capital

Response to Peter Frase on identity politics

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Jacobin has published a short reflection by Peter Frase on identity politics, with the humorous title “Stay Classy.” Unfortunately, the title is probably the best thing about it. The rest of it is a bit slapdash, haphazardly whipped together. Especially the bit on “racecraft,” which seems both tacked on and untrue to  Barbara and Karen Fields’ argument in their book of the same name. Generally I think Frase is the brains of the bunch over at Jacobin, and still recommend his “Four Futures” essay to anyone interested in the journal. But this piece — as well as his earlier article on the 2011 protests in Wisconsin, “An Imagined Community,” in which he claimed “all politics are identity politics” — I find far weaker.

Anyway, I read this article when it appeared on  Frase’s blog. Here’s what I wrote there, with a few slight alterations:

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The emphasis on “identity” is misleading.

Marx stressed the significance of the proletariat as the “universal class” of bourgeois society because of its decisive position within the capitalist mode of production. Not because workers are the most downtrodden or marginalized members of society, but because they are uniquely placed to overturn the present social order. Immiseration notwithstanding, lumpenproletarians (the so-called “lazy lazzaroni” of  the “classes dangereuses“), the unemployable reserve army of labor, and those still involved in peasant labor have it far worse than those who manage to find waged or salaried jobs under capitalism. So if oppression doesn’t index political potential, what does? What makes the working class so special?

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Once again, it’s not that the working class is inherently radical or progressive. History has shown again and again that workers are susceptible to the influence of reactionary ideologies, and quite often act in ways that seem to go against their best interest. Proletarian parties and political movements have repeatedly erred in assuming that the laboring masses would eventually come around to socialism, only to see their expectations dashed at the final moment. All the same, the proletariat remains the sole hope that capitalism might someday be overcome. If workers aren’t natural-born revolutionaries, though — if they don’t automatically organize around socialist principles — what could possibly justify this continued belief?

Though it risks sounding redundant, we would do well to remind ourselves that the fundamental structuring principle of the capitalist social formation is capital. Capital is a social relationship in which a given magnitude of value, itself comprised of finished products embodying dead labor, must augment itself through the process of production, by coming into contact with living labor that valorizes it further. It is thus necessarily mediated at every level by wage-labor, on which its fructification relies. For this reason, it is dependent on a class of laborers — a social group determined by its relation to the means of production. Continue reading →

Krugman on Piketty: From one celebrity neo-Keynesian to another

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Paul Krugman writes in today’s New York Times on the buzz around Piketty’s Capital in the Twenty-First Century. Believe the hype, he advises, but the French economist is certainly no Marxist. The celebrated columnist documents some of the more extreme reactions the book has elicited from Republicans and right-wingers, which he calls “the Piketty panic”:

[C]onservatives are terrified…James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged”…it has been amazing to watch conservatives, one after another, denounce Mr. Piketty as a Marxist. Even Mr. Pethokoukis, who is more sophisticated than the rest, calls Capital a work of “soft Marxism,” which only makes sense if the mere mention of unequal wealth makes you a Marxist.

It is to Krugman’s credit that he can see through the hysterical right-wing denunciations of Piketty as a “Marxist” or “collectivist,” however. That’s something that can’t really be said for the book’s various “Marxian” admirers. Many on the Left tend to believe the Right’s paranoid rhetoric about fairly anodyne liberalism: if conservatives decry Keynesianism or political correctness as “Marxist” (i.e., economic  or cultural), then it must be!

Yeah, not really. Continue reading →

The metropolis, money, and abstraction

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What follows is an extract, some preliminary research, from an essay I’m working on with Sammy Medina. It’s in very rough form, and over-footnoted. Much of it will have to be cut. But I still felt like I had to go through everything step by step to make sure that each stage of the argument holds up. Once that’s done I’m hoping I’ll find shortcuts for how to say it with greater brevity.

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The modern metropolis, both in its historical origins and present-day existence, is the site of capitalist accumulation par excellence. As the German sociologist Georg Simmel put it in his celebrated 1903 essay, “The Metropolis and Mental Life,” “[t]he metropolis has always been the seat of the money economy.”1 Money played a vital role, after all, in shifting the political center of gravity away from the countryside toward the city. Despite the numerous titles and privileges enjoyed by clergymen and noblemen, the townsmen had one mighty weapon in their struggle against feudalism: money.2 By removing the primacy of land tenure (i.e., the manorial system of fiefs and hereditary estates), it eroded the basis of traditional bonds of dependence. “Long before the ramparts of the old baronial castles were breached by the new artillery, they had already been undermined by money,” wrote Friedrich Engels in 1884. “In fact, gunpowder could be described as an executor of the judgment rendered by money.”3

With the increased availability of minted coins in Europe — starting in the twelfth century with the discovery of silver deposits in Thuringia,4 but especially following the influx of precious metals from the New World after 14935 — commodity circulation took place on an expanded scale.6 For merchants and moneylenders living in the cities, the pervasiveness of pecuniary transactions allowed them to leverage their position at the crucible of exchange against the landed aristocracy in the surrounding territories.7 The feudal lords relied on the towns both for their finished wares as well as the occasional loan, and thus fell prey to price gouging and crippling debt. Hard currency thereby helped bring about the decline of feudalism alongside the rise of the revolutionary bourgeoisie.

Cities today invariably reflect this influence. Not simply owing to their past function as the breeding-ground of modern capitalism, but because of their ongoing inundation by the money form of capital as well. Practically every facet of urban life is organized according to synchronized rhythms of exchange.8 Here money acts as a sort of perpetuum mobile, facilitating the circulation of commodities throughout the city and its environs.9 At the same time, however, it accelerates the tempo of daily interactions, since “a change in monetary circumstances brings about a change in the pace of life,” as Simmel observed.10 Whether a town was from the outset a center of trade or a seedbed of industry,11 money eventually permeates its entire infrastructure. Replacing medieval relations rooted in so-called “natural economy,”12 it soon becomes integral to the comings and goings of the whole populace.13

The move away from economies based on barter and the gift, where precise equivalence of exchange is either impossible or besides the point, toward economies based on money and credit acquires an almost world-historical significance in this light.14 Indeed, it is difficult to exaggerate the unique character of a money economy. Continue reading →

Marx and Wertkritik

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Elmar Flatschart
Alan Milchman
Jamie Merchant

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Originally published in the Platypus Review. On Saturday, April 6, 2013, the Platypus Affiliated Society hosted a panel, “Marx and Wertkritik,” at its Fifth Annual International Convention, held at the School of the Art Institute Chicago. The panel featured Elmar Flatschart of the German theoretical journal EXIT!, Alan Milchman of Internationalist Perspective, and Jamie Merchant of Permanent Crisis. It was moderated by Gregor Baszak, of Platypus. What follows is an edited transcript of their discussion. A full recording of the event can be found online. 

Event Description

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Perhaps one of the most influential developments in Marxist thought coming from Germany in the last decades has been the emergence of value critique. Building on Marx’s later economic works, value critics stress the importance of abolishing value (the abstract side of the commodity), pointing out problems in traditional Marxism’s emphasis on the “dictatorship of the proletariat”. The German value-critical journal Krisis has famously attacked what they believed was a social democratic fetishization of labor in their 1999 Manifesto Against Labor. Such notions have drawn criticism from more “orthodox” Marxists who miss the role of the political in value critique and the possibility of immanent transformation through engaging the realities of capitalist societies.

Did the later Marx abandon his political convictions that he expressed in the Manifesto? What about his later political writings, such as his “Critique of the Gotha Program,” in which he outlines the different phases of early communism? Is Marxism a scientific project, as claims from value critics seem to indicate? Was Marx trying to develop of a “science of value” in his later works? What can value critique teach us after the defeat of the Left in 20th century? Did traditional Marxism necessarily lead to the defeat of the Left?
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Elmar Flatschart: Value critique, or, following the theorem developed by Roswitha Scholz, a critique of value-diremption [Wertabspaltungskritik], seeks to understand and critique the fundamental mechanisms that govern modern society. This critique is not as interested in the political Marx of class struggle and the workers’ movement, but more in the philosophical aspects of his work that focus on the abstract and fetishized character of modern domination. This approach tries to keep the abstract critical theory of society strictly separate from the contradictory practical attempts to overcome capitalism. Marxism shouldn’t be understood as an identity-giving, wholesome position, which history proved to be erroneous, but should be reduced to a theoretical core that can help us to understand society, via a negative critique, even if it does not necessarily provide us with a way out. The call for the abolition of labor does not have immediate ramifications for Marxist politics.

There is no new program or a master plan for emancipation that can be developed out of the abolition of value. Rather, it can be seen as a condition of emancipation from value and the abstract system of oppression it represents. How emancipation will be achieved is a more complex story. We know what will not work: much of what the Old Left proposed as Marxist politics. A lot of that should be abandoned because, essentially, abstract domination cannot be abolished through the imposition of some other kind of direct, personal domination. If we are to critique the abstractions of the economic forms, we similarly have to target the political form itself. While Marx and Engels suggested as much by their formulation of the state eventually “withering away,” I think we need to be a lot more radical. Emancipation ultimately has to mean the abolishment of the political as well. This is contradictory in the present political situation, but we should not try to postpone this task until after the revolution. We should see the constraints and the fetishizations immanent to the political form as something we want to get rid of now. Continue reading →

Fragments

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by Reid Kane Kotlas 

Untitled.
Image: Georges Braques,
Bottles and Fish (1909)
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Originally posted on Reid Kane’s tumblog.

To have a system and to have none

Contrary to Hegel, who sought to consummate in theory the system that emerged as humanity rendered itself the necessary product of history, Marx is thought to have definitively indicted this system, or at least what it became. Marx’s critique is understood as a ‘systemic’ critique, a critique not of the actions of individuals or groups but of the whole social structure within which individuals and groups are bound to adopt the social roles that give them actuality. Marx offered no alternative system however, and that alternative which was eventually offered in his name ended in calamity.

Yet Marx did not offer such a critique. Rather, he recognized that the system had already become self-critical, and that this criticism was now advancing in the form of the struggles of the proletariat. It was with this struggle that Marx identified his criticism, a criticism which is nothing if not a critical participation in the political struggle, and thus a struggle to transform the ‘system’ on its own basis. “By raising the representative system from its political form to the universal form and by bringing out the true significance underlying this system, the critic at the same time compels this party to go beyond its own confines, for its victory is at the same time its defeat.” Continue reading →

“The Four Cs”: Commodity, Currency (Money), Capital, Corporation — A popular lexicon regarding some commonly confused terms, along with some further scholarly notes

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The Parisian Arcades

The “Four Cs”: Commodities, Currency (Money), Capital, and Corporations

POSITIVE DEFINITIONS

First we can state briefly what these objects concretely are, so that we can then spell out exactly what they are not.

Commodity — A commodity is any product that is produced for sale on the market, i.e. for the sake of exchange.  Like any other product (non-commodities included), it has a certain utility, or “use-value.”  Products, regardless of their salability, tend to be useful in some way or another, to satisfy a certain need.  Use-values are of a qualitative nature.  That is to say, they are useful because they possess certain utile qualities.

Unlike other products, however, commodities also possess a certain value, or “exchange-value.”  As soon as a product becomes available for exchange on the market, it is thereby converted into a commodity.  Exchange-values are of a quantitative nature.  That is to say, they are valuable because they possess a certain quantity of value.

(It must be noted, however, that if a commodity loses its use-value, i.e. becomes broken or useless, it simultaneously loses any exchange-value it might have had).

How is this quantity of exchange-value determined? What is the basis for the following equation: 20 yards of linen = 1 coat? In terms of their material qualities, the two are totally incommensurable.  A coat may be made of linen, but a single coat does not require 20 yards of linen to produce.  Nevertheless, their quantitative equality presupposes an underlying qualitative identity of substance.  The question thus becomes: What exactly is this substance?

The substantial basis for the equality of two dissimilar items or use-values is the amount of labor-power expended upon them, measured in homogeneous units of time (days, hours, minutes, etc.).  This alone determines the magnitude of value that a commodity possesses.

Commodities are not unique to capitalism.  They preexist the crystallization of the capitalist social formation.  However, in precapitalist societies, the majority of goods that are produced are not commodities.  In other words, most products are intended for immediate use or consumption, either by their producer himself or his next-of-kin.  Society’s general mode of production is only properly called “capitalist” when the majority of its products are commodities.

One final point about the commodity-form should be made before passing on to money.  This concerns the extent to which one’s labor (or more specifically, one’s labor-time) can itself be sold as a commodity on the market.  An employer purchases a certain duration of a person’s labor-time in exchange for the services rendered or products produced.  In return, the employee is typically compensated by hourly wages or an annual salary.

Though wage-labor existed in the margins of precapitalist society, the reproduction of the capitalist mode of production requires that there exists a large displaced population of persons whose only commodity available for sale is their labor.  Thus, under capitalism, wage-labor or salaries becomes generalized as the societal norm.

Currency/Money — Money is a certain commodity that is set aside to serve as a universal measurement of value.  It is the universal equivalent of qualitatively dissimilar commodities.  Money therefore serves as a quantitative medium of exchange.

In another sense, money (as such) is the circulation of commodities.  That is to say, it provides the means by which the exact quantity of one commodity is traded for an exact equivalent quantity of money, which is then used to purchase a given quantity of another.  Money acts as an intermediary in place of direct barter.

This operation can be illustrated by a simple formula, using these symbols:

C = Commodity.

M = Money.

C → M → C.

One commodity is sold for its value in money, which is then used to purchase an equivalent value in another commodity.  This allows for a more equitable exchange of value between commodities than took place in simple barter, which tended to involve uneven transactions.

Capital — Capital is self-valorizing value.  In other words, it is value that becomes more value, or money (which is but an expression of value) that magically transforms itself into more money.  The principle of capitalization is that you start the day with a certain amount of money, and by the end of the day you have more money.

As Marx put it, this process is almost “theological.”  In capital, value becomes at once the subject and object of its own activity, ceaselessly augmenting its own magnitude.  The analogy Marx uses is the differentiation of God the Father from God the Son in the triune theology of traditional Christianity; they are both made from the same substance, and are equally old, yet one begets the other.

The ultimate expression of capital in all its forms is the following:

M → Mº.

(º = “prime.”  Money “prime” signifies the increment of value over and above the amount of value originally advanced.  Once thrown back into the circuit of production and circulation, however, this augmented money or value obtained as a result of capitalization becomes the starting value of the new formula).

Species of Capital

1. Interest-bearing (usurers’) capital — M → Mº.  This is the basic formula of money lending or usury.

A certain amount of money is advanced as a loan, in return for a greater amount of money to be received later, the magnitude of which is determined by a contractually agreed-upon interest rate.

2. Commercial (merchants’) capital — M → C → Mº.  In its most simple form, this just involves the purchase of a commodity for a certain amount of money and its resale for a greater amount of money.

This can be accomplished in any number of ways.  First, a merchant can simply find a chump who is willing to either sell a commodity for less than its value, or a chump who is willing to buy a commodity for greater than its value.

A more calculated approach might involve the purchase of a commodity in a locale where it is abundant (where it is not as highly valued), and then transport it for sale in a locale where the commodity is scarce (where it is more highly valued).  The difference between the money originally paid and the money received at the end of this cycle is the surplus value.

3. Industrial capital — M → C → Mº.  Formally, this circuit is identical with that of merchants’ capital.  The crucial difference consists in the nature of the commodity purchased.  In the movement of industrial capital, the commodity bought is always the labor-time of another person.

Thus, the formula for industrial capital may perhaps be more properly described as M → C(L) → Mº.

Obviously, in this formula the following symbolism is used:

L = Labor.

The labor-time expended by the worker imparts greater value onto the articles under production, thus augmenting the original value of the commodities involved.

Two methods can be used to extract surplus-value in this process:

1. Absolute surplus-value — The capitalist extends the length of the working day, so that the worker invests an amount of labor-time into production greater than the value he receives in wages.  Once the commodities produced in this process are sold in circulation on the market, the surplus-value gained thereby is “realized.”

2. Relative surplus-value — The capitalist reduces the amount of time required to impart a certain amount of value into production below the average of the social aggregate.  This is accomplished by either revolutionizing the social organization of the division of labor or by overhauling the technical means of production.  As a result, the capitalist is able to sell the commodities produced at a level lower than the social average while still realizing the same amount of surplus-value.

Of course, once these new methods of heightened productivity are generalized throughout society, the advantage gained vanishes.  This necessitates a constant revolutionization of the technologies and organization used in production, and an accelerating pace of modernization.  This gives rise to what Moishe Postone has called the “treadmill effect” of capitalism.

4. Finance capital — Mx → M → C → Mº → Mºx.  In this formula:

x = x/100, where x ≤ 100.

Finance capital operates by having investors contribute a percentage of the overall money used to supervalue the value originally inserted into the circuit.  Typically, finance is invested into industry, where again the commodity purchased is labor.  Thus, the formula in this instance would appear as Mx → M → C(L) → Mº → Mºx.

Corporation — A corporation is an association of capitalists who jointly share ownership of a single enterprise.  This is achieved by making shares of the company’s ownership available for purchase by the public.  Historically, this is connected to the rise of the join-stock exchange in the middle of the nineteenth century.  While corporations tend to be much larger and more visible than smaller private businesses, both operate according to the logic of capital.

NEGATIVE DEFINITIONS

Now that we have indicated what these terms are, we can safely say what they are not, in order to clear up some common misconceptions surrounding them. 

Commodity — A commodity is not identical to any other good, article, or product.  Unlike these other products, commodities are not produced for immediate use or consumption by their producer.  Rather, commodities are produced in order to be sold or exchanged, either for money or for other commodities.

Furthermore, commodities are not unique to capitalist society.  Obviously, there existed precapitalist systems of barter, commerce, and exchange.  The point is that throughout most of history the majority of products were not intended to serve as commodities.  They were for the most part produced to serve the most immediate needs of the producer, or alienated without recompense into the possession of one’s feudal lord.  By contrast, capitalism only comes into existence when the majority of products produced by society are commodities.

Currency/Money — The value of money is neither imaginary nor arbitrary.  Money is simply the universal equivalent form of exchange, used as a measurement of the value of goods, or commodities.  This is something of which the Alternative Currency working group should take note.

There are quite real and concrete historical reasons for the development of the money-form of value.  Precious metals came to serve as this medium of exchange because of their practical divisibility, and because of their relative scarcity (and thus also their value, given the difficulty of their location/extraction).  It is true that these metals come to be increasingly substituted by paper money representing their value, and even more abstract forms of credit, but this does nothing to diminish the validity or reality of money as an expression of value.

Capital/Capitalism — Capitalism does not necessarily entail the existence of a free market.  The libertarian notion that has become fashionable in recent years is that only under the economic conditions of laissez-faire, or government non-intervention, can capitalism flourish and exist in a “pure” form.  They cite Bernard Mandeville or a diluted, oversimplified version of Adam Smith as evidence of this proposition.

Some leftish moderates, accepting this facile rightist notion of what capitalism is, naïvely believe that administrative reform, government oversight, more expansive welfare/social programs, and bureaucratic regulations would help counter the volatility and rampant inequality inherent in capitalism.  They believe that the perpetual crisis at the core of capitalism can be “curbed,” “corrected,” or even “controlled” by such Keynesian, neo-Fordist measures.

In reality, however, state-interventionist capitalism is just as capitalist as free market capitalism.  The fundamental principle underlying capitalism in all its different configurations is perhaps elusively straightforward: capital itself.

Corporation — A corporation is not simply any form of capitalist big business.  In fact, in terms of private property, a corporation is actually less tied to the interests of a single individual than non-corporate businesses.  Because the existence of a corporation qua corporation involves an enterprise “going public,” i.e. selling shares of its ownership, it actually reflects (in terms of sheer magnitude) a larger proportion of the public interest than a smaller private enterprise.

Of course, the public character of the corporate enterprise and big agribusiness (the Monsantos of the world) shouldn’t fool us as to their capitalist nature.  A corporation is beholden only to the interest of its shareholders, and not to the public at large.  They have one obligation alone — to turn a profit for those who own a portion of their stock.  And corporations have been known to be exceptionally ruthless in this pursuit.

The only point that I am trying to make by this is to note the irrevocably capitalist character of both big corporations as well as small businesses.  Both operate according to the logic of capital: the supervaluation of value.  In other words, big corporations and small businesses have the same goal at the end of the day.  They seek to turn money into more money. Continue reading →