Keynesian economic policies don’t work, but fighting for these policies will?
Guglielmo Carchedi’s essay on the so-called Marxist multiplier has me bugging. He is handing out bad advice to activists in the social movements and telling them this bad advice is based on Marx’s labor theory of value. The bad advice can be summed up concisely: Keynesian policies do not work and cannot work, but the fight for these policies (as opposed to neoliberal policies) can help end capitalism:
From the Marxist perspective, the struggle for the improvement of labour’s lot and the sedimentation and accumulation of labour’s antagonistic consciousness and power through this struggle should be two sides of the same coin. This is their real importance. They cannot end the slump but they can surely improve labour’s conditions and, given the proper perspective, foster the end of capitalism.
Frankly, Carchedi’s advice is the Marxist academy’s equivalent of medical malpractice. (For the record, Michael Robert’s has his own take on the discussion raised by Carchedi’s essay.)
Tags: budget deficit, capital, debt, Depression, economic policy, Employment, falling rate of profit, financial crisis, great depression, Guglielmo Carchedi, inflation, Karl Marx, Keynesian economics, Marxism, neoliberalism, political-economy, unemployment
In 2003, Michael Lebowitz asked an interesting question: What Keeps Capitalism Going? What explains the persistence of an exploitative relationship in which the working class must sell their labor power to the capitalists who own the means of production. This latter group — the capitalists — have no concern for the workers, Lebowitz explains; they have only two interests in the outcome of this exchange: profits and more profits. The purchase of the worker’s labor power allows the capitalist to direct the workers in the act of production for the purpose of producing more capital; and this new capital goes back into the process of producing even more capital. According to Lebowitz this was what Marx was trying to tell us in books like Capital:
This was the central message that Marx was attempting to communicate to workers. What is capital? It is the workers’ own product which has been turned against them, a product in the form of tools, machinery—indeed, all the products of human activity (mental and manual).
When I read this passage, I wondered why Lebowitz considers the capitalist exploitation of the worker to be the central message Marx wanted to communicate to the working class? In the 19th Century almost everyone knew labor was the source of the wealth capital produced — even bourgeois economists admitted it. The capitalist and worker engaged in constant conflict over both the division of the working day and, more importantly, over its length. Is Lebowitz suggesting working people are now too dense to understand how their companies make money? But I thought, okay, so let’s see where he is taking us with this revelation.
Critical Literacy, Sustainability, and Personal Power: Using Hilary Janks as a Model for Change in American Education and Environmentalism
If a society of empowered citizens is to be realized, it’s imperative that an education system adopt Janks’s critical literacy doctrine and apply it in a sustainable environment. What better way to empower citizens and overcome a hegemonic order than to adopt truly sustainable practices and become self-sufficient?
In reading Literacy and Power by Hilary Janks, I was impressed with her ability to apply critical theory practically and effectively, but what most impressed me was her ability to establish a successful education system in South Africa without the resources so many of us in American private and public schools take for granted, and I think that’s one thing missing from American education – a struggle.
This paper will provide a model for what I’m calling Critical Literacy and Sustainability Camps. It will outline a learning curriculum and adopt many of Hilary Janks’s critical literacy activities to equip campers with an arsenal of critical reading and writing skills and sustainable living practices.
The word sustainability gets thrown around a lot and is generally misunderstood, much like Marxism and socialism. Merriam-Webster defines sustainable as:
adj : of, relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged.
Sustainability isn’t about driving high mileage cars, using more efficient light bulbs, or turning your thermostat down. Sustainability is about walking, not using light bulbs, and disconnecting your thermostat, and until this fact is realized by every American they will continue to be slaves to a hegemonic order consisting of high fuel prices and the ever-increasing utility bill.
The sustainable home is a farse. The idea that construction companies are building homes out of recycled materials and throwing solar panels on the roof is a futuristic, science fiction novel. First of all, until you grow enough food to feed yourself every day you are not sustainable, so it’s pretty difficult to imagine the sustainable home when the inhabitants of that home aren’t sustainable. Secondly, these sustainable homes are still hooked up to an energy grid, and unless you want to spend roughly $10,000 up front to run your refrigerator off solar panels (or want a refrigerator the size of a suitcase with no freezer) you’re going to use grid energy, which is not sustainable. The sustainable home is a tent or a teepee or a cabin with no grid energy and enough land to grow enough food to eat every day.
The Critical Literacy and Sustainability Camps I’m proposing would help teach children the definition of true sustainability through experience. These camps would have limited electricity provided by solar or wind power for emergency situations. No electrical lighting is available at the camps besides flashlights and headlamps. The camps would also have very few vehicles with combustion engines to be used in emergency situations, and these vehicles would run on biofuel. This helps instructors teach the campers how difficult true sustainability is to achieve, and gives the instructors an opportunity to explain why their biofuel bus is not sustainable while they ride into camp on it. Even before the campers arrive they’ve learned a valuable lesson about what sustainability is and is not.
At orientation the campers choose activities and classes they will participate in during the course of their stay. A critical literacy course will be a requirement of all campers because “language is not mere words…language constructs reality,” (Janks, 60) and until children are capable of reading between the lines to resist textual impositions they really aren’t reading at all. “Discourses manufacture or produce people,” (Janks, 60) so it’s important children realize the power of language at an early age. Campers will critically read texts of all sorts, especially advertising, as Janks demonstrates in Literacy and Power. Breaking down the advertisements helps children realize the power words and images can have over us, and the hegemonic order that perpetuates this power.
All campers are required to take a second language course. Janks, and others, have made it clear that native speakers of English will be left behind if they remain monolingual. ”There are already more speakers of English as a foreign language than of first and second language speakers combined. Already there are more speakers of English who are bilingual or multilingual than there are monolingual native speakers of English” (Janks, 144). The result of discourse dominance is a case of identity theft of sorts. “The price native speakers of English have to pay for speaking a global language, is that the language no longer belongs to them” (Janks, 151). Other cultures adopt your discourse and inevitably, your culture, and create hybrid discourses and cultures. “Access to dominant forms tends to come at the expense of diversity” (Janks, 116). We shouldn’t allow our access to a dominant discourse limit our diversity. We should embrace diversity, and go out searching for it.
Each second language course will create an alphabet book, as recommended by Janks, to be shared with children of other discourses. Campers will also be encouraged to write a weekly letter to a pen pal in their second discourse in order to utilize the skills they’ve learned and share the sustainable practices they’ve acquired with children all over the world.
Obviously, there will also be activities that teach students sustainable practices. Like Janks’s students, our campers will grow their own food and campers will assist in the kitchen. Archery and hunter safety courses will be offered to interested campers. Camping trips give instructors an opportunity to teach campers to distinguish edible and poisonous plants in the surrounding area, creating an experience that’s harder to forget than any book of edible and poisonous plants. Fishing, hiking, mountain climbing, and other outdoor activities will be offered to campers to broaden their skills and increase their physical strength and endurance.
Janks implores us to make learning fun again, using games to provoke thought. “While desire can consume us, pleasure can renew us. Critical literacy work in classrooms can be simultaneously serious and playful. We should teach it with a subversive attitude, self-irony and a sense of humour” (Janks, 224). It is imperative that the next generation of children have skills to thrive in a capitalistic world, and it’s a lot easier to acquire these skills if it’s fun in the first place.
Janks suggests that we can attain personal power through critical literacy, but I suggest we attain practical survival skills to empower us as well. It’s time to think practically about hegemony, and the best way to overcome a system of order is to withdrawal from that system entirely. Living capitalistically is a choice, and though the comforts of Central Air and HBO are certainly enticing, they’re simply a choice. Though getting around the private property aspect of capitalism is difficult, there are squatters that don’t pay a dime in rent living on public land, so there’s a way around everything. There’s a man living in Moab, Utah caves eating whatever he can find and hasn’t pulled a salary for over a decade (Ketcham).
I was disappointed to learn that many of the valuable programs implemented in South Africa that developed specifically in reaction to a lack of financial stability, like the gardening and recycling programs, were discontinued as soon as the school had investors like BMW building new facilities. I think if we embrace this struggle, we would learn a whole lot more.
I’m not saying American primary education shouldn’t receive funds. That’s preposterous. But these sustainable practices are not being taught anywhere besides the homes of sustainable families, which are very hard to find. What I’m saying is there’s nothing wrong with options, and to give parents the option of empowering their children with skills that can overcome a hegemonic order and help them and their Earth live healthier lives.
Applying Janks’s critical literacy idea to deconstruct the idea of sustainability as Americans see it, and then reconstructing a practical application as a result of that deconstruction, can be beneficial to the next generation of children hoping to break free from a hegemonic order.
My friend has a special disdain for people who decorate the bumpers of their cars with “Sustainability Now” stickers because the people slapping those stickers on their cars don’t know what sustainability means. Frankly, putting one of those bumper stickers on a bike would be oxymoronic since the bike’s tires are made of petroleum, but many Americans don’t think about this. They think if they’re getting 35 mpg they’re doing their best to be sustainable. And the way marketing campaigns conceal the true meaning of sustainability certainly isn’t helping.
It’s time there was an outlet that taught critical literacy and true sustainability practices, not just to protect the ozone or our water, but to free society from the shackles of hegemonic order and capitalistic ideals. “Critical reading, in combination with an ethic of social justice, is fundamental in order to protect our own rights and the rights of others” (Jenks, 98). By implementing Critical Literacy and Sustainability Camps, children will have the opportunity to see through the bullshit and free themselves.
The one thing I think we can all agree on regarding Hilary Janks’s Literacy and Power is that language does have power, and in order for students to acquire this power, their engagement in the material is essential. That is, they must enjoy learning what they’re learning or they won’t learn it. Janks provides some guidance regarding how to engage a text. “Engagement without estrangement is a form of submission to the power of the text regardless of the reader’s own positions. Estrangement without engagement is a refusal to leave the confines of one’s own subjectivity, a refusal to allow otherness to enter” (Janks, 96). So it’s simple, really. Don’t believe everything you read and don’t believe everything you think. Always question. “We need to think of identity as constantly in process, as dynamic rather than fixed, as produced but not determined” (Janks, 99). Enrolling your son or daughter in a Critical Literacy and Sustainability Camp gives them the tools they need to free themselves from the ruling order. It’s time we offered them the opportunity to understand and change their world. Paulo Friere says, “To exist, humanly, is to name the world, to change it. Once named, the world in its turn reappears to its namers as a problem and requires of them a new naming” (Janks, 161). It’s time we renamed Earth.
Tags: american, camp, capital, capitalist, children, choice, critical literacy, discourse, Education, environmentalism, fun, generation, hegemonic, hegemony, hilary janks, janks, language, learn, literacy, Power, Rights, skills, sustainability, sustainable, teach
“Well, what point of view would you expect to come out of this?” Noam Chomsky
In his mutualist economic work, Studies in Mutualist Political Economy, Carson asks us to consider two questions:
“1) if the “historical process” of primitive accumulation involved the use of force, how essential was force to that process; and if force was essential to the process, does it not follow that past force, as reflected in the present distribution of property, underlies the illusion of “free contract”; 2) how is it possible for employers to consistently pay a price for labor-power less than its product, if labor is free to bargain for the best possible deal? (Recourse to vague ideas of “social power” or “market power,” without an explicit examination of their nature, is not a satisfactory explanation.)”
With these questions, Kevin is actually throwing dust in our eyes to blind us; this is clearly some kind of literacy test for dumb Marxists:
Taking the second question first, in Marx’s actual theory the worker is never paid “less than her product”, since the only “product” in her possession is her labor power. There is no reason to explain how she is compelled to receive less than the value of this commodity; there is no need to appeal to vague nonsense phrases like “social power” or “market power” to explain profit — but then again, at no point in Marx’s theory does Maurice Dobbs or Benjamin Tucker make an appearance inform the parties how the law of value is supposed to function. In Marx’ model, competition between and among the capitalists and workers does not give rise to the value of labor power — this competition plays no role whatsoever in deciding how labor power will be priced. Rather, only after labor power becomes a commodity, and, thereby, acquires a value, does the universal competition between and among capitalist and workers arise. Competition does not explain wages, wages explain competition.
As is normal for a free market, the worker is entirely free to shop her labor power for the best deal; so, she always receives the full value for it. And, as Carson should already realize, there is not one act in this process but two as in any such exchange — an exchange of money for a commodity and its actual use — neither of which is, in any fashion, given by the other.
First, we have the exchange of wages for the labor power — an act, as Carson informs us, that is entirely innocent of all exploitative features, and not in any fashion to be regarded as threatening. As in any other commodity exchange we have to assume the capitalist and worker agree on a set price for this commodity, each with an eye to maximizing their gain by the transaction. The worker has to consider all the elements that go into the value of her labor power directly and indirectly — food, clothing, shelter, medical care, a Facebook page of her own, etc.; the capitalist approaches the transaction as he would any other business investment, with an eye to a return on his investment in the particular commodity negotiating the terms of its own purchase across the table from him. The question is: How much is the capitalist willing to offer for this labor power? While Carson has no difficulty understanding how a plot of virgin land containing a seam of coal might acquire a value in the market, with labor power, how it comes to acquire a value quite different than what it can produce seems altogether a mystery to him. However, as in the case of coal and land, the capitalist values this object as he does any other: by what he might gain by employing it as capital.
Carson argues, but never demonstrates, why this labor power should have its price determined by anything other than the same laws that determined the prices of any object. Yes, as Carson states, unlike the worker, coal does not require coaxing to give up its heat; but, by the same token, coal cannot be coaxed to pull itself out of the ground by flights of fancy of a better life in a furnace. A Mexican peasant, however, might be encouraged by such visions to leave her small plot of land to pick lettuce in one of the many agricultural factories in the United States. Even if we assume this job is unpleasant and avoided by Americans, we can easily imagine that purely economic interest might encourage the Mexican peasant to uproot herself from her small plot and make a remarkably dangerous journey to the United States in search of better economic opportunities. All we have to assume in this case is that the peasant obtains a material advantage over her present circumstances as a small-holder in Mexico by voluntarily selling herself into wage slavery in America. As Engels argued against Duhring, no force is necessary for this purely economic transaction; yet, the peasant voluntarily abandons her independent means of labor to become a wage slave precisely because she can improve her economic circumstances by doing so. Having separated herself from her independent means of labor to cross into the United States, the worker finds her labor power is now entirely useless to her, and, for this reason, is without any value at all unless she can find a buyer who has a use for it. But, it is useful to the capitalist only insofar as he can employ it as capital and produce a profit over the wage he has paid for it.
What is significant about this transaction, however, is this: until the transaction actually takes place, the labor power has not produced anything — it is merely a potential investment by the capitalist who hopes to employ it afterward to create a profit. For the moment, this is only a hope on the part of the capitalist. Whether this hope is realized is of no concern to the worker, who wants only to be paid the full value of her labor power in its present pristine form, unsoiled by the act of labor. So, when Benjamin Tucker sticks his nose into this private transaction to warn both sides that labor power is entitled to its full product, both sides tell him to go to hell, since, they agree, the labor power has not produced anything, and is itself the “product” being discussed. Asking Mr. Tucker to leave the room so they can finalize their agreement, they proceed to agree on a price. The first act of the transaction is complete — the labor power was purchased at it value, and all parties are satisfied with the deal. At no point was it necessary for either party to call in the State to sign onto the agreement “in letters of blood and fire.”
Only now do we get to the second act: the exploitation of this labor power by the capitalist. Carson wants the worker to be paid the full value produced by the actual consumption of the labor power; but, as we can now see, when the labor power is actually being exploited, it is no longer the property of the worker — it belongs to the capitalist who purchased it. The exchange of money for the commodity was only the first step and has been completed. It is now the property of the capitalist — although it still physically stands before him in the body of the worker. The labor power is not put to work until the capitalist has closed the deal to the satisfaction of both parties. Carson is entirely correct to say that the value of the labor power is its product, but this value is determined by the use to which its owner will now put it. Carson wants to skip over this observation, or treat it as inconsequential to the discussion; but it is, in fact, the heart of the matter. When the laborer puts her own labor power to use as an individual producer, its usefulness for her is directly realized in the product her labor can produce. If we could speak of value (wage) in this context (which, of course, would be silly) the “natural wage” of this labor would indeed be its product. This does not change one iota if we now assume the labor power is employed, not by the direct producer, but by the capitalist: the same condition holds: the usefulness of the labor power for the capitalist is directly realized in the product it produces.
Is there anything in this latter act of exploitation that requires State intervention? Is there anything in the latter act that requires unequal exchange in the former? Is there any reason why just this sort of exchange cannot happen completely as described in the absence of the State? Carson should answer these questions carefully, because he has made the argument that just such a transaction is benign, and is entirely consistent with his vision of a petty bourgeois market socialism. As a libertarian, he also believes a property owner has the right to employ his property as he sees fit without State interference or subsidy. The only difference between Carson and Marx in this above described scenario is that Marx states this is all that is required for exploitation, while Carson swears it to be the basis for market socialism.
Turning to the first question, an answer to which Carson demanded, we can now understand how Engels could argue that, in theory, the entirety of the premises of capitalism could arise by purely economic means without any appeal to the process of primitive accumulation Marx graphically describes in both the German Ideology and Capital. Indeed, in the very text cited by Carson with regard to Marx description of primitive accumulation, Marx himself refers to it as an artificial (i.e., not natural) means of abbreviating the transition from feudal to capitalist relations of production:
The system of protection was an artificial means of manufacturing manufacturers, of expropriating independent labourers, of capitalizing the national means of production and subsistence, of forcibly abbreviating the transition from the mediaeval to the modern mode of production.
Moreover, Marx in describing primitive accumulation notes that, side by side with primitive accumulation, the disintegration of the old society is already preceding apace:
The economic structure of capitalist society has grown out of the economic structure of feudal society. The dissolution of the latter set free the elements of the former.
The immediate producer, the labourer, could only dispose of his own person after he had ceased to be attached to the soil and ceased to be the slave, serf, or bondsman of another. To become a free seller of labour power, who carries his commodity wherever he finds a market, he must further have escaped from the regime of the guilds, their rules for apprentices and journeymen, and the impediments of their labour regulations. Hence, the historical movement which changes the producers into wage-workers, appears, on the one hand, as their emancipation from serfdom and from the fetters of the guilds, and this side alone exists for our bourgeois historians. But, on the other hand, these new freedmen became sellers of themselves only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal arrangements. And the history of this, their expropriation, is written in the annals of mankind in letters of blood and fire.
The industrial capitalists, these new potentates, had on their part not only to displace the guild masters of handicrafts, but also the feudal lords, the possessors of the sources of wealth. In this respect, their conquest of social power appears as the fruit of a victorious struggle both against feudal lordship and its revolting prerogatives, and against the guilds and the fetters they laid on the free development of production and the free exploitation of man by man. The chevaliers d’industrie, however, only succeeded in supplanting the chevaliers of the sword by making use of events of which they themselves were wholly innocent. They have risen by means as vile as those by which the Roman freedman once on a time made himself the master of his patronus.
There is, Marx notes, a two-sided process taking place — not simply the primitive accumulation occurring under the influence of emerging capitalist relations, but also a disintegration of the old feudal relations of production which sets the elements of these new forces free. Carson makes the argument that employment of these artificial means, even if they were limited only to that ugly period of human history, nevertheless taints the relations of productions down to the present day:
As for the fact that the pre-existing economic means must have been gotten by someone’s labor, once again, so what? Who said that force created production? One might as well say that the pre-existence of a host organism negates the principle of parasitism. And Engels himself admitted that the economic means might be in the hands of the ruling class as a result of past force. If the means of production under their control may indeed be the result of forcible robbery, what becomes of Engels assertion of these pre-existing means as a telling point against the force theory? In any case, it is quite consistent to posit a process in a series of stages, in which the progressive accumulation of capital, and the increasing exploitation of labor, are a mutually reinforcing synergistic trend, with force as still the primary cause of exploitation. In every case, the accumulated economic means that make heightened exploitation possible are the result of past robbery. As the Hindu theologian said of turtles, it’s force all the way down.
Carson makes a powerful argument here that an event precipitating a historical process expresses itself in the relations established long after the event has passed into history. Capitalist relations of production, even if they were not today influenced by continuous State intervention to maintain the system of exploitation, owe their existence to the ugly use of violence at the earliest moments of its emergence. However, as we have seen in this chicken-versus-egg farce of an argument, Capital is only the final stage of an historical process whereby the direct laborer is separated from the objective means of production — a separation that in no way begins with force, but with the material gain of the ancient family group when it replaced communal ownership with individual property relations under the encouragement of the earliest instances of commodity exchange between neighboring family groups. Rather than force all the way down, it has been just as Engels stated: material gain all the way down.
Thus, Marx provides us with the critical key to understanding what neither the Anarcho-Capitalist and Marxist critics of the Fascist State can explain, nor can be explained by the liberal and conservative apologists of Capital: not the use of force in exploitation, but consent within the democratic republic founded on universal suffrage to this exploitation, and particularly the role this universal suffrage plays in emergence of the Fascist State. Anyone trying to understand the argument of Marx and Engels by reading Maurice Dobbs or Paul Sweezy has already led himself into a theoretical cul-de-sac. Marx and Engels never assume the laborer is paid less than her product; rather, they assume precisely the opposite: the worker gains materially by entering into wage slavery with an utterly rapacious, vile, detestable parasite on the body human. This material gain need only be just significantly better than that which could be realized if the Mexican migrant instead remained on her small-holding.
What really has to be explained by any theory of historical development is why the numerically vastly superior mass of laborers, despite this Fascist State role, and despite the obvious consequences of this role, nevertheless voluntarily reproduce the relationship through their suffrage. To use one of Carson’s own analogies as the basis for furthering my argument:
Engels still did not show that exploitation was inherent in a given level of productive forces, without the use of coercion. He needed to show, not that parasitism depends on the preexistence of a host organism (duh!), but that it cannot be carried out without force. Every increase in economic productivity has created opportunities for robbery through a statist class system; but the same productive technology was always usable in non-exploitative ways. The fact that a given kind of class parasitism presupposes a certain form of productive technology, does not alter the fact that that form of technology has potentially both libertarian and exploitative applications, depending on the nature of the society which adopts it.
Carson employs the case of a parasite to argue against an alleged fallacy beneath Engels’ position that force presupposes material relations of production and does not create them. Carson explains that the existence of the host body does not, of itself, presuppose the parasitic infection. This is a good analogy since medicine has for the last 80 years actually introduced deadly live organisms into the human body under controlled circumstances precisely to inoculate humans from illnesses spread by these organisms. While the existence of the human body does not imply the existence of a parasite, the mere existence of the parasite in the human body does not imply an illness. In the case of inoculation it actually implies resistance to the illness caused by the parasite. You cannot argue that one condition necessarily implies the other — that coexistence of the use of force with exploitation implies the latter is dependent on the former, or vice versa. The two occur side by side throughout history, and, moreover, both influence and reinforce each other, and, at other times, altogether appear at loggerheads. Indeed history is replete with the use of force precisely aimed to overthrow existing modes of exploitation, and against the states that enforced these modes — our own Paris Commune is just one such instance.
The logical insufficiency of Carson’s force argument in this case is revealed when we inquire into how the most democratic of all republics — the United States — nevertheless appears most completely in the grip of monopoly interests. The State, in Carson’s argument, is constantly intervening in the market to enforce conditions of unequal exchange. Carson argues the intent of this intervention is to produce a material gain for monopoly:
Of course the use of force is aimed at the benefit of the user–who ever denied it? Who in his right mind would claim that exploitation is motivated by pure E-vill, rather than material gain? And since, by definition, means are always subordinate to ends, the ends are always more fundamental.
This reasoning appears to present no difficulty in certain previous incarnations of the State — the slave, for instance, did not enjoy universal suffrage — but, it’s actual practical failure as an explanation is revealed when it comes to explaining the democratic republic as the very instrument for enforcing the ruthless exploitation of the mass of society by a numerically small group of parasites. Having dispatched the materialist view of history, Carson should at least be required to offer an opinion on why a State based on universal suffrage, clearly dominated by a proletarian majority, might come to enforce circumstances where this proletarian majority are systematically robbed of their “natural wage” through unequal exchange with their own consent? What we have to explain is not, “pure E-vill” but, rather a complete lack of material gain to the majority of voters under the existing political relations of society.
Once you introduce the idea that capitalist exploitation is based on unequal exchange, you must now explain why the democratic republic continuously enforces this unequal exchange despite a obvious lack of material gain for the proletarian majority, and even at their expense. The easiest way to explain this, of course, is by identifying an obvious defect in existing political relations themselves — that, somehow, democracy is also infected with the parasite — that, in the words of Noam Chomsky, this consent is in some fashion manufactured, as he describes in a 1992 interview:
QUESTION: You write in Manufacturing Consent [(Pantheon, 1988)] that it’s the primary function of the mass media in the United States to mobilize public support for the special interests that dominate the government and the private sector. What are those interests?
CHOMSKY: Well, if you want to understand the way any society works, ours or any other, the first place to look is who is in a position to make the decisions that determine the way the society functions. Societies differ, but in ours, the major decisions over what happens in the society — decisions over investment and production and distribution and so on — are in the hands of a relatively concentrated network of major corporations and conglomerates and investment firms. They are also the ones who staff the major executive positions in the government. They’re the ones who own the media and they’re the ones who have to be in a position to make the decisions. They have an overwhelmingly dominant role in the way life happens. You know, what’s done in the society. Within the economic system, by law and in principle, they dominate. The control over resources and the need to satisfy their interests imposes very sharp constraints on the political system and on the ideological system.
QUESTION: When we talk about manufacturing of consent, whose consent is being manufactured?
CHOMSKY: To start with, there are two different groups, we can get into more detail, but at the first level of approximation, there’s two targets for propaganda. One is what’s sometimes called the political class. There’s maybe twenty percent of the population which is relatively educated, more or less articulate, plays some kind of role in decision-making. They’re supposed to sort of participate in social life — either as managers, or cultural managers like teachers and writers and so on. They’re supposed to vote, they’re supposed to play some role in the way economic and political and cultural life goes on. Now their consent is crucial. So that’s one group that has to be deeply indoctrinated. Then there’s maybe eighty percent of the population whose main function is to follow orders and not think, and not to pay attention to anything — and they’re the ones who usually pay the costs.
Innumerable variants of this silly thesis are employed by Libertarians, Anarchists and Marxists to explain how a Fascist State so clearly operating at the expense of the mass of society nevertheless enjoys their continued support or, at least, their apathy in the face of its ravages and predation. Marx’s theory, on the other hand, predicts precisely political support for the existing mode of exploitation, since he never assumes existing political relations are founded on anything other than the law of value, equal exchange, and material advantage accruing to both exploiter and exploited. It is the operation of the law of value itself, which encourages the small-holder to convert herself into a wage slave, that also ensures its continued existence, despite the obstacles Capital places in its own way, through the continuous intervention of the Fascist State.
The conclusion arrived at by Marx’s theory should be sobering for critical communist theory– the worker does not merely sell herself into slavery willingly, she also assures, through her political activity, that the conditions for her enslavement are maintained despite her exploitation. This conclusion cannot be ignored or jury-rigged out of existence by means of silly arguments based on alleged “social power”, unequal exchange, or manufactured consent. They must be faced squarely by critical communism. In this task, Carson’s mutualist synthesis of the dominant streams of critical communist theory is an utter failure.
Tags: Anarcho-capitalism, Benjamin Tucker, capital, compulsory labor, Eugen Duhring, Fascist State, Frederick Engels, Karl Marx, Kevin Carson, labor, labor power, Marxism, Mutualism, Paris Commune, primitive accumulation, Stromberg, surplus value, The State, wage slavery
“…an ingredient in someone’s soup.” –Rod Serling
According to Carson the arguments of the Anarcho-Capitalist and Marxist variants of critical communist theory identify a movement of large-scale, organized capital to obtain its profits through state intervention into the economy, although the regulations entailed in this project are usually sold to the public as progressive restraints on big business, which creates, “a system of industrial serfdom in which politically connected capitalist interests exploit workers and consumers through the agency of the state.”
It should have been obvious to Carson at the outset that this argument by Anarcho-Capitalism and Marxism was always suspect, since it is just a simplistic inversion of the argument of “mainline ‘conservatives’ and ‘liberals’” that the Fascist State acts to restrain “the power of big business” by means of “Progressive and New Deal programs forced on corporate interests from outside, and against their will.” It doesn’t take any particular genius to see that the social class most advantaged by existing political relations might find it in their interest to portray these relations, not as advantages, but as limitations or constraints on their social power. That, this realization should be seen as an analytical accomplishment in the 21st Century is not just curious on its face, it is a commentary on the pathetic state of critical communist theory.
The simplistic mirror imaged world view of the conservative and liberal pundits is mirrored again in the simplistic conclusions of its Anarcho-Capitalist and Marxist critics, and the superficial analysis of the critical camp as a whole is itself merely the mirror image of the superficial analysis of the mainstream camp. The common conclusion of both critics and the mainstream is that the State is the autonomous author of political-economy, and economic players merely act out a script that emerged full blown from the central plan of society’s general manager. All agree — to one extent or another — that the role of the Fascist State has nothing at all to do with the relation between capitalists and the wage laborers as antagonistic poles of Capital and absolutely dependent for their existence as opposing classes on this relation. On this basis, Carson argues there is no antithesis between property and labor as such — that wage labor can coexist with property, if the State, which dominates both in the interest of monopoly, is abolished.
Kevin Carson’s attempt to synthesize the arguments of Anarcho-Capitalism and Marxism was always a fool’s errand. He produces a mash up of a critique of Capital from the viewpoint of the capitalist and from the viewpoint of the laborer, when what was really called for from him is a critique of capitalist labor itself — of the relation between these two classes and the implications this relationship has on the emergence and development of the Fascist State. We are led to believe that the relation between property and wage labor is entirely innocuous save for Fascist State intervention. Thus, Carson makes the assertion that wage labor can exist in a non-exploitative society without ever investigating the nature of wage labor itself as a historical social form. He essentially treats the worker as a self-owned commodity and applies to the labor market the same analysis he applies to the market in shoes.
Is this possible? Marx, who before he even begins to consider the commodity in circulation, and before he considers it as an essential element of the capitalist mode of production, takes the time to consider the commodity in its own right as an object. He begins by noting that every commodity has a two-fold character — that, for the producer, it satisfies no need for her and exists for her only as an object to be exchanged, a social use value. Without these two together, it is not a commodity:
A thing can be a use value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c. A thing can be useful, and the product of human labour, without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use values, but not commodities. In order to produce the latter, he must not only produce use values, but use values for others, social use values. (And not only for others, without more. The mediaeval peasant produced quit-rent-corn for his feudal lord and tithe-corn for his parson. But neither the quit-rent-corn nor the tithe-corn became commodities by reason of the fact that they had been produced for others. To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.) Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value.
Understand what is going on here in Marx’s analysis: the commodity has no usefulness to the individual producer, but it must have a usefulness for others. This appears altogether benign in relation to object like a sack of potatoes or shoes (although, as I will show, even here Marx argues it is surprisingly malignant) but, in relation to the human capacity to labor, it implies her productive capacities are entirely useless to her. Her own body is not her self, but a detachable object that exists only to be exchanged for money. Before he even begins to consider this object in the context of the capitalist mode of production, and its vital role in this mode, Marx has already demonstrated how for the laborer her own qualities as a human being no longer exists for her except as means. And, to be absolutely clear on this point, throughout all of Capital, labor power is the only commodity Marx is discussing — even when he uses quantities of coats and tons of iron as his practical examples. In his dry sarcastic academic style Marx is painstakingly describing precisely what it means to reduce a human being to a commodity.
He is discussing the capitalist mode of production and he is only speaking of the inherent qualities of the commodity that is specific to this mode of production — qualities it shares with other commodities, but which have quite unique results when applied to this one in particular. The pathetic abortion that passes for Marxism has no inkling of this fact. And, Carson, because he uncritically accepts the assumptions of the Marxist and Anarcho-Capitalist analyses of the capitalist mode of production, never ventures into an analysis of labor power on his own. As a result he offers nothing new in this regard, and fails to address the critical objection raised by Marx to the very idea that human capacities can simply be treated as another commodity for sale. Instead we get from Carson only that the value of this commodity consists in what it can be compelled to produce:
“[T]he natural wage of labor in a free market is its full product…”
The only thing differentiating one set of human capacities from another are not the uniquely human desires and wants of the individuals concerned, nor how these unique desires and wants are expressed in their activities, but the impersonal exchange value contained in each as expressed in so many ounces of gold. Thus, human beings can be compared to each other as one might compare linen and coats. This corrosive force, introduced into our very concept of what it means to be a human being by the capitalist mode of production and exchange, is never examined by Carson — as it is never examined by the Anarcho-Capitalist or the Marxist, nor by mainstream political-economy — but generally accepted among both apologists and critics of capitalist society as a fact.
This brings us to the refutation of Eugen Duhring by Frederick Engels — and to Carson’s objection to the views expressed by Engels in this debate:
Engels, to render the Marxian theory consistent (and to deflect the strategic threat from the market socialists mentioned above), was forced to retreat on the role of force in primitive accumulation. (And if we take his word on the importance of Marx’s input and approval during his writing of Anti-Dühring, Marx himself was guilty of similar backpedalling). In Anti-Dühring, Engels vehemently denied that force was necessary at any stage of the process; indeed, that it did little even to further the process significantly.
Every socialist worker [like every British schoolboy?]… knows quite well that force only protects exploitation, but does not cause it; that the relation between capital and wage labour is the basis of his exploitation, and that this arose by purely economic causes and not at all by means of force [emphasis added].
This raises the question of to what extent the legal system is presupposed in even “purely economic” relations, and whether more than one “purely economic” state of affairs is possible, depending on the degree of such state involvement. For example, are combination laws, laws of settlement, and laws on the issuance of credit without specie backing essential to the process of free exchange itself, or only to the capitalist character of such exchange?
Engels stated the case in even more absolute terms later on, denying that force was necessary (or even especially helpful, apparently) at any stage of the process.
…even if we exclude all possibility of robbery, force and fraud, even if we assume that all private property was originally based on the owner’s own labour, and that throughout the whole subsequent process there was only exchange of equal values for equal values, the progressive development of production and exchange nevertheless brings us of necessity to the present capitalist mode of production, to the monpolization of the means of production and the means of subsistence in the hands of a numerically small class, to the degradation into propertyless proletarians of the other class, constituting the immense majority, to the periodic alternation of speculative production booms and commercial crises and to the whole of the present anarchy of production. The whole process can be explained by purely economic causes; at no point whatever are robbery, force, the state or political interference of any kind necessary.
You can see Carson’s brain smoking here. How can exploitation occur when obviously the value of wages must be equal to the value of its product — yet, as a practical matter it does not? Indeed these are Engels words, and, moreover, they are fully consistent with the conclusions reached by Marx in his analysis — indeed Marx himself contributed an entire section to Engels polemic against Duhring. But, even if Marx had not made such a contribution, Engels words stand on their own as an exemplary piece of historical materialist argument. So let’s parse Engels argument.
Is Engels denying the role of force in history? Obviously not. He explicitly states force has been employed to enforce existing social relations throughout history, and that the capitalist mode of production was no exception to this role. So, although differing on a lot of fundamentals with Kevin Carson, Marx and Engels did not differ much with him on the historical record of the State; which is what makes the points on which they differ both significant, yet entirely beside the point: Kevin Carson believes exploitation cannot happen without the State; however, Marx and Engels are discussing an altogether different subject!
To do this, they document a number of then known instances where pre-capitalist forms of private property emerges without State action directly out of communal ownership. Engels shows how, in documented cases, the commons themselves were dissolved through the emergence of commodity production. Private property emerges spontaneously, and without any action by the State — gradually the commons is converted into a community of small-holders because the members see a material advantage to the dissolution of the commons:
Private property by no means makes its appearance in history as the result of robbery or force. On the contrary. It already existed, though limited to certain objects, in the ancient primitive communities of all civilised peoples. It developed into the form of commodities within these communities, at first through barter with foreigners. The more the products of the community assumed the commodity form, that is, the less they were produced for their producers’ own use and the more for the purpose of exchange, and the more the original spontaneously evolved division of labour was superseded by exchange also within the community, the more did inequality develop in the property owned by the individual members of the community, the more deeply was the ancient common ownership of the land undermined, and the more rapidly did the commune develop towards its dissolution and transformation into a village of smallholding peasants. For thousands of years Oriental despotism and the changing rule of conquering nomad peoples were unable to injure these old communities; the gradual destruction of their primitive home industry by the competition of products of large-scale industry brought these communities nearer and nearer to dissolution. Force was as little involved in this process as in the dividing up, still taking place now, of the land held in common by the village communities [Gehöferschaften] on the Mosel and in the Hochwald; the peasants simply find it to their advantage that the private ownership of land should take the place of common ownership. Even the formation of a primitive aristocracy, as in the case of the Celts, the Germans and the Indian Punjab, took place on the basis of common ownership of the land, and at first was not based in any way on force, but on voluntariness and custom. Wherever private property evolved it was the result of altered relations of production and exchange, in the interest of increased production and in furtherance of intercourse—hence as a result of economic causes. Force plays no part in this at all. Indeed, it is clear that the institution of private property must already be in existence for a robber to be able to appropriate another person’s property, and that therefore force may be able to change the possession of, but cannot create, private property as such.
Engels is not here discussing hypothetical scenarios of exploitation; rather he is discussing actual evidence from documented research of contemporary scientists into historical and contemporary communities. Moreover, he was an acknowledged expert in his on right on the subject he is discussing. In this research, he notes, there is compelling evidence to support the hypothesis that pre-capitalist private property spontaneously emerged from communal ownership, disintegrating this ownership, not due to force and violence, but due to the material advantages it offered over communal ownership. To what in this argument can Carson possibly object? Is Engels distorting or fabricating the research of these scientists? Is he spinning this evidence in a way that throws the best light on his own hypothesis? Is he concealing other exculpatory evidence that proves these communities broke, not on their own volition, as Engels states, but due to the force and violence of previously undisclosed players? This is a pure and simple presentation of the historical record, which cannot be refuted simply by dismissing it out of hand — as Duhring does — but must be met with equally persuasive evidence to the contrary, or with evidence Engels is making an erroneous interpretation of the facts.
Nowhere does Carson offer any such evidence.
The separation of the laborer from the objective conditions of labor is by no means accomplished all in one leap as Carson would have us believe, but is a process lasting thousands of years, beginning with the dissolution of the early human communities founded on common ownership. The emergence of commodity production and exchange, and private property with it, directly out of the commonly held property of the community was the initial step by mankind on the long road leading to the complete separation of the laborer from the means of production — an act only finally completed with Capital, when the laborer herself is turned into a commodity. True, in its earliest moment of development, this separation is only rudimentary; however, in a community founded on common ownership of the means of production, all members had access to all of these commonly owned means. The separation of the producer from the means of production begins exactly with the division of this common property into private hands, when the individual’s access to the now privately held property of the community can only take place on the basis of exchange. The individual is now in possession of his own individual means of production, but he is, by the same token, severed from the greater portion of the total communal means of production which now are the property of other members of the community. On the one hand, with the disintegration of the community, the total communal means of production is now divided into privately held properties, and, on the other hand, the producers are themselves divided from the mass of total communal means. This world historical separation, of course, is simply the outcome of a process that begins with the producer’s own act of commodity exchange — an act which is nothing less than a separation of the individual act of labor from satisfaction of the needs of the producer.
Engels is not discussing exploitation; he is discussing how society itself, and our conception of ourselves as human beings, is being transformed by the way we go about our productive lives. A transformation that, as I will discuss in the final part of this series, culminates in the emergence of a completely unique circumstance: exploitation based entirely on equal exchange of value within the world market.
Tags: Anarcho-capitalism, Benjamin Tucker, capital, compulsory labor, Eugen Duhring, Fascist State, Frederick Engels, Karl Marx, Kevin Carson, labor, labor power, Marxism, Mutualism, Paris Commune, primitive accumulation, Stromberg, surplus value, The State, wage slavery
“woeful work they have made with it…”
Kevin Carson asserts Marx held to the idea the abolition of the system of wage slavery could not occur until the productive forces it represents had reached their fullest possible development. According to Carson, Marx made the argument that an attempt to create a society free of exploitation before technical and productive prerequisites for it had been achieved would be unwise. This argument is vital for Carson, because he intends to assert on the basis of this alleged error by Marx that, absent State coercion, a market in wage labor would not spontaneously give rise to a system of wage slavery. According to Carson, State coercion is the necessary condition for exploitation of the worker to take place. Without this State coercion, the worker cannot be reduced to a wage slave simply by the act of selling his labor power. Quoting Benjamin Tucker, Carson states, “the natural wage of labor is its product.”
But, by raising the charge against Marx, Carson is, in fact, changing the entire nature of his argument. Instead of sticking strictly to a historical argument, he now switches to a hypothetical one. He is asking the question: “In theory, is it possible for free and non-exploitative social relations from replacing the State before all of the technical and productive prerequisites are in place?” He asserts, without offering any evidence, that Marx answers this question with a negative. So, I have to pause for moment to disprove Carson’s charge.
The first problem with this hypothetical question is that Carson never details, on the basis of Marx’s argument, the technical and productive prerequisites for a free and non-exploitative society — that is, he never describes what the phrase “fullest possible development” of wage slavery means. And, the reason for this failure is obvious: Marx assumed Capital had already created the basis for the voluntary association of labor, by creating modern industry, the world market and a mass of individuals in all the most developed nations who had all the attributes necessary to effect this association.
In the German Ideology, Marx explains that Capital has already rendered a great mass of society propertyless, and produced great wealth and culture, based on a great increase in productive power of labor. It had already developed the productive forces and brought about universal competition within society; which produced a global labor force of wage slaves, made each nation dependent on the revolutions of the others, and effectively created a perverse sort of global community founded on wage slavery.
Thus, in 1845, Marx argues, the premises for a voluntary association were already in existence. These developments, in Marx’s opinion, not only made a free and non-exploitative society possible, they made its eventual emergence inevitable. By buying into the argument of Benjamin Tucker with regards to Marx’s theory, Carson is forced to ignore Marx’s own writing on this question in the German Ideology — an error which, apparently, is not difficult for Carson, since, as we have seen, he already failed to find any reference to primitive accumulation in the very same text.
In that text, Marx writes:
Thus things have now come to such a pass that the individuals must appropriate the existing totality of productive forces, not only to achieve self-activity, but, also, merely to safeguard their very existence. This appropriation is first determined by the object to be appropriated, the productive forces, which have been developed to a totality and which only exist within a universal intercourse. From this aspect alone, therefore, this appropriation must have a universal character corresponding to the productive forces and the intercourse.
The appropriation of these forces is itself nothing more than the development of the individual capacities corresponding to the material instruments of production. The appropriation of a totality of instruments of production is, for this very reason, the development of a totality of capacities in the individuals themselves.
This appropriation is further determined by the persons appropriating. Only the proletarians of the present day, who are completely shut off from all self-activity, are in a position to achieve a complete and no longer restricted self-activity, which consists in the appropriation of a totality of productive forces and in the thus postulated development of a totality of capacities. All earlier revolutionary appropriations were restricted; individuals, whose self-activity was restricted by a crude instrument of production and a limited intercourse, appropriated this crude instrument of production, and hence merely achieved a new state of limitation. Their instrument of production became their property, but they themselves remained subordinate to the division of labour and their own instrument of production. In all expropriations up to now, a mass of individuals remained subservient to a single instrument of production; in the appropriation by the proletarians, a mass of instruments of production must be made subject to each individual, and property to all. Modern universal intercourse can be controlled by individuals, therefore, only when controlled by all.
This appropriation is further determined by the manner in which it must be effected. It can only be effected through a union, which by the character of the proletariat itself can again only be a universal one, and through a revolution, in which, on the one hand, the power of the earlier mode of production and intercourse and social organisation is overthrown, and, on the other hand, there develops the universal character and the energy of the proletariat, without which the revolution cannot be accomplished; and in which, further, the proletariat rids itself of everything that still clings to it from its previous position in society.
Again, not to put to fine a point on this, in 1845, Marx states explicitly that this voluntary association of labor results “from the premises now in existence.”
So, in complete contradiction to Kevin Carson’s assertion, and to the muddle-headed arguments of the Marxist, Marx himself argues in 1845 that all the conditions for a voluntary association of labor had already been achieved by society. On this basis, any charge made against him that the system of wage slavery had to reach “their fullest possible development,” is both an egregious distortion of the facts, and a lie. It follows from what I have said, that Marx greeted the Paris Commune — led, as it was, by Anarchists/Libertarians — as an authentic communist attempt to realize a voluntary association of labor and put an end to wage slavery.
Even if we consider Carson’s assertion that
Just social and economic relations are compatible with any level of technology; technical progress can be achieved and new technology integrated into production in any society, thorough free work and voluntary cooperation.
we only arrive at the conclusion that in all epochs men and women have struggled to put an end to the exploitation of their labor under whatever were the prevailing conditions of its extraction and realize a society in which they were not treated as the property of another in one guise or another. Marx makes no argument against this assertion, except to state that, owing to the conditions of society up to Capita,l all of these attempts merely end in new fetters on the individual. While the existing mode of the exploitation of labor is abolished, it is merely replaced by a new mode of exploitation. He does not offer a theoretical response to Carson’s hypothetical argument, but a historical one, in which men and women replace one limited mode of existence with another.
Carson, however, is not satisfied with this answer, so he further argues:
Had not the expropriation of the peasantry and the crushing of the free cities taken place, a steam powered industrial revolution would still have taken place–but the main source of capital for industrializing would have been in the hands of the democratic craft guilds. The market system would have developed on the basis of producer ownership of the means of production.
The point of Carson’s argument is, of course, that the market in wage labor need not result in a system of wage slavery. However, Marx never once argued development of the productive forces could not take place within a producer owned context; he only argued that the actual historical development of productive forces took place in opposition to peasant property and the free cities. Far from making the patently absurd argument that development of the productive forces could not take place within the context of producer control over the forces of production, Marx made the argument that, with the system of wage slavery, producer control of the productive forces could be achieved only through their voluntary association and the means of production made the common wealth of society — there was no other possible route to ownership and control over the means of production by the great mass of propertyless wage slaves other than by establishing this control in a voluntary cooperative union.
Moreover, Marx argues the system of wage slavery was itself the drag on the development of the productive forces. The productive power of social labor would never be truly realized as long as wage slavery existed. The system of wage slavery, he argued, increasingly demonstrated its senility as it proved unable to overcome the obstacles placed in the path of the development of the productive forces created by the system of wage slavery itself.
Thus we find, in the previously cited Capital, Volume 3, Chapter 15:
On the other hand, the rate of self-expansion of the total capital, or the rate of profit, being the goad of capitalist production (just as self-expansion of capital is its only purpose), its fall checks the formation of new independent capitals and thus appears as a threat to the development of the capitalist production process. It breeds over-production, speculation, crises, and surplus-capital alongside surplus-population. Those economists, therefore, who, like Ricardo, regard the capitalist mode of production as absolute, feel at this point that it creates a barrier itself, and for this reason attribute the barrier to Nature (in the theory of rent), not to production. But the main thing about their horror of the falling rate of profit is the feeling that capitalist production meets in the development of its productive forces a barrier which has nothing to do with the production of wealth as such; and this peculiar barrier testifies to the limitations and to the merely historical, transitory character of the capitalist mode of production; testifies that for the production of wealth, it is not an absolute mode, moreover, that at a certain stage it rather conflicts with its further development.
He later adds:
Capitalist production seeks continually to overcome these immanent barriers, but overcomes them only by means which again place these barriers in its way and on a more formidable scale.
The real barrier of capitalist production is capital itself. It is that capital and its self-expansion appear as the starting and the closing point, the motive and the purpose of production; that production is only production for capital and not vice versa, the means of production are not mere means for a constant expansion of the living process of the society of producers. The limits within which the preservation and self-expansion of the value of capital resting on the expropriation and pauperisation of the great mass of producers can alone move — these limits come continually into conflict with the methods of production employed by capital for its purposes, which drive towards unlimited extension of production, towards production as an end in itself, towards unconditional development of the social productivity of labour. The means — unconditional development of the productive forces of society — comes continually into conflict with the limited purpose, the self-expansion of the existing capital. The capitalist mode of production is, for this reason, a historical means of developing the material forces of production and creating an appropriate world-market and is, at the same time, a continual conflict between this its historical task and its own corresponding relations of social production.
From these passages, it is clear that Marx could not have believed that a non-exploitative society had to wait until the productive forces created by wage slavery reached their fullest possible development, because he believed the system of wage slavery itself created barriers to development of the productive forces. It follows from the evidence I have offered here that, for Marx, it was not a matter of tolerating the system of wage slavery until it has reached its fullest possible development, but precisely the opposite: without abolishing the system of wage slavery the productive forces of society could not reach their fullest possible development!
How Carson manages to stand Marx’s argument on its head, and to level this charge against him is simply incomprehensible to me, but is not the least bit surprising, since Carson sets out, not to disprove the arguments of the Anarcho-Capitalist and Marxist variants of critical communist thinking, but to synthesize their arguments with his own mutualist argument that a market in wage labor is consistent with a non-exploitative society. He therefore, ends up appropriating both the theoretical blunders of the Anarcho-Capitalist and the Marxist along with their insights.
I will turn to this angle in my next post.
Tags: Anarcho-capitalism, Benjamin Tucker, capital, compulsory labor, Fascist State, Karl Marx, Kevin Carson, labor, labor power, Marxism, Mutualism, Paris Commune, primitive accumulation, Stromberg, surplus value, The State, wage slavery
Even when it was laissez, it wasn’t faire
If it were merely a historical question of the material role the State played in the emergence of Capital, and the role it continues to play in Capital’s own development even now, Kevin Carson and Karl Marx would be in complete agreement on the facts. Even if we extended Carson’s argument to include the idea that every step in the development of Capital has required State coercion and violence, Carson would get no argument from Marx. Finally, Marx would entirely agree with Carson’s argument that the present system is exploitative; and that its exploitation depends solely on the state.
The disagreement between Marx and Carson is not with these historical and material facts, but with the question raised by them of, which, the State or Capital, is the driving force in this development. While Carson believes the State is the autonomous actor in the development of capitalist exploitation, Marx believed the State’s absolutely essential role in the development of Capital results from inherent internal barriers created by the capitalist mode of production itself. In support of my assertion on these points, I offer no other evidence than Marx’s own words as written in Capital, Volume 3, Chapter 15:
“If, as shown, a falling rate of profit is bound up with an increase in the mass of profit, a larger portion of the annual product of labour is appropriated by the capitalist under the category of capital (as a replacement for consumed capital) and a relatively smaller portion under the category of profit… Furthermore, the mass of profit increases in spite of its slower rate with the growth of the invested capital. However, this requires a simultaneous concentration of capital, since the conditions of production then demand employment of capital on a larger scale. It also requires its centralisation, i.e. , the swallowing up of the small capitalists by the big and their deprivation of capital… It is this same severance of the conditions of production, on the one hand, from the producers, on the other, that forms the conception of capital. It begins with primitive accumulation…, appears as a permanent process in the accumulation and concentration of capital, and expresses itself finally as centralisation of existing capitals in a few hands and a deprivation of many of their capital (to which expropriation is now changed). This process would soon bring about the collapse of capitalist production if it were not for counteracting tendencies, which have a continuous decentralising effect alongside the centripetal one.”
In this sketch of the contradictions inherent in Wage Slavery, Marx demonstrates why continuous state intervention is necessary not merely at the earliest periods of the emergence of the social relation, during the period of primitive accumulation, and in its latest period of development, a period of absolute over-accumulation of capital, but why state intervention in the social process of production is required during the whole of the capitalist epoch. On its own, the contradictions inherent in the capitalist mode of production itself would drive it to rapid extinction.
As with Carson’s Mutualist analysis, there is in Marx’s theory no period of laissez-faire political relations in which “the… character of the system was largely… a “neutral” legal framework…” This much should already be obvious, since, in 1848 — six years before Benjamin Tucker was born, more than two decades before he became an Anarchist, and nearly three decades before his first published work — Marx wrote in the Communist Manifesto, “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.”
Precisely when the mainstream historian, the Anarcho-Capitalist and the Marxist propose the State operated as a neutral legal framework, and not to enforce the system of Wage Slavery — and, precisely when each proposes Capital was in its alleged “competitive”, as opposed to its alleged “monopoly”, phase — Marx was describing the State in exactly these terms. Historical materialism has never proposed any other relation between the State and the total social capital than the one cited above — that the State, insofar as it can be considered a distinct entity in capitalist society, acts as the general social manager of the mode of production.
However, even if we go beyond the merely formal distinction between Capital as a form of private property and the State as the general manager of the interests of these private capitals — i.e., as the general manager of the system of Wage Slavery — and assume the State has acted throughout history directly on its own behalf as the social capitalist, it is still obvious that the inherent contradictions of the capitalist mode of production impose on the State-Capital entity precisely the same laws as are imposed on the total social capital when it is formally operating independent of the State. The entirely formal distinction between the State, on the one hand, and the total social capital, on the other, has absolutely no impact on the influence of the relations of production on political relations generally, but only on the ways this influence is expressed in actual political events.
This is because, in historical materialism, the State, whatever its relation to the existing mode of production prevailing in society, is nevertheless only a body composed of members of society carrying out the particular public functions of the State. It is a part of the general division of labor prevailing in society, and not, as mainstream political-economy would have us believe, an entity standing outside this division of labor. It does not matter in the least whether politics forms a sphere separate from the direct exploitation of labor power in the capitalist mode of production — as, for instance, is said to prevail in the United States — or is entirely fused with this direct exploitation of labor power — as might be argued in the case of the People’s Republic of China at present — the contradiction arising from the process of production of surplus value itself gives rise to the same necessities.
Moreover, in every historical epoch known to us, the State is not, and has never been, anything but a given quantity of surplus product of the existing mode of exploitation of labor organized in the form of the State. Since, in all epochs for which historical records are available, it is composed of men and women who are, by definition, unproductive drones within society, wasting the productive capacity of society on efforts, which, under any and all previous epochs, are entirely superfluous to human needs, it follows that its entire constitution depends on the productive labor of the remaining portion of society, and on the actual mode of production of surplus product prevailing in the society, however historically determined. For the State to be otherwise, it would no longer be the State, but a particular element of the productive capacity of society itself.
Finally, it is an obvious conclusion that whatever the social relations under which the surplus product of society is produced in an epoch, these social relations are of paramount importance to the State, precisely because it has bearing not only on private interests bound up with the mode of production, but with the interests of the State itself. If this relation between the State and the prevailing mode of extraction of surplus product had not been already explicitly argued for by centuries of observers, it could be easily deduced from historical experience. Thus, for example, Wikipedia tells us, in the literature of Ancient Greece, the only basis on which utopian society is organized without a slave population is that where labor itself has been abolished:
The Greeks could not comprehend an absence of slaves. Slaves exist even in the “Cloudcuckooland” of Aristophanes’ The Birds as well as in the ideal cities of Plato’s Laws or Republic. The utopian cities of Phaleas of Chalcedon and Hippodamus of Miletus are based on the equal distribution of property, but public slaves are used respectively as craftsmen and land workers. The “reversed cities” placed women in power or even saw the end of private property, as in Lysistrata or Assemblywomen, but could not picture slaves in charge of masters. The only societies without slaves were those of the Golden Age, where all needs were met. In this type of society, as explained by Plato, one reaped generously without sowing. In Telekleides’ Amphictyons barley loaves fight with wheat loaves for the honour of being eaten by men. Moreover, objects move themselves—dough kneads itself, and the jug pours itself. Society without slaves is thus relegated to a different time and space. In a “normal” society, one needs slaves.
What is particularly offensive in this regard, is the implication made by Kevin Carson, that somehow, Marx held to the same conclusion as the ancient Greeks, namely, that the system of Wage Slavery could only be abolished given the abolition of labor itself. Carson argues:
A second failing of Marxism (or at least the vulgar variety) was to treat the evolution of particular social and political forms as natural outgrowths of a given technical mode of production.
No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production replace older ones before the material conditions for their existence have matured within the framework of the old society. Mankind thus inevitably sets itself such tasks as it is able to solve, since closer examination will always show that the problem itself arises only when the material conditions for its solution are already present or at least in the course of formation. In broad outline, the Asiatic, ancient, feudal and modern bourgeois modes of production may be designated as epochs marking progress in the economic development of society. (169)
For the Marxists, a “higher” or more progressive form of society could only come about when productive forces under the existing form of society had reached their fullest possible development under that society. To attempt to create a free and non-exploitative society before its technical and productive prerequisites had been achieved would be folly. The proper anarchist position, in contrast, is that exploitation and class rule are not inevitable at any time; they depend upon intervention by the state, which is not at all necessary. Just social and economic relations are compatible with any level of technology; technical progress can be achieved and new technology integrated into production in any society, thorough free work and voluntary cooperation. As G. K. Chesterton pointed out, all the technical prerequisites for steam engines had been achieved by the skilled craftsmen of the High Middle Ages. Had not the expropriation of the peasantry and the crushing of the free cities taken place, a steam powered industrial revolution would still have taken place–but the main source of capital for industrializing would have been in the hands of the democratic craft guilds. The market system would have developed on the basis of producer ownership of the means of production. Had not Mesopotamian and Egyptian elites figured out six thousand years ago that the peasantry produced a surplus and could be milked like cattle, free people would still have exchanged their labor and devised ways, through voluntary cooperation, to make their work easier and more productive. Parasitism is not necessary for progress.
Is this right? Is Marx making the absurd statement that Wage Slavery could not be abolished until the productive forces founded on Wage Slavery “had reached their fullest possible development under that society.” Carson offers not one bit of evidence to support this outrageous claim, and is demonstrably wrong on it.
I will examine this absolutely incomprehensible charge in my next post.
/edited for terminology — JRE
Tags: Anarcho-capitalism, capital, cartelization, colonization, compulsory labor, Conservatism, Fascist State, Jim Crow, Kevin Carson, labor, labor power, Liberalism, Marxism, monopoly, Murray Rothbard, Mutualism, poor laws, primitive accumulation, Racism, soviet union, Stromberg, surplus value, The Constitution, The State, vagabondage, vagrancy laws, wage slavery
Our friend, Moneybags, must be so lucky…
I apologize to readers for the mind-numbingly extensive quotes in the previous post, but I wanted it to be absolutely clear that the historical record demonstrates Carson is entirely on firm footing when he asserts Capital — that is, Wage Slavery — would be impossible without the State — not just presently, but in the earliest moments of its emergence as well. I now want to be equally clear that Marx himself acknowledges this to be a fact, when he writes:
For the conversion of his money into capital, therefore, the owner of money must meet in the market with the free labourer, free in the double sense, that as a free man he can dispose of his labour-power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realisation of his labour-power.
The question why this free labourer confronts him in the market, has no interest for the owner of money, who regards the labour-market as a branch of the general market for commodities. And for the present it interests us just as little. We cling to the fact theoretically, as he does practically. One thing, however, is clear — Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labour-power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older forms of social production.
So, too, the economic categories, already discussed by us, bear the stamp of history. Definite historical conditions are necessary that a product may become a commodity. It must not be produced as the immediate means of subsistence of the producer himself. Had we gone further, and inquired under what circumstances all, or even the majority of products take the form of commodities, we should have found that this can only happen with production of a very specific kind, capitalist production. Such an inquiry, however, would have been foreign to the analysis of commodities. Production and circulation of commodities can take place, although the great mass of the objects produced are intended for the immediate requirements of their producers, are not turned into commodities, and consequently social production is not yet by a long way dominated in its length and breadth by exchange-value. The appearance of products as commodities pre-supposes such a development of the social division of labour, that the separation of use-value from exchange-value, a separation which first begins with barter, must already have been completed. But such a degree of development is common to many forms of society, which in other respects present the most varying historical features. On the other hand, if we consider money, its existence implies a definite stage in the exchange of commodities. The particular functions of money which it performs, either as the mere equivalent of commodities, or as means of circulation, or means of payment, as hoard or as universal money, point, according to the extent and relative preponderance of the one function or the other, to very different stages in the process of social production. Yet we know by experience that a circulation of commodities relatively primitive, suffices for the production of all these forms. Otherwise with capital. The historical conditions of its existence are by no means given with the mere circulation of money and commodities. It can spring into life, only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world’s history. Capital, therefore, announces from its first appearance a new epoch in the process of social production.
From this passage we can see that Capital, that is, Wage Slavery was, in Marx’s opinion, not a result of nature, nor was it the mere product of preexisting social development. Rather, it was a rupture — a world historical occurrence — in pre-capitalist social relations. Even with the appearance of commodities, trade, money, etc. the emergence of capitalist social relations is not a necessary outcome. It occurs in history only when the owner of the means of production and subsistence enters into a specific relationship with another who has the “freedom” to sell her capacity to labor and is, moreover, compelled by circumstances, on pain of starvation, to sell this capacity. However, as was shown in the previous post, even facing starvation, it still took relentless state violence over many decades — centuries — for this mass of pitiful sub-humans to be broken to a life of wage slavery.
Wage slavery is no natural state for any human being. Despite the violence of the State and the efforts to starve them into submission, domesticating human beings to the routine of modern wage slavery was nowhere near as clean and elegant as is implied by the supply/demand curve of the simple-minded economist. It was — and remains today — an arena of constant violent aggression within society against the worker, in which every means available — political, military and economic — are brought to bear to compel her submission. The neglect of this fact is all the more to be denounced, since, in the Fascist State, the wage slave is routinely portrayed as the willing partner in an otherwise unremarkable market transaction — the Fascist State is all too ready to deny the paternity of its bastard offspring, and swear them all to be the product of Virgin Birth.
Kevin Carson may be polite, and keep this discussion on an intellectual plane, but I am not so polite; I am willing to thrust the face of the Anarcho-Capitalist in the shit that is the history of Capital. As the Anarcho-Capitalist drones on and on about the “Rights of Englishmen”, and “Taxation as a form of Involuntary Servitude”, this nonsense can be brought to a sudden halt merely by asking him to consider how long the wealth of one would be safe, if the State could not be called upon to protect his property rights from the anger of the remaining 9,999 living on the edge of existence. Nothing converts a Rothbardian Anarcho-Capitalist into a model Fascist Citizen so quickly as the possibility of Voluntary Association of the laborers and the eradication of Wage Slavery.
On the other hand, we have the Marxist, who, despite his self-identification, could not pick Karl Marx out of a crowd of well shaven Keynesian economists. Unlike the Anarcho-Capitalist — who, reflecting his social base, decries the imposts of the Fascist State on the meager wealth of the petty capitalists, marginalized from productive employment of their capital by the progress of Capital itself, and forced to scurry about in various speculative enterprises to protect it from inflation — the Marxist is a poseur, who advocates on behalf of the wage slave — but only so far as she remains a slave of the State. Reduction of hours of labor to end unemployment forever? The Marxist has never heard of such nonsense, despite having read Capital, where Marx explicitly referred to it as the “modest Magna Carta” of the working class. In any case, the Marxist explains, we need the Fascist State to “invest” in “infrastructure” and “green jobs”, so the active laboring population must be worked to its absolute limit and the unemployed left to starve, so that the Fascist State may have the resources it needs to accomplish this. (Taking a page from the talking points memo of Fascist economists like Paul Krugman, the Marxist has taken to referring to wasteful Fascist State expenditures as “investments”.) If, by some fantastic chance, working people should overthrow this Fascist State, the Marxist explains, even then compulsory labor cannot be done away with. The workers is not prepared intellectually to manage her own affairs without the despotism of the party-state, which alone has the foresight and vision to manage society on her behalf until such time as she is deemed capable. When might this be? The party-state will know it, when the time arrives, of course.
Carson is not only right to take both Anarcho-Capitalists and Marxists to task on this point, he has the entirety of the bloody history of Wage Slavery on his side — a history both the Anarcho-Capitalist and the Marxist wish to ignore; which they wish to prettify by blaming its results either on the State, as the Anarcho-Capitalist does, or on Capital, as the Marxist does. The true facts are these: the Wage Slave was bludgeoned by decades of State violence, even as she was starved out by the monopoly owners of Capital, in an efforts to make her submit to the very conditions of life we now take as the natural state of society. If, Kevin Carson is to be criticized for anything in this regard, it is that he did not treat these critical communist trends with the contempt they deserve — that he did not call them out on their nonsense, and expose their muddle-headed arguments as such. I think there is a reason for this; and, I believe that reason lies in the flaws of Carson’s own argument regarding both Capital and the State — a flaw he shares with both communist trends.
I will turn to this in my next post.
Tags: Anarcho-capitalism, capital, cartelization, colonization, compulsory labor, Conservatism, Fascist State, Jim Crow, Kevin Carson, labor, labor power, Liberalism, Marxism, monopoly, Murray Rothbard, Mutualism, poor laws, primitive accumulation, Racism, soviet union, Stromberg, surplus value, The Constitution, The State, vagabondage, vagrancy laws, wage slavery
Capital, or, Slavery by Another Name
Kevin Carson’s “Austrian & Marxist Theories of Monopoly Capital: A Mutualist Synthesis” states his Mutualist position in opposition to both the anarcho-capitalist Libertarian and Marxist theories of monopoly capitalism. The theories of the Anarcho-Capitalist camp and the Marxist camp are, in turn, set in opposition to mainstream liberal and conservative arguments.
According to Carson, mainstream liberals and conservatives argue the Fascist State acts as a constraint on Capital. Though differing on whether this constraint operates in favor of society or against, both wings of the dominant consensus hold to this view:
Both mainline “conservatives” and “liberals” share the same mirror-imaged view of the world (but with “good guys” and “bad guys” reversed), in which the growth of the welfare and regulatory state reflected a desire to restrain the power of big business. According to this commonly accepted version of history, the Progressive and New Deal programs were forced on corporate interests from outside, and against their will. In this picture of the world, big government is a populist “countervailing power” against the “economic royalists.” This picture of the world is shared by Randroids and Chicago boys on the right, who fulminate against “looting” by “anti-capitalist” collectivists; and by NPR liberals who confuse the New Deal with the Second Advent. It is the official ideology of the publick skool establishment, whose history texts recount heroic legends of “trust buster” TR combating the “malefactors of great wealth,” and Upton Sinclair’s crusade against the meat packers. It is expressed in almost identical terms in right-wing home school texts by Clarence Carson and the like, who bemoan the defeat of business at the hands of the collectivist state.
The conventional understanding of government regulation was succinctly stated by Arthur Schlesinger, Jr., the foremost spokesman for corporate liberalism: “Liberalism in America has ordinarily been the movement on the part of the other sections of society to restrain the power of the business community.” Mainstream liberals and conservatives may disagree on who the “bad guy” is in this scenario, but they are largely in agreement on the anti-business motivation. For example, Theodore Levitt of the Harvard Business Review lamented in 1968: “Business has not really won or had its way in connection with even a single piece of proposed regulatory or social legislation in the last three-quarters of a century.”
Carson has this to say of the critical communist theories of Anarcho-Capitalism and Marxism:
Stromberg’s argument is based on Murray Rothbard’s Austrian theory of regulatory cartelization. Economists of the Austrian school, especially Ludwig von Mises and his disciple Rothbard, have taken a view of state capitalism in many respects resembling that of the New Left. That is, both groups portray it as a movement of large-scale, organized capital to obtain its profits through state intervention into the economy, although the regulations entailed in this project are usually sold to the public as “progressive” restraints on big business. This parallelism between the analyses of the New Left and the libertarian Right was capitalized upon by Rothbard in his own overtures to the Left. In such projects as his journal Left and Right, and in the anthology A New History of Leviathan (coedited with New Leftist Ronald Radosh), he sought an alliance of the libertarian Left and Right against the corporate state.
Rothbard treated the “war collectivism” of World War I as a prototype for twentieth century state capitalism. He described it as
a new order marked by strong government, and extensive and pervasive government intervention and planning, for the purpose of providing a network of subsidies and monopolistic privileges to business, and especially to large business, interests. In particular, the economy could be cartelized under the aegis of government, with prices raised and production fixed and restricted, in the classic pattern of monopoly; and military and other government contracts could be channeled into the hands of favored corporate producers. Labor, which had been becoming increasingly rambunctious, could be tamed and bridled into the service of this new, state monopoly-capitalist order, through the device of promoting a suitably cooperative trade unionism, and by bringing the willing union leaders into the planning system as junior partners.
In this article, which is a review of the literature, Kevin Carson attempts to synthesize the view of the two critical communism theories. Carson takes on both the opportunism of Anarcho-Capitalism and Marxism, with regards to capitalist property and the State, respectively. He attempts to demonstrate what these critical communist theories have in common, but also how their differences leads them into errors.
He argues, rather persuasively, that capitalist social relations are impossible without the State. His argument refers not just to present day Capital — during this period of over-accumulation — but also to the very beginning. So, he is making the argument that Capital itself arose on the basis of violence and state-sponsored primitive accumulation. He is, therefore, not making a hypothetical argument, but a historical one – which argument can be actually confirmed by historical records.
While we can make hypothetical arguments against his position, the real question is: “Does his argument hold water as history?” The answer to this can only be, “Yes.” So, that being the case, my own review begins with acknowledging this historical fact. So far as I can see, Marx and Carson agree on this point. Even though Carson asserts Marx disagrees with him in the German Ideology. Marx does not. He writes of the bloody violence unleashed on the floating population of England under Henry VIII, and, moreover, the history of plunder and colonization, and intensified inter-state conflict that accompanied the rise of Capital:
With guild-free manufacture, property relations also quickly changed. The first advance beyond naturally derived estate capital was provided by the rise of merchants whose capital was from the beginning movable, capital in the modern sense as far as one can speak of it, given the circumstances of those times. The second advance came with manufacture, which again made mobile a mass of natural capital, and altogether increased the mass of movable capital as against that of natural capital.
At the same time, manufacture became a refuge of the peasants from the guilds which excluded them or paid them badly, just as earlier the guild-towns had [served] as a refuge for the peasants from [the oppressive landed nobility].
Simultaneously with the beginning of manufactures there was a period of vagabondage caused by the abolition of the feudal bodies of retainers, the disbanding of the swollen armies which had flocked to serve the kings against their vassals, the improvement of agriculture, and the transformation of great strips of tillage into pasture land. From this alone it is clear how this vagabondage is strictly connected with the disintegration of the feudal system. As early as the thirteenth century we find isolated epochs of this kind, but only at the end of the fifteenth and beginning of the sixteenth does this vagabondage make a general and permanent appearance. These vagabonds, who were so numerous that, for instance, Henry VIII of England had 72,000 of them hanged, were only prevailed upon to work with the greatest difficulty and through the most extreme necessity, and then only after long resistance. The rapid rise of manufactures, particularly in England, absorbed them gradually.
With the advent of manufactures, the various nations entered into a competitive relationship, the struggle for trade, which was fought out in wars, protective duties and prohibitions, whereas earlier the nations, insofar as they were connected at all, had carried on an inoffensive exchange with each other. Trade had from now on a political significance.
With the advent of manufacture the relationship between worker and employer changed. In the guilds the patriarchal relationship between journeyman and master continued to exist; in manufacture its place was taken by the monetary relation between worker and capitalist — a relationship which in the countryside and in small towns retained a patriarchal tinge, but in the larger, the real manufacturing towns, quite early lost almost all patriarchal complexion.
Manufacture and the movement of production in general received an enormous impetus through the extension of commerce which came with the discovery of America and the sea-route to the East Indies. The new products imported thence, particularly the masses of gold and silver which came into circulation and totally changed the position of the classes towards one another, dealing a hard blow to feudal landed property and to the workers; the expeditions of adventurers, colonisation; and above all the extension of markets into a world market, which had now become possible and was daily becoming more and more a fact, called forth a new phase of historical development, into which in general we cannot here enter further. Through the colonisation of the newly discovered countries the commercial struggle of the nations amongst one another was given new fuel and accordingly greater extension and animosity.
Beyond Marx himself, further support for Carson’s position is found on the website, Spartacus Educational, regarding the bloody history of the emergence of wage slavery:
Poverty in Tudor Times
In Tudor England about a third of the population lived in poverty. Their suffering always increased after bad harvests. A shortage of food resulted in higher prices. This meant that poorer families could not afford to buy enough food for their needs.
Wealthy people were expected to give help (alms) to local people suffering from poverty because they were old, blind, crippled or sick. Some wealthy people were generous while others were mean. This meant that poor people in some villages were fairly well cared for while others died of starvation.
Unemployment was a major cause of poverty. When large landowners changed from arable to sheep farming, unemployment increased rapidly. The closing down of the monasteries in the 1530s created even more unemployment. As monasteries had also helped provide food for the poor, this created further problems.
Unemployed people were sometimes tempted to leave their villages to look for work. This was illegal and people who did this were classified as vagabonds.
A law passed in 1536 stated that people caught outside their parish without work were to be punished by being whipped through the streets. For a second offence the vagabond was to lose part of an ear. If a vagabond was caught a third time he or she was executed.
In 1550 Parliament passed a law stating that every parish had to build a workhouse for the poor. Edward VI set an example by giving permission for Bridewell Palace in London to be used as a workhouse. In exchange for food and shelter, the people who lived in the workhouse worked without wages. If people without work refused to go to the workhouse they were to be treated as vagabonds.
To pay for these workhouses, vicars were given permission to ask everyone in the parish to give money. If people refused, the vicar had to report them to his bishop. Workhouses did not solve the problem. It has been estimated that in 1570 about 10% of the population were still wandering around the country looking for work.
In 1576 a new Poor Law was introduced. Each parish had to keep a store of “wool, hemp, flax, iron or other stuff that was to be handed out to the unemployed. In exchange for the goods that they produced, the parish gave them money. In this way, the poor could continue living in their own homes. This new law also introduced fines for those who refused to pay money to help the poor.
This was followed in 1601 by another Poor Law. Workhouses now had to be provided for people who were too old or ill to work. People who refused to contribute money to help the poor could now be sent to prison.
The website offers the following documentation of its assertions:
Thomas More, Utopia (1516): “The landowners enclose all land into pastures (for sheep)… the peasants must depart away…. And when they have wandered… what else can they do but steal or go about begging.”
In 1566 Thomas Harman wrote a book about vagabonds: “They are punished by whippings. Yet they like this life so much that their punishment is soon forgotten. They never think of changing until they climb the gallows.”
In 1594 William Lambarde made a speech about poverty in England: “There were always poor lepers, aged poor, sick poor, poor widows, poor orphans, and such like, but poor soldiers were either rarely or never heard of till now… They lead their lives in begging and end them by hanging… They fight our wars… enduring cold and hunger when we live at ease, lying in the open field when we are in our beds.”
Letter sent by the citizens of London to Edward VI (1553): “It was obvious to all men that beggars and thieves were everywhere. And we found the cause was that they were idle; and the cure must be to make them work… by providing work ourselves, so that the strong and sturdy vagabond may be made to earn his living. For this we need a house of work… And so, we ask for the king’s house of Bridewell.”
Law passed by Parliament in 1576: “So that youth may be accustomed and brought up in labour and work, and so they do not grow to be idle rogues… it is ordered… that in every city and town within this realm a large stock of wool, hemp, flax, iron… shall be provided.”
Report on a survey carried out in Norwich in 1571: “Many of the citizens were annoyed that the city was so full with poor people, both men women and children, to the number of 2,300 persons, who went from door to door begging, pretending they wanted work, but did very little.”
Law passed by Parliament in 1597: “Every vagabond or beggar… shall be stripped naked from the middle upwards and publicly whipped until his or her body be bloody, and forth with sent to the parish where he was born… If any vagabond or beggar return again, he shall suffer death by hanging.”
Wage slavery was born of violence, and violence has accompanied it during its entire reign. Capital is the mother, the State is its father. The wage slave is the bastard offspring of both. And, this antihuman union has been quite fertile. The connection between the state and compulsory labor is so seamless that even the Workers’ Paradise had laws against “flitters, loafers, absentees, and grabbers”:
In the Soviet Union, the workers work not for capitalists, but for themselves, for their socialist state, for the good of all humanity. The overwhelming majority of laborers and office workers honorably and conscientiously work in enterprises, transport, and establishments, take a professional attitude toward work, offering models of Stakhanovite valor, strengthening the might and defense capabilities of the motherland..
But side-by-side with honest and conscientious workers, there are still scattered unmotivated, backward, or dishonorable people — flitters, loafers, absentees, and grabbers.
With their second-rate work, absenteeism, lateness to work, aimless wandering about the factory during work-time, and other violations of the rules of internal work organization, and likewise with individual capricious migrations from one establishment to another, these people disrupt labor discipline, and bring great losses to industry, transport, and all of the national economy.
They try to give as little work as possible to the state, and grab as much money as possible for themselves. They abuse Soviet labor laws and reles, using them for their selfish interests. They do not work fully even druing the established hours of the working day; often they work only 4 or 5 hours in all, wasting the remaining 2-3 hours of working time. With this, the people and the state lose every year millions of work days and billions of rubles.
When flitters and loafers are fired, they start filing lawsuits, and, not working, win payments for supposedly involuntary unemployment. Dismissal from an establishment for violating labor discipline, as a rule, is no sort of punishment at all for truants, since in the majority of cases they quickly find work in other establishments.
Using current regulations about granting vacations, according to which the right to vacation is granted after 5 1/2 months of work in a factory or institution, flitters and loafers, running from one establishment to another, contrive to get two vacations in one year, ending up in a preferred position over conscientious laborers and office-workers.
In housing projects, built by factories for their laborers and office workers, apartments are often occupied by persons who either voluntarily quit work in these establishments or were fired for violating labor discipline; because of this laborers and office workers, who have worked long and honorably in one establishment, are entirely deprived of necessary living-space.
In distribution of trips to rest homes and sanatoriums, flitters and truants enjoy the same rights as honestly working laborers and office-workers. In the same way, both in payment of insurance awards for temporary infirmity, and in the awarding of pensions, the necessary sharp distinction is not made between conscientious workers with long uninterrupted terms of service in a given factory or institution, and violators of labor discipline — flitters, running from some factories and institutions to others.
Some trade-union, managerial, and even judicial organs show an inadmissible, antisocial, complaisance toward violators of labor discipline and even connive with them — against the interests of the people and the state, — often deciding questions about reinstatement at work, about payment of insurance for temporary inability to work, about eviction from factory apartments, etc. in favor of flitters and truants.
All this leads to a situation, where dishonorable workers, laboring little, can live at the expense of the state, at the expense of the people. This evokes just protests from the majority of laborers and office workers. It demands the introduction of various changes in current rules of internal labor administration and in the norms of social insurance, so that in the future there will no longer be the same treatment for conscientious workers as for loafers and flitters; so that encouragement will be offered only to honestly working laborers and office workers, and not to those who subvert labor discipline and skip easily from one establishment to another.
Major abuses are found also in the practice of using leave for pregnancy and birth. It often happens that some women, seeking by deceitful means to live at the expense of the state, go to work in factories or institutions soon before giving birth only in order to receive the 4-month paid leave, and never return to work. The interests of the state demand an immediate end to this abuse..
Moreover, laws against vagabonds are still on the books in the United States today. According to one writer, it was not unusual for these laws to be used against Black men even into the 1950s in Birmingham. Police would sweep up all men who appeared to be without jobs. Once convicted, they would be hired out the mining companies. Carl V. Harris writes of this practice in his 1972 book, “Reforms in Government Control of Negroes in Birmingham, Alabama, 1890-1990″
“When the newspapers announce that the ever alert Sheriff and his trusted deputies rounded up some twenty or thirty negroes in the woods, wounded two or three and landed the balance in the county jail for crap shooting, does anybody believe that the peace of the county is being conserved, or does every man know that the syndicate is trying to reimburse itself for its campaign expenditures?” Thus did Walker Perry, chief attorney for the Tennessee Coal, Iron, and Railroad Company, denounce in 1912 the oppressive fee system, under which the Sheriff’s “syndicate” in Birmingham and Jefferson County, Alabama, allegedly earned $50,000 per year in fees by energetically arresting Negroes on petty gambling charges. Perry, as chairman of a reform crusade to abolish the fee system in Jefferson County, was one of many reform movement leaders who between 1890 and 1920 sought to remedy defects in the local government’s methods of controlling Negroes.
Most Birmingham whites believed that their local government should exercise vigilant control over the Negroes who composed approximately 40 percent of the population of their city. In 1889 the editor of the Birmingham Age-Herald declared: ‘The negro is a good laborer when his labor can be controlled and directed, but he is a very undesirable citizen.” In 1906 the editor of the Birmingham News said: ‘Anyone visiting a Southern city or town must be impressed at witnessing the large number of loafing negroes… They can all get work, but they don’t want to work. The result is that they sooner or later get into mischief or commit crimes.” The editor believed that such Negroes were “not only a menace to the public safety” but also “to some extent a financial burden upon the taxpayers.”
The Constitution actually allows this practice in the very amendment that outlawed slavery:
Thirteenth Amendment – Slavery And Involuntary Servitude
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2. Congress shall have power to enforce this article by appropriate legislation.
For decades this amendment was used to justify state action that in essence, reproduced all the vilest practices of slavery. How soon will it be before these laws are applied to the 99er population?
Tags: Anarcho-capitalism, capital, cartelization, colonization, compulsory labor, Conservatism, Fascist State, Jim Crow, Kevin Carson, labor, labor power, Liberalism, Marxism, monopoly, Murray Rothbard, Mutualism, poor laws, primitive accumulation, Racism, soviet union, Stromberg, surplus value, The Constitution, The State, vagabondage, vagrancy laws, wage slavery
In part one of this series, I showed how inflation affects not only consumption but also production. In the former, inflation expresses itself in the fall of the consumption power of the mass of society. In the latter, inflation expresses itself as a fall in the actual realized rate of profit — a negative rate of profit arising not from a material change in the composition of capital, but from a depreciation in the purchasing power of money. The two of these effects are achieved by one and the same cause. The two effects do not simply exist side by side, but influence each other: in the circulation of capital, excess money-demand effectively reduces the portion of the output of productively employed capital that is realized in sales. With an inflation rate of ten percent, a capital with value of $100 now can be realized only if $110 is offered for it. On the other hand, a capital with the actual value of $110, is effectively purchased for $100.
The problem here is that between the production of the commodity and its realization in a sale the purchasing power of the money has depreciated. The problem can be better understood if we divide value and price and examine each separately. If we assume a capital with the value of $100, represents 10 hours of socially necessary labor time, we can make the following observation: The capitalist takes his capital with a value of $100 or ten hours of labor time and produces a quantity of commodities with a new total value of $110, representing 11 hours of socially necessary labor time. However, during this same period, the purchasing power of money has changed so that 1 hour of labor time no longer has a price of $10, but has a new price of $11. His capital now has the value of 11 hours of labor time with an implied expected price of $121 (11 times 11 = 121), yet he only realizes $110, or 10 hours of labor time under the new price conditions.
From the point of view of value, the capitalist has taken his capital with a value of 10 hours of socially necessary labor and produced a capital with a value of 11 hours of socially necessary labor. Yet, of this 11 hours of value he only realizes 10 hours, i.e., he realizes no more than his original investment. From the point of view of price, the capitalist has taken his capital with a money-price of $100 and produced a capital with a money-price of $110. He expects no more than $110 and is satisfied with this, despite the fact that this $110 in sales only has a value of 10 hours of socially necessary labor time.
The riddle of the divergence of prices from values
The riddle of this perverse situation can only be solved if we assume that a change occurred in the relationship between values and prices during the exchange of money and commodities — that the realization of the value of capital produced suffered from a defect such that a portion of the value this capital was lost in the act of exchange itself. This defect, as we showed in part three, is already inherent in the value/price mechanism itself. The value/price mechanism contains in itself a contradiction between the actual labor time expended on the production of a commodity and the socially necessary labor time required for its production; a contradiction between the value of the commodity itself and the expression of the value in the form of the price of the commodity; and, a contradiction between the price of the commodity denominated in units of the money and the socially necessary labor time required for the production of the object that serves as the money.
These contradictions exists only in latent form until crises bring them to the surface in a sudden divergence between prices and values of commodities. During periods of over-production of commodities — or, more accurately, over-accumulation of capital — these crises are expressed in the sudden collapse in the prices of commodities below their value, or socially necessary labor times. The divergence between prices and values of commodities only express the fact that for a more or less lengthy period of time wealth can no longer accumulate in its capitalistic form; and, as a result, the socially necessary labor time of society must contract to some point where the production of surplus value no longer takes place. Precisely because the circulation of capital requires not just the production of surplus value in the form of commodities, but also its realization in a separate act of sale of these commodities, the possibility exists for an interruption of the process of realization for a longer or shorter period of time until balance between production and consumption is restored — that is, until conditions exist for the total social capital to once again function as capital; for the process of self-expansion of the total social capital to resume.
If, for whatever reason, conditions are not established for the total social capital to resume functioning as capital — for the process of self-expansion of the total social capital to begin again — production itself must cease. The interruption of exchange — which, I note for the record, begins not with too much money-demand for too few commodities, but precisely the reverse — creates a sudden fall in the rate of profit to zero. If this occurs not as an intermittent breakdown, but as a permanent feature of capitalist production — which is to say, if the over-accumulation of capital is not momentary, but a now permanent feature of the mode of production — capital has encountered its absolute limit as a mode of production. From this point forward the production of wealth can no longer take its capitalistic form — can no longer take the form of surplus value and of profit.
Over-accumulation of capital and civil society
Moreover, since the production of surplus value is the absolute condition for the purchase and sale of labor power, the sudden interruption of its production affects not just the capitalist class, but the class of laborers as well — it appears in the form of a social catastrophe threatening the existence of the whole of existing society, and all the classes composing existing society without regard to their respective place in the social division of labor. Each member of society encounters the exact same circumstance: she cannot sell her commodity, whether this commodity is an ordinary one — shoes, groceries, etc. — or the quintessential capitalist commodity, labor power. The premise of all productive activity in society is that this activity can only be undertaken if it yields a profit; if, in other words, the existing socially necessary labor time expended by society realizes, in addition to this value, additional socially necessary labor time above that consumed during its production.
Marx argues in Capital Volume 3 that capitalist production presupposes a tendency toward the absolute development of the productive forces of society, irrespective of the consequences implied by this development for capital itself. What does Marx mean by this? As a mode of production, capital shares with all previous modes of production the feature of being founded on natural scarcity, on the insufficiency of means to satisfy human need. Yet, at the same time, it implies a tendency for the productive capacity of society to develop more rapidly than consumption power of society — a tendency for more commodities to be thrown on the market at any given time than society can consume under the given conditions of exchange. What society can consume at any given moment is not determined simply by the amount of commodities available to be consumed, but by class conflict between the mass of owners of capital and the mass of laborers; a conflict which presupposes the reduction of the consumption power of the mass of laborers to some definite limit consistent with the realization of profits.
That this conflict, absent a successful attempt on the part of the mass of society to end the monopoly over the means of production by an insignificant handful of predators, must be settled in favor of capital and, therefore, that production is constantly kneecapped by completely artificial limits on consumption, is already given by capitalist relations of production themselves — relations which nowhere figure in the description of capital by simple-minded economists, who instead ascribe this barrier to the gold standard, etc.
This contradiction — that the productive power of society tends toward its absolute development, yet the consumption power is constantly constrained by the need to produce commodities at a profit — implies that at a certain point in capital’s development production and consumption come into absolute conflict — a conflict which, on the one hand, cannot be resolved by simply increasing this productive power still further, nor by limiting consumption still more severely. It can only be overcome by such means as overthrow capitalist relations entirely, or, alternately, destroy both the productive and consumption power of society together in one and the same act of exchange.
Exchange and disaccumulation, or, the destruction of value through exchange
I have made the assumption that both the productive power of society and the consumption power of society are destroyed by one and the same act of exchange. Based on this assertion, I define inflation not simply as the increase in money-demand over the supply of commodities, but the actual destruction of the productive power of society and consumption power of society during the act of exchange. Or, what is the same thing, by the progressive reduction of the total social capital circulating within society, i.e., the reduction of the quantity of the existing total social capital which continues to function as capital within society, through exchange.
I have also made the assumption that this same act of exchange also expresses,
- the contradiction between the actual labor time expended on production of commodities and the socially necessary labor time required for production of these commodities — inflation, therefore, expresses itself as a declining portion of the total labor time expended by society that is socially necessary, or, alternately, the constant increase in the total labor time of society in relation to the social necessity for productively expended labor time;
- the contradiction between values of commodities and the expression of these values in the prices of commodities — inflation, therefore, is expressed as a decline in the value of commodities as a proportion of the prices of commodities, or, alternately, the constant increase in the prices of commodities in relation to their values; and,
- the contradiction between the prices of commodities denominated in units of the legally defined money and the price of the commodity that historically served as the money — inflation, therefore, is expressed in the constant depreciation of the exchange ratio of the money token against the commodity historically serving as the standard of price, or, alternately, as the rising price of the commodity historically serving as the standard of prices denominated in the money token, i.e., a secular rise in the price of gold.*
The conditions of this act of exchange, which destroys both the productive power of society and its consumption power — and which, on this basis, progressively reduces the quantity of the existing total social capital which continues to circulates as capital and function as capital on this basis — is fulfilled only by exchange of that portion of the newly created social capital representing surplus value with ex nihilo money, and the unproductive consumption of this newly created value by the Fascist State. Moreover, this unproductive consumption of the newly created surplus value is only fulfilled if it is entirely unproductive in all of its forms, i.e., whether this unproductive consumption takes the form of the unproductive consumption of commodities, of labor power, or, of the fixed and circulating capital.
Fascist State expenditures consist entirely of removing the surplus product of labor from circulation, consuming it unproductively, and replacing this surplus product in circulation with a valueless ex nihilo money that formally completes the act of exchange, but that in reality abrogates it. The total mass of capital circulating within society is thereby reduced by this exchange, while the total money-demand in society is simultaneously increased.
The chief symptoms of inflation, therefore, is (1.) the unproductive consumption of the existing total capital by the Fascist State, no matter what form this unproductive consumption takes; (2.) the constant secular increase in Fascist State expenditures, no matter how these expenditures are financed, but which is no more than the continuous exchange of every form of commodity (i.e., of capital in the form of commodities) for newly created valueless ex nihilo money; and, finally, (3.) the constant expansion of the total labor time of society beyond that duration required by the satisfaction of human needs. In tandem with the improvement in the productivity of labor, society is compelled to expend an ever greater amount of effort just to feed, house and clothe itself. In tandem with the reduction in the value of commodities, the prices of commodities soar still higher. In tandem with relentless expansion of Fascist State expenditures, the actual provision of necessary public services — education, health care, provision for the disabled and those no longer able to work, public infrastructure and communications — sink into decay and obsolescence.
The terminal trajectory of capitalist social relations is expressed precisely in the fact that at a certain stage of development the total social capital can no longer function as capital, can no longer realize the constantly increasing quantity of surplus value produced in the form of profits, that, to the contrary, this surplus value must be unproductively consumed in its entirety by the Fascist State and replaced by purely fictitious profits denominated in a purely fictitious money.
*NOTE: I need clarify from Part Three that this third contradiction implies gold tends to exchange with other commodities at some exchange ratio below its relative value, despite its rising nominal price. As is obvious, if commodities are priced above their values, the purchasing power of gold — the physical body of exchange value — is exchanged below its value. This situation, which once occurred only during periods of general capitalist expansion, is now a permanent feature of exchange. It is, however, expressed through the intermediary of the money token by commodities being priced above their values, while gold is priced below its value. An existing quantity of money token can buy fewer commodities, but more gold, than otherwise expected. This inevitably leads to charges by gold-bugs that the price of gold is being deliberately suppressed, but I think it is actually a natural consequence of over-accumulation of capital — a condition normally seen at the apex of an expansion. Commodities in general are devalued, but this devaluation is expressed most thoroughly in the devaluation of the former money commodity which serves little other function in society but to express value.
Tags: capital, commodity, consumption, ex nihilo money creation, ex nihilo pecunaim, exchange, fictitious profits, fiscal policy, gold, inflation, monetary policy, negative rate of profit, prices, production, public debt, purchasing power of money, socially necessary labor time, stupid economist tricks, wages
According to the Wikipedia entry on Executive Order 6102, the fine for hoarding gold was ten thousand dollars. At the same time, the executive order demanded all private holdings be turned in and exchanged for government issued ex nihilo dollars at an exchange rate of $20.67 per troy ounce of gold. Using this as our base measure, the fine for hoarding gold amounted to 483.79 troy ounces of gold.
So, like the authors of the Wikipedia entry I tried to update the purchasing power of the 1933 ten thousand dollar fine into an amount of money equal to it in 2011 dollars. I went to the Bureau of Labor Statistics Consumer Price Index website and found that according to its statistical measure of inflation it now takes $171,897.69 to purchase the same quantity of goods that the ten thousand dollar fine would have purchased in 1933. According to the Bureau of Labor Statistics, the purchasing power of the ten thousand dollar fine has fallen to just 5.82 percent of its purchasing power in 1933. This is a fantastic depreciation in the purchasing power of dollars. However, it is also a gross lie — the depreciation of dollars has been far more severe than even the BLS admits, as we will now show.
The Problem of the Consumer Price Index
The Consumer Price index has been the subject of continuing controversy, including charges that it overestimates inflation and charges that it underestimates inflation. But, this controversy does not concern us here, since it is, in part at least, a political disagreement. What does concern us is the index itself, which popularly purports to measure the depreciating purchasing power of money in relation not to a fixed standard, but against a multitude of standards — that is, against a so-called basket of consumer goods.
Upon deeper investigation, however, I found, according to the entry in the Wikipedia on the United States Consumer Price Index, that the CPI was never meant to measure inflation or the depreciating purchasing power of money:
The U.S. Consumer Price Index (CPI) is a time series measure of the price level of consumer goods and services. The Bureau of Labor Statistics, which started the statistic in 1919, publishes the CPI on a monthly basis. The CPI is calculated by observing price changes among a wide array of products in urban areas and weighing these price changes by the share of income consumers spend purchasing them. The resulting statistic, measured as of the end of the month for which it is published, serves as one of the most popular measures of United States inflation; however, the CPI focuses on approximating a cost-of-living index not a general price index.
Intrigued by this disclaimer, I went searching for the difference between a measure of inflation and a measure of the “cost of living”. Among the information I found was an admission by the Bureau of Labor Statistics that the Consumer Price Index not only does not measure inflation, but it is not even a true measure of the cost of living. It is limited to measuring market purchases by consumers of a basket of goods and services.
According to Wikipedia, the BLS states:
The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure. BLS has for some time used a cost-of-living framework in making practical decisions about questions that arise in constructing the CPI. A cost-of-living index is a conceptual measurement goal, however, not a straightforward alternative to the CPI. A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living. Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this to also take into account changes in other governmental or environmental factors that affect consumers’ well-being. It is very difficult to determine the proper treatment of public goods, such as safety and education, and other broad concerns, such as health, water quality, and crime that would constitute a complete cost-of-living framework.
Since, the BLS, by its own admission, incompletely measures the amount you must spend to achieve a presumed certain level of “utility” — the so-called Standard of Living — how do they define this “utility”? Further reading explains:
Utility is not directly measurable, so the true cost of living index only serves as a theoretical ideal, not a practical price index formula.
So, to sum up: the Bureau of Labor Statistics Consumer Price Index is a measure of a theoretical construct which cannot be defined, is difficult to determine, and, in any case, is not directly measurable: the so-called “Standard of Living“.
The hidden costs borne by society
If we go back to the first paragraph of the original definition of inflation proposed the the Wikipedia entry, we find this:
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[my emphasis] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.
Inflation is defined as the general rise in prices of goods and services, but also as the erosion of the purchasing power of money — i.e., the depreciation of money. Against what is this erosion of purchasing power to be measured? Here, the Wikipedia is silent, leaving us with the wrong idea that the “real value” of money is to be measured against the commodities we can purchase with it. As this “real value” erodes, we can purchase fewer goods and services. This implied method of measuring the depreciation of money, however, does not give us a general measure of the price level, as the BLS admits, but only a measure of the price level as expressed in a series of transactions in the market for so many individual commodities.
The war in Afghanistan, for instance, would not be captured by this implied method; nor, would the cost incurred by society as a result of the damage British Petroleum caused to the Gulf of Mexico; nor, the cost borne by society for the Fukushima nuclear disaster, or that created by the bailout of the failed banksters on Wall Street. Unless these costs actually entered into the prices of commodities in market transactions, they will not show up in the Consumer Price Index. And, a considerable period of time could pass between the events and their expression in the prices of commodities tracked by the Consumer Price Index. Moreover, the change in prices of the commodities tracked by the Consumer Prices Index are subject to innumerable factors arising from market forces within the World Market — making it impossible to trace any specific fluctuation back to its source. On the other hand, each of the events of the sort cited above materially affected either the necessary labor time of society or the quantity of ex nihilo money in circulation within the economy.
The question to which we seek an answer is not how much the purchasing power of ex nihilo money has depreciated with respect to some arbitrarily established concept of living ltandard, but how much it has diverged from the purchasing power of gold standard money? To answer this question, we must directly measure these changes by comparing the general prices level against the commodity that served as the standard for prices until money was debased and replaced with ex nihilo dollars.
Gold standard dollars more or less held prices to the necessary social labor time required for the production of commodities; the divergence between gold and dollars since the dollar was debased, provides us with an unambiguous picture of inflation since 1933. The divergence between the former gold standard money and ex nihilo money must be expressed as the depreciation of ex nihilo money purchasing power for an ounce of gold over time , or, what is the same thing, as the inverse of the price of gold over a period of time — as is shown in the chart below for the years 1920 to 2010.
Inflation since 1933 has been four times higher than BLS figures show
So, how does all of this relate back to the fine imposed on anyone found guilty of hoarding gold under Executive Order 6120? Remember, in 1933 the ten thousand dollar fine could have been exchanged for 483.79 ounces of gold. According to the BLS Consumer Price Index this translates into $171,897.69 in current dollars. However, 483.79 troy ounces of gold actually commands the far greater sum of $714,441.22, or 4 times as many dollars as the BLS Consumer Price Index states.
To put this another way, the Consumer Price Index is a complete fabrication by government to deliberately understate the actual depreciation of dollar purchasing power. The cumulative results of decades of false inflation statistics can be seen by simply comparing CPI statistics to the actual depreciation of dollar purchasing power against its former standard, gold. The extent of this fabrication can be seen in the chart below:
Moreover, for 2010, the annual average price inflation rate was a quite staggering 26%, when measured against the value of gold, not the paltry 1.6% alleged by the BLS.
If you didn’t receive a 26 percent increase in your wages or salary in 2010, you experienced a 26% loss in purchasing power — your consumption power was systematically destroyed by Washington money printing.
Using gold as the standard against which the depreciation of ex nihilo money is measured demonstrates how the Fascist State deliberately manipulates statistics for its own purposes to hide from the public the extent to which it manipulates exchange, and, therefore, the extent to which this manipulation has resulted in greatly increased prices for commodities.
But, gold does not only allow us to actually visualize the extent of this manipulation, as we shall show in the next post, gold also can demonstrate how this manipulation results in the needless extension of social working time beyond its necessary limit. That the Fascist State relentlessly extends working time beyond this limit, or, more importantly, that operates to maintain an environment of scarcity within society, which is the absolute precondition for Capital’s continuation.
To be continued
Tags: Bureau of Labor Statistics, capital, commodity, Consumer Price Index, consumption, ex nihilo pecunaim, exchange, Federal Reserve, fiscal policy, Franklin Delano Roosevelt, gold, Gold Reserve Act of 1934, gold standard, Gold standard dollars, inflation, monetary policy, negative rate of profit, Presidential Executive Order 6102, prices, production, purchasing power of money, Standard of Living, stupid economist tricks, the "real value" of money, Utility, value versus “real value”
In the bare bones sketch of Marx’s theory I argued that the value of the object serving as money played no role in its function as money. This was incomplete, of course, but it served to advance my argument until I could directly address the implication of debasement of money by the industrial powers during the Great Depression. In reality, the price (actually value/price) mechanism can only perform its function to coordinate the separate acts of millions of individual labor times if it shares with commodities the attribute of being a product of labor itself, and, for this reason, requires a definite socially necessary labor time for its own production. Because gold has value, it can express the value of the commodities with which it is exchanged.
On the surface, a commodity is exchanged for money, and this transaction is the exchange of two absolutely unlike objects: the money serves no purpose but means of exchange, while the commodity with which it is exchanged is eventually consumed; the money never leaves circulation, while the commodity disappears; the money can always find a new owner, while the commodity only finds an new owner where it is needed. They are as different as night and day. Although, the flows of money through the community are only a necessary reflex of the flows of commodities through the community as it engages in a more or less developed act of social production. But, by always being exchangeable for commodities throughout the community, always being in constant circulation within the community, and by serving only as means of exchange, money brings millions of isolated individual acts of production into some sort of rough coordination.
As the physical expression of socially necessary labor time money is a natural and spontaneous means by which the value/price mechanism regulates the activities of the community in absence of the community’s own planned management. However, I must emphasize, money is only the expression of socially necessary labor time; it is not and should not be mistaken for socially necessary labor time itself. And, it can only express the socially necessary labor time of society, because the community requires some definite socially necessary labor time to create it. What object serves as money for the community is, therefore, of general interest to the whole of the community, and has a very long history — most of which, since we take this history as our starting point, is of no interest to us here. I only note that since this General Interest must take some form, the form it takes during the period under discussion, from the Great Depression until the present, are the laws of the various States regarding the legal definition of money.
Breakdown of the law of value emergence of the Fascist State
On April 5, 1933, the Roosevelt administration issued Executive Order 6102. The Wikipedia outlines the scope of this executive order:
Executive Order 6102 is an Executive Order signed on April 5, 1933, by U.S. President Franklin D. Roosevelt “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates” by U.S. citizens. The bank panics of Feb/March 1933 and foreign exchange movements were in danger of exhausting the Federal Reserve holdings of gold. Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both.
This simple executive order, which was succeeded by several additional orders during 1933, and by the Gold Reserve Act of 1934, removed gold as the standard for the dollar, made it illegal to own more than a small amount of the metal, and compelled individuals under penalty of law to turn their gold over to the Federal Reserve in return for the then existing exchange rate of $20.67. On the surface this order just gave the State monopoly over the ownership of gold and reduced money to just a State-issued token. While this step was, in and of itself, fairly staggering, particularly when we consider that it was duplicated in all the big industrial nations at the same time, once we consider the full ramifications of the orders and succeeding law in terms of the various national economies, it quickly becomes apparent that a state monopoly over the ownership of gold, and the replacement of gold standard money by State-issued currency was only the most obvious effect. John Maynard Keynes, who examined the issue entirely from the standpoint of a bourgeois economist, had some inkling of the far reaching implication of State issued ex nihilo money. Fifteen years earlier, he argued that the inflationary consequences of excessive money printing amount to the confiscation of private property:
… By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.
Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
If excessive money printing raised the question of secret confiscation of property, the actual confiscation of gold, and the replacement of gold money by state-issued currency amounted to the explicit expropriation of monetary wealth. Yet, even this implied expropriation of social wealth in its capitalistic form was not the most significant implication of the state action: From the standpoint of Marx’s theory, the debasement of money was the abolition of the historically developed natural and spontaneously created value/price mechanism as the regulator of the social act of production. In place of a natural relation between the values of commodities and the prices of commodities, the relation between the two was, after this, to be established as a matter of state policy. This separation is the absolute development of the historical antithesis between the commodity and money, since paper money has no use except as medium of circulation of commodities — as means of exchange. Moreover, by this executive order severing gold from money, we see not only that the value of the commodity was severed from its price, but, further, that production was severed from consumption; labor power was severed from wages; surplus value was severed from profits. Finally, with the law of value no longer determining the social necessity of a given expenditure of labor time, the labor time expended by society was no longer limited by social necessity.
In place of the historical, spontaneous and naturally developed mode by which the separate activities of millions of members of Civil Society in every country had been hitherto regulated, social labor and its duration was now regulated by the State, and under conditions determined solely by the State. The abolition of the gold standard did not simply sever the connection between gold and money, and abolish the value/price mechanism, it also placed the total social capital of Civil Society at the disposal of the State — or, what is the same thing, announced the emergence of the Fascist State. Property, the classical thinkers argued, is the power to dispose of the labor of others, hence this total social capital was converted into the property of the State.
The Fascist State as regulator of production and consumption
The entire social capital of every nation was expropriated, precisely as Marx predicted, but in a fashion and under circumstances quite different than those which might have been welcomed by him. As I argued in another post, Marx’s differences with Bakunin came down to difference over whether the Proletariat would be compelled to effect management of social production according to the principle of “to each according to his work”, that is by replacing the existing Civil Society and the State with new rules enforcing labor equally on all members of society. Marx was not making this argument in a vacuum; his theory predicted a breakdown of the law of value as the regulating principle of social labor before the necessary conditions were established for a fully communist society. Society would be required by this breakdown to step in and manage social labor directly and according to a plan. Marx’s argument with the Anarchists essentially asked the question, “By what rules would this management be effected?” As is obvious from an investigation of history, this question was settled decisively in favor of the existing Civil Society, which rose to manage its General Interest — i.e., its interests as a mode of Capital — through the machinery of the Fascist State.
Within ten years of this act, more than 80 million people were dead and the Eurasian continent lay in ruins, as each nation state, finding itself in total control of the productive capacity of their respective nations, immediately put this productive capacity to good use by trying to devour their neighbors — unleashing a catastrophe on mankind. By 1971, with the collapse of the Bretton Wood agreement, a single fascist state, the United States, had imposed on the survivors the very same control over the other national economies, that it imposed on its own citizens.
As I stated in the previous post:
However, there are so many holes in the economist’s definition of inflation, as a matter of due diligence I must consider inflation from the standpoint of Marx’s labor theory of value. If I arrive at the same conclusions about inflation that are expressed in the Wikipedia definition — or at conclusions that throw no new light on the subject — then I will have spent about five hours pursuing a dead end.
I have now considered inflation from the standpoint of Marx’s labor theory of value and have come to decidedly different conclusions than those drawn in the Wikipedia entry on the subject. These conclusions, I argue, suggest a catastrophic breakdown of the conditions of capitalist production and exchange during the Great Depression; and, based on this, the assumption by the State of direct management of social production, the conversion of the total social capital into the property of the State — not by means of outright seizure of this capital, but by taking control of the conditions of exchange — and the extension of this relationship to the entire World Market.
With the assumption of management of social production by the Fascist State, the law of value, which served to limit the average price of the commodity to the socially necessary labor time required for its production, no longer imposed such limits on prices. Hence, prices could be determined by factors other than the value of these commodities. On the other hand, with the law of value — that is socially necessary labor time — no longer imposing a limit on the total labor time of society, this labor time could be expanded in a form that is completely superfluous to social necessity. We can, therefore, define inflation as the chronic general rise in the price level resulting from the further extension of hours of labor beyond their socially necessary limit; or, prices held constant, by the reduction of the ratio of socially necessary labor time to the actual hours of labor expended. Finally, we can see that inflation itself is no more than the result of Fascist State policy, which, acting as the social capitalist, seeks the ever greater extension of the working day even as the productive capacity of society reduces the necessary labor time of social labor.
In my next post, I will examine each of these conclusions in turn.
To be continued
Tags: Bakunin, capital, Civil Society, commodity, consumption, ex nihilo pecunaim, exchange, Federal Reserve, fiscal policy, Franklin Delano Roosevelt, gold, Gold Reserve Act of 1934, gold standard, inflation, Karl Marx, Lord John Maynard Keynes, monetary policy, negative rate of profit, Presidential Executive Order 6102, prices, production, stupid economist tricks, value versus "real value"
The Wikipedia definition of inflation includes this rather silly statement on the definition of the so-called “real value” of money:
…inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.
In this statement the “real value” of money is reduced to the purchasing power of the currency, which is simply the inverse of the price of a commodity. If a commodity has a price of ten dollars, the “real value” of a dollar in relation to this commodity is one tenth of the commodity. By the same token, the value of the commodity can be said to be ten times the “real value” of one dollar. The value of the commodity is, therefore, only its price in some unit of the currency, and, in this way the economist can dispose of the nasty implications of Marx’s labor theory of value — that the classical notion of value amounts to a death sentence for Capital itself, and of the sum of relations of society founded on Capital.
It is typical of economics that its practitioners hold to the notion reality can be abolished merely by refusing to acknowledge its existence. Thus, tens of millions of unemployed women and men no longer exist simply because the Bureau of Labor Statistics’ data removes all evidence of their existence. Unemployment like the classical notion of value is no more than a conceptual construct which can be disposed of by replacing it with a new concept. However, there are so many holes in the economist’s definition of inflation, as a matter of due diligence I must consider inflation from the standpoint of Marx’s labor theory of value. If I arrive at the same conclusions about inflation that are expressed in the Wikipedia definition — or at conclusions that throw no new light on the subject — then I will have spent about five hours pursuing a dead end. The effort, however, is worth it.
Price and value
It may surprise you that, in Marx’s model, money can be thought of as something without any value at all. Value is a characteristic of a commodity, and, insofar as we consider money not as money, but as just another commodity (for instance, the gold in a necklace) it does indeed have value equal to the socially necessary labor time required for its production. But, when serving as money, gold’s value as a commodity never enters into the equation. As money, gold’s entire role in social production is to express the value of the commodity, not its own value; and this it does in its material body. Marx would never speak of the “real value” of money, because as money, its “real value” is not what matters — what matters is its physical material.
Simplified Marx’s model is this: When we speak of the value of a commodity, we are referring to the duration of labor time socially required to produce the commodity. This socially necessary labor time is expressed in a quantity of gold that requires the same duration to produce. The socially necessary labor time required to produce the commodity is the value of this commodity, while the quantity of gold equal to this socially necessary labor time is not the value of the commodity, but its price. Value and price are two different animals — in the market, where the commodity is exchanged for money, the the value of a commodity and its price in gold are just as likely represent two different quantities of socially necessary labor time as they are to agree. They will agree only on average. In its simplest form, Marx’s theory of value assumes not that the price and the value of a commodity are the same, but that they are NEVER the same — the price of the commodity and its value only coincide by innumerable transactions in which the two only coincide on average.
If the price and the value of a commodity never coincide, what is Marx’s point? His point isn’t to find the secret of prices of commodities, but to demonstrate how the millions of separate and isolated activities of the members of society are, through this mechanism of constant price fluctuations, converted into an embryonic form of social production. While the economist is trying to crack the great ‘mystery’ of price, Marx is showing how private productive activity naturally begins to inch its way along the long road to fully social cooperative productive activity.
The point of the exercise is to advance a theory showing how the labor time of the community, composed as it is of millions of separate labor times is regulated naturally through the pricing mechanism, since the community does not regulate this labor time consciously and according to a plan. In this sense, I think, Marx is not breaking any new ground in relation to the classical writers like Adam Smith. Marx’s unique contribution to this discussion is that in place of labor time generally, he posits socially necessary labor time — which is to say, he shows that productive activity is carried on under the conditions that are established generally in society and not directly arising from the decisions of the individual. The individual’s productive activity is, therefore, being constantly coerced by conditions that are entirely beyond her control, which impose on her the requirement to constantly reduce the amount of time she spends on the production of her commodity.
The conclusion Marx drew from his investigation, briefly stated, was this: If there is no connection between the socially necessary labor time of society and the prices of the commodities produced during this socially necessary labor time, the pricing mechanism could not effect a coordination of all of the millions of individual acts of production within society. We already know these millions of individual acts are not planned and consciously coordinated by the members of society; if we presume these millions of individual labor times are regulated naturally by prices, we have to accept the idea that price itself is doing what people are not, namely effecting regulation of millions of different labor times. So while, in the real world, a commodity requires so much definite time to produce, how much of this time is considered necessary, and how many of the items are to be produced, is determined by society in general, and this value is imposed on the individual in the very real form of the commodity’s price.
When too few of the commodity is produced, its price rises signaling a need to increase the amount of social labor expended on production of the commodity, when to many of the commodity is produced, its price falls signaling a need to reduce the labor time expended on production of the commodity. On the other hand, if the average amount of time need to produce to commodity falls, its price falls signaling a need to reduce the labor time expended on production of the commodity; and, if the average amount of time need to produce to commodity increases, its price increases signaling a need to increase the labor time expended on production of the commodity. This is not rocket science, folks. It is just common sense.
Capital and value
Capital introduces an additional complexity to what I have stated above: with capital the aim of production is not to produce the commodity, but to produce a profit on production of the commodity. The capitalist doesn’t care about the commodity in the least, he is totally focused on seeing that he ends with more gold in his pocket than he began with. To do this he begins with so much money-capital, which he lays out on labor power and the other necessities demanded by production of the commodity. Since he is bound by the same laws that govern production generally, he can only realize a profit if the labor power he purchases can produce more value than it costs for him to purchase it, that is if he can realize, in addition to the money-capital he advanced, this same quantity of money-capital plus an additional sum of money-capital.
However, there is a problem here: when we say the capitalist aims to produce more value than he laid out at the beginning, we are also saying the capitalist aims to produce more socially necessary labor time than is expended in the production process. Since, at every point in the development of Capital, the existing value of labor power in the form of wages is given, the new value created must result in still more labor power in the form of additional wages — the number of laborers under the direction of one capitalist constantly expands, fed by the millions of smaller, less productive, capitalists and property owners who a driven to ruin by the advance of Capital itself.
For our purpose in understanding inflation, what is important to note is that the very process of capitalist production itself presupposes that value, or, socially necessary labor time, exists in two contradictory forms: first, in the value of the wages paid out by the capitalist for labor power; and, second, in the form of additional value over these wages, which, having been newly created in the production process, can now reenter production as additional capital only if it is realized through sale. If we assume for purposes of this argument that the wages paid out are immediately realized by the existing mass of laborers in the form of food, clothing and shelter, we still have to consider how the additional sum of newly created value is realized.
Making a straight-line assumption for the sake of simplicity, this newly created value has to find a market beyond the existing social capital — i.e, it has to enlarge the market for the existing social capital. If this cannot be done, the newly created value cannot be realized, and further expansion of Capital cannot occur. The periodic crises when Capital momentarily out runs the conditions of its own process, is converted from its merely relative form into its absolute form as the capitalist can no longer realize profit on his production and ceases productive activity altogether — industry grounds to a halt, millions of laborers are idled, along ten of thousands of factories, prices of commodities collapse and lay unsold and the flows of money capital cease. While Capital presupposes the constant reduction of socially necessary labor time in the form of wages paid out, it simultaneously presupposes the expansion of socially necessary labor time in the form of additional wages for additional labor powers.
The contradiction inherent in value comes to the fore: to resume production socially necessary labor time must expand, but, since this socially necessary labor time is, in this example, limited to the wages paid out to the laborers, it can expand only on condition that wages increase. On the other hand, the increase in wages must reduce the profits of the capitalist, and the portion of existing socially necessary labor time that the capitalists claims as their rightful profits. Since, on no account are the capitalists willing to part with one additional cent in wages, they opt to maintain their profits by reducing wages still further; however, since this further reduction of wages only reduces still further socially necessary labor time, their actions only increase the problem. Wages are too high, yet, paradoxically, they are also too low.
Price and value reconsidered
Under the assumptions I am using of a very bare-bones description of the problem posed by the inherent contradiction in value, I need to sum up some of the characteristics of the contradiction. First, there is a contradiction between the actual labor time expended on the production of a commodity and the socially necessary labor time required for its production. Second, there is a contradiction between the value of the commodity itself — i.e., the socially necessary labor time expended on the production of a commodity — and the expression of the value in the form of the price of the commodity.
To these two already identified contradictions we must add a third: there is a contradiction between the price of the commodity denominated in units of the money and the socially necessary labor time required for the production of the object that serves as the money. While money denominates the price of a commodity, and thus express the value of the commodity, it does not necessarily follow that the money itself contains the same socially necessary labor time as is contained in the commodity. This much is already obvious, since prices fluctuate for innumerable reasons away from the value of the commodity, likewise this fluctuation is accompanied by corresponding fluctuations away from the socially necessary labor time contained in the money for equally innumerable reasons — for instance, a sudden discovery of a huge new source of gold which serves as the money, may force gold to exchange with commodities below its value for a time, which is to say, it takes a larger than “normal” quantity of gold to purchase a given commodity.
This is further complicated when we consider that gold was often not used directly in transactions, but substituted by a placeholder like paper money. In fact, Marx assumed that, for most transactions, gold was not even necessary even when it was formally designated as the money. The replacement of gold by paper tokens in circulation was entirely possible within certain limits. It was only a step from here for our economist to come up with the ‘brilliant’ idea that is didn’t matter what served as money. In this sophomoric reasoning, since money itself only played a token role when it served to facilitate transactions, anything could serve as money as long as it could fulfill this token role. The value of commodities could forthwith be expressed in units written down on paper or embedded in the dancing electrons on a computer terminal. As long as the State legally determined that these tokens were money, they could serve the role as effectively as any commodity money like gold.
This idea, although floating around in society for several decades, did not actually become the dominant view of money until conditions very much like those I described in the preceding section of the post burst into full bloom in the Great Depression. Those conditions brought all the contradictions inherent in value to the surface in a rather awesome fashion: to address the impasse created by the fact that wages were too high, and, at the same time too low; that socially necessary labor time in its wage form stood in complete contradiction with socially necessary labor time in its profit form; and, that, therefore, the value of commodities stood in direct conflict with the prices of commodities; within a short period of about five years every industrial nation devalued its currency and went off the gold standard. The contradictions inherent in value led society to sever the relation between value and price — not just in theory as previously, but in reality and throughout the World Market.
To be continued
Tags: capital, Civil Society, commodity, consumption, exchange, Federal Reserve, fiscal policy, gold, Gold Reserve Act of 1934, gold standard, inflation, monetary policy, negative rate of profit, prices, production, stupid economist tricks, value versus "real value"
I set out to write a piece on Murray Rothbard and communism. Instead, I got bogged down by this detour into Marx’s theoretical differences with Anarchism. The day progressed, Marx and Bakunin would not stop their bickering and let me leave. Alas, Murray will have to wait for another day.
They say that their only concern and aim is to educate and uplift the people (saloon-bar politicians!) both economically and politically, to such a level that all government will be quite useless and the state will lose all political character, i.e. character of domination, and will change by itself into a free organization of economic interests and communes. An obvious contradiction. If their state will really be popular, why not destroy it, and if its destruction is necessary for the real liberation of the people, why do they venture to call it popular?
Marx replies to this:
Aside from the harping of Liebknecht’s Volksstaat, which is nonsense, counter to the Communist Manifesto etc., it only means that, as the proletariat still acts, during the period of struggle for the overthrow of the old society, on the basis of that old society, and hence also still moves within political forms which more or less belong to it, it has not yet, during this period of struggle, attained its final constitution, and employs means for its liberation which after this liberation fall aside. Mr Bakunin concludes from this that it is better to do nothing at all… just wait for the day of general liquidation — the last judgement.
The answer Marx gives to Bakunin is extremely telling not simply in relation to Anarchist ideology, but — more important for our times — in relation to the present day Marxists.
In Bakunin’s understanding Marx was making the argument that some definite period of time after the overthrow of the political rule of the capitalist class, the working class would not immediately abolish its own coercive political rule, but would embark on some period of a transitional ‘worker’s state’ (a term Marx accepted in another context, but did not endorse). In Marx’s model, says Bakunin, during this period the worker’s state would “uplift the people … both economically and politically…” to some certain level of social development where the worker’s state, and its coercive functions, would become obsolete.
Bakunin proposes that a contradiction lay at the heart of Marx’s position: If the worker’s state is truly popular — that is, if it truly enforces certain rules that are commonly and overwhelmingly supported — why can’t this coercive power be done away with entirely? And, if its coercive power must be done away with for the society to enjoy real unfettered association, why is Marx calling it a popular power?
Marx corrects Bakunin to clarify that his position is expressed in the Communist Manifesto and not in the words Bakunin employs to describe them. He then continues to explain the basis of the ideas in the Manifesto: First, upon coming to power the Proletariat takes political control of society under definite economic conditions, and not on the basis of some idealist notions independent of those economic conditions. Since, in Marx’s theory, the State arises from the material conditions of society and does not exist independent of those conditions, it is not possible for coercion to just disappear until the conditions giving rise to it disappears as well. Try as society may like to abolish the functions of state power on the morning of the new order, still the actual economic conditions on which this new order rests have their reciprocal influence on society. Bakunin’s argument that in no case should the Proletariat establish its political rule amounted to a demand that it not take power until it could immediately abolish itself, its condition of existence up until that time, and all other classes in society, i.e, until Capital having completed its historic role of developing the productive forces of society and run its course, collapsed on its own.
Second, Marx’s meaning in this context is not always properly understood — and, this is where Marxists get themselves into hot water. State power is always coercive — it is the imposition on the individual of conditions of her own activity against which the individual naturally rebels. The coercive functions of the ‘worker’s state’ are no different in this regard to the coercive functions of any previously existing state. It may be uncomfortable for us to assert this fact, but it in no way can be ignored — for the individual the coercion of a ‘worker’s state’ is, in its effect, no different than the coercion of the capitalist state. With regards to the individual this rule is despotic, and the fact that, in this case, the despotic hand is encased in a democratic glove does not change its despotic nature in the least.
However, the discussion of this despotic rule is wrongly limited to the actual machinery of state, as if the coercion of capitalist society consisted entirely of an armed body of men and women enforcing the naked rule of the capitalist class. In fact, coercion here has to be seen in a broader context: it is also coercion that the worker, deprived of all means of production, must sell herself into slavery in exchange for wages. It is also coercion that no one may access the means of consumption in society except on the basis of exchange of equal values — of money exchange. It is also coercion that the worker cannot sell her labor for wages except on condition that she work a period of time in excess of the value of these wages for the exclusive benefit of the capitalist. Each of these examples is a form of coercion prevalent in capitalist society. And, each is understood by all members of society to be the conditions under which the whole of capitalist economic activity is carried on. So pervasive are they, that these forms of coercion appear to us not a forms of coercion at all but a basic and eternal condition of human existence. Moreover, in many cases these forms of coercion appear altogether accidental — for instance, it is possible to strike it rich in the lottery, write a best seller, or start a successful rock band and be able to avoid having to spend your days in a cubicle sending or answering email or working the checkout counter at WalMart.
The communist movement of society has the aim not simply of abolishing the machinery of state — the body of men and women who arrest you if you violate the law of equal exchange of value by pilfering in WalMart, the judge who presides over your trial, the district attorney who prosecutes you, the jailor to whose care you are remanded after conviction, and the politicians who passed the law into being — it also has the task of ending exchange of values and all other forms of economic coercion as the basis for the individual’s activity.
In the conditions under which Marx carried on his debate with the ideas of the Anarchist Bakunin, it is clear that society had in no way been prepared for the immediate abolition of the State in its entirety. Capital had not by any means so transformed the social economic landscape that Marx could imagine it prepared for not only the abolition of the political rule of the capitalist class, but all class rule and classes themselves. The economic development of society had definitely not reached the stage that the Proletariat could abolish itself as a class.
And, why is this? In my opinion, every scenario Marx could see of a possible assumption of power by the Proletariat, society was still in the grip of scarcity. Although, as he acknowledged, Capital had performed a prodigious feat of transforming the conditions under which labor was undertaken by society, society had not yet made the abolition of necessary labor possible. Taking power under those conditions would, of necessity, involved realizing a communism of relative poverty — the sharing of the conditions of scarcity under a more or less ‘equal’ apportioning.
And, what did Marx think was the rule under which this scarcity would be shared out? “From each according to his labor, to each according to his work.” Access to the common fund of consumption had to be on the basis of the labor of each member of society. Each would receive from this common fund no more than she contributed to this fund. Even if we assume the immediate abolition of the entire machinery of the old State and its replacement by the association of society — and Marx made precisely this assumption — nevertheless society would be imposing on the former capitalist and State officials the same coercive conditions of activity that nature imposed on it:
“Do you want to eat? Get a job! If you won’t work because you are too dainty and work is beneath you, then you will starve!”
Thus, society would take a step forward in its historical development in that, for the first time, labor would be required of all members of society. But, this step was not the final one to be taken: the final step consisted of the abolition of this very requirement imposed equally on all members of society to engage in labor. The replacement of the rule: “From each according to his labor, to each according to his work”, by a new rule, “”From each according to his labor, to each according to his need”, required not simply the assumption of power by the Proletariat, but a certain definite material condition — the emergence of a society of abundance.
He did not hesitate to make his opinion known to the Anarchists on this issue, and he did not hesitate to make it known to his so-called followers as well, when, as happened in the Gotha Program, they came up with all sorts of silly ideas. Marx’s response the Gotha was pretty blunt: Upon taking power the Proletariat would break the monopoly of the capitalist class over the means of production. Workers would not receive the entire proceeds of their labor, but only a portion; the rest of which would go to cover replacement of the common means of production, expansion of those means, and insurance against losses. From the remaining fund would be deducted general social costs of administration, means for common satisfaction of needs like medical care and education, and means for those who are not able to work. What portion of the common labor would be needed for these items could only be decided democratically by the whole commons — and, in all probability those who lost the vote would feel coerced by the majority, since these costs would still be deducted from them despite their disagreement. What was left after this had been accomplished would then be divided according to their contribution.
What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges. Accordingly, the individual producer receives back from society — after the deductions have been made — exactly what he gives to it. What he has given to it is his individual quantum of labor. For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.
Here, obviously, the same principle prevails as that which regulates the exchange of commodities, as far as this is exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labor, and because, on the other hand, nothing can pass to the ownership of individuals, except individual means of consumption. But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form.
At this point, however, Marx is not finished: he goes on to explain why even this seeming logical and just division of the product of labor among the members of society actually conceals an unequal distribution, because although the return for work is the same, people are not. Although this inequality in fact is abhorrent — an indifference to the particular circumstance of each individual — there is, in his mind, no other basis that such division can be made. Thus, for Marx, the end aim of the transition is not an equal return on the labor contribution of each, but ending all connection between the labor each member of society contributes and the means they can access. The rule that everyone must work is itself abolished — or withers away.
And, this is where Marxists get into hot water — they impose on Marx’s comments the completely unhistorical dogma that the communist movement of society is necessarily split between the period beginning with the political overthrow of the capitalist State and the period during which the transitional form of Proletarian rule comes to an end. They are only parroting Marx in his argument with Bakunin, while understanding none of his argument.
At the beginning of this period of social transformation the political rule of the Proletariat is “stamped” with the conditions of the capitalist society that has just been overthrown. It follows from this that Marx is not making an unhistorical division between this point in time and the point where the Proletarian rule ends, but is precisely emphasizing that the actual conditions governing capitalist society, when this event takes place, must be studied and understood. It follows that his comment cannot be taken as a hard and fast rule, still less elevated into a dogma as the Marxists do, that there is some necessary period of transitional state between the overthrow of capitalist rule and a stateless, classless society. Capitalist society is by no means the same creature in 1874 that it is in 1917, 1929, or 2011. In each case the practical tasks imposed by the assumption of political power by the Proletariat must be different as the new society is being “stamped” with a decidedly different set of circumstances.
What are those conditions today? Are they the same as they were in 1874 or 1875? Are they even the same as they were in 1929 or 1970? Does Marx’s words have the same meaning in his day as they do now that Fascist State expansion — the continuous destruction of surplus value and its replacement by ex nihilo pecuniam — has become a condition for all economic activity?
Marxists have no answer to these questions because instead of making an analysis of present day conditions of capitalist society, they insist on taking Marx’s debate with Anarchists completely out of its historical context and worshiping dogmas.
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.
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.
Tags: Absolute Over-Accumulation, budget deficit, capital, debt, deficit spending, Depression, economic policy, ex nihilo pecunaim, inflation, job creation, Karl Marx, over-production, prices, profit, Proletarian Revolution, public employment, shorter work week, surplus value, the death of politics, the Fascist State, THE GREAT DEPRESSION, Trickle Down Economics, unemployment, value, wages, world market
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 premised on 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 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 proceed on a different basis.
Tags: Absolute Over-Accumulation, budget deficit, capital, debt, deficit spending, Depression, economic policy, inflation, job creation, Karl Marx, prices, profit, public employment, shorter work week, surplus value, the death of politics, the Fascist State, THE GREAT DEPRESSION, Trickle Down Economics, unemployment, value, wages, world market
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.
Tags: Absolute Over-Accumulation, Ben Bernanke, budget deficit, capital, Christina Romer, debt, deficit spending, Depression, economic policy, inflation, job creation, Karl Marx, political-economy, prices, profit, public employment, shorter work week, stupid economist tricks, stupid Marxist tricks, Stupid progressive tricks, surplus value, the Fascist State, THE GREAT DEPRESSION, Trickle Down Economics, unemployment, value, wages, world market
Capital is production run amok — production for the sake of production; the Fascist State — which in its fully developed form only exists in the American State — is consumption for the sake of Capital, i.e., consumption for the sake of production run amok. Since it produces nothing, the expenditure of the Fascist State is composed entirely of the surplus produced by the mass of capital set in motion.
This expenditure must come from that portion of the surplus produced by capitals which does not go into either the expansion of variable capital (wages) or the expansion of constant capital (machinery, raw materials, etc.) It comes in various forms — wages paid out to a portion of the working class, subsistence income, subsidies, payments for goods and services provided by private capitals, etc. The Fascist State pays for these expenditures by issuing newly created ex nihilo pecuniam.
Fascist State expenditure, therefore, only destroys the productive capacity of society to the extent this additional surplus value does not enter into expanded capitalist production. i.e., to the extent capital is not exported, or is exported in insufficient quantities.
According to Marx:
The contradiction of the capitalist mode of production, however, lies precisely in its tendency towards an absolute development of the productive forces, which continually come into conflict with the specific conditions of production in which capital moves, and alone can move.
The conflict expresses itself in the fact that production halts, and must always halt, before want is satisfied — that Capital is incompatible with abundance. Capital is a mode of production founded on scarcity and cannot be otherwise. On the one hand, a mass of society is rendered superfluous to productive activity by the development of the productivity of labor. On the other hand, an abundance of means of labor and necessities threatens the conditions under which surplus value is realized, triggering a longer or shorter period during which production ceases.
This internal contradiction seeks to resolve itself through expansion of the outlying field of production [by export of capital]. But the more productiveness develops, the more it finds itself at variance with the narrow basis on which the conditions of consumption rest. It is no contradiction at all on this self-contradictory basis that there should be an excess of capital simultaneously with a growing surplus of population. For while a combination of these two would, indeed, increase the mass of produced surplus-value, it would at the same time intensify the contradiction between the conditions under which this surplus-value is produced and those under which it is realised.
The absolute over-accumulation of capital is that point in the development of Capital where the realization and conversion of surplus value into new capital no longer takes place under any conditions. The periodic explosions seen earlier in Capital’s development has become a permanent feature of the mode of production.
The emergence of the Fascist State — which Marxists have, for the most part, never grasped properly — marks its beginning with the emergence of this permanent feature of the capitalist mode of production, as a social necessity arising from the inherent tendency of Capital toward the absolute development of the productive forces of society by absorbing into itself the ever increasing mass of surplus value, which grows daily, even more rapidly than Capital can expand into the outlying field of production within the World Market.
The rate of surplus value constantly increases owing to the laws of Capital’s own development — this implies an ever greater quantity of commodities (of capital in the form of commodities) thrown onto the World Market, and the constantly diminishing application of labor to the production of these commodities; the increase in the scale of productive activity; the centralization of capital into fewer hands; the accelerated pauperization of the mass of remaining property owners; the increasing gulf between the producers and the condition of production; and an always accelerating tempo of accumulation.
But this ever accelerating tempo of accumulation runs into the absolute barrier of Capital’s own conditions of existence — that Capital rests on the limited consumption power of the mass of laborers; that only the threat of starvation can compel an individual to so absolutely debase herself as to sell herself into slavery daily, and that, therefore, Capital ultimately rests on maintaining the mass of society within certain definite narrow limits of existence, i.e., the daily average wage.
The growth and development of the Fascist State is, therefore, subject to certain conditions, the most important of which is that the consumption of the mass of society must never expand beyond that point where the sale of labor power is threatened, i.e., must never exceed the average of the daily wage. Consumption must indeed increase, but this increased consumption must impoverish society on an ever increasing scale — the productive capacity of society must be routinely and systematically destroyed.
But, the conclusion that the consumption of the mass of society must never expand beyond the point where the sale of labor power is threatened implies, under conditions of Capital’s own logic, that the absolute value of the mass of wages must fall, despite the Fascist State’s ever increasing direct and indirect employment of wage labor. And, the conclusion that the productive capacity of society must be routinely and systematically destroyed implies, for the same reason, that the mass of capital, although constantly increasing, nevertheless falls in absolute value. Thus, while always increasing in absolute mass, total capital — both variable and constant — is declining in absolute value. This results in a negative rate of profit, although, as we shall see, it appears to the economist otherwise: that the mass of profits increase — even appears to increase obscenely — as the mass of surplus value increases.
The capitalist only sets his capital into motion on condition that the surplus extracted from the worker can be realized. His capital is laid out and must return to him in its entirety plus an average rate of profit. If his sum of capital is $100 and the average rate of profit is 10%, he expects to recover $110 from his investment. If the sum of capital is $1000 and the average rate of profit is 5%, he expects to recover $1050 from his investment. He places a definite quantity of capital in motion and expects a definite quantity of capital to return to him. The profit expected by the capitalist is in absolute mass equal to the absolute mass of the surplus produced by the variable capital he sets in motion. If the variable capital set in motion by the capitalist equals $100 and the rate of surplus value equals 50 percent, the capitalist expects a mass of profit equal to $50.
The capitalist placed in motion a capital of $1,000, composed of $900 of constant capital, and $100 of variable capital. Having extracted from the worker an additional $50 in surplus value the capitalist must now sell his commodities and reconstitute his original sum of capital, $1,000 plus a profit of $50. Under the conditions we are now considering — absolute over-accumulation of capital — the entire sum of surplus value equal to $50 must be destroyed, but it must be destroyed in manner that still appears to allow the capitalist to “realize” the full $50 of surplus value in the form of profit.
This is accomplished as follows: In exchange for the $50 amounting to the value of his surplus product the capitalist receives $50 of ex nihilo pecuniam, which, as it requires no labor time to create at all, contains no value. He has his $50 and is completely satisfied with the exchange. But, the value of the commodities, rather than being reconverted into money capital, disappears from circulation and is destroyed.
Leaving aside the constant capital, we have three sums: variable capital (wages) amounting to $100, surplus value amounting to $50 that must be destroyed, and profit amounting to $50 that must be realized. For the economists, who long ago expelled value from their field of study, this destruction poses no problem. And, this is as it should be: since the economist only reflect the economic laws of Capital from the standpoint of bourgeois society, by expelling value from his consideration he has only done in theory what Capital is doing in reality, namely, abolishing itself within the limits of its historical form.
But, from our standpoint this exchange presents us with a problem that deserve further consideration: $100 has been laid out in the form of variable capital, and $150 has been realized. Yet, the total sum of expenditures was $200: $100 in variable capital, $50 in profit and $50 in Fascist State expenditures. Moreover, the actual mass of capital has shrunk by an amount proportional to the expenditures of the Fascist State.
The solution is obvious: The capitalist received in return for $50 of his surplus value no real value; the $50 of surplus value was consumed unproductively. In return for the real value produced by Capital of $50, nothing was realized. Fifty dollars of commodities were withdrawn from circulation by the Fascist State and replaced with ex nihilo pecuniam with a face value of $50. The conditions of realization were formally fulfilled in this transaction, yet actually abrogated: in return for $50 of value the Fascist State paid nothing.
The $50 of ex nihilo pecuniam paid to the capitalist has no value, and this he discovers when he is confronted with the rising cost of production due entirely to the depreciation of the purchasing power of his capital. This depreciation is calculated not simply on the value of the variable capital and profit, but on the whole of his capital. If, before his total capital was c = $900, v = $100, and s = $50, for a total value of $1050, he finds that his total capital has decreased in purchasing power by $50.
Thus, rather than having a reconstituted capital with a purchasing power of $1050, his capital has a purchasing power of only $1000, or 95.24% of its expected purchasing power. The depreciation of the purchasing power of his capital means he cannot produce the same mass of surplus value on the basis of the former conditions of production. He can purchase $100 of labor power, but this $100 of variable capital now has a value of only $95.24. With a rate of surplus value of 50%, his capital only creates a mass of surplus with a value of $47.62. Although the rate of surplus value is unchanged, the value of the mass of surplus value and the mass of profits has fallen — and this has occurred even though all the conditions of his activity has been formally fulfilled. He has no choice: to achieve the same mass of surplus value, and, therefore, the same mass of profit, he must increase the rate of surplus value.
For the mass of capital set in motion the conditions allowing for the increase in the mass of surplus value produced, and the conditions allowing for the increase in the realization of this same mass as profit now stand wholly in contradiction to each other. In the former case, the production of surplus value requires the further reduction of social labor time in its necessary form; but, the realization of the surplus value requires the extension of social labor time in its superfluous form. The complete incompatibility of these requirements for the normal functioning of Capital under conditions of absolute over-accumulation is presented in all its glory.
In Capital , Volume 3, Chapter 15, Section III, Marx asks, “When would over-production of capital be absolute?” He is speaking here not merely of commodity overproduction, but of the over-accumulation of all the elements of Capital.
There would be absolute over-production of capital as soon as additional capital for purposes of capitalist production = 0. The purpose of capitalist production, however, is self-expansion of capital, i.e., appropriation of surplus-labour, production of surplus-value, of profit. As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working-time supplied by this population, nor the relative surplus working-time, could be expanded any further (this last would not be feasible at any rate in the case when the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore, when the increased capital produced just as much, or even less, surplus-value than it did before its increase, there would be absolute over-production of capital; i.e., the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC. In both cases there would be a steep and sudden fall in the general rate of profit, but this time due to a change in the composition of capital not caused by the development of the productive forces, but rather by a rise in the money-value of the variable capital (because of increased wages) and the corresponding reduction in the proportion of surplus-labour to necessary labour.
In other words, the capitalist succeeds in wresting additional surplus from the worker, but this surplus produces a contraction of profit. In theory, the mass of profit is equal to the mass of surplus value. But this surplus value has to be realized as profit; it has to be sold. If this is not accomplished, or is accomplished only in part or at a loss, Marx argues, surplus has been created, but it is not realized.
The result is the formation of a mass of forcibly idled capital and a mass of forcibly idled workers — a classical depression. Now, he explains, it is entirely possible to put these two masses together and produce more goods, but that would only further hurt profits. And, since the motive of capitalist production is profit, production halts at the point where the mass of profit cannot be increased.
It is important to state that this result is NOT a defect of Capital — absolutely NOT a defect. Yes, production halts before want is satisfied, but that isn’t the point: Capital is concerned only with maximizing profit — not human need. If you want to run a charity Gandhi, go run one! If, however, you want to maximize profits, you stop at the point where profit is maximized.
The mode of production develops the productive capacity of labor with an eye toward the production of surplus value (profit). This production of surplus value, however, is also the expenditure of labor beyond the time necessary to produce wages and capitalist consumption. Any additional capitalist investment beyond this point would, by definition, result in superfluous output that cannot increase profits.
In a closed system, where export of this excess capital is not possible, production would halt leaving both excess labor powers and idled capital. As a result, both the value of the sum of wages and of the excess capital would fall as competitive pressures increased within each class. This would lead to a further fall in the actual quantity of the labor powers and the mass of capital employed. Unable to expand into new markets, Capital would, instead, begin to implode in on itself.
The problem is simple: One worker can produce enough for two, three, or ten, but this can only be done profitably if those others have the wages to purchase what has been produced. The surplus produced must now be sold before the capital can be reinvested, and this further investment can only take place if it is profitable to do so. If, it is not profitable to expand production with the additional surplus, the production of surplus itself must contract.
With the absolute over-accumulation of capital, the conditions under which surplus is produced stands in absolute contradiction with the conditions under which this surplus is realized. Capital undertakes production only to make a profit, but the surplus necessary for this profit wipes out profit. The capitalist class as a whole is empirically confronted with the need to progressively reduce productive activity.
Want increases, but this want only compels further contraction of productive activity. The very increase in want itself presupposes the further contraction of productive activity — the inability of the mass of society to buy what has been produced. At the same time, absolute over-accumulation presupposes the accelerated concentration and centralization of capitals as smaller capitals are idled altogether. To operate profitably the scale of production must increase, but this is only possible for the very biggest capitals. Finally, even the biggest capitals are no longer profitable, and all productive activity grinds to a halt.
This process takes place in any case in a closed system and does not in any way depend on processes outside capital itself. And I don’t think any process outside Capital can reverse, slow or otherwise counter this process. Assuming a closed system it is inevitable. In an open system, where the export of capital is still possible, it takes longer — but even an open system is located in a closed one. (For this reason, protectionism only accelerates the decline of a capitalist economy.)
According to Marx’s theory, the mass of surplus value is a direct function of the rate of surplus value times the mass of the working population. If the rate should increase, and the population is held constant, the mass of surplus value increases; and, vice versa. The working population, however, labors for so many hours at a time and, this length of individual working time has bearing on the rate of surplus value. All else being held constant, if the hours are longer, the rate of surplus value increases. If the hours are shorter, the rate decreases.
The absolute contradiction between the conditions of production, and the conditions of realization, of surplus value resolve into this: X hours of surplus labor time is expended, but Y hours of surplus labor time can be realized in the form of profit. Where X is greater than Y. The difference between X and Y is labor time that cannot be realized as profit.
I think, in Marx’s model of absolute over-accumulation Y = 0. Which is to say, none of the expended surplus labor time can be realized as profit. (I am assuming I understand him correctly and that I am not just blowing smoke.) While the rate of surplus value continues to increase, the rate of profit has dropped to zero – thus capitalist production grinds to a halt.
But this point only represents two different quantities of labor time, X and Y, which, divided by the number of workers employed productively, gives us the normal working day. Over-accumulation of capital leads to the formation of a mass of unemployed workers, but this formation is just a proportional reduction of the sum of hours of work. It is the reduction of social hours of work, while individual hours of work continues as before – the reduction of work is shared unequally.
Some workers are idled altogether, another group can only find limited work, and still another can find work only at reduced wages. Yesterday, everyone was employed and at good wages — life was good. Today, everyone suffers from too little work and falling wages.
When work is plentiful, competition between workers is muted and unions grow. Some even imagine the political conquest of power. When work becomes scarce, the competitive divisions within the class grow more pronounced — each worker becomes a petty commodity seller. The consciousness of the class as a class dissolves to reveal a mass of squabbling wage slaves fighting over the table scraps of Capital. Each is compelled, under penalty of starvation, to employ every advantage — race, nationality, language, religion, gender — for survival.
These circumstances lead not as Marxists like Wolff imagine to new opportunities for the workers’ cause, but their further degradation. As a class they only have the “opportunity” for misery and the reproduction of their miserable existence as wage slaves — for the employment of their bodies and capacities as mere means of survival, a foul, detestable act which fills the air with the stench of the slave markets.
Hitler was carried to power on the shoulders of the unemployed, and Auschwitz was a smooth operation modeled on the factory floor.
The result of depression is not the opportunity for liberation of the working class, but emergence of a fascist State of the Hitler type. This Fascist State absorbs the mass of unemployed labor power and idle capital to produce an unprecedented outburst of global violence. With the Fascist State we see not simply war between nations, but the deliberate targeting of civilians and productive infrastructure. Entire cities are targeted not to undermine the enemies capacity to fight, but the capacity to produce. Civilian populations are targeted for extermination; industrial infrastructure, roads, communications far from the battle are leveled.
The absolute hostility of the Fascist State to productive activity is seen in the determination with which it destroys the productive capacity of its foes. Its nature is revealed: that it is parasitic; that it is inimical to the productive employment of human capacity; that it thrives on scarcity; that it is only the expression of hunger, scarcity and want organized as a definite body of parasites on society; that its sole activity is the manufacture of scarcity, hunger and want; and its sole purpose is to expand the scale of this activity.
In area after area, wherever the State extends is vile tentacles, it does so not to increase the productive capacity of society, but to destroy it. Education, health-care, agriculture, industry — this mass of vile pestilence knows nothing of these things save turning them into a means to waste labor, or worse, instruments for its own expansion. In their stead, it posits the empty activity of the bureaucrat, the financier, those whose work does not touch on any of these activities. Those who exist only to interfere with productive activity and to reduce it to just another mode of the State’s own existence.
It doesn’t matter what children learn, only that massive quantities of resources are consumed in this activity. It matters not whether the sick are treated, only that an ever increasing volume of superfluous activity can be expended on “health-care”. The best of all possible worlds: those areas where nothing is produced, yet vast resources are idled (ex. strategic petroleum reserves) or destroyed (ex. wars of aggression).
While Capital is production run amok — production for the sake of production — the State is consumption for the sake of Capital. What matters is not that children be housed, fed, educated, but that surplus value produced by Capital be consumed in its entirety. The expansion of the State is not determined by any need to satisfy wants, but to satisfy the conditions for the self-expansion of capital, but, the condition for the self-expansion of Capital is the extension of the hours of social labor beyond its necessary limit.
Hence, the tendency toward constant expansion of the Fascist State is a law.
The argument i have tried to make in the previous parts of this series ( one, two, three and four) is simple: What is taking place in the battle in Wisconsin, and the battle against austerity generally has nothing to do with Capital directly, but instead is concerned with the massive population of working people rendered completely redundant by the progress of Capital’s development, and a huge mass of capital that must stand idle as a result of this progress. The specific problem at hand is that under existing social conditions this idle capital and redundant population can only be employed if the capital is wasted, consumed unproductively and absorbed by a population of working people whose daily labor creates nothing, satisfies no human need — not even their own.
This catastrophe expresses itself, first, in the monstrously bloated body of the State that grows to such proportion that it chokes off the employment of the productive capacity of society; and, second, that the State, however bizarrely swollen — as can be seen in the US accounting for 48% of global defense expenditures — is still not bloated enough; that it has not, despite the glaring obscenity of such wasteful spending in the face of growing poverty, grown to the proportion necessary to ensure the continuing purchase and sale of labor power, i.e., to ensure employment of capital for the extraction of surplus value.
The first aspect of this crisis, however, can only be resolved by the further expansion of the State — on pain of a growing class conflict and to suppress this conflict — and not through austerity. So it is not surprising that politicians, acting under the slogan “Jobs, Jobs, Jobs”, blindly offer every manner of silly and contradictory policies to effect this expansion: tax increases and tax reductions; new public debt issues and urgent calls to balance the budget; committees formed composed of senior politicians and academics, corporate CEOs, and wealthy contributors to discuss “investment” in public education, infrastructure and new technologies said to offer society the opportunity to “win the future”, and, at the same time, efforts to dismantle existing State public services, and protections for workers and the environment. In short, a relentless effort by the capitalists to dump the entire burden of the crisis onto the shoulders of working women and men; and, an equally vigorous struggle by working people to avoid this burden.
The second aspect of this crisis places a material demand on the State to increase its burden on society. For all the bleating of politicians about how the country must increase its competitiveness the State grows, but it grows in a way that does not add to the productive capacity of society in any fashion. The nation must become poorer not richer as a result of this growth, less productive, less competitive, more dependent on imports from nations where the continuing employment of oxen in agriculture is not uncommon, and where — owing to the low productivity of labor — daily wages are a fraction of the American average hourly wage.
The method employed by the State to increase its size and overcome the rising antagonism between production and consumption, no matter whether the method adopted is the issuance of new public debt — as advocated by Keynesians like Paul Krugman — or the wholesale creation of new money directly through State expenditures — as advocated by Modern Monetary Theorists like Billy Mitchell — is depreciation of money; a depreciation that is only possible because the State previously debased money from the gold standard.
No other object in society touches on commodities more intimately than the ratio by which these commodities exchange for money itself. Absent crises, Capital presents itself in the form of the ceaseless, uninterrupted, and expanding dense network of interrelated transactions whereby money and commodities are exchanged — and within which any particular commodity may pass through many such transactions before falling out of circulation and being consumed.
However, what concerns every member of society is that she receives some definite amount of money in return for her commodity. If she is a worker, she seeks only an agreed upon wage; if she is a capitalist, she seeks only a return of her capital plus an average rate of profit in the form of some definite quantity of money. With its authority to determine what serves as money, the State can “purchase” the labor power of a worker, or the commodity of the capitalist by exchanging these commodities for money created out of thin air.
Thus, the ratio between the sum of money in circulation and the sum of commodities in circulation is upset in proportion to the injection of the new ex nihilo pecuniam; while, on the other hand, a portion of the existing capital and labor power in circulation is consumed without being replaced. The total sum of commodities in circulation are reduced, and the prices of the remaining commodities increase. In this way, both the existing capital and labor power are devalued simultaneously and together in proportion as the expenditures of the State increase.
Yet, despite this devaluation of the existing capital and labor power by the State, it should not be forgotten that devaluation must take place on any account. It is not the State that forces this devaluation on Capital, but Capital which forces it on itself. The antagonism between the conditions of production and those of consumption are such that without this devaluation Capital would altogether collapse in on itself.
The fact stands as follows: the problem posed by the antagonism between the conditions under which society produces and consumes cannot be resolved in any way other than a general reduction of hours of work. Absent this general reduction of hours of work it becomes necessary for the State to increase its expenditures of wholly superfluous employment of both capital and labor power — to devalue both through inflation in order to overcome the contradictions inherent in the capitalist mode of production itself.
We who favor a stateless society should be absolutely clear on these points and never back down from them:
First, the State does not grow to care for the sick, feed the hungry, or add to and repair the roads, bridges and communications of society. It grows DESPITE these pressing social needs. Only by wasting productive resources on an ever increasing scale can any economic activity take place on the existing basis — the State indeed grows, but so do all of these nagging social ills.
Second, thirty million are unemployed not because there is no work to be done, but because it is not profitable to do those things that need to be done given the overly long hours work mandated by law. Factories are shuttered not because there is no need for their products, but because satisfying those needs intensifies the problem of recovering the capital laid out in their production plus an average rate of profit. The further expansion of the State addresses these problems only by intensifying them — by bringing into still greater antagonism the contradiction between production and consumption.
Should the thirty million unemployed find jobs it is only on the basis that their addition to the labor force comes directly or indirectly at the expense of the wages of the already employed 130 million, such that this larger labor force of 160 million now enjoy no more wages (or even less wages) than the 130 million did before — that the total wages formerly shared by the 130 million is now shared by 160 million, so that each suffers a proportional drop in their material standard of living.
There is no route out of this crisis through State economic policy: not through senseless battles to defend the coddled unions in the public sector, nor by stupid progressive slogans to tax the rich. The struggle against austerity cannot be won by defending the public unions, nor by silly attempts hold the line on public budget cuts or increase State expenditures. Only by reducing hours of work can we extricate ourselves from the deepening crisis of Capital and the relentless expansion of the repressive, aggressive and parasitic State.
Tags: austerity, capital, company unions, economic policy, falling rate of profit, fascism, inflation, Karl Marx, labor, labor power, make the rich pay, money creation ex nihilo, Stupid Left Tricks, stupid Marxist tricks, Stupid progressive tricks, superfluous labor, the politcal-economy of fascism, The State, work time reduction
First, the argument that the event unfolding in Wisconsin, Ohio and other states are a battle over public union rights is disproved once we realize that these public unions are not and never were unions. The public unions are organs of the State, no different than the unions of the old Soviet Union, or the People’s Republic of China — organs for the management of public labor, entirely composed of a portion of the working class who, under this miserable mode of production, live on the surplus labor of the productively employed portion of that class. Although we may violently disagree with Walker and his political thugs, we still must acknowledge that the fight to defend the unions is essentially, and for all practical purposes, nothing more than a fight to defend the State itself and its parasitic domination of society.
Second, by the same token, without in any way standing with capitalists like the Koch Brothers, the argument that, in their hostility to the burden of the State, the Koch Brothers’ libertarian attitudes differ significantly from working class dissatisfaction with the burden of the State is belied by the very slogan raised by supporters of the working class themselves, “Make the Rich Pay”. Although the Left makes the argument that the hostility of capitalists like the Koch Brothers to the State is unique to the capitalist class, in the very slogans they raise the Left actually acknowledge this same hostility to the State among the working class. Neither of the two classes want to bear this burden; particularly in times of economic distress every member of society seeks to minimize the tax bite of the State. This reaction from the mass of the working class was entirely predictable, and explains the reluctance of writers like Felix Dzerzhinsky to wage the battle over austerity on the flimsy basis of defense of the public unions.
I now turn to the question of how this fight must resolve it self, and why, as events are proving in both the United Kingdom and Ireland, the austerity currently being pursued by Walker cannot work.
While the battle over the burden of the State on society assumes the form of a conflict between the classes over how this burden should be distributed, it would be wrong to say the events in Wisconsin arise from the conflict among members of society over the division of this burden between the two classes; rather, the truth is precisely the opposite: the conflict between the two classes produces a tendency toward the expansion of the State. We should not mistake the two: what is expressed in the austerity battle is not the conflict between the two classes, but their common hostility to the burden of the State; but, this ever expanding State is itself only the general social expression of the irreconcilable conflict between the two classes. The State is at once both the constantly expanding expression of the conflict between the two classes and a burden on them that each tries to cast off.
These two aspects of the relation between the State and society do not simply exist side by side, but influence each other: on the one hand, the growing conflict between the two classes presupposes the growing fascist character of the State — what Marx refers to as the employment of “democratic-republican institutions .. as a means, not of doing away with two extremes, capital and wage labor, but of weakening their antagonism and transforming it into harmony.” This implies the constant expansion of the State. On the other hand, this growing domination increases the burden of the State on society, and, therefore, the conflict between the two classes over the division of this burden; as well as the more or less constant struggle by each class to cast that burden off entirely.
At the same time, since the expansion of the State is the increasingly necessary condition for the relation between the two classes — the increasingly necessary condition for the purchase and sale of labor-power, without which neither class can exist; and which implies the further reproduction of all the fundamental contradictions within Capital on an increasing scale — the expansion of the State presupposes the further immiseration of the mass of workers and the further centralization and concentration of capital into fewer hands. Any given expansion of the State, therefore, is always insufficient, and merely intensifies the inherent tendency toward the law of the falling rate of profit even as it works to counter this tendency; producing still more pressure for the further expansion of the State and of the World Market. Each new expansion of the State and of the World Market merely compels the further expansion of both.
What makes this a crisis of the State, i.e., something more than a mere economic crisis, is that it presupposes certain definite economic conditions which, on the one hand, cannot be resolved simply by austerity, i.e., reducing the total wages of the working class, as might be sought by capitalists like the Koch Brothers; nor, on the other hand, can it be resolved simply by reducing or taxing the excessive profits of capital, as is demanded in the sophomoric slogan, “Make the Rich Pay”. Only by imposing such conditions as reduce both the mass of wages and the mass of profits together and simultaneously — that is, by the devaluation of both variable and constant capital — through the expansion of purely wasteful State expenditures — by the still greater accumulation of absolutely superfluous labor; of labor-power that neither serves to produce new value, nor, on this basis, as self-expanding value, as capital — is the resolution of the crisis possible.
If those who want a stateless society are to offer a way out of this nightmare, it can be done only on the basis of a clear-headed understanding of the unfolding process. We cannot simply base our advice to working men and women on stupid progressive slogans. And, this is the subject of the final part of this series.
To be continued
Tags: austerity, capital, economic policy, falling rate of profit, fascism, Felix Dzerzhinsky, Karl Marx, Koch Brothers, labor, labor power, Libertarianism, make the rich pay, Scott Walker, starve the beast, Stupid Left Tricks, stupid Marxist tricks, Stupid progressive tricks, superfluous labor, the politcal-economy of fascism, The State
I stated earlier that I think the Koch Brothers are being framed for the events in Wisconsin, but I don’t want you to get me wrong here: the Koch Brothers will get no defense from me — nor would they need or want one. They are libertarians who really do want to get rid of the welfare state — or at least the parts they find offensive to their property rights; but show me an election where the libertarians have garnered more than two percent in any national election contest.
Still, I do not offer the argument that the Koch Brothers are innocent of this attempt to break the unions and impose austerity on working people. And, why would I offer that argument in any case? Isn’t it obvious already that the capitalists in their battle against the laborers always seek to reduce wages to the lowest possible sum? What do we add by jumping up and down like imbeciles wagging our fingers in their faces declaring, “You want to starve us!” like a bunch of naive progressives who believe the antagonism between capital and labor can be overcome at the negotiating table? The point isn’t that the capitalist always and everywhere wants to maximize profits by reducing the wages of the working class to the barest minimum, but that it is precisely this effort that constitutes the historical mission of that class — they are compelled by this insatiable hunger for profit to develop the productive capacities of society!
So I am amused by the meaningless statement by Felix Dzerzhinsky, in his post, Two, Three, Many Wisconsins on the Kasama website that, “we need to put the demand to make the rich pay at front-and-center…” It is a naive slogan almost universally reflected in the posts of Left-leaning writers who invariably point to the same shopworn examples of efforts by Capital to reduce their taxes:
Today’s “debt crisis” is the culmination of the long-term “starve the beast” strategy from an organized corporate-conservative movement. By cutting taxes for the wealthy they have starved the government, created massive debt (guess where the interest payments go) gutted the infrastructure, and put our country on the road to third-world status. This conservative movement has an agenda, and is not interested in working out “bipartisan” compromised.
All of this is incontestably true, but how does this effort on the part of Capital lead to the slogan, “Make the rich pay”? This sophomoric progressive slogan has nothing to do with communism. Pay with what? Every dime the rich have they have extracted from the labor of the working class. They “pay” for nothing — not even for the labor power of their wage slaves. That this demand, which is nothing more than the silly delusion of the progressive wing of the Democratic Party, should be uttered by a communist is not just silly, it is incomprehensible.
Even for those with only cursory knowledge of Marx’s writings it is obvious that, in his theory, the entire cost of the State are nothing more than proceeds of the unpaid labor of one portion of the working class paid out as wages or subsistence income to another portion. That the capitalist class should want to shift these costs directly to the productively employed working class — to reduce their consumption by an amount proportionate to these costs, and therefore allow the wages of one worker to suffice for two — doesn’t require a degree in Hegelian philosophy. It only requires commonsense.
The capitalist class would be more than pleased to see the costs of the imperialist adventures in Iraq and Afghanistan, the countless military bases encircling the globe, and the ever increasing burden of debt service, deducted directly from the wages of the working class, and to not be forced to see their plunder of working people shared with the vile, parasitic organs of the State. My argument has nothing to do with entirely predictable attitudes of the Koch Brothers. I don’t think the Koch Brothers family agenda is the only force behind Walker’s provocation, and, the drive for austerity in general, as many on the Left imagine.
As the slogan, “Make the rich pay”, implies, the working class has no more desire to absorb the cost of the State than does the capitalist class.
Thus, we are left with no other conclusion but that both Capital and Labor — each class driven by its own empirical needs — are trying to throw off the burden of the State. That, in a society founded on class conflict, this general attempt by society to throw off the cost of this parasitic and wholly unproductive organ takes the form of a conflict between classes on how to divide this burden, should be no mystery to communists.
So long as fascist State economic policy assures an expansion of economic activity, the conflict between the two classes exists only in its latent form — the State issues lucrative contracts to capital; and, directly and indirectly prompts ever greater employment of redundant, superfluous labor-power. The two classes settle, into a more or less uneasy coalition made possible by the fact that each finds the essential condition for its existence — the purchase and sale of labor-power — relatively stable and expanding.
It is only when State economic policy runs into difficulty, when, for a shorter or longer period, the State is incapable of realizing general economic expansion, and when, therefore, the purchase and sale of labor-power is threatened on a more or less universal basis, that the contradiction inherent in the capitalist relations is again brought to the fore, and society descends into open class conflict.
During this period, when the economic crisis has assumed its sharpest form, the burden of the previous accumulation of superfluous labor, and of the costs associated with this superfluous labor, become intolerable and must be cast off. The mode of this casting off is already given in the contradiction inherent in capitalist relations themselves, as each class attempts, by all the means available to it, to push off onto its opposite the burden of the crisis.
The class conflict resulting, which must threaten the existence of the State itself, cannot be resolved simply by passing the burden from one class to the other, but only by the further expansion of unnecessary labor, and by expansion of the State — if this cannot be accomplished, or can only be accomplished in part, the crisis must lead to an unwinding of a part, or even all, of the accumulated superfluous labor, and the abrupt devaluation of both existing capital and labor-power — the form of resolution I turn to in the next part of this series.
To be continued
Tags: austerity, capital, economic policy, fascism, Felix Dzerzhinsky, Kasama, Koch Brothers, labor, labor power, Libertarianism, make the rich pay, Scott Walker, starve the beast, Stupid Left Tricks, stupid Marxist tricks, Stupid progressive tricks, superfluous labor, the politcal-economy of fascism, The State, WEAC
Is it possible to get rid of government, either by abolishing it outright or gradually reducing it, without, at the same time, ridding society of Labor? This is a question posed by libertarians and marxists who declare their opposition to abolishing one or the other.
First, let’s define what I mean by Labor. As I am using the word, Labor is not work; I define work as any form of productive activity during which we create some useful object by mixing our human effort with natural objects. It is the metabolism of life: the exchange between nature and humans which is essential to life itself. Labor, on the other hand, does the above as well, but the aim of the activity is to create value — a commodity with a price.
Among Marxists, one would think this question had already been settled by the experience of the Soviet Union. There, despite Marxist expectations that the State would whither away once wage slavery was thought to be abolished, the State never even shrank. It continued to expand up until the point it collapsed entirely. Even if we accept the idea that the Soviet Union was confronted by an implacable enemy, it is hard to accept this as an explanation for the Soviet occupation in Eastern Europe, its massive accumulation of troop and military power, and the willingness of Moscow to sacrifice basic material standards of living of the country, when the United States is presently bogged down and slowly being defeated by isolated bands of mostly illiterate guerrillas in the mountains of Afghanistan — much as the USSR was previously. How, under any reasonable scenario, was the US supposed to occupy and pacify a population of freely associated, well-educated, highly skilled persons, spread over one sixth of the planet’s surface and eleven time zones?
But, marxists seem unable to absorb this lesson of history. Among libertarians, I am often in conversation with, and reading the posts of, those who are quite seriously opposed to the State, but fierce opponents of any limitation on hours of Labor.
In all honesty, folks, how is this supposed to work?
Total federal, state, and local government employment (not including the military) in 2008 stood at 22.46 million persons according to the Census Bureau (pdf). At the same time, total employment in the US stood at 145.36 million persons (pdf). Government provided approximately 15 percent of all direct employment — and this does not even begin to take into account those persons who owed their jobs directly or indirectly to government expenditures: those employed as a result of contracts with various agencies of federal, state, and local bodies — Blackwater, GE, Raytheon, and the entire Fortune 500 come to mind — and those whose jobs are at least in part the result of demand generated by various transfer programs, like Social Security, Medicare, Medicaid, school lunch programs, etc.
If we could remove all of these expenditures overnight by means of a magic wand, what would happen to the economy and the tens of millions of other jobs only indirectly affected by this? Where would all of the goods produced for this massive body of entirely superfluous laborers be sold? Even if we did not remove it entirely, but only limited it by refusing to raise the debt ceiling and preventing the expenditure of some 3 trillion additional dollars by Washington over the next two years, what now fills that void?
If libertarians and others who are seriously determined to get rid of the State have no answer to these questions, what answer will your congressperson have when Obama and Boehner grab them by the lapel and show them, in very graphic terms, exactly what their vote against raising the debt ceiling will do to employment?
The argument can be made that any limitation on hours of labor requires State coercion and limitations on the individual’s right to enjoy her property — every wage contract is a voluntary agreement between two property-owners, even if one of the parties has no choice but to make the agreement. However, thirty, forty, or fifty percent unemployment is also the coercive application of market competition. If some make the argument that capitalist coercion is somehow more “natural” than State coercion, I need only remind them that the State, having been around for thousands of years longer than Capital, is clearly far more “natural” than the latter.
I am not for coercion in any form — political or economic. I am not trying to abolish State coercion in order to allow the mechanisms of economic coercion room to expand, further intensifying the already Hobbesian environment of Civil Society. The vast majority of the population of the United States is dependent on selling their Labor Power — even those who are self-employed. The idea that they will come to see Washington as a greater threat to their well-being than the Koch brothers, WalMart, or BP is laughably naive. Start abolishing regulations, reducing the minimum wage, breaking pension plans, and slashing Social Security, and you will see how little love folks have for a stateless society that leaves them at the mercies of the owners of capital.
This really doesn’t require a doctorate in economics: those who are really serious about a stateless society, and not simply using it as a screen to advance their own agenda, will understand that State coercion cannot be abolished without also abolishing the coercion of the market in Labor Power.
Update: Courtesy of Zero Hedge, a list of Russell Index companies that generate 50 to 100 percent of their revenue from the federal government.
Update 2: Someone asked me a good question: Am I suggesting there should be no reduction in the size of government until hours of work can be reduced? Absolutely not. It would be a mistake not to do the two together, but the biggest mistake would be to do nothing until both can be done together. If the debt ceiling increase can be voted down today, it should be voted down; in time it will be obvious that hours of work must also be reduced.
Tags: afghanistan, budget deficit, capital, debt ceiling, deficit spending, Employment, hours of labor, labor, labor power, Marxism, shorter work week, soviet union, Stateless Society, stupid Marxist tricks, The State, unemployment, war
We can now restate Marx’s theory in a way which will make it easily digestible by those who stand full square for a completely stateless society, as well as the various and sundry people who seem intent on getting him completely wrong in every possible variation — including the imbeciles who count themselves among his followers:
Marx came to the conclusion that capital was abolishing the need for labor and this abolition had profound, far-reaching, implications for the whole of society, and the social relations within which individuals carried on their activity.
Moishe Postone writes:
Until this historical stage of capitalism, according to Marx’s analysis, socially necessary labor time in its two determinations [necessary labor time and surplus labor time] defined and filled the time of the laboring masses, allowing nonlabor time for the few. With advanced industrial capitalist production, the productive potential developed becomes so enormous that a new historical category of “extra” time for the many emerges, allowing for a drastic reduction in both aspects of socially necessary labor time, and a transformation of the structure of labor and the relation of work to other aspects of social life. But this extra time emerges only as potential: as structured by the dialectic of transformation and reconstitution, it exists in the form of “superfluous” labor time. The term reflects the contradiction: as determined by the old relations of production it remains labor time; as judged in terms of the potential of the new forces of production it is, in its old determination, superfluous.
By concentrating property into fewer and fewer hands; ripping the mass of society out of its long historical practice of carrying on its activities in relative isolation employing crude instruments of production for a meager material standard of living that just barely ensured their survival; and, converting the mass of society into directly social laborers, capital was making it possible to apply the latest technological breakthroughs, advancing scientific knowledge, and economies of scale to the task of producing a basic minimal standard of living with as little labor as possible given the level of development of the productive capacities of the laborers themselves and the tools they employed.
No aspect of this process was being consciously undertaken by any member of society, any group of its members, nor even by the members of society as a whole. No one consciously declared their intention to abolish labor. Each person in society was only engaged in self-interested activity in pursuit of private ends: the proletarian, for whom the sale of her labor power was a matter of simple survival — a matter of life and death, the capitalist, for whom continuation as owner of property required the ever increasing surplus producing capacity of the capital under his control. No where in society was the abolition of labor the expressed aim of anyone engaged in this mean, brutal process.
Indeed, as mankind actually crosses the threshold, the event horizon, where it is no longer possible for the demand for productive labor to increase, despite the increasing social demand for new, previously unimaginable, forms of material consumption, the members of society actually experience this incredible historical event as a loss — a terrifying regression to an earlier period of starvation and want — against which the whole of society blindly struggles, employing for this purpose all the instruments at its disposal, including the State, for the purpose of increasing the demand for labor where no productive employment of this additional labor exists, or can exist.
The human and material capacities of entire continents are laid to waste in an unceasing series of ever more barbaric wars; entire industries spring up overnight not for the creation of new means of production and consumption, but solely to destroy existing means; ever more terrible engines of self-extinction appear, and with them, a mass of proletarians whose sole purpose is to devise and create ever newer versions of these insane commodities. Alongside these industries, and essential to their existence, rises an entire industry of financial engineers, a class of public and private debtors, and the cancerous growth of fictitious capital and financial instruments.
Organizing, expanding and directing this obscenity, the State: that wholly superfluous organ of society, whose long bloody history of aggression, repression, and conquest, stands alone as the single greatest, longest running, continuing conspiracy against the rest of mankind, as well as its chief tormentor, torturer, and parasite in every age and in every epoch — a vile, filthy, parasitic collection of drones whose sole purpose in life has, always and everywhere, been to suck the life from society for its own enlargement — becomes, in the Orwellian world of Hobbesian chaos, the very instrument by which the members of society seek to stave off the results of their own activity.
In tandem with the ever diminishing material demand for productive labor, the social demand for labor in any and every form emerges as the rallying cry from every part of the society. In tandem as the State increases its invasive penetration into, and totalitarian control over, hitherto private and common activities, the Hobbesian chaos reigning within society intensifies, gains a more pervasive character, and further reduces each member of society more completely to an anonymous set of abstract data-points which can be identified, sifted and measured by the high priests of economic policy — converted into the raw material of policy recommendations for potential State action over a shorter or longer period of time. The parameters of this potential State policy action itself becomes the focus of the mass of the members of society and subjected to the Hobbesian chaos of society as interests line up on each side of the debate and seek to gain control of the lever of State power. In turn, as this body of parasitic drones master the control of society and gains knowledge of how it can maximize the expansion of purely superfluous labor, its policy parameters narrow — not employment, but the “non-accelerating inflation rate of unemployment”; not free trade, but “free trade agreements”; not economic growth, but “low-inflation economic growth”. In this way, State economic policy is gradually converted into those policies which maximize not the expansion of superfluous labor in general, but the expansion of the State itself as a completely superfluous, cancerous growth on society.
It is precisely this State which, Marx argues, cannot on any account serve as the foundation of the new society. It cannot be salvaged, it cannot be reformed, it cannot be utilized to emancipate society in any fashion. It must be broken: discarded by society; and, with it, Labor itself, and all the remnants of the existing order. The abolition of Labor, and the age-old division of labor that has for so long chained humanity to a set of alien, inhuman relations, increasingly becomes bound up with the question of the abolition of the State, and the abolition of the State is increasingly dependent on the abolition of superfluous labor in every form.
Tags: abolition of labor, abstract individual, abundance, aggregate demand, capital, capitalists, Civil Society, class interest, class society, Classes, deficit spending, economic policy, fascism, Federal Reserve, fiscal policy, free trade, full employment, gdp, general interest, hours of labor, interest, Karl Marx, labor power, law of value, Marxism, Moishe Postone, monetary policy, NAIRU, productive forces, productivity, profit, Proletarians, Property, public debt, rent, scarcity, superfluous labor, surplus value, The State, unemployment, value, voluntary association, wages, war
In the first part of this series (here) I argued that Karl Marx’s Individual is the same Individual who appears in the writings of 18th and 19th Century thinkers. Moreover, Marx’s assumptions imply an environment of Hobbes’ war of all against all and an increasingly illiberal, repressive and aggressive, parasitic State.
In the second part of this series (here) I argued that Marx never believed that there would need to be a period of state socialism to achieve a stateless society. His model of a revolutionary reconstitution of society rested on the idea of a free voluntary cooperative association, which emerges directly out of capitalist society and, which would be the only form of social organization in this stateless community. Marx’s model of the emergence of this voluntary association assumed it occurred empirically, i.e., as an act of commonsense necessity to everyone.
In the third part of this series (here) I argued that Marx did far more than merely uncover the secret of the worker’s exploitation. Marx’s theory is not a theory of labor’s exploitation under the capitalist system but a theory of social decomposition and transformation of labor activity: ripping the producers from their property; casting them into the ranks of the Proletarians; molding their activity through centuries of despotic capitalist rule into directly social cooperative laborers employing means of production that could only be put into motion by their combined cooperative effort. The transformative process comes to an end when it is no longer profitable to employ labor power under any circumstances — an event which compels the proletarians to take control of their own productive capacities as individuals and organize their activity in free voluntary association.
In this part I will show why Brad is wrong when he states that Marx’s theory requires an unusually altruistic individual to realize the voluntary association. Marx’s theory does not in any way involve a society of unusually altruistic individuals, because it rests on the assumption that scarcity itself has been abolished.
Brad, in his post, “Marxism And Libertarian Exploitation Theory”, argues:
[Marx's] analysis does not take into account individual goals, which is a very human desire to maximize gains for one’s self and one’s own. Humans are cooperative, but we are cooperative individuals. Cooperation can be sustained in a system of mutual benefit, but humans typically have a difficult time sacrificing for the collective over the long haul. Anarcho-socialism relies on such mutual cooperation (and sacrifice) in the absence of a coercive entity, and thus relies on human nature to be compatible with such a system.
Is this assumption actually correct? Does Marx’s theory assume that the individual sacrifice for the collective over the long haul? Let’s begin by returning to Marx’s sketch of the circumstances surrounding the birth of a society founded directly on voluntary association.
In Marx’s model of the State, this parasitic entity appears to hover over society. This separation of the State from Civil Society is in some sense real and in another sense only apparent: as Brad Warbiany demonstrates, the best writers of the time saw in many State actions of the 18th and 19th Century the expression of some definite interest of specific groups in society — a trail of evidence that could probably be traced to the actual motives of specific individuals, as some have argued in the case of our own War on Terror. However, even with these observations it is far from correct to view the State as a mere instrument of any given interest within Civil Society — that it always expresses, for instance, the will of the capitalist class against the working class in some vulgar fashion. It is closer to the truth to understand that the State is the expression of the interests of Capital — a social relationship between and within the two classes, which is not, nor can it be, identical with the interests of either class, nor any particular faction of either class.
If some particular State action can be traced to the interests of one or the other class, and to one or another faction or groups of individuals within either class, it is necessary to point out that it represents those interests within the limits imposed on it by Capital itself. It is possible, therefore, for the State to both express the general interest of all social classes within the limits of capitalist relations, and, simultaneously, appear indifferent, hostile, and an increasingly intolerable burden to the whole of society. Thus, while bourgeois writers after Marx increasingly explain the actions of the State by reference to the interests of one or another faction of society — for the Nazis, it was Jews and communists; in our own time it has been black helicopter conspiracies, the Illuminati, or some other such nonsense — Marx’s theory explains those actions by referencing the general conditions prevalent under capitalist social relations.
I believe the above picture of the relation between the State and Civil Society has implications not only for the politics of capitalist society, it has implications for the manner in which the category Value expresses itself as well. Moishe Postone, in his painstaking reconstruction of Marx’s thinking on Labor as a Value creating activity, “Time, Labor, and Social Domination”, showed that Value — which Marx defined as the socially necessary labor time required to produce labor-power — was not only the basis for the exploitation of the worker in the form of surplus labor time — which, in his model, is the source of profit, interest and rent — but also the basis for a peculiar form of labor activity: superfluous labor time; the period of labor activity which is entirely superfluous to the productive employment of labor power either for the production of wage goods or capital goods.
Where does this superfluous labor time come from?
With the increasing productivity of social labor, an increasing share of the existing labor-power can no longer be profitably employed, i.e., employed by capitals for the purpose of creating surplus value. Capital begins to exhibit symptoms of relative breakdown: an entirely superfluous mass of proletarians who cannot find employment, a mass of machinery which can no longer be put to use by these proletarians, a mass of money-capital which cannot find profitable investment opportunities, and a mass of commodities which cannot be sold.
On the one hand, this so-called deficit in “aggregate demand”, Marx declares, is nothing more than the necessity for a general reduction in hours of work expressed in the form of the law of Value prevailing in capitalist society. On the other hand, since, the purchase and sale of labor power remains essential to Capital itself, and the basis for both the subsistence of the proletarians and the extraction of surplus value by capitals, the necessity for a general reduction in hours of work takes its opposite form: A general social demand from the two great classes in capitalist society for intervention by the State to increase “aggregate demand” by various measures — in other words, for action by the State for active economic policy intervention designed to ensure that the essential condition of Capital — the purchase and sale of labor-power — can continue uninterrupted.
This intervention, which is essentially fascistic, accompanies the rise of the Fascist State, and rests on the interests of both great classes in capitalist society insofar as they are considered only as poles of the relation, Capital, explains the astonishing growth of the State in the 20th Century, which expands from an estimated mere 3 percent of United States Gross Domestic Product to approximately 43 percent in 2010, with an accumulated debt that is greater than the total annual output of the United States’ economy — and currently increasing at the unprecedented rate of more than ten percent per year.
It is precisely in this unprecedentedly enlarged cancer on society that what Michael O. Powell, in his post, “Rethinking Marx”, calls the “high degree of capital to fund” voluntary association is already present in its latent form, as an constantly increasing mass of productive capacity being expended in the wholly unproductive — and from the standpoint of a voluntary association, wholly unnecessary — form of State expenditures. The conversion of the relative breakdown of Capital into its absolute form, which implies the collapse of active State intervention in the economy, frees the entirety of the productive capacity of society from both the dependence on profit as the motive force of productive activity, and the overwhelming mass of this capacity from its wasteful and superfluous employment by the State.
The members of society, who are by this collapse, compelled to create a voluntary cooperative association, find themselves awash in an abundance of productive capacity exceeding, by far, any measurable need for it. With the abolition of the State, the need for Labor itself disappears, taking with it the epoch of scarcity,the Law of Value, Class society, and all the ugly muck of ages.
Tags: abstract individual, abundance, Adam Smith, aggregate demand, capital, capitalists, Civil Society, class interest, class society, Classes, Classical liberalism, deficit spending, economic policy, fascism, Federal Reserve, fiscal policy, gdp, general interest, hours of labor, interest, Karl Marx, labor power, law of value, Libertarianism, Liberty, Marxism, Moishe Postone, monetary policy, productive forces, profit, Proletarians, Property, prouctivity, public debt, rent, scarcity, superfluous labor, surplus value, the Individual, The State, value, voluntary association, wages, War on Terror