The Political Situation (13/14)
So, the political situation today is not at all the same as it was in the 1920's/30's, and the reason for that is that the economic situation, today, is also not that of the 1920's/30's. Then capital faced a crisis of overproduction of capital, as the demand for labour-power had pushed up wages, squeezing profits. The Labour movement was strong and well organised, coming at the end of a period of 25 years, of economic expansion, and strengthening of the economic and social position of the working-class. To resolve the crisis of overproduction, capital needed a technological revolution that starts in the 1920's, and peaks in 1935, to introduce labour-saving technologies that create a relative surplus population, increases unemployment, reduces wages, and boosts profits. A strong labour movement resists, but in material conditions which are increasingly against it. It is impossible to successfully resist within the limits of capitalism, so unless the workers break out of it, they go down to defeat. Wherever, they seek to break out of the limits of capitalism, they are confronted by fascism and Bonapartism. In the 1930's, as capital imposes these solutions by one means or another, the rate of profit is driven up. Increasing profits (supply of money-capital), with a slower rate of economic expansion (demand for money-capital), means that the rate of interest falls. Asset prices rise through the 1930's, and 40's, but it takes until 1954, until the Dow Jones recovers, in real terms, its 1929, pre-crash levels.
Today, by contrast, the peak of the Innovation Cycle is already 35 years behind us, in 1985. The years of crisis, and intensive struggle over the introduction of these technologies to replace labour and drive down wages and drive up profits, are also 35 years behind, having been fought out in the industrial battles of the 1970's and 80's, such as the 1984-5 Miners Strike and so on. In reality, that was the situation in 2008/10, and the actions of states since 2010, have frozen things at that point in time, sending the mechanics of the long wave cycle into a ten year hibernation. Every so often, it wakes up, but its anaesthetised with another dose of money printing, sending it back to sleep, but each time, it requires a bigger dose to stop the bear from awakening in a bad mood, and starting to rampage.
The consequence is that profits remain high, and wages remain low. There is an appearance of high levels of employment, but much of it is fake employment alongside large-scale underemployment. Whenever capital has sought to expand, over the last twenty years, it has never found difficulty in obtaining the labour required, and so it has not faced any significant problem with rising wages squeezing profits, other than for specific types of labour, for limited periods. There is always a background rise in productivity arising from the introduction of new types of machine and technique in different industries, but in periods of extensive accumulation, such as we are in now, this pace of development is below the average, and that is because capital faces no compelling reason to engage in such technological innovation. Rather its focus is to utilise the developments in technology not in relation to means of production, but means of consumption. It is a period when it creates ever more consumer goods based upon the technologies it develops in the previous period, and these form the basis for the expansion of markets in breadth, which also enable the value of all of its existing products to be realised in them.
No comments:
Post a Comment