Capitalism and productivism in Lyn Marcus' dialectical economics

Lyn Marcus NCLC leader
Lyn Marcus (a.k.a. Lyndon LaRouche) c. 1974

Will Barnes' critique of Lyn Marcus (Lyndon LaRouche)'s text Dialectical Economics.

Submitted by Hieronymous on January 23, 2012

content note:
Lyndon LaRouche moved from being a member of the Trotskyist SWP in the early '60s to being associated with various international far right groups by the late '70s. There is discussion of LaRouche's involvement in the Occupy movement and other connections elsewhere in the library. While this trajectory is mentioned in the introduction, the analysis, while critical of the work itself, doesn't sufficiently draw the connection to LaRouche's later stances. We therefore reproduce it for reference purposes and not as an endorsement of the subject matter.

The following remarks will examine the analysis of capitalism in Lyn Marcus' Dialectical Economics. The basic categories of Marcus' analysis (“negentropy,” “expanded reproduction”) permit him to identify economically irrational features of capitalist development that are amendable to radical reform. This reform involves markedly increased efficiency and productivity. For Marcus, this reform would greatly lessen the instability of capitalism, ameliorating crises. The reform leads to a capitalism without capitalists based on central planning.

Lyn Marcus is better known by his birth name, Lyndon LaRouche. His major work, Dialectical Economics though published in 1975 was basically completed about 1970. This was roughly three years before the time from which, conventionally speaking, his “about face” is dated: Before the moment at which he is said to have shifted from a critical to a managerial theory of capitalism; before the moment at which the Labor Committees (NCLC) openly appeared as thuggish gangs engaged in violence against other reformist and ostensibly revolutionary organizations in the United States; and at which time Marcus himself began to visibly exhibit a personal style that, without doubt shrill, surely was and remains paranoid1

We’ll set aside Marcus’ personal trajectory and briefly consider two aspects of Dialectical Economics on its own merits. The first concern's Marcus' view of the dynamics of capitalist development. The second is an attempt to show this view is necessary linked to a project of rationalizing capitalism.

Analysis of Capitalism

We can start with the standpoint of the particular firm or individual capitalist which is for Marcus a false perspective. He calls it simple reproduction. (This is the narrowest use of the term which has a broader sense in Marcus. The broader sense refers to the process of capitalist production that merely reproduces the existing productive forces without renewing them, i.e., without generating the output required to sustain production through the losses that are incurred in a cycle of production: Resources and raw materials must be replenished, eventually machinery must be replaced due to wear and tear, and workers must renew themselves. If none of this occurs, production would grind down and eventually collapse from these losses. Marcus calls such losses “entropy.” He does not believe this situation refers to any actual reality, but is just an abstract model of how capitalism functions.)

As Marcus understands it, labor power creates surpluses that support capitalist consumption. The same surpluses as money capital are used to purchase new equipment that replaces worn out machinery and to replenish raw materials and other inputs. By creating these surpluses that replace and replenish, labor power counters these losses in production (wear and tear, materials depletion). Labor power counters the entropy in production. It is then counter entropic or negatively entropic or, as he prefers, negentropic.

Return to the standpoint of the particular firm or individual capitalist.

In the pursuit of profitability, each firm, each capitalist, in relation to all others strives to lower costs of production; or, amounting to the same, achieve increases in productivity. In all spheres where there is actual production (i.e., where capitalists are not merely siphoning off and redistributing surplus generated elsewhere in the global capitalist economy, and where increased productivity is not achieved by reorganizing labor within the production processes), firms that pursue this activity are effecting “alterations in technology which are changing the socially necessary costs of reproduction of the capital being consumed by that firm” (295). This activity creates pressure to lower the socially necessary costs of the renewed production of all capitals within an industry, a sector, ultimately the global economy, where production occurs. This is necessarily the case: Capitalism is unitary. All production processes together with distribution and the financial system indirectly express a mutual dependency of all upon all.

The analysis of the interconnected processes of production can, in a grossly abstract manner, be understood in terms of its components. These are constant capital designated “C” or that portion of the material aspects of the labor process actually consumed in the production of a product (including plant and equipment, raw materials and auxiliary materials); variable capital designated “V” or the labor of women and men purchased by a capitalist; and, “S” or the surplus value generated in and through the exploitation of that living labor, understood as labor power. The capitalist calls this surplus “profit.” These designations can be rendered algebraically in the formulation, S/(C+V). This ratio provides a mathematical statement of the rate of profit. According to Marcus, it establishes the framework for the reproduction of society as a whole. Such reproduction includes the working class (its labor power) and the class of capitalists, their consumption and the diversion of this surplus into activities, institutions, and adjunct social strata that are necessary to the maintenance of their power in society (for example, the military, the array of police forces, the courts, legislatures, educational institutions, etc.)

Return to capitalism as a unitary, global reality. At this level, it is precisely this surplus, “S,” that is required to sustain the social totality in view of the losses that incur to “V” and “C” during a cycle of production. Call this expanded (or extended) production. This not unproblematic.

According to Marcus, “the whole of capitalism is an interconnected network, and since any increase in social productivity's socially necessary costs in any part of the worldwide system is a reduction in socially necessary cost through the entire system.” If we recall that each and every capitalist pursues a competitive advantage through technical innovation, then “the lowering of socially necessary costs is continuous except in extraordinary circumstances of breakdown” (295). What is problematic? Lower socially necessary costs are embodied in new technical inputs to production, in machinery that once set in motion by abstract labor (that is, through the labor power of living, breathing workers) increases the productivity of that labor. Accordingly, it lowers the quantity of value embodied in commodities that are produced under these conditions. Or, stated differently, it increases the sheer mass of commodities produced in the same amount of time that was required to produce a smaller mass under conditions of production prior to the introduction of the new technical input (the new machinery). In phenomenal terms, the product can be sold cheaper. Effectively, the firm operating with these new technical inputs has rendered the machinery of all other firms which sell the same or similar products obsolete. Those other firms, however, continue to value, in their profit and loss statements they continue to price, that machinery at the costs of purchase. We can say they continue to use a historical valuation but not a current valuation (295). These “local” determinations of the “book value” of primarily fixed assets accumulate throughout the economy. This means that the valuations of each firm are not aligned with the socially necessary costs that are required for production of commodities in the economy as a whole. We can call it a general valuation. The book value assigned by capitalists to their capitals is, in other words, above that of the general, current valuation. Yet the “discrepancies between local valuations and general valuations of individual capitalists' capitals must ultimately be reconciled. Indeed, they are reconciled, through the bust end of a boom or a general breakdown crisis” (295). Historically, up until at least the first imperialist world war, capitalist crises realigned book valuations and the general evaluation by enforcing devaluation or devalorization on capitalists. (In the language of the business classes, capitalists experienced a “shake-out” as some went “belly up” and simply disappeared.) Until the thirties of the last century, known as the “Great Depression” with its three deep troughs (1873-1878, 1882-1884 and 1892-1896) the whole period from 1873 until 1896 is the classical example in this history of a generalized devalorization.

But in the boom phase of a capitalist cycle it is this growing disparity between book valuations of capitalists' capitals and their general valuation that obtains. We can say that, for each and every capitalist (each and all of them pursuing their own individual interests), this technical innovation aimed at increasing the rate of profit on individual capitals effectively creates more capitalist claims on or titles to the total surplus value that circulates than can possibly be satisfied. In this sense a portion of those claims are necessarily fictitious. Yet, for Marcus, this is not the fundamental situation. That situation is operative among individual capitalists themselves: The pursuit by each and every capitalist of technical innovation without some overriding coordination that allocates resources to capitalist firms and eliminates competition results in what he calls “anarchy”: “The principle immediate source of this latitude for the grossest deviation from reality is the anarchy of capitalism, such that capitalists, treating parochialized aspects of capital in general as virtually autonomous 'economies' (heteronomy), cannot distinguish between absolute and relative surplus value in an immediate way” (320-321). There are three points here.

First, inasmuch as technological change within capitalism creates and then exacerbates this anarchistic and localized situation and its development, there is, Marcus indicates, already a fictitious element within capitalism. It is representable as whatever quantum of disparity between books and current evaluation exists. It too like capital itself accumulates (297).

Second, as already suggested Marcus follows Marx in employing a value analysis of the surplus the capitalist calls profit. For Marcus, the distinction between relative and absolute surplus value refers us back to a difference between the micro economic situation and that as it obtains at the level of world capitalism. Relative surplus value is a portion of local surplus value that does not augment the total surplus. Marcus calls the latter absolute surplus value. It only becomes visible once capitalism is examined and analyzed at the level of its global operation, a perspective he calls “expanded reproduction” (177-178, 423). Relative surplus value should be equated with a fictitious element in the operation of capitalism.

This difference between the local situation of the individual capital (which, again, Marcus calls anarchy) and the dynamics of the system that operate at the level of the world is of real import. It is, according to Marcus, ultimately this anarchy that creates capitalist crises. The significance of this should not be overlooked, for it opens the door to a “revolutionary” reformism: It makes it possible to overcome the contradictions that resolve themselves in a general breakdown of capitalism by way of a statist project that pursues an extreme rationalization of capitalism. Or, in Marcus' formulation, “A rational economy, by contrast, would restrict 'profit' to absolute profit” corresponding to absolute surplus value, “and would distribute to the various parts of the economy portions of the absolute profit of the whole economy” (321 for citation, 369). We shall shortly explore how he would rationalize capitalism (i.e., how he would render it vastly more efficient thereby ameliorating those contradictions).

Third, if overcoming this anarchy so-called makes a rationalizing, reformist project possible, the project itself can only take shape on the basis of the perspective of expanded reproduction. (For, it is only from this perspective that the anarchy among capitalist firms as the central feature of capitalism becomes visible in the first place). In Marcus, the perspective of expanded reproduction, of the simultaneous renewal and enlargement of capital that reproduces capitalism as a system, is necessarily and indissolubly linked to this project. The categories of the analysis of expanded reproduction such as capital in general (the total capital), labor power in Marcus' peculiar usage (discussed below), surplus after deduction for capitalist consumption (called S'), etc., serve only this purpose: They provide theoretical mediations that identify points of leverage within capitalism that advance, intensify and accelerate rationalization...

Marcus brings together this anarchy of capitalist production, the fictitious accumulation of claims on surplus value and the crisis they culminate in this way: The capitalist's fixation on his own capital... it is necessary for he wouldn't be a capitalist if he behaved otherwise... creates the situation as it exists on the ground: “The anarchy of capitalist economy (the system of autonomous property titles) precludes such systematical practical distinctions between absolute surplus value and fictitious relative surplus value. Under circumstances in which the rates of speculative gains tend to feed themselves, so that speculation, or the growth of fictitious relative surplus value, proceeds at an advantage relative to production of absolute surplus value, the anarchy of the capitalist organization of society leads inevitably and rather hastily to a general monetary crisis” (321, emphases added).

Marcus' account of capitalist development at this point manifestly anticipated the renewal of a general crisis of capitalism manifested in monetary crisis which, beginning from the collapse of Lehman's in September 2008, has yet to exhaust itself. (As we write, it may well deepen with collapse of the Euro).

Let us pursue his account to that point at which its internal logic dictates the necessity of a crisis in the financial system of capitalism.

The whole issue turns on the question of what “happens to capitalist reproduction of capitals when the assumed value of those capitals outruns their objective basis?” (305).

Before any new inputs (machinery, raw materials, etc.) can find their way into production those inputs must have been produced and, having emerged from production as commodities, sold. Before there can be any further production, consumption or accumulation, the value of commodities must be realized in exchange... Logically at least, for actually the processes of production and exchange (realization) are simultaneous occurring at countless sites and moments throughout the capitalist economy... Between production and exchange stands credit, that is, the banking system: Within a cycle of production the capitalist goes to a bank and borrows on existing plant, equipment, inventory or future products (those portions that are not already mortgaged). He does this in order to purchase raw materials, or necessary components that permit finishing production of some goods, or to install a new instrument or machine to meet or better the competition. Larger firms operate from a “cash flow”: They, for example, pay for wages and salaries, high turnover inventory items, administrative and incidental expenses, etc., out of the proceeds of their ongoing operations. But when they expand, they may or may not turn to “their bank.” If not, they issue stock. Like state bonds and mortgages of all sorts, stocks can be discounted (purchased at some price less than its full face value), and either individually or bundled, then resold. The resale generates a sometimes not so narrow margin of profit for the original purchaser. They can be combined with other stocks, bonds or mortgages (and mixed as well), and resold again and again. In the simplest of cases, these arrangements are not made in cash all at once, but “on time,” on a schedule of payments. Even here, they can be leveraged: The resale generates the income or cash flow which permits periodic payments on the original purchase(s). But whatever else occurs, two features might be noted.

First, the increases in actual income to the extent they are run through the banking system (and sooner than later these issuances all do), directly or indirectly, will bring about an issuance of paper money to facilitate the ongoing, expanding economic activity. (This will be done by the bank of banks, the state's central bank.) This inflates the means of current payment and also provides the basis for further, future speculation (348).

Second, for Marcus, it does not matter whether we are dealing with title to a certain quantum of labor power, plant, machinery, inventories, or to title to stocks, bonds, mortgages or any of the myriad, convoluted financial “instruments” as they exist today. In all cases, credit detaches the capitalist claims on capital in any of its forms and makes it independent of the total surplus value as it is generated in production and realized in exchange (348). The former exceeds the latter, and as speculation develops over time this excess grows.

Speculation, or at least persistent, large-scale and ubiquitous speculation in the sense that induces monetary crises, is not simply given with the issuance of credit. Ultimately, it develops because productive investment offers declining returns relative to what can be gained by speculation itself. This occurs in a long chain of events: Based on technical inputs into production, new machinery is introduced and the productivity of labor increases. Workers are replaced by those machines and consequently lose their employment. At the same time, the sheer mass of commodities grows. And, in the relation between the increasing devaluation of fixed assets in production as new machinery appears and declining presence of value producing workers in the same production, the average rate of profit spread across the entire economy falls (294-299).

So in Marcus, there is this contradiction. One side entails the massive extension of credit, rampant speculation and the growing divergence of the surplus value generated on the basis of production and realized in the sale of commodities. The other side involves the paper claims on this surplus. Yet the falling rate of profit across the economy as a whole is not directly and immediately the outcome of this contradiction (328). In any monetary crisis, there are as a rule other social relations and processes that intervene. For example, there is taxation policy, or expenditures on war that increase a national debt creating the necessity of bond issuance. None of these are external to the dynamics of capitalist development. None of them are “exogenous 'factors'.” All not only heighten and intensify speculative in lieu of productive investment. And some, among which first and foremost is class struggle, underpin those very dynamics. For it is proletarian defeat in major class confrontations that allows technical innovation in capitalism to proceed with a vengeance. Following upon such defeat working class recomposition is achieved in a really big way (leading to reduction in the absolute numbers of workers in the “advanced” sectors of industrial production). This further leads to income redistribution and growing inequality through the tax code as it is promulgated at the level of the state. That, in turn, puts more money in the hands of those disposed to speculation.

Here we reach a critical point whose immediate outcome is either depression or monetary crisis (373). “As the ratio of formation of speculative (fictitious) to productive capital increases, the rate of inflation increases” (350). Here the banking system or its summit, the state's central bank (the US Federal Reserve, European Central Bank, Bank of Japan, Swiss National Bank, Bank of England, Peoples Bank of China), is decisive: If the growth of the money supply created by central banks slackens or tapers off, a payments shortage inclusive of a credit crunch ensues (350). The immediate result is a precipitous decline in the volume of world trade, and shutdown in production sites across the world (which, if the attenuation of money supply continues will become systemic). This leads to large scale unemployment. All taken together amount to a depression. If the money supply continues to expand proportionately relative to the growth of rampant speculation, interest rates must also increase in order to counter the “inflationary discounting of long-term credit” (350). This, in turn, leads to abandonment of that form of credit, to increase in the use of short-term credit, increasing this form of debt, to increases in the rates charges for short-term debt and, in particular, to an accelerated rate of payments on this form of debt (350-251). Recall that all nearly all debt of this sort is speculative and is leveraged; that is, a small percentage of cash (at most 5-10%) actually stands behind each level of these financial “instruments.” (The more the “assets” in question have been resold the closer to zero this margin approaches). Until this moment the state under the auspices of the central bank can continues to postpone a reckoning by taking the astronomical amounts of fictitiously accumulated capital, debt, on to its balance sheet (398). At the same time, at this moment it takes simply one margin call to send the whole house of cards tumbling down. When it happens, we have a monetary crisis. Again, witness Lehman Bros...

Productivism and Illusorily Liberating Technological Development

We would note that Marx distinguishes between the concrete labor of agriculturists who till the soil, who plant, care for and harvest foods such as vegetables (or artisans who produce goods of all sorts), and the abstract labor that produces goods in capitalist production. Referring to a worker who is propertyless and has only own her own activity to sell, he calls the labor once it is exchanged for a wage “labor power.”

Marcus identifies this specific historical form of human activity, labor power, with human creativity itself. He does so because it (like all forms of human activity that issue in products) can further be identified with a form of making that is productive (175-176, 192-193, 204, 205, 402-403, 466-467). Making of this sort brings forth something new in nature and into the world. What it produces is capital. In this sense, it sustains capitalism by creating “values” (ultimately capital itself). Losses occur in production. There is “entropy.” For example, wear and tear on machinery will eventually necessitate its replacement. But we human beings as labor power must also sustain ourselves. We must socially reproduce ourselves. (This is done through the wage.) Because labor power itself sustains the whole system of social relations called capitalism, Marcus says as we noted above that labor power is a form of negative entropy, “negentropy.”

As Marcus understands it, labor power is never “simple productivity,” that which produces a mere product. The product is, after all, only the medium in which labor power expansively reproduces itself as “a new increase in the quality of labor power” (178). It is, in other words, “a capacity to assimilate and realize new productivities”: It aims only at itself in this endless productive practice...

Here we pose the question, does this endless productive practice mean that Marcus harbors a productivist illusion? Does he believe that technology alone can provide the dynamics leading to a working class self-emancipation which tends toward the creation for the first time in history of a genuine humanity?

We should let Marcus speak for himself:

“The fact is that capitalist accumulation, by virtue of accelerating ‘energy throughput’ of capitalist technology and the scale and depth of capitalist production, has qualitatively altered the entirety of the earth, both as a biosphere and inorganically” (278). Thus, “capitalism is historically progressive as long as it fully realizes extended reproduction through the accompanying development of the labor process” (278, and similarly 386).

Then there is, of course, this written, mind you, circa 1973: “The ecology of the solar system is not that distant from the domain of earthly budgets” (252) and, since that may not be clear enough, there's this: “… [It] is the wildest presumption imaginable to calculate the space and resources available for human existence solely in terms of the earth. Since there is no possibility that human existence will continue beyond this century without the massive conversion of our technology on the basis of thermonuclear fusion, and since that realization means the most explosive scientific advances in the history of mankind, it is the wildest delusion, a literally pathetic delusion in every respect, to doubt that man will soon be populating the moon and Mars” (50).

We shall not linger here, but in this regard it is legitimate to ask, “why anyone would think to utilize the categories of expanded reproduction and negentropy (there are other not discussed here such as the 'total social capital’”) that belong to the analysis of capitalism under any other conditions than that analysis? Once workers begin to undertake a societal practice the abolishes the social processes of capitalist production, why use categories that theoretically capture and fix features of capitalism? Unless someone, like Marcus, thinks not only that, “The economy, viewed with some knowledge of the ABCs of technology, is one horrendous mass of waste, redundancy, obsolescence and managerial incompetence,” but also thinks, “The only useful approach to the wretched state of the U.S. economy today is the scientific, rational approach to planned economy”? (221). In other words, why would anyone deploy these categories unless committed to reestablishing capitalism on a firmer basis? In Marcus' case, the answer is obvious. He repeatedly speaks of “socialist 'capital-in-general',” “socialist science” and a “socialist program for expanded reproduction,” “socialist expanded reproduction” and, of course, “socialist accumulation,” not to mention the “workers' economy” characterizing a free society (251, 281, 287, 288-289, 448 n.31). And, if anyone with a taste for this kind of analysis thinks that Marcus is merely referring to the “lower stage of communism,” to a period of “transition between capitalism and communism” (the period of the so-called dictatorship of the proletariat)2 and the extraction of surplus value from workers (or, if you prefer as we do, exploitation) designed to ensure expanded reproduction, are essential features of a free society. Patently indicated by statements such as, “The universality of capitalist accumulation exists despite the will of the capitalists, contrary to their consciousness and their wills,” it is, then, both possible and necessary that Marcus grasps the prospect of a capitalism without capitalists (283). If this is not enough, well Marcus, never too shy, bluntly states, “Socialist accumulation would be a chimera unless it meant rescuing some positive feature of capitalist accumulation from capitalist accumulation, specifically, the capitalist rate of profit” (287). (It is precisely at this moment that the revolutionary intelligentsia in its true persona emerges: “Socialist accumulation can originate only as the creation of a portion of the capitalist intelligentsia, because the necessary overview of world-historical reality and of universal labor exits under capitalism only within the ranks of the intelligentsia” (289)).

We shall momentarily recount some of the broad elements of rationalization of capitalism in Marcus. But first we shall restate the “micro economic” criticisms of the organization of the capitalist firm (in the United States) which Marcus offers. These include the relation between lead time for raw material and component inputs to production runs in relation to the “delivery window” for “marketing season” (230); sharp draw downs in inventories that are designed to eliminate excesses but only hamper production because those inventory items that don't turn are effectively fixed capital (i.e., they are overaged, made obsolete by technical innovation (230-231)); inefficiencies in production due to elapsed time bringing warehoused inventories to the actual site of production (232); and excessive product diversification that is linked to general expansion of credit; the consequent redundancy in product offerings, not to mention marketing and a rather vicious competition between product retailers all of which is “monstrously” irrational in the specifically capitalist sense of economic rationality (232-235).

We can legitimately wonder why on Earth anyone committed to the abolition of capital would seek to make capitalist firms more efficient and productive. But Marcus goes further: Grounded in his own business administrative experience, he offers a broad analytic framework to overcome “micro economic” liabilities. The framework consists in analysis of the firm codified in his interrelated Process Sheet, Bill of Consumption and Bill of Materials (228, 230, 250, all are his terms, his creations). These together form an analytic that connects production flows, inputs and outputs as consumer goods and their dynamics. Along with termination of incompetent managements, Marcus would utilize them to rationalize the firm as the cell of capitalist production. At this point, we might wish to inquiry, “Where is the working class in all this?”

Exemplified by “lean production” and “just in time” inventory management, the fact that the historical development of capital itself has gone some ways to overcome some of this strictly capitalist irrationality, confirms (not that it even needed confirmation) that it is not and never has been the task of revolutionaries to reform capitalism.

Yet Marcus further offers us at least in part a set of prescriptions as the level of the world capitalism (and the total capital) which would qualitatively enhance his rationalizing project.

He would require that individual productive units, industrial sectors and the whole (capitalist) economy incorporate into its costs of production what capitalists’ call “externalities.” This refers to the damage done to the local ecology, to communities that surround or are close by industrial firms. Marcus, cites the example of a paper mill (and its owner) which (and who) pollutes a stream with toxic substances (which kills wildlife, if not immediately then is assimilated into its tissues and organs and will eventually erupt as a cancer in both that wildlife and humans). Marcus claims costs of these so-called externalities as constant capital costs would proportionally diminish after these “prophylactic” expenditures have been made. This further assumes that overall capitalist development is technologically accelerated (189). It also assumes these preventative measures are generalized not just industry wide but throughout the economy. It is an important assumption because short of doing away with industry altogether that question arises as to how are these measures to be instituted? What power says they must and will be made?
Marcus would also divert the wasteful expenditure of nonproductive sectors like the military (219), presumably abolishing it in its conventional hierarchical and bureaucratized form.

He would increase the number of physicists and engineers holding Ph.D.s. He would increase their numbers for “basic research” in conjunction with a 10% rate of growth of constant capital expenditures on industrial plant and equipment (219, 218). At the same time, he would replace gasoline and diesel private automotive based transportation by mass rail, over the road or the long-haul tractor trailer by rail transport (218).

These changes involve “qualitative” questions of cheaper costs, less time and “other major considerations” entailing modernizing decaying infrastructure. This infrastructure can be identified as urban mass transit, railroad systems, and crumbling roadbeds. These changes, of course, also involve replacing obsolete forms of equipment and incompetent management (187, 220). And, they entail de-suburbanization (223-224).

Simultaneously, Marcus would establish the energy that fuels capitalist development on an entirely new basis. He would replace petroleum-based power production, and fission reactors with fusion based thermonuclear power (187-188). Fusion power plants are smaller, cheaper, and eliminate the pollutants that arise in steam and gas turbines. They do not produce indissoluble radioactive byproducts as does nuclear fission. This is a case of what Marcus characterizes as a total innovative technological breakthrough. Like steam and petroleum in the past history of capitalism (which serve as the models of his thinking here), once instituted, their usage would reverberation throughout all sectors of the capitalist economy and place it entirely new foundations: It would initiate a new order of the appropriation of nature or radically new form of development within capitalism that extends its life. The upshot would effectively create novel natural resources where they had not existed in the past. It would overcome, all this according to Marcus, the waste, destruction and liabilities of that past development (at least with a view to future capitalist development). It is what we call the rationalization of capitalism, but not its abolition and transcendence.

Marcus appears to realize this development will not occur again unless it is undertaken from a revolutionary point of departure. That is, it would require a working class revolution which his forces would exert themselves to capture and divert into perpetuating capitalist development through competent management and administration of the state economic planning of capitalism. Here, then, is the response to the question, “what power would accomplish these changes?” The answer is a councilar or “soviet government” and a “soviet state,” emphasis on the state.

Wherein would we find the core of this new power? In discussing his technological dystopia, Marcus is speaking of a “guiding overview,” i.e., technocratic planners or, if you prefer, “the leadership of a U.S. sector of a socialist economy.” Its task is to unify the “aggregation of interconnected individual creative acts” while pursuing “the practical problem of working class as a whole of the task of achieving an approximately 25 per cent annual rate of growth” (222).

He imagines this “problem” and imagines it in relation to a similar commitment to a mere 10% rate of annual growth: He performs a thought experiment utilizing both rates of annual growth with a view to “V,” the wage component of production “costs.” In the end, he tells us that his, and others’, “prolonged reflection” has led to the conviction that the 25% rate of annual growth in the US sector of the international division of labor is appropriate after the annual rate of wastage in the US economy is factored out. In other words, it is appropriate after the leadership around him has rationalized production and distribution along the lines indicated above. According to him, it is a more than reasonable objective: The costs of imports to the “underdeveloped” sector of the international division of labor in this socialist economy would involve a vast program of capital exports to this sector. It would have to be modernized to provide those imports. That would aid in enhancing this growth rate. Additionally, the capacity to produce for those exports would entail modernizing those backward subsectors of the US economy. This would absorb underemployed and unemployed labor power. And, of course, modernization is an ongoing, ceaseless process that calls forth its own further, future ceaseless development (222-223).

From all this (222-228, 332-333, 338-339), one gets the following sense which is difficult to doubt: Resting on this unrelenting development of productive forces, Marcus’ vision necessarily entails a “leadership,” a regime of specialists (political economists, accounts, actuaries, scientists, architects, administrators “and others” not the least of which would be Marcus himself). In their “mediation” as “’experts’ on each category of human need” and in “using concrete professional skills to mediate its [the working class’] comprehension of technology and other phenomena” (226), they inhabit an institutionally distinct space, that of “centralized planning.” Their activity is crudely that of counting and calculating and on this basis creating a plan and whatever options it affords. We consider these very much bourgeois “activities” in the narrow sense of engaging economic rationality. Meanwhile the mass of workers would discuss this plan which is simply presented to them fully formed. According to Marcus, this means an “interchange” between leaders and workers occurs “within the class as a whole.” It signifies an “extended debate about economic problems” transpires between two groups. But it is only one which “thinks” and in so doing generates (even if only in the bean counting, numerically manipulative fashion of the bourgeoisie) the fabled plan. The other discusses the options or ready-made alternatives presented to it. Marcus calls this discussion about the economic programs” “a kind of organic celebration.” He appears to believe that human creativity does not of necessity immediately and directly involve generating the alternatives. Instead, it is a matter of having it done on workers’ behalf by “experts,” “professionals” and “leaders” who pursue “socialist accumulation” as the “centralized agencies of the class as a whole.” (289).3

Planning in Marcus is unthinkable without an analysis of the “expanded reproduction” of society and the categories that rests on it. These transhistorical categories of his thought (labor power, negentropy, total social capital, constant capital, etc.) necessary belong to the reform by way of a ceaseless technological rationalism of capitalism. The standpoint of expanded reproduction is synonymous with the destruction of the state (in its historically specific bourgeois form) and its reconstruction for purpose of accelerating endless expansion of productive forces. This is program of the Communist Manifesto (where the state is merely captured), Lenin's September 1917 “Can the Bolsheviks Retain State Power?” as well as the “Manifesto” of the Second Congress of the Third International. If this program was ever adequate to a general emancipation based on revolutionary working class activity, it has been obsolete for sixty years.

Will Barnes
January 2012

[for an extended version of this critique, contact me by PM. — Hieronymous]

  • 1In order to dispense with this at the outset, we shall merely state the following:

    This is one of the exceedingly distasteful characteristics of Marcus' work, its aggressive, at times openly belligerent orientation to any perceived opposition. So that, for example, it is de rigueur for him that the primary form of analysis of those opponents is to be carried out from the standpoint of their “hysteria,” since it is patently obvious to Marcus that his opponents' positions are expressions of “deep, compelling obsessive psychological needs.” For that analysis in preliminary form, Dialectical Economics: An Introduction to Marxist Political Economy. Lexington (MA), 1975: 20-22, 422-424 n. 53. [Dialectical Economics available as pdf file here] (Unless requiring footnoting, hereafter all references to this work will to appear in the body of this essay with referenced page numbers noted parenthetically.)

    An organizationally embodied, practically oriented account of psychoanalysis and individual pathology necessarily leads to the type of abuse the National Caucus of Labor Committees (NCLC), and LaRouche personally, internally engaged in, centered on “deprogramming” its own members.

  • 2Marx, Critique of the Gotha Program (1875), Part IV., Marcus expressly states otherwise (228, 275): He states that classes (at least the working class),
  • 3“It is not so hard to visualize a society in which detailed national economic-planning programs are disseminated among all working people for thorough discussion”; originating with experts, planners and, of course, leading cadre of the “socialist vanguard,” “such proposals would form the basis for an organic political debate within the population.” Ibid, 338. Emphasis in original.

    Marcus' planned socialist economy with its programs and proposals no doubt emanating from a “world soviet” can be fruitfully contrasted with the revolutionary vision of communism as it originates in B. Astarian's discussion of “Production without Productivity” in his Crisis Activity and Communization (2010) accessed online at


Kadir Ateş

12 years 5 months ago

In reply to by

Submitted by Kadir Ateş on January 24, 2012

[for an extended version of this critique, contact me by PM. — Hieronymous]

Why can't you just post it here?


12 years 5 months ago

In reply to by

Submitted by Hieronymous on January 24, 2012

It's around 25 single-spaced pages with multiple footnotes.

PM me your e-mail address and I'll send it to you to post up yourself. It's quite time consuming to get all the formatting and footnotes done properly.

Thank you for your help.

Kadir Ateş

12 years 5 months ago

In reply to by

Submitted by Kadir Ateş on January 24, 2012

I won't post it up for you, but wanted to know why you wanted people to send you a PM. I think it is a good critique.

I recall Larouche's fondness for "brother Sweezy," with whom he had a friendly debate. Sweezy recommended to D.C. Heath that it publish Dialectical Economics. As I read your excellent and very accurate account of Larouche's thinking at that time, which echoes still today without reference to Marx, I was reminded at many points of the Monthly Review tradition which began with Monopoly Capital and continues today. Allowing for obvious methodological differences (i.e) Larouche's adherence to Marx's value theory, there are many areas of convergence: Most glaring is the concept of "surplus" itself. In both thinkers it can double as surplus value at the point of production, and a net social profit that seems to have an existence of its own. Though he railed at "underconsumptionists" Larouche shared Sweezy's focus on the disposal of the surplus (this is where he hauled in Rosa Luxemburg, as Sweezy brought in neo-Luxemburgists) and the key role of the "3rd World." Just as Larouche stressed the suppression of technological innovations by giant firms protecting their "dead capital" needing more time to valorize past investments, Sweezy too saw this kind of "stagnation" as rooted in the monopoly power of giant firms to control the entry of new productive capital into the market. Larouche certainly agreed with Sweezy that surplus disposal required ever increasing deductions from the surplus to be invested in advertizing, marketing, dodgy accounting, military production and myriad other forms of "waste." Both emphasized "financialization," though to different degrees in the 70s, but today Monthly Review presents an analysis of the present crisis very much reminiscent of Larouche's fixation with "fictitious capital's" cannibalization of not only industrial capital but just about everything edible-- the state debt, public services, futures markets for staples (i.e.) grain, currencies, water rights in Bolivia etc etc. (At this point note the parallels with David Harvey). While Monthly Review advocates tax restructuring, public spending and other Keynesian fixes, Larouche pushes infrastructural development including energy (NAWAPA), massive government investment in basic science, and controls on speculation (restoring Glass-Steagall). Larouche now apotheosizes FDR and the New Deal. But at root how much really separates Paul Krugman, Monthly Review and Larouche (allowing for the bizarro factor) in terms of anti-depression measures?
These convergences or shared foci had escaped me until I stumbled upon this article.


9 years 5 months ago

In reply to by

Submitted by notpopfront on January 23, 2015

But do you not agree that there is such a thing as "fictitious capital"? While some may view it as justifying an anti-banking/finance strategy in favor of "good capitalists" it does not mean it is not real.