Karl Marx’s alternative to capitalism part 48
In the previous post I noted that Marx states that solving the problems thrown up by social revolution will be possible when the conditions are present or “in the course of formation” with the implication that if they are not present or insufficiently in formation they cannot be accomplished.
These tasks include the development of the forces of production and of the working class and its movement so that it takes into its own hands these forces. Only through the massive socialisation of production carried out by capitalism is it possible to make these forces the collective power of the working class. Individual production such as peasant holdings, guild production, or petty commodity production in general, cannot support collective ownership. In the terminology of the Preface of 1859, the new relations of production would not be appropriate to the forces of production.
The massive development of today’s socialised production could only come about through the huge accumulation of means of production and transport etc, which cannot now function without equal development of massive amounts of data and information. These have developed through accumulation of these means as capital by the capitalist class. This in turn is simply invested surplus value that could not have been accumulated without the massive growth in the exploitation of the working class.
All this entails certain characteristics that are important to understanding the prerequisites for socialist revolution, understood both in terms of the development of the productive forces, before and after the occurrence of working class political revolution, and for the political revolution itself.
The advance of the forces of production has involved the prodigious increase in the international division of labour with implications for their continuing development, and how they must develop further under working class control and direction. It also makes clearer than was the case in Marx’s time that political revolution by the working class cannot succeed on a purely national basis, something that would already be universally accepted had the working class movement succeeded in developing international organisation, which therefore remains a crucial task.
The existing forms of socialisation also inevitably involve enormous increases in the concentration and centralisation of capital, which assists the possibility and potential for collective ownership by the working class. This has necessarily involved an enormous increase in planning both within and between individual productive forces. Engels recognised this in his critique of the Erfurt Programme, when referring to paragraph 4 of that programme’s criticism of “the planlessness rooted in the nature of capitalist private production”
Engels suggested that this “needs considerable improvement. 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 opposition between capitalism and socialism is not therefore about a simple counter-position of market and plan, since development of the latter within capitalism also helps lay the ground for the new relations of production that define the new working class society. It is the class that rules, that carries out the planning and that determines its scope and character that makes the difference, not the existence of plans themselves.
This also means that whatever role market relations initially have in the transition to cooperative production – before and after political revolution – will arise from the existing planning within capitalism, its degree of development beforehand and the capacity to expand and advance it thereafter.
The material relations of production that herald socialism also therefore refer to the forms of ownership that exist before political revolution, that will serve to help bring it about as well as help progress its success thereafter:
“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.”
As Engels said in a letter to Bebel:
“Marx and I never doubted that in the transition to the full communist economy we will have to use the cooperative system as an intermediate stage on a large scale.”
It is not therefore simply a question of some quantitative development of the forces of production, which is the limited way that it is often considered, but the necessary characteristics of that development – including the social forms that it takes – that affect the sufficiency of the material preconditions for socialism and the associated requirements for successful political revolution.
So, Marx does not say that just because the forces of production have developed – to whatever level – the new society will emerge out of it. If it does not then it (the old society) may well continue to develop its forces of production. The creation of the new is a conscious act.
This is because it is the working class itself, as it is organised in production, that is the prime productive force, which comes into conflict within the prevailing relations of production, i.e. the class relations of subordination and exploitation, and which means the contradiction between the forces and relations is not a simple resolution in favour of the forces, as some bourgeois analysis might seek to contend. An early formulation by Marx appeared in the Poverty of Philosophy:
“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 organisation 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.”
In Value, Price and Profit Marx explains to workers that ‘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.’
Thus, the way the social forms of production have developed under capitalism are also part of the material circumstances that face the working class in its task of overthrowing and transforming it. This includes the international nature of the division of labour and of the classes necessarily based on it; the increased removal of the capitalist class directly from the greatest means of production with the substitution of professional and technical staff that shade into the working class; and the forms of socialised ownership arising, including development of its cooperative forms, which can all act as more direct preparation of the working class for its new role as master of society.
Marx presented no systematic view on how all these elements might come together just as he did not provide a blueprint about how the new society would be planned, as the latter grows out of the former and not from some prior schema. It has however been stated repeatedly that this would arise directly out of existing society and not from some invented first principles, whether that be a certain plan or state structure; especially as the latter must become subordinated to general society and not its master.
Back to part 47
Forward to part 49
Sráid Marx 
I think its fundamental to understand Marx & Engels’ theory of historical materialism, as being the equivalent for the evolution of social forms as the equivalent of Darwin’s theory of evolution of biological species, and within that the Natural laws – The Law of Value and the Law of Natural Selection – perform the same role as the driving force, explaining the process by which this evolution takes place. Marx and Engels refer to that, as does Lenin, whilst all, obviously also emphasised the difference between the former and latter, being the role of human beings in shaping the process, and separating themselves from the reactionary, Malthusian aspects of Darwin’s theory.
The Law of Value, as Marx sets out in his Letter to Kugelmann and elsewhere, requires all societies (in fact, you can also see it within Nature – for example, water takes the course of least resistance in running down hill, cows will eat the lushest grass first – to raise labour productivity so that the maximum use values can be produce with the available social labour-time. Its why, as Marx describes in A Contribution, and in Capital I, within the primitive commune and the peasant household, a social division of labour arises, long before any consideration of trade or commodity production. From all of this can be traced the development of towns, and of markets in those towns, of an incentivisation of further social division of labour, and development of commodity production, to differentiation of these urban commodity producers into bourgeois and proletarians, the development first of interest-bearing capital and merchant capital, and subsequently with the development of this commodity production in the towns of industrial capital, which, in turn undermines the subsidiary industrial production of peasant households, leading to the process of differentiation spreading to the countryside, and so of the spread of capitalism from th towns to agriculture. In Capital I and III, Marx then explains the continuation of this same process leading to the concentration and centralisation of capital, the fetter of the monopoly of private capital as the individual private capitalists can no longer mobilise sufficient for the needs of the mammoth size of enterprises, most notably of the railways.
So, this fetter of the monopoly of private capital is burst asunder, in the mid 19th century, as the new form, socialised capital takes its place – cooperatives and joint stock companies. None of this as they set out requires a conscious decision by anyone, but is explained by the blind operation of the Law of Value, driving productivity higher. But, what does require conscious decision, is where these new forms come into conflict with the old forms of control, and the distribution arising from it.
As Marx sets out in Capital III, Chapter 27, the contradiction is resolved positively in the case of the cooperatives and negatively in the case of the joint stock companies. In the cooperatives, they have to borrow money to use as money-capital, to begin operation to supplement profits for accumulation. Whilst capitalist lenders – as was seen with Ralahine – will charge them higher rates of interest, the cooperators can maintain this within the bounds of competitively determined market rates of interest. What is more, they exercise control over the actual capital accumulated. Not so with the joint stock company. It raises money by borrowing from banks, issuing bonds and debentures, but also by issuing shares – either to a restricted number of people in a private limited company, or to the public in a public limited company – but these shareholders are then the ones who exercise control not only over their shares, but also over the capital, and thereby the company.
As its been described, its like a seller of umbrellas, who having been paid for the umbrella (the interest paid on the loan) then still insists on acting as though the umbrella belonged to them, determining its use and so on. It is the contradiction between thee two forms of capital shares (fictitious capital) and real industrial capital (socialised capital owned collectively by workers) that is the foundation of the transitional nature of this socialised capital, and of the transitional society in which this form of capital dominates. Its also why, in Anti-Duhring, Marx and Engels set out there explanation that the logical conclusion of such a process is state-capitalism, in which the ruling class are purely money lending capitalists, who lend money to the state via the purchase of bonds, upon which they receive interest, out of the profits created by the state owned industries.
But, unlike the cooperatives, in the joint stock company, the shareholders exercise control, and can then pay themselves whatever amount of interest (dividends) they choose, as well as paying whatever amounts they choose to the executives they appoint to look after their interests, as against the interests of the company. As Marx describes, these executives are not to be confused with the actual functioning capitalists, the day to day professional managers who do the job an old individual private capitalist would have done of organising production, and who are now drawn from the working-class, and paid wages. The executives sit above them, and their revenue comes from surplus value.
The ability of the ruling class/shareholders to continue to exercise this control is a function of a conscious decision, a political act to determine company law so that they continue to exercise control over capital they do not own, a clear contradiction with bourgeois property law, seen openly in comparing their position even with that of bond holders, a bank lending money, and even more openly when compared with a worker cooperative – though not a consumer cooperative. It requires a conscious political act to change that situation, and to bring the legal/political superstructure into alignment with the objective reality of productive and social relations. It requires a political revolution.
In TOSV, Marx also sets out why it could only be in the form of capital that the required centralisation and socialisation of production could occur. It was the same operation of the law of value, which meant that driven by competition, it was individuals – and Lenin most notably describes which individuals and families were best placed to undertake this role, i.e. those with larger families and so on – that were led into commodity production, and that same competition leads them first to centralise means of production in their hands, and as their neighbours go under, to appropriate their means of production, and use it to then employ those neighbours as wage workers. It is the basis of Marx and Engels letters to Zasulich Danielson and so on, that the only way that Russia could have skipped this capitalist stage of development is if workers had carried through a socialist revolution elsewhere, and its forms could then be exported to Russia, along with the productive forces. Engels wrote along similar lines to Kautsky about how they would have to relate post revolution to the colonies.
On international political revolution. I think its unlikely that a successful political revolution would happen in any EU country, for example, without it being part of an EU wide, at least, social upsurge. And, ultimately, as Lenin and Trotsky describe, Socialism In One Country is impossible, because to develop the productive forces to their highest level requires international trade, and social division of labour, which imperialism would always limit, let alone waiting its time to intervene militarily etc. However, as Trotsky describes – See Writings on Britain – it is possible for a successful political revolution in one country to take place. The point is a) that does not constitute socialism, but merely one precondition for it, b) it must inevitably be thrown back unless it is quickly supported by the international revolution, and hence permanent revolution now takes on this wider meaning, c) countries that already have a higher level of development will be able to hold on for longer, in waiting for that support than less developed economies. Hence the Russian Revolution was pretty much doomed, and the same is true of all of those Third Worldist adventures that think they can, like the Narodniks, create an alternative path of development for less developed economies outside the framework of imperialism, simply on the basis of petit-bourgeois nationalism.