Reply To Rory

This is a reply to Rory's comment on Michael Roberts Blog that I previously promised to provide. 

The sequence of comments can be traced back from the link provided. It can be summarised as follows. I argued that shutting down the global economy was reactionary. I argued that it was not surprising that catastrophists have been happy to see the global economy shut down, because, for years, they have been predicting that it would shut down as a result of some global economic crisis arising from The Law of the Tendency for the Rate of Profit to Fall, or else, in the case of environmentalists that it would have to be shut down to avoid some Malthusian global ecological crisis. 

As an aside, on both these points, my position is that a global economic crisis is likely at some point, but it will not be a result of the Law of the Tendency for the Rate of Profit to Fall, because, as Marx describes, crises of overproduction are caused by capital being overproduced relative to the social working-day, so that absolute surplus value cannot be expanded further, and, in conditions where relative surplus value can only be increased by carrying through a technological revolution, to introduce labour saving technology. We are not close to the condition where capital is overproduced relative to the potential social working-day, and so where a new technological revolution is required to raise relative surplus value. We are probably around 10-20 years from such a point, as a result of the long wave cycle being stretched out as a result of the effects of the 2008 financial crisis, and subsequent imposition of austerity to slow global growth, to avoid its repetition. 

On a global ecological crisis, it is, of course, always a possibility, but Malthusians have been promising that such a Biblical Flood would come to wash us away with our sins for more than 200 years, and it has repeatedly failed to materialise. On the contrary, capitalism has raised the level of science and of productivity repeatedly so as to drive the likelihood of such a catastrophe further and further away from us. Malthus predicted that population would grow faster than the potential for food production, but the opposite has happened. In the 1970's, catastrophists told us that oil was about to run out, but 50 years later, the world is awash in the stuff, and its cheaper than ever. Capitalism is a system that proceeds on the basis of crises, but at every stage it has raised its game to provide solutions to immediate problems, before those problems became an irreversible threat to the system itself. Moreover, many of those solutions have come from the very economic development that capitalism itself has brought with it. 

So Rory says, in response to this argument, and my reference to Colin Clark's work in the 1950's, showing that the world was capable of feeding itself, and to a higher level, many times over, 

“Yet, capitalism did not implement the more efficient methods scientists and other rational people were aware of because it’s not a system concerned with human need.” 

But, the first bit of that's not true, and the second bit is only partially true. Firstly, Malthus, Chalmers and Ricardo were all proved wrong by capitalism, because, as Marx showed, basing himself on the work of Anderson, there was no reason why capital in agriculture/primary production could not continue to raise productivity, and so produce more than enough food to meet rising demand. Moreover, it could do so, whilst reducing agricultural/primary product prices, a a result of this higher productivity. There was no law of diminishing returns. The main obstacle in that regard was not capital, but was landed property, and the effect of rent. Because rent is surplus profit, the existence of landed property always restricts the amount of capital that is invested in the land. Firstly, capital is only invested on the land if agricultural/primary product prices are high enough to ensure such surplus profits, so that the rent can be paid to the landlord. Secondly, especially where landlords imposed short lease periods, this acts as a disincentive to additional capital investment on the land, because, at the expiry of the lease, the landlord is the one who appropriates the fixed capital invested on the land, such as for drainage and irrigation, buildings and so on, and because these investments raise the output, and so profit, the landlord also uses this to demand a higher rent for the land, for the new lease period. 

So, its totally untrue to say that capital did not utilise scientific methods to raise productivity and raise output. It was the old feudal and peasant farming methods that failed to do so, and is why those opposing capitalism from these earlier perspectives are reactionary. Those opposing it from the perspective of Socialism are quite right to do so, but doing so simply by demanding Socialism Now, is Utopian, and thereby reactionary, because its divorced from current reality. Moreover, nearly all those opposing capitalist development from a catastrophist standpoint, are not doing so from a socialist perspective that demands increased levels of output to meet global needs, and that involves the kind of large-scale, socialised production upon which collective ownership can be based, but are doing so, from a reactionary perspective of seeking to turn back capitalist development, to slow it down, not speed it up. 

The biggest step forward in that regard was, in fact, the development of large-scale agricultural development in North America. There a relative shortage of labour meant that, from the beginning, agriculture was undertaken on a more capital intensive basis, and because there was no landed property in North America, farmers were able to make these investments free of the limitations imposed by rent. And, when landed property does arise in North America, as the land is gradually settled by these farmers, it is again the development of large, industrial scale agricultural that overcomes the problems of landed property, because the huge agribusinesses themselves are both productive-capitalist and landowner, pocketing profits in one pocket, and rents to themselves in the other. These businesses have invested massively in fixed capital to raise productivity. 

Nor is it entirely correct to say that capitalism is a system that is not driven by human need. Primarily, its true that capitalism is a system driven by profit, and by the need to accumulate capital, as a consequence of competition. But, it does not produce simply for the fun of doing so. There is no point producing surplus value, unless that surplus value can be realised, and, right at the start of his work, Marx outlines that a product, and consequently a commodity only has value, if it is also, for someone a use value, i.e. it meets someone's human need! Capitalism cannot produce profits, unless it first produces commodities that consumers want and have the ability to buy, i.e. that meet their human needs. In developed economies, it has done that remarkably successfully, as a consequence of the investment of capital, utilisation of the latest technologies and so on, so as to raise productivity, and reduce the values of those commodities. In fact, in most Western economies, it has managed to raise productivity and reduce values to such a degree that food accounts for only a minor component of the household budget of the majority of households, and on average about 30% of the food bought by households is actually thrown away. 

The problem for people in many poorer parts of the world is not that capitalism cannot produce enough food to feed them, but that they do not have the income to be able to buy the food they require, and their own peasant agricultural production is too low productivity to be able to produce the food required for their own subsistence. In other words, this is not a problem of capitalism being too developed, and a requirement to hold it back, or turn it back, but a problem of capitalism not being developed enough, and a need to speed it up. If capitalism in these areas were more developed, then the labourers, as wage labourers, would have higher incomes, the food production in these economies would take place itself on a developed capitalist basis, with higher levels of productivity, lower prices, and higher profits. The labourers would then be able to buy more and better food. A look at the process of capitalist development everywhere, starting in Britain, shows that to be the case, and more lately a look at what has happened as Chinese peasants left subsistence agriculture to become industrial wage labourers shows it to still be the case. The food consumption of those former peasants has risen dramatically now, as wage workers. 

Since 1980, the global workforce has doubled, and most of the increase has been in Asia. According to the ILO, the world labour force has grown by around a third in the first decade of this century alone. The number of workers employed in industry has risen by around 30% or about 150 million workers, the number employed in services has risen by 35%. This incessant demand for labour-power pushed up nominal and real wages significantly, at a global level. That was manifest in a sharp rise in global food demand, as the higher living standards of these workers was first translated into a better diet. The start of the new long wave boom after 1999 enhanced this process. In 2005, Chinese consumption of meat was 2.4 times what it was in 1990, milk 3 times, fruit 3.5 times, vegetables 2.9 times, fish 2.3 times, whilst its consumption of cereals, mostly rice, fell by 20%. The large rise in demand from China, and other developing economies, was part of the reason for the spike in global food prices, at the end of 2007 and beginning of 2008. 

But, that spike in prices, also led to a spike in capital investment in food production, just as similarly, the rise in other primary product prices led to a spike in investment in production of those other commodities. And, again, that investment far from being faced with diminishing returns, once it had fed through, saw, instead, falling marginal costs of production, and falls in global prices of all these primary products from copper and iron ore, to oil and milk. Now, you can complain that there are millions of people across the globe who do not have access to many of these things, or cannot currently buy them, but that is certainly not down to some metaphysical incapacity of the globe to produce them. Nor is the answer to that inability of millions to be able to buy these commodities to actually reduce global productive capacity, which is what you appear to be advocating. Rather it is to increase that productive capacity. That is what Socialism would have to do to meet the needs of all these millions, and until we actually get Socialism, it is what we require capitalism itself also to do. It is what we should demand that it do. Certainly we should not demand that it does the opposite by reducing or stopping production, which will indeed be catastrophic for everyone. 

“Capitalism does not have a legacy of deploying the most efficient technologies in any proactive, forward-thinking sense, just the opposite.” 

Quite true, capitalism is not Socialism, but we do not have Socialism, and so the next best alternative is the capitalism we do have, and its gradual process of transformation into Socialism. Just because, capitalism is not perfect, is not Socialism, is no reason to say “Stop The World I Want to Get Off”, because that simply leads you into something far, far worse. Our task as socialists is rather to welcome the continued development of capitalism, and to intervene in that process to try to drive the forward movement down the path that is most favourable to the working-class, and development of Socialism. That path certainly does not lead back from where we have just come from! 

“Ecological failures on a global scale do not come with “do-overs”. There is a reservoir of natural capital that does not immediately bounce back just because international capital suddenly realizes human beings need a habitat” 

Well, a lot of ecological disasters were caused by modes of production prior to capitalism, and that continues to be the case. The creation of large desert areas occurred long before capitalism, for example. Capitalist production, because it precedes capitalist agriculture by some considerable time, means that the demands of industry placed increased burdens on an agriculture that was not fitted to meet them, leading to over farming and so on. But, that is a consequence of the inefficient methods of pre-capitalist agriculture not of capitalist agriculture. When that agriculture reaches a point that it can no longer meet the needs of this rapidly growing industry, capital itself is led to intervene in agricultural production and revolutionise it. And, it is precisely because large-scale capital does recognise that land is a valuable resource, especially when it has invested vast amounts of fixed capital in it, that it does seek to curate it in a way that the small scale peasant farmer never could. In fact, it does so in the same way that this large scale industrial capital recognised the need to curate its supply of labour-power, by creating a welfare state. 

In the 1950's, capitalism in developed economies introduced Clean Air Acts, and huge swathes of polluted land and water was cleaned up. It did that proactively to improve the health of its main resource, human labour-power, and it was able to do it, because the level of capitalist development had provided the economic resources to do so. Similarly, capitalist development, and its development of science and technology led to the development of more efficient engines that utilise oil more effectively, it has developed alternative energy sources, such as solar power that, in the developed economies, are now replacing fossil fuels. The development of electric vehicles means that the use of fossil fuels, as energy sources, is likely to continue to decline, and begin to decline rapidly, not only before the oil itself runs out, but before burning it causes irreversible ecological damage. 

“To have a shot at staying below a 2C rise in global average temperature those emissions need to be reduced by 50% in twenty years while population and living standards increase, putting pressure on energy demand still dominated by fossil fuels. There’s no way that will occur within the logic of capitalism.” 

But, it already is happening, and the more profitable alternative energy becomes, the more it will happen. Will it keep average global temperature down enough to avoid a 2 degree rise? I don't know, but it may be that the cost of achieving that, by reducing output is greater than the benefit, especially if the additional growth comes from the development of the less developed areas of the world, such as Bangladesh. It may well be the case that, for, say, Bangladesh, the best hope lies not in trying to avoid relatively small amounts of global warming that may be unavoidable, but in developing its economy, so as to be able to deal with the consequences of that global warming, in the way that a relatively prosperous Netherlands was able to use its prosperity to build dams, drainage systems, and so on, and thereby to even reclaim areas of sea to usable land. 

“If that would be possible under production for profit, international capital would have already been deployed to areas most at risk from global warming” 

But, as stated above, where its profitable to do so it is. In Britain and elsewhere, the capitalist state also uses revenues to provide flood defences, and so on. Moreover, your argument starts from the wrong perspective. Socialism, would, in the same way that a nation state uses its resources to provide such measures against flooding, utilise its resources globally to that effect. But, your argument makes the assumption that this Socialism already exists as an alternative to what actually exists, which is capitalism! Given the current non-existence of Socialism, we have to deal with the reality of the capitalism that does exist. Your position, therefore, amounts to saying capitalism isn't perfect, and so we will seek an answer that depends on something far worse, i.e. a holding back or turning back of capitalism! 

“and in developed countries, there would be something akin to full-employment with a drastically reduced but more efficient “work week”. It would’ve happened decades ago when the scientists were warning about this exact scenario.” 

Why would that be the case? There is no reason why capitalism that seeks to maximise profits would do that. 

Again you seem to have lapsed into an argument that says capitalism isn't Socialism, something we all already know. The question is not about whether capitalism is Socialism, and could or would bring about the same conditions that Socialism would, or in the same way, but is about the reality that what exists is capitalism, and the answers to the problems that creates is not by looking backwards, which is what the demands to “hold back”, or “turn back” capitalism amounts to, but is by looking forward, to welcoming the continued forward movement of capitalism, and engaging in the class struggle as part of that forward movement so as to strengthen the progressive elements of it, to strengthen the position of the working-class within that movement, and thereby to facilitate the transition to Socialism.