Conclusion: Money and Class Struggle - Werner Bonefeld and John Holloway

9 Conclusion: Money and Class Struggle
Werner Bonefeld and John Holloway

INTRODUCTION

It can't be defended except as mob rule. Maybe the country doesn't know it yet, but I think we may find that we've been in a revolution more drastic than the French Revolution. The crowd has seized the seat of government and is trying to seize the wealth. Respect for law and order is gone (Bernard Baruch's comment on Roosevelt's abandonment of the Gold Standard in 1933, quoted in Schlesinger, 1959, p. 202).

Few statements express more forcefully the inner connection between money and class struggle which has been the principal theme of this book. Baruch's reaction to the abandonment of the Gold Standard is very far from being the wild exaggeration that it at first appears to be. The abandonment of gold did indeed carry 'mob rule', the in subordination of labour, right to the very core of capitalism, where it was transformed into credit expansion and monetary instability. The inner connection is, however, two-sided: Baruch's the statement can be read backwards as well as forwards. The logical Keynesian response to Baruch's monetarist anxieties would have been: 'Yes, respect for law and order has gone, the crowd has seized the seat of government and this revolution is more drastic than the French Revolution, but the country doesn't know it yet. Credit expansion is our only hope, as long as the country doesn't know what is happening, the monetary trick will help us to restore respect for law and order, throw the crowd out of government and bring about a restoration before anyone has even realised that there has been a revolution.'

The inner connection between money and class struggle is a complex one: at the same time as money (as credit) gives recognition to the power of labour, its movement and changing configuration both disarm and fragment that power. The monetary response to the power of labour is at the same time a re-shaping, or re-composition of the antagonism between labour and capital. In other words, the history of money can be seen as the movement of the composition, decomposition and recomposition of class relations.

CREDIT EXPANSION AND CLASS STRUGGLE

Credit always plays an important role in the reproduction of capitalist social relations. It always involves an element of risk, a gamble on the future. If a capitalist asks a bank for a loan, he is in effect saying: 'I need money; I do not have enough money at the moment because the exploitation of my workers has not given me enough surplus value. But I shall exploit them sufficiently in the future to allow me to repay the debt with interest.' Credit always involves a gamble on the future, a bet which creates a fiction: the future exploitation of labour is treated as though it were present exploitation. If the capitalist succeeds in exploiting the workers sufficiently in the future, he wins his bet; if not, both he and the banker lose.

The same can be said at the level of capitalism in general: the expansion of credit is an admission that the present subordination of labour is not sufficient for the expansion of capital, that is for capital to exist as capital, as self-expanding value. The historical tendency is for capital to gamble and to bet on the future subordination of labour.1 Credit is a means of integrating the exploitation of labour with the realistion of value in circulation. This credit-based integration is always precarious. It presents a claim on the future subordination of labour and thus a speculative integration of labour into the capital relation. In other words, credit expansion which is not matched by a corresponding expansion of the exploitation of labour substitutes a fictitious subordination of labour for the present lack of subordination, and it always involves a gamble on future subordination: if capital loses the bet, there is a financial collapse.

Credit expansion is not the cyclical phenomenon that economic theory presents it to be. Rather, for capital, it is a way of escaping the present insubordination of labour. This insubordination is concealed and dressed up as an economic problem. As the economic expression of the insubordination of labour, credit expansion has become an apparently ineradicable cancer at the very core of capitalism. This is not the result of policy errors, as monetarists would claim, but reflects the dependence of capital on a force which it does not control: labour.

The great wave of revolutionary struggle at the start of this century which found its most intense expression in the October revolution of 1917, was overcome partly by violence, but partly by the expansion of credit in the 1920s, which led eventually to the Crash of 1929. The expansion of credit which preceded the Crash was the other face of the open insubordination of the October Revolution, a bet on future subordination.

After the trauma of 1917 and its echo in 1929, the expansion of credit was raised to a central principle of capitalist rule. The importance of Keynes as a theorist was that he provided underpinning for a process already taking place, the acceptance that the state could maintain order only through accepting and promoting the expansion of credit. After the Second World War, the labour question was controlled crucially through the expansion of credit. As Burnham indicates, the purpose of the Marshall plan 'was the raising of living standards “to resist the lure of Communism” ' (Burnham, 1990, p. 100, quoting Gifford, Advisor to the US Department of Commerce). The insubordination of labour was translated into an economic problem, into monetary instability.2

The expansion of credit was double-edged. On the one hand, it provided a means of integrating the exploitation of labour with the realisation of surplus value in circulation. On the other hand, the acceptance of credit expansion as a principle of rule meant acceptance of a tendency towards the inflationary dissociation of money from production. In these circumstances 'book-keeping' on a global scale became one of the most important 'mechanisms' of control. The prevention of a separation of money from production was based on the recognition of the dollar as a world currency and the subordination of other currencies to the dollar within pre-determined margins. 'Book-keeping' took the form of an alternation between deflationary pressure on and inflationary support of 'domestic accumulation'. In Britain, the so-called 'stop-go cycles' gave an economic name to the containment of labour on the basis of global demand management. Credit expansion provided a means of containing conflict, of taking the sharp edge off the open class battles that dominated the early part of the century and that had reappeared after the Second World War when the mood was decisively socialist.3 But the price paid was the loosening of the crucial nexus between the monetary system and the rate of productivity.

1970S AND 1980S: CREDIT AND DECOMPOSITION RECOMPOSITION.

The second great wave of struggle this century, that associated with 1968, gave a renewed impulse to the expansion of credit. The revolt of those years, as in the early part of the century, was contained in part through violent suppression, but to a much greater extent through the expansion of credit. For this reason, the consequences of '1968' (the accumulated wave of struggle that showed its crest in 1968) were less dramatic but in some ways even more profound than the upheavals of the earlier part of the century. The precarious relation between the monetary system and the rate of productivity was ruptured even more fundamentally, as reflected in the breakdown of the Bretton Woods system in 1971.

The struggles of the late 1960s meant that capital could no longer count on direct control of labour power in the factory. The exploitation of labour's productive power was confronted with depressed rates of profits. The exploitation of labour had become much too expensive at the same time as capital's ability to impose necessary labour upon social labour power was severely restricted. Further, the disruptive power of labour made itself felt in the late 1960s in resistance against the intensification of work and attempts to reduce wages (incomes policies). In other words, the working class made it clear that it would no longer permit itself to be exploited beyond certain limits.

Capital responded by fleeing the factory. The dramatic and unprecedented increase in global money capital was not matched by the reduction of necessary labour, the constitutive side of surplus labour. In other words, capital started to accumulate wealth in the money form without a corresponding exploitation of labour power in the factory. It seemed that capital had 'forgotten' the slow pace and dirty place of production. Capital tried to become clean: profits could be yielded much more easily in financial investment, and the extortion of 'interest' was promoted by the state through fiscal and anti-inflationary policies. Capital's attempt to 'liberate' itself from the contested terrain of exploitation and to go beyond itself by asserting itself in its most 'rational' form of money capital indicates the power of labour's insubordination. It indicates also the fictitious character of the containment of labour: the monetary accumulation was in fact an accumulation of 'unemployed' capital, of capital which had fled the factory and made money from betting on the future exploitation of labour. In other words, the speculative dimension of accumulation and the power of labour's insubordination are two parts of the same walnut.

Capital's flight from the factory into the fantastic world of the self-expansion of money recomposed the global relations of exploitation and struggle. The world market became a market in money. Capital's attempt to avoid the factory and to make money out of money created a much more fragile capitalism on a global scale. Without capital's global search for profit in money it would have been unthinkable for the Mexican debt crisis of 1982 to have had such an immediate knock-on effect on 'western' banks and through them on the global circuit of capital. In other words, capital's inability to impose expanding valorisation upon the productive power of labour was matched by a much stronger assertion of labour's disruptive power. The effects of the inability of the Mexican government to contain the social conflict over debt repayment which forced it to threaten default, made it clear that conflicts which would once have seemed small and marginal now had a disastrous effect on the stability of the capitalist world as a whole. The dissociation of money from exploitation provided a new unity to the international struggle against capitalism. This unity has its concrete materiality in the struggle against austerity.

The Mexican debt crisis of 1982 made clear that the formidable attempt at containing labour on a global scale within the capital relation through a policy of tight money had reached an impasse. The 'crisis of 1982' indicated a tremendous recomposition of the class relation. Seemingly 'marginal' pockets of resistance to the imposition of money-in-command threatened to transform the attempt to make money out of poverty into a severe global financial crisis. The deregulation of global credit relations not only undermined the corporatist integration of big labour. It also presented an opening of political spaces. 'Mexico 1982' signalled that 'money' does not only subjugate all social relations to relations of exchange. It signalled also that 'money' supplies a global unity to struggles against 'debt enforcement'. In other words, the global debt crisis indicated the recomposition of labour as the antagonist to the terrorism of money on a global scale.

'Mexico 1982' showed the disruptive power of labour on a global scale. In fact, the homogeneity of labour's resistance to the imposition of global debt enforcement reached its peak. The 'cycle' which had begun in 1971 with the detachment of the dollar from gold. and which had developed through the recession of 1974-5 and the Italian crisis of 1976, the pound sterling crisis of 1976 and the dollar crisis of 19774 came to a crunching halt during the recession of the early 1980s.

The initial response to the upheavals of 1968-1971-1974, the attempt to impose austerity by consent, had been abandoned by the late 1970s-early 1980s against the background of the so-called crisis of social democracy. The discrediting of a policy that sought to implement austerity by consent made itself felt in various ways, such as the 'winter of discontent' in the UK, the rise of new social movements in Germany, and Italy's movement of 1977.5 The deregulation of global credit relations had undermined the attempt to contain the labour question through policies of social reform and to integrate labour into the capital relation through selective corporatist policies.

Resistance to austerity by consent gave the political significance to the monetarism of the New Right and its strategy of imposing tight money without prior agreement and endorsement from the trade union movement. The financial crises of 1976-7 expressed labour's insubordination in economic terms. They signalled not only the end of a policy of class decomposition associated with corporatist forms of integration and exclusion but, also, a shift to a much more direct and indiscriminate attempt to deflate the 'economy' and to 'increase productivity'. The ascendancy of neo-liberal policies entailed a forceful and much more direct confrontation with the 'labour question'. The 'currency' crises of the 1970s paved the way for monetarism's indiscriminate attempt to tie money to exploitation.

The Mexican crisis of 1982 was a response to this attempt. The insubordination of labour which constituted both the 'currency crisis' and 'Mexico 1982' are thus closely connected. There was a new homogeneity of resistance directed against a policy of debt enforcement, a homogeneity which sprang from the undermining of the corporatist integration of big labour and the indiscriminate attack on social labour through tight money. This indiscriminate monetarist attack opened up tremendous political spaces. These spaces were integrated through, and defined by, money. Thus, the events of the 1970s reappeared in a much more forceful way in 1982. This is why, in 1982, the breakdown of control through tight money spread through the capitalist world with lightning pace.

The crisis of 1982 was not a crisis at the margins of the capitalist world. Rather it was a crisis at the very heart of capitalist reproduction. The monetarist project of using money as a means of disciplining labour power through debt and its enforcement, and through unemployment and devaluation of capital on a massive scale in the early 1980s, acknowledged the force required to reimpose capitalist command over labour for exploitation. However, it could reimpose command only by threatening the stability of the credit relations upon which existing social relations rested.

AFTER 1982: DECOMPOSITION THROUGH CREDIT

The indiscriminate imposition of money failed to redeem money and was thus hastily abandoned. The rapid shift from a policy of tight credit to a policy of credit expansion meant that capital, rather than confronting the working class directly at the place of production, embarked upon the socialisation, rather than the eradication, of debt. This response acknowlegded labour's insubordination and sought to contain it by decomposing class relations through the encouragement of debt. Credit expansion helped to decompose the homogeneity of resistance to austerity on a global scale. It integrated the working class into the capital relation through a credit-sustained boom.

The boom of the 1980s acted as a neutralising agent as it helped to coopt parts of the working class to the project of prosperity. The unity of opposition to the imposition of money in command was thus broken. The credit-sustained boom of the 1980s, which built on the continuous transfers from the so-called debtor countries to the so called metropolitan countries, acknowledged the fact that sustained accumulation is the best guarantee for the fragmentation or decomposition of class relations. This decomposition involved not just a fragmentation of unity as between the metropolitan countries and 'debtor countries'. It involved crucially the decomposition of class relations within each country. Capital brought to bear its monetary destruction on every point of the social unification of labour as the antagonist to debt enforcement. Poverty, unemployment and marginalisation of superfluous labour power coincided with prosperity. The boom vindicated the monetarist imposition of market equality. The decomposition of resistance to austerity was based on poverty, a poverty which was the mirror image of a credit-driven prosperity. In the face of poverty, prosperity broke the homogeneity of resistance against austerity.

The significance of credit expansion as a central principle of capitalist rule reasserted itself. The policy of deregulation and the assault of the global decomposition of labour's antagonism to money went hand-in-hand. As Negri (1989, p. 134) puts it, the 'reconstruction of the market means giving a free hand to the individualistic pillage of social cooperation; it means to promote the ignoble legend of competition ... At the head of the reconstruction of the market, capitalist ideology places the objective of segmenting the labour market.' (1989, p. 134). Thus, credit expansion not only sustained the exploitation of labour in an increasingly fictitious dimension. It also helped to promote the notion of the market and thus to counter working class solidarity through the impartial imposition of abstract equality, i.e. the equality of money. The policy of market freedom equated citizenship with the power of money. Everybody is equal before money. This was a formidable attempt to 'establish conditions of separation and detachment, and effective obstacles to the cooperative process' (1989. p. 134). The decomposition of class relations through the market-based pluralism of the New Right depended on the continuous reproduction of 'the dual society' (1989. p. 134). Against the background of a continuous dissociation of money from exploitation, the 'dual society' was not an end in itself but rather the condition of capitalist reproduction, a condition which had itself to be reproduced: the decomposition of class relationships on the basis of market equality had to be durable in order to prevent the recomposition of labour as the antagonist to money's disinterested and increasingly violent rule.

The monetary decomposition of class relations through the encouragement of private ownership involved, as its presupposition, the equally individualising enforcement of debt in the courts. The ready extension of credit and the coercion entailed by the collection of debt are two sides of the same state-sponsored coin. The life blood of the boom was credit and the price for the control of credit expansion was paid by the working classes in so-called debtor countries, as well as by the unemployed and impoverished. Those fortunate enough to participate in the boom were controlled by the threat of marginalisation. They faced harsh penalities should they fail to respond adequately to the market forces or should they be in disagreement with 'management's right to manage'. The sack, or lost wages due to strikes, meant that contractual agreements on interest payments might be disrupted. The threat of unemployment was reinforced by the threat of a forcible collection of unpaid debt, eviction and thus homelessness and poverty.6 The disciplining power of debt and precarious work cannot be overestimated. The incentive not to endanger the bases of life, such as housing, education, health, clothing, heating, and so forth, undermined solidarity with those whose poverty stood as a constant warning.

The decomposition of class relations rested on the benefits generated by the boom, the tight control over that part of public spending that supported the working class, the enforcement of law and order, the encouragement of property ownership and the encouragement of personal debt. The pacification of the class struggle through a credit sustained boom and a policy of state austerity belonged together. The overt face of the credit-sustained imposition of the wage relation was the use of the welfare state as a means of making people work for their benefits and of supervising social relations on the basis of poverty.

The reconstitution of the circuit of social capital on the basis of credit expansion and monetary attack on the working class extended the non-resolution to labour's insubordination into an increasingly fictitious dimension. The Keynesianism of the New Right speculated on the future subordination of labour by diverting surplus capital into financing the growing mountain of public and consumer debt on a global scale. Credit-sustained accumulation reproduced the speculative dimension of accumulation, while the rise in productivity rested on the scrapping of unproductive plant, the shedding of labour, and the intensification of work. At the same time, the credit-sustained accumulation made possible the fragmentation of the working class on the basis of a divisive imposition of the wage relation through the conceding of wage rises to some and the destruction of the relation between public spending and wages.

The last decade did not represent a frontal assault on the working class. Sections of the working class enjoyed a growth in living standards, even if they paid the price of intensification of labour. The use of public expenditure focused on the disorganisation of class premised on the divisive orientation of collective welfare provision to the market through, for example, contracting out of services, deregulation of wage protection, integration of employment and social policies and encouragement of property ownership. The decomposition of class relationships in terms of property owner and citizen involved the use of repressive means of political domination. The monetary expansion which responded to the homogeneity of labour's antagonism to the enforcement of debt in 1982, was overtly repressive in form. The decomposition of class relations through the imposition of the abstract equality of money meant that the positive rights and entitlements associated with the Keynesian era were pushed aside: the right to welfare was attacked; the right to employment disappeared; the right to housing was delegated to market forces, the right to health care became more and more selective; the right to education was eroded; the right to enjoy values other than material gains was restricted to those financially able to entertain a happy life. Rights were redefined: instead of the right to employment, the right to go in search of employment ('get on your bike') was proclaimed. Other rights either disappeared or were severely restricted: the right to campaign for higher wages, health and safety standards, for example, became more and more restricted, if not abolished altogether,7 during the 1980s. The erosion of 'rights' coincided with the privatisation of services. deregulation of wage protection and the encouragement of private insurance against risks, such as ill-health.

Money is a great 'equaliser'. It showed its true potential to push aside 'rights and entitlements' which were associated with the institutionalisation of labour's political power after the Second World War. Money knows no special privileges. It treats poor and rich as equals. Money does not know the 'value' of health care, it only knows the cost of health care and the profit which can be gained from it. The attack on the welfare state involved the injection not only of commercial criteria but also the attempt to impose the spirit of in equality, i.e. the inequality of the private market individual. The imposition of the abstract equality of money involved the imposition of inequality because 'the power which each individual exercises over the activity of others or over social wealth exists in him as the owner of exchange values, of money' (Marx, 1973, p. 157). The decomposition of labour on the basis of 'equality' negated and disrupted the socialisation of labour's antagonism in favour of the reconstitution of social relations on the basis of financial ability; the equality of the market individual before the power of money. The attack on collective provision in favour of market freedom and choice encouraged individualistic forms of social cooperation as amply expressed in the en couragement of greed associated with the modern personification of the erstwhile clerk: i.e. the yuppy. The abdication of public responsibility for private provision and the erosion of those provisions that remained in public responsibility revolved around the market-led re-composition of class relations on the basis of the distinction between the strong and able and those who are not. The market-led reconstitution of social relations involved the imposition of formal equality through selective access to hierarchical values. All this involved the imposition of the lurid face of equality which is characteristic of an organisation of work based on capitalist exchange relations. The imposition of poverty, hierarchical values and individualistic forms of social cooperation were used as a means of countering solidarity on the part of insubordinate labour.

The great institution of civilisation, money, supported itself by making those whom capital found it difficult to exploit pay for the promiscuous and incestuous speculation of money with itself. The containment of labour in the form of capital took on the forms of credit and fiscal expansion (permitting a containment of labour's productive power in ever-more speculative forms), on the one hand and, on the other, the expansion of pacification costs designed to decompose class relations and to destroy the Keynesian nexus between public expenditure and wages. The monetary decomposition of class relations involved a repressive use of public expenditure, conferring on those upon whose passivity the stability of a policy of state austerity rested the generosity of the market (wage increases, shareholding, owner occupation), while imposing poverty. Work, and repressive bureaucratic supervision upon those pushed to the margins of the labour market.8

During the 1980s, the welfare state was progressively transformed from an institution designed to maintain workers for capitalist exploitation into an institution not only of controlling those pushed to the margins of social life but also of imposing poverty and of trapping and forcing people into low paid employment. However, this transformation of the welfare state was expensive and proved difficult to implement, as can be seen by the uneven development in the reconstruction of the welfare state. The attack concentrated on those sections of the working class, such as women, young workers, the unemployed and 'racial' minorities, which could be separated from the organised labour movement much more easily than others. On a global scale, the attack focused on those hardest hit by the recession of the early 1980s. The antagonism to a control through debt was thus decomposed on the basis of what Hirsch (1985/1991) refers to as the 'southafricanisation' of metropolitan countries. This characterisation is shared by Negri (1989, p. 97) who argues that the 'ideal of modern-day capitalism is apartheid'. However, and as Negri insists, unlike Hirsch, apartheid is the ideal but not the reality. The reality was insubordinate labour and its containment through the decomposition of class relations. The aim has been to avoid, even at the cost of unrestricted credit expansion, any overt form of working class insubordination.

The decomposition of labour along the lines of a 'dual society' imposed upon the class conflict a pluralist conflict over status and position in society. Hierarchies and pluralist conflicts were imposed and reinforced. These run counter to class relations and channelled class conflict into forms which divided social relations according to wage differentials, according to gender, according to 'race', according to 'region', according to religion, according to skill, according to 'nation' (bloodiest of all) and according to rich and poor countries.

Divisions increased the conflict amongst the 'segments'. As Cleaver (1993, p. 37) puts it in discussing the United States, 'counterattacks against particular sectors, expecially those whose demands and struggles cut transversally across numerous other conflicts (e.g. the women's movement, "minority" movements, and immigrant self-mobilisation) have involved fuelling the most vitriolic ideologies of human division – sexism, racism and ethnic jingoism'. Instead of the abstract equality of money being confronted with the demand for social self-determination, the decomposition of class relations resulted all too often in a conflict which balanced society: the political response to already ghettoized 'minority populations' supported 'juridical and legislative attacks on gender rights' and 'racial rights as well as welfare state cuts' (see Cleaver, 1993, p. 38). The decomposition of class relations helped, thus, to make 'conflicts' constructive for capital and capable of being exploited for the removal of 'protective rights'. However, a constructive conflict is always precarious and does not lack its destructive potential.9 The war in the former Yugoslavia stands as a warning.

The imposition of tight money rested on a systematic exercise of state power that defined social activity on the basis of the market – poverty is not unfreedom. The shift in emphasis of the meaning of consensus to unquestioned obedience and the crushing of 'disobedience' through repressive display of state power reaffirms negatively the difficulty capital faced in securing the subordination of social relations to the abstract equality of exchange relations and, within exchange, of exploitation.

The decomposition of class on the basis of the categories of property owner and citizen was made possible by sustained accumulation and an array of state violence, stretching from the repressive use of the welfare state to the paramilitary suppression of dissent and the legal and monetary disciplining of trade unions to police their members without leaving them in exchange even a semblance of political involvement. The highly differentiated mixture of attack and conciliation involved the policing of social relations by a state that was prepared to resort to provocation and highly differentiated use of force.

AND YET ...

The destruction of the conditions of homogeneity of the class struggle against the imposition of money-in-command went hand-in-hand with a continuous dissociation of money from exploitation. The monetary and legal decomposition of class relations and the attempt to recompose social relations on the basis of the individualising and fragmenting form of the wage relation was based on credit-sustained accumulation. During the 1980s, speculation was not a sign of a lean and fit capitalism but an expression of insubordinate labour. Insubordinate labour was not only contained through speculation: it existed through speculation. Monetarism's control through book-keeping was never successful, however painful the results of its attempt.

The very intensity of the attack against labour underlines the depth of the crisis of capital. In spite of all the hardship, all the misery, all the cost-cutting, all the poverty, all the intensification and restructuring of labour, capital is still incapable of reproducing itself other than by credit expansion, other than by committing more and more of the surplus value not yet produced. In spite of all the triumphs of capital, it seems incapable of ridding itself of the insubordination which has entered into it like a chronic disease.

During the 1980s, the speculative dimension of accumulation expressed the speculative containment of insubordinate labour. The unregulated expansion of credit and the abrasive attack on the working class are closely interconnected. The more the dependence of capital on labour was sustained by credit, the more the state had to guarantee credit through the eradication of public deficits. The more the state cut back on welfare spending, on housing, health and social security, the more people were forced into debt in order to maintain a tolerable standard of living. The more the whole existence of capital was based on credit, the more capital needed to push through changes in working practices, changes in technology and intensification of work as well as reductions in state expenditure in order to sustain the validity of credit. The more the state sought to reduce its social expenditure, the more private debt became a means either of securing the newly-won property rights or of sustaining basic subsist ence levels, such as housing. Besides, the growth of credit increased inflationary pressure and speculative attacks on currency. High interest rates helped to control inflationary pressure and to liquidate some money as personal bankruptcies and repossessions increased. The disciplinary force of the socialisation of 'bad debt' is enormous. The inability of capital to control social relations through a policy of state austerity is oppressive in terms of individualising private debt and its enforcement. However, the attempt to decompose the homogeneity of resistance to money had a contradictory result in that the fragmenting attack on social relations involved the reconstitution of class relations on the basis of debt. The republic of individualised property owners turned, by the 1990s, into a republic of debt. The inflation of credit is the most powerful expression of the fragility of capital's containment of labour.

By the late 1980s, it became clear that the expansion of credit was not matched by an integration of labour with an expansion of capitalist accumulation. The attempt to deflate the money supply, and thus to guarantee credit through taxation, by a policy of state austerity was successful in containing class struggle through a monetary and legal decomposition of class relations. However, it failed to decompose the working class into a profitable labour force. The credit boom of the 1980s turned into a credit crisis. The integration of abstract labour with the value form is based on bad debt. The attempt to guarantee credit growth through poverty, increased job insecurity, and an attack on trade unions which sought to hinder a collective response by limiting the scope for trade union organisation and action, has failed. Capital has to face labour in the contested terrain of production. It cannot run away forever because the rising ratio of debt to surplus value will make it increasingly difficult to make money out of debt.

Over a period of two decades money has emerged as a central axis of class conflict. By the 1990s, the weakness of productive activity and the instability of the financial system presents the failure of neo-liberalism to secure the future exploitation of labour in the present. Debt calls into question the monetarist attempt to recompose class in terms of the categories of property owner and citizen. The individualising monetary decomposition of class relations comes to the fore in its most violent form: the exhaustion of the illusion of prosperity and the transformation of prosperity into debt and bankruptcy. Far from stimulating investment, employment and output, the result of credit expansion in a tight monetary framework was the deterioration of conditions and mass unemployment. There was no break through in investment. Credit expansion was used for speculation rather than for the generation of surplus value. The use of debt as an instrument of control, and the failure of this control in the form of a speculative boom, shows the strength of labour, even at the moment of defeat, to resist the recomposition between necessary and surplus labour. The result of this resistance was an integration of labour into the capital relation on the basis of an irredeemable expansion of credit.

The reconstitution of the circuit of social capital does not just require, as during the 1980s, a divisive and fragmenting decomposition of class relations in terms of the property owner and citizen. Rather, it involves the imposition of valorisation upon the labour process. Such an imposition implies not just the intensification of work and the repressive exclusion from production of those whom capital is forced to disregard as being inessential. It entails the transformation of money into truly productive capital. This transformation presupposes the subordination of labour to an expanded extortion of surplus value. In other words, money, rather than betting on future exploitation, has to be transformed into an effective command over labour in the present. This means that the exploitation of labour has to deliver rates of profit adequate to redeem debt and to allow for expanded capitalist accumulation. This exploitation of labour presupposes the recomposition of the relation between necessary and surplus labour. The recomposition of this relation is still beyond the horizon. There is no surer indication than the ballooning of bad debt that capital has not succeeded in imposing a recomposition of the relations of exploitation adequate to the accumulated claims upon surplus value.

The experience of the last twenty years suggests that the transformation of money into truly productive capital is both essential and impossible. Capital cannot run from labour for ever, yet the experience of the last twenty years suggests that it is also incapable of confronting labour on the terrain of production in a way that would restore a sound basis for capital accumulation. For the last twenty years, everything possible has been done to avoid a repeat of 1929, not for humanitarian reasons, but because a comparable destruction of fictitious capital would now be not at all comparable in its magnitude and its implications: it would shake capitalism to its very foundations. When a repeat performance of the Crash of 1929 threatened in October 1987, even the most fierce monetarists advocated expansion – anything to avoid the catastrophe, and confrontation, that a slump would bring.

There seems to be no way forward, for capital or for labour. Yet this is not the first time. Writing in 1934, Paul Mattick suggested that capitalism had entered an age of permanent crisis:

The periodicity of crisis is in practice nothing other than the recurrent reorganisation of the process of accumulation on a new level of value and price which again secures the accumulation of capital. If that is not possible. then neither is it possible to confirm accumulation; the same crisis that up to now had presented itself chaotically and could be overcome becomes permanent crisis (1934/1978, p. 94).

In contrast to previous crises of capitalism, which had always led to a restructuring of capital and to a renewed period of accumulation, the crisis of the 1930s appeared to be so profound and prolonged as to be incapable of solution, Crisis. Mattick suggested, had ceased to be a periodically recurring phenomenon and had become an endemic feature of capitalism.

Mattick's suggestion, pessimistic though it was, turned out to he far too optimistic. Capital did resolve its crisis, in blood. Capital was restructured and the basis for a new period of accumulation created. This 'golden age' of post-war capitalism is now a memory and once again it would seem that we are in a situation of permanent crisis. It is possible that the crisis will be permanent, with a progressive 'southafricanisation' or 'brazilianisation' of the world, a gradual in crease in inequality. violence, famine, war. It is possible too that the crisis will not be permanent. that it will in fact be resolved: what the resolution of 'permanent crisis' can mean stands behind us as a warning of a possibly nightmarish future.

The argument proposed here suggest also another possible future. The crisis of capital is the crisis of capital's dependence upon labour. The 'permanence' of the crisis is not only a warning but a message of hope. The hope is that, if capital, for all the intensity of its struggle, has not yet achieved the decomposition of the working class into a profitable labour force, it is because of the enormous power of insubordinate labour. Currency crisis, debt crisis, recession and so forth, are false names for the crisis of the capitalist exploitation of labour. 'Capital' cannot be blamed for its crisis. Rather, credit should be given to whom credit is due: the insubordinate existence of labour. Theoretically and practically, this power must be made manifest.

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• 1See also Bologna's (1993) intriguing commentary on Marx's writing on money between 1856 and 1957.
• 2On the politics of post-war reconstruction, see Burnham (1990).
• 3Of course money was not the only element. Rearmament and McCarthyism also played an important part. McCarthyism is merely the US-American expression of virulent anti-communism which was supported on a global scale by the theory of totalitarianism which equated fascism with communism. This equation destroyed any connection between fascism and capitalism. Totalitarian theory worked like a washing powder: capitalism cleaned itself from fascism, war and destruction, and reappeared as the true and only lover of humanity. The Cold War was the lover's honeymoon.
• 4See Bonefeld's 'Monetarism and Crisis', Chapter 3 in this volume. See also Marazzi's, 'Money in the World Crisis', Chapter 4 in this volume.
• 5See Bonefeld (1993), Hirsch (1980) and Lotringer and Marazzi (1980), respectively.
• 6See Ford (1988) on debt and individualisation.
• 7For example, in the United Kingdom, the young unemployed on government training schemes are not regarded as employed by the Department of Health and Social Security. This means that they are not entitled to industrial injury benefits.
• 8The dispersion between high and low paid workers increased dramatically. According to S. Brittan (Financial Times, 6 January 1994) it 'has increased to levels greater than anything since the 1940s'. See also Mitter (1986).
• 9On the dialectical continuum between contructive and destructive conflicts, see Agnoli (1992).