Monday, 8 June 2015

Capital III, Chapter 6 - Part 11

At the time Marx was writing, productive-capital essentially left the job of securing these materials, as well as disposing of its goods, in the colonies, to the merchant capital that had grown up in that role under feudalism. The development of the huge trusts and more specifically the multinational companies, brings about the hegemony of productive-capital, which sets about regularising the supply of those materials and organising their production on the same basis as all other industrial production. In order to remove some of the vagaries of wild price fluctuations in these materials, capital introduces, futures markets and so on.

But, capital also introduces other forms of co-operation. For example, the huge car companies co-operate with each other, so as to be able to develop more fuel efficient engines, thereby reducing the effect of high oil prices. A large part of the work of universities and other research institutions is to produce new inventions and technologies that capital in general can utilise.

Engels writes,

“Since the above was written (1865), competition on the world-market has been considerably intensified by the rapid development of industry in all civilised countries, especially in America and Germany. The fact that the rapidly and enormously expanding productive forces today outgrow the control of the laws of the capitalist mode of commodity exchange, within which they are supposed to operate, impresses itself more and more even on the minds of the capitalists. This is disclosed especially by two symptoms. First, by the new general mania for a protective tariff, which differs from the old protectionism in that now articles fit for export are those best protected. And secondly, by the trusts of manufacturers of whole spheres of production which regulate production, and thus prices and profits. It goes without saying that these experiments are practicable only so long as the economic climate is relative favourable. The first storm must upset them and prove that, although production assuredly needs regulation, it is certainly not the capitalist class which is fitted for that task. Meanwhile, the trusts have no other mission but to see to it that the little fish are swallowed by the big fish still more rapidly than before.” (Note 16, p 120)

But, things equally moved on, even from when Engels wrote that. The development of these huge multinational corporations went hand in hand, not only with the development of the role of the nation state, but also with the development of supra state bodies, whose role was to try to bring about such regulation. Developed economies created welfare states, which regularised the supply of labour-power, and provided an important economic lever to act as an automatic stabiliser; in every developed economy, the state accounts for between 40-50% of economic activity; central banks act to regulate money supply and prevent a deflation of the general price level.

At an international level, capital has grouped together in large economic blocs, like the EU. It has established organisations for international regulation such as the IMF, WTO, World Bank and so on. None of this planning and regulation is in any sense socialist. There is nothing inherently socialist about planning. A far greater step towards socialism would be workers ownership and control of the means of production, than any amount of planning. But, in analysing the capitalism we confront today, we should use Marx's method and tools to understand it, as it really exists, not try to make today's reality fit in with some ossified view of Marx's description of the capitalism that existed 150 years ago!

“The closer we approach our own time in the history of production, the more regularly do we find, especially in the essential lines of industry, the ever-recurring alternation between relative appreciation and the subsequent resulting depreciation of raw materials obtained from organic nature.” (p 121)

It was for this reason that futures markets, like the Chicago Mercantile Exchange first evolved for agricultural products, so as to even out these kinds of fluctuations and provide consumers and producers of these commodities with greater certainty of the price they would have to pay for their inputs, and would receive for their output.

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