Introduction to this revision
On the Left there is a real prejudice that Paul Krugman’s Keynesian policy ideas represent a more humane form of capitalism than Obama, Bush, Geithner and Bernanke neoliberal policies. Or that state social spending represents a more moderate face of capitalism than calls to dismantle entitlements and welfare spending. Even anarchists like Chomsky or Marxists like Wolff buy in to this stupid proposition.
Let’s be clear about this: there is not a dime of fascist state spending on anything that is not aimed at prolonging the life of capitalism. There is not a single penny spent on the poor that is not aimed at anything but intensifying their poverty. We are talking about a class of cannibals that have ruthlessly leveled entire cities to gain a competitive industrial advantage. If you think capitalism has a human face, you should get your fucking head examined.
Henry VIII exterminated 70,000 men and women to force the working class to accept wage slavery. The folks who control wealth right now, slaughtered millions on every continent to accumulate it, yet we still have dumbasses in the movement who think Obama cares about the unemployed and about your health? We are facing a class of predators who would feed on your children if they thought it would give them a competitive advantage. These are people who will drive our species to the brink of an extinction level event, secure in the knowledge there is profit to be made.
Our limitation, naiveté, is the inability to imagine just how inhumanely they can act toward entire sections of humanity to make a buck. We on both the Left and Right can talk all we want about the Constitution or “human need”, but this is meaningless to these people. They have already told us “The Constitution is not a suicide pact.”
Translation: “Whatever we have to do, we will keep our monopoly over the wealth of society.”
“The central problem to be addressed is clear enough. Compound growth for ever is not possible and the troubles that have beset the world these last thirty years signal that a limit is looming to continuous capital accumulation that cannot be transcended except by creating fictions that cannot last.”
There has been a long debate among historical materialist theorists going back almost to the day Frederick Engels died in August 1895. That debate can be stated this way: Does the capitalist mode of production reach a breakdown point on its own because of its internal laws, or can it continue pretty much indefinitely unless the working class acts to put an end to it?
There were theorists like Henryk Grossman, Rosa Luxemburg and the Bolsheviks who argued capitalism’s internal contradictions made its break down inevitable. But, there were also heavy weight theorists, like Karl Kautsky, Rudolph Hilferding, and Otto Bauer, who argued these internal contradictions, while leaving capitalism prone to all sorts of crises, were not fatal to it. These crises would bring down capitalism only by serving as impetus to goad the class struggle. However much the conditions within capitalist society deteriorated at times, this latter group argued, the coup de grace to capitalism must be delivered by positive working class political action.
There is no question capitalism has a long term tendency toward a declining rate of profit. Karl Marx clearly argued for this — but Ricardo, Smith and Mills also came to similar conclusions. Many of the important economists of the classical period understood there to be a long term tendency for the rate of profit to fall that appears to limit the lifespan of the capitalist mode of production. Yet, today, I think it would be safe to say almost all Marxists hold to the idea the end of capitalism requires political action — it does not break down of its own accord. Marxists may differ among themselves on the form this political action must take — revolution or franchise — but they agree some definite form of political action to overthrow capitalism must take place.
(FWIW: I happen to be in the former group: no matter the failures of the working class, I think capitalism is a mode of production with an expiration date.)
Capitalist Breakdown Defined
The two sides in the debate over the theoretical necessity of capitalist breakdown is sometimes obscured by the language employed by Marxism. But, this debate can be simply stated: in Marx’s theory capitalism had a tendency toward what he referred to as “absolute development of the productive forces.” This is a very fancy technical term in Marxism for the tendency of capital to reduce the amount of labor it takes to produce a commodity to the lowest possible minimum. The breakdown point of capital can be thought of as that point where no improvement in the productive capacity of labor power, or reduction in the amount of labor employed to produce commodities, can increase the absolute mass of profits to offset the tendency inherent in capitalism toward a fall in the rate of profit. Marx defined it as that point where any additional capital set in motion to produce surplus value resulted in the same quantity of profit, or even less profit, than before the increase.
The logic of this tendency is not difficult to understand: since the capitalist makes his profit during the period of the working day when the worker labors gratis for the capitalist, the capitalist has every interest in minimizing the portion of the working day when the worker is reproducing the value of her wages. Thus, the overall trajectory of the capitalist mode of production is to constantly reduce the time it takes for the worker to create the value of her wages, and increase the portion of the working day when she is creating capitalist profits.
If this ever reached its absolute imaginable limit, the worker would spend all her time creating profits for the capitalist and none producing the value of her wages — but, this would immediately bring the capitalist accumulation process to a standstill. Now, Marx introduces a lot of reasons why this had not happened, and was unlikely to happen, in his lifetime. But, he never ruled out that this was a historical tendency of capitalism — a law which gave capitalism a limited shelf life.
Whether or not in the interim capitalism was overthrown by the workers, the laws internal to the mode of production would eventually kill it. The workers’ struggle to overturn capitalist relations of production and the working out of the law of value are two admittedly related but distinct processes. After Engels death, however, to a certain extent, the two problems — capitalism’s internal laws, and the workers’ revolution — sort of get compressed into one argument. Rather than capitalism’s internal laws being considered independently of, and apart from, the workers’ revolution, the two were conflated into the same event.
One side of this debate — represented, as I said, by Hilferding, Kautsky and Bauer among others — argued the demise of capitalism was not inherent in the mode of production, but required the political action of the working class. This side created a sort of steady state model of capitalism. I blatantly stole the term “steady state” from physics, which had a similar debate in the fifties and sixties. The debate in physics was whether the universe had a cosmological trajectory toward dissolution or would roughly reproduce itself in the present form forever. A similar argument occurred in Marxism regarding the trajectory of capitalism — with the “steady state” side arguing capitalism could restore itself to “normal” operation indefinitely.
The “steady state” advocates did not say capitalism would not encounter crises — in fact, they assumed it would. And, with each crisis, the conditions of capitalist accumulation would undergo a significant depression. Eventually, these crises would more or less trigger the working class, who would suffer the effects of crises, to abolish capitalist relations of production. But, until this happened, capitalism would more or less loop through cycles of boom and bust; perhaps morphing as it went along.
Grossman paraphrases Kautsky’s argument this way:
Kautsky concludes that ‘it is no longer possible to maintain that the capitalist mode of production prepares its own downfall through the very laws of its own development’ (p. 541). Kautsky’s argument is based entirely on the fact that the position of the working class improved after the conditions described in the Communist Manifesto. From this fact he draws the conclusion that Marx’s theory of the development of the productive forces under capitalism is untenable, especially the idea, basic to Marx, that from a certain stage onwards capitalism is a fetter on the productive forces. To this Marxist theory Kautsky counterposes the directly opposite conception: ‘If earlier modes of exploitation ultimately led to a destruction of the productive forces, despite short spasms of expansion, industrial capital is defined by its tendency to augment them’ (p. 539).
However, Grossman argued, capitalism had to suffer an irretrievable breakdown not because it led to the destruction of the productive forces, but because it ceaselessly developed them to the point where capitalism itself was the obstacle to the process it had unleashed. Having created the working class, it would now begin to starve them to ensure its profits:
The fact remains that at a late stage of accumulation this general tendency towards the depression of real wages emerges inexorably from the very process of capital accumulation on the basis of a rising organic composition. It follows that this tendency can be delayed for some time; it can be slowed down by the action of specific counteracting tendencies, but it cannot be abolished. Abstracting from such purely temporary phases, we see that from a certain point of accumulation onwards wages must decline continuously under pure capitalism, despite any initial increases. After this point the tempo of accumulation and technological advance slows down and the reserve army grows.
Obviously such a process cannot last indefinitely. A continuous deterioration of wages is only possible theoretically; it is a purely abstract possibility. In reality the constant devaluation of labour power accomplished by continual cuts in wages runs up against insuperable barriers. Every major cut in its conditions of life would inevitably drive the working class to rebellion. In this way, and through the very mechanism that is internal to it, the capitalist system moves incessantly towards its final end, dominated by the ‘law of entropy of capitalist accumulation’.
The Great Depression: breakdown, but no breakout
While the two sides may have differed on whether capitalism would actually experience a breakdown, both agreed on the result. Whether there was a breakdown or not, conditions would eventually deteriorate to a degree the working class would opt out of capitalism. If patient education had been done with the working class by its leaders, socialism would be on the agenda of society.
Back in the 1930s, this debate made the Great Depression a very interesting real time test for these two competing historical materialist theories. If the advocates of capitalist break down were right, a general global social revolution would be inevitable because capitalism would not and could not recover.
The Great Depression is also very interesting because it is the event that meets Engels’ criteria marking the next “economic advance” of the relations of production — what he called “the attainment of another step preliminary to the taking over of all productive forces by society itself”. Engels basically stated, this Event would happen when the existing state was compelled by economic events to take control of the productive forces and manage them itself. Engels emphasized it had to be forced on the bourgeois state, not some sort of “Prussian Socialism”. This is what actually occurred in the Great Depression. By Engels definition, I think, capitalism had indeed suffered a breakdown — not a mere crisis, as had happened in previous depressions.
It turns out the “catastrophists” were correct. Capitalist breakdown was inevitable. But the breakdown itself, while proving the “catastrophist” argument about breakdown correct, also proved both sides wrong about the outcome of this break down. Socialism did not result either from the breakdown or the prolonged deep economic dislocation that followed. Capitalism broke down, but rather than producing the much hoped for socialist revolution, fascism swept Europe and all industrial nations.
It seems both the break down theorists and their opponents figured wrong. Conditions in capitalist countries deteriorated sharply and for a prolonged period of time, but despite this deterioration, no socialist revolution erupted. In some countries, like Germany and Italy, overtly fascist parties took power; in other countries, like the US, Britain and English speaking countries, fascism generally did not appear in these overt political forms. When the depression struck, even workers in countries like Germany, which had a large successful socialist party, abandoned it for fascism.
I have no real explanation yet for why this happened, and have no intention simply to blame the leaders of the German party. It is enough to say, when faced with massive unemployment, the German workers immediately sought to reproduce themselves in their roles as wage slaves. In other words, they attempted to restore their previous conditions of existence — and I do not think this was a failure of education. In any catastrophe, natural or social, the first thing people try to do is “piece their lives back together”. No one sitting in the middle of a massive disaster like Katrina says to themselves, “Hey, this might be a good time for a career change.” No one looking at their flattened trailer in Oklahoma, in the aftermath of a tornado, says to themselves, “Well, I always wanted to move to Paris and paint anyway.”
Clearly, with appeals to themes like national rebirth or national renewal fascism made an appeal to the working class that implied a restoration of some imaginary image of a pre-crisis social equilibrium that never existed. Communists would do well to understand this appeal, since evocation of a past when, somehow, things were better than today remains a critical element of fascist state politics today. These false memories of an idyllic past are evoked precisely to steal the future of the working class, and for no other reason. Communism must be linked to the future not the past, and, moreover, to a future where class society and the state no longer exists.
The Fascist State and the birth of economic policy
Besides confirming, I think, that breakdown of the capitalist mode of production was independent of the political action of the working class, the emergence of fascist states in all industrial countries can clarify much about the working out of the law of value. What I find really interesting about the rise of fascism in the aftermath of capitalist breakdown is how these fascist regimes — whether overt or de facto — coped with the crisis. What measures did these fascist regimes take, and why did they work? Moreover, how do you define “work” in this instance?
The working class rallied to capitalists like Roosevelt, or fascist parties like the Nazis, who promised to “fix capitalism”. And, “fix capitalism” they did: they imposed a set of policies that further devalued labor power beyond the impact on wages produced by the Great Depression itself and ended the years of economic contraction. In the United States, these policies generally go by the name of Keynesian monetary and fiscal policy.
To understand how Keynesian economic policies work, we have to understand what the alternative to Keynesianism was at the time. The alternative to Keynesian policies was simple: reduce hours of labor until no one was unemployed. Unions proposed to reduce the work week to 30 hours, and the law almost passed in the United States, until Roosevelt maneuvered to kill it. Reducing hours of work was not a hare-brained scheme thought up by utopian dreamers: everyone expected hours of labor to be reduced as industrialization spread and multiplied the productivity of human labor power with automation. Which is why a reduction in hours of work came so close to being voted into law during the Great Depression — actually passing the United States Senate.
But, since the profits of capitalist firms increase with the increase in the length of the workday, businesses fiercely resisted any attempt to impose limits on hours of work. Ideologists for capital came up with a new tack. They argued the depression happened not because the social workday was too long, but because of what they now termed “insufficient demand” for output. Reframing the debate this way was essential — if, indeed, the problem could be reframed as “insufficient demand”, the state could, in theory at least, offset the lack of “market demand” with its own spending.
Soup kitchens full of unemployed workers and warehouses full with unsold commodities were now redefined as a case of “insufficient demand”. But, this way of describing the problem was actually just a very slick sophisticated marketing campaign. The marketing campaign came with its own pseudoscience attached in the form of John Maynard Keynes’s treatise, “The General Theory of Employment, Interest and Money“.
According to Wikipedia:
The central argument of The General Theory is that the level of employment is determined, not by the price of labour as in neoclassical economics, but by the spending of money (aggregate demand). He argues that it is wrong to assume that competitive markets will, in the long run, deliver full employment or that full employment is the natural, self-righting, equilibrium state of a monetary economy. On the contrary, under-employment and under-investment are likely to be the natural state unless active measures are taken. One implication of The General Theory is that a lack of competition is not the fundamental problem and measures to reduce unemployment by cutting wages or benefits are not only hard-hearted but ultimately futile. (my emphasis)
According to the Wikipedia, fascist state intervention in the economy is necessary to prevent it falling into a condition of “underinvestment” and “underemployment” — whatever these nonsense terms mean. However, in direct contradiction to the above piece of fascist state disinformation, the General Theory simply lays out a conceptual framework for accomplishing what Grossman argued years earlier the capitalists would have to accomplish if capitalism was to restore the rate of profit: set in place a mechanism to continuously devalue labor power by means of deliberate state action to depreciate the purchasing power of debased paper currency.
Keynes wrote the exact opposite of what is described in the Wikipedia article. Instead of trying to avoid “cutting wages or benefits“, he explained why the state could do it more effectively through fiscal and monetary policy than individual capitalist firms. In his General Theory, Keynes argued workers would find it difficult to fight against inflation’s effect on reducing the real value of wages. They might resist a direct cut in their own wages, but lowering the “real” wage — i.e., forcibly devaluing labor power with steady incremental inflationary pressure — while nominal wages remained the same would pose a real difficulty for labor unions to combat:
…it would be impracticable to resist every reduction of real wages, due to a change in the purchasing-power of money which affects all workers alike; and in fact reductions of real wages arising in this way are not, as a rule, resisted unless they proceed to an extreme degree. Moreover, a resistance to reductions in money-wages applying to particular industries does not raise the same insuperable bar to an increase in aggregate employment which would result from a similar resistance to every reduction in real wages.
In other words, the struggle about money-wages primarily affects the distribution of the aggregate real wage between different labour-groups, and not its average amount per unit of employment, which depends, as we shall see, on a different set of forces. The effect of combination on the part of a group of workers is to protect their relative real wage. The general level of real wages depends on the other forces of the economic system.
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.
The fascist state solution to the depression, Keynes cynically argued in his Machiavellian book, is to covertly force wages down to the level where the extraction of surplus value could be expanded through inflationary fiscal and monetary policy.
Of course, if the work week had been shortened, unemployed workers would have easily found jobs, but shortening the work week would have also reduced the mass of surplus value produced by the workers, and, therefore, reduced capitalists’ profits. So, just as Grossman had argued in 1929, Keynes argued maintaining capitalist accumulation in the aftermath of capitalist breakdown required the more or less continuous deterioration of wages through the covert mechanism of fascist state inflationary monetary policy.
Just how long would Krugman be a darling on the so-called Left if it was clear he has only ever advocated continuous wage reduction to prop up profit? This, in fact, is his entire economic program, as well as the whole aim of fascist economic policy. What we have been witnessing these past eighty years is not “economic growth” (whatever that nonsense phrase even means) but the continuous forcible devaluation of wages to prop up the extraction of surplus value.
Fascist state policy and the law of value
However, using government spending to offset “insufficient demand” was not as simple and straightforward as it sounds for us today. There were definite material limits to what the state could spend to prop up demand determined by the law of value. At the onset of the Great Depression, money was gold and this commodity money had a value that was independent of government policies and determined those government policies. The state could not just go in the back room a print up a couple billion ounces of gold and force them into circulation.
Moreover, even if the state spent a commodity money like gold to support demand, the gold would soon drop from circulation again and back into hoards as owners realized gold was now trading for goods below its actual value. The movement of gold in the economy was not an independent variable; it was dependent on the values of the commodities being sold — and the depression had greatly reduced commodity circulation. To circumvent the limitations on economic policies imposed by the law of value, the fascist states had to replace gold with an inconvertible token money — which then could be forced into circulation covertly through government spending.
The Keynesian policies effected in the United States consisted of two principal measures: first, replacement of the pre-1933 commodity based dollar with an inconvertible token currency also named the dollar, and second, devaluation of this inconvertible currency by 70% against the pre-1933 dollar.
The first measure — introduction of an inconvertible currency — handed to the state the power to spend “money” into existence without the emergence of a two tier price system — with token currency immediately losing credibility to commodity money. The capacity to create “money” at will allowed the state to employ the excess capital of society and the industrial reserve for whatever purpose the state assumed to be important. The second measure — devaluation — acted as an across the board wage reduction imposed on the working class. It was a naked act of class war terrorism, effected by leaving nominal wages intact while reducing the purchasing power of those wages. With this measure the fascist state forced the recovery of the rate of profit.
However, circumventing the law of value by replacing commodity money with an inconvertible token had a hidden cost. If, for whatever reason, society was not willing to reduce hours of work to end the depression, the hidden logic of the situation required the work week to get longer! This might seem a bit bizarre but it was true, because fascist state spending “solved” a different problem than was solved by reducing hours of labor. Rather than attacking the source of the depression fascist state spending proposed only to treat the symptoms — unemployment, excess capacity and a general glut of commodities.
Reducing hours of work countered the depression by cutting into the production of surplus value. Excessive extraction of surplus value from wage labor created the overaccumulation of excess goods, excess capital, and unemployment. But, since surplus value was also the only source of profits, reducing hours of work cut into that too — raising a howl among capitalists. Hours of labor reduction worked essentially by reducing the surplus value produced by the working class that is at the heart of overproduction of capital.
Fascist state spending, however, was aimed at preserving profits while absorbing the massive glut of unemployed workers, idle factories and unsellable commodities. This required setting these elements of superfluous capital and labor power in motion for the expressed purpose not of producing more capital, but for consuming the capital already being produced.
Waste on an unimaginable scale
Okay, so you don’t want to reduce hours of work, right? Then you have to figure out what to do with all that unsold crap and the unemployed. There was only one caveat: the “solution” offered by fascist state spending meant unprecedented amounts of labor time had to be expended in ways that were wasteful and unproductive, since the aim was to absorb otherwise unsellable commodities, employ otherwise superfluous productive capacity, and hire otherwise unemployable workers. Whatever purpose adopted by the fascist state, it could not be productive — it could neither add to real wages, nor increase the total productive capital of society. The problem, from the standpoint of capital, was not too little productive capacity in the form of labor power and capital, but too much. Labor had to be wasted on a grand scale — a scale equal to the excess crap coming out of the factories. The fascist state was awash in resources on an unimaginable scale, and it could lavish any whim.
So, if you want to waste labor on a really gargantuan scale, here are some suggestions: send people into the wilderness to carve some faces into the sides of mountains. Who they carve in those cliffs isn’t important — as long as they burn through lots of unsold crap, like jackhammers and lunch pails. Pay people to paint art on post offices; collect oral history among former slaves; build dams that would never earn their way back into the black; construct public buildings, and bridges and roads to nowhere; or operate relief programs. All of these programs appear today as an explosion of “progressive” governance in the face of an economic catastrophe, until you realize their sole purpose was to avoid curtailing the system of wage slavery by even one minute of labor.
Of course, the most important use to which all these newly minted fascist states put this superfluous capital and labor power was building and employing massive military power to slaughter the citizens and destroy the productive facilities of their economic rivals. It did not hurt to expend a little of this wasted labor power on leveling the productive facilities of your industrial competitors. So we can also thank Keynesian economic policy for making possible the so-called strategic bombing campaigns by the Allies against Germany and Japan, in addition to the slaughter of another 80 million in a global war of division.
The solution consistent with the capitalist mode of production was to produce things then destroy them. The time spent carving faces into cliffs was time not spent building houses and factories. But, for capital, there were already too many houses and factories — that is, there was too much to be profitably employed as capital.
Now, this did not mean for all time no new factories or houses could be built — I want to be clear about that. Although, capital actually suffered a real catastrophic breakdown, new factories and new houses continued to be built. What fascist state economic policy really required was that no matter how much productive capital was added to circulation, the quantity of capital consumed unproductively — wasted — had to increase still faster. The problem of Keynesian economic policy is not the production of surplus value, but ever more rapid expansion of unproductive consumption of this surplus value. So, from 1934 until now, under the Keynesian economic regime, productive capacity rapidly increased, but not so fast as the unproductive expenditure of labor time.
The Limits of Fascist State Economic Policy
The capitalist breakdown that occurred in the Great Depression meant millions were permanently cut off from wage work and facing starvation. Capitalism could not bring them back into productive employment within the limits of the then existing legal working day, even if the capitalists had been so inclined. Breakdown meant those productive jobs would never come back. Capital had reached the limits of accumulation, and the only real solution was general and deep reduction of hours of work. People wanted work, but the expansion of productive employment within the confines of the capitalist mode of production had stopped. To “create jobs” at this point, based on the old conditions of accumulation, could only be accomplished by unproductive employment.
In the Great Depression, capitalist breakdown confronted society with the necessity for a general and continuous reduction of hours of labor — for abolition of wage slavery. There was no way to go back from the Great Depression to some earlier, robust form of capitalism. In just a few hundred years since its inception, capitalism had thrust mankind out of the world dominated by labor.
Fascism is, first and foremost, the recognition by society that the capitalist mode of production has outgrown its historical usefulness; but this is only recognized in the negative sense with money that is worthless, labor that produces nothing and the production of “commodities” like aircraft carriers. Labor itself is simply human productive activity that creates value — thus, human productive activity today no longer creates value. When an ever increasing portion of society is compelled to demand jobs from the state — to demand it engage directly or indirectly in make-work jobs creation — just to escape unemployment and poverty, it should already be clear to Marxists that the wage labor relationship has already outlived its usefulness in spurring the development of the forces of production.
However, the emergence of the fascist state and the expansion of unnecessary labor in the form of state spending is not the last word on this. Although the fascist state has been energetically expanding superfluous labor to support the capital accumulation process for decades, the progressive reduction of socially necessary labor time — which is a process internal to the capitalist mode of production itself — has proceeded just as vigorously. Rather than counteracting capitalism’s drive to reduce the value of labor power to zero, fascist state economic policy has removed the impediments to the expression of capitalism’s tendency toward absolute development of the productive forces.
It should now be obvious why the Left’s attachment to Keynesian economic policies and the portrayal of neoliberal globalist policies as somehow different from, and opposed to, Keynesian policies is not just wrong but terribly misguided. In fact, as I have shown, Keynesian policies have never been aimed at anything other than slowly starving the working class. Neoliberal policies are simply Keynesianism on steroids — an intensification of Keynesian policies. Writers like Wolff and Resnick have completely missed the point by distinguishing between Keynesian and neoliberal economic policies. This is just another example of how the Marxist Academy has been thoroughly infected with marginalist thinking. From the point of view of Marx’s labor theory of value, Keynesian policies are an attempt to extend the life of capitalism by continuously devaluing the value of wages by means of monetary policy to maintain the rate of profit. The only thing neoliberal globalist policies add to this is the export of entire industries to low wage nations and “consumer debt”. The first policy accelerates the forcible devaluation of labor power; the second policy extends this devaluation by means of credit. Neoliberalism intensifies Keynesian economic policy, but at the cost of accelerating the rush of capital toward its final destination. Handing out subprime mortgages was not just a venal attempt to ensnare the poor in debt, it was an act of desperation by a mode of production hurtling toward its extinction.
The problem posed by the fascist state is not the production of wealth as such, but the production of wealth in its capitalistic form – production motivated by profit. The production of wealth in its capitalistic form today requires an ever increasing expenditure of superfluous labor time by the state. Unless the state constantly increases its wasteful destruction of the total surplus product of labor, the surplus value extracted from an ever dwindling number of productively employed workers cannot be realized as profits. The fascist state has not abolished the ultimate result of the capitalist accumulation process; it has, rather, bought time for capitalist relations of production at the ultimate cost of compressing into one single event, the historical results of the past eighty years of capitalist accumulation.
What is most significant about the present crisis — what should draw the attention of every communist theoretician — is the fact that for the first time in 80 years, the dollar denominated measure of US GDP has contracted year over year and is still falling. This implies the critical limits of fascist state economic policy has been encountered, or will be encountered shortly.
Tags: Bolsheviks, capitalist breakdown, classical economic theory, commodity money, devaluation of the dollar, Fascist State, fascist state economic policy, fascist state political economy, Federal Reserve Bank, Frederick Engels, Henryk Grossman, history of the great depression, Karl Kautsky, Karl Marx, Labor theory of value, labor time, law of value, Lord John Maynard Keynes, otto bauer, Rosa Luxemburg, Rudolph Hilferding