Anti-Duhring, Part III – Socialism, II – Theoretical - Part 4

But, its clear that this perceived role of share ownership, in each of these forms, has no validity. In a worker cooperative, for example, the money put up by each worker is always likely to be only a tiny fraction of the money-capital required. The worker cooperative, as with any other capital, will, usually, need to borrow money-capital from a bank, or directly in the money markets, by the issue of bonds, for example. Yet, the loaning of money in any of these other forms – from the bank, or the buyers of bonds – does not give the bank nor bondholders any legal right to exercise control over the cooperative.

Nor should it. The lender of money is the owner of that money, and so entitled to exercise control only over it. They do so by voluntarily surrendering possession of that money, for a specified period, and on specific terms. For example, they agree to lend the money for, say, 5 years, and, in return, for a given rate of interest, which may be fixed or variable, and so on. But, surrendering possession of the money means exactly that. The borrower becomes the possessor of that money – not its owner – for a specified time, and buys things with it. They pay a price for this temporary possession of the money, and that price is the market rate of interest. As Marx sets out, what they have actually borrowed is not money, but money-capital.

Money can have no price, contrary to the claims of bourgeois economics, however much they try to dress it up with concepts of time-preference and so on. But, Marx explains, loanable-money-capital, can have a price, precisely because, of the nature of capital, as self expanding value. The value of capital, is that, once employed, its use-value is to be greater at the end of its circuit than it was at the start. It is this use-value of capital – not as a thing, i.e. not as machines, materials, or labour-power (commodities) – as a social relation, that has a price, precisely because those that do not own it, are prepared, and are able, to buy it, in order to employ it, so as to obtain the average industrial profit, by doing so. As Marx notes, in Capital III, it is the division of capital into these two different forms – interest-bearing capital, and industrial capital – each antagonistic to the other, and of the owners of these two different forms of capital, that makes possible the category of interest, and determines the rate of interest.

The owners of interest-bearing capital lend money-capital to industrial capitalists, who buy things with it. The commodities they buy – machines, material etc. (constant capital), as well as labour-power (variable-capital) – they not only possess, but own. They buy these commodities, precisely in order to utilise them as capital, to obtain, thereby, the average industrial profit. It is only the potential to obtain this average industrial profit that makes borrowing the money-capital worthwhile, but, also, which makes possible the payment of interest to the lenders of that money-capital.

If I borrow money, and just put it in a box, buried in the ground, at the end of the loan period, it will not have become any more money, whatever the basis of my time-preference. Similarly, if I spend the money on the purchase of commodities for my personal consumption, it will not have expanded in value, whatever my time preference. In the former case I at least have the initial capital sum that I can repay, and only have to find a way of obtaining money from elsewhere, to pay the interest. In the latter, having consumed unproductively the commodities I bought with the money, I now have to find money to repay both the initial capital sum, and the interest. There is no objective basis for assuming either is possible.

Money cannot have have two different values. It cannot have a price – interest – based on a difference in those values. But, as Marx describes, capital, as a social relation, does have two different values, precisely because it is self-expanding value. Its value at the end of the circuit of industrial capital, is greater than it was at the start of the circuit. It is greater by the amount of average industrial profit, whose basis is the surplus-value created in the production process. Interest is not a price of money, but of money-capital. It is a deduction from profit, just as is rent and taxes.

It is not the lender of money-capital – be they a bank, bondholder, or shareholder – that is the owner of the industrial capital, bought with the money-capital they loaned, but the industrial capitalist. The loaned money-capital, might appear to be itself, capital, and to self-expand, by the amount of interest, but it is not. It is Marx explains, simply fictitious-capital. It has no real existence, as capital, separate from the same money-capital, borrowed by the industrial capitalist, and used as industrial capital to produce profit. The industrial capitalist, as the owner of that industrial capital appropriates the profit, and only out of it, then, pays interest to the owner of the money-capital they borrowed. The lender of money-capital has no such right of ownership or control. It is not their industrial capital, and not their industrial profit.

When, a bank lends money to someone to buy a house or a car, the bank has no ownership of the house or car, no right to tell the borrower how to use the house or car, and so on. They only have a right to the return of the money at the end of the loan period, and to be paid the agreed interest on the loan. The interest, is not a price for money, in this case either, but the same price of money-capital, the price the lender could have obtained had they loaned the money to be used as money-capital to an industrial capitalist.

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SNNS 59

 

Northern Soul Classics - Cheer Me Up - The Globetrotters

I found out that one of the members of the Globetrotters was J.R Bailey, whose aliases include Chuck Wood, J.B. Troy, and Al Wilson (Help Me), not the other Al Wilson known for the Snake. 

Anti-Duhring, Part III – Socialism, II – Theoretical - Part 3

If we consider the further evolution of industrial capitalism into state-monopoly capitalism (imperialism), by the end of the 19th century, we see a further purposive, but unconscious, transformation. Private industrial capitalism comes to an end, except in its reactionary remnants, as small capital, in the hands of the petty bourgeoisie, the precarious self-employed and so on. Industrial capital becomes socialised capital, in the form of the joint stock company and cooperative. This socialised capital is the collective property of the “associated producers”, i.e. the workers and managers employed in the company. The functional role of the private industrial capitalist comes to an end, just as happened previously to the landed aristocracy.

The socialised industrial capital, objectively, the collective property of the associated producers, who merely borrow loanable money-capital, to acquire it, creates new forms of property, new social relations, and new ideas. This is not yet a new mode of production. It is more like a metamorphosis of the existing mode of production, based on capital and commodity production. As Marx notes, in Capital III, Chapter 27, both the joint stock company and the cooperative are “transitional forms of property”, between capitalism and socialism. In the workers cooperatives, Marx notes, the contradiction between capital and labour is resolved by the workers becoming their own capitalist.

In the joint stock company – the modern form of which is the huge multinational corporation – the capital is, objectively, just as much the collective property of the workers employed in the company as is that of the cooperative. But, unlike the workers cooperative, the workers do not exercise control over their collective property. Instead, control is enshrined in law as resting with shareholders, who are not the owners of that capital, but simply creditors of the company, people who lend money-capital to it, in exchange for interest. Just as in the past, even when the landlord class lost all of their social function in production, they used their control of the political regime, not only to obtain rent, as a deduction from profits, but also to control the conditions under which their rents were set, so now, as the private capitalist has lost their social function in production, they have used their control of the political regime, not only to obtain interest/dividends, as a deduction from profits, but, also, to control the conditions under which that interest/dividends is obtained.

These underlying, objective, social elations are obscured, even in the worker cooperative. In the worker cooperative, it is not the fact that the capital is the collective property of the workers that appears as the basis of their control over it, but the fact that they are also shareholders. In other words, in most worker cooperatives, the workers themselves put up a small amount of their own money to finance the company, and, in return, obtain a share, which entitles them to interest/dividends on the money they advance. This gives the appearance of making this no different to any other joint-stock company, except that, whilst the interest/dividends may be proportional to the money loaned to the company, in both cases, the same is not true in relation to the exercise of control.

In a worker cooperative, every worker gets an equal vote. In a joint stock company, the more shares you have the more votes you have. In consumer coops, another variation appears. It is not the workers that get to exercise control over their collective capital – or even, often to be able to become shareholders in it – but those who consume its commodities. They become members, and get a single vote, by buying a single share; but the dividend they receive is proportional to how much they spend, as consumers, with the coop. Where the joint-stock company entrenches control with the existing, bourgeois ruling-class, because they are the ones with vast amounts of loanable money-capital, and able to buy the most shares, the consumer coop tends to entrench control with the permanent upper echelons of the cooperative management. Consumer shareholders have no direct involvement in the day to day operation of the cooperative, as the workers do, and so come to rely on what they are told by the upper management. The shareholders rarely even turn up to meetings, leading the coops permanent bureaucracy to exercise control. Its why the trades union and social-democratic bureaucrats prefer this model as against the worker cooperative.

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Anti-Duhring, Part III – Socialism, II – Theoretical - Part 2

Moreover, the commercial bourgeoisie prospers, so it is not just the ideas that these new social relations engender that take hold within the state. The commercial bourgeoisie uses its wealth to better educate its children, who, in turn, increasingly take up their positions within the personnel of the state itself. The state, consequently, becomes, objectively, a bourgeois state. Its ideas are bourgeois ideas, its personnel are increasingly bourgeois, and yet this state continues to operate for the benefit of the existing feudal ruling-class, and within the ideological, legal and political framework of the old feudal regime. It is this contradiction that the political revolution has to resolve.

In Britain, this process takes place over a long period, and is correspondingly confused and messy. The bourgeoisie and landed aristocracy inter-marry, and so on. Although the British state becomes, objectively, a bourgeois state, by the time of the Glorious Revolution, the political regime remains firmly in the hands of he feudal aristocracy well into the 19th century. In 1832, the bourgeoisie, in alliance with the petty-bourgeois commodity producers, and a nascent proletariat, carried through the first act of the political revolution. It gets the vote for bourgeois property owners, and abolishes many of the “rotten boroughs”, and so on. By 1848, the industrial bourgeoisie had become the dominant section of the bourgeoisie, and, as Engels describes, in conjunction with the industrial workers, carries through the second stage of the political revolution. But, as Marx notes, as late as 1865, in his Inaugural Address to the First International, the landed aristocracy still accounted for a majority of those sitting in the Commons, let alone the Lords.

In the US, the process was more rapid, and less messy. The vast land areas meant no landlord class could be established. The landlord class was represented by the British Crown, which acted to appropriate revenues, and by the slave owners, in the South, who produced cotton and other agricultural commodities that fed the British industrial revolution. The American Revolution swept away the first, and established a bourgeois republic, and the second was swept away by the US Civil War, which asserted the dominance of US industrial capital, and of its centralised, but still federal, state.

In France, the process was more prolonged, as in Britain, due to the existence of established land ownership by the feudal aristocracy. The 1789 Revolution was clearer, establishing the Constitutional Assembly, but, as with the English Civil War, saw an immature bourgeoisie have to cede the political regime to Bonaparte. As Marx notes, in the following decades, there were changes back and forth of the political regime, with Louis Phillippe replacing Bonaparte, and then, in 1848, Louis Bonaparte replacing Louis Phillippe, and yet the objective nature of the state remained that of a bourgeois state.

In Russia, the emancipation of the serfs, in 1861, led to a rapid growth in commodity production and exchange, and consequent rapid growth of the bourgeoisie. As Marx and Engels wrote at the time, this change, itself, was driven by Russia's defeat in the Crimean War by the industrial powers of Britain and France. Similar changes occurred in Japan. By the 1890's, objectively, the Russian state was a bourgeois state. Its actions, as Lenin pointed out to the Narodniks, were geared to a more rapid development of industrial capital in Russia. It was as utopian for the Narodniks to make their appeals to that state, to foster their petty-bourgeois schemes, as it is, today, for statists to appeal to the bourgeois state, in Britain, or elsewhere, to act in the interests of workers, or small business; the latter appeal, itself, being reactionary.

In all these cases, the social revolution, which happens purposively, but unconsciously, behind society's back, transforms social relations and ideas. It changes the ideas and personnel that guide the actions of the state. It does all this, whilst, all the time, the old ruling-class continues to control the political regime/parliament etc., and also, continues, thereby, to expand its own revenues, as deductions from the rapidly expanding industrial profits. A spark for the bourgeois revolutions after all was the demands for yet more revenues. In England, it was Charles I's demand for more taxes to fund his army; in the US, it took the form of “No taxation without representation”.

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SNNS 58

 

Northern Soul Classics - Washed Ashore - The Platters