The method of the Left, though it continues to call itself “Marxist”, is, in fact, metaphysical rather than dialectical, it is, largely moralistic rather than materialist, and so cannot identify and analyse flux, leaving it mechanically applying old categories and formulas, rather than analysing current reality. These failings have left the working-class without any effective leadership over the last 80 years, strengthening the position of social-democracy. But, social-democracy, wracked by the contradictions set out above, has also arrived at a point of crisis, and, in order to try to contain that crisis, it has had to resort to increasing degrees of Bonapartism, to make appearance and reality hang together.
The Bonapartist regime of Starmer inside Blue Labour is a clear example of that, but the same applies inside the US Democrats, and across European social democracy. That same Bonapartism is manifest in the social-democratic state too, and the current overt abandonment of the façade of bourgeois-democracy, in order to justify genocide, and deny the masses the right to speak out against it is just the latest, most visible manifestation of it. There is a clear yellow line connecting the use of claims of “anti-Semitism” against the Left over recent years, to justify witch hunts, deny free speech, and to justify Zionism, with the current utilisation of those same tropes to suppress the global opposition to the Zionist genocide in Palestine.
The astronomical levels of liquidity thrown into circulation, via QE etc., are an indication of that underlying crisis of social-democracy, as are the astronomical levels of asset prices, that bear no resemblance to the underlying valuation of real capital, and its profitability. Its most surreal expression was negative yields, with more than $20 trillion of bonds, globally, at one point, having negative yields! That was not because the amount of interest being paid was small, it wasn't, it was huge, as with the amounts paid as rents and taxes. It was simply a function of the astronomical level to which the price of assets be they bonds, shares, or land had been inflated. In other words, 100/1,000 is 10%, but if the 100 increases to 700, whilst the 1,000 rises to 70,000, it is only 1%!
The nature of socialised capital, identified by Marx, as a transitional form of property, implies and necessitates change, transition from one state to another, but the nature of the Left's metaphysical philosophical method, means that it cannot theorise or grasp this process of transition. In one form, its either capital or not capital, utilising the method of the syllogism, manifest in the idea that the change of state occurs in one leap, effected by the proletarian revolution, pace 1917, and in another, this change occurs superficially, at least, by the action of the capitalist state, via an act of nationalisation, for example.
But, the objective laws of capital, continue to grind on, behind Men's backs, even though they have been churning at subterranean depths for the last 40 years, breaking through the surface every so often, as they have resulted in rising employment, rising wages, feeding through into increased aggregate demand, fuelling economic growth, and a demand for additional capital, causing interest rates to rise, and asset prices to drop, as most visibly occurred in 2008. The capitalist state, as the state of the ruling class, whose form of property is fictitious capital, has tried to reconcile this contradiction.
In 2010, it implemented austerity to slow economic growth, so trying to slow the growth in employment, and consequent rise in wages. The goal was two-fold. By holding back the rise in wages, it held back any squeeze on profits, and, secondly, by holding back the expansion of employment and rise in wages, it held back the expansion of demand for wage goods, which, in turn, dampens the role of competition in driving firms to accumulate capital so as to increase their supply. By reducing that demand for capital accumulation, it holds down interest rates, and so enables asset prices to remain inflated.
Why does it do that, because, contrary to the model used by the Left, which sees capital in the terms of its early 19th century form, in which capitalists are the private owners of real industrial capital, dependent on maximising profit, the ruling class, today, is rather that class of “coupon clippers”, owners, not of real industrial capital, but of fictitious-capital, identified by Marx and Engels in Capital, and Anti-Duhring.
This ruling class, rather than seeking the maximisation of industrial profit, seeks the maximisation of its total returns from interest, rent and capital gains. For more than 20 years, it could maximise its revenues from interest and rent, at the expense of retained profits, because, in the 1980's, the technological revolution, raised productivity, and the rate of profit, as well as creating a huge release of capital, as vast amounts of fixed capital suffered a massive moral depreciation. This reality, is also in complete contradiction to the idea, clung to by much of the Left, that capitalism is in some kind of period of decline or decay. On the contrary, in that period, it has been at its most dynamic, since its inception.
But, as with every such long wave cycle, this period in which the new technology raises productivity, as existing equipment gets replaced by new equipment (See Marx in Theories of Surplus Value, Chapter 23), and the rate of profit rises along with a release of capital, (intensive accumulation), runs out. At some point, all the old fixed capital has been replaced by the new. The rise in productivity slows, and, to increase output, it is no longer a matter of replacing old equipment with newer equipment, but of adding additional equipment itself (extensive accumulation). And, added equipment means additional workers, even if relatively fewer additional workers than would have previously been required using the old technology.
That point arose around 1999, and as I have set out many times before, going back to the early 2000's, this period after 1999, and up to the global financial crisis of 2008, saw a huge expansion in output, again confounding the claims of the catastrophists that capitalism, globally, was in some kind of terminal decline or decay. The simple fact that, of all of Man's output, in his entire history, 25% of it occurred in the first decade of this century, illustrates that point.
But, it was this economic expansion that spelled the end for the model of conservative social-democracy that had existed over the previous 20 years, starting with Thatcher and Reagan, and ending with Brown and Bush. Everything that has happened since 2008, is merely an attempt to deny reality, and to cling to that old model at an ever increasing cost, and ever more authoritarian means. And, again, contrary to the model used by the Left, in which this is all done in the interests of capital, rather than the interests of the ruling class, the measures undertaken have increasingly damaged the real economy, and damaged real industrial capital. It illustrates the extent to which, as Marx and Engels theorised more than a century ago, that ruling class of coupon clippers, whose interests are antagonistic to real capital, have become a reactionary fetter on the development of capital itself.
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