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The ABC’s of Communism Bolshevism 2011 Jason W. Smith, Ph.D.
Chapter 12: The Stage of Capitalism A commodity produced by machinery to which labor-power has been put (little or no skill required now) has within it both exchange value and value as a utilitarian item. The capitalist is interested in the commodity’s exchange value for in that act (of exchange) he can realize (materialize) the surplus value inherent in the system of production wherein the workers are paid at one rate (value) and the actual realized value of what they produced is considerably greater. This is true because within the commodity is also paid and unpaid labor-power, as we are about to see. The Category of “Form” Determines a Commodity’s Destination The form of the surplus value produced determines where commodities must go. In other words, if I am a capitalist producing iron I have to sell it to another capitalist (somewhere in the world) who can use it to make something - for example, steel. In this sense humanity is still in a rather primitive condition where the raw characteristics of the articles created, dictates what must happen thereafter. A useful way to picture this is to think of the “opposite” of destination being determined by form, as one sees when we think of a STAR TREK replicating machine. You ask the machine for a cup of coffee and the cup, filled with coffee, materializes. In this futuristic vision the value and surplus value inherent in the system of production are liquid (transmutable) and “form” means nothing. If we assume that this future society is a Communist system, where there is no money, no classes, no war, etc. such advanced technological conditions make sense - a la Gene Roddenberry’s presentation of the future. Under such hypothetical conditions in the future, value and surplus value are truly free and can be transmuted at will into whatever form. That is not the situation now, nor has it ever been, in the history of capitalism (or in the history of the world.) We are still stuck with the fact that whatever the form of a commodity produced may be, so its destination is pre-determined. People don’t eat iron - only certain other industries can absorb it - and, thus the surplus value within it. The Category of “Labor-power” Technically speaking the moment human labor was commoditized as “labor-power” we had the emergence of the germinal of capitalism. By “commoditized as labor-power” in capitalism we mean that a group of workers in a factory put out so much labor per unit time - that unit of time is measured by the factory clock. Some workers may be more efficient than others but for purposes of the “commodity” of labor-power it is whatever the average homogenized output per hour may be. Let’s say it again: labor-power as a category and as a commodity is the homogenized (averaged) factory-clock governed, collective output of a group of factory workers. Prehistorically, and in the Ancient World, before factory clocks and without machines of the typology (diagnostics) listed below labor-power may also have been proto-commoditized as I have discussed above, in a few examples, but these represent only “proto-commoditization.” Mathematics of Social Production Note: In a truly abstract sense, in our equations, we have stripped the entire matter of social production to its essence (four elements). These are (a) labor-power (b) technology (in the case of capitalism it is machinofacture; in our time automated and cybernetized machinofacture) (c) value and (d) surplus value. You may think of labor-power in our equations as having two sub-elements consisting of (i) the three dimensions of work with machinery, collectively undertaken, to which we add (ii) a fourth temporal dimension. Thus, work may (i) be measured and made more-or-less efficient in the mechanical performance sense and (ii) the necessary time it takes said work socially to occur (e.g., the way workers are organized within the factory and at the factory bench), may likewise be treated as a separate sub-element. Socially Necessary Labor-Time The collective labor-power input of a group of factory workers constitutes socially necessary labor-time in capitalist production. However, in pre-capitalist stages socially necessary labor-time is far less of a precise quantitatively determinable category. Nevertheless, it is critically important to cross-cultural analysis. This is true because in the Primitive World, and in the Ancient World (Slavery and early Feudalism) work also had a measured character. Socially necessary labor-time input was understood, if not precisely quantified, by those concerned. As such, socially necessary labor-time is a broader and more flexible category than labor-power (with its rigorous method of factory bench homogenizing, and factory clock measuring, of labor input.) Furthermore, the very inherent nature of the capitalist system of factory production makes paid and unpaid labor-power the basis for extracting profit as we are about to see. It is this very nature of capitalism which makes it a legalized system of theft. The Law of Value The scientific definition of value in its general sense is the amount of socially necessary labor-time involved in production of some given commodity. In Capitalism, value is the amount of socially necessary labor time it takes to reproduce the cost of labor-power (V1) and to maintain the machinery (V2). Usually we consider surplus value over and above these “value” costs although in some instances both V and SV are terms included in discussions of “value.” In either case and in any event in our discussions we have always reduced the matter of “social production” to its four essential elements (labor-power, technology, value and surplus value.) With the caveat that for cross-cultural comparative purposes we change the content of each term in a controlled way as we progress sequentially from one sociocultural evolutionary stage to another and from one set of equations to the next. Shorthand in Marxist academic circles for the “value” aspect of this productive process, as a core concept, is the phrase “the Law of Value.” Remember, the ideal conditions, include (i) the world as the marketplace (ii) outside regulation is absent (i.e., free unfettered competition) and (iii) only the essential elements are included in the equations. (Labor-power and its 4th dimension [i. e., time] is one element; machinery (technology) the second; value the third; and surplus value, the fourth). Notice that SV (surplus value) is that additional amount of commodity produced per given unit of time which the capitalist appropriates and it corresponds to unpaid labor-power, which is to say also that it corresponds to unpaid socially necessary labor-time. It is from this surplus value column that both profit and investment capital (NGM) must come. - And, it is this fact of commodity production in capitalist systems, which allows the capitalist to appropriate profit “honestly.” This is to say, without the stigma of “swindling” it via sharp trading practices. Sometimes we say we have both paid and unpaid socially necessary labor-time in each commodity and that saying refers to the amount of value (V1, V2) and surplus value (SV) represented in each commodity. So in addition to utilitarian value and exchange value, V1, and V2 and Surplus Value, we also have paid and unpaid labor-power involved in each and every commodity. In practical terms this means each worker is working part of her shift for her employer and not for herself. If one thinks oh well the capitalists are putting forth their factory and its equipment and the raw materials so they deserve something. Perhaps, but remember also, the capitalists are the most recent of a long line of sharks who got their hands on communal property, made it theirs by force, and now confront you with the means of production in their private hands. You say okay but in the real world how much is he taking from me right now? Well when you see how great that is compared to what you are getting paid then you will acquire the beginning of proletarian consciousness. Finally, note the production of surplus value and its rate of production is one thing. The production of profit and its rate of production is a separate thing. Two categories frequently mixed up together. There are many ways in which surplus value may be expended by the capitalist and profit is just one outcome. This is of critical importance to us because as you are about to see it is the absolute decline in the rate of profit, not in the rate of surplus value production, which is the at-bottom cause of the general crisis of capitalism. Mercantile Capitalism vs. True Capitalism The moment long distance trade afforded the opportunity to make a profit at both ends of a deal, since the socially necessary labor-time involved in production is a complete unknown to the partners on both ends, we had mercantile capitalism. That is, the accumulation of money capital via the process of trade. However, in economic analysis of sociocultural stages we must always begin with the nature of the productive system. Thus, for true capitalism to be said to exist in the sense of production, we must have machinofacture extant. Then the potential of human labor is made real because it is magnified exponentially via the use of machinery and via the use of the new category of labor-power. At the end of each day you can see we can visualize each hour as having a part of what is produced as value and another portion as surplus value – or at the end of the day we can say X hours have produced value and Y hours have produced surplus value - furthermore, you see profit can be squeezed directly from said labor-power, out of the surplus value column. Remember our definitions: Value 1 is the wage paid to the worker for his labor; again in strictly economic terms we are purchasing the socially necessary labor-time to use via machinery in the production of a commodity for exchange. Value 2 is the cost of maintaining the machinery and the factory. In this case, capital is accumulated via production when the owner of the machinery and the factory who is also the purchaser of the labor-power appropriates profit from the surplus value column directly, rather than having to swindle it via “sharp trading practices” from a seller at one end of some deal, and a buyer at the other. What do we mean by machinofacture? The manufacture of commodities via the input of labor-power applied to machinery is what we call machinofacture. It is the technological heart of true capitalism. There were originally five essential technological elements to machinofacture; these being: (1) a cheap and plentiful supply of highly carburized (flowing pig) iron; from which a somewhat decarburized wrought iron was obtained (from which steel can also be made.) This meant blast furnaces, for both the pig iron and the decarburized wrought iron. China had blast furnace flowing pig and wrought iron two thousand years, or more, before it was independently invented in Liege c. AD 1500. (2) Machine tools to cut and work iron and steel and make machinery. (3) Iron and steel machinery to produce other commodities such as pottery and textiles. (4) Steam engines. These were the first sources of power to be put to machine tools and machinery independent from those of nature (wind, water, animal, human power.) As a matter of interest the Chinese invented the steam engine many centuries before a French priest brought a toy steam engine back to France. This toy inspired Denis Papin to put the principles to work. The Britisher Thomas Newcomen heard of Papin’s experiment and proceeded to build the first steam engine in the West which was later perfected by Mr. James Watt. (5) Factory installation of machinery to which human unskilled labor-power could be put to work. In this way we see that the pure category of abstracted socially necessary labor-time, which is to say of commoditized labor-power, emerges and is henceforth the key to capitalist production. This category (labor-power) was Karl Marx’s original and unique contribution to classical political economy. Otherwise Marx accepted most of the categories of economic analysis of Adam Smith, Ricardo, et. al. The “proto-“steps leading toward this entirely new category in economic analysis are what we should look for in our studies of prehistory. You will recall that we found this category clearly emergent for the first time, in Advanced Theocratic Chiefdoms [ATC’s] (labeling it so and assigning it the definition of being the lowest common denominator for determining V1.) In so doing we were linking socioeconomic prehistory to history. Capitalism in Origin As for the emergence of capitalism a few comments are in order. Actually, as I have pointed out before, we can see germinal capitalist sectors in the political economy of both the Old World Slave and Feudal Stages (West and East) and in the New World also. - And, as I have also pointed out, this is because whenever labor is pooled and averaged according to some homogenizing, averaging, equalizing equivalent to the factory clock, we have the germinal of capitalist production. Whenever labor-power is purchased and put to work, whether on the land or in the factory, we have a capitalist germinal element emergent. These germinal elements in the Old World go back to the first city states in Sumeria, along the Nile, and in nuclear China. The later archaeological record in Mesoamerica is replete with examples of purchased labor put to work on the land and in factories from Olmec times forward; in Peru, from Chavin times forward. In fact, you will recall that we found proto-commoditized labor-power in the Hunting-gathering Tribes and in Agricultural Tribes. In Stone Age Economics, as in modern Economics, one can trace specifically defined attributes back into their previous forms and this search for the origins of commoditized labor-power is an example. Why didn’t the capitalist sector of these Ancient Slave and Feudal Stages become ascendant earlier? Precisely, because machinofacture had not yet been invented. The essential five diagnostic attributes we discussed above simply had not yet come together in one place at one time prior to the second half of the 1700's AD. When they did come together in Europe and New England and in China (and in preliminary form in other parts of the world such as Latin America) Capitalism quickly replaced feudal land holding as the primary source of wealth for the domesticating and ruling classes. Quickly, is of course, a relative term. From the time of Oliver Cromwell, a capitalist farmer himself (who purchased some labor-power each year to use on his lands rather than taking feudal tithes from serfs), in say 1640, until the emergence of the five essential technological elements of original capitalism in Old and New England around 1765, 125 years passed. Note the transition from feudalism in Europe to Capitalism in Europe and the America’s, was not a peaceful transition. Actually it was never a peaceful transition anywhere. Everywhere the bourgeoisie had to fight for political power. Recent novels and films about the transition to imperial feudalism in Japan (Shogun) where the new class of burghers played a role, and their later transition to full power in a stage of Capitalism they create in their own image in Japan (The Last Samurai) are examples on point. We should be, given the excellent historical record, well aware of the details of this struggle whether in the English Civil War, the American Revolutionary War, the Napoleonic Wars in Europe, the Taiping Rebellion in China, or the Meiji Revolution in Japan. On the other hand academia has often spent more time in obfuscating the process rather than in explaining what was going on - at least as far as textbooks for the lower grades in North America are concerned. So, in reality despite the excellent historical record there is very widespread ignorance of the transition in countries like the USA. However, at the time, the underlying cause of the anti-feudal revolt among the English was not much of a secret. This is not to say that the religious arguments of the English Revolutionaries of 1640 to 1660 might not tend to confuse the realities of those moments today. It is to say that a correct understanding of all of the religious arguments among the Protestant New Model Army men and the various Parliaments of the English Revolution period requires class analysis. The highest class of the English Revolution in terms of mass numbers was that of the capitalist farmers (e. g., Oliver Cromwell) - and these capitalist farmers did have some aristocratic allies supporting them, rather than the King and his feudal parasitocracy, precisely because they were convinced of the advantages of hiring labor rather than having to hire men to control serfs. The next highest groups of Republicans were the independent petty bourgeois shop holders and guildsmen (artisans, mechanics and proto-proletarians belonging to guilds.) Finally, there were the lowest level of the Parliamentary forces - the serfs and the landless agricultural laborers. Each of these three groups had a name (Congregationalist-Independents, Levelers, and Diggers) and each had a program that became increasingly radical from top to bottom. In fact, at the bottom, we have what Karl Marx would later call a primitive kind of communism being preached. All three classes of the revolutionary forces tried to justify their actions according to a particular interpretation of the Bible which began with the Pre-Ordained Divine Plan beliefs of Oliver Cromwell and ended with the most radical interpretations of the teachings of Jesus Christ at the bottom. Eventually capitalism had to win out over feudalism because the productive capacity of machinofacture was of a qualitative order of magnitude greater than any feudal land-holding system, even one in its finest hour. Armed with plenty of cash the bourgeoisie eventually had to succeed. But, they could not succeed permanently in the years of the English Revolution and the EnglishRepublic (wherein both the Monarchy and the House of Lords were abolished) either in Old England or New England. Why not? Because, the five original essential elements of machinofacture were still over a century away when Oliver Cromwell died in 1658. Origin of Capitalism in Europe Karl Marx and Frederick Engels saw the emergence of capitalism in Europe as having occurred first in the city-states of Italy, especially, northern Italy. Here the city-state communes of cities like Padua had in the 1300's become concentrations of pooled, averaged, factory clock regulated, thus commoditized, purchased labor-power alongside, or part of, the older guild system. Marx and Engels also recognized the expansion of European capitalism as being intimately involved with the discovery of gold and silver in the New World. It was this overnight concentration of cash wealth in the hands of the ruling classes of Europe which gave them not just what they needed to trade with in the great ports of the Old World, but also the capital they had to have to invest in expensive new technology (such as the Liege blast furnace invented and invested in heavily there beginning in 1500 - only two years after the greatest gold strike in the history of Europe had been made in Hispaniola.) East African, Arabian and South Asian ports had just become open to Europeans, and for the first time, since the collapse of the Roman Empire West c. AD 400. Columbus was well on his way to opening a new route to China and the Japans even though he made it initially only as far as the Bahamas in1492. Portuguese sailors rounded the Cape of Good Hope (South Africa) a few years later. The Crusades Remember that prior to the last decade of the 1400's Europe was an isolated appendage of the Eurasian land mass and all trade had to go through expensive middle persons. The Islamic regimes of Arabia controlled most of Europe’s trade with Arabia, East Africa, India, Indonesia (the Spice Islands), China and the Japans. European ruling classes were so unhappy about this that for several centuries they had tried everything to find a way to cut out the middle people. Thus, for example, the Crusades. Yet, to no avail. It would be the Iberians, on the tip of the European peninsula, pursuing their natural inclinations to explore the neighboring territories, which meant by boat, who would take the successful route down the west coast of Africa, finding thereby the direct route to the Far East, round the Cape of Good Hope. Europeans on a “Cash Only” Basis All of a sudden, in the decade from 1492 to 1502, the European turn toward naval circumvention of the Muslims paid off. Portuguese sailors found the tip of Africa in the South and quickly turned northward once again from the Cape of Good Hope making their way to Calicutt, India by way of East Africa and South Arabia - And, Spanish privateers used the Bahamas and Cuba as their gate way into a truly New World. Shortly they would cross Mexico and build the direct route to East Asia dreamed of by the Great Admiral, Cristobal Colon. Now, the manufactured goods of the Italian city-states, Benelux, France, Germany, London, and so forth, could find their way to the great markets of the Old World without the intolerable cost of the Muslim interface. They could also be sold to a “made” market of European colonials in the New World. The enslavement of the Native Americans provided the key thing European traders needed however, and that was cash. Gold and silver would pay their way into Asian markets any time. Which was essential. Because European goods were cheap and shoddy. Furthermore, the Europeans had nothing to sell that the Asians didn’t have in better quality and larger quantities with the exception of English wool, White slaves, and personal firearms. The Portuguese sailors had almost been hung in Calicutt (not Calcutta which was a British creation later on the other side of India. Calicutt is now Bombay or Mumbai) when they showed up with junk like glass trading beads! (The Chinese had had cannon for at least three centuries by this time, but had never taken it to the level of muskets and pistols for the individual fighting man.) Yet this period, beginning in the late 1400's, was nothing more than what Marx and Engels said it was, “the rosy dawn of Capitalism.” It was not true capitalism in the sense of production via machinofacture (and its five essential technical elements) with its cheap, unskilled, workers at the factory bench, where their purchased labor-power was pooled and averaged and regulated by the factory clock. In the decade 1492-1502 this was just more mercantile capitalism. - And, so it would remain until the Europeans invented machinery and then also brought said machinery to the masses of sub-humanized people of South Asia, especially India. Chief among these would be the English capitalists. Why? Because the French capitalists lost what Winston Churchill has called “The First World War” (what in the USA is often termed “The French and Indian War”) and was fought out on a global basis. The most important part of that British global victory was not in North America but in India where the French were forced out for good. This “First World War” (1758-63) was still a good two and a half centuries away from the days of rounding Good Hope and discovering the Bahamas. Thus, the “rosy dawn” of capitalism occurred within the Feudal Stage (albeit it, of course, in the final Phase of said Stage.) British Capitalism Creates Colonial Financial Crisis Tea Party in Boston It’s important for you to recognize at this point one critical factor in the emerging post-War (1758-1763) situation in Britain. Yes, the Brit capitalists won the war against France, but they did so at the cost of about 60 million pounds! Parliament took various taxing measures including requiring the North American colonies to pay part of the bill - at least the ongoing part of supporting British troops and other British Government functions in the Atlantic colonies. This was an abrogation of the long ago won, full civic rights in colonial Assemblies, due to rich White Yankees, in the North American system of rule by White Male Wealthy men. The Stamp Act and other taxing pieces of legislation culminated in the Boston Tea Party and led directly to the North American Revolutionary War (1775-1781.) The ultimate cause having been the greed of the British capitalist’s in command of the UK Government which led them to war in order to seize French and other possessions on a global basis. One side effect in the end would be this greed having led directly to the loss of the North American colonies altogether. Technically this is a colonial war rather than an imperialist war in that the British and French capitalists were not trying to export capital anywhere except India (textile factories). That is, factories and the machinery within them were not being sent here and there and sold to anyone anywhere. Just the opposite actually as you will see in Chapter 21 on British Imperialism versus North American colonists. General Contradiction vs. General Crisis As we have seen the greatest transition, in human history, occurred many millennia before the emergence of Capitalism. That was when the General Contradiction of the primitive communism of the Hunting-gathering Stages and Tribal Agriculture, expressed in the prime directive to avoid surplus production at virtually any cost, had been replaced by the General Contradiction of the Servitude Epoch and its prime directive; namely, to maximize surplus production regardless of the amounts of value and surplus value being produced. This General Contradiction of the Servitude Epoch continues in the third and final (Capitalist) Stage of the Servitude Epoch, and, of course, in the preceding transitional phase out of Feudalism. So, Capitalism emerges long after the Great Divide in Human History. But, it continues with that General Contradiction (of the Servitude Epoch) as its own. What about the General Crisis of Capitalism? The General Crisis of Capitalism As we have seen each Stage has its own specific General Crisis. Capitalism will have its own General Crisis and we can see it in the germinal forms from which it emerges. In the Capitalist Stage the General Crisis is a function of the competition between the sub-column of “profit” and the sub-column of “investment in the Next Generation of Machinery (NGM)” under the category we call Surplus Value. {In this discussion of the mode of production of the Capitalist Stage you should remember that one given (condition of the problem) is that ‘what is produced is sold, or otherwise realized, in the marketplace.’} The Law of the Absolute Decline in the Rate of Profit The General Contradiction of the Capitalist Stage is the same as it was in the preceding Stages of the Servitude Epoch - the drive of the domesticating, exploiting, ruling and owning classes to maximize their profits, regardless of the amounts of value and surplus value being produced. The General Crisis of Capitalism is, however, as Karl Marx discovered, distinct from that of slavery. In fact, it is unique. The General Crisis of Slavery was created when the financial cost of the police and the army needed to keep the slaves in obedience and submission continued to increase (not to mention the more intangible “social cost” of the Generals realizing they could replace their employers.) In capitalism the general crisis is caused by the necessity (to stay competitive) to continue to invest more and more money into new and continually successive generations of machinery. In order to stay competitive each capitalist must constantly buy new machinery that produces more commodities per unit of labor-power employed. Even so, and therefore, unless the amount of labor-power going into the productive process is increased on a one to one basis with the introduction of each new unit of machinery the rate of profit per unit of labor-power must decrease. It must decrease because the new machinery costs a lot of money, and without increasing labor-power input, the rate by which surplus value is increased must be relatively less than it had been previously, precisely because of this new cost of new equipment. It is this fact which creates the crisis. That is why we say that, at-bottom; the General Crisis of Capitalism is caused specifically by the law of the absolute decline in the rate of profit. What precisely does this mean? When the capitalist buys new equipment to stay competitive, and to reduce the cost of the labor-power going into his productive line, he takes a reduction in the rate of surplus value creation. Why? Because, he reduces his work force, or reduces the hours of labor-power of his original work force, thus reducing the hours applied to the new machinery; simultaneously he increases the cost of “t” because of the cost of installation and higher maintenance costs. On top of that, remember that both the cost of the next generation of machinery (NGM) and profit must come from the surplus value column. There is nowhere else for either to come from. If the new machinery is ten times more productive per unit of labor power applied to it, (more productive than the previous machinery,) the capitalist will make more money, even after factoring-in installation and increased maintenance costs, but there is less overall production for the surplus value column AND HIS RATE OF PROFIT MUST FALL since we must now factor-in the cost of the new equipment. Again. His rate of profit must fall for two reasons: (1) the only way to maintain the same rate of surplus value production (given the cost of purchasing, installing and maintaining the new equipment) is to introduce labor-power at a one-to-one ratio with the productive power of the new machinery. Under capitalist relations of production this cannot be done. The idea was to reduce the cost of labor and to stay competitive. His idea was not to hire more workers and/or to put all these laborers to work for longer periods of time. Either one or both of these would result in increasing the cost of Value 1 (wages), thereby decreasing the amount of production dedicated to the SV column. (2) Furthermore, by increasing the amount of surplus value devoted to investment in the next generation of machinery (NGM) he further decreases the amount of surplus value available for the profit sub-column; production which at any rate has already witnessed an increased value 2 – i.e., increased the magnitude of V2 (maintaining newly purchased and installed equipment). Finally and most importantly, the capitalist must pay for the new equipment, and this new cost factored in, reduced absolutely the amount of surplus value available for profit. Look at the formula: lp + t à V1, V2 + SV Profit/NGM (a) (b) (c) (d) lp = labor-power (a) t = machinofacture technology (automated, cyberneticized in modern times) (b) V1 = wages (c) V2 = cost of maintaining machinery (c) SV = surplus value (d) NGM = Next Generation of Machinery the locus of the general crisis. (d) Profit = that portion of surplus value appropriated by the capitalist (d) To maintain the rate of profit one must first maintain the rate of surplus value production by introducing new labor-power equivalents [a] to the new machinery [b] at a one-to-one ratio. Otherwise the percentage rate of surplus value on the right side of the arrow must decline, as the new equipment has to be paid for also, as does its installation and maintenance. Less surplus value means less available for profit, because second, the complex of new machinery costs must also come from overall value-surplus value production further reducing the amount of surplus value available for the profit sub-column. This is an iron law. There is no way around it. Except in the future with robotic artificially intelligent STAR TREK labor-power when it would be possible to introduce {a] at the equivalent one-to-one ratio with [b] – and, where the cost of the new machinery [d] is easily absorbed by the vastly increased productive capability of the robotically manned overall system of production, assuming there are no social restrictions as there are under capitalism to such a policy. In a capitalist system this introduction of labor-power at a one-to-one ratio isn’t done, as we have seen above, so the (i) rate of surplus value production has to decline on the right side of the equation, because (ii) the heavy investment in purchasing, installing and maintaining the new machinery combine to leave less surplus value available for the profit sub-column (with V2 increasing alongside t - i. e. with “c” increasing along with “b”.) That is, the totality of costs (i.e., where these costs of “t” are accounted for under V2 and NGM) of all of this new equipment further reduces the amount of production available under surplus value for the profit sub-column. Thus the rate of profit must decline. Simple arithmetic. (Or perhaps not so simple – but, nevertheless just as real.) There are things a capitalist can do which will ameliorate the speed by which his rate of profit will decline. Always these have to do with decreasing the cost of (a) by decreasing the amount of (c). Slave labor in Nazi systems, or simple wage control, declining safety procedures (failure to adequately maintain equipment and working safeguards) under fascist systems, are examples, but there are many other less draconian ways such as those pioneered by the North American capitalists (including “Taylorism” [i.e., efficiency] or assured US governmental contracting or simple monopoly). But in the end they are all stop-gap band-aids if you will and can only work for limited periods of time. Another topic for another book. {Note: in Stalinist Socialist systems it has been possible to introduce labor-power at a one-to-one ratio with new machinery and new factories (via reduced wages, forced labor, volunteerism, Stakhanovism [enthusiastic worker dedication and sacrifice in production]). – And, what would have been profit is shifted instead to other sub-categories, especially NGM. Furthermore, these things were done - especially in the USSR under Stalin and in China under Mao. This is the at-bottom economic reason why both countries witnessed the early “miracle of overnight development” that was the centerpiece of attention in the world academic community of economists in the 1930s and 1950s respectively. However, there are reasons why this kind of an increase in applied labor-power cannot last forever (can only be temporary), and without giant leaps in technology which take time', but that is also another story for another book.''} At any rate, in practice, and most commonly, some capitalists try to maintain their rate of profit by decreasing their investments in NGM. Eventually they lose competitive advantage. One capitalist eats the other. Capital is concentrated and centralized. This was discovered by Karl Marx in the mid-1840’s. Marx began his full explication in Capital Volume One (1867). In practice in the 20th century we have seen the capitalist classes resorting to various extreme measures such as Nazism, a variety of fascist practices insuring low and controlled wages, ignoring deteriorating working conditions, and the US system of assured governmental contracting, and always the tendency to monopoly maximized. Negating the Law of Value Free Enterprise vs. Monopoly and Non-Competitive Contracting Corruption is Inherent in Capitalism There is a widespread myth in capitalist economics, or at least in the way it is presented to the unknowledgeable beginning student, that “free enterprise” is an essential characteristic of the capitalist system. Exactly the opposite is the case, in fact. But, in Marxist theory, freedom to compete without interference at home and/or abroad is an essential given for capitalism to function properly. What is the answer to this conundrum? The law of the absolute decline in the rate of profit is the at-bottom reason why the primary drive of capitalist enterprise is always toward (1) monopoly and further toward (2) assured (which is to say Government guaranteed) contracts. It has always been the case that capitalists struggled to get contracts without competition (See Marx’s Capital Volume III) and to assure that what competition exists exists at an absolute minimum. Why? It should be obvious. If one can obtain an assured purchase price of commodities through a monopoly on their production or at least at a price one dictates via negotiation with a “friendly” purchaser it is a world far preferable to one in which the law of value is allowed to dictate price. In this way the capitalists who succeed in achieving a monopoly on producing said commodities or at least arranging friendly (non-competitive) purchases can also assert some control over the otherwise absolutely declining rate of profit precisely because eliminating real competition is in effect a means of negating the law of value. It is a form of corruption, of course. But it is so essential to reversing the otherwise destructive tendency (to maximizing profit) created by competition, where each capitalist must otherwise attempt to turn the law of value to his own interest by doing something to cut costs per commodity produced, that there is no other realistic way to turn. Corruption is as you can see, therefore, inherent in the capitalist system. If I can get the US government to pay me according to some assured formula (such as cost-plus “defense” [war] contracting – that is to say, the present system where the US government assures me (the capitalist presenting the commodity) that I will be paid my cost of production plus a guaranteed profit (of say 17%) I need no longer worry about the Law of Value. At least for the moment. No one else will be allowed to compete with me for the commodity being produced (say a warplane) and the more I spend the more profit I will make (17% of one billion is a lot more than 17% of half a billion). In the most egregious contemporary cases such as the war contracting for US imperialism in Iraq, the process is taken to the extreme. Now, in the USA, favored corporations are handed guaranteed cost-plus contracts without ever having to even submit proposals for initial review (as for example competing capitalists have had to do in the past when submitting proposals for weapons systems, where two or three were allowed to compete). Now it is up to the contractor to decide if a hammer is worth $1.95 or $101.95, which aside from ethical considerations makes “price” an altogether “arbitrary” matter. (There may be delayed checks by regulators but the key word is “delay”, because the capitalist already has the money and has been using his ill-gotten gains for even further profit making in some or another way.) The desire to have assured government contracts lies at the bottom of Western European capitalist war contracting since the days of old. Whether in Britain or France, for example in the 1600’s and 1700’s, manufacturers always sought to eliminate the law of value via corrupt practices (buying government and legislative agents under the table) to assure the awarding of such contracts. The same was the case in the USA during the Revolutionary War and everywhere else the bourgeoisie fought for power. (Cheating on quality and quantity of course is a better business practice of all concerned but altogether aside from this inherent corruption – a different type of corruption.) In summary, eliminating competition (the absolute tendency of capitalism toward monopoly) is an inherent function of the recognition of capitalists that they could temporarily negate the law of value and for awhile offset the absolute decline in the rate of profit. It has its most modern manifestations in fascist systems such as those of Germany and Italy, or for that matter in the USA with its post-World War II cost-plus “defense” contracting and current non-competitive bidding. Now, for a few additional comments on the birth of Capitalism. Capitalism in the English-speaking World As we have seen true capitalism, in the sense of capitalist production, required a ruling class with machinofacture (and all five of its essential minimal elements) as its profit center. Once that existed then it was possible for the middle classes (which is what the French word “bourgeoisie” means) to mount a serious effort to take political power away from the feudal aristocrats and nobility. Not that these middle classes hadn’t already tried. Britain The first Western Area attempt to put political power in the hands of the bourgeoisie occurred in the English Revolution {I like to use the dates 1640 -1660 for convenience. In actuality it would be more like 1642 - 1658.} Note that at this time the English-speaking World consisted only of what we call the United Kingdom and Ireland, and the North American Atlantic Coastal Colonies with a few Caribbean colonies thrown in. The entire English-speaking World of that time was affected by the English Parliamentary revolt. This revolution was eventually headed by Oliver Cromwell who used his New Model Army as the social engineering instrument which shaped the entire experience. The New Model Army could not be defeated. Because of that military fact Cromwell was able to abolish the Monarchy and the House of Lords. He created the EnglishRepublic and tried to put political power in the hands of the bourgeoisie. But, without machinofacture as their overwhelming profit center, the bourgeois elements, especially the capitalist farmers, were unable to make their revolution permanent. Cromwell’s New Model Army was based on capitalist farmers such as himself. Why do we call them capitalist farmers if capitalism did not yet exist as a sociocultural stage? Because these are farmers who “hire” labor as they need it. These are farmers who prefer not to incur the expense of hiring thugs to control serfs. Once Cromwell died, and his military genius removed from the class struggle, it was only a matter of time until the wealth of the aristocrats and nobility from their traditional sources (farmers held as serfs; and to the degree they were invested in proto-manufacturing endeavors and world trade, from those too) reversed the political gains of the English Revolution. For a time the traditional Monarchy and House of Lords returned. Cromwell’s rotting corpse was exhumed and flogged and it seemed as if everything gained in Old England by the civil wars and revolution had been lost. Although, in Britain, machinofacture was on the horizon, ascendant, it was not yet transcendent. It would take another century for the five essential elements to come into play simultaneously, thus, it took the British bourgeoisie another century to fully take command. Although, after the post-Cromwell “Anti-restoration Revolution of 1688,” the British burghers were never less than equal partners with the landed aristocracy. North America At the same time, almost as if out of sight out of mind, the New Englanders had been left alone for a good two decades - really closer to three decades. - And, during that period of time they had developed their own domestic political institutions. Furthermore, the drastic labor shortage in New England had created a tremendous demand for every kind of gadget and invention that could save labor-power input and magnify what labor-power input that was available! These are the two main reasons why the first really successful transition to Capitalism as a sociocultural evolutionary Stage occurred in New England. Left to their own devices the North American middle classes made a successful way in both the area of political life and in the equally important area of rapidly coming to terms with the new technological innovations. Innovations leading to germinal machinofacture! By the time we see the Anti-Restoration Revolution of 1688 in England, the North Americans had plenty of experience, (nearly four decades of practice,) in de facto self-government minus feudal interference. That fact forever marked the further evolution of those English colonies along the AtlanticCoast. The fighting for a new and bourgeois dominated way of life began in North America in 1775. Almost a century after the Anti-Restoration Revolution of 1688 in London. But, its destiny was laid during the Cromwellian Revolution of 1640-1660 and its consequences would be truly revolutionary. Semi-Capitalist farmers like Washington and Jefferson combined with Capitalist manufacturers and mercantilists in New England to put paid to the extended arms of British Colonialism and the feudal order/cum capitalist order, it represented. Since, in the British North American colonies, the machinofacture elements were in place alongside those of mercantile capitalism, and capitalist farming was the basis of this largely agricultural land, and because there was only a weak native feudal (Loyalist) overstructure to combat, the North Americans were able to pull off a successful military struggle with some critically important help from their enemy’s principal enemy - the French capitalists and aristocrats. That war, conducted by George Washington and his Staff, changed history forever. Think about it. It’s as if Cuba’s quiet success in building Socialism may someday (say one hundred years from now) be seen as the real beginning of true Communism, even with the collapse of the World Socialist Stage’s homeland. Certainly, if not Cuba, then China may emerge as the first of the true Socialist and later Communist countries. Not that anyone would have thought this way when everyone’s eyes were focused on the USSR! This is one of the advantages of having an Olympian view of prehistory and history. It makes the comparative method of historical analysis fruitful. However, the Cuban, Chinese or Vietnamese situation may turn out to be as prognosticators of the future of Socialism, there is no doubt but that the USA, tiny and virtually impotent, was the first homeland of the first permanent truly diagnostically Capitalist Stage (minus the Feudal residue of Great Britain) country in the World. Why? Because all of the trappings of power that spread awe and aura among most observers are really irrelevant to the outcome. What are important are the underlying economic and political diagnostics of class power. The Americans had the unhindered, critically important social and cultural and technological elements for building capitalism, even if the World didn’t know it until much later. Before Industrial Slavery in the USA Even the existence of slavery did not seriously, adversely, effect the North American bourgeois success, since the slavocrat economy of the South (as we were about to know it) was still in a rudimentary phase; the slave owners were as likely to be neutral or supportive of the Revolution as they were to be loyalist. Witness the slave owners Washington and Jefferson. Some of these slave owners were more attuned to the use of free hired agricultural labor to which slavery was a somewhat antiquated adjunct (thus, the term “semi-Capitalist.) A true united front could therefore be, and was, forged. Industrial slavery of the sort that followed the introduction of the Cotton Gin and the huge increase in demand created by the textile capitalists of Europe was yet to come at the time of the US Revolutionary War (1775-1781). Note that many of the textile capitalists, especially in Great Britain, were unusually intelligent. For example, Frederick Engels was a British textile magnate. Some of them were capable of foreseeing the doom of US cotton slavery and the General Crisis of Capitalism (with it, the concomitant need to move factories to India.) The French Revolution Brings Capitalism to the Fore in Europe The Great Revolution in France, in 1789, brought the bourgeoisie to political power there. Let us examine a few of the reasons why capitalist revolution in France was so much more important to the political immediacy of the European continent than anything the North American Revolutionary War portended. (Bourgeoisie is the French word for middle class; i.e., “middle” between the aristocracy/nobility on the one hand and the mass of dispossessed agricultural workers and urban proletarians on the other hand.) France had been the heartland of Europe since the collapse of the Roman Empire West. It was France that had the overwhelming concentration of Western Europe’s population, which was four times as large as the rest of Western Europe combined. - And, the French had inherited the infrastructure of advanced technology of the preceding Roman Slave Stage The French Monarchy and its Consigliore would never have consented to help the North Americans (in the US Revolutionary War of 1775-1781) with their radical political program being propagandized here and there and everywhere, if they had really thought the Americans had any chance of spreading such pernicious doctrines in France. The French rulers had millennia of experience in class dictatorship and a very efficient and effective state apparatus. At the center, were the secret police and this police force had concentrated the French noble families (the French boss hierarchy equivalent to Egyptian “Nome bosses” or Chinese “scholar-bureaucrats”) at Versailles (now a Parisian suburb). These bosses numbered some 400,000, individuals; all deeply in debt, and under constant surveillance. The French rulers felt confident in their ability to keep the status quo extant. What the French Monarchists did not understand was that Capitalism in both manufacturing and agriculture had a new and permanent technological base. The French “High Command” did not understand that the amount of capital being created permanently in the hands of the owners of the capitalist farms and the factories was overwhelming vis a vis the traditional sources of feudal capital accumulation. - And, all of this capitalist income was above and beyond, and in addition to, the vast amounts of money capital being acquired globally, in everything from sharp trading to the exploitation of slave labor in the Caribbean. Furthermore, these new rich elements (bourgeoisie) were not concentrated at Versailles by the secret police – in fact, they were concentrated nowhere by the police. They found their own favorite locales in the libraries, salons, and clubs of France’s great cities. At any rate, these French “middle persons” (bourgeoisie), and the intellectuals who adhered to them could not be set aside and ignored. Yet this was something that the Old Regime could not understand and therefore, could not admit. Thus, came the uprising of 1789. This time it was the turn of the French ruling classes to experience the civil war that their English brethren had gone through well over a century earlier. In the event, France’s civil war quickly spread throughout the country and ended in the liquidation of the aristocratic and noble classes and indeed of the Monarchy and all of its institutions. In three short years. Along the way the Revolution gave the peasantry the land of the Monarchy, the boss hierarchy, and their Church. In so doing the Revolutionary leaders created a vested interest in making the Revolution permanent among the masses of French farmers. It would be these capitalist farmers that provided the cannon-fodder for the Revolutionary Armies and those of Bonaparte a few years later. In the two decades following the uprising of 1789, the French capitalist classes in various political forms, destroyed feudalism, not only in France, and the heartland of the old Roman Empire (the entire Riviera from Rome to Barcelona and adjacent territories), but in much of the rest of Europe as well. This was accomplished militarily. At first under the various governments of the Revolution proper and later under the leadership of Bonaparte. The Congress of Victors The Restoration of 1815 There is little new under the Sun. With the collapse of the French Revolution/cum Empire the Feudal elements with the foreign (Russian) troops they needed at their disposal, attempted to reverse all the gains of the bourgeoisie. At the Congress of Vienna (the Congress of Victors), in 1815, it may well have seemed to observers that they had succeeded. But, as in England with the death of Cromwell, the success of the Feudal Restorationists was destined to be short lived. For, at-bottom, the nature of technology had changed forever. Thus, while the political form of French government featured the restored Old Monarchical order, the underlying economic and thus inevitably the political power would have to be in the hands of the new, and permanently emergent, agricultural and manufacturing middle classes. Continental Capitalist Economic Downturn Leads to Continental Revolution The General Crisis of Capitalism (which we defined above} began to come to a head in the 1830’s and finally provoked the European wide Revolutions of 1848-50 wherein labor found its first independent political role. This real world event triggered the acceptance of Karl Marx’s theoretical discoveries by the European labor movement. - And, it encouraged the more far-seeing and richest European capitalists to try sending more machinery to the cheap labor of the colonies. Sharpest, at this hinge of historical fate, were the British textile magnates. They envisioned India’s cheap labor applied to their machines. They knew, from experience, about Indian contributions to dyeing and weaving; they saw that the huge numbers of absolutely destitute people on the Indian subcontinent could be placed at the factory bench - burned up - replaced again - ad infinitum. Capitalism Prospers in North America While the attention of Europe was focused on its own deepening economic and political crises in the 1840's what went largely misunderstood, or completely non-understood, was the great success of the North American bourgeoisie. They had spread into the West and South of territories only nominally theirs and often into territories belonging to other nations. - And, in all these cases they were successful. Furthermore, the technological progress of the North Americans was phenomenal. Every kind of advanced industry existed in at least one of the Northern cities. - And, compared to Europe, North American capitalists had relative labor peace. When the urban proletariat grew too angry with their conditions in factories the American capitalists had the open valve of the West beckoning to these disaffected workers. Workers could take their ambition and give capitalist farming a try in the West (“Go West Young Man”). The heat was off of the pressure cooker the way it could never be off in Europe. Thus, the North American industrial capitalists avoided any duplication of the European Revolutions of 1848-1850 that brought Karl Marx and his analysis of Capital, and what needed to be done about it, to the fore. (Marx’s original “Critique” of Capitalist production was written and circulated by him and Frederick Engels in the mid-1840’s; and its implications were popularized by him during the European revolutions of 1848-1850 (e. g., The Communist Manifesto), and led to the book we know as Capital Volume One in 1867). In fact the Gringo Regime was so stable that it profited from the difficulties of the European rulers by completing its seizure by 1848 of the rest of northern Mexico including New Mexico, Arizona and California. Whatever the French and English may have thought about renewed Yankee aggression there wasn’t much they could do about it with their state apparatus’s struggling just to stay afloat. In summary, by 1850, the North American capitalists had not only avoided the proletarian uprisings preoccupying Europe, but they had seized northern Mexico as a result of their victory in the First Mexican War. They brought new territories into the Union and California entered as a “Free State.” Yet, the gringo capitalists had a cancer in their system just as deadly as the armies of unemployed workers were to their European counterparts. What was that cancer? Slavery. Free Labor vs. Slave Labor – Whither the USA? The US northern Capitalists were forced to pay a high price, to their Slavocrat counterpart rulers in the South, for California and the West coming on board without slavery. That was the United States Federal “Fugitive Slave Act.” For the northern fat cats the Slavocrat South was about to become a worse problem, at least temporarily, than the indigenous revolts of proletarians in Europe. The US federal courts were as corrupt in 1850 as they are today in 2011 and the US Supreme Court was controlled by the worst of the worst of the Southern slavocrats. These evil men had only one interest; that interest lay in maintaining a tight rein on their slaves. The new law created a force of federal commissioners to hunt down fugitive slaves in any state and return them to their owners. Even Africans who had been free for many years, and lived in Free States could be seized and “returned.” The commissioners were nothing more than scum-of-the-Earth hoodlums, but they enjoyed a new legal status with the power to kill while in pursuit of Black Men, Women and Children, and under the new US federal law these thugs could compel citizens in Free States to assist in the pursuit and de facto kidnapping of runaway slaves and free Blacks! Hefty fines and prison sentences awaited Whites who refused to cooperate. A captured Black person could not testify on his or her own behalf and was not entitled to a court trial. Civil War in the Offing This Act enraged the North. Some states reacted by passing legislation designed to hamper the federal thug’s activities, but such laws were declared unconstitutional by the slavocrat U.S. Supreme Court. When riots occurred in Northern communities and when soldiers were deployed to restore order, the soldiers refused to fire on the protestors. In Kansas and Nebraska the gauntlet was thrown down by Free Soilers, not about to put up with the Fugitive Slave Act or the idea of slavery on their Free Soil! Civil War was in the offing, as the 1852 publication of Harriet Beacher Stowe’s Uncle Tom’s Cabin prepared the people of the North to see slavery in the South for what it really was. - And, the Achilles Heel of the Southern Slavocrat Regime was laid bare for all to see. That was the running away to Canada and Mexico of thousands and thousands of slaves not about to put up with enslavement any more. At least 150,000 slaves escaped to Canada, and perhaps that many more made it to Mexico. When the South’s evil leaders realized that their Fugitive Slave Act was going to fail they prepared to leave the Union and form their own tyrannical state! Those of you interested in the history of the Slave Revolts that brought the slave system to its end should read US Communist Herbert Aptheker’s doctoral dissertation (published as American Negro Slave Revolts in 1943) and his earlier work on the Nat Turner Rebellion and go from there. The First Imperialist War By 1850, the profits returning to the capitalists of the United Kingdom from the factories they had installed in India triggered the Crimean War of 1853 - 1856. The Russian financial capitalists and their Czar hoped to seize India’s cheap labor from the English with their massive land armies. The outcome was devastating for the Russians and not so good for the Light Brigade. (After Cromwell, the British rulers would never allow promotion in the officer’s ranks except for reasons of class and privilege. Thus, one of the most incompetent aristocrats ever to wear a British uniform was in charge of the Light Infantry Brigade at Balaklava. He took a private yacht to the war zone and bedded down there with a bevy of beauties and the best of food and service. His tactic in the crunch was to lead his dragoons (mounted infantry), weak and dying of dysentery, straight into the artillery of the waiting Russians, who naturally, wiped them out. Thus, Lord Tennyson’s poem, The Charge of the Light Brigade: “Not for Us to Reason Why; Only to Do and Die!”) John Brown As the resistance to the Fugitive Slave Act spread throughout the North (and in the South where increasing numbers of slaves were taking to the ankle express as they headed south and north to Florida, Mexico and Canada) armed struggle broke out. Kansas and Nebraska were the scene of the most violent confrontations between free soilers and slavers. Leading the fight were men such as the abolitionist preacher John Brown. (Abolitionist was the popular term for those advocating the abolition of slavery.) Brown was ready to start the US Civil War right now (1859) and over the issue of slavery. He and his group prepared an attack on the Harpers Ferry, Virginia, US Armory. This military action was to support the political objective of initiating civil war by arousing the slave population to take up the now available arms at Harpers Ferry. In the event the Army was able to defeat the insurrectionists and killed them. But the fact the civil war did start immediately thereafter (1861) made John Brown a hero in legend and in music (“John Brown’s Body lies smoldering in the Grave” and “Battle Hymn of the Republic”.) It would be four years after Harper’s Ferry before Abraham Lincoln would issue the Emancipation Proclamation. But, be there no doubt, John Brown’s insurrection against slavery and the USA Government that enforced it was the first shot fired in the US Civil War. Labor Takes a Giant Step Forward – September 28, 1864 The (1st) International Working Men’s Association During the course of the US Civil War (1861-1865), Karl Marx joined the {First} International Working Men’s Association {1864 - 1876} immediately after its September 28, 1864, London creation. Marx rapidly became the key person holding the International together and in shaping its composition and policies over the next 12 years. Marx saw the opportunity to organize massive strikes of British workers as part of his support of the GreatRepublic, and this made the International something to be reckoned with right away, for the USA. Especially after Washington (DC – the US State Department) responded warmly to his letter to Abraham Lincoln, on behalf of the International, in which Marx gave Lincoln full support for the Union in the US Civil War. Civil War (1861-1865) in the USA Changes Marx’s Presentation of Capital The US Civil War triggered the destruction of the slavocrat overburden that the North American burgeoning bourgeoisie had inherited as a product of the way they fought and won the Revolutionary War with Great Britain (1775 - 1781.) Those who have read Capital
(Volume I) know that it begins with a citation about the historic significance
of the US Civil War; but you may not know that it was that war which brought
Marx to a new way of presenting his first magnum opus to the world. Because, from a ruling class point of view, the struggle in the US between the Capitalist North and Slavocrat South was fundamentally a struggle between those who advocated that labor-power be purchased and paid at free value (therefore at a higher rate than the slave but without the financial burden of policing the slaves) and those who advocated that labor-power be paid at the value of minimal subsistence (the cost of keeping the slave alive and paying those holding him in subservience). For free workers the struggle was a reflection of the struggle for paid hours of labor versus unpaid hours of labor. With free workers having to compete with the lowest common denominator (cost of keeping the slave alive) the hours for which they would be paid would be very few indeed – thus, the status of poor Whites in the South became known to advancing Union armies as the living conditions of “poor-White Trash.” – And, the workers of England and the rest of Europe understood this very well. Although the two British working class newspapers had started out in support of the South alongside the capitalist press (because the “cotton famine” had shut down a great deal of the British textile industry), Marx had been able to educate and guide them so that by 1864, as Marx wrote to Abraham Lincoln, on behalf of the (1st) International Workingmen’s Association, to paraphrase, “European labor has seen the struggle of the Great Republic against Slavery as its own struggle!” The struggle for paid hours of work, and adequate pay at that, is the very heart of the international working class movement – the very heart of Marxism. American workers saw that wage slavery was bad enough and suspected what European workers already knew. Namely, any and all capitalists would reduce them to chattel slavery if they could, because they already done that everywhere in Europe they could, as our entire European history and ongoing cultural connection with Europe proved. Three Organizational/Structural Steps to Emancipation 1 2 3 The International Workingmen’s The Paris Commune The Russian Counsel Association (1864-1876) Model (1871) Model (1905) From left to right we have the initial three historical stages of organizational awareness in the process of proletarian emancipation. The First International September, 1864 Twelve years after reaction crushed the revolutions of 1848-52 a defensive organization led by relatively conservative British trade unionists was created in London. Its purpose? To (1) stop by physical force (on the Continent) the importation of scab labor into Britain and (2) raise and share “strike” funds to offset the capitalist international organization of labor and finance. It was called the International Workingmen’s Association (and it had some definite feminine affiliates but in these days only the most progressive males – such as Marx himself – saw this as an absolute necessity.) Karl Marx joined the First (there would be three by 1919) International within a month and volunteered his services to the cause. Marx had just inherited his share of his parent’s estate and was financially independent for the first time in his life. Prior to this time Marx earned money as a writer for many newspapers, especially in other countries, and he received a great deal of financial support from his friend the British capitalist Frederick Engels. By this time Marx had been out of organized politics since 1852 – for twelve years in other words. During those years Marx had been doing research at the BritishMuseum library and in three more years this research would come together in the first volume of Capital (1867). Marx quickly became the ideological and organizational leader of the First International. In his hands “Marxism” (the science of historical materialism) would defeat syndicalism, anarchism and revisionism within its own ranks and the International itself would move from being a defensive organization into an offensive one. This development caused the most reactionary governments in Europe to form the first anti-communist Pact. The Paris Commune For your purposes you may organize your studies in two parts. The first is understanding the specific historical circumstances surrounding the Franco-Prussian War of 1870-1871 that led to the Civil (class) War in France (1871). The second is the way the Paris proletariat organized this first attempt of the working class to establish its own form of government. The second of these topics concerns what you need to internalize right now. Namely, the structure of this first proletarian attempt at governing. No one has summarized the governing nature and importance of the Paris Commune better than did Marx himself in 1871 (The Civil War in France: The Paris Commune) in the following five principal points about the structure and indeed nature of the new Government of Paris. (1) Elimination of the state (professional Army) and its replacement by an armed organization of the people. (2) Vesting of political power in immediately recallable delegates (3) No more than workmen’s wages be paid any Government employee or leader (4) Combination of executive, legislative and judicial powers in one “working” Government rather than a debating society of different capitalist and bourgeois interests. (5) The entire nation from the village to the federal level and everything in between to be governed by similar working bodies of immediately recallable men and women paid no more than anyone else. In the end the capitalists succeeded in destroying the commune and shot over 10,000 men, women and children, by firing squad, and deported to penal colonies (e. g., Devil’s Island) or imprisoned 14,000 more. As importantly, historically, the First International got the credit (or blame) from the aristocrats, nobility and capitalists who began to form anti-communist policies collectively. This early “anti-Comintern Pact” (the second would be between Germany, Italy, Spain and Japan in the 1930’s) set the stage for the final conflict between workers and capital. The Psychological Theory of Marxism Marx dropped the long introductory sections on the “history of the theory of surplus value” from Capital Volume I (these would eventually be published by Karl Kautsky in three parts [before he turned renegade] and today are often referred to as Capital Volume IV by Marxist scholars.) Instead, Marx substituted “The Commodity.” Why? Because, in and of itself the capitalist produced commodity embodies all of the secrets of capitalist production. Of equal importance, is that within the commodity lie the secrets of psychological fetishism wherein “the material relations among people appear as social relations between things.” - And, this is the basis for the further development of the Marxist theory of psychological imprinting which I have explained in this Handbook. In that imprinting of the underlying template of material relations also lays the secrets of sexual fetishism, where sexual object identification is part of the reflection of these material relations of life. These underlying templates are (1) the altruism of primitive communism and (2) the sadism of the servitude epoch. In the transitional periods, both. Without Feudalism, Without Slavery, the Future Was Theirs The end of the US Civil War brought both capital and labor to the fore in North America, as the prime interested parties, and thus the prime movers, respectively, in advancing and defeating the Capitalist Stage. – And, as Marx’s leadership of the First International of Workingmen, and his services in blocking Britain’s entry into the War on behalf of the Confederate Regime (also, blocking British construction of Naval Men of War for the Slavocrat Regime in Richmond by organizing a giant British national strike action), was well known to the readers of the New York Daily Herald (for which Marx had been the London correspondent), Marxism began to make rapid headway in the American House of Labor. Not too mention the post-1850 arrival of real Marxists among the refugees from the European working class revolutions of that time (1848-1850). The New Englanders had begun their political life in the 1600’s essentially independent of Feudalism, as we saw earlier in this book – now they would continue it without the anachronism of Slavery. – And, as the struggle between capitalists for the world’s cheap labor and markets intensified, the inherent necessity of revolutionizing the means of production did also. Let us examine this notion of revolutionizing the means of production. The “Form” of Surplus Value Determines its Destination II Machinofacture increases the productive power of human labor exponentially; it creates huge amounts of commodities. But, the national market is limited to the purchasing power of workers (who are paid at Value - that is, the cost of their wages, keeping them alive [and their families]) and the luxury living requirements of the capitalists. That is not enough. As I pointed out in the beginning of this section, and as Karl Marx discovered, it is the “form” of a commodity which determines its destination, thus, also the way in which the surplus value within said commodity can be realized, or made material, so that the capitalist can use it for his advantage. Something besides value (I & II) and Profit must take up the excess surplus value. Even though the capitalists have the world as their market (not just the nation in which production occurs), a basic condition in the economic theory of all of Marx’s work, this is still not a sufficient answer. No, the answer is that for the massive surplus value being produced, to be consumed, it has to go to more constant capital (the physical means of production) - iron isn’t eaten, it has to go to the steel industry - steel has to feed the machine tool, machinery and construction industries. In other words, other capitalists are often the only and best market for all of this excess surplus value. Revolutionizing, or innovating, new means of production, offers the needed market for all this surplus value. Innovation This was true then. It is just as true now. This is the reason for the exponential increase in the rate of new generations of equipment (Next Generation of Machinery – NGM, in our formula) being invented and brought on-line. For example, one no sooner has a computer than it is “obsolete.” Contemporary computer manufacturers have a “law” which says that microprocessors will be completely reinvented (revolutionized; improved) every 18 months. They rely on this “law” for the survival of their industry, by recreating the marketplace continuously. As we have seen capitalists always strive to eliminate competition via (a) monopoly and (b) assured (friendly; corrupt) contracting. They also use their governments to (c) force further innovation. For example, the US government (by way of Congressional legislation) was recently used by manufacturing capitalists to force TV stations across the nation to go to High Definition (by law!) despite the fact that such technological advance means extraordinarily high costs for the capitalists of the communications industry (not to mention the “unnecessary” aspect of such new legally mandated equipment.) In short, no kind of end-user capital absorber would work unless it was constantly being reinvented (revolutionized.) The means of production, in other words, have to be built all over again. This is quite feasible if the rate of improvement and innovation of the means of production keeps apace with the need of capital to find an outlet. This is what drives innovation in Capitalism. This is what, as Marx discovered by 1844, is responsible for the exponentially, logarithmically increasing rate of innovation in the means of production in Capitalist systems. Seeds of Its Own Destruction As constant capital (e.g., machinery) increases as the end-user of surplus value, and more and more workers (the owners of their own labor-power) are sent to the street (unemployed) with the introduction of the new machinery, generation after generation, workers become increasingly restive. The Iron Law of Capitalist Relations of Production is creating its own grave digger. For workers as a class have no choice but to struggle to seize state power; to put an end to capitalist relations of production in favor of relations that put them at the top of the priority list rather than at the bottom of it. Workers must have a system of social relations that put their needs first, rather than putting the maximization of profit for the domesticating (exploiting) few at the top of that list. (See The Communist Manifesto, Chapter 2, Paragraph 22). Working Class power must become their political objective. That is why we Bolsheviks are a working class Party. We know scientifically that only the working classes can create humanity’s future, because only working people “have” to create such an egalitarian future. (Again, the Star Trek model of advanced technology and advanced social relations may be an excellent tool for educational purposes when organizing contemporary working people.) At any rate, after 1850, more and more capital was sent abroad to utilize the dirt-cheap labor-power of the colonies. The sending of more and more machinery to the colonies was the response of the most sophisticated capitalists within the ruling classes. But most importantly in the half-century from 1848 to 1903, was the growth of the international organization of labor under the banner of Marxism, because the acceptance of Marx’s discoveries was the most sophisticated response of the most advanced workers of the capitalist world. (1848 being the European revolutions and the appearance of The Communist Manifesto and 1903 being the formation of Bolshevism.) More and more unemployment at home triggered revolts. The rising of workers in France in the form of the Paris Commune of 1871; the USA revolt of workers that resulted in the St. Louis Council of 1877, were early related events. Related because all of the capital being sent abroad decreased still further the employment roles (workers receiving factory wages) in both countries. (Of course, in both cases there were many other specific factors involved in both uprisings but for our purposes we are concerned with the role of exported capital.) As it had been in the 1840’s, the Americans were less affected in the 1870’s than the Europeans, by this extra-territorial flight of Capital. This time, because of the rapid industrialization, and expansion of industrial infrastructure, that accompanied the destruction of slavery in half the North American nation, after northern victory in 1865. Nevertheless, the US situation was exacerbated by the desire of capital to flee to quicker-return profit-center parts of the colonial world (such as Latin America.) In fact, the shortage of capital in the USA was so great (initially as a consequence of Lincoln having begged and borrowed every bit of money he could get his hands on to pay for the cost of the “industrial” way the Union fought and won the Civil War) that Capital in Europe was finding New York a far more profitable place to go than to stay at home. (As a matter of interest, “James Bond” creator, one-time MI6 agent, Ian Fleming, owed much to his grandfather, who became one of Britain’s richest men by making 40 odd trips back and forth from Scotland to New York with bags of cash he was able to raise overnight in the UK for railroad and other industrial investment in the US and the US Latin American de facto colonies; the senior Fleming starting as a simple clerk who noted upon arrival in New York, with the end of the Civil War, that capital invested brought two to three times as much in the US as in his homeland of Scotland.) Worker’s parties began to appear in the European capitals of Capital. Parties which took Karl Marx and Frederick Engels as their mentors (even though both men were often at odds with these would-be offspring.) These years were also the years of maturation of the phase of imperialism of the Capitalist Stage. Imperialism is the last phase of the Capitalist Stage. However, this phase has proven to be of over one hundred fifty years in duration, and we can now see that it will continue well into the 21st century, despite the fact that both Stages of Socialism are now extant on the historical stage. Revisiting the European Working Class Movement The Twenty Years between Marx and Lenin During the years of the First International (1864-1876) Marx battled the anarchists and the syndicalists for control of that body. At the same time a group of reforming type (soon to be called “revisionist”) socialists was emerging in Germany. All of these tendencies were in serious theoretical error. Mikhail Bakunin (1814 – 1876) (one of the two principal anarchist leaders of that time the other being Pierre-Joseph Proudhon) exposed anarchism’s theoretical bankruptcy during that fight by maintaining that humans were innately incapable of behaving in any way other than one in which some would rise above the others, regardless of any other circumstances. The few structured above everyone else, using armed force, (the state), would always compel those below to act as they dictated. This is a kind of primitive biological determinism in that it takes its cue from the idea that humans are genetically programmed to behave in this way. As such it is categorically wrong by definition. In other words, this is part of the fundamental theoretical error in anarchist sociology. Marx and Engels had discovered the science of anthropology (culture) and the growth of that science ever since (and all four of its subdisciplines) tell us that it is not the structure of society which leads to the evils of class dictatorship but the economy of society. That is, the three components of culture (technology, social organization and ideology) act as if they were straddled with “governors” (negative feedback style) so that no one component can get too far out of sync with the other three, and all together comprise the buffer between humans and nature. This buffer we call culture has its own laws of causality and process. There is no genetic predetermination in humans as far as social behavior is concerned. This is scientific law today and written in stone but in those times it had not yet garnered the massive proof that anthropology would provide in the 20th century. The Syndicalists like the anarchists came in a variety of schools and movements but they too were defeated in the First International in that they could not come to accept Marx’s proof that the state is the instrument of arising classes and not the cause of class division. Thus, the Marxists insisted that the cap state be destroyed first so that the socialist state could be constructed and take its place. Only after the elimination of the causes of the state (classes and class war) could one talk about the abolition of the state altogether. Arising at the same time was a school of Right-wing social democratic Reformists (who would soon be called evolutionary socialists or “revisionists”) which advocated in one form or another participating in the bourgeois political formation (parliaments for example) and in struggling for working class immediate welfare needs such as the eight hour day, social security, medical care, public schooling and so forth. This latter group claimed Marx and Engels as their theoretical founders but in fact they took these great social scientists work along an entirely new road. Marx and Engels saw participating in all forms of struggle (thus all political forms within capitalist society) as essential to building a base for the eventual armed insurrection and violent overthrow of the cap state. The reformists however had an entirely different take. They came up with one excuse or another to substitute the idea that this kind of struggle would lead to peaceful parliamentary evolution out of capitalism into socialism. This completely self-serving fallacious doctrine became the basis of “revisionism” (led by the German Social Democrats such as Bernstein and Kautsky.) As the Syndicalists and the Anarchists went their own way after 1876 so did these reforming revisionists. When Marx died in 1883 they had spawned nearly identical reformist-revisionist parties in most of the rest of the countries of Europe. In 1889 these parties came together and formed the Second International Association of Workingmen. In the twenty years between Marx’s death in 1883 and Lenin’s founding of the Bolshevik Party in 1903 the principal fight within the European Working Class Movement ceased being between Marxism on the one hand and Syndicalism/Anarchism on the other hand and now became a fight between orthodox Marxists and Revisionist Marxists. - And, so there we stood. Why Racists and Fascist Radio Nutballs Sometimes Succeed As you can see the laws of capitalist production were not easy to discover. Frederick Engels remarked in his 1883 funeral eulogy to Karl Marx in London, that the unlocking of the “secrets” of capitalist production was one of Marx’s two greatest contributions. (The other being the discovery of the laws of history as we reviewed earlier; in the USA what is more often thought of as the tripartite nature of the (anthropological) concept of “culture.”) Workers know they are being exploited but the mechanics of that exploitation are difficult for them to understand in many cases. After all it took the genius of Karl Marx to explain the process to intellectuals. As a consequence workers have often fallen victim to all kinds of persons who would trick them. Fascist radio nutballs like Rush Limbaugh for example and others like Hitler and Mussolini use populist language as the first and foremost trick after racism - Hitler put the words “socialist” and “workers” in the name of his Nazi Party (National Socialist German Workingmen’s Party.) Our task is to set the record straight and educate those workers we can reach who have been misled. Because, if we don’t, and we allow them to become Nazi’s, we will end up having to kill them somewhere down the road in the inevitable armed struggle. |
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