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

Capitalist cooperation and Socialism

Karl Marx’s alternative to capitalism – part 38

recent book on how capitalism, through the socialisation of production, is preparing the ground for socialism makes a point made by many – that Marx left no blueprint for a socialist economy.

“Karl Marx and Friedrich Engels may have expertly described the political economy of the capitalist mode of production, but they left few specific descriptions of what their hoped-for replacement would look like.”

Not only is it just as well that they did, given the specific way capitalism has developed, but had they done otherwise it would have contradicted their view that socialism would be the creation of the working class, not the elaboration of ideas sucked out of the thumb of great thinkers.

In fact, the authors of the book do not repeat the error of others, who rebuke Marx for not leaving a ready-made solution, because their book is all about how modern capitalism provides the foundation for socialism (as Marx first described in his critique of the political economy of capitalism).  As the great man said, the task of socialists is only to make workers conscious of what is going on in front of their eyes in order to move forward.

Their criticism of lacking a blueprint is made more against the Bolsheviks in 1917, but then the Russian empire did not have the preconditions for socialism.  The development of the socialisation of production possible under socialism, made possible by prior capitalist development, wasn’t achievable because the latter’s development was insufficient. Other more advanced capitalist powers could not assist because they did not also succumb to revolution.  The fault was not in the heads of the Bolsheviks or the gaps in their programme but the gaps in reality between what existed and what had to be achieved.

The socialisation of production under capitalism that paves the way for socialism can be considered in a number of aspects – the concentration and centralisation of capital and production, created by the increase in cooperative labour arising from the expansion of the division of labour.  The first two provide the grounds for the fully cooperative labour of socialism just as the increase in cooperative labour has entailed centralisation and concentration.

As Engels said, quoted in the previous post, “Before capitalistic production . . . the instruments of labour – land, agricultural implements, the workshop, the tool – were the instruments of labour of single individuals, adapted for the use of one worker, and, therefore, of necessity, small, dwarfish, circumscribed. But, for this very reason they belonged, as a rule, to the producer himself.  . . . But the bourgeoisie . . . could not transform these puny means of production into mighty productive forces without transforming them, at the same time, from means of production of the individual into social means of production only workable by a collectivity of men.”

The point of socialism is for these means of production to become not only the product of the labour of the collective worker but also to come under its ownership and control.

Capitalism, properly speaking, only really begins with this enlarged scope and scale of production.  As Marx writes in Capital Volume 1:

 “Capitalist production only then really begins, as we have already seen, when each individual capital employs simultaneously a comparatively large number of labourers; when consequently the labour-process is carried on an extensive scale and yields, relatively, large quantities of products. A greater number of labourers working together, at the same time, in one place (or, if you will, in the same field of labour), in order to produce the same sort of commodity under the mastership of one capitalist, constitutes, both historically and logically, the starting-point of capitalist production.”

Marx notes that: 

“When numerous labourers work together side by side, whether in one and the same process, or in different but connected processes, this form of labour is called co-operation . . . Not only have we here an increase in the productive power of the individual, by means of co-operation, but the creation of a new power, which is intrinsically a collective one.”

It is this collective economic power that must become conscious of its role and its interests, which necessarily must entail political consciousness.

Of course, with this development of capitalism, it is capital which combines the many workers, the social labour, that makes cooperation the productive force that it is, requiring greater and greater amounts of capital with person(s) whose sole role it is to wield this capital.  The technical division of labour is subsumed within a social division of labour marked by an increasingly hierarchical division of power between owners, Directors, managers and workers, within which there are other numerous lesser gradations of division.  Cooperative labour thus presupposes a capitalist class that grows in power as the scale of cooperative labour also grows.

This class performs the necessary tasks of directing, superintending and adjusting the performance of this cooperative labour.  This class also imposes the discipline and domination of labour which unavoidably arises, and suppresses the resistance that workers instinctively feel in response to external discipline and control.  Capitalist ideology then identifies the necessary role of direction of cooperative labour with the capitalist and its role of domination.  It does this even when the individual capitalist owner has been replaced by Directors and senior managers who might however be ‘incentivised’ by share options etc. and thus see a material basis for their role of enforcing the requirements of capital.

How easily this is done is demonstrated by Marx when he says that “it is not because he is a leader of industry that a man is a capitalist; on the contrary, he is a leader of industry because he is a capitalist.”

This ideology does not grant that the cooperative workers might carry out the direction of their labour themselves.  Marx quotes the ‘philistine’ Spectator magazine, unfortunately still with us, saying of workers’ cooperatives that:

“They showed that associations of workmen could manage shops, mills, and almost all forms of industry with success, and they immediately improved the condition of the men; but then they did not leave a clear place for masters.” As Marx says – ‘Quelle horreur!’.

The individual workers are only in the workplace because capital has employed them to be there and directs and controls their actions.  Their collective power appears as the power of capital and the capitalist and/or management.  While they understand that they do not ‘belong’ to either they also understand that they only perform their work because they have been hired to achieve both the objective of the company and the means to achieve it, neither if which is theirs.  This alienates them from their work and is a barrier to their understanding that their labour, like that of the rest of the working class, is the collective foundation of all production, and this being the case, they should both direct and control it.

Again, Marx notes the confusion created: that the power of cooperative labour created by capitalism is not seen as a particular form of such labour but only as the power of capital and its system. Capitalism is nevertheless necessary to bring this particular power of social labour into the world – “the capitalist mode of production is a historically necessary condition for the transformation of the labour process into a social process . . .”

Of course, cooperation has been a feature of all human society and often comes to the fore in particular circumstances, such as natural disaster, giving the lie to crude propaganda that people are naturally or spontaneously selfish or greedy.  Only the capitalist mode of production however raises this cooperation to unprecedented scope and sophistication and does so regardless of the subjective motivations of individual members of each class. 

It is capitalism which brings about the socialisation of production through increased division of labour allowing the concentration of capital, the application of machinery and development of large scale industry, requiring the most developed cooperation to make it work.

The ideologues of capitalism constantly assert the virtue of competition in its creation but fail to acknowledge and recognise the associated requirement for cooperation.  At best they seek to determine the limits of cooperation to within firms, in order to assert the primacy of competition in relations between them, but which even here is only partially true.

The unacknowledged role of cooperation can often be seen in references to Adam Smith’s famous pin factory, which required no new techniques or technology but simply required a single worker to devote herself to one of the eighteen tasks required to make a pin, as opposed to each worker completing all of them.  Where previously 200 could be made in one day by ten workers, this specialisation allowed production of 28,000 pins in a day.

No pin was therefore the product of a single worker, so we cannot measure output by adding up the number created by each worker as we would have before.  Labour has become a social activity requiring the cooperation of each worker so that every pin is wholly the product of all.

When we consider the incredible division of labour today, in order to create such things as cars, ships and computers, it has extended beyond a single workshop to a division of labour between thousands if not tens of thousands of production sites across the globe.  Even ‘simple’ commodities, that are usually taken for granted in the most advanced countries, are the product of tens of thousands of factories and offices.  Water requires treatment works, which requires cement, steel, computers and chemicals etc., which each require their own enormous separate production processes.  Electricity requires power stations and wind farms with thousands of separate components and an electricity transmission and distribution system to deliver it.

All these elements involve a massive division of labour both within production units and between them.  We can no longer even conceive how any of this could be the product of one worker or even single group of workers.

Such is the achievement of capitalism in creating the collective worker.  Its socialisation of production requires the cooperation of millions of workers across the globe, yet rather than unite to advance this cooperation to the benefit of all those involved we have drummed into us that we must compete with each other.  Not to develop the best products or techniques, but to crush and kill off competitors and potentially destroy the jobs of others.

As the division of labour has advanced so has the necessity for cooperation and so are the preconditions for socialism more and more established; all driven by capital’s own thirst for surplus value and profit.  The full potential of such cooperation can only be realised through its conscious extension by all those involved in the process of production, distribution and consumption, and the political arrangements that preside over it.  All aspects of it, including competition, then become the conscious and purposeful activity of the collective worker.

Back to part 37

Forward to part 39

Karl Marx’s Alternative to capitalism part 26 – forces and relations of production 9

In the previous series of posts I have set out Marx’s views on the contradictions of capitalism, between its productive forces and the relations of production, and have gone to some length to explain the concepts involved.

Much of this might seem rather tenuously related to the issue of Marx’s alternative to capitalism.  Previously, however, I have explained that this alternative can only arise out of existing society, and not from any sort of blueprint, either based on high moral values of equality and justice etc. or more or less elaborate plans for the a society, for example how a planned economy might be made to work more efficiently than capitalism.

More particularly, this alternative cannot be conceived as simply political revolution, for such a revolution presupposes the grounds for its success – on the development of the forces and relations of production as set out in these previous posts, this one and the next one.

The development of the forces and relations of production explains how the alternative that grows within capitalism and will supersede it might be conceived, and on these grounds that political revolution might be considered a reasonable objective.

In this way, Marx explains how the development of capitalism creates the grounds and tendencies of development of an alternative society:

“The conditions for production become increasingly general, communal and social, relying less on the individual capitalist. We have seen that the growing accumulation of capital implies its growing concentration. Thus grows the power of capital, the alienation of the conditions of social production personified in the capitalist from the real producers. Capital comes more and more to the fore as a social power, whose agent is the capitalist. This social power no longer stands in any possible relation to that which the labour of a single individual can create. It becomes an alienated, independent, social power, which stands opposed to society as an object, and as an object that is the capitalist’s source of power.”

“The contradiction between the general social power into which capital develops, on the one hand, and the private power of the individual capitalists over these social conditions of production, on the other, becomes ever more irreconcilable, and yet contains the solution of the problem, because it implies at the same time the transformation of the conditions of production into general, common, social, conditions. This transformation stems from the development of the productive forces under capitalist production, and from the ways and means by which this development takes place.”

Marx sets out “Three cardinal facts of capitalist production:

1) Concentration of means of production in few hands, whereby they cease to appear as the property of the immediate labourers and turn into social production capacities. Even if initially they are the private property of capitalists. These are the trustees of bourgeois society, but they pocket all the proceeds of this trusteeship.

2) Organisation of labour itself into social labour: through co-operation, division of labour, and the uniting of labour with the natural sciences.

In these two senses, the capitalist mode of production abolishes private property and private labour, even though in contradictory forms.”

Marx notes that the bigger, more concentrated and centralised capital becomes, the less important is the role of the capitalist himself, while this process simultaneously involves the centralisation of capital in a few hands including through the decapitalisation of many.  Although “this process would entail the rapid breakdown of capitalist production, if counteracting tendencies were not constantly at work alongside this centripetal force, in the direction of decentralisation.” (Capital Volume III, p 354 – 355)

Ernest Mandel, in his introduction to Volume III of Capital, sets out a flow-diagram putting forward the elements of Marx’s analysis and placing them within separate boxes, with the end point being ‘socialism’, and with the penultimate box the ‘tendency towards collapse of capitalist system’.

While useful as a graphical presentation of the elements of Marx’s analysis, it is misleading if it is assumed that socialism is simply a result of capitalist collapse, rather than capitalist collapse being the result of socialism, in other words the actions of the working class.

It is however useful to sum up the last few posts by itemising these different elements that are  included in Mandel’s schematic, with the understanding that socialism is not the result of the automatic working out of any or even all of these factors, but rather the conscious intervention of the working class, not in a voluntarist way, but arising out of (at least some of) the factors set out below, and in particular ways that we shall later explore.

  • Growing difficulty of maintaining market economy, value realisation, under conditions of growing automation.
  • Periodic crises of overproduction.
  • Tendency to growing centralisation of capital in fewer and fewer hands.
  • Tendency of average rate of profit to decline.
  • Tendency to growing objective socialisation of labour.
  • Growing contradiction between socialised labour and private appropriation.

The contradiction between capitalist relations of production and its productive forces is evident every day, in the inability of capitalism to secure permanent full employment, in fact its inability to function without a reserve army of labour that helps regulate its functioning.

The tendency to the socialisation of production through, for example, the growth of monopoly might be seen as anticipation of socialism, which in a negative fashion it is, but while it entails increased planning within enterprises, it does not otherwise prevent capitalist crises.

Likewise, increased state ownership and intervention also anticipates resolution of the contradiction between the forces and relations of production, but does not resolve it and does not represent a model of future society.  As Engels notes:”

“But, the transformation — either into joint-stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces. In the joint-stock companies and trusts, this is obvious. And the modern State, again, is only the organisation that bourgeois society takes on in order to support the external conditions of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists.”

“The modern state, no matter what its form, is essentially a capitalist machine — the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is, rather, brought to a head. But, brought to a head, it topples over. State-ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.”

The true anticipation and herald of the new mode of production is contained in the development of workers’ production, anticipation of the associated workers’ mode of production, through the growth of workers cooperatives, as argued by Marx:

“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.” (Capital Volume III)

Back to part 25

Forward to part 27

Karl Marx’s alternative to capitalism part 18 – forces and relations of production 1

We have seen the importance of production to individuals and to society and how the relations of production condition our lives and thus how changing these is fundamental to any alternative that seeks to radically transform these lives.

An alternative view is that it is not possible to ascribe any objective primacy in historical explanation to any of the multiple factors that bring about a particular event.  Since multiple factors create history and all are necessary for any particular outcome there can be no fundamental ordering or understanding of historical development.  This view therefore implies that pursuit of any alternative can have no secure foundation because any particular outcome is a combination of causes, each of which is necessary for the existence of that event and its consequences, and it is impossible to control for all these multiple causes.

It is not my purpose to go into a philosophical interrogation of this claim but to point out that Marxism demonstrates the cogency of its alternative not by the attractiveness of its ideas but by their consistency and correspondence to reality; that they explain the real world, how it develops and how it may be changed.  Its correctness therefore arises from real history which must evidence its ideas and the persuasiveness of its alternative. Marxism does not therefore impose formulas on history to which the real world must adhere but establishes the laws through which history develops by looking at history itself. The existence of such laws is demonstrated by interrogation of history itself.

Its claim is therefore that there are some things more important than others to understanding historical development and therefore fundamental in determining how it can be changed and placed under conscious human control, in so far that it can.  The claim by Marx is that it is how people cooperate to reproduce their conditions of life, and the forces of production and relations of production as the key aspects of this process, that can explain its overall development.  These aspects of history have to be identified and their mutually conditioned development explained by history and not by some theory imposed from outside.

The ‘Preface’ of 1859 contains some very short remarks setting out this view:

“In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness . . . 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.”

The key part of this that is often misunderstood is “relations of production appropriate to a given stage in the development of their material forces of production.”  For some this means that that forces of production have primacy in explaining historical development, in that the relations by which people come together to produce are determined by the level of development of these forces of production and that changes in these relations of production arise from the development of the productive forces.  An alternative view is that it is the relations of production, for example, of exclusive capitalist ownership of the means of production plus a working class without such ownership, and the competition among these capitalists, that is the motor of development.  In other words, two diametrically opposite views!

In the last post, I explained what was meant by the relations of production under capitalism.  Turning to the forces of production, these can be considered to be the instruments of production including technology (factories, offices, transport, machines etc. – the physical instruments used to produce material goods and ‘immaterial’ services); raw materials used in production; and labour used in production including its mode of organisation, cooperation and division of labour.

Human labour power is the most basic force of production and since relations of production are composed of people we can see that the forces and relations of production are not physically separate things but different aspects of the way individuals combine in society to produce and reproduce that society.  The most basic force of production under capitalism is therefore the working class.

There is not therefore a set of forces of production upon which a separate set of relations are imposed to make a combined mode of production.  These are two aspects of the one production process with their own features that entail the contradictory development of capitalism as a whole and explain its development.  Just as the commodities produced in capitalism have a use value – they must have some use in order to be bought and sold – and they must have an exchange value – they must have a monetary value that determines whether they are made and sold, and at what price they are sold at; so, the forces and relations of production are aspects of the one process of (re)production.

This means that production is capitalist production for profit, which is derived from the unpaid labour of the worker.  This however can only be profit if the commodities made by the worker are sold, which means the commodities must have a use value, for if they had no use they would not be purchased, and the lower the share of wages in the value created in production the greater must be the consumption of the capitalist and other parasitic classes.  The surplus value created by the worker, the unpaid labour transformed into money, allows the capitalist to purchase more instruments of labour and hire more labour power.

Production is therefore not just the production of material goods and services but the reproduction of class relationships and the relations of production. The forces and relations of production exist as a unity, as aspects of the same process.

The reproduction of classes thus involves not just the hire of labour to make a profit but assumes that the wage can function as a wage because the commodities the worker needs to consume can be purchased with money the worker receives and are thus themselves commodities produced by wage labour.  This is also the case with the instruments of labour which are not self-produced either by the capitalist, and certainly not by the worker, but are themselves commodities produced by wage labour.

Only when this is the case can we really claim that the relations of production and classes typical of capitalism are adequately developed so that the features of capitalism that we will later discuss are expressed and become typical, including separation of the worker from the means of production and their re-uniting only under the control of capitalists, who now monopolise their ownership.  Only to the extent that this is the case can we talk of capitalism and we can only know this by historical investigation.  While elements of wage labour and capital have existed for many centuries, the capitalist mode of production has not.

The first claim by Marx is that certain relations of production are appropriate to, or correspond with, a given stage in the development of the material forces of production.  But in what sense are the forces of production primary?

A second famous quote from Marx sets out in a more specific way than the 1859 Preface his views:

“The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows directly out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers — a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity — which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state.”[i]

Marx is therefore saying that the level of productivity determines what forms of extraction of surplus from the exploited class are possible. He sets out a general relation between the level of productivity (size of surplus) and the forms of surplus labour possible given that level of productivity.  This form of surplus labour extraction is the basis for sustaining class relations in society and this class society determines the kind of political form the society takes or ‘the form of the relation of sovereignty and dependence.’

Class relations thus grow out of production so must in some way be separate from production for these relations to in turn react upon it, so that the class relations have to correspond with production.

Of course, at any particular time production takes place within class relationships but taken separately, in this sense, it may be considered as simply material production, as production of use values, as production in itself, a process between men and women and nature involving methods of labour.

This is an aspect of the actual mode of production useful in order to understand production as a whole, which also necessarily includes class relations.  The forces and relations of production therefore include the same people and the same processes but understood as different aspects of the one mode of production, aspects that are not simply conceptual but can be demonstrated through real history.

The ability of this production to support any class society, the scope and extent of this class society and the potential to abolish class society altogether, depends upon the productive forces creation of a surplus and the extent of this surplus production.

[i] Marx goes on to say that “This does not prevent the same economic basis — the same from the standpoint of its main conditions — due to innumerable different empirical circumstances, natural environment, racial relations, external historical influences, etc. from showing infinite variations and gradations in appearance, which can be ascertained only by analysis of the empirically given circumstances.”

Back to part 17

Forward to part 19

Karl Marx’s alternative to capitalism part 17 – social classes

The relations established when people produce together is fundamental to the overall position they occupy in society. These relations of production are therefore fundamental to all the social and political questions faced by individuals.

Yet in mainstream conceptions of politics these fundamental relations do not exist – rent, profit and wages are all the expressions of relations of production but they are simply treated as a given, and the distribution of population in receipt of them also simply assumed.  Instead of examining the foundations of society, what already exists is simply assumed to be natural.

The class categories that are employed, such as ‘middle class’, are politically loaded to express either neutrality between those who work and those who own capital, and/or beg the question of what these people are in between.  Old class categories such as A, B, C1, C2, D and E are recognised as outdated even in their own terms while newer categories such as these don’t explain anything, while smothering fundamental divisions.  In Britain, and also Ireland, cultural expressions of class such as speech come to represent class, again without explaining it. Politics, as marketing, packages people into all sorts of random categories, from ‘squeezed middle’ to ‘just about managing’ to ‘people who get up early in the morning’ and ‘hard working families.’   How could real alternatives to what exists arise from such misconceptions?

All these categories appear as more or less random aspects of the lives of working people who above all else have to work for a living but cannot be categorised as such, cannot be informed that their fundamental characteristic is one of class defined by relations of production.  Other divisions heaped upon them, such as those based on religion or race, help make this a reality while these and other basic divisions such as sex overlay such division, adding, reinforcing and obscuring all at the same time but never replacing or eradicating.

Identification of new categories of social existence – be they defined in workers’ roles as consumers, the ‘affluent worker’, or as producers, ‘professionals’ or ‘precariat’ – might reflect some reality of capitalist development but never at the most fundamental level.

Marx doesn’t reject the reality behind these categories but sees their elaboration as the working out of the contradictory development of capitalism:

‘Incidentally, . . . although every capitalist demands that his workers should save, he means only his own workers, because they relate to him as workers; and by no means does this apply to the remainder of the workers, because these relate to him as consumers. In spite of all the pious talk of frugality he therefore searches for all possible ways of stimulating them to consume, by making his commodities more attractive, by filling their ears with babble about new needs. It is precisely this side of the relationship between capital and labour which is an essential civilising force, and on which the historic justification—but also the contemporary power—of capital is based.’ (Marx, Grundrisse)

This property of capitalism is not incidental, as Marx notes, ‘the simple concept of capital has to contain its civilising tendencies etc. in themselves; they must not, as in the economics books until now, appear merely as external consequences. Likewise, the contradictions which are later released, demonstrated as already latent within it.’

The unavoidable development of capitalism by its nature contains contradictions that are fundamental to it, and being fundamental, involve progress that presages its supersession by an alternative social system, based on its massive increase in the productivity of labour.  This gives rise to variations in the roles of workers in production and to their relation to, and aspirations for, the fruits of the productivity of labour in their role as consumers.

The relations of production therefore define the classes which individuals belong to, even if they have not the slightest notion that this is the class position they occupy or even misinterpret their class interests, whether due to racism, nationalism or whatever.  In reality most people do understand that they occupy a particular class position, and are members of a class, although fewer then define themselves and their social and political interests with class politics consistent with this position.

This is truer of individuals within the working class than capitalist class, whose members generally have a much higher level of consciousness of their membership of their class and appreciation of what political interests they therefore must pursue as a result. While socialists usually concern themselves with the point of view of the oppressed and exploited class and their political ideas; when it comes to the consciousness of the exploiting classes, the decisive role of production and productive relations on the form of political consciousness is much more apparent.

The rich are more conscious of their wealth and its source, because they have it, than those who actually created it but do not.  They are more conscious of who they continue to get it from, and their competitors for it, from within their class and from other classes.

This, however, does not also prevent some of them from misinterpreting their class interests or making erroneous political calculations. Not everything individual capitalists do reveals their essential ‘true’ nature and ‘true’ interests.  This is one reason why socialists should not simply seek the opposite of what one political representative or section of the capitalist class happens to advance at any particular time, but seek to identify and advance the political interests of the whole working class independently, taking account of the whole constellation of class relations.

Today, we only need to think of the numerous and varied state, state-sponsored and private think tanks proclaiming the benefits of capitalism, forecasting its development, developing policies for it and providing consultants to implement changes, to appreciate the level of class consciousness of the capitalist class, and also its variety of outlooks.

Classes are therefore collectives and not simply an addition of atomised individuals.  Atomised individuals as such do not exist, as we are all products of families, friends, work colleagues, and those we interact with on a daily basis.  More than that, our lives are products of millions of people we will never meet who set rules by which we live, through laws, regulations and standards.

Literally millions of people impact on our lives in a way that we take for granted most of the time, as we must or we would spend our time thinking of nothing else.  The cooperation among millions of people to ensure our society works, produces and consumes, that we may continue to live, grows and grows every year.

When we enter the world we do not choose how we do so and do not choose to which class we belong.  Only in young people’s sci-fi films, such as ‘Divergent’, is it possible to pick how one wants to live in society and the role we want to play.  Our position in society constrains our choices and conditions how we lead our lives, so determining our view of the world, which we can never look at totally afresh, free of any preconceptions.  What we can do is become as conscious as possible of what these are.

When Marxists therefore define a society as capitalist we mean certain things which must be studied in order to be fully understood.  Even the idea of capitalism as an example of a particular set of relations of production must be determined through research and study involving understanding the practical reality of individuals’ everyday lives.  The limits of such explanation must be determined in the process, and cannot be taken as completed or timeless without need for continual rethinking and development, just as the world changes and develops itself.

In capitalism, the relations of production define the existence of a class that has to sell its labour power in order to live and, in order that they produce for society, that they be combined with the means of production.  These means of production include factories, offices, transport, shops, warehouses, docks, mines and all machinery and equipment of every kind that workers employ when they work.  The latter are owned by a separate class of capitalists, and sometimes the state rather than private corporations.

Just as there are no individuals who can properly be understood apart from the world they inhabit, with its many other individuals, so classes cannot be understood at the individual level.  A worker may negotiate a pay rise with an employer, but what makes the worker a member of a class is that they cannot survive without selling their capacity to work to a capitalist.  Similarly, a capitalist is just such a person because they own the office or factory and the worker does not.  They have the money to pay the worker for her capacity to work on their behalf.  This work is carried out not because of the consumption needs of the capitalist but because he wants to make a profit from the labour performed by the worker.

A well-paid worker, or someone who considers themselves middle class, can hire childminders or even a few hours of a person to clean their house, but they will never get rich doing so because the childminder or cleaner is not paid in order to make a profit.  The money paid in wages to the childminder or cleaner is not therefore capital aimed at procuring profit.  No matter how well paid the worker is, she will not be better off financially from having paid wages to childminders or cleaners.

The capitalist on the other hand will hope to make a profit and become richer through paying wages to his workers, who can indeed be childminders or cleaners, whose services are sold to others, and who are paid less by the capitalist than the value of the labour they perform on his behalf.

The worker on the other hand, no matter how affluent she is likely to become, cannot abstain from selling her labour power because she has no other source of income.  For the vast majority neither savings nor family support can substitute for their wage or salary.

In such a society, the need to sell one’s labour power exists because the ability to cosume at the prevailing standard of living expected in that society cannot be achieved through the worker labouring on her own behalf or through ownership of capital in any form, be it money or material means of producing commodities.

At the beginnings of capitalism peasants or farmers who owned or had customary rights to land could provide for themselves and did not need to sell their ability to work to someone else.  Capitalism sometimes drove them from their land in order to make them dependent on selling their labour power to capitalists.  Ironic then, that capitalist ideologues condemn workers for not standing on their own two feet while their system originates, and can only stand on its feet, through depriving the labouring population of its independent ownership of the means of production.

These are the characteristic relations of production under capitalism.  These relations dominate people’s lives because they determine what they do eight or more hours a day; what income and security they can provide for their families; what levels of consumption they can aspire to; and what general social characteristics they will share with neighbours and friends.  In short, all these social characteristics are entwined with the relations of production, which are therefore infused into every aspect of our lives.  Our culture as expressed in everyday behaviour is not reducible to our relations of production but neither is it separate from these relations, which define the fundamental social relationships of which our daily lives consist.

This is what is meant by the first section, quoted in an earlier post, of the ‘Preface’ of 1859 drafted by Marx:

“In the social production of their existence, men inevitably enter Into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.”

Back to part 16

Forward to part 18

Karl Marx’s alternative to capitalism part 16 – the production of life

Marx’s alternative is undoubtedly the most radical alternative to capitalism, which can mislead some to reject it on the grounds that it must therefore be utopian.  Years of reaction have drastically reduced expectations among those who oppose the worst aspects of capitalism and much of the anti-capitalism of the last few decades has not actually been anti-capitalist at all, never mind socialist.

In fact, it is the far-reaching character of Marx’s alternative that makes it a real alternative because it is based on capitalism’s own revolutionary character, a character that encompasses its civilising mission and the repeated crises that demonstrate its contradictions and potential for replacement.

The depth and comprehensiveness Marxism seeks is both a barrier to its initial acceptance and absolutely necessary in order to understand its presentation of an alternative to capitalism.  Many come to reject capitalism through its immediate exploitation and cruelty, through appreciation of its inhumanity and destruction, understanding this opposition in terms of moral judgements that stand apart from the crude and degrading material requirements of the system.

Marxism by contrast starts from these material requirements, ones that are required of any social system, but which take a particular social form within capitalism.  It seeks to understand both requirements and particularly how the working of capitalism paves the way for its supersession.  Marxists do not therefore condemn capitalism only for its cruelty, destruction, exploitation and inhumanity, but also because, in its development of the needs and capacities of humanity, these are in turn restricted and disfigured by it, when capitalism itself has created the grounds for all these needs to be met and capacities to be developed.  If this were not the case there would be little point in opposing an exploitation or oppression that was inescapable and could not be replaced.  At the same time, Marxism realises that what is required is replacement of the system, not mere adjustment or reform.

Exploitation and oppression is built into the structure of capitalism, and is at the core of Marx’s understanding of historical development including the development towards socialism.

For Marx “History does nothing, it “possesses no immense wealth,” it “wages no battles.” It is man, real living man, that does all that, that possesses and fights; “history” is not a person apart, using man as a means for its own particular aims; history is nothing but the activity of man pursuing his aims.” (Marx and Engels ‘The Holy Family’).  And by ‘man’ we should understand all of humanity.

This means that both the oppressive and civilising characteristics of capitalism are not something disembodied, inflicted upon humanity from without.  Both aspects arise from the actions of humanity itself resulting from the form of society inhabited, given to it and which it only imperfectly understands.

“Man can be distinguished from animals by consciousness, by religion or anything else you like. They themselves begin to distinguish themselves from animals as soon as they begin to produce their means of subsistence.”(Marx and Engels ‘The German ideology’)

Humanity is therefore ‘a tool-making animal’.  Direct and individual acquisition, or appropriation of naturally occurring items, that can be consumed directly by nonhuman primate populations, differs from the social production through the expenditure of energy among human populations. This capacity comes to define and redefine human organisation.

“Labour, then, as the creator of use-values, as useful labour, is a condition of human existence which is independent of all forms of society; it is an eternal natural necessity which mediates the metabolism between man and nature, and therefore human life itself” (Marx, Capital Volume I). People must work no matter what type of society they live within; how they do this defines the human community within which they exist.

Those that work with nature to ensure the continued existence and reproduction of humanity, at whatever level of development it has achieved, act upon external nature and change it, and in this way simultaneously change their own nature.

“When the worker co-operates in a planned way with others, he strips off the fetters of his individuality, and develops the capabilities of his species.”  (Capital Volume I)  For Marx, humanity, in the shape of those who work, who will liberate it from oppression and exploitation, “must pass through long struggles, through a series of historic processes, transforming circumstances and men.”

Of course, if they do not, workers can become “apathetic, thoughtless, more or less well-fed instruments of production . . . degraded to one level mass of broken wretches past salvation.”  We constantly come across the extremes of both: working people who inspire and those whose apathy and ignorance dismays and demoralises.

However, it is work itself, which by definition working people must by and large perform, which forces upon them, by necessity, considerations that can lift them above apathy and degradation.  Work is therefore central to how human society is structured, how it reproduces itself, how it develops new forms, how it understands itself, and how it can change human perceptions and desires for potential new forms of social organisation.

So, what is particular about human labour?  “[Let us] presuppose labour in a form in which it is an exclusively human characteristic. A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labour-process, we get a result that already existed in the imagination of the labourer at its commencement. He not only effects a change of form in the material on which he works, but he also realizes a purpose of his own that gives the law to his modus operandi, and to which he must subordinate his will. And this subordination is no mere momentary act. Besides the exertion of the bodily organs, the process demands that, during the whole operation, the workman’s will be steadily in consonance with his purpose. This means close attention. The less he is attracted by the nature of the work, and the mode in which it is carried on, and the less, therefore, he enjoys it as something which gives play to his bodily and mental powers, the more close his attention is forced to be” (Marx, Capital Volume 1)

To the extent that the worker is compelled to labour for a purpose that is not hers, that she may even oppose or detest, such labour is against her nature as a conscious being and her freedom to express her consciousness in whatever way she wishes.  Her views and awareness of compulsion and lack of freedom, which she will see as inhuman and against her human nature, may lead to resistance and ultimately revolt against such a society that entails such constraints.

Since labouring is a social activity – no one can or does work alone – the rebellion by a worker against the drudgery and oppression of work reflects not just the constraints on the realisation of this worker’s own purposes but the purposes of everyone with whom she works, the purposes of her fellow workers, and in an extended sense of all those who work, the working class as a whole.  This is true whether she is conscious of her membership of a class or not.  Thus does capitalism, at a very basic level, engender opposition to its inhuman workings.  The more accomplished its civilising role has been, the more conscious will workers be of constraints and more capable of seeking to remove them.

This recognition of the most fundamental need of people to work together upon nature to ensure their existence at whatever level of development they have reached is sometimes viewed as so fundamental that it has no specific or practical significance for understanding contemporary problems and issues.  But a moments’ thought disposes of this.

“All production is appropriation of nature on the part of an individual within and through a definite form of society.”  “Human life has from time immemorial rested on production, and, in one way or another, on social production, these relations we call, precisely, economic relations.”  So not just the products of labour, or how that work takes place, but also the form of society itself is determined by the relations in which people come together to labour in production.

Unemployment, the threat of it and insecurity it evokes; the lack of decent work and of low pay; of poor conditions, pensions and welfare rights; of zero hours’ contracts, food banks and reliance on benefits; the allocation of the labour of society that does not value or provide for sufficient health and education.  All these aspects of society are simply elements of how humanity allocates its labour in order that humanity maintain its existence in the fashion that it has been born into. How people work and produce together is therefore fundamental.  For Marx material production “is the basis of all social life, and therefore of all real history.” (Capital Volume 1 p 286)

Marx describes the general process in his booklet ‘Wage, Labour and Capital’:

“In the process of production, human beings work not only upon nature, but also upon one another. They produce only by working together in a specified manner and reciprocally exchanging their activities. In order to produce, they enter into definite connections and relations to one another, and only within these social connections and relations does their influence upon nature operate – i.e., does production take place.”

“These social relations between the producers, and the conditions under which they exchange their activities and share in the total act of production, will naturally vary according to the character of the means of production. With the discovery of a new instrument of warfare, the firearm, the whole internal organisation of the army was necessarily altered, the relations within which individuals compose an army and can work as an army were transformed, and the relation of different armies to another was likewise changed.”

“We thus see that the social relations within which individuals produce, the social relations of production, are altered, transformed, with the change and development of the material means of production, of the forces of production. The relations of production in their totality constitute what is called the social relations, society, and, moreover, a society at a definite stage of historical development, a society with peculiar, distinctive characteristics. Ancient society, feudal society, bourgeois (or capitalist) society, are such totalities of relations of production, each of which denotes a particular stage of development in the history of mankind.”

Back to part 15

Forward to part 17

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Karl Marx’s alternative to capitalism part 10 – crises and contradictions iV

aaeb3f49f0044521a0b0904c2599b84b_18In 1921 Leon Trotsky argued that “If the further development of productive forces was conceivable within the framework of bourgeois society, then revolution would generally be impossible. But since the further development of the productive forces within the framework of bourgeois society is inconceivable, the basic premise for the revolution is given.”

I will argue against this view but it should not be taken that by this Trotsky believed that any particular country had to have fully developed capitalism before socialist revolution could succeed because obviously his theory of permanent revolution argued precisely that this was not the case. The argument just presented is a view of the world taken as a whole and not any particular country.

In his view capitalism could break at its weakest link but this is not Marx’s theory of the transition to socialism.  For capitalism not only to break but be replaced by socialism it is necessary that capitalism be broken not where it is weakest but where the working class is strongest, and the two are not the same.

The view that the productive forces have to have exhausted themselves has been a default view of much of the Marxist movement since 1938 and the writing of the Transitional Programme, which was called ‘The Death Agony of capitalism and the tasks of the Fourth international’.  Adherence to this view means accepting that we have been living during a period of capitalism’s death agony for the past nearly 80 years.

It is this that justifies the view that objective conditions make the world ripe for socialism and that what faces socialists is a crisis of working class leadership. The task is simply to fight for leadership of the working class as it presents itself; its objective position and situation within society is relevant only in so far as it lends itself to gaining such leadership.  Since capitalist crises cannot be definitively solved by capitalism then such crises provide the opportunity for Marxists to win this leadership.

Those who have read earlier posts in this series will know that I reject the view that the productive forces of capitalism have stagnated.  This view was certainly challenged by the post Second World War economic upturn.  Crisis conditions in the 1970s and 1980s might have revived the view that capitalism was in long term crisis but the period since has seen huge economic growth.

Again the view that capitalism is in crisis might be bolstered by the financial crash in 2008 and the secular stagnation following it that has been posited by some writers but such crises do not amount to the long term crisis of capitalism suggested by Trotsky and secular stagnation has yet to be demonstrated.  If it were, it would still not amount to the long term crisis of capitalism that has been claimed, except that stagnation is not compatible with capitalism and if it existed it would create conditions of crisis.  

In previous posts I noted that capitalism had continued to develop the productive forces over the last century, including the expansion of the working class, its health and education and also its living standards.  Of course this does not mean that the next century will follow the pattern of the last.  This is as unlikely as the twentieth century following the pattern of the 19th, but it is at least necessary to appreciate what has already happened before thinking we are qualified for the much more hazardous task of speculating on what will happen in the future.

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A recent article in ‘New Left Review’ notes that:

“Our available economic resources are greater than ever before. Between 1980 and 2011 world GDP per capita (in constant prices and purchasing power parities) increased 1.8 times, the IMF reports. As a comparison, we may remember that between year 1 and 1820 global product per capita is estimated to have increased 1.4 times, and from 1870 to 1913 1.7 times. More reliable are figures for 1950–73, 1.9, and for 1973–2003, 1.6.”

In his book ‘Postcapitalism a Guide to Our Future’ Paul Mason quotes figures that show global GDP per person rising by 162 per cent between 1989 and 2012 and in the developing world by 404 per cent.  It rose by ‘only’ 33 per cent in the 100 years after the ‘discovery’ of the Americas and by 60 per cent in the fifty years after 1820.

Of course, this is not to deny the growth of inequality and ecological threat arising from the capitalist nature of such growth, how could it be otherwise?  Paul Mason notes that while the real incomes of two thirds of the world’s people rose significantly, as did that of the top 1%, the majority of people in America, Japan and Europe had no real increase and some a decline.  As the article in New Left Review notes:

“Furthermore, the conventional norm of progress obscures the unequal distribution of its opportunities. Almost half, 46 per cent, of the world’s income growth between 1988 and 2011 was appropriated by the richest tenth of humanity.  In the US, since the late 1990s, there has been a progressive decoupling of GDP per capita—advancing with short-lived fallbacks—and the family income of four-fifths of the population, which has been stagnating and recently declining, above all from the median and below. The spread of the Anglo-American financial crisis of 2008 has meant a substantial decline in the income share of the bottom 40 per cent in the recession-hit European countries, from Greece and Ireland to the UK and Spain.”

One Marxist[i] makes a persuasive case that the official figures underestimate the growth of specifically capitalist production because they ignore the conversion of the Stalinist states to a new economic system.  These figures treat the production in these states prior to the introduction of capitalism as if it were already capitalist but this ignores the boost to specifically capitalist production of the acquisition of productive forces on the cheap and the availability of huge pools of labour power that can now be exploited to further the accumulation of capital:

“In 1991 the centrally planned economies had a population that was 35 percent of that in the market capitalist economies. The restoration of capitalism in them massively increased the world’s working class that could be exploited by capital, while at the same time the world’s capitalists paid almost nothing to privatize the assets of entire economies. . . .By 2006 China, now the second largest capitalist economy in the world, employed 112 million industrial workers (Bannister 2009), not including millions more in the former USSR and CEE.”

“During the 1990s capitalist production of electricity rose 44 percent, aluminium 45 percent, hydraulic cement 60 percent, steel 39 percent, automobiles 21 percent, and GDP 42 percent, with the rate of increase accelerating the decade after. This is particularly significant as this period extends to 2010 and so includes the period of the credit crunch recession after 2008. The growth of output in the emerging markets has been combined with the accelerated decline of industrial output in the West, but this is a transfer of production, not its disappearance. By 2010 the transition economies as a proportion of total capitalist production produced 29 percent electricity, 52 percent aluminium, 65 percent hydraulic cement, 53 percent steel, 30 percent automobiles, and 26 percent of GDP.”

It is hardly credible that the objective and subjective conditions for socialism could be bifurcated for so long – that the problem is simply one of mis-leadership – while the social and political power of the capitalist class over the working class, effected by the enormous development of capitalism, reflected also in the ideological hold of the former over the latter, can be considered a secondary matter.

That this continuing subordination of workers by capitalism for decades, without challenge in any fundamental respect, could be considered not to have affected the consciousness of new generations of workers, were it true, would prove Marxism false.  The idea that the fundamental problem is simply one of working class leadership is not credible.

Marxists are always keen to assert that they do not seek crises and do not welcome the attacks on workers which large crises inevitably result in, including unemployment, wage cuts and attacks on workers’ democratic rights to organise.  But if crises do provide the opportunity to replace capitalism, and the grounds for socialism already exist, then this would be something of a puzzle.

In part we have already noted the answer – that crises openly express capitalism’s contradictions and posit the need for an alternative.  However, it matters not whether socialists wish or do not wish for crises, capitalism will see to it that they erupt anyway.  It is not workers who create economic crises but the contradictions of the system itself.

Socialists do not welcome crises in themselves because they become opportunities to overthrow capitalism only under certain conditions.  Since capitalism has had many crises and we do not have socialism we can infer that these conditions are rather restrictive, or have been so far.  Is there anything in Marx’s alternative that explains why this has been the case and therefore what might we change to address our failures so far?

An answer to this means going beyond seeing capitalist crises as simply the opportunity to overthrow capitalism without understanding what makes them such an opportunity, as opposed to an opportunity for capitalism to resolve its contradictions at workers’ expense.  The answer does not lie in the illusion that capitalism is a system in permanent crisis or is in an epoch of revolution. Crises there have been and even revolutions but clearly this hasn’t been enough for Marx’s alternative to have flowered.

The last 100 years has witnessed many revolutions.  The most important at the beginning of the last century were carried out under the banner of socialist revolution but they nearly all failed very quickly.  Later revolutions that destroyed capitalism did not usher in socialism or even societies controlled by workers taking decisive steps towards socialism.   The belief was widespread that socialist revolutions would be complemented by national liberation struggles which would lead to democratic revolutions, but again there were numerous democratic revolutions, few overthrew capitalism and none of them brought about socialism.

Since the decline of such struggles the most important revolutions have involved the overthrow of Stalinism and the concomitant reintroduction of capitalism while the Arab Spring has not resulted in any fundamental reordering of society, except in the sense that in some societies it has led to their disordering and collapse.

There have been plenty of revolutions but the changes have been mainly one of political regimes without fundamental changes to class rule, at least in the sense of the working class ruling society.  Such glimpses of a new worker-controlled society have been brief and fleeting.

Marx’s prognostication was that “the bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones.” 

The history of modern revolutions is testimony to this.  The absence of working class revolution is not.  Ironically, if you seek to reduce Marxism to a task of resolving a crisis of leadership you weaken its explanatory power, its guide to political intervention and its appeal.

Marx was aware that sometimes decades of political development are necessary for a working class to make itself capable of ruling society.  This is true now for reasons that Marx could not be fully aware of.  What he did do however was provide analyses of capitalism that may help socialists appreciate why we have failed so far.

[i] On the Alleged Stagnation of Capitalism, William Jefferies, available on the net.

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Karl Marx’s alternative to capitalism – part 9 crises and contradictions iii

economic crisisCapitalism’s crises are the expression of its contradictions, among which must be those that provide grounds for resolution through working class creation of a socialist society.  While the absence of crisis at any time does not mean that the system’s contradictions have been removed, it signals that they must at least have been temporarily contained or limited while continuing to develop, without erupting into violent disruptions of the system. Marx reacted to the return to some sort of prosperity following a crisis as a signal that socialist revolution was for the time being off the agenda.

For capitalism the eruption of economic crisis is also the means by which the contradictions of capitalist accumulation are (temporarily) resolved, by reducing the costs of raw materials and machinery etc.; destroying competitors by making the least efficient firms go bust; increasing unemployment, so putting pressure on workers to increase the pace of work and reducing wages; and by prompting the state to lower legal protections for workers or lower corporate taxes etc.

Only in a crisis does it seem obvious that capitalism is unable to cater for the needs of the majority, and to a degree that stimulates mass resistance and opposition, so what then may result is a political crisis of its rule.  There is less reason to expect the working class and other oppressed parts of society to seek an alternative to the system if it is not in some sort of difficulty.

On the other hand if workers are not prepared to react to crises by defending gains and can’t be radicalised sufficiently to achieve overthrow of the system, or have the social and economic power to do so, then socialists must accept that the limits placed on the scope of working class action at such times do not yet include the system’s overthrow.

While economic and political crises signal the possibility of an alternative and a possible opportunity to create one there is no longer a view that they point to the inevitable triumph of socialism.  Crises can awaken workers to politics, can propel them to political organisation, push them to fight and make them seek out alternatives but if this is true of the vast majority and such development only takes place on the eve of revolution then it is only a minority who enter the fight with some idea of what that fight is, about how it might be won and what constitutes victory.  These are rather weak grounds on which to expect success.

As I noted in the last post – what attitude workers take to crises, how they understand them, who they blame and what solutions they seek are strongly conditioned by their previous experience prior to and outside capitalism’s difficulties.  This strongly determines the outcome of crises

“There are no permanent crises” Marx said, which means that such crises in themselves cannot be the grounds for socialism since these grounds must be continuous and persistent conditions within the capitalist system.  Crises therefore cannot be confused with the contradictions of capitalism that provide the source for anticipating its replacement.

So if not permanent crises, is it the nature of the stage of capitalism that warrants the claim that the possibility of socialism exists, as Marx claimed.  It would appear that for the majority of Marxists the answer is yes: we have been living within the highest stage of capitalism for the last one hundred or more years, set out most famously by Lenin in his short book – ‘Imperialism, the highest stage of capitalism’.

Further to this, the other Marxist leader of the Russian revolution wrote a political programme for his supporters in 1938 in which he clearly characterised the nature of the epoch during which he lived:

“The economic prerequisite for the proletarian revolution has already in general achieved the highest point of fruition that can be reached under capitalism. Mankind’s productive forces stagnate. Already new inventions and improvements fail to raise the level of material wealth. Conjunctural crises under the conditions of the social crisis of the whole capitalist system inflict ever heavier deprivations and sufferings upon the masses. Growing unemployment, in its turn, deepens the financial crisis of the state and undermines the unstable monetary systems. Democratic regimes, as well as fascist, stagger on from one bankruptcy to another.”

“All talk to the effect that historical conditions have not yet “ripened” for socialism is the product of ignorance or conscious deception. The objective prerequisites for the proletarian revolution have not only “ripened”; they have begun to get somewhat rotten. Without a socialist revolution, in the next historical period at that, a catastrophe threatens the whole culture of mankind. The turn is now to the proletariat, i.e., chiefly to its revolutionary vanguard. The historical crisis of mankind is reduced to the crisis of the revolutionary leadership.”

This political programme, The Transitional Programme, became the guiding strategy for those Marxists who rejected the distortion of socialism by Stalinism in the Soviet Union and who stood in the revolutionary tradition of Marx.

The view that socialism was retarded not so much by capitalism itself, or the political forces that defended it, but by other factors can easily be appreciated in a world in which the most powerful forces claiming to be Marxist ruled over vast parts of the globe. In these countries workers held no political power except through a bureaucracy that ruled in its name and unilaterally claimed to be its leadership.  As long as this was the case the struggle for genuine socialism had to counter the claims of Stalinism that the degenerate bureaucratic dictatorships in the Soviet Union and Eastern Europe were the future socialist society which Marx foresaw.  In this sense, the view that the crisis facing socialists boiled down to who was able to claim the mantle of leadership might seem to have not a little currency; if only because if Stalinism was socialism then the majority of workers and many Marxists weren’t interested.

Trotsky’s predictions of catastrophe should also be viewed in light of the headlong march towards world war, a war that would exceed the death and destruction of the Great War that had ended only twenty years before.  In fact this second world war had already begun with already catastrophic results for the Chinese people.  When we consider that the possible number of deaths due to World War II is as high as 80 million people it is no exaggeration to have stated in 1938 that “a catastrophe threatens the whole culture of mankind.”

What matters today is whether the context in which this happened now prevails, or has prevailed ever since it was written in 1938; in other words that “the economic prerequisite for the proletarian revolution has already in general achieved the highest point of fruition that can be reached under capitalism.”

If this were so then the series of posts of which this one is a part, dealing with Marx’s alternative to capitalism growing out of capitalism itself, would have little need to go beyond a political analysis of the class struggle and specifically how and why the working class still allows itself to be politically led by political forces opposed to the revolutionary overthrow of capitalism.

to be continued

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