Sunday, 17 January 2016

Overcoming The Power of Capital - Part 1 of 8

This is the first of an eight part series, replying to the article - Overcoming The Power of Capital - by Mike McNair.  It is the full version of a response that I have written, which is scheduled to appear in the Weekly Worker.

Mike McNair examines the question of the conditions under which socialists might support the taking of governmental office. He does so within a framework in which severe constraints are placed upon the kinds of government policy that can be pursued. In determining what these constraints are, Mike first sets out his analysis of the nature of modern capitalism, as one in which money-capital is dominant, and, in a global economy, this money-capital is able to move at a moment's notice from one economy to another.

In responding to Mike, therefore, I first want to deal with his economic analysis, which provides the basis for his argument. The idea that it is money-capital that is dominant, is fundamentally at odds with Marx's own analysis, of mature capitalism. For Marx, both Merchant Capital (in which he includes money-dealing capital), and Interest Bearing-Capital (money-lending capital) are subordinate to productive-capital. They must be so, because it is productive-capital which creates the surplus value. Both money-capital and commodity-capital, which comprise the circulation phase of capital, are subordinate to the productive-capital, and this is not changed by these forms of capital, becoming separated off to form independent capitals in the shape of merchant capital, and money-capital. Merchant Capital only shares in this surplus value, because of its nature as capital, whilst Interest Bearing Capital, plays no role at all in the actual circuit of capital, standing outside it. It appropriates a portion of surplus value only as interest, whose rate depends upon the demand for and supply of capital, both of which, in turn, are a function of the rate of profit.

Of course, Marx could be wrong, and Mike could be right. I will attempt to show later that this is not the case. Mike is, however, correct to point to the role of money-capital, which should properly be termed interest bearing capital to distinguish it from money-dealing capital. But, he is right for reasons contrary to those he seeks to promote. The reason he is right to highlight this role, is because of the analysis provided by Marx, that there is a fundamental contradiction of interests between this interest-bearing capital, and industrial capital (both productive-capital and merchant capital). That contradiction becomes even more significant when, in the latter part of the 19th century, big industrial capital, itself takes the form of socialised capital, and so where the real capital itself becomes the collective property of the firm, or as Marx puts it “of associated producers”. The Joint Stock Company, as much as the Co-operative, represents such socialised capital, and the end of capital as private property.

“This result of the ultimate development of capitalist production is a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of associated producers, as outright social property. On the other hand, the stock company is a transition toward the conversion of all functions in the reproduction process which still remain linked with capitalist property, into mere functions of associated producers, into social functions.”

(Capital III, Chapter 27)

Upon this material basis of socialised, productive-capital, and privately owned interest-bearing capital, rests two contradictory class interests, representing two opposing forms of property – one forward looking and progressive, the other backward looking and reactionary. It is on this basis that the political division, within bourgeois democracy, between conservatism and social democracy rests. It is also upon this basis that I will seek to show that Mike's conclusion that social democratic policies are unachievable, because they are contradictory to the interests of capital, is fundamentally wrong. Moreover, whilst social-democratic policies may be, and often are, contrary to the interests of money-lending capital, in the short-term, it is precisely because money-capital, merchant capital and landed property are subordinate to industrial capital that, in the longer-term, social-democratic policies that bring about an expansion of the latter, and of the mass of profits, are also in the interests of these other forms of property.

I also then want to look at the question of what is the aim of governmental office? My answer to this question is itself conditioned by the conclusions of the economic analysis. The framework, within which I deal with this question, is again that suggested by Marx. It is that we should promote whatever has the effect of strengthening the position of the working-class, and its ability for self-activity, and self-government. It is not the reformist aim of providing palliatives, still less the idea that it provides a gradual route to Socialism.

Forward To Part 2

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