Karl Marx’s alternative to capitalism – part 1

Posted on March 2, 2015 by irishmarxism

The reason why a person will identify themselves as a Marxist will be biographical, a product of their background, history and circumstances, their attitudes, character, personality and intellectual curiosity. All these will be individual and accidental to a greater or lesser extent, the product of one’s actions and decisively, the views and actions of others that one comes into contact with, directly and indirectly.

On the other hand their background and circumstances and the views and actions of others that influence them will be social, the product of society as a whole. Even their individual character and intellectual curiosity will be shaped strongly by their social circumstances. So also the reason to identify as a Marxist is not individual or accidental but crucially derives from the content of Marxism itself.

It constitutes the most rational alternative to capitalism and all the irrationality and oppression that that system entails. The most consistent and coherent alternative to capitalism is Marxist because Marxism comprehends capitalism in a way that is adequate to its replacement.

Marxism best encapsulates the view that ‘another world is possible’ because it best understands capitalism itself and can identify whether, and to what extent, an alternative can develop out of it. Any alternative must come out of it in some way, yet be sufficiently different to actually be an alternative, and not a refurbished version of existing society which must enforce the limitations and strictures of the existing system. Marxism must therefore identify in what precisely this alternative consists.

The strength of Marxism is not that it has developed a brilliant idea from the brain of an exceptional intellect but that it seeks to bring to consciousness the development of capitalism itself and the alternative that is pregnant within it.

“In that case we do not confront the world in a doctrinaire way with a new principle: Here is the truth, kneel down before it! We develop new principles for the world out of the world’s own principles. We do not say to the world: Cease your struggles, they are foolish; we will give you the true slogan of struggle. We merely show the world what it is really fighting for, and consciousness is something that it has to acquire, even if it does not want to.” Karl Marx 1843.

If capitalism does not contain within it the struggles that will replace it, and the grounds for those struggles to succeed, then there will be no alternative to capitalism, at least not with the features or characteristics associated with a socialist alternative.

The claim that Marxism is the social and political alternative to capitalism thus rests on its claims to understand the development of capitalism so that the alternative it poses is not then a utopian one, sprouted more or less fully formed from the brain of this or that social reformer, but from the perceptible development of capitalism itself.

Just as the alternative to capitalism grows out of capitalism itself so too does the understanding of the alternative grow in the same way from the development of the system.

This is held to account for Marx’s known aversion to setting out a blueprint of what the alternative will look like. It was, for example only when Marx was in his mid-50s that he claimed he had found, or rather the working class itself had found, through the experience of the Paris Commune of 1871: “the political form at last discovered under which to work out the economical emancipation of labour.”

In his review of this experience Marx made many observations on the alternative to capitalism that apply today, including that:

“The working class did not expect miracles from the Commune. They have no ready-made utopias to introduce par décret du peuple. They know that in order to work out their own emancipation, and along with it that higher form to which present society is irresistibly tending by its own economical agencies, they will have to pass through long struggles, through a series of historic processes, transforming circumstances and men. They have no ideals to realize, but to set free the elements of the new society with which old collapsing bourgeois society itself is pregnant.”

A book published a few years ago is an extremely useful guide to Marx’s concept of the alternative to capitalism, more particularly of the principles that underpin it. It demonstrates that the alternative is not some perfected socialist state or society, not some condition of social equilibrium but a movement of people and their own self-activity and self-development.

“Communism is for us not a state of affairs which is to be established, an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence,” (Marx in The German Ideology).

There is no end-state to socialism, perfect or otherwise, but the social conditions that allow the full flourishing of the individual and humanity as a whole, which will in turn change social conditions.

Socialism cannot be reduced to principles such as a planned economy because planning itself is only one human activity, the totality of which is the expansive alternative that Marx foresaw.

The alternative to capitalism is the self-development of humanity, its overcoming of an alienated existence within which its own powers over its environment and its own development appear separated from and oppressive to it. So humanity understands the danger of environmental destruction but has no transparent means of control to stop it despite its own actions being the cause of the threat. So it witnesses economic disruption, unemployment, poverty and suffering, caused by a drop in ‘value’ of pieces of paper – shares, bonds, swaps, options, derivatives etc -that it has created but which by themselves are simply pieces of paper, which in any rational society it would be impossible for them to cause the suffering involved in economic crisis.

Emancipation therefore is the result of the actions of humanity itself, led by a class within society whose liberation must entail the liberation not only of itself but of society as a whole – what is called a universal class because it represents the universal interests of all humanity.

This universal class is the product of the prodigious development of the forces of production under capitalism, to a degree that could never have been conceived in previous history, including the rapid development of technology, scientific knowledge and overall cultural development.

It is people however who create history, ‘history’ itself does nothing, and it is the development of the working class that is the carrier of the wonders of the new capitalist society and the bearer of the new within it.

What is required then is that the working class becomes conscious of its role in existing society and the necessity for it to change this society. Decisive for the working class is therefore its awareness of itself as a separate class with its own interests, requiring a change in the consciousness of the mass of workers.

This change in consciousness to an awareness of class interest does not mean the nullification of individual personality or character but the recognition of shared interests that will allow creation of a society in which the free development of individuals is the condition for the free development of everyone; no one is subject to the requirement to work to live in order that someone else can live without working. The creation of wealth will be for the satisfaction of individual needs and desires and not the pathological pursuit of profit for a few. People will labour to satisfy their needs not the accumulation of money, wealth and capital for others.

The structures of society will therefore be the consciously directed products of human activity, transparent in their operation. They will not entail the domination of people by impersonal, disembodied powers such as the ‘rule of the free market’ or ‘rule of law’ or ‘state authority’, over which individuals feel and have no control. No longer will workers face wage cuts or unemployment because the things they produce are no longer profitable to produce and the needs of ‘the economy’ then require the sacrifice of their livelihood. Things no longer control them, they control the things that would not exist without them. No longer will the price of pieces of paper wreak economic devastation.

Instead workers will control the things that are their creation, including the machines they build, the firms they create, the agencies that provide services or set rules for them – all the organisations appointed for any purpose that affect them. They control them because they work in them. Managing them is not a detached function to be carried out by a separate class or bureaucratic group but is the task of everyone. Management and control become part of everyone’s job description.

By this means the supreme authority, the State, that rules over society is not set apart from it but is gradually abolished through its functions being incorporated into society itself and into its day to day functioning. Only in this way can the rule of a minority become the rule of the majority, can the working class become the new ruling class, before there is no class system whatsoever because no relations of economic and social domination exist.

For this to happen the majority of society have to be not so much ready to carry out these million and one tasks but more and more actually carrying them out beforehand. The problem then is not so much to revolutionise the means of production or state structures but to revolutionise the working class.

So how does capitalism create the conditions for this? In what way does capitalism itself prepare the ground for its supersession by the working class?

Forward to Part 2

Visiting Trier

Posted on February 8, 2015 by irishmarxism

Last year I went on my holidays to the French wine region of Alsace although I did very little drinking as most of the time I was driving. As a quid pro quo I was able to take the opportunity to drive over and visit Trier in Germany.

Trier is a contestant for Germany’s oldest city, a UNESCO world heritage site and the location of notable Roman buildings. Of course for a Marxist it is also distinguished as the birthplace of Karl Marx, which has been turned into a museum, and it was for this reason that I ventured out of France.

If I thought the French didn’t pay much attention to speed limits it appeared to me that the Germans didn’t have one. On two rather short journeys to and from Trier to the French border I came across three traffic accidents including one rather nasty one in which an occupant was being cut out of a car.

Having arrived safely at our very functional hotel, which consistent of separate concrete boxes called rooms and a bigger box that doubled as reception and breakfast area, we took a dander round the town where I explained that it was unusual to have anything to do with Marxism as a local tourist attraction. It was pointed out to me that the most memorable aspect of this was the local tourist bus painted with Karl Marx’s mug.

The next morning we had breakfast in reception, in which the juice and Rice Crispies were almost in the street. All very lean I was told, proving to me that I am not the only one who doesn’t really switch off when on holiday. The big TV behind the desk was showing the news on some local channel. I was too far away to hear but this wasn’t a problem as I don’t speak German anyway. And in any case my eagerness to see who had won the Scottish referendum was being addressed by an interview with a guy who had a very bad Mel Gibson Braveheart haircut, and a Saltire painted across his face. He had the demeanour of Mel at the end of the film when he was on the rack. I guessed who had won.

We then took in the museum and the audio tour that outlined Marx’s family background and history, the story of his political involvement and an AB of his ideas. It was competently done, without being ruined by the reformist bias I had feared from it being run by the Sozialdemokratische Partei Deutschlands (SPD) and its Friedrich Ebert Foundation, named after a real reactionary bastard, whose historical role might well make those who think social democracy has turned right under neoliberalism rethink just how left it was beforehand.

It was a bit bemusing to find out that the young Karl had hardly got out of his nappies before he had moved house along with his family, but you hardly treat such a visit as a religious pilgrimage, in which you touch the foot of the statue of the blessed man or feel his earthly presence.

Like all museums it had a shop but inexplicably nothing for lovers of Flat Whites or three-shot Cappuccinos. Being a sucker for a certain type of tat I attempted to buy a bust of the man himself ( you’ve already got one); a Karl Marx mug (it’s too tacky); some red wine (I’m sure it’s just not nice) and a fridge magnet (you don’t even know what it says because you can’t speak German). However I did get away with the museum exhibition booklet and a bar of ‘Karl Marx Fine Chocolate’, which I haven’t yet opened just for badness.

What didn’t fully strike me as very poor until much later was the paucity of Marx’s writings that were for sale, but then the SPD believes that his writings really are only a museum piece, and the shop is for taking things away. The best the exhibition booklet could come up with, in its final words on ‘Marx in the Twenty-First Century’, was that “engagement with the methods of Karl Marx and the questions he posed will continue to be meaningful”. You don’t say.

The final chapter, on ‘Embracing of the Ideas of Karl Marx Worldwide’, cited the following, among others, as coming under his influence or claiming to express his ideas – Mao Tse-tung, Pol Pot, the ANC, Fidel Castro, Salvador Allende and liberation theology. When we add the various ‘Marxist’ schools including the Frankfurt school, structuralism, post-Marxism and Analytical Marxism etc. and the experience of the various state regimes that have laid claim to Marx as their inspiration – from the Soviet Union to Albania – we can see the obstacles to engaging with Marx in a way that is not only meaningful but faithful to his writings.

So why bother? A look at the activities of today’s organisations claiming to be Marxist shows that the political programmes put forward hardly correspond to his oft-stated views. From capitalist state ownership as the road to, and destination of socialism, to strikes for higher wages as ‘going to the heart of the system’, if you hang around the Left long enough you will hear every competing conception of socialism that Marx fought against being presented as the authentic expression of his views.

Quotes from Marx are regularly thrown about but rarely after actually reading the original. In Ireland our latest Marxist TD is shown on YouTube commencing an educational meeting with a quote from Marx’s Capital, which he admits he hasn’t read but which the chair of the meeting assures him ‘nobody has’.

By reading the original the original meaning might actually be understood. A very simple reason why to bother.

But the answer is not simply to ‘go back to Marx’ as a way of overcoming the obstacles created by the distortion of his teachings by many who have claimed to be his followers.

This is not least because they have sometimes genuinely sought to apply his teachings, albeit often in a one-sided and partial way, providing one-sided and partial truths. The direct words of Marxism expressed by Marx have been supplemented by the history of the development of his ideas and of the working class movement and it would be in complete conflict with his method to seek to go beyond the failures of both by simply claiming they are ‘wrong’, isolating ourselves from them and ignoring the lessons to be learned.

The history of Marxism and of the working class movement is now the ground on which both must be renewed. Such renewal requires not just engagement with the direct views of Marx but also with the fragmentation and degeneration of Marxism and the labour movement. The experience of both cannot be ignored or wished away and the alienation arising from them must be overcome because this alienation is now part of the reality we must seek to change, just as Marx sought to change the reality that he faced, including the various schools of socialism that he considered must be overcome and banished during his time.

Lessons from the Grangemouth dispute

Posted on November 11, 2013 by irishmarxism

I received an email from Socialist Democracy inviting me to contribute to a discussion based on an article they have written on the lessons of the Grangemouth dispute in Scotland. This article sets out the devastating scale of the defeat – the freeze in pay, butchery of pension entitlement and castration of union organisation. Many in the media called it an old fashioned battle of labour against capital, such was the unvarnished clarity of what was involved.

The questions to be answered are whether there could have been a different result and what lessons can be learnt?

The article does not say whether the result could have been different. Given the circumstances I think not, but this means we must be clear what the circumstance were that lead to this conclusion.

As for the lessons the article posits two – that the entire strategy of the trade union leaders has been overthrown and that of union support for, and reliance on, the Labour Party is a mistake. I believe that there is a third rather more basic one, which can be explained very much as the old fashioned relationship between labour and capital. What is this relationship?

The relations of capitalist production are unequal as they involve capitalists as owners of the means of production, including oil refineries and petrochemical works, and workers separated from ownership of such means of production and dependent on employment by the capitalist for their livelihood. In a struggle that does not threaten or weaken these foundations it is generally the case that the capitalists will be able to impose their wishes because these align with the power structures in society.

This does not mean each and every strike or struggle by workers is doomed to defeat but that in certain disputes this power of capital is fully deployed and the fundamental imbalance in power is cruelly demonstrated. Were it otherwise capitalism might be able to find some stable compromise, some equilibrium between the two classes that would allow a ‘fairer’ distribution of resources. No such stable equilibrium has been found. Marxists have been confirmed in their view that the liberation of the majority of working people requires overturning the existing system and creation of one in which the monopoly of ownership of capital is destroyed.

This is the basic case for socialism in opposition to all those who think a better world is possible while not overthrowing the fundamental structures of society.

It is not an all or nothing case. It does not say that workers can do nothing to protect themselves short of socialism. Struggles that do not threaten these fundamental relations can sometimes be victorious such as when the economy is booming, unemployment is low and workers can strike or otherwise bargain for higher wages without fear of being sacked and their place being taken by the unemployed.

Of course in an economic downturn the temporary leverage of workers and trade unions is undermined and the power of capitalists to do as they wish because of their ownership of capital is reasserted.

In the case of the Grangemouth dispute this means that no workers’ action no matter how brilliant, innovative or militant could prevent Jim Ratcliffe from using his ownership of capital to close the refinery and petrochemical works and throw thousands of workers onto the dole.

Of course if you were convinced he was lying about the profitability of the plant and convinced his threats to close were a bluff the solution is simple – call his bluff and tell him his demands will not be accepted. Unfortunately his ownership means that only he and his management know the truth and his claims that the plant only had a future if he was able to put £300 million in investment into it were credible. The same system that decrees private ownership of a refinery also necessarily involves periodic overcapacity in production and this was held over the workers’ heads as the brute fact that required they surrender or face the sack.

Under such circumstances no one can be surprised the workers decided to accept the lesser evil.

The article is correct that simple strike action would not succeed. It was the boss who went on strike – it’s called a lockout. It is he who brought production to a halt and threatened to make this permanent.

Others called for widespread solidarity action perhaps secondary strikes. Firstly these are illegal and related to this, workers have not yet the level of combativity to carry out such action, even those involved in the chemicals industry who would have lost their own jobs had Grangemouth closed.

If it is argued that this strategy is one we must argue for and attempt to build for the future then this is indeed an element of strategy. In this situation however there is no reason to believe Ratcliffe gave a rat’s arse about the fate of the wider industry and of the other thousands of jobs that would have been lost. If he was going to close Grangemouth then all these strikes would have made no difference to his plans.

A second possible answer was to call on the state to nationalise the refinery and works. The problem with this is that neither the British State based in London nor that part that might go independent had no intention of doing so. Both are ‘open for business’ only when it means private capitalism. So who was going to nationalise the works? If it is believed that strike action would compel such nationalisation then it would have had to be wider and deeper than that considered above and the first response of the State would have been to attempt to throttle it. Some people keep on forgetting the State is the protector of the enemy.

Some on the Scottish Left said the situation at Grangemouth showed the need for independence but this was not an immediate solution. As we have just said, the Scottish National Party has no intention of nationalising private industry when private capitalists are prepared to invest if only the workers accept the necessary sacrifices. Alex Salmond’s primary concern was with the exposure of his independence project, and the illustration of how weak the idea of a prosperous oil economy looks in light of this immediate threat to pull the plug. Since the refinery provides fuel for northern England and Northern Ireland as well as Scotland the case for action to protect the service went beyond the border and thus implicitly provides the grounds for wide action to defend it. It also undermines any case for a nationalist solution from the right or the left.

The article argues against the efficacy of such answers and proposes its own elements of a strategy. Some of these are by no means very clear.

For example what does this mean? –

“The trade union and political fights have to be united around a movement that is willing to reject the claims of finance capital and to step in and expropriate capital where it is necessary to preserve the livelihood of workers.”

The only time a workers’ movement will be able on its own to expropriate capital is when there is a revolutionary situation. We’re not in one of those so it wasn’t and isn’t an answer. (We’re also fighting industrial capital in this one.)

The article says –

“The Labour Party has promised a temporary freeze on prices, so a call could be made for a permanent cap . . .”

Just how are the laws of capitalism to be permanently abolished or even suspended when the system still exists?

They can’t. The only way they can is if and when there is a revolution that creates the conditions for totally remodelling economic and social relations and even then prices will not be abolished for some considerable time.

The alternative proposed revolves around occupation and seeking an alternative to the Labour Party.

Once again however if the plant is really losing money and the threat of closure real then why would Ratcliffe not just let the workers occupy, sit in the refinery and – so far as he was concerned – rot away? It would be just another way of closing the plant if he didn’t get the workers to accept his demands.

What the demand for occupation means is that workers take over ownership and run it themselves. They cannot simply run it themselves without ownership. No one would provide raw materials or other services without someone to contract with and you don’t form contracts with those in unlawful possession. So the question is how would the workers take ownership? How would they get the money to buy it and to invest perhaps the£300 million Ratcliffe says is needed?

Obviously this is much harder when pushed against a wall, with no preparation and no conception that this is the alternative. Equally obviously if it is accepted that this is the road that workers in such situations should follow then it would be better to be prepared for such a challenge. The challenge is precisely to the monopoly ownership of the means of production that we said at the start is the heart of the relationship between capital and labour and at the heart of capitalism.

The workers movement is big enough to fund research into the creation of worker owned businesses. Workers might start to fight to gain control of their pension funds to invest in their own enterprises. Money can be raised for investment from financial institutions or other funding means to be determined. A network of employee owned cooperatives already exists. What is involved is not utopian, in the sense it has never been done before, nor is it without rational calculation.

If workers could be ready for such an alternative the threats of closure would not be so conclusive.

In other words the alternative to capitalist ownership is workers’ ownership. Not just in some indefinite future ‘after the revolution’ but now and not just for now but in order to build towards the future.

Finally the article criticises the unions’ support for the Labour Party. It notes that organised workers continue to support their trade union and political leaders, although it only proposes that in order to fight both it is necessary to break from the Labour Party but not from the existing trade unions. It calls for a ‘class struggle movement’ to be created across all the unions, which should call for a new working class party.

It obviously believes this fight can dismiss the Labour Party and need not go through it, although it does not explain how this can be achieved when it acknowledges workers continuing support for that Party. Implicit is the view that a fight within that Party is not needed to convince workers to break from it. This in my view is very doubtful.

It draws no lessons from its ridicule of the small socialist organisations which have attempted this road or what it correctly describes as the private character of their concerns; illustrated by their bizarre discussions and replication of policies that decades ago they excoriated the Labour Party for. The articles’ own call for a revolutionary party is correct but of no help here since it is put forward, necessarily so, as an ideal future location.

Instead it states that – “there are many issues around which a fightback can be organised, but they cannot be organized by the current leadership of the working class . . . What it [Grangemouth] has shown up is the utter inability of the traditional leadership to defend workers and the demoralisation and lack of strategic vision on the part of the socialists.”

If what is being said is that a new leadership has to be created, and the existing one challenged, then this is correct. If it is being said that this is a precondition for a fight-back then this is not correct. It is only in the course of struggle that existing leaderships can be defeated, as long as such objectives become part of the struggle by the mass of ordinary workers.

The workers at Grangemouth and, by extension, those beyond have suffered a cruel defeat. One possible reaction is to be cowed by the power of capital to shatter livelihoods. A second is to seek some magic bullet of a strategy that workers can employ to defeat such plans: a strike, secondary action or an occupation.

A third lesson is that very often workers are forcibly confronted with the reality that to secure a decent life they need to go beyond capitalism and that no amount of shifting it with militant action can change its fundamental nature. This nature is one where capitalists own the means of production and they can open and close it when they want. This is not a strong argument for capitalism but a powerful argument for changing society – for socialism.

As Marx said – “the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day’s wage for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!“

Marx on pre-capitalist societies: review of ‘Marx at the Margins’ part IV

Posted on May 27, 2013 by irishmarxism

By Belfast Plebian

Marx published very little in the last ten years of his life and did not even manage to finish volumes two and three of Capital. Some historians have said that he ran out of mental capacity. There were only two important documents published, small in size: the Critique of the Gotha Programme of 1875 is a schematic appraisal of the muddled socialism of Germany Social Democracy and the other a revised version of the Communist Manifesto for mainly Russian readers published just a month before Marx died in March 1883

It is the second document that offers a clue to what Marx was researching in his later years. Marx and Engels state in the preface that they had neglected to say much concerning social developments in the United States of America and also in Russia in the original Manifesto. They then present a brief synopsis of the condition of the small independent farmers in the United States under the duress of expanding capital while turning to conditions in Russia they note the rise of a new revolutionary movement. They then attempt to take stock of the revolutionary potential contained within the primeval communal relations of the Russian society:

‘Can the Russian obshchina, a form , albeit heavily eroded, of the primeval communal ownership of land, pass directly into the higher form of communal ownership? Or must it first go through the same process of dissolution that marks the West’s historical development? Today there is only one possible answer: If the Russian revolution becomes the signal for a proletarian revolution in the Wes , so that the two complement each other , then Russia’s peasant communal land ownership may serve as the point of deparure for a communist development.’(T.Shanin p139)

In 1983 Teodor Shanin published a ground breaking book called ‘Late Marx and the Russian Road: Marx and the peripheries of capitalism’, a collection of Marx’s draft sketches and letters dealing with questions posed by the development of embryonic capitalism in Russia.

In a letter addressed to the Russian populist writer Nikolai Mikhailovsky Marx explained his research: ‘In order to reach an informed judgement on Russia’s economic development, I learned Russian and then for many years studied official and other publications relating to the question’.(Shanin p135) Marx also says that ‘I have come to the conclusion that if Russia continues along the pathway she has followed since 1861, she will lose the finest chance ever offered by history to a people and undergo all the fateful vicissitudes of the capitalist regime.’ Marx stated his thesis tentatively referring to the now hectic undermining by both Russian and foreign capital of the customs of the usually isolated communal villages.

What Marx seemed most eager to banish in the mind of his Russian populist reader was the idea that he had arrived at a general philosophical account of modern historical developments. Marx’s letter was a response to a sympathetic review by Mikhailovsky of Capital Volume One, an appraisal that had ascribed to Marx a unilinear account of necessary historical development.

The Russian populist had said in the review that Marx: ‘In the sixth chapter of Capital, the section called So called Primitive Accumulation, here, Marx has in view a historical sketch of the first steps of the capitalist process of production, but he gives us something much bigger, a whole philosophical-historical theory. This theory is of great interest in general and especially great interest for us Russians.’

In his reply Marx is determined to say that he has no such general theory of historical development ‘The chapter on primitive accumulation claims no more than to trace the path by which, in Western Europe, the capitalist economic order emerged from the womb of the feudal economic order….Thus events of striking similarity, taking place in different historical contexts, led to totally disparate results. By studying each of these developments separately, one may easily discover the key to this phenomenon, but this will never be attained with the master key of a general historical-philosophical theory, whose supreme virtue consists in being suprahistorical.’(Shanin 136)

The above is important for it distances the late Marx from some of his own more rigid conceptions as articulated in the German Ideology and from the common ‘historic Marxism’ thesis that what Marx was about was revising the Hegelian philosophy of History in a materialist direction. The idea that Marxism is a failed Universal Theory of History is still the predominant one in social science.

The other equally important point was that Russia and other pre-capitalist societies ought not to be conflated with Western feudalism. Marx was in fact researching various pre-capitalist societies that were not feudal in the European sense. When he spoke of an Asiatic mode of production he was not using the construction in a geographical sense, for it included most of South America and even parts of North Africa, especially Algeria. Marx was not even trying to describe the pre-capitalists societies in any historical-anthropological way. What he was really interested in was how capitalist expansion was penetrating and transforming pre -capitalist societies that had no feudal past, in short the disruption being wrought by the advancing capitalist-colonialism of his own lifetime. (We do not say imperialism for this terminology was not used by Marx.)

Marx conducted his research using his normal method of reading the leading bourgeois authors and compiling excerpts from them with his own added comments. He made extensive excerpts and notes drawn from authors such as: the pioneering anthropologists Henry Morgan’s ‘Ancient Society’ 1877; the evolutionist John Lubbock’s ‘The Origin of Civilisation and the Primitive Conditions of Man’ 1870; Maxim Kovalevsky’s study of India ‘Communal Landownership, the Causes, Course and Consequences of its Decline’ published in Russian in 1879; the political historian Henry Sumner Maine’s ‘Early History of Institutions’ (1885); notes of sixteen thousand words on John Phear’s ‘The Aryan Village of India and Ceylon’ 1 1880 and Robert Sewell’s ‘Analytical History of India’ 1870.

Much of this material had to do with the communal and clan structures of the still prevailing pre-capitalist societies. Marx appropriated, albeit critically, these works. He portrays Maine as an ideologue defending capitalism and empire rather than a genuine historical scholar. He agrees with Kovalevsky’s arguments covering changes to the communal property forms in India but criticises him for sometimes conflating India with European feudalism.

Marx declares one maxim of his method as ‘One has to be on guard when reading the histories of primitive communities written by bourgeois authors. They do not even shrink from falsehoods. Sir Henry Maine, for example, who was an enthusiastic collaborator of the English government in carrying out its violent destruction of the Indian communes, hypocritically assures us that all of the government’s noble efforts to maintain the communes succumbed to the spontaneous power of economic laws!’ (Shanin 107)

Anderson, basing himself on notes by Kovalevsky, argues that, Marx created a typology of communal forms across many societies and made differing assessments of their durability. The second theme in the notes and drafts is a comparison between Russia and other ‘Asiatic communes’. To be sure he had not worked out a theory of revolution for Russia or for the others he had studied; moreover he was careful to take note of the political independence of Russia as an important difference.

In respect of the potential for social resistance Anderson argues that of the several communal forms that he had studied, Marx thought they were not as resistant to elimination as those that were rooted in Russia. This was due more to the fact that most of the others had already been conquered by colonial capitalism. Marx’s guess on Russia is best stated in this from a letter quoted in the Shanin collection: ‘What threatens the life of the Russian commune is neither an historical inevitability nor a theory; it is oppression by the State and exploitation by capitalist intruders made powerful, at the expense of the peasants, by this same State.’

Anderson concludes by saying that he hopes that his journey into Marx’s writings on nationalism, race, ethnicity and non-Western societies has revealed the multidimensional character of his overall intellectual projects, especially in his later years. Marx’s critique of capitalism was far broader than is usually supposed.

Anderson has done this, though he may have talked more about gender relation. He mentions differences between Marx and Engels on how they each made use of the findings of Morgan’s study of the origins of patriarchy but he does not develop it much.

There are just a few other points I would like to make that Anderson in his restraint refrains from making.

One point about historical materialism that springs to mind after reading Anderson’s book is that it is not a finished theory and has no pretension to be a finished one. It must be open to new evidence and new experiences. If it is taken up as a closed system it would only become a sort of repository of past societies, like a great city museum stuffed full of abandoned knowledge and artefacts.

Another point concerns the assessment of the idea of progress that inheres within historical materialism. The bourgeois ideology of progress is rampant and without qualification: capitalism always improves the world through its free production of commodities, its new technologies, its science and its legal and political forms.

In so far as there is an opposition to this bourgeois credo of progress it can take on more than one mask. In our time the most forceful originates from the mind of the German philosopher F. Nietzche, who declares in his ‘The Anti-Christ’ of 1888 that ‘Progress is merely a modern idea, that is to say a false one.’ Nietzche was much more impressed by the knowledge and art of the ancient world than he was with the modern one, as are his most intelligent followers.

This is not the kind of opposition, said Marx, that the workers and oppressed of the modern world need, the opposition of reactionary modernism. Yet the socialist movement in the broad sense has been damaged by the full embrace of the capitalist ideology of progress. In the first instance, with the progressive Germany ideology of Social Democracy and the Second International, revolution was no longer necessary as steady progress was already happening under capitalist conditions. This steady progress must we remind ourselves included an acceptance of progressive colonialism.

Then there was the progress of actually existing socialism, supervised by the Stalinist bureaucracy and its ideology of State controlled economic progress. Soviet society was reputed to be one without social contractions

Yet Marx assesses capitalism and its progress under the auspicious of dialectical contradiction; all progress within capitalism is torn by irony, even the breakthroughs of science are bundled with contradiction. Medicines are withheld by patents and the Internet technologies are distorted by corporations, to cite just a few examples.

When we speak about the dialectic we are in fact using irony rather than a special kind of logic. The use of dialectic was spoken about by Plato in his dialogues. Socrates was the master of subjective irony. When Hegel revived the use of the dialectic he tell us that he learned it by studying the dialogue by Plato called the Meno.

Marx is the master of something more than subjective irony, he is the master of objective irony, he found it especially in the capitalism-colonialism of his own time and the quotes I have picked out from Anderson’s study are replete with this objective irony.

Finally something should be said about the controversy over Marx’s occasional referrals to the Asiatic and feudal modes of production. Marx in fact wrote more words about Asiatic society than he did about Ancient or Feudal society, yet in the official Stalinist literature it went unmentioned. The Communists spoke of the slave owning, feudal and then capitalist modes of production but not the Asiatic. Why was all talk of Asiatic society covered up by the Stalinist ideologues?

The best known book on this is a tendentious one by Karl Wittfogel called Oriental Despotism published in 1957. The book is tendentious because Marx stopped speaking about pre-capitalism societies in terms of Oriental Despotism at an early stage, and because it is doubtful Marx had developed an account of such societies to the point that he was confident in naming them as belonging to a separate mode of production; the societies were too various for him to make that mistake.

Finally the Stalinists did not censure the terminology primarily because it sounded more like a description of the despotic Soviet Union under Stalin but because referring to the feudalism of China or India or Vietnam facilitated an international politics of anti-capitalist revolution that conceded revolutionary leadership to a class of supposed ‘progressive capitalists’ who were an integral part of common national and democratic revolution directed against the colonists and a class of reactionary feudal landowners. It hardly mattered that Marx thought these Asiatic societies were not feudal in the European sense.

Kevin Anderson has produced an admiral book.

concluded

Marx on Poland and Ireland: review of ‘Marx at the Margins’ part II

Posted on May 9, 2013 by irishmarxism

by Belfast Plebian

Marx served as the chief European correspondent of the New York Tribune, the most important newspaper in the United States in the nineteenth century. Anderson believes these articles ‘constitute a far more serious and sustained affair than is generally realised. They fill most of the contents of volumes 12 through 17 of the MECW, each of which runs to over five hundred pages.’ All too often these articles have been seen as mere digressions from the more important economic works Marx was preparing roughly at the same time.

Their relative neglect is due in part to what Marx himself said about them in a letter disparaging his own involvement with political journalism. One letter Marx sent to a German comrade residing in the United States said he found the ‘perpetual scribbling for the newspapers tiresome’ and expressed a wish ‘ to withdraw into solitude for a few months and work at my economy.’

The articles were also ignored because in the beginning the principal students of the works of Marx were non English speaking Europeans who thought of him primarily as a writer of German prose and even as a strictly European intellectual. In more recent times the journalism has been downgraded due to a sarcastic criticism at the hands of some influential post colonial writers who have uncovered in them a so called Marxist justification for progressive colonialism.

Marx’s 1853 articles on India, especially his ‘The British rule in India’, are believed to espouse a doctrine of an enlightened colonialism. Edward Said’s book ‘Orientalism’ avers that in ‘article after article he [Marx] returnedwith increasing conviction to the idea that even in destroying Asia, Britain was making possible a realsocial revolution.’ Anderson accepts that some of the early Tribune articles contain Eurocentric generalisations. In about the time of the communist manifesto Marx tended to extol the benefits of an inventive British capitalism over the cost of massive social dislocation. A dialectic relationship of both is present but not always so, and the neutral idea that all pre-modern societies like in India and China are destined to make an adjustment to a foreign induced capitalist modernisation is powerfully present.

Anderson presents the case that the Tribune articles on pre-modern and ‘barbarous Asian despotism’ register a steady shift in emphasis, becoming more dialectical and if anything the negative side of capitalist progress is emphasised and a critical support for political resistance to colonialism becomes more the norm.

What can be said with Said and others is that their criticism of Marx rests only on a few early Tribune opinion pieces and extrapolations from the general drift of the unrevised versions of the communist Manifesto, without appreciation of Marx’s constant revisions to his own analysis. What changed between 1853 and 1872-83 was his greater understanding and assessments of the various communal relations still dominant at that time.

Marx actually went on to identify at least three types of early communal relationships; the Greco-Roman, Germanic and the Asiatic. In the argument of 1853 the communal social relations present in these societies at the village level created a very repressive control by the village community over the non-free individual and made the basis for a despotic State, hence they were taken to be ‘barbarous.’ Marx then began to assess them differently and in the Grundrisse he states that the ‘The Asiatic form necessarily hangs on most tenaciously and for the longest time.’

Already in the Grundrisse of 1857-58 he was beginning to characterise the communal relations as containing both despotic and democratic potential. He also began to think that it was not the supposed common ownership of land that differentiated these pre capitalist social formations but the use of collective labour in working the land that really marked them out. Thus in the 1880s he wrote that the Russian village with its communal social organisation might be able to avoid all of the exploitation typical of capitalist progress by revolutionising itself and overthrowing the landed class and by linking up with the workers movements in the West. Marx in fact refers to such an alternative in the preface to the Russian edition of the Communist Manifesto, although it should be borne in mind that he was not proposing a unique Russian road to socialism.

Marx was not defending communal social relations in their existing forms in any unqualified fashion, for he also argued they needed to be revolutionised from within and linked to technological achievements from without . In this way, these indigenous social forms, and the defence of them against capitalist encroachment, could form the starting point for a wider communist transformation that would involve both large agrarian societies like India or Russia and the revolutionary labour movements of already industrialising ones like England, France and Germany.

In the occasional scribbling on the British colonialists and their actions in India and China Marx became ever more contemptuous of what the British colonial-capitalists were actually achieving: ‘More than that of any other nation, the history of English economic management in India is a history of futile and actually stupid (in practice, infamous) experiments . In Bengal they created a caricature of English large scale landed property; in the south east they created a caricature of peasant smallholdings. In the north-west they did all they could to transform the Indian economic community with communal ownership of the soil into a caricature of itself.’(Grundrisse p. 451)

The developing journalism of Marx also refutes the widely held idea that he took no interest in the national movements of his own time. It has been widely trumpeted that Marx raised up the idea of trans-national social class to such a height in his dialectic that the idea of ‘national right’ was completely suppressed altogether in his mind. In textual terms, much of the critique of Marx and Engels on nationalism centres on their early ethnocentric disparagement of some of the Slavic societies of Eastern Europe and the Balkans as “unhistorical” nations.

This thesis is challenged in the examples of Poland and Ireland, both primarily rural societies with no organised communist movement. Anderson shows that Marx’s support for Polish independence was one of the great political passions of his life. One source of our confusion stems from the fact that some influential post Marx socialists developed a pronounced opposition to Polish independence and an explicit critique of Marx, especially Rosa Luxembourg and even Karl Kautsky. Also with Stalin, who partitioned Poland in 1939-41, everything to do with Polish independence was labelled a counterrevolutionary deviation, while most of Marx’s writings on Poland were expunged from the official collections.

The historian of ideas Isiah Berlin is just one of many influential liberals who have charged Marx with a political blindness in respect of the great national movements of the nineteenth century. A study of Marx’s writings on various national struggles, especially those covering Poland and Ireland, showed that he in fact related the workers struggles to the key national struggles without compromising the higher cause of communist revolution.

Anderson shows that the themes of nation and race were intertwined with class analysis and were not relegated to minor matters in his own active political life. In fact they took up most of his Marx’s time as a leader of the First International and were at the core of his clashes and controversies with rival socialist tendencies (mainly Proudhonist and Bakuninist), covering the entire duration of the First International.

Anderson writes that: ‘In Marx at the Margins, I did try to respond to serious scholarly critiques of Marx on nationalism and ethnicity such as those by Ephraim Nimmi (1994), who carried out a textual analysis of Marx’s voluminous writings on nationalism. I generally eschewed reference to the kinds of peremptory (and textually unsupported critiques of those like Giddens who seem to get a free pass so long as their target is Marx.’

In the document of 1864, the ‘Inaugural Address’ of the International, which in effect became its programme, the main theme was of course the international battle between capital and labour, however even here Marx referred to Ireland, Poland and the American civil war.

The period of the First International was also the period of the first drafts of Capital and all three political struggles feature heavily in the historical side of the economic critique. The importance of the American civil war for International Labour is cited in the very preface of the first edition of volume 1 of 1867. The ideological divisions that caused an eventual split in the First International were over Marx’s insistence that the workers movement should not restrict its own outlook to reductive class questions. At the time of Pierre Joseph Proudhon’s death in 1865, Marx wrote a long article in German in which he repeated his earlier critiques of the French utopian socialist’s economic theories. He also added a stinging rebuke directed against Proudhon’s thoughts on Poland: ‘ his last work, written against Poland, in which for the greater glory of the tsar he expresses moronic cynicism, must be described as…not merely bad but base.’

A year later, opposition to Marx emerged within the International among some of its French-speaking members, most of them influenced by Proudhon. In keeping with the viewpoint that labour should not involve itself in wider political issues, but stick to social and economic ones, they opposed singling out Poland for specific advocacy. In a letter Marx send to Engels dated January 5, 1886 Marx says that Poland is the basis of the dispute ‘A plot has been hatched…it is tied up with that pack ofProudhonists in Brussels. The real crux of the controversy is the political question.’

Marx opened the year 1867 in the midst of his finishing the final draft of Capital with a lengthy, well researched speech to a London meeting commemorating the 1863 Polish uprising sponsored by the International and a Polish exiles group. Marx avers that Poland remains the key to a revolution on Continental Europe because it would undermine the reactionary grip of Russia: ‘There is only one alternative left for Europe, Asiatic barbarism under Muscovite leadership will burst over her head like a lawine (avalanche), or she must restore Poland.’ `

After Marx set about constituting the International he became heavily involved with Irish affairs and this was underpinned by a substantial amount of private study. His first interest was following the struggle for land reform and he went more deeply into the class structure of rural Ireland, summarising his findings in a July 11^th Tribune article ‘The Indian Question-Irish Tenant Right:

‘A class of absentee landlords has been enabled to pocket, not merely the labour, but also the capital of whole generations, each generation of Irish peasant sinking a grade lower in the social scale, exactly in proportion to the exertions and sacrifices made for the raising of their condition and that of their families. If a tenant was industrious and enterprising he became taxed in consequence of his industry and enterprise. If on the contrary he grew inert and negligent he was reproached with the “aboriginal faults of the Celtic race”. He had accordingly no other alternative left but to become a pauper-to pauperise himself by industry or to pauperise by negligence. In order to oppose this state of things “Tenant Right” was proclaimed in Ireland….England has subverted the conditions of Irish society. At first it confiscated the land, then it suppressed the industry by Parliamentary enactments and lastly it broke the active energy by armed force. And thus England created those abominable conditions of society which enable a small caste of rapacious lordlings to hold the land and to live upon it. Too weak yet for revolutionising those social conditions the people appeal to Parliament, demanding at least their mitigation and regulation.’ Marx then detailed the vociferous opposition from the land-owning classes to the tenants’ rights law proposed to Parliament in June 1853.

After a break of two years Marx returned to the subject of Ireland with an article called Ireland’s Revenge written for the Neue Order-Zeitung on March 16, 1855 and another eulogising the deceased Irish Chartist leader Feargus O’Connor: ‘he died as a pauper in the true sense of the word, the burial expenses were met by the working class of London.’ Three years later he wrote another article for the Tribune in January 1859 speaking of the ‘excitement in Ireland about a witch hunt directed against Irish conspirators.’

Kevin Anderson summarises the result of the first phase of the study of social conditions in Ireland covering the 1850s in three propositions:

1. While they (Marx and Engels) enunciated clear support for the struggles of the Irish they always counselled Irish revolutionaries to devote more attention to the internal class dynamics of Irish society. In this they were especially critical of the upper class Catholic nationalism of O’Connell.

2. They urged Irish revolutionaries to develop the firmest unity with British workers particularly the mass-based Chartist movement, pointing out that the Chartists supported the repeal of the Union of Ireland and England.

3. They singled out Irish immigrant labour in Britain, both as an index of Irish oppression at home and as a factor holding down the wages of English workers. Moreover they argued that British rule in Ireland proved that the British State could be just as repressive as continental regimes like Bonapartist France or Prussia.

to be continued.

So you think you know about Karl Marx? A review of ‘Marx at the Margins’, Kevin B Anderson.

Posted on May 2, 2013 by irishmarxism

By Belfast Plebian

To date, no comprehensive intellectual biography has been published in any language. Kevin Anderson.

Every new class consciousness generation is forced by contemporary events to return to the philosophy of Karl Marx, not in a mood of revival but to learn something important that has become forgotten or carelessly overlooked by previous students.

In the past the known side of Karl Marx was represented by the Communist Manifesto, a handful of works by Engels and the first volume of an unfinished study of the capitalist-bourgeois model of the good society, Capital volume 1. The later volumes of Capital economic studies were inaccessible to most readers because they followed a difficult logic and even Engels, the life long friend and editor of at least three of the economic volumes, is frequently accused by contemporary devotees of seriously misunderstanding the logic of value as expounded across its many pages. In fact the leading lights of the ‘intellectual academy’ seem to have reached a sort of consensus that Engels got the economic critique wrong in his introductions and prefaces of the numerous editions, though it has not yet reached a consensus as to the linking arguments of the exposition, the relationship – to give one central example – of the tendency for the average rate of profit to fall to the sudden outbreak of an economic crisis, which is still hotly disputed.

There is another part of the Karl Marx legacy that has yet to be appreciated. I will call this, for want of a better expression, the esoteric part: that part of the intellectual legacy that got buried and then neglected by the custodians of the early workers’ parties. Many documents concerning what Karl Marx did and thought during his own lifetime were left unpublished until after the formation of an ‘historic Marxism.’

Marx had frequent disputes with other communists in his own lifetime and they were certainly able to understand him, maybe because the fundamentals of political existence then were stated in common speech in contrast to the specialised language of later social science. Marx in fact is famous less for his critique of classical economic science than for his preparation of the communist manifesto in 1848, one of the most accomplished of common language documents ever recorded and distributed. The manifesto was composed as a blend of just rhetoric and historical knowledge, and espoused in the name of a living revolutionary movement, the Communist League.

The act of rendering the dialectical thought of Karl Marx into fluent and accessible pamphlets and journalism is not without a certain risk of vulgar distortion. Even sections of books approved by Karl Marx himself, like the ‘Anti Duhring’ of Engels, to this day provoke criticism from some ‘Marxists’.

One reason we may well surmise why Karl Marx kept his partnership with Engels strong for so long was that he felt a need for an intellectual accomplice who could speak to the workers about political economy in a less convoluted style than he thought he could do. Marx always maintained that an attack on bourgeois economics as first expressed by Engels was not only his first introduction to the subject matter but a life-long inspiration.

Marx for sure could write in the style of a campaigning journalist but he certainly preferred to delegate the role of first publicist to his partner in revolution. When Engels committed intellectual blunders Marx usually refrained from excommunicating him. Engels held frustrations of his own, especially over the esoteric intellectual habits of Marx, complaining in a letter: “as long as you still have an unread book that you think important, you do not get down to writing.”

With the benefit of historical hindsight Marx and Engels may have even ‘over-succeeded’ with their exoteric publications like the Communist Manifesto and the Ani-Duhring because these publications became by the turn of the century the core of what became known as ‘Second International Marxism’. They published the first version of the great manifesto in February 1848 and then went on to publish several revised versions.

With the very first one they faced a pressure familiar to all those who write for a public purpose: their friends’ impatience (from their comrades in the Communist League of whom we have records from the time). A month before publication the secretary of the Communist League wrote saying ‘The central committee charges its leading circle in Brussels to communicate with Citizen Marx and to tell him if the manifesto of the C. Party, the writing of which he undertook to do at the recent congress, does not reach London by February 1st of the current year, further measures will have to be taken against him.’

The manifesto was the declaration of a hard fought battle of ideas within the Communist League, an early example of a revolutionary united front, so the ideas expressed in the first edition can’t be ascribed without some reservation to Karl Marx alone.

Marx and Engels wrote several prefaces to the later editions that seem to edge closer to something like a genuine historical Marxism. In the 1872 German edition they say that in view of the gigantic strides taken by modern industry in the preceding twenty-five years, and in view of the political experience gained through workers participation in the Paris Commune of 1870/71, the communist programme of the first edition has in some respect become antiquated.

In point of fact friendly critics of the manifesto like Leon Trotsky and Ernest Mandel point out some serious flaws even in the revised versions from the perspective of a later Marxism. Trotsky says that in showing how capitalism draws along in its wake the backward and barbaric countries the manifesto does not say anything about the struggle of the colonial and semi- colonial peoples for their independence. He also says that the most obsolete part of the manifesto is Marx’s criticism of the socialist literature prevalent at that time.

Ernest Mandel says that the manifesto established the unfortunate myth of the driving down of workers wages to a subsistence level, the iron law of wages, as one of the main tenets of orthodox Marxist thought, something he in fact refuted in his scientific account.

What we learn from this worry over the communist manifesto is that we must be conscious of shifts and developments in the thought of Karl Marx. We must not even assume that the later books, essays and pamphlets are always an improvement on the earlier ones. After all we all decline with age.

Marx is unusual in that he has often suffered greater distortion in the hands of his supporters than from his intellectual enemies although these have often stood on common ground. To give just one example, both past friends and enemies typically selected out points 5, 6 and 7 of the Communist Manifesto as the only guide to what Marx argued for by way of an alternative to capitalist arrangements. Point 5 states that communists are in favour of the centralisation of all credit in the hands of the State by means of a national bank with an exclusive monopoly. Point 6 states that communists are in favour of a monopoly of the means of communication and transport in the hands of the State and point 7 calls for an extension of factories and instruments of production owned by the State. Nowadays we would call this a programme for state organised capitalism.

It is to the credit of the author of this book about the thought of Karl Marx that he scrupulously tries to avoid a stereotyping of Marx by not resorting to the usual interpretative device of selecting just a handful of well known ‘key passages’ from the better known publications and then referring to this selection as definitive of Marxism . The chief virtue of the book is that it presents to the contemporary militant a serious reading of essays, documents and letters by Karl Marx that are not well known or are seldom thought to be worthy of comparison to the key passages approach. The good thing is that we are offered a more ‘historical’ account than we are usually given. We might legitimately call this a dialectical account of the development of the mind of Marx.

Anderson’s method is to split the collected works into a kind of core and a periphery and show how the works of the periphery if studied carefully offer us a more concrete understanding of the abstract core. The core for Anderson consists not so much of a privileged statement or single book but of the concepts of social capital and the exploitation of labour, the theory of alienation and fetishism and finally the notion of dialectics. These ideas are the core because they appear as a seam that is more or less present in all of the primary works.

Anderson does not make an assessment of Marx’s intellectual development on the basis of a definite epistemological break between a young, humanist Marx and a mature, scientific Marx like the French professor Louis Althusser tried to do.

Anderson is one of those historians participating in the publication of MEGA2 which began in Moscow and Berlin in 1975, came to a standstill in 1989 with the implosion of the Soviet regimes, and was taken up again mainly by Western funded institutes. What we now have before us is a much expanded version of the works of Marx and Engels than was previously available. It is hard to think of another modern thinker with so small a ratio of published writings during their own lifetime to those actually written. Works now considered central to the canon such as the 1844 manuscripts, the German Ideology, the Grundrisse and the Theories of Surplus Value were largely unknown to the “orthodox Marxists” of 1905. For the purpose of this review it is useful to be reminded of what new material is included in the complete works, for Anderson makes use of some of them in his study.

The updated complete works are divided into four sections:

Section One: early works, articles and drafts.

Of thirty two volumes now planned, seventeen have appeared. Especially notable is the inclusion of a rougher but larger version of the influential 1844 manuscripts. Marx appears to be writing two versions at the same time.

Section Two: Capital and Preliminary Studies.

Consisting in 15 volumes, of which as of 2010, 13 have been published. What has been included are all the editions of volume one of Capital. Important here is a print of Engels’s 1890 German edition, but with an important addition from a French edition prepared by Marx himself in 1872-1875 with an extra 60 pages not included in the English translation of the standard German edition. This, it turns out, was the edition most favoured by Marx though not by Engels. Anderson presents some extracts of letters concerning their difference of opinion over what version of Capital volume 1 should be prioritised. Other volumes offer draft manuscripts for what became Volumes 2 and 3 of Capital, which can now be studied to see how Engels edited and arranged them.

Section Three: Correspondence.

Of 35 volumes planned, 12 volumes covering the years up to 1865 have been published. In the previous complete works most letters from Marx to people other than Engels were usually omitted.

Section Four: Excerpt notebooks.

Of 32 volumes planned, eleven have so far been published. Here we have many drafts and notes never published before in any language. These include notebooks from 1844-1847 on political economists such as Jean -Baptiste Say, Jean-Charles Sismondi, Charles Babbage, Andrew Ure and Nassau Senior. Excerpt notebooks from Marx slated for publication include (1) notes from 1853 and 1880 on Indonesia, (2) notes from 1852 on the history of women and gender relations, (3) notes on the history of agriculture in Russia plus some on prairie farming in the United States, (4) substantial notes on Ireland from the 1860s, (5) notes on agriculture in Roman times, and finally (6) a massive chronology of world history composed during the 1880s.

Kevin Anderson situates his presentation of the development of Marx close to a mode of interpretation associated with the books of Raya Dunayevskaya (his own book is dedicated to her) whose most notable books are Marxism and Freedom (1958,) Philosophy and Revolution: from Hegel to Sartre, and from Marx to Mao (1973) and Rosa Luxemburg, Women’s Liberation and Marx’s Philosophy of Revolution (1981).

In her own work Dunayevskaya turned to the unpublished ‘Ethnographic’ notebooks of Marx to argue against the thesis that the old Marx(the last ten years) was an unproductive thinker, pointing to some of the different conclusions Marx reached in contrast to Engels in the study of the role of women and class in early societies. This she believed was important owing to the undisputed spell Engel’s ‘Origin of the Family, Private Property and the State’ held over all later communists. It was taken on trust that Marx had no thoughts of his own relevant to what was later to be called women’s liberation.

Some of the less well know documents that Anderson mines concern the political journalism, especially those relating to race and class in the United States, the national struggles in Ireland and Poland, and others covering the colonial expansion in India, China and Java. He then relates some of this material to editions of Capital especially the generally ignored French edition, the one Marx himself preferred.

He also takes us on an excursion through Marx’s late studies of pre-capitalist societies with particular reference to Russia and India and asks what his reasoning was in spending so much time on them, all the while jeopardising the completion of Volumes 2 and 3 of Capital.

What we end up with is a much more energetic and interesting ‘late Marx.’ It should be noted that David Riazanov and his colleagues at the Moscow institute neglected to publish some of these later documents stating that Marx by 1880 ‘had lost his ability for intensive, independent, intellectual creation….. Sometimes, in reconsidering these notebooks, the question arises; why did he waste so much time on this….that is inexcusable pedantry.’

In the next post we will look at some of what Anderson reveals about these writings, including those on Ireland.

Marxism and the State

Posted on November 13, 2012 by irishmarxism

In a previous post I said that I would be looking at the Marxist view of the State and in this post I will look at some aspects of Karl Marx and Frederick Engels’ original view. For them the possibility of socialism was not that it best met some general principles of justice or equality but that it was based on the actual social and political development of the existing capitalist system. If there were no developments within capitalism that might form a real foundation for achieving the former ideals then these ideals were practically worthless. The question however is on what developments within capitalism is the potential for socialism based?

It is undoubtedly the case that the state plays a greater and greater role in capitalist society and that as this system has developed so has the role of the state. That this has been so despite decades of rhetoric by the most ideologically rabid supporters of capitalism against the state ranks as only further proof of its central role. The state also played a major role in the creation of the capitalist system although its importance may be subject to historical debate.

On this basis the majority of the socialist movement has come to identify socialism with this state either through state ownership, regulation, taxation or state expenditure on ‘public’ services. In the form of Stalinism it has taken the shape of the most gargantuan forms of state power which has assumed prerogatives in social life that have associated the liberatory content of socialism with the totalitarian nightmares of Orwell’s 1984.

This has nothing to do with Marxism. In fact the intellectual journey by which the young Marx came to ‘Marxism’ involved an utter and complete opposition to the state, as formulated by the German philosopher Hegel, which Marx carried out through his ‘Critique of Hegel’s Philosophy of Right’. Marx’s view of socialism was not an ideal state which society must seek to achieve but the movement of a class to achieve political power as the means by which to ensure its own and humanity’s social liberation. Socialism is therefore the movement of the working class to achieve power, not the actions of a state and especially not a capitalist one!

For Marx therefore the active germ of socialism is not expressed under capitalism by the growth of the state but by the growth in the social and political power of the working class, which itself is based on the objective development of the capitalist system. The growth of the state does not in itself herald the new society because Stalinism has demonstrated that a society based on even the state of a superpower is not a historically viable social formation.

The Marxist view of the increasing role of the state was explained by Engels in relation to his native Germany under the Chancellor Bismarck:

“. . . only when the means of production and distribution have actually outgrown the form of management by joint-stock companies, and when, therefore, the taking them over by the State has become economically inevitable, only then — even if it is the State of today that effects this — is there an economic advance, the attainment of another step preliminary to the taking over of all productive forces by society itself. But of late, since Bismarck went in for State-ownership of industrial establishments, a kind of spurious Socialism has arisen, degenerating, now and again, into something of flunkyism, that without more ado declares all State-ownership, even of the Bismarkian sort, to be socialistic. Certainly, if the taking over by the State of the tobacco industry is socialistic, then Napoleon and Metternich must be numbered among the founders of Socialism.

If the Belgian State, for quite ordinary political and financial reasons, itself constructed its chief railway lines; if Bismarck, not under any economic compulsion, took over for the State the chief Prussian lines, simply to be the better able to have them in hand in case of war, to bring up the railway employees as voting cattle for the Government, and especially to create for himself a new source of income independent of parliamentary votes — this was, in no sense, a socialistic measure, directly or indirectly, consciously or unconsciously. Otherwise, the Royal Maritime Company, the Royal porcelain manufacture, and even the regimental tailor of the army would also be socialistic institutions, or even, as was seriously proposed by a sly dog in Frederick William III’s reign, the taking over by the State of the brothels.”

In the development of capitalism increased socialisation of production that anticipates and presages socialism is reflected in the increased role of the state and in this sense only is it progressive in that it signals the development of society towards socialism. This does not mean that socialists should give any political support to this increased role of the state never mind put it forward as socialist in itself. The development of capitalism has created and continues to create massive misery and exploitation through driving people from the countryside to cities and is progressive because it creates a working class which is the bearer of a new society but no one thereby claims that socialists should support this process politically.

This again is presented by Engels:

“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 organization 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.”

Support for nationalisation as a socialist measure is a short-cut, a short-cut to nowhere:

“It is a purely self-serving falsification by the Manchesterite [laissez-faire] bourgeoisie to label every intervention into free competition as `socialism’: protective tariffs, guilds, tobacco monopoly, statification of branches of industry,…, royal porcelain factory. We should criticize this, not believe it. If we do the latter and base a theoretical argument on it, then it will collapse along with its premises” (Engels quoted in Draper, Karl Marx’s Theory of Revolution, 1990,p.96)

From the glorification of the power of the state comes the betrayal of socialism in the form of nationalism which is why it is so apt that this is often expressed in the demand for nation-alisation, as if the more of this demanded the more radical is the socialism.

This type of ‘socialism’ is often also associated with ethical considerations of justice and equality and the view that this can be achieved through state action. This opens up the possibility of the latter becoming prettified beyond all recognition. So vast bureaucracies become socialist institutions and means tested, inadequate benefits dispensed through pipettes become a whole new model of society.

If statisation is the advance of socialism then reforming this state is inherently the way forward and electoral success to reach the ‘pinnacle’ of this society becomes the most natural means to its attainment. Calls for widespread nationalisation, defence of the welfare state without the least criticism of it, demands on the capitalist state to do things it simply will not and cannot do and rank electoralism are all consistent with each other and hallmarks of many of today’s ‘Marxists’. As Marx was himself compelled to say of some of his ‘followers’, if this is Marxism I am no Marxist.

In his career Marx came across this approach to politics, which is all too familiar today, in the shape of the German Ferdinand Lassalle, who sought state aid for workers cooperatives as the germ of a future socialism, of which the workers were not yet ready to openly fight for. Today some demands for nationalisation and state redistributive policies are designed to manoeuvre workers into a movement for socialism without even mentioning the word never mind traducing its real content.

Frederick Engels and Eduard Bernstein penned a critique of this sort of approach:

“If the masses could not yet be interested in the actual end of the movement, the movement itself was premature and then, even were the means attained, they would not lead to the desired end. In the hands of a body of working-men not yet able to understand their historical mission, universal suffrage might do more harm than good, and productive co-operative societies – with State-credit could only benefit the existing powers of the State, and provide it with a praetorian guard. But if the body of working-men was sufficiently developed to understand the end of the movement, then this should have been openly declared. It need not have even then been represented as an immediate aim, to be realised there and then. Not only the leaders, however, but every one of the followers that were led ought to have known what was the end these means were to attain, and that they were only means to that end.”

Today calls on the state to do good are presented as the means to win workers’ votes, which will ultimately lead to socialism, while the goal is considered too advanced to be put forward clearly, put to them as something that they must do and only they can achieve. The avoidance of socialism and its real content today goes under the name of anti-capitalism or under the banner of broad left parties and alliances which hide what its sponsors claim they really stand for.

Let’s be clear about what the nature of Marx and Engels’ argument was. It has been compared to their attitude to reforms. Thus while they were in favour of many reforms to the capitalist system, the purpose of such reforms was to place the working class in a better position to carry out the revolutionary overthrow of capitalism. It was not because such reforms of themselves were the means to bring socialism into effect.

So today socialists should not reject demands on the state or recoil from calls for nationalisation where these might be appropriate. These proposals should not however be considered the basic mechanism for the transition to socialism; the all-encompassing framework for the programme that becomes its heart, body and soul and the all-embracing grounds on which the socialist argument takes place. However as we have noted before this is exactly the role that the capitalist state plays today in the politics and programme of the left. In a number of posts this has been explained; from the demands that the state tax the rich to investment to create jobs and nationalisation as if this were socialism itself.

The difference can quite easily be seen,on the one hand, in opposition to austerity, cuts in public services and opposition to privatisation, which should all be supported, and, on the other hand, putting forward as the socialist solution massive state investment as the answer to unemployment, economic insecurity, inequality and low standards of living. While such a policy by the capitalist state might be better for workers in that it provides some protection and better grounds for workers’ own organisation it is not itself the workers’ own alternative. Nationalisation, state investment and taxation are not solutions and certainly not socialist ones. All this has been explained in previous posts.

One other thing must also be explained. Opposition to austerity must be supported, be part of the Marxist programme, because this is something to be carried out by workers themselves. Keynesian programmes of state-led investment hand everything over to the state to achieve. It remains in control, dictates how much and what is to be done, when, where and how. It is precisely to remove all this from state control that is the task of the working class.

This is what Marx meant when he said that “every step of real movement is more important than a dozen programmes” which has been re-translated today so that state reformist electoral programmes are mistaken for real movement. This denial of the primary role of workers’ own activity is reflected also in these organisations sectarian organisational practices and electoralism which are simply the everyday practical out-workings of a programme that signals dependence on the state for solutions that should come from the workers themselves.

Thus for Marx, support for workers cooperatives in ‘Capital’ is distinguished from Ferdinand Lassalle’s state aid for producers’ co-operatives – “as far as the present co-operative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not protégés either of the governments or of the bourgeois.”

For Marx and Engels “the emancipation of the working classes must be conquered by the working classes themselves.” This is the starting point for today’s struggle for socialism, not faith in the benign actions of the capitalist state.

BBC ‘Masters of Money’ considers Karl Marx (Part 2)

Posted on October 7, 2012 by irishmarxism

The BBC programme was called ‘Masters of Money’ and was ostensibly all about money but there was nothing said about Marx’s theory of money, which is fundamental to explaining the current economic crisis.

For mainstream economics money is essentially just paper that can be used to exchange commodities. Provided it is not issued in too high a quantity it will maintain its value and is useful for this purpose. Already we can see a problem. What is the intrinsic value of pieces of paper or metal coins? If it had an intrinsic value its issue would hardly be a problem. It becomes a problem because paper money cannot fulfil all the functions of money precisely because it does not have an intrinsic value.

The massive expansion of credit makes credit too look like money in that it is used to exchange commodities. However at a certain point people want paid with money and not yet more credit. When this happens credit stops being given to some people and we have a ‘credit crunch’ such as developed in the latest financial crisis when banks refused to lend to each other and Governments had to step in.

For Marx money is itself a commodity with an intrinsic value because it too is the product of human labour. Historically it has taken the form of gold. This is why commodity exchange is an exchange of equals because when money is exchanged for a commodity the money is either gold directly or indirectly if it is convertible into gold. The end of such convertibility does not abolish exchange being one of equivalents. Just as credit cannot become real money and this is proved during a credit crunch so paper money is exposed when it is over-issued and creates inflation and when in a crisis capitalist investors look to put their money into something that will preserve the real value of their wealth.

In fact this occurs during booms when speculation on one type of asset after another leads to bubbles – in high-tech company stocks, houses, commodities and now certain government bonds. The price of oil is one barometer of this activity.

Thus just as the massive expansion of credit is not a solution to the problem of capitalist crisis and the contradiction between a limited market and profitable production so also is the printing of money through quantitative easing not a solution. Yet according to mainstream economics there is no reason why printing money should not be a solution. The proof of the pudding is that while quantitative easing has prevented collapse it has not abolished the crisis.

Many companies are sitting on piles of cash including US multinationals holding money outside the US and so evading US taxes. There is an ‘investment strike’ because of the recession which has created unemployment, falling incomes, debt crises for many countries and austerity which promises not a recovery but continued recession. All this is worse in Ireland because it is not mainly the policy of austerity which is the problem but a massive overhang of debt, which must otherwise be repaid, and shrinkage in demand due to lower wages, unemployment and emigration.

We are back to ‘solutions’ that are based on more investment and higher wagers but which ignore that it is the system based on profit which is the cause of the problems.

Two other issues occupied the last part of the BBC programme. The first was whether capitalism would last more or less forever or would be temporary and replaced by something else. The programme accepted that Marx’s analysis of capitalism had a lot of sense to it but it did not, to no one’s surprise I am sure, think that he had any alternative. In fact the very scarcity of his views on this was held up a number of times while recognising that no one else had much of a clue either.

This was more than a little disingenuous. The programme started off with shots of the Berlin Wall being demolished and of pictures of Red Square in Moscow and of Stalin. The presenter recalled that she was at university at the time the Berlin Wall came down and one thing she was aware of was that ‘communism’ had definitively failed. The programme she said would therefore not look at what Marx had to say about communism. To return at the end of the programme and say that Marx had no alternative while excluding what he did say about an alternative is, well, not exactly fair.

Also unreasonable was the nonsense that Marx, although he had been poor, had towards the latter years of his life become a bit bourgeois. This seemed to consist of such things as worrying over the future of his children and taking walks in the park in quite nice areas of London. What a traitor! He hadn’t even been down a coal mine, unlike the presenter who went down one for the programme.

That leaves me a bit conflicted as I worry over my children, like nice walks in the park (sometimes) but have been down a coal mine (once).

More importantly the programme argued that Marx had no alternative and implied that this explains the otherwise puzzling phenomenon, gleefully expressed by ex-Tory Chancellor of the Exchequer Nigel Lawson, that many people were not flocking to the banner of Marxism. The latter is a fact, so is it the result of the former?

In an earlier post on the defeat of the opposition to the austerity referendum I asserted that the Left and the working class generally did not have a real alternative, as opposed to some theoretical one, and that this was fundamentally why many workers had voted for something that was against their interests and which some knew to be the case. The programme actually expressed very well what is meant by an alternative, if I recall more or less accurately, it said that this would be when ‘a compelling alternative would appear.’ What is this ‘compelling alternative’? If we are talking about the replacement of the political economy of capitalism we are also talking about its replacement by the political economy of the working class. What is this?

Marx described the alternative to capitalism this way:

“But there was in store a still greater victory of the political economy of labour over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold “hands”. The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolized as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart. In England, the seeds of the co-operative system were sown by Robert Owen; the workingmen’s experiments tried on the Continent were, in fact, the practical upshot of the theories, not invented, but loudly proclaimed, in 1848.”

(http://www.Marxists.org/archive/Marx/works/1864/10/27.htm)

The beginning of an alternative to capitalism arises only when the working class takes action, however small, and is not limited to creation of worker owned and controlled production. The creation of its own organisations to defend itself against capitalism also foreshadows its future control over the whole of society. The creation of its own workers party is the pinnacle of it being conscious of its tasks. Many of the political organisations claiming the banner of the working class and the mantle of Marx replace the centrality of the working class itself with calls upon the state, the capitalist state, to take the action only the working class can take and only which if it does take, can it be considered any step towards socialism.

So the BBC programme on the alternative of Karl Marx got his essential teachings wrong but unfortunately, through empirical impressions, got the current weakness of the socialist alternative right. The programme itself however is an indication that this alternative is as necessary as it ever was.

BBC ‘Masters of Money’ considers Karl Marx (Part 1)

Posted on October 2, 2012 by irishmarxism

As part of its ‘Masters of Money’ series the BBC 2 programme, which looked at the ideas of John Maynard Keynes and Friedrich Hayek, finished by looking at the economic ideas of Karl Marx. The overall verdict? It could have been a lot worse.

There were of course huge simplifications that erased exactly what Marx was saying. These could have been avoided, and the dismissal of communism and what Marx had to say about it was on a par with cold war contempt, but despite this there was a coherent argument through the programme.

It was very much the creature of a mainstream bourgeois economist albeit one who thought there were important insights to be found in Marx, particularly his perspective on the inequality of capitalism and its instability. It avoided some cheap shots and pointed out that Marx appreciated the revolutionising of production achieved by capitalism and its dynamic development across the world. The presenter Stephanie Flanders repeated the often made observation that Marx’s description of capitalism is more true now than when it was first made. She also correctly observed that profit is the soul of capitalism and made some correct remarks about the compulsive nature of the drive for profit within the system.

There were some strange observations which tried to tie the relevance of Marx’s views to particular periods which excluded the post war boom and included the 19^th century but excluded the great depression of the thirties. The whole point of the programme however was to assert the relevance of his views today and if it did no more than this then it must be judged positively.

There were some problems that, had they been addressed, would have made for a much better exposition of Marx’s ideas. The first is that the programme avoided what Marx thought was his greatest economic discovery – the nature of surplus value. This is the discovery that the economic value created by capitalism is the result of human labour and can be measured by the labour time necessary for its production. The source of capitalist profit is the result of the difference between what the capitalist pays for this capacity to labour and what this labour actually produces. This explains how a surplus can be produced and a profit arise when the exchange of commodities, including labour power, is the exchange of equivalents. It is not a question of workers being cheated when they receive a wage in return for their labour power or of unequal exchange of commodities.

This is not a particularly difficult concept to explain but it does very clearly reveal the exploitation of the working class and exposes all the hypocritical justifications of the system.

The second problem is not what was left out but what was included, that Marx held that the absolute level of wages would be held down under capitalism. This doesn’t sit well with the programme’s acknowledgment of Marx’s view that capitalism develops the forces of production. Who did Marx believe would buy the goods created by the development of these productive forces? This of course was the central tenet of the programme: that for Marx this was precisely the problem.

Marx’s argument was held to be that the tendency to lower wages reduced the ability of workers to buy the goods they produced. Increasing wages would only reduce profits, the objective of the system, so this is not a solution. As a temporary ‘fix’ the system expanded credit to make up the shortfall in wages and allow all the goods produced to be purchased. The explosion of credit therefore explains the current economic crisis emanating within the financial services industry. The programme was actually quite good when it cut to the right-wing talking heads who pooh-poohed the idea that low wages contributed in any way to the crisis. They looked neither comfortable nor convincing, or maybe that was just me.

The programme argued that Marx’s criticism went much deeper than any other but actually the programme didn’t go deep enough. Not altogether its fault since there is widespread debate among Marxists about the causes of the current crisis and even about the fundamental mechanisms of what might be called ‘classic’ capitalist crises.

What can be said however is that the description of the crisis given in the programme and the role of credit and wages is only how the crisis manifests itself, not how it is caused. To explain the latter would require one to start with the idea ignored – surplus value.

If low wages restricting the market were merely the problem the question would not be so acute. The capitalists who had diddled the workers could simply purchase what the workers did not. Everything would then be sold. The problem is worse because the workers create added value over and above what they are paid, over and above what is required to maintain production and also above the conspicuous consumption of the capitalists, and this additional value produced must find a market. Why can’t this too be solved by the capitalists buying the difference?

The answer is that it can but the question then is what is the result of this? Additional value appropriated by capitalists can expand their luxurious lifestyles but the driving force of the system is not this but profit. To increase this means expanding production both to garner extra profit and destroy competitors. This means the capitalist must employ the additional value produced by the workers to further invest in more workers and also machinery, raw materials etc to expand output. The problem is intensified as production increases, new markets are sought for the things that are produced and the amount of surplus value (unpaid labour) created is expanded.

In the longer term the rate of profit comes under pressure as the capitalists replace workers with machines in order to produce more cheaply or even to produce some goods at all (some high-tech ones for example). However because profit comes from workers the value of production comprised of workers labour declines and so does the proportion made up of surplus value, from which profit comes. Fewer workers will create proportionately less surplus value while the cost of machines and raw materials etc increases relatively, so reducing the rate of profit. The capitalists with the lowest productivity and lowest profitability can be forced into bankruptcy. Of course to some extent this too can be offset by lower wages but the increasing sophistication of production means that paying peanuts will not allow the ‘monkeys’ to engage in the skilled labour required. This is a long term tendency but one we can see in operation through the economic history of the west and in the rapid economic development of Asia. It implies that profit plays a smaller and smaller relative role in production which calls into question a system in which this is the whole purpose of its existence.

The regular periodic crisis, including the current crisis, is the route by which this longer term tendency operates. The compulsion to produce more and more surplus value also produces these more regular booms and busts. The drive to expand the creation of surplus value means increased accumulation of workers, machines and materials and the expansion of markets to purchase the additional production. In an economy dedicated to the needs of the population such increased production can be consciously planned and coordinated and its limits set by society as a whole. Under capitalism no such limits are acceptable.

The limits on production of surplus value are therefore not set by the needs of society or by the limits of the purchasing capacity of workers and capitalists. To break from these limits credit is expanded to bridge the limitations on consumption that are the result of the limits of production. Through credit capitalism seeks to satisfy the capitalist desire to expand production through the accumulation of more and more surplus value. Credit expands the market for increased surplus value production.

This can produce fantastic economic booms of the sort we have seen in the last decade or so in Ireland and across much of the globe, from China to Brazil. The attempt to expand real production and to create an even larger market for it must at some point necessarily collapse for the same reason that credit is originally introduced. Just as increased credit is an attempt to increase profit so the collapse of credit is the result of credit no longer being able to expand profitable production.

Workers must pay back debt at some level and beyond a certain point this becomes impossible because of the limits to their real incomes determined by real production. The same is true of the capitalists. Ever more convoluted attempts to expand credit beyond the capacity to pay it back – through creation of yet more credit – is doomed to collapse as the ever expanding amount of debt requires greater and greater repayments to keep it going. The fantastic expansion of the financial services industry is testament to how big such an exercise can become. A glance at the size of the balance sheets of the Irish banks in comparison to the size of the whole economy reveals the scale of the overproduction and credit expansion that can arise.

In Ireland and the US the limits were reached when workers could no longer pay for inflated housing or capitalists pay for inflated office and other building construction. A surplus of such properties is eventually created, overproduction appears, prices collapse, capitalists cannot sell except at a loss and those who built the houses and offices go bankrupt, workers in construction are made unemployed and the banks which financed it all go bust. At such points it can appear that the problem is that workers wages are not big enough to buy all that has been produced and that this is the problem. Solutions are proffered by Keynesians who say that what is need is yet more investment to take the place of that which has just collapsed. But as we see, these solutions do not address the underlying problem and provide a ‘solution’ only by postponing the collapse and stoking up a bigger tsunami when the boom busts later.

In these circumstances blame is also placed on the institutions which created the massive credit explosion – the banks – especially since such booms inevitably involve hugely speculative, criminal and stupid behaviour during a time when everyone thinks they should be getting rich quick. No one needs regulation during a boom when money is being made and afterwards the call is made that we have to have stricter regulation when again, but for opposite reasons, no one needs regulation. Regulation becomes the alibi for the systematic failures of the system. Left wing critiques which focus on the banks play into the hands of those who want to ignore or are simply ignorant of the system itself being responsible for the bust. That the bust is so spectacular is simply a result of earlier failure to burst the bubble. For a longer and bigger boom the price paid has been a longer and bigger bust but either way capitalismproduces booms and crashes. Keynesian solutions to extend the boom can simply create bigger crashes.