Internationalist Perspective

Internationalist Perspective 53

The new issue of Internationalist Perspective is ready.

The issue includes articles on the earthquakes in Haiti and Chile, Afghanistan, discussions of class consciousness and reification, the second part of an analysis of Venezuela, and an editorial on global trends.

The articles should be up on the web site within the week, but contact IP if you’re interested in a hard copy.

DISCUSSION MEETING OF INTERNATIONALIST PRESPECTIVE IN PARIS ON “OBAMA, THE BANKRUPTCY OF THE PROVIDENTIAL MAN.“

Text for IP public meeting at AGECA 177, rue de Charonne, Paris 11ème, beginning at 3:15, Saturday March 20 2010.

During several discussion meetings, we focused on the economic crisis, its depth, its roots and its consequences.

Today, we want to come back to the assessment of the Obama government, not because we would have imagined that anyone in our milieu would be astonished by the current assessment, but to approach an aspect which we did not sufficiently address due to not enough time: its ideology.

Indeed, the economic crisis constitutes a factor that has an impact on the proletariat. This impact can be that of the abatement, the discouragement and a turning in on itself. But, if it is accompanied by a questioning about the reasons for the crisis, a refusal of the acceptance of its logic and its effects, this impact can then contribute to the development of class consciousness. Thus, after questioning the economic crisis, it was logical to reconsider the way in which the ruling class was going to try to defuse the possibility of a questioning by the proletariat. And for this reason, the themes of the Obama campaign and his election even were going to make of him a providential man on the ideological level. Moreover, it also should be stressed that this ideological impact largely went beyond the borders of America. The election of Obama impassioned and mobilized indeed all the desperate petits-bourgeois throughout the world.

The Bush era had been marked by the fight against terrorism and its effects, namely, the engagement on the military terrain of many American troops. And if the invasion of Iraq had seemed to confirm American supremacy, the management of the presence of the troops on the Iraqi and Afghan ground had been transformed quickly into an inextricable quagmire. Coffins of G.I’ s returning to the country, as well as the pharaonic sums absorbed in the military budget has made dissatisfaction swell. In the same way, if the American nation were found united against a common enemy after the attacks of September 11, the priorities of daily needs quickly rose to the top and the lack of attention and means devoted to dealing with the increase in unemployment, to impoverishment or to the disaster victims of New-Orleans contributed to this wave of dissatisfaction vis-a-vis the comprehensive policy led by Bush. A change of discourse thus was essential in an urgent way.

Obama is the man we all awaited: he promised us a world where imperialists tensions would be more regulated by diplomacy rather than military engagement; an economic crisis which would be taken in hand, which would punish the greedy and corrupt bankers, or the incapable economic leaders who would be summoned to render account (GM); the financial world “would be regulated”; greater attention would be devoted to the most disadvantaged, to the victims of the crisis, a plan of social coverage would be finally set up and, on which Clinton had broken his teeth, Obama would manage to overcome the resistances of Congress and the Republicans; the image of America broken by the detention conditions of Guantanamo and the scandal of Abu Grahib would be restored by the punishment of the bad elements and the closing of the prison at Guantanamo. And finally, the supreme and delicious promise: all would become possible again, through the famous slogan “Yes, we can,” that splendid distillation of the burning American dream and of an infantile illusion of absolute power. The persona of Obama himself, of black race, was only the confirmation that all is possible. In short, Obama promised another capitalism, the kind that we all dreamed of: a clean and reasonable, controlled and tolerant capitalism. To the faultfinders who started to wonder where the world went, torn by its economic and warlike contradictions, to the revolutionaries posing the question of the historical perspective and the emergence of a new society, Obama came to give this answer: Yes, another capitalism is possible. And the proof was the response that we had all awaited, which was that Obama was elected, both in the United States and by the enthusiasm of segments of population throughout the world.

Obviously, from discourse to practice, things are not so easy. But Obama does not separate his goodwill and his determination. Simply put, he added a little water to his wine; he has to take more time, he must face the resistance of political enemies.

Because, as regards the regulation the banking system and finance, we can recall the warning statements of the new guru of American finance in connection with the fact that the bankers have once again returned to “their bad habits.”

On the economic level, Obama had been committed to restarting the US economy and reducing the budget deficit. Let’s remember, this deficit had reached the record level of 10,6% of the GDP and is supposed to be brought back to 8,3% within the framework of the next budget. The US president also wants to reduce the federal deficit by half from by the end of his first term in 2013: all that being made possible by an economic recovery and a rise in tax revenues. Alas, the economic indicators remain well below the hopes of Obama, and unemployment went beyond the 10% threshold last October.

On the imperialist level, the promise of military disengagement has only entailed a transfer of troops from Iraq to Afghanistan, this latter constituting a quagmire about which one can only wonder how America will arrive at disengagement without too much of a humiliation. In addition, the American troops also seem to be always short-sighted, continuing to make mistakes in their targets, and thus increasing the opposition of the local populations and so, risking still more the possibility of political solutions. The new American policy is thus always put on hold: no settlement is in sight in the Near East where Israelis and Palestinians are currently no longer interested in the larger world context. The humdrum routine continues – of course more gently than in the Bush era – with Iran, regularly summoned to accept control of its production of uranium; and the Obama government simply seems to wait until the internal tensions will make the Iranian president fall like ripe fruit. On the terrain of human rights, the charismatic US president had the “audacity” to privately receive the Dalaï Lama. Nevertheless, his audacity is replaced by a greater pragmatism when he is reinforcing commercial agreements between the United States and China, two nations closely dependent on one another on the commercial and financial level. Lastly, to come back to Guantanamo, some prisoners were indeed paroled to certain countries that volunteered to take them, but that has been very limited. In short, the “Yes, we can” has come up against the limits imposed by the capitalist system, and the regulated and pacified capitalism that Obama promised has little by little given way to a more global questioning of its real perspectives.

For several years now, IP has stressed that the use of the ideological weapon is no longer done through grand themes of mobilization that would divert the populace from real concerns, but rather as a response to facets of daily life, and the concerns that arise from it.

Therefore, what we must denounce, as a contribution to the ongoing political reflection, is that today ideology consists in taking into account all the questions that are posed by the proletariat, and providing them with answers that do not question either the logic of the functioning or the thinking of capitalism. Thus, vis-a-vis ecological concerns, Obama – like the majority of the leaders of the planet – makes the commitment to invest in alternative energies and to subject themselves to international conventions. In front of the social grumbling arising from the degradation of conditions of work, from the increasing opposition to military engagement, there too, the ideological speech is not to divert attention, as was the case before, but to give “answers” about the very source of the dissatisfaction. And this way of responding to the questioning about the perspectives for the future, if it has materialized today in the election of Obama, is not new. For a number of years, the ruling class has resorted to such a formula. One such example was capital’s response to the alter-globalization movement. Born in a nebulous anti-globalization and anti-capitalist mélange, the alter-globalization-movement was a response to this questioning about the need for another world. Other currents, like that of a “green” capitalism, have constituted an ideological effort to respond to real concerns about the functioning of the economy, again within the logic of capital. Similarly, the development of “fair trade,” which has really taken off, and which is a mix of ecological preoccupations and the good conscience of the petits-bourgeois, has taken center stage to replace any questioning about the ferocious exploitation exercised by capitalist production. There is thus a particular use of ideology that is no longer a mobilization on themes of diversion, but rather ideological adaptations (and sometimes practices, since “fair trade” constitutes a truly new commercial niche as does renewable energy, a real windfall for the creation of new markets) to respond with to questions about future perspectives. It is in this context that it is necessary to situate the discourse of the Obama campaign and the enthusiasm that it generated throughout the world.

But there is also a double potential for the intervention of revolutionaries. Too often, we were satisfied, either to look with contempt at certain tendencies like those of fair trade, or to limit ourselves to just denouncing them as false alternatives. Nevertheless, insofar as they indicate concern and the ambient questioning, we have to take them into account and to show why they represent only a better management of the system and thus, not a real perspective for any change in its functioning. In addition, these alternatives show their limits more or less quickly. There too, the situation contains a potential for revolutionaries: to put on the agenda the question of overall functioning of the capitalist system, its uncontrollable tendencies and the perspective for the emergence of another kind of society.

It is to resituate this double potential, and to examine how we can concretize it in a credible and comprehensible way in our intervention, that we wanted to again take up these issues from the angle of an assessment of the policy of Obama.

A FEW REMARKS ON THE PRESENTATION OF `CONTROVERSES ON THE CRISIS

1. Compared to the analyses of the ICC, from which Controverses only recently split, this text is a clear step forward. No longer are we confronted with simple formulas; there is a real attempt to deepen that must be welcomed.

2. Still, and this is understandable since their separation is recent and they must still take stock of their experience, the bad influence of the ICC does not yet seem to be completely overcome. In the ICC, an article on the crisis is a repetition of formulae, with facts and figures selected to prove them. In Controverse’s text, the formulas are gone and what remains is only an empirical analysis. An analysis closer to Marx’s method, on the other hand, would be above all, historical, which is completely lacking in Controverse’s analysis. It would start from the fact that what occurs on the level of prices and profits, is different from, and determined by, what happens at the level of value. That, Controverses does not do either. The text speaks about profits and solvent markets, but never about `value’ or `surplus value’. Does Controverses assume that price = value and that profit = surplus-value? (They do, but only in their totalities). If Controverses distinguishes between them, we do not find any trace of it in this text.

3. This lack of a Marxist approach is shown in the interpretation of the graphs on which Controverses bases its conclusions. Already we can notice that Controverses uses the EU or the US as a stand-in for the worldwide economy. Furthermore, the lack of distinction between profit and surplus-value makes it appear as if all the profit of the US is generated inside the US. IP, on the other hand, shows that in the phase of the circulation of commodities, surplus-value is redistributed, and that it is thus necessary to integrate into the analysis an understanding of the way in which this distribution changes historically (see chapter on `metabolism’ in my recent text ‘Crisis of Value’). A large part of American capital is fictitious capital, however, its profits are quite real.

4. According to Controverses, the boom of the post-war period was terminated by a fall of the rate of profit, caused by a decline of productivity, (without explaining what caused the latter). The current crisis on the other hand, whose beginning it situates in1982, would be caused by a lack of markets, caused by the decline of demand of the working class whose purchasing power decreases because of the attack on wages, etc. According to Controverses, its graphs prove that. But we can interpret them very differently. Graph #3 does not necessarily show a fall of wages but a fall of the share of wages. It does not say a share of what but one can assume that it is a share of the BIP. Thus, that says that the cost of wages related to the total value of production is reduced. Does Controverses think that it would be better for capital that the cost of wages would be higher, because that would create more demand from the workers? From the point of view of capital, this additional consumption would be quite as unproductive as an increase of its own consumption. And it is the latter that it prefers. Thus graph #5, which shows a relative fall on behalf of consumption of the working class and a simultaneous increase in the total consumption of the US, shows, indeed, that the increase of ’solvent markets’ and the relative diminution of wages can occur at the same time.

5. The decline of the share of wages cannot be presented as a problem of reduction of the market in itself. If wages decrease relative to profit that means that the capitalist can consume even more. The problem is that this wage decline indicates that in future production less human labor will be employed and thus less surplus-value will be created. The problem of the markets and that of the tendency of the rate of profit to fall cannot be separated. We must see how they interact and for this we must see their common origin: the value-form, and the contradiction which results from this between exchange-value and use-value, abstract labor and concrete labor, capitalist wealth and real wealth, in the Marxist sense. We are completely in agreement with Controverses when it says that the current crisis is caused by an overabundance of capital but not when it says that it is divorced from the threat of the decline of the rate of profit. The overabundance of capital is only one problem because these capitals are not stable containers of value, because they must either valorize or devalorize. It is the decline of the creation of value that causes their devalorization. As Controverses affirms, it is the economic crisis which caused the financial crisis, not the reverse.

6. It is important to insist on the value-form as the cause of the crisis, because an analysis like Controverse’s which says that the cause of the crisis is a lack of demand on the part of the working class, is recuperable by the capitalist left. It is necessary to go to the root. If we speak about the economy, it is only because that gives us an opening to show the need and the possibility of a new world. But our analysis can only be this lever for consciousness if we can connect the bases of capitalist society to the contradictions which confront us today.

Sander

A Text by “Controverses”

The following text was released by a group which recently left the ICC. We will shortly post our response to it. The original text contained several graphs which are not available for reproduction here.

The subject of this public meeting (Which crisis of capitalism?) being vast, the only aspect that will be treated here concerns the analysis of the causes of the crisis and the questions that can be posed in connection with its comprehension.

Indeed, this crisis is commonly presented as being a financial crisis, which then would have been transmitted to the real economy. In other words, the origin of the economic recession and unemployment would lie in greed, in the lack of regulation of the financial sector or its parasitism on the real economy. Our sense of the correct analysis is exactly the opposite: it is the contradictions in the real economy that have provoked the financial crisis.

Obviously, such as it unfolded through the succession of events, like the stock market crash, the bank failures, or the subprime crisis, the crisis appears above all as a financial crisis. In the same way, it also appears that the economic recession and unemployment developed after the financial crash. The facts thus seem to give credence to those who say that the current crisis is, above all, a financial crisis. This dimension of the crisis is undeniable. It would be absurd to deny it.

However, in limiting ourselves to this aspect, one cannot explain why the financial sector took on such importance in the economy, or why the financial sector could skid and also suddenly become so greedy. Limiting ourselves to the financial aspect prevents an understanding of the fundamental causes of the crisis. For Marxists, a financial crisis is only one consequence of more fundamental contradictions within the capitalist economy. It must be asked what are the fundamental contradictions of the capitalist economy? There are essentially two:

1) The first corresponds to the difficulties of capitalism to extract sufficient profits for a given investment. In current language: it is said that investments are less and less profitable. In Marxist language, it is what we call the tendency of the rate of profit to fall.

2) The second contradiction is the one relative to the difficulties of the system to engender demand at the high level of volume of produced goods, therefore, the difficulty of disposing on the market the entirety of production.

These are the two contradictions in the real economy that have regularly generated all the crises of overproduction until now. During a little more than two centuries of existence (1780-2009), capitalism knew a little less than about thirty crises of overproduction. Thus, that made, on average, a crisis every eight years.

However, to understand how these two contradictions function, as well as their connection with the financial crisis, it is necessary to add two other specifications:

1) In general, these two contradictions appear together and are mutually generated: indeed, not to be able to sell all its goods does not make it possible to recover the totality of its profit, and an insufficiency of profits generates an insufficiency of markets. However, it is necessary to insist on the fact that these two contradictions can also arise separately, or in a way such that one of the two contradictions prevails. This is important to understand the crises of capitalism, because all the crises do not always proceed in the same way, as we will see.

2) The second specification to make is that these two contradictions play out, at the same time, in the short and medium term. When one speaks about short term, one speaks about those cycles of intermediate duration of eight plus years; and when one speaks about medium term, they are periods from 25 to 40 years of growth or less.

After this brief recalling of the framework of the Marxist analysis of crises, we will see now, in concrete reality, how these two fundamental contradictions of capitalism can explain the crisis, and what link there is with the financial crash. The three graphs below can help us there:

The curve of the market index on the first graph shows us the two last speculative bubbles: the first is the Internet bubble at the time of the recession of 2000-01, and the second is the subprime bubble with the current recession. That is the financial shutter of the crisis. On the other hand, much more interesting is the other curve, that which shows the evolution of the real economy, more precisely of the profitability of companies, i.e. the rate of profit. Why is this more interesting? For three reasons at least:

1) The first, is that we can clearly note the close link which exists between the evolution of profits and the evolution of the stock exchange.

2) The second is that this connection is not unspecified: it is the evolution of the rate of profit that determines the evolution of the market indexes. In the business cycle in the short run, it is the reversal to a fall of the rate of profit (thus the insufficiency of profits) that causes the stock exchange crash.

3) The third reason is that it is also the reversal to a fall of the rate of profit that is at the origin of the cyclical economic crises in 2000-01 and 2008-09.

In other words, in the short run, it is, indeed, the evolution of the rate of profit that is at the origin of the business cycles, of financial crashes, but also of recessions. We thus have here an initial very clear answer in relation to the question with which we began: we are not in the presence of a financial crisis which was transformed into economic recession, but in the presence of an economic recession which was transformed into a financial crisis. It is an initial point that appears very important to us to emphasize, and with which to respond to the dominant ideology, and so to reaffirm the Marxist analysis of crises.

However, when we take a step back and look at the medium-term evolution, other important components appear. It is what the second graph tells us, where three phases are very clearly distinguished:

1) The first phase of the post-war period until the end of the 1960’s, is the boom period where the rate of profit and accumulation went up, and in parallel.

2) The second phase starts at the end of the 1960’s with the reversal to a fall of the rate of profit. It is also seen that this fall of the rate of profit involves the rate of accumulation until 1982. Consequently, it is noted again that it is the dynamics of the rate of profit which puts an end to the prosperity of the post-war period and which inaugurates the long period of crises of the last forty years.

3) The third phase starts in 1982. There, on the other hand, the two evolutions diverge: the rate of profit goes up strongly, but not the rate of accumulation, which continues to decline (NB: the calculation of the rates of profit obviously does not include here the speculative rise of the value of stacks and bonds.)

We can then put forth the four following questions vis-a-vis these evolutions:

1) Why profits increase from 1982 after having dropped for a long time?

2) If profits increase, why doesn’t accumulation re-establish itself, and why does crisis persist?

3) Since profits go up drastically, can we still say today that it is the fall of the rate of profit that is the cause of the crisis?

4) What is the connection between the financial economy and speculative bubbles?

1) A response to the first question appears immediately: profits could be restored because wages were compressed. It is what one clearly sees on the 3rd graph: wages represented two thirds of final demand until 1982, whereas 25 years afterwards, they represent only a little more than half. The principal consequence which results from this is a drastic contraction of the solvent markets, a formidable restriction of the capacity to sell the produced goods, because neither is compensated by the consumption of the capitalists (which, in addition, is unproductive by definition), nor by investments and the sales in emerging countries.

2) We can then easily respond to the 2nd question: why accumulation does not start again and thus why the crisis endures in spite of the rise of the rate of profit? Quite simply, and mainly, because of this drastic contraction of the markets: there are, indeed, still investments today, but they are primarily investments of rationalization and merger, not of widening as during the period of prosperity after the war.

3) To answer the 3rd question is also easy: can one still say that it is the fall of the rate of profit that is the cause of the crisis inasmuch as it increases drastically? Yes, as one saw on the first graph, the short-term evolutions of the rate of profit are always the motor of the business cycles and the crises. However, since 1982, we have no longer been in the presence of a general tendency to a fall of the rate of profit, but of a medium-term upward trend.

Consequently, and this is important, the essential economic problems since the 1980’s are not related to a lack of profitability of companies, but an insufficiency of solvent markets to which production can flow. In other words, since the 1980’s, capitalism is again profitable, but that has happened through a low level of accumulation and growth, a significant level of unemployment, and an increasing misery for the large majority of workers, since this re-established profitability of companies is made by lowering wages, while laying off, and by intensifying work conditions, and not, as in the post-war period, by an increase of productivity gains which are still weak as we can see it on the fourth graph:

4) With respect to the 4th question, that relating to the origin of the importance taken by the financial sector in the economy since the 1980’s, the response is also easy to understand. We can read it on the second graph: it is all the space represented between the two curves, this space growing during time represents the mass of the profits not used for investment and which fed finance. In other words, it is the absence of sufficient markets that did not allow the mass profit to be invested to widen production. Consequently, profits then moved towards finance.

This is very important to understand, because it is generally affirmed in the revolutionary press that the rise of finance since the 1980’s, and the repetitive bursting of the speculative bubbles would be the consequence of the fall of the rate of profit; i.e. the capitalists would take their money out of circulation as a consequence of the low profitability of productive investments. However, all the graphs here show that this reasoning is false in the medium-term: productive investments are profitable and the profits are ever greater. It is logical: speculation is all the more strong as the profits are high. In the medium term, it is thus completely false to say that capital runs out of money because profits are weak! It is not this phenomenon (the weakness of the profits) that can explain the rise of the importance of the financial sector in the economy. It is precisely the reverse: the superabundance of profits that do not find wider outlets for investments.

The consequence of all that, and it is the 2nd important point of our presentation, is that the essential aspect of the economic dysfunctions since 1982 is related to the weakness of solvent markets, and no longer to the fall of the rate of profit as in the 1970’s. The best proof is the configuration which led to the last stock market crash: as wage demands were drastically compressed (graphic 3 and 5), growth was obtained only by boosting consumption (graphic 5) by a flight to debt which began in 1982 (graph 6) and a reduction in the rate of saving which also began in 1982 (graph 7).

And tomorrow? Tomorrow, this perverse dynamic of the capitalist economy will continue still more because nothing was resolved; worse, the installation of patches to re-establish the machine will worsen the medium-term difficulty, even if it will make it possible to push back the short-term recession. If nothing changes, we run into a stone-wall; that much is assured. And, here it is the workers who will feel it, initially at the level of jobs, by an explosion of unemployment. It is what is already at hand today and which is announced even more massively for the months to come.

End Notes A Response – A letter from Gilles Dauvé

The following post is letter from Gilles Dauvé of Troploin in response to our review of End Notes 1

October 12, 2009

Dear Internationalist Perspective:

Here are some remarks on the review of End Notes on your blog, July 26, 2009.

First, I’d like to say that you give a fair summary of our views and those of Théorie Communiste.

I’ll just go back to a few points.

You write that we do not explain “Why the proletariat allowed itself to be led by the left” in 1919, 1936, 1968, etc. This is indeed a major question. Some would say a riddle. Yet the problem is which question needs to be asked and answered exactly.

We can understand why the Russian Revolution failed, because it did happen and eventually failed, but understanding why no (or not much) revolution happened in Germany in 1919-21 is a different matter. In the first case, we’re explaining what took place; in the second, what did not take place, or only partly. In fact with Russia, we’re dealing with how; with Germany, we’d be looking for why. We cannot evade whys, they’re often inevitable, but we can’t expect the same result as when we’re searching for hows.

It certainly is frustrating to think that no German revolution occurred in 1919…because the vast majority of German workers did not want revolution. But there’s no way we can avoid this intellectual dissatisfaction. Trying to turn history into equations like physics or astronomy only provides us with the comforting appearance of a solution.

Surely the appeal of T.C.’s theories is that they come up with explain-it-all answers, but what do these answers actually answer?

Slicing up history into phases can be very useful, except when it becomes a quest for the “last” phase. Marxists ought to be a bit wary of this effort (or temptation). When 1914 broke out, and even more so after 1917, we said that mankind was entering the epoch of wars and revolutions. True, but we’ve seen a lot more wars than revolutions. You’re well aware of the traps of the “decadence” theory.

It’s interesting to note how new historical slices are discovered. Théorie Communiste tells us that communist revolution was impossible under 19th century capitalist formal domination. Then real domination comes in the 20th century, with lots of class struggle but hardly any communist attempt. So theory cuts real domination into two and delineates a second real domination phase, more real than the first, so this time the proletariat has no alternative but to try and communize the world. This time, at long-last, no dead ends, no side roads: reformism and radical democracy, we’re told become devoid of content, and unions and parties are bound to lose their grip. There’s no deep difference between this perspective and the “final crisis” theme: the ideas differ, the attitude is similar: both look for the ultimate stage when only revolution is the possible outcome. So logically, this perspective has to re-write the past and find the ultimate cause that explains both why there could not be a revolution before, and why there will be one now.

Such theories are very appealing because they can integrate any fact, even those that contradict them. In 20 years, if revolution has not come, the same theory will define a third phase within real domination.

By the way, I doubt we ever wrote that the workers had been “betrayed.” I’d say that they chose to follow the SPD in 1919, the French CP in 1936, etc. Worker bureaucracy only prevails because the rank-and-file supports it (not without contradictions and conflicts, of course).

This is not being finicky about words. Believing in treason is also believing in the existence of traitors that mislead the workers and have to be constantly exposed. The Trotskyists used to do it by calling the unions and parties’ bluff. The ICC does it by systematic denunciation.

One last word on the importance of the value-form. We fully agree. In fact, value is the undercurrent in all our analyses on the evolution and present state of capitalism.

This is just a short letter. We’ve dealt with these issues in

Whither the World? (2002)
In for a Storm. A Crisis on the Way(2007)
What’s it all About? (2007)
A Contribution to the Critique of Political Autonomism (2009)

(I mention only the texts that are available in English)

Thanks to the latest issue of I.P. I found about Controverses and wrote to them.

All the best to you…

Gilles Dauvé

Report on Internationalist Perspective’s Public Meeting in New York

Internationalist Perspective held a public meeting in New York on October 15, 2009 on the current econimc crisis. Here is a report on the meeting.

IP Public Meeting, New York, October 15, 2009

There were 15 at the meeting (besides IP): several “class struggle” anarchists, linked to NEFAC, though critical of it in a number of respects; 2 ICC; three from the Meltdown List (including L.G.); J. from Endnotes, and a few others who seemed politically close to him; and H.

I did the introduction, focusing on how the crisis had “produced” a dramatic increase in the rhetoric of “anti-capitalism,” which entailed a positive critique of capitalism, focused on attacks on speculation, “unproductive” capital, neo-liberalism, and on the need for regulation, Keynesian economic and financial policies, and – at the extremes – nationalization and statification. By contrast, I posed the need for a negative critique of capitalism, focused on the value form as the root of the crisis, and the necessity to attack the value form both theoretically and practically as the only response to the alternative posed by Rosa Luxemburg: socialism or barbarism.

Sander’s presentation focused on the toll the present crisis – the deepest since the 1930’s — has taken, especially in human terms, on a global level. In contrast to the rise of equity and share prices over the past six months, he accentuated the rise in global unemployment (now measured in the billions), the blighted urban landscapes, the ecological crisis, itself exacerbated by capital’s desperate search for new energy sources and quest for profitability through the exploitation of cheap labor in the Third World, which involves dependence on the most toxic and polluting forms of energy. Sander then evaluated the prospects for an economic recovery, accentuating the greater capability that capital possesses today vis a vis the 1930’s to prevent a total collapse, while focusing on how the contradictions of the value form itself constitute an insurmountable obstacle to any sustainable recovery. Indeed, the very steps that capitalist states have taken to avert a collapse already contain the seeds of new financial bubbles and the spectre of an even deeper crisis on the horizon.

The discussion, and it was a real discussion, not just questions posed to IP, with comrades speaking to each other and not just to IP, was very animated. Several issues dominated it. There was general agreement that the response of the class to the crisis, despite some militant struggles, was still weak in the face of such a sharp deterioration in living and working conditions. To which one response of IP was that this was one more indication that the value form was not just material but subjective too; that it had impacted the very way in which workers “see” the world, making the value form appear natural. Beyond that, this led to a focus on the role of pro-revolutionaries: was it primarily theoretical, were they outside the class, trying to animate it and provoke a response, or were they a part of the class, indeed, not different than any other workers? Was there a distinction between theory and practice, was there a distinct role for pro-revolutionaries, and in addition to theory, how did pro-revolutionaries play a role as an “accelerator” of class struggle – indeed, in addition to theory did pro-revolutionaries need a new “idiom” into which to translate their analyses of the value form, for example, into the actual terms of the life of the collective worker? Or was such a putative task already the creation of a division of labor between pro-revolutionaries and the class. The ICC argued that revolutionaries were simply one part of the class, and that at critical points the class can be ahead of the revolutionaries. At least one of the anarchists argued that pro-revolutionaries were not “just” workers; that their theoretical practice was vital, J. and others with him argued that there should be no separation – at times it seemed – no distinction even between pro-revolutionaries and workers, and no tasks that were specific to pro-revolutionaries.

At the end of the meeting, the NEFAC comrade suggested the possibility of a meeting of several of his comrades with IP, which we endorsed. H. has asked to be in close contact with us, and J, who is organizing a conference sponsored by the journal “Historical Materialism” (Trotskyist, but open to the left communist and heterodox Marxist currents) has invited IP to make presentations.

Mac Intosh

What was China?

The following is a post by a member of Internationalist Perspective on a list about China. It was written in as part of a thread of Maoist China.

First, on your last point. While I don’t have an extensive knowledge of China during its Maoist period, I would not be surprised if, as you say, there was not a great deal of increase in the organic composition of Chinese capital in general during that time (as compared, e.g. with its post-Maoist period). The reason, I suspect, relates to what you describe as a very significant increase in the mobilization of labor power, especially in the countryside. And that would be, I would imagine, because what was really occurring during that time was primarily the primitive accumulation of Chinese capital on a massive scale. That would of course be because China’s economy at that time was very ‘backward’ or undeveloped in comparison to the most ‘advanced’ or developed capitalist countries of the West. That would also account for why what was going on then didn’t appear to mimic ‘normal’, developed capitalist extraction of surplus-value and the operation of the law of value as Marx theorized it.

However, you have also claimed (in your first and second points) that during the Maoist period the ruling class was developing the productive forces in order to strengthen China. But how was it developing the productive forces without increasing the organic composition of its capital? Generally these two processes are coeval. As productive forces develop, typically, living labor in the production process is replaced by dead labor, i.e. constant capital, thus, an increase in organic composition. Perhaps, as you suggest in your final sentence (of point three), an increase in extraction from rural workers — and let’s assume that such extraction was principally of absolute rather than relative surplus labor — that would indeed offset the tendency for the rate of profit to fall, but it wouldn’t negate it. The tendency would still be operative, though, it’s just that during that period it would be effectively counter-acted, just as it was in the early days of Western capitalism, of what Marx called the formal domination of capital.

You say that a capitalist cares not one iota what product is being produced as long as it makes a profit, whereas China did care during the Maoist period which products were being produced. But you are comparing the individual capitalist (or firm) with the whole Chinese ruling class (state). That is not the proper comparison to make, however. At the national level, the level of the national capital, and hence the ruling class and state, of both Stalinist state capitalist countries (e.g. the USSR) and of Western (liberal or mixed) state capitalist countries, the ruling class very much does care about which products are produced. The same concern (as in Maoist China) for the development of the means of mass destruction and other products that are necessary for national ‘defense’ and imperial expansion and conquest applies to them. Also, apart from the products necessary for building up a strong state machine, are those products necessary for providing basic energy needs for their industries, infrastructure, etc, not to mention the housing, health-care, education and other basic needs of the population generally in order to sustain a modern, developed society and to prevent the dispossessed masses from becoming an unmanageable problem. Certain specific products are necessary to meet these needs and it is the state that is charged with assuring their production.

Even if China was largely autarkic during the Maoist period, it still existed in a capitalist world and it had to compete with other countries in that world. It couldn’t afford to ignore what those other countries, especially the most powerful ones, were doing, geo-politically, militarily and economically. It needed to both try to catch up and ‘keep up’ with them and to utilize its economic resources as efficiently as possible in order to do this catching and keeping up. Certainly the Chinese state, exercising more or less total control over the Chinese economy, could organize this effort in a way that wouldn’t appear, on the surface at least, to mimic the way it occurs in liberal or ‘mixed economy’ capitalist countries. But if efficiency or productivity in this effort was significantly ignored, it would clearly at some point thwart it. Whereas, I would argue, if efficiency/productivity was pursued in order to decrease the time and resources needed to achieve it, then the same fundamental economic processes must have been operational.

A final point. You claim that China did not mimic accumulation for accumulation’s sake. But would you say that, e.g. Stalinist Russia in the 1930s did so mimic it? Surely it could be seriously argued that Stalinist Russia in the ’30s pursued the development of its productive forces in order to create a strong military and country within a tense international environment (i.e. the same as how you characterize Maoist China). Yet it was also a state capitalist society and mode of production, was it not? In fact, was not the economy of Maoist China in large part modeled on that of Stalinist Russia? (Not that it was an exact replica, of course.) In any case, ‘accumulation for accumulation’s sake’ is how capitalist economic functioning appears on the surface to an outside observer. It is not the reality for either the individual capitalist/firm or the national capital/ruling class/state. The reality is that accumulation in capitalism is invariably pursued for the sake of power, both economic and political.

E.R.

The Crisis has Raised the Stakes – Public Meeting in New York

The economic crisis will not go away. More stimulus spending or less may alter the pace but not the course. This crisis is more than a conjunctural downturn. It is the fever of a sick civilization. Capitalist civilization is sick of old age but will do anything to survive.

Those who blame capitalism for the crisis, fall into two categories. There are those who tell us we must use the very institutions of capitalist civilization to fight it: its parties and elections, its unions and NGO’s: all will be well when the bad politicians and union-bosses are replaced by good ones, and when the state increasingly intervenes in the economy until it has replaced the private sector. Of course that is the more “radical” version of this scheme; the fiery red as opposed to the pale pink of those who merely advocate the perfect symbiosis between state and private capital as the best of all possible worlds. What all of them have in common is their desire to fix and improve capitalism, their belief that what is needed are better, more unselfish leaders, more state-regulation, the creation of more money. Their critique of capitalism is a positive one. The future they envision is still that of a commodity economy with money, banks, prisons, etc, but all a bit more humane.

In contrast to this outlook, which characterizes the left generally, more and more voices express a negative critique of capitalism. They do not believe capitalism can be made better, or that it can gradually evolve into something else. It can only get worse, lead to more devastation and misery. For them the root of the problem is not bad leaders or a lack of regulation. The root is capitalism itself, its very foundation: the value-form, which turns everything and everyone into a commodity, whose fate is determined by the market. They want a revolution that puts humans in control of their fate. A revolution that uproots capitalism, that comes from below and sweeps away all the building blocks of capitalist society, all the national, ethnic, racial, religious, boundaries that divide us; a revolution in which the self-organization of the working masses in struggle broadens into the self-organization of a society in which things are produced for human needs, not for profit.

This revolution starts from below, with young people in Athens deciding in general assemblies to take back the streets, with workers in China and Korea fighting off the police, with workers in France proclaiming their refusal to accept responsibility for the crisis, with unemployed construction workers in Cleveland entering vacant homes and making them livable for homeless families…In all these examples, laws were broken. Cracks appeared. These cracks will multiply. More important than what is immediately lost, or gained in these struggles, is that they are steps in the development of the consciousness of the necessity and the possibility of revolution. In this process, pro-revolutionaries, those who see that the dynamic of these acts of resistance implies the uprooting of capitalism, are an important component. The clear articulation of the negative critique of capitalism becomes a potent accelerating factor when it is felt in the practical struggle. Pro-revolutionaries must participate in this struggle. Their understanding of the past – the defeats, the pitfalls of the struggle — and of the potential for the future, leads them to speak out.

But too often those pro-revolutionaries don’t take that responsibility seriously enough. They too suffer the alienation produced by capitalism. Too often they are “selling” themselves, individually or as an organization. They lose themselves in petty squabbles far removed from the actual reality, in rivalry and in competition. This has to stop.

In light of the stakes raised by the present crisis, Internationalist Perspective launched an appeal to all those who share the negative critique of capitalism and thus the same internationalist revolutionary outlook: abandon sectarianism, stop competing, recognize that you share the same goal, recognize that nobody has a patent on the truth, recognize that if you are to really play a revolutionary role, you will need more clarity than you have now; recognize that this clarity requires you to reexamine your dogmas, realize that only by discussing fraternally and working together, can the pro-revolutionary voice become stronger.

To discuss with us the state of capitalism’s crisis, the potential for resistance to it, IP’s appeal and the reactions to it, and more generally the question, “What to do?,” we invite you to come to a

PUBLIC MEETING

at: TRS suites, 44 East 32nd Street (between Park and Madison), Manhattan.

THURSDAY, OCTOBER 15, 7 PM.

Other groups who share our negative critique of capitalism are invited to present their views and there will be ample time for general discussion.

INTERNATIONALIST PERSPECTIVE

“End Notes” 1: A Review

“End Notes” is the new publication of comrades who left “Aufheben,” apparently because of disagreement over how much emphasis should be put on discussion with the milieu of the “communisateurs,” especially “Théorie Communiste.” As can be seen in the first number of End Notes, these comrades are determined to pursue the discussion with TC. Indeed, this number is largely a debate between “Troploin” (Dauvé) and TC, with the promise that in “End Notes” 2 their own positions will be articulated.

What “Troploin” and TC (indeed the milieu of the communisateurs) share is the conviction that proletarian revolution must from its onset lead to immediate communisation, overturning the law of value, wage labor, indeed work as it has historically taken shape. There is then no place for any period of transition. What separates these two currents is “Troploin’s” insistence that communisation, understood as the abolition of work, has been the immediate project of the proletariat since its advent as a class; this was the case in 1795, in 1848, in 1917, in 1936, in 1968, as it is today. The historical and political conditions for the actualization of that project are not constant for “Troploin” – today, for example, we are not in a revolutionary period – but that is and has always been the sole project of the proletariat, one frustrated by the forces of capital, especially the left, whenever a revolutionary situation arose. For TC by contrast, the historical conditions for communisation are of recent date, emerging only after the epoch of the formal domination of capital and the first phase of its real domination (Fordism); after 1968, indeed only in the last 40 years. Until the present, second, phase of the real domination of capital, the abolition of work was not on the historical agenda. What was on the historical agenda was the proletariat, labor, as the capitalist class; the proletariat, labor, replacing the bourgeoisie as the ruling class, and owning and operating the means of production and exchange, with work under the commodity form as the basis of social and economic life, only under the management of the workers.

Where “Troploin” insists that historically, in both the nineteenth and the twentieth centuries, the proletariat never sought to raise itself to the level of a class managing commodity production and motivated by the project of work, though such ideologies were perpetrated by the left of capital, Social-Democracy, the Bolsheviks, the unions, but instead sought the abolition of work, TC argues that a project of the management of commodity production was the only one that the proletariat under the prevailing historical conditions could advance. Where “Troploin” insists that the proletariat at each revolutionary moment was betrayed by the left (though as TC points out, without explaining why the proletariat allowed itself to be led by the left), TC argues that it is only in the current epoch, the second phase of the real domination of capital, that communisation, the abolition of work, is on the historical agenda.

The historical questions of exactly how the proletariat “behaved” at each revolutionary conjuncture, and how capital re-asserted its domination, is an extremely important issue. “Troploin”’s claim that the proletariat did not simply embody a productivist ideology, and acceptance of the value-form until the 1970’s is one I share. Opposition to such a vision and ideology can be seen throughout the historical existence of the proletariat, even as much of the left, of “orthodox” Marxism, with roots in the working class, did, indeed, have the productivist vision that “TC” attributes to the proletariat as a class. Yet “Troploin” needs to answer “TC”’s question: if the proletariat has been committed to a project of communism and the abolition of work from its inception, how was that project frustrated at each turn by the left? But what seems missing from even “TC”’s critique of what it sees as the a-historical character of “Troploin”’s analysis; what seems missing from both currents, is a focus on the value-form itself, and Marx’s analysis of it. It is as if the proletariat and its project can be separated from the historical trajectory of value production itself. “TC” would claim that it pays careful attention to changes in the structuration of capitalism, with its theory of three successive phases in the domination of capital. Yet, in the second phase of the real domination of capital, when “TC” claims the proletariat’s project is now immediate communisation, the power of capital over the proletariat — not just the coercive power of its state, but its ideological hegemony — has not been smashed. Indeed, neither “Troploin” nor “TC” seem to say anything about how the spread of the value-form from the immediate process of production to shape the whole of life, and the power of reification, has affected the proletariat and its capacity to actualize a project in which the objective is the abolition of wage-labor. Nor do either of these tendencies, at least in the texts included in “End Notes,” discuss whether the science and technology that has made the real domination of capital possible is itself potentially utilizable for communism or is, rather, integrally linked to capitalism and the value-form. Similarly, neither “Troploin” nor “TC” seem to have anything to say about the specific facets of the life of the collective worker — the creativity that capitalism cannot extinguish because it is necessary, in however a distorted form, to the survival of capital, the historical memories of the proletariat and its struggles that persist even under the real domination of capital — that might counteract the reifying power of capital, and that point to an actualization of the revolutionary potential of the collective worker.

Mac Intosh

Pyeongtaek Strike Continues in South Korea

A strike now completing its fourth week at Ssangyong Motors in Pyeongtaek, South Korea, remains a standoff as of this writing. The strike echoes in many ways the dynamic seen in the recent Visteon struggle in the UK and in battles over auto industry restructuring around the world. Involving, on the other hand, an outright factory seizure and occupation, and preparation for violent defense of the plant if necessary, it is the first struggle of its kind in South Korea for years.

The company was taken over three years ago by China’s Shanghai Automotive Industry Corporation, which holds 51% ownership. At the time, the Pyeongtaek plant had 8700 employees; it now has 7000. In February the company filed for bankruptcy, proposing a restructuring and offering the Pyeongtaek plant as collateral for further loans to re-emerge from bankruptcy. The court approved the bankruptcy plan, pending adequate layoffs to make the company profitable again.

The management strategy seems to have been a long-term whittling down of personnel combined with acquisition of technology for operations in China. Since the Shanghai Automotive takeover, there has been no new investment at Ssangyong Motors, and no new car model launched. (Korean prosecutors have raised questions over the legality of the technology transfer to China, since the technology in question was developed with Korean government subsidies, but to date no legal action has been taken.)

Workers at the plant responded with strikes against pending layoffs in April which accelerated into a full strike and plant takeover and occupation by 1700 workers on May 27 when the list of workers to be laid off was announced. The strike focused on three main demands: 1) no layoffs 2) job security for all and 3) no outsourcing. The company wants to force 1700 workers into early retirement and has fired 300 casuals.

The Ssangyong workers are organized in the Korean Metal Workers Union (KMWU) and have worked an average of 15-20 years in the factory. A regular worker earns a base pay of approximately 30,000,000 won (currently ca. $25,000) per year; a casual earns about 15,000,000 for the same work. (In Korea, the base pay is only part of the salary, which includes benefits –for regular workers—as well as significant overtime paid at a higher rate, often 10 hours a week and accepted, or even desired, by most workers as a necessary income supplement.)

As of mid-June, about 1000 workers were continuing the occupation, with wives and families providing food. About 500 workers not slated for layoff are staying at home, and about 1000 supervisory staff are scabbing, mainly maintaining machines, while no cars have been produced since the occupation began.

There has been to date little mass police presence in Pyeongtaek. This is due at least in part to to the current political crisis in South Korea following the recent suicide of ex-president No Mu Hyeon and subsequent large-scale demonstrations expressing growing outrage against the current right-wing government of Lee Myong Bak, demonstrations that are expected to gain momentum into July. The Lee government, elected in December 2007 on a program of high economic growth and now discredited by the world crisis, has been taken aback by the depth of outrage revealed in demonstrations mobilizing up to 1 million people. After the unleashing of riot police provoked further outrage and brought more people to the streets, the government is unwilling to risk further disenchantment by an assault on the Pyeongtaek factory.

On June 16, a large anti-strike rally of more than 1500 people was held outside the factory gates. The rally was attended by the 1000 supervisory scabs, 200 hired thugs and 300 workers not on the layoff list and not supporting the strike. 400 riot police stood by, doing nothing, and finally declared the scab assembly illegal.

During the scab rally, about 700-800 workers from nearby factories, such as the Kia Motor company, came to defend the Ssangyang plant, in part in response to a text message tree of the KMWU.

The occupying workers have made plans for armed defense against any police attempt to recapture the plant, stocking iron pipes and Molotov cocktails. As a further fallback plan, they intend to concentrate in the paint department, where the flammable materials (in their estimate) will dissuade the police from firing tear gas cannisters and setting off a conflagration.

According to one activist critical of the role of the union, the KMWU seems to remain in control of the strike. In contrast to role of the unions in the Visteon struggle in the UK and in the dismantling of the US auto industry, the KMWU has thus far supported the illegal actions of seizing the plant and preparing for its armed defense. On the other hand, it has been concentrating on the demand for no layoffs and soft-pedaling the demands for job security for all and against out-sourcing.

The core occupation of the plant is powered by 50 or 60 rank-and-file groups of 10 workers each, who in turn elect a delegate (chojang) for coordinated action. According to the same critical activist, these chojang are the most combative and class-conscious workers.

The outcome of this strike remains up in the air. It benefits from a momentarily favorable political climate, which has put the Korean government on the back foot, but it is up against the deep crisis of the world auto industry and the world economic crisis generally. The nearby Kia Motor Company plant is itself in the middle of critical negotiations for crisis measures, and GM-Daewoo is being hit with the world reorganization of GM. The company strategy, as in the case of Visteon, seems to be at best slow attrition (already underway since 2006) or even an outright closing of the plant. The Ssangyong Motor struggle may light a fire in the Korean auto industry and beyond, or, more likely, be strangled, slowly or not so slowly, in its current isolation.

Loren Goldner

June 19, 2009