Sunday 31 October 2021

A Characterisation of Economic Romanticism, Chapter 2 - Part 2 of 16

For the romantic, crises are unnatural, rather than being a normal part of the functioning of the system and its development. Sismondi sought to avoid crises, by holding back the development of the productive forces, by constraining them, and the expansion of supply, by the existing bounds of demand, determined by a slowly expanding population. But, the entire basis of the progressive nature of capitalism in rapidly developing the productive forces, and in sharply raising living standards, is the fact that it does not expand supply and demand proportionately, but expands supply faster than demand, and, in the process, not only expands demand, but creates the surplus production out of which rapid accumulation can be undertaken, raising productivity and freeing labour and capital to be used in ever new spheres of production. It is the Civilising Mission of Capital.

Yet, as Marx describes in The Poverty of Philosophy, out of this competition also comes monopoly at a higher level, and then competition between these monopolies is also raised to a higher level. As Marx and Engels describe, this development of the productive forces, of monopolistic competition also drives forward the need to create single markets much larger than that of the nation state, whose borders now act as fetters on further capitalist development. At the same time, it leads to the need for regulation and planning, and the involvement of the state to create the framework for such regulation on an ever larger scale.

“In the trusts, free competition changes into monopoly and the planless production of capitalist society capitulates before the planned production of the invading socialist society. Of course, this is initially still to the benefit of the Capitalists.”

(Anti-Duhring, p 358)

These new conditions mean that, increasingly, for these mammoth capitals, they invest and produce on the basis of plans, themselves based upon projections of future demand, and economic expansion. As Engels put it,

“What is capitalist private production? Production by separate entrepreneurs, which is increasingly becoming an exception. Capitalist production by joint-stock companies is no longer private production but production on behalf of many associated people. And when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness.”

(Critique of The Erfurt Programme)

For decades, now, the largest producers have shifted the burden of risk to large retailers, only producing to orders submitted by the latter, and now, the retailers, using instant information, from Electronic Point of Sale (EPOS) systems, submit those orders based upon real, live data on demand. As Simon Clarke put it, even thirty years ago,

“Indeed it would be fair to say that the sphere of planning in capitalism is much more extensive than it is in the command economies of the soviet bloc. The scope and scale of planning in giant corporations like Ford, Toyota, GEC or ICI dwarfs that of most, if not all, of the Soviet Ministries. The extent of co-ordination through cartels, trade associations, national governments and international organisations makes Gosplan look like an amateur in the planning game. The scale of the information flows which underpin the stock control and ordering of a single Western retail chain are probably greater than those which support the entire Soviet planning system.”

(Capital and Class, Winter 1990)

Lenin continues,

“Mr. N.–on’s phrases about the “instability” of capitalist economy, about the lack of proportion in the development of exchange, about the disturbance of the balance between industry and agriculture, between production and consumption, about the abnormality of crises, and so forth, testify beyond all doubt to the fact that he still shares the viewpoint of romanticism to the full. Hence, the criticism of European romanticism applies word for word to his theory too.” (p 214)

What distinguishes Marx from Sismondi or Proudhon, or Danielson, Lenin says, is that,

“he places the question of the instability of capitalism (which all these three authors admit) on a historical plane and regards this instability as a progressive factor. In other words: he recognises, firstly, that existing capitalist development, which proceeds through disproportion, crises, etc., is necessary development, and says that the very character of the means of production (machines) gives rise to the desire for an unlimited expansion of production and the constant anticipation of demand by supply. Secondly, he recognises elements of progress in this development, which are: the development of the productive forces, socialisation of labour within the bounds of the whole of society, increased mobility of the population and the growth of its consciousness, and so forth.” (p 216)

The failure of Sismondi and Proudhon to understand that this instability is inherent, in respect of capitalism and commodity economy, is what leads them to Utopianism. Their failure to understand the progressive elements inherent in the instability is what makes their theories reactionary. Lenin makes an important distinction, here, between the theories and the individuals that propose them.

“This term is employed in its historico-philosophical sense, describing only the error of the theoreticians who take models for their theories from obsolete forms of society. It does not apply at all to the personal qualities of these theoreticians, or to their programmes. Everybody knows that neither Sismondi nor Proudhon were reactionaries in the ordinary sense of the term. We are explaining these elementary truths because, as we shall see below, the Narodnik gentlemen have not grasped them to this day.” (Note *, p 217)


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