Chapter 11 – Results and Prospects
Part 2
Industrial
capital, via its natural process of concentration and
centralisation, becomes socialised capital, which, as Marx describes,
is the transitional form of property, and upon which the material
basis for social-democratic ideas are developed, which bear within
them the roots of socialist consciousness.
“The
value of these great social experiments cannot be overrated. By
deed instead of by argument, they have shown that production on a
large scale, and in accord with the behests of modern science, may
be carried on without the existence of a class of masters
employing a class of hands; that to bear fruit, the means of
labour need not be monopolized as a means of dominion over, and of
extortion against, the labouring man himself; and that, like slave
labour, like serf labour, hired labour is but a transitory and
inferior form, destined to disappear before associated labour
plying its toil with a willing hand, a ready mind, and a joyous
heart. In England, the seeds of the co-operative system were sown
by Robert Owen; the workingmen’s experiments tried on the
Continent were, in fact, the practical upshot of the theories, not
invented, but loudly proclaimed, in 1848.”
Marx
– Inaugural Address to the First International
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In
the 1970's, social-democracy pulled back from confronting and
overthrowing the power of the owners of fictitious capital, because,
as was the case with the liberal bourgeoisie, in 1848, they required
the mass of the working-class behind them to accomplish their aims,
and took fright. The consequence was a conservative reaction, most
notably in the shape of Thatcher and Reagan, in the UK and US, Both
rested upon that social base of millions of small business owners;
both sought to undermine the social base of social-democracy within
the organised working-class. Neither could escape the objective
reality that modern capitalism is dominated by socialised capital,
and that the interest and rents paid to rentier capitalists, and the
taxes paid to the state, depend on the profits produced by that
socialised capital.
Nor
could they escape the fact, as Marx described in Capital III,
Chapter 15, that the extraction of surplus value, is only the
first part of the story in the production of profits, and that the
second part depends upon the realisation of those profits, via the
sale of the finished products.
“But
this production of surplus-value completes but the first act of
the capitalist process of production — the direct production
process. Capital has absorbed so and so much unpaid labour. With
the development of the process, which expresses itself in a drop
in the rate of profit, the mass of surplus-value thus produced
swells to immense dimensions. Now comes the second act of the
process. The entire mass of commodities, i.e.
,
the total product, including the portion which replaces the
constant and variable capital, and that representing
surplus-value, must be sold. If this is not done, or done only in
part, or only at prices below the prices of production, the
labourer has been indeed exploited, but his exploitation is not
realised as such for the capitalist, and this can be bound up with
a total or partial failure to realise the surplus-value pressed
out of him, indeed even with the partial or total loss of the
capital. The conditions of direct exploitation, and those of
realising it, are not identical. They diverge not only in place
and time, but also logically. The first are only limited by the
productive power of society, the latter by the proportional
relation of the various branches of production and the consumer
power of society. But this last-named is not determined either by
the absolute productive power, or by the absolute consumer power,
but by the consumer power based on antagonistic conditions of
distribution, which reduce the consumption of the bulk of society
to a minimum varying within more or less narrow limits. It is
furthermore restricted by the tendency to accumulate, the drive to
expand capital and produce surplus-value on an extended scale.
This is law for capitalist production, imposed by incessant
revolutions in the methods of production themselves, by the
depreciation of existing capital always bound up with them, by the
general competitive struggle and the need to improve production
and expand its scale merely as a means of self-preservation and
under penalty of ruin. The market must, therefore, be continually
extended, so that its interrelations and the conditions regulating
them assume more and more the form of a natural law working
independently of the producer, and become ever more
uncontrollable. This internal contradiction seeks to resolve
itself through expansion of the outlying field of production. But
the more productiveness develops, the more it finds itself at
variance with the narrow basis on which the conditions of
consumption rest.”
Capital
III, Chapter 15
|
A
necessary contradiction arises from attempting to raise the rate of
profit by depressing wages, and so raising the rate of surplus value,
and the ability then to realise that produced surplus value, as
profits, when the workers whose wages have been cut, comprise a large
component of aggregate demand.
As
I described in my book, Marx and Engels Theories of Crisis,
the answer that was found to this dilemma was debt. What workers
could no longer consume from their stagnant or reduced wages, they
were encouraged to buy instead on credit, as credit controls and
other financial regulations were abolished in the 1980's. Many
thereby mortgaged their future labour-power, to finance their current
consumption, turning themselves into debt slaves, as well as wage
slaves. Private debt soared into the period prior to the 2008 crash,
and has soared again now to similar levels.
Households
covered their consumption via this debt, whilst countries covered the
import of the commodities consumed by those households, by borrowing
from foreigners, particularly from Asia, as the trade deficit grew
ever wider. But, as described in Chapter 9, consumption that is not
financed from revenue can only be financed by a consumption of, and
thereby destruction of, capital. As Joan Robinson said, a long time
ago, there is a big difference between borrowing to invest in
productive capacity, which increases wealth, and borrowing simply to
finance consumption, which destroys wealth.
In
examining the situation in any society, as I wrote recently, Marxists do not simply undertake a
superficial, journalistic snapshot of the constitutional
arrangements, and governmental powers, but examine the social
relations upon which the different parties rest. The truth is always
concrete.
A
fundamental understanding, in this regard, as I have set out in the
past, requires a recognition of the existence of three different
powers – the economic and social power, the state power, and the
governmental power or political regime.
The
economic and social power can be thought of as civil society, As
Marx says, in The Critique of the Gotha Programme, it is upon
this civil society that the state itself ultimately rests. The civil
society is never static, but is constantly developing in the
direction of the new economic and social relations, under the
pressure of the development of the productive forces. The
bourgeoisie developed capitalist property within the pores of feudal
society, and they developed their own forms of self-government
alongside it, as alternative forms to those of the existing ruling
class. And, the working-class develops co-operatives, trades unions,
and other forms of collective organisation, such as Friendly
Societies, and its own political party as an alternative power to
that of the bourgeoisie.
The
economic and social power itself derives from the dominant social
relations arising from the dominant economic relations. Moreover,
this has to be analysed concretely and dynamically, not superficially
and statically.
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