Internationalist Perspective 'As We See it'

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Spikymike
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Jan 7 2016 16:03
Internationalist Perspective 'As We See it'

I have previously recommended (with only minor reservations) libcom regulars reading this three part statement by IP issued as a discussion document;
http://internationalist-perspective.org/IP/ip-texts/IPCL-intro.html
They have now issued a more formally agreed and compact statement summarising their marxist influenced analysis of capitalism and political conclusions. Although I thought the comment ''...which means that the capital-labor relation has wiped out and replaced all pre-existing ones'' relating to capitalism's conquest of the world was an unfortunate exaggeration I could find little else to disagree with, even if it inevitably leaves much more to discuss in terms of any practical application of our common political activity. Well worth a read here:
http://internationalist-perspective.org/IP/ip-texts/IP_Ref_text_2016A.pdf

petey
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Jan 7 2016 18:35

thanks mike.

fischerzed
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Jan 10 2016 22:45

Mike

You beat me to the punch! I was about to post the link when I discovered you already had.

The document in question, "The World as We See it: Reference Points" represents long months of discussion, arguments, rewrites and edits, and we hope people will respond (positive or negative) to it here or by contacting us at ip@internationalist-perspective.org

Cheers

Fischer

ajjohnstone
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Jan 11 2016 03:44

Can i endorse this paragraph as a definition of what has been called the 'Thin Red Line', a project with a soft spot in my heart and occasionally espoused by myself on these forums

Quote:
Just as the proletariat of today is more fragmented and diverse than it has ever been, so too are the prorevolutionary organizations. They come from various theoretical backgrounds: Marxism, anarchism, the theory of communization, etc. IP recognizes this diversity and works to network between groups. No individual or group possesses the whole truth. Political organization allows the confrontation of ideas, networking, debates and discussion from which may arise new clarification on capitalism and its possible overthrow. Ephemeral organizations and long-term structured organizations, occasional meetings and regular debates, all these expressions can be valuable for the development of a clearer awareness of the challenges today. We do not seek their merging into one large organization, but we encourage communication and collaboration between them, and re-groupment when it makes sense.

Again the article expresses my own wish for the future of my own Party

Quote:
Theory must be where the struggle is. Therefore, the political organization must aim to participate actively in the struggles of the collective worker. ‘Participate’ rather than ‘intervene’: instead of making one-sided interventions, we seek to participate in the conversation of resistance, in which theory inspires and develops action, and is, in its turn, inspired and developed by action.

[my emphasis]

Spikymike
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Jan 11 2016 11:22

My thanks to ajj for his genuine endorsement of this small section of the IP statement though I must say that the spgb's practice seems to fall far short of his wish for that organisation as a collective body to ''participate actively in the struggles of the collective worker''. This is not to say that any of the tiny pro-revolutionary organisations around in our milieu today can claim a comprehensive participation at each level and in every sphere of social activity, inevitably it seems resulting in various degrees of specialisation of their activity in theoretical development, educational and 'propaganda' output, workplace and 'community' agitation etc, with those organisations that attempt such a comprehensive coverage rarely achieving any significant progress. Probably also why individuals are often motivated to move around between and in and out of the various existing organisations or to set up usually short lived alternatives. One of the reasons why websites such as libcom for all their shortcomings are so valuable. We could also benefit by some more input into the far fewer attempts at running 'non-denominational' discussion groups, conferences and seminars in addition to agitational workplace and 'community' networks. So more co-operation between pro-revolutionaries certainly. The rest is dependent on a much more advanced and developed level of class struggle world-wide.

ajjohnstone
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Jan 11 2016 13:18
Quote:
We could also benefit by some more input into the far fewer attempts at running 'non-denominational' discussion groups, conferences and seminars in addition to agitational workplace and 'community' networks.

I know you were a little critical of the lack of involvement of SPGBers in the MDF and i acknowledge that the SPGB may well be called to account.

But then i can also show that the SPGB does respond in a comradely fashion with such as the Oxford Communist Corresponding Society. Or currently with the Wakefield Socialist History Group. Others that have been given comradely reviews is Critisticuffs.

When we have our own problems of lack of members turning up to our own branch meetings with more and more inquorate then the lack of visitors to non-SPGB groups is understandable.

I know the Edinburgh branch has persisted with a discussion group for many years that is open and welcomes the participation of others. It meets at ACE so it couldn't be any more amenable to anarchists and other activists. There exists a Brighton discussion group with regular non-members in attendance and two new discussion groups, Folkestone and Liverpool, trying to get off the ground. I'm sure they would welcome political exchanges with others who hold similar but not identical points of view.

I guess one snag is these are seen as SPGB-sponsored affairs rather than what they could and perhaps should be ...umbrellas for the Thin Red Line along the lines of perhaps the Workers Forum of the 40s and present MDF

In regards to involvement in the wider context of workers struggles then i have to confess for the SPGB it is wishful thinking and only an aspiration for the future. Occupy rose and fell too quickly for the SPGB's sometimes glacial process of decision-making to permit it to make any noticeable input but most Party-members were keen to participate and offered critical support...But you personally knowing some of our elderly members wouldn't have expected them to exchange a soft bed and feather-downy for a sleeping-bag under canvas.

I would add that our blog, Socialism Or Your Money Back has been very vocal in posting support for migrants and highlighting the environmental issues.

This year may be interesting in regard to trade union protests to the Tory new laws. I hope we will be more visible at these offering an analysis that will be one you yourself cannot endorse but also one that will nevertheless be still critical of the unions encouraging and urging them to go further than they do. I would like to see joint meetings or forums to discuss our differing perspectives and ideally to put those in front of union members and union activists rather than talking to the already converted. After all at the end of the day, it will be workers who decide which of us presents the better arguments to carry forward into practice.

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Jan 12 2016 17:15

Thanks Mike. I still need to finish sections 6-8, but I broadly agree with sections 1,4,5,9 & 10. Apart from the problematic historicist proposition, you mentioned, my main objection to sections 2 & 3 are that it remains too much a simple rehash of orthodox marxist positions, in potentially fatal places. This paragraph (and a bit) captures most of the issues:

Quote:
Real domination caused a vertiginous development of capitalist society, but it also developed its inherent contradictions. Capital, wealth, can take no other form than that of the commodity, exchangeable for other commodities. That means it must have a use-value (for somebody with money to buy it) and an exchange value, the content of which is abstract labor time, value. It cannot exist without either: if it has no use-value, it can’t be sold, and if its production requires no labor time, none can be stolen, so there can be no surplus value or profit. Use value and value, the two sides of the commodity, must therefore develop hand in hand. But under real domination, they become increasingly unhinged. Use-values grow exponentially through technification, a process in which living labor is subtracted, replaced by technology. But the growth of value requires that living labor-power is added. Capitalist society runs more and more on past labor (hardware and software). The pool of living labor, from which surplus value can be extracted, tendentially shrinks, despite the increasingly efficient fishing techniques. Tendentially, this leads to a relative decline of the production of new value while the exponential growth of use-values (of the capacity to produce them) clashes with the narrow basis on which the conditions of consumption in capitalism rest, and impedes the realization of value.
.
Real domination brought capitalism’s crisis tendency to the fore. It is a crisis of profit, a crisis of overproduction, a financial crisis, but its roots are in the commodity in the breakdown of its unity.[...]Still, capitalism cannot get rid of its crisis-tendencies. It can only overcome them through a massive devalorization of existing capital. It needs violent phases of destruction, either through depression or war, to restore conditions for new growth.

The very last point, which is one being pushed by the likes of Alan Freeman and Andrew Kliman for the last years ("the decline of the rate of profit can only be solved by socialism or world war 3") is really a consequence of the first.

The first point - "Capital, wealth, can take no other form than that of the commodity, exchangeable for other commodities" - is fatally wrong. Capital can, does and must, take the form of money capital during it's valorization-in-process cycle. In fact the money phase is the only phase that cannot be dispensed with in any of the variant cycles (industrial: M-C...P...C'-M'; merchant: M-C...M': financial: M...M'). If capital can take the monetary form, then it is no longer clear that wars actually result in the destruction of capital that Freeman/Kliman take as a given. Certain capitalists certainly make a hell of a lot of money out of war. Just because armaments and war materiel are destroyed in their consumption does not make them materially different from any other commodity. The fact that infrastructure and people are destroyed in the process does not demonstrate per se, that war inevitably results in the destruction of capital overall - unless you take the position (opposed to Marx) that capital cannot exist in the monetary form. And as for depressions - well pretty much everybody accepts that depression-deflation cycles increase the buying/command power of saved investment capital at the expense of debtors - if anything existing capital is increased rather than destroyed in that case.

The section "Capitalist society runs more and more on past labor (hardware and software). The pool of living labor, from which surplus value can be extracted, tendentially shrinks" section is just basically the same old OCC/FROP orthodoxy that I reject entirely - see thread here entitled "The OCC", for my reasoning.

The third thing I take issue with is the idea that the roots of capitalist crisis are in the breakdown of the commodity's unity and that this is a new development of the era of "real domination". (Again, in passing, the idea of global, "geological time", eras is historicist). First of all, in the para the assumed breakdown of that unity and it's link to crisis hedges its bets by first leaning on the OCC/FROP and then flip-flops onto underconsumptionism (aka "crisis of realization") due to expansion in productive capacity clashing with "the narrow basis on which the conditions of consumption [...] rest", i.e. the buying power of the w/c. Frankly this is a sop to Piketty and socialdemocrats pointing to the falling real income share. If the "narrow basis" is the problem, why won't "widening" it again, by using political power to rise the real income share of workers again, be the solution? I think both arguments are wrong, but to be unable to choose between the orthodox FROP zusammenbruch theory and the socialdemocratic underconsumption theory, is a greater wrong than the sum of the parts.

But... my main issue with the splitting asunder of the commodity's unity is that this is not a new thing, in the sense that the passage from the relative form of value to the general form of value - i.e. the emergence of the value-form itself - is predicated precisely on the rupture between the exchange value of the general equivalent - money - and its use value. And since the dual nature of the commodity is predicated on the existence of the general form, to allow for the transformation of concrete labours into abstract labour - then the rupture between use value and exchange value is always-already part of the value-form from the very outset. And if you consider it, the special characteristic of capital - its limitless self-accumulation - would be impossible if the money form was still tied to a concrete use-value basis (think how many workers would have to be engaged in the physical production of money's concrete use-value base, for e.g.).

Spikymike
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Jan 13 2016 12:10

ocelot,
Thanks - good to get some considered thoughts on these texts.
I took the paragraph referring to the increasing unhinging of use value and value to be the same issue which Paul Mason was seeking to develop in his Post Capitalism book and derived from Marx in his fragment of the machine text but emphasising this as a tendency inherent in the commodity form from the start but speeded up (if still very long term) under the IP extended version of the real domination of capital as one of the factors increasing the certainty and intensity of capitalist crisis rather than Mason's 'evolutionary' transition to some hybrid 'post capitalism'? I'm not convinced that you have proved your claim of a tilt towards an underconsumptionist approach in the emphasis on the problem of 'realisation' , I recall that this dual analysis of the nature of capitalist crisis was developed more extensively in the series of IP articles by Sander that I have referred to previously.
Much else in your post for me to mull over though IP might be better than me to respond in due course.

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Jan 13 2016 17:02

OK, read through sections 6, 7, 8 in detail. Really like section 8 - I actually think it's the strongest section overall.

As an anarchist unsurprisingly I have no disagreements with the political conclusions of section 6 - the only minor quibble would be the definition of the state is a little bit structural-functionalist (and historicist), so slightly circular, but it's a minor quibble.

Section 7 I do have serious problems with, but the details are pretty involved (exogenous vs endogenous money, invalidity of "fictitious" as a category of capital, etc, etc) so I will hold off on a detailed breakdown of that section to a separate post.

In passing, as an unconnected issue, that I couldn't understand what the following was actually supposed to mean.

Quote:
Money has grown at an increasingly faster pace than “the real economy”, that is, than the value of the commodities that are actually produced and sold. Therefore, it must devalue. But that only happens when production and consumption are stimulated despite the lack of profitability. The result is high inflation, endangering the value of money as such and thus of the entire hoard.

[i.e. I don't understand how the sentence in bold follows the sentences before it and joins them to the one after it]

So. leaving aside a detailed discussion of section 6, I wanted to come back to another issue I had with sections 2 & 3 (What is Capitalism & The Historic Trajectory of Capitalism). It's initially a problem with the question of the transition from pre-capitalism to capitalism, but links to other stuff.

Quote:
In the most basic terms, capitalism is a result of a unique convergence between
1) an abundant source of “free” labor,
2) an accumulation of capital in its money form and
3) the appearance of a state apparatus capable of regulating a new productive/distributive regime.

"1" is the problem here, from a transition point of view. In short 1 is not a precursor/prerequisite to capitalism but a consequence of it. Materially, for a significant section of the dominated, producer class to eat and exist while not engaged in agriculture presupposes a revolution in agricultural productivity.

Even more than that - and here I am plugging the Marxist guitar into the amp of heterodoxy and turning the heresy dial up to 11 - this point of origin, in order to produce the radical decrease in agriculture of the ratio of living labour to land required, means that the specific capitalist relations of production not only appear first in agriculture rather than manufacturing (as the "Political Marxist" tendency of Brenner et al have pointed out), but appear in the form of real domination ab initio, rather than passing through a prior stage of "formal subsumption".

That is, we need to take a leaf from the NML book that rejects the "logical-historical" reading of the stages of the value form (i.e. no historical "golden age" of simple commodity production, where commodities exchanged at their values and use-value and exchange value cohabited in harmonious unity) and apply it to the formal and real subsumption categories. Once capitalist relations of production have been established in one area (in agriculture initially) they can then colonise other areas of production (mining, manufature) by the formal/real sequence outlined by Marx in Capital, in relation to manufacturing. However, at the point of origin, there is no pre-existing external power to impose formal domination. An imminent origin requires the historical inversion of the conventional logical order in that the strategy of relative accumulation - the "economising" of scarce labour inputs in agriculture - is the only one that can effect the necessary revolution in agricultural labour productivity on which all further development is dependent. Historically in pre-capitalist societies, such as the otherwise technologically far more advanced China, the temporary accumulation of surplus labour acted as a disincentive to investment in labour-saving technologies given availability of cheap labour as an alternative.

tl;dr it is not an abundant source of free labour that produces capitalism, but capitalism that produces an abundant source of free labour.

(This doesn't help the whole era of formal domination vs era of real domination epochal thing, naturally.)

Should also be noted that factor 2) "the accumulation of capital in its money form" is in direct contradiction to the axiom in section 3 that capital can only be accumulated in the form of commodities. That is an internal contradiction between sections 2 & 3 independent of any views of my own.

S. Artesian
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Jan 14 2016 03:02

Ocelot says:

Quote:
And as for depressions - well pretty much everybody accepts that depression-deflation cycles increase the buying/command power of saved investment capital at the expense of debtors - if anything existing capital is increased rather than destroyed in that case.

Any data to back that up-- that existing capital is increased, rather than destroyed-- in either its fixed, circulating, or money forms?

Spoiler alert: data for the US shows just the opposite for the period of the Great Depression.

Spikymike
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Jan 14 2016 15:18

Only just started to have a look at Brenner after a long delay so that might help me consider that aspect later.

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Jan 14 2016 16:50
Spikymike wrote:
Only just started to have a look at Brenner after a long delay so that might help me consider that aspect later.

I'd probably skip Brenner and go straight to Ellen Meiksins Wood - something short and readable, like The Origin of Capitalism, to get an overview of the general idea, and then get back to the whole detail of the original Brenner debate (he's a more boring writer, imo) if you then think that it warrants your further attention.

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Jan 14 2016 16:54
S. Artesian wrote:
Ocelot says:
Quote:
And as for depressions - well pretty much everybody accepts that depression-deflation cycles increase the buying/command power of saved investment capital at the expense of debtors - if anything existing capital is increased rather than destroyed in that case.

Any data to back that up-- that existing capital is increased, rather than destroyed-- in either its fixed, circulating, or money forms?

Spoiler alert: data for the US shows just the opposite for the period of the Great Depression.

Cool - which data? (i.e. links please).

I'd be interested to see data showing that the buying power of saved investment capital decreased and the real indebtedness of debtors lessened rather than intensified during the Great Depression.

S. Artesian
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Jan 14 2016 17:14

Asked you first. Provide some data to back up your assertion, that "existing capital is increased."

Arguing that "buying power" is increased when asset bases are reduced, when capital is contracting, or that debtors are more deeply indebted is precisely not a refutation that capital must devalue, demolish, liquidate the existing capital values embodied in the means of production. You are mis-taking the processes of concentration, centralization, which operate in both expansion and contraction, with accumulation itself. You are arguing the capital has expanded during the period of its relative and absolute contraction. Do you have some numbers to back that up?

Is "value expanding value" during a depression? Simple enough to find data to support, or refute, that claim.

I'm asking for the data that shows capital is increased during the Great Depression-- that any of the measures by which we measure capital expansion-- revenues, profits, profitability, fixed assets, output, investment, cash and cash-type assets on hand increase for capital as a whole, as a system.

US BEA and bea.gov has the tables on investment, asset growth, GDP, etc. back to 1929 and beyond that... so click away.

SpikeyMike-- don't skip Brenner--- his work, compiled in The Brenner Debate, and elsewhere is well worth the effort.

petey
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Jan 14 2016 17:22
ocelot wrote:
Ellen Meiksins Wood - something short and readable, like The Origin of Capitalism,

recommended?

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ocelot
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Jan 14 2016 18:18

Shit. Just saw Ellen Meiksins Wood just died. Bollocks. One of my favourite Marxists.

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ocelot
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Jan 14 2016 18:18
petey wrote:
ocelot wrote:
Ellen Meiksins Wood - something short and readable, like The Origin of Capitalism,

recommended?

Definitely

S. Artesian
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Jan 14 2016 19:10

Where did you see that confirmed (I know it's on the Wikipedia page)?

alb
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Jan 14 2016 19:15
ocelot wrote:
Section 7 I do have serious problems with, but the details are pretty involved (exogenous vs endogenous money, invalidity of "fictitious" as a category of capital, etc, etc) so I will hold off on a detailed breakdown of that section to a separate post.

I agree. For instance, what are these passages from section 7 (p. 19) trying to say?

The "hoard" referred to in this paragraph is defined in the previous one as "accumulated wealth", presumably the totality of accumulated capital.

Quote:
Capitalism has, especially in the last 60 years, increasingly sought refuge in money creation, either to stimulate production and consumption, or to stimulate the growth of the hoard, propping up its “value” despite a declining rate of value creation in the real economy. In other words, a massive creation of fictitious capital, not resulting from new value but created out of thin air, has been mixed into the pot. Money has grown at an increasingly faster pace than “the real economy”, that is, than the value of the commodities that are actually produced and sold. Therefore, it must devalue. But that only happens when production and consumption are stimulated despite the lack of profitability. The result is high inflation, endangering the value of money as such and thus of the entire hoard.

This appears to be saying no more than if you create more purchasing power (money as claims on wealth) than the economy requires the result will be a rise in the general price level ("inflation"). But is the excess of money really capital, even "fictitious" capital? Marx did use the term but not in a sense different from what it generally meant in the 1860s (or the 1890s when Engels edited his draft of Volume III of Capital for publication), i.e as the conversion of a regular stream of income into a notional capital sum which can itself be bought and sold, or "capitalisation", nowadays "securitisation". But this is separate from and not the same as creating more purchasing power in the form of money

And who is doing this creation of money "out of thin air"? Is it the government? The central bank? Commercial banks?

Is there really "a declining rate of value creation in the real economy"? If so, what's the evidence for it?

The first part of the following paragraph appears to be a description of Quantitative Easing (and why it doesn/t/hasn't caused inflation). But is it this that is really keeping capitalism going? And has the money created by QE really gone towards "the fortunes of the super-rich (I thought it was held by financial institutions rather than rich individuals)?

Quote:
A second approach has been more efficient: by forking over newly-created money directly to capital (meanwhile demanding austerity from the rest of society), the hoard has been successfully defended. Most of that new money never enters into circulation except within the hoard itself. It therefore causes no inflation (again, except in the hoard). While propping up the demand for financial assets, the money is sterilized in the coffers of central and private banks in the fortunes of the super-rich. There, it does no good (only a small fraction of it re-enters the productive sphere) but also no harm. Precisely by not re-entering the circulation of commodities, the hoard hides the fictitious nature of the money that is created without a corresponding creation of value. The program of the capitalist left would accomplish the opposite and reveal the fiction. And it is on this fiction that capitalism rests. The belief that money is value and that value is real wealth. If that belief falters, capitalism breaks down.

Is capitalism really kept going by "fictitious capital", whether created by ordinary inflation or by quantitative easing? Would it collapse without these? This would seem to be a financial, not to say, monetarist theory of the collapse of capitalism, similar to the so-called "financial meltdown" of capitalism expected by many currency cranks. It's not too clear what's the role of the "capitalist left" (Labour Party, Trotskyists and other reformists) in precipitating this. Would it be through the raging inflation the implementation of their programme would cause?

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Hieronymous
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Jan 15 2016 03:57
ocelot wrote:
Shit. Just saw Ellen Meiksins Wood just died. Bollocks. One of my favourite Marxists.

Damn! That's depressing. Her books were so readable yet theoretically penetrating. She'll be sorely missed.

Sander
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Jan 15 2016 07:46

I’m happy to see some serious discussion of our Reference Text on Libcom. I want to emphasize that this text is not a finished product but a work in progress. Therefore constructive critique, such as pointing out passages that are underdeveloped or lacking in clarity, or formulations that lack precision (Spike Mike mentioned one, and he has a point) are very welcome. I further want to emphasize that this is a summary of our positions. As such, it is concise and the argumentation is not as fully developed as in articles in IP that are about one of the specific points. I will refer to some of these articles in my reply, I hope you’ll read them. They may clear up some confusion. A lot has been written already, too much to answer in one post. So I’ll try to do this in several posts.
I welcome AJ’s support for IP’s approach to debate. We would like to be informed of the forums SPGB organizes, especially in Edinburgh. There would be a lot to discuss. There is a big difference between us on how we see the state and its institutions. AJ writes:

Quote:
“This year may be interesting in regard to trade union protests to the Tory new laws. I hope we will be more visible at these offering an analysis that will be one you yourself cannot endorse but also one that will nevertheless be still critical of the unions encouraging and urging them to go further than they do.”

In other words, assume the task of cheerleaders, for the workers but also for the institutions that tie them to capitalism. From our text it should be clear that we reject this, but AJ does not comment on this glaring difference nor on the analysis on which it’s based. So that’s something to discuss.
On to Ocelot.

Spikymike
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Jan 16 2016 18:35

Just to say Sander that the earlier IP debate and discussion on class struggle and the unions (to which alb contributed), and which I have recommended and linked previously, has now been added to the libcom list on this subject (here: http://libcom.org/library/trade-unions-pillars-capitalism-internationalist-perspective) and could perhaps be discussed better on other threads rather than here.

Sander
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Jan 16 2016 08:12

Ocelot writes:

Quote:
The first point - "Capital, wealth, can take no other form than that of the commodity, exchangeable for other commodities" - is fatally wrong. Capital can, does and must, take the form of money capital during it's valorization-in-process cycle.

The last sentence is correct of course but the critique is based on the assumption that money is not a commodity. But it is. Indeed, it is impossible to understand money and its function if one does not understand that it is. That doesn’t mean it is the same as other commodities. Together with labor power but for different reasons, it is the one commodity that is special, different from all others. It represents all others and at the same time stands opposed to them. It is the universal commodity, that circulates and thereby embodies the value of all others, and at the same time it is a particular commodity, with its own demand, competing with other commodities and which can exceed the demand for all other commodities.

It is the alpha and omega of the capitalist accumulation process. M must become M’.

But money does not create value. The only commodity that does, is labor power. Other commodities transfer value but only the consumption of labor power can make it grow, and only money (and a few others) can hold it. All other commodities are perishable money, Marx wrote, while money is the imperishable commodity. But, as he implied, it only seems imperishable. Not only because its value can only increase as much as the creation of value by labor power (and its realization) increases. Also because, as a commodity, money must possess both constitutive elements of the commodity: it must ‘embody’ value as well as have a use-value. Its value, assuming we agree on the framework of Marx’s value-theory, comes from the value of the commodities transferred into it and grows accordingly. Its growth depends on the growth of surplus value extraction. Its use-value is its capacity to circulate value and to hoard it, to maintain it as value in a latent, not immediately valorizing state. But the growth of that hoard is limited by its capacity to valorize over a longer term, and thus by its use-value in that regard.
In other words: the commodity money can be overproduced, just like any other.

Ocelot seems to think that value is stable, regardless what form it takes, whether it be money or armements or anything else. But value isn’t permanent, it must constantly transform. M must become C. C must become C’. C’ must become M’. M’ must become C”. And so on. At every point, the transformation is an obligation. If it doesn’t succeed, devalorization is the result. M offers the illusion of escaping from that obligation, of being capable to maintain existing value as value, regardless what happens in the real economy. That’s why problems in the transformation M – C (lack of profitable investment opportunity) leads to a ballooning growth of M. That’s why we see the “safe haven effect”, the flight of money capital to where M seems the safest, leading to a small recovery in the US in the past years, while most of the rest of the world kept sinking deeper.

Because value must constantly transform, the form it takes is very important, contrary to what Ocelot seems to think, because it is the specific form, and thus its use-value, which makes the transformation possible. As Ocelot writes, “Certain capitalists certainly make a hell of a lot of money out of war.” But as Marx wrote “short of a miracle, only those things can be transformed into capital which are utilisable in the labour process (i.e. the means of production), and in addition such articles which are suitable for the maintenance of the worker (i.e. the means of subsistence)”. In other words, military production, and all other commodities that are unproductively consumed, are a net loss for capital as a whole. The loss is mitigated by the realisation of the surplus value created in their production but their very use-value implies that they cannot be constitutive elements of new capital, of new value. They are an endpoint rather than a moment in the cycle. They are a burden on the profit-rate of capital as a whole, as even bourgeois economist recognize. Similarly, the use-value of the commodity money has to be understood in this framework, the constant need for transformation of value in order to continue its accumulation. The use value of money is to bridge C- C’-C” (in order to achieve M-M’-M”). It does so by stepping constantly into the place of other commodities but also by building up a hoard that remains connected to M-C over a longer period, through the credit system, to value creation. Any creation of money that exceeds this use-value, is overproduced and must devalorize. This is what Ocelot does not see when he makes the incredible claim that capital is actually doing well in times of depression and war- no devalorization to be seen on his planet.

That leads us to Ocelot’s critique of IP on crisis-theory, to which I will reply in my next post.

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Jan 17 2016 01:23

Artesian wrote:

Quote:
arguing that "buying power" is increased when asset bases are reduced, when capital is contracting, or that debtors are more deeply indebted is precisely not a refutation that capital must devalue, demolish, liquidate the existing capital values embodied in the means of production.

Yes, the increased buying power is because the price of assets are greatly reduced. Firms go bust and sell off what they have at fire-sell prices. The remaining firms who have survived benefit from this- they gain market share but also can buy up what's left for a song. This is what sets the stage for the coming expansion within the contraction itself.

Ocelot wrote:

Quote:
...in order to produce the radical decrease in agriculture of the ratio of living labour to land required, means that the specific capitalist relations of production not only appear first in agriculture rather than manufacturing (as the "Political Marxist" tendency of Brenner et al have pointed out), but appear in the form of real domination ab initio, rather than passing through a prior stage of "formal subsumption".

This may be true for England, but many countries have transitioned to capitalism with agriculture remaining very backward. A very interesting example is Japan, but its far from the only one; This is why its hard to take Political Marxism seriously- although it's a neat little theory, its hopelessly anglo-centric and therefore ahistorical when applied to capitalism as a world system.

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jura
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Jan 17 2016 07:57
kingzog wrote:
This may be true for England, but many countries have transitioned to capitalism with agriculture remaining very backward. A very interesting example is Japan, but its far from the only one; This is why its hard to take Political Marxism seriously- although it's a neat little theory, its hopelessly anglo-centric and therefore ahistorical when applied to capitalism as a world system.

Political Marxism's response to this is that capitalism elsewhere developed as a (competitive) response to British economic (as well as military and colonial) expansion, often with the direct involvement of the state in industrialization because there was no time for a "spontaneous" development. But it still holds that the "prime mover" was agricultural capitalism in the British countryside.

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Jan 19 2016 21:06
S. Artesian wrote:
Asked you first. Provide some data to back up your assertion, that "existing capital is increased."

Arguing that "buying power" is increased when asset bases are reduced, when capital is contracting, or that debtors are more deeply indebted is precisely not a refutation that capital must devalue, demolish, liquidate the existing capital values embodied in the means of production. You are mis-taking the processes of concentration, centralization, which operate in both expansion and contraction, with accumulation itself. You are arguing the capital has expanded during the period of its relative and absolute contraction. Do you have some numbers to back that up?

On reflection you are right to call me out on that. My position would require the possibility of a frictionless transfer of accumulated capital from all other forms into secure financial instruments, which is clearly impossible (even if the state was not so stupid to respond by actually reducing the available pool of treasuries, as the US initially did in the depression). There's no way the appreciation in real value of the nominal amount of capital that made it to safety, for lack of a better term, could counter-balance the losses in stocks, bonds, and devalued capital goods in ruined businesses and sectors.

I still think the proposition that the physical destruction of war necessary leads to destruction of capital overall, does rely on the assumption that only capital in the form of material capital goods is "real" to be self-evident. I'd need to see some actual figures before assuming that the Vietnam War resulted in a net destruction of US capital, for e.g.

But focussing more clearly on matters of mass of capital (as opposed to concentration, centralisation and command power of capital) now makes me see that I have a bigger problem understanding how the reduction in the mass of capital whether by military or economic destruction, reduces the technical or value composition of capital, once reconstruction begins in the post-crisis phase.

If re-investment of retained capital (however reduced) is reinvested at the same level of technology (or at least not a lower one) then the technical ratio of the mass of constant (fixed and circulating) production capital to labour power, will be the same as before. And without substantial technological change from pre-crisis times, then the value compostion, will be the same. So if the profit rate is linked to the overall OCC, and the OCC is a ratio, not a mass, I don't see how the reduction in overall capital mass leads to reduced OCC in new-build restoration production.

Clearly I'm missing something important in the argument

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Jan 19 2016 21:53
Sander wrote:
The last sentence is correct of course but the critique is based on the assumption that money is not a commodity. But it is.

Which is where we disagree. Because I say that the only way to assert this is to do such violence to definition of a commodity as to destroy it's usefulness as a category.

Sander wrote:
That doesn’t mean it is the same as other commodities. Together with labor power but for different reasons, it is the one commodity that is special, different from all others.

And there is a point at which those differences make it a different thing altogether. My mobile phone does not walk like a duck, quack like a duck or swim like a duck. But that's not because it is a special duck, different from all the others, it's because it's not a duck, it's a mobile phone.

Sander wrote:
It represents all others and at the same time stands opposed to them. It is the universal commodity, that circulates and thereby embodies the value of all others,

And in order to assume the role of universal representative of the value of all other commodities, making their incommensurable concrete use-values, commensurable in value terms, it has to become abstracted from its own original concrete and incommensurable use-value (gold, silver, rice koku, etc)

Sander wrote:
and at the same time it is a particular commodity, with its own demand, competing with other commodities and which can exceed the demand for all other commodities.

It is a unique thing alright, but it does not compete with other particular commodities as a particular commodity. It loses the form of a particular commodity once it becomes the general form of value.

Sander wrote:
Also because, as a commodity, money must possess both constitutive elements of the commodity: it must ‘embody’ value as well as have a use-value. Its value, assuming we agree on the framework of Marx’s value-theory, comes from the value of the commodities transferred into it and grows accordingly. Its growth depends on the growth of surplus value extraction. Its use-value is its capacity to circulate value and to hoard it, to maintain it as value in a latent, not immediately valorizing state.

The value of a commodity is the socially necessary labour time necessary to produce it (and each additional unit of it). Not the case for money. Strike one on the exchange value of a commodity.

The utility of money is certainly to capacity to circulate value and to hoard it. But utility and use-value are not the same thing. The use-value of a commodity is tied to the particular concrete qualities it has, it's physical extension, which are incommensurable to other different use-values. The utility of money is to make these incommensurable use-values commensurable in exchange. That is a utility, not a use-value. In German Marx mostly uses Gebrauchswert, but on occasion, Gebrauchsgestalt. The value form does not have a concrete Gestalt. Strike two.

Sander wrote:
In other words: the commodity money can be overproduced, just like any other.

When a commodity is overproduced the value crystallised in it by the socially necessary labour expended in its production is not realised. But the value of money is not determined by the abstract labour necessary to produce it. Zimbabwe style overproduction of money does not result in unrealised abstract labour, but the dilution of the value of money by oversupply. Again, the value of commodities is not determined by demand and supply the way that money is (ignoring the issue of variable monetary velocity for a moment).

Sander wrote:
Ocelot seems to think that value is stable, regardless what form it takes

Nope

Sander wrote:
The use value of money is to bridge C- C’-C” (in order to achieve M-M’-M”).

Again this is systemic utility rather than use-value.

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Jan 20 2016 01:35
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Ocelot: And without substantial technological change from pre-crisis times, then the value compostion, will be the same. So if the profit rate is linked to the overall OCC, and the OCC is a ratio, not a mass, I don't see how the reduction in overall capital mass leads to reduced OCC in new-build restoration production.

Of course, that "substantial technology change" is exactly what prefigures the "crisis" and the upheaval, and the long-term structural changes in capitalism. Marx says almost exactly somewhere in his Economic Manuscripts 1857-1864 (maybe the Grundrisse?)

But it's not "right" because Marx said it's right. That the OCC changes, and changes disproportionately so that the inanimate portion grows faster than the surplus value it extracts and so produces a situation where the rate of profit tends to decline as capital accumulates is evident from the study of any number of industries-- semiconductor fabrication, flat panel glass display, petroleum, automobile production, maritime shipping (EEE container ships, anyone? or Dry bulk freighters)-- and erupts in bouts of overproduction (semiconductors, petroleum, container ships, dry bulk carriers, iron ore, steel, anyone?).

The point of capital is accumulating the means of production as values; the point of accumulating the means of production as values is to employ that expanded "fixed base" to reduce the necessary labor time and transform the fixed assets into an growing mass of commodities.

The law of the tendency of the rate of profit to decline as capital accumulates leads to overproduction. The response to general overproduction is quite clearly the destruction of commodities, the devaluation of assets, the liquidation of capital values by finance, or fire or flood.

Moreover, the response of the bourgeoisie tends, and always tends to become the attempt to drive the cost of labor-power below its value; that is to say to drive the wage below the value required for labor to reproduce itself.

Destroying the accumulated capital doesn't take place without destroying the variable capital-- marching off to war, and to wage-levels below "the normal" etc. etc.

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Jan 20 2016 12:03

Yes, but that doesn't really answer my question of how the reduction in the mass of accumulated capital leads to a lowering of the OCC in new (or resumed) firms in the reconstruction phase though.

I think the general thinking is probably a "common sense" assumption that if total accumulated capital is reduced more than working population, then when growth resumes the aggregate ratio of constant to variable capital must be also. But then, looking at the picture at the individual constituent level, it's hard to see that is possible without at least some firms individually being recomposed with a lower constant/variable ratio, and that kind of technological regression doesn't seem to happen (if anything it's the other way around, reconstruction takes place at a the highest level of productivity available, rather than the rates of older, aging fixed capital, pre-crisis - which actually makes the problem worse from a naive OCC perspective). I think there's a fallacy of composition in the "common sense" picture which doesn't stand up to detailed scrutiny.

But anyway, my personal obsession with the problems of the OCC is a bit of a derail here. I really need to assemble my criticisms of this concept into a single text for circulation for proper feedback/criticism.

Before I get on the detailed response to section 7 of the IP doc, I just wanted to pick up on one other thing in Sander's response above.

Quote:
As Ocelot writes, “Certain capitalists certainly make a hell of a lot of money out of war.” But as Marx wrote “short of a miracle, only those things can be transformed into capital which are utilisable in the labour process (i.e. the means of production), and in addition such articles which are suitable for the maintenance of the worker (i.e. the means of subsistence)”. In other words, military production, and all other commodities that are unproductively consumed, are a net loss for capital as a whole. The loss is mitigated by the realisation of the surplus value created in their production but their very use-value implies that they cannot be constitutive elements of new capital, of new value. They are an endpoint rather than a moment in the cycle. They are a burden on the profit-rate of capital as a whole, as even bourgeois economist recognize.

The problem here is "all other commodities that are unproductively consumed". My initial challenge was

"Just because armaments and war materiel are destroyed in their consumption does not make them materially different from any other commodity."

"materially" is probably unfortunate given that I really mean in relation to social production. If I go into a US supermarket I can buy an iPad or an M16. What is it about the M16 that makes it any less of an ordinary consumer product than an iPad? Why does it represent a break in the cycle of capital's valorisation in a way that the iPad doesn't? All consumer commodities - whether consumed by individuals or departments of state - have the characteristic of not re-entering the production cycle as fixed capital. So what? All end-user commodities have to go through the process of delivering it's use in consumption and then end up as waste (so it must be replaced) otherwise there would be no cycle at all.

I just don't see how it is possible to draw a line between consumer commodities, whether mobile phones or guns, that delimits "means of subsistence" from "unproductively consumed commodities" that is actually a materialist rather than moral definition (however covert).

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Jan 20 2016 15:32
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Yes, but that doesn't really answer my question of how the reduction in the mass of accumulated capital leads to a lowering of the OCC in new (or resumed) firms in the reconstruction phase though.

Well, let's look at recent experience: the US auto makers, post 2007. 27 production plants were closed, employment levels cut by 1/3; wage tiers introduced so that those hired after 2008 made 50% less than those hired previous to that year; and work rules changed so that overtime no longer accrued after 8 hours in a day, but after 40 hours in a week.

Profitability restored.

What's the difference between that-- and torching 27 factories; sending 1/3 of your work force off to die; freezing wages, etc? Degree? Quantity? Duration?

Quote:
If I go into a US supermarket I can buy an iPad or an M16. What is it about the M16 that makes it any less of an ordinary consumer product than an iPad?

Yeah, I find the notion of waste production, or unproductive consumption a bit problematic. In fairness though, some would claim that if you, a worker, buys an M-16 for recreational use, then its consumption, and its production, are both "productive," as it becomes part of the means for reproducing you, the worker, as the worker. If the military buys the M-16s-- then it's not contributing to either the reproduction of the workers or of capital in that it is not "value engendering value."

I think the issue is really complicated. Clearly military spending advances capital on its course of reproduction. Major advances in US factory production were first developed in armaments production in the arsenal workshops. That the government has taken over this role from private entities ("public" military as opposed to private military) doesn't seem to change the essential relationship. Tax money used for military spending does not represent a deduction, really, from capital, but IMO, a "clawback" from wages.

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Jan 20 2016 16:10
kingzog wrote:
Ocelot wrote:
Quote:
...in order to produce the radical decrease in agriculture of the ratio of living labour to land required, means that the specific capitalist relations of production not only appear first in agriculture rather than manufacturing (as the "Political Marxist" tendency of Brenner et al have pointed out), but appear in the form of real domination ab initio, rather than passing through a prior stage of "formal subsumption".

This may be true for England, but many countries have transitioned to capitalism with agriculture remaining very backward. A very interesting example is Japan, but its far from the only one; This is why its hard to take Political Marxism seriously- although it's a neat little theory, its hopelessly anglo-centric and therefore ahistorical when applied to capitalism as a world system.

Agree with what Jura already wrote on this. I was referencing PM in the narrow question of agriculture rather than manufacturing or commerce being the necessary point of origin for capitalist social relations. As for the other aspects of the PM theory of the transition, I partly agree with it, but I also think it is only part of the story - and that the other part was precisely England's relation to external colonies in Ireland and North America. In other words, acquring large colonial possessions in the Americas is not sufficient to explain the transition (otherwise Portugal and Spain would have been the first European powers to make the transition), but neither do the unique pattern of property and social relations that became established in English agriculture, post-Black Death explain the transition there, without the wider international context of colonialism.

This recent interview in Viewpoint with the authors of a new book pushing back against the supposed Eurocentrism of PM and Wallerstein's World Systems approach, looks interesting in this context - but I think the most likely explanation lies in combining the insights of PM on the contigent and rare local pre-transition relations of production, and the "anti-Eurocentric" emphasis on the need for an international context.

(Sorry for derail)