I am writing this in late October 1998 in what seems to be a pause in the latest phase of the world financial crisis.

This cannot be a full analysis of the ultimate sources of the crisis, which would require a much longer manuscript. In my view, the current situation is merely the latest eruption of a crisis in accumulation that first surfaced ca. 1965 in the simultaneous recessions in the U.S., Germany and Japan (through 1967), signaling that the postwar boom was running out of steam. The postwar boom (or, in reality, the recovery from the 1930’s depression that began in 1938 and which ended globally in the crisis of 1973-75) must in turn be seen in the context of the “Thirty Years War” of 1914-1945, in which the viability of capitalism as a world system was first put on trial, a trial from which it emerged through inter-imperialist wars, depression, fascism, Stalinism, Popular Fronts, “national liberation fronts” and a revamped “liberal democratic capitalism” that had an illusory, ephemeral world triumph in 1989-1991.

Nor do I wish to get TOO deep into debates about Marxian crisis theory: Hilferding vs. Luxemburg vs. Bukharin vs. Grossmann. These debates are by no means “theological”, and every “empirical” assertion ultimately reflects a commitment to some theory, implicit or explicit, as well as to differing programmatic solutions. The following remarks will quickly show me to be in a modified version of the Luxemburg stream. I think virtually most readers will concur in the happy demise, over the past 25 years, of the “monopoly capital” school that developed from Hilferding, Hobson, Lenin, and Bukharin through Baran, Sweezy and Magdoff to its final partisans Amin, Emmanuel, Bettelheim, and Mandel in the 1970’s. Similarly discredited is the overlapping “Keynesian Marxism” of Robinson, Kalecki, Sraffa et al, which culminated in the 1970’s “wage push” theory of crisis of figures such as Hirst and Hindness and truly theological treatises on the so-called “transformation problem”.

I think it is possible to agree to disagree on certain fundamentals and still benefit from debate around a narrower band of analyses of contemporary developments.

Capitalism is a system of valorization. Capital is first of all a social relationship, in which labor power is transformed into a commodity as wage labor. But “capital” appears empirically to capitalists only as a “capitalization” of assets producing profit, interest and ground rent. >From a deeper point of view, profit, interest and ground rent are mere distributions of what Marxists call the “surplus value” available to sustain them. From a more superficial point of view, that of daily capitalist practice, profit, interest and ground rent appear as stocks, bonds, and deeds, etc. paper “titles to wealth” that give enterpreneurs, bankers and landlords claims to a share of surplus value.

“Valorization”, on the surface, means that individual capitalists “throw” money M into investment with the expectation that, over time, it will return to them as expanded money M’. As long as adequate surplus value is available to sustain expected rates of return as profit, interest and ground rent, “valorization” continues. When it is not available, there is crisis, and paper claims to wealth are destroyed or devalued. When a new equilibrium is established between profit, interest and ground rent on one side, and available surplus value on the other– whatever the interim material cost to society, in depression, war, immiseration, disease, shortened longevity– a new cycle can begin. “On the surface”, then, a crisis such as the current one occurs because the totality of existing claims to profit, interest and ground rent cannot be “valorized” through the existing available surplus value: they are FICTIONS which must be destroyed by “devalorization”. That is what, in a first approximation, a “world financial meltdown” entails.

We see these fictions– ficticious capital– today in the vast “non-operating assets” of the Japanese banks, the unpayable external debts of Thailand, Indonesia, Russia, South Korea, Mexico, and Brazil; in the suddenly insolvent “hedge funds” such as Long Term Capital Management, whose liquidation would have reverberated through more than $1 trillion in assets; in still unliquidated real estate assets in Japan, China, Hong Kong, the U.S. and Europe; in the multi-trillion dollar holdings of U.S. Treasury bills, to a large extent by foreigners; and the servicing of the U.S. government debt, Third World debt, corporate debt, and consumer debt at every level of society. We see them, finally, (and perhaps in the long run most importantly) in fixed capital plant rendered worthless by technical innovation or by vast overcapacity in its sector. All these claims on wealth must be valorized through available surplus value or destroyed (and trillions have already been destroyed). But devalorization is not merely a brutal, anarchic and wasteful accounting procedure: capitalists attempt in every possible way to foist the costs of maintaining threatened existing values onto the working class in an attack on the total social wage. Keynes long ago remarked that workers would more willingly accept an erosion of pay through inflation and taxation than a direct pay cut from their employer, and from the 1960’s onward the system applied this insight with a vengeance. When, for example, the U.S. government “nationalizes” bad bank loans to Brazil and Mexico (as it did in 1982), or the tens of billions of losses of the savings and loan debacle (as it did in 1991), all working people are taxed to pay off these new additions to the national debt, as they are taxed to pay the 15% of government expenditure which now goes merely to servicing that debt. When the IMF “rescue” team tells Indonesia to engage in a national fire sale, its only concern is that Indonesia keep up payments on its debts, not what will happen to ordinary Indonesians in the process.

What we have been seeing since July has been a classical liquidity crisis of the type described by Marx in Sections IV and V of vol. III of Capital (without, of course, the question of gold flows then relevant). A liquidity crisis is a panic flight to cash and near-cash. Federal Reserve Bank chairman Alan Greenspan has said that in 50 years of studying the U.S. economy he has never seen anything like the current situation. He means that for the first time in postwar history a worldwide deflation, as opposed to inflation, is the main threat. All previous postwar recessions (and particularly the deep ones– 73-75, 80-82, 89-92– after the end of the postwar boom) have been precipitated by the jacking up of interest rates to choke off the threat of runaway inflation. Of course a runaway inflationary blowout of the kind which threatened the system in 1978-80 would have been followed by a deflationary blowout if it has not been contained by draconian credit management ultimately paid for by the grinding down of working-class living standards. Every “inflationary threat” conceals the deeper “deflationary threat” of devalorization. But only six months ago, still “fighting the last war”, most official attention was riveted on the possible return of inflation; today it is a deflationary bust of a 1929-scale or larger which is the specter openly haunting central banks and corporate boardrooms.

I would like to focus on one, often overlooked, but in my opinion central aspect of the crisis of which we have–to put it mildly– not heard the last. That is the question of international liquidity. To do so skirts over fundamental questions (as per above), not because they are not fundamental but because, in my opinion, they cannot be seriously addressed or settled in this brief format. Those questions include 1) the “deep” limits of the capitalist mode of production, or the superannuation of the law of value; 2) the question of the “closed model” of vols. 1 and 2 (only capitalists and workers, and many other things “held equal”) vs. the “open model” of vol. 3 and in particular the question of how the “closed system” interracts with non-capitalist social strata such as small producers and peasants (Rosa Luxemburg again); 3) the role of working-class self- activity in the unfolding of the crisis; 4) the question of productive vs. unproductive labor (I would estimate the latter at minimally 40-50% of the current workforce in “OECD” type countries) and 5) the way in which ficiticious capital arises out of the sphere of production itself (essentially, the transition from vols. 1 and 2 to vol. 3. Other participants can undoubtedly add others. The question of international liquidity, on the other hand, is “topical” because we have just been through one ratchet turn of a global liquidity crisis, and more shoes will surely drop before it is over.

International liquidity has been an issue, though for the most part only “off stage” (except for specialists and a handful of Marxists), since the late 1950’s, yet it has moved intermittently to center stage, only to be largely forgotten until the next chapter of the crisis. I think international liquidity is central, however, because it is there as in few other arenas that one can see “ficticious capital” right at the surface of events, setting the terms for different actors to act, or not to act.

The question of international liquidity today is first of all the question of the “dollar standard” that the world has been on since the establishment of the Bretton Woods system in 1944, and above all since that system was scrapped in 1973, officially inaugurating the deepest downturn since 1938. True, Bretton Woods was based on a “gold exchange” standard in which the dollar was supposed to be “as good as gold”, but already by 1967 the United States was strong-arming foreign holders of dollars not to trade them in for gold (as they theoretically could do, and some did), until it “slammed down the gold window” in August 1971, forcing (along with other measures) a 30% upward revaluation of the yen and the mark, only one of many unilateral acts of American economic nationalism. The reconfigured Bretton Woods system of December 1971, hailed by Nixon as “the greatest monetary agreement in history”, lasted a full 14 months to March 1973, immediately followed by the deepest world downturn since the 1930’s depression. (The current readjustment of the yen-dollar relationship is frought with similar overtones.)

Why should such a seemingly arcane question as international liquidity be of central interest to Marxists? Any number of other viewpoints– Ricardian, Keynesian, monetarist, not to mention crackpot populist “funny money” theorists and gold bugs, could agree on many aspects of what follows. Writers as divergent as Robert Triffin, Jacques Rueff, Hyman Minsky, or Harry Magdoff, to name only a few, have put hands on different parts of this same elephant, not to mention the lesser known “real Keynes” who wrote on sterling balances, the Indian currency question , German war reparations or salient aspects of the Bretton Woods system he helped to create, before he was airbrushed into the Pollyannish theorist of crisis-free “demand management” and “built-in stabilizers” by postwar American academicians. What sets “us Marxists” off from all the above viewpoints is a belief that there is a fundamental contradiction within capitalist accumulation– the limit to the capitalist mode of production being capital itself– that the most brilliant technocratic elimination of “ficticious capital” would not solve but merely bring to the empirical surface.

That said, “ficticious” capital has a very real existence, and kills, as we are seeing daily. The issue, for us, is to determine how that underlying “fundamental contradiction” is interracting today with ongoing events and class struggle.

Between 1958 and 1968, when the “gold-dollar question” was truly the realm of arcane specialists, the current “ficticious bubble”, then counted in tens of billions and now denominated in trillions, first attracted attention. How many militants of 1968 had heard of it then, or could meaningfully define it even today, not to mention explain how it has been one reality shaping events all along? What moved international liquidity out of arcane debate onto the front page is the little detail that it stands at the heart of international trade, investment, capital flows, etc. and ultimately at the heart of accumulation as it appears to capitalists, which unfortunately, from here to the revolution, has a preponderant influence on our lives too. What we are seeing today on a grand scale of potential global panic has in fact been rehearsed a number of times, (and almost led to global panic in March 1968, the summer of 1974, and during the “gold rush” of 1978-1980). As Marx says (I quote from memory) in the chapter on “World Money” early in vol. 1, “money only comes to its concept as world money”. From at least the 15th century, capital has always involved a system of international loans tied to banks and the debt of states, with their power to tax and guarantee those debts, the latter fact being one fundamental reason that capital is always ultimately political.

Earlier banking history is instructive here. At the end of weeks-long international trade fairs in early modern Europe, debits and credits were cancelled out among traders and the remaining difference settled in gold. In the core countries of 19th century (mainly North Atlantic) capitalism, when the classical gold standard had some reality, participating countries settled up trade balances in the same way. Gold as “world money” (money “come to its concept”) was a “totem” representing a surplus in international trade, whose presence or absence could be the basis for credit expansion or contraction in a country’s domestic economy. Even in the New York City garment district in the 20th century, this “totem” concept was applied in bales of cloth that passed among shops to settle up accounts. As long as everyone involved can agree on the specific material form and value of the totem, anything can be the “universal commodity”, the standard or equivalent of all others, in a trading system. (How gold acquired this position in capitalism cannot concern us here.)

In 20th century capitalism, (setting aside the thorny debate about the reality, in practice, of the 19th century gold standard) (again, cf. Capital, vol. III, Sections IV and V), an innovation occured, first in the pre-1914 period of British hegemony, and then “perfected” in the post-1944 period of U.S. hegemony. The “hegemon” in the world system imposed its currency as “paper gold”. The “totem” in which trade balances were settled up ceased to be even theoretically gold, and became an international “reserve currency” held in the central banks of surplus countries. Even better, the surplus countries reinvested (often under compulsion to do so) the “totem” in the capital markets, stock market, government bonds, etc. of the “hegemon”, thereby making possible further credit expansion and more trade deficits of the “hegemon”. Britain achieved this position only with its own colonies, and with the semi-colonial world (e.g. Argentina, etc.), when it was known as the “sterling balances” problem. But the U.S., through Bretton Woods and after, achieved this relationship with the entire world. The net result allows the “hegemon” of the system to finance its whole credit system, investment (including foreign investment) and trade with its own balance of payments deficits. (In the mid-1960’s, American corporations were buying up European industry with overvalued dollars recycled from American payments deficits.) Jacques Rueff, DeGaulle’s main economic advisor in mounting periodic nationalist resistance to U.S. hegemony, described the U.S. position in the Bretton Woods system as follows (again, I quote from memory): “I buy a suit from my tailor, and give him an IOU. He lends me the IOU, which I use to buy another suit from him, and so on ad infinitum.” Or, as Michael Hudson put it, describing the 1971-73 scrapping of Bretton Woods, the world went from “a system of paper gold to a system of paper paper”.

Most economists, and far too many Marxists, think of money as a “veil” that merely represents real transactions of exchange. But Sections IV and V of vol. III of Capital are one long demonstration of how, through the credit system, a “fictive demand is created” beyond anything representing real assets, and circulates. During Marx’s lifetime, no central bank had yet achieved the ingeniousness of “paper gold” that its surplus trading partners had to hold in lieu of real exchanges of goods, not to mention the “paper paper”, the trillions of dollars today held by foreigners that represent almost 50 years of U.S. balance of payments deficits, not to mention nearly 30 years of simple U.S. balance of trade deficits. This “dollar overhang” is at the heart of the question of international liquidity today. It is the cutting edge contemporary equivalent of the “totem” used by the system to “settle up” transactions, except that unlike its predecessor, gold, or even the humble New York garment district bales of cloth, this totem represents a vast ficticious “hot potato” that corresponds to no real production or even tangible commodity. These dollar-denominated assets, whether held as stocks, bonds, or U.S. Treasury bills, or as reserves in the Bank of Japan, demand a rate of return, demand “valorization” like all other money capital. As money M, they must return to their holders as expanded money M’ after a certain period. The wealth required for this to remain a “virtuous circle” must be wrung out of world accumulation alongside all other claims to profit, interest and ground rent. The threat of the implosion of this hot-air bubble has hung over the world economy for 40 years, although the “elastic band” by now has been stretched beyond even the most pessimistic warnings of the early phase of the crisis.

I am not suggesting that the crisis of the world system could be solved by some new “Bretton Woods” conference to reform international finance, though it certainly could be mitigated, as it has been mitigated (and paid for by workers) by the ad hoc band-aid measures of the past 40 years. History, however, shows that such conferences occur only after the contending parties have settled their disputes in economic catastrophe, trade wars, shooting wars, etc. whose results can then be formalized in international treaties. The United States is hardly going to give up the advantages of being the “hegemon” without being compelled to do so.

I am suggesting, however, that if we wish to understand the contemporary update of earlier liquidity crises, we must begin by dissecting international liquidity in its current form.

Once “paper gold” and then “paper paper” began to replace gold as the “totem” for settling up international accounts, a certain contradiction was posed between the domestic use of a nation’s currency and its international use. These two dimensions were not preordained to function in harmony, from anyone’s viewpoint. Foreign holders of dollars from 1958 onward, and above all by 1968, had to watch the value of their assets eroded by domestic U.S. inflation, whereas U.S. credit policy increasingly had to subordinate domestic expansion to the international danger that these foreign holders would massively dump the dollar. In 1978-80, this possibility was palpable, and in October 1979 the Fed had to increase the discount rate by 2% in a single move to avert it, but also thereby began the credit crunch leading to the deep recession of 1980-82. Earlier in the century, the British economy was similarly hammered by a high interest rate serving financial interests of the City which starved British industry of investment. Money, as “world money”, as money “coming to its concept” is not merely a veil; the ficticious totem requires management that at times ravages real production. And nowhere is this more visible than in the problems of the hegemon in managing international finance.

As I indicated, none of the above is a specifically “Marxian” analysis; variants of it are to be found in intelligent bourgeois commentary as well as in more fringe “funny money” (not to mention fascist) theories. We arrive here at the frontiers of the kind of “theology” which I said at the outset I wish to minimize in our bulletin board discussion. I will briefly state my position, and hope (but in no way insist) that others will keep the same proportions in their responses. Otherwise we are setting ourselves up for long disquisitions on the organic composition of capital, the meaning of the falling rate of profit, the problems in Rosa Luxemburg’s notion of the transition from vols. 1 and 2 to vol. 3 of Capital (the question of expanded reproduction), price and value, Grossmann vs. Luxemburg, and we risk seeing our exchange sink quickly into the boredom of differential equations and pages of reproduction schema from the end of vol. 2. The “critique of political economy” no less than “economics” can easily become the “dismal science” (the “economic shit” that Marx hoped to wrap up…in 1857!) if it is not closely tied to a “sensuous” involvement with contemporary developments, and a strategy to intervene in them. The latter focus, on the other hand, can degenerate into impressionistic journalism without some serious theory. Once again: I don’t for a minute wish to trivialize the importance of these questions: I would merely like them to be debated without a full settling of the question of “fundamentals”, to debate, if possible, the “grey areas” of overlap rather than the bedrock of foundations.

So, here goes. The “closed system” of vols. 1 and 2 is made up exclusively of capitalists and wage laborers. We recall that in this presentation Marx assumes 1) simple reproduction 2) no non-capitalist population (meaning petty producers, peasants, other modes of production, 3) all commodities exchange at their value and and 4) no banking system. The “open system” of vol. 3 (beginning with the discussion of expanded reproduction at the end of vol. 2) begins to introduce all these realities. IF the entire world contained nothing but capitalists and wage laborers and IF there were no credit system, something like an algebraic relationship between the organic composition of capital and a “falling rate of profit” would exist right on the surface of capitalist practice.

But there is no such world, which is why this discussion is necessary.

What distinguishes a Marxian analysis of “international liquidity”, etc. from all other approximations of the same “elephant” is the assertion that the ficticious “totem”, the bubble of “hot air” which circulates today as the trillions of dollars making up the “dollar overhang” held by foreigners, has its origins inside the “closed system” of capitalists and wage laborers.

Capitalist practice, once again, knows nothing of our categories of analysis. It knows a “capitalization” of assets that produce a cash flow of profit, interest and ground rent. (A “capitalization” is a multiple of the cash flow generated as profit, interest, etc. by an asset, set against the general rate of profit. A bond producing $5 of interest annually in an environment where 5% is the generally available rate of profit is therefore “worth” $100.). A slum tenement or decrepit factory is similarly “worth” a capitalization of its net surplus cash flow. Such a capitalization is “ficticious”, in our language, because the “net worth” of an asset over long periods can have little or nothing to do with the real social cost of reproducing it. Such capitalized “price” and true social reproductive value only “coincide” in reality at the pit of a depression, the same shakeout of ficticious value of which we have had a foretaste in the past months (or more accurately since the July 1997 devaluation of the Thai baht). Bringing “capitalizations” into line with the actual available surplus value is another way of stating the problem of “fictions” with which we began.

“Inside” the “pure” (vol. 1 and 2) system of only capitalists and wage laborers, the original ficticious bubble appears in these capitalizations of fixed assets which are steadily devalued by advancing labor productivity (the real cost of reproducing those assets) spurred by competition but which, because of the anarchic nature of the system, are not regularly devalued to reflect increased productivity. Rather, they demand valorization at the prevailing rate of profit, calculated on a capitalization basis of cash flow, regardless of the underlying real material reproductive values involved.

This initial ficticious increment of capitalization, however, circulates far beyond the “pure” system, stretches the “elastic band” of the total production process far beyond the “closed” world of only capitalists and wage laborers, through CREDIT. Through credit, the initial overvalued fixed assets generated in the sphere of production itself circulate and become indistinguishable from similar capitalizations of interest, rent, etc. and all the other instruments through which the total cash flow, and therefore part of surplus value,is tapped. Through the system of international loans, ultimately underwritten by state debts and the power of the state to tax, the fictive bubble originating in the sphere of production circulates globally as long as it can be “valorized” through a surplus generated somewhere in the system. When it cannot, we have the situation in which we find ourselves today, which is in reality a situation that has been growing ever more dangerous for 40 years by ever-greater credit expansion and wage-gouging to keep the fictive values afloat. Just as in Marx’s time, when “M. le Capital and Mme. La Terre danced their macabre dance”, so in ours, the valorization of stocks, bonds, deeds, “derivatives”, and the like must at all costs continue, however many Indonesias, Thailands, Brazils, Koreas, Mexicos and Russias are devastated in this latest version of domination of the dead over the living. 
Many aspects of the above suggest themselves for special focus, and cannot be settled here : 1) the specific liquidity situation in Japan, particularly in the banking system, 2) the possible meaning of the “return to Keynes” currently being mooted by the dominance of “center-left” governments in Europe, i.e. the possibility of reflation 3) the question of the “euro” and world liquidity, 4) the Asian crisis, 5) the recent slowdown in China, and the possibility of a Chinese devaluation (currently on hold because of the strengthened yen) 6) social resistance to austerity in different parts of the world, 7) the prospect of a “new Bretton Woods” and the possible role of the phony left in bringing it about 8) the rivalry of the three major trading blocs, as expressed through currency crisis (such as the recent revaluation of the yen) 9) the squeeze on working class incomes through the pressures of the real estate market (i.e. rent) when ficticious capital has become so preponderant over productive investment. 10) the question of dollar-denominated international liquidity in the era of deflation we are entering as opposed to the era of inflation we are exiting.

These are merely questions that occur to me, but others will have other questions. None of these are, in my view, an academic exercise, but a step toward developing strategic and tactical perspectives for intervention the coming years. Nevertheless, I will conclude with some ways in which I think the perspective outlined above will become the practical concern of a movement to end capitalism.

“Economics”, i.e. what Marx called the critique of political economy, only takes us so far. The question of the action or inaction of the working class in the crisis has everything to do with what happens in “economics”. I doubt that anyone will deny that the American working class’s mainly supine acceptance of a 20% fall in living standards and a 10-20% increase in the work week and other assaults on the “total social wage” since 1973 have been central in capital’s “restoration of profitability”, the booming stock market, and a major upward redistribution of wealth now 30 years in the making. But while America is the extreme case among workers in the “advanced capitalist” world, no other working class has been notably more successful in fighting austerity. Most resistance up to now has been defensive, attempting to hold capital to the “old rules” of the postwar boom and the “gains” of that era, rather than posing the working class as the basis of a completely different kind of order. December 1995 in France and the battles of the past 2 years in South Korea are, to my mind, clear examples of such defensive battles. As such, they cannot achieve much in the long run, except forcing the capitalists to regroup for another attack. To become a “class for itself” rather than a “class in itself” (a class for capital) the working class movement has to point the way to a new society, embodied in its own movement first of all. To do so will require programmatic formulation for a transition out of capitalism, which can hopefully be short, but which will not be instantaneous. It is of course impossible to foresee a thousand contingencies in how this will come about, but certain problems will have to be confronted immediately no matter what the contingencies. Our task is obviously not to run capitalism better than the capitalists; it is to end capitalism, meaning first of all the wage labor system. My hope in beginning this discussion of liqudity is to zero in on more precise appreciations of the conjuncture as well as to see more concretely, from a strategic point of view, how the working class can become the ruling class. This involves program, among other things.

Thirty years ago, programmatic questions seemed clear. The struggle was against “bureaucracy”: liberal democratic Keynesian, Social Democratic, Stalinist, Third Worldist. The working class would occupy the means of production, impose soviets, and soviet democracy, as the “free association of the producers” would replace the market and the state in regulating production and reproduction. “Vanguardists” (principally coming from variants of Trotskyism and ex-Trotskyism) and “ultra-lefts” mainly coming from variants of councilism might disagree about the role of the “party” in getting to “all power to the soviets” (not to mention its role in the demise of the old soviets) but virtually all agreed on the “goal” as direct management of production and reproduction by the producers, summed up perhaps in the formulation “nationalization under workers’ control”. In this lyrical “1968” atmosphere, the “abolition of wage labor” and of commodity production might be tacked on as a laundry list by orthodox purists (who would ever say they were “for” wage labor?) but their centrality to an understanding of communism was moot. Against “bureaucracy”, the solution was: “democracy”, soviet to be sure. At its worst, this “syndicalist utopia” barely went beyond the idea of the working class “democratically” managing the society that the capitalists managed “bureaucratically”.

The question of “international liquidity” and related matters were of increasing interest during the post-1968 assault on the old “worker fortresses” (Detroit, Manchester, Renault-Billancourt, Alsace, the Ruhr, Turin-FIAT, etc. the sites of so many “1960’s” worker upsurges) through robotics, high-tech “cottage” decentralization, outsourcing, and relocation of mass production to low-wage “Third World” zones which has, by now, largely decimated the core of the “classical” means of production which American and European workers were supposed to seize and place under the control of soviets. Today, particularly in the “advanced capitalist” world, so many wage workers perform unproductive labor in the spheres of “ficticious capital” (banking, insurance, state and corporate bureaucracy, advertising), so much production goes into socially destructive sectors (arms production, law enforcement, office construction, prisons) there are too many “workplaces” which should not be placed under “workers’ control”, but simply abolished. Too many proletarians have been expelled from the old production process, or will never arrive there, because the assault on the global wage bill has produced a world-wide “rationalization” movement and “race to the bottom” which, to this day, workers have been virtually powerless to combat. In the same way as “the limit of the capitalist mode of production is not in production, or at best is a very elastic one” (vol. 3), more than ever before, the problem of class struggle today cannot limit itself to the point of production. It is rather from a “vol. 3” “total social capital” viewpoint, the reproduction and valorization of capital as a whole, that the ultimate vulnerability of the system and a renewal of “programmatic imagination” beyond “nationalization under workers’ control” emerge into view. And this “vol. 3” viewpoint leads straight to (among other things) the question of international liquidity, for it is exactly there, where “money comes to its concept” that the total capital is reproduced and valorized.

Imagine, to conclude, a concrete example: the South Korean mass strikes of January 1997 and subsequently, following the November 1997 collapse of the Korean economy. The basic demand of all these struggles was: “save our jobs”. It is a familiar battle cry which has been heard all over the world in struggles big and small, for the past 20 years, most recently in the defeated Liverpool dockers’ strike, the temporary standoff of the Australian dockers’ uprising, a thousand (mainly losing) battles against plant closings, “downsizing”, “outsourcing”, relocation and the like. China in October 1997 announced 100 million layoffs by 2002.

Imagine, instead, workers in a country such as Korea, or any other major industrial country, going beyond a dual power factory occupation and/or general strike, imposing themselves as the sole power and saying, in effect: “to hell with these jobs, many of them socially useless and others positively harmful. We repudiate Korea’s foreign debts and call on workers of other countries to repudiate theirs. We repudiate the international dollar standard and invite workers in all countries to join us in its abolition. We will replace it with a “Bretton Woods” of the world working class which will establish a global program for a transition out of capitalism, as rapidly as possible. The world today has a productive capacity to abolish wage labor everywhere, and therefore the capitalist law of value as the regulator of production and reproduction. This cannot be achieved in any single country or small group of countries but only on a world scale. We call for the abolition of all socially useless and socially harmful work (both of which exist only to reproduce capital) and the freeing of labor from those spheres for socially useful work. This will make possible any further improvements in the productivity of labor, as deemed socially necessary, and therefore further free humanity from the need of “value relations” to regulate exchange. We propose to rebuild the world from top to bottom to place creative activity, and not the accumulation of capital, as the goal of social life”.

To paraphrase someone 130 years ago, “let them inscribe on their banner not “save our jobs” but rather “abolish our jobs, and with them the wage labor system”.

However “utopian” such a scenario sounds, it is in fact the “necessity” of today, if the working class is to go beyond a “class in itself” stance, however militantly demanding that capitalists “play by the (old) rules”, to become a “class for itself”, posing itself as a new ruling class of a new kind of society. Were it to occur today, in a single country, it would in all likelihood become a “Paris Commune” of our time, perhaps bloodily defeated, but also sending shock waves through history as the Paris Commune has. It would kill off the almost ominpresent ideological belief today that “there’s no alternative to liberal democratic capitalism and the market” just as the liquidity crisis of this year has killed off neo-liberal triumphalism. If the world working class does not eliminate the circulating bubble of ficticious “hot air”, it will pay the terrible cost of its “Chapter Eleven” proceedings under the hegemony of capital.