On the One Hand; On the Other Hand

1. Wasn't it just yesterday that bankers, finance ministers, international monetary funders, bric-ers, emerging and established marketeers were complaining about the weak dollar; about the irresponsibility of quantitative easing; about all that "hot" money sloshing and flushing through the world markets threatening all of those bankers, ministers, funders, bric-ers, marketeers with the specter of.... not communism, certainly not anything quite so quaint and obsolete as that...but that walking nightmare for capitalists called inflation?

Actually, no it wasn't just yesterday.  It was a couple of years ago, but what's a couple of years in the past to somebody just now approaching the peak of his or her theoretical, analytic, literary, sexual and, I hasten to add, comic powers?

Putting aside my existing and anticipated personal triumphs for just a moment, now the complaint is about the strengthening dollar and its adverse impact on the emerging and established marketeers, on the funders and finders, the bankers and wankers; about the veritable tax the appreciated dollar levies on those forced to settle their international positions, their trade, in the currency underpinning trade.

Putting aside my personal triumphs for just another moment, now the complaint is about deflation;  declining commodity prices; devaluation, depreciation, de-just-about-everything, which in truth has gripped the markets, consistently but more or less thoroughly since 2008, but now made so visibly acute in the collapse of oil prices brought about by the dramatic increase in US production from "tight oil" sources.

The "strong dollar" has reversed the cash flows that buoyed the emerging market countries; the flood of oil from US (and Canadian) sources has glutted the markets, eroding the earning base of commodity exporters.  Where and when once upon a time the mainest of main enemies, the greatest and most satanical of Great Satans exported inflation thereby buttressing its privileged position atop the capitalist heap through unequal exchange, now and here the mainest enemy greatest  Satan maintains its unfair ranking by exporting deflation.  On the one hand...

At the same time,   there's no shortage of analysts, advisers, political economists, political economist columnists, etc. etc. eager to  point out the "windfall," the "benefits," the uptick the decline in oil prices will mean... will mean for almost everybody... for you, for me, for airlines, bus companies, city governments, auto and their parts manufacturers.  Why, it's a veritable wage increase.  It increases disposable income.  It increases consumer spending.  It's good for you and good for me and good for....

Almost everyone.  Sure it is.

2.  It's not really the case that the strengthening dollar has dictated the course of deflation to the world economy.  Deflation in Japan has been around for 20 years more or less; and deflation in Europe is entering a seventh year, during most of which the dollar has been relatively "weak" in relation to the euro.

And it's not just  that US daily production of crude has just about doubled in six years.  It is the case that US production has doubled while the rate of growth for both global oil production and consumption has slowed dramatically.  For the period 2000-2007, global production increased by 10 percent while consumption grew by 12 percent.  For 2007-2014, world production expanded by 6.5 percent, while global consumption grew 4.2 percent.

This marked deceleration in consumption has been driven by the collapse, pretty much, in rates of consumption in North America, which flipped, on the one hand, from a 5.8 percent increase for 2000-2007 to a decrease of 7 percent in the 2007-2014.  This configuration of increased, but slowing, production with declining consumption is overproduction.  More precisely, it is the overproduction of capital that determines the declining real consumption.

Now the development of social production is, in a very real sense, the development of overproduction.  After all, the critical category for such development is surplus, socially accessible surplus.  Surplus is the "movement from necessity to freedom," which is to say, surplus is the material representation of the productivity of social labor.

As capital, the means of production exist  as commodities, as  value-extracting;  realizing, and only realizing, their accumulated value in the expansion of new values.  Capital is always a mode of persistent overproduction, and overproduction is established as an expression of the determinant negation-- value production producing devaluation--  of capitalist reproduction.  Overproduction of capital, of value, is the sweet spot and the hard place, the hammer and the anvil of the rate of profit.

So much for theory.  In the concrete, overproduction of capital, and overproduction of commodities are not immediately the same.  In the concrete, overproduction of capital and overproduction of commodities converge.

In practice, the collapse in the oil prices is the moment when the value of oil, the socially necessary time for reproduction, has eaten away at the price of production, the price through which the total profit is apportioned among the sectors of capital according to mass and efficiency.   This is the moment when the insufficient profit has been generated in capital as a whole to support the mechanisms for distributing that profit. This is the moment when the production of value undermines the property relation underpinning value production.

If the accumulation of capital, the profit of capital, were exclusively dependent upon cost,  then the decline in the price of the inputs into any one or all sectors would always and forever amplify that profit and that accumulation.   Of course, profit and accumulation are not exclusively dependent upon cost, but upon the proportions, the relations, the social ratio of the living and "dead" or "congealed" components of production.  So the reduction in input costs will be overwhelmed in all sectors of capitalist production by the general devaluation, the general decline of profits; by the inability to generate the profit in production required for both the preservation of current values, and the realization of expanded values.

Overproduction is driven by the tendency of the rate of profit to decline.  Consequently, the "increase in real wages" predicted as a consequence of oil price declines will be more than offset by reductions in the total wage as a proportion of production through unemployment, austerity, low-wage jobs, temporary work; the "boost" to consumer spending will be more than offset by the curtailment of capital spending; the "stimulus" to  production will disappear in the contraction in business activity;  the prospect of recovery will be smothered by sharp declines in the circulation of commodities manifesting first in continued slow down in the rate of growth of world trade, and then in the absolute volumes and values in world trade.

Anybody arguing that declining oil prices, abstracted from the general conditions determining those price movements, foreshadow a general upturn for capitalism doesn't know up from down, ass from elbow, one hand from the other.

S.Artesian
December 17, 2014


 

Totally Unexpected, Completely Shocking, Unbelievably Surprising....

...news:  Heavily redacted executive summary of US Senate Select Intelligence Committee  report on CIA interrogation methods reveals CIA tortured; CIA lied; CIA deceived; CIA didn't actually obtain "intelligence."

From the Financial Times editorial of 11 December 2014: 

The most overlooked part of the US Senate's report on the Central Intelligence Agency's  use of torture is its remedies.  It offers none.  Many of the report's details are new and shocking.  There is no doubt that after 9/11 CIA routinely practiced brutal forms of torture, misled Congress about what it was up to and made false claims about the benefits of "enhanced interrogation techniques."

Technically not.  The most overlooked part of this entire charade is the assertion that the CIA method of operation was initiated after 9/11, as if all throughout the 1950s, 60s, 70s, 80s, 90s, the CIA had not practiced brutal forms of interrogation and assassination; as if before 9/11 the CIA hadn't engaged in the protection of drug dealers; as if before 9/11 the CIA hadn't employed Mafioso, Nazis, murderers, torturers in its "everyday"activities; as if prior to 9/11 didn't mislead Congress; as if before and after  9/11 the Congress wasn't/isn't  only too happy to be misled; as if the CIA hasn't always been in the business of making false claims about everything and anything.

 Let's be clear, the CIA is no abscess on the body of US "democracy."  US "democracy" is the abscess on the body of the human species.    


S. Artesian
December 13, 2014

A Modest Proposal

Some worry has been expressed that the demonstrations against police murders of black people lack "demands" or "program."  Me?  I'm not worried.  I think that the demonstrations' organizing principle-- "Stop Police Murder"-- through taking to the streets is both necessary and sufficient. It, taking direct action, is the appropriate and only viable means to the end.

So the questions, so to speak, are not  "What are your goals?  What is your plan?  What's the strategy?"  The issue that needs addressing is "How do we sustain this?  How do we expand this struggle, make the struggle both more extensive and intensive?"   

It's tough for me to admit it, and probably impossible for others to believe it, by I don't have all the answers, emphasis on all.  But I do have a modest proposal.  I propose we start the expansion process by agitating for the separation and expulsion of all police unions, organizations, "brotherhoods," including those of  prison and security guards, etc. from membership in or confederations with labor unions.

Isolation of the police unions from those of labor means opposition and nothing is more important to the development of a workers' movement in the US today than rejection of and opposition to the police as part of that movement.

Demonstrations against union confederations that include police associations; unions that include police officers as members; labor organizations that maintain "fraternal" ties to police organizations; district labor councils that include or allow police representations-- seem like a good, and logical, place to start.

Leave your prescription pill vials at home, lest some cop mistake it for a gun.

December 5, 2014

Welcome to Ferguson, New York

So we have a video recording, an audio recording; we have the medical examiner's report-- "homicide;"  we have a cause, application of the choke hold, a "banned" maneuver, and we have a grand jury that "refuses" to indict.    The obvious conclusion is what it  always has been,  that the police are doing their jobs, and their job is  what it always has been, choking the life out of black people.  Next case.

Look, even the state of Mississippi was able to get Byron de la Beckwith to the actual trial stage three times. 

You have to understand the way the system works: black youth with his hands up? Mortal threat.  Black man selling loose cigarets? Capital crime.  White youth shooting dozens in a school?  Troubled boy.  White men fleecing thousands, earning millions?  Role models.

December 3, 2014

This is the Modern World

1.  It is the "universalizing tendency" of capitalism that allows Marx to recognize, categorize, and critique its historical specificity-- or rather the historical specificity of the condition of labor that is capital's determinant.  That condition is that the laborers have no use for their own labor, that the labor has no value to them,  save its use in exchange, as value to be exchanged for the equivalent of the value of the means of subsistence.  So labor-time is compelled to present itself as exchange value, compensated for the time necessary for its reproduction, while the working time exceeds that of compensated time.

It's nice work if you can get it, and believe me, the bourgeoisie get it.  And they let us know how-- dispossessing the direct producers; destruction of the "natural economies," through any and all means, and any and all means include war, famine, plague, slavery, -- all of which are not ends in themselves but means to the beginning-- "free," detached, destitute, untethered labor power.  

These same means accompany capitalism throughout its development and in its dotage, when accumulation requires devaluation and devaluation requires driving, somehow, someway, the compensation of labor-power below its cost of reproduction.  Sometimes this occurs in a form unaltered from its antecedents;   sometimes in an altered form.   War is made manifest as civil war, or as terrorism practiced against indigenous populations; famine practiced as austerity, reducing the caloric intake of agricultural and urban producers; plague practiced in the breakdown, neglect, absence of infrastructure-- safe water, sanitation, public health services-- so essential to the reproduction of the working class.

The reproduction of the working class is less critical than expropriation of  labor-time. Dispossession  doesn't always, doesn't ever,  mean capital is able to access  all the "free labor" thus detached.  It does mean capital can aggrandize some of that labor power as wage-labor, and that some is powerful enough to drag other production into the process of exchange where value can obscure the origins of commodities.  Enter not the world, but the world market, of plantations, haciendas, prison labor, and slums:

When an industrial people producing on the foundation of capital, such as the English, e.g., exchange with the Chinese, and absorb value in the form of money and commodity from out of their production process, or rather absorb value by drawing the latter within the sphere of the circulation of their capital, then one sees right away that the Chinese do not therefore need to produce as capitalists.  (Grundrisse Notebook 7)

Value consumes "unfree" labor; wage-labor transfers unfree labor through the production of expanded value. 

2.   Capital is the condition of labor.  This is the material basis of production--  the means of subsistence aggrandized as private property, an equivalent for a proportion of which is exchanged with destitute, detached, dispossessed wage labor.    From this social condition of labor we get a mode of producing commodities, unlike, but capable of simultaneously absorbing and eroding, previous modes of producing commodities.

It's not, or more precisely, not only that the logic of Marx's analysis is "as a whole," hangs all together; it is that it hangs all together because Marx the logic is the apprehension of history and history is the telling, and retelling, of the social condition of labor. 


So..capitalism is not  just the amassing of wealth; the extensive and intensive networks of exploitation and commerce.  After all, wealth, commerce, markets, extensive trade networks have existed throughout history without yielding capitalism. And it is not the case that capitalism resides incipient within all other modes of production.  History is not destiny, and the domination of capital is not the necessary result of all modes of production  It is the form, the expression, the social relation by which the wealth is amassed.

The quantitatively greater, and faster, amassing of wealth; the extensive and intensive networks of exploitation and commerce are derived from the qualitative "nature" of value, and the laws of value production.  We move from the accruing of the surplus product of, by, and for exchange to the accruing of the means of production so that all production is surplus.  In this way the very category of surplus product disappears.  All product is now of by and for exchange; and appears as value. 

3. Marx takes a position in the "Brenner debate:"

 The existence of domestic handicrafts and manufacture as an ancillary pursuit to agriculture, which forms the basis, is the condition for the mode of production on which this natural economy is based n European antiquity and the Middle Ages, as still today in the Indian village communities where the traditional organization has not yet been destroyed. The capitalist mode of production completely abolishes this connection; a process can can be studied on a large scale particularly during the last third of the 18th century in England. People who had grown up in more or less semi-feudal societies, such as Herrenschwand, for example still consider this separation of agriculture and manufacture as a foolhardy social venture, an incomprehensibly risky mode of existence at the end of the 18th century. And even in those agricultural economies of ancient times which show most analogy with the capitalist rural economy, Carthage and Rome, the similarity is more with a plantation economy that with the form truly corresponding to the capitalist mode of production. [underscore added] A formal analogy, though one which proves to be completely deceptive in all essential points as soon as the capitalist mode of production is understood– even if not for Herr Mommsen, who discovers the capitalist mode of production in every monetary economy– such a formal analogy is to be found nowhere in mainland Italy in ancient time, but only perhaps in Sicily, since this served as an agricultural tributary for Rome, its agriculture being essentially designed for export. Here one can find farmers in the modern sense. (Capital, Volume 3)

The careful reader will note that while Marx refers to the "natural economy," nowhere does he refer to "simple commodity production" or a "simple commodity producing economy."  No such animal ever existed.   

Unique to capital is its amassing of  labor-time as/in values through the continuous diminution of the labor power necessary for the reproduction of the values themselves.  Capital reproduces itself, reproduces its classes through the relative expulsion of living labor-time from the production process.  Unique to capital is this compulsion to reduce the necessary labor-time required from the reproduction of commodities, including the labor commodity.  This is what accounts and amounts for/to capital's need for the productivity of labor. 

Again Marx "takes" his position on the "Brenner debate:"

A definite stage in the  development of agriculture, whether in the country concerned or in other countries, forms the basis for the development of capital.  (Economic Manuscripts, Theories of Surplus Value, Chapter 2)

Now, by this time we should know that when when Marx is writing about "productivity"-- hell, when Marx is writing about anything, he is not simply referring to a a "quantity"-- a technical relation, but a social relation, or more precisely and particularly in periods of transition, emergence, revolution, the interpenetration of the technical means and the social ends.  

The productivity to which Marx refers is precisely an economic compulsion to expand  production as the production of values through a disproportional reduction in the necessary labor so employed.  As is the case with all social compulsions, "extra-economic" forces, bodies of armed men enabled by "laws," actualize the economics.

It is just that simple.  And complex. While capitalism can absorb and find fuel in the production of non-capitalist modes; while capitalism can, to a high degree support and integrate such modes, it does so as a moment in its own reproduction, thus undermining these modes. 

5.  Uneven and combined development is the vital extension of and contribution to Marx's  critique of capitalism.  As a theory, it too takes its starting point as the material basis of production.  As a practice, we get permanent revolution-- a telescoping, compression of the "tasks" of revolution such that social development of/and from any particular economic organization is inseparable from the general emancipation of social labor.    The material basis cuts both ways: "development" cannot be abstracted from the emancipation of labor; no general emancipation of labor is possible within the boundaries, the limits of any "single" economy.

The material basis for the theory of uneven and combined development is that capitalist relations do not arise from the non-capitalist relations, particularly the agricultural relations of a "backward" country.  Capitalism does not "evolve" from the "feudal" or "semi-feudal" or "quasi-feudal" relations of the  "backward" areas.  Capitalism is introduced, modestly or massively, and confronts not "incipient native capitalism" as its obstacle, but those non-capitalist forms of appropriation as well as the persistence of the "natural economy," subsistence production and the consequent lower productivity of agriculture.   That capital in its "advanced" condition adapts, and adapts to, these limits to its own "complete" expression; to its expansion of "free"-- that is labor power as  value-producing value-- wage-labor is an index to the limit of capital itself.  The determinant of value production, the organization of wage-labor, the organization of the class of wage-laborers is transformed first into the limitation of capitalist production before it emerges as capital's negation.

It is evident in uneven and combined development, whether it be that of the US slave south to the civil war,  or the sharecropper-plantation system after the defeat of Radical Reconstruction; or the land tenure relationships in Mehmet Ali's Egypt; or the haciendas of Mexico in the 19th and  20th centuries, that these specific forms do not reproduce themselves as capitalist; do not reproduce the social condition of labor under capitalism; do not, on their own, "evolve" "naturally" into that "modern" "developed" capitalism; and thus cannot produce the negation of capital-- then, or now.  That capitalism has developed as it indeed has developed, unevenly and in "combination," is the proof that capitalism did  develop as it did.  The circuit of capital is never uniform but always deformed...until it is abolished.

November 7, 2014

The Coalition of RWM

It's already started, the so-called, post mortem on the pus filled cadaver of US electoral politics.  The usual dead dog answers, complete with flies, are out there-- about the "no vote"  the "non-voters" "the plaguers on both your housers."  The story is the no story.

Well here's the no story.  That "no vote" has nothing to do with wishing "a plague on both your houses."  The strategy of the RWM (rich white men) is to prevent poor people, single-parents (women), unionized employees, students, black people (especially black people) from being able to vote.  The only voter fraud in the US is anti-voter fraud. 

Voter ID laws are the new poll tax; the breath from the lungs of the new old Jim Crow.

Next up for the US bourgeoisie?  Repealing the 13th, 14th, 15th amendments and paying reparations, not to the descendents of the slaves, but to those of the slaveholders for the loss of their property during the war of Northern aggression.   

GSA is already seeking proposals for the design and construction of the Jeff Davis-Lester Maddox Mall, recycling pieces from the soon to be demolished Lincoln Memorial.

The first act of the new Congress will be to proclaim the White Camelia  the national flower.


November 6, 2014

No comment comment

RKKR (John Roberts, Brothers Koch, Karl Rove) coalition rolls to victory.  Vows to redeem America from the disgrace of permitting African-American presidency.  "Our long national nightmare is soon to be over," proclaims RKKR.

November 5, 2014

And There Ain't No Santy Clause Neither

Read it and weep:  http://www.theguardian.com/environment/2014/oct/19/amazon-deforestation-satellite-data-brazil

How could this be?  Brazil's a charter member, the B in BRIC, perhaps the Bric-iest of the BRICs and everyone knows BRICs are the last best hope of humanity.  You mean to say that Lula and Dilma and all the rest are just.......capitalists?  Without any sense of love for mother earth like that aspiring Bric-ette Evo Morales?

I'm shocked.  I'm appalled.  I'm heartbroken.

I may never attend another Left Forum. Nor the World Social Forum. 

Wait 'til Al Gore finds out.

Truth Be Told

Once upon a time, back in the day, long ago-- when everybody was getting in touch with himself, or herself, while I was, of course, eager as always to touch someone other than myself,  I thought to myself, and out loud:  "What happens if, after making all that effort, spending all that time and money, you get in touch with yourself and you don't particularly like the way it, or you, feel(s)?"

Is it possible that you can revert, so to speak, to not being in touch with yourself? Probably.  But look at all the time wasted.  So why risk it?  What's the point?

Suppose, just suppose I happened to be some self-aggrandizing ego-centric high-powered highly performing sociopath and I go to one of these retreats in California where sunshine and the St. Andreas fault wage a never-ending battle for possession of daily life?  And there among the surf and sand and temblors I "get in touch"? Exactly what is it I think I'm going to be touching?  And more importantly, how can I get it off me?

Fortunately, I don't have that problem.  I don't really overvalue myself enough to be self-aggrandizing; as for high-performance? Do us a favor.....

At core I'm a sluggard; a person who wants nothing so much as to spend day after day near the sea under one or more of those umbrellas with the beautiful navy-blue crests, logos of the restaurants that populate the beaches of Nice.

If I had, or had had the money, I would be, would have been the laziest man in history-- perfectly happy to regard rolling over twice in a single ten hour period as an aerobic workout.  And rolling over three times?  "Feel the burn"?  I wouldn't make that mistake again, believe me.

I could be perfectly happy turning my skin  slightly more brown and less supple than the belt holding my white linen trousers, which of course, I only wear to and from my perfectly appointed chaise lounge.

I would be happy, actually disbelieving of my good fortune, to only need to raise a hand, and not even the whole hand-- maybe just two fingers-- and obtain a towel, another glass of wine, another kilogram of mussels (with frites).

In fact, provided somebody gave me a blanket, I wouldn't budge from the spot (except for the necessary reasons). 

When it rained?  I'd get wet.

All in all, it's my good fortune that I have never had the money to get in touch with the real idle rich me, which me has always been too lazy to make an extended appearance.

October 11, 2014

Object Lessons of Overproduction

1.  Most of the bourgeoisie's political economists are perplexed about one thing or the other most of the time.  They're perplexed when the capitalist economy moves from expansion and into expansion; when it move through expansion to contraction.  Most of the bourgeoisie's political economists are so perplexed most of the time that they, more or less, assign the responsibility for this movement to the irrational acts of irrational players, or mistaken programs by mistaken programmers; or prejudices, ignorance, bias by the ignorant, prejudiced, biased; who, of course, were just as prejudiced, biased, ignorant 6, 10, 24 months ago before the economy moved from expansion to contraction.  So most of the time, most of the political economists qualify their confusion  with "these things take time," and/or "we told you so. We warned you of the long-term consequences of....(government spending, deregulation, easy credit, tight money.........etc.etc. etc.)."

They're perplexed when the downturn is stronger than expected.  They're perplexed when the downturn is longer than expected.  They're perplexed when the recovery is "L shaped" instead of "V shaped;" or when it's "W shaped;" or when it's "U shaped."   This leads anyone not schooled in the mystifying process of political economy to wonder "What exactly did they expect from a bunch of ignorant, prejudiced, biased, irrational, error-prone (regulators/deregulators, bankers/bureaucrats) acting ignorantly and irrationally?"

Most of them are perplexed.  Most of the time.  And those political economists that aren't confused? They're just not paying attention.

2. What the bourgeoisie's political economists lack, of course, is...well they lack many things. Here are a couple.    They lack (1) a sense of their own role, their own function as shills for the huckster's pitch that capitalism, warts and all, is the best human beings can do.  They lack (2) recognition that the forces intrinsic to capitalist accumulation impair and disrupt that accumulation; that accumulation becomes devaluation.

In truth, the political economists don't understand...markets.  They cannot comprehend that in the billions of individual exchanges in the markets, the "trend," is established only because the commodities are not simply products, but also represent the conditions of capital.

While the processes of capitalism capitalism are always that of dynamic disequilibrium; are always erratic, uneven; the disequilibrium nevertheless expresses a secular, structural, historical development.  That development is given its acute form in the cycles of capital.  It is the convergence of the historical development with (and through) the cyclical movement, the aligning, the superimposition of the historical development upon the upon the capitalist cycle that brings us to the conjunction, which at one at the same time is and is more than the impairment of accumulation.

3.  When our confused political economists ask why the current recovery is so weak, the question becomes a means for them to avoid the structural trend that is super-imposed upon, and concentrated in,  the acute moment-- why has the rate of increase for the output of goods and service per capita during years 1987-2013 slowed to half the rate of that increase for the period 1961-1987?

In spite of all the technology thrown into the production process; despite all the deregulation; despite all the incense burned at the Fed-- output per capita has declined.


The rate of growth of output  per capita declined over the long term for the reasons that the rate declines in the short-term cycle-- that is to say profitability and the need to offset declining profitability.  Asset-liquidation, reduced industrial employment is essential to the expansion of technology.  While the population continues to increase, the value-producing population decreases.  The proportion of new value introduced into the economy just as, just so, and just because the new value is the living labor which now animates, mobilizes, carries the already, and continuing, accumulated capital which can add nothing new, and worse (for the bourgeoisie) can only give up its "sunk costs"-- its value-- over longer cycles of turnover.

4.  Perplexed,  the pundits, political economists, branch managers, security floggers search for a method of radical simplification for the task of understanding what they themselves mystify-- value-- in "markers" that act as index to the health of the capitalist economy.  So there's copper, known to the traders as Dr. Copper.  There are the order books for maritime shipping.  There's oil, once upon a time known and no longer thought of as "black gold."  There's gold itself, the "store" of value.  There was/is/has been/will be cotton, coal, steel and of course automobiles-- especially automobiles.

The rise and fall of the prices of all these commodities are the measures by which the bourgeoisie make it perfectly clear to everyone but themselves that each commodity-- from container ships to powdered milk-- is a husk, a shell, a mule for the transit of the only measure that counts-- profitability.

5. We can "look" at any thing, or any measure we want.  What we see however will always be a moment of capitalism.  The accumulation of moments becomes the trend.  The totality of the moments is the truth of capitalism, and that truth is overproduction.  Overproduction is the overproduction of the means of production as capital,  any portion of which capital can lay claim to a portion of the value in the markets only through the more intense exploitation of labor power...which is to say only through the general devaluation of all other capital.

We can look at steel.  We will see overproduction.  We see it in China's increased output and capacity.  China now accounts for nearly half the global output of steel, utilizing only 2/3 of its production capacity.

We see that profits in China's steel sector have declined to historically low levels (although that's not really much of a history).

We see that half of China's steel mills operate  at a loss. 

We see at the same time that 2014 is the 6th consecutive year of declines in steel production in the European Union, with the decline in output between 2007 and 2013 measuring 21 percent.

We can look at iron ore.  We see another moment of overproduction-- actually another moment in the overproduction of steel as prices for ore have declined some 50 percent off their peaks.

We will hear the market analysts moaning that although ore prices are near 5 year lows the major producers continue to ramp up production.  Why?  Because over the past five years the major producers-- Rio Tinto, BHP-Billiton, Vale-- have invested heavily in more efficient machinery and methods for the extraction of iron ore, so much so that they have reduced their costs of production to $30 per ton.

So the prices have fallen to $80 per ton?  So what?  There's still profit to be made by the majors through overproduction and driving the smaller producers out of the markets-- by devaluing capital.

We are seeing  that overproduction rearranges profit even at the expense of profitability- at the expense of the rate of profit.

We are seeing that overproduction is the condition of capital where prices and values converge; where prices finally catch up, in their descent, to the reduced increments of value added in production.

We can look at the production of petroleum liquids and gas.  We will see a tripling of output over last seven years in the United States.  We see a production increase of such magnitude that US imports have declined by more than half.  We see overproduction of such magnitude that it has offset, nullified, the "usual" "beneficial" impact armed conflict has on oil prices.   Not even wars in the Mideast, proxy wars in the the Ukraine can get the price of oil back to $100 per barrel.  We see overproduction of such magnitude that the "contango" is back in play-- where crude oil tankers are used to warehouse oil in hopes that future prices will rise.

We see all that while we hear the CEO of Chevron complain:  "One hundred dollars a barrel is the new twenty dollars a barrel in our business."

We see, we hear, and we can read the oil companies' rate of return on capital employed:  2000-18%;  2005-19%; 2007-15%; 2009-9%; 2014-8%.

We can see the impact of US shale production in the deepwater rig utilization rate which declined from 100 percent to 65 percent in six years.  Only yesterday seems so long ago.

We can look at world trade, where slowing growth is the twin, and the offspring, of overproduction.

6.  We can see all of this.  We can read Marx who, as noted in earlier posts, writes:

 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….Since this decline of prof signifies the same as the decrease of immediate labour relative to the size of the objectified labour which it reproduces and newly posits, capital will attempt every means of checking the smallness of the relation of living labour to the size of the capital generally, hence also of the surplus value, if expressed as profit, relative to the presupposed capital by reducing the allotment made to necessary labour and by still more expanding the quantity of surplus labour with regard to the whole labour employed

and maybe we realize or maybe we don't that this violent destruction is inherent to and resolves the issue of "underconsumption" and "effective demand."  Maybe we recognize in that paragraph the answer to Marx's own musing about why, with the increase in social productivity, it is profitable to produce six knives for the same value contained in a single knife when there is no requirement for an individual or "individuals" to purchase six knives.  Maybe we recognize that the producer of the six knives absorbs, garners the profit that the producer of one knife previously obtained, just as Rio Tinto obtains a profit from ramping up overproduction despite the decline in prices.

Maybe we recognize that this-- this producing 6 in the place of 1-- this overproduction is the way capital develops; that devaluation is inherent in capitalist reproduction.

Maybe we see, or we don't, that the upheavals triggered by overproduction/devaluation as confused as they may be in the Ukraine ("We want to live like Europeans."  And now they have their IMF austerity program to prove it.); or Hong Kong; or Egypt; or Syria are in fact upheavals produced by the impairment in capitalist accumulation.

Maybe we see that the expressions, "slogans,"  these initial upheavals have adopted ("democracy," "freedom") are the initial  opposition to the poverty that capital deploys as it reduces "the allotment made to necessary labour... by still more expanding the quantity of surplus labour with regard to the whole labour employed."

Maybe we see that these upheavals in and through their very confusion will recede, and be replaced by workers revolution against capital, against value production. 

If we don't see that, all of that, then we're the ones not paying attention.

S.Artesian
October 6 2014

My Favorite Mart(x)ian

Proyect on Putin and the "left":  

Russia is in the throes of a nationalistic/Orthodox church deep freeze and it is regrettable that so many on the left cheer Putin on as if he is Che Guevara. 

--almost as regrettable as those that cheer Che Guevara as if he were Lenin, which is
--almost as regrettable as those that cheer Lenin as if he were Marx

 
Proyect on Michael Moore:

And this idiot had the nerve to beg Ralph Nader not to run. He is finally eating his words. 

--as opposed to those who begged Nader  to run (see below).  

Proyect on his favorite next word-eater:

It would help if the left could get its act together and organize an independent campaign around a charismatic leftist candidate. Nader is out of the question with his stupid right-left convergence politics but someone like Cornel West could be huge (although I doubt that he would run.) 

--because why?  West isn't eating his words re Obama?  Or because we're suddenly hungry and need words to eat?






Personal favorite:

Proyect list member on cynical self-centered technologies: 

The Gates initiative in education was always cynical and self-interested, centered as it is upon heavy investments in new technologies.

Sent from my  Windows Phone   (emphasis added)


Coming soon:  Object Lessons of Overproduction

Reverse Moses (Rabbenu and Robert)

The Financial Times of Friday August 8, 2014 reported the following:

Moshe Feiglin, the deputy speaker of the Knesset and a member of the Likud party, called on the prime minister last week to reconquer Gaza, turn it into 'a flourishing Israel city,' and expel its civilian population to 'certain open areas on the Sinai border adjacent to the sea...until relevant emigrations are determined.'

How perfectly Hebrew of Moshe, our reverse Moses, starting on the right, replaying the tape of the flight from Egypt backwards, sending the Palestinians out to wander into the desert for....for as long as it takes. 

Although...what's a flourishing city without a furnace or two to keep people warm at night?

Moshe is also considering building a railroad in the desert to transport the Palestinians to a camp, the entrance to which will be inscribed

 " עבודה גורמת לך בחינם"

 

S.Artesian

Tragedy Engulfs Middle East

One Israeli soldier missing.

The tragedy is that only one Israeli soldier is missing.  To end this tragedy, all Israeli soldiers must go missing.  Immediately.  Permanently.

Israel has no "right" to existence, no more than apartheid South Africa had a right to existence.

Nation-states are not established nor preserved by right, but by force.  Israel was established by force; by the force of British imperialism; by the forced dispossession of Palestinians; by the forced seizure of territory in 1948 and 1967.

The Egyptian military, those heroes of the Sinai crossing, that last true bastion of democracy and the Egyptian nation, are besides themselves with glee over Israel's attack on Palestinians.

Soon, some brilliant commentator will suggest that the "Western-inspired" revolt in Syria is all that is preventing Assad, that champion of the Syrian nation, another product of imperialism, from coming to the aid of the Palestinians.  

The existence of a Palestinian people is a mortal threat to the existence of the nation-state, as no national formation can contain, much less resolve, the dispossession and expropriation at the core, its core.  Hence, applause for the murderers, with whispered requests to be just a little less murderous.

Killing children?  That's capitalism.  One soldier missing?  That's a tragedy.  

 

Once Again

Once again, the intrepid pilots of the heroic Israeli Air Force, defied the "steel curtain" of Palestinian raised fists and curses to avenge the memories of the 6 million incinerated in Hitler's death camps by incinerating, blasting, and otherwise slaughtering several hundred Palestinian children. 

"Take that, Goering, you fat bastard!" crowed the Israeli Prime Minister, Benjamin "Nuke" Netanyahu on national TV. 

Pushing rapidly through the hole the hero pilots had torn in the aggressor childrens' ranks, the intrepid soldiers of the Israeli Defense Forces leveled weapons depots cleverly concealed as schools, nurseries, apartment buildings, municipal water services, and gardens. 

"We found your tunnels, Eichmann, you cowardly rat!" announced Nuke in an interview with CNN.

Sadly, upwards of ten and maybe even twenty of Israeli's finest young warrior-princes sacrificed their lives in the never-ending battle to preserve the never-ending battle against those who refuse to understand that being a chosen people means never having to say you're sorry.  Or stop killing. 

Meanwhile, Nuke announced a new trade agreement with the "Third Reich in Exile" group located somewhere, and in various locations, in South America.  Israel will sell the group the latest version of its high-tech industrial ovens, the proceeds from which sales will be used to purchase supplies of  Zyklon B gas from the group I.G. Farben-in-exile.

So What?

So this showed up in the comments section on Michael Roberts' website:

The elephant in the room in all self titled Marxist economists are the effects of labour migration to labour rates as advanced capitalism started to go east in the early 70′s due to the costs of the Vietnam war which triggered the breakdown of the post Bretton Woods financial system.

The companies that could not physically go east started to import workers en masse and massively lowered wage rates at the same time as massively increasing indebtedness. Deindustrialisation in the West is becoming the norm and the Chinese having been recipients of western technology are involved in massive copyright fraud which will collapse eg the German economy.

The old recession hasn’t gone away its just that the capitalist nation states have stepped in to honour the debts of private banks. These banks are now being centralized on a massive scale and by the end of this year 85% of all Eurozone banks will be controlled from Brussels. When the next wave of financial meltdowns occur each country in the EZ wont have more than 4-5 banks forcing one more mergers until we are left with …one.

Either which way monopoly capitalism is losing both its customer base (by lowering the standard of living across the EZ) and its financial base is being centralised across different countries with different histories and languages and work cultures. By allowing those who have perfected the art of bankruptcy in the 20th century to run the EU in the 21st, total bankruptcy once more is on the cards….

Britain on the other hand just prints money, creates hyperinflation for overseas investors in property and the indebtedness of the banks if property was accounted for would be massive but a false sense of security exists as it has the EU model with American financing and appears to be permanently in ‘boom’ even when billions are spent subsidising wages or bailing out banks. As such it its business as usual, nothing learned nothing new gained as if Northern Rock never happened.

And so what?  So this:  this guy's got a point:  we haven't opposed his type, and this type, of  garbage vigorously enough; we have not refuted this xenophobic nonsense with enough data and enough passion to shut up these clowns who think they can camouflage their racism, their jingoism, their inner Le Pen, with allusions to and the illusion of radicalism.

We haven't repeatedly, insistently, called for the end to all immigration restrictions; to open borders.  We haven't repeatedly, insistently, demanded that all workers, in or out of all workers' organizations, take actions in the US to bar the entry of ICE agents into the workplaces.


We haven't refuted the nonsense about "de-industrialization." 

Asset stripping is not de-industrialization.  The growth of industrial output in China, Brazil, South Korea, Indonesia is no more the cause of so-called de-industrialization than is the growth of "finance capital."  The de-industrialization is not de-industrialization at all but rather the increase in the organic composition of capital,  improvements in the productivity to labor, accompanied by, and by necessity, attacks on the wage-structure, which is the response to the fall in profitability dictated by the accumulation of capital itself.

We haven't pointed out that for capital what counts is not the accumulation of the means of production, but the accumulation of the means of production as capital, as value-absorbing, value-commanding, value extracting values themselves.  So......so the industrial output of Japan, US, Canada, Australia, the EU may decline as a percentage of world-wide industrial output, but the value added by private industry in the US between 1999 and 2013 increased 35 percent, a rate greater than that of GDP as whole, and this despite the greatest economic contraction in 75 years.

We haven't vanquished this baloney that says workers in the "advanced" capitalist countries "benefit" from the "super-profits" extracted from workers in Africa, Latin America, Asia, when transparently,  the assaults on the workers living standards in the "advanced" countries increases in tandem with the
proportion of global industrial value extracted from those workers in the "less developed" countries.

We haven't been forthright in demanding not only that bourgeois governments default on both their sovereign debt and the debt of financial institutions, but that our program of our party for our class regards such defaults as necessary, unavoidable, and welcome. 

We haven't said flat out that the failure of the financial system, the absolute implosion of capitalism (which is unlikely to occur) is the lesser evil.   We haven't been explicit in pointing out that this is not a case of  wishing that "things get worse, so they can get better," but that the cost to human beings from the collapse of capitalism is less than the cost of maintaining capitalism, as because and since the maintenance of capitalism, much less the expanded reproduction of capitalism, is the most destructive force ever known.  Look at China, Mexico, Libya, Syria, the Ukraine, Iran, Egypt, the Marianas, Greece, India.

We haven't risked advocating economic defeatism; that the main enemy is always at home, and home is everywhere.  We haven't stated often enough, loudly enough, that we don't care if China's capitalism and capitalists steals every "trade secret" from the bourgeoisie of Germany, France, Japan, the US, etc. etc. etc.  We haven't said we would welcome the collapse of the German bourgeoisie if that collapse were to be caused by China's disregard of property rights.

We also haven't said that no such collapse will occur from such "theft."

We also haven't said that we have no interest in preventing a collapse of Chinese capitalism, Russian capitalism, Brazilian capitalism, Venezuelan capitalism, because such a collapse is immaterial. What is material is which class will mobilize enough of itself and others with enough power to defeat the other class?  

We haven't pointed out enough how printing money has absolutely nothing to do with impaired or repaired profitability.  We haven't vanquished this mealy-mouthed superficial political economist's tabula rasa, which is nothing but the old supply and demand ideology all dressed up and going in circles.  

We haven't said it often enough, loudly enough, that we have no stake, no interest, no desire in accommodating, preserving, protecting any single aspect of the economic, political, social, cultural disaster that is capitalism.

We haven't said enough how sick we are of the "left"-- the boredom and ignorance it traffics in as it operates as a career-path for "professional revolutionists."  Don't take my word for it.  Just look at the archives of the "Left Forum."

We haven't said the "left" all of it, from top to bottom, stem to stern; from councilist to partyist; from Kautskyists to the self-styled little Trotskys, to the neo-situationists, is a waste of time in a wasting land.

And don't make me say this again.


S.Artesian
July 14, 2014

Function at the (con)Junction

1.   It is, Marx writes in his introduction to A Contribution to the Critique of Political Economy, that conflict between the means of production and the relations of production that inaugurates the revolutionary struggle.  The struggle itself is for a more complete, thorough, productive, satisfying, emancipatory social organization of labor.  Development as a "thing," as economic growth, increasing  industrial output, expanded GDP, etc.  is precisely not and precisely never the object nor the subject of revolution.  Development of things, "objective forces," is not the subject of history.  History as a "thing" has no purpose.  Development of relations is the subject and the "purpose." Human labor does quite clearly have  a purpose and that is the satisfaction and the creation of  needs.  Once set in motion as a social process, human labor seeks its own emancipation.

Development is not, ipso facto, emancipatory.  At best, and at most, it is the substrate upon which the emancipation of labor rests. Not at its best, development is an ideological category, another fetish whereby power over the needs of humans is assigned to an object when if fact that power is but a product of the already existing incomplete, unproductive constraining, destructive unfree relations surrounding human labor.

In political struggle, "development" is used to smother the revolutionary impulse for the emancipation of labor  by subordinating the condition of that labor, class, to the "nation," the "people,"-- to the improvement of the conditions for exploitation.  It is no wonder that such "revolutions" however much or little they "rip up" the ground of the previous regimes, disintegrate; that all such revolutions become imitators of, and enforcers for, the already "developed" relations of capital. 

2.  The mode of production is that specific, essential, determining, condition of labor by which the society reproduces itself; which is to say, how it reproduces the classes that make up the conditions of labor and that give the society life, however nasty, brutish and overlong that life might be.

Capital compresses and composes the conflict between labor-- that social impulse to satisfaction-- and the condition of labor-- the subordination of satisfaction to the accumulation of value.  Labor has purpose, wage-labor as the condition of labor has the purpose of value expanding value.   

Ownership of the instruments of production, the property of capital, exist as value only to the degree that the value can be captured and transferred by wage-labor to the expanded value of commodity production.   Once the increment of value appreciation begins to decline, that property, that ownership of those instruments, becomes so much dead weight. 

The conflict that Marx identifies as that of the means with the relations of production is in fact the conflict between labor and the condition of labor; between the labor process and the valorization process; between the satisfaction and creation of needs and the accumulation of value.  The conflict materializes itself "economically" as a decline in value; as loss; as a reduction in profit.  This disturbance in accumulation is in fact a disturbance in the ability of capital to reproduce the classes that give it life.  Labor is plentiful; it cannot be employed.  Labor is "tight;" there is not enough stripped, destitute labor while unemployment, shadow employment, marginal employment, temporary employment are everywhere.  Bring in the migrants, the women, the children to be worked to death.  Get rid of the "restrictive" labor laws, unions, regulations that constrain the expansion of capital's greatest achievement, the working poor.

All in all, the accumulation of capital means the accumulated capital cannot exploit the supplies of labor intensively enough to offset the very decline in the rate of accumulation inherent in the process.

3.  At the same time as capital runs up against the limits of its own reproduction, of its ownership, of its property-- when it cannot reproduce the classes of its own existence within its own relations of production-- it runs up against the constraints of other relations of property; of those relations that exist, and persist, even as capital expands to dominate the markets for commodity exchanges. When, after all, capital's own property relations limit its power to reproduce the wage-relation, the class of bourgeoisie and the class of the proletariat; those same limits impede capital's ability to transform all other property, all other production relations, in its own image.

4.    "A definite stage in the development of agriculture whether in the country concerned or in other countries forms the basis for the development of capital.” -Marx, Theories of Surplus Value, Part 1.

He wasn't kidding.  The development of a level of productivity in agriculture,  is essential to allow, to create, the expulsion of the laborer from 1) providing for its own direct subsistence and 2) from the productive process; in this case the dispossession of the producer from his own property, from providing directly for subsistence, creates a condition of labor as value producing and as a cost of production to be reduced in the process of accumulation

The level of productivity  is not, and is never solely the result of an application of technology to cultivation.  It is driven, literally, by a compelling social forces-- that 1) the subsistence of the producer is dependent upon exchanging his/her labor power for a value that is equivalent, more and less, to the cost of keeping bodies and souls together 2) that the owners of the product have no direct use for the product and need to exchange all the product in order to claim a portion of surplus value that is embedded within the mass of all commodities brought to market.

As capitalism confronts that constraint which is itself, the confrontation is expressed in an accommodation to the "pre-capitalist" "non-capitalist" conditions of agricultural production.  The hacienda, the plantation, the great house, the latifundia, all with their co-existing villages, pueblos, share-croppers, tenants, debt peonage, slavery, near slavery, slavery, communes are incorporated in and by commercial exchange.  In Brazil. Bolivia. China. Ecuador. Egypt. Mexico. Philippines. But such exchange is not, does not create, that compelling social force, the need for accumulation; the necessity for transforming the condition of labor.  The lack of that compulsion is then expressed is lower agricultural productivity, in persistent subsistence, and below-subsistence direct production. In Brazil, Bolivia, China, Ecuador, Egypt, Mexico, Philippines-- to name just a few.

This moment of grand "calcification" was reached by capitalism shortly after the US Civil War, and is marked by the long and ugly retreat from "Radical" Reconstruction.  The subtext, latent content, of the Civil War was the condition of black labor, and the prospects for its emancipation.  Such emancipation could not be realized by and within the constraints of "free soil" farming.  There would be no re-creation of yeoman farming in the South.  There could be no process of differentiation among small independent farmers based on rates and masses of accumulation.  Southern property, plantation property, had to be redeemed, and the redemption was in the sacrifice of black labor.

5. " No matter whether a commodity is the product of slavery, of peasants (Chinese, Indian ryots), of communes (Dutch East Indies), or of stated enterprise (such as existed in former epochs of Russian history on the basis of serfdom), or of half-savage hunting tribes, etc., commodities and money of such modes of production, when coming in contact with commodities and money representing industrial capital, enter as much into its rotation as into that of surplus values embodied in commodity-capital.  The character of the process of production from which they emanate is immaterial.  They perform the function of commodities on the market, and enter into the cycles of industrial capital as well as into those of the surplus-value carried in it.  It is the universal character of the commodities, the world character of the market, which distinguishes the process of the rotation of the industrial capital. [Marx-- Capital Volume 2, Chapter IV, "The Three Diagrams of the Process of Circulation"]

This "ecumenical" quality, which allows industrial capital to absorb the commodities from all modes of production by measuring them as values creates an  evolutionary dead end for an aspiring bourgeoisie emerging from the relations of exchange. And for the revolutionists emerging in opposition. 

 With agricultural productivity impeded by the hacienda, and the commune; with labor fixed to the land, the domestic market for industrial production atrophies in its very gestation. 

Land reforms, as such, are organized around creating a class of small-property holders; a parody of the myth of a self-differentiating peasantry as the basis for capitalist agriculture.  It wasn't then, and it cannot be now.

The significance of capital encountering the limits of value production is that as a reaction, "productivity" of things, of the "forces of production," is advanced against the emancipation of labor.  Capital is thereby preserved, sustained.

S.Artesian
July 6, 2014

Evolution Triumphant: Bipedal Reptile Discovered!!!

Tony Blair Selected to Oversee UAE subsidiary Egypt








http://www.theguardian.com/politics/2014/jul/02/tony-blair-advise-egypt-president-sisi-economic-reform

(with thanks to William Bowles)

It's So Gratifying....

... to know that some people really, really, really stick to their principles; cannot will shall not be moved;  that some retain that spirit of defiance, rebelliousness; that at least one remains who is absolutely unrepentant in his ongoing commitment to left-cartoon capitalism, to the support of those former guerrillas now government executives no matter what that government does.

Last year, it was Alvara Garcia Linea of Bolivia.  This year we get, courtesy of that peripatetic blogger, movie reviewer, and all-around bore Louis Proyect, José Mujica, ex-tupamaro, current president of Uruguay and........guess what?....supplier of military and police personnel to the UN forces occupying Haiti.

Proyect reproduces portions of, and the link to, a particularly noxious puff piece of hack writing on Mujica .

The recent achievement by Mr. Mujica's government that precipitates this adventure in blow-job journalism Proyect provides without comment or criticism is Mujica's bold decision to go where no one has gone before-- except the bourgeois governments of the Netherlands, Colorado, and Washington state, and legalize marijuana.

Isn't that great?  Mujica, guerrilla-entrepreneur turned state capitalist, sees in legalizing marijuana.... revenue streams.  Why allow all that money to go untaxed to drug cartels by keeping marijuana illegal?  Shouldn't the government of the people, by the people, for the people get its fare, I mean fair, share of the long green?  Of course it should.

And with that revenue, Mujica can purchase weapons for the military and police he traffics in with MINUSTAH.  Isn't exchange value a wonderful thing, I mean relationship?  Synchronicity is what markets provide. 

Gives a whole different meaning to the Stoner Rifle.  Can't wait to see the movie, Mujica lights up Haiti.  But don't waste time with Proyect's review. 

SA

May 10, 2014

And Furthermore...........

Furthermore, Marx's analysis, showing that the conditions that determine the tendency of rate of profit to decline are the conditions that accompany the increase in the mass of profits is developed on the basis of the consideration of the total social capital.

Marx is referring to the total social capital; he is analyzing the development of capital as a totality.

Therefore, furthermore,  the more capitalist production develops, the more capital accumulates, the more it reproduces itself, the more it engages wage labor, the greater the mass, and the lower the rate of profit. This is cold consolation, and no compensation for the capitalists, since the increment of the expansion of value– the rate of accumulation is the be all and end all of value production. As a consequence, the distribution of the mass becomes ever more critical– which is why Marx asserts that competition does not cause the rate of profit to decline; rather the decline in the rate of profit determines and intensifies competition.

As, furthermore Marx says in Vol 3 of Capital ["The Law Itself"] “Previous economists, not knowing how to explain the falling rate of profit, invoked the rising mass of profit, the growth in its absolute amount, whether for the individual capitalist or for the social capital as a whole, as a kind of consolation, but this was also based on mere commonplaces and imagined possibilities.”

How does Marx explain the increase mass of profits?– By a massive increase in capital deployed against, engaging, increased masses of wage-labor:

“When the percentage composition in the previous example was 60c + 40v, the surplus-value or profit on it was 40 and the rate of profit therefore 40 per cent. Let us assume that at this level of composition the total capital was 1 million. The total surplus-value and total profit would then amount to 400,000. If the composition were later to become 80c + 20v, the surplus- value or profit on each 100 would be 20 with the level of exploitation being the same. But the surplus-value or profit grows in its absolute mass, as we have shown, despite this decline in the rate of profit or the decline in the production of surplus-value by each capital of 100 and this growth might be from 400,000 to 440,000 say. This is possible only if the total capital that corresponds to this new composition has grown to 2,200,000.  The mass of the total capital set in motion has risen to 220 percent of its initial value, whereas the rate of profit has fallen by 50 percent. If the capital had simply doubled, then at the rate of profit of 20 percent it could only have produced the same amount of surplus value and profit as the old capital of 1,000,000 did at 40 percent. Had it grown by less than this it would have produced less surplus value or profit than the capital of 1,000,000 did previously, although at its earlier composition this would only have had to grow from 1,000,000 to 1,100, 000 in order for its surplus value to rise from 400,000 to 440,000.

“Here we can see asserting itself the law we developed earlier [ volume 1, chapter 25, 2] according to which the relative decline in the variable capital, and thus the development of the social productivity of labor, means that an ever greater amount of total capital is required in order to set the same quantity of labour-power in motion and to absorb the same amount of surplus labour…”

“A fall of 50 per cent in the rate of profit is a fall of a half. If the mass of profit is to remain the same therefore, the capital must double.” 

And, furthermore,  where does this massive increase in capital come from to generate the massive profits? Where can it come from? With the means of production organized as commodities, as values, it can only come from the expansion of value; it can only come from the expanded and/or intensified exploitation of labor-power.

Hence, furthermore,  at a certain point the accumulation of capital sooner or later reaches a point where it must attempt to drive the wage below the value of labor-power, below its costs of reproduction.

At its apotheosis, capital is nothing but primitive accumulation all over again.

Marx isn't kidding when he says of the law of the tendency of the rate of profit to fall that that tendency is the most important law of capitalist reproduction.   Furthermore.

April 26, 2014

On Marx on Value, Fixed Capital, and the Rate of Profit.

You know, I hate citing texts.  Kind of like I hate repeating myself.  If the analysis has validity, then we can find, examine, and display that validity in the concrete-- that is to say not just in history, but in immediate, concentrated history, which is, and is all, that economics  will ever be until that glorious day when it, economics, is abolished; we can find, examine, and display that validity in the real relations between classes; in the specific, and specificity of the, conditions of labour which is all that history has been; and all an economy and its "laws of motion" ever was.

But every once in awhile, I think, "Wait a minute......I have notebooks filled with comments of my own on paragraphs and pages Marx wrote and what X or Y or Z or a H or a P or Maoist ABC, or Leninist XYZ says Marx says is not at all what Marx said."

For example, I write: "No, value is not an eternal, universal condition of production.  The law of value doesn't operate ahistorically, regardless of the class relations."

So OK,  I pull out the notebooks, and the citations, and the page/reference numbers to where Marx says what I said he said and I try to put a really fine point on it, just because... well, somebody isn't  getting the point and I know that someone sure can't be me.

Well then, from the notebooks and other places:

1. In the Grundrisse, Marx points out “Circulation therefore does not carry within itself the principle of self-renewal. The moments of the latter are presupposed to it, not posited by it.” And later in the Grundrisse: “The simple movement of exchange values can never realize capital.”
Make what you want of that. I make that the realization of capital requires the expansion of value production, meaning the exploitation of wage-labor, and when the profitability of that exploitation falls, increased circulation cannot overcome the decline.

2. Marx makes it clear in the Grundrisse that labor exists as a/the use value of/for capital; the mediating activity by which capital realizes itself. It is the means by which it reproduces itself AS EXPANDED VALUE.

If we are to regard Marx’s work as the immanent critique of capital, as the critique contained within capital’s own manifestations, then we have to recognized that the “fault” “limits” “conflicts” “contradictions” of capital are contained exactly in this reproduction of expanded value. We must recognized that VALUE is an historically specific category, not a “universal” one; that VALUE production is the limit to capital. That, at a certain point, the labor process and the value production process which are fused in a specific social form, are in opposition to each other and explode into conflict.

3.  Marx states: “The constantly ongoing devaluation of capital, resulting from the increase in the force of production………”
Stop right there: Get that? Capital is constantly devalued by increasing the force of production. This represents and obstacle, and impediment, and integument to the reproduction of capital. It is necessary to the expansion of capital– just as the prices of production serve to transfer value, to devalue some capitals– but the ongoing devaluation overtakes accumulation when profitability, when the rate of profit declines and the devaluation of “secondary” tertiary, etc. capitals does not siphon enough profit to offset that decline in profitability.

4. Certainly capital shares “something” with all previous production– namely that it is “social” production; involving the organization and distribution of the total socially available labor-time over the activities necessary to the reproduction of society.

Yet capital is a specific organization of that social labor-time; where the “need” can only be meet through the organization of labor as a commodity for exchange– as a value for the production of values. This in turn requires a specific set of historical conditions (which Marx claims have been most clearly and perfectly achieved in England.  And good for Brenner, to take that seriously)– those conditions being the separation of the laborer from the instruments of labor– the dispossession of the independent, subsistence, and subsistence plus surplus producers. This IS the fundamental condition for the organization of capital; for VALUE PRODUCTION, which after all, is what capital is. And all this depends on LABOR having NO USE VALUE to the laborer SAVE ITS VALUE IN EXCHANGE FOR THE MEANS OF SUBSISTENCE.
This leads to the exchange of commodities at the time socially necessary for their reproduction– a UNIQUE SPECIFIC CONDITION for social production.

Marx puts it like this in the Grundrisse:

“The great historic quality of capital is to create this surplus labour, superfluous labour from the standpoint of mere use value, mere subsistence; and its historic destiny (Bestimmung) is fulfilled as soon as, on one side, there has been such a development of needs that surplus labour above and beyond necessity has become a general need arising out of individual needs themselves– and, on the other side, when the severe discipline of capital, acting on succeeding generations has developed general industriousness as the general property of the new species, and finally when the development of the productive powers of labour, which capital incessantly whips onward in its unlimited mania for wealth, and the SOLE CONDITIONS IN WHICH THIS MANIA CAN BE REALIZED (caps added), have flourished to the stage where the possession and preservation of general wealth require a lesser labour time of society as a whole, and where the labouring society relates scientifically to the process of its progressive reproduction, its reproduction in constantly greater abundance; hence where labour in which a human being does what A THING COULD DO HAS CEASED" (caps added-SA).

So if “value” is eternal, if the law of value is universal, how can any of the above be accurate? How in fact if the “issue” the "offspring"  of capitalism is unique, socialism, and requires such previous development, can the “law”– WHICH IS THE CLASS RELATION necessary to this development– have existed universally, eternally previous to the existence of the classes? It cannot.

Hence, what counts are the specific laws of value production, and the specific conflict within the terms, the conditions of value production– the conflict between labor and the conditions of labor. The condition of labor in capitalism is that in order to aggrandize greater portions of surplus value, capital has to expel proportionately greater amounts of living labor from production, thus undermining the very source of its profitability– the component, the relation, the RATIO of the source of new value, of profit to the production process.

5. Criticizing Ricardo for assuming that the categories of capitalist production are “natural,” ahistorical, universal, Marx writes:

“With him [Ricardo], however, wage labour and capital are again conceived as a natural, not as a historically specific social form for the the creation of wealth as use value; i.e. there form as such, precisely because it is natural, is irrelevant, and is not conceived in its SPECIFIC relation to the form of wealth, just as wealth, itself in its exchange value form, appears as a merely formal mediation of its material composition; thus the specific character of bourgeois wealth is not grasped– precisely because it appears there as the adequate form of wealth as such….. as if the form of wealth based on exchange value were concerned only with use value, and as if exchange value were merely a ceremonial form….. ”

So much for the universality of value production, its “eternal” quality divorced from the specific class relations of capital.

6. Marx:   “But from the fact that capital posits every such limit as a barrier and hence gets IDEALLY beyond it, it does not by any means follow that it has REALLY overcome it, and since every such barrier contradicts its characters, its production moves in contradictions which are constantly overcome but just as constantly posited. Furthermore. The universality towards which it irresistibly strives encounters barriers in its own nature, which will, at a certain stage of its development, allow it to be recognized as being itself the greatest barrier to this tendency, and hence will drive towards its own suspension…”
“…The whole dispute as to whether OVERPRODUCTION is possible and necessary in capitalist production revolves around the point whether the process of the realization of capital WITHIN PRODUCTION [caps added] directly posits its realization in circulation; whether its realization posited in the PRODUCTION process is its REAL REALIZATION…..Ricardo and his entire school never understood the really MODERN CRISES, in which this contradiction of capital discharges itself in great thunderstorms which increasingly threaten it as the foundation of society and production itself.”
–Grundrisse The Chapter on Capital Notebook 4 (Transition from the process of the production of capital into the process of circulation…..)

And there’s always this gem: “The higher the development of capital, the more it appears as a barrier to production– hence also to consumption–”

7. Marx says this: “Hence, the larger is the part of the capital consisting of the fixed capital–i.e. the more capital acts in the mode of production corresponding to it, with great employment of produced productive force- and the more durable the fixed capital is, i.e. the longer its reproduction time, the more its use value corresponds to its specific economic role- the more often must the part of capital which is determined as circulating REPEAT THE PERIOD OF ITS TURNOVER, AND THE LONGER IS THE TOTAL TIME THE CAPITAL REQUIRES FOR THE ACHIEVEMENT FOR ITS TOTAL CIRCULATION.
– –Grundrisse, The Chapter on Capital, Notebook 7 (Turnover time of capital…..)

8.  Marx continues, as if anticipating the tub-thumpers of fictitious capital:
“This much clear, then, which already follows from the difference introduced by fixed capital into the industrial cycle, namely that IT ENGAGES THE PRODUCTION OF SUBSEQUENT YEARS, and just as it contributes to the creation of a large revenue, it anticipates future labour as a counter-value. The anticipation of future fruits of labour is therefore in now way a consequence of the state debt, etc., in short, not an invention of the credit system, It has ITS ROOTS IN THE SPECIFIC MODE OF REALIZATION, MODE OF TURNOVER, MODE OF REPRODUCTION OF FIXED CAPITAL."

That specific quality introduced with increasing fixed capital is– lengthening of the period of total turnover, of total realization.

9. Now, if the introduction of the increased component of fixed capital into the increasing component of constant capital, does not reduce the turnover period, but lengthens it; does not offset the decline in the “unit” rate of profit by increasing the annual rate of profit, where are we? We’re where we always are– with the relation between the living and dead components of capital determining profitability; with the contest between accumulation and devaluation; where accumulation produces devaluation.

And this is where the decline in the rate of profit is NOT offset, and cannot be offset by an increase in the MASS of profit–

that point is the point where, with a declining rate of profit because of the amassed, stored, accumulated capital in its fixed assets, the ability to EXPAND the production of VALUE at an increment high enough to generate profit is IMPAIRED due to the high THRESHOLD COSTS FOR SUCH EXPANSION represented in the established industries themselves. Thus boutique auto producers can gain a hold, a fraction, in the market, and  thus markets can be segmented or “niched”; thus automakers accustomed to, organized around lower profit margins, as the Japanese automakers are can gain significant market share– with the support of MITI, or similar organizations;but the large auto makers, established majors in their “home markets,” are not generating profits quickly or massively enough to capture significantly greater shares of the established markets.

10.  Now we come to Marx’s analysis of the rate of profit in the Grundrisse. In Notebook 7, Marx says:  

“Thus, in the same proportion as capital takes up a larger place as capital in the production process relative to immediate labour, i.e. the more the relative surplus value grows–the value-creating power of capital– the more DOES THE RATE OF PROFIT FALL. ….Hence the rate of profit falls relative to the total value of the capital presupposed to production–and of the part of capital acting as capital in production. The wider the existence already achieved by capital, the narrower the relation of newly created value to presupposed value (reproduced value). PRESUPPOSING EQUAL SURPLUS VALUE, I.E. EQUAL RELATION OF SURPLUS LABOUR AND NECESSARY LABOUR, there can therefore be an unequal profit, and it must be unequal relative to the size of the capitals. The rate of profit can rise although real surplus value falls. Indeed the capital can grow and the rate of profit can grow in the same relation if the relation of the part of the capital presupposed as value and existing in the form of raw material and fixed capital rises at an equal rate relative to the part of the capital exchanged for living labour. But this equality of rates presupposes growth of the capital without growth and development of the productive power of labour. One presupposition suspends the other. This contradicts the law of the development of capital, and especially of the development of fixed capital. Such progression can take place only at stages where the mode of production of capital is not yet adequate to it….”

First let’s keep in mind that all these movements of capital are cyclical, but that within the cycles, that with the repeated cycles, and trend is established, an overall structural movement based on the growing accumulation of capital.

The movement of the rate of profit in synch with the growth of the fixed assets and raw materials is possible, but it is an “outlier”– it is a condition counter to the real domination of capital– where the productivity of labor does not grow, which means in fact, that the application of fixed assets to production is impeded in that the necessary labor, the wage is not reproduced in less time;  “This contradicts the law of the development of capital, and especially the development of fixed capital.”

Marx calls the various iterations of the decline in the rate of profit, or the changes in rates of profit in proportion or disproportion to the size of the capital the “most important law of modern political economy, and the most essential for understanding the most difficult relations. It is the most important law from the historical standpoint. It is a law which, despite its simplicity, has never been grasped and, even less, consciously articulated.”

Marx, of course, is about to consciously articulate the importance of the law: “hence it is evident that the material  productive power already present, already worked out, existing in the form of fixed capital, together with the population etc., in short all conditions of wealth, that the greatest conditions for the reproduction of wealth, i.e the abundant development of the social individual– that the development of the productive forces brought about by the historical development of capital itself, when it reaches a certain point, suspends the self-realization of capital, instead of positing it.”

Wow.

 Let’s continue:

“Beyond a certain point, the development of the powers of production becomes a barrier for capital”….. [ and let's not lose sight what capital "means"-- it means the expansion of value production, of the production of the means of production and subsistence as values to be exchanged with living labor; it means reproducing the capital relation and "materializing" that relation in greater accumulations]…. ; hence the capital relation a barrier for the development of the productive powers of labour. When it has reached this point, capital; i.e. wage labour enters into the same relations towards the development of social wealth….as the guild system, serfdom, slavery, and is necessarily stripped off as a fetter…. [Marx is just getting warmed up]… “the material and mental conditions of the negation of wage labour and of capital…are themselves results of its production process [see previous comments about the conflict between the labor process and the valuation process; between labor and conditions of labor].

“The growing incompatibility between the productive development of society and its hitherto existing relations of production expresses itself in better 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….Since this decline of profit [NOTE: Marx does not distinguish rate from mass of profit here, the decline of one is the decline of the other] signifies the same as the decrease of immediate labour relative to the size of the objectified labour which it reproduces and newly posits, capital will attempt every means of checking the smallness of the relation of living labour to the size of the capital generally, hence also of the surplus value, if expressed as profit, relative to the presupposed capital by REDUCING THE ALLOTMENT MADE TO NECESSARY LABOUR AND BY STILL MORE EXPANDING THE QUANTITY OF SURPLUS LABOUR WITH REGARD TO THE WHOLE LABOUR EMPLOYED.”{caps added}

“These contradictions lead to explosions, crises, in which momentary suspension of labour and annihilation of a great portion of capital violently lead it back to the point where it is enable [to go on] fully employing its productive powers without committing suicide.”

So, I’ll pause here… with plenty of more from the Grundrisse still to come– not to mention the other economic manuscripts Marx wrote between 1857 and 1864, and from volume 3 itself.
One can, of course, disagree with Marx, argue that Marx was wrong… but what one cannot do is  pretend Marx is saying something about the rate of  profit and profitability which he does not say.

S.Artesian  April 24, 2014