…And its Consequences

The present financial crisis, with its threats to the existing international banking and credit system, and the underlying economic crisis, the global crisis of over- accumulation, which is its basis, is the greatest challenge to the functioning of world capital since the early 1930’s. Given the gravity of this crisis, the current recession will most likely be a very deep and protracted one, striking all sectors of the global economy.

Its impact on the working class will be devastating, leading to a vast increase in unemployment as the economy contracts, both in the advanced capitalist countries and in the emerging economies, lower wages as well as significant cuts in the “social wage” and pensions, together with the loss of homes due to foreclosures, which hits the working class especially hard. Yet this is no “death crisis” of capitalism; it will bring no automatic collapse, the expectation of which is a significant barrier to revolutionary struggle and to the development of the consciousness of the collective worker. Capital possesses enormous resources, economic, political, and ideological, upon which it can draw. One such resource is to blame the crisis on the greed of the bankers and capitalists, to focus anger on “Wall Street,” and its agents whose avarice has supposedly brought this crisis upon us. From the US and Germany, to Russia and China, that ideological campaign has already begun. It is important, then, to recognize – as Marx insisted -- that the capitalist is simply the functionary or executor of capital, and not the responsible agent of the economic processes to which he or she responds: For Marx, “… individuals are dealt with only insofar as they are the personifications of economic categories, the bearers [Träger] of particular class relations and interests.” (1) The executor or functionary of capital, the capitalist class, acts consciously, but without an understanding of the complex of networks and interests that it personifies, without a full understanding of the exchange mechanism, and the objective or real abstraction in which value is incarnated. As Marx pithily said, “they do not know it, but they do it.” It is capital and the logic of the value form that has produced this crisis, and not the capitalists, and their cupidity or stupidity. And any “solution” short of the abolition of value production will only prepare the way for new and even more devastating crises. Within the confines of capitalism and the value form, we can expect a provisional end to the policies of neo-liberalism and deregulation that were ushered in by Thatcher and Reagan in the 1980’s. As the steps already taken by capital to respond to the credit freeze and the need to re-capitalize the banking system indicate, regulation will now become the mantra of the most powerful elements of the capitalist class. It is not just left-liberalism and Social Democracy which now rejects neo-liberalism, and which seeks to save capitalism through regulation and Keynesianism. In its lead article this October, the New Left Review sees promise in “financial regime change,” and holds out the prospect that more scope for government regulation of the financial system “may give the new regime that emerges from the current upheavals greater stability than its predecessor.” (2) That is surely the aim of capital, though it ignores the fact that this is not just a financial crisis; it is rather a global crisis of the value form and its insurmountable contradictions. Moreover, an end to policies of deregulation does not mean an end to globalization, which is separable from neo-liberalism, though it was the latter that historically made possible the former. For the moment, the time to dismantle the policies and institutions of globalization – the WTO, the IMF, the World Bank, the OECD, -- and with it a robust populism of the left or right, has not yet come. (3) Indeed, capital, for the moment, needs to reinforce the bonds of globalization: the advanced capitals, the EU, Japan, the US, need the markets of the emerging economies (China, India, South East Asia, Brazil) if the slackening of domestic demand, even with lower interest rates, is to be offset, and the emerging economies need the open markets of the advanced capitals to prevent a collapse of their own newly industrializing economies. Moreover, deflationary tendencies in the periphery of world capital, and ever cheaper wages there, will lower the wage bill in the advanced capitals, by keeping the flow of cheap consumer goods coming in the midst of unemployment and declining wages in those sectors of world capital. The most intelligent functionaries of capital, from the US to China understand this. Just as they understand the need of capital to further degrade the natural environment in its unceasing quest for surplus-value, in its determination to reduce the costs of variable capital as it seeks to raise its rate of profit, a process that the present economic crisis will exacerbate, as the conversion of left liberals and even some of the left to an expansion of offshore drilling for oil and the building of nuclear reactors makes abundantly clear.

Those very “needs” of capital, mired in a deepening economic crisis, are a significant reason why, even before the credit crunch this past September, leading sectors of the capitalist class in the US had already made it clear that it preferred a Democrat to a Republican as president; that it preferred Obama to McCain. The future of American imperialism was one reason: Bush’s unilateral foreign policy had proven an obstacle to the support of allies in policing the world and its global economy. Bogged down in Iraq, incapable of making progress in bringing about an end to the Israeli-Palestinian conflict, the debacle in Lebanon, where Syrian influence was growing, the danger of unilateral American moves against Iran, the need to increase troops in Afghanistan, and the task of restoring some kind of order in Pakistan and preventing its descent into civil war, all made some kind of “intelligent” imperialism, to replace the discredited Bush doctrine, an imperative need. It was precisely Obama who was made to order to be the functionary of such an intelligent imperialism, of the sort represented by Zbigniew Brezinski or Colin Powell, though the replacement of Donald Rumsfeld by Robert Gates as American Secretary of Defense had already signaled the beginnings of such a shift by the Bush administration. The financial and economic crises, and the moves already undertaken by Secretary of the Treasury Henry Paulson, and the Fed Chairman, Ben Bernanke, signaled the need for capital to reverse the course towards deregulation of financial markets, and engage in robust Keynesian economic policies to reflate the economy, without sacrificing the “gains” for capitalism made possible by globalization. The ideological commitment of much of the Republican Party to lower taxes, Reaganomics, and opposition to the Paulson plans for re-capitalizing the banks, all made it clear that in the present situation, Obama, and a Democratic Congress, was a better choice to implement the economic policies that capital required than McCain. While the exact course of the economic crisis cannot be predicted, it would seem that Obama and the Democrats are best suited to wear the mask of capital at the present time; indeed, Obama’s capacity to mobilize popular support for “change” is one reason why that is the case. Should the policies of an Obama administration fail, should popular discontent significantly rise, populist movements of the left or right will probably grow. In such a case, the right-wing of the Republican Party, with an anti-Washington, anti-Wall Street, ideology, and calls for anti-immigrant legislation and protectionist economic policies, may well resonate with both the middle class and elements of the working class too (as will similar calls in the EU countries too). But for the moment, capital has the functionaries it needs in charge of both the executive and legislative branches of the American republic; functionaries who can best assure the kind of international cooperation that the continuation of American hegemony requires.

While capital needs the best functionaries to assure its continuation, it also requires something else: the ability to control the population, to guarantee its hegemony over the collective worker, which entails an ability to mold the human population as subjects. One facet of the shift from the formal to the real domination of capital is a concomitant shift from a reliance on force or coercion to control the working class to a reliance on its capacity to ideologically shape the human “material” that it needs to control; to shape humankind as a certain kind of subject. We are not speaking of simple mystifications, tricks, by which the working class is induced to accept the rule of capital. Rather it is a matter of profoundly shaping and re-shaping the very culture, needs, psychology and anthropology, of the human being; its subjectification. The value form is not some kind of coat that humankind can simply take off when the weather changes, certainly not in the epoch of the real domination of capital, where its rule, cultural, economic, and political, becomes totalitarian. Theodor Adorno added to Marx’s concept of the rising organic composition of capital, the concept that the “organic composition of man” is growing: “Only when the process that begins with the metamorphosis of labour-power into a commodity has permeated men through and through and objectified each of their impulses as formally commensurable variations of the exchange relationship, is it possible for life to reproduce itself under the prevailing relations of production.” (4) Adorno’s rising organic composition of man grasps the immanent tendency of capital in its phase of real domination to extend the changes in the technical composition of capital, the relation of dead to living labor, into the very constitution of the worker: his needs, her affects, his vision of the world, her perceptual universe. While Adorno may have captured one of the immanent tendencies of capitalism in its phase of real domination, we believe that his vision of the rising organic composition of man is too pessimistic; that it virtually forecloses any possibility of revolutionary struggle or the development of class consciousness on the part of the collective worker. We do not want to underestimate the capacity of capital to subjectify the population that it rules; its successes have been historically compelling. Indeed, the power of nationalism, in both left and right forms, and the recrudescence of religious ideologies, which have quite literally re-shaped a considerable portion of humankind, are a warning to those who might underestimate this power of capital, and the extent to which the exchange relationship has penetrated most aspects of human existence. (5) However, it also seems to us, that there are counter-tendencies to capital’s power to bring about the subjectification that it needs and wants; counter-tendencies inherent in the value form itself and its laws of motion. Capital has not succeeded in expunging the collective memories of humankind’s struggles against exploitation, embedded in the history of every culture and social order, and especially the struggles of the working class, memories that the very globalization of capitalism spreads universally; memories that can be re-actualized, particularly in an era of crisis. Moreover, one of the means that capital must wield in order to escape its downward economic spiral is to accelerate the development of the productive forces, including especially the productive force of humankind, of the collective worker. That requires the creativity and innovation on the part of workers, without which scientific and technological stagnation will prevail. On the one hand, capitalism needs the creativity and innovation provided by the collective worker in order assure its own economic bases, the competitiveness of capital entities; on the other hand, that creativity and innovation has the potential to escape the control of capital, to extricate itself from the prevailing modes of science and technology integrally linked to the law of value, to re-animate the very tendencies to resistance and rebellion that capital seeks to expunge from creativity and innovation, but that may be inherent in it.

There is no inevitability of communism attendant on a devastating economic crisis - the 1930’s should have demonstrated that - and the real domination of capital has proceeded over the course of the past eight decades. Revolutionaries will not shout “here’s to the crisis,” aware as they are that crisis does not necessarily result in revolution, that it causes enormous suffering for the working class, and can lead to ever-greater “barbarism,” to xenophobia, war, and genocide. The crisis itself is inevitable; its outcome is not. One effect of the present crisis will be to shatter the “normalcy” of economic growth, of faith in the benefits of the prevailing science and technology. To the questions that arise as the processes of normalization breakdown, capital will try to provide its own answers. Yet none of those “answers” can resolve the necessity that lies at the heart of the value form, that “… its production moves in contradictions which are constantly overcome but just as constantly posited. The universality towards which it irresistibly strives encounters barriers in its own nature, which will, at a certain stage in its development, allow it to be recognized as being itself the greatest barrier to this tendency, and hence will drive towards its own suspension. … Ricardo and his entire school never understood the really modern crises, in which this contradiction of capital discharges itself in great thunderstorms which increasingly threaten it as the foundation of society and of production itself.” (6) The task of revolutionaries is to show where the horrific logic of the value form leads, in this epoch of social retrogression, to provide different answers to the questions that are beginning to be asked, to intervene in all the cracks that open up in the edifice of capitalist normalcy; to devote themselves to the work of that old mole of revolution, and to the possibility of creating a human community.

Mac Intosh

November 7, 2008


1. Karl Marx, Capital: A Critique of Political Economy, Volume One, Preface to the First Edition, Penguin Books, p. 92.

2. Robert Wade, “Financial Regime Change?” in New Left Review, 53, September-October 2008.

3. Recent proposals of President Sarkozy in France to use the partial nationalization of key firms to protect them from foreign takeovers, especially by foreign government-owned sovereign funds, is indicative of the kinds of protectionist moves that a deepening economic crisis may provoke.

4. Theodor Adorno, Minima Moralia: Reflections from Damaged Life, # 147, NLB, p. 229.

5. This should serve as a warning to the growing number of theorists for whom the changes in the organization of capitalism over the past several decades, and the growth of what many designate, mistakenly in our view, as “immaterial labor,” is indicative of the overcoming of the law of value within capitalist society. Quite the contrary, those very developments indicate the continued existence of the domination of the value form in capitalism today, even as its perpetuation has become an obstacle to the growth of real wealth. As Marx pointed out, the very historical trajectory of capitalism has transformed the law of value from an historical condition for the creation of real wealth into a barrier to such creation: “The surplus labour of the mass has ceased to be the condition for the development of general wealth, just as the non-labour of the few, for the development of the general powers of the human head. With that, production based on exchange value breaks down ….” (Karl Marx, Grundrisse: Foundations of the Critique of Political Economy (Rough Draft), Penguin Books, p. 705. That is to say, any link between capitalism and human progress, any “progressive” role for capitalism, has ceased, even as the penetration of the value form into the life of humankind has grown.

6. Karl Marx, Grundrisse: Foundations of the Critique of Political Economy (Rough Draft), pp. 410-411.

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