Capital moves - John Holloway

John Holloway on the global relocation of capital.

IN THE OBVIOUS, common sense interpretation, the sentence 'capital moves means that capital, normally in one place, gets up and moves. British capital is exported and invested in Africa. Japanese capital moves out of Japan and flows into the United States. Capital is understood as basically fixed, but capable of motion. Capital is attached but capable of detaching itself. Thus: Volkswagen has a car factory in Puebla, but we know that it (a German company) can close its factory and move its capital elsewhere. Capital is capable of movement, but it is defined first in terms of its attachment: attachment to a company (Volkswagen), attachment to a branch of industry (the automobile industry) and attachment to a place (Puebla, Germany). Thus, following the same reasoning, capital invested in the textile industry is often referred to as 'textile capital , capital in the banking industry as 'banking capital , capital owned by Mexicans as 'Mexican capital , by US Americans as 'US capital , etc. Although the capacity of capital to move, or to detach itself from a particular owner or branch of economic activity, is never put in question, the movement of capital is secondary to its initial definition in terms of attachment or fixity.

In all of these examples, capital is treated as a thing, a thing that can be owned, a thing that is normally attached to a particular place, company, branch of economic activity; a thing that can be moved, from place to place, from company to company, from one branch of activity to another.

All this is obvious; but once we try to deprive capital of its thinghood, it becomes less obvious. Why should we try to deprive capital of its thinghood, why is the obvious analysis of the movement of capital not sufficient? The answer is surely that it depends on what we want to understand. If we want to understand capitalist development as economists, or if we want to understand the way in which capital dominates society, then there is probably no reason to question the thinghood of capital. If, however, we want to understand not the domination and reproduction of capital, but the vulnerability and rupture of capital, if, in other words, we want to understand not how capitalism works, but how it can be destroyed, then we need to open up the thinghood of capital, to break its facticity, to break the illusion/reality of 'capital is, capital moves, capital rules, that's the way things are . That is why Marx devoted much of his life to showing that capital is not a thing but a social relation, a social relation which exists in the fetishised form of a thing.

If capital is understood as a social relation rather than a thing, then what does it mean to say that 'capital moves ? The answer is now less obvious. How can a social relation move? The movement of capital can only refer to the mobility, or perhaps better, flux or fluidity of the social relations of capitalism, the relations of power under capitalism.

What the mobility of capitalist social relations means can best be seen by contrasting capitalism and feudalism. Under feudalism, the relation of domination/exploitation was a direct and personal one. A serf was bound to a particular lord, a lord was limited to exploiting the serf that he had inherited or could otherwise subjugate. Both sides of the class divide were bound: the serf was tied to a particular lord, the lord was tied to a particular group of serfs. If the lord was cruel, the serf could not decide to go and work for another lord. If the serfs were lazy, unskilled or otherwise insubordinate, the lord could discipline them but could not simply fire them. The relationship between serf and lord had a fixed, immobile character. The resulting discontent was expressed in revolt by the serfs on the one hand, and the pursuit by the lords of other ways of expanding power and wealth on the other. The personal, immobilised relationship of feudal bondage proved inadequate as a form of containing and exploiting the power of labour. Serfs fled to the towns, the feudal lords accepted the monetisation of the relation of domination.

The transition from feudalism to capitalism was thus a movement of liberation on both sides of the class divide. Both sides fled from the other: the serfs from the lords (as stressed by liberal theory), but also the lords from the serfs, through the movement of their monetised wealth. Both sides fled from a relation of domination which had proved inadequate (as a form of domination). Both sides fled to freedom.

Flight to freedom is thus central to the transition from feudalism to capitalism. But there are, of course, two different and opposing senses of freedom here (a dualism which is the central contradiction of liberal theory). The flight of the serfs was a flight from subordination to the lord, the flight of those who, for one reason or another, no longer accepted the old subordination, the flight of the insubordinate. The flight of the lords was just the opposite: when they converted their wealth into money, it was a flight away from the inadequacy of subordination, a flight from insubordination. On the one side, the flight of insubordination, on the other side the flight from insubordination: viewed from either side, it was the insubordination of labour that was the driving force of the new mobility of the class relation, the mutual flight of serf and lord.

The flight of-and-from the insubordination of labour, the mutual repulsion of the two classes did not, of course, dissolve the class relation. For both serf and lord, the flight to freedom came up against the reassertion of the bond of mutual dependence. The freed serfs found that they were not free to stop work: since they did not control the means of production, they were forced to work for a master, someone who did control the means of production. To survive, they had to subordinate themselves again. However, this was not a return to the old relation: they were no longer tied to one particular master, but were free to move, to leave one master and go and work for another. The transition from feudalism to capitalism involved the de-personalisation, disarticulation or liquefaction of the relations of domination. The relation of exploitation was not abolished by the dissolution of the ties of personal bondage, but it underwent a fundamental change in form. The particular bond that tied the serf to one particular master was dissolved and replaced by a mobile, fluid, disarticulated relation of subordination to the capitalist class. The flight of insubordination entered into the very definition of the new class relation.

On the other side of society, the erstwhile lords who converted their wealth into money(FN1) found too that freedom was not all they had imagined, for they were still dependent on exploitation, and therefore on the subordination of the exploited, the workers, their former serfs. Flight from insubordination is no solution for the lords turned capitalists, for the expansion of their wealth depends on the subordination of labour. They are free to abandon the exploitation of any particular group of workers (for whatever reason--laziness, inappropriate skills, whatever) and either establish direct links of exploitation with another group of workers or simply participate through non-productive investment in the global exploitation of labour. Whatever form their particular relation to the exploitation of labour takes, the expansion of their wealth can be no more than a part of the total expansion of wealth produced by the workers. Whatever the form of class domination, labour remains the sole constitutive power. Just as in the case of their former serfs, flight to freedom turns out to be flight to a new form of dependence. Just as the serfs' flight from subordination leads them back to a new form of subordination, the lords' flight from insubordination leads them back to the need to confront that insubordination. The relation, however, has changed, for capital's flight from insubordination is central to its struggle to impose subordination (as, for example, in the ever-present threat of factory closure or bankruptcy). The flight from insubordination has become a defining feature of the new class relation.

The insubordination of labour is thus the axis on which the definition of capital as capital turns. It is the mutual repulsion of the two classes, the flight of and from subordination, that distinguishes capitalism from previous class societies, that gives a peculiar form to the exploitation on which capitalism, like any class society, is based. The restlessness of insubordination enters into the class relation as the movement of labour and capital.

From the start, the new class relation, the relation between capitalists and workers (or, more accurately, since it is a depersonalised relation, between capital and labour) is a relation of mutual flight and dependence: flight of-and-from insubordination, dependence on re-subordination. Capital, by its very definition, flees from insubordinate labour in pursuit of more and more wealth, but can never escape from its dependence upon the subordination of labour. Labour, from the start, flees from capital in pursuit of autonomy, ease, humanity, but can escape from its dependence upon and subordination to capital only by destroying it, by destroying the private appropriation of the products of labour. The relation between capital and labour is thus one of mutual flight and dependence, but it is not symmetrical: labour can escape, capital can not. Capital is dependent on labour in a way in which labour is not dependent upon capital. Capital, without labour, ceases to exist: labour, without capital, becomes practical creativity, creative practice, humanity.

Both serf (now worker) and lord (now capitalist) remain as antagonistic poles of a relation of exploitation-and-struggle, but that relation is no longer the same. The insubordination of labour has entered into the definition of the relation as restlessness, mobility, liquidity, flux, fluidity, constant flight.(FN2) The class relation has become a constantly shifting, inherently mobile relation, in which all capitalists participate in the exploitation of all workers and all workers contribute to the reproduction of capital, and in which the patterns of exploitation are constantly changing, kaleidoscopically.

With the transition to capitalism, the dialectic of insubordination/subordination of labour which is the core of any class relation acquires a distinctive form--the antagonistic movement of the flight of-and-from the insubordination of labour to its renewed subordination. This peculiar historical form is expressed in the familiar categories of political economy: in the existence of labour power and of the products of labour as commodities, in the existence of value, money, capital. All of these categories express the indirect or disarticulated character of capitalist domination. All express the fact that, in capitalism, the subordination of labour is mediated through 'freedom , the 'freedom of the worker and the 'freedom of the capitalist, or, in other words, the flight of-and-from insubordination. These categories therefore, often taken to embody the law-bound character of capitalist development, are in reality expressions of the defining presence of the insubordination of labour within the capitalist relation of subordination, that is to say, of the chaos at the heart of capitalist domination.

This seems upside-down. We are not accustomed to thinking of value, for example, in these terms. It is more common to think of value as establishing order (the 'law of value), as being the social bond in a society of autonomous producers. This is correct, but only if the emphasis is on the critique of liberal theory. The notion of the 'law of value says in effect: 'despite appearances, the apparently autonomous producers of capitalist society are bound together by a social connection which operates behind their backs--the law of value . If, on the other hand, we start not from the appearance of fragmented individualism, but from the historical irruption of the insubordination of labour into the very definition of subordination, then value expresses the fragmentation wreaked by this irruption upon the more cohesive domination of feudalism. The law of value is simultaneously the lawlessness of value, the loss of any social control over society's development, the presence of insubordination within subordination. Value is the political-economic expression of the presence of the contradictory flight of-and-from insubordination within subordination itself, just as freedom is its categorial expression in liberal political theory.

Value, in the form of money, is the new liquidity of the class relation. It is the fact that social relations come to be mediated through money that makes it possible for the worker to shift from one master to another, in each case selling his or her labour power in return for a certain amount of money. It is the fact that the lord-turned-capitalist can convert his wealth into money that makes it possible for him to abandon one group of workers and move to another, and to participate in the global exploitation of labour.

Money not only liquifies the class relation, it also transforms or fetishises it. It gives its own colouring to the class relation, making the relation of subordination/insubordination appear as a relation between rich and poor, a relation of inequality between those with money and those without money rather than one of antagonism. It transforms the antagonistic relation of subordination/insubordination into a relation of money, transforms the flight of-and-from subordination which defines the capital-labour relation into the movement of money, the movement of capital (understood as an economic phenomenon.

The banal sentence with which the article began, 'capital moves has now acquired a new meaning. It is a tautology. 'Capital moves does not mean that capital is normally still and now moves, but that capital is inherently mobile.

Capital, then, is a social relation. But it is not simply a social relation of exploitation/subordination/domination. It is a social relation of subordination (etc) in which the defining presence of insubordination is expressed as unceasing restlessness, mobility. This mobility is both functional (as capital is metamorphosed from productive to commodity to money capital, and back) and spatial (as capital flows/flees through the world in search of a means of self-expansion). The peculiar unity of subordination/insubordination which is the differentia specifica of capital is expressed in the unity of production and circulation, or in the unity of the different functional forms of the circuit of capital (discussed by Marx in Volume II of Capital), or in the unity of the world as the locus of class struggle (the relation between insubordination and subordination). Conversely, the dislocations of production and circulation, or of the different functional forms of the circuit of capital, or of the spatial flow/flight of capital can only be understood as the disunity-in-unity of insubordination and subordination, the constant inability of capital to contain labour, the constant overflowing of insubordination from subordination, the existence of labour against-and-in (and not just in-and-against) capital.

All this is just a rephrasing and development of what has been a central theme of CSE debate over the last twenty years and more--the critique of structuralism, of the separation of structure and struggle. The separation of structure and struggle is, crucially, the separation of subordination and insubordination. It has been common in the mainstream (and overwhelmingly structuralist-functionalist) Marxist tradition to think of capitalism as a basically self-reproducing system of domination/subordination occasionally disrupted by class struggle (the open manifestation of insubordination), as a self-reproducing economic system, in which the exploited workers are victims, except on the rare occasions on which they engage in open struggle. In this tradition, the labour theory of value is understood as the mechanism which explains the self-reproduction of capitalism: there is a peculiar blindness to the most obvious feature of the labour theory of value--namely, that it is a theory of capital's dependence upon labour, a theory therefore of class struggle. It is in the face of this stultifying, and above all disempowering tradition of mainstream Marxism that it is important to reassert the unity of insubordination and subordination, the corrosive, destructive, chaotic presence of insubordination within the definition of subordination itself.

The way in which the notion of the mobility of capital is used in many current discussions of the 'internationalisation or 'globalisation of capital is one example of the separation of subordination and insubordination, structure and struggle. In such discussions, labour, if it features at all, appears only as a victim of the latest developments in capitalist domination. The actors in such discussions bear such names as US capital, Japanese capital, European capital, finance capital. Debate centres on the extension of the power of 'finance capital , on the 'inter-imperialist rivalry between 'US capital , 'Japanese capital etc. All of these categories rest on the notion of capital as a thing, a notion that excludes the attempt to understand the restlessness of capital in terms of the power of insubordination. If current changes in capitalism are understood in terms of the conflict between different national capitals,(FN3) then class struggle, if it appears at all, can only appear as a reaction to the changing form of domination, not as the substance of the change. Everything is turned upside down: the 'globalisation of capital (which I take to refer to the enormous increase in the speed and scale of the flow/flight of capital in money form) is seen as an increase in the power of capital, rather than as a manifestation of capital's incapacity to subordinate labour.(FN4) The violence of money is a measure of capital's flight from the insubordination of labour, and of the desperation of its need to re-subordinate.(FN5).

Marxism is a theory, not of the power of capital, but of the power of insubordinate labour.

Added material.

This statement is so obvious that there seems no point in writing it down, much less making it the title of an article. And yet...

FOOTNOTES1. In a helpful comment on the first draft of this paper, Chris Arthur remarks that 'the paper virtually asserts that the capitalist is the lord with a new hat on. This is historical revisionism on a grand scale with no evidence given. He should at least concede to the usual story that a new mode of production meant, at a minimum, the decline of the lord and the rise of the capitalist, at a maximum a sharp class struggle between the two, punctuated by episodes like the French Revolution . Chris is quite right: the argument of the paper is indeed that the capitalist is the lord transformed. What matters is not the question of personal continuity (present in some cases, absent in others), but the understanding of the transition from feudalism to capitalism as a change in the form of the relation of domination and struggle or, better, of the insubordination/subordination of labour. If class is understood not as a group of people ('capitalists , 'lords ), but as the pole of an antagonistic relation of domination (cf. Marx; Gunn 1987), then it is clearly wrong to see the struggle between capitalists and lords as a struggle between two classes. It was, rather, a struggle over the form of class domination, the form of subordinating insubordinate labour. For 'historical revisionism on a genuinely grand scale, see Gerstenberger (1990), who supports a similar argument against the orthodoxy of Marxist historians with an impressive wealth of evidence (in English see Gerstenberger 1992; Holloway 1993; Gerstenberger 1993).

2. It follows that class antagonism cannot be understood simply in terms of production, but in terms of the unity of circulation and production. The view of production as primary and circulation as secondary tends to lead to a view of the working class as the class of people subordinated in production, that is, the industrial proletariat. If capital is understood in terms of the unity of production and circulation (or the unity of the flight of-and-from insubordination and the imposition of subordination), then a different picture emerges. Capital lives by subordinating and then fleeing from the insubordination which is inseparable from subordination: it sucks in labour to exploit and then spits it out as unpalatable. The antagonism which defines the working class is not one of subordination, but of subordination/insubordination: the working class are not subordinate victims but the insubordinate from whom capital flees and whom it must subordinate. If capital lives by sucking and spitting, the working class can accurately be defined as the unpalatable sucked and spat of the earth.

3. The only possible justification for the notion of a 'national capital would be in terms of the understanding of the national state as an obstacle to the equalisation of the global rate of profit (cf. Capital Vol.III, ch.10), but I have not seen such an argument made, and in any case it would have to be made in class terms. I see absolutely no reason for granting a priori validity to such questionable categories as 'Britain , the 'United States , 'Mexico , 'Ireland , 'Japan , etc. Like any other category of social theory, these must be criticised.

4. For a development of some of the arguments in this paper, see Bonefeld (1993), Bonefeld and Holloway (1995).

5. This paper seems to float in the air, but it does not. Behind it lies the question of the relation between the zapatista uprising in Chiapas and the devaluation of the Mexican peso, together with the upheavals on the world financial markets (the 'systemic risk to world capitalism) which the uprising has provoked. The understanding of the flight of capital from Mexico as an economic phenomenon quite distinct from the revolt in Chiapas (the separation of structure from struggle) makes it more difficult to establish the unity between the two forms of discontent, in the countryside of Chiapas and in the world's biggest city. The connecting fuse, once lit, could change the world.

ACKNOWLEDGMENTMy thanks, for their critical comments on the original draft of this paper, to Ana Esther Cece-a, Andrés Barreda and their seminar group in the UNAM, to Chris Arthur, Werner Bonefeld and to Paul Stewart as co ordinating editor for Capital&Class.

REFERENCESBonefeld, W. (1993) The Recomposition of the British State, Dartmouth, Aldershot.

Bonefeld, W. and J. Holloway (1995) Global Capital, the National State and the Politics of Money. Macmillan, London.

Gerstenberger, H. (1990) Die subjektlose Gewalt: Theorie der Entstehung bürgerlicher Staatsgewalt. Verlag Westfälisches Dampfboot, Münster.

Gerstenberger, H. (1992) 'The Bourgeois State Form Revisited , in W. Bonefeld, R. Gunn and K. Psychopedis (eds.) Open Marxism, Vol.1, Pluto Press, London.

Gerstenberger, H. (1993), 'History and "Open Marxism": A reply to John Holloway , in Common Sense No. 14.

Gunn, R. (1987) 'Notes on Class , in Common Sense No.2.

Holloway, J. (1993) 'History and Open Marxism , in Common Sense No. 12.

Marx, K. Capital.