Free trade and Socialism part 4 – Karl Marx on Free Trade ii

Much of the previous post setting out the circuit of capital accumulation is basic to the understanding of Marxists, although many would now not appreciate Marx’s view that socialists should not seek to destroy capitalism by simply trying to prevent it from working – by putting up barriers to trade and thus frustrate the conversion of money into commodities and commodities into money: M – C and C’ – M’.

The righting of the wrongs of capitalism can only be achieved by replacing the system of production and thus the way the reproduction of society takes place.  Since the precondition for this is the full development of capitalism, including creation of the working class as the immense majority of society, this cannot be done by seeking to make capitalism either not work, or seek to make it work differently from how it actually does and must work.

None of this prevents socialists fighting for reforms within capitalism, in order that workers’ lives are made better, but this objective cannot rely on the good intentions of the state and cannot even rely on the effects of trade union struggle.  As Marx puts it:

“the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles [over wages]. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady.”

“They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day’s wage for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!”

“ . . . Trades Unions work well as centers of resistance against the encroachments of capital. They fail partially from an injudicious use of their power. They fail generally from limiting themselves to a guerilla war against the effects of the existing system, instead of simultaneously trying to change it, instead of using their organized forces as a lever for the final emancipation of the working class that is to say the ultimate abolition of the wages system.”

So, restrictions on trade, as far as Marx was concerned, were not progressive and did not alter the basic relations of capitalist society.   And, of course, Marx was under no illusions as to what these relations were and what they entailed:

“To sum up, what is free trade under the present condition of society? Freedom of Capital. When you have torn down the few national barriers which still restrict the free development of capital, you will merely have given it complete freedom of action. So long as you let the relation of wage-labor to capital exist, no matter how favorable the conditions under which you accomplish the exchange of commodities, there will always be a class which exploits and a class which is exploited.”

“It is really difficult to understand the presumption of the free traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage-workers. On the contrary. The only result will be that the antagonism of these two classes will stand out more clearly.”

“Do not be deluded by the abstract word Freedom! Whose freedom? Not the freedom of one individual in relation to another, but freedom of Capital to crush the worker.”

This did not mean Marx sought to shackle capital, as those who seek to reform capitalism think can be achieved, or that its reactionary consequences can be fought by isolating their country from its international development – like leaving the ‘neoliberal’ EU and frustrating the globalisation of capital.

In concluding his speech on free trade Marx said this:

“Do not imagine, gentlemen, that in criticising freedom of commerce we have the least intention of defending protection. One may be opposed to constitutionalism without being in favor of absolutism.”

“Moreover, the protective system is nothing but a means of establishing manufacture upon a large scale in any given country, that is to say, of making it dependent upon the market of the world; and from the moment that dependence upon the market of the world is established, there is more or less dependence upon free trade too. Besides this, the protective system helps to develop free competition within a nation. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute monarchy, as a means for the concentration of its own powers for the realization of free trade within the country.”

“But, generally speaking, the protective system in these days is conservative, while the free trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the free trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favor of free trade.”

Unfortunately, today this approach is rejected by many calling themselves Marxist, who seek not only to protect “old nationalities” but actually to promote them, through for example support for Scottish separation. For them, the combined and uneven development of capitalism must be addressed through national separation on a more perfect basis, which unfortunately for those fooled by this scenario does not exist.

These Marxists might seek a way to demure from Marx’s words by stating that his views were particular to its time, when free trade represented the free development of a capitalism that was in some sense progressive as against reactionary feudal restrictions on free markets and development of the forces of production.

While this was certainly the situation that Marx quotes in the passage above, the current pursuit of national solutions against the development of international capitalist economic and political arrangements such as the EU, is equally reactionary since it also seeks to turn the clock back.

The defeats to the working class and socialism experienced in the twentieth century have been internalised into a predilection to state what you are against, with nothing beyond eschatological declarations of the need for revolution as something to say about what you are for.

So, in this view, socialism is to be built not on the foundation of capitalism and its achievements but on its collapse.  Capitalism must go back to national forms because the working class has failed to build itself an international unity, while this left fails to understand how impossible it would be for the working class to develop an international movement while capitalism is restricted within national economic and political forms.

The left that rails against free trade does not pause to think that the development of free trade within countries, such as Marx referred to above in relation to Germany, created exactly the same sort of circumstances for many workers as the freedom afforded to international trade does today. Yet these socialists are so limited by nationalism that they would find it incomprehensible to advocate restrictions on trade within countries.  As internationalists however, they should seek the minimisation of differences between the working classes of the different nations through the processes Marx stated above.

For many socialists internationalism has taken on a purely moralistic character because they reject the material foundations upon which it can become an immediate material need for workers.  This material need, an interest in fighting international capitalism can only be created through international capital accumulation creating an international working class more and more exposed to the reality that the system that exploits them and which they must resist is international and therefore the alternative to it must also international; there is no question of the alternative being a backward step in the socialisation of production.  As Marx says, this international development of capitalism “pushes the antagonism of the proletariat to the extreme point.  In a word, the free trade system hastens the social revolution.”

Back to part 3

An exchange of views on the French Presidential election

The following is a short exchange of views on Facebook on the French Presidential election which is taking place today:

LMcQ – See if you can guess which candidate’s leaflet has three explicitly racist pledges.  I’m struggling with this “they’re as bad as each other in the final analysis” line of argument.

Sráid Marx:  I don’t think that’s the argument being put. What about – how will Macron defend workers against fascism (or however one wants to characterise the FN) by implementing an austerity offensive against them, pushing them even further into the pursuit of bad alternatives (like FN)? And how will you explain to them that when you said they should vote for this offensive you didn’t actually mean you supported this offensive. I seem to remember we have been here before with a Le Pen and some geezer called Chirac and voting for the less worst alternative has just brought us to here. At what point, or how bad, would the lesser alternative have to be before you said – stop! The workers cannot lend support to those who simply prepare the way for the fascists and who you must at all times regard as your enemy. And if this is a frightening prospect to you that is only because your only defence ultimately is your own strength and this you cannot delegate – and certainly not to shits like Macron!

RM: Macron is an immediate short term defence against fascism simply because he is the only possible non-fascist outcome at this point. Everything starts from the present. The Chirac argument here is interesting. Yes, voting Chirac to defeat le Pen brought us to ‘now’ but that is surely a better option than to be looking back after 15 years of fascism in power!

Sráid Marx:  Everything starts from when it starts, which at any point in time is usually not the present. Today the weakness of the workers’ movement arises from its failure to successfully oppose austerity and build its own alternative political position in the past. This weakness is not addressed one iota by voting for Macron, in fact it is set back and will always be set back as long as the Macron’s of this world win and the likes of a Le Pen can be waived in front of us to get everyone to vote for the lesser evil. We know this because, as I said, it has happened before. An immediate defence against fascism? But the present passes into what we view now as the future and we will be weaker because we believed that Macron is some sort of defence. If he is one at the election then by definition his success is also a continuing defence, or do we only oppose and fight him unless there is an election. At what point do we say that workers must create their own alternative and cannot support the politicians and policies that brought us to this horrible choice? That is the political choice that we must take; that it is not on the ballot paper is more than unfortunate but that is the case nevertheless. Having our political choices determined by electoralism is not the way forward but is often a trap.

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SD: In an election which can only have one of two outcomes the alternative to the lesser evil is the greater evil.

Sráid Marx: Of course you are correct, but the question is whether the lesser EVIL is actually too high a price to pay.

F-CL: Well, if you don’t go with the lesser, surely the question is, is the greater evil too high a price to pay?

Sráid Marx:  Yes, a very good answer. But it still leaves you with the option of determining that both evils cannot be endorsed and that the elections leave you with no acceptable choice and to reject the choice given to you. Or do you believe that in all elections one must vote and endeavour to find the lesser evil?

F-CL:  It depends on circumstances … if there is a real, public abstain campaign and a refusal to vote can be seen to have meaning in the election then I think not voting could be the best option. And having “None of the above” on the voting paper – so you can actually show rejection of all – would be good (in fact, I think we should have a policy of including this option in all votes). But in my experience it is very rare for this to be the case, and going for “None of the above” would encourage people to not maximise the opposition to the greater evil, so even if “None” were an option I think I would usually come down in favour of lesser evil

The other alternative justifying not voting is for the candidates to be as close to as awful as each other to make any differentiation pointless. But this awfulness also involves assessment of the perceived consequences of who gets voted in. Even if Macron and Le Pen are close to each other (in fact I don’t think they are), Le Pen getting in would boost the far right far more than Macron would and you have to take that into account as well as the politics of the candidates

SD:  Surely the issue is about which outcome leaves the working class best placed to fight. In almost all circumstances the working class and the oppressed are going to be able to resist a lesser evil better than they could resist a greater evil, otherwise it wouldn’t be a greater evil.

Sráid Marx:  Not if they are disarmed politically by believing their class enemy is in any sense their protector against reaction. Workers must be taught again and again that they share interests as a class and not with liberals or other bourgeois figures.

SD: That’s quite a big if that you have inserted there. You think it is possible to convince people threatened by the rise of the FN to abstain, yet you don’t believe it possible to convince people that voting for a lesser evil still means they need to organise against that lesser evil?

Sráid Marx:  First I think that the threat that they will most likely face is Macron and his reactionary agenda and a vote for him is a statement that ‘it could be worse’! If such a view is justified in the election – why not afterwards? Fighting the FN is not the only issue in this election. In fact the rise of the FN is due to the policies now being pursued by Macron, policies that the FN say they have an alternative and a left that simply wants to fight the FN and votes for Macron and his policies makes their pretence all the stronger. The message for an active abstention is that you cannot rely on a simple vote to stop the FN, that the FN will get stronger if everyone else rows behind Macron and his reactionary policies and only the FN is seen to stand against them all the way. It’s a message that if you hate or fear the FN there is no solution but your own activity and a workers’ alternative to the policies that Macron will pursue, which the FN will feed off and attempt to continue to grow from.

SD: But “active abstentions” don’t actually exist, except in the heads of ultra lefts who try to comfort themselves that doing nothing out of sectarianism is a political act. Voting or not voting won’t make an iota of difference as to whether people fight back after the election. It just might be slightly harder to do so with an FN president.

Sráid Marx:  Let’s assume for one moment you are right – this would still not justify support for Macron, nor would it invalidate the objections to such support. But while living in Belfast I have seen a number of active abstention campaigns where leafleting, postering and canvassing were all carried out to encourage abstention. It is not even a merely ‘ultra-left’ notion – the greatest number of posters I ever saw in an election in West Belfast was when the Provos wanted an abstention when Bernadette McAliskey stood for the European parliament and the republicans still opposed participation in Brit elections. As to whether voting will affect how people will behave after the election, it must be clear that a working class vote for Macron will strengthen him. It would really be a sort of ultra-leftism to believe workers will vote for a bourgeois candidate but mobilise against him the day after, on the understanding that he is the lesser evil. Of course I have seen a similar view that they would immediately mobilise against a Le Pen victory dismissed, although you only claim it might be slightly harder.

 

 

Free Trade and Socialism part 3 – Karl Marx on Free Trade i

When Karl Marx reviewed his career in 1859 he highlighted four works that he had written – The Poverty of Philosophy, Communist Manifesto, Wage-Labour and Capital and a pamphlet on Free Trade.  The last was given as a speech in 1848 at a time when the Corn Laws had recently been repealed in Britain, a sign of the triumph of industrial capital over landed interests, who had stood in the way of free trade and the interests of manufacturers in reducing wages through cheaper food imports.

Since the purpose of free trade was to reduce the price of corn upon which workers depended, and so allow a reduction in their wages, it might seem that Marx would either oppose the repeal of these Corn Laws or at best take the view of “a plague on both their houses”, and take no side between industrial capital and landlords.  As Marx noted:

“The English workers have very well understood the significance of the struggle between the landlords and the industrial capitalists.  They know very well that the price of bread was to be reduced in order to reduce wages, and that industrial profit would rise by as much as rent fell.”

Perhaps, in fact, Marx would oppose this strategy of the workers’ most immediate, growing and more important class enemy and oppose free trade?

Today a similar situation arises in the debate over leaving the European Union.  Why should workers concern themselves with either side of a debate over a European free trade arrangement when again it is one carried on between different fractions of the class enemy?

After all, it is argued that the EU is irreformably neoliberal, although those that argue this often point out that it hasn’t always been such; although this also immediately raises the issue that some sorts of capitalist arrangements are better for workers than others – an anti-austerity policy is better than a neoliberal one for example.

For others, as I have noted, it all “depends”, and the question of free trade is bound up with a range of other issues, often involving development of less industrialised countries, national oppression, “unfair” trade and super- exploitation of workers in less developed countries.  However none of this prevents one from forming a view on the question of free trade itself and facing the implications for workers of such a policy.

This was the approach taken by Marx.  In doing so he was abundantly clear what the nature of the argument was for free trade put forward by the economists representing industrial capital:

“The whole line of argument amounts to this: Free trade increases productive forces. When manufactures keep advancing, when wealth, when the productive forces, when, in a word, productive capital increases, the demand for labour, the price of labour, and consequently the rate of wages, rises also.”

“The most favourable condition for the workingman is the growth of capital. This must be admitted: when capital remains stationary, commerce and manufacture are not merely stationary but decline, and in this case the workman is the first victim. He goes to the wall before the capitalist. And in the case of the growth of capital, under the circumstances, which, as we have said, are the best for the workingman, what will be his lot? He will go to the wall just the same.”

“The growth of capital implies the accumulation and the concentration of capital. This centralisation involves a greater division of labour and a greater use of machinery. The greater division of labour destroys the especial skill of the labourer; and by putting in the place of this skilled work labour which any one can perform, it increases competition among the workers.”

“This competition becomes more fierce as the division of labour enables a single man to do the work of three. Machinery accomplishes the same result on a much larger scale. The accumulation of productive capital forces the industrial capitalist to work with constantly increasing means of production, ruins the small manufacturer, and drives him into the proletariat . . .”

“Finally, the more productive capital grows, the more it is compelled to produce for a market whose requirements it does not know—the more supply tries to force demand, and consequently crises increase in frequency and in intensity. But every crisis in turn hastens the concentration of capital, adds to the proletariat. Thus, as productive capital grows, competition among the workers grows too, and grows in a far greater proportion. The reward of labor is less for all, and the burden of labor is increased for some at least.”

For some modern Marxists many of these words of Marx make no sense – how many today would repeat his remark that “the most favourable condition for the workingman is the growth of capital”?  How many would welcome the increased accumulation of capital though it leads to crises and increased concentration of capital, because it adds to the proletariat?  When was the last time the growth of capital was welcomed even though it increases competition among workers?

Instead the depredations of capital are opposed on the basis that the effects of capitalism can be much reduced through trade union action, its evils ameliorated through state intervention, while confused notions are retained that revolution will spring naturally from capitalist crises and destroy the same state that introduced the reforms.

On only one aspect of his argument has it been widely accepted that it is not the job of socialists to prevent the development of capitalism, and this is the view that workers must be protected from the replacement of their labour by opposing the increased use of machinery.  As Marx notes – “there is no kind of manual labour which may not any day be subjected to the fate of the hand-loom weavers” whose labour was replaced by machinery, with the consequence that “the hand-loom weavers are on the verge of that state beyond which human existence can hardly be sustained. . .”

Yet today the view that free trade should be opposed in principle to protect workers from capitalist competition would be more widely held than the views expressed above.

For Marx, free trade was a moment in the accumulation of capital, as he set out in Capital Volume II in chapters one to three.  In the circuit of money capital, Marx sets out that money (M) is exchanged for commodities (C) which are then exchanged for another sum of money (M).  Obviously this has no purpose for a capitalist unless the second sum of money is larger than the first, or why bother?

Since at each stage in the exchange of money for a commodity and the commodity for money it is the exchange of equivalents, no one is short-changed, so where could a profit arise?  As Marx explains, the commodities purchased by money by the capitalist include machinery, raw materials etc. and labour power, which all go to create the newly created commodities which the capitalist sells for a larger amount of money than spent on buying the commodities used in production.  The increased value of the commodities sold for money by the capitalist arises in production so that in the circuit M – C – M’, the second M’ is larger than the first M and the whole point of the circuit for the capitalist becomes clear.

The sum of money M’ is larger than the original amount of M invested and the increase arises in production, from the employment of labour power, which is remunerated by wages.  Again the assumption is that wages equate to the value of labour power so that we again have an exchange of equivalents and no one is ‘cheated’.  The worker will receive wages to a value that will allow her or him to turn up for work every day in such a condition as will allow her or him to produce to the efficiency, quality and standard required in the particular society that exists at that time and place, and will allow new generations of workers to do the same.

However the value created by the worker in production, through their labour, is greater than the value they are paid in wages for their capacity to work, which is their handing over to the capitalist of their labour-power that the capitalist can direct with a view to producing a profit.  The circuit of capital is therefore better set out as M – C . . P . . C’ – M’; where the first C in the circuit includes the purchase of labour power for wages, P equals production carried out by the worker; the second C’ are the commodities produced by the worker and the second sum of money M’ includes the additional value created in production and included in the second C’. This is the output of production that can then be sold for a bigger sum of money that now includes the profit of the capitalist.

The inequality in capitalism, including different levels of exploitation and power, and the resulting insecurity, stress and degrees of poverty are a result of what arises in production and the class relations that are founded in this production.  To seek to right the wrongs of capitalism through opposition to trade, through trying to make it ‘fair’, or to seek to limit in any fundamental way the inequality and exploitation that capitalism gives rise to through changes to trade, is to miss the point.  All these are a result of the class relations resting in production.  To seek to limit trade is to seek to disrupt C’ – M’; to disrupt the accumulation of capital – or to make it ‘fair’ – when the problem lies within the whole circuit of capital, with the existence of production based on capital itself.

As Marx explained, in all the exchanges within this circuit we have the exchange of equivalents; before the commodities denoted as C’ are produced for sale other commodities, including machinery, raw materials and labour power are also sold and purchased.  Trade unions try to determine the level at which labour power is sold through fighting for “a fair days’ work for a fair days’ pay”, but even they cannot overturn the way capitalism works and cannot fundamentally alter the drive for profit that animates the circuit of capital. Trade unions can no more make capitalism fair than demands for fair trade can prevent exploitation or inequality in the class relations based on production.

Back to part 2

Forward to part 4