Posts Tagged ‘Karl Marx’

Change the World Without Taking Power: A decade later John Holloway’s challenge still unmet

February 20, 2013 1 comment

«Kapitalismus aufbrechen!»

A decades ago John Holloway shook up the Marxist academy with the publication of his book, Change The World Without Taking Power”. Holloway’s argument was that the Marxist preoccupation with taking power was not only obsolete, it was counterproductive, serving only to divert energy and time to a quixotic effort that leaves Marxists banging their heads bloody against the brick wall of capitalist relations of production. Said Holloway:

The world cannot be changed through the state. Both theoretical reflection and a whole century of bad experience tell us so. ‘We told you so’, say the satisfied ones, ‘We said so all along. We said it was absurd. We told you that you couldn’t go against human nature. Give up the dream, give up!’

A decade after it was published, I think it an examination is called for, the purpose of which is to see how Holloway’s critique of post-war Marxism stands up to time.

Read more…

Panitch on the lack of ambition and self-confidence of the Left

January 24, 2013 3 comments

OLYMPUS DIGITAL CAMERAIn 2011, Leo Panitch wrote a piece, The Left’s Crisis, examining the Left’s response to the present crisis. He noted the Left’s response could be broken into two types: “irresponsible” and “fundamentally misleading”. In the irresponsible group, he puts those who called on Washington to let the banks fail, which, he asserted, gave no thought to the consequences of such an event. In the fundamentally misleading group he put those who called for tighter regulation of banks, which he asserted are already the most regulated in the world market.

The Left’s “lack of ambition” in the crisis, says Panitch, was indicated by the fact that there were far more calls for salary limits on top mamagers of Wall Street investment firms, than calls for turning the banks into public utilities. This was true, Panitch notes, despite the fact that turning banks into publicly owned utilities is a long-standing communist measure dating back to the Communist Manifesto. The fact that even some bourgeois writers were calling for just such a measure while the Left was not shows its lack of ambition and self-confidence.

Panitch states, fundamental change can only happen through a class struggle that would involve a massive transformation of the state itself. Getting reforms like converting banks into utilities is not going to happen by bringing a bunch of lawyers into a room. Even something as mundane as better regulation cannot be won without a mobilization of the working class:

“[We] ought to be trying to educate people on how capitalist finance really works, why it doesn’t for them and why what we need instead is a publicly owned banking system that is part of a system of democratic economic planning, in which what’s invested and where it’s invested and how it’s invested is democratically decided.”

The banking nationalization that is now occurring in the wake of the financial crisis by the government all over the world only involved socializing financial losses, while leaving the structures that lead to these losses in place:

“…this really represented “not the nationalisation of the banks, but the privatisation of the Treasury as a new kind of fund manager.”

Panitch argues the most important reason to nationalize the banks is to cripple finance capital and change the balance of forces. Additionally, according to Panitch, the socialist argument for nationalizing the banks would be to put credit to work for socially useful ends. Despite the disastrous collapse of the Soviet Union, socialists can’t avoid the need for planning, says Panitch, and credit is the core of any planned alteration of industry. Controlling credit provides for democratic control of investment. However, Panitch notes, people are not motivated by democratic control of investment, which, even if it does not fall prey to the errors of the Soviet Union, will not deliver benefits for decades.

“People need to be mobilized by immediate demands, as they were by the demands for trade union rights, a reduced workweek, a public educational system a welfare state, etc”

The solution is to combine a long term vision of democratic investment with immediate benefits that sustain it and make it possible. A case for this might be made for a massive public housing program, universal public pensions, free public transit, etc. These efforts would be aimed at decommodifying basic needs as far as this is possible within capitalist society. People like these things, but you very quickly face the problem of where the money for such programs will come from. This question can be addressed by bringing credit under the control of the state.

The Left on defense

The Left, Panitch argues, has been very defensive in its thinking:

“We need to try to see this moment of crisis from the perspective of what openings it could create. The limitations of a purely defensive response to the crisis lie in not taking advantage of the opportunity that the crisis creates. Despite the ‘Another World Is Possible’ rhetoric, the left has been more oriented to attempting to hold on to things than to taking things in a new direction.”

This is the defect of the view that says you can change things without taking power: we are left preventing the state from doing things, but do not advance our goals. You don’t engage on the terrain of the state or transform the structures of the state. While Panitch understand the current streak of anti-statism, he argues, “we need to go beyond protest, or we will be trapped forever in organizing the next demo.”

The state will transfer the crisis down to regional and local levels, and hopes thereby to impose limits on the response to the crisis. We must learn how to link up local struggles and turn them into a struggle for state power, otherwise we will be trapped by local limits.

I don’t think Panitch’s argument can just be dismissed. Unlike a lot of the shit I read, this guy appears to have decades of practical work and an encyclopedic knowledge of organizing history covering many countries. I was just floored by the breadth and depth of his argument here and here for instance. Moreover, there are two things about his argument that I find fascinating. First, he admits his ideas have gone nowhere practically — this admission is very fucking refreshing on the Left. Second, his argument that the Left has no ambition or self-confidence is frighteningly on fucking target.

On the basis of just those two statements alone, this guy deserves everyone’s attention, I think. He has given a lot of thought to the problem and invested a lot of effort figuring out a solution and clearly he cannot be accused of thinking on the margins. Moreover, I don’t think it is enough to say his conceptions of change are fundamentally flawed, since they are evidently no more flawed than any other ideas among, for instance, parties like SYRIZA, etc.

SYRIZA is rushing headlong into a crisis right now for ideas not much different than the ones for which Panitch argues. The only difference here is that the crisis for SYRIZA results from actually winning political power, not by a failure to win it. But failing to win political power and winning it makes all the difference in the world no matter how flawed our conceptions.

See, for instance, the Paris Commune, when the communards were faced with the necessity of breaking the state power, not reforming it. There is no hint of this necessity to be found in the Communist Manifesto — it was imposed on the Communards by the reality of implementing their program. All the measures indicated in the Communist Manifesto program had to take the back seat to the necessity, first of all, to break the state. When Panitch refers to this program — “Marx made – among his list of ten reforms – for the centralization of credit in the hands of the state” — he completely overlooks that these demands were superseded by breaking the state, not simply “transforming the structures of the state”.

Is breaking the state as valid as public banking?

Was this lesson from the Commune valid? By the time of the Great War there were clearly two opinions on this. Some Marxists held the state had to be broken, others argued the existing state did not have to be broken. The Bolsheviks, who argued for the former, upon taking power changed their view and actually proposed to employ the existing state to build socialism. By the end of World War II, this debate over the state was further distorted into whether there had to be a violent revolution or not. So the question hinged, it seems, on whether this state would be “seized” or simply won by “peaceful means” in an election.

In Panitch’s opinion, the distinction is now between “change the world without taking power” and “engaging on the terrain of the state”. But, there is a fallacy in Panitch’s argument regarding the need to engage on the terrain of the state: simply stated society at large is the terrain of the state. By supposedly engaging on the terrain of the state, Panitch clearly means engaging within the machinery of state itself, as distinct from society. Which is to say, Panitch is suggesting we attempt to transform society by means of the state machinery. This is pretty much the gist of what he means when he says,  “a system of democratic economic planning, in which what’s invested and where it’s invested and how it’s invested is democratically decided.”

However, if these decisions are not already being democratically decided, they must be despotically imposed by the state. The leads us to another problem with Panitch’s argument: if the decisions of the democratic state are being despotically imposed on society despite democracy, it seems to me this would be easier to explain this to people than it would to explain, “how capitalist finance really works, why it doesn’t for them and why what we need instead is a publicly owned banking system that is part of a system of democratic economic planning.” It should, in other words, be easier to explain why democracy itself is a farce and must be replaced by an association of producers. This is particularly true since it is widely felt that Washington is just not at all responsive to the control of voters.

It seems Panitch is ready to accept the then innovative ideas of mid-19th century communists when it comes to such standard present day bourgeois practices as a progressive income tax, credit socialization, land use regulation, free education, public roads and infrastructure, etc., but he is not willing to accept the addition of the lesson, hard won at the cost of the lives of many communards, that the state must be broken to this list. I am not sure why this is, and can find no reason for this except that it is the one item not accepted by the fascists. Almost every measure in the Communist Manifesto is standard practice by the fascist states in every country except the replacement of the state itself by association.

A further objection can be made to Panitch’s argument: As he states,

“But you do have to be a Marxist to understand that [reform] is not going to happen by bringing some lawyers into a room and signing a few documents. … fundamental change can only really happen through a massive class struggle, which would involve a massive transformation of the state itself.”

If even a simple reform recommended by bourgeois writers, and proposed by communists 150 years ago, like making banks public utilities, requires a massive class struggle involving a massive transformation of the state, why not simply aim at the outset to replace the state by association — thus ending the false distinction between changing the world without taking power and engaging on the terrain of the state. The only argument for not aiming at the outset to replace the state by association is that simple reforms like public banking is easier than wholesale reorganization of society. Panitch’s argument is that this is not true: even such a modest and self-evident reform of banks, recommended by a bourgeois writer, requires a massive class struggle.

Changing the world without taking power over others

tahrir-square_1166216I think Panitch definitely falls for a phony and entirely meaningless distinction between “changing the world without taking power” and “engaging on the terrain of the state”, i.e., within society itself. Both can be accomplished by changing the world without taking power over others, i.e., by replacing the state by association. If, as Panitch argues, even simple reforms require massive class struggle, the working class cannnot afford to dispense with its own organization. The aim of mobilization cannot be to turn this power over to the state, as was done in Egypt, but to become the new conditions of society.

In Tahrir Square all were equal and no one was able to dictate the views of others, this short-lived association, however, soon gave way to talk of constitutions and ministries. The association that had brought down the Mubarak regime was deemed unfit to manage its own affairs. Although for three decades no political party was able to do what the association did in 18 days, “commonsense” ruled this association too inept to manage society. In other words, “commonsense” decided that the working class should only serve as cannon fodder. The working class should be “mobilized” whenever some faction or another wishes to marginally change the existing state with some piecemeal reform and then rapidly demobilized once success has been secured.

I am not suggesting this is what Panitch is trying to do, but he has to see events like Egypt in this light as well as the danger hidden beneath SYRIZA’s growing popularity and likely victory. If upon winning the coming election, SYRIZA does not immediately begin replacing the state with association it must fail.

T.I.N.A.: There is no alternative to the fascist state?

Panitch’s essay led me to contemplate what he called the lack of ambition and self-confidence of the Left. People have completely accepted T.I.N.A. The Left is now incapable of articulating an alternative that does not go through the existing state. The healthy section of the Left now no longer even tries — it has given up entirely — while the unhealthy section is mired in opportunism.

I think this is a good thing.

Fascism has completely broken the Left down: appropriated its symbols and converted its highest ideals into election Newspeak. Fascism has made it impossible for the Left to formulate its argument in a political form by immediately expropriating every instance.

Just look how Tahrir Square turned into the FSA — T.I.N.A writ large.

Every time the Left looks for a political exit from this crisis it must fall into the lap of fascism — T.I.N.A. Fascism thrives on politics, since it is an entirely political mode of production — the production of surplus value in the form of the state. If the Left are having a problem articulating their aims in a political form is it not just possible “political aims” are the problem? It is not a problem of finding the correct political aim, but of realizing politics itself is a dead end.

For you mainstream Marxists out there, that means there is no longer any possibility of a so-called “minimum program” for the working class. Another way to put it: the first act of the Commune was to break the state. This is no longer possible without breaking capitalism entirely. When the state is the capitalist, the first cannot be separated from the second. Breaking the state was always the “minimum program” of communism — you just forgot this. Everything else proposed to be undertaken in the Communist Manifesto — which is still the only common program adopted by all communists  alike, irrespective of whether they call themselves Marxist or anarchist — depended on immediately breaking the state. It is the development of the capitalist mode of production itself that has altered this and made it impossible to do one without the other. So the task hasn’t changed in 150 years, the implications of breaking the state has: it must immediately lead to breaking capitalism itself.

So let’s assume there is a need for a so-called “minimum program” as proposed by mainstream Marxism. This means a set of measures communists propose must be accomplished by the working class upon assuming power. This is based on some assessment of the current situation and the difficulties the class will face once in power. This fucking minimum program itself rests on the assumption the working class will replace the state with its association. It is not as if replacing the state is a long term goal; it is the precondition of an assumption of power, the form this assumption takes. Before embarking on any sweeping changes to society, in other words, as Marx argued against Bakunin, “the whole thing begins with the self-government of the commune.”

I mean, how much clearer could Marx have been on this, Marxists? Did he mumble? So before you can even articulate a minimum program, you have to explain how the existing state must be replaced by association. In other words, you can’t articulate political aims but aims that are entirely anti-political. You begin with the notion that, in any case, the existing state will be leveled in its entirety and replaced by association — no fucking minimum wage, no fucking social security, no fucking EPA, no fucking defense department — only association. If you can’t get on-board with this — which is ONLY the precondition for a minimum program — stop calling yourself a Marxist, please. Call yourself a progressive, or better yet, a fucking fascist, which you are.

Do we need a state to care for the elderly?

Yes, the environment, the disabled, the elderly, the unemployed etc. have to be cared for — but it is the association that does this! The task is not left to a bunch of elite managers who move back and forth from Wall Street to federal agencies. The association of producers decides EVERYTHING. This is already a more audacious program than conceived in any party program produced by a Marxist party today. And I think I can say this without reservation: Marxist programs do not even come up to this minimum requirement for a minimum program.

The point is not how much of the social product is devoted to education of children, but who decides this. Is this decided by bureaucrats in the Department of Education or by an association of producers?

T.I.N.A. is not about where social resources go or how they are employed, it is about where these decisions are being made. Once the association of producers has taken command of the social resources, these resources no longer exist as forms of capital. They are transformed into mere use value — objects of utility for the mass of society and subordinated to their needs alone. Marxists and the Left in general focus on how the social product will be divided, when the real question is who is making this decision.

Folks, the capitalist class is trapped. It is utterly dependent on the state and has no options in this regard. It cannot go back to an earlier mode of accumulation, which is why as a class it is desperate and violent in the extreme. There is not one country today where the capitalist class can survive the replacement of the state by an association of producers. And, as Egypt proved, there is not one country today where the working class can “take power” without replacing the state with its association.

Marxists and the Left in general keep trying to avoid this brutal fact, by articulating a set of demands aimed at less than association. It will not work: as Tahrir Square shows, anything less than association will be co-opted by the fascist state.

Ludwig von Mises and the demise of the Austrian School (2)

January 22, 2013 Leave a comment


Part Two: “Lies, damned lies and statistics”

In part one of this series I made four points:

  1. Critical socialism is not the same thing as socialism proper: the first is a political criticism of capitalism, the second is a process created by capitalism itself.
  2. Socialism proper is nothing more than a transition from individual production and exchange to directly social production and results from the historical action of the capitalist mode of production itself on the conditions of labor.
  3. As against Mises’s argument that inequality of talents and abilities among the members of society is the precondition and determining force of social life, Marx argues the development of the productive forces obscures religious, social, intellectual and individual differences.
  4. When confronting this universal leveling power of the productive forces, the old dying order makes futile attempts to check or break it by political means, i.e., by employing the state power to protect its privileges.

In this part, I will show how Mises falsified empirical evidence, misrepresented Marx’s theory of capitalist concentration and centralization of capital, and some thoughts on why I think the Austrian school as a whole serves only as ideological cover for the apologists of the fascist state. The Austrian school provides these fascists with a conveniently pessimistic model of the real state of society in the absence of the state that is employed solely to discourage the working class from recognizing the need for its abolition. In short, Austrian theory reinforces the argument that there is no alternative to the fascist state.

Read more…

Ludwig von Mises and the demise of the Austrian School

January 20, 2013 Leave a comment


Since Zak Drabczyk has been having a lot of fun stomping on the basic and sacred arguments of the Austrian-school-type regressive anarchist trend centered on the Mises Institute, I thought I would pile on and get in a few punches on my own. So, at the request of an anarchist on twitter, @adamblacksburg, I wrote up this two part critique of Ludwig von Mises’ SOCIALISM. I will post the second part of this critique by Friday.

Read more…

The strange case of the missing “Revolutionary Subject”

January 13, 2013 4 comments


In his dissertation, “Marx’s concept of the transcendence of value production” Peter Hudis levels an interesting criticism at Moishe Postone:

“Since Postone thinks that capital is the subject of modern society, and not the workers or other forces of liberation, he is led to argue that the alternative to capital will ultimately emerge not from the development of human agents like the proletariat but rather from capital itself.”

The criticism is based on Postone’s interpretation of Marx’s argument, in the words of Hudis, that

“Capital takes on a life of its own because the subjectivity of workers is subsumed by abstract labor.”

The problem of “The Revolutionary Subject” is a big one for Marxists academics because they just can’t figure out who the fuck is actually making this damn social revolution. And without being able to identify a subject, it is rather difficult to figure out to whom communists should be speaking.

Read more…

Deconstructing the main thesis of Andrew Kliman’s “The Failure of Capitalist Production”

December 22, 2012 3 comments

The fundamental problem of fascist state data

Interesting argument by Andrew Kliman in his book, “The Failure of Capitalist Production”: the rate of profit tends to fall; but this tendency is “reversed” by the destruction of capital. I keep looking at this statement because it seems suspiciously widely accepted by Marxists all of a sudden. Kliman states it this way:

“The rate of profit—that is, profit as a percentage of the amount of money invested—has a persistent tendency to fall. However, this tendency is reversed by what John Fullarton, Karl Marx, and others have called the “destruction of capital” —losses caused by declining values of financial and physical capital assets or the destruction of the physical assets themselves.”

I am not questioning the idea the rate of profit tends to fall nor that this fall leads to crises. The problem I have here is with destruction of capital and Kliman’s definition of profit. First, a lot of people have looked at this profit thingy, and some agree with Kliman, while others disagree. My problem is not whether one group is right and the other wrong — it is how can any of this be determined based on fascist state data on corporate profits.

If we walk away from this highly controversial category for a second and look just at employment in the United States there is the same problem. The data, as compiled by the fascist state, is absolutely worthless to address important questions of Marxist theory. The whole of government employment is unproductive labor, but bourgeois data makes no distinction between productive and unproductive employment. Profit can only be calculated on productive employment — so where does the whole of fascist state employment belong?

Second, Kliman talks about “profit as a percentage of the amount of money invested”, but in actuality he uses dollars instead of money. Everyone uses this measure, but Carchedi’s essay calls it all into question: Washington doesn’t use money to pay its debts. The dollars the fascist state uses to pay its debts are either the result of revenue raised by taxes, or dollars created out of nothing — but, as Carchedi notes:

“… one does not “create money out of nothing”, an absurd proposition. Out of nothing, one can create nothing.”

When the state was a tiny sliver of the economy, this was not a big problem — but now it is 50% of the US economy, with a deficit of between 7 and 10% of GDP. This entire mass consists of labor that is, by definition, not productive in the capitalistic sense, and is itself only a form of surplus value wrung from the productively employed workers. This must be true by definition.

Most surplus value is consumed unproductively by the fascist state

Now Marx’s formula for profit is s/(c+v); and a shit load of the “s” does not take the form of corporate profits. The greater mass of this “s” is in the form of fascist state expenditures. At least, this is what makes sense to me — I could be wrong, but this is how I read Marx.

In fact, employment in the form of government is one of the fastest growing sectors of employment in the post-war period. To be sure, by definition, this is a portion of surplus value that is not being reinvested in productive capitalization — by definition. It represents, therefore, a massive destruction of surplus value on a scale unequaled in the history of society — annually!

So far as I can tell, no Marxist scholar has tried to include the massive quantity of surplus value expended in the form of the state into the discussion of the rate of profit. How can you tell whether the rate of profit has risen or fallen without including the single largest form of surplus value in “the economy”.

The total government consumption of surplus value amounts to $6.3 trillion; by comparison consider that China’s total GDP is estimated at $7.3 trillion. The US government sector is by far, the largest consumer of surplus value on the planet, yet it appears in no Marxist estimates of the rate of profit that I have seen.

This is just another example of the resistance of the Marxist school to subjecting the fascist state to historical materialist analysis. Marxists treat the state as if it is outside the economic structure of class society and figures only as an ahistorical mechanism of class rule.

Kliman argues in the introduction to his book

“However, I do not want to overstate the role of methodological and theoretical differences Prior to analyzing the data, I had no prior belief that actual rates of profit had failed to rebound since the early 1980s, and I even wrote that “profitability has been propped up by means of a decline in real wages for most [U.S.] workers”

I take this to mean Kliman alleges those who come to conclusion other than his are engaged in wholesale distortion of the empirical data. Which is to say the differences in methodology and theoretical assumptions do not account for the different results on the rate of profit. Is there some justification for this conclusion? Perhaps.

Both Kliman’s data and Dumenil and Levy’s data depend not on Marx’s definition of surplus value, which must include the surplus consumed by the fascist state, but only various measures of reported profits assuming an economy solely composed of productive capitals. Since both begin not with Marx’s definition of surplus value but with the reported profits of private capitals they are both fundamentally flawed. The minor difference in their data at the end of this process conceals that both Kliman and Dumenil and Levy’s work are fatally flawed. For Dumenil and Levy this negates their conclusion entirely; however this is also true for Kliman’s conclusion — although he at least get the direction of the rate of profit correct.

In Kliman’s thesis, the rate of surplus value — not the rate of reported profits — is key to his argument. And his argument is that the fascist state is preventing the destruction of value, giving rise to stagnation and slow growth. In fact, it appears most surplus produced by the productive capitals is being destroyed by the fascist state but even this is not sufficient as the crisis demonstrates.

The rate of profit is indeed falling as Kliman alleges, and to a far greater extent than he even imagines. An ever increasing quantity of surplus must be absorbed by the fascist state solely to maintain capitalist relations of production. His theoretical assumptions led him to compile empirical data that actually weakens his argument. Moreover, Kliman misses the most important point buried in the data: the rate of profit is negative and has been negative since the 1970s!

A negative rate of profit?

As Kliman argues about growth generally,

“The generation of profit is what makes possible the investment of profit. So, not surprisingly, the relative lack of profit led to a persistent decline in the rate of capital accumulation (new investment in productive assets as a percentage of the existing volume of capital). Sluggish investment has, in turn, resulted in sluggish growth of output and income.”

This is the only conclusion to be drawn by the collapse of industrial employment since 1979. As can be seen in the BLS data below, employment in the goods producing sector of the economy (which I am treating as a proxy for productive investment in this note) peaked in 1979 and has been declining since:

Goods Producing employment 1939 to 2012 (Source: BLS)

Goods Producing employment 1939 to 2012 (Source: BLS)

Moreover, as is clear from the chart above, since 2000 this decline has become abrupt — which is also the time during which all the talk of deflation began. Kliman is likely not only correct in relation to Dumenil and Levy, he is likely more right than his pitiful charts on corporate profits demonstrate. Industrial employment has not been at this level since 1950 before the Cold War build out began. By the end of 2011, industrial employment has fallen 30 percent since its post-war peak.

During this period we see four things:

  1. despite the fall in goods producing employment, the rate of profit as measure by both Kliman and Dumenil and Levy and a host of others remains positive;
  2. US trade deficits open up and widen;
  3. the US federal budget deficits also widen;
  4. the world market is struck by a series of financial crises.

How in Marx’s theory can we explain the fact that the profit rate, as different theorists measure it, remain positive despite the fall in goods producing employment? One possible explanation is to discount entirely the collapse of goods producing employment over the past 30 years. As Kurz demonstrates an increasing mass of productive capital itself is financed by fictitious capital and is itself fictitious. For instance, 8 aircraft carriers have been produced on orders by Washington since 1980 and three more are under construction, this completely wasteful expenditure is embedded in the data on goods producing employment. Although this employment produced a commodity (of sorts) it represented a subtraction from the mass of capital.

But this fact only adds to the problem: even employment that might be considered productive turns out to be unproductive. The decline of productive employment is actually greater than the data implies, and thus greater is the negative value of the rate of profit. This further conflicts with the positive measure of corporate profits as measured by a host of different scholars. And this difference cannot be blamed on their different methodologies, but on their basic theoretical assumptions regarding the fascist state.

Can the rate of profit be reversed?

This raises an additional question about Kliman’s thesis: How is the fall in the rate of profit “reversed” by the destruction of capital? If profit = s/(c+v), how does the destruction of capital lead to an increase in the profit rate? If I am wrong in this, please correct me, but I read chapter 15 as stating the fall in the rate of profit leads to a wash out in those capital not able to offset the fall in the rate of profit by an increase in the mass of profits — it does not lead to a recovery in the rate of profit. Is Kliman’s thesis just badly worded or does he read Marx as stating the fall in the rate of profit can be reversed?

And if the profit rate cannot be reversed, as my reading of Marx suggests, it must go to zero at some point, without more involved. At some point the rate of profit must equal zero; or as Marx puts it:

“… the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC.”

In other words, my interpretation necessarily leads to absolute overaccumulation of capital. Kliman’s and Simon Clarke’s arguments against absolute overaccumulation of capital requires the fall in the rate of profit can be reversed. The profit rate can never go to zero and the demise of capitalism is not inevitable.

In addition, if Kliman and Clarke are correct the very idea the profit rate is negative at this point is not only wrong, but absurd. And this means there has to be some other explanation than the one proposed by Kliman for the decline of goods producing employment investment. I would very much like to hear that other explanation by anyone in the Marxist academy.

A negative rate of profit is important because it means the total mass of employed capital has been shrinking since the 1970s. Once the rate of profit goes negative, the mass of productively employed capital must eventually reach zero. This calls into question another facet of Kliman’s thesis. According to Kliman the capital destruction necessary to “restore the rate of profit” during the depression of the 1930s was very large and the process very traumatic to society. Based on this Kliman argues:

“Policymakers have not wanted this to happen again, so they now intervene with monetary and fiscal policies in order to prevent the full-scale destruction of capital value. This explains why subsequent downturns in the economy have not been nearly as severe as the Depression. But since so much less capital value was destroyed during the 1970s and early 1980s than was destroyed in the 1930s and early 1940s, the decline in the rate of profit was not reversed. And because it was not reversed, profitability remained at too low a level to sustain a new boom.”

Based on Kliman’s view that Marx’s theory allows for restoration of the rate of profit, this is a convincing argument. However, if the opposite holds, no restoration of profits rates is possible, the argument collapses in on itself. In the latter case, if the fascist state does not prevent the destruction of capital, but facilitates it, this would as well explain why there has been no replay of the Great Depression. Since the destruction of capital is necessary to begin a new expansion phase, and since this destruction cannot be prevented, it is entirely possible that Keynesian policies work by accelerating the destruction of capital, not preventing it.

And how might this destruction be facilitated? Simply by lending it to the fascist state, which — according to Carchedi’s essay — does not produce value but only consumes it.

This would also explain why the rate of growth of the economy has slowed: since an increasing portion of the produced capital is being destroyed by fascist state expenditures, a declining portion newly produced surplus value is actually reentering capital reproduction.

Some notes on Marxism and social emancipation (3)

December 21, 2012 2 comments

The impending implosion of the Marxist school

Historically speaking, for Marx, the capitalist mode of production, no matter its defects, could be justified on the basis that by ruthlessly exploiting the worker, stunting her development and reducing her to the status of a slave, it nevertheless brought about an increase in the productive capacity of social labor. It was admitted that this increase in the productivity of social labor was in no way the aim of the mode of production, but merely a byproduct of the unending search for still greater profits. On this basis Marx answered the critics of Ricardo:

“It is that which is held against him, it is his unconcern about “human beings,” and his having an eye solely for the development of the productive forces, whatever the cost in human beings and capital-values — it is precisely that which is the important thing about him. Development of the productive forces of social labour is the historical task and justification of capital. This is just the way in which it unconsciously creates the material requirements of a higher mode of production.”

When studying the operation of the capitalist mode of production, Marx was not given to outbursts of moral anguish about the capitalist mode of production and the results of the capitalist epoch. This is what separated him from the moralizers and utopian socialist of his day: that despite all the defects of the mode of production it carried the seeds of its own supercession by a higher mode of human society — the social individual.

What separates Marx from the Marxist academy, however, is that in his view capitalist relations of production were only historically justified to the extent they materially contributed to the development of the productive forces. The discussion of capitalist relations of production within the Marxist academy today takes no account of this. If wage slavery can be justified at all, it is only on the basis this wage slavery produces more material wealth than individual production. Individuals producing separately, whose activity only becomes social through exchange, cannot produce a material wealth anywhere near the scale of this same mass of individuals engaged in directly social labor. If the catalyst to the formation of directly social labor was found in wage slavery, we only inherit this as the premise of our own time to be abolished.

This is what is so amazingly stupid about Carchedi’s essay on the so-called Marxist multiplier: having demonstrated (as best he could) that fascist state economic policy cannot add to the wealth of society, but can only unproductively consume (destroy) it, he then adds this idiocy:

“The above should not be construed as if labour should be indifferent to state-induced capital-financed redistribution and/or investment policies. On the contrary, labour should strongly struggle for such policies. But this struggle should be carried out not from a Keynesian perspective but from the proper, Marxist, perspective.”

Mind you, Carchedi’s finding is not just that fascist state economic policy does not increase the wealth of society, he found, in addition to this fact, the fascist state only works by unproductively consuming wealth. Despite this finding, Carchedi recommends the working class ignore his results and “fight” for these policies. On what basis does Carchedi make his perverse recommendation?

“From the Marxist perspective, the struggle for the improvement of labour’s lot and the sedimentation and accumulation of labour’s antagonistic consciousness and power through this struggle should be two sides of the same coin. This is their real importance. They cannot end the slump but they can surely improve labour’s conditions and, given the proper perspective, foster the end of capitalism.”

Of course, the fascist state cannot improve the worker’s lot without deepening the crisis, but the struggle to make the fascist state improve the worker’s lot can? How? The fascist state only destroys material wealth, but fighting for this destruction will produce an “antagonistic consciousness”? The crisis is wholly produced by the dependence of the production of material wealth on capitalist profits, but fighting for fascist state economic policies — which only destroys the wealth that can’t become capital — will foster an end to capitalist production?

An inversion of Marx

In the most amazingly brazen act of revisionism, Carchedi completely inverts Marx’s reasoning: where, for Marx, capitalist relations of production may be morally repugnant, but justifiable because they increase the productive power of social labor, Carchedi argues fascist state intervention does nothing to increase this productive capacity, but is justifiable because of a placebo effect. Although fascist state economic intervention cannot add to the production of material wealth, workers should fight for it because they think it will. Left political activity can, somehow, avoid the problem that no state action of any sort can “solve” the crisis, because this Left activity can produce a consciousness that is antagonistic to capitalism.

Once you realize this is Carchedi’s entire argument, you realize how completely bankrupt post-war Marxism really is.

Carchedi’s argument is not the only expression of this problem. The blog, The Commune, shows how Carchedi’s findings are being welcome within the Marxist school:

“Carchedi has recently argued in the International Socialism Journal that  Keynesian measures “cannot end the slump, but they can surely improve Labours Conditions and given the proper perspective, foster the end of Capital” But he fails to inform us how Marxism can be reconciled with Keynesianism, particularly in the light of his demonstration in the same article, with his Marxist multiplier, that the economics of Marx and Keynes are incompatible. But it does not prevent him from speculating that “from a Marxist perspective state induced capital financed distribution and investment policies need not carry the ideological content attached to the word, the community of interests between two fundamental classes”. It seems, Keynesian reformism or looking to the Capitalist state for reforms can be given a Marxist twist. “

The writer complains Carchedi fails to reconcile Marxism with Keynesian policies, but the real subtext is a plea for a proposal on how the Left can avoid the necessary conclusion that state action of any sort cannot have a positive result. If Carchedi’s conclusion is to be accepted, the Left has no choice but to accept that political demands for state action are worse than useless. In this case the Occupy, who resisted advancing any demands, were instinctively correct, and the Marxist camp was wrong.

Further, the alleged distinction between so-called limited reforms and revolutionary demands dissolves into nothing. There are no reforms short of abolition of capital possible, since Carchedi’s argument demonstrates nothing short of getting rid of wage slavery and the profit motivewill do. Moreover, Carchedi’s findings are not limited to the inability of the state to solve the crisis — although the idiot never noticed it — he actually proved the state can only destroy material wealth, it can only consume existing material wealth without replacing it.

This is the point of Carchedi’s essay: even if you could improve the lot of the worker, you would only reduce profits. Once profits are reduced, the crisis intensifies — more workers are thrown out of work. Political demands for state intervention into the economy, therefore, have only the perverse results of destroying the very material wealth activists demand be redistributed. Fighting for reforms only produces reforms, and these reforms only destroy material wealth.

A deep crisis with Marxism

Carchedi’s argument is, therefore, an expression of a deep crisis within Marxism. Marxism is a political critique of capitalism, but politics itself is dead — it cannot in any way improve the lot of the working class. Without politics, Marxism is dead and Carchedi has unknowingly composed its obituary.

There are no demands to be made on the state to address the crisis because the state’s own actions only express the crisis and deepen it. The Left is in the unenviable position, however historically necessary, to embrace Reagan’s argument:

“Government is the problem”

What is destroyed by the state is not so much the means of consumption but the means to produce consumption — labor and capital. The impact of this destruction is doubled by the fact it cripples future consumption as well. So much of today’s labor is diverted from production to unproductive consumption reducing tomorrows consumption. This is the aspect of the problem Carchedi never makes clear because he wants to justify reformist political activity.

Similar to Carchedi, Kliman argues any successful attempt to redistribute income downward will lead to a deepening of the capitalist crisis. However, Kliman is not so stupid as Carchedi and points out the logical result of reformist political action that must only intensify and deepen the crisis.

“If my argument is sound, what are the consequences? Well, under  capitalism, a new economic boom requires the restoration of profitability, but downward redistribution of income will reduce profitability. It will therefore tend to destabilize capitalism even further. It might trigger renewed panic in the world’s financial markets, and who knows what will happen then? In this way, or by causing investment spending to fall, downward redistribution could lead to a deep recession, even a depression. And because progressive policies will have failed, again, to make capitalism work better—for itself—the stage will have been set for other people and other ideas to come along and fix the mess. Even fascism might become a serious option, as it was in Europe during the Great Depression.”

(NOTE: With Kliman, as with Marxists in general,  fascism is always only a threat waiting in the wings — they can’t admit present political relations are entirely fascistic for the same reason they cannot admit political action is entirely useless: They have no Plan B.)

Kliman has a solution to this dilemma but it doesn’t appear to include openly stating Keynesian policies must be opposed and the state must be abolished:

“Working people need to be prepared to confront the fact that their struggles to protect themselves in the face of the economic slump are not in the system’s interests, and that successful struggle might well set off a virulent reaction.”

(WTF is “the system”? Never mind, I don’t want to know.)

Having decided, like Carchedi, that “the system” will not tolerate an increase in the consumption of the working class, (an observation that is entirely valid BTW), Kliman offers what alternative? In a long passage during which Kliman wrestles with himself and his dilemma, Kliman admits,

“It is one thing to recognize the instability of capitalism, but another to show that an alternative to it is possible.”

He adds,

“It would be disastrous merely to call for socialism while ignoring the problems of mass unemployment and foreclosed homes that may well persist for many years to come. Merely thinking about alternatives to capitalism while ignoring these problems is no solution either.”

Kliman is clearly having a problem here with his own theoretical dead-end: he knows state intervention in the economy doesn’t work but neither does merely demanding socialism. However since he is such a simpleton Marxist academic, he can only think in these two superficially contradictory forms. Still, he argues,

“Yet it is wrong to counterpose thought and activity in this manner. They are not opposites, but go hand-in-hand.”

Which is to say, the theoretical conclusion that there is no alternative to communism and the practical fact that there is no communist alternative go hand in hand. A page or two passes in his book, and still Kliman has no idea how these “not-opposites” facts can actually becomes not-opposites. A few pages later we learn the emancipation of the working class must be its own act — a truth not evident until Kliman told us, I guess. Now drifting helplessly, Kliman tells us we need to figure out how a society can be organized without capitalist relations of production — completely forgetting that is why the reader picked up his book in the first place. Finally, Kliman throws in the towel, stating

“I am painfully aware that these reflections are not yet an answer to the ‘Like what, exactly?’ question.”

Really, Andrew, I am pretty sure you did not experience the pain your readers must feel following this long-winded bullshit. In the end Kliman admits he hasn’t any more clue than Carchedi to the problem posed by the Marxist critique of Keynesian theory:

“Unless and until a credible answer is worked out, it seems to me that the most likely alternatives we face are either full-scale destruction of capital value, or persistent economic sluggishness, mounting debt burdens, and recurrent financial crises and downturns.”

The Marxist fraud

It is almost as if Carchedi, Kliman and the Marxist school were completely unprepared for the results of their own finding. Which, of course, means they never had any idea on measures short of useless demands for FULL COMMUNISM than equally useless demands for Keynesian reforms. This is an indication that the Marxist school has hit bottom and is now lying in the gutter — with Carchedi’s critique of Keynesian theory, Marxism is exposed as a fraud. It never had any answers to the crisis that were not simply a variation of Keynesian economic policy prescriptions.

The previously mentioned blog argues along the lines of Kliman and Carchedi:

“Capitalist accumulation has crisis written into its DNA. To survive there has to be the destruction of capital, so that it can revive itself for another round of accumulation. That means idle machinery, derelict buildings, unused materials, speculative bubbles bursting, high unemployment to lower wages, inefficient capitalists going bankrupt. After all, fiscal stimulus and the New Deal did not bring capitalism out of depression in the 1930’s. It was the material destruction of the second world war, the destruction of capital, and the defeat of the European workers movement by fascism. But despite this, some on the left still argue for a more militant and more full blooded version of Keynesianism advocated by the trade union bureaucracy, which is really nostalgia for the golden age of capitalist prosperity.”

Of course, the argument advanced here assumes even the destruction of capital can lead to revival of capitalism. This is not at all the case. While destruction of capital in this crisis is in theory necessary, there is no actual level of destruction of capital that is sufficient to allow for the revival of capitalism. By definition no amount of capital destruction can revive capitalism after the onset of absolute overaccumulation.

To an extent the lack of a Marxist alternative to fascist state economic policy was concealed by the success of fascist policies. Marxists were relieved of a need to offer an alternative short of communism because the crisis always resolved before the subject came up. But this depression is not going away, Marxist are having to face the fact that Keynes is not a solution to capitalist crisis and they don’t have one. Now that fascist state policies are failing to bring about a recovery, Marxists are being forced to admit they never had an alternative. And they haven’t a clue what an alternative even fucking looks like.

The complete fraudy of Marxism was concealed by the fact they could simply demand redistribution in favor of the working class and quietly ignore the massive destruction of productive capital the fascist state actually employed to recover from the crisis. Now that they have to face their theoretical poverty, they go on and on about the development of ‘antagonistic consciousness” and “workers’ can only emancipate themselves” and every other sort of useless bullshit.

The real problem is that they have been sleeping with the fascists on the pretext there were worse fascist (alternately described as neoliberals, minarchist libertarians, militarists — really take your pick ) lurking in the background. They argued the reduction of wage labor was worse than wage slavery and on par with unemployment. They bought into the argument that the fascist state could increase economic activity, that the distribution of the social product could be changed by government, and that employment could be increased by state spending. They even bought into the bourgeois myth that a reduction in hours of labor could lead to a fall in the consumption of the working class.

As if the activity of the working class had any connection whatsoever to do with the consumption of the working class.

As if it this activity was not aimed solely at the production of a surplus over their consumption.

As if a reduction itself did not have to reduce the mass of surplus value first before it ever touched on the mass of wages.

Surplus value results solely from that portion of the labor day beyond the period the value of the worker’s wages are produced. Reducing hours of labor cannot reduce wages unless it proceeds so far as to reduce necessary labor time.

The cause of capitalist crisis is always capitalism itself

In labor theory these three propositions must be true:

  1. The resolution of the crisis requires the destruction of capital;
  2. the capital that must be destroyed is the product of surplus labor time;
  3. the surplus labor time that produces the capital that has to be destroyed can only be reduced by reducing hours of labor

I really am not sure what is so fucking difficult about this for Marxists to grasp — even assuming they are simpletons. This is not some mysterious formula hidden in the crannies of macroeconomic calculus, it is simple labor theory of value. All the elements of this argument can be grasped without reading beyond the first few chapters of Capital. What amazes me is the some of these folks, like Kliman, actually hold positions in universities and can’t connect the dots. Instead we get pages of nonsense before Kliman finally runs out of ink and is forced to admit: “I am painfully aware that these reflections are not yet an answer to the question.”

Now that Keynesian economic theory has been debunked by Carchedi the real problem for Marxism emerges: In addition to having to define the aim of social emancipation, Marxism is now also confronted by a need to constitute goals short of this. As Kurz explained, Marxism’s fraudulent pose always rested on answering the problem of social emancipation after seizure of state power. The struggle for reforms short of complete emancipation was held to be the path forward, culminating in the seizure of political power. Only once this phase of struggle had been completed, and power lay in the hands of the working class, the real task of emancipation would begin.

With the complete debunking of the Keynesian scam, Marxism is now left without any narrative for the path to political power. And it should be seen precisely as a narrative, since no Marxist ever really had any idea how progressive reforms would produce a revolution. The idea that the struggle for reforms eventually end in revolution was a myth story Marxists told themselves in the absence of a real path. You cannot reform away money-relations, wage labor, commodity production, the machinery of state, etc. The Commune did not reform the state, it abolished it outright. Soviet production did not reform money-relations, the relations were abolished and replaced by a plan.