of society.

The proletarians as the material determining force in society

This raises the question of how imperatives of the capitalist relations of production appear to the working class itself. First, since the material requirements of the working class appears as a general pressure imposing itself on the capitalist mode of production (i.e., as a law of value), the fact that this pressure appears as a law, and not the outcome of a political conflict, is an important feature of capitalist political relations. The contradiction between the law of value and the law of the average rate of profit — which is nothing more than the contradiction between labor, on the one hand, and capital, on the other — must be resolved, and it is resolved through a general demand for social management of the productive forces.

The forces of production created by capital, having completely escaped the control of patriarchal, and even private social forms of management entirely, can only be brought under the control of the state or the workers themselves in the form of their own association. Even if the class struggle between workers and capitalist is settled in favor of the capitalists as occurred in the 1930s, private management of the forces of production must still be superseded by social management of these forces in the form of the existing state.

The dispossession of the capitalist class is completed, and the capitalist class is reduced to a superfluous mass of coupon clippers and speculators.

The fact that the state today makes up more than fifty percent of industrial economies is not even considered a significant fact by communists who continue blithely along with their heads up their collective ass. For Marxists, anarchists and libertarians, no less than for the workers, constant growth of the fascist state is as normal as the sunrise. The growth of the state is not taken as a symptom of the crisis of capitalism even as all attempts by the capitalist to reduce fascist state expenditures exacerbate the euro-crisis, and plunges Europe deeper into depression.

Second, depending on where the working class is located in this crisis — in Germany or in Greece — determines how the crisis appears to them: as a necessary result of southern Europe’s profligacy or as the product of German mercantilism. The fact that one and the same euro-crisis can appear in contradictory forms depending on the location of the observer suggests none of these forms is the crisis itself, but forms of appearance of the crisis — they are simply superficial expressions of the crisis.

This not to deny the profligacy of Greece’s state or the mercantile policies of Germany’s state. Rather I argue that even if we abstract from these purely national defects European capital is suffering a crisis of overproduction that is expressed both in German surpluses and Greek deficits. This is shown the moment attempts to end Greece deficits produce another drop in economic activity in Germany. The deepening crisis produced by attempts to reduce deficit in southern Europe show generalized overproduction in Europe merely was premised on the deficits of states like Greece and Spain.

The working class has proved unable to address this crisis precisely because the crisis superficially appears in different forms in Germany and Greece. Each working class has then focused on its own state as an instrument to address the crisis. But Germany’s state can no more insulate the workers there from the impact of a crisis of overproduction than Greece’s state can protect the workers there from austerity. I think common sense requires us to ask ourselves what would a reasonable person do when the only instrument you have at your command to fight a crisis of overproduction – the nation state — has been made completely ineffective in fighting that crisis by the very structure of the euro-zone itself?

Any way out of this crisis that proposes German workers should pay for the profligacy of the Greece state, and bail out Greece’s bondholders is not going to fly. At the same time, it is already demonstrated to even bourgeois ideologists that making the Greece workers pay for the profligacy of the Greece state cannot work and can only lead to the further collapse of the euro-zone economy. Both materially and politically the working class has been driving this crisis without any overt manifestation political consciousness communists say is necessary for it to play its historical role. The German workers can fuck German bond-holders simply by refusing to bailout Greece debt. Capital has already demonstrated to itself that any attempt to “make Greece citizens pay” only leads to depression. Despite its apparently ineffectual political resistance, the working class is actually determining all events in Europe right now. And it is doing it without any overt expression of class consciousness that Marxists have long held is a necessary precondition of its revolutionary role.