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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!

The Black Hole: Marxism, the State and the Social Revolution (3)

August 13, 2011 Leave a comment

“…the more does it actually become the national capitalist, the more citizens does it exploit.”

In the first part of the series, I made three critical assumptions about present political-economic relations.

First, in 1929, Capitalism suffered a general breakdown, brought on by absolute over-accumulation — absolute over-production. This crisis, known popularly as the Great Depression, occurred in every major industrialized nation in the world market, and constituted a global over-accumulation of capital that was irreversible. It took the form of a great mass of unemployed workers, side by side with a mass of unemployed means of production and subsistence.

Second, the fascist states which emerged from this economic catastrophe took the form of the ‘political rule of the proletariat over itself’, effected through its suffrage in the nations where it formed the largest class.

Third, the only alternative solution to the breakdown of capitalism and the “political rule of the proletariat over itself” was and remains the reduction of labor hours.

I also attacked the “Marxist theory of the state” and argued this “theory” is, in fact, not supported by Marx’s critique of capitalist society. So far as I can determine, not a single point of Althusser’s 1970 statement of the ‘Marxist theory of the state’ is found either in Marx’s or Engels’ writings of the state. While it is true, Althusser agrees with historical materialism that the state is an organ of class rule, this simplistic description of the state is ahistorical and does not satisfy the historical materialist description of the capitalist mode of production as a distinct historical stage in the development of the forces and relations of production.

Althusser’s statement can be applied to any epoch of human civilization, and to every known mode of production. It does not explain what of the capitalist state is specific to the capitalist mode of production and the social relations within society that are founded on this mode. What is specific to the state under the capitalist mode of production is not merely, or even primarily, that it is an instrument by which the ruling class imposes its will on society: in the writings of Marx and Engels, the state under the capitalist mode of production is “essentially a capitalist machine,” that displaces and renders the capitalist class itself superfluous to the mode of production and functions as the national, i.e., social, capitalist.

Althusser treats the state as an ahistorical category, not as a real thing situated in the capitalist epoch. The state is reduced to an instrument of repression, which appears in the capitalist epoch already in its complete and unchanging form. Essentially, Althusser recycles Duhring’s argument on force and dresses it in 20th Century “Leninist” clothing. While he does not go so far as Duhring and Anarchism to give force the determining role in historical development, he treats the state itself as essentially unchanged by the material changes in society.

This essentially static view of the state can not help us understand our present condition, as it throws no light on existing social relations.

*****

In the second part of the series, I examine Lenin’s and Kautsky’s argument that the class conflict takes place completely within the bounds of a commercial transaction and confirm it as agreeing with my understanding historical materialism. The recognition by Lenin and Kautsky of the limits of the purely economic struggle — of the struggle with the capitalist over the terms and conditions of the sale of labor power, however, is converted by Leninism into an argument that the proletariat is incapable of carrying out its historical mission of burying capital without theory. And, since the proletariat is not “the bearer of theory”, into an argument for a vanguard party.

The argument for a Leninist vanguard party on these grounds, however, is a non-sequitur, since, despite the limitations of the economic struggle, historical materialism insists the working class abolishes capital based on empirical comprehension of their circumstances — not on a theory purporting to describe these circumstances.

Marxists take Kautsky’s and Lenin’s arguments completely out of context of the capitalist mode of production itself, and abstracted from the impact the mode of production has on the state. Although the conflict between capitalist and wage laborer is essentially a commercial conflict, Engels description of the State shows how the capitalist (as personification of the relationship) is progressively displaced by the state as Capital develops. The marginalization of the capitalist does not resolve — overcome — the class conflict; rather, it converts it into a directly political struggle. Which is to say, the worker to assert her purely commercial interests in the class conflict, must also assert her political interest against the state.

If, on this basis, historical materialist investigation of the Fascist State refutes the arguments of the Marxists who trace their thinking to Lenin, still more clearly does it refute the European Social-Democrats who, having thrown Marx and Engels out the window entirely, propose to tinker with existing relations to render capitalism more humane. This latter gang of opportunists aspire to nothing more than perfecting the Fascist State as the social capitalist.

Against both failed variants of this tradition, we demand not a new brand of sectarian organization, nor reform of politics, but the abolition of the state.

*****

While the historical task of the worker is simplified by the convergence of Capital and the State power and the emergence of the Fascist State, it is obvious this fascist state rests on universal suffrage of the proletarian majority. To put it bluntly, in her political activity the worker constitutes the very machinery of exploitation against which she fights. Her commercial interest as a seller of labor power, sparks her political activity to ensure this sale is consummated; the terms and conditions of this sale, and the prerequisites of these, figure as this or that economic policy of the fascist state. On the other hand, the enlargement of the state, its increasingly pervasive economic role, is no more than the expansion of the state as social capitalist and must lead to the ever increasing exploitation of the worker. The more she struggles to realize political relations to satisfy her requirements as a seller of labor power, the more indifferent the State becomes to her needs as a human being.

This must lead to two results that I can think of:

In the first instance, what was once concealed beneath purely monetary relations must become increasingly obvious to the proletarians: that their activity is the enlargement of an alien power standing over against them. As the state becomes the social capitalist, what was previously only a theoretically derived conclusion regarding the relationship between capital and wage labor is made explicit and comprehensible to the worker.

In the second instance, the increasingly comprehensible relation between capital and wage labor appears, not in its commercial form, but in the form of increasing antagonism to the fascist state, and to its role as social capitalist, stated in a political form, i.e., as demands against the state. However, expressed in this purely political form, it is now the empirical expression of a radical critique of all existing relations.

The Black Hole: Marxism, the State and the Social Revolution (2)

August 11, 2011 1 comment

Karl Kautsky

(I want to clarify that I am discussing certain writers, while withholding judgement on their overall work. It is not my intention to assert they were wrong in their time and place, only that their arguments have been taken out of context by what is currently referred to generally as “Marxism”. Moreover, by “Marxism” I include the body of work that traces its origins to both the Soviet experience and to Western Social-Democracy.)

Convergence of the economic and political conflict in society

In the first part of this series, I introduced some fundamental assumptions about 21st Century society. I also took issue with the Marxist theory of the state, as elaborated by Louis Althusser in his 1970 work, Ideology and Ideological State Apparatuses. Now, I want to sketch out my understanding of the historical materialist conception of both the State and Capital, in order to trace the error in the ‘Marxist theory of the State’ back to its likely roots.

The nexus of the relation between the two appears to arise just before Lenin and his work, What is to be Done. In chapter II of this book, Lenin quotes Karl Kautsky on the relationship between Marxist theory and the practical economic struggle of the working class:

“Many of our revisionist critics believe that Marx asserted that economic development and the class struggle create, not only the conditions for socialist production, but also, and directly, the consciousness of its necessity. And these critics assert that England, the country most highly developed capitalistically, is more remote than any other from this consciousness. Judging by the draft, one might assume that this allegedly orthodox Marxist view, which is thus refuted, was shared by the committee that drafted the Austrian programme. In the draft programme it is stated: ‘The more capitalist development increases the numbers of the proletariat, the more the proletariat is compelled and becomes fit to fight against capitalism. The proletariat becomes conscious of the possibility and of the necessity for socialism.’ In this connection socialist consciousness appears to be a necessary and direct result of the proletarian class struggle. But this is absolutely untrue. Of course, socialism, as a doctrine, has its roots in modern economic relationships just as the class struggle of the proletariat has, and, like the latter, emerges from the struggle against the capitalist-created poverty and misery of the masses. But socialism and the class struggle arise side by side and not one out of the other; each arises under different conditions. Modern socialist consciousness can arise only on the basis of profound scientific knowledge. Indeed, modern economic science is as much a condition for socialist production as, say, modern technology, and the proletariat can create neither the one nor the other, no matter how much it may desire to do so; both arise out of the modern social process. The vehicle of science is not the proletariat, but the bourgeois intelligentsia: it was in the minds of individual members of this stratum that modern socialism originated, and it was they who communicated it to the more intellectually developed proletarians who, in their turn, introduce it into the proletarian class struggle where conditions allow that to be done. Thus, socialist consciousness is something introduced into the proletarian class struggle from without [von Aussen Hineingetragenes] and not something that arose within it spontaneously [urwüchsig]. Accordingly, the old Hainfeld programme quite rightly stated that the task of Social-Democracy is to imbue the proletariat (literally: saturate the proletariat) with the consciousness of its position and the consciousness of its task. There would be no need for this if consciousness arose of itself from the class struggle. The new draft copied this proposition from the old programme, and attached it to the proposition mentioned above. But this completely broke the line of thought…”

Kautsky’s statement concerns the formation of consciousness under the capitalist mode of production. In it he proposes a dual track model of communist consciousness, where the direct conflict between wage labor and capital coexists side by side with, but separately from, the understanding of the implication of this conflict. The worker is engaged in the direct struggle, the intellectual brings to her a consciousness of the implications of her struggle — the need for her to assume control of the state.

In chapter III of the above book, Lenin imports Kautsky’s statement into his argument against what would later become the Mensheviks in Russian communism. However, we now have a problem: societies do not imagine themselves into existence. (I got this statement from somewhere, but can’t remember who, perhaps the Marxian writer Chris Cutrone) This is, in my opinion, a restatement of the fundamental historical materialist assumption — material conditions first, ideas second.

Kautsky’s statement, therefore, violates a fundamental assumption of historical materialism — its most important assumption. Perhaps a correction is in order: he does not directly violate this assumption, since he is only talking about Marx’s theoretical conclusion. As a theory, he may be correct, but communism cannot possibly rest on general acceptance of a theory. Which is to say, communism, as a real movement of society, must have been inevitable even if Marx had not discovered it. If the science had advanced no further than, say, Ricardo or Hegel or St Simon, the emergence of communism would still occur.

Discovering this inevitability, of course, was science, and this is a product of the intelligentsia — but not the historical process itself. The result is, if all communists were to disappear tomorrow, this process would still unfold according to its own logic. Communists are superfluous to it — a fifth wheel. We can no more change the outcome than can Ben Bernanke over at the Federal Reserve Bank.

I tried this argument out at Kasama.org and (after having a collective seizure) they asked me if this was true why was I a communist? More importantly, Why was Marx a communist? Why did he organize the working class movement? I had no real answer for this at the time.

I do now, because a tweep, @, asked how I would explain 1929 from a materialist perspective.

I think it was because Marx saw 1929 coming, and the implications of the Event — Engels actually stated it explicitly. At a certain point, both knew, the State would have to seize control of the entire machinery of production. Whether this ended in a social revolution, or what I now call the Fascist State would depend on the “political consciousness” of the class. How much of the theory of its own material condition it had absorbed would decide the outcome — not the final outcome, but the intermediate outcome.

That was the Event that should have seen the Paris Commune reborn on a global stage — a form for the proletariat to work out its final liberation — a liberation, not just from wage slavery, but from labor itself.

Marx was notorious for not talking about the future, only the immediate was important — because he was not given to making blueprints. The world did not need another utopian system — it only needed to understand its actuality and the process inherent in it. In Volume 3, however, and Engels in “Utopian and Scientific Socialism” we get a glimpse into the implications of his theory.

The fact is, in historical materialism properly understood, the Proletarian never even realizes she is a wage slave. As individuals, they act exactly like any other commodity seller, like small commercial players. The worker sells her one commodity over and over again and the conflict with the capitalist over the terms of this sale falls completely within the bounds of commercial rivalry.

Lenin explicitly states this idea in chapter III of What is to be Done; he argues that the trade union fight alone is insufficient for the development of a communist consciousness among the working class:

“The overwhelming majority of Russian Social-Democrats have of late been almost entirely absorbed by this work of organising the exposure of factory conditions. Suffice it to recall Rabochaya Mysl to see the extent to which they have been absorbed by it — so much so, indeed, that they have lost sight of the fact that this, taken by itself, is in essence still not Social-Democratic work, but merely trade union work. As a matter of fact, the exposures merely dealt with the relations between the workers in a given trade and their employers, and all they achieved was that the sellers of labour power learned to sell their “commodity” on better terms and to fight the purchasers over a purely commercial deal. These exposures could have served (if properly utilised by an organisation of revolutionaries) as a beginning and a component part of Social-Democratic activity; but they could also have led (and, given a worshipful attitude towards spontaneity, were bound to lead) to a “purely trade union” struggle and to a non-Social-Democratic working-class movement. Social-Democracy leads the struggle of the working class, not only for better terms for the sale of labour-power, but for the abolition of the social system that compels the propertyless to sell themselves to the rich. Social-Democracy represents the working class, not in its relation to a given group of employers alone, but in its relation to all classes of modern society and to the state as an organised political force. Hence, it follows that not only must Social-Democrats not confine themselves exclusively to the economic struggle, but that they must not allow the organisation of economic exposures to become the predominant part of their activities. We must take up actively the political education of the working class and the development of its political consciousness. “

What does Lenin’s statement imply about the empirical relation between these two great classes of capitalist society, and for the mode of production itself?

The capitalist as buyer of labor power confronts the worker as seller; and, later, the worker as buyer of subsistence commodities confronts the capitalist as seller. Both poles of this relationship rests on the successful exchange of labor power for wages. The sale of labor power appears, in the first instance, as the direct result of the exchange of labor power for wages. And, the sale of labor power appears, in the second instance, as the condition for the exchange, as means of purchase in the form of wages for commodities.

Historical materialism states that labor power has undergone a change between the first instance and the second instance. This change is both qualitative: labor power is consumed and this consumption turns it into various useful objects — shoes, cars, etc. But, there is also a quantitative change: the value of the latter — shoes, cars, etc. — is greater than the former — the initial labor power.

Empirically, however, it appears otherwise: while a qualitative change has taken place, there has been no quantitative change. This is because all the quantitative change has taken place outside the purview of the commodity sellers — outside of exchange.

Everything which, from the standpoint of the law of value, appears as a necessary result of the improvement in the productivity of social labor, appears to the society of commodity sellers in its inverse form: theoretically, there is creation of surplus value, but, empirically there is “not enough money in circulation”. Society is constantly threaten by overproduction and crises.

The entirety of the reality of the material relations of production is hidden behind money, not only from the capitalist but also the worker. Both classes are fucking clueless. And, they are engaged in this meaningless, never-ending, commercial squabble over terms of a filthy transaction. But, as repulsive as the relationship is, they are both trapped in it: without it, the capitalist cannot be a capitalist, while the worker starves.

The reproduction of the relation, the purchase/sale of labor power, is their entire, and intimately shared, basis for existence. And, as Engels shows, and many writers like Kevin Carson recount, the relationship becomes increasingly dependent on the state. Now let’s look again at the quote from Engels, I referred to in the previous part of this series:

But, the transformation — either into joint-stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces. In the joint-stock companies and trusts, this is obvious. And the modern State, again, is only the organization that bourgeois society takes on in order to support the external conditions [my emphasis] of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists. The modern state, no matter what its form, is essentially a capitalist machine — the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is, rather, brought to a head. But, brought to a head, it topples over. State-ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.

What Engels is predicting here is an Event: that impending convergence of the purely commercial relation between the wage worker and the capitalist over the purchase/sale of labor power, with the incremental expansion of state management of the process of production itself. Stated simply: in 1880, Engels was predicting that the purely commercial conflict between the two great classes would be converted by the convergence with increasing state control over production into a directly political struggle — into a direct fight against the national — i.e., social — capitalist, the state.

In 1929, capitalism enters its end-stage, and becomes absolutely dependent on the State. The state, in turn, becomes the fascist state, representing not capitalist or worker, but Capital — the relationship itself. And, this happen 50 years after Engels wrote these words:

“The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist…”

From the moment this process culminates, the capitalist class is a side-show, lacking any real role in production beyond clipping coupons. Everything is being managed by the state. The fight against capital is now immediately political — expressed directly in the conflict with the state itself.

The Black Hole: Marxism, the State and the Social Revolution

August 8, 2011 Leave a comment

Louis Althusser

There is a massive black hole in the center of Marxism that cannot be ignored, since it touches on the question of social revolution itself. That question can be posed this way: What happened to the Soviet Union? But, the better formulation is this:

Why didn’t the Great Depression touch off a revolution in the West?

Numerous explanations of this failure have been offered by commentators of every variety within and without Marxism. During the Great Depression, it is clear, capitalism suffered an irreversible breakdown due to absolute over-accumulation. And, it is also clear that effective control over the state was already in the hands of the proletarian majority through its suffrage. Moreover, as now, the solution to the general crisis of capitalism was already obvious, and universally recognized: reduction of labor hours.

The principal explanations now fashionable within Marxism deny one or more of these facts. They propose: There is,

  1. no general crisis; or,
  2. no effective control over state power by the proletariat; or,
  3. that reduction of hours of labor will not work.

Every one of these explanations violate the assumptions of historical materialism.

If you deny there is a general crisis of capitalism, you are making the argument there can be absolute over-accumulation in one country leading to export of capital to the less developed regions of the world market, but there cannot be absolute over-accumulation in the world market itself. And, since Lenin’s theses on imperialism is entirely based on the concept of global over-accumulation, you have to reject his conclusions. Not too mention a materialist explanation of the more than 130 million dead in two world conflicts and the numerous conflicts following this.

If you want to deny universal suffrage of the proletarian majority is the sufficient condition for its effective political rule you must then impose conditions on this rule other than those that stem from its material position in society. You must then deny Marx’s thesis that the proletariat’s historical mission stems from who they are, not what they think. This position, as in the “Bolshevik model”, denies the capacity of the proletariat to empirically determine their own role in history.

Lenin advances the “Bolshevik Model” in “What is to be Done.” Which, I think, is a reaction to social-democratic reformism. No matter what the cause, this idea becomes embedded in Marxism so firmly that it has been enshrined as the concept of “vanguard party”. Anarchists rightly ridicule this by pointing out Marxism leads either to reformist social-democracy or despotic Leninism.

On the other hand, Marxism borrows from the argument of Anarchists like Noam Chomsky that, somehow, the effective power of the proletariat is a manufactured consent — the working class is indoctrinated. Their leaders are bribed, their organizations are co-opted, and their reality is hidden from them by deceptions spread in the media.

Finally if you deny reduction of hours of labor is the only solution to the general crisis of capitalism you can’t explain the fascist state. The fascist state emerges simultaneously in all industrial nations during the Great Depression despite their numerous historical differences. It clearly emerges as the political response to the general crisis, which is nothing more than massive unemployment a glut of productive capacity and intense competition between national capitals over division of the world market.

But, absolute over-accumulation is just accumulation of capital that can no longer function as capital that cannot expand its own value through exploitation of labor power, cannot realize the surplus value extracted as profit. It takes the form of a mass of superfluous means of subsistence, means of production, and idled workers, who are now available for war.

This surplus of mean of subsistence, means of production and idled workers is produced during the period of the social work day beyond that required for the wages of the productively employed population. Absolute over-accumulation simply means the work day can’t be longer than that needed to satisfy the material requirements of the laborers.

I think, any attempt to explain why the Great Depression did not end in a social revolution must begin with these assumptions. This explanation must, at the same time, account for the failure of the Marxist-Leninist model of revolution. The first failure is only the second failure presented in another form.

We can probably best begin to account for what happened during the Great Depression by examining the flaws in the Marxist theory of the state. For this, I want to use Althusser’s 1970 work, Ideology and Ideological State Apparatuses.

Althusser has this formulation of the ‘Marxist theory of the state’ (the quotation marks are his, not mine):

To summarize the ‘Marxist theory of the state’ on this point, it can be said that the Marxist classics have always claimed that (1) the state is the repressive state apparatus, (2) state power and state apparatus must be distinguished, (3) the objective of the class struggle concerns state power, and in consequence the use of the state apparatus by the classes (or alliance of classes or of fractions of classes) holding state power as a function of their class objectives, and (4) the proletariat must seize state power in order to destroy the existing bourgeois state apparatus and, in a first phase, replace it with a quite different, proletarian, state apparatus, then in later phases set in motion a radical process, that of the destruction of the state (the end of state power, the end of every state apparatus).

The problem with this statement by Althusser of the ‘Marxist theory of the state’ is that it is a fantasy; and is not historical materialism. To figure out why, we have to work backwards in Althusser’s formulation — from (4) to (1)

With regards to (4), I have never encountered the formulation in Marx or Engels that the workers replace the bourgeois state apparatus with their own. In fact, I have never encountered Marx or Engels speaking of any state apparatus but the present bourgeois state apparatus. And, their verdict on this, based on the Commune, was definitive: It must be broken.

Not reformed, not replaced, not refurbished — broken.

What made the proletarian state power different from all preceding forms is that this apparatus itself was abolished at the outset. The Anarchists of the Commune replaced it with a working body combining both deliberative and executive functions. Marx could have differed with this, but he explicitly did not — he endorsed it.

With deliberative and executive functions combined, there is no state apparatus as distinct from state power. But, the present state consists of this division — of a useless legislative body and power concentrated in the executive. Since, there was no stand-alone executive in the Commune, the idea that the state is destroyed only in later phases is complete bunk. For this reason, Marx referred to what Anarchists created in the commune as no longer a state.

This has to be emphasized: Marx looked at what the Communards created and said it was NOT a state.

And why was this: because the Anarchists had abolished the historical division between the executive and deliberative functions of the state. The new society was itself both the deliberative body and the means for executing its decisions. In both the Soviet despotic and the Western democratic forms of proletarian rule, we find exactly that this division is not done away with.

In (3), Althusser argues that the objective of the class struggle is to wield the state apparatus as a function of class objectives. But, as early as 1845, in The German Ideology, Marx described the proletariat as a class which was not a class, but the dissolution of other classes. In 1851 work, Reflections on Money, he explains how money relations conceal relations of production and classes.

Both classes shop the same stores, pay the same prices for the same goods — the only apparent difference is the amount of money in their wallets. While material relations of production determine society, these relations are buried deep beneath purely monetary ones. Given that, for the proletariat, it is not a class in any real sense, and given that its relation to other classes is concealed from it how is historical materialism to conclude that the proletariat wields state power as a function of its class objectives?

Since all interests are only interests in the exploitation of labor under given relations, how is labor itself to express such an interest? Against what class is this interest to be expressed other than itself?

In (2), Althusser expresses the opinion that state power and state apparatus must be distinguished. So, how are we to do this? Until the Commune had state power ever been exercised in any other form than through the state apparatus? Was there a discovery in 1970 of some epoch in which the state power of the ruling class was exercised directly and not through an apparatus?

Althusser is wrong on this, I think.

Throughout history, state power has consisted of an armed body of men to enforce the domination of the existing ruling class. This special interest, which having raised itself to position of the general interest, must become the objective of all special interests seeking to impose themselves on society as the general interest. The competition between classes over control of this apparatus only expresses the fact that the history of society is the succession of one after another special interests.

In (1), Althusser defines the state as “the repressive state apparatus”. But, Engels, in his 1880 work, Socialism: Utopian and Scientific, is already describing the state as much more than this: “The modern state, no matter what its form, is essentially a capitalist machine — the state of the capitalists, the ideal personification of the total national capital.”

If the crises demonstrate the incapacity of the bourgeoisie for managing any longer modern productive forces, the transformation of the great establishments for production and distribution into joint-stock companies, trusts, and State property, show how unnecessary the bourgeoisie are for that purpose. All the social functions of the capitalist has no further social function than that of pocketing dividends, tearing off coupons, and gambling on the Stock Exchange, where the different capitalists despoil one another of their capital. At first, the capitalistic mode of production forces out the workers. Now, it forces out the capitalists, and reduces them, just as it reduced the workers, to the ranks of the surplus-population, although not immediately into those of the industrial reserve army.

But, the transformation — either into joint-stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces. In the joint-stock companies and trusts, this is obvious. And the modern State, again, is only the organization that bourgeois society takes on in order to support the external conditions of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists. The modern state, no matter what its form, is essentially a capitalist machine — the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is, rather, brought to a head. But, brought to a head, it topples over. State-ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.

Already, under the pressure of the capitalist mode of production, the state was undergoing a profound transformation. The state was not eclipsing the two great classes in bourgeois society, but coming more to function as the social capitalist.

Bakunin’s Anarchism, Marxists Dogmas and Marx

April 6, 2011 Leave a comment

K. Marx (L) and M. Bakunin

 

I set out to write a piece on Murray Rothbard and communism. Instead, I got bogged down by this detour into Marx’s theoretical differences with Anarchism. The day progressed, Marx and Bakunin would not stop their bickering and let me leave.

Alas, Murray will have to wait for another day.

***

There is an interesting response given by Karl Marx to a denunciation of his views by Mikhail Bakunin in notes on quotations Marx pulled from Bakunin’s book, Statism and Anarchy.

Bakunin writes:

They say that their only concern and aim is to educate and uplift the people (saloon-bar politicians!) both economically and politically, to such a level that all government will be quite useless and the state will lose all political character, i.e. character of domination, and will change by itself into a free organization of economic interests and communes. An obvious contradiction. If their state will really be popular, why not destroy it, and if its destruction is necessary for the real liberation of the people, why do they venture to call it popular?

Marx replies to this:

Aside from the harping of Liebknecht’s Volksstaat, which is nonsense, counter to the Communist Manifesto etc., it only means that, as the proletariat still acts, during the period of struggle for the overthrow of the old society, on the basis of that old society, and hence also still moves within political forms which more or less belong to it, it has not yet, during this period of struggle, attained its final constitution, and employs means for its liberation which after this liberation fall aside. Mr Bakunin concludes from this that it is better to do nothing at all… just wait for the day of general liquidation — the last judgement.

The answer Marx gives to Bakunin is extremely telling not simply in relation to Anarchist ideology, but — more important for our times — in relation to the present day Marxists.

In Bakunin’s understanding Marx was making the argument that some definite period of time after the overthrow of the political rule of the capitalist class, the working class would not immediately abolish its own coercive political rule, but would embark on some period of a transitional ‘worker’s state’ (a term Marx accepted in another context, but did not endorse). In Marx’s model, says Bakunin, during this period the worker’s state would “uplift the people … both economically and politically…” to some certain level of social development where the worker’s state, and its coercive functions, would become obsolete.

Bakunin proposes that a contradiction lay at the heart of Marx’s position: If the worker’s state is truly popular — that is, if it truly enforces certain rules that are commonly and overwhelmingly supported — why can’t this coercive power be done away with entirely? And, if its coercive power must be done away with for the society to enjoy real unfettered association, why is Marx calling it a popular power?

Marx corrects Bakunin to clarify that his position is expressed in the Communist Manifesto and not in the words Bakunin employs to describe them. He then continues to explain the basis of the ideas in the Manifesto: First, upon coming to power the Proletariat takes political control of society under definite economic conditions, and not on the basis of some idealist notions independent of those economic conditions. Since, in Marx’s theory, the State arises from the material conditions of society and does not exist independent of those conditions, it is not possible for coercion to just disappear until the conditions giving rise to it disappears as well. Try as society may like to abolish the functions of state power on the morning of the new order, still the actual economic conditions on which this new order rests have their reciprocal influence on society. Bakunin’s argument that in no case should the Proletariat establish its political rule amounted to a demand that it not take power until it could immediately abolish itself, its condition of existence up until that time, and all other classes in society, i.e, until Capital having completed its historic role of developing the productive forces of society and run its course, collapsed on its own.

Second, Marx’s meaning in this context is not always properly understood — and, this is where Marxists get themselves into hot water. State power is always coercive — it is the imposition on the individual of conditions of her own activity against which the individual naturally rebels. The coercive functions of the ‘worker’s state’ are no different in this regard to the coercive functions of any previously existing state. It may be uncomfortable for us to assert this fact, but it in no way can be ignored — for the individual the coercion of a ‘worker’s state’ is, in its effect, no different than the coercion of the capitalist state. With regards to the individual this rule is despotic, and the fact that, in this case, the despotic hand is encased in a democratic glove does not change its despotic nature in the least.

However, the discussion of this despotic rule is wrongly limited to the actual machinery of state, as if the coercion of capitalist society consisted entirely of an armed body of men and women enforcing the naked rule of the capitalist class. In fact, coercion here has to be seen in a broader context: it is also coercion that the worker, deprived of all means of production, must sell herself into slavery in exchange for wages. It is also coercion that no one may access the means of consumption in society except on the basis of exchange of equal values — of money exchange. It is also coercion that the worker cannot sell her labor for wages except on condition that she work a period of time in excess of the value of these wages for the exclusive benefit of the capitalist. Each of these examples is a form of coercion prevalent in capitalist society. And, each is understood by all members of society to be the conditions under which the whole of capitalist economic activity is carried on. So pervasive are they, that these forms of coercion appear to us not a forms of coercion at all but a basic and eternal condition of human existence. Moreover, in many cases these forms of coercion appear altogether accidental — for instance, it is possible to strike it rich in the lottery, write a best seller, or start a successful rock band and be able to avoid having to spend your days in a cubicle sending or answering email or working the checkout counter at WalMart.

The communist movement of society has the aim not simply of abolishing the machinery of state — the body of men and women who arrest you if you violate the law of equal exchange of value by pilfering in WalMart, the judge who presides over your trial, the district attorney who prosecutes you, the jailor to whose care you are remanded after conviction, and the politicians who passed the law into being — it also has the task of ending exchange of values and all other forms of economic coercion as the basis for the individual’s activity.

In the conditions under which Marx carried on his debate with the ideas of the Anarchist Bakunin, it is clear that society had in no way been prepared for the immediate abolition of the State in its entirety. Capital had not by any means so transformed the social economic landscape that Marx could imagine it prepared for not only the abolition of the political rule of the capitalist class, but all class rule and classes themselves. The economic development of society had definitely not reached the stage that the Proletariat could abolish itself as a class.

And, why is this? In my opinion, every scenario Marx could see of a possible assumption of power by the Proletariat, society was still in the grip of scarcity. Although, as he acknowledged, Capital had performed a prodigious feat of transforming the conditions under which labor was undertaken by society, society had not yet made the abolition of necessary labor possible. Taking power under those conditions would, of necessity, involved realizing a communism of relative poverty — the sharing of the conditions of scarcity under a more or less ‘equal’ apportioning.

And, what did Marx think was the rule under which this scarcity would be shared out? “From each according to his labor, to each according to his work.” Access to the common fund of consumption had to be on the basis of the labor of each member of society. Each would receive from this common fund no more than she contributed to this fund. Even if we assume the immediate abolition of the entire machinery of the old State and its replacement by the association of society — and Marx made precisely this assumption — nevertheless society would be imposing on the former capitalist and State officials the same coercive conditions of activity that nature imposed on it:

“Do you want to eat? Get a job! If you won’t work because you are too dainty and work is beneath you, then you will starve!”

Thus, society would take a step forward in its historical development in that, for the first time, labor would be required of all members of society. But, this step was not the final one to be taken: the final step consisted of the abolition of this very requirement imposed equally on all members of society to engage in labor. The replacement of the rule: “From each according to his labor, to each according to his work”, by a new rule, “”From each according to his labor, to each according to his need”, required not simply the assumption of power by the Proletariat, but a certain definite material condition — the emergence of a society of abundance.

He did not hesitate to make his opinion known to the Anarchists on this issue, and he did not hesitate to make it known to his so-called followers as well, when, as happened in the Gotha Program, they came up with all sorts of silly ideas. Marx’s response the Gotha was pretty blunt: Upon taking power the Proletariat would break the monopoly of the capitalist class over the means of production. Workers would not receive the entire proceeds of their labor, but only a portion; the rest of which would go to cover replacement of the common means of production, expansion of those means, and insurance against losses. From the remaining fund would be deducted general social costs of administration, means for common satisfaction of needs like medical care and education, and means for those who are not able to work. What portion of the common labor would be needed for these items could only be decided democratically by the whole commons — and, in all probability those who lost the vote would feel coerced by the majority, since these costs would still be deducted from them despite their disagreement. What was left after this had been accomplished would then be divided according to their contribution.

Marx continues:

What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges. Accordingly, the individual producer receives back from society — after the deductions have been made — exactly what he gives to it. What he has given to it is his individual quantum of labor. For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.

Here, obviously, the same principle prevails as that which regulates the exchange of commodities, as far as this is exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labor, and because, on the other hand, nothing can pass to the ownership of individuals, except individual means of consumption. But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form.

At this point, however, Marx is not finished: he goes on to explain why even this seeming logical and just division of the product of labor among the members of society actually conceals an unequal distribution, because although the return for work is the same, people are not. Although this inequality in fact is abhorrent — an indifference to the particular circumstance of each individual — there is, in his mind, no other basis that such division can be made. Thus, for Marx, the end aim of the transition is not an equal return on the labor contribution of each, but ending all connection between the labor each member of society contributes and the means they can access. The rule that everyone must work is itself abolished — or withers away.

And, this is where Marxists get into hot water — they impose on Marx’s comments the completely unhistorical dogma that the communist movement of society is necessarily split between the period beginning with the political overthrow of the capitalist State and the period during which the transitional form of Proletarian rule comes to an end. They are only parroting Marx in his argument with Bakunin, while understanding none of his argument.

At the beginning of this period of social transformation the political rule of the Proletariat is “stamped” with the conditions of the capitalist society that has just been overthrown. It follows from this that Marx is not making an unhistorical division between this point in time and the point where the Proletarian rule ends, but is precisely emphasizing that the actual conditions governing capitalist society, when this event takes place, must be studied and understood. It follows that his comment cannot be taken as a hard and fast rule, still less elevated into a dogma as the Marxists do, that there is some necessary period of transitional state between the overthrow of capitalist rule and a stateless, classless society. Capitalist society is by no means the same creature in 1874 that it is in 1917, 1929, or 2011. In each case the practical tasks imposed by the assumption of political power by the Proletariat must be different as the new society is being “stamped” with a decidedly different set of circumstances.

What are those conditions today? Are they the same as they were in 1874 or 1875? Are they even the same as they were in 1929 or 1970? Does Marx’s words have the same meaning in his day as they do now that Fascist State expansion — the continuous destruction of surplus value and its replacement by ex nihilo pecuniam — has become a condition for all economic activity?

Marxists have no answer to these questions because instead of making an analysis of present day conditions of capitalist society, they insist on taking Marx’s debate with Anarchists completely out of its historical context and worshiping dogmas.

Capital, Absolute Over-Accumulation and the Fascist State (Part three)

March 22, 2011 Leave a comment

The constant expansion of the Fascist State presupposes the constant expansion of capital which can no longer function as capital, which can no longer employ labor power for purposes of the self-expansion of capital; which, in other words, seeks its self-expansion, not by augmenting the productive capacity of society but by exploiting the wholesale destruction of this productive capacity through fictitious profits.

Of superfluous labor, Moishe Postone writes:

It should be clear that “superfluous” is not an unhistorical category of judgment developed from a position purportedly outside of society. It is, rather, an immanent critical category that is rooted in the growing contradiction between the potential of the developed forces of production and their existent social form. From this point of view, one can distinguish labor time necessary for capitalism from that which would be necessary for society were it not for capitalism. As my discussion of Marx’s analysis has indicated, this distinction refers not only to the quantity of socially necessary labor but also to the nature of social necessity itself. That is, it points not only toward a possible large reduction in total labor time but also toward the possible overcoming of the abstract forms of social compulsion constituted by the value form of social mediation. Understood in these terms, “superfluous” is the historically generated, immediate opposite of “necessary,” a category of contradiction that expresses the growing historical possibility of distinguishing society from its capitalist form, and, hence, of separating out their previous necessary connection. The basic contradiction of capitalism, in its unfolding, allows for the judgment of the older form and the imagination of a newer one. My analysis of the dialectic of transformation and reconstitution has shown that, according to Marx, historical necessity cannot, in and of itself, give rise to freedom. The nature of capitalist development, however, is such that it can and does give rise to its immediate opposite—historical nonnecessity—which, in turn, allows for the determinate historical negation of capitalism. This possibility can only be realized, according to Marx, if people appropriate what had been constituted historically as capital.

Although Capital is founded on scarcity, it nevertheless has a tendency toward the absolute development of the productive forces — toward, in other words, realization of abundance. But, the development of the productive forces occurs wholly within the limits of scarcity — a limit against which Capital constantly strains yet is continually thrown back by its own inherent contradictions. The productive forces develop to a staggering extent — as can be seen in American agriculture where the labor of 0.6% of the population suffices to feed the remaining 99.4%, yet, hunger persists, and grows; prices continually inflate; and the war on the consumption power of society extends even to routinized crop destruction by using it for fuel.

Capital’s problem is not how to abolish hunger and want, but how to dispose of massive quantities of output without abolishing hunger and want. The productive forces have grown to such scale that truly insignificant quantities of labor can produce astounding quantities of output. The question posed to political-economy — to “economic policy makers” — is how to maintain profitability by destroying this abundance. Capital’s tendency to absolutely develop the productive forces comes down to a tendency toward absolute expansion of the Fascist State.

The law of the tendency toward a falling rate of profit not only presupposes export of capital, it presupposes export is absolutely insufficient. It presupposes the export of capital only intensifies the absolute over-accumulation of capital. Thus, alongside the export of capital, the Fascist State grows and must grow at an accelerated rate. Or, put in terms that might be understood by the Modern Monetary Theorist:

Reagan proved that deficits don’t matter.” —Dick Cheney

What matters isn’t the completely fictional accumulation of public debts but that ever increasing quantities of excess capital is destroyed. The expansion of the Fascist State and the destruction of capital is, for this reason, only two sides of the same process. It is the annihilation of value in the perverse form that socially necessary labor time shrinks, even as labor time grows absolutely. This requires not simply the destruction of new surplus value but also the devaluation of the existing variable and constant capital.

The perversity of the requirement: All of this destruction of value and surplus value must be profitable for Capital. Thus Capital in its necessary form must be replaced by Capital in its purely superfluous form. This, of course, is impossible: Capital is value, and value is socially necessary labor time alone. Hence, superfluous Capital is not Capital at all, but merely accumulated superfluous labor time operating as if it is necessary labor time. The logic of the Fascist State is, for this reason, I think, identical with the logic of Capital itself, but with a profoundly different aim. If, for whatever reason, society is unable or unwilling to reduce its hours of labor, the Fascist State is the necessary result. It is the necessity for a reduction of hours of labor expressed in the perverse form of an increasingly intolerable Fascist State.

Thus, the Fascist State is only a symptom of the absolute nature of the contradictions at the heart of capitalist relations of production under conditions of absolute over-accumulation, and as a consequence of a general failure on the part of society to liberate itself from labor — a consequence of society’s failure to reduce the social hours of labor, and thus bring its activity under its conscious control. It is the accumulation of entirely unnecessary labor, superfluous labor, performed by society, in the form of a grotesquely overgrown, and constantly expanding, State power.

That the diminishing application of living labor to production results, and must result, in the extension of hours of superfluous labor in the form of the Fascist State explains why the rise of this state occurs simultaneously with the withdrawal of gold money from circulation as legal money in the United States in 1933, and the subsequent end of the dollar peg to a specific quantity of gold in 1971. The claim by economists like Ben Bernanke and Christina Romer that the Great Depression was caused by the restriction on the supply of money imposed by the gold standard is a crock, an admission that Capital, if it is to continue to dominate society under conditions of absolute over-accumulation, requires the decoupling of money from the commodity serving as measure of value and standard of price — that prices must no longer be constrained to express only the socially necessary labor time embodied in commodities generally, and, specifically, in labor power, the capitalist commodity par excellence, the commodity without which capital cannot become capital, cannot expand its value.

The subsequent explosion of the price of gold, and prices generally, gave evidence of the extent to which the magnitude of the existing quantity of capital in circulation denominated in the legally established gold standard dollar had diverged from its actual value — the extent to which the magnitude of this capital denominated in pre-1971 dollars had already diverged from its actual magnitude denominated in so many billions of ounces of gold. The replacement of money by ex nihilo pecuniam — by money created out of thin air — did not itself lead to inflation, to the depreciation of the purchasing power of money, but only expressed the growing divergence between the shrinking socially necessary labor time of society  and the ever expanding total labor time of society. This divergence presupposes the growing divergence between the value of commodities and their prices: even as the value of commodities shrink, the prices of these same commodities increase. The sum of prices must constantly increase in proportion as the sum of values fall. It is not the increase in the supply of money that leads to the increase in prices of commodities, but the increase in the total hours of social labor in proportion to the socially necessary labor time of society that requires both the increase in the supply of money and the increasing prices of commodities.

The stupidity of liberals and progressives, and the mass of Marxists theorists following them, is that they imagine the Fascist State by directly employing the labor power of society can overcome the inherent tendency toward the formation of a surplus population of workers. What they always overlook in their fascination with this fascist idea is that value is socially necessary labor time — the duration of labor time during which the worker reproduces the value of her own wages. The Fascist State, however, is composed of the surplus of labor time over this quantity of hours. It follows from this that even if the mass of unemployed is provided jobs by Fascist State spending, the new sum of wages including the increase in wages by this additional employment is, and must be, offset by the further contraction in the value of individual wages; that the new sum of wages amount to no more, or even less, than the value of the sum of wages before the unemployed are given public jobs. The average daily wage decreases in value as the mass of employed workers increase. The impoverishment of the individual worker is thereby accelerated; but in this case it is not owing to improvements in the productivity of labor, but owing to the sharing of the meager quantity of means of consumption — to which the workers are limited by Capital itself — among a larger number of hungry mouths.

A vicious circle is thus created: Capital creates surplus value by limiting the consumption of the worker. This surplus value, however, must then be unproductively consumed in its entirety by the Fascist State to maintain the conditions under which it was created, i.e., to maintain the limited consumption of the worker. The new value, having been consumed by the Fascist State, is replaced in circulation by ex nihilo pecuniam having no value whatsoever; and, which only devalues the existing employed variable and constant capital — or, what is the same thing, inflates the prices of the commodities composing both variable and constant capital. Finally, the purely monetary devaluation of the variable and constant capital increases the pressure on Capital to increase the rate of surplus value in order to maintain and increase the mass of surplus value, i.e., to further increase the productivity of labor by reducing still further the consumption of the mass of society.

This has political consequences to which I turn next.

Class War in Madison? Not so fast… (Final thoughts)

March 9, 2011 1 comment

The argument i have tried to make in the previous parts of this series ( one, two, three and ) is simple: What is taking place in the battle in Wisconsin, and the battle against austerity generally has nothing to do with Capital directly, but instead is concerned with the massive population of working people rendered completely redundant by the progress of Capital’s development, and a huge mass of capital that must stand idle as a result of this progress. The specific problem at hand is that under existing social conditions this idle capital and redundant population can only be employed if the capital is wasted, consumed unproductively and absorbed by a population of working people whose daily labor creates nothing, satisfies no human need — not even their own.

This catastrophe expresses itself, first, in the monstrously bloated body of the State that grows to such proportion that it chokes off the employment of the productive capacity of society; and, second, that the State, however bizarrely swollen — as can be seen in the US accounting for 48% of global defense expenditures — is still not bloated enough; that it has not, despite the glaring obscenity of such wasteful spending in the face of growing poverty, grown to the proportion necessary to ensure the continuing purchase and sale of labor power, i.e., to ensure employment of capital for the extraction of surplus value.

The first aspect of this crisis, however, can only be resolved by the further expansion of the State — on pain of a growing class conflict and to suppress this conflict — and not through austerity. So it is not surprising that politicians, acting under the slogan “Jobs, Jobs, Jobs”, blindly offer every manner of silly and contradictory policies to effect this expansion: tax increases and tax reductions; new public debt issues and urgent calls to balance the budget; committees formed composed of senior politicians and academics, corporate CEOs, and wealthy contributors to discuss “investment” in public education, infrastructure and new technologies said to offer society the opportunity to “win the future”, and, at the same time, efforts to dismantle existing State public services, and protections for workers and the environment. In short, a relentless effort by the capitalists to dump the entire burden of the crisis onto the shoulders of working women and men; and, an equally vigorous struggle by working people to avoid this burden.

The second aspect of this crisis places a material demand on the State to increase its burden on society. For all the bleating of politicians about how the country must increase its competitiveness the State grows, but it grows in a way that does not add to the productive capacity of society in any fashion. The nation must become poorer not richer as a result of this growth, less productive, less competitive, more dependent on imports from nations where the continuing employment of oxen in agriculture is not uncommon, and where — owing to the low productivity of labor — daily wages are a fraction of the American average hourly wage.

The method employed by the State to increase its size and overcome the rising antagonism between production and consumption, no matter whether the method adopted is the issuance of new public debt — as advocated by Keynesians like Paul Krugman — or the wholesale creation of new money directly through State expenditures — as advocated by Modern Monetary Theorists like Billy Mitchell — is depreciation of money; a depreciation that is only possible because the State previously debased money from the gold standard.

No other object in society touches on commodities more intimately than the ratio by which these commodities exchange for money itself. Absent crises, Capital presents itself in the form of the ceaseless, uninterrupted, and expanding dense network of interrelated transactions whereby money and commodities are exchanged — and within which any particular commodity may pass through many such transactions before falling out of circulation and being consumed.

However, what concerns every member of society is that she receives some definite amount of money in return for her commodity. If she is a worker, she seeks only an agreed upon wage; if she is a capitalist, she seeks only a return of her capital plus an average rate of profit in the form of some definite quantity of money. With its authority to determine what serves as money, the State can “purchase” the labor power of a worker, or the commodity of the capitalist by exchanging these commodities for money created out of thin air.

Thus, the ratio between the sum of money in circulation and the sum of commodities in circulation is upset in proportion to the injection of the new ex nihilo pecuniam; while, on the other hand, a portion of the existing capital and labor power in circulation is consumed without being replaced. The total sum of commodities in circulation are reduced, and the prices of the remaining commodities increase. In this way, both the existing capital and labor power are devalued simultaneously and together in proportion as the expenditures of the State increase.

Yet, despite this devaluation of the existing capital and labor power by the State, it should not be forgotten that devaluation must take place on any account. It is not the State that forces this devaluation on Capital, but Capital which forces it on itself. The antagonism between the conditions of production and those of consumption are such that without this devaluation Capital would altogether collapse in on itself.

The fact stands as follows: the problem posed by the antagonism between the conditions under which society produces and consumes cannot be resolved in any way other than a general reduction of hours of work. Absent this general reduction of hours of work it becomes necessary for the State to increase its expenditures of wholly superfluous employment of both capital and labor power — to devalue both through inflation in order to overcome the contradictions inherent in the capitalist mode of production itself.

We who favor a stateless society should be absolutely clear on these points and never back down from them:

First, the State does not grow to care for the sick, feed the hungry, or add to and repair the roads, bridges and communications of society. It grows DESPITE these pressing social needs. Only by wasting productive resources on an ever increasing scale can any economic activity take place on the existing basis — the State indeed grows, but so do all of these nagging social ills.

Second, thirty million are unemployed not because there is no work to be done, but because it is not profitable to do those things that need to be done given the overly long hours work mandated by law. Factories are shuttered not because there is no need for their products, but because satisfying those needs intensifies the problem of recovering the capital laid out in their production plus an average rate of profit. The further expansion of the State addresses these problems only by intensifying them — by bringing into still greater antagonism the contradiction between production and consumption.

Should the thirty million unemployed find jobs it is only on the basis that their addition to the labor force comes directly or indirectly at the expense of the wages of the already employed 130 million, such that this larger labor force of 160 million now enjoy no more wages (or even less wages) than the 130 million did before — that the total wages formerly shared by the 130 million is now shared by 160 million, so that each suffers a proportional drop in their material standard of living.

There is no route out of this crisis through State economic policy: not through senseless battles to defend the coddled unions in the public sector, nor by stupid progressive slogans to tax the rich. The struggle against austerity cannot be won by defending the public unions, nor by silly attempts hold the line on public budget cuts or increase State expenditures. Only by reducing hours of work can we extricate ourselves from the deepening crisis of Capital and the relentless expansion of the repressive, aggressive and parasitic State.