Housing development Ciudad Jardin Soto Real. 312 empty houses, 1169 houses not even built. 1

Radical interpretations of the present crisis

New York University
November 26, 2012
Platypus Review

..Loren Goldner | David Harvey
Andrew Kliman | Paul Mattick


Last au­tumn, chapters of the Platy­pus Af­fil­i­ated So­ci­ety in New York, Lon­don, and Chica­go hos­ted sim­il­ar events on the theme of “Rad­ic­al In­ter­pret­a­tions of the Present Crisis.” The speak­ers par­ti­cip­at­ing in New York in­cluded Loren Gold­ner, Dav­id Har­vey, An­drew Kli­man, and Paul Mat­tick. The tran­script of the event in Lon­don ap­peared in Platy­pus Re­view 55 (April 2013). What fol­lows is an ed­ited tran­script of the con­ver­sa­tion that PAS-NYC hos­ted on Novem­ber 14, 2012 at the New School.

Pre­lim­in­ary re­marks

Loren Gold­ner:
The title of my talk to­night is “Fic­ti­tious Cap­it­al and Con­trac­ted So­cial Re­pro­duc­tion.” It is im­port­ant to note that as we con­vene to­night, there are gen­er­al strikes across the south­ern flank of Europe, the miners’ strikes in South Africa, and at least 50 strikes a day in China. While we con­vene to talk about the crisis, there are people in mo­tion try­ing to do something about it.

Marx writes in his Grundrisse, “Cap­it­al it­self is the mov­ing con­tra­dic­tion, [in] that it presses to re­duce labor time to a min­im­um, while it pos­its labor time, on the oth­er side, as sole meas­ure and source of wealth.”[1] Un­pack­ing that one sen­tence can get us very far in un­der­stand­ing the crisis and the his­tory of at least the last hun­dred years.

Cap­it­al can be broken down in­to Marx’s cat­egor­ies: sur­plus value (s), vari­able cap­it­al (v), and con­stant cap­it­al (c). With­in con­stant cap­it­al there is a break­down in­to (i) fixed cap­it­al, which refers gen­er­ally to ma­chinery and tools, and (ii) cir­cu­lat­ing cap­it­al, which refers to things such as raw ma­ter­i­als.

With these cat­egor­ies I would like to ad­dress the ques­tion of fic­ti­tious cap­it­al, which I define as claims on the so­cial wealth and so­cial sur­plus that cor­res­pond to no ex­ist­ing so­cial sur­plus. The ori­gins of fic­ti­tious cap­it­al are the ad­van­cing pro­ductiv­ity of labor in cap­it­al­ism, which is an an­arch­ic sys­tem, one that is con­stantly de­valu­ing the con­stant cap­it­al in­ves­ted by the cap­it­al­ist class. Cap­it­al volumes 1 and 2 de­scribe a pure cap­it­al­ist sys­tem, in which there are only two so­cial classes: the wage-labor pro­let­ari­at and the cap­it­al­ist class or the bour­geois­ie. Oth­er classes enter the pic­ture, for in­stance peas­ants, in the long his­tor­ic­al chapter on ac­cu­mu­la­tion. But Marx is try­ing to set up a pure mod­el and then move on to the more every­day ap­pear­ances of the sys­tem.

Value is defined in Marx as the so­cially ne­ces­sary labor time of re­pro­duc­tion; I want to em­phas­ize the “re-” in re­pro­duc­tion. For, in the open­ing chapter of Cap­it­al, Marx talks a lot about the value of a com­mod­ity as the so­cially ne­ces­sary labor time em­bod­ied in it, but later moves to so­cial re­pro­duc­tion. There he is talk­ing about an ex­pand­ing sys­tem in which the early defin­i­tions are su­per­seded.

Cap­it­al­ists them­selves tend to have only a vague idea of use-value. As they are run­ning a so­ci­ety in­to the ground, say in the con­tem­por­ary de­bates on in­fra­struc­ture, cap­it­al­ists come to a re­cog­ni­tion that use-value plays some kind of a role. But, by and large, in­di­vidu­al cap­it­al­ists are in­ter­ested in profit of which use-value is a mere by-product. One as­pect of re­cent cap­it­al­ist his­tory that is im­port­ant to em­phas­ize is that the tre­mend­ous in­comes that a part of the cap­it­al­ist class gets from the sale and rent­al of build­ings of all kinds has long su­per­seded the total amount of profit dir­ectly de­rived from in­dustry. This is im­port­ant to un­der­stand for the con­tem­por­ary situ­ation.

There is an­oth­er cat­egory that doesn’t at­tract the at­ten­tion that it should: what I call “cap­it­al­ist con­sump­tion.” Cap­it­al­ist con­sump­tion does not refer to the con­sump­tion of the cap­it­al­ists them­selves, not the yachts in the Hamp­tons and the Malibu life­style, but the con­sump­tion of all the hangers-on of the cap­it­al­ist class. Marx has a col­or­ful for­mu­la­tion, in which he refers to king, min­is­ter, pro­fess­or, and whore, as dif­fer­ent em­bod­i­ments of the hangers-on. But I would ex­pand this cat­egory quite a bit to in­clude state bur­eau­crats — let’s not for­get that 35–40% of U.S. GDP goes to state ex­pendit­ure at the loc­al, state, and fed­er­al level. In 1950 there were ten work­ers for every man­ager; today there are three. The mil­it­ary po­lice, pris­on sys­tem, and the biggest single group the so-called FIRE (Fin­ance-In­sur­ance-Real Es­tate) sec­tor, which rep­res­ent the in­terest and ground si­phon of sur­plus value, all of these ele­ments en­force cap­it­al­ist so­cial re­la­tions. We also have the total wage bill, which is com­prised of more than the pay pack­ets or checks, but also everything that goes in­to edu­ca­tion and train­ing. The mil­it­ary has in­creas­ingly as­sumed this role over the last thirty to forty years in the U.S. with the col­lapse of a lot of vo­ca­tion­al schools.

Though an in­com­plete pic­ture, all the above points to dif­fer­ent ways in which cap­it­al in crisis trans­fers vari­able and con­stant cap­it­al to a sur­plus, as a way of sav­ing it­self. In the United States and most coun­tries in crisis over the last 40 years, we see the non-re­pro­duc­tion of labor power — just think of the fact that al­most 40% of all high school stu­dents in NYC don’t ever fin­ish high school.

Also im­port­ant, per­haps more im­port­ant, is prim­it­ive ac­cu­mu­la­tion. This Marx defines as the sep­ar­a­tion of petty pro­du­cers from the means of pro­duc­tion. There is a lot of de­bate about wheth­er Marx simply meant the ex­pro­pri­ation of the Eng­lish peas­antry in the late-17th early 18th cen­tury. But I think prim­it­ive ac­cu­mu­la­tion is a per­man­ent fea­ture of the cap­it­al­ist sys­tem. In this re­spect, I fol­low as­pects of Rosa Lux­em­burg’s The Ac­cu­mu­la­tion of Cap­it­al, which in­cluded chapters with ex­amples of this pro­cess from the nine­teenth cen­tury. I don’t think one has to go along with all of Lux­em­burg’s reas­on­ing to re­cog­nize the mo­bil­iz­a­tion by mod­ern cap­it­al of labor power out­side of the sub­sect­ors of the world eco­nomy, more spe­cific­ally the peas­antry of In­dia, China, Lat­in Amer­ica, and Africa. All kinds of people who are not wage work­ers are re­cruited to the wage labor sys­tem, after an­oth­er sub­sect­or has paid their re­pro­duc­tion costs.

In short, what keeps this pro­lif­er­a­tion of fic­ti­tious cap­it­al afloat in all the forms that I have just de­scribed, is a gen­er­al pro­cess of non-re­pro­duc­tion: both of labor power and of as­pects of con­stant cap­it­al, such as in­fra­struc­ture — con­cern­ing which, for in­stance, the Amer­ic­an So­ci­ety of Civil En­gin­eers es­tim­ates that it would cost 2.3 tril­lion dol­lars just to bring things to a stand­ard level.

Dav­id Har­vey: I had an in­ter­est­ing ex­per­i­ence in May when I was in Istan­bul, where I was giv­ing lec­tures and hanging out with so­cial move­ment people. Istan­bul is a boomtown and it is quite in­cred­ible what is go­ing on there. Tur­key is grow­ing around 7% a year. There is talk of a new bridge across the Bospor­us, and the pop­u­la­tion of Istan­bul will grow from 18 mil­lion to 40 mil­lion in 10-15 years. Mean­while, Athens, two hours away by flight, is a cata­strophe. Ar­gen­tina was a dis­aster in 2001–2003, but by 2004 it had reneged on its debt and has been boom­ing ever since. China in early 2009 had lost close to 30 mil­lion jobs due to cuts to ex­port in­dus­tries. Yet by the end of the year it re­cor­ded a net loss of 3 mil­lion jobs, which means that they cre­ated 27 mil­lion jobs in nine months, through ex­pans­ive urb­an­iz­a­tion — ba­sic­ally, a huge in­fra­struc­ture project. The bankers in China obeyed the or­ders of the Cent­ral Com­mit­tee to lend. The huge labor ab­sorp­tion in China stands in con­trast to the 7 mil­lion net jobs lost in the same year in this coun­try. Why? For one thing, you have this stu­pid form of aus­ter­ity here, where­as, in ef­fect, there was a Keyne­sian ex­pan­sion pro­gram in China. Ar­gen­tina did very well, too, be­cause it star­ted selling all its ag­ri­cul­tur­al com­mod­it­ies to China. It is now one big soy plant­a­tion for the China trade. How are we to cre­ate a the­or­et­ic­al ap­par­at­us that can en­com­pass these in­cred­ible dif­fer­ences, as well as the dy­nam­ics that cre­ated them?

I tried to do a little of that in the En­igma of Cap­it­al, ana­lyz­ing the ways cap­it­al flows. As Marx puts it, every lim­it and bar­ri­er has to be over­come. But as you sur­pass one crisis, it just mani­fests some­where else. It has moved from the U.S. and the prop­erty mar­kets, im­pact­ing con­sumers in China, and then spun over to the fin­an­cial sec­tor, cre­at­ing sov­er­eign debt prob­lems, as in Spain. It is in Ice­land, then Dubai, and then Greece. If you don’t have a the­or­et­ic­al frame­work that can un­der­stand the rapid­ity of these moves then you can­not really en­com­pass what is go­ing on. The crisis tend­en­cies of cap­it­al­ism are nev­er re­solved, but simply moved around from one space to an­oth­er and from one sec­tor to an­oth­er.

That the crisis moves around like this poses great dif­fi­culty for or­gan­iz­ing. The huge anti-cap­it­al­ist move­ment in Ar­gen­tina in 2003, with its as­sem­blies, strikes, and fact­ory takeovers, re­sembled a re­volu­tion­ary move­ment. But five years on, everything is back to nor­mal. One polit­ic­al dis­aster fol­lows after an­oth­er. Something that looks like a re­volu­tion­ary move­ment can sud­denly res­cind it­self. The res­ult is that the class struggle is very volat­ile right now. If we were in Bolivia in 2003–05, we would be look­ing at El Alto, which was in re­volu­tion­ary mode, but now that Eva Mor­ales is in power you have a mix of in­di­gen­ous think­ing and neo­lib­er­al com­prom­ises.

I take ser­i­ously Marx’s ar­gu­ment that crises ex­press the in­tern­al con­tra­dic­tions of cap­it­al. However, here can be a tend­ency, when we come across something we don’t fully un­der­stand, it is tempt­ing to chalk it up to the “in­tern­al con­tra­dic­tions of cap­it­al.” What do we really know about the struc­ture of in­tern­al con­tra­dic­tions with­in the cap­it­al­ist mode of pro­duc­tion? When does a con­tra­dic­tion be­come an ab­so­lute con­tra­dic­tion and gen­er­ate a crisis?

I went back to Cap­it­al, and there are 17 in­tern­al con­tra­dic­tions spe­cified therein. To give you one ex­ample: The ba­sic con­tra­dic­tion is between use-value and ex­change-value. One place to look at this is hous­ing, which has a use-value. But many people who dwell in houses don’t rent, but be­come in­cor­por­ated in­to home own­er­ship — and this use-value is sold as a com­mod­ity. This be­came very pop­u­lar to­ward the end of the 19th cen­tury, when it was seen as a way of sta­bil­iz­ing so­ci­ety. Home dwell­ers even­tu­ally be­came homeown­ers who would use their house as a form of sav­ing. This be­came crit­ic­ally im­port­ant in the Great De­pres­sion, when all of the fin­an­cial re­form was about en­cour­aging home own­er­ship amongst the work­ing classes. It was once fam­ously said that the sav­ings and loans so­ci­et­ies and build­ing so­ci­et­ies across Great Bri­tain were the best de­fenses against Bolshev­ism. Or to put it the oth­er way around: debt en­cumbered homeown­ers don’t go on strike.The in­cor­por­a­tion of the U.S. work­ing class as homeown­ers in sub­urb­an loc­a­tions turned them in­to very con­ser­vat­ive people. They be­came the de­fend­ers of prop­erty rights and de­fend­ers of cap­it­al­ism rather than its es­sen­tial en­emies. Pri­or to this un­like they had been part of a con­scious polit­ic­al project dur­ing, say, the 1930s.

Around 1980, hous­ing be­came something else, not simply a form of sav­ing, but a form of spec­u­la­tion. Homeown­ers be­came much more con­cerned with im­prov­ing the ex­change-value of their house. You would stretch a bit to buy a house for $200,000 , im­prove it, and sell it for $300,000 in a couple of years. The Sav­ings and Loan Crisis of the late-1980s and the hous­ing crash of 2008 led to fore­clos­ures and a crisis of ex­change-value, which in turn led to some people be­ing denied the use-value of their house. This con­flict between ex­change and use-value has evolved his­tor­ic­ally and has cul­min­ated in the cur­rent crisis.

This can help tell us what an anti-cap­it­al­ist polit­ics should be about: namely, that we do not want hous­ing that is vul­ner­able to the ex­change-value cal­cu­lus. We want hous­ing to be se­cured as use-val­ues that every­one can ac­cess. The same is true of edu­ca­tion, health­care, and wa­ter sup­ply. In oth­er words, what you do is say that the con­tra­dic­tion led us in­to this crisis, but we have a par­tic­u­lar polit­ic­al stance now which would roll back neo­lib­er­al­ism’s drive to privat­ize all those things, gear­ing them to­ward ex­change-value ac­cu­mu­la­tion.

An­drew Kli­man: “Do dif­fer­ent in­ter­pret­a­tions of the crisis really re­com­mend dif­fer­ent polit­ic­al strategies?” That this ques­tion has to be asked is a sign of the ir­ra­tion­al­ism and elit­ism in which much of the left is mired. If you think the masses need you to lead them step by step to a more ad­vanced con­scious­ness, like pieces on a game board, how they un­der­stand the crisis is un­im­port­ant. But how this van­guard un­der­stands the crisis is not im­port­ant either un­til you have the al­le­gi­ance of people, so gain­ing that al­le­gi­ance be­comes the all-im­port­ant task — ap­peal­ing to them where they are now, provid­ing sound bytes about Wall Street, neo­lib­er­al­ism, and the one per­cent. Sim­il­arly, if you think that people can change so­ci­ety by spon­tan­eous activ­ity alone, or by a spon­tan­eously ar­rived at con­sensus, un­der­stand­ing how cap­it­al­ism func­tions be­comes un­im­port­ant. Activ­ity be­comes all-im­port­ant, the pos­sib­il­ity of un­in­ten­ded con­sequences is dis­missed, and ra­tion­al ar­gu­ment is seen to lead only to dis­agree­ment and dis­unity.

I be­gin from a dif­fer­ent start­ing point. Many lack in­form­a­tion and ac­cess to ideas, but they want a real solu­tion to the on­go­ing eco­nom­ic mal­aise. They are not go­ing to rise up un­think­ingly without first know­ing what they are try­ing to ac­com­plish and what ac­tions can reas­on­ably ac­com­plish it. Fi­nally, ac­tions have un­in­ten­ded con­sequences, as the many failed re­volu­tions and failed uto­pi­an ex­per­i­ments at­test. The road to the present mor­ass was paved with good in­ten­tions. This sug­gests the need for severely ra­tion­al­ist polit­ics. We have to be op­press­ively aware that some sup­posed solu­tions to our eco­nom­ic prob­lems seem good on the sur­face, but won’t work, or will only worsen the crisis.

When I set out to write The Fail­ure of Cap­it­al­ist Pro­duc­tion, I found some things about the present day crisis that counter the tra­di­tion­al ac­count on the Left about the causes of the re­ces­sion. First, the turn­ing point of re­cent U.S. eco­nom­ic his­tory was not the rise of neo­lib­er­al­ism, but what tran­spired in the 1970s, with the slow­down in eco­nom­ic growth, the re­l­at­ive in­crease in bor­row­ing, glob­al fin­an­cial in­stabil­ity, de­cline in the growth of U.S. pub­lic in­fra­struc­ture de­vel­op­ment, and so forth. This alone casts doubt on the polit­ic­al de­term­in­ism of the con­ven­tion­al left view that the re­versal of neo­lib­er­al­ism is the key to solv­ing our eco­nom­ic prob­lems.

Con­trary to what the con­ven­tion­al left ac­count sug­gests, I also found that the rate of re­turn on in­vest­ments, the rate of profit, of U.S. cor­por­a­tions did not re­bound un­der neo­lib­er­al­ism. It fell from the mid-1950s through the early 1980s and nev­er re­covered in a sus­tained way. Na­tion­al cor­por­a­tions’ for­eign in­vest­ment also trended down­ward. This has to do with the long-term slow­down in the growth of pro­duct­ive in­vest­ment or what is called the rate of cap­it­al ac­cu­mu­la­tion. The con­ven­tion­al left ac­count claims that slow­down was caused by fin­an­cial­iz­a­tion: Cor­por­a­tions di­ver­ted profits from pro­duc­tion to fin­an­cial uses. But I found that there was no such di­ver­sion. Al­most all of the fall in the rate of ac­cu­mu­la­tion had taken place by 2001. Between 1981, when Regan took of­fice, and 2001, the peri­od of neo­lib­er­al­ism, U.S. cor­por­a­tions in­ves­ted a big­ger share of their profits in pro­duc­tion than they did between 1947–1980. Pro­duct­ive in­vest­ment ab­sorbed a big­ger share of their sur­plus than it had be­fore. So the slow­down in growth of pro­duct­ive in­vest­ment is real; however, it was not caused by the dif­fi­culties in ab­sorb­ing the sur­plus, but by the re­l­at­ive lack of sur­plus or profit in the first place.

For U.S. cor­por­a­tions, the en­tire fall in the rate of ac­cu­mu­la­tion or pro­duct­ive in­vest­ment between 1948–2007 is at­trib­ut­able to the fall in their after tax rate of profit. I have found that even though there has been a rise in in­come in­equal­ity in this coun­try, which is real, profits did not in­crease at the ex­pense of wages and be­ne­fits. The share of cor­por­ate out­put that em­ploy­ees re­ceive did not change, nor did the share of the net na­tion­al product that the work­ing class was able to buy. Work­ers’ in­come en­abled them to buy the same share they were able to buy be­fore, without go­ing deep­er in­to debt. Re­dis­tri­bu­tion from wages and be­ne­fits to profit didn’t oc­cur, and thus was not the cause of the debt build-up. There was a build up, but for oth­er reas­ons.

The un­der­ly­ing causes of the Great Re­ces­sion, at least in the U.S., are the long-term fall in the rate of profit. This is what led to a long-term slow­down in pro­duct­ive in­vest­ment, which in turn led to a slower growth of out­put and in­come. The slow­down in in­come growth led to ever rising debt bur­dens, as did gov­ern­ment policies that re­peatedly kicked the can down the road by throw­ing even more debt at the prob­lem and en­cour­aging private bor­row­ers to do the same. This led to a series of burst bubbles and debt crises, cul­min­at­ing in the Great Re­ces­sion. The re­ces­sion was triggered by a fin­an­cial crisis. There is no deny­ing that. But if the fin­an­cial is­sue was the only as­pect of the prob­lem, the eco­nomy should have re­boun­ded smartly long ago, since the fin­an­cial crisis in the U.S. had been quelled by the end of 2008. But there has been no such re­bound any­where in the world and that is mainly due to the prof­it­ab­il­ity and debt prob­lems that re­main un­re­solved and to the polit­ic­al con­sequences of those debt prob­lems, es­pe­cially for the fu­ture of the Euro­zone.

What are the polit­ic­al im­plic­a­tions of this ana­lys­is? First, neo­lib­er­al­ism did not cause the changed trends in the eco­nomy. Fin­an­cial­iz­a­tion didn’t cause profits to be di­ver­ted from pro­duc­tion. So people who want a broad multi-class al­li­ance against neo­lib­er­al­ism, re­pla­cing the bad cap­it­al­ists with the good cap­it­al­ists, who want in­vest­ment in pro­duc­tion and for jobs to be cre­ated — this isn’t go­ing to solve the prob­lem. Pro­duct­ive in­vest­ment is not go­ing to re­bound un­til prof­it­ab­il­ity prob­lems, debt prob­lems, and the as­so­ci­ated lack of con­fid­ence re­main un­re­solved.

Debt for­give­ness can help people in debt and in debt­or coun­tries but it is not go­ing to solve the eco­nom­ic mal­aise. To re­verse the mal­aise, the debt prob­lem has to be solved in a way that boosts lenders’ con­fid­ence that they are go­ing to be re­paid, not the op­pos­ite. If lenders are forced to for­give some of the debts, they are go­ing to learn the les­son that they should not lend, or that they should lend at much high­er rates, and we would have no solu­tion to the crisis. There has not been re­dis­tri­bu­tion in the United States of wages and be­ne­fits for profits, so while re­duced in­equal­ity is cer­tainly go­ing to help those at the bot­tom, it is not go­ing to solve the eco­nom­ic crisis. Profit is the fuel on which cap­it­al­ism runs. The prob­lem that cap­it­al­ism is fa­cing is that it has been low on fuel for quite some time and any re­dis­tri­bu­tion­ist meas­ures that si­phon off even more fuel are not go­ing to help to sta­bil­ize cap­it­al­ism, but will do the op­pos­ite.

I do not think that there is any pro­gress­ive or left­ist solu­tion with­in the con­fines of cap­it­al­ism. With­in the sys­tem the prob­lems are go­ing to be solved — if they are solved — by ad­dress­ing the prof­it­ab­il­ity and debt prob­lems. So I would like to sug­gest that we stop think­ing about solv­ing the crisis and in­stead as­sist peoples’ on­go­ing struggles to pro­tect their in­comes, jobs, and homes. Con­ces­sions were won dur­ing the Great De­pres­sion, they can be won again, even though they will not solve cap­it­al­ism’s prob­lems and, in fact, might even make them worse. Con­ces­sions are nev­er­the­less worth fight­ing for and sup­port­ing. We need to of­fer the pro­spect of a so­cial­ist way out of the crisis. It is a real his­tor­ic­al pos­sib­il­ity. Struggles have been ac­cel­er­at­ing throughout the world and the prob­lem has been the Left’s re­sponse — or lack of re­sponse. In the fall of 2008, the no­tion that cap­it­al­ism had failed was com­mon in the main­stream me­dia, but it went nowhere be­cause al­most all of the Left moved in the op­pos­ite dir­ec­tion. The Left tried to down­play the sever­ity of the crisis. It didn’t so much as echo the con­clu­sion that cap­it­al­ism has failed. That was an enorm­ous lost op­por­tun­ity and ex­plains a lot of what this pan­el is meant to ad­dress.

Paul Mat­tick: “What does it mean to in­ter­pret the world without be­ing able to change it?” This is not par­tic­u­larly mys­ter­i­ous. Chan­ging the world re­quires the col­lect­ive ac­tion of very large num­bers of people. This does not mean, as the guid­ing ques­tions for this pan­el sug­ges­ted, that cap­it­al­ism is a sys­tem devoid of hu­man agency. Hu­man agency keeps cap­it­al­ism go­ing, as people go to work, go to school, buy and sell goods. The pro­cess of so­cial re­pro­duc­tion is car­ried out by act­ive, con­scious in­di­vidu­als. The ex­ist­ence at vari­ous times of so­cial move­ments against that re­pro­duc­tion at­tests to oth­er dir­ec­tions for that hu­man agency. The misery the so­cial re­pro­duc­tion pro­cess gen­er­ates ex­plains those move­ments and with them the vari­ous ef­forts to un­der­stand the sys­tem that con­sti­tute the his­tory of so­cial­ist thought. As Marx ob­served long ago, it is so­cial be­ing that, prac­tic­ally speak­ing, de­term­ines the con­scious­ness, not the oth­er way around.

The most pro­found un­der­stand­ings of cap­it­al­ism will lack any prac­tic­al im­port­ance un­less what used to be called the broad masses of the people are en­gaged in so­cial trans­form­a­tion in ways that lead them to find those un­der­stand­ings use­ful. Marx’s own thought provides an ex­cel­lent ex­ample. His bril­liant ana­lys­is of cap­it­al­ism was for the most part not even read, much less un­der­stood or ac­ted on, in the hey­day of Marx­ist move­ments. It was, after all, of little rel­ev­ance to the so­cial demo­crat­ic projects of the reg­u­la­tion of the mar­ket sys­tem in West­ern Europe and the con­struc­tion of state cap­it­al­ism in Rus­sia.

Today, with the dis­ap­pear­ance of the his­tor­ic­al left, Marxi­an ideas have be­come largely an aca­dem­ic spe­cialty. On the oth­er hand, what seems an in­creas­ing in­terest in those ideas, in­side and out­side the academy, at­tests to a grow­ing dis­com­fort with the ex­ist­ing so­cial sys­tem, es­pe­cially since the start of the cur­rent de­pres­sion in 2007. It is not im­possible that some of those presently en­gaged in in­ter­pret­ing the world may some day get a chance to par­ti­cip­ate in chan­ging it. It may be hard on a thinker to dis­cov­er how little bril­liant in­ter­pret­a­tion shapes his­tory, but there is a pos­it­ive side to this situ­ation. If the pro­let­ari­an re­volu­tion re­quired a firm grasp of Marx’s Cap­it­alwith, for ex­ample, a cor­rect un­der­stand­ing of value-price trans­form­a­tion by the afore­said broad masses, it is hard to ima­gine how that re­volu­tion could ever get go­ing. Luck­ily this is not how so­cial move­ments hap­pen. They hap­pen when large num­bers of people find the ex­ist­ing state of af­fairs un­bear­able to such a de­gree that they are will­ing to risk the com­forts of or­din­ary life, not to men­tion life it­self, to try something new. Then they look around for ideas that might help them un­der­stand what is hap­pen­ing to them and what they can do about it. So­cial the­ory can help ex­plain how such situ­ations may come about, but it can­not be ex­pec­ted to pro­duce them.

Crisis is a term used very loosely. I like to re­mem­ber its ori­gin­al mean­ing: a turn­ing point. A crisis com­ing after a peri­od of prosper­ity ini­ti­ates a peri­od of de­pres­sion, thus it cor­res­ponds to what on the oth­er end is called a re­cov­ery. In this sense the crisis of 2007–08 is over, but the de­pres­sion lingers on des­pite all the of­fi­cial talk of re­cov­ery. Of course the down­turn, like all de­vel­op­ments in cap­it­al­ism’s his­tory, is un­even in its ef­fects. The weak­est are hit hard­est. Small busi­nesses are crushed in Greece while Ger­many is still do­ing fairly well. As De­troit is de­pop­u­lated, hous­ing prices rise in Brook­lyn and Par­is. For this reas­on, the so­cial ef­fects are like­wise un­even, al­though this also re­flects the strengths and weak­nesses of loc­al tra­di­tions. Que­bec stu­dents de­feated an ef­fort to in­crease uni­versity tu­ition while Amer­ic­an stu­dents have been un­able to pre­vent sim­il­ar de­vel­op­ments. Such move­ments, like the mass demon­stra­tions in Lis­bon and Spain that have so far held back some­what the as­sault on the Iberi­an work­ing class, have so far re­mained sporad­ic, loc­al­ized, and lim­ited in their chal­lenge to the cap­it­al­ist eco­nom­ic or­der. For this reas­on, we can­not really speak of so­cial or polit­ic­al crisis at the present time.

This eco­nom­ic crisis and the down­turn that led in­to it are like earli­er epis­odes of the same type in the his­tory of cap­it­al­ism since the early 19th cen­tury. But like each of those pre­de­cessors they have nov­el fea­tures. Crises mani­fest deep-rooted prob­lems in prof­it­ab­il­ity in the cap­it­al­ist eco­nomy, which dis­cour­age in­vest­ment and cre­ate un­em­ploy­ment and mar­ket gluts. They are over­come as the de­pres­sion acts to shift cap­it­al val­ues and labor costs down­ward. The de­valu­ation of cap­it­al makes pos­sible high­er profit rates and so a re­viv­al of eco­nom­ic af­fairs. The last ma­jor down­turn of this type, which began in the 1930s and led in­to World War II, was so de­struct­ive in its ef­fects on cap­it­al val­ues as to make pos­sible the 20 years of prosper­ity known to eco­nom­ists as the golden age. But even this pros­per­ous peri­od re­quired con­stant in­fu­sions of gov­ern­ment spend­ing to main­tain low levels of un­em­ploy­ment. When the golden age came to an end in the mid-1970s gov­ern­ment bor­row­ing and spend­ing was fur­ther in­creased. More and more gov­ern­ment policies also fa­cil­it­ated the ex­pan­sion in­to the 21st cen­tury of the cred­it ne­ces­sary for the debt-based ver­sion of prosper­ity that las­ted des­pite con­tinu­ous debt cresses, stock mar­ket crashes, cur­rency ex­change crises and dec­ades of de­pres­sion in Ja­pan. The fail­ure of all this to re­store the prof­it­ab­il­ity of cap­it­al can be seen in the flow of money from cap­it­al in­vest­ment to spec­u­la­tion, which of­fers high short-term profits, at least for the well-placed or lucky. As cap­it­al flowed in­to spec­u­la­tion in­stead of pro­duct­ive in­vest­ment, pro­du­cing the ef­fect of tem­por­ary prosper­ity by means of a series of bubbles, work­ing class liv­ing stand­ards were main­tained by the massive growth of con­sumer debt, cul­min­at­ing in work­ers’ par­ti­cip­a­tion in the mort­gage bubble in the early 21st cen­tury. Like the growth of state debt and the wel­fare state, the dif­fi­culty we see today in do­ing away with them re­gisters the de­cline of the private en­ter­prise eco­nomy.

Des­pite its dy­nam­ism and the gi­gant­ic in­crease in the pro­ductiv­ity of hu­man labor that it has achieved since the early 19th cen­tury, and des­pite the dis­ap­pear­ance of polit­ic­al and so­cial bar­ri­ers to its spread in the course of the 20th, cap­it­al­ism has not been able to gen­er­ate the quant­ity of profit pro­duc­tion needed to in­cor­por­ate much of the world’s pop­u­la­tion in­to its mod­ern in­dus­tri­al form. The fail­ure of the non-fin­an­cial parts of the eco­nomy to ex­pand suf­fi­ciently showed it­self in 2008 in the near col­lapse of the whole Rube Gold­berg device of can­ti­levered fin­ance. For the same reas­on the massive in­crease in gov­ern­ment spend­ing that avoided a re­turn to de­pres­sion con­di­tions after the mid 1960s led not to a steady flow of profits from the now primed pump, but to today’s in­creas­ingly prob­lem­at­ic state de­fi­cit.

From the view­point of the Marx­ist the­ory of cap­it­al ac­cu­mu­la­tion, it is pre­cisely the avoid­ance of de­pres­sion con­di­tions that have pre­ven­ted a new trans­ition to prosper­ity since the end of the post-war golden age. The de­sire to avoid a full-blown de­pres­sion, still, as of late-2012, pre­vails among the glob­al ru­ing class. Al­though smal­ler scale busi­nesses have been pushed in­to bank­ruptcy, the European Cent­ral Bank along with the In­ter­na­tion­al Mon­et­ary Fund and Fed­er­al Re­serve Bank of the U.S. are print­ing money to keep afloat the banks and hedge funds, whose in­vest­ments powered the re­cent ex­pan­sion of the euro and dol­lar zones. At the same time, one sees in full force the will to ex­tract as much as pos­sible from the world work­ing class by cut­ting wages, in­clud­ing so­cially ad­min­istered seg­ments of the wage such as pen­sions and health in­sur­ance, along with the elim­in­a­tion and privat­iz­a­tion of gov­ern­ment ser­vices with at­tend­ant cuts in pub­lic em­ploy­ment. This is held some­what in check by mass ex­pres­sions of an­ger; aus­ter­ity has not pro­gressed as rap­idly, for ex­ample, in Spain or Italy as it has in smal­ler and weak­er eco­nom­ies, like Ire­land or Greece. Is this to say that the cur­rent crisis cycle has moved cap­it­al­ism to the point of break­down, in the sense of self-de­struc­tion? No. Be­cause today, as in all earli­er mo­ments, cap­it­al­ism’s fate hangs on the will­ing­ness of hu­man be­ings to en­gage in the dif­fi­cult struggles needed to over­throw ex­ist­ing re­la­tions of so­cial power and cre­ate new forms of pro­duc­tion and con­sump­tion.

In its cur­rent con­di­tion, cap­it­al­ism prom­ises eco­nom­ic dif­fi­culty for dec­ades to come. Waves of bank­ruptcies and busi­ness con­sol­id­a­tions for cap­it­al­ist firms and in­creas­ingly ser­i­ous con­flicts among eco­nom­ic en­tit­ies and even na­tions all cen­ter around who is go­ing to pay for the sys­tem’s sur­viv­al. The mass un­em­ploy­ment and ma­ter­i­al depriva­tion that Marx pre­dicted as the long-term out­come of cap­it­al­ist de­vel­op­ment have be­come fea­tures of the world eco­nomy. That is not per­man­ent, but it will be with us for an ex­ten­ded time, to­geth­er with the hav­oc prom­ised by the on­go­ing eco­lo­gic­al cata­strophe. It is not in­con­ceiv­able that this could lead to so­cial and polit­ic­al con­vul­sions that would de­serve the name of crisis.


Dav­id, I would even­tu­ally like to hear about the 16 or so con­tra­dic­tions that we didn’t ad­dress yet. But first, re­gard­ing the hous­ing bubble that began in the 1980s right up to 2007–2008, it seems to me this was a re­sponse to a deep­er crisis of prof­it­ab­il­ity in the sys­tem as a whole. It was part of a wider at­tempt to solve the crisis by put­ting con­sump­tion power in the hands of people with sup­posedly ap­pre­ci­at­ing as­sets, i.e., their homes. An­drew, I agree about dat­ing the crisis to the 1970s. You men­tioned that there has been no fall in real wages for Amer­ic­an work­ers. I don’t want to ar­gue much over stat­ist­ics, but the dis­ap­pear­ance since the 1960s of the one-paycheck fam­ily means that, with these same levels of in­come, the pos­sib­il­ity of one paycheck re­pro­du­cing a fam­ily of four has be­come nearly im­possible. Marx men­tions in Cap­it­al, and this is of­ten neg­lected, that the wage of a work­er is not just to re­pro­duce the work­er but also to pro­duce the next gen­er­a­tion of work­ers. The rise of the 2- and 3-paycheck fam­ily is a sure sign of a con­trac­tion of so­cial re­pro­duc­tion. Paul, I would like you to elab­or­ate more on the de­valu­ation rep­res­en­ted by the crisis of 1929–45, or 1914–1945. At those times a phase of de­struc­tion did lay the found­a­tion for the post-war boom, so why do you think that is not what is go­ing to hap­pen now? What we have seen the 1970s is a kind of sub­sti­tute World War III, in that there has been tre­mend­ous de­struc­tion on a world scale. Do you think that so­cial re­volu­tion is a pos­sible out­come of the crisis?

DH: I was a little con­fused by your un­der­stand­ing of fic­ti­tious cap­it­al, Loren. I un­der­stand it as the cap­it­al­iz­a­tion of any in­come stream, which can then be brought to the mar­ket and sold in stocks and shares. What’s strik­ing about Marx’s ana­lys­is is that this is where he comes back to the ques­tion of fet­ish­ism. Why it is it that the fet­ish­ist­ic char­ac­ter of the cred­it sys­tem can pro­duce cir­cu­la­tion of fic­ti­tious cap­it­al? That leads in­to an in­ter­est­ing ques­tion as to why cap­it­al ac­tu­ally tol­er­ates the in­san­ity of the cred­it sys­tem, which is a Pan­dora’s box out of which all kinds of nasty things jump, in­clud­ing the spec­u­lat­ive waves that we have been ex­per­i­en­cing.

An­drew, I too date the ori­gins of neo­lib­er­al­ism to the late 1960s and early 1970s, par­tic­u­larly the mar­ket crash of 1973, which was fol­lowed then by what I saw as the ma­jor dual ex­per­i­ment in neo­lib­er­al polit­ics: One was in Chile, of course, in 1975, and also of course in the New York fisc­al crisis. The no­tion of struc­tur­al ad­just­ment that would later be­come a shib­boleth with­in the IMF after 1992 was first ex­per­i­mented with in 1975. The ori­gin of neo­lib­er­al­ism was not tech­nic­al. It was a class project. To those who ar­gue that neo­lib­er­al­ism is over, I say the class project is go­ing very well, in fact the up­per classes have be­nefited from this last crisis. In many ways they have con­sol­id­ated even more wealth and power.

AK: When I say that the real wages and be­ne­fits of Amer­ic­an work­ers have in­creased in place and their share of in­come hasn’t fallen, I am talk­ing about the real wages per hour, and this is not be­cause per fam­ily they are work­ing more hours. What Paul has said, about the em­pir­ic­al basis of the claim that there has been a di­ver­sion from pro­duc­tion to fin­ance, the evid­ence ac­tu­ally points to the op­pos­ite.

My oth­er com­ment though is that the ac­tu­al con­tra­dic­tion, as Marx ar­gues, is between use value and value, not use-value and ex­change-value. The two factors of the com­mod­ity are use-value and value. Ex­change-value is just a form of ap­pear­ance. It seems like a kind of ab­struse the­or­et­ic­al point, but I think it goes deep in­to the ques­tion of what we need to do, which is to get rid of the law of value, the eco­nom­ic laws that com­pel pro­du­cers to pro­duce at low cost be­cause time spent pro­du­cing stuff that you don’t need above the so­cial av­er­age does not count.

PM: We don’t see the kind of massive de­valu­ation of cap­it­al that took place dur­ing the Great De­pres­sion and the Second World War be­cause the nature of the cap­it­al­ist eco­nomy re­lent­lessly pushes people in that dir­ec­tion any­way. Hence every gov­ern­ment’s move in the dir­ec­tion of aus­ter­ity, cheered on by cap­it­al­ist pun­dits, who at the same time are re­luct­ant to des­troy the debt-based struc­ture sup­port­ing the fic­ti­tious cap­it­al that had sus­tained the ap­pear­ance of prosper­ity over the last 30 years. Cap­it­al has be­come much more cent­ral­ized and con­cen­trated in the last 50 years and much more glob­al­ized. The only hope for cap­it­al­ism, you could say, for cap­it­al­ism would be massive de­valu­ation, even though they don’t want to do that, hence the end­less pussy­foot­ing around aus­ter­ity and bits of stim­u­lus.

Ques­tions and an­swers

Ross Wolfe:
Do you think that U.S. he­ge­mony is at an end, and if so, what is to come? Is neo­lib­er­al­ism at an end? What will re­place it?

DH: As far as mil­it­ary power is con­cerned, the U.S. is he­ge­mon­ic, ab­so­lutely! But is it fin­an­cially and pro­duct­ively he­ge­mon­ic? In many ways it seems more de­centered. We are get­ting re­gion­al he­ge­mons like China in the Far East, Brazil in Lat­in Amer­ica, and so on. In some parts of the world neo­lib­er­al­ism nev­er really got star­ted. Lat­in Amer­ica has been anti-neo­lib­er­al for some time now, ad­opt­ing (broadly speak­ing) a more Keyne­sian ap­proach. Neo­lib­er­al­ism was a polit­ic­al project, which had di­verse struc­tures deeply em­bed­ded in some parts of the world and not in oth­ers. The re­ac­tion against it is also un­even. Is this the end of cap­it­al­ism? Cer­tainly not. But the in­ter­est­ing ques­tion is what kind of cap­it­al­ism will fol­low — a plu­to­cracy, or something rather dif­fer­ent?

AK: While cer­tainly the U.S. has mil­it­ary might that is un­rivaled, there is an ar­gu­ment, which I think should be taken ser­i­ously, that in the fin­an­cial sphere and the eco­nom­ic sphere, the U.S. was nev­er he­ge­mon­ic. Re­gard­ing neo­lib­er­al­ism, I don’t ac­cept that the eco­nom­ic dir­ec­tion is de­term­ined by polit­ics and ideo­logy. I think it is rather the re­verse. Con­sider that Henry Paulson, the neo­lib­er­al Treas­ury Sec­ret­ary, pushed for a massive bail­out. Those in power will do what is prag­mat­ic, mud­dling through to keep the sys­tem afloat, whatever their ideo­lo­gic­al in­clin­a­tions, if they think that is what it takes to save cap­it­al­ism.

PM: Neo­lib­er­al­ism nev­er really ex­is­ted as much more than an ideo­logy. The greatest proph­et of neo­lib­er­al­ism in Amer­ic­an his­tory, Ron­ald Reagan, also was the greatest Keyne­sian. The move to­ward aus­ter­ity does not sig­ni­fic­antly de­crease state in­volve­ment in eco­nom­ic activ­ity. We don’t know what the out­come of any peri­od of so­cial and eco­nom­ic crisis would be. The his­tor­ic­al re­cord is that so far only small minor­it­ies of people have tried to over­throw the ex­ist­ing sys­tem of so­cial re­la­tions. It’s pos­sible that in the fu­ture much lar­ger num­bers of people might be moved in a sim­il­ar dir­ec­tion and they might be large enough to suc­ceed in do­ing it.

Laurie Penny: How is listen­ing to a pan­el like this, with four white males telling us things we already largely know, help­ful to us in over­com­ing the crisis? Why was noth­ing men­tioned about rights, gender, or the fam­ily? Why were these treated as side is­sues?

Un­named audi­ence mem­ber: One im­plic­a­tion of the crisis of neo­lib­er­al­ism is that there is no al­tern­at­ive and that this ab­sence of al­tern­at­ives has to do with the col­lapse of the cent­rally planned eco­nom­ies. Would so­cial­ism en­tail the cre­ation of a demo­crat­ic, glob­ally planned eco­nomy?

LG: I am really sorry that I was born a white male and spent 40 years study­ing cap­it­al­ist crisis. I think the ques­tion of the dis­ap­pear­ance of the one-paycheck fam­ily — though I am no fan of the bour­geois nuc­le­ar fam­ily — is one key as­pect of the con­trac­tion of so­cial re­pro­duc­tion. This can lead to a fruit­ful dis­cus­sion of some gender is­sues.

If one looks over a 200-year peri­od — from the very labor-in­tens­ive cap­it­al­ism that ex­is­ted in the early 19th cen­tury to today — there is no ques­tion that there has been a long-term trend to­wards the rise of con­stant cap­it­al and the di­minu­tion of vari­able cap­it­al, al­beit with a lot of fluc­tu­ations along the way. The cred­it sys­tem was ne­ces­sary to up­hold the value of dif­fer­ent claims to wealth well past the time they oth­er­wise would have col­lapsed due to lack of profit. The goal of so­cial­ism is, as An­drew said, the ab­ol­i­tion of value, the de­struc­tion of the reg­u­la­tion of so­cial pro­duc­tion by so­cially ne­ces­sary labor time.

PM: Par­ti­cip­at­ing on a pan­el like this is not a rad­ic­al activ­ity. It does not change the world. It does not un­der­mine any­thing. As a group we are in­ter­ested in the sub­ject, but I see no reas­on to de­scribe that as a rad­ic­al or re­volu­tion­ary activ­ity. I gen­er­ally re­fuse to be on a dis­cus­sion that does not in­clude at least one fe­male. This time I would have re­fused, but, the truth is, I deal with a lot of the crisis lit­er­at­ure, but I don’t know any wo­men who are writ­ing about the sub­ject. I would say that is­sues of race and gender, while of im­port­ance or in­terest polit­ic­ally, are quite ir­rel­ev­ant to the ques­tion of the nature of the world eco­nom­ic down­turn. They have no bear­ing on it. This is an ex­tremely, highly ab­stract fea­ture of cap­it­al­ism. If you had total gender equal­ity and total ra­cial equal­ity in every na­tion in the world, you would still have eco­nom­ic de­pres­sions. If we would be­gin to talk about polit­ic­al re­sponses to the ex­ist­ing eco­nom­ic situ­ation, then we would have to start talk­ing about gender, race, na­tion­al­ity, and many oth­er so­cial cat­egor­ies. I think it has to be faced, as a so­ci­olo­gic­al fact, that Marx­ist the­ory is a male busi­ness, like ham ra­dio op­er­at­ors or trop­ic­al fish keep­ing. It’s a hobby for white males. There is a his­tory be­hind that so­ci­olo­gic­al fact.

AK: I would also have liked a more rep­res­ent­at­ive pan­el. But, on the ques­tion of plan­ning: If you are go­ing to over­come the law of value, you have to have plan­ning and at some level it will have to be cent­ral­ized, for prac­tic­al reas­ons. To have a world eco­nomy, it has to be co­ordin­ated. It doesn’t have to be co­ordin­ated by bur­eau­cracy in an op­press­ive man­ner. Mi­chael Al­bert and Robin Hahnel have done really good work about how you can have, in a sense, cent­ral plan­ning, without any­body be­ing con­trolled.

Ben Blum­berg: If it is dif­fi­cult to con­ceive of the end of cap­it­al­ism, this prob­ably is an in­dic­a­tion that there is not cur­rently a force cap­able of chal­len­ging it. If that is the case, what is the in­ter­pret­a­tion of cap­it­al­ism for? Do you think that, in the early 20th cen­tury, when there was a burst of re­volu­tions, that the is­sue of anti-cap­it­al­ism was clear­er?

PM: We have now had 300 years of cap­it­al­ism. It seems like it has al­ways been there and al­ways will be there. The prob­lem is still the same and the solu­tion is still the same. Un­less people fig­ure it out, they will suf­fer wretchedly. Since people are not com­pletely nuts, it’s pos­sible they will be pushed to the point that they say, “We have to do something about this.” If they want to, they cer­tainly can.

LG: Forty years ago, the most ad­vanced no­tion of re­volu­tion on the rad­ic­al left was the idea of seiz­ing the factor­ies and es­tab­lish­ing work­er’s coun­cils. But look­ing more deeply in­to Marx, one of the things that al­ways struck me was that as cap­it­al­ism evolves, it il­lu­min­ates things in Marx that people didn’t no­tice be­fore. Let’s take the un­pub­lished sixth chapter of volume one of Cap­it­al. It has this very power­ful de­scrip­tion of the trans­ition to an em­bod­ied tech­no­logy that self-ex­presses a so­cial re­la­tion­ship of cap­it­al. Most early 20th cen­tury Marx­ists did not even know this chapter, but the evol­u­tion of cap­it­al now makes it stand out. As for the early 20th cen­tury, I think it is very im­port­ant to un­der­stand that the over­whelm­ing ma­jor­ity of Marx­ists and re­volu­tion­ar­ies at that time were stat­ists of one kind or an­oth­er. There was a be­lief that if it wasn’t a ques­tion of seiz­ing the ex­ist­ing state, it was a ques­tion of set­ting up an­oth­er state that would es­sen­tially con­tin­ue cap­it­al in a dif­fer­ent form, as in the So­viet Uni­on.

DH: Value is a so­cial re­la­tion. As such, it is im­ma­ter­i­al and ob­ject­ive, as Marx makes very clear. It there­fore needs ma­ter­i­al rep­res­ent­a­tion, money, which de­pends on ex­change-value. But the rep­res­ent­a­tion of value, the money form, does not truly rep­res­ent it. Value is so­cially ne­ces­sary labor time on a world scale. The prob­lem is that its rep­res­ent­a­tion is such that private per­sons can ap­pro­pri­ate its so­cial­ity. As a res­ult, this so­cial power can be ac­cu­mu­lated by an in­di­vidu­al and a class. This rep­res­ent­a­tion of value in the money form is a per­ver­sion of what value is really about, and this is a con­tra­dic­tion. If you want to ab­ol­ish classes and the in­di­vidu­al ap­pro­pri­ation of so­cial value, then you have to come up with a money form that is anti-ac­cu­mu­la­tion. This is a very in­ter­est­ing idea. Marx says that the money com­mod­it­ies are gold and sil­ver for the very simple reas­on that they do not ox­id­ize. They do not rot or dis­in­teg­rate, but re­tains its char­ac­ter. There­fore, you can ac­cu­mu­late and save value. If you had a form of money that dis­solved, you would end up with a very dif­fer­ent kind of so­ci­ety, be­cause money would aid cir­cu­la­tion but would not fa­cil­it­ate ac­cu­mu­la­tion. Per­haps we should start in­vent­ing new forms of money that ox­id­ize!

What we have to do is stop the ac­cu­mu­la­tion of wealth and power in private hands. One of the ways to do that is to re­vo­lu­tion­ize the money form. I know someone is go­ing to say, “Marx ob­jec­ted to Proud­hon’s at­tempts to do this,” but Marx is some­times un­fair to Proud­hon. Some of the stuff about al­tern­at­ive cur­ren­cies, which the Marx­ist left usu­ally re­nounces as an­arch­ist, is ac­tu­ally worth con­sid­er­ing.

Un­named audi­ence mem­ber: What are the polit­ic­al im­plic­a­tions at stake in the con­tra­dic­tion between use-value and ex­change-value?

AK: This is not the es­sen­tial con­tra­dic­tion of cap­it­al but a form of its ap­pear­ance. The in­tern­al con­tra­dic­tion of cap­it­al is between use-value and value. It is not just a ques­tion of Marx be­ing fair or un­fair to Proud­hon; there is a ques­tion of wheth­er or not you can fun­da­ment­ally al­ter the nature of the sys­tem by reg­u­lat­ing mar­kets or mess­ing with money. Marx puts for­ward a very de­tailed ar­gu­ment — in sec­tion three, chapter one of Cap­it­al,volume one — about why at­tempt­ing to change the sys­tem by ab­ol­ish­ing money, while keep­ing com­mod­it­ies and com­mod­ity pro­duc­tion in­tact, is like get­ting rid of the pope while keep­ing Cath­oli­cism oth­er­wise in place.

The Left set about down­play­ing the crisis of 2008. Howard Zinn re­marked in The Na­tion, “It is sad to see both ma­jor polit­ic­al parties agree to spend 700 bil­lion dol­lars of tax-pay­er money to bail-out huge fin­an­cial in­sti­tu­tions.”[2] Pop­u­lists like Zinn were fo­cused on, “Why are we en­rich­ing the bankers?” while fail­ing to see that the sys­tem was hanging in a bal­ance. The fin­an­cial sys­tem could have col­lapsed in Septem­ber-Oc­to­ber of 2008. But the Left didn’t want to say that it wanted that to oc­cur. Yet it hated to ad­mit that keep­ing cap­it­al­ism afloat re­quired the im­ple­ment­a­tion of something like TARP. The Left was thus un­able to put for­ward a reas­on­able re­sponse in light of the wide­spread opin­ion that cap­it­al­ism had failed.

LG: What does the non-re­pro­duc­tion of the work­ing-class mean and what is the role of the re­volu­tion­ary left? I think we saw a very good ex­ample of this in the most rad­ic­al days of Oc­cupy, which took place on the West coast, where you might say a “pre­cari­at” or a large pool of cas­u­al work­ers began to form an al­li­ance with more tra­di­tion­al, older or­gan­ized work­ers, the West Coast Long­shore­man Uni­on. This cul­min­ated with the at­tack on the Long­shore­man in the fall of 2011 and car­ried over in­to the spring of 2012. I do not ad­voc­ate the form­a­tion of a van­guard party. Someday, a polit­ic­al party will emerge, but in the mean­time what is pos­sible and ne­ces­sary is a net­work of people, like those in Oc­cupy, that are spread­ing an ana­lys­is of the fun­da­ment­al crisis of the sys­tem, put­ting for­ward the claim that there is no exit short of a so­cial­ist-com­mun­ist al­tern­at­ive to the cap­it­al­ist mode of pro­duc­tion. As Marx says in the Com­mun­ist Mani­festo, the in­volve­ment in this or that struggle is not the ques­tion of vic­tory or de­feat, but of build­ing the unity of the work­ing class. I think that’s what briefly emerged, in Seattle, Port­land, and San Fran­cisco, at the time of the Long­shore­man struggle.

PM: The non-re­pro­duc­tion of the work­ing class is a mis­nomer. What one should say is that the value of labor power is de­clin­ing or be­ing pushed down. A smal­ler per­cent­age of the world’s pop­u­la­tion is be­com­ing ne­ces­sary for the work­ing class. You can send half the people in the United States to col­lege but you only need to em­ploy eighty per­cent of them. The oth­ers will be­come part of the “pre­cari­at” and go on to work as baris­tas or scrabble for some oth­er kind of wage-labor, or go to Ver­mont and to make goat cheese. In Greece now, there are no jobs for people, but glob­ally the work­ing class is re­pro­duced. As Marx ex­pec­ted, the re­serve army of labor in­creases over time. China is an in­ter­est­ing ex­ample where, in the last 10 years, there has not been one new job in man­u­fac­tur­ing, ac­cord­ing to ILO (In­ter­na­tion­al Labor Or­gan­iz­a­tion) stat­ist­ics, partly be­cause the south­ern edge of China, where for­eign man­u­fac­tur­ing and as­sembly plat­forms are con­struc­ted, is us­ing the latest tech­no­logy with ex­tremely high pro­ductiv­ity.

Un­named audi­ence mem­ber: His­tor­ic­ally, so­cial­ists have pro­posed an­swers even bey­ond cap­it­al­ism, point­ing to the re­appro­pri­ation of tech­no­logy. What happened to that so­cial­ist ima­gin­a­tion?

LG: Tech­no­logy as such is not cap­it­al. Cap­it­al is a so­cial re­la­tion­ship and in the case of, say, the port of Rot­ter­dam, where some in­fin­itely small num­ber of long­shore­man are un­load­ing ships in the biggest port in Europe, this shows how cap­it­al has mar­gin­al­ized much of the work­ing class through tech­no­lo­gic­al in­nov­a­tion even as it de­pends upon the value of the re­pro­duc­tion of labor power as its stand­ard for ex­change. It is only a so­cial­ist-com­mun­ist so­ci­ety that can strip away that value form and use tech­no­logy for its un­real­ized use-value.

PM: I feel I have to de­fend the hon­or of the so­cial­ist past. The idea of the ab­ol­i­tion of labor and the ab­ol­i­tion of the work­ing class was the prime idea of much of the so­cial­ist move­ment of the 19th cen­tury and it was par­tic­u­larly dear to the heart of Marx, who looked to a com­mun­ist so­ci­ety in which people would do as little work as pos­sible through the egal­it­ari­an use of tech­no­logy in or­der to max­im­ize free time. This was the Marxi­an uto­pia: The free­ing of time for every­body by ab­ol­ish­ing the class of work­ers. Through the gen­er­al­iz­a­tion of labor, the hours of labor would be shortened and every­body would do as little work as pos­sible. This is a very old idea that Marx’s son-in-law Paul La­far­gue cel­eb­rated, and it is one that all so­cial­ists should fol­low. |P

Tran­scribed by Daniel Jac­obs and Kon­stantin Kam­in­skiy.


1. Karl Marx, Grundrisse: Found­a­tions of the Cri­tique of Polit­ic­al Eco­nomy, trans. Mar­tin Nic­olaus (New York: Pen­guin Books, 1973), 706.
2. Howard Zinn, “Spend the Bail­out Money on the Middle Class,” The Na­tion, Oc­to­ber 27, 2008.

5 thoughts on “Radical interpretations of the present crisis

  1. Pingback: Counterhegemonic apparatchiks: Sebastian Budgen and Alexander Locascio | The Charnel-House

  2. “Why was nothing mentioned about rights, gender, or the family? Why were these treated as side issues?”

    Well I am pretty sure Laurie Penny’s articles in the Guardian and analysis of things aren’t helping to overcome anything either.

  3. Pingback: A Marxist-feminist critique of intersectionality theory | The Charnel-House

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