Monday, 21 June 2021

A Characterisation of Economic Romanticism, Chapter 1 - Part 9

As Lenin says, Sismondi was far too knowledgeable and conscientious an economist to deny that the market was expanding, or that natural wealth was rising. And yet, the idea that the home market was increasing as a consequence of the increase in commercial wealth that proceeds alongside the ruination of the independent producers, offends his petty-bourgeois sensibilities, and the theories he had built on them. On the one hand, Sismondi, therefore, simply says contradictory things, and, on the other, he explains the rise in national wealth and expansion of the market on the basis of the capitalist producers' ability to sell into foreign markets. 

“As the reader sees, our Narodnik economists say the same thing word for word.” (p 138) 

But, the same is true of today's petty-bourgeois catastrophists, as well as the petty-bourgeois “anti-imperialists” who believe that this problem of markets, and the falling rate of profit, is what necessitates capital having to engage in colonialism and neo-colonialism, and “super-exploitation”. After WWII, the Stalinists had to similarly try to explain why it was that a capitalism that was supposed to be in its death agony, that was supposed to be in almost permanent crisis, as a result of the Law of the Tendency for the Rate of Profit to Fall, was, in fact, in the finest of health, with profits rising, and living standards similarly rising significantly along with it. But, it was not just the Stalinists that were wrong-footed. The Trotskyists too had believed that capitalism was in its Death Agony, as they had described it in the 1938 Transitional Programme. Only at the point that this long wave uptrend began to turn did they abandon that perspective, adopting the essentially Keynesian analysis of a crisis-free capitalism, on the basis of state intervention. 

But, in the preceding period, both had to explain this renewed vigour of capitalism that defied their expectations. What is more, they had to explain it in the context of the demolition of another shibboleth, the destruction of the old colonial empires that they had seen as the inevitable manifestation of imperialism, as described by Lenin in 1916, as the necessity to carve up global markets. 

The answer provided was a repetition of the approach of Sismondi and the Narodniks, with other equally absurd notions thrown in for good measure. So, the main thrust of the solution put forward was that capitalism/imperialism had only not suffered a catastrophic crisis, because it had exported its surpluses to the colonies, and had boosted its profits, and rate of profit by an even greater exploitation of these colonies via unequal exchange and super-exploitation. As for the colonial empires themselves having been demolished, this was really a subterfuge, we were told, that simply hid the neo-colonialism which was the form in which this greater exploitation and unequal exchange was conducted within the confines of centre-periphery relations. The problem was, of course, as with the contradiction faced by Sismondi and the Narodniks, in trying to make this argument, that the market in those “neo-colonies” was also expanding, along with the expansion of capitalism in those economies. 

They failed to distinguish between colonialism, which is based upon commercial and interest-bearing capital, in cahoots with landed property, and imperialism, which is based on large-scale industrial capital. Colonialism relies on monopoly and protectionism, as the basis of the unequal exchange, whereas imperialism relies on the extension of free trade, the creation of large single markets, and so on, and where colonialism relies on profit on alienation, imperialism relies on industrial profits from the creation of surplus value, in production. Because they continued to base themselves on the concepts of colonialism, described in Lenin's Imperialism, they were wrong-footed as imperialism led to the development of capitalist production in these “neo-colonies”, some of which developed at such a pace that they eclipsed the size of the economies of their former colonial masters. 

Alongside these Sismondist explanations was added other nonsense. For example, the Keynesian proposition that the physical destruction of capital, by war, was beneficial in restoring the rate of profit, was put forward. Its nonsense, as Marx sets out in Theories of Surplus Value, because the physical destruction of capital simply imposes additional costs, requiring a tie-up of capital, and, thereby, also reducing the rate of profit. What Marx sets out as the basis of raising the rate of profit is not the destruction of such use value, but of exchange-value, for example via moral depreciation

The Stalinists initially attempted to defend Varga's Law, by performing statistical acrobatics to try to show that capitalism was not really growing rapidly, and workers living standards were not rising sharply. Then, to explain things like the creation of welfare states, they argued that they were all really a bi-product of soviet communism, as western imperialism had to provide all those things to prevent workers following the example of their Eastern European comrades. Of course, these were the same East European workers who were literally dying to get out of those Stalinist hell-holes, who had to be trapped behind Berlin walls and barbed wire, and their rebellions put down by tanks and machine guns, who had to be continually monitored by huge surveillance states and so on. 

As the European Communist Parties became nothing more than reformist, social-democratic parties, and as they adopted Keynesianism as their mantra, it became easy for them to argue that the apparent contradiction, here, was not real, because, now, state intervention could mediate the interests of capital and labour, creating a crisis-free capitalism, whereby all that was required was to elect left-wing governments, who like the proposals of the Narodniks, would be able to turn the state away from the wrong path of development, and turn it on to the path of harmonious development. 

That the Stalinists could put forward such an explanation was bad enough, but the Trotskyists also made a similar argument. The Stalinists, of course, continued to portray Eastern Europe as a workers' paradise, right up to the point of its collapse, but the Trotskyists had pointed out the reality from the beginning. The Stalinist claims that imperialism had to buy off the workers to stop them rushing to the Eastern European alternative were absurd, but they were even more absurd coming from the mouths of Trotskyists who made clear that Eastern Europe was a hell-hole for workers!


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