The Hypocrisy of NATO's Illegal War On Iran - Part 16

Marx noted, in Capital III, Chapter 23,

“It would be still more absurd to presume that capital would yield interest on the basis of capitalist production without performing any productive function, i.e., without creating surplus-value, of which interest is just a part; that the capitalist mode of production would run its course without capitalist production. If an untowardly large section of capitalists were to convert their capital into money-capital, the result would be a frightful depreciation of money-capital and a frightful fall in the rate of interest; many would at once face the impossibility of living on their interest, and would hence be compelled to reconvert into industrial capitalists.” (p 378)

It is precisely that problem that the ruling-class of rentiers has faced. On the one hand, the microchip revolution of the 1980's, brought a huge rise in productivity, and the rate of profit. It brought a huge moral depreciation of the fixed capital stock, and with it a huge, global release of capital. All of these realised money profits fed into money markets, causing global interest rates to enter a secular decline from 1982 onwards, and a consequent rise in global asset prices.

In the US, stock markets rose by around 1300% between 1980 and 2000, more than 4 times the rise in GDP. Stock and property markets across the globe followed suit.

In Britain, house prices quadrupled in the 1980's. No wonder, in this “loadsamoney” culture, this inflation of asset prices, seemed to amount to the creation of wealth out of thin air.

Of course, ownership of speculative assets is neither the same as ownership of productive-capital, nor the same as ownership of a durable commodity. If you own bonds or shares, for example, if the market price of those assets rise sharply, you can sell them, and simply pocket the capital gain. You don't have to buy other bonds or shares to replace them. If you own property as a speculative asset, or as a landlord, you can similarly, sell those properties, if property prices rise sharply, without needing to replace them. In both cases, you can simply bank the realised capital gains, and wait until asset prices fall again. But, that is not the case if you own a property as a durable commodity/fixed capital.

If house prices rise, as a homeowner, that is of little benefit to you, for the simple reason that if you come to sell your home, you still need somewhere to live, and so must replace it with an equally more expensive house. If you are a commercial business that owns the commercial property in which you operate, the same applies, the building constitutes a piece of fixed capital. In fact, a rise in property prices, generally operates to your disadvantage, rather than advantage. If house prices across the board double, but wages remain the same, then, the house you paid £50,000 for, when you sell it for £100,000, appears to have provided you with £50,000 for free. But, to move to a better house, means that, this better house, which previously cost £75,000, will now cost you £150,000. In reality, you will have lost £25,000, compared to had house prices not risen.

Of course, had you not been a homeowner to start with, you would have lost out even more, which is why so many people, now, cannot afford to buy a home. Yet, the bourgeois media portray any fall in asset prices as being catastrophic, despite the fact that, for the great mass of society, they would be hugely beneficial. Indeed, for industrial capital, they would be hugely beneficial too, as I have set out, elsewhere. Its not just those who cannot afford to buy a home that are adversely affected by high house prices. One solution to the inability to pay the high prices, would be, for example, for wages to rise. But, a rise in wages, means a fall in industrial profits. Many unable to buy, are led to rent, but, that leads to higher rents, which again, means either higher wages, or else higher levels of housing benefits. Those higher benefits require higher taxes, which again, reduces industrial profits.

As I've set out, elsewhere, the same is true with inflated bond and share prices, which form the basis of workers' pension funds. The delusion referred to earlier, in which money-capital is seen as the only real capital, and the interest on which is seen, not as a deduction from industrial profit, but as some kind of natural fruit of that capital, leads to the assumption that if asset prices rise, the fruit of those assets increases along with it, like a bigger plum tree, producing more plums. But, as Marx set out, interest/dividends are simply a deduction from profit, and if the mass of profit does not rise, there is no sustainable basis for interest/dividends to rise. If interest/dividends do rise, without the mass of profit rising, then, rent, tax or profit of enterprise must fall, as Marx set out in Capital III, Chapter 15.

But, unless capital is accumulated – more labour employed – the only way to increase the mass of surplus-value/industrial profit, is to raise the rate of surplus-value. In the conditions of the 1980's, and 90's, as the huge rise in productivity created large relative surplus populations, which pushed down relative wages, and also reduced the value of labour-power, and so raised the rate of surplus value that was possible. Indeed, by raising the rate of turnover of capital, it also raised the annual rate of surplus-value, and average annual rate of profit. It, also, as set out earlier, created a release of capital that appeared as a mass of realised money profit. But, that was then, and this is now. Those conditions began to change when the new long wave upswing began in 1999, just as they have done in previous long wave cycles.

Back To Part 15

SNNS 46

 

Anti-Duhring, Part III – Socialism, I – Historical - Part 6

The failure to address that property question, indeed even to understand it, has left the working-class effectively leaderless. On the one hand, social-democracy and social-democratic parties, in the 20th century, emphasised the common interest of labour and capital. Indeed, as Marx sets out in Wage-Labour and Capital, so long as you assume the continued existence of capital, that is true. The workers interest is that of capital too, for a continued accumulation of capital, so that more labour is employed, which creates the best conditions for their wages to rise, not only from the fact of being fully employed, but also because of rising social productivity and an expansion of the range of goods and services they can consume, as Marx describes in The Civilising Mission of Capital. It also means that, as their employment expands towards full employment, their bargaining position is strengthened, so that not only do nominal and real wages rise, but also relative wages.

However, as Marx describes, in Wage-Labour and Capital, and in Capital III, Chapter 15, it is, then, precisely this rise in relative wages, whose concomitant is a fall in relative profits, i.e. a profits squeeze, as seen in the 1960's/70's, which creates a crisis of overproduction of capital. The first consequence is that the smaller, least efficient capitals, the plethora of petty bourgeois producers – whose profit margins were already below the average – go bust. To the extent they employ workers, they are laid off. The consequence is, the, also, an overproduction of commodities, even where none existed previously, because the firms that have gone bust no longer buy from their suppliers (as Marx puts it, capital itself is physically composed of commodities), and their workers no longer have wages to finance their own consumption.

So, the affluence of the workers, in these best of all conditions, turns, for many of them, into the cause of their own misery. Moreover, the underlying cause of the crisis of overproduction of capital was the shortage of labour, causing relative wages to rise, and so relative profits to fall. To respond to it, capital is led to engage in a technological revolution, to raise productivity, and to replace labour with machines. Again, that was seen in the 1970's, with the microchip revolution. Consequently, as long as capitalism continues, and so long as the working-class does not have control over its own collective property – the large-scale socialised capital – it is doomed to repeat the cycle of prosperity, full employment/boom, crisis, and unemployment.

Social-democracy, and reformist socialism/Menshevism, cannot offer any solution, therefore, but, at the other pole there are the “revolutionary” sects, who can only offer the illusion of some repeat of the Bolshevik Revolution of 1917, or worse a version of the Peasant Wars, such as that in China in 1949, of Vietnam, Cuba, and so on. All of which are based on the interests of the petty-bourgeoisie and not the industrial proletariat. But, that petty-bourgeoisie and peasantry can never form the ruling-class, because of its atomised and heterogeneous nature. It always results in chaos, crisis and Bonapartism. It can be see as a result of Brexit and Trump, today. But, the victory of Trump, Brexit and other petty-bourgeois nationalist movements is, itself, a consequence of the failure of Marxists to offer a real analysis and solution to the property question, turning themselves, simply, into more militant wings of social-democracy, and proponents of bourgeois, trades union consciousness.

Back To Part 5

Anti-Duhring, Part III – Socialism, I – Historical - Part 5

The 1832 Reform Act was a victory for the bourgeoisie as a whole, but the workers were left to pursue their own interests and demands for political rights and freedoms via the Chartist Movement. The large-scale, industrial capitalists, again, required the support of the workers to consolidate their victory, in 1848, against the other sections of the bourgeoisie – the commercial bourgeoisie and financial oligarchy – and its political reflection was the creation of the Liberal Party, in which the big industrial capitalists sat side by side with the trades union representatives of the workers.

The same was true in France, but its political revolution was far more thoroughgoing than its British equivalent. The Monarchy, and large sections of the aristocracy faced the criticism of the guillotine.

“To be sure, the bourgeoisie had already developed rapidly during the Revolution, partly by speculation in the lands of the nobility and of the Church which had been confiscated and then sold, and partly by frauds on the nation by means of army contracts. It was precisely the domination of these swindlers that brought France and the Revolution to the verge of ruin under the Directorate, and thus gave Napoleon the pretext for his coup d'etat.” (p 331)

For Saint-Simon, rather like with the Physiocrats, the “workers” were not just the labourers, but also the capitalists, be they industrial capitalists or the merchants and bankers. The Revolution set this mass of “the people” against the idlers of the old aristocracy, but the idlers were not confined to them, but, also, all those that simply lived off their incomes without taking any part in production. At a time when capitalist production was still relatively undeveloped, compared to the later large-scale production, it is easy to see why this distinction was made.

For Saint-Simon, The Reign of Terror showed that the actual workers, the great mass of labourers and petty-bourgeois, did not have the capacity to lead the country.

“Who then was to lead and command? According to Saint-Simon, science and industry, both united by a new religious bond destined to restore that unity of religious ideas which had been broken since the Reformation – a necessarily mystical and rigidly hierarchical “new Christianity”. But science was the scholars; and industry was, in the first place, the active bourgeois, manufacturers, merchants and bankers. Of course, these bourgeois were to transform themselves into public officials, into trustees of society, of a sort; but they were still to hold a commanding and even economically privileged position vis-a-vis the workers. The bankers especially were to be called upon to direct the whole of social production by the regulation of credit. This conception was in exact keeping with a time when large-scale industry and with it the chasm between bourgeoisie and proletariat were only just coming into existence in France.” (p 331-2)

Here can clearly be seen, even before the development of large-scale, socialised capital/imperialism, the basic outlines of social-democracy. A shared interest between capital and labour, but with the professional middle-class representatives of capital “functioning capitalists”, managing national production on behalf of “society”. Along with it goes the required planning and regulation of production and credit. All of this is contained in the statist ideas of Lassaleanism and Fabianism.

“But what Saint-Simon especially lays stress on is this: what interests him first and above all other things is the lot of “the largest and poorest class” (la classe la plus nombreuse et las plus pauvre).” (p 332)

Unfortunately, that same kind of moralism pervades much of today's Left. It confuses “the poorest” with the working-class, just as it confuses “the rich”, by which if often means the affluent, with the bourgeoisie, and worse, the owners of capital. As Marx set out in relation to the hand-loom weavers, and Lenin set out in relation to the poorest peasants, the poorest (actually the least affluent, i.e. least net income) are not the workers but, setting aside the paupers and chronically unemployed, the great mass of the petty-bourgeoisie. These layers, the breeding ground of reaction and fascism, and which, today, is the foundation of Trumpism, Faragism, Starmerism, Bolsonarism, and all the other reactionary nationalist movements, can never be the prime concern of Marxists.

Our concern, today, can only be with the organised working-class, which is, itself, now, the collective owner of all the socialised capital that dominates production, and, via its pension funds, also, the collective owners of a large part of the fictitious capital, which draws its revenues from that socialised capital's profit. But, in neither case is the working-class allowed, by law, to exercise control over its own property. That, today, is the property question that Marxists must address in their programmes.

Back To Part 4

Anti-Duhring, Part III – Socialism, I – Historical - Part 4

Marx makes the same point in Value, Price and Profit.

“They ought, therefore, not to be exclusively absorbed in these unavoidable guerrilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day's wage for a fair day's work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!"” (p 93)

The contradictions arising from capitalist production were only taking shape, in 1800, when the utopians were setting forth their observations. The first, generalised crisis of overproduction of commodities did not occur until 1825. It was another quarter of a century before large-scale industrial capital asserts its dominance, and another quarter century before that large-scale industrial capital, predominantly, takes the form of socialised capital, in the shape of the co-operatives and limited liability companies that flourished after the passing of the Limited Liability Act of 1855. So, the Utopians could not see such development, and the means of achieving their goals. Rather, they relied still on the pervasive power of reason and belief that, if only society could have its eyes opened to such reason, a harmonious development could be undertaken.

“During the Reign of Terror, the propertyless masses of Paris were able to gain the mastery for a moment [and thus to lead the bourgeois revolution to victory against the bourgeoisie itself]. But, in doing so they only proved how impossible [it] was [for] their domination [to last] under the conditions then obtaining. The proletariat, which was only just separating itself from these propertyless masses as the nucleus of a new class, and was as yet quite incapable of independent political action, appeared as an oppressed, suffering estate, to which, in its incapacity to help itself, help could, at best, be brought in from without from above down.” (p 329-30)

The Utopias dreamed up were incapable of becoming real, not because the productive forces were not developed sufficiently, but because there was no reason that the capitalists were going to voluntarily abandon their own advantages and position as ruling-class. In 1800, it was still the case that many of the private industrial capitalists were former skilled labourers themselves. The majority of production was undertaken, still, by petty-bourgeois, independent commodity producers, like the hand-loom weavers But, as the fate of the latter showed, described by Marx in Capital I, those conditions were rapidly changing, as machine industry drove them out of production, and concentrated the means of production in the hands of private capitalist families, whose lifestyles were transformed along with it.

Marxist theory is not a theory that starts from the individual seeking to turn each one into a clone of another. So, of course, some of these individuals caught a glimpse of the future, but Marxist theory, historical materialism, is a theory based on the interests of given forms of property, and so the behaviour, in aggregate, of the social classes based on it. That some of these individuals did obtain a glimpse of the future, albeit expressed in their various fantastical forms, is still a mark of their own genius.

“Saint-Simon was a son of the great French Revolution, at the outbreak of which he was not yet thirty.” (p 330)

That revolution was carried out against the old aristocratic ruling class, a class of parasites and idlers that leached off the great mass of society engaged in the production of the nation's wealth – the Third Estate. But, this Third Estate was soon revealed to, in fact, be a contradictory whole, comprising, at one pole, the rising bourgeoisie, and, at the other, the emerging proletariat. Much as with the political revolution in Britain, in which the bourgeoisie conducted its struggle for political rights and freedoms, whilst drawing behind it a large mass of petty-bourgeois producers, and the emerging proletariat, as symbolised by the gathering in St. Peter's Fields in Manchester, it soon became apparent that this political revolution was one that the bourgeoisie sought to contain within strict limits.

Back To Part 3

Forward To Part 5

SNNS 45 - Parts 1 & 2

 

SNNS 44