Anti-Duhring, Part II Political, Economy, III – The Force Theory (Continued) - Part 3 of 10

The Netherlands, as the first leading mercantile nation, built its military power on the basis of the wealth acquired from such mercantilism, and that military power, also, correspondingly was manifest in its navy. The same was true of Britain, which overtook the Netherlands as the leading mercantilist nation. In both cases, the actions of these nations, in using their military power, to establish colonial empires, reflected the nature of their own and global economic development at that point. The ruling class comprised a landed aristocracy that appropriated surplus value in the form of rent, and a rising commercial class, that appropriated surplus value in the form of commercial profit, as well as a financial oligarchy, that appropriated surplus value in the form of interest. In other words, all forms of appropriation based on unequal exchange, rather than the production of surplus value.

The basis of that unequal exchange was to buy low and sell high, to obtain commodities below their value and sell them above their value. For a mercantilist nation, the basis of doing this, on a large-scale, was to be able to secure foreign sources of commodities in high demand, for example, all those exotic new commodities such as tea, coffee, tobacco, chocolate, spices, silks and so on that the voyages of discovery had begun to introduce.

The stage of global development meant that the economies of many of the places where these new exotic products came from were not only pre-capitalist, but, even, pre-commodity production and exchange. It is this combination of the stage of development in the mercantilist nations and the stage of development in the countries they colonised that determines the form of domination and appropriation of surplus value, i.e. the creation of colonial empires, and unequal exchange. The use of superior force was, by no means, thereby, simply arbitrary, but was driven by economic motives, and those economic motives were, themselves, determined by the form of economic relations of the time, i.e. the dominance of mercantilism.

By contrast, at the end of the 19th century, it is not mercantilism that dominates but industrial capital. As Marx describes, in Capital, wherever those “antediluvian forms of capital”, such as commercial capital, and interest-bearing capital, which, together with landed property, form the basis of mercantilism, dominate, it is impossible for industrial capital to prosper. It is precisely because of their nature, extracting surplus value by unequal exchange – commercial profit, interest, rent – that they leach off industrial profit and diminish it, restricting its accumulation. It is why industrial capital, supported by the industrial proletariat had to defeat its mercantilist opponents in 1848, as epitomised by the Repeal of the Corn Laws.

Industrial capital produces surplus value, as industrial profit, and seeks to minimise the deductions from it in the form of rent and interest. As Marx sets out, in Capital III, Chapter 17, it also seeks to reduce the amount deducted from it in the form of commercial costs, but these commercial costs are integral to it realising the produced surplus value. Commercial capital exists as a specialised form of capital solely in order to reduce those costs, and so increase realised profits. Its only on that basis that it forms a part of industrial capital, and is allowed to obtain the average industrial rate of profit.

So, when industrial capital becomes dominant, at the end of the 19th century, this commercial capital, and its role in the old colonial empires remains important to it, in those economies that had those empires. It ensures the continued supply of cheap food and materials, as well as protected markets into which the expanding output of industry can be sold, as a safety-valve against an overproduction of those commodities.

However, the consequence of the role of colonialism, was, itself, a development of commodity production and exchange, in those places it colonised, and, as elsewhere, that led to a development of capital and capitalist production, of a bourgeoisie and proletariat, in the colonies. Moreover, other nations, which did not have extensive colonial empires, had also industrialised, and, now, were based on large-scale industrial capital, notably Germany, Japan and the US.

The US, as a result of the Civil War, turned the Confederate states into its own internal colonies, much as Tsarist Russia did with Siberia. Via the Monroe Doctrine, it also warned European colonialism to keep its hands off South America, which it saw as its own backyard. Germany sought to, belatedly, establish its own colonial empire, in Africa, whilst Japan was just one of the countries, along with Britain, that established itself in China. It is, in fact, this tail-end of colonialism that misled Lenin into seeing this continued carving up of the world into colonial possessions as the characteristic feature of imperialism.

Back To Part 2

Forward To Part 4

Northern Soul Classics - Just Ain't No Love - Barbara Acklin

 

Friday Night Disco - Weigh All The Facts - L.J. Reynolds

 

Anti-Duhring, Part II Political, Economy, III – The Force Theory (Continued) - Part 2 of 10

The feudal nobility used their position and acquisition of wealth, via rents and taxes, to obtain large retinues and private armies. But, the acquisition of these retinues and armies was a consequence of their position as nobility, and consequent accumulation of wealth, not vice versa. But, rather as with Crusoe's ownership of the sword being superseded by Friday's possession of the revolver, the military power of the nobility, based upon the cavalry, armour and stone fortifications, was superseded by the military power of the urban bourgeoisie. Where did that power come from? Again, it came from the economic power of that urban bourgeoisie, based on industry and commerce, its access to firearms and cannon that made the armour, cavalry and stone fortifications of the nobility obsolete.

“So, the revolver triumphs over the sword; and this will probably make even the most puerile lover of axioms comprehend that force is no mere act of the will, but requires the existence of very real preconditions for its functioning, especially, instruments, the more perfect of which vanquishes the less perfect; that further these instruments have to be produced, which at the same time implies that the producer of more perfect instruments of force, commonly called arms, vanquishes the producer of the less perfect instruments, and that, in a word, the triumph of force is based on the production of arms, and this in turn on production in general — therefore, on “economic power”, on the “economic situation”, on the material means which force has at its disposal.” (p 212)

As I have noted elsewhere, in relation to the lessons of the Chinese Revolution, this is important in relation, also, to the difference between proletarian revolution and peasant guerrilla war. As Trotsky noted, it is the ability to produce the arms required that is decisive, and it is the industrial proletariat, in the towns and cities that has that power. The peasantry, engaged in guerrilla warfare, does not. It can only acquire those arms by stealing them, which assumes they already exist, or else obtaining them from some ally. In the case of the Bolshevik Revolution, Trotsky notes that peasant detachments played an important role, but only on the basis of their subordination to their allies within the industrial proletariat that provided the weapons and so on. Elsewhere, such guerrilla bands have to rely on external allies, and often, those “allies” are simply using them as part of their own strategic objectives.

The same principle applies in relation to imperialism. The state that has superior weapons is able to conquer one that does not, but what determines its possession of those superior weapons is again its economy, its productive power. What has been seen, on numerous occasions, is that, in a war, it is not even the state that has the most weapons at the start of the war that is determinant, but the state that is able to produce more weapons, more quickly, and to produce the weapons best suited to the conditions of such a war once it has begun.

The same argument, used by Engels against Duhring, arises again. Why just because one state has superior weapons would it, necessarily, use them to conquer some other state? For Duhring, the answer is simply because it can, it is the nature of Man to do so. Yet, there is plenty of evidence that that is not true. For millennia, humans existed without engaging in such behaviour. Often, when one tribe engaged in conflict with another, it was, again, based on some objective, material antagonism, driven by economic interest. With Native American tribes, competition and conflict, which appears war-like, often took the form of “counting coup”. And, as Engels demonstrated, in “The Origin of The Family, Private Property and The State”, when one tribe raided another, and took prisoners, this was, also, usually, not to obtain slaves, but to replenish the depleted numbers of their own tribe. Even tribal lands and hunting-grounds were not off-limits to other tribes, who were allowed to pass through them on their seasonal migrations.

Moreover, as Marx notes, in The Poverty of Philosophy, even if we view such predatory activity of a more powerful tribe or nation, as a means of “pillaging” or stealing the surplus value produced by another nation, the means required to do this are completely different where the nation is a peasant economy, and that surplus takes the form of a surplus agricultural product, as against a nation whose economy has developed to the stage of stock-jobbing.

Back To Part 1

Forward To Part 3

Anti-Duhring, Part II Political, Economy, III – The Force Theory (Continued) - Part 1 of 10

In this chapter, Engels expands on the argument that force itself is a function of economic relations and production.

Also known as “The General”, because of his knowledge of military tactics and strategy, Engels draws on that knowledge to dismantle Duhring's argument. He begins, again, with Duhring's Robinson Crusoe example, in which he had spoken of Crusoe subjugating Friday “sword in hand”. But, where had this sword appeared from? Duhring simply assumes it into existence, thereby, removing all need to consider production or economic relations. Twenty years ago, I debated online with a number of Austrian School proponents whose approach, like that of neoclassical economists is the same. They seek to show that value and exchange-value/market price are the same thing, and that this value is subjective, determined by utility. In Theories of Surplus Value, Chapter 20, Marx destroys this argument, first put forward by Samuel Bailey, decades before the emergence of the neoclassical school.

So, in one of these debates, my interlocutor posed the question, if you had a comb, and I had a razor, whilst you wanted the razor and I wanted the comb, would you exchange your comb for my razor. In other words, this is a version of the water-diamond paradox that I have dealt with elsewhere. So, I, of course, asked the question where did the comb come from, and where did the razor come from? The answer given to this inconvenient question, as with Duhring and the sword, was that they were “found behind the barn”! In other words, the question of production, and, thereby, of value, was swerved around.

As I pointed out to my interlocutor, if all commodities could be simply “found behind the barn”, they become free goods, with no value, no matter how much use-value/utility they might possess. The air we breathe has the greatest utility, but no value, because we discover it, not “behind the barn”, but each time we breathe. It require no labour for its production. It is a free gift of nature.  If I could find one comb behind the barn, as an assumption, then, I can assume another 10, 100, or 1 million, so that determining an exchange rate for them against razors becomes meaningless. Indeed, I could assume that another look behind the barn provided a similar supply of razors, and anything else I might require!

Engels makes the same point against Duhring, noting that if it can be assumed that Robinson just discovers a sword, it can be assumed that Friday discovers a revolver, and so the force relation is reversed. Of course, it might be argued that Robinson was simply stronger, fitter and a more skilled fighter than Friday, without the need to resort to weapons, but the characteristics of strength and fitness are, themselves, functions of production, the ability to have had adequate nutrition and so on.

Moreover, if we move away from the fictional world of Robinson Crusoe, in the real world, we have collections of individuals living in tribes, clans and families. Taken over these collectives, the individual characteristics of strength, fitness and so on are averaged out so that there would be no such advantage of one group over another, other than where other factors were involved, for example, the better nutrition of one group, or its ability to have produced weapons, or better weapons. Again, that would mean that force was determined by productive and economic relations, not vice versa.

If we look within any such collective, we find that the rulers/exploiters form a small minority, and so any natural ability they might possess would be outweighed by the greater numbers confronting them. So, again, no explanation resting on force stands up for their initial subordination of the majority. That a ruling-class, having become ruling-class, is able to utilise that position, and the consequent inequality of distribution, to be able to acquire superior force, so as to maintain itself in power, is, of course, true. Not least of which is the armed power of the state.

Back To II - The Force Theory

Forward To Part 2

Anti-Duhring, Part II, Political Economy. II – The Force Theory - Part 9 of 9

But, as I have described elsewhere, there is another aspect of this. That is that the ruling-class has used its control over the political regime to ensure that it continues to exert control over property it does not own – socialised industrial capital. Socialised industrial capital is the collective property of the workers, but they are excluded, by company law, from exercising control over their property, other than in the case of the worker cooperative. They are even denied control over their own pension funds! Shareholders are only creditors of such companies, the same as bondholders or a bank that lends money to it etc. Yet, the shareholders are able to vote at the AGM, appoint Directors to act on their behalf, and so on, i.e. to exercise control over property they do not own, including, thereby, to control how much of the profits are paid to them as dividends, used to buy back shares, rather than invest in capital accumulation and so on.

As Marx notes, in Capital III, this indicates the antagonistic relationship between this fictitious-capital, and the real industrial capital, between the division of profit into interest/dividends, and into profit of enterprise. There is no objective basis for shareholders being given control, and as Kay and Silberston point out, other creditors – bondholders, banks, landlords, equipment lessors – have no such right. It stems purely from the control of the political regime by the ruling-class, and its ability, thereby, to determine company law, much as the landlord class continued to legislate in their class interests throughout the 19th century.

If the associated producers – workers and managers – exercised their rightful control over their collective property, the amount paid in dividends, and consequently in other interest payments, capital transfers, as well as in inflated salaries and other payments to executives, would be reduced massively. By far the greatest source of additional money-capital for investment comes from realised money profits. Workers exercising control would use those profits for capital accumulation, largely removing the need to borrow money from share and bondholders. Of itself, that would reduce the amounts paid in dividends and interest. The consequence would be a fall in share and bond prices, and consequently, other asset prices, such as land.

In the period following the early 1980's, the microchip revolution massively raised productivity, and with it relative surplus value. As with all such stagnation phases of the long-wave cycle, the surplus product,/surplus value/net product rose relative to the gross product/output value. The rise in productivity also cheapened fixed capital, via a huge moral depreciation, raising the rate of profit, and creating a huge release of capital. Interest rates fell, causing asset prices to rise, also causing yields on those assets to fall. Given that the ruling class is, now, a class of speculators and coupon-clippers, that owns only these assets, it saw, on the one hand, a huge rise in its paper wealth, as asset bubbles inflated, but a fall in its revenues, as yields on those assets fell (not only dividend yields, and bond yields, but also rents).

It, once again, sought to counter this inevitable consequence of the operation of the economic system it created, and rests upon, by political means. Firstly, it used its control of capital to simply increase dividends, and other capital transfers. Haldane notes that, in the 1970's, dividends accounted for only 10% of profits, but by the 2000's, they accounted for 70% of profits. Of itself, this shows the extent to which the ruling-class and its ownership of fictitious-capital acts in a way that is antagonistic to and detrimental to the rational development of capital itself.

By draining profits into dividends, interest payments, and other capital transfers, capital accumulation was, itself, held back, which, in turn, constrained the further expansion of capital, and, thereby, of profits, undermining the capitalist system itself. On the one hand, it facilitated a rise of industrial capital in China, and other newly industrialising economies, whilst, in the developed economies, it facilitated a resurgence of the petty-bourgeoisie, which stepped into the void created. Since the 1980's, the petty-bourgeoisie, in Britain, has grown by 50%, reversing the trend of the previous 200 years, and providing the material basis for a resurgence of petty-bourgeois, nationalist politics, as presented by Brexit.

Back to Part 8

Forward To III - The Force Theory (Continued)

Anti-Duhring, Part II, Political Economy. II – The Force Theory - Part 8 of 9

The imperialist stage of capitalism is signified by this development of monopoly capitalism, and its association with the state. The state, increasingly plans and regulates, introducing standards and so on. It creates a welfare state, which takes on the job of producing the publicly educated and skilled labour-power required by capital, including the provision of the middle-class managers etc. But, this imperialist capital has already outgrown the limits of the nation state, and national market. As a national bourgeoisie, it, inevitably, seeks to resolve that constraint by exerting itself against other national bourgeoisies. The fact that it developed, via social democracy, meant that the workers, in each imperialist country, also, saw themselves as a national, rather than international class, a fact exemplified in the actual constitution and operation of the Second International.

Colonialism arose, in the period before the development of imperialism, or even the dominance of industrial capital. Its basis was mercantilism, the symbiotic relationship between commercial and money-lending capital with the old nobility and landlord class. Its source of revenues was unequal exchange, and protected markets, which is why it developed via the opening up of new geographical territories, and the subordination of more primitive modes of production. But, imperialism rests on the domination of large-scale, industrial capital, and its need for an ever larger, single domestic market, not, now, as a source of materials, and destination for its output, but as the location for its investment of capital, and exploitation of labour.

The US Civil War was a front-runner of the process, as the industrial capital of The North subordinated the South, and established the predominant role of the federal State over the individual states. The reactionary, petty-bourgeoisie, has been resisting that ever since in insisting on states rights, much as internationally, they insist on the right of national self-determination. Yet, in each case, they end up depending upon the capitalist state itself to achieve that for them, whether its Trump using his power as President, or else, the repeated demands for “liberal intervention”, by imperialist states on an international scale. Just before that, the US had, also, expanded its territory by annexing Mexican territory in Texas, California and Oregon. The US, also, expanded the size of its territory, via the Louisiana Purchase, and the purchase of Alaska from Russia.

In the Spanish-American War, the US sought to expand its own borders into the surrounding Spanish colonies. The Franco-Prussian War, and, then, WWI in Europe, saw German imperialism fight it out with French imperialism over dominance in the creation of a single European state, able to compete with British imperialism, and the rapidly developing US imperialism. As Trotsky set out, in The Program of Peace, this simply reflected the historically progressive, and inevitable process of dismantling the outgrown nation states that, now, were a reactionary fetter on the development of capital, let alone socialism.

“If the bourgeoisie now appeals to force in order to save the collapsing “economic situation” from collapse, it is only showing that it is labouring under the same delusion as Herr Dühring: the delusion that “political conditions are the decisive cause of the economic situation”; that just like Herr Dühring it imagines that by it it can regenerate those “second order facts”, the economic situation and its inevitable development; by means of “the primary factor”, of “direct political force”, and that it can shoot and kill with Krupp guns and Mauser rifles the economic consequences of the steam-engine and the modern machinery driven by it, and of world trade and the present day development of banking and credit.” (p 211)

That process continued in WWII, and, only on the basis of the subsequent hegemony of US imperialism, able to subordinate European and Asian imperialism to it, in a common front against the USSR and China, was it able to come together as an uneasy, voluntary association of nation states (EU, and similar blocs), as well as a certain degree of global regulation via international, para-state bodies such as GATT/WTO, World Bank, IMF and so on. The fall of the USSR, but rise of China, as a global economic powerhouse, has fractured that previous uneasy coalition, which always involved the subordination of other imperialist blocs to the US, and that fracturing is now manifest via the role of Trump.

Back To Part 7

Forward To Part 9