more Goldner on imperialism
From: Loren Goldner lrgoldner@yahoo.com Date: January 4, 2007 1:07:41 PM EST To: dhenwood@panix.com Subject: Yet another one
Dear Doug,
The debate on imperialism continues to percolate on our list. If you
think the following intervention of mine is worth circulating on
yours, I’d appreciate feedback.
Thanks
Loren
Thanks to Mike, Rakesh and Paul for re-igniting our imperialism
debate to kick off 2007, which promises to be quite a year.
Before I get started, I would just like to say that if primitive
accumulation” is too specifically linked to the initial separation of
producers from the means of production in the 15th-17th century, then
let’s develop another term to describe the forms of capitalist loot
to which I referred in my December posts. In addition to Luxemburg, I
was influenced by the left opposition theorist Preobrazhensky’s (in
The New Economics) argument for “socialist primitive accumulation” in
the 1920’s: organizing a managed decline of the Russian peasantry
through selling industrial goods dear and buying agricultural goods
cheap. (Let’s not get distracted by the unhappy outcome of that
strategy.) I said and I’ll say again that when capital interacts with
nature and petty producers outside the wage-labor relationship, and
when it pushes wages and capital expenditure below reproductive costs
inside that relationship, it is violating the “exchange of
equivalents” which Marx saw as the “heuristic” framework for
separating capitalist profits and accumulation from swindle,
monopoly, selling goods above their value, and other wrong-headed
explanations of profit. And if we don’t want to call that NON-
REPRODUCTION primitive accumulation, fine, but let’s first admit that
such phenomena exist, and (since the 1970’s) are increasingly
important, and moreover indispensable to the system.
I have invoked the good name of Rosa Luxemburg as the theoretical
framework closest to my interpretation of Marx primarily because of
her focus on these aspects, inside and outside the pure capitalist
system, of non-reproduction, which I don’t find in Grossmann or
Mattick. But in fact my framework differs somewhat from hers, and
this debate is a good place to air it.
Mike says I don’t explain WHY capitalism needs permanent primitive
accumulation (or some similar term). OK, here goes.
Let’s review what I consider some basics, which are not always self- evident in some of the interventions in this debate.
First, vol. I and most of vol. II of Capital are a phenomenology of a
closed capitalist system in which there are only capitalists and wage
laborers, and most of the focus is on the single firm.
When, in the last section of vol. II, Marx shifts to the “total
social capital” and expanded reproduction, he is moving beyond that
heuristic model. That demarcation of the interraction of the “pure
system” (capitalists and wage laborers) with, on one hand, the vast
modern population of unproductive consumers who consume surplus value
and do not produce it, i.e. the FIRE (finance- insurance- real
estate) sector, state civil servants, managerial strata, the military
sector, the law enforcement/ prison sector and, on the other hand,
with nature and with petty producers (today found primarily in the
Third World) is fundamental for clarity. None of the latter
populations are present in vols. I and II, except for some
interesting asides and the important chapters in the middle of vol.
II dealing with insurance, bookkeeping and other “faux frais” of
production. Capital is a circuit (in vols. I and II, with simple
reproduction) and is a spiral in expanded reproduction, and a
commodity, whether from Dept. I or II (and in what department do we
put a tank or a guided missile?) which does not complete the circuit,
i.e. is not productively consumed in Dept. I (new means of
production) or Dept. II (new labor power) ceases to be capital.
Rosa Luxemburg also had the great merit of emphasizing capitalism as
a transitional mode of production between European feudalism and
socialism. This may seem a truism, but it is much more than that. In
her survey of the rise and fall of political economy from the
Physiocrats to the Ricardian school, she points out that only a
socialist (i.e. Marx) could solve the problem of the source of profit
and of expanded reproduction. To wit: capitalism must be seen as a
necessarily incomplete, transient mode of production, which lives in
part off the pre-capitalist modes it looted and continues to loot,
and whose full crisis is only visible to someone seeing “beyond” it.
Capitalism is therefore a system in which no practical viewpoint,
either of an individual capitalist or of the total social capital, or
finally of labor power as a commodity (the class-in-itself) can be
concretely universal. All viewpoints on capital “within” the system
are “negation of the negation” viewpoints, and only the perspective
that looks prior to and beyond capitalism can be a “self-subsisting
positive” with a universal practical (class for itself) program. From
the Italian pirates of the 11th century to the slave labor in the
Dominican Republic or Brazil today, capitalism has never stopped its
“looting” of labor power and resources “outside” the closed (vols. I
and II) system of exchange of equivalents.
Next, and this is fundamental, capital does not appear to capitalists
as value-valorizing-itself or a social relationship of production; it
appears to them as titles to wealth, namely to profit, interest and
ground rent, whose value is determined over the course of a business
cycle not by the fine points of the opening chapters of vol. III but
as a capitalization of anticipated future cash flow. Marx of course
only introduces such titles to wealth–stocks, bonds, leases–after
first presenting the heuristic pure system, setting it in motion in
the final chapters of vol. II (expanded reproduction), and then
discussing the determination of price and the rate of profit in the
opening sections of vol. III. Capital as capitalists know it, up to
and including all the new “financial products” of the past 25 years,
are “liens” on the total cash flow representing, ultimately, the
total surplus value produced in the “pure system” AND supplemented by
LOOT (non-reproductive exchange) outside and eventually inside the
system. We know very well that over long periods of a capitalist
cycle these “liens” can depart widely from the price/value
determinations that ultimately regulate the cash flow on which they
draw, until they are deflated in the periodic crash.
But the source of that total profit/ total surplus value is an
empirical question, not to be settled by abstract resort to different
takes on the transformation problem or possible flaws in the
reproduction schema of vol. II. Are capital plant (means of
production, infrastructure) and labor power being reproduced or not?
Such a question immediately takes us from the realm of pure theory
(however fundamental) to the real concrete historical operation of
the system.
The relationship between the value of the myriad capitalist titles to
wealth and the surplus value and loot on which they draw is, of
course, not an arbitrary one.
Let’s go back to the pure system, only capitalists and workers, no
banks, no other distorting “titles to wealth”. Let us further imagine
that the entire world is capitalist and that everything exchanges at
its value. In such a world, over time, one would expect to see the
rising C/V ratio express itself “algebraically” in a falling rate of
profit. Capital ultimately destroys itself, becomes a barrier to
itself, by pushing the productive forces to a point where the
socially necessary time of reproduction, based on the reproductive
value of labor power, can no longer serve as the “numeraire” for
exchange among capitals. Capital, as we know, requires living labor
to exist, and for labor power’s value to be the numeraire, and it
simultaneously, through innovation, expels living labor from the
production process and undermines the numeraire. That is the pure
model’s fundamental contradiction.
That is the pure model. It strikes me that the interventions on this
list which dwell on Luxemburg vs. Grossmann and Mattick are tilting
at windmills to the extent that they focus on the theoretical
operation of the pure system and ignore the above considerations.
Because, of course, the pure model of capitalism has never existed
and never will exist. As we know, titles to wealth (profit, interest,
ground rent), central banks regulating the markets of such titles,
and a state enforcing such titles all pre-existed the full-blown
triumph of capitalism, i.e. the transformation of means of production
and labor power into commodities as the dominant source of wealth.
Once we add titles to wealth to the pure model, as Marx does in the
middle and concluding sections of vol. III, we see a different
picture. It is precisely because of these titles and because of
capitalism’s ability to loot non-capitalist populations and nature
that we do NOT see any algebraic relationship, over long cycles,
between the C/V ratio and the capitalist rate of profit. Such titles
tend to correspond to the underlying value mainly at the end of one
cycle (through deflation) and the beginning of the next one. The
deflationary crisis acts as a form of “retroactive planning” that re-
equilibrates the capitalists’ titles to wealth with the underlying
rate of profit generated within the pure system. (What we have been
living through, particularly since the early 1970’s, has been a huge
operation of credit pyramiding, managed by the world’s central banks,
aimed at PRESERVING the paper value of existing titles to wealth, and
a significant transfer of C and V to S to help prop up those titles.
That latter phenomenon is what I call the “self-cannibilization” of
the system when the “primitive accumulation”mechanism turns inward,
i.e. non-reproduction.)
Rosa Luxemburg, in The Accumulation of Capital, used the examples of
the looting of the 19th century American farmer through bank loans,
the Anglo-French seizure of the Egyptian cotton crop as collateral
against loans, and the locust-like depradations of Africa, India and
China as examples of ongoing primitive accumulation. For her,
although she stresses the importance of the international system of
loans in most of these cases, it was a question of the sale of real
goods to the non-capitalist producers that was foremost, in exchange
for the increment of loot that came back in the wealth produced in
far less productive regions of the world.
Luxemburg did not live to see either the post-1933 American or German
creations of quasi-permanent military production, supported by the
taxation of the working class, and still less the post-1944 Bretton
Woods system, in which the U.S. financial markets and the U.S. state
acquired the ability to tap wealth from every part of the capitalist
world (until recently, minus Russia and China) through dollar
seigneurage.
Thus I would “correct” Luxemburg to the extent that the external
relations of the “pure system” are not so much about the sale of a
surplus product on the model of the sale of industrial goods to
independent farmers or peasants (though that of course also takes
place) as the more important circulation of an ever-increasing
fictitious totem (fictitious capital) through international loans in
exchange for whatever loot can be acquired from petty producers’
labor power or from nature. I argue that this fictitious totem is
initially lawfully generated WITHIN the pure system, analogous to
Luxemburg’s unsaleable surplus product, and is discussed in Marx’s
middle chapters of vol. III. This is the NECESSARY, internally
generated reason that the system requires permanent primitive
accumulation: the answer to Mike’s question.
As Luxemburg says (I paraphrase from memory) capitalism’s problem is
its drive to universality (universal exchange of equivalents) and its
inability, because of the heteronomy of the system, to become universal.
Back to the closed system, to which we have added capitalist titles
to wealth, capitalizations of an anticipated cash flow. These titles
of course go together with a capital market, a central bank and a
state enforcing them, and ultimately a state debt (again, all vol.
III phenomena)
Because capitalism is an anarchic system, (a “heteronomic” system in
Kant’s sense) a practical perspective on the total social capital
which could keep these capitalizations (most immediately, stocks)
rigorously in line with the underlying (current reproductive cost)
value of the assets on whose cash flow they depend is a chimera.
Increases in labor productivity, particularly those which ripple
quickly through the whole system, such as canal and railroad
construction in the 19th century, or the air, shipping and
communications innovations of recent decades, are not necessarily
immediately registered in the capitalized value of all assets. Over
time, such innovations create rather a fictitious increment “f” of
overvalued capitalizations which must be periodically purged in a
deflationary collapse. The actions of the central bank in regulating
credit markets aim at preserving at least some of the capitalized
titles to wealth from the devalorization (deflation) demanded by
increased labor productivity.
Capital, as we know, is the fundamental movement M-C-M’: money
capital (M) converted into the commodity form in production (C) with
the aim of its return as expanded money (M’). But, as we have said,
individual capitalists know this process only as titles to wealth,
“liens” on the cash flow generated from such investment. The total
profit on which such titles depend is supplemented, through primitive
accumulation, outside or ultimately inside the pure system. The
credit markets, the central bank and the state debt are all designed
to “manage” the increasingly disparity between total titles to wealth—
the fictitious totem—and their pure system value as long as possible.
I would argue, therefore, that this internally-generated, “pure
system” ball of hot air, FICTITIOUS CAPITAL (fictitious relative to
the real current reproductive value of assets) is, more than real
goods, what is “exported” in exchange for loot. As long as sufficient
loot compensates for the fictitous gap, accumulation can continue.
This is my minor disagreement with Luxemburg.
The fictitious totem in the contemporary world is first of all the
huge ($3-4 trillion, at current, conservative) estimates) dollar
“overhang”, the net U.S. external debt ($11-12 trillion held abroad,
minus $8 trillion in US assets overseas), held mainly in central
banks. Everything, from a capitalist viewpoint, must be done to
prevent its deflation. The U.S. government is busy depreciating it,
yet its foreign holders fret at the erosion of their holdings. They
relend the money to the U.S. government and U.S. financial markets,
making possible more domestic U.S. credit, more consumption, and more
imports from America’s creditors.
To be continued. (!)
Loren Goldner lrgoldner@yahoo.com