(Published fall 2002)
Now, what would one say to a man who exclaimed: You ask, where will the profit of the (railway) line come from? I beg your pardon, but that is down in black and white in the costing. In sober circles one would probably indicate…that he belonged in the lunatic asylum or the nursery. But among the official custodians of Marxism such know-alls form the ‘supreme court’ of ‘experts’ who give reports on whether other people have simply completely misunderstood the nature, aim and significance of Marx’s models! (p. 70).
Rosa Luxemburg, Accumulation of Capital (1913)
The truth of this society is the opposite of this society.
Guy Debord, Society of the Spectacle (1967)
This world where, every day, strutting boorishness and stupidity thumb their nose at intelligence.
(Tizon and Lonchampt, Your Revolution Is Not Mine (1999)
It is hardly a secret that the contemporary world is one of tremendous dislocation in which every advance of capital seems to entail, and require, a major retrogression of the human. From the post-modern shopping galleries of American “edge cities” to the killing fields of Rwanda, from the gangster-ridden kleptocracy now ruling the former “socialist” bloc to the slums of Latin America controlled by an international drug cartel better equipped and armed than the state itself (in those cases where it does not directly control the state), from the eclipse of General Motors by Walmart as the biggest American corporate employer to the millions of displaced itinerant peasants looking for work in the free economic zones of China, from whole formerly blue-collar neighborhoods of London and the Paris suburbs now effectively run by drug-dealers with the blessing of the state to thuggish government unions enforcing order in the Mexican maquiladoras, from the depopulated villages of rural Yemen knee-deep in the plastic refuse of trashy consumption to the Lumpenization of minds by drugs and television and gangsta rap in the Bronx and South Central LA, from the sinister Mafia-ruled cities of the French Riviera and the fungus-like growth of the European extreme right to Bombay slums of downsized textile workers rallying to the blood-and-soil atavisms of Hindu fundamentalism, from the fundamentalist madrasas of Karachi to black-leather gold-chain Ivy League seminars in post-modernism, “free market”capitalism, in its seeming moment of unchallenged triumph, seems far indeed from the Declaration of the Rights of Man of 1789 and the culture of a Diderot, a Hegel or a Beethoven which it produced in its revolutionary phase.
There is no need to continue with a litany that can easily lead to a similarly ideological paralysis of despair and resignation. We know perfectly well that bourgeois ideology itself, even in its most radical moments, was always vulnerable to this kind of devolution. Hobbes, Adam Smith, and Ricardo (to take the example of English materialism and political economy) were attacked in their own time as cynical subversives for having had the honesty to strip away the “aura of sanctity” surrounding the emerging bourgeois social relations they articulated. But buried in their atomist and individualistic assumptions about man in bourgeois society (which for them was the only society that ever existed or would exist) was a vision of man as basically an animal, trapped in a war of all against all, incapable of any social community except one resting on constraint. Posed in this way, and juxtaposed onto the brutalization of sensibilities evident everywhere today, it is easily seen that figures such as Hobbes, or Malthus, or Bentham, are theoreticians par excellence of the present, and that nothing in the best of bourgeois culture offers any serious stopping point on the slippery slope to today’s Brazil, where ten million abandoned children raise themselves on the streets, or to today’s U.S. prison system, where two to three million people (mainly black and Latino) work for pennies in corporate installations built into the prison itself, or perform in gladiator tournaments organized by the guards in the towers of the super-max.
What is slightly staggering, if only for a moment, is the ease with which modern capitalist society, in the past three or four decades, sloughed off any pretense of its old claims to humanism and culture. In the first decades after World War II, Western capitalism paid lip service to the spread of democracy, to its high culture, to the benevolent uses of science and technology. Of course, we know that even then, this culture (in Kenneth Rexroth’s memorable formulation) was already a “corpse that jerks like a dead frog on a hot wire”. We know that a new kind of brutalized social type began to appear as early as the 1870’s in the mercenaries returning to Europe from the colonies, such as the Congo under King Leopold in 1900. From its 15th century beginnings onward, capital had always developed, side by side, the proletariat and the colonial world.
Beginning in the late 1970’s, capital, beginning in the deindustrialized heartland of Anglo-American finance and real estate, has evolved the following new phase. It has declared war on its own earlier welfare statism, presented as “conservative”, “stodgy”, “rent-seeking” and “stagnant” (as if capital’s own rates of growth in the era of welfare statist ‘rent seekers” (1945-1975) had not been systematically higher than in the subsequent ‘neo-liberal phase”). Everyone knows the litany: rarely in its history has capital been so explicit in affirming that people exist for the well-being of the economy rather than the opposite. What is prescribed today in a language synthesizing Orwell and Goebbels is ‘reform’, ‘flexibility’, ‘risk’, ‘perfect markets=perfect democracy” and above all the pulverization of anything smacking of the ‘social’, from job security to decent retirement to public housing to welfare to progressive taxation to health care to unemployment insurance to the Social Security system to state-owned enterprises, all of which have been hijacked by unaccountable ‘special interests’ destroying ‘entrepreneurship’ in their Soviet-like sloth. And everyone knows that during the 25-odd years of the ascendancy and dominance of this ideological and programmatic turn, the capitalist state has hardly shrunk, but has continued to centralize, and has greatly expanded the openly Hobbesian side of the earlier welfare state: military production, the armed forces, the prison system, police, lawyers of every stripe, intelligence services, and forms of social control. At every turn of daily life one confronts increasing electronic surveillance, from virtually compulsory ‘EZ’ automated toll booths to subway passes that record all entry points; one confronts ‘improved’ services from toll-free (or not) numbers, increasingly located in India, where the customer on hold performs unpaid labor in infernal waits, or is confronted with endless telephone trees which rarely or ever correspond to one’s needs, or is kept on hold with braindead Musak and then cut off without explanation after 20 minutes, or finally speaks to a harried and braindead call-center worker who does not have the desired information or who gives the wrong information. Unemployment insurance, which used to concentrate the unemployed in public offices and gave them a minimal sense of their collective situation, is now dispensed in the same way. On-line services and the completely wired household promise to liberate people from ever having to leave home. Gated communities and security guards (the number one source of employment in Brazil) spread like fungi. Prisons are privatized, and every possible civil service function is privatized or out-sourced.
Behind all appearances, the concept that unifies a surprising amount of the above is that of social reproduction.
Many self-professed Marxists, who have read all three (sometimes even four) volumes of Capital, seem totally unaware of the significance of the closing chapters of vol. II and of the concept of expanded social reproduction. They similarly pay little or no attention to the vol. III “total social capital” framework. But for the first time in 30 years, there is an upsurge of interest in Capital, and thus a possibility of engaging new circles of people with this “total social capital” reading.
Central for us is the concept of fictitious capital. We see fictitious capital as the total claims on global wealth in excess of the cost of reproducing existing wealth, in the form labor power and means of production. Further, we feel that the incomplete nature of vols. II and III of Capital is in large part responsible for the obscurity of fictitious capital in the Marxist discussion.
Not even the events of the past year (Enron, World.com, etc.) have dented this view. Marx never finished vols. II and III, and never solved the problem of expanded reproduction to his own satisfaction. Most contemporary Marxists tend to say: “what’s the big deal about expanded reproduction? It’s just an increase of simple reproduction”. Such linear thinking comes from supposed dialecticians, who can quote chapter and verse from all three volumes. But they, like so many others, understand the contemporary world strictly through a reductionist reading of Capital and not through an engagement with the evolution of capitalism today, as perhaps best summed up recently in bourgeois commentator Adam Barth’s “inverted pyramid” of debt resting on a sliver of paid-in capital as the typical large corporation today.
We propose to begin a polemic with the left over this question, which at the heart of today’s situation. As indicated in the above quote from Rosa Luxemburg’s Antikritik, ,there is today an incredible lack of attention to the “real material” production and reproduction process, which determines precisely whether the total social capital is reproducing itself or not, not to mention labor power.
One of the lynchpins of this complacency is the question of productive and unproductive labor. 99.9% of all Marxists get no further than Marx’s assertion, here and there in the first part of Theories of Surplus Value (“vol. IV”) that any labor is productive if it produces a profit for a capitalist, i.e. a prostitute in a brothel, a teacher in a private school, etc. Yet Marx is discussing (as he is discussing in vols. I and II) the question of the INDIVIDUAL firm, and that the “local profit” of an individual firm is not necessarily a profit at the level of the total social capital. Nevertheless, for starters, Marx does say in vol. III that the state debt is entirely fictitious, and further that all labor performed against REVENUE is indeed unproductive. Given that state expenditure, backed by the state debt (at the Federal, state and local levels) today accounts for 40% of US GDP, that points to a lot of unproductive labor right there.
We can go on to include corporate bureaucracy, the whole FIRE (finance-insurance-real estate) sector, everything connected to law enforcement (i.e. security guards, police technology), much of high tech and telecommunications (the latter because of its use predominantly in book-keeping for the preceding sectors). All of these anti-social activities are deductions from the total surplus value available to capital for productive investment, what Marx called the “faux frais” of the system, expenditures that occur only to maintain capitalist social relations.
Another common argument holds that the large number of unproductive workers in the U.S. economy (or, to a lesser extent, Europe) points to a great increase in productive capacity in the past 30 years of crisis; yes, such people will say, there has been some serious de-skilling of the blue-collar work force, but this is not a problem for the future post-capitalist society because it occurred as part of a capitalist intensification of the labor process. Far more is produced in the world today with less labor, and that is the way capitalism works. Thus, when the working class takes over, there will be no problem of skilled labor shortage.
While it is undeniable that on a world scale there has been some advance of the “total product” since the early 70’s ( dating the crisis from “1973” though it really started in 1958 with the beginnings of the dollar crisis) the above view greatly underestimates the amount of simple looting that has taken place through the proliferation of fictitious capital. One can begin with the non-replacement of infrastructure. The U.S. alone would need about $3 trillion of infrastructure investment to “catch up” for all the non-replacement of the past three decades. A recent flooding of the Chicago sewers that wrought millions of dollars worth of damage could have been averted with a $2000 repair that didn’t happen because of budget cuts.
Similarly in high tech. How much of high-tech and telecommunications is employed in capitalist book-keeping or other unproductive activities? The figures on productivity (always suspicious) show very low productivity growth from the early 70’s to the mid-90’s, and the capitalists are constantly revising downward the supposed productivity miracle of the second half of the 90’s. Energy also raises enormous questions. The nature of cities, suburbs and exurbs are highly profitable as real estate phenomena, but constitute great drains on social wealth in travel time, housing cost, etc; the nature of transportation from the focus on the automobile and the truck as opposed to mass transit and high-speed railroads; highway construction and maintenance; pollution, fossil fuel consumption, not to mention the expense of defending the oil fields. Finally, the military sector, which while it does produce some useful spinoff, has been a huge-multi-trillion dollar sinkhole since World War II.
When one turns to the reproduction of labor power, the leftist mentality under discussion doesn’t seem disturbed by the wholesale downsizing of the blue-collar work force of the 1970’s and its transformation into employees of Wal-mart’s, gambling casinos, fast food outlets, security agencies, etc. (Are these all profit-making and therefore “productive labor”?) This, again, for some is an expression of an improvement in capitalist production on a world scale, even if the wage bill has in fact declined. In the Boston area, when for example the Boston subway needed to replace an older generation of retiring repairmen and couldn’t find the skilled labor to do so; or when, at the height of the late 90’s bubble, small factories in the northern blue-collar Boston suburbs couldn’t find qualified machinists because the regional youth had gone into computers. As Fingleton documents (in In Praise of Hard Industries), this ideological contempt for skilled blue-collar work in the Anglo-American fictitious capital “model” (there are currently more people in Britain working in Indian restaurants than in steel mills) does not exist in the “mercantilist” economies such as Germany and Japan which never bought the “post-industrial” myth.
A good way to think about real U.S. economic performance since World War II is to extrapolate from the growth rates achieved then (1942-1945) and imagine what a “rational” development of the economy at the same level since then would have produced. This would naturally require some kind of logarithmic concept, since real production in those years was growing at 15-20%, even with 12 million people out of the work force in the military. Then compare this hypothetical logarithmic growth with the anemic 3% per year (or whatever) that has actually taken place since 1945 (based on the dubious “GDP” concept) We can think of socialist program as a resumption of something much closer to the POTENTIAL of the world economy, necessary to equalize material conditions upward, in an entirely new model of production and consumption, on a world scale. We can, therefore, arrive at a specific sense of the downgrading of American labor power by considering the tremendous labor shortage such a shift would reveal.
The net deficit position of the U.S. exceeds of $2 trillion, with $10 trillion held abroad offset by $8 trillion of U.S. holdings. The U.S. has been draining off something on the order of 40% of global savings, needing more than $1.5 billion a day to finance the balance-of-payments deficit, now on the order of $400-500 billion per year. This smoke-and-mirrors game is maintained by the imperative for major overseas holders of dollars to reinvest them in the U.S. for lack (at the moment) of a better alternative. But, as already seen this year, a significant fall of the (DJI) stock market since 2000 has translated into a 15% fall of the dollar, as investors show signs of pulling out of the U.S. (There remains the little question of where they’re going to go.) These two phenomena work in tandem: every fall of the dollar devalues foreign investment in the U.S., and every fall of the stock market stimulates movement out of the dollar. The question of what will actually happen when this outward flow becomes a torrent is frightening, and it will reveal the U.S. economy to be far more crippled, far more pervaded by unproductive labor and fictitious garbage than it seems to the proverbial leftist mentioned above, not to mention to mainstream bourgeois opinion. It is frightening to consider the potential cost to the working class of paying off, under capitalist rule, the compounding external debt of $2 trillion, once the foreign subsidy to the U.S. credit pyramid is withdrawn. Yet this reality is nowhere in the discussion of the left anywhere, and barely in official discourse.
Finally, and perhaps most importantly, the special brilliance and relevance of the approach of Luxemburg and those who follow her “total capital rigor” lie in the recognition that “primitive accumulation” is a permanent feature of capitalism. To the Marxists mentioned earlier, such an assertion sets off howls of laughter. Primitive accumulation (as it was further developed by Luxemburg and others working off her problematic) means on one hand the classical separation of petty producers and peasants from tools and land (as, obviously, already discussed by Marx and still continuing in the Third World) but more importantly a more generalized NON-REPRODUCTION THROUGH NON-EXCHANGE OF EQUIVALENTS (as in the best-known case) in order to prop up fictitious values. This is what really drives home the fictitious capital argument. Our leftist reads in Capital that the capitalist purchases labor power at its cost of reproduction (along with all the other assumptions of vols. I and II) and therefore assumes, once again, that this occurs in reality. But when we consider the vast incorporation of labor power taken from Third World agriculture into the world work force, we have a massive case of labor being exploited whose “costs of reproduction” were not paid for by capital. When we consider the driving down of the reproductive wage by capital for workers who WERE reproduced within the system, we see non-reproduction again. Consider the fate of the children of the blue-collar workers of a generation ago, largely consigned to minimum wage “service” jobs, when not (in the case of blacks and Latinos) to the drug trade, gang warfare and to prison. Considering the looting of nature (the depletion of nature and the non-development of new technologies to draw on new potential resources), we see it yet again.
How many leftists think about the “cluster” effect of new technologies, the way in which innovation interacts not merely with one sector but with all the sectors that feed into it and which it displaces? The typical leftist might get as far as conceding that the value of a commodity such as a machine is its cost of reproduction in current terms, but because this consciousness is focused on a vol. I and II optic of the single firm, rarely does one encounter an awareness that, for example, the most productive machine for producing, e.g. buggy whips today would be worthless because of other types of transportation have completely passed it by. More immediately pertinent, one can about how transportation is shaped by capital heavily invested in certain sectors (e.g. auto, trucking), which does everything possible to marginalize technologies that would effectively depreciate their assets.
Socialist program, in short, has to insist on how little a mature transition out of capitalism would look like the contemporary world. The capitalists have a full program for society that reaches far beyond the point of production, but the left offers nothing of the kind. Above and beyond this type of analysis, the purpose of this web site is to make that kind of program palpable. This programmatic vacuum of the left is at least partly responsible for the ebb of struggle that has taken over the U.S. and much of Europe in the past three decades.
Until ca. 1973, “everyone” seemed to know, more or less, what a revolutionary break with capitalism would look like: all power to the soviets and workers’ councils. The “most advanced” perspective on these questions viewed “another kind of society” as the working-class democratic management of this one. But with the long advance of “post-industrialism”, i.e. fictitious capital and economic activity set in motion by fictitious capital, this vision evaporated. What can “all power to the soviets” mean in a world where the first task of a revolution would be to abolish 50% or more of the jobs and work places that currently exist? On a world scale today, the labor power and the technology exists for a dismantling of the law of value, the regulation of production and reproduction by socially- necessary labor time. But now more than ever it is necessary to insist that this has little to do with the “democratic management” of THIS concrete material world. From this flows a five-point minimum transitional program:
1. Dismantling of the dollar-based global financial system and of fictitious capital in all its forms.
2. A massive re-education of the unproductive work force for socially-useful work.
3. Automation of all socially-necessary work that society wants to automate.
4. Retraining the labor power freed by 2) and 3) for a complete reconstruction of the U.S. “economy” and for a massive export program to equalize world conditions upward.
5. A shortening of the working day, as the implementation of 2, 3 and 4 permits.
This is a minimum program because it does not begin to address the question of how the working class will control the process, not to mention the development “of an activity as all-sided in its production as in its consumption wherein labor no longer appears as labor, because an historical need has replaced a natural one”. But most of the left never gets past workplace-based conceptions of struggle, and the development of a movement out of that struggle as the place where “program” will supposedly be developed.
“Socialist program” ultimately assumes a soviet of the world working class (following an equally assumed successful world revolution), and the necessities implied in expanded reproduction of the world population, the “standpoint of socialized humanity”. A brief extrapolation immediately makes it clear that the “equalization upwards” of the populations of China and India (for starters) implies, for example, a supersession of the “auto-steel-oil” economy which is still so central to “advanced industrial societies”. This “global soviet” of the working class allows us then to “think back” to the balance of forces today, on their way to the creation of such a situation. There is nothing utopian about this way of posing the problem; on the contrary, its strength is the focus on the “immanent” necessities of world development as a whole; its sole presupposition is the potential of existing labor power and technology, freed from capitalist social relations.
The Working Class as “Visible Negation” of Capitalism
How did the left get itself into this situation? When we think back to the history of the “classical workers’ movement” from the 1840’s to the 1940’s ( most of what happened in 1945-1973 was kind of a coda to that earlier period) we immediately see that it existed as a “counter-society” to the dominant capitalist one. It had a vast popular press; workers’ schools; publishing houses such as Kerr; workers’ study groups for mere literacy and beyond that for self-education beyond politics, in history and culture and science. (Eugene Debs, as a young man, for example, took part in a workers’ literacy group that read…Goethe.) It is certainly true that the most important “school” was in the struggles that built the unions and the working-class political parties, not to mention the Commune and 1905. No doubt there was little clarity in this counter-society about “program”; as the unions and parties developed (especially in Europe) there was a broad assumption that “socialism” meant such institutions with state power. They were powerful enough and close enough to power by 1900 to set off the “revisionism” debate in Germany and similar confrontations in other countries. Then the revolutions of 1905 and 1917-21 put the question of soviets and workers’ councils, the direct management of production, on the agenda (questions taken up again in Spain in 1936-37, Hungary ’56, France ’68).
The Bureaucratic Planning State (1930’s-1970’s)
Out of this pre-1914 reality, and the defeats of the revolutions of 1917-1921, came the “planning states” of the 1930’s, Stalinist, fascist, corporatist, Social Democratic, Keynesian, Third World Bonapartist, which held sway into the 1960’s and early 1970’s. For most of the postwar period, even conservatism in the West was generally resigned to the spread of this kind of statism, consciously seeing itself as mainly trying to slow down its inevitable triumph. The spread of this kind of statism from the 1930’s ot the 1960’s set the stage for the vast “anti-bureaucratic” mood of the 1960’s revolt, where “the” question was posed everywhere in terms of “bureaucracy” vs. “democracy”, above all in the strike waves in Britain, the U.S., France, Italy and Poland. Planning itself acquired a purely technocratic, elitist aura, an activity of grey specialists. There was a certain convergence in the 1960’s between the “anti-bureaucratic” revolts of the right and the New Left.
The “bureaucratic project” broke down in the Keynesian “stagflation” of the 1970’s, and brought to the fore the Hayek- von Mises “free market” critique of “socialism” which had been reduced to marginality in the 1940’s. The perception on which the Thatcher-Reagan backlash rode to power in 1979-80 was that the “welfare state” had induced permanent stagnation and that “free markets” were necessary and sufficient to restore dynamism. From this point onward the great expansion of fictitious capital knew almost no bounds.
Nevertheless, it is fundamental that when we critique the “conflict between the relations of production and the forces of production”, we be clear that we do not mean the further “growth” of the crap produced by this society, going back decades. We do not want to fall into the trap of counter-posing fictitious capital to existing “real” production, as if most commodities produced in this system merely require the peeling off of the fictitious form. We only need to think of suburban and exurban sprawl to see an arresting example of how fictitious capital (in this case, the needs of the FIRE sector) pervades material reality in the mass production of junk. We do not want, once again, to call for an “expanded reproduction” of this crap. The expanded reproduction we are interested in is the expanded reproduction of human creative powers, as Marx described in Precapitalist Economic Formations: “When the narrow bourgeois form has been peeled away, what is wealth, if not the universality of needs, capacities, enjoyments, productive powers, etc. of individuals, produced in universal exchange? What, if not the full development of human control over the forces of nature—those of his own nature as well as so-called “nature”? What, if not the absolute elaboration of his creative dispositions, without any preoconditions other than antecedent historical evolution which makes the totality of this evolution—i.e. the evolution of all human powers as such, unmeasured by any previous yardstick, an end in itself? What is this, if not a situation where man does not produce himself in any determined form, but produces his totality? Where he does not seek to remain something formed by the past, but is in the absolute movement of becoming?”
Since World War I, and the early congresses of the Communist International, a certain strand of Marxism (today represented mainly by Trotskyism and some currents of left communism) has characterized the contemporary epoch as the “epoch of imperialist decay” or as “decadence”. While there are a number of definitions of decadence, the one that seems to us most apt is the one referred to by Marx in vol. III of Capital: the inability of the system to socially realize its gains in productivity. In the late 1960’s and early 1970’s, bourgeois theorists mused about a “leisure society” and about what society would do with so much leisure. Yet precisely at that time, along with an acceleration of income inequality, capitalism was also reversing a long-term trend of a shortening work week. What is a more obvious sign of the decadence of the dominant social relations than the co-existence of technological innovation and a lengthening work week throughout much of the “advanced” capitalist world, led (as always) by the U.S.? What the “leisure society” theorists of the 1960’s overlooked was the fact that capital lives from the exploitation of human labor, not from technological innovation per se. The reversal of trends toward shortening of the work week after more than a century in which the work week fell from 60 or 70 hours in the 1860’s to 40 hours by the 1960’s reflects the fact that capital is not technology but rather a “valorization process” wherein living labor is the sole source of profit.