In reality, we must build an anti-statist movement composed entirely of supporters of the state
Tea Party demonstration in Boston, 2010
The central problem posed by the debate in Gonzo Times: how to build an anti-statist movement in a political environment almost entirely populated by supporters of the state?
We have no choice but to assume this is the situation faced by anti-statists who hope to construct a society based on voluntary association. A voluntary association isn’t a product of anti-statist ideologies, but a result of actions by people who employ the state in their interest.
In my opinion, the fight against austerity on the Left, and the fight against the incessant expansion of state spending on the Right, are identical. To realize either aim, you must realize both of them. This practically resolves into a fight against the most wasteful state spending. The profligacy of the fascist state can only be addressed if it targets those expenditures which satisfy no human need whatsoever. And, austerity can only be addressed if it addresses the relentlessly expanding absorption of real social resources by the fascist state.
Poverty and fascist state military expenditures are not two different problems — stated this way, this is self-evident. But, why this is true is often lost on those who oppose the fascist state: and this lack of clarity severely hurts our cause.
Those who oppose the state have their feet in both sides of this debate; some are in movements against wasteful spending and some are in movements against austerity. However, there is no coordination of message among all opponents of the fascist state working in these two movements. In both movements opponents of the fascist state should be showing how poverty and state domination of real social resources are identical.
This domination of real social resources is not just an ideological construct; it consists of productive capital, and labor power diverted from productive use. It is the same capital and labor power that, were it productively employed, could abolish all poverty in short order. Bringing this truth to both sides of the social debate is important, but not easy — both sides are dominated by fascist state parties and organizations. Both sides are played off against one another for the purpose of maintaining existing political and economic relations.
The opponents of the state have a task to turn what are now two camps battling for control over the state into one camp aiming to abolish it. To do this we need tools and arguments: tools that strip off the veil hiding real relations, and an argument based on those real relations.
I want to propose one tool available to us and it is based on what I think is a basic truth: the lies of the fascist state begin with money.
If you look at the chart in my post to Gonzo Times from yesterday, Sorry progressives, the Bush tax cuts did not kill the economy, you can see why this is true. That chart shows there has been two depression since World War II — the economy suffered depression in 1970-1981 and for the last 10 years. Not a single economist admits to this. Not the Fed or a single government agency has ever discussed this, but all know this to be true. The reason why you do not know it to be true is that your attention is focused on dollars, rather than the price of gold.
(In the following part of this post, I don’t want you to get me wrong. I am not arguing for a return to the gold standard — I am just laying out the history.)
States learned pretty early on in the 1800′s that their paper token of money could within limits serve the same function as commodity money. During the Civil War, Congress issued tokens to fund war against the slave states; in World War I, Britain did the same to fund its effort. The Confederacy employed the same token issue to make up for its lack of gold to fund its rebellion. And, it is common knowledge everyone from banksters to states routinely debased money to siphon off whatever portion of wealth they could. Manipulation of the metal content of coin, or excess creation of paper tokens were so routine, we had a habit of biting a coin to test it.
However, this “counterfeiting” was always held in bounds by the fact that these coins and paper were only tokens of a definite quantity of gold or another metal. The state issued a paper token and received real goods in return, but this eventually led to the collapse in purchasing power of the token. The paper tokens were only a claim on gold, and when people cashed in this claim for gold, banks suffered a loss of their real assets. At the same time, you or I could only verify that a paper token of a dollar really was worth a dollar by cashing it in for a gold dollar.
The possibility existed, however, that the paper dollar we accepted in return for our commodity, was not actually equal to a gold dollar.
The possibility that a paper dollar is not actually the equivalent of a “real dollar” is the basis of the discrepancy in the chart I posted. In what now serves as a dollar, there has never been a year over year contraction in the US economy since the Great Depression until now. However, the same data measured by the yardstick of the price of an ounce of gold shows there has been two severe depressions during that time.
The first was the Great Stagflation of the 1970s — an event so severe even today we fear inflation more than unemployment. The second, began in 2001 and has continued uninterrupted until now. The Great Stagflation of the 1970s saw real economic activity collapse by 82% — far more severe than the Great Depression and lasted more than twice as long. This depression has lasted as long as the Great Stagflation, with real economic activity falling some 75% so far.
Just as we saw in the Great Stagflation the collapse of classical Keynesianism, now we see the collapse of neoliberalism. The collapse of the neoliberal consensus stems from the fact that what worked to end the crisis of the 1970s is not working now. The neoliberal consensus was: “free trade agreements”, stable deficit spending, consumer debt, and export of manufacturing. Capital was exported to the low wage periphery, and the excessive profit took the form of consumer debt and US Treasuries financed with artificially low interest rates. This is not working any longer, and the political crisis of the moment consists entirely of a debate over what replaces it.
The fascist state can no longer function in the old way, and a new way of rationalizing Capital has yet to emerge.
Personally, I don’t understand most of this, but I do understand that all statistics regarding the actual economy are a lie. All economic and political analysis that proceeds from the dollar already accepts the Fascist State’s lie in its totality. Exposing the Fascist State on the Left and the Right, begins with ripping off the veil of money and revealing the true state of affairs.
The most important piece of information implied by the chart posted yesterday is the great gap between real and dollar denominated activity. Simply stated, on the chart you can see how far the economy can fall, should the collapse in fiscal and monetary policy continue.
The next most important piece of information provided by analysis based on gold is how deeply the wages of the average worker has been cut. It is not the least bit true that wages have stagnated over the past three decades; the real case is far more horrific: at the highest point in the expansion coming off the Great Stagflation, the average hourly wage was just 40% of what it was in 1970. Measured in dollar terms, the wages of the average worker have never fallen year over year, in gold terms they fell to about 10% by 1980. And, as I stated, they only recovered to about 40% of the 1970 level by 2001, when the economy was again plunged into depression. The real purchasing power of wages right now is about 10% of the level in 1970, and still falling.
These are just 2 examples of how money is providing a cover for Fascist State policy by confusing working people about their own reality. I should be clear at this point: this confusion is not an accident; it is not an artifact of otherwise natural money relations. It is true, as historical materialism argues, that money acts as a veil to hide real relations between individuals in society. However, we are not dealing with money in its “natural form”, i.e., in the form of commodity money. We are dealing with an entirely fictitious form of money; deliberately created to hide from the worker her relation to the state itself. A form created to conceal from her that her exploitation is now managed directly by the fascist state, which acts as the social capitalist.
This effort is best explained by one of the two geniuses who first described how it worked, Lord John Maynard Keynes:
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. – Keynes, General Theory, 1936
This is the entire political-economy of the fascist state stated concisely in the words of one of its most profound thinkers: working people will respond to gradual starvation through inflation by working more and longer to make up for the loss of real wages.
5:49 pm
Great article but it leaves me more confused about your opinion of gold. I see you say things (e.g. on Twitter) like “because gold is the perfect store of value, it is now perfectly unsuitable to society,” and here it seems like it’s a useful reference point for mediums of exchange.
We have discussed FOFOA a few times and I’m having a hard time seeing how this doesn’t agree with his notion that physical gold is a “focal point” for currency (though currently unable to perform that role do to being encumbered by “paper gold”). That would seem to make gold “suitable” (though not the way gold standard bugs think, and maybe I’m using the word differently that you are) precisely because it’s not useful as a commodity or as currency. “Gold is best when it lies still” and all that. To quote freegolder “Blondie”:
Thoughts?So is the point of your statement from Twitter that if gold is storing surplus value that this represents a problem, e.g. it’s a symptom of superfluous labor in the system?
7:41 pm
Let me try to separate the problems and take them one by one. I can not promise this is completely correct; only that it is my best understanding at this time:
To your last question: gold cannot be the store of ‘surplus value’, it can only store ‘value’ — the distinction here is necessary. Gold is the perfect receptacle to store value, i.e., to store socially necessary labor time, but capital is the production of surplus value, i.e., the production of surplus socially necessary labor time. If the new value created by capital hardens into a hoard of gold, it is no longer capital. It has ceased to circulate as capital, to seek self-expansion through circulation. It is dead.
This is my difference with FOFOA. S/He thinks the aim of capitalist production is the accumulation of value, and wants it to be gold; but I think the aim of capitalist production is more capitalist production. For value to end up as a gold hoard, is symptomatic of depression, not the normal functioning of the mode of production. In practice, gold did not circulate as capital, but was replaced in circulation by bills of exchange and the like. It was credit money. Only when circulation of commodities reached the final sale was there the actual exchange of the commodity for gold — and this exchange validated the entire chain of credit money transactions.
If this final transaction did not take place, the entire chain of credit money transactions were rendered fictitious, even though they had been undertaken in good faith. The claims represented by the credit money could not be realized and were now worthless. The Great Depression was the emergence of this latter problem as a permanent feature of the economy. So, to reestablish the circulation of capital, money had to be debased from gold and replaced with a fictional form. This replacement, however, brought the entire mode of production under the control of the fascist state.
11:46 am
The focus of this article on the price of gold ignores the difference between how much the wage of a worker bought in 1970 and how much it buys now, not in gold but in food, rent, entertainment, and so on. The result of such a comparison may agree with this article, but such a comparison was not made, and all we see is some Glenn Beck style fapping over gold.
3:26 am
I am interested to see how you arrive at this conclusion: “…all we see is some Glenn Beck style fapping over gold.”
Am I selling gold? Or, am I using it as an analytical tool? Does the fact that Beck sells gold invalidate it as an analytical tool? Aside from the fact that I have shown comparisons on a number of commodities between 1970 and 2009 in other post is, of course, not the point here. Your implication is that there is no validity to even comparing total economic activity between 1970, 2001 and 2010 in both nominal dollars and gold for purposes of deciding whether we are in a depression or not.
Simply to make such an assertion is not enough. Prove I am wrong. Show why gold cannot serve as a measure of economic activity.
Moreover, there are more variables than simply how much the worker pays for food, clothing and shelter. There are any number of areas of the economy which do not end up in a basket of goods in a grocery store that require expenditure of human labor. It is, for example, quite obvious that the cost of four military conflicts are not paid for directly out of the wages of the working class, but nevertheless affect consumption in society — either by diverting resources from human need, removing able bodied workers from productive employment, or destroying productive capacity. These are lost hours of work that are employed superfluously by the Fascist State.
Should these superfluous hours of labor not be measured as well? Or, must we insist that only the costs deducted directly from the working class for basic subsistence be included? If it is to be the latter case, you have a problem, since it is impossible for the total prices of wage goods to exceed the total sum of wages paid out to the working class. We will always find — by definition — that the value of the one will always equal the value of the other.
4:56 am
You aren’t selling gold, but you declare gold the best measure of economic activity and the price of gold to be the best determinant of the value of wages, and it is this attitude toward gold, treating it uncritically as The Thing to go to. I don’t know if you are correct, so I have no interest in ‘proving you wrong’, which is why I never said you were wrong and why I worded the comment very carefully: I find your take on it to be insufficient, or rather, irrelevent. Rather than prove you wrong, I’m asking you to convince me, though your reply here shows you have no interest in that.
What I’ve pointed out is the need to compare the ability of the worker’s wages to buy use values. To dismiss this by saying that we also need to look at other stuff, such as the money spent by the state on all kinds of stuff is to miss the point.
What a worker can buy with their wages is certainly influenced by all the other stuff, but they are different questions. You seem to be conflating the total share of wages in the economic output with the value of wages to each worker. That is the only way in which your points can matter. If we are not looking at the total wages of the employed proletariat, then the money spent on wars only matters through how much it drives down take-home wages in the form of the use values they can buy.
As for comparing economic activity in dollars and gold, I actually disagree with both, except insofar as we see shifts of money, that is, shifts of proportions of investment or output among different things. For an actual comparrison of economic activity we should look at how much is produced, not in dollars or gold, but in actual figures. How many watts of power, how many tonnes of iron, how many bushels of wheat, how many toy soldiers. Where did they go, how much were consumed and how much was dumped, how many labour hours were involved in production and how many workers did that work?
Given all this, how does the price of gold fit in, and why is it, and not those other things The Thing to base your analysis on?
12:44 pm
Because gold is the premier measure of value. Which means, it is the premier measure of the portion of the social work day that actually produces value. And, what is value? Value is socially necessary labor time. By employing gold in analysis, it is possible to discover how much of the actual social work day is socially necessary, and how much is pure waste — superfluous activity producing no value at all.
This is why ex nihilo money cannot be a tool for analysis. It can provide us a nominal view of economic activity, but it cannot tell us how much of that activity is necessary and how much of it is pure waste. Of course, only Marx’s labor theory of value acknowledges the existence of a category of labor time that is entirely superfluous either to the production of use value, or to the consumption of those use values. So, no other approach to analyzing the material mode of production even asks the question:
“How much of current economic activity in society is superfluous to human need?”
Moreover, value is not only socially necessary labor time, it is also the definition of that portion of the social work day during which the wages of the worker is produced — the other portion being surplus labor time. Since, only Marx’s theory even acknowledges this division, no other approach understands the significance of what you called insignificant:
“To dismiss this by saying that we also need to look at other stuff, such as the money spent by the state on all kinds of stuff is to miss the point.”
It does not miss the point, precisely because we are dealing with a mode of production that undertakes production for the sake of production alone, and in which human need (wages) does not figure directly, but only indirectly: as a barrier or an obstacle to the creation of surplus value.
The fact that gold is a measure of value, makes it possible to uncover the whole of fascist state policy, which is the unproductive consumption of labor power itself to provide the external conditions for extraction of surplus value under conditions of overaccumulation of capital.
I am sorry, but whatever analytical tool you are using has no idea this layer of economic activity even exists. You are blind to it. So even when I point it out to you, you cannot see its significance: the greater part of the social work day is entirely unnecessary. Hours of work can be slashed and mankind freed from labor. This is the historical mission of capital.