Paul claims,
“Bough
agrees with Kondratiev that it is technological change (such as the
invention of computers) that triggered this wave.”
I have said
no such thing. The causes of the beginning of a new Long Wave are
manifold, technological change being only one of them. As I pointed
out to Tony Clark in another reply it is also down to the length of
time required to develop new sources of raw materials etc. A
fundamental aspect is the development of whole new industries, and
products, some of which can be based on technological changes from a
long time before. For example, the steam engine was based on a
technological discovery back in ancient Greece. Yes, I do believe
that if Capitalism were no longer able to develop the productive
forces then it would be in decline. It is no different than Marx's
statement that no Mode of Production leaves the stage of history
until, it has exhausted its potential to develop the productive
forces!
Paul says,
“For
Bough, ‘decline’ would only make sense if research into science
and technology ceased and the tendency towards greater automation
reversed.”
Why? There
could be increased research, but nothing new coming out of it. The
number of workers employed across the globe, and the level of their
consumption could reach such a level that it was no longer possible
for capital to create new Use Values that could be sold profitably to
them, which would mean Capital would have no reason to invest in
trying to do so. Why would it require the tendency to greater
automation to be reversed? In fact, one of the greatest developments
of higher value production by Capital in recent years, has been in
knowledge based production, and in other forms of high value
production that relies on highly skilled, often highly paid, complex
labour rather than on automation! In fact, some of the development
in Financial Services (by no means all of which is unproductive in a
Marxist sense) fits this description.
Paul
asserts,
“In
other words, it would mean an absolute collapse of the system leading
to mass impoverishment.”
Why? Such a
situation could simply lead to stagnation, or low growth. If it were
accompanied with falling population growth, then stagnant
productivity growth, which is the concomitant of no development of
the productive forces, could actually lead to higher per capita
living standards for workers.
Paul's
accusation that my description of decline is “Stalinist” is
laughable. As Mandel points out the Stalinists continually tried to
“prove” that living standards were really falling in the West,
when it was obvious they were rising. The Stalinists believed that
Lenin's pronouncement in “Imperialism”, that Capitalism was in
decay, required denying that any real progress was being made. In
other words, it is the Stalinists who made exactly the same arguments
that Paul is making today! It is Paul who treats Lenin's 'Imperialism'
as though it were some Holy Manuscript. But, sine the 1980's, at
least, many, if not the majority, of Marxist economists have recognised
that Lenin's “Imperialism”, was theoretically flawed, and
factually incorrect even at the time it was written. As Bill Warren
points out in “Imperialism: Pioneer of Capitalism”, for Lenin it
is a pretty shoddy piece of work that relies heavily on the analysis
of the British Liberal Economist Hobson for the role of Monopolies,
and their activities in the Colonies, and on Hilferding's “Finance
Capital”, which was a phenomenon particular to Germany.
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| The Human Genome was decoded by a private company. It is already leading to many new treatments that will replace existing drugs, more cheaply and effectively. |
As Warren
states, many of the comments that Lenin makes, and which today's
faithful repeat, are so hedged around with caveats as to make them
meaningless. Unfortunately, today's believers, like Paul, always
forget to consider or to mention the caveats, a process that began
with Stalinism in the late 1920's. For example, Lenin gives
examples of various inventions that were supposed to have been
invented that Monopolies prevented from being introduced. Stories of
this kind have always abounded, and Marxist economists in later years
have found that most of them are untrue. In general, Monopolies have
an incentive in cornering the market of any new wonder product.
Having provided these examples, Lenin continues,
“Certainly,
monopoly under capitalism can never completely, and for a very long
period of time, eliminate competition in the world market (and this,
by the by, is one of the reasons why the theory of ultra-imperialism
is so absurd). Certainly, the possibility of reducing the cost of
production and increasing profits by introducing technical
improvements operates in the direction of change. But the tendency to
stagnation and decay, which is characteristic of monopoly, continues
to operate, and in some branches of industry, in some countries, for
certain periods of time, it gains the upper hand.”
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| Even in high value production like surgery technology is intervening via robots, to reduce costs, and boost profits. |
Just look at
all the provisos! Monopoly cannot, either completely or for any
length of time eliminate competition. A fact that Marx had made
clear in the Poverty of Philosophy against Proudhon. As Marx puts
it, Monopoly begets Competition, which begets Monopoly, which begets
Competition at a higher level. Lenin recognises that the potential
for reducing costs and raising profits by introducing technical
improvements works in exactly the opposite direction of the decay he
had just described! And, what have we seen in the period since WWII,
is precisely that Monopoly Competition has raised the level of
competition to ever new heights. Not competition to lower prices,
though that has been a necessary consequence of the massive increases
in productivity – but one of the roles of Central Banks has been to
ensure that it is only real rather than nominal prices that fall –
but precisely what Lenin describes here. These large Monopoly firms
have competed by seeking to continually raise productivity through
large scale investment, economies of scale, the introduction of
better machines and systems such as Taylorism, and Toyotism etc. It
has been precisely this competition to reduce costs, and extract
Relative Surplus Value, that has driven rapid technological change of
the kind that Lenin hedges his statement about decay with here! But,
Lenin ends the paragraph about decay with the provisos of all
provisos. This decay is neither ubiquitous, nor permanent! Rather
it may only operate “in some branches of industry”, and only in
“some countries”, and then only “for certain periods of
time”!!!! It is on this theoretical rock that Paul builds his
church!
Paul in one
of his previous letters had also used Lenin's work to claim that
Imperialist states had only been able to develop their Welfare States
because of the super exploitation of their Colonial possessions. As
Warren points out Lenin's theory in relation to the connection
between Colonisation and Monopoly is obviously factually flawed. The
country with the largest Colonial Empire was Britain, but its economy
was the least dominated by Monopolies. The country whose economy was
more Monopolised and characterised by Hilferding's “Finance
Capital” i.e. Germany, essentially had no Colonies to speak of.
The other economy that was dominated by large industrial monopolies,
the US, had no Colonies. In fact, under the Munroe Doctrine, it also
warned European Colonial powers to keep their hands off Latin
America. Worse still, the development of these huge Monopolies could
hardly be an explanation of the carving up of the world, because the
development of these large monopolies that Lenin describes did not
occur until the end of the 19th century, and by that time
the world had already been carved up!!!
There
undoubtedly was exploitation of Colonies on the basis of unequal
exchange, because the Colonies were the product of European
Landlordism and Merchant Capital. That is how both these forms of
Capital extract surplus. But, Imperialism, the expansion of
industrial Capitalism is not Colonialism. Contrary, to Lenin's
expectations, based on an analysis of Colonialism, the world was not
carved up into a series of Colonial possessions, but the very
opposite happened. The Colonial Empires were broken up, with a good
degree of urging from the US, and capitalism expanded not through the
combination of Monopolies and their own domestic State, via military
conquest, but through the global expansion of multinational and
transnational companies that increasingly had no particular
allegiance to any one State, and which encouraged all states within
the system of states to create international state bodies, and legal
structures, to facilitate their operation throughout the globe.
Contrary, to
Lenin, in many of the colonies, which were dominated by Landlordism
and Merchant and Money Capital, there was no major investment of
Capital. The largest Capital flows by far went not to these
economies, but to other developed “Imperialist” economies. Only
when some of these ex-colonies achieved a minimum standard of
infrastructure, and other basic requirements, did industrial Capital
begin to invest in them in a large way, and by and large the
consequence has been progressive. Instead of super exploitation,
these economies have been able to industrialise rapidly, to an extent
that many of them now challenge the “Imperialist” states
themselves in global markets.
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| Fordist Education Factories mass produce new workers to meet the needs of Capital. |
So Paul's
claim that the development of Welfarism as only possible on the back
of super exploitation of the Colonies is as baseless as his other
arguments. Germany, which had no Colonies to speak of, developed
elements of a Welfare State (in Prussia) in the 1820's. It was the
first to have a National Insurance Scheme by the end of the 19th
Century. The US, which had no Colonies developed free State
Education at a fairly early stage, to meet the needs of US Capital,
which was developing on the basis of a rapid development of
technology. But, Paul also argues that the most rapid growth in
Welfarism occurred after WWII. But, that is precisely the period
when the Colonial Empires were being dismantled! In the US, which
again still had no Colonies, Fordism developed on the basis of
Company provided Welfarism, and did so not because of super
exploitation of Colonies, but through the rapid expansion of Relative
Surplus Value made possible by Taylorism, and mass production
techniques! Precisely, the basis upon which Welfarism was expanded
after WWII across Europe. Once again, Welfarism is not the product
of Capitalist decay, and the decline of Exchange Value as Paul would
have us believe, but was the product of rapid technological change by
Capital, making possible the rapid growth of Relative Surplus Value,
which funded Welfarism, which in turn provided the essential
commodities (Health and Education) to workers via mass production
(Fordist) methods that were both the most efficient for Capital at
the time, and which met its needs for the reproduction of
labour-power.
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| Was it Really? |
Instead of
seeing this development of State Capitalism for what it is, Paul
instead sees it once again as an indication of decay, and yet at the
same time sees in it something socialist, representing the
replacement of the market with some form of planned production of Use
Values. Oddly, he views it as being, therefore, unproductive! Once
again, these are ideas that have come down through Stalinism and
Fabianism. In what sense does a miner go from being a productive
worker one day, to becoming an unproductive worker the next, just
because the Capitalist State has become his employer? Clearly he
does not. The same is true for steelworkers, railworkers, nurses,
doctors, teachers etc. All of these workers are involved in
producing commodities, which are sold to the working-class. They may
provide them being employed by a private employer or by a State
capitalist employer. In either case they are employed by Capital,
they produce commodities, and they produce Surplus Value. Whether
that Surplus Value is appropriated by their own employer (be it a
private employer or the State) is irrelevant, because as Marx
demonstrates in his Transformation of Values into Prices of
Production, the total Surplus Value produced by all workers is
shared out by Capital in accordance with the Capital employed via
market prices. In reality, the existence of Monopoly power, and the
way in which Capital uses the State to meet its needs means that the
actual allocation of Surplus Value is more complicated than that.
All Capital,
be it small scale Capital or State Capital produces Use Values,
because as Marx says, nothing can be a commodity unless it is also a
Use Value. Someone must want it. All Capital is, therefore, forced
to organise its production to produce to meet the needs of consumers,
because unless they do so, they do not sell their products, and they
do not realise their profits. To claim there is something different
about State Capitalist production because it produces Use Values
rather than things to sell is simply wrong. Moreover, what the
Capitalist State does in relation to commodities like Education and
Health, is that it uses its monopoly position to sell these
commodities to workers as a captive market, in the same way that 19th
century Capitalists did via the Truck System. It is not at all true
to say that these Use Values are produced to meet needs of, or that they
are provided free to workers. The only needs they are produced to meet are the
needs of Capital, which is why they are reduced whenever Capital
experiences a prolonged or serious economic crisis, which reduces its
needs for labour-power.
They are
merely important commodities required for the reproduction of
labour-power, and as such Capital forces workers to buy them in
sufficient quantity and quality to meet its needs, and to pay for
them via taxes. The situation was even clearer in regard to State
owned industries such as Coal, Energy and Steel, where market prices
to domestic private industries were set at such low levels as to
ensure a direct transfer of the Surplus Value created by State
workers to private Capital.
As Engels
puts it in Anti-Duhring,
“The
modern state, no matter what its form, is essentially a capitalist
machine, the state of the capitalists, the ideal personification of
the total national capital. The more it proceeds to the taking over
of productive forces, the more does it actually become the national
capitalist, the more citizens does it exploit. The workers remain
wage-workers - proletarians. The capitalist relation is not done away
with. It is rather brought to a head” (p360).
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