(The relevance of Marx in the 21st Century.)
A) MARX: ON CAPITAL AND CRISIS.
After many years of being written off as outdated – by those who didn’t know any better – the investigation of the capitalist mode of production by Karl Marx, once again proves its undoubted merit. I shall argue in this article that the ongoing economic and financial crisis (of 2008 to 2011 and beyond) cannot be fully understood without having grasped – at least the essence – the analysis made by Marx. Despite a long interval of time the situation remains as his friend and associate Engels stated, Marx‘s analysis; “…offered to him who knew how to use it the key to an understanding of all capitalist production“. (Engels. Preface to Volume 2 Capital.) A few pro-capitalists have recently admitted as much in the main stream media. One commentator declared the current crisis as the ‘Revenge of Marx‘. Another, Nouriel Roubini, asserted;
“Karl Marx had it right. At some point, capitalism can destroy itself. You cannot keep on shifting income from labour to capital without having an excess capacity and a lack of aggregate demand. That’s what has happened. We thought that markets worked. They’re not working. The individual can be rational. The firm, to survive and thrive, can push labour costs more and more down, but labour costs are someone else’s income and consumption. That’s why it’s a self-destructive process.” (Interview. Wall Street Journal. Sept.2011.)
However, despite the above insight, the majority of the so-called economic ’experts’ continue to flounder as they try to predict outcomes and suggest remedies for the volatile symptoms of the debt-riddled capital ‘markets‘. Some commentators have understood that there is a problematic connection between the production of products (commodities) and services (the basis of any social and economic system) and the speculative antics of the finance and banking capitalists. However, typically they perceive the relationship the wrong way around. They view the financial sector as determining the economic sector, when in fact, as we shall see, it is the reverse. Thus they start from a position which assumes that in this crisis, everything else in society must be sacrificed to propping this financial sector up. In this way they advise attempting to deal with the symptoms of crisis and not the causes. If we consider the economic analysis of Marx, the fallacy of this self-serving, inverted perspective will become clear. What will also become clear is the real source of the crisis and the nature of the process which creates it. However, before, looking in more detail at the capitalist economic process it is worth considering an important summary of the conclusion reached by Marx after studying, Smith, Ricardo and over a hundred other noted economists of the capitalist system. He observed;
“Since the aim of capital is not to minister to certain wants, but to produce profit, …a rift must continually ensue between the limited dimensions of consumption under capitalism and a production which forever tends to exceed this immanent barrier. Furthermore, capital consists of commodities, and therefore over-production of capital implies over-production of commodities.” (Marx. Capital Volume 3. Page 251.)
a) Economic circulation. (The crisis predetermined.)
At the basis of any society lies the production and circulation of products and services. This is no less true of the modern complex capitalist system than previous forms of society. The difference being under capitalism, these goods and services -and the main means to produce them – are presently under the control of those who own money in the form of capital. This ownership and control of production arose out of previous economic developments which created an extensive system of exchanges, which required money as a medium of exchange. Marx again on the circulation of commodities;
“The circulation of commodities always requires two things: Commodities which are thrown into circulation and money, which is likewise thrown into it….The process of circulation … does not, like direct barter of products, become extinguished upon the use-values changing places and hands. The money does not vanish on dropping out of the circuit of the metamorphosis of a given commodity. It is constantly being precipitated into new places.…” (Marx. Capital. Volume. I, page 162. Emphasis added. RR).
It is the insertion of accumulated money in new places within circulation, which, as we shall see below, creates additional wealth for the rich, but at the same time impoverishes the poor. The initial function of money – and still its primary mode of operation for the vast majority of people – is as a means of exchange for things they need. Even money banked for the vast majority of people, is as a store for future probable exchange needs. However, for a minority who become rich, much of their money has taken on a new ‘mode’ of operation and becomes a means of gaining more money. They have, or can obtain, more money than they need to purchase goods and services, and they invest this ‘surplus’ to obtain even more money. The huge and multiple problems accruing with this process as it has developed will be considered later. Meanwhile Marx describes this intrusion of money – as capital – in the following manner;
“The simple circulation of commodities—selling in order to buy—is a means of carrying out a purpose unconnected with circulation, namely, the appropriation of use-values, the satisfaction of wants. The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement. The circulation of capital has therefore no limits.” (Marx. Capital. Volume 1 page 219. Emphasis added. RR)
The problem with inserting accumulated money into the circulation process, is that it is both parasitic on the primary process, and at the same time it pushes the process beyond production for need and on to production for greed – the unlimited use of money in order to create more money. The fuel that has always powered capitalism is greed and the top 10% are currently running on a high octane grade. The fact that some people are able to use money in this historically new mode (to create more money) has allowed a class to develop which enables them to ‘speculate’ in three main ways. 1: They can use the money to buy bulk commodities and sell them in the circulation process for more than they bought them – gaining a profit from commerce. 2: Alternatively they can use their surplus money to set up production of commodities or services and sell these in the circulation process, for more than they paid for them – obtaining profit from production. 3: They can lend their surplus money at ‘interest’ so as to make more money – extracting profit from production via financial banking and speculation.
Each of these three arena’s of ’investment’ are crisis prone and during such crises, negatively effect the normal functioning of production and exchange. A crisis, or disturbance, in one part of this financially extended (and accelerated) circulation of production and exchange, results in a crisis for everyone. As it developed from feudal times to modern capitalist, the increased complexity of social production and exchange, created the potential for the three above sources of crisis to become international and then world-wide. The infamous ’South Sea Bubble’ was one such early and notable capitalist collapse, the 1930’s Wall Street Crash, being another. However, since these earlier periods, the pool of surplus money has increased astronomically. This accumulation accelerated when money was invested as ‘capital’ in the increasing mechanisation of the production of commodities, starting with the industrial revolution and on to today’s automated production. It is this production process, we need now to consider.
b) Capitalist production. (The crisis determined.)
So the real impetus to the existence of a large-scale, multi-facetted circuit of commodity production, came with the development of capital as a complex integrated system of money-directed and money-propelled ‘means of production‘. Marx, transforming the insights of Smith and Ricardo, argued that the real value-adding catalyst of those ‘means of production’ (raw materials, machinery and labour) bought together by the capitalist, was the ‘labour-power’ of the worker, purchased as a commodity. The wage paid to the worker under the rule of capital was henceforth, directly related to the means to keep him or her alive, not to how much value the labour-power of the worker gave to the production process. With admirable intellectual persistence, Marx was able to probe away at every detail of capitalist theory and practice. Using the analytical concepts of necessary labour and surplus labour he then went on to explain how profits were ultimately obtained. It is as follows. The worker works part of the day, week or month, the necessary part, and during that necessary time, gives a value to the commodities or services equal to his or her wages or salary. However, at the point where the worker has returned the value of his or her wages, the worker is not allowed to depart and leave the place of work. Under the capitalist wages and salary system, the workers must continue to work the hours remaining in the negotiated ‘working day’ (or month), and work them for no return. As Marx noted with regard to the 19th century level of exploitation;
“Half the working day costs capital nothing; it thus obtains a value for which it has given no equivalent.” (Marx. Grundrisse. Notebook 3. Page 324. 1973.)
Due to the above-noted improvements due to mechanisation, automation and computerisation, modern production has decreased necessary labour time and increased surplus labour time. The surplus labour time worked, therefore, creates even more surplus products or services. It is these surplus products and services which as a consequence contain the surplus value (profits) which is realised as money, when they are sold. The proceeds of these sales returns as capital to the capitalists, who begin inserting it into and onto the circulation process again. By his detailed, forensic analysis, Marx had revealed one potential moral question and two important economic aspects leading to crisis. First the moral. The fact that a portion of the days work was surplus labour and unpaid, the exchange between the worker and the owner of capita,l from an anti-capitalist perspective, is a ‘rip-off’. In fact it is often a double rip-off because after the very first complete circuit of a productive capital, or soon after, the capitalist pays the workers’ next set of wages out of the previous or subsequent cycles of surplus value (unpaid labour) created by the workers. The degree to which this double exploitation takes place, determines the rate of surplus value created. Thus;
“The rate of surplus-value is therefore an exact expression for the degree of exploitation of labour-power by capital, or of the labourer by the capitalist.” (Marx. Capital Volume 1, page 314/15.)
Clearing away the confusions of earlier economists, Marx transparently exposed the fact that the workers are, by means of a detour through the accounts of the owners of capital, actually paying themselves for the privilege of producing untold wealth for the owners of capital. Capital accumulation, by private individuals whether as owners or shareholders, is nothing less than a sophisticated form of theft, but one successfully disguised by sophistry, the payment of a wage and the spuriously justified concept of valid profits. Yet, as noted, the subtle and blatant immorality of this disguised form of unequal exchange was not all that Marx’s economic analysis revealed. It revealed that the logic of capital, through its surplus value (profit) accumulation, pushed surplus production to the point of a crisis of over-production of commodities and overproduction of capital. A crisis which then, as it is doing now, dislocates the normal functioning of commodity production and exchange.
c) Overproduction. (The crisis manifested.)
As was noted in the first quote from Marx, the difference between the value embodied in surplus production and the value paid in wages is such that the total wages of the working population are in no way sufficient to purchase all the items they collectively produce. This difference between the total value created and the total amount paid to the workers creates a scenario of what Marx described as relative overproduction. Relative overproduction in the sense that more items are produced than can be sold and bought in order to realise the profit (surplus value) embodied in them. As Marx further commented;
“The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit.” (Marx. Capital Volume 3 p 650.)
At one moment in time this early form of the crisis appears as an overproduction of commodities at another moment an overproduction of capital invested in commodity production. Older, readers may recall, the infamous, ‘butter mountains’ and ‘wine lakes‘, which along with other surplus production ‘dumping‘, were the early European symptoms of this initial stage of a developing capitalist crisis. This potential for overproduction, multiplied as it was (and is) by the increases in technology and in the number and diversity of capitalist enterprises employing masses of workers, periodically creates the above-noted problem of crisis. Marx also drew his readers attention to the further consequences of capitalist inspired over-production – permanent levels of unemployment;
“Over-production of capital is never anything more than overproduction of means of production—of means of labour and necessities of life — which may serve as capital, i.e., may serve to exploit labour at a given degree of exploitation; a fall in the intensity of exploitation below a certain point, however, calls forth disturbances, and stoppages in the capitalist production process, crises, and destruction of capital…..The circumstances which increased the productiveness of labour, augmented the mass of produced commodities, expanded markets, accelerated accumulation of capital both in terms of its mass and its value, and lowered the rate of profit—these same circumstances have also created, and continuously create, a relative overpopulation, an over-population of labourers not employed by the surplus-capital…. “ (Marx. Capital. Volume 3 page 339. Emphasis added RR.)
Over the last few decades, there has been systemic, and still increasing levels of unemployment, alongside the proliferation of mass commodities in all the advanced capitalist countries of the world, particularly Europe, North America and Japan. This has been due to the increases in the productiveness of labour via time and motion studies and the previously noted, introduction of automation and electronic technology. The general fall in the rate of profit, after the boom period following the Second World War, also saw capitalist production facilities transferred from the advanced countries of Europe and North America, to those with lower labour costs. This capital ‘outflow’ left additional unemployment behind but led to a further increase in the mass of profits, which was then available to be used for any and every form of ’investment’. This whole development demonstrates that the mechanisms revealed by Marx in his economic studies still operate. This is so even though the sophistication of the commodities and services, along with production techniques, has evolved along with the complexity of the financial sectors and the involvement of the state. And it is this complexity which often disguises the reality of what is taking place.
“Hence what appears as a crisis on the money market is in reality an expression of abnormal conditions in the very process of production and reproduction.” (Marx. Capital. Volume 2 page 429/430.)
It is these abnormal conditions, which have been caused by the fact that the surplus capital created in the production processes, and the urge to create more, has been used to develop the extensive use of credit and international speculation. The use of credit, in place of direct money, has allowed the capitalist system to extend and expand astronomically, but at the cost of problems caused by defaults and failures to pay, due to interruptions within the increasingly complex infrastructure of financial institutions. Credit has also put enormous amounts of fictitious money (as capital) into the financial superstructure and placed it into the hands of people whose primary and sometimes only goal is to create bonuses and fees for themselves. Thus;
“With the development of the credit system; great concentrated money-markets are created, such as London, which are at the same time the main seats of trade in this paper. The bankers place huge quantities of the public’s money-capital at the disposal of this unsavoury crowd of dealers, and thus this brood of gamblers multiplies.” (Marx. Capital. Volume 3 page 688)
It is here that we should note the financial sectors concern for the crisis publicly emerging in 2008 and continuing, described in terms of ‘toxic loans’ and ‘credit defaults‘. We need only recall, the Internet speculative ‘bubble’ of the late 20th century and the 21st century, collapse of the housing mortgage ’sub-prime’ mortgage packages in the USA, to confirm the relevance of Marx’s diagnosis of crisis. That is to say, a breakdown at any link in the increasingly complex chain of circulation, would throw the whole essential process of production and exchange into chaos, confusion and crisis. And during Marx’s own lifetime, it did. Yet this was not the only problem revealed by his persistent, searching analysis. The separation of the financial sector and the continuing rise in surplus value amassing within its area of control has led increasingly to speculative adventures in which huge funds were, and are, allocated to wild and desperate projects in the hope that a profit could be made. The crises, created by speculative losses in the financial sector, have severe repercussions in the circulation of capitalist-driven productive relations.
“This confusion and stagnation paralyses the function of money as a medium of payment, whose development is geared to the development of capital and is based on those presupposed price relations. The chain of payment obligations due at specific dates is broken in a hundred places. The confusion is augmented by the attendant collapse of the credit system, which develops simultaneously with capital, and leads to violent and acute crises, to sudden and forcible depreciations, to the actual stagnation and disruption of the process of reproduction, and thus to a real falling off in reproduction.” (Marx. Capital. Volume 3 page 336.Emphasis added. RR.)
The losses, defaults and banking collapses, which have triggered the present confused turmoil and threaten peoples jobs, houses, pensions and general welfare are the modern analogues of what Marx describes above. The banking system from merely being large-scale, safe, temporary cash-boxes for spare cash were transformed into lenders of capital. In this way an institutional separation and an apparent independence grew up within the financial sector, leading for a period to appearances of banking solidity and reliability. This growth of the purely financial sectors of capital, which on one level lubricated the path of capital accumulation for the capitalists, had also introduced other levels of complexity and further contradiction. The pathway of the circulation of capital now has more points of separation and thus more points of possible interruption. The imperative to realise the surplus value and thus preserve the original capital and its incremental off-spring (profit), gave rise to the aggressive search for new markets, internally and then externally. This led to the aggressive penetration of capitalism into every nook and cranny on the globe – the period of colonialism and imperialism – which has still not completely ended as the examples of Israel, and recent armed interventions in Iraq, Afghanistan and Libya demonstrate.
However, there is a second important and crisis-ridden symptom caused by the vast amounts of surplus value realised in the capitalist production of commodities and services. Much of that surplus value, realised as money-capital (ie money returned to the capitalists but not destined for the capitalists own consumption), becomes surplus not only to the needs of the wealthy individuals, but also to the commodity production processes themselves. As we have seen, this money, collected together in banks and other financial institutions, now exists as ‘loan capital’ or ‘money capital’ and driven by the desire of its owners and managers for more (the latter for fees and bonuses), therefore seeks alternative ‘speculative’ outlets. These vast amounts are loaned at ‘interest’ or used to buy and sell ‘stocks‘, ‘bonds’ and other more modern ‘financial instruments’ such as ‘futures’ and ‘derivatives’. All of which, as we shall see in the next section, have led to the current economic and financial crisis, and which now threatens the lives and livelihoods of so many citizens of the world.
d) Financial Speculation. (The crisis amplified.)
The huge amounts of money swirling around within the financial sector of capitalism arise from two sources. The first is the source noted above – the production and sale of commodities and services. It is an accumulation and surplus created by the combined efforts of those productive citizens, who work for a salary or wage. This surplus finance – ‘money-capital’ – exists as currency residing in various forms of deposits and accounts. The second source is created in the form of the trade in ’paper’, also mentioned above (section c). This money market ‘paper’ comprises of a mixture of certificates, bonds, issues, futures, derivatives and numerous other financial ’instruments’, which in their essence are nothing more than future ’promises to pay’. Despite the quality of the paper upon which they are printed, they remain nothing more than sophisticated and often complex I.O.U.’s. An obvious problem occurs when these ‘promises-to-pay’ are traded as if they had an intrinsic value of their own, and are counted as good as money. The problem is that in actual fact they are only as good, as the promises to pay are realistic and not just wishful thinking. As this multitude of (often bundled together) certificates etc., are passed on (bought and sold) for cash or other pieces of paper, they appear – when credit is good – to be valuable in themselves. For this reason they soon proliferate. As an example of such proliferation, it is estimated that in 2011, a sum of $600,000 billion represents the amount of hopeful claims resting on OTC’s (Over-The-Counter Derivatives) alone. Yet, the bulk of this ‘paper’ as with many other financial ’instruments’ will actually be, and in crisis will be shown to be, a fictitious form of money. Marx again, this time on fictitious forms of capital.
“The reserve funds of the banks, in countries with developed capitalist production, always express on the average the quantity of money existing in the form of a hoard, and a portion of this hoard in turn consists of paper, mere drafts upon gold, which have no value in themselves. The greater portion of banker’s capital is, therefore, purely fictitious and consists of claims (bills of exchange), government securities (which represent spent capital), and stocks (drafts on future revenue)….. In addition to this, it must be noted that this fictitious banker’s capital represents largely, not his own capital, but that of the public, which makes deposits with him, either interest-bearing or not.” (Marx. Capital. Volume 3. page 629/630. Emphasis added. RR.)
Since the above type of trading is largely made up of fabricated representatives of money, (ie paper promises to pay) such trading is viewed as risky and so the risk is insured or ‘hedged’ as it is often termed. However, if one or more of these claims or I.O.U.’s fails to be honoured, then a whole chain of ‘promises-to-pay’ defaults can and often does occur. In terms of such collapses and default losses due to speculative trading in such paper, one only need recall the Barings Bank and Sumitomo cases of the late 20th century. Such collapses did not end with these two particular events as the later examples at Allied Irish Banks, Societe Generale and more recently of the Swiss UBS bank trader, Kweku Adoboli, testify. All these publicly acknowledged incidents have shone a light on the ice-burg tip of derivatives dealings, which at least one Financial Times correspondent considered, “dangerously opaque and illiquid” (FT August 1 2011). Indeed, this observation is not surprising, ‘derivatives‘, were designed precisely to be opaque and therefore mask or hide much of the ‘toxic-debt‘ they contain. This toxic aspect of the present crisis is systemic, (an inherent part of the system) as is well known to those in the finance sector of capitalism, even if they have failed to understand the whole process. For example;
“In the wake of the collapse of Lehman Brothers, the need for a mechanism by which to move derivatives trades out of a collapsing institution and onto the books of others has come into sharp focus….Limiting systemic risk has become one of the overarching themes of global market reform in the wake of the financial crisis..” (Financial Times. OTC section. August 1. 2011. Emphasis added. RR.)
Note that the ‘risk’ in this financial market is admittedly ‘systemic’! Note also, that although it is not mentioned in this quote, those in charge of your pension fund and other such structured savings schemes, are up to their necks ‘playing’ the market in such lottery-type ‘spread-betting’ gambling with your savings and your future pension. Financial instruments such as ‘derivatives’, ‘mortgage guarantees’ and ‘credit default swaps’ and ‘spread-betting’ or ‘short-selling’ on share prices, are just the most recent means by which the financial sector of society has sought to speculate and to ‘insure’ their speculation against possible loss. There are at least two-score acronyms, such as OTC’s in financial sector language, all based around the production of multiple ‘certificates’ which promise to pay – at a future date – the principle borrowed together with interest – if they are not already ‘discounted’. They are the modern terms for that earlier capitalist development of ‘bills of exchange’ and ‘drafts’ which were described by Marx.
Since these ‘investors’ are just passing around large amounts of fictitious money in the form of elegant looking pieces of paper, in the expectation of increasing their wealth, it would seem to be no problem for ordinary people if they eventually lost the lot. However, it is a great problem, as we can understand, when we realise that some of the money is real and some of this real money is ours. Plus this group, are tied into the same banking system as the rest of us and are parasitic on the production and circulation of commodities and services. For this reason – their crisis – suddenly becomes ours! Further collapses in the finance sector will cause further dislocations and interruptions to the basic circuit of production and exchange. [See the article – ‘No Plan B. at http://www.critical-mass.net] We already know this is so from the fact that the general tax-payer was forced by the government to pay to support the speculative banking losses (risky trading swindles – dodgy derivative mortgages) in 2008, so that we would have a banking system to continue using. This was a situation which has caused much debate and controversy. It is one which is still actively debated as Marx anticipated.
“This is the point where both sides of the controversy on the prevalent theory of crises are at the same time right and wrong. Those who say that there is merely a lack of means of payment, either have only the owners of bona fide securities in mind, or they are fools who believe that it is the duty and power of banks to transform all bankrupt swindlers into solvent and respectable capitalists by means of pieces of paper. Those who say that there is merely a lack of capital, are either just quibbling about words,…. or they are referring only to such cavaliers of credit who are now, indeed, placed in the position where they can no longer obtain other people’s capital for their operations and now demand that the bank should not only help them to pay for the lost capital, but also enable them to continue with their swindles.” (Capital Volume 3 p 693. Emphasis added. RR.)
Swindles such as that perpetrated by Bernie Madoff’s Investment Securities, discovered in 2008, indicate that little has changed over the 120 or so years since Marx penned the above words. And of course, swindles are still being carried out daily. Such actual and potential financial tremors and debt-bomb explosions in the financial superstructure, ahead of a further devastating general collapse, have already had massive effects upon the foundations upon which it is built – the foundations of everyday employment in production and circulation – a foundation upon which we all currently rely. Marx’s observation above, that speculators demand the bank should help them out is now being taken even further. The banks, following this example, now also demand to be ‘bailed-out’ of the situation they have helped create, by gifts of tax-payer money and by the removal of welfare benefits to ordinary people. Which brings us to the much vexed question of sovereign debt.
e) State debt. (The crisis politicised.)
The question of massive state debts, which swamped the media attention during the summer of 2011, is an interesting and revealing one. These modern state debts range from trillions of dollars and Euro’s to billions of pounds and other currencies. However, it is the extent of the debt, which is new, not its actual existence. The logic of how it arises is simple. Governments of capitalist countries acquire their revenue from two main sources of realised surplus value. The first source is tax deductions directly from income, profits, purchases (VAT) and property. The second source of government revenue has been from loans. So in sum, government revenue comes from taxes upon individuals, industry, commerce, finance and loans. Of course, all these sources of income are derived ultimately from the surplus value created during the process of production. It is of course, the loans and expenditure of governments, not the taxes paid by citizens, which have create the present monstrous levels of state debt. However, these revenue sources are not static, but variable and have varied progressively downward for the following reasons.
Since the mid 20th century, production for profit once again began to exit the advanced countries of Europe and North America in particular, with an accompanying rise in unemployment. Jobless workers no longer pay tax and the support they need from the state increases. In addition the absent companies no longer pay the home government the taxes they formerly did, so that source of state income is also reduced. Nevertheless, the ambitions of governments often continue to outstrip the tax revenues accruing to them. Armed forces, for the purposes of forcibly securing sources of raw materials, loan guarantees and markets for capital, are expensive to maintain. When they are deployed in wars for the same or other purposes, the expense shoots up as the equipment increases in sophistication and needs replacing as it is worn out or destroyed. In short, state expenditure everywhere has been going up, whilst state income has been going down. In such circumstances the pro-capitalist governments of Europe and North America (the modern cavaliers of credit) have availed themselves of loans from those in the financial sectors of the economy, who as we noted above, have individually or collectively managed to accumulate vast wealth in the monetary form. But within this ‘sovereign’ lending process lies another fundamental problem. Marx, explained the potential outcome of this in the following manner.
“The state has to annually pay its creditors a certain amount of interest for the capital borrowed from them. In this case, the creditor cannot recall his investment from his debtor, but can only sell his claim, or his title of ownership. The capital itself has been consumed, i.e., expended by the state. It no longer exists. What the creditor of the state possesses is 1) the state’s promissory note,…..this promissory note gives the creditor a claim upon the annual revenue of the state, that is, the annual tax proceeds, for a certain amount… But in all these cases, the capital, as whose offshoot (interest) state payments are considered, is illusory, fictitious capital. Not only that, the amount loaned to the state no longer exists…No matter how often this transaction is repeated, the capital of the state debt remains purely fictitious, and, as soon as the promissory notes become unsaleable, the illusion of this capital disappears.” (Marx. ibid page 623. Emphasis added. RR. )
The modern capitalist state in Europe and North America has been increasingly drawn into the speculative financial circuit of creating ‘paper’ or fictitious capital. The politicians and other agents of the state, have issued ’bonds’ for increasingly vast amounts, during the post-war period, which they knew could never be paid from the states existing tax-revenue base. These bonds have no intrinsic value, they are only ‘promises to pay’ issued by governments, it must be said, without the consent of their respective citizens. These state officials now continue to sell ‘government ‘bonds’ just to pay the interest on the previous bonds they issued. The increasing of the state debt limit in the USA during August 2011, as with previous increases, is a recognition of the fact that state income – under the richest form of capitalism – is never going to match state expenditure. Not without, that is, cut-backs in state employment and other such expenditure of such magnitude and diversity that it will engender huge uprisings and potentially revolutionary consequences. And such increases in debt ceilings, and reductions in employment and welfare benefits do not even solve the problem, they merely push the it further into the future – or in the current US political terminology they just ‘kick the ‘can’ up the road’.
Those finance capitalists, the modern equivalent of Marx’s ‘money capitalists‘, who have accumulated huge wealth and provided the loans to governments are demanding increasing interest for some governments on future loans, in one case over six percent during August 2011. These bond holders are also presently ‘passing-the-parcel’ round – so to speak – and trying to off-load their existing bonds and other such promissory notes, before any country defaults and cancels these politically promoted obligations. In the same way as the private sector finance capital made bad loans (mortgages etc) and then on governmental initiative were bailed out by the tax payer, the owners of government bonds wish to offload the government’s bad debts onto the citizens of the respective countries. The additional pound of flesh, they are factoring into their calculations is the demand to be guaranteed state assets in case of the inevitable default. Thus, if this transpires, an individual or conglomerate of individual finance capitalists will own national resources and land that was formally in the collective ownership of the people via the state. These financial ‘vampires’, via their representatives in central banks and the IMF (International Monetary Fund), are also insisting that the politicians decrease all state jobs (initially 30,000, in Greece – more to follow), welfare (including pensions), along with increasing taxes and prices. It is this IMF and ECB (European Central Bank) led project, which is undemocratically controlling political outcomes and politicising the economic crisis as the occupiers of Wall Street, the rioters in Greece and the demonstrators in Spain are now recognising.
f) Looking beyond Capital. (The crises surmounted.)
So there we have it. Let us summarise this system of capitalism. Commodity production under the control of, and driven by capital, over-produces endless varieties and surplus numbers of commodities, while creating unemployment, on the one hand, and on the other, creates huge quantities of profits for the rich. In this process it: a) exhausts the raw material resources of the planet and pollutes the air, the sea, the land; b) gluts the markets with short-life goods creating obsolete commodities that need to be dumped and engendering a fetishist, insatiable desire for possession of commodities among people; c) creates structured unemployment and relative poverty; d) produces a mass of profits so immense that those in control of it search for any and every possible means of increasing wealth. This frantic search leads to speculation and eventual collapses in production and thus further unemployment, collapses in the value of money, collapses of fictitious capital and debt crises – all of which lead to further dislocations in the much needed circuit of production and exchange. The present crisis – which has not yet hit its lowest point – demonstrates that the capitalist mode of production and exchange has again reached its practical, social and now its ecological limits. This tendency to ignore boundaries of either, moral, ethical, fiscal or ecological is inherent within the capitalist mode of production and was also identified by Marx.
“The limits within which the preservation and self expansion of the value of capital resting on the expropriation and pauperisation of the great mass of producers can alone move—these limits come continually into conflict with the methods of production employed by, capital for its purposes, which drive towards unlimited extension of production, towards production as an end in itself, towards unconditional development of the social productivity of labour.” (Marx. Capital Volume 3 p 331. Emphasis added. RR.)
This unquestioned drive toward, unlimited extension of production, is reflected in the repeated mantra proposed by politicians – of all shades of opinion – who imagine that the solution to this crisis created by the past and present overproduction is further capitalist production – on and on, into the future. This same proposal is repeated by the ‘officials’ of various trade union movements throughout Europe and North America. These ‘leaders’ seem content to regurgitate variations on the dominant liberal-economic theme. They all, in one nuanced form or another, repeatedly intone, ‘the solution lies in ‘economic growth‘, as if it were some magic incantation which will miraculously make the current problems vanish. In this way, they all fail to see, or ignore, not only the causes of the present catastrophic symptoms, but also the growing awareness, that the ecology of the planet could not possibly sustain the unlimited extension of production which is both implicit and explicit under the domination of capital. This additional consequence, was a probability of which Marx was well aware. In his personal notes (Grundrisse) prior to the writing of ’Capital’ he wrote that under capitalism science and technology was primarily directed toward production for profit. He further commented;
“For the first time, nature becomes purely an object for humankind, purely a matter of utility…the theoretical discovery of its autonomous laws appears as a ruse so as to subjugate it…whether as an object of consumption or as a means of production.” (Marx. Grundrisse. Page 410. Penguin 1973. Emphasis added. RR.)
There are many challenges facing individuals, communities, nations, and of course where these overlap, humanity in general. However, the greatest challenge is not the conquest of space as many seem to imagine. Nor is it the ability to explore the deep ocean trenches or to overcome or eliminate the many diseases still blighting the human species. Great as these challenges are, they are not the most difficult, for they do not require the collective and concerted efforts of millions, but merely the concerted efforts of a relative few knowledgeable, well funded and committed people. The greatest challenge is the overcoming and ending the rule of capital with its symptoms of militarism, colonialism, imperialism, exploitation and ecological destruction along with the re-organisation of social production on a new and completely different basis. For that, millions of committed and organised citizens are required to press for change. The kind of numbers that courageously and tirelessly filled Tahrir Square and other Arab streets, but this time assembling and organising knowing they have to not just change the political regime, but alter the entire socio-economic system. And this time seeking an alteration that, unlike in the 1930’s collapse, does not try to replicate either the authoritarian system of Fascism, or that of Leninist/Stalinist style state-capitalism. What Marx has to say on the latter question of a post-capitalist, future will be the focus of the next section.
B) MARX: ON POST-CAPITALIST SOCIETY.
It has been argued in section (A) above that without a grasp of the detailed economic analysis of Marx in Das Capital and the Grundrisse, it is impossible to understand the real causes and depth of the current economic crisis. Using extracts from Marx’s major works, it has been demonstrated that it is not just the financial superstructure of capital (with its speculative and fictitious capital) which is flawed, but the very basis (production for profit) upon which our essential production and consumption of commodities and services are based. The neglect of Marx’s theoretical works have led, within bourgeois intellectual affairs, to the development of an economic and political elite who are incapable of understanding the dynamics of the system they uphold. Therefore their efforts at trying to patch up problems within the banking and financial sectors, as was done by this milieu in the crisis of 2008, was akin to stitching up a still infected wound; the infection just surfaced again (in 2011) having further poisoned the circulation systems arteries and organs. In this case the organs and arteries are those effecting the circulation of commodity production and exchange upon which the mass of ordinary people rely.
Yet even after this experience, politicians of all shades, left, right and centre, have still failed to recognise the underlying economic infection, and merely discuss a further financial suture or surface ’stitch-up’. It was argued that the gangrene festering in the fundamental production and exchange system was the control of private and corporate production and profit extraction with its attendant motive of greed. It was suggested that this poisonous penetration of frenetic wealth accumulation needed to be removed from the process of commodity and service production and exchange. Only in this way would the economic and social affairs of global societies be able to gain stability, rationality and ecological sustainability. What was not touched upon in section A and remains to be considered, was what might or ought to replace the economic system of capital. And importantly, in the context of this article, what Marx had to say on this crucially important issue. Three questions therefore now arise.
i) What form of post-capitalist socio-economic organisation is to replace the present capital inspired crisis-riddled production processes?
ii) What form of socio-political movement will be required to enforce and ensure such necessary changes?
iii) What conditions will motivate and create the collective energy and determination required for such revolutionary change?
Therefore what will be contained in the following sections, are those aspects which Marx considered the necessary basis for any transformative developments, leading towards a future post-capitalist form of society.
1) What economic form should a post-capitalist society take?
It may seem surprising, but many important aspects the future economic form of society is already here! As is the case in many areas of life, the seeds of the future, frequently become evident in the development of the past and emerge practically in the present. For example, large-scale production and exchange have already taken place, and continue to take place without the presence of capitalists in the process. Such non-capitalist production and exchange currently exist in three basic forms. The first is in the form of the public sector, the second is in the form of co-operative societies and the third is in the form of voluntary sector. None of these three extensive forms arise as a result of private investment and none of these forms function in order to create private profit. In this general regard, it is important to recognise and constantly remember that; ’capitalism’ and its investors only insert themselves in economic areas where it is financially advantageous to them. If capitalism cannot make a profit out of a necessary or desired element of economic or social life, it will be shunned it like the plague. Indeed, capitalism’s advocates will often go further and argue that this or that essential service – which cannot be (or can no longer be) – exploited for profit, should be provided by the state or by a voluntary sector operator. Hence, the obvious and historic proliferation of public services (courts, education, libraries, hospitals, welfare benefits, fire-service, police, social work, army, navy, air-force, etc.) and thousands of voluntary organisations.
With a few notable exceptions, the vast majority of these non-profit public services are not only advantageous, but necessary for any form of organised social life. Further still, in moments of collapse, as with the private banks in 2008, capitalism, relies upon non-capitalist public (ie social) forms of organisation and support to buoy them up or bail them out, until they are ready, and able, to begin exploiting again. Even hugely successful capitalists at all times, rest upon the solid foundation of public or community services, such as education, roads, police, law courts, army, navy, air force, fire, public health etc. Without these foundations they, their profit extraction and their frenetic speculation could not exist. An economic and social world without capital is therefore already absolutely essential for present society. Moreover, a world without capital it is eminently desirable, and as we have seen, is increasingly necessary if repeated economic and environmental crises are to be avoided.
In consideration of the co-operative form of organisation Marx made the following comment.
“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them…by enabling them to use the means of production for the employment of their own labour.” (Marx. Capital Volume 3 page 431.)
So in fact the economic processes of the future are already in existence – at least in substantially embryonic form – in the present. Any future society, cannot escape the need to produce commodities and services, along with the education and training necessary to fulfil the various tasks which are required to staff that post-capitalist economic system. Fortunately, as we have seen, alternative forms of commodity and service production and exchange, without the poison of production for profit instead of production for use, have been around for a considerable length of time. It should not be overlooked that the early co-operative movements in various countries attempted to do precisely that – and in many places did it to an impressive degree. Banks, farms, cotton mills, shops, supermarkets, funeral services and many other co-operative societies were formed, providing quality goods and excellent services. Their problem and relative demise was not due to the fact that they were inefficient or deficient in themselves. Indeed, the conditions of employment and general welfare provisions for their employees was above – in some cases well above – those in the private, profit-motivated sector. It was this disparity, along with some moderate mal-adjustments (the shortcomings noted by Marx), which caused their demise.
In a ‘mixed’ economy, the fact that profit-motivated enterprise, generally exploits labour, materials and machinery more intensely and ruthlessly, means the products and services are often cheaper and thus undercut those produced by co-operatives and in this way undermines their existence. It is clear from this past experience that egalitarian co-operation cannot compete on prices with cut-throat capitalism, but the answer is not to dismantle co-operation, with its better conditions and pension outcomes, but to outlaw capitalist exploitation and prevent this sectors progressive reduction of all working peoples entitlements. As a general socio-economic rule, co-operatives aim to increase employment and level-up terms and conditions for working people and, importantly, they do not re-locate their businesses to countries with lower labour costs and leave unemployment behind. In contrast, private enterprises invariably decrease employment, aim to level-down terms and conditions – except for the boardroom executives – and frequently re-locate to countries with low pay and conditions for working people.
The same general principle applies to the existence and functioning of public sector employment. This sector, because it is not organised for the production of private wealth accumulation, also generally has better conditions, salaries and pensions than the private sector. Not only schools, colleges, universities, social services and local government agencies, but for a whole generation, electricity, gas, railways, sewage, water, telephones were also operated as public service corporations. There were of course problems with their set-up and functioning, but here too they generally did an excellent job, with reasonable costs and established above the private sector working conditions, salaries and pensions. Compared with the present problems associated with the now privatised, telecommunications, rail, gas, electricity and water supplies, the previous difficulties in these sectors were slight and remediable.
Without cut-throat competition from capitalist enterprises – in their carefully chosen ’advantageous’ situations – the public sector and co-operatives, could, and did, function extremely well. With some minor adjustments at the top, they would generally still be fairer, greener, and more sustainable. The frequent myth that a vibrant private sector is necessary for innovation, evaporates, when it is recognised that the leading innovators in all forms of 20th and 21st century research, have been overwhelmingly initiated by publicly funded university departments. It is only after consistent successful results are achieved in these publicly funded institutions that the potentially lucrative innovations have been handed over, and continue to be handed over, to the private sector to exploit and make a relative few individuals rich. This innovative myth also further evaporates, when it is recognised that many private sector innovations are unnecessary and often severely detrimental to the health and safety of their employees, customers and increasingly to the environment.
Therefore the future economic and social system, which is devoid of crises and dislocations caused by excessive wealth accumulation and speculation, is not overly complex nor is it outrageously frightening. It does not need rocket science levels of technocracy nor does it comprise of Gulags, forced collectivisation or a little red book. It simply comprises of more of the already sustainable best we have now, but without the internal cancer of production and speculation for personal profit. The future economic structures which are to the benefit of the majority, lie in the adjustment, improvement and expansion (overcoming the shortcomings) of the public sector and co-operation. The problems with the public sector which need to be addressed in the future, are obvious. Public services, need to be far more democratic involving the workforce and users, and far more egalitarian. Any needed key positions, within them should be no longer excessively paid and such posts should be made directly accountable and revocable. In short, accountability, equity and collective management are among the changes necessary for future public services. Co-operatives, need extending to all forms of production and services presently undertaken by the private sector and democratically run – actively involving the workforce and users. As with the public sector, any necessary key positions in these organisations should not be excessively paid and should be directly accountable and revocable.
There is at least one more significant socio-economic adjustment which will be necessary to avoid future problems with a possible re-emergence of capitalist exploitation and crisis. It will be recalled, (as in section a) of Capital and Crisis.) that it is the accumulation of money in the form of capital, constantly inserted into the basic production and circulation, which is the problem and in turn gives rise to overproduction, speculation and eventual repeated economic and financial collapse. The source of this greed and interruption needs to be prevented in any post-capitalist society. Having analysed the contradictory and increasingly malign nature of money as a means of ‘stored value’ and exchange, Marx observed the future necessity of removing this now terminally flawed mechanism;
“In the case of socialised production the money capital is eliminated. Society distributes labour-power and means of production, to the different branches of production. The producers may, for all it matters, receive paper vouchers entitling them to withdraw from the social supplies of consumer goods a quantity corresponding to their labour time. These vouchers are not money. They do not circulate.” (Marx. Capital Volume 2. Page 358.)
If this seems startling at first it should be recognised that for most people our existing money – in the form of notes, coins and particularly ‘hole in the wall’ cards – mainly operate precisely as such exchange vouchers. We use them merely to obtain consumer goods and services. The vast majority of us do not accumulate them in order to insert them into the circulation of commodities and services for our own exclusive pecuniary advantage. In other words, the 99% of us (as per the Occupy Wall Street‘ slogan) do not use money in this capitalist way, but as immediate or saved vouchers in exchange for what we need. No problem there then! However, in order to prevent their future misuse, by those so minded, any accumulative potential of these vouchers will have to be ended. The future exchange vouchers, under post-capitalism, like the present debit cards we use to shop with, will therefore not be treated as money in the traditional capitalist sense. To prevent a rebirth of capitalism, it would be necessary to prevent them circulating and being accumulated. They will therefore, be probably a modern electronic version of the type of ‘exchange vouchers‘, mentioned by Marx.
The economic form of a post-capitalist society has been described, albeit for the purposes of this article, in very broad strokes. The detailed filling out of such models has been done elsewhere, for example by the Co-operative Movement itself and in particular by Michael Albert in his book, ‘PARECON; Life after Capitalism’. Further possibilities, building on these and other suggestions is a work in progress and cannot be dealt with here, for it is now necessary to confront a very real problem of past anti-capitalist practice and terminology. The words most commonly used to describe what would replace capitalism have been the political terms – socialism and communism. However, there is now an intractable problem with the use of both these terms. In the first place they no longer describe any specific, agreed socio-economic system, they merely label previous (and current) failed political parties, systems and dogmas. As a result, the continued use of these terms, without adequate definition, obscures more than it reveals.
Indeed, such is the opportunist nature of politics in general, that the terms, socialism and communism have been appropriated by ruthless scoundrels, from as wide a range as, Stalin, Mao, Mussolini, Blair, Gaddafi, Mubarak, Ben Ali and a wide range of lesser known, but equally socially inept individuals. Secondly, the past examples of post-capitalist experiments, led by ‘socialists’ and ‘communists’ have largely been top-down totalitarian monstrosities, such as those organised in the Soviet Union, China, North Korea and Cambodia etc. It is necessary for those serious about a post-capitalist future, therefore, to probe beyond such adulterated abstractions and out-dated terms and consider what Marx considered would be the socio-political ‘essence’ of a non-capitalist form of society. In his study of the transformative process set in motion during the revolutionary events of the Paris Commune, Marx observed that;
“From the very outset the Commune was compelled to recognise that the working class, once come to power, could not go on managing with the old state machine; that in order not to lose again its only just conquered supremacy, this working class must, on the one hand, do away with all the old repressive machinery used against itself, and on the other safeguard itself against its own deputies and officials, by declaring them all, without exception, subject to recall at any moment.” (Marx. Class Struggles in France. Peking edition. Page 15. Emphasis added. RR.)
I suggest such remarks by Marx have been insufficiently considered by many on the anti-capitalist left, particularly those who identify with the traditions of Lenin, Stalin, Trotsky and Mao. Marx’s repeated advice amounted to saying to citizens and working people, they need not only to remove the ‘old repressive machinery’ used against them (ie the state), but also safeguard themselves ‘against its own deputies and officials’. There are numerous other such words of advice, by Marx after he had studied various 19th century revolutionary upheavals against the system of capitalism. Of course within the subsequent history of the working class struggle for better conditions, there are also numerous practical examples which would amply confirm the relevance of this advice.
2) What form of socio-political movement is required?
It should be noted, as indicated in the previous quotation and elsewhere in his writings, Marx never suggested anything like the absolute, totalitarian, centralised authoritarian control of working peoples economic, social or political life, which were imposed by, and through ’the Party’ in the Soviet, Union, Communist China, North Korea, Cambodia and elsewhere. The return of Marx to relevance in the 21st century, will reveal that community self-activity, self-organisation and self-evaluation, along with the all-round, dignified development of humanity, were the fundamentals advocated by the revolutionary-humanist Karl Marx. These fundamentals are still relevant and apply as equally necessary to the modern anti-capitalist movement and the organisation of a post-capitalist form of society. Yet, the articulation of these fundamentals has all but disappeared among contemporary politicians of all shades – left, right, and centre. All are top-down centralist advocates and defenders of powerful state organisations in which the citizens and public spaces are monitored and controlled. This too is perhaps not surprising for despite their rhetoric, politicians are primarily self-seeking and self-serving. Indeed, Marx and Engels, were scathing with regard to political organisations in general, ‘left’ political organisations and ‘left’ people in particular. The number of self-claimed ‘socialists’ – as with those noted above – who at best are actually nothing more than ‘left’ supporters of the capitalist system, and at worst are brutal dictators, are perhaps more numerous now than when Marx described their antecedents as ’reactionary’, ‘bourgeois’, or ’utopian’ socialists. But Marx and Engels even saw problems with those who claimed to be followers of their own anti-capitalist analysis. For example Engels, at one point felt compelled to remark;
“Unfortunately, however, it happens only too often that people think they have fully understood a new theory and can apply it without more ado as soon as they have assimilated its main principles, and even those not always correctly. And I cannot exempt many of the more recent ‘Marxists’ from this reproach, for the most amazing stuff has been produced in that quarter too.” (Engels to Bloch Sept 1890)
The number of self-declared ’Marxists’ who have thought they fully understood Marx and produced ‘amazing stuff’, not to mention, seriously dangerous stuff, has undoubtedly increased, since these remarks were made in the late 19th century. The difference between Marx’s position and that of his numerous self-appointed, misguided, sectarian, alleged followers, on a post-capitalist future, has been extensively dealt with in the book – ‘Revolutionary-Humanism and the Anti-Capitalist Struggle’. Meanwhile it is time to press on and consider what form of socio-political movement will be required to enforce and ensure the necessary changes to a future post-capitalist system of production and exchange.
At this point a word or two needs to be written on the present make up of the working class. Due to the increasing complexity of modern production methods and the increasing sophistication of modernity, working people are now spread across, blue collar and white-collar occupations and across public-sector and private sector employment. There is undoubtedly many differing pay levels within these occupations, but anyone who works for a salary or wage belongs economically to the working class, and it is this class – at all levels – which is now about to face the full effects of the unfolding crisis. The modern working classes have also been educated to a degree unprecedented in the history of the human species, they are therefore, eminently capable of staffing even multifaceted production facilities and undertaking complex areas of research and organisation. They lack only the determination, the means and an understanding of the necessity of going beyond capital in order to press on. In this regard, large-scale collective self-organisation of working people, is the only means for oppressed and exploited majorities to prevail over the well-armed, greedy and reactionary minorities with the power and ‘arms’ to prevent the changes necessary to introduce a more just, equal, stable and sustainable future society. Working people, may not yet be entirely ready to go beyond capital, but the younger generation in particular, are already consciously confronting it and the political systems which uphold it. And, as Marx suggested;
“Where the working class is not yet far enough advanced in its organisation to undertake a decisive campaign against the collective power, ie the political power of the ruling classes, it must at any rate be trained for this by continual agitation against this power and by a hostile attitude toward the policies of the ruling classes.” (Marx to Bolte. 1871. In Selected Correspondence. Page 255.)
In the evolving crisis of 2008 – 20011 there is as yet, no decisive campaign against the collective power of the ruling elites and very little agitation against their overall policies. These two aspects have yet to be developed from within the initial outrage and despair. In the final paragraph of the previous section, it was suggested that millions of committed and organised citizens will be required to organise and press for the changes necessary to permanently solve the persistent socio-economic crises caused by the domination of capital. Such a movement will necessarily have a political dimension but importantly it should not seek to perpetuate formal politics nor promote or elevate an alternative class of politicians. Why? Because as Marx had already recognised by the year 1844;
“The principle of politics is the will. The more one-sided and, therefore, the more perfected the political mind is, the more does it believe in the omnipotence of the will, the more it is blind to the natural and spiritual limits of the will, and the more incapable it is therefore of discovering the source of social ills.” (Marx. Critical marginal Notes etc. Volume 3. Collected Works. Page 199.)
Read and considered carefully, the last sentence of the above extract encapsulates the essence of why the Bolshevik experiment in the Soviet Union went so badly wrong in 1918 – 1920. Bolshevism was the extreme expression of the politics of dogmatic certainty and party omnipotence. It is worth stressing that Marx had a lot to say concerning the shortcomings of politics and the political mentality, which has been neglected, perhaps purposely by some – but that aspect too is material for another time. Suffice it to say here that since politics is the practical means of governance by an elite over the rest of society, politics is always fatally flawed – even in its modern representational forms. In this regard, revolutionary politics fares no better than reactionary politics. A study of history confirms, this perspective. Revolutionary politicians take power away from the citizens and place it in the hands of oligarchic political elites organised within a ‘state’ as they did in the English, French, American, Russian and Chinese revolutions. It is in the logical expression and narrow nature of politics to organise a ruling stratum, protect itself with armed bodies of men and send the rest of us back to wage labour to be further exploited. In the 21st century, this realisation has become abundantly clear to increasing numbers of the world’s citizens. This explains the present reluctance of activist citizens, from the Middle-East, across North Africa, to Europe and North America to engage with existing political organisations or to create new analogues of the existing ones.
Any post-capitalist society, will need to redress the widespread communal and social ills caused by the domination of capital and for that political forms of hierarchical organisation will represent an obvious ‘top-down’ cul-de-sac. However, there are some modern anti-capitalists, who persevere with a conception that they, organised as an elite political ’vanguard’, will be necessary to lead the working classes into the future and guide them politically once there. This is patronising, reactionary and potentially totalitarian view is nothing new. During the time of Marx, there were also those among the radicalised intelligentsia who could see that the system of capitalism was essentially unjust, fundamentally flawed and needed changing. It was this kind of understanding which motivated them to join the anti-Capitalist struggle of that period in order to lead it. Marx had this to say about such condescending leadership approaches;
“The emancipation of the working classes must be achieved by the working classes themselves. We cannot therefore co-operate with people who openly state that the workers are too uneducated to emancipate themselves and must be freed from above by philanthropic persons from the upper and lower middle classes.” (Marx/Engels. Circular letter. September 1879. Selected correspondence. Progress page 307. Emphasis added. RR.)
Anyone reading Marx on ‘The Civil War in France’, (an essential text for those who adhere to the self-activity of working people during revolutionary developments) will encounter further warnings over trusting self-appointed ’revolutionaries’ who in wishing to play a pre-eminent part, have “hampered the full development” of every previous revolution. With such warnings in mind we need to consider the barriers to the unity needed in order to effect the changes required. The barriers to sufficient unity for ‘large-scale collective organisation’ among working people are numerous. Racism, sexism, ageism, religion, nationalism are the obvious ideologically erected problems to unity which need to be challenged and overcome, but among anti-Capitalists there is also another. During a period when Marx and Engels were engaged in a struggle against ‘socialist’ sectarians who under a slogan of unity, caused discord and splits, Engels penned the following words;
“It is for this reason that the biggest sectarians and the biggest brawlers and rogues shout loudest for unity a certain times……at every stage part of the people get stuck and do not join in the further advance; and even this alone is sufficient to explain why the ‘solidarity of the proletariat’ is in reality everywhere being realised in different party groupings , which carry on life and death feuds with one another…..” (Engels to Bebel. 1873. In Selected Correspondence Page 266.)
How true that last sentence still rings, when we consider the contemporary situation. It is a matter of common knowledge that the modern anti-capitalist movement is also split into numerous competing and frequently acrimonious tiny sects. They have been in this condition for well over half a century to my direct practical knowledge. Despite Marx’s well known activist advice to those opposed to capital encapsulated in the sentence; ’workers of the world unite, you have nothing to lose but your chains’ many anti-capitalist sects have repeatedly failed to unite among themselves even though their differences are often miniscule. Hence, even the midst of an immense and developing crisis for capitalism, they remain chained to the confines of their tiny grouplets and their internally unchallenged dogmas. Marx also had quite a lot to say on this particular aspect of the political mentality, for he was not only an anti-capitalist theoretician but also an anti-capitalist activist. During one period of activism, he helped form an international organisation. He later commented on its purpose;
“The International was founded in order to replace the socialist or semi-socialist sects by a really militant organisation of the working class….The development of socialist sectarianism and that of the real working-class movement always stand in inverse proportion to each other.” (Letter: Marx to Bolte. November 1871. Emphasis added. RR).
Tragically, the sectarian, anti-capitalist left has always been an impediment to the collective unity of those opposed to the rule of capital and acted as an impervious barrier to the involvement of many working people in such struggle. This is no less true today than it was in the time of Marx. By their competitive and divisive manipulations they cause splits in any unity previously achieved and/or by their machinations, actively prevent future unity being realised. By their arrogant assertions of absolute understanding and superior knowledge to everyone else, they introduce an intellectual hierarchy and cause confusion in their followers and others in the wider struggle. By their internal partisanship and dogma they suppress or prevent a thorough evaluation of their own strategies and tactics, and by the dubious formula of democratic-centralist structure, they outlaw the testing of alternative possibilities. [For a full list of sectarian characteristics and their effects, see the article ‘Sectarianism and calls for a general strike’ at; <www.critical-mass.net>] So good are sectarians at causing splits and divisions among themselves and people in struggle, that if such sectarians did not already exist, an astute ruling class would probably want to invent them.
3) What conditions will sufficiently motivate change.
Revolutionary changes, requiring the mobilisation of masses of people, do not occur without sufficient cause. Despite what some people seem to think, ideas alone are not sufficient cause. No amount of theoretical exposition or consistent agitation will stir millions into action, without there being actual events which cause serious and debilitating consequences to their actual lives. It has already been argued, that commencing with the banking crisis of 2008, the underlying crisis of capitalist relative overproduction has burst through the unstable volatile financial layer that has arisen upon the circuit of production, exchange and consumption. It was suggested, using the economic insights of Marx, that the present crisis is of considerable magnitude, and that it is likely to become considerably worse, and that if that is the case then;
“Beyond a certain point, the development of the powers of production, becomes a barrier for capital …The growing incompatibility between the productive development of society and its hitherto existing relations of production expresses itself in bitter contradictions, crises, spasms. The violent destruction of capital not by relations external to it, but rather as a condition of its self-preservation, is the most striking form in which advice is given it to be gone and to give room to a higher state of social production.” (Marx Grundrise. Penguin. Page 750.)
From the evidence of financial collapse and crisis in 2011, few could contradict, the warranted assertion that the present system is again in systemic melt down. Nor can the fact be credibly denied that a continuation of unbridled capitalist production for another century, will further devastate the planet with detrimental if not catastrophic consequences. If the analysis, in this article is correct, and this present crisis is currently unstoppable and unsolvable, then we can expect, as occurred in the 1930’s after the 1929 Wall Street Crash, serious and debilitating consequences to the lives of millions of people. Extreme nationalisms and racial tensions were fomented during that period of crisis and resulted in catastrophic outcomes for ordinary people. However, if in their protests and organisation, a sufficiently large number of working people succeed in obtaining a high degree of unity of purpose, and gain the necessary insights into the fundamental causes of the breakdown of the system, then progress can and will be made. Such participants will need to start to advocate and work towards, people’s assemblies, in place of the present political institutions. They will call and work for a wiping out and total cancellation of the ’odious’ state debts. They will call for and work toward the complete abolition of financial speculation – in all its forms; and they will call for an expansion of egalitarian focussed, controlled and staffed public services and co-operative projects.
In the process of such mobilisation, already beginning to take place in the various anti-capitalist demonstrations such as the ‘Occupy Wall Street’ movement, they will be tempted, by the pro-capitalists, (for obvious reasons), to direct their attention to blaming various victims and dealing with the symptoms of crisis. In this way politicians of left, right and centre, will act to leave the underlying corrupt and crisis-ridden system intact. Protesting citizens will also be invited by a variety of ‘time-warp’ revolutionaries to follow a particular nuanced interpretation of Stalinist, Leninist, Trotskyist or Maoist vanguardism, without having to bother with a detailed evaluative study of the divisive shortcomings of this model for themselves. Yet if enough people are able to resist and/or overcome these twin diversions, build up tolerance, solidarity, humanity, critical diligence, perseverance and perhaps re-discover pre ‘Marxist‘ Marx, then a new revolutionary and humanist movement can be born.
We may not need Marx, to arrive independently at many of the conclusions necessary to overcome capital. However, to neglect his considerable contribution to the economic analysis of capitalism and of the humanist purpose for superseding it would be to ignore one of the most valuable tools in the task of deconstructing the policies of existing ruling elites. Such neglect of Marx, would also hinder the task of envisioning the form a post-capitalist reconstruction of sustainable human societies would usefully take. It undoubtedly remains true today, as it did in Marx’s time that communities are needed where the means of production are shared and the rounded development of every citizen is realised as representing the true wealth of any society. If such a perspective would inform participants in future anti-capitalist protests, then this would offer a fruitful way forward. Such a movement, if successful, would have the ability to assist in the future transformation of humanity and the planet in a direction worthy of the best instincts and practices of the human species and not continue with the current one which is only worthy of the worst.
R. Ratcliffe (October 2011.) http://www.critical-mass.net/