What Next? - Part 10

For Britain (2)

In order to understand the material conditions that affect Britain's future its necessary to start at the top. The global economy entered the Spring Phase of the long wave in 1999. As I wrote some years ago, however, the global economy is characterised by combined and uneven development.  Some parts of the global economy, such as Britain, having been formerly dominant, have been in relative decline for some time. Britain has been in relative decline since the latter part of the 19th century, as new economies like Germany, the US and Japan developed; some of those economies, like the US and Japan, that were dominant after WWII, have themselves gone into relative decline, as new economies like China have arisen. Other economies like Germany have managed to reinvent themselves. Germany is essentially transforming itself into a new economy, as the industrial heart beating at the centre of a new EU state.

This process of combined and uneven development has other effects. It causes a growth of demand for labour-power; the working class expands and its conditions improve; workers find it easier to organise and advance their interests. Its hard to know exactly how this has affected workers in China, other than we know that wages have risen there considerably, and the state has recognised the need to respond to their demands. There are indications of widespread unofficial action by workers, but as yet it has not broken out into the establishment of large scale, independent workers organisations or demands for wider democracy, as has happened with, the Arab Spring. Again, I suggested some time ago, that it would be in these newer dynamic economies that such action would be seen, whereas, in the older economies, like the UK, any action would at first continue to be more defensive. 

During such Spring periods, the growth of capital tends to be based upon intensive accumulation, so that new technologies are introduced that replace existing technologies. But, what gives the Spring phase its vibrancy is that a high rate of profit, caused by the increase in productivity, which raises the rate of surplus value, increases the rate of turnover of capital, releases capital, and creates a relative surplus population, provides the basis for the creation of many new capitals. Examining this phase in the 19th century, Marx refers to the fact that many former workers and overseers took the opportunity to set up their own businesses, and it is in the new types of production that many of the new small businesses are established. In many ways, this is replicated within the world economy, as new more vibrant national economies arise to challenge the older, more sclerotic economies.

But, the further development of this process leads to first a concentration of this capital, as it increases in size organically, and then to its centralisation, as the more dominant capitals swallow up the smaller capitals. That process tends to develop during the Summer phase of the cycle, which began around 2012, as also the growth of productivity slows down, and each capital seeks to consolidate its position, by bulking up, and removing the competition. The economic laws, which drive in that direction for individual capitals apply also to national capitals. It is why the natural drive for capital has been to create larger markets within which to operate. But, contrary to the utopian ideas of the Eurosceptics, it is impossible to develop such single markets, without also creating a single economy, and a single state which determines the rules and creates the level playing field within which each individual capital is to operate.

That includes the establishment of a single currency, so that capitals in one part of the market cannot obtain unfair advantage over others, by utilising leverage over the state to manipulate the value of the currency against their competitors; it involves having a single fiscal policy so that capitals operating in one part of the market do not obtain tax advantages over capitals operating in other parts of the market; in a welfare state, it means that there are common benefits, pensions, retirement ages and so on, so that capitals operating in one part of the economy do not obtain subsidies from the state, in the shape of a social wage paid to their workers.

That is why nation states themselves were created by the bourgeoisie as part of their revolution. As Marx points out, what the bourgeoisie require above all else is that each capital operates on a level playing field, of the same rules and conditions applied to each. That was manifest in Britain, in the 19th century, when it came to the laws under which individual capitals had to operate. In its youth, capital, faced with a vast reservoir of labour to exploit, used up labour supplies at a phenomenal rate, driving workers living standards down sharply, and causing mortality rates to rise to a degree that threatened capital itself. Three generations of workers were killed off by overwork and poor conditions, in the time that would previously have only accounted for one.

For its own sake, capital required a limitation of its actions, in the shape of the Factory Acts, and the limitation of the working day. Yet, the capitalists themselves recognised that left to their own devices they would not do so. Competition would drive each of them to try to work their employees to the utmost, to pay them as little as possible, and to fail to provide the necessary safe working conditions.

“We, therefore, find, e.g., that in the beginning of 1863, 26 firms owning extensive potteries in Staffordshire, amongst others, Josiah Wedgwood, & Sons, petition in a memorial for “some legislative enactment.” Competition with other capitalists permits them no voluntary limitation of working-time for children, &c. “Much as we deplore the evils before mentioned, it would not be possible to prevent them by any scheme of agreement between the manufacturers. ... Taking all these points into consideration, we have come to the conviction that some legislative enactment is wanted.” (“Children’s Employment Comm.” Rep. I, 1863, p. 322.) 

(Capital I, Note 2, Chapter 10)

“Some of the masters themselves murmured: 

“On account of the contradictory decisions of the magistrates, a condition of things altogether abnormal and anarchical obtains. One law holds in Yorkshire, another in Lancashire, one law in one parish of Lancashire, another in its immediate neighbourhood. The manufacturer in large towns could evade the law, the manufacturer in country districts could not find the people necessary for the relay system, still less for the shifting of hands from one factory to another,” &c. 

And the first birthright of capital is equal exploitation of labour-power by all capitalists.” 

(Capital I, Chapter 10)

Whatever, the conservative nationalists of the Tory Party or UKIP say about only wanting a single market, without all of the political trappings of the EU and a single state, the two things necessarily go together. As Frederick Hayek put it, all such regulations over the length of working day, working conditions and so on, are compatible with liberal principles and competition,

“so long as these restrictions affect all potential producers equally”.

(The Road To Serfdom, Chapter 3, p 28)

But, it is impossible for such regulations to apply to all potential producers within a single market unless there is a single state to establish such regulations and to enforce them. Capital needs ever larger single markets within which to operate, and it necessarily requires larger states to set the regulations under which the capitals within it operate. That is why, the US underwent its Civil War to create a single centralised state. It is why Europe first went through the process of establishing nation states in the 18th and 19th centuries, and in the same process began almost immediately to seek to unify those states into a single European state, via the wars of the 19th century, and the two world wars of the twentieth century. It is why, the EU was established, and why the US has established NAFTA. It is why Africa is creating its own economic unions, and has set itself the goal of creating a single African Economic Union. It is why similar economic blocs are being created across Asia, Latin America and elsewhere. It is why over and above these economic blocs, supra national state bodies to establish controls and regulations, such as the IMF, WTO and so on were established. These are simply political reflections of the underlying material conditions. Set against this reality and the tide of history, the bleatings of Cameron, let alone of the eurosceptics appear truly bizarre, and out of time.