The growth of the capitalist system involves the development of new needs – we did not need the mobile phone until it was invented and many didn’t consider getting one until it got small enough in size and price. This will be true of the new needs we are currently unaware of, that will also arise from the capitalist development of the forces of production.
The productive forces that create these new needs are primarily “the accumulation of the skill and knowledge (scientific power) of the workers themselves . . . and infinitely more important than the accumulation – which goes hand in hand with it and merely represents it – of the existing objective conditions of this accumulated activity. These objective conditions [machinery, equipment, infrastructure etc.] are only nominally accumulated and must be constantly produced anew and consumed anew.” (Marx, Theories of Surplus Value Vol 3)
This process is a fundamental feature of capitalism and thus to the development within it of the conditions for its supersession. It evolves through antagonisms, and in the 1859 Preface to ‘A Contribution to the Critique of Political Economy’ Marx states that ‘at a certain stage of development, the material productive forces of society come into conflict with the existing relations of production.’ At this point there ‘begins an era of social revolution.’
For Marx the creation of these conditions, the promise of a new non-exploitative and non-oppressive society, can no more avoid the antagonisms of capitalism, and all its ills, than humanity could avoid belief that the world it inhabits is the creation of a divine being.
“An oppressed class is the vital condition for every society founded on the antagonism of classes. The emancipation of the oppressed class thus implies necessarily the creation of a new society. For the oppressed class to be able to emancipate itself, it is necessary that the productive powers already acquired and the existing social relations should no longer be capable of existing side by side. Of all the instruments of production, the greatest productive power is the revolutionary class itself. The organization of revolutionary elements as a class supposes the existence of all the productive forces which could be engendered in the bosom of the old society.” (Marx, The Poverty of Philosophy, 1847)
This was written early in Marx’s career and, if the last sentence is to be understood strictly, implies that the organisation of the working class supposes that the productive forces have grown to such extent that they cannot grow further within capitalism. While some Marxists believe this stagnation or absolute retardation of capitalist development is the case, or rather repeatedly declare that this must be the case, or is impending, this is very hard, in fact impossible, to defend. The working class continues to grow massively across the world and could not do so, by definition, if the productive forces of the capitalist system were not also growing.
Marx may be thought to repeat this understanding twelve years later in the 1859 Preface to ‘The Critique of Political Economy’ quoted above, and which we looked at over a number of posts in this series as a succinct published summary of his views on these decisive questions.
Here he says that:
“No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.”
G A Cohen in his celebrated book ‘Karl Marx’s Theory of History, A Defence’, rewords the first part of the sentence to read “No economic structure (set of production relations) ever perishes before all the productive forces for which there is room in it have developed. . .”
We will leave aside his replacement of ‘social order’ by the narrower ‘economic structure (set of production relations)’ and we will come back to his translation of ‘sufficient’ as ‘for which there is room’.
Cohen is right to note that this does not say that once all the productive resources have been developed an economic structure (or social order) perishes; it may ‘fossilise’, or decline or end in ‘ruination’ as Marx once alluded to in ‘The Communist Manifesto’. The second part also does not mean that if the material conditions sufficient for a new society have developed within the old one this new society will emerge. It may not, and this will depend on concrete historical circumstances. Marxists have good grounds for believing that the material conditions for a new socialist society that develop within capitalism will engender its emergence.
These grounds include the earlier statement, noted above, that
“At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.”
These grounds are verified not only by an understanding of the dynamics of capitalism, which have been verified empirically (repeated economic and political crises caused by the contradiction between the forces of production and the relations of production within it) but also by the history of class struggle, confirmed by the continued existence of that struggle.
What is ‘up for grabs’ is that these changes “lead sooner or later to the transformation of the whole immense superstructure.” Given the perennial optimism of many Marxists, which unfortunately (?) I don’t share, I consider this might now better be rephrased by taking out the words ‘sooner or’; although given the relative brevity of mature capitalism’s existence this might only be a reflection of a perspective from a human lifespan that is nearer departures than arrivals.
For Marxists, as opposed to analytical philosophers like Cohen, the real issue here is that the productive forces continue to be developed by capitalism and that this might imply two things. First, that the idea that previous attempts at socialist revolution could have been successful is mistaken, and second, that current ideas that socialist revolution is on the agenda (in some historical as opposed to immediate sense) are mistaken for the same reason.
As we have seen, it will not do to avoid this potential difficulty by claiming that capitalism is not developing the productive forces. There are political organisations which have repeated the idea that capitalism has been in crisis more or less the whole period of their own existence but, as I have already noted, the working class has grown enormously in the last period, which means the growth of wage labour, exploitation and the creation of masses of new surplus value upon which capitalist accumulation takes place.
I said I would return to Cohen’s translation of “No social order is ever destroyed before all the productive forces for which it is sufficient have been developed” into “No economic structure (set of production relations) ever perishes before all the productive forces for which there is room in it have developed. . .”
This passage has been translated in a number of ways but it is undoubtedly better that it be understood to mean that the social order of capitalism is insufficient for the development of the productive forces rather than the stage must be reached where there is simply lack of room for these forces to develop.
That latter suggests an absolute barrier which, when reached, will mean that the productive forces will cease to develop. Since we have not, and do not, appear to be approaching such a stage, this would seem to argue that the destruction of capitalism is not on the historical agenda and certainly has not been in the century in which Marx lived or in the twentieth century either. The idea that capitalism could have been overthrown at any point during this time would have been illusory – capitalism had the potential to develop the forces of production massively. It certainly ‘had room’ for them.
The possibility of the overthrow of capitalism rests not on the existence of some absolute obstacle which ceases to provide room for its development but from the contradictions it contains that make capitalism insufficient for the development of the forces of production within it. This is expressed in crises of overproduction, in which the relations of production impose on these forces the necessity for an expansion based on the realisation of massively increased amounts of surplus value. In other words, the expansion of these forces is continually thrown into crisis because the need for this to involve a suitable expansion of profit.
When this doesn’t happen crises of overproduction lead to interruptions in the development of these forces through the typical symptoms of crisis – unemployed labour and instruments of production, and unsold commodities that cannot satisfy the consumption needs of workers or of capitalists for continued and expanded production. The development of capitalism means that this contradiction increases and the capitalist mode of production becomes more and more insufficient for this development.
Each crisis trends towards a greater mass of capital unable to contribute to its own expansion, whether it is expressed in larger and larger numbers of workers unemployed, greater means of production unused or devalued through bankruptcies and reduced capacity utilisation, and a greater number of commodities unsold or sold at reduced prices.
It is not that each crisis must register a successively greater percentage of unemployment or fall in levels of production. We should not seek confirmation of Marx’s analysis through expecting every crisis of overproduction to be worse in these relative respects, as if industrial production must fall more, and unemployment must always be higher, than the Great Depression of the 1930s etc.
It is that capitalism means the accumulation of greater and greater amounts of capital, and the crises that its contradictions create thus tend to throw back, and tend to the destruction of, absolutely greater amounts of capital. The grounds for socialism do not arise from only one pole of this contradiction but also from the development of the forces of production that precede crises and subsequently follow them.
This is what demonstrates the fettering of the forces of production by the relations of production. These relations imply unceasing competition between different capitals and the states they both support and rely upon. This means economic crises become political conflicts, not just involving suppression of subordinate classes but also war between rival capitals and states.
The bloody history of capitalism, especially in the first half of the twentieth century shows the absolute devastation that the contradictions of capitalism can inflict, as the international development of the forces of production runs up against capitalist relations of production centred on national states and Empires. Rival capitalists stand behind these states as they seek through alliances and opposition to advance at the expense of others.
*KMAC: Karl Marx’s Alternative to Capitalism
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Sráid Marx 
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I think you should take a look at ‘The philosophy of Marx’ by Etienne Balibar. The chapter called Time and Progress : Another Philosophy of History ? is especially pertinent.
One section is called The Marxist Ideologies of Progress….
‘Let us recall the three great instantiations of Marxist ‘progressivism….the ideology of social democracy and more generally of the Second International…The second is the ideology of Soviet Communism and ‘real socialism…Finally, there is the ideology of socialist development, both as elaborated in the Third World and as projected onto it from outside after decolonization.
‘Marx hardly ever uses this term Fortschritt, Fortgang in Capital, except to counter pose to it, in the spirit of Fourier, the picture of the cyclical ravages of capitalism….He only uses it, then in an ironic sense : so long as the contradiction between the socialisation of the productive forces and the desocialization of human beings is not resolved, the talk of progress to be found in bourgeois philosophy and political economy can never be anything but a mockery and a mystification…
‘This is where the second aspect emerges ; what interests Marx is not progress, but the process, which he makes the dialectical concept par excellence…process is neither a (moral spiritualist) concept nor an economic (naturalist one)’
Back when a reviewed the book by Anderson I raised of two items. I quoted the French edition of Capital as opposed to the German edition, the edition that Marx was responsible for and not Engels and CO. Marx warns us that he does not intent to provide the reading public with a universal-philosophical account of History like Hegel culminating in a happy ending. The other point was that the term progress does not belong to dialectic evidence, it belongs to the ideology of subjective assessment. I think Balibar agrees with me on this point.
I disagree with your explanation of crises, and I would argue that the fetter on development of productive forces is that I have described above, not something arising from the ephemeral crises of production. As Marx says in TOSV, in response to Smith, crises of overproduction arising from over accumulation of capital is only temporary and permanent crises do not exist. Every such crisis simply creates new conditions for an expansion of capital into ever new spheres, as set out in the Civilising Mission of Capital.
The fact that it leads – though via contradictory paths – to the requirement for greater planning and regulation, and on an increasing geographic scale, its one reason that the drive towards war can be reduced, or is at least not inevitable as Lenin thought in his analysis in Imperialism. Kautsky has been more accurate in his theory of Super Imperialism than was Lenin. For example, it led to the creation of the EU, not to mention all the other such politico-economic blocs across the globe. In the aftermath of WWII it led via Bretton Woods, to the creation of global para state social democratic planning and regulatory bodies such as GATT, IMF, world bank and so on.
These inevitably also lead to competition at a higher level, and competition between blocs, but this is no different to competition between small capitals leading to monopolistic competition and oligopoly leading to state-capitalism, and greater state level planning and regulation. In other words a contradictory and non-linear process of development.
Crises are better understood as expressions of the contradictions of capitalism, between the forces of production and relations of production, and their eruption gives rise to transparent destruction of productive powers. The forces of production become ever more socialised, giving rise to international cooperation and planning; however, within capitalism these are inadequate to prevent crises that demonstrate that the contradictions have not been resolved. Competition drives forward the forces of production but lack of planning as a result of the relations of production fetters them, and as socialisation increases the latter becomes a more important ‘permanent’ fetter.
The failure to solve the contradiction means, as you say, that competition is resolved to a higher level. The emergence of blocs, such as the EU, is testament to the correctness of some of what Kautsky said just as two world wars were testament to the brutality of imperialist competition. It is because the development of capitalism is non-liner that I noted the history of devastating war that characterised the first half of the last century and which remains a potential outcome in future if capitalism is not replaced.
I’ve set out my argument in relation to crises of overproduction – crises of overproduction of capital and of commodities they are not identical – here so no point in me replicating it.
I don’t deny the continued existence of crises, only that it is this which represents the “fetter” that Marx talks about in terms of the development of productive forces that leads to a revolution in the productive and social relations. That fetter is in fact, the private monopoly ownership of capital, as stated in Capital 1. That fetter is burst asunder by the expropriation of the expropriators whereby socialised capital expropriates this private capital.
Lenin, in his response to Mikhailovsky comments that Marx as a materialist never made predictions, but only described reality as it had already revealed itself, and was simply continuing to mature. He makes this comment in relation to precisely this point. When Marx describes Socialism as inevitable, Lenin says, this was not some prediction of the future, but a statement by Marx of what had already occurred, and was manifest by the productive and social relations of this large scale capital by the latter part of the 19th century.
The same thoughts can be seen in Kautsky’s Road To Power and in The Erfurt Programme. As Engels puts it in his critique of the latter.
“I am familiar with capitalist production as a social form, or an economic phase; capitalist private production being a phenomenon which in one form or another is encountered in that phase. 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.”
The thought is expanded even further in his and Marx’s comments in Anti-Duhring. The point at issue at that time was not that this process had already unfolded, but the extent to which socialists could simply sit back and allow it to continue to unfold (Bernstein) or had to actively engage in class struggle for political power.
I don’t agree that the world wars were a consequence of imperialist competition, as in the standard Leninist conception. Rather I think that what is manifest is the normal requirement for capital to burst beyond the limits of the nation state to form a much larger single market and state, i.e. a European single market and state. Its a repetition of bourgeois democratic national revolutions, the creation of the German state by Prussia, and so on.
The above account of historical materialism raises some questions in respect of revolutionary practice. What were Marx, Lenin and Trotsky doing when posing as revolutionaries ? What theory guided their decisions in their actual political participation? Marx had participated in the revolutions of 1848 before he published his outline of historical materialism, dated as 1857. If he was not sourcing his own political action and led by his theory, later described as a materialist account of history, did he have another theory guide his political choices, or was it some personal character trait that led him into the drama of revolutionary politics . As we know those liberals who write books against Marx, Lenin and Trotsky often attribute their political activity on behalf of the socialist revolution to some personality trait or other, the oft repeated one that Lenin was out for revenge for the State execution of his older brother.
Then we come on to the historical materialists who said that the Bolshevik revolutionaries were volitionist or vanguardist etc. In Russia the leading theorists of historical materialism was known to be Plekhanov, he went against the Bolshevik revolution on the basis of his understanding of the central tenets of historical materialism. The many critics of the revolutionary actions of Leon Trotsky often refer to his amended version of historical materialism, changing the very name, ‘theory of permanent revolution’, to that of the ideology of the premature socialist revolution, finding Trotskyism to be incompatible with historical materialist. Certainly the productive forces of capitalism had not burst asunder the class relations of production Russia by the year 1918.
It was controversies over the connection of Marxist theory, i.e. Historical materialism to the praxis of revolutionary politics that led some post world war two Marxists away from trying to resolve the quarrel between the Stalinists and Trotskyist implications of HM for actual contemporary political interventions to another Marxist theory i.e. Marxist Humanism to be extracted from the writings of the young Marx. The theory of Historical Materialism had become closely identified with one version of Stalinism or another. Incidentally J.A. Cohen was indeed an analytical philosopher, that was his PAY job, however his family background was linked to the Canadian Communist Party. Some objected to his book about historical materialism because he had banished Hegel and the Dialectical method from Marx, other critics, with an understanding of Stalinism, argued that he had given the most sophisticated version of the Stalinist version of Historical Materialism. A much more convincing version that the typical communist party one.
By the 1960s another theory was being excavated out of the books of Marx. One can trace the rise of Marxist Humanism to the publication of the early writing of Marx. In 1961 Eric Fromm persuaded Tom Bottomore to translate into English the early writings of the young Marx, Fromm wrote an extensive introduction to the collection, outlining the Marxist account of human and social alienation under capitalism. There is some truth to the Idea that the Marxist student radicalism of the 1960s was based on this recovered Marxist humanism. The French communist philosopher Louis Althusser was quick to oppose the new Marxist humanist philosophy, under the banner of the Marxist science of history, historical materialism, his attack on the humanist Marx can be found in his 1963 collection ‘For Marx’.
Did the radicalism of the sixties come to a bad end because it was mainly based on the recovered Marxist humanism of the early works, a general theory of human or labour alienation? I really can’t answer the question. It does seem like a legitimate inference to state that Marxist Humanism can point to volitional or subjective action, ie the triumph of the good will of mankind over the bad intellect of Stalinism.
It was worth mentioning that Marxist Humanism was superseded by the various intellectual trends we typically bundle under the label post-modernism. There was already an underground current in vogue in French philosophy brought into being by the publication of Heidegger’s ‘Letter on Humanism’ published in France in 1947. The letter was an assertion by Heidegger that Sartre had misunderstood Existential philosophy in claiming it was was a new modern humanism. Recall that Sartre was one of the leading proponents of the existential and humanist Marxism based partly on the works of the young Marx. Althusser disliked Sartre and his Marxist version of existential freedom plus humanist ethics. Most of the up and coming philosophers of the France Academy had
already been exposed to Heidegger’s famous directed letter against Humanism and were already tuned against every version of humanism, including the Marxist on based on alienation. Two French philosophers in particular, Foucault and Derrida wrote papers directed against the philosophy of humanism. This is known as the End of Man conclusion.
So Marxist Humanism got assailed on the theoretical side by the post-modernist theorists, schooled by Heidegger, and it was also beaten back on the practical side by the failure to deliver much after the political defeats of Paris 1968. It should be noted that Marxist humanism had not been merely an English and and French intellectual tendency, in fact to became the basis of theoretical and oppositional Marxism in many countries including, Hungary, Yugoslavia Czechoslovakia and Poland. However it failed to thrive in the long run, in the new social conditions after 1990 it fizzled out and its journals all closed down, with the benefit of time, Marxist Humanism looks more like a transitional tendency onto something else, something resembling identity politics, it lasted only as long as Stalinism prevailed as a heavy handed State doctrine.
Maybe it is because Marxist Humanism is no longer a vital ingredient we have returned to the older historical materialist controversy!
“Marx had participated in the revolutions of 1848 before he published his outline of historical materialism, dated as 1857. If he was not sourcing his own political action and led by his theory, later described as a materialist account of history, did he have another theory guide his political choices, or was it some personal character trait that led him into the drama of revolutionary politics . ”
Engels describes in “The History of the Communist League” that he and Marx had both arrived at a materialist theory of history at about the same time, prior to their participation in the Revolutions of 1848. Indeed, the Communist Manifest written in 1847 is a succinct account of that theory. Prior to that time, as Engels says, they were essentially bourgeois radical liberals, and elements of that continued to show through in the Manifesto and their other positions at that time.
“The many critics of the revolutionary actions of Leon Trotsky often refer to his amended version of historical materialism, changing the very name, ‘theory of permanent revolution’, to that of the ideology of the premature socialist revolution, finding Trotskyism to be incompatible with historical materialist. Certainly the productive forces of capitalism had not burst asunder the class relations of production Russia by the year 1918.”
The point here is not whether the productive relations had changed in Russia so as to make a socialist revolution possible. Trotsky did not believe they had, and said so openly. Indeed, that is the basis of his argument against Socialism In One Country, that the revolution would fail unless it was made permanent in the sense of being extended from within national borders to an international revolution. In 1905, Kautsky arrived at the same conclusion, and Lenin made the same argument in the April Theses and Letters on Tactics. The point was that 1848 and 1905 showed that conditions had arisen whereby in many countries where the bourgeois-democratic revolution had been delayed, material conditions now existed where a national bourgeoisie was small and weak, a large peasantry and petty-bourgeoisie still existed that sought the implementation of the bourgeois-democratic revolution, whilst the proletariat had become large, organised and disciplined and inevitably came forward as the leading force in society to push through that revolution drawing the peasantry behind them.
Having been placed in this position of being the social force that carries through the bourgeois revolution a party of the proletariat leading a Democratic Dictatorship of the proletariat leading the peasantry is also inevitably led to have to begin to implement positions that advance the cause of that proletariat, in conditions where the productive forces do not allow it, and where those policies mean that the interests of workers are brought into contradiction with those of the bourgeoisie and that section of the peasantry becoming bourgeois as part o the process of differentiation. The workers have to drive the split in the peasantry deeper, and organise the proletarianised peasants and petty-bourgeois on collectivist lines.
Its necessary to read the section in TOSV carefully. Marx was dealing with the writings of Hodgskin. As an early representative of the workers, Hodgskin sought to emphasise the role of labour as against he role of capital, in opposition to the bourgeois economists that did the opposite as justification of profit. From that perspective, Marx say, he was justified, but, theoretically its erroneous, because it gives no role in the production process for capital, and particularly for fixed capital in enhancing the productive power of labour. Its true that the most powerful productive force is labour itself, but is the labourer of 200 years ago, as much a productive force as the labourer of today? Clearly not, and that is due to the fixed capital that stands behind the worker today.
Its also necessary to understand what is meant by social revolution, in what Marx describes. It has come to be equated with “socialist revolution”, but these are two different things. The social revolution occurs behind Men’s backs as a consequence of the changes in productive forces and changes in productive and social relations this brings with it. Capitalist social relations were established long before the capitalist class secured political power for itself, which required the bourgeois-democratic revolutions to achieve. Capitalist social relations were established in Russia by around 1870, and the Russian state became a capitalist state even though political control remained in the hands of Tsarist absolutism.
Similarly, as Marx sets out in Capital III, by the latter half of the 19th century, capitalist social relations had already broken down in Britain, because private capital had been superseded by socialised capital in the form of the joint stock company and co-operative.
“It is the abolition of capital as private property within the framework of capitalist production itself…
This result of the ultimate development of capitalist production is a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of associated producers, as outright social property. On the other hand, the stock company is a transition toward the conversion of all functions in the reproduction process which still remain linked with capitalist property, into mere functions of associated producers, into social functions…
This is the abolition of the capitalist mode of production within the capitalist mode of production itself, and hence a self-dissolving contradiction, which prima facie represents a mere phase of transition to a new form of production.”
In other words, it already represents the accomplishment of that social revolution. What it does not represent is the achievement of the political revolution, the reflection of the social revolution in the realm of the political and juridical superstructure. It represents a transitional phase of society, a phase I term social-democracy, just as for a long period there was a symbiotic relation between the dissolving feudal aristocracy and rising financial and commercial bourgeoisie, a transitional phase of Mercantilism between feudalism and industrial capitalism. Within the transitional phase of social-democracy, capital exists as socialised capital rather than private capital, as Marx says in Chapter 27, it represents he transitional form of property. Objectively, it belongs to the associated producers – apparent in the cooperative, but not in the joint stock company – but must continue to operate as capital, and not yet as merely means of production.
But, its requirements now involve an increasing abandonment of the conditions underlying private capitalism and competition. It requires extensive planning and regulation, which can only be undertaken at a societal level, which requires social control over that capital. It is this which comes into conflict with the continued control exercised by shareholders over the capital they now do not own. In other words, the political juridical superstructure must be aligned with the underlying social relations that have already come into existence. Centre stage is taken by “the property question”.
Marx and Engels make the same point in Anti-Duhring, and Lenin also makes it in Left-Wing Childishness.
“Everybody knows what this example is. It is Germany. Here we have “the last word” in modern large-scale capitalist engineering and planned organisation, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist, Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content—a Soviet state, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism…
And history (which nobody, except Menshevik blockheads of the first order, ever expected to bring about “complete” socialism smoothly, gently, easily and simply) has taken such a peculiar course that it has given birth in 1918 to two unconnected halves of socialism existing side by side like two future chickens in the single shell of international imperialism. In 1918 Germany and Russia have become the most striking embodiment of the material realisation of the economic, the productive and the socio-economic conditions for socialism, on the one hand, and the political conditions, on the other…
“. . . Try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!
“. . . For socialism is merely the next step forward from state-capitalist monopoly.
“. . . State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs ””
In other words, Marx’s analysis has been born out. The development of the productive forces did reach a limit, the fetter imposed by the private ownership of capital. It burst asunder those fetters as long ago as the 19th century. It abolished the private ownership of capital for the dominant section of the economy, leaving private capital ownership only in the hands of the small capitalists, and petty-bourgeoisie. It brought about a revolution in social relations, creating large scale socialised capital and the social-democratic state resting upon it, as a transitional form of property and transitional form of state between capitalism and socialism. We already have socialist relations of production, and socialist social relations, but we do not have socialist political and juridical relations, so that control over this capital remains in the hands of shareholders not workers.
“With the development of social production the means of production cease to be means of private production and products of private production, and can thereafter be only means of production in the hands of associated producers, i.e., the latter’s social property, much as they are their social products. However, this expropriation appears within the capitalist system in a contradictory form, as appropriation of social property by a few; and credit lends the latter more and more the aspect of pure adventurers. Since property here exists in the form of stock, its movement and transfer become purely a result of gambling on the stock exchange, where the little fish are swallowed by the sharks and the lambs by the stock-exchange wolves. There is antagonism against the old form in the stock companies, in which social means of production appear as private property; but the conversion to the form of stock still remains ensnared in the trammels of capitalism; hence, instead of overcoming the antithesis between the character of wealth as social and as private wealth, the stock companies merely develop it in a new form.” (Capital III)
It requires the superstructure to be brought into alignment with these new social relations. It requires a political revolution to establish the political regime of the working class, and thereby to ensure that workers obtain the full control over this socialised capital that is their collective property, and thereby also bring about a transformation in distribution relations.
We agree that ‘the most powerful productive force is labour itself’ and the dynamic development of capitalism that dwarfs that of previous societies derives from the relations of production that specify that form of society, which is the capital-labour relation that drives accumulation through the creation of surplus labour in the form of surplus value.
The importance of labour is demonstrated in the recovery of Germany from the destruction of the Second World War through a skilled labour force, and negatively in the low culture and lack of skill in the Russian workforce that, for example, Trotsky lamented in the first chapter of ‘The Revolution Betrayed.’
In relation to joint stock companies, I think it goes too far to say that they ‘already represents the accomplishment of that social revolution’; in the nature of a transition this has not yet been achieved. The ownership and control of capital by the associated producers that would justify that view has not yet been achieved. I think this is consistent with what you say about socialised capital that ‘objectively, it belongs to the associated producers – apparent in the cooperative, but not in the joint stock company – but must continue to operate as capital, and not yet as merely means of production.’ As you know, the cooperative sector is much smaller than the capital controlled by financial companies in various sorts of funds.
So, for example, I am currently reading a book by Gérard Duménil and Dominique Lévy, who claim that this control, and the vast incomes received from it, make the current form of capitalism a transitional form of society, not to socialism but to a new managerial form of society in which the current transitional form is best understood as managerial capitalism. I don’t agree, and it is of course not a new idea, but it does indicate to me that the social revolution has not been accomplished.
It is not therefore merely a case of a political revolution, which of course is how many Marxists have telescoped their understanding of socialist revolution.
In relation to the Lenin quote, I agree that ‘state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!’ but I disagree with how this is often interpreted to mean that if ownership by a workers’ state simply replaces state-monopoly capitalist ownership the foundation of socialism exists. This turns socialism into state ownership instead of ownership by the associated producers.
Since crises of overproduction still occur, and the ‘privatised’ control of vast amounts of socialised capital still result in huge financial crises, I don’t agree that the fetters on the forces of production applied through the capitalist mode of production have been ‘burst asunder . . . as long ago as the 19th century.’ (The limits of purely private ownership have, but this does not exhaust the forms of capitalist ownership and of capital as such.)
So, I also don’t believe we have a ‘transitional form of state between capitalism and socialism’, but have a state that still defends capitalist private property, albeit mainly in the form of control, and partial ownership, of socialised capital as well, to a much lesser extent, in the smaller forms of purely private capital.
I therefore think that the passage of Marx you quote can be understood to say that the relations of production have not escaped socialised forms of capitalism and still require a socialist transformation that make the associated producers both the owners and controllers of the large funds of capital and of the direct controllers of the instruments of production at the level of the factory, office, company and industry.
So Marx says ‘However, this expropriation appears within the capitalist system in a contradictory form, as appropriation of social property by a few . . but the conversion to the form of stock still remains ensnared in the trammels of capitalism; hence, instead of overcoming the antithesis between the character of wealth as social and as private wealth, the stock companies merely develop it in a new form.” This new form is still one that requires transformation in relations of production and not ‘merely’ in the form of state.
I planned looking at aspects of some of the issues above as part of this series of posts.
On Joint Stock companies, we shouldn’t allow terminology to prevent us from seeing where we agree. The crucial distinction, here, is control as against ownership. The fundamental point is that in relation to such companies, objectively, ownership resides with the company itself, as a legal entity. The position on that is quite clear, despite the fact that its continually presented that ownership of the company is the same as the ownership of shares in the company. Shareholders do not own companies, they own shares. The company owns itself – See: Kay & Silberston. But, as Marx says, what can the company be, in terms of control and decision making, other than its associated producers, its workers and managers?
The contradiction Marx sets out then, in the quote previously cited is this that the capital itself is owned by the associated producers, but is controlled, not by the producers, but by shareholders. This is the fundamental property question that must be addressed. You do not have to believe that capitalism must be crisis free to accept that this represents a fundamental change in the productive and social relations compared to what existed under the regime of privately owned capital. On the contrary, a transitional form of property, which is precisely what Marx describes the joint stock company as well as the cooperative as being, would undoubtedly continue to exhibit many of the characteristics of the previous capitalist productive relations, as well as increasingly the characteristics of the new socialist productive relations. That is pretty much a definition of them being transitional.
What I absolutely agree is that workers do not have control over that capital, and that brings us back to the debate between the reformists and revolutionaries, which is that you can’t simply sit back and allow things to unfold. For one thing the mass and power of fictitious capital, all those shares, bonds and so on has expanded massively too, and the interests of the owners of that fictitious capital – share holder value, the need to inflate and keep inflated asset price bubbles and hold back real capital accumulation – comes into conflict with the interests of the real capital itself. It becomes a cause of crises and instability of itself as seen with the financial crisis of 2008.
But, its not the underlying productive and social relations that need to be now revolutionised, here. How in reality would that be changed other than simply extending what already exists? Simon Clarke pointed out 30 years ago that the planning of a single large western supermarket chain was already far more extensive and advanced than the whole of Gosplan! Nothing materially needs to change other than the fact of workers control over it, and thereby the redirection of it to meet workers needs rather than the needs of profit – or indeed, increasingly, the needs of shareholders and their requirement to keep asset prices inflated, even if that means undermining the accumulation of capital and production of profits!
If tomorrow, a Workers Government were elected committed to scrapping the existing rights of shareholders to vote, elect company boards etc., and instead extended the principle of industrial democracy already present in Germany, by saying Boards would be elected by the companies workers, an objective by the way I think socialists should be campaigning for – then exactly what do you think these workers then in control of all these large companies would have to change in those productive relations, in order for it to constitute a fundamentally different set of social relations?
There would be none. At that point it is simply a question of quantity not quality. It would simply require the workers in all these companies to take all of the existing production, marketing and financial plans, all of the plans they have in conjunction with their suppliers and customers, and further integrate them. It would require further integration with the existing planning of the state and central bank and so on. But, these are simply additions to what exists not some completely new condition. The qualitative change that occurs is merely that of control not ownership, but of course that is one hell of a significant change, but its a change at the level of legality not reality. Its a recognition at the level of he political and legal superstructure of the underlying material reality.
So, I want to be clear here that in talking about the Political revolution, and in giving the quotes from Left-Wing Childishness, I am not at all presenting the arguments put forward by the statists, and which Lenin often also falls into. The statist argument is that a Political Revolution must occur for the Proletarian Revolution, because its argued its only after workers get control of the state that they can “expropriate the expropriators”. Its then the Workers State that nationalises and plans he economy, and graciously hands all of this down to the workers – if they are lucky. Poppycock.
If the social revolution is already behind us, as I say it is – of course, there remains a vast amount of privately owned small capital, and as Marx says in Capital III, and also taken up by Engels its amongst this plethora of unplanned, unregulated private capital that the main continuing sources of crises emerge – then no part falls to a workers state following any political revolution to carry out such a top down function. Marx’s argument in his Inaugural Address, in relation to Co-ops, and the need for securing political power, applies the same in relation to Joint Stock companies. If a Workers Government introduced industrial democracy then overnight the distinction between a workers owned cooperative and a joint stock company would disappear.
The latter would continue to pay a market rate of interest as dividends to shareholders for the money they lend to the company, just as workers in a coop pay a market rate of interest to banks on the money they borrow. But, that would be all. The current control, the use of profits to boost share prices and so on would end. Of course, the owners of fictitious capital would resist – a slaveholders revolt, but its precisely in that role that the Workers State has its function in slapping it down.
We have socialist economic forms, but we do not have workers control over those forms, which is precisely why it is transitional and not yet socialism. It is somewhere between – social-democracy. And, it brings its own new contradictions. In the age of private capitalism, the state had to act fairly unambiguously to advance the interests of capital accumulation. Today, ultimately, the state must also advance the interests of the accumulation of that large scale socialised capital. But, the large scale owners of fictitious capital also continue to be the ruling class, and the state acts in their interests. The interests of the tow, as Marx sets out in Capital III, are antagonistic.
The shareholders seek greater amounts of interest/dividends, the socialised capital needs lower levels of interest/dividends so as to accumulate more from profits. The shareholders seek inflated asset prices, but asset price bubbles cause instability, and reflating bubbles by holding down interest rates via holding back economic growth, inhibits the realisation of profits and accumulation of capital. Ultimately, despite repeatedly catering for the short term needs of the ruling class, the state itself has to act in the interests of the real capital and not the fictitious capital, because the fate of the state depends upon the real capital.
It is another manifestation that the underlying productive and social relations are out of line with the political and juridical relations. It is the latter that now need to be brought into alignment.