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Anarchists, Libertarians and Marxists need to change the debate on jobs and debt (2)

October 13, 2012 2 comments

We have to change the terms of the debate on jobs and debt. We need to insist a job is nothing more than wage slavery and we don’t need Washington’s effort to create more of it by adding to this wage slavery even with more debt slavery. It is not like we have to argue existing jobs need to go away; why is Washington creating more of them, when existing hours can be reduced to solve the problem of unemployment rather than more debt?

2. Monetary Policy, or what happens when a hyperinflationary collapse of the dollar is NOT the worst possible outcome

The media is abuzz with speculation following the Federal reserves announcement of quantitative easing version 3.0. This version calls for the Federal Reserve to pour unlimited quantities of currency created out of nothing into the market, buying up worthless assets on a monthly basis to the tune of $40 billion per month. The result could be the printing of nearly a half trillion dollars in new, freshly produced, token money being forced into the economy every year until further notice.

The implications of this monetary insanity can be understood simply by reading the opinions of any number of economists and market watchers who are very delicately raising the spectre of a Zimbabwe style hyperinflation. Still subdued but growing talk of such an event has moved from the periphery of “financial advisers” and gold bugs into the mainstream argument of some pretty staid experienced players.

Take, for instance, a recent comment by Art Cashin, a veteran of the stock market who has probably seen every high risk moment in the market since well before Nixon closed the gold window in 1971, up to and including witnessing the market plunge 25% in a single day in 1987.  Cashin oversees the management of more than $600 billion in assets and is not given to losing his head over every minor fluctuation in the S&P 500. A market crash is not Cashins concern, however — he fears hyperinflation. Cashin notes Weimar Republic hyperinflation did not burst out all at once, but was preloaded by continuous money printing that only made its way into the market over time:

“It (the inflationary spiral) was in fact delayed for a couple of years.  But once it started, it could not be taken back.  So here in the United States and in the European Union, there are very few, if any, signs of inflation because people are so concerned (that they are hoarding money).

“[You] will have to keep an eye on the velocity of money.  Watch figures like, here in the United States, the M2 (figure), and see if it begins to grow through velocity, and get very cautious at that point.  There are some potentially eerie parallels (today vs the Weimar Germany era).  The United States trauma was unemployment and deflation (in the 30s), but in Germany in the 20s, it was money that ruined an entire society.”

Events are not yet to the point where Cashin is advising his clients to take their worthless fiat currency and sell it for gold, silver and other precious commodities, but he is suggesting there is such a heightened level of potential for a monetary catastrophe at present to warn people should begin to look for indicators of hyperinflation in the data:

“I think you are certainly at a ‘flashing yellow alert.’  You have in place a variety of things that could begin to react somewhat domino-like.  As I said, there are measures and items that the listeners (and readers) can look for themselves.  Look at, what is the growth in the money supply, M2?  It comes out every week.

If [the M2 measure of the money supply] begins to grow rapidly, then the money that the Fed has created will be seen as moving through the system.  That will create the high risk of accelerated inflation, and perhaps, God forbid, runaway inflation.”

Even if we discount Cashin’s argument as just another example of fringe hysteria, Zero Hedge recently explained, there are voices within the Federal Reserve’s own research department that echo Cashin’s argument:

Yes, it is ironic that the Fed is talking about “common sense”, we know. But the absolute punchline you will never hear admitted or discussed anywhere else, and the reason why the Fed can no longer even rely on its models is that…

Carlstrom et al. show that the Smets and Wouters model would predict an explosive inflation and output if the short-term interest rate were pegged at the ZLB (Zero Lower Bound) between eight and nine quarters. This is an unsettling finding given that the current horizon of forward guidance by the FOMC is of at least eight quarters.

In short: the Fed’s DSGE models fail when applied in real life, they are unable to lead to the desired outcome and can’t predict the outcome that does occur, and furthermore there is no way to test them except by enacting them in a way that consistently fails. But the kicker: the Fed’s own model predicts that if the Fed does what it is currently doing, the result would be “explosive inflation.”

You read that right: if Bernanke does what he not only intends to do but now has no choice but doing until the bitter end, the outcome is hyperinflation. Not our conclusion: that of Smets and Wouters, whoever they are.

And these are the people who are now in charge of everything.

Is there anything worse than a hyperinflation for capitalism?

The warnings by Cashin and the writers at Zero Hedge suggest Bernanke’s Federal Reserve is engaged in an extremely risky gamble on a policy that could lead to the dollar replacing Kleenex as the preferred method of catching sniffles during cold and flu season. I think it is safe to say the Fed would not be undertaking this gamble just to move unemployment a few points. A high risk gamble on this scale with the world’s reserve currency clearly hints what is at stake is likely much worse than a mere outburst of hyperinflation.

So what is worse than a hyperinflation of the dollar? What threat could there be to capitalism right now that risks reducing the dollar to a worthless piece of scrip with no purchasing power whatsoever? How about, a hyperdeflation, an inverse condition where all prices instead of going to infinity and beyond go to zero?

But there is a big problem with this argument: There is not a single recorded instance of hyperdeflation in history, we are told, and logically it cannot happen. Zero Hedge remarks on the question in a caustically titled post “The Monetary Endgame Score To Date: Hyperinflations: 56; Hyperdeflations: 0”:

We won’t waste our readers’ time with the details of all the 56 documented instances of hyperinflation in the modern, and not so modern, world. They can do so on their own by reading the attached CATO working paper by Hanke and Krus titled simply enough “World Hyperinflations.” Those who do read it will discover the details of how it happened to be that in post World War 2 Hungary the equivalent daily inflation rate of 207%, the highest ever recorded, led to a price doubling every 15 hours, certainly one upping such well-known instance of CTRL-P abandon as Zimbabwe (24.7 hours) and Weimar Germany (a tortoise-like 3.70 days). This and much more. What we will point is that at no time in recorded history did a monetary regime end in “hyperdeflation.” In fact there is not one hyperdeflationary episode of note. Although, we are quite certain, that virtually all of the 56 and counting hyperinflations in the world, were at one point borderline hyperdeflationary. All it took was central planner stupidity to get the table below, and a paper with the abovementioned title instead of “World Hyperdeflations.”

The Cato Institute’s paper presents a very powerful empirical argument against the case for deflation and hyperdeflation. Unfortunately it rests entirely on two fallacies that are hidden in its very title: First, hyperdeflation has nothing to do with the fate of any fiat currency, even the world reserve currency, the US dollar. A hyperdeflation is not the death of any particular currency nor even a series of currency collapses — it is the death of money itself.

The second fallacy in the Cato paper will take a bit longer to explain and once explained will show why it is so important to every anarchist, libertarian and Marxist.

Can there be such a thing as a hyperdeflation?

A hyperdeflation might possibly be defined as a situation where prices of commodities declined even as the supply of money increased. As the Cato Institute paper explains — there is no recorded instance of a hyper-deflation in the historical record. Of course, mild and even very severe deflations did occur several times up until the Great Depression; but history has many more examples of hyperinflations, as the Cato paper argues.

The problem with the Cato paper, however, is that its argument rests on the “quantity theory of money” fallacy — which according the Wikipedia states “that money supply has a direct, proportional relationship with the price level.” Which is to say, the Federal Reserve can force prices to increase — create inflation — if it increases the quantity of currency in circulation. In fact, this theory is wrong. The prices of commodities do not depend on the quantity of money in circulation, but on the quantity of socially necessary labor time required for their production. And here, at least theoretically, the case against hyper-deflation falls apart.

Here is the problem at the end of capitalism’s life: If the Marxist writers Moishe Postone and Robert Kurz are correct, the socially necessary labor time of commodities now have two distinct and contradictory measures: its labor time as a simple commodity and its labor time as a capitalistically produced commodity — yielding two quite different potential prices.

To put this in simpler terms, the price paid in a store for a typical commodity like an iPhone is mostly a reflection of the costs of economically wasted labor. The iPhone itself takes very little direct labor to produce, but, if its production is to be profitable, the accumulated costs of waste within the economy requires a massive mark up in the price you pay for it at the checkout counter.

What is this waste? Well, one source is the overhead created by the costly burden of government at present. Since the government doesn’t produce anything, its entire cost is borne by the rest of society. If, for instance, government accounts for about 50% of GDP, this means every product has a 100% markup just to pay for the operating expense of federal, state and local government. So about half the cost of your iPhone goes to cover things like drone attacks on Afghanistan civilians or corn subsidies to agribusiness. These cost don’t appear anywhere unless it comes directly from your wages in taxes, but even in this case the costs must be passed on in commodity circulation and will accumulate there in the costs of each commodity.

So every commodity essentially has two prices: the one that you pay at the checkout counter, which includes all the wasted economic activity in society, and the other, hidden, true price, which is the actual direct cost of producing to commodity. Surprisingly, this latter price is now only a negligible fraction of the total price of an iPhone, a pair of shoes, or even an automobile — the overwhelming bulk of the price of every product you buy consists of the hidden costs of economic waste within society that has accumulated over the past eighty years.

This is why, as I discussed in part one of this series, it now takes as much as seven dollars of debt, or even more, to create a single dollar of wages through fascist state economic policies designed to create jobs. Simply put, this internal discordance in the price of every commodity is a hyperdeflation weapon of mass destruction just waiting for a triggering event. What is making the Federal Reserve risk even the total collapse of the dollar on an insane gamble is the fact that this implosion can be triggered by the mildest hint of deflation. To prevent this event, the Federal Reserve must restart the failed system of debt accumulation that crashed in the financial meltdown of 2008.

Anarchists, libertarians and Marxists have a chance to put sand in the gears of the fascist state and bring it down along with the entire mode of production. All it requires is for us to change the debate over jobs and debt — opposing both Federal Reserve monetary and Washington fiscal policy aimed at expanding still further the system of wage slavery through policies designed to promote economic waste and debt.

But we can do this only if we are willing to take capital and the state head on by demanding an immediate reduction in hours of work until everyone who wants to work has a job, along with the elimination of all public and private debts, and abolition of all taxes.

Anarchists, Libertarians and Marxists need to change the debate on jobs and debt (1)

October 6, 2012 Leave a comment

We have to change the terms of the debate on jobs and debt. We need to insist a job is nothing more than wage slavery and we don’t need Washington’s effort to create more of it adding to this wage slavery even with more debt slavery. It is not like we have to argue existing jobs need to go away; why is Washington creating more of them, when existing hours can be reduced to solve the problem of unemployment rather than more debt?

1. Fiscal policy, or how to create one job on Main Street by borrowing five jobs from Wall Street

In 2011, a congressman made the argument that Obama’s stimulus program had produced jobs at the cost of $278,000 per job. Although the charge was nothing new, it made its rounds on the conservative GOP talking points circuit, and even ended up in the congressional record. This number, of course, was so outrageous by any measure of efficiency that it had to be analyzed by what we might call “clear thinking persons with no agenda”, i.e., the news media.

One “news source” in particular known for its ability to vet these things is PolitiFact.com, and it went after the congressman’s charge. PolitiFact established that the congressman, a Republican, was deliberately distorting facts against Obama’s stimulus program.

At $666 billion, the bill was estimated by the White house to have “saved or created” between 2.4 to 3.6 million jobs. What the congressman did, was employ the low end of the number of jobs “created or saved” and apply it to the total of the bill.

The Obama administration responded that this was unfair, since the money went to more than just creating jobs, it also invested in infrastructure, energy, education etc. Which is an odd response, since obviously the administration included those “investments” in its estimate of jobs “created or saved”. The Associated Press made the further argument that,

“Any cost-per-job figure pays not just for the worker, but for the material, supplies and that workers’ output — a portion of a road paved, patients treated in a health clinic, goods shipped from a factory floor, railroad tracks laid,”

So what AP is stating is that a job created by economic stimulus must account not just for the labor power directly expended, but also the constant capital used up in the course of this expenditure. But then AP performs an almost unnoticed sleight of hand and counts everything  twice. So we count the money spent to build a road in terms of wages and materials, then we count the road as a finished product; we count the wages and material employed to build a clinic, and then we count the clinic as an operating concern.

Once we remove the misleading double counting from our calculation in the argument in the AP version of this story, how this differed from what the congressman said, is unclear. Indeed his criticism was later refined by one conservative media outlet this way:

“He says he never said that $278,000 per job went to salaries, but ‘rather that each job has cost taxpayers $278,000.'”

Five dollars of debt to produce one dollar of wages

So what the worker actually receives of the $278,000 spent to create her job is one thing, and the cost of creating that job is another. Assuming the worker received an average hourly wage of around $19, she would have an annual wage of $38,760, minus taxes. But to receive this $38,760 minus taxes in wages, the taxpayer must pony up $278,000 minus the taxes paid by the worker.

Which is to say, it roughly takes about 7 dollars of spending to create 1 dollar worth of wages using fiscal stimulus. Moreover, this fiscal stimulus must be newly created money, through debt, and, therefore, created out of nothing. If we take the administrations preferred figure of $185,000 per job, this still amounts to 5 dollars of new debt to produce 1 dollar of wages.

Between the GOP and the Democrats, then, there is agreement that it takes somewhere between $5 and $7 of debt to create $1 of wages. For some reason, despite the general validity of the congressman’s claim, Politifact.com decided it was not true on a technicality:

“Contrary to Dewhurst’s statement, the cited cost-per-job figure was not aired by the Obama administration. At bottom, his statement leaves the misimpression that the money went solely for jobs rather than a range of projects and programs, including tax breaks. We rate his claim False.”

There is, of course, another way of looking at this from the point of view of Wall Street banksters. From their point of view, it only takes 1 dollar of wages to create 5 dollars of new debt. Since the banksters are only interested in the accumulation of debt, which sits on his book as an asset, this is a fine ratio.

If the fascist state wants to create one job, it has to borrow the equivalent of five jobs to create this one job. The accumulation of the public debt outruns the income of the members of society who must eventually pay off the debt with their income. For every dollar they get in increased income, their debt obligation increases by five dollars. They must work to pay off this debt, requiring a further extension of wage slavery beyond what is required just to satisfy their needs.

Since after the housing market meltdown citizens can no longer be relied upon to accumulate this debt on their own (they have all become subprime  borrowers) the state now takes on this obligation on their behalf, and raises the funds to service it by slashing their retirement and health benefits, reducing their access to public services like education, and inflating the prices of commodities by depreciating the currency.

This is how the scam works, folks!

You vote for Obama and the Democrats, and they mortgage your life and labor to banksters. They call this mortgaging of your life “progressive fiscal policy”, and sell it to you as a benefit.

However, since the congressman hails from the GOP, an avowed political opponent of the democrat president, he failed to add this additional fact: The argument does not change if, instead of democrat spending, we substitute GOP tax cuts, except that tax cuts are even more inefficient at “creating jobs” than fiscal spending. With GOP tax cuts, as the research suggest, the actual relation between the debt accumulated and the jobs created is aimless and dispersed and rather a bit more difficult to assess. Rather than aiming at some specific form of wage slavery as the democrats do, GOP tax cuts aim solely at subsidizing all wage slavery.

Tax cuts only have some definite targeted effect to the extent they increase the deficit and the flows of state expenditures into the coffers of banksters. While both spending and tax cuts result in a massive expansion of the public debt, in general, the less targeted the accumulation of the public debt, the more it directly favors only the banksters, who, in any case, underwrite this debt. The question is only one of degree, not result.

With democrat spending, the accumulation of debt takes a specific form — a road, a school, or an industry. It is targeted, and, therefore, can be more precisely applied, no matter that is still wasteful. What’s more, as Democrats and Republicans alike already know, the produced product can now be renamed the Obama Bridge-Tunnel Highway to Nowhere, or the Obama Elementary School, or the Obama Green Energy Research Park, or, as is always inevitable, no matter which party incurs the debt, the USS Obama.

If the outrageous cost of creating unnecessary jobs by fiscal policy is staggering, just wait until I next explain what knowledgeable insiders are saying about the cost of the Federal Reserve’s monetary policy.

Sorry progressives, the Bush tax cuts did not kill the economy

August 17, 2011 3 comments

United States Gross Domestic Product (Gold) 1929-2009

A quick note to slap down the standard progressive interpretation of the impact of the Bush tax cuts on the economy. Sorry folks, there is no real empirical support for your position.

Progressives who praise the Clinton era job creation performance versus Bush era job creation performance, and link this to Clinton tax increases versus Bush tax cuts, overlook two things that lead to the wrong conclusion: First, the Clinton job performance came during a time of a general economic expansion, Bush’s performance came during a general contraction. This fact is lost in the data because the data employs dollars as measure of economic activity and so masks the depression that began in 2001. If you discount the dollar denominated economic data using the price of gold, the contraction clearly shows up beginning in late 2000.

The second thing overlooked with this comparison is that Clinton era job creation (not “Clinton job creation” or “Bush job creation” — the two men created nothing) was exactly the wrong policy. The Clinton era succeeded in creating jobs, true. But it was creating jobs into the face of rising imports from China and other low wage nations and a general glut of capital on the world market. The depression did not appear suddenly because of the Bush tax cuts, but resulted in a too long social work day leading into the Bush era. To put this another way, the Bush era’s poor legacy creating jobs was a legacy of the Clinton era’s success at creating too much superfluous work.

The Bush tax cuts came in response to this, which was already evident as he began his term, and was his justification for the tax cuts. Progressives don’t want us to remember why Bush demanded the tax cuts, but some of us do not have such a short memory. This is not a whitewash of the Bush tax cuts; clearly they failed entirely to stop the depression from emerging and gaining steam — but they did not create the depression. Nor, were they responsible for poor job creation during the Bush and Obama years. It was already baked into the cake by overaccumulation of capital.

For those who are interested, as proof of my argument, I include the chart above showing GDP as measured by gold between 1929-2009. In the chart you can see clearly the three depressions that occurred over those years: 1929-1934, 1970-1981, and 2001-present.

The problem is not, and has never been, Republican anti-tax policies versus Democrat social spending policies — both are a sideshow to chronic overaccumulation of capital. Tax policy cannot fix this.

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

March 27, 2011 Leave a comment

I want to summarize a bit at this point, because I received a comment from one person that my writing style made his head hurt. If, I have made this unnecessarily difficult to understand I apologize for that. In part, this arises from the fact that I am grappling with this material as I write these posts. Writing is the way I best absorb what I am reading.

***

First, in relation to absolute over-accumulation:

Over-accumulation is sometimes popularly referred to as over-production (although this latter term sometimes means different things to different people). According to Marx, over-accumulation of Capital produces a fall in the rate of profit and the crowding out of a portion of the active capital — some portion of the total social capital has to lie idle. In other words, the entire system experiences a severe crisis. General over-production leads to a mass of commodities that cannot be sold and which only reduce the value of the remaining portion. Prices fall, businesses go bankrupt, millions are unemployed, and factories are shuttered. The portion of the total social capital which is forced to lie idle can not function as capital — it cannot be used to exploit labor power to create surplus value, or can only exploit it on condition it accepts a lower rate of profit or even a loss. Which actual capitals are forced to lie idle is decided by competition over how to share losses among the total social capital. Each capital tries to minimize its own loss and pass the burden of losses on to the rest of the class.

Says Marx:

A portion of the old capital has to lie unused under all circumstances; it has to give up its characteristic quality as capital, so far as acting as such and producing value is concerned. The competitive struggle would decide what part of it would be particularly affected. So long as things go well, competition effects an operating fraternity of the capitalist class, as we have seen in the case of the equalisation of the general rate of profit, so that each shares in the common loot in proportion to the size of his respective investment. But as soon as it no longer is a question of sharing profits, but of sharing losses, everyone tries to reduce his own share to a minimum and to shove it off upon another. The class, as such, must inevitably lose. How much the individual capitalist must bear of the loss, i.e., to what extent he must share in it at all, is decided by strength and cunning, and competition then becomes a fight among hostile brothers. The antagonism between each individual capitalist’s interests and those of the capitalist class as a whole, then comes to the surface, just as previously the identity of these interests operated in practice through competition.

Under conditions of absolute over-accumulation, however, the problem is not simply that one or another capital must lie idle — i.e., no longer function as capital — the total social capital can no longer function as capital. Even the very biggest capitals can no longer realize profits from the production of surplus value. Conditions are such that the production of surplus value no longer leads to the increase in the mass of social capital and the mass of employed labor power, but to the absolute fall in both the mass of social capital and employed labor power. Capital as a mode of production, i.e., as an economic system, has suffered an absolute breakdown from which it cannot recover.

Second, in relation to absolute over-accumulation and the Fascist State:

The Fascist State arises out of conditions of absolute over-accumulation as a political response to the Great Depression of the 1930s. So far as I can tell, the emergence of the Fascist State in the 1930s was not itself a given in the process I am describing. Rather, it is a political development resulting from the unwillingness or inability of society to reduce hours of labor in response to the Great Depression. Because it legally determines what serves as money, the Fascist State can “purchase” the surplus value produced by the total social capital that would otherwise be unsellable and pay for this consumption with entirely worthless ex nihilo pecuniam. The Great Depression could be managed by the use of the state’s power to create money. It also became generally obvious to the ruling elites of the leading industrialized countries that the increase in the mass of surplus value produced by the total social capital could be utilized by the Fascist State to increase its military power — and this opportunity the industrialized countries immediately exploited first by preparing for total war in the run up to World War II.

For the United States, which as a result of World War II was the last nation standing with its productive capacity completely intact and in fact greatly increased, the ability to absorb an unlimited amount of unsellable surplus output produced not just domestically but throughout the World Market resulted in the accelerated expansion of its unprecedented political, military, and economic power in relation to all other nations. It also resulted in the fact that the accelerating concentration and centralization of capital, which must accompany absolute over-accumulation, proceeds under conditions which gives a competitive advantage to American capital, and forces the capitals of other nations to absorb the losses. The flow of completely worthless American ex nihilo pecuniam into the World Market, generated by massive trade deficits and massive public spending deficits, are, in reality, not an “unsustainable burden” on the U.S. economy, as economists like to pretend, but amounts to the continuous extraction of surplus value from entire nations — who are converted into additional sources of surplus value through this process — and from the World Market generally. The American Empire is, therefore, the realization of the Fascist State — its perfection — as was only dreamed of by failed attempts like Hitler’s Germany and Mussolini’s Italy.

***

The result of the first process is a catastrophic breakdown of exchange, and a has implications for both production and consumption. Taxes aside, the Fascist State pays out its obligations not by the equal exchange of values, but by offering worthless ex nihilo pecuniam in exchange for the goods it consumes. It is true that taxes are already unequal exchange, but this form of unequal exchange was necessarily limited by the obvious impact of increased taxes on society. Taxes imposed on society result directly in the loss of individual consumption power — a loss which is both obvious and which have on occasion been the spur of rebellions throughout history. Moreover, absent tribute, the State was limited to imposing the burden of its parasitic existence on those territories over which it actually was sovereign.

With ex nihilo pecuniam, there are no such limits: the burden of Fascist State expenditures have no direct impact on society. Rather, society experiences this burden indirectly in constant and pervasive rising prices as the purchasing power of money depreciates — a burden the unscrupulous economist is only too willing to ascribe to a host of other causes — supply or demand shocks, rising labor costs, etc. (Offering an endless list of such “causes” for events so as to obscure THE cause is standard operating procedure for these paid apologists of the Fascist State.) As Keynes observed, within certain limits continuous pervasive inflation of prices, while just as effective as taxation in reducing the consumption power of the mass of society and increasing Fascist State expenditures, also traps the members of society in a false choice pitting the purchasing power of their wages against the possibility of being unemployed altogether:

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.

A kind of perverse “communism” emerged within the World Market as a whole in which the contribution to the common wealth of society is indeed detached from consumption but in a rather bizarre manner: Nations, like China, who produce very large quantities of commodities for export, receive nothing in return for this labor — their exports are essentially provided gratis to the Fascist State.

The result of the second process is the World Historical defeat of the Proletarian Revolution — the challenge by the proletarian class majority of society to capitalist class rule and the almost constant contention between the two classes over which would control the state power. The absolute over-accumulation of capital, since it leads directly to the breakdown of the process of production and exchange, presented the proletarian majority of society with the opportunity to raise itself to political rulers of society. But, this required the reduction in hours of labor for the mass of society and a successful effort to bring the total process of production under conscious management.

Mind you, these required steps were not optional for the working class majority of society. Under conditions of absolute over-accumulation, the profit motive no longer serves as the impetus of productive activity; it no longer performs the function of setting the social capital in motion for the simple reason that, with the breakdown of exchange, the realization of the produced surplus value has broken down as well. The social capital could only be placed in motion under premises that are altogether incompatible with the capitalist mode of production. In Marx’s theoretical model, I believe, the failure to assume control of the production process and reduce hours of labor during the Great Depression was a catastrophic World Historical event from which the Proletariat as a class cannot recover.

The very emergence of the Fascist State in the form of an American Empire presupposes the concentration and centralization of capital into a global capital under the control of the American Fascist State, on the one hand, and, on the other hand, the division of the great mass of proletarians along every possible line and, in first place, their division into numerous inconsequential national working classes — split up into nation states. I think the consciousness of the class as a class, which cannot be anything but a political consciousness, is necessarily confined to the nation state and the contest over power within the nation state. But, it is just this nation state which is converted into a hollow shell with the emergence of the American Empire. Although formally a sovereign power and answerable to no other authority than its own self, the nation state is, in fact, stripped of all sovereignty by the growing influence of the World Market on its internal economic life. Even if, as Marxists continue to insist, the project of the proletariat remains the capture of state power, it is self-evident that exercising this state power as a class is now impossible. There is no way any single national proletariat, or group of national proletariats, can bring the social process of production under their control as the entire social process of production has completely escaped national control. The era of Proletarian Revolutions is over.

The communist movement of society begins on these premises.

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

March 25, 2011 Leave a comment

In its fully developed form, the Fascist State is an American empire imposed by the United States on all other national states, in which each of these national states are no more than its local (national) subsidiary. The emergence of this Fascist State became the condition for the further development of the World Market bound up with Capital.

Over-accumulation of capital results from the fact that capital is founded on scarcity and can only exist on this premise. This fact leads us to the export of surplus capital into what Marx referred to as the outlying field of production within the world market, where it can be employed at a higher rate of profit. But, absolute over-accumulation in the complete meaning of this term, presupposes absolute over-accumulation not only in one or a few nations, but in all nations together. Thus, it also leads to the universal — and not merely national — competition between capitals, aimed  at concentration of the total global social capital and the elements of capital into fewer hands, and the global centralization of this social capital, along with the emergence of a global finance capital — the problem presented by the conversion of the mass of surplus value into a mass of profits within the World Market as a whole.

The question how the concentration and centralization of national capitals is to proceed is settled in the manner of such disputes between nations — i.e., by armed conflict in which one national state emerges victorious — a condition most notably expressed in the eruption of predatory total war between nation states during the Great Depression whose bloody power had been swollen by the sheer mass of social labor time that could be converted into unproductive military expenditures on a truly horrific scale. World War II was the systematic destruction not merely of armies on the battlefield, but of the industrial capacity of the belligerents and the civilian populations who could place that capacity in motion. From this point forward, when I speak of absolute over-accumulation I shall be referring to absolute over-accumulation within the World Market as a whole; and, when I speak of the Fascist State, I will be speaking of the American empire.

***

In the preceding section, I have suggested that under conditions of absolute  over-accumulation of capital, it becomes necessary for society to reduce total hours of labor, and thus bring its productive activity under its conscious control. If this is not done, or is done insufficiently, the Fascist State emerges as a symptom of the unwillingness or inability of society to realize the general reduction of total labor time. I have further argued that this unwillingness or inability to reduce total hours of labor leads to an expansion of total social labor time in relation to socially necessary labor time, i.e., to an increase in superfluous labor time. This expansion of total social labor time in proportion to necessary labor time leads to a general rise in prices of commodities even as the value of the commodities fall. Side by side with this general rise in prices, we see also the forcible withdrawal of gold standard money from circulation as money and its replacement by American ex nihilo pecuniam, along with the constant increase in the supply of this fictitious money.

It is not the increase in the supply of this fictitious money that leads to inflation, i.e., to a general rise in the prices of commodities, to the depreciation of the purchasing power of the money generally, but the increase in the proportion of total labor time to socially necessary labor time that leads to both the increase in the supply of money and the general increase in prices. If taxes are assumed to be zero, the growth of the Fascist State, of superfluous labor in the form of a grotesquely bloated and constantly expanding state, consists precisely in the issuance of ex nihilo pecuniam to pay for its expenditures. Its growth and the growth of the money supply are identical.

At the same time, the growth of the Fascist State is also the unproductive consumption of the superfluous portion of the surplus value produced by the total social capital, of the mass of surplus value that cannot be employed productively by the social capital as additional capital for the purpose of self-expansion. The expansion of the Fascist State is, therefore, also the expansion of fictitious profits, or profits “realized” on surplus value that no longer exists and has been consumed unproductively by the Fascist State.

But, socially necessary labor time is only that portion of the working day during which the mass of workers produce the value of their wages. The duration of labor time beyond this is surplus value, which, under condition of absolute over-accumulation, cannot be sold at a profit — actually realized according to the law of value — and, which, therefore, must be unproductively consumed (destroyed) entirely by the Fascist State. It is logically impossible to assume, as do the various statist ideologues, that an increase in Fascist State expenditures can lead to an increase in the wages of the working class, or an improvement in their conditions. The opposite is actually the case: the increase in Fascist State expenditures presupposes the increase in the mass of surplus value, in the mass of labor time expended by society beyond that labor time required for the production of the commodities consumed by the working class. This expansion only results in the further impoverishment of the great mass of society.

Thus the constant increase in Fascist State outlays, even for social services, result only in the deterioration of the mass of society; in their increasing impoverishment; in the actual decline in “real” wages; and in the general rise in both prices and unemployment. Yet, moderation of prices and unemployment during periods of expansion bring no more than the slightest moderation of this immiseration — the stagnation rather than outright decline of wages, and stagnant, desultory, job growth rather than outright increases in unemployment.

The absolute over-accumulation of Capital presupposes that all the contradictions of capitalist society comes to its surface in a rather spectacular fashion and on a global scale. A rampant speculative binge of remarkable proportions is unleashed as even the very largest capitals find it impossible to realize the surplus value extracted from the mass of employed labor power and thus are forced into speculative financial pyramid schemes. Competition between capitals explode, but no increase in the concentration and centralization of capital suffices to reduce the costs of production sufficiently to enable realization of the gains of this concentration and centralization — indeed, the problem of realization only becomes more difficult and profound as the concentration and centralization of capital proceeds at an accelerated rate. Wages are too high, but also too low — thus even as the reduction in the value of labor power accelerates by export into the least developed regions of the World Market where wages can be paid amounting to a fraction of the most developed regions, and by accelerated application of machinery, science and technology to still further reduce the expenditure of labor power and increase its surplus producing capacity, the successful reduction of the value of labor power only creates the necessity for its further reduction.

The ferocity with which Capital attacks the value of wages increases in proportion as each successful assault on the value of wages necessarily creates a demand for the next wave of assaults. Governments are converted directly into an instrument for the creation of fictitious profit and speculative financial schemes. The Fascist State is an agent for increasing the rate of surplus value, for an increase in the mass of surplus value produced, and, therefore, for an increase in its own mass as consumer of the entirety of the surplus value produced and the creator of fictitious profits on an even greater scale. The magnitude of the insatiable lust for profit increases, and, simultaneously with this increase in magnitude, the effort by the state to satisfy this lust by reducing the tax rate on capital (which continues to exist only as a formality, a fig leaf to provide political cover for Washington’s absolute corruption); promoting increased export of capital; ripping up regulations or altogether ignoring them; deliberately exposing the mass of society to environmental disasters and the ever expanding despoiling of nature; the routine introduction of dangerous materials into the food chain; the promotion of dangerous products etc., all for the purpose of gaining an insignificant increase in the rate of surplus value.

The Fascist State is the world historical political defeat of the Proletariat in its struggle for power against the Bourgeoisie. It is the actual political-economy of this defeat in the form of a globally dominant parasitic mass that grows in proportion as the political defeat of the Proletariat becomes the very premise and condition of the Proletariat’s own political activity — to the extent, therefore, that its complete and final subjugation to Capital is the premise not merely of its productive activity, but of its political activity as well; that political activity itself offers only to increase its impoverishment — its absolute degradation and absolute immiseration — and the constant expansion of its own capacity for self-governance in the form of an alien power confronting it and ruthlessly dominating it. The very political power of the proletarian majority of society looms as a merciless tyrannical social power over it that is absolutely indifferent to it.

On what other basis can the emergence of the Fascist State in a society founded on universal suffrage be premised other than those under which the actual proletarian majority of society express their own divisions in the form of this Fascist State? And, under what conditions should we expect these divisions to be most pronounced other than universal competition within the proletarian majority of society; under which each member of this class is thrown into absolute competition with the rest of the class, where every member of the class is set in absolute competition against every other member, and, therefore, under such condition as the class more or less assumes the form of a mass of petty commodity sellers under the most extreme competition, i.e., under conditions of an absolute and growing excess population of laborers? Marx argues that over-accumulation of capital consists precisely of this absolute excess population of laborers along with an absolute excess of capital.

It follows that the question is not whether the working class is split into adherents of greater Fascist State deficit spending, or a reduction of Fascist State deficit spending — that they oppose each other as Democrat versus Republican, progressive versus Tea Party, liberal versus conservative, public employee versus private employee, black versus white, male versus female, undocumented versus citizen, employed versus unemployed, etc. All such distinctions between and among the various factions within the Proletariat are of no significance whatsoever — are merely incidental to the outcome of the process I have described. It is not a question of the political prejudices or particular circumstances of the various members of the working class, but of politics itself: that Fascist State, no matter its specific composition and periodic reshuffling, is indifferent to this class, hostile to its interests, and exists only to further degrade and impoverish it.

The Fascist State signifies that politics is dead! That the class struggle has been settled decisively in favor of the Bourgeoisie and against the Proletariat — a class struggle that ended with the world historical defeat of the Proletariat. That the struggle against present day society must henceforth go ahead on a different basis.

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.

Six reasons why Marxists and progressives need to oppose unemployment compensation

December 21, 2010 2 comments

I received this response to my post, What help for the 99ers? (Part four: It’s not personal), yesterday on GonzoTimes:

Turn your soul off. Turn your humanity off. Turn your brain off. And voila, you’ve turned into a Republican “pro-lifer” who says “screw the poor”. Genius!

The comment was a bit cryptic to me. Is the writer saying I have become a Republican pro-lifer who hates the poor? I could not be sure so I responded with this gem in a moment of anger:

If your cryptic comment is directed at me, I take offense — not with your remark, but with the phony humanitarianism hidden behind it. Giving the unemployed $300 a week does nothing to address the causes of unemployment, which is Washington itself. If you are moved by the plight of the 99ers, as I am, I suggest you link up and find ways to support them on an authentic basis, rather than mailing your support in via your taxes. But, more important, I hope you will be moved to fight to reduce hours of work to abolish unemployment and the system that creates it permanently.

You might also consider Badiou’s critique of phony humanitarianism in his book, Ethics.

I am not satisfied with this response. It was driven as much by defensiveness as by any positive statement on the situation of the 99ers. It, therefore, does nothing to convince those who really support the cause of the 99ers to take another look at their assumptions.

Am I a renegade? The question asked, of course, demands a complete response — not first to the commenter, but to myself. Am I on some slippery slope to the renegacy decried by Badiou? Definitely time for an attitude check, and a deep examination to make sure my humanity was still in working order.

I come away from this moment of self-reflection even more sure of my position and a more fervent opponent of unemployment compensation than before. I do not think my view is one of a renegade or heartless conservative, but one who remains committed to the aims I have stood for since I was a teenager and first encountered the idea of communism. I put forth below six reasons why I think it is the classical communist position to oppose unemployment compensation:

The question I asked myself is this: Would Marx have supported unemployment compensation in his day? And, my answer to that was, “Yes.” Without a doubt he would have advocated for it, and considered it a demand consistent with the aim of communism — a measure designed to protect the working class from the vagaries and misery of the business cycle. So, why am I advocating against it? This is not Marx’s day. In his day periodic crises were common enough and no more than temporary lulls between periods of expansion during which the productive capacity of society was being augmented by capital. The scale of production was being increased, and the numbers of laborers moving from agriculture into industry was, however subject to fluctuations and sudden fits and stops, progressively converting the labor process from that of solitary farmers into massive engines of immediately social production. The process was not pretty, by any stretch of the imagination, but it was moving society generally in the direction of the abolition of labor.

Today it is otherwise. Society is drowning in its own productive capacity and we face a State that, for its own purposes, seeks to drive us under altogether. This requires we rethink all our assumptions. So here are my thoughts:

First. Today’s crises are not the mere interruption of an otherwise revolutionary reconstitution and enhancement of the productive power of labor. They are  failures of State measures to facilitate the constant expansion of completely superfluous labor. Supporting unemployment compensation today, when unemployment is no longer a temporary condition but a permanent feature of an economy drowning in a surplus population of able-bodied workers, and when the only effective policy to reduce this surplus population is to reduce hours of labor, is a travesty.

Second. Just as this crisis is not a momentary cessation between periods of expansion of capital, so it is not an accident, defect, or aberration. It has been established by economists that we are facing a long-term secular decline in Washington’s capacity to force the creation of new jobs. Washington’s tools of fiscal and monetary policy are gradually becoming ineffective in stimulating superfluous economic activity. It is also requiring more aggressive measures to produce the same effect — much like in the case of a junkie requiring larger doses of his preferred substance to achieve the same high. Washington is now creating massive amounts of new debt each month in a desperate attempt to keep this ugly Ponzi scheme right side up. The declining effectiveness of job creating measures stems not from lack of serious effort on Washington’s part, but on the very goal of the effort itself: to create work where there is no need for work.

Third. The strategy adopted by Washington to create unnecessary work was predicted to fail by many economists during the housing bubble; and at least as early as 1993, Hyman Minsky predicted a financial disaster was unfolding before our eyes. He warned of just the kinds of Ponzi schemes that Washington was facilitating in its deregulation of financial activities in its desperation to lengthen the working day by encouraging working families to accumulate unprecedentedly large personal debts. Despite these warnings, Washington, under the Clinton administration, and again under the Bush II administration, facilitated this accumulating family debt and even put in place measures to prevent working families from declaring bankruptcy to relieve themselves of it. Fully two thirds of all job creation during that period resulted from such debt accumulation.

Fourth. Beyond this, Marx and many other writers warned that a collapse of capital was inevitable. The growing output of industry resulting from improvements in productivity of social labor, Marx explained, was running into declining demand for productive employment of labor resulting from this improvement. In its drive to accumulate surplus, capital was making the ever increasing employment of superfluous labor into the necessary condition for the employment of productive labor. In time it would, he argued, become a matter of life or death for capital to find some means to increase the absolute waste of human labor in order to support profitable investment. That time arrived during the Great Depression when every industrialized nation suffered a catastrophic economic failure, and the State stepped in as the ultimate consumer of commodities and labor power rendered superfluous by overly long hours of work. Efforts by many to reduce hours of work during that period were defeated in Washington, which went on to erase the possibility of less work time from political-economic conversation.

Fifth. Despite all of the above, an argument could be made that we are nevertheless forced to support unemployment compensation because we have no power to change the situation in the short run. I think this argument is specious and even misleading: Unemployment compensation is exactly the wrong measure to pursue at present because it asks people to identify with the very cause of their unemployment. It is the political equivalent of asking people to lobby Bill Gates and Warren Buffett for handouts to ease their poverty. This “progressive” solution to the problem of the ever lengthening work day, which is the entire basis for the present unemployment, is to ask the very institution in society responsible for unemployment to ease the impact of the problem it created in the first place. We have to wake up to the fact that Washington is not a neutral actor in this play: it is the largest single consumer of surplus value in the society — and in human history; beside it, every other consumer — all “the rich” taken in their entirety — run a poor second. Washington not only knows the consequences of its policies, it fucking intends to create those consequences! The whole of its policies are designed to press the consumption of the mass of society to the lowest possible level in order that it may feed on the resultant surplus.

Sixth. We should be completely offended by the very concept of State aid for unemployment in any case. The entire argument for it, as offered by progressives and Marxists, rests on the image of the unemployed as helpless victims who must be protected from the vagaries of economic forces. As Badiou might argue, this image is completely isolated from its social context. The image of the suffering victim does not ask us how this pathetic creature came to be in her circumstance, nor does it seek to identify who caused her suffering. We are left with the need to do something — anything — to end the suffering. But, what? It is all too easy to write your congressperson or senator demanding an end to the suffering, and then sit comfortably at home watching the progress of the bill on the Rachel Maddow Show — self-satisfied that you did your part, and outraged at those who didn’t.

I am sorry, but I do demand you do something — something real, something authentic! I demand you go out of your house and find 99ers, create a network of support among folks in your community to support all 99ers. Make their plight your own in voluntary association with others. And, demand Washington cease to exist.

What help for the 99ers? (Part four: It’s not personal)

December 19, 2010 2 comments

I did not mean to go on this long on the dire future of the 99ers. I wanted only to show the connection between their demand for assistance and the demand for the abolition of the State — and, of Washington, which is the headquarters of the machinery of State, its coercive machinery of repression and imperialist adventures. Nevertheless, I am drawn to extend this thread by things which occur to me in the course of considering the 99ers, who are our family and friends, neighbors and buddies, and who, without some bold step by us all, will become the fulcrum to impose a devastating austerity on us all.

“The law, in its majestic equality,” says, Anatole France, “forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.” In this elegant sentence, France encapsulates the entirety of the relation between the individual and modern society: the State exists as an immediate totality; ideally, its laws are meant to apply to all equally without regard to the circumstances of any particular individual. Seen in the most favorable light, all we can hope to achieve under the conditions of modern society is the equal application of State laws over a society composed of individuals who are anything but equal in their actual circumstances, wants, needs or desires. To actually function as the representative of a society gripped by such vast inequality as our own, Washington essentially must be indifferent to that inequality, to presume no more than the typical circumstances. Only by being indifferent to the manifold miseries of its citizens can Washington truly represent them.

And, this is also true for unemployment: insofar as Washington is concerned, the unemployed worker is a devastating insult to the Puritan Ethic — it is the tool of Satan’s workshop, a potential source of civil unrest and Bolshevik militancy, an existential threat to the existing order. But, this worker as constituted by capital are not the actual living breathing individual workers as they really exist. but only the collective mass of these immediately social laborers, which mass exists as a totality and only within this totality. This collective worker is, of course, composed of individuals of varying demographic characteristics which are to each, on the one hand, advantages — such as education, skills, and social, familial, ethnic relationships, etc. — and, on the other hand, disadvantages — skin color, national origin, sexual orientation, language, etc. Position within this hierarchy of the collective laborer, thus, appear altogether arbitrary and at once the result of certain fixed prejudices within the society or the result of certain “objective” qualities — education, skills, etc.

The State, for its own purpose, as representative of society, may enforce laws preventing discrimination against certain individual characteristics, or promote the development of certain skill sets or level of education, but, to the extent it pursues these goals, it does not do so because of its desire to improve the lot of the individual worker, but to perfect the collective worker as a collective worker — that is, as a body capable of producing surplus value.

Washington’s indifference to the fate of the 99ers should not be confused with an indifference toward unemployment in general; Washington is keen that the collective worker should work as many hours as can be squeezed into a single social workday and seeks to maximize those hours through its fiscal and monetary policies. Its goal, whether unemployment be high or low, always is to work this collective body to the legal limit of the workday. It is, by contrast, only indifferent to which individuals composing this collective body actually work and which starve. Washington’s indifference to the 99ers, to quote Tom Hagen, “is business not personal.”

The indifference of Washington to the fate of the 99ers is only a reflexive expression of its hostility to reducing the legally mandated limit on hours of labor. Since the aim of the State is always and under all circumstances to maximize its enlargement, it must, of necessity seek to extend the work day not merely beyond the time needed to produce the commodities required by the collective body of workers, but also beyond that required to the collective body of capitalists to expand the scale of production. Since, capital’s hunger for profit knows no bounds, the State knows no limit to its own enlargement. Thus, the State’s ceaseless stimulation of profitable economic activity results in the ceaseless expansion of the State itself. Washington decries unemployment, but only to the extent that employment reaches what it calls “full employment” — a euphemism for that level of employment where additional State action produces no additional surplus value. It is the task of a vast army of economist functionaries, public, private and academic, to determine by any number of measures where precisely this level is — and, it is the subject of much controversy, which, to the uninitiated, can be confused with an actual interest in the conditions of the working class as individuals, but, in fact, it is just business.

Even if we assume, as does the progressive or vulgar Marxist, that the expansion of the State is necessary for the general improvement of the population of workers who are under increasing financial distress, and suffering misery, it cannot be denied that this expansion must come at the expense of the workers themselves. Their polite demands for laws to be passed to improve the lot of working families amounts — although the progressive would be horrified at the suggestion — to a demand for confiscation of the property of “the rich”, and the assumption by the State of the role of social capitalist. Indeed, it is the self-evident implications of their own demands that cause progressives to pull back from this implicit logic and submit themselves to meekly following in the wake of the Party of Washington — being entirely satisfied with whatever meager realization of their demands against the existing order can be achieved in the cloakroom of Congress. They are reduced to a mere lobby, another one of the special interests with their hands in the pockets of the taxpayer fishing through them for spare change.

On the other hand, their craven cowardice when facing the implications of their own demands, leads them to turn on the workers themselves and chastise them for over-consumption, gluttony and spoiling the planet. The worker is now transformed from a vulnerable victim needing the protection of the State into a greedy malevolent hedonist caring only for his own satisfaction and the world be damned. The logic of the demands require the State erect protection of the working class at their own expense, hence, consumption must be curtailed and taxes raised so that the State, having impoverished the worker, can now rescue him from his impoverishment. In this regard we see a slew of new and increased taxes on the substances commonly consumed by the population of workers that can be labeled as “sinful” — taxes on cigarettes, alcohol, gasoline, etc. — to fill the ever widening black hole that is government’s need for new sources of revenue.

Progressives completely miss the point here: for government expenditures to have an economic effect, i.e., a stimulative effect on employment, they must be entirely superfluous both to the consumption of the working class, and to the requirements of capital as such; that is, to the productive employment of labor and the expansion of the means to productively employ labor. But, the phrase, “the consumption of the working class”, includes the consumption of both those workers who are productively employed and those workers who are unproductively employed, as well as those who are altogether unemployed and living on government assistance. Simply put: to render “aid” to the 99ers by political means, the State must be indifferent to them and their daily increasing misery; it must do precisely those things which offer no assistance to them, impoverish them still further, and meet no human need, whatsoever.

It’s not personal; it is just the way the mode of production operates.

What help for the 99ers? (Part three)

December 18, 2010 Leave a comment

Why is Washington so implacably hostile to a reduction of hours of work as the solution to unemployment? And, why has it abandoned the 99ers to their fate?

The answer to these questions is simple: Washington depends on the unpaid hours of labor wrung from the working population as much as capital itself. Washington is not a neutral party when it comes to hours of labor; it is, without exception, the largest single consumer of surplus labor time in society. The entirety of its revenues amount to the unpaid labor of society either directly, in the form of taxes, or indirectly, in the resources it controls through debt or money printing.

This fact is never admitted by progressives, nor even by vulgar proponents of Marx’s theory. The argument made by the Marxists against the current State amounts not to a recognition that the machinery of state shares with capital the total pot of surplus labor time, and, as a result, must be interested in the longest possible duration of unpaid labor, but only that this machinery is under the control of capital and should instead be controlled by the working class. The progressive critique of the State amounts to a demand that this unpaid labor time be devoted to the “improvement of society”; the typical vulgar proponent of Marx differs from this only in that he proposes this be under the direction of a working class party. Neither raises the demand for the abolition of all unnecessary labor, and with it, the state in its entirety.

When the Great Depression erupted Washington suddenly had access to billions of hours of unpaid social labor which it, along with the other great powers, immediately set about throwing into preparation for World War II. Government, already the largest single consumer of unpaid labor time in society, expanded monstrously – consuming perhaps as much as 40 percent of national output. But, in the aftermath of that horrible conflict, we really see its voracious hunger, and insatiable lust for surplus as the Truman administration conceived of and implemented a policy of a permanent war footing: The Cold War.

In his annual message to the Congress, delivered January 12, 1951, Truman opened with these words announcing the birth of the national security state:

We face enormously greater economic problems, as I transmit this fifth annual Economic Report, than at any time since the end of World War II. Although our economic strength is now greater than ever before, very large new burdens of long duration are now being imposed upon it.

The United States is pledged and determined, along with other free peoples, to cheek [sic] aggression and to advance freedom. Arrayed against the free world are large and menacing forces. The great manpower under the control of Soviet communism is being driven with fanatic zeal to build up military and industrial strength. We invite disaster if we underestimate the forces working against us.

The economic strength of the free peoples of the world is, however, superior to that of their enemies. If the free nations mobilize and direct their strength properly, they can support whatever military effort may be necessary to avert a general war or to win such a war if it comes. The resources are on our side. The only question is whether they will be used with speed and determination. The answer will depend upon unity of purpose and of action–unity among the free nations, unity here in the United States.

Unity is imperative on the economic front. On this front, under the American system, everybody is involved–every businessman, worker and farmer; every banker and scientist and housewife; every man and woman. We can win our way through to ultimate triumph if we all pull together. Decisive action, essential to our safety, should not be halted by controversy now.

Truman, in his report, explains the implications of a conflict with the Soviet Union of a very long duration:

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.

For those readers whose critical facilities have been dulled by countless hours of exposure to American Idol, what we have here are the words of a craven hustler — a two-bit con artist trying to sell you something you don’t need. Washington is in the business of selling security and its sales methodology is the practice of sowing fear of chaos, terror, and the unspeakable strange unknown. This sales strategy required the creation of an adversary to the “American system”, as well as its domestic avatar buried deep within the populace, to create a pervasive sense of vulnerability and distress among the population. It doesn’t matter that this adversary is Soviet communism or “Islamofascism”, nor that its domestic avatar appear in the form of a devout Muslim citizen or communist trade union activist; what matters is that the threat be, at the same time, pervasive and discrete, universal and particular, potentially life-threatening and merely strange.

This impeccably crafted direct appeal to the collective lizard brain of society, which paralyzes critical thought as our painfully slow brain tries to calculate the odds that the Sikh gentleman sitting in front of us on the bus might be strapped with explosives — renders critical thinking useless, and, therefore, a mere impediment to the apprehension of our empirical circumstances, reduces each of us to a suggestible sheeple, and set us up for acquiescence to the burden of providing Washington with ever greater hours of unpaid labor.

On the one hand, this “service” provided by Washington is very profitable to capital in its own right, since it requires enormous amounts of otherwise unprofitable output in the form of every imaginable thing from paperclips to the most advanced spy satellites, and launchers to put them in orbit. On the other hand, the demand for these products are the very kinds of superfluous expenditures that become increasingly necessary for the continuation of this social form of production.

Once the identity of interest between capital and the State in the longest possible extension of hours of labor is established, it is possible to understand not only Washington’s hostility to work time reduction as the means to end unemployment, but also its imposition of the regime of global competition on the American economy, its facilitation of companies moving industrial facilities and service jobs off-shore, and its hypocritical promotion of amnesty for undocumented immigrants: the capitalist state is a state that must operate according the laws of capital because it is founded entirely on the consumption of the surplus labor created by capital.

It also helps us explain the abandonment of the 99ers to their fate, the impending evisceration of the social safety net and the brutality of the austerity regime now being prepared by Washington. Far from merely falling under the control of Wall Street, Washington itself wants and needs this brutal assault on the living standards of Americans because all other methods of increasing the extraction of surplus value have failed.