Karl Marx’s alternative to capitalism – part 12 Mandel vs Warren

mandel3In 1969 the Belgian Marxist Ernest Mandel wrote an article for ‘New Left Review’ that discussed the question “when, why and how will the great majority of the American working class (the white working class) revolt . . . by making a socialist revolution.”

He went on to say that “in the history of the world socialist movement, there are only three fundamental answers to this question. One is the answer given by utopian socialists, and various propaganda sects of very different colours and origins, who all agree on one basic point: that the working class (or mankind for that matter) will never move towards socialism as long as it has not ‘seen the light’—i.e. let itself be persuaded by the particular creed of the particular sect in question.”

“The second answer, diametrically opposed but parallel to the first one (and as fundamentally wrong) is that ‘when objective conditions are ripe’ (when ‘the productive forces have ceased to grow’; or when ‘misery has become unbearable’; there are many variations of fatalism), the ‘workers will become socialists’ and ‘make a revolution’.”

“The third and correct answer, that of the classical socialist movement, perfected by Lenin, says that workers will make a revolution when (a) socialist consciousness has been introduced in their midst by an organized vanguard; (b) this consciousness merges with a growing militancy of the whole class, which is a function of growing social contradictions, and (c) that militancy emerges into an objective situation of sudden and extreme instability of the ruling class (a ‘prerevolutionary situation’, a ‘revolutionary crisis’).”

I don’t agree with this third answer.  Experience has been that point (a) has been very much like the first answer; that (b) is just a restatement of the second answer and that (c) is an inadequate basis for socialist revolution, as this series of posts on capitalist crises has hopefully demonstrated.

The introduction of socialist consciousness by an organised vanguard can only be something more than a propagandistic sect if there is some material basis for the generation of socialist consciousness among the working class.  By the latter I mean recognition that workers must own the means of production, not capitalists and not the state, and that they need to rule politically, through their own state.  A small propagandistic group cannot generate and convince millions and a vanguard would need to be so large that it needs explanation itself and is not an explanation.

Militancy is necessary arising from social contradictions but this militancy is never without purpose so the nature of the contradictions on which it is propelled plays a large role in determining this purpose, in channelling the militancy along certain lines, towards certain solutions and with a certain consciousness and political understanding appropriate to it.  Militancy usually takes the form of action around the role of the workers as seller of his or her labour power – over wages, conditions or the inability to sell labour power at all and suffering from unemployment.

Since the key to socialist consciousness is rejection of labour power as a commodity, the ‘wages system’, there is a qualitative leap in consciousness required from such militancy. Reformist politics which simply seeks better terms for the sale of workers’ labour power is normally better placed to represent and capture such consciousness, whether this reformism genuinely seeks to achieve the aims of the militancy or not.

So whatever contradiction exists within capitalism that brings to the fore workers’ lack of ownership of the means of production is best placed to provide the soil and nourishment for the socialist consciousness out of the militancy generated by this contradiction.

So a better definition of the conditions conducive to socialist revolution would involve, if we take Mandel’s approach: (1) a socialist vanguard which is a mass movement that is derived from a fundamental objective feature of capitalism committed to the conscious building by workers of a mass party plus (2) a wider militancy that is based upon a contradiction of capitalism that points to socialism as the resolution. These are two expressions of the same process with different levels of consciousness characterising different layers of the working class arising from the relevant capitalist contradiction, which is necessary for (3) any crisis of class rule, which is to lead to socialist revolution.

The key is not therefore the crisis or, as Mandel puts it at the end of the article: “these subjective factors, reacting from the social superstructure on class relations, cannot be the main cause of a new mass radicalization of that working class. The main cause can only be found in a change of material conditions. The growing crisis of American imperialism can only transform itself into a decisive crisis of American society through the mediation of a growing instability of the American economy. This is our key thesis.”

Crises are an intrinsic part of capitalism; like troubles, we do not have them to seek.  What we do have to seek is the objective contradictions of capitalism upon which a subjective socialist movement of workers can be built.  And like crises, the contradictions of capitalism are also not hard to find. The creation of a workers movement that seeks their resolution in socialism is the task and not a vanguard that can lead workers to take advantage of episodic crises, which are not permanent, to seize political power without first having established that for the working class itself this is what its objective should be.

Just as capital is both a thing and a social relation; money, commodities, machinery and factories etc. while also the relation of the exploitation of workers labour power to create more value than that which they are paid; so the movement that overcomes capital will be both a thing that demonstrates the objective overcoming of capitalism and also the relation of workers breaking from capitalist exploitation through breaking the monopoly ownership of the means of production.

In 1974 Mandel engaged in a debate with Bill Warren, a writer with quite different views, about the capitalist crisis that had developed at that time and about what the crisis meant for the strategy for a working class conquest of power.

Warren argued that capitalism and its development of the productive forces was less and less effective in responding to the social needs of workers which the system itself had developed.  This incapacity of capitalism was reflected in the increasing role of the state which carries out roles of economic distribution that allocation through the market cannot.  The working class develops new aspirations for itself and becomes a decisive factor in the direction of this increasing state control.

Warren therefore writes that “It therefore seems to me that the long-run strategy of the working class must be to centre the struggle around the control of economic policy. To put it somewhat differently: if the working class is to develop as the leading class within society, as a hegemonic class, it must itself become a leading class within capitalism before it conquers state power. . . it seems to me that the present characteristic of Western capitalism is not one where the working class can rely on stagnation, slump or decline in order to conquer power, but, on the contrary, must rely upon its ability to increasingly lead society in such a way as to control the economy in a fashion more relevant to social need.”

Mandel disagrees and comes straight to the point:

“I would agree with Bill Warren that the case for socialism should not be based on the fact that capitalism produces increasing misery, or even a decline in material wealth . . . I do not think that the working class can become the leading class in society before it has taken political and economic power. I think that the very characteristic of the capitalist economy is that you cannot run that economy on basic lines other than those of capitalist interest. That is to say: on the lines of profit.”

Warren’s reply is that the British economy had already changed dramatically since the 19th century, that a large proportion of the population was employed in non-profit sectors and a large part of investment was state led.  This is a process that had taken a long time but one which had gradually been able to impose working class social priorities on capitalism.  The problem has been that the working class had not attempted to carry out these changes within capitalism as a leading class, as a class leading society in order to bring about its social priorities.

Nevertheless, despite the fact that it has not acted as a dominant class within society, but rather as a subordinate class, it had nevertheless brought about extremely fundamental changes in capitalist society. What’s more to the point, it had been able to bring these changes about without any major disruption in the ability of capitalist society to continue to work relatively effectively. These extremely fundamental changes had been compatible with the operation of the profit motive.

He went on to argue that “The kind of process that I am invisaging, in other words, is one in which the working class actually intensifies class struggle over the imposition of social priorities, but does so in a way which is consistent with a realistic way of keeping the capitalist economies operating. This has already happened in the past.”

Mandel concludes by recognising that “the might of the working-class movement has enabled it to realize through society, to impose on the capitalists, a certain number—I would be much less optimistic than he in my assessment of its achievements—but a certain number of social priorities. That is the main contribution which the working-class movement has made up to now, through the improvement of the situation of the working class and to the change in social conditions in general. There is no dispute about that. People who dispute that would dispute the very existence of more than 100 years of mass organization of the working class. But I would strongly deny the possibility that this process can grow in an unlimited way without bringing social and economic contradictions within the capitalist system to an explosive point.”

to be continued

Back to part 11

Forward to part 13

One thought on “Karl Marx’s alternative to capitalism – part 12 Mandel vs Warren

  1. Once again we agree more or less entirely. Just to be picky, however, you say,

    “Just as capital is both a thing and a social relation; money, commodities, machinery and factories etc. while also the relation of the exploitation of workers labour power to create more value than that which they are paid…”

    I think this should be clarified. The “thing” that capital is, is self-expanding value. This thing, self-expanding value, can only exist as a result of a specific social relation. The things “money, commodities, machinery and factories etc.” are not capital, but only use values, which, within the context of capitalism, i.e. the specific social relation that is required for self-expanding value to exist, also take the form of commodities.

    As Marx, described in Capital II, the cotton that forms the constant capital of a capitalist textile producer, may not itself have been produced capitalistically, and so may not have comprised the commodity-capital of a cotton producer. It could have been produced by a slave-owning producer, or by a peasant farmer. It only forms commodity-capital, Marx continues, because, in practice, capitalist production only occurs after merchant capital has already developed, so that the capitalist producer of yarn buys the cotton from a capitalist merchant, not from the slave-owned, or the peasant producer. But, again, the yarn producer does not buy the cotton from the merchant as capital, but only as a commodity. It only becomes capital for the yarn producer, after he has bought it, but again it is not the cotton itself that is capital, but its capital value, which in turn determines its potential to self-expand, as with any other capital value within that specifically capitalist social relation.

    Labour-power is never capital. For the worker who sells labour-power, it is only ever a commodity, and it is that commodity which the capitalist buys. Like the cotton, it only becomes capital in the hands of the capitalist, who again does not buy capital, but only a commodity. The difference between the commodity cotton, bought by the capitalist and the labour-power bought by the capitalist, is that the former can only transfer its value, current reproduction cost, to the end product, whereas the labour-power has a fixed value (equal to the value of labour-power, itself equal to the value of a fixed quantity of use values required for the reproduction of the labour-power, which are held by the capitalist as variable capital, either physically in the shape of those use values, paid in kind to the worker, or more typically as a sum of money which is paid as money wages, with which the workers then buy those required necessities from other capitalists, but in the production process this fixed value, itself expands into a larger value, creating a surplus value for which the capitalist has given no equivalent. (it is, in fact, only a self-expanding value for the capitalist, as Marx sets out as against Proudhon, because under capitalism, as with every other mode of production, this surplus does not magically appear. An equivalent for the surplus value has in fact, been paid, but it is paid by the worker who undertakes the amount of surplus labour required to bring about this expansion of value.)

    The difference here then between capitalist production and other modes of production is also made clear. Under other modes of production the cotton can only transfer its value to the yarn into which it becomes a part. A peasant producer of yarn when they sell yarn, recovers this value of cotton, and also recovers the new value created by the labour they have expended on its production. This labour divides into two parts – one part necessary labour, required for the reproduction of the peasant’s labour-power, and the other part surplus labour, which the peasant can use to either increase their consumption, or to turn into other means of production, which can be accumulated, so as to increase their future production.

    For the peasant, this surplus labour they undertake and which becomes embodied in a surplus product, thereby represents a surplus value – in previous modes, it forms part of what is appropriated by the feudal lord as rent, for whom it is a real surplus value, i.e. a value for which they have given no equivalent – but for the peasant, this surplus value is not the same as that for either the landlord or the capitalist. Neither the landlord nor the capitalist give any equivalent for the value they obtain as rent, or profit, but any surplus product left in the hands of the peasant, and its value does not come to them gratis, but is only the equivalent of the surplus labour they have, in fact performed to produce it. Marx, in setting this out as against Proudhon, thereby demonstrates that it is not a matter of this surplus magically appearing, but that it exists in all forms of society precisely because the new value created by the expenditure of labour is greater than the value required for the reproduction of that labour-power. It is a matter of who appropriates that surplus labour, and the means by which they do so, which determines the specific historical nature of the mode of production.

    The peasant, or artisan producer thereby creates a commodity whose value comprises the value of the means of production they use up in the final product, plus the new value they create with their labour, and this is the value of the commodity they recover in selling the commodity. They only – at best – get back a value equal to the value they have given up in some other form (means of production, labour undertaken).

    But, this is not the same with capitalist production. Not only does the capitalist obtain a surplus value in the specific sense that they obtain an amount of value gratis, but it is not just as a result of employing labour-power, bought as a commodity from wage workers that this is the case. Under capitalism, it is not just that labour-power produces a surplus value, but that every capital, as capital represents self-expanding value, and thereby becomes entitled to the average rate of profit. A capital that only employs a factory, machines and raw material, and no labour-power, would thereby produce no surplus value, and yet would still represent self-expanding value, because this capital would be entitled to obtain the average rate of profit, as with any other. It would obtain this profit because it would sell its products at their price of production (cost price plus average profit), and unless the market price of these commodities, was at least equal to that amount, capital would not engage in such activity, resulting in the market prices of those commodities rising, as supply fell relative to demand, until the price of production was achieved.

    This is why Marx makes the distinction that surplus value relates only to, is produced by, the variable capital, whereas profit relates to and is produced by the whole capital.

    It is not the factories, machines, materials etc. that are capital. They are only commodities that comprise the form the capital assumes. Nor is it the value of these commodities that determines the profit, but rather it is the fact that the value of these commodities represents an amount of capital value. A machine with a value of £1,000 does not produce a profit of say £100 because of its specific use value as a machine with that value, but only because it represents a capital value of £1,000, and with an average rate of profit of 10%, it is entitled, as with any other capital, to obtain such profit.

    In fact, as Marx sets out in Capital III, capital itself, like labour and land, has no value. Capital, self-expanding value, is not the product of labour, any more than is labour (as opposed to labour-power) or land. When Marx talks about the value of constant capital, he is talking about the value of the commodities that comprise it, and when he talks about variable capital he means the value of the commodities that comprise it, i.e. the value of all those wage goods required for the reproduction of labour-power. But, as Marx set out in his argument against the bankers such as Overstone, in Capital III, it is not this value that is determinant of the profit. In other words, the profit does not rise because the value of factories, machines, material rises. In fact, the rate of profit falls, when the value of all these things rise.

    A capital of £1,000 may produce £100 profit this year, but only £50 next year, even though the value of the factory, machines and material remains constant, for the simple reason that the average rate of profit itself may have fallen. In other words, as marx sets out as against Overstone and others is that the price of capital – as self-expanding value – varies not in relation to the value of the commodities that comprise it, but in relation to the demand and supply for capital itself, in other words, not the demand and supply for factories, machines, raw material or labour-power, but the demand and supply for capital to act as capital, as self-expanding value, and in essence that is a function of the rate of profit.

    When the rate of profit is high, the demand for capital will tend to be high, because capitalists and potential capitalists will demand capital so as to take advantage of these high profit rates, and vice versa. To complicate matters, however, as Marx sets out, during such phases the supply of potential capital may also be high, because the high rates of profit, become realised as money profits, which can be transformed into money-capital, thrown back into circulation, so the supply of capital also rises offsetting the rise in demand. The price of capital, therefore, is represented not by the prices of commodities, such as factories, machines, materials or labour-power, but by the rate of interest the market price for the use value of capital itself, the use value of being self-expanding value.

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