The redundancy of the capitalist class

Karl Marx’s alternative to capitalism part 40

While the socialisation of the capitalist mode of production, associated with the centralisation and concentration of capital, requires unprecedented cooperation in production, alongside the massively increased division of labour, it not only makes the potential for the working class to control such forces manifestly easier, it also progressively demonstrates the increasing potential redundancy of the capitalist class for the direction and management of this production.

The scale and scope of production becomes too big for individual capitalist owners to finance and manage.  Marx refers to the “enormous expansion of the scale of production and of enterprises, that was impossible for individual capitals.” (All quotations from Capital Vol III).

“Capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.”

This means that there is a “transformation of the actually functioning capitalist into a mere manager, administrator of other people’s capital, and of the owner of capital into a mere owner, a mere money-capitalist . . .  (the salary of the manager is, or should be, simply the wage of a specific type of skilled labour, whose price is regulated in the labour-market like that of any other labour) . . . total profit is henceforth received only in the form of interest, i.e., as mere compensation for owning capital that now is entirely divorced from the function in the actual process of reproduction, just as this function in the person of the manager is divorced from ownership of capital.”

“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.”

 Marx describes this process as “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.” 

For Marx, this whole process demonstrates that profit is not the reward for the labour and skills of the capitalist but makes it more obvious that it is the result of the appropriation of surplus value derived from the labour of workers, including its managers in so far as these are exploited.

Individual capitalists, indeed the whole capitalist class, commands capital that they no longer actually own, the property of others, so that all justifications of profit as the reward for risk (with other peoples’ money) or, even more ridiculously, abstention and saving (through a finance industry notorious for excess consumption!), is exposed as absurd. 

Also created is “a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation. It is private production without the control of private property.”  “Conceptions which have some meaning on a less developed stage of capitalist production, become quite meaningless here.”

Today these phenomena are reflected in the widespread contempt for corporate executive pay and the culture of greed, incompetence and arrogance of bankers and others engaged in the finance industry. 

The sacred principle of private ownership of capital and associated caricatures of the heroic self-made entrepreneur less and less reflect any reality in the system, which itself carries out the crime of expropriation that is supposed to damn socialism:

“Success and failure both lead here to a centralisation of capital, and thus to expropriation on the most enormous scale. Expropriation extends here from the direct producers to the smaller and the medium-sized capitalists themselves. It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production. In the last instance, it aims at the expropriation of the means of production from all individuals.”

“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.”

“The credit system accelerates the development of the productive forces and the establishment of the world-market. It is the historical mission of the capitalist system of production to raise these material foundations of the new mode of production to a certain degree of perfection. At the same time credit accelerates the violent eruptions of this contradiction – crises – and thereby the elements of disintegration of the old mode of production.”

Over-expansion of credit is often blamed for the periodic crises of overproduction or financial crises, including the construction boom in Ireland when it became the predominant element of the Celtic Tiger, and the 2008 financial crash centred on unsustainable credit and its extension through derivatives.  For Marx such events are simply the aggressive manifestation of the essential dynamic of the capitalist mode of production which, as such, has a two-sided result requiring more than simple condemnation.

“The two characteristics immanent in the credit system are, on the one hand, to develop the incentive of capitalist production, enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling, and to reduce more and more the number of the few who exploit the social wealth; on the other hand, to constitute the form of transition to a new mode of production. It is this ambiguous nature, which endows the principal spokesmen of credit from Law to Isaac Péreire with the pleasant character mixture of swindler and prophet.” 

All these developments have the potential to provide a transitional form out of capitalism and towards socialism:

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.”

“They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage.”

 “Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale.”

“The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.” 

“Cooperative factories provide the proof that the capitalist has become just as superfluous as a functionary in production as he himself, from his superior vantage point, finds the large landlord.”

Back to part 39

Forward to part 41

The socialisation of capital

Karl Marx’s alternative to capitalism part 39

Marx notes that a certain accumulation of capital is a precondition for the capitalist mode of production that it then develops accumulation enormously:

“The continual re-transformation of surplus-value into capital now appears in the shape of the increasing magnitude of the capital that enters into the process of production. This in turn is the basis of an extended scale of production, of the methods for raising the productive power of labour that accompany it, and of accelerated production of surplus-value.” (Marx Capital Volume 1)

This involves an increasing division of labour inside and outside the workplace; the introduction of machinery and development of large-scale industry; the application of science and knowledge to production; and the increasing transformation of the natural world, all of which can only be the work of many workers combined together.

While many Marxists have prioritised regard to the underdevelopment of imperialist dominated countries and the remaining industrial backwardness of many, they have been loath to also recognise the growth of capitalism which is a necessary feature of its existence. Instead of capitalist development being the grounds for socialism its relative lack of development is often considered to be the warrant for revolution.

This increasing accumulation of capital results in its concentration and centralisation, the former “only another name for reproduction on an extended scale.”  Centralisation of capital on the other hand allows the greater extension of capitalist accumulation: “a more comprehensive organisation of the collective labour of many people, for a broader development of their material motive forces, i.e. for the progressive transformation of isolated processes of production, carried on by customary methods, into socially combined and scientifically arranged processes of production.” (All quotes from Marx, Capital Volume III).

This centralisation accelerates accumulation and allows the creation of forces of production hitherto beyond the capacity of previous numerous smaller capitals, with Marx noting the example of the construction of railways in the 19th century.  These in turn add to the productive power of any particular capitalism, raising the standard of productivity required by any newly aspiring capitalist power; requiring it to match the already existing scale, division of labour and technology in order to successfully compete.  New capitalist enterprises or countries must aim to at least match this level of development in order to survive, even allowing for temporary protectionist measures it may adopt in then meantime.

The concentration and centralisation of production is but one aspect of the centralisation of capital, with capital in its money form also concentrated and centralised; through its expansion it becomes an enormous means for further development of production and accumulation.

As this accelerated accumulation becomes ever more powerful it heightens the contradictions of capitalism, including the elimination of smaller, or even larger, capitals by competitors, which becomes less and less acceptable to such capitals.

Cartels are formed that predetermine the level of production in order to support the prices and profitability of participating firms, and when even this is not enough socialisation goes further with the creation of monopolies.

“This is the abolition of the capitalist mode of production within the capitalist mode of production itself, and hence a self-abolishing contradiction, which presents itself prima facie as more a point of transition to a new form of production.”

Marx notes that expropriation as the starting point of capitalism – through depriving of peasants etc. of their means of production by severing their ties to the land so that they must sell their labour power to capital – becomes the expropriation of other capitals and the creation of monopolies.

The scope and scale of capital no longer allows for the great productive powers created to be the product of individual capitals but the combined power of socialised capital.  The financial system becomes one mechanism through which this socialised capital is concentrated, centralised and distributed.

The scale of production – including huge monopolies – and the power of the financial system require the intervention of the state to secure and regulate their workings, while the monopolies and financial system in turn intervene into the state to defend and advance its collective and specific interests.

This socialisation of production comes more and more into contradiction with the appropriation of production by individual capitals and tiny class of capitalists at its apex.  The massive planning of huge companies with internal economies larger than many countries stands in contrast to the uncontrolled gyrations of the economy as a whole.  The product of socialised labour is inimical to capitalist appropriation of its product, resulting in greater or lesser, but nevertheless permanent, inequalities due to class distinctions. 

The socialisation of production continues today, reflected in the growth of the concentration and centralisation of capital in monopolies and growth of the capitalist state.  Even after decades of ‘neoliberalism’ that supposedly relegated the importance of the state, in the US government spending as a percentage of Gross Domestic Product has reached around 40%, having been 34% in 1979 and 7% before World War I.

The expanding role of the state includes vital support for production as noted in the book of economist Mariana Mazzucato:

“Mazzucato lists twelve crucial technologies that make smartphones “smart “: (1) microprocessors; (2) memory chips; (3) solid state hard drives; (4) liquid crystal displays; (5) lithium-based batteries; (6) fast Fourier transform algorithms; (7) the internet; (8) HTTP and HTML protocols; (9) Global Positioning Systems (GPS); (11) touchscreens; and (12) voice recognition.  Every last one was supported by the public sector at key stages of development.” 

The extent of the concentration and centralisation of capital is recorded in a database of 37 million ‘economic actors’ from 194 countries (the Orbis 2007 marketing database reported on by New Scientist).  The socialisation of capital is illustrated by the 13 million ownership links involving ownership of shares etc. between these agents.  The study of these identified 43,000 transnational companies in 116 countries, plus an additional 500,000 other corporations and 77,000 individual shareholders to which the transnational corporations have direct or indirect ownership relations.  A core of 147 firms controls 40% of the value of the transnational corporations while 737 companies or individuals control 80%.

Such integration is also illustrated by the chance that any two firms in the S&P 1500 US stock market index will have a common owner holding at least 5% per cent of shares in both is 90 per cent, up from around 20 per cent only twenty years ago (People’s Republic of Walmart

In another academic paper (from 2018) the authors find that:

“In the last two decades, over 75% of U.S. industries have experienced an increase in concentration levels. We find that firms in industries with the largest increases in product market concentration have enjoyed higher profit margins and more profitable M&A deals. At the same time, we do not find evidence of a significant increase in operational efficiency, which suggests that market power is becoming an important source of value.”  The paper thus appears as another example of the view that monopolisation is at variance with the essential operation of capitalism.

This growth of the forces of production has relied upon the development of the labour of the working class, even if its powers have been turned against it; illustrated by notoriously anti-worker companies such as Amazon that are to the fore in developing unheard of levels of planning in their operations.

Nevertheless, the growing concentration and centralisation of capital, with its increased planning and networking of production and distribution, makes the potential for the working class to control such forces manifestly easier.  As Engels notes in an addition to Volume III of Capital, when speaking of the chemical industry, “competition has been replaced in England by monopoly, thus preparing in the most pleasing fashion its future expropriation by society as a whole, by the nation.” 

Back to part 38

Forward to part 40

Irish Unity referendum: 50% + 1 < 50% – 1 ?

Jack O'Connor sets out his aims as new Labour Party chairman

The Irish press is full of news items and commentary on the possibility of a referendum on Irish unity and what a United Ireland might look like.  Fianna Fail and Fine Gael figures have ruminated on potential changes to the Irish flag and anthem to help accommodate unionists.

The national anthem – Amhrán na bhFiann – is usually taught and sung in Irish even though I believe it was originally written in English, and the Tricolour already has the colour orange to go with the white and green – to represent the peace and unity between Catholics and Protestants.  Unionists generally don’t speak Irish and they already have the national anthem and flag they want. ‘God save the Queen’ and the Union flag already suit them fine.

Irish Nationalist proposals regarding them are therefore really rather pathetic. Of more substance are proposals of political compromises that, for example, would allow the retention of British citizenship and of a Stormont Assembly with certain powers covering the current six-county area of Northern Ireland.

If it is not true, on this particular score, that unionists have already got what they want, it is only because many have not fully reconciled themselves to the current power sharing arrangements in the existing Stormont.  The DUP sends copies of the Good Friday Agreement to the President of France to inform him that Northern Ireland is inside the UK, but doesn’t inform him that the DUP opposed the agreement because they thought it was a route out of it.

More fundamentally, Unionists would not be Unionists if they would accept such power sharing as a definite minority in a unitary Irish State, something which they delight in pointing out.

So, when it was reported that Jack O’Connor would give a speech saying that there should be a guarantee that there will be a significant number of unionist ministers in any government formed in a united Ireland there might be a tendency to dismiss it as more of the same rubbish.  This time, for a socialist, this is not the case, since O’Connor was making a May Day speech and invoking the name and politics of James Connolly:

“It is imperative that we, who are informed by the legacy of Connolly, intervene to counsel against any proposition that a vibrant sustainable democracy can be constructed on the basis of a sectarian headcount, most especially one which results in a ‘50 per cent plus one’ conclusion.”

“Such a result would present the very real danger of a reversal into the ’carnival of reaction’, which he correctly predicted would accompany partition, to the power of 10.”

This is an extraordinary claim that is not supported by any evidence or argumentation that I have seen.  For it to be true Irish Unity would have to be accompanied by thousands of sectarian killings; the arming of thousands of Catholic paramilitaries by the state; the gerrymandering of political boundaries and systematic discrimination against Protestant workers on an enormous scale.  These workers would have to face massive intimidation and denial of basic civil rights for this prediction to be true.

Where does O’Connor think such a programme will come from and who does he think would support and carry it out?

It is not necessary to have illusions in the Irish State or in the existence of Catholic sectarianism in order to argue that this is nonsense.  We do not face a repeat of the effects, times ten, of the original partition through creation of a united Ireland.

On the contrary – just like the original – once again any violence that is threatened will undoubtedly come from loyalism, and what will matter is its strength and any potential support for it from the British state or elements of it.  This was the predicament 100 years ago and it remains so.

Of course, it is less of a problem today, given the growing weakness of unionism and potential disinterest within the British State in supporting any loyalist resistance to what would be a vote for unity within the North.  But it is a problem to be overcome and not legitimised and thereby strengthened.

So O’Connor is not standing against any future ‘carnival of reaction’ but stands deflecting from the real threat of political violence that would exist in the event of a vote for unity; and standing behind acceptance of the continuing results of the existing carnival of reaction.  He thus retrospectively endorses the original gerrymander and the original sectarian headcount that Connolly did indeed predict would be ‘a carnival of reaction’.  Worse, what he suggests is a continuation of politics based on it, as he must if he advocates the continuation of superior rights to be accorded to unionism.

This he also does by proposing a guarantee that any new constitution “should specify a significant minimum requirement in terms of the number of unionist ministers and the proportion of cabinet seats they would occupy, so as to avoid any suggestion of tokenism.”

No such guarantees are suggested for Irish nationalist representation, or any section of it, or representation by workers’ parties.  He might think the former doesn’t need it or that the latter shouldn’t have it but both considerations apply to unionism.

Unionism shouldn’t have it because it is simply a concession and legitimation of sectarianism that pumps life into what should be a dying political movement, and it doesn’t need it because unionism would indeed be a dying movement, one that should be left to expire.

Any worker’s leader should have recognised a long time ago that unionism has been based on sectarianism and could only claim disproportionate political representation in a united Ireland on the same grounds.

It has already been pointed out than unionism in the Southern State after partition 100 years ago had no future, despite the distinct political interests of Southern Protestant Unionists in the new confessional Free State.  There was no future in hoping for a return of British rule which would then have required enormous force to impose.  Whatever remaining economic and social privileges that still persisted for Protestants in the new state were left to wither or were really a result of class privileges.

In time many Protestant citizens in the Southern state became indistinguishable in their national allegiance from the rest of the population.  The growing secularisation of popular opinion in the Irish State provides no grounds for believing that a new eruption of Catholic sectarianism faces Protestants in a unitary state.  In such circumstances a policy of sustaining the powers of unionism would serve not to eradicate sectarianism but to sustain it.

If this unionist political representation had any real effect on Government and state policy it would most likely be reactionary and anti-worker, although it seems that the interests of workers are the furthest thing from O’Connor’s mind.  It would lay claim to political allegiance based on religion, which would prompt resentment and opposition in the rest of the population.  If it had no effect on state policy it would be a promise to unionism betrayed and thus satisfy no one.

O’Connor thinks 50% + 1 is undemocratic but won’t say what result would be.  He is left with the unfortunate view that 50% -1 is the greater mandate.

BBC, DUP & Brexit

BBC's Andrew Marr slammed for 'poor research' on Brexit NI Protocol -  BelfastTelegraph.co.uk

In last weekend’s Marr show the  BBC rallied behind those Brexit forces, which would appear to be almost all of them, who still can’t get their head around the idea that you can’t leave the EU without consequences and that these consequences are not a punishment but actually what they voted for.

This time it was the new leader of the Democratic Unionist Party, Edwin Poots, who was allowed to forget that it was his Party that had helped deliver Brexit and in a form that didn’t allow Northern Ireland to join with the rest of the UK in its new relationship with the EU.  Such a deal, as proposed by Theresa May, was opposed by the DUP as insufficiently Brexity.

Marr appeared to labour under the impression that the Northern Ireland Protocol is solely the EU’s baby and not a joint production with the British Government. Perhaps to be regarded as another one of Boris Johnson’s unrecognised children?

One even had sympathy with the EU representative who had to respond politely to the ignorant and repeated interruptions of Marr, including the latter’s injured innocence that the EU should seek to take legal action against the British for breach of their legal obligations under the Protocol.  Not for him the previous obvious and hardly avoidable observation that – for the DUP – it was “arguably your political incompetence that got you here.”

Marr pushed the incoherent unionist argument that they were so offended by the very temporary suggestion of the EU to invoke Article 16 of the Protocol in order to amend its operation that this was what was required, this time by the British Government.

While sarcastically referencing the ‘sacred’ Single Market, the one Brexit supporters want out of but also to enjoy its benefits, Marr pointed to an opinion poll in Northern Ireland which showed that ‘48% hate the Protocol’.  

‘Hate’ of course is a strong word; was not quite what the question asked, and presumably must mean that while 48% ‘hate it”, 46% also ‘love it’.  The numbers are within the margin of error, and repeating the unionist assertion that speaks of the people of Northern Ireland as if it consisted solely of unionists, the other assertion of Marr – that ‘the people of Northern Ireland have lost faith in the Protocol’ – was hardly justified by the poll.

The BBC, through Marr, appeared to adopt the view of unionism encapsulated in such mottos as ‘we are the people’ and ‘our wee country’, which may be properly understood as ‘WE are the people and ‘OUR wee country’.  That the majority in Northern Ireland voted against Brexit is ignored as unionism, and now the BBC, considers that the rights of the majority of unionism takes precedence.

But perhaps the BBC is also registering something else, which is the evolving strategy of its master – the British Government.

At the beginning of the year the incoherence of unionist rejection of the Protocol led the DUP leader Arlene Foster to point to its benefits (as the alternative to futile opposition).  Unionist hostility spoke of changes to the Protocol.  Now this opposition demands its complete removal.

A large part of this hardening of position derives from the encouragement of the British Government, in a cynical attempt to play the Orange card and support its own policy of seeking changes but not complete abolition.

Of course, British opposition is mainly motivated by the attempt to create leverage elsewhere in UK-EU relations and not any particular priority allotted to the North of Ireland.  So, when it is reported that ‘a senior ally of the Prime. Minister’ says that the Protocol is “dead in the water” this is simply playing to the gallery, in this case just after Lord Frost and the Tory Secretary of State had met loyalist paramilitaries represented by the Loyalist Communities Council (LCC).

Similarly, Poots’ total opposition puts forward, as an alternative, checks on goods in other locations within Northern Ireland “including the ports.”  This however rather undermines his argument that the level of such checks makes them impossible and doesn’t carry any weight when it is to the checks themselves that is the objection.  The promise of any such alternative is about as trustworthy as a promise from Boris Johnson. 

Unionists want the Protocol destroyed and the British Government would like it filleted for other purposes.  Neither are acceptable to the EU.

The increased legitimacy given by the British Government to the paramilitary front organisation is illustrated by its providing a platform to the LCC at a Westminster Committee hearing, allowing a teenage loyalist to make the statement that he stands by previous remarks that “sometimes violence is the only tool you have left.”

That the Orange card is being played is made abundantly clear when the Tories reveal that the 12th July has been “privately set” by David Frost for the easing of Protocol checks.  The culmination of the loyalist marching season is now aligned with deadline for acceptance of the demands of the British Government.

Such recklessness by the Tory regime passes right over Andrew Marr’s head, while he accuses the EU of endangering the peace process.  He denigrates the EU Single Market, but is unwilling even to raise the question whether the vast majority of European States constituting the EU is going to roll over on account of teenage threats on behalf of criminal gangs; the pronouncements of creationist politicians, or as a result of the perfidy of the serial liars of the British Government.

Unionist opposition, backed by the British, may have hardened but the reality of their mistaken Brexit policy has simply compounded their frustration at their inability to push the peace process in a sufficiently rightward direction, a process many of them never supported in the first place.  As unionism has hardened it has also thereby divided.

The DUP is now irreversibly split down the middle.  The only question is what organisational from this division will take.  It is haemorrhaging support to the softer unionist Alliance Party and the even more uncompromising Traditional Unionist Voice.

It has attempted to protect one flank by making overtures to the loyalist paramilitaries in the LCC (by both sides of the current split) but this has proceeded to claims that the UDA has intimidated DUP members to support the new leadership.

The paramilitaries are themselves united in opposition to the Protocol but divided on everything else, so that what appear as marginal figures present as leading spokesmen of loyalist opposition.

On the other side of unionism, its moderate commentators denounce EU ‘intransigence’ while calling on it to protect Northern Ireland from the potential for unionism to finish off the Stormont Executive.  Unfortunately, the DUP has made promises in its opposition to the EU that it cannot keep and the EU has no interest in ensuring that they are kept.  The party may soon no longer be the largest political party or even the largest unionist party.

To expect the EU to capitulate to such a weakened and fractured opposition and a British Government flailing about for trade deals that won’t deliver is to live in an alternative universe.

The EU seeks to become a major political as well as economic power on the world stage.  It expects to be taken seriously by the likes of China, Russia and the United States.  Whatever ‘pragmatic’ changes it is prepared to make to the workings of the Protocol will not amount to accepting any significant risk to its Single Market. Such changes as are proposed will require the British Government to introduce all the measures agreed by it but not implemented.

The failing and weakening of the Good Friday Agreement institutions will continue as will the parallel confusion of unionism.  The Northern State will continue to hold together and no Irish unity referendum will come along soon to save everyone from the decay.  Out of all these processes it is ironically only the successful operation of the EU Protocol that promises some grounds for successful, if only temporary, stabilisation.