Internationalist Perspective 'As We See it'

Yeah, agree. That's a weird argument to make. Indeed, the argument should really be reversed. Use-values that are completely "destroyed" (used up) in consumption can actually accelerate the valorization process. There is a reason for the existence of planned obsolesence as it accelerates exchanges; the consumer has to re-buy the commodity much sooner than normal. Indeed, theoretically speaking, it does not matter if the use-value in the end is actually consumed. All that matters is that commodities are sold so that the surplus-value in them is realized. From a pure value point of view, the cycle of accumulation would continue uninterrupted.

I don't disagree that war can restore profitability through analogous measures to how US auto makers did in your example. The conventional view of the success of the German Wirtschaftswunder after the flattening of its industrial heartlands during WW2 (i.e. reconstructing industry with the latest most efficient technology available) follows roughly along the same lines.

My problem is this doesn't fit with the conventional picture of the tendential rise in the OCC causing a tendential fall in the rate of profit, leading to a period of crisis, It's the second part of the story, that the devalorisation of capital allows for the restoration of the profit rate, that I have a problem with.

Let's take a look at the measures Big Auto took - slashing wages and closing plants (shedding workers and fixed capital). The first measure is strategy of absolute surplus value (in volume 1 terms*) and does not affect the ratio of labour to constant cap per unit product - so unchanged OCC. However, if we make the not unreasonable assumption that there was a bias towards closing more unproductive plants and keeping open the more up to date, more efficient ones, that would increase unit productivity in the remaining (reduced) operation - which would (value composition of constant cap inputs unchanged) actually increase the OCC of the sector.

So what? Well, if the restoration of the profit rate has nothing to do with lowering the OCC (and seemingly linked to actually increasing it, at least at the level of individual corpos or sectors), then the rise of OCC can't be the source of the crisis in the first place. Really, in that case, you're talking about a periodic crisis of overaccumulation - which is not the same thing.

Bear in mind, I'm responding to my (possibly erroneous) reading of this section of the IP position doc

[I suspect "fishing" is a typo]

Which I interpret to being roughly equivalent to the position of Kliman, Freeman, et al, that the rising OCC, as outlined in (Engels' remixed) Volume 3, is the source of secular fall in the profit rate that can only be resolved by either terrible destruction of world war 3 (or socialist revolution). (And they make the further point that the great depression was only ended by the war, so it's not depression or war, but either war or depression and then war)

The problem with restating the crisis theory as a recurrent crisis of overaccumulation, from the orthodox anti-Bernsteinian point of view, is that other than requiring painful periods of devalorisation, it doesn't provide any final limit to, or historical crisis of, the capitalist mode of production as a whole.

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* this is arguable depending on your interpretation of the strict form of words used in volume 1 (i.e. formally just lengthening the working day, as opposed to wage cuts), but I tend to go with the general idea of relative surplus value being the specifically capitalist strategy that "revolutionises out and out the technical processes of labour, and the composition of society" via technological change - and the consequent increase in the technical composition of capital - i.e. less labour per unit produced.

Indeed, the steps taken in response to the tendency of the rate of profit to fall do not necessarily lower the organic composition of capital. What those steps do accomplish is boost the rate of extraction of surplus value, while devaluing and liquidating portions of accumulated capital (look back at the bankruptcy, liquidation, and consolidation of US railroads in the late 1970s through the 1990s). Route miles (trackage) was dramatically reduced; switching yards eliminated; employment shrunk, creating a reduced asset base which allowed for the restoration of profit (with thanks to the US govt's 3R, 4R, and Stagger's rail recovery legislation, and the growth of containerized traffic), and applications of more modern "command and control" technologies.

The OCC of railroad capital expanded far beyond what it was before, in value terms, and by the mid 1990s, the annual capital expenditures for a single Class 1 railroad were greater than those annual expenditures in the 1980s for all Class 1 railroads.

That said, your assertion that:

is not correct. It doesn't follow that if the restoration of the rate of profit does not require the lowering of the OCC, that the increase in the OCC can't be the source of the problem. Of course it can, in that the rate of profit can be restored by increasing the rate of extraction of surplus value to offset the decline in the rate of profit triggered by the increased OCC.

And yes, we are precisely talking about the cause for the "periodic crises of overaccumulation"-- as those periodic crises are both the product and producer of the tendency of the rate of profit to fall-- the change in the relation of the technical and living components of capitalist production. It's in volume 3 where Marx talks about the "overproduction of capital" and points out that the overproduction of capital is the overproduction of the means of production as capital, where the accumulated means can no longer achieve the intensified exploitation of labor power.

Does this mean there is no hard and fast historical limit to capitalist accumulation? I think it does. In fact to argue that the OCC or the TFROP does set some permanent, impermeable boundary, gets us to that ideological point where some argue that "the bourgeoisie can no longer develop the means of production." Of course, they, the bourgeoisie "can."

The famous countervailing tendencies are operative, and capital can restore itself unless and until it's overthrown. That it turns the world into an abattoir until that overthrow is accomplished is the price everybody else pays.

To cut things back to front a bit:

Yes. And this is a similar understanding (if I'm not mistaken) to the ideas in section 5 in the IP doc - "But it is not Inevitable" - which I broadly agree with.

I guess my concern is that the statement in Section 2 that "[Capitalism] needs violent phases of destruction, either through depression or war, to restore conditions for new growth." comes across as a more apocalyptic statement that once the rising OCC has reduced the profit rate to crisis level, then ONLY war or depression can restore the profit rate. Which, to my ear, still has a resonance of entering the old "epoch of wars, revolutions, and the proletariat’s struggle for power". As opposed to the restructuring methods - painful enough as they were to the people who ended up out of a job - that you describe in the restoration of the profitability of the US railroad sector in the 70s - 90s.

I have other problems with the idea of investing in new technology to increase the rate of extraction of surplus value (namely the idea of a further increase in the OCC being the cure for the disease brought about by the rise of the OCC, the idea of increasing the rate of surplus extraction as "counter-tendency" when it's nearly always the primary motive of new technological investment, etc), but I'm hesitant to go too far down the rabbit-hole of getting back into the debate of that whole monster thread on the Michael Roberts blog over the Heinrich v Kliman debate on this (which the "counter-tendency" issue reminded me of). So maybe park that one for another day.

I really want to look more closely at the relation between value, money and "the hoard" proposed in section 7. The problem is finding a way that isn't about arguing about the validity of theories in the abstract, but looking what potential mistakes of political practice might result from problematic understandings of value, money and wealth. Which is a bit difficult given the low level of anti-capitalist movement activity, in general, and the impossibility of predicting future activity.

This is problematic on multiple levels. (ignoring the previous problem discussed - i.e. that the declining rate of value creating in the "real" economy is inexorable) The idea that money "represents" real-world value, implies some kind of one-to-one relation, beyond which there is an overproduction of money (and note the distinction between "money" and "the hoard" has collapsed here) as "fictitious" capital. In other words money is a quantity variable, rather than a flow variable, whose effective supply is highly dependent on varying speed of circulation - i.e. the conventional neoclassical quantity theory of money is at work. Secondly the means and agency of money creation is obscured (by use of the passive voice) and the qualifier of that creation being "out of thin air" - a la "Zeitgeist" - leaves the impression that there's no difference between Mugabe's regime forging it's own currency by using the mint's printing press to physically print more Zim dollars, than Quantitative Easing or the "horizontal" creation of money through credit creation in private banks and financial institutions.

This is not just economic illiteracy in terms of basic understanding of money (a non-trivial matter in any understanding of capital) but it ignores, above all, the role of demand in the burgeoning creation of new triple-AAA rated (incorrectly) financial instruments prior to the 2008 crash. It was the role of real value, being accrued by Chinese banks, and above all the Chinese state (through it's "sterilization" operations) being fed back into the market for US "risk-free" dollar denominated financial instruments, that created the impetus for the financial innovations of synthetic CDOs and all the other panoply of now justly-infamous pieces of financial hoodoo. But this was not "thin air" - it was really accumulated value seeking storage instruments.

And this, ultimately, is another one of my problems of the Kliman-style retreat to the OCC as crisis-explainer. I don't believe that such a high level of abstraction, that abstracts away from the actual historical and contemporary growth and development of the world market, can on-balance better explain current crises rather than obscure them. In that sense, for all her analysis later turned out to be fatally flawed, at least Luxemburg attempted to situate the crises of her era in the development of the global capitalist system of her time. To me it seems a regression to retreat from that big picture to a horizon where we treat the development of the world system as if it could be modelled on an internal contradiction of the US economy, abstracted from the rest of the global market. But anyway...

Indeed it is. "Fictitious capital" explanations are about as lame as you can get, particularly when intended as an explanation for the whole course of capitalist development in the last 60, or 70 years.

Everything is wrong in the fictitious capital argument:

1) it is not a substitute for real value creation, but accompanies periods of real value creation
2) it's "not created out of thin air"-- unless you think capitalism is always a Ponzi scheme all the time-- and even then somebody somewhere provided some "seed money"-- real capital
3)the origin of credit instruments is not as a substitute for production but in the different realization times of different capitals, "smoothing" these interruptions and differences so that production can be maintained while awaiting the completion of the different circulation times
4) the credit instruments distribute profit and are essential in the creation of the general rate of profit
5)the linear argument that states because money has grown faster than the value of commodities and therefore money must devalue is contradicted by the actual, including the recent history of capitalism.
6) the claim that "money must be devalued "is essentially a "monetarist" argument and ignores the importance of the velocity of the circulation of money; ignores the fact that money supplies continue to grow and exceed "total values" without producing a condition of permanent inflation; that what gets devalued in a contraction are the commodities, not money. Look for example at 2008/2009 (after the collapse of Lehman Bros.) when the Fed had to create open-ended currency swap lines to supply dollars to central banks around the world as private banks hoarded dollars refusing, for example to issue letters of credit to finance world trade.
7) add your own here_____.

Other than that, I have no problem with theories of fictitious capital.

Capital has survived and prospered, even with reduced rates of profit, because it has intensified the exploitation of labor power; transferred wealth up the social ladder; and physically enforced that exploitation and transfer.

Agree with what you write about this. Awaiting IP's defence of their essentially financial/monetarist theory of contemporary capitalism and its problems.

Thank you for your patience. I had a few other priorities on my plate. In the coming days I have free time and hope to adress most of the comments, including your claim that we defend a monetarist position. Other in IP have said they would comment as well.

Maybe to try and put the issue in a more concrete context - in the anti-austerity movement in Spain in the last years, a number of groups (M15, "Indignados", etc) raised the slogan "no es una crisis, es un estafa" - "it's not a crisis, it's a con".

The problem I see with the "fictitious capital" argument presented in section 7 is in one of the issues SA pointed out:

"2) it's "not created out of thin air"-- unless you think capitalism is always a Ponzi scheme all the time-- and even then somebody somewhere provided some "seed money"-- real capital"

If we're going to make an argument that the crisis is not a scam, but a crisis ...of capital's function (viewed normatively from our perspective) then the position that it's all "made-y, uppy", printing money "out of thin air" subjecting us all to the valorisation of "fictitious capital", is a bad place to start, because it does sound indistinguishable from saying the whole affair is actually a scam and capitalism is just a Ponzi scheme. Or, worse still, the "bad capitalism" of global financiers, the Goldman Sachs "vampire squid", etc is the Ponzi scheme, which must be replaced by "real" jobs for "real" people, employing "real" capital (now with new added environmental friendliness!) to meet "real" needs in a "real" democracy.

Just to make this clear, I would hope IP does not waste any time refuting the issue of a "monetarist position." It's immaterial, and irrelevant.

What IP should do, IMO, is apply its meta-analysis, its "macro" evaluation of capitalism, to the "micro"-- to an industry, or sector, like maritime shipping, containerization, semiconductors, steel, aluminum, or my personal favorite petroleum (upstream, extraction) in one or some or all countries, and show how, and when as chronology and sequence are most important, all the elements of the "macro" are made manifest in the industry, and how the "motion" of capital in that industry recapitulates and confirms what IP claims in its theoretical analysis of capitalism as a whole.

Sorry for the delay and thank you all for your comments. In this post I want to reply to the criticisms that Ocelot and others made on the points in the Reference Text of IP on the roots of capitalism’s crisis.

As a reminder, IP’s view on this, in a tight nutshell, is that capitalism is in a systemic crisis because it has created a world in which it no longer fits. Because value becomes increasingly dysfunctional as vehicle for the creation of real wealth, and the creation of real wealth becomes increasingly dysfunctional as vehicle for value’s accumulation. This is the result of capitalism’s historic evolution. We use Marx’s concept of real domination to analyze this. It means the gradual penetration of the value-form into all the pores of society. Everything, tendentially, becomes a commodity.

The commodity has a dual nature: it is value and it is a use-value (it is useful for someone who has the money to buy it). It needs to be both but real domination sends the production of value, on the one hand, and of use-values, on the other, on increasingly diverging growing curves. The cycle of transformations value has to go through to continue its accumulation and to reproduce society becomes compromised at several points: C – C’ because of the resulting tendential fall of the rate of profit, C ‘- M’ because of the resulting saturation of productive demand but also M’ – C”, because, given the two other bottlenecks, M has the incentive to stay M, resulting in overaccumulation of money-capital and financial crisis.
The real world is much more complex than that but that is the ground layer to which the criticisms were directed.

Ocelot objected to the formulation, borrowed from Marx, that all social wealth in capitalism takes the form of commodities. Fatally wrong, according to him, because it also takes the form of money-capital. To my reply that money is a commodity too, he countered that it isn’t, because his mobile phone is not a duck (they’re probably both commodities though ).

I get it, they’re very different, and that’s true, Marx too scoffed repeatedly at economists like Say who thought money is a commodity like any other. He emphasized it’s quite different from all other commodities since it’s the only one that is exchangeable into all others. “In order to secure the exchangeability of the commodity, exchangeability itself is set up in opposition to it as an independent commodity (it was a means, becomes an end)” (Grundrisse, p.201) Hence he called it “the general commodity” but he also pointed out the inner contradiction in money in that “…money is not only a general commodity, but it is also a particular, and […] as a particular, it comes under the laws of supply and demand…” (Gr. p.200) As a particular commodity, it can be withdrawn from circulation and overaccumulate.

Commodities, Marx stated, “are only commodities because they have a dual nature, because they are at the same time objects of utility and bearers of value.” (Cap1, p.138) It is only because it is also a commodity that money can be exchanged with other commodities . It must be a bearer of value and be useful for someone willing to exchange it with its equivalent

Ocelot objects:

That is indeed a clear difference between money and other commodities. The commodity exists doubly, as value (money) and as a specific product. When a commodity is sold, it splits - its exch value is free to go anywhere, to become any other commodity, while its use value is withdrawn from circulation and consumed, productively or unproductively. Not so money: as the general commodity, it is not withdrawn and consumed, but remains circulating, constantly stepping into place of other commodities. But it can do so only because it is also a bearer of value, the equivalent of the commodity for which it is exchanged. It embodies abstract labor, even though little or none was needed for its material production. Indeed, it may have no material form at all. Its material form is irrelevant “because it is not in this material that the commodity exchanged for money is supposed to be realized, but rather in the material of another commodity.” (Gr., p.211) The split transfers the abstract labor (value) of the commodity into money. That way, the totality of money comes to represent the totality of the value of all other commodities. “But if by this it is meant that money exchanges only real wealth which already exists, then this is false, since labour as well is exchanged for it and bought with it, i.e, productive activity itself, potential wealth.” (Gr., p.216)

That money is value is a real fact, as well as mere belief, like value itself. An objective abstraction. Its value does not come from its production costs and its utility is not based on its material qualities. “The utility of gold and silver rests on this, that they replace labour”, Marx approvingly quotes his contemporary economist Lauderdale . What it transfers is pure exchange value and in that sense, it is “the commodity in its pure form, indifferent to its natural particularity” (Gr., p.213) In order to circulate the value of commodities, it must be a commodity itself. Circulation is only possible because “ideally”, commodities are already transformed into money, and money ideally into other commodities. Because of the basic unity between them. The circulation process is a totality of exchanges of commodities, based on their value, not of exchanges of commodities with a non-commodity.“At no point does it [money] cease to be a commodity, as long as it remains within the role of medium of circulation”. (Gr., p.215)
What when it stays no longer within that role, when it’s wanted for itself, withdrawn from circulation, in other words, when it behaves as a particular commodity?
Ocelot writes:

That is a quite astonishing claim in a world in which financial markets overshadow all others. According to Marx: “Just as exchange value, in the form of money, takes its place as the general commodity alongside all particular commodities, so does exchange value as money therefore at the same time take its place as a particular commodity (since it has a particular existence) alongside all other commodities.[…] money comes into contradiction with itself [..] by virtue of being itself a particular commodity (even if only a symbol) and of being subject, therefore, to particular conditions of exchange in its exchange with other commodities, conditions which contradict its general unconditional exchangeability.” (Gr., p.150)

What makes money a particular commodity with its own demand, competing with other commodities for the largest possible share of the total demand? What is its “particular existence”? What utility does it have when it turns its back to circulation? Not its material substance (“even if only a symbol”). It is wanted for itself because of its capacity to store value. Because even while not circulating value, it remains a potential means of payment, it keeps its “general unconditional exchangeability”.

Aside from the fact that hoarding is what capitalism is all about, the capacity of money to withdraw from circulation is absolutely essential to capitalism’s functioning. Capital has to be able to leave circulation without losing its value, to re-enter it when and where productive opportunities arise. It needs credit, financing over the long term. As Marx explains in Cap2, without hoard formation, the capitalist mode of production could not develop on a large scale. (p.418)

How does the hoard maintain the value that is realized in it, as value? Value isn’t stable. No matter how much exchange value was transferred into it, as a commodity, money remains bound by its utility, in casu its “general unconditional exchangeability” into equivalent commodities. Originally, this utility was based on money’s existence as a particular commodity like any other, with a value based on its production cost and a specific use-value (as precious metal). The quantity of abstract labor needed to produce a certain quantity of gold or silver, was what made money able to measure the value of other commodities, and what allowed it to be withdrawn from circulation without losing its value. That is clearly no longer the case. More than ever, money is being withdrawn from circulation, coveted for its own properties, but these have little or nothing to do with the qualities of its material substratum (if there is any) or the quantum of labor needed to produce it. It is hoarded because it appears “the imperishable commodity” (Gr., p 145). But no matter how much value has flown into it, it can only stay “imperishable” and maintain its general exchangeability in so far as its functional utility remains intact. That is its capacity to represent existing value (in circulation) and to represent future value (in the hoard). This utility is quantitatively defined so money can be overproduced. When that occurs in circulation inflation is the result, when in the hoard, it leads to financial bubbles.

The hoard’s value is maintained and grows because it remains connected, over the long run, to the valorization process. But if valorization runs into obstacles in the phase C – C’ (TFRP) and in the phase C’ – M’ (lack of productive demand), the entire commodity-world has to devaluate, including the accumulated hoard.

But that does not happen immediately . Capital flees production to seek shelter in the hoard. The rising demand for money for its value-storing capacity, pushes its price upward. On the one hand, this seems to confirm the wisdom of refraining from M-C and the possibility of accomplishing M –M’, money breeding more money, without the mediation of production. This process, in Marx’s view, is the perfect illustration of the fetishism that lies at the heart of the value system. (“Thus we get the fetish form of capital and the conception of fetish capital. In M –M’ we have the most vacuous form of capital, the perversion and objectification of production relations in their highest degree. It is the capacity of money, or of a commodity, to expand its own value independent of reproduction which is a mystification of capital in its most flagrant form.” (Cap3, p.392) On the other, it depresses the demand for other commodities further and thus discourages production, new value creation, even more.

As more capital flees productive investment, more and more exchange value flows into the hoard. But at the same time, the need for it as a use value, its connection to the valorization process, decreases. Financial capital overaccumulates. Its increasing mass becomes a crushing burden on the economy as a whole. It has to devalorize. It has become impossible “to maintain the value that is already realized as value”. (Marx)

It is the devalorization of the hoard that brings all the crisis tendencies together and makes it general because it affects all aspects of capitalist society’s reproduction. The crisis is even existential: with the collapse of the hoard, society loses its rudder and its purpose. Therefore, preventing this collapse becomes the state’s main objective. It’s the main purpose of the orgy of money creation unleashed after the crisis of 2008. Not the stimulation of production and employment, to which only a fraction of that new money went. What Quantitative Easing did was buying financial instruments to boost their prices. It is in fact an income redistribution program for the benefit of owners of capital. A greater share of the totality of money (of the value it represents) is sent into their pockets, at the expense of everyone else.

From the above it’s clear that I disagree with Ocelot when he writes:

Why does a commodity need to have a use-value? Because without it, it can’t be sold, its value can’t be realized and transferred into other commodities. That is the only reason. It does not have to be ‘objectively’ useful, it does not have to be material, it does not have to have sensuous qualities, a “physical extension”, as long as it is of use for someone willing to exchange it for its equivalent, regardless of what he wants to do with it, regardless whether his need is natural or functional, created by capitalism’s specific conditions. In today’s digitalized world, there are lots of commodities that are immaterial. When I spent my money on software, on a lottery ticket or on a financial instrument instead of on iron and linnen, in each case I buy a commodity (which doesn’t mean that in each case an exchange of equivalents takes place, of course).
That doesn’t mean that the substance of the use value has no consequences. That is what Khawaga seems to think, when he writes:

Would it, regardless of the use-values of the commodities, as long as they are sold? That would take care of C-M. But what about the next phases in the cycle, M- C and C – C’? They can only occur if the specific use values that together constitute the concrete means to carry value further in the cycle (means of production, including labor power) were already produced when C –M occurred. The less C – M is the realization of the value conjoint with these use values, the less value can re-enter the phase of production and create new value. The demand for these use-values saturates, because of the giant productivity unleashed by the same shift to past labor/social knowledge-based production (real domination) which causes the general rate of profit to fall (tendentially). To borrow an example of Marx, if the diverging growth curves of use values and value cause the value of 1 knife to be spread over 100 knives, this does not imply that the demand for knives grows accordingly. The demand is not determined by the value-content of the commodity but by its actual use-value for potential buyers. So there is an intrinsic finality of demand for each commodity due to its use value, and likewise for the combination of commodities that are the means of production. It doesn’t mean that the whole surplus product must be productively consumed, but that the growth of unproductive consumption is bound by the growth of productive consumption, which makes the former possible. Therefore the former’s growth cannot compensate for the exhaustion of demand for the latter. So when we quoted Marx as saying capitalism’s evolution brought it into conflict with "the narrow basis on which the conditions of consumption rest", we did not allude to “the buying power of the w/c”, as Ocelot assumes, but to the limits to the demand for commodities that are productively consumed.
Ocelot accuses us of “flip-flopping” between the TFRP and the market-contradiction, to “hedge our bets”, Alb thinks our view is monetarist, Artesian thinks we’re hallucinating when we speak of fictitious capital. I hope to have at least shown that money is a commodity and why that is important, and that there is a coherence in our analysis, that we look at the accumulation cycle as a whole, how the different choke points are generated by the obstacles created by capitalism’s trajectory to its base, the value-form, how these chole-points are interconnected.There’s no flipflopping, there’s no monetarism that makes monetary imbalance the root-cause of crisis. Marx wrote his only outline for a comprehensive crisis-theory in a section of “Grundrisse”, known as the “Fragment on Machines” in which neither the LTFRP nor the market contradiction is treated as an independent factor but both, and other crisis manifestations, are linked at a deeper level, in the value-form itself. We expand on that.

For the sake of briefness, this text has cut corners and has left several aspects of crisis-analysis un- or underdeveloped. For a more detailled analysis, read “A crisis of value”
http://internationalist-perspective.org/IP/ip-discussions/crisis_of_value.html
and http://internationalist-perspective.org/IP/ip-archive/ip_58-59_IPCL2E.html
“ A Debate on Crisis Theory” in http://internationalist-perspective.org/IP/ip-archive/IP_60.pdf
examines the debate over the tendential fall of the rate of profit between Heinrich and Kliman et al, as well as Heinrich’s critique of Marx “Fragment on machines”, mentioned above. In the same PDF there is an article, “ Why Wealth Redistribution Cannot Solve Capitalism's Crisis”, a subject that also was touched upon in this discussion.

So... Sander can you apply your analysis to the production of commodities like say, semiconductors, or container ships, or petroleum, and show us, using the actual data accruing to the production of these values, how the aspects of your theory are confirmed in the material world?

PS-- I didn't say you were hallucinating in your "analysis" of fictitious capital, I said you were wrong.

Sander, thanks for your considered and detailed reply. Maybe it's just me, but engaging debates on revolutionary theory seem to be less common on these forums than a few years back, so it's good to have something substantial to chew on.

That said, your response was fairly lengthy (it took me three visits to read it all), so I'm going to respond in parts to sections of it, rather than try and include everything in one monster post.

Firstly as our debate on value form might appear obscure or theological, I want to start with this:

The bit I bolded above is imo at 180 degrees with the real dynamic. Quantitative Easing certainly drives up the prices of US Treasury bonds (using the US example), but this has the effect of lowering the return on Treasuries and T-bills. In other words, the intent of QE is to starve financial capital held in this "risk-free" form in an attempt to force them out into the bond and equity markets. In other words the purpose of QE, as regards the flow of investment capital, is to squeeze it out of "safe haven" unproductive assets and into bonds and equities - now we can argue whether that is to stimulate productive investment or to prop up equity values in the face of declining profit expectations, but that's another matter which doesn't change the fact that your statement above is the opposite of the real process. Also, to describe QE as an "orgy of money creation" is again repeating the "printing press" metaphor of right-wing neoliberal economists whose monetarism is unable to explain why the tripling of US base money supply achieved by QE in the two years after the 2008 crisis, failed to produce any runaway inflation or "overproduction" (in your language) effects. Which brings us back to the other motive behind QE, the spectre of a debt deflation spiral. But given that the real, as opposed to nominal, value of liquid capital hoared in "risk-free" unproductive stores of value like Treasuries, guaranteed deposits, etc, initially increases rather than decreases, the defence of that fraction of capital is not the state's primary concern. However, here we're at an impasse over the ambiguity of the IP doc concept of the "hoard". Whether that includes merely the liquid capital withdrawn from productive investment, or the totality of social capital, spread over financial capital assets, all existing means of production and "land" assets, etc. If the latter then your account of QE as safeguarding the hoard by boosting prices of haven assets doesn't make sense, if the former then the effect of QE on squeezing returns on haven assets to zero or, increasingly, negative interest rates, also goes against your account.

I'll return to the debate over value form and the nature of money in a future post. But I wanted to start by grounding the debate in examples where the seemingly abstract theoretical debates assume lead to serious differences in interpreting real-world developments. I note you assume by "monetarism" the charge of holding "monetary imbalance [to be] the root-cause of crisis". I can't speak for alb, but for myself I meant it more in the technically less correct, but relatively current sense of subscribing to the quantity theory of money (e.g. whereby "money represents the totality of value"). I note also, with interest, that you seem to quote the Grundrisse exclusively in your arguments on the commodity nature of money. And in fact go on to assert:

Which is interesting in that you seem to follow the autonomists in taking a "Grundrisse-primacy" position (certainly as far as value theory goes, if your appeals to scriptural authority are anything to go by) and valorise the fragment on machines. Yet whereas the post-autonomists use the fragment to justify their declaration that the law of value is dead (thus dispensing with value theory altogether) you seem to elevate it to the pinnacle of Marx's crisis theory.

I'm not sure I've seen that combination before, it may be unique, it certainly seems original. So I will read the linked text with interest. From my own point of view, I accept that Marx's views evolved through his life and work, and generally take his later writings to be superior to his earlier ones in the matter of value theory, as well as everything else. I also don't accept the post-autonomist use of the fragment on machines to declare the law of value defunct, and personally give those paragraphs the same status as the infamous ones in the 1857 Preface - i.e. at best unrigourous prose with little analytic value, at worst just plain wrong.

Finally, I should say that your response to Khawaga's comment seemed to me profoundly wrong. But I'll give him a chance to respond on his own account first.

(to be continued...)

Perhaps Sander can supply some clarification. This appears in the recent IP position paper:

Is IP suggesting the the Confederate troops were proletarians?

Even on the Union side, with so little of the economy, and so little of the population urbanized, and involved in industrial production, it's a stretch to call the majority of those troops "proletarians."

Friend of mine claims that IP considers the US Civil War an intra-capitalist dispute where the revolutionary stance would have been that of defeatism, working for defeat on both sides.

Is that an accurate rendering of the IP position?

Yes I too was wondering what the "hoard" is (strange choice of word anyway), especially in the light of this:

If it just includes "liquid capital withdrawn from productive investment" then Ocelot is right to say that protecting the position of this section of the capitalist class is not the the state's main objective. And if it means "the totality of social capital" the "value" of this is not something the state has the power to maintain. In any event, it still seems to be a theory that capitalism is being prevented from collapse by the financial/monetary intervention of the state.

Artesian wrote:

Marx expected the victory of the North to speed up the development of capitalism, and therefore also of the working class, and thus be beneficial to the latter. We don’t disagree with that. The question is whether that was worth the price of more than 600 000 lives and all the other misery the war caused. “Half a million proletarians” may be an exageration, as there were many small farmers etc. among them, but that hardly changes the point. The war was horror and the fate of the downtrodden didn’t improve much after it. Marx was still too much captivated by his schematic, deterministic view of history to realize this.

More on other comments soon.

In order to avoid derailing this thread, I would suggest, if Sander agrees, that a new thread around this issue should be initiated.

My first comment would be : Sander didn't answer the questions. I didn't ask why Marx held his view; or even if Marx held a view. I asked if IP considered the Confederate troops proletarians. I asked if IP holds to "turn the guns around. Defeat of the North by the South is a 'lesser evil' than pursuing the war on behalf of the North."

The question for Marxists is precisely not what Sander claims it was: "The question is whether that was worth the price of more than 600 000 lives and all the other misery the war caused."

Baloney. The issue is what determined the war; what made it an historical necessity (if it was); and therefore what compelled the parties to act as they did. History does not assign a price to lives. That's a bourgeois affectation. History is not a cost-benefit scheme or an accounting exercise.

The war didn't improve the "fate" of the downtrodden "much"? Once again baloney. Fate's got nothing to do with it. The war abolished slavery. Was this revolution completed? No. But without the war, there would have been no period of Congressional (Radical) Reconstruction, 1868-1872, which in fact did greatly improve the material lives, if not the fate, of the downtrodden.

That the bourgeoisie turned away from Radical Reconstruction and agreed to the restoration of Redemptionist governments in the South does not mean the war or Reconstruction was a waste-- unless of course you think that the migration of blacks to the cities after the turn of the century, the civil rights movement, the militant struggles of black industrial workers would have occurred without the Civil War, without the 13th, 14th, 15th amendments.

As for Sander's rationalization of IP's "exaggeration" of the death of 500,000 proletarians: Since when do Marxists, presenting an analysis of capitalism engage in "exaggeration"? Exaggeration? What's next, claiming "artistic license" in mis-characterizing class struggle? IP does not engage in exaggeration-- but in direct distortion to support a position that has no real basis in fact. That's called ideology.

See why this should be split-off?

By coincidence this article on the Reconstruction and its importance for today was published on the Common Dreams website

http://www.commondreams.org/views/2016/01/30/fables-reconstruction-why-c...

Artesian,
I’m appalled that you think the dead of 600 000 people (regardless whether they were proletarians or not) and all the other misery the war inflicted should not be a factor in judging whether to support such wars or not. It reminded me of Che Guevara writing in his diary that the millions of deaths in an atomic war would be well worth it to advance the cause of communism. I’m not saying you would make the same judgement but you argue in much the same vein as he did when you write

Right. History has no feelings, it does not suffer, it has no sense, it has no purpose. But we humans do.

Sander,

I'm appalled that your tally of the cost-benefit of the US Civil War does not include the lives of the millions of Africans enslaved, those more than thousands who perished in the Atlantic passage, and those millions who were, quite literally, worked to death.

Those bodies, somehow, don't show up in your ledger, do they? Of course not, they were slaves. By definition, they don't count.

The absurdity of your "position"-- your numbers-driven pacifism-- is that, besides begging the questions, it leads to asking, "Well, if only 200,000 died, would that make it worthwhile?"

As if once the struggle is joined, you would have known what the death toll would have been.

I'm asking you to answer some simple questions, which the careful reader will note, you continue to avoid answering:

1. Is it IP's position that Marx, and the IMWA, were wrong in endorsing the North's military, political, and economic struggle against the slaveholders' rebellion?

2. Is it IP's position that "revolutionary defeatism"-- which means that revolutionaries in the North welcome the defeat of the Union troops by the troops of the slaveholders' rebellion as preferable to the victory of Union troops-- was the "correct" position?

3. What justification can there be for claiming that the US Civil War sacrificed the lives of over "500,000 proletarians on both sides" when the composition of the slaveholders' army was not proletarian at all, and the proletarian component in the Union Army was a distinct minority?

4. Does the IP regard the victory of the North in the Civil War, the formal, legal, and substantive elements of the abolition of slavery-- i.e. military occupation of the South, Congressional Reconstruction, the 13th, 14th, 15th amendments as "tragedies," and not just tragedies, but a defeat for the prospects of revolution?

Perhaps the US should have, after all, been more like Brazil? And let slavery continue, say until the 1880s, then those 500,000 of almost proletarians, including the almost proletarian slave owners, wouldn't have had to sacrifice so much? And the million or so slaves, those actually performing the labor, those who would have died in the 30 or so years.....?????

Do at least try to answer the questions. After that, you can be as appalled as you like.

A comment by Sander, in the midst of a discussion of the value-form, that the US civil war was a capitalist war, and one of the first wars in which warfare itself became industrialized, foreshadowing in that respect the inter-imperialist wars of the future, is being turned into a dispute over whether one would have supported some form of revolutionary defeatism -- a manufactured dispute reeking of archaism. What is indisputable if we want to be sidetracked here is that the aftermath of the civil war within ten years was the institutionalization of the Jim Crow system in the South, including the reduction of the mass of the black population (the freedmen) to a new form of enforced labor as sharecroppers or penal workers, held in thrall by the power of the state and the Klan to enforce its racial codes; an outcome supported by both the winners and the losers in that conflict. That said, however, it's the actual trajectory of capitalism today that's at issue in this thread, so let's not be diverted.

Get your facts straight, Mac, if you're going to participate. Just to bring you up to speed and correct your distortion of the record, it was not a comment by Sander that triggered the discussion of the Civil War. It was the statement in your position paper "As We See It" on the Civil War that prompted my questions in this thread, a thread devoted, according to its title devoted to Internationalist Perspective: 'As We See It. Can't think of a better place to raise the question, can you?

Plus, I suggested that the admins might want to split the thread so we could pursue both issues. They have, so far, not seen the need for that. OK, then this is the place to pursue these matters.

You don't like it? Too bad. Ask the admins to split the thread, and then there will be two places where you can avoid the issues you raise in your own position paper.

Moreover, a friend of mine-- you know him, Loren Goldner-- stated that IP hold's a "defeatist" position on the US Civil War so I asked for clarification on that.

All will note that you, like Sander, ignore the questions directly dealing with the assertions in your position paper, and your attempted rationalizations thereof ("war is horrible." "war is terrible." "war cost 500,000 proletarians their lives." "I'm appalled at your sang froid" blahblahblah).

So let me reproduce the questions and then you may, one more time, and with feeling, avoid answering them, claiming that questioning your own assertions-- like the Confederate troops being "proletarians" for one-- is a diversion from.......what? Value-form? Do us a favor....

1. Is it IP's position that Marx, and the IMWA, were wrong in endorsing the North's military, political, and economic struggle against the slaveholders' rebellion?

2. Is it IP's position that "revolutionary defeatism"-- which means that revolutionaries in the North welcome the defeat of the Union troops by the troops of the slaveholders' rebellion as preferable to the victory of Union troops-- was the "correct" position?

3. What justification can there be for claiming that the US Civil War sacrificed the lives of over "500,000 proletarians on both sides" when the composition of the slaveholders' army was not proletarian at all, and the proletarian component in the Union Army was a distinct minority?

4. Does the IP regard the victory of the North in the Civil War, the formal, legal, and substantive elements of the abolition of slavery-- i.e. military occupation of the South, Congressional Reconstruction, the 13th, 14th, 15th amendments as "tragedies," and not just tragedies, but a defeat for the prospects of revolution?

No one disputes that Congressional Reconstruction was eviscerated; that a campaign of terror organized by the former Confederates and slaveholders (those "proletarians" who survived the tragic Civil War-- the tragedy being that they in fact survived) was the motor on the Redemptionist trolley; that the Northern bourgeoisie, and the Northern petty-bourgeoisie, turned away from Reconstruction when Reconstruction, to succeed, required racial equality throughout the land.

However that doesn't mean the Civil War was not necessary, and did not carry within it the impulse to emancipation-- as in fact subsequent revolutions and civil wars have embodied a similar impulse only to wither, ebb, and re-form the conditions of exploitation and oppression.

So answer the questions and in the subsequent discussion see if you can link your answers to your analysis of the value form. If you cannot, then you don't really get what Marx was driving at, and why he undertook the critique of capital.

All the talk in the world about value form don't mean a thing if the only place your so-called Marxism gets you is a place of abstention in a war against slavery.

This started as a thread on a substantive topic, from which I thought I'd learn something.

As we see Internationalist Perspective:

Theory: value form

Practice: value form

A young black proletarian says (to Internationalist Perspective):

"Hey professors, look out the window! What do you think of all those kids disrupting traffic because another white cop has killed another unarmed black teenager?"

Internationalist Perspective's response:

"value form"

Then some of us who aren't abstentionists from the class war that shapes our lives say:

"Hey Internationalist Perspective, why don't you answer the kid's question?"

Internationalist Perspective response:

"Let's not be diverted from value form"

We again respond:

"Why are you getting so surly?"

Internationalist Perspective response:

"Because of your disgust for value form"

See how that can be frustrating?

Actually, in the real terms of Marx's critique of capital, the practical struggle embodied in the US Civil war, of the actual material conditions of class, and the prospects for the emancipation of labor is 1000 times more substantive, than IP's (mis)exposition on fictitious capital, value form, etc.

Be that as it may, I asked the admins to split the thread.

US Cvil War sub-thread split here Was the Union war against the Confederacy a progressive war or imperialist bloodbath?

(Don't need to be an admin to "split" a thread)

That's not "splitting" a thread. Splitting is when the posts, in their original formal are constituted as a separate thread. But so much for hair-, I mean thread, splitting.

Well, now all IP has to do is to continue avoiding applying concretely its "meta-theory" to the actual developments, cycles, motions of capital accumulation, demonstrating how the categories of its theory are made manifest in any specific industry.

Well, needs must. I do intend to come back on some of the other points in Sander's response to me earlier (specifically money and value-form related). I'm also interested in commenting on the US Civil War thing, which is another reason why I created the other thread. But in both cases, I'm a little time-embarrassed at the moment with work, so will have to get back to both in a bit...

If this was 1861, or even 1871, I would have put on the blue and seen the American civil war much as Marx did, though with the knowledge of more than a century and a half, it's hard not to see the outcome of that war not having been baked into the cake, which, of course changes the way in which the war today is understood: as the march of a capitalist juggernaut on its way to global domination, and with respect to the black population first as cannon fodder in the late stages of the war, then as an exploited caste condemned to sharecropping and the rein of the Klan, then to labor in the factories of the North (and segregation and racism in its cities), and now to incarceration in its prison complexes and to mass unemployment, and Flint Michigan or west Baltimore as its exemplars. Was it all inevitable, a necessary series of stages? Inasmuch as I don't believe in the laws of history and their inevitability -- so dear to traditional Marxism, no. But it's 2016, and now the task is what are the historical conditions today for the abolition of capitalist social relations? Which brings us to the centrality of the value-form, and the prospects for the development of a revolutionary consciousness that can both grasp the value-form as historically specific, and provide a basis for its abolition.

At the risk, then, of responding here to Ocelot's post of January 29 on IP's purported "Grundrisse primacy", references to Marx's "Fragment on Machines" in that text seems crucial to an understanding of the actual trajectory of capital. Despite its interpretation by Toni Negri as a basis for putting an end to the proletariat, creating a "multitude," and seeing immaterial (or cognitive) labor as upending the very bases of the classic wage relation, it actually subjects the whole of a worker's existence (24/7) to the imperatives of capitalist accumulation. And for that ever-growing part of the population whose existence has become, to use a now well known expression, "precarious," other modes of control, ideological and physical, are being developed by capital, including its left (identity politics and nationalism). However, Negri and other post-workerists constitute just one way to read the "Fragment on Machines." IP's Reference Text points to other ways, ways that illuminate the actual trajectory of capitalism today, ways that take us beyond the Hobson's choice between Luxemburg's crisis theory and Henryk Grossmann's. Perhaps we should move on to that.

Belongs in the other thread, Jack, I mean Mac. Trying to divert us?

But since you brought it up here: So what are the answers to the questions? And in particular, how can IP in a position paper claim that the US Civil War claimed the lives of half a million proletarians? Do the troops deployed by the slaveholders' rebellion count as proletarians to IP?

I didn't say the Civil War was inevitable. I did say it was necessary, not as a a "stage of history, but for the advance of US capitalism. The abolition of slavery was essential to that necessity.

That you can claim the grasping the value-form as historically specific is the basis for revolutionary consciousness, while at the same time and in the same place produce distortions of the actual class forces engaged in historically specific struggles, kind of undercuts your assertion that grasping the value form is quite that important.

What you have created is a philosophy of the abstract that has only minimal contact, tangential at best, with the world of the concrete.