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A Few Words on David Graeber’s Guardian Article

April 22, 2013 Leave a comment

debt

David Graeber’s article in the Guardian, There’s no need for all this economic sadomasochism, is very disturbing because in it he adopts the argument of the MMT fascists. I want to state this clearly, although I am generally supportive of his activist work with Occupy, I think he is way off on this idea.

First he starts out by making the patently absurd argument that the euro-crisis is about morality, not profit:

“After all, as I and many others have long argued, austerity was never  really an economic policy: ultimately, it was always about morality. We are talking about a politics of crime and punishment,  sin and atonement.”

This, he knows, is not an accurate portrayal of austerity, but simply one that dovetails with his notions on debt in general. The aim of austerity has no more to do with morality than a tax on cigarettes has to do with discouraging smoking. The aim, in both cases, is to maximize fascist state control of economic life and maximization of profit through this control.

He then accuses Dutch and German voters of “fiscal sadism” because they don’t want their wages to bail out the holders of fascist state  debts in Greece and Spain. What sort of nonsense is this? They should simply lie down and allow the banks to rummage in their wallets? The resistance to bailing out the Greece fascist state has less to do with “fiscal sadism” than a desire not to bail out German banks. I think, it is important we do not lump German voters in with German banksters in this crisis. While it is true, “Politicians locate economic theories that provide flashy equations to justify the politics”, this has nothing at all  to do with the resistance of overwhelmingly working class voters to having their pocket picked by these politicians.

This conflation is bad enough, but then Graeber goes in to embrace the theoretical arguments of the fascistic Modern Money Theory (MMT) school. MMT is a ‘theory’ on the workings of so-called modern money, i.e., fascist state issued valueless counterfeit currency that began in use following the Great Depression. This counterfeited currency is employed by the state to manage economic activity within capitalist economies. It is the instrument by which the fascist state functions as national capitalist managing the national capital as direct exploiter of labor. It is impossible to employ this ‘theory’ in the interests of the vast majority of the society, who are being directly exploited by the state through the use of this currency.

Moreover, if MMT is correct, the problem faced in the euro-crisis exactly opposite of what it appears: there is not too much state debt, but too little. In modern money theory without sufficient debt, the excess capital sloshing around the system has no place to be profitably invested. To find a place for this fictitious capital, MMT argues, the fascist state must create an ever increasing quantity of debt instruments.

Which is to say, for German mercantilist policies to produce ever increasing quantities of excess capital, Greece must, at the same time, issue ever increasing quantities of bonds to absorb the German surpluses. Side by side with the German workers compelled to work long hours to produce otherwise unsellable exports, we get Greece workers working long hours to pay otherwise unrepayable public debts.

What sort of bullshit is this to adopt into Graeber’s anti-statist message?

The MMT argument is not particularly disturbing in itself. It merely carries the bourgeois economist’s argument to its absurd limits. What is disturbing, however, is the idea this “theory” is gaining any traction among antistatists. It is a completely fascistic theory that deserves only to be opposed wherever it rears its head.

Anti-statists have their own solution: wipe out all debts without exception and reduce hours of labor for the mass of society.

Anti-statists should not be trying to figure out how the states of Europe can carry even bigger loads of debt. Fuck the banksters — they can all go to hell and take their fascist mini-states with them.

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.

Guglielmo Carchedi’s bad advice for activists

December 16, 2012 Leave a comment

kelley

Keynesian economic policies don’t work, but fighting for these policies will?

Guglielmo Carchedi’s essay on the so-called Marxist multiplier has me bugging. He is handing out bad advice to activists in the social movements and telling them this bad advice is based on Marx’s labor theory of value. The bad advice can be summed up concisely: Keynesian policies do not work and cannot work, but the fight for these policies (as opposed to neoliberal policies) can help end capitalism:

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.

Frankly, Carchedi’s advice is the Marxist academy’s equivalent of medical malpractice. (For the record, Michael Robert’s has his own take on the discussion raised by Carchedi’s essay.)

Read more…

Letter to the Occupy Movement: The jobs number you never hear about says Washington’s fucked

October 5, 2012 1 comment

Here is an interesting chart from Zero Hedge: In data going back to 1980, employment for younger workers aged 20-24 has never increased — that is, it has never increased until this year:

I know what you are thinking: the data provided by Washington is a fraud. I am going to show why, even if we take that chart on its face value as genuine, Washington is completely fucked. I am going to subject the entire category “employment” to an analysis using Marx’s labor theory of value. By “employment”. of course, I mean wage slavery; which means, although it is commonly treated as a good, it is actually an evil. But, I intend to treat this “employment” on its own terms, as it is commonly held a some sort of social good.

Let’s begin with this morning’s non-farm payroll report — 114,000 net hires in the economy and an unemployment rate of 7.8%. Both of these numbers are, of course, cooked beyond all credibility, but this is not the point. It doesn’t get us any closer to the actual situation to state (as the GOP will, no doubt) that Washington cooks the unemployment numbers. Dems cook the books when they control Washington, the GOP cooks them when they are in control.

Washington has always cooked the numbers — now the numbers are burnt beyond all recognition.

(First a note about this morning’s serving of cooked data: According Mish Shedlock, the minimum net new hires needed just to keep the unemployment rate flat is 125,000 per month. Last month there were 114,000 net new hires, however the unemployment rate declined from 8.1% to 7.8%. So, before you Obama voters celebrate, you should be aware than the economy did not even provide enough new hires to offset people coming into the labor force looking for jobs.)

Compulsory employment growth and inflation

It is the labor force participation rate that is most revealing in the numbers. The labor force participation rate (the blue line in the chart provided by Calculated Risk below) peaked in 2000-2001 and has been on a slow decline since that recession. From a high of just over 67%, that rate has now fallen to about 64% in this report. This reverses a trend of increasing participation in the labor force — folks actively seeking work — that goes back at least to 1962, according to the data available to me. Since 1962, in other words, as a general rule each year has seen more people trying to get a job than the year before. This trend higher reverses in the 2001 recession, and as a general rule, each year fewer people are participating in the labor force.

Why is this reversal in labor force participation important to analysis? Well, let’s look at this statement by President Truman in 1950 speaking of the military buildup that commenced with the start of the Cold War:

“In terms of manpower, our present defense targets will require an increase of nearly one million men and women in the armed forces within a few months, and probably not less than four million more in defense production by the end of the year. This means that an additional 8 percent of our labor force, and possibly much more, will be required by direct defense needs by the end of the year.

These manpower needs will call both for increasing our labor force by reducing unemployment and drawing in women and older workers, and for lengthening hours of work in essential industries. These manpower requirements can be met. There will be manpower shortages, but they can be solved.”

Following World War II, Washington set it as a priority that the labor force should steadily increase each year, in order to siphon off a portion of this growth for its military expansion. This goal was secretly given legal form as National Security Council Report 68. The goal of “full employment” was made the primary labor policy of Washington in 1946 and renewed in 1978.

“Full employment” in this case should be understood as full employment of labor power resources. In other words, it was the policy of the United States to seek full employment of its labor power resources for its strategic national ends. This “full employment” policy was sold to Americans as Washington’s commitment to providing a job to everyone who needed a job.

Which is fine and dandy, except at the same time, Washington was deliberately debasing the currency, driving up prices, and forcing more folks (particularly women) into the labor force to compensate for falling consumption, and moreover, forcing people to work well past their retirement. So what at first appears to be a benign policy, even an commendable agreement between Washington and its citizens that it would do everything in its power to create jobs, turns out to be a policy of forcing every person under its domination to look for work.

Children barely off the breast were abandoned to daycare warehouses, so mothers could find work just to pay for daycare; even substitute formulas for the breast were devised, so children could grow up attached to a rubber substitute for their mothers; essential functions within the home like child-rearing were thus commodified. And this, in turn, led to its own set of social ills, as women were assaulted by their bosses, discriminated against in their careers and under-paid — as the nation was convulsed with real or imagined terror of child abuse in day care centers. A generation of children were now referred to as “latch-key kids”, and teenage pregnancies proliferated. The elderly went back into the work force and became greeters at Wal-Mart, as people delayed or altogether gave up on the idea of retirement, unable to amass sufficient savings to stop working. Taking care of the elderly itself became a commodity sold as nursing home care.

Still, labor force participation increased despite these horrors.

Compulsory employment growth and debt: the hidden relationship

Hand in hand with this goes the ever increasing accumulation of consumer debt that working folk used to compensate for stagnant wages, despite the fact that each family was working more hours than their parents had. And all of these ills, which list could be extended almost indefinitely, appeared to have no cause other than the individuals themselves. If someone ended up working in a Wal-Mart at 70, it was because they had not saved enough; if a woman abandoned her child to day care, it was because she or her husband had not spent enough time in college; if teenagers were now getting pregnant at 13, it was because the morals of society were collapsing.

No one looked at Washington and said, “You fuckers are responsible for this!” And, if by chance, someone did say this, it was only in the form: “You democrat fuckers have tied up the economy with your regulations”; or, “You Republican fuckers have crippled Washington to the point that government can’t provide enough stimulus to create full employment.”

No matter what the policy advocated — tax cuts or spending increases — there was always someone to assure us it would create jobs and pay for itself with “increased economic growth”. Through most of the period from at least 1980 until now the growth of employment has always been proportional to the increase in debt. From 1980 until at least 2006, the savings rate of American declined until it went negative entirely in 2004-2005. It is particularly interesting that the saving rate actually touched near zero just as the labor force participation rate reached its peak.

The problem with the latest employment figures, however, is not to be found in the effects of a rising participation rate on working families, either in the form of social ills or the accumulation of debt. It is that, no matter these ills and no matter the accumulation of debt, total hours of labor must increase — the fate of capitalism depends on this growth.

But, it is not increasing.

Why compulsory growth of employment is necessary for Washington

Capitalism is a mode of production where the employment of labor power must constantly increase, no matter what the consequences. This mean, the duration of labor must constantly rise, a duration that is a function of the number of workers times their hours of work. Washington and the political parties always directs our attention to the unemployment rate, which figures are usually cooked, but, what really matters for Washington, is not the unemployment rate, but the duration of the social working day. At least this seems to be what is relevant, from the standpoint of Marx’s theory.

According to the date I have access to, social labor day has fallen only four times in the last 36 years: briefly in 1991 and again in 2001, and in a sustained way from 2007 to 2009. In other words, since this depression began in 2001, the total hours of work has fallen 3 years between 2001 and 2009. The response to this fall the first time, was the Bush tax cuts, Paul Krugman calling for a housing bubble to replace the NASDAQ bubble Bernanke’s speech on deflation, and Alan Greenspan being asked to retire from the Fed.

The second and third times the total social labor day shrank, coincided with the collapse of the financial system and Fed monetary policy.

This argues that this measure of economic activity is more significant than the hype over non-farm payroll numbers would have you believe. Such an argument might be said to be based entirely on coincidence, were it not itself based on the arguments of Postone and Kurz. They suggested the social labor day must constantly expand if existing relations of production are to be maintained.

What is more, each writer comes to this conclusion from different premises, i.e., different and contradictory notions of value. Postone’s argument suggests that the total labor time of society must expand despite the contraction of socially necessary labor time in the forms of value and surplus value; while Kurz suggests the increasingly fictional quality of credit, of fictional claims to future profits, requires the constant expansion of total labor time of society. In either case, Postone in 1993, and Kurz in 1995, using different notions of value, argue the total labor time of society must increase. And when, in fact, this total labor time actually did not increase, first a depression was triggered, then a financial collapse.

But, I hear you: ‘I am still not convinced by the evidence — it could, after all, be a really good scientific wild-assed guess on the part of those writers.’

Good point! Evidence suggests each writer, Postone and Kurx, was familiar with the writings of the other — so this could be just another instance of group-think. Instead of just going from Postone and Kurz to the empirical data, we need to go from Postone and Kurz back to Marx’s argument to establish a logical chain of reasoning, and figure out if, in fact, these guys were just making a wild guess.

In Marx’s argument, capitalism is not just a system of commodity production; it is a system of surplus commodity production, of the production of surplus in the form of commodities, of the production of surplus values. As a system of commodity production that aims always at the production of surplus value, capitalism relentlessly aims toward self-expansion beyond its given limits — as Marx put it, it employs existing value to create surplus value. Both Postone and Kurz employ this argument to uncover the absolute necessity of capitalism, at a certain stage in its development, to produce a sector consisting entirely of superfluous labor. In fact, Marx himself hints at just this result in volume 3, when he writes:

“If, as shown, a falling rate of profit is bound up with an increase in the mass of profit, a larger portion of the annual product of labour is appropriated by the capitalist under the category of capital (as a replacement for consumed capital) and a relatively smaller portion under the category of profit. Hence the fantastic idea of priest Chalmers, that the less of the annual product is expended by capitalists as capital, the greater the profits they pocket. In which case the state church comes to their assistance, to care for the consumption of the greater part of the surplus-product, rather than having it used as capital.”

Marx is clearly suggesting the unproductive consumption of the total social product becomes increasingly necessary when he closes with the wry comment:

“The preacher confounds cause with effect.”

Still later, Marx decries the result of this process:

“In the first place, too large a portion of the produced population is not really capable of working, and is through force of circumstances made dependent on exploiting the labour of others, or on labour which can pass under this name only under a miserable mode of production.”

Which is to say, a growing mass of workers makes its living by subsisting on the surplus value of the productively employed population. So, for me at least, there is a clear line beginning with Marx, through the argument of Postone and Kurz, that is expressed graphically below in the empirical data on the social labor day:

This decline is far more significant than the manipulated data foisted on the population of voters this morning. It suggests there is a real material dysfunction in fascist state economic policy that cannot be altered with a set of misleading stats. Beyond the convenient and willful ignoring of the shrinking labor participation rate, and the mass of unemployed no longer counted, the data suggests a situation that cannot be repaired by confidence tricks designed to keep the two parties in power.

Almost a fifth of the population is now permanently locked out of the labor force — the highest on record — according to Zero Hedge calculations:

If hours of labor do not expand at a sufficient rate to sustain existing relations of production, the entire Ponzi scheme must collapse. This process has probably already begun, which explains the insanely desperate actions of the Federal Reserve over the past month.

Kicking Capitalism Down the Road: Occupy Wall Street and Debt

October 1, 2012 Leave a comment

The entire point of bourgeois misdirection in this crisis is to convince us that our choices are between debt or unemployment — that is between “growth” and “austerity”, and between taxes and reductions in our pensions, social security, and wages; that is, a choice between “kicking the can down the road”, or “taking our medicine now”.

It is important that the debate be framed this way, because these are the only two options consistent with existing relations of production. Since these choices are both consistent with existing capitalist relations of production, the fascist state does not care which option you choose. Just as Washington does not care whether Obama or Romney wins the next election, it does not care whether this crisis is resolved by debt or unemployment. You are free to make your choice based on what feels right to you — letting people go years without a job, or piling up the public debt.

Your choices are posed in this way because it is assumed you have already accepted the premise of these choices: It is assumed you have accepted the idea that this crisis can only addressed at your expense. You have, therefore, accepted the premise that you must either take the hit to your standard of living now, or in the future. Whether you take the hit now or in the future, you accept that this is the only way forward.

This is why there are so many people running around trying to stock up on guns, beans and gold — assuming the big hit is coming. It is just a matter of time, we are told — shit is going to get funky.

It is absolutely necessary that you never question this premise, and everything is aimed at preventing you from ever questioning this premise. This is not just the message coming from Washington and its servile agents in the media and economics profession; it is also the message delivered on the Left and the Right. On the Right, it is expressed in a demand to end the deficits no matter what the cost, on the Left it is expressed in a demand to end austerity no matter how this ends in more public debt.

It is not just that these contradictory demands appear as polar wings of politics, it is that the demands themselves must be posed as an unbridgeable contradiction. In fact, there is nothing that prevents the Left from adopting the Right’s demand against deficits as well as its own against austerity. And there is nothing that prevents the Right from adopting both a demand against deficits and a demand against austerity. But if this phony contradiction is not maintained, there is no Left or Right — and the point of politics is that there should always be a Left and a Right.

I think this is the revolutionary significance of the Occupy movement’s idea of addressing debt; it breaches this false contradiction. Occupy, which has already clearly taken on austerity, is now adding the question of debt to its argument. With a movement that opposes both austerity and debt, the phony opposition between Left and Right will be ended. Combining a demand against austerity with a demand against debt, announces working people will not pay for this crisis now or in the future. It throws down a gauntlet to Washington and Wall Street in the form of a demand that is not consistent with capitalism or the state.

The significance of these two modest demands against austerity and debt, when combined, are far greater than it may look on the surface. For instance read this quote from David Graeber:

“One realization really startled me when researching the book: that is, the realization that throughout human history, most people have been in debt. Think about it for a second. Could the majority of the human race really be improvident failures unable to manage their affairs, and thus justly dependent on the rich? Of course not. Rather, states and elites have always colluded to ensure that their subjects become debtors; not least, because debt is the easiest way to take a relation of violent inequality, of violent extraction, and make it seem not only moral, but make it seem like it’s the victim who’s to blame.”

How does this describe euro-austerity and the continuing argument that Greece “deserves” austerity now because of its past public profligacy? The fact is the public debt Greece accumulated in the past was just the inter-temporal shift of austerity and nothing more.

And not only private debt, but public debt more so, since Washington can, through its inflationary monetary policy, extend the impact of this austerity throughout the world market. Washington can, therefore, under the pretext of increasing its own debt, impose an austerity on every nation trading in dollars.

Debt, Inflation, Unemployment and Austerity

Consider the problem of debt and austerity from another perspective: In an austerity, unemployment rises, wages and pension are slashed. An increase in debt now is nothing more than the inter-temporal transfer of these same effects over some period of time going forward — wages and pensions are gradually slashed over time. This is accomplished through inflation, and can be made to appear as the result of “natural” forces rather than deliberate policy.

Employment growth slows and persistent high level of unemployment can last for a decade or more. What is accomplished all at once in an austerity regime is, with debt, accomplished over a period of time. All the effects of austerity are still felt by the mass of society, but the torture is extended sometimes a decade or longer.

The state must impose this austerity on behalf of capital because it nothing more than capital organized as the state, but the question is whether the population will accept it all at once, or whether it must be stretched out. This is politics — how much pain can the proles take, and it is a practical question. If people surround the government and demand it resign, this government can be replaced by one “committed to growth”, i.e., the accumulation of even more public debt.

Although this new government only promises to stretch austerity over a decade, instead of imposing it all at once, it is sold as compassion. Twenty five percent unemployment now, or ten percent over the next decade; slashing wages and pensions now, or inflating away their value and compelling people to work longer — make your choice, folks. In either case, the mass of society suffers the effect of unemployment and reduced subsistence through state policy.

Occupy is taking on precisely this policy in both of its possible manifestations. It is combating both an immediate imposition of an austerity regime and an inter-temporal imposition of this regime through debt.

We have to consider also the relationship between unemployment and wages: the reduction of wages is the aim and unemployment is the means. In a market where there is low unemployment, there is less competition among the working class — it has the opportunity to organize itself. Moreover, even where there is some unemployment this occurs against a backdrop where this unemployment is unevenly distributed — in specific sectors or regions of the world market the demand for labor power may even exceed the supply. The impact this has on profits is obvious, and the capitalist class responds to this with all the means at its disposal — introducing new machines, reducing wages, layoffs.

What Keynes explained to the capitalist class is that its typical response to this condition — slashing wages — is counterproductive. Since the Great Depression, profitability cannot be restored simply by slashing wages — as Greece and Spain is demonstrating graphically. What is gained by slashing wages, is lost when the working class goes into the market to purchase goods. The state, Keynes argued, can accomplish the task far more efficiently than capitalists in slashing wages. This is because the method employed — debt — has the effect of subsidizing profits even as the purchasing power of wages fall.

Of course, Kurz explains, this results in the accumulation of debt that cannot be paid off — but that is the can that must be “kicked down the road”. In the long run the debt cannot be paid off, but in the interim it can transfer the product of labor from wages to profits. And, as Keynes observed, in the long run you will be dead after having slaved your entire life away to service that debt.

It is not just private debt that transfers the product of labor from one class to the other, state debt has this very same effect. Your take home pay doesn’t change, but the prices of what this take home pay buys spirals out of sight. In the choice between austerity and debt, debt is actually the preferred option because the state doesn’t provoke people into the streets. As Keynes explained in his General Theory, unions will fight a cut in their wages, but not one imposed through debt and inflation.

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

I bet you could count the number of major demonstrations against inflation in the past forty years on a single hand — I know of no strikes produced by it. Nobody ever surrounded the congress to demand a reduction in inflation nor fought the police in the streets with firebombs because of it. As a matter of fact, the prima facie silliness of the euro-austerity regime in Spain, Greece, Ireland, Portugal etc., suggests the states and ruling classes of those nations are now trapped and cannot employ debt to meet their aims.

By taking on the issue of debt Occupy is in fact taking on one of the most powerful tools in the state’s arsenal for imposing austerity — debt. Occupy is showing that it is not just a matter of austerity versus debt, but also of austerity through debt. The debt campaign is big because it calls bullshit on both the Democrats and the GOP and can appeal to whatever healthy elements remain in the Tea Party.

*****

As a side note I also want to point out that not one Marxist critic of David Graeber was able to uncover this hidden connection between debt and austerity that Occupy has discovered purely through its practical activity alone. This includes that asshole over at Jacobin, Mike Beggs; that “humanist marxist” Andrew Kliman; Dean, Deseriis, and a host of other imbeciles. Nor does it appear in the writings of Marxists who feel an obligation to repair capitalism, such as Dumenil, Levy, Saad-Filho and that sorry lot.

What good is a goddamned theory if the people using it are idiots.

Oh yeah. And fuck Zizek too!

Reply to Deseriis and Dean on OWS: “Fuck you and fuck Zizek too!”

September 27, 2012 Leave a comment

Marco Deseriis and Jodi Dean have opened their sectarian Marxist pie holes to argue Occupy is unable to address “division within the movement”. Their nonsense is posted to Kasama Project here.

Their trash is titled, “A movement without demands?”; but its real complaint can be better stated as “A movement without politics?”. Since Marxists can only conceptualize a movement of society as a political movement, Occupy’s refusal to raise political demands is confusing.

There is, Deseriis and Dean explain, a division within Occupy that many want to deny. However, to become more than a protest movement, Occupy will have to “acknowledge division, build alternative practices and organizations, and assert a commonality.” I think this is a bold assertion, since, so far as I can tell, neither of these two idiots has any accomplishment building anything.

I mean, when I was just a dumb kid, I went on a trip to China as guest of the Communist Party of China — it was a big deal to me. Here I was going to the place only just recently presided over by the great Chairman Mao himself. Surprisingly, although this party had in fact liberated China from the sphere of US hegemony, reorganized society along completely different lines, and turned the capitalist class into docile toadies, never once did anyone there say, “This is how you do it.” They had done it, but never once acted as though their practice had any particular significance for our own. They even emphasized that Mao’s ideas were only “Marxism-Leninsm adapted to the conditions of China” and did not have global significance.

But, Mr. Deseriis and Ms. Dean, who have never built a thing in their lives apparently think this lack of accomplishment sets the stage for them to “educate” the Occupy on how “to metamorphose from a protest movement into a revolutionary movement”. The fucking arrogance of these two imbeciles is just breathtaking.

According to Deseriis and Dean, apparently the objection to turning Occupy into a political movement arise from three different arguments within the movement. These arguments state that political demands are by definition not representative; that they reduce the autonomist character of the movement; and that they subject the movement to threat of being co-opted.

Deseriis and Dean take each of these three objections in turn, based on …what? Experience? No. It actually results from Deseriis’s and Dean’s diagnosis that what really bedevils Occupy at this point in its evolution is that it refuses to acknowledge the principle problem faced by the movement is not the state, but Occupy itself.

“The problem is that the objection as it has been raised in the movement misconstrues the location of the division that matters.”

Really? How so?

“The co-optation objection presents the problem as between the state and the movement rather than as a division already within indeed, constitutive of, the movement itself.”

According to Deseriis and Dean, then, the problem is not Wall Street, but Occupy Wall Street; the problem is not the one percent, but the 99%. The resistance of Occupy to reconfiguring itself as a mere political movement suggests it wants to suppress divisions within itself and these divisions are expressed in an aversion to raising political demands. But this aversion is entirely misplaced, Deseriis and Dean explain,

“First, we can make demands on ourselves. Second, demands are means not ends. Demands can be a means for achieving autonomous solutions. When demands are understood as placed on ourselves, the process of articulating demands becomes a process of subjectivation or will formation, that is, a process through which a common will is produced out of previously divergent positions. Rather than a liability to be denied or avoided, division becomes a strength, a way that the movement becomes powerful as our movement, the movement of us toward a common end.”

This argument appears quite rational — indeed it looks all dialectical and shit, Hegelian even — on the surface. But, let me ask Deseriis and Dean one question: Is not the state itself already this “subjectivation or will formation” that naturally emerges out of the divisions of society?  And why must we replace the existing “subjectivation or will formation” of the existing state with just another form of “subjectivation or will formation”?

Is the social revolution simply the replacement of one form of impersonal subjectivity with another? Or is it the abolition of all impersonal subjectivities?

If one is looking for a process unequalled by “which a common will is produced out of previously divergent positions” we already have one: the bourgeois democratic state. The periodic elections within the state, with its cesspool of corruption and parasitic collusion, gives us the opportunity to forge a “common will” every four years.

If this is what the Occupy should aspire to be, in the opinion of Deseriis and Dean, no matter how much this is framed in the form of obligatory references to “the commons” — that sacred institution of Marxist dogma — it is not just a dead end, but ignores the fact that every socialist state in the 20th Century was based on common ownership of the means of production.

And every one of them proved to be a horrific failure.

Does my argument deny the existence of divisions within the Occupy movement? Of course not. But these divisions cannot be overcome with some barbaric and regressive attempt to create a common will out of previously divergent positions; rather, it requires the end of circumstances by which individual wills are compelled into a state of absolute dependence and universal competition with one another.

Deseriis and Dean are deliberately confusing the need for associative management of common resources, with the needs for a common will. This is based on a fundamentally flawed Marxist analysis of the problem facing mankind. The problem is not that the common resources of society are not subject to a common will, but that the will of each individual has been subjected to the control of common resources.

Whatever form this control takes — individual, cooperative, or state ownership — the individual has always been subject to this form. It is always the commons of society that acquires subjectivity at the expense of the members of society. In the social revolution it is otherwise, the individual achieves true subjectivity, and the commons is reduced to mere means. Wal-Mart is just a place to buy toilet paper to wipe your ass after a satisfying shit — there is no reason it should be dominating our lives in any incarnation — individual, cooperative or as the common property of society.

My reply to Deseriis and Dean, therefore, is the same as my reply to Kliman:

“Fuck you and fuck Zizek too!”

Marx’s Inconvenient Truth for Marxism and the Left

July 2, 2012 9 comments

In 2003, Michael Lebowitz asked an interesting question: What Keeps Capitalism Going? What explains the persistence of an exploitative relationship in which the working class must sell their labor power to the capitalists who own the means of production. This latter group — the capitalists — have no concern for the workers, Lebowitz explains; they have only two interests in the outcome of this exchange: profits and more profits. The purchase of the worker’s labor power allows the capitalist to direct the workers in the act of production for the purpose of producing more capital; and this new capital goes back into the process of producing even more capital. According to Lebowitz this was what Marx was trying to tell us in books like Capital:

This was the central message that Marx was attempting to communicate to workers. What is capital? It  is the workers’ own product which has been turned against them, a product in the form of tools, machinery—indeed, all the products of human activity (mental and manual).

When I read this passage, I wondered why Lebowitz considers the capitalist exploitation of the worker to be the central message Marx wanted to communicate to the working class? In the 19th Century almost everyone knew labor was the source of the wealth capital produced — even bourgeois economists admitted it. The capitalist and worker engaged in constant conflict over both the division of the working day and, more importantly, over its length. Is Lebowitz suggesting working people are now too dense to understand how their companies make money? But I thought, okay, so let’s see where he is taking us with this revelation.

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