In the worldwide renaissance of interest in the work of Karl Marx of the past decade, a renaissance well-timed for the current (August 2007-November 2008) textbook liquidity crisis resulting lawfully from the anarchic character of capitalist accumulation, one key concept of Marx still remains in the shadows: the expanded reproduction of society and of nature.
SOCIAL REPRODUCTION FOR BEGINNERS:
BRINGING THE REAL WORLD BACK IN
"The animal is immediately one with its life activity, nor distinct from it. The animal is its life activity. Man makes his life activity itself into an object of will and consciousness. It is not a determination with which he immediately identifies. (The animal)...produces in a one-sided way while man produces universally...The animal only produces itself while man reproduces the whole of nature."
K. Marx, 1844 Manuscripts
In the worldwide renaissance of interest in the work of Karl Marx of the past decade, a renaissance well-timed for the current (August 2007-November 2008) textbook liquidity crisis resulting lawfully from the anarchic character of capitalist accumulation, one key concept of Marx still remains in the shadows: the expanded reproduction of society and of nature. As increasingly erudite and radical “re-readings” of Marx slough off a century of Social Democratic , Stalinist and Trotskyist ideology and deformation (that is, statist and productivist deformation), as book after book rehabilitates a concept of “value” in full recognition of Marx’s lifelong involvement with Hegel, contemporary critique still fails to do full justice to Marx’s idea that
“Accumulation requires the transformation of a portion of the surplus product into capital. But we cannot, except by a miracle, transform into capital anything but such articles as can be employed in the labour process (i.e. means of production), and such further articles as are suitable for the sustenance of the worker (i.e. means of subsistence)…In a word, surplus-value can be transformed into capital only because the surplus product, whose value it is, already comprises the MATERIAL COMPONENTS of a new quantity of capital.” (Capital, vol. I, pp. 726-727) (our emphasis)
The modest aim of the following essay is to reconnect with the insight that “surplus value” in Marx is not only an abstraction (however necessary) but also a surplus of concrete goods and services that are either “productively consumed” in the expansion of what Marx called Dept. I (production of means of production) or of Department II (production of means of consumption) , or else they are used by the contemporary vast army of unproductive consumers, thereby ceasing to be capital and “falling out” of the “circuit” of capital and depleting rather than expanding the reproduction of society and nature. It aims to show that Marx’s materialism (different, as he insisted in the First Thesis on Feuerbach, from all previous materialisms by its incorporation of the ‘active side developed by idealism’) was no mere epistemological stance but was, in fact, what Engels later called it, namely “the germ of a new world outlook”. The “sensuous transformative activity” of the Theses was not some later-forgotten youthful lyricism but informed Marx’s views of science, technology, natural history and resources, population, agriculture and ground rent, and are the (generally more implicit than explicit) underpinning of Capital. As such, they are of course of the greatest relevance today.
In taking seriously Engels' remark, we rehabilitate Marx's method as a theory not only of world history but of biosphere and ultimately universe history. Such an approach allows us to see the atmosphere created by much of the ecology movement, from its 1960’s/1970’s emergence with the Club of Rome, the (MIT) Meadows Report on the Limits to Growth and John D. Rockefeller III’s Zero Population Growth to its contemporary incorporation into the mainstream as many aspects of green capitalism, as an updated Malthusianism (Malthus, aside from his famous argument about the arithmetic growth of food production and the exponential growth of human population--refuted in his own time by innovations in British agriculture) also predicted that London would be buried in horseshit from horsedrawn carriages ca. 1890). We can thereby pinpoint LINEARITY as a fundamental aspect of bourgeois ideology, and see the non-linear “apples to oranges” effect of periodic revolutions in technology, which move capitalist society as a whole from one “manifold” to another in a way that cannot be extrapolated from the earlier manifold but which involve a “leap”, a new standard of value. Both the productivist Ricardo (the “Hegel” of classical political economy, the “most advanced bourgeois viewpoint” as Marx said in Theories of Surplus Value) and the anti-productivist Malthus posed “end of the world” scenarios that rested on the assumption of non-innovation, or at best mere linear innovation of technology and of the resources on which technology could be based. Capitalist ideology historically reified many things as “fixed”: fixed linear development, fixed resources available to society, fixed human activity in the division of labor, which latter (following the 1844 Manuscripts definition of an animal as “producing only its own nature”) implies the “animalization” of human beings in capitalism (cf. our opening quote), culminating in the bestiality of fascism. (FOOTNOTE; This is spelled out in more detail in my essay Race and the Enlightenment, Part II, on the Break Their Haughty Power web site http://home.earthlink.net/~lrgoldner).
Different societies historically had differing views of nature, “projections” of their ideologies into nature (e.g. Darwin’s replication of bourgeois social relations, directly influenced by Malthus, in his account of evolution), but the Theses on Feuerbach mean essentially that human biosphere activity simultaneously and lawfully creates both “new natures” and new “human natures”. Oil in the 19th century went from being a curiosity used by Arab nomads for their lamps to the fundamental energy resource of capitalism; oil was not “visible” to an earlier phase of capitalism that did not have the technology to make use of it, just as coal had been largely invisible to 17th-century wood-burning technology, leading to a “wood shortage hysteria” through the depletion of Europe’s forests quite similar to some ecocatastrophe scenarios circulating in recent decades. By 1900, the new global relation to the biosphere (which we can broadly characterize as the real domination of capital, founded on the increased intensification of production by technology) was being newly theorized (consciously or not) in areas we associate with such names as Picasso, Joyce, Einstein, Freud and many more. There is indeed an ecology crisis, but we can counter the “New Age” and increasingly mainstream claim that it is due to “too much technology” with a critique showing how much of it is due to blocked technological development. Exhibit A for the prosecution is the car economy.
Marx's "sensuous transformative praxis" meant, simultaneous with social revolutions, the periodic human revolutionizing of the biosphere. Put simply if not crudely, the earth could support 10 million human beings 10,000 years ago, and 6+ billion today. Obviously this could only happen through a series of revolutions in "biosphere praxis" simultaneous with revolutions in social relationships. The "mere" idea of the number of human beings who could be supported by an acre of land is a measure for the "energy potential" of given societies: handfuls for some early societies, thousands today.
And lest anyone think this is a mere quantitative approach to "population growth", we emphasize rather the "quality" of human being, the generally available "practical mastery" that a specific society manifests in its members, in the sense that a decently-schooled 10th grader today knows more about physics than Isaac Newton ever did, as an imparted social legacy “built into” contemporary social practice. A society either reproduces this legacy in an expanded form or it does not, and quickly goes backward. We can compare such an understanding with the 11th-century English Domesday Book, the first attempt at “national accounting”, the latter being an example of a reified feudal “animalized” understanding of wealth, a mere counting of heads, livestock, crops, to make the point that population and wealth are not a mere additive question of numbers but of “quality” in the social powers available to the widest numbers of people. This critique of Malthusianism makes possible both an understanding of Europe’s post-1950’s virtual population stagnation (minus immigration), a stagnation now showing up in the “pensions crisis”, as well as of the vast peasant populations of the Third World which compensate with numbers for poverty and the weakness of sustaining social institutions. Stagnation or contraction in the advanced capitalist sector, and overheated population growth arising from backwardness in the Third World are two sides of the same coin. Contrary to IMF and World Bank Malthusianism, to arrive at a rational rate of population growth, it is necessary to RAISE living standards to both make possible the reproduction of “state of the art” skilled labor power and to eliminate the need for vast quantities of unskilled labor power that compensate for high mortality rates and lack of social support for the elderly.
The “germ of a new world outlook”, indeed.
“Surplus value”, once again, is not just an abstract category that it was and is for so many Marxists past and present; in a way similar to Marx and Rosa Luxemburg, it is necessary to understand “surplus value” concretely, as a mass of producer and consumer goods, the nature of whose material content and concrete consumption (i.e. by whom) is of utmost importance for understanding an economy. Instead of getting drawn into endless and tedious (and formal) arguments about the “falling rate of profit”, we also insist on the “circuit” (Kreislauf in Marx’s usage in Capital) of a society’s REinvestment of the social surplus into expansion (or its unproductive consumption of the surplus in the case of contraction) to further means of production and labor power, as the ultimate criterion for determining a system’s dynamic. This idea, once grasped, shows the “affluent society” of the 1950’s and 1960’s, not to mention the post-1973 U.S. economy, “the richest country in the world”, to be a decaying society living on borrowed time (and increasingly on borrowed funds). The dominant economic ideology solves the problem of counting apples, oranges and pears by classifying all of them as “apples” in the banal distorted concept of “GDP” where the production of guided missiles, skyscrapers for corporate bureaucrats and police locks to protect inhabitants of investment-starved cities is counted indifferently alongside the necessary consumption of the working class, including its education, health care and leisure.
For Hegel and for Marx, an object (in Marx’s case, a commodity) has no “discrete” existence “in itself”, but is rather a RELATIONSHIP (in Marx’s case, a self-relationship of production and reproduction), mediated by an object.
S/(C+V), then, is not merely the “rate of profit” of capitalism, but also the “rate of surplus energy” for any society, past, present or future. Further, it is emphatically NOT a reductionist “quantitative” ratio, but rather (to use Hegel’s term, easily evident in Marx) a “relationship that relates itself to itself”, a SELF-REFLEXIVE relationship (Marx defines capital as “value valorizing itself”). Every society (largely unconsciously, particularly in the case of capitalism) “deliberates” on its use of S, and it is in this “deliberation”, however mediated by social relations and ideology, that the “sensuous transformative praxis” of the Theses on Feuerbach—the unique ability of human beings to express their “species-being” in the qualitative transformation of the biosphere and hence of themselves—is practically linked to social reproduction.
One can understand this on four successively deeper levels:
1.the total social product (the capitalist myth of “GDP”) as the “sum” of all individual capitals, or a “total price”; (market price)
2.the total social product as the total value of all individual capitals,
understood (in an actually Marxist view) as the total social labor time necessary to reproduce the total product today; (total value)
3.the total social product as the total literal (“use value”) goods and services, divided into means of production and means of consumption, available
for either expanded or contracted social reproduction;
But all of these successive approximations are reified expressions of
4. S/(C+V) as LABOR POWER IN RELATIONSHIP TO ITSELF, the ultimate reality of world history. Even the most sophisticated representation of S/(C+V) in terms of social labor time of reproduction is somewhat reductionist, because expanded reproduction is constantly revolutionizing the “standard” of value as measured in labor time, creating an “apples to oranges” problem for any attempt to quantitatively express social reproduction over time.
Capital, as self-valorizing value, is the commodified inversion of self-developing labor power.
Or, as Marx put it, in Pre-Capitalist Economic Formations:
"...When the narrow bourgeois form has been peeled away, what is wealth, if not the universality of needs, capacities, enjoyments, productive powers, etc. of individuals, produced in universal exchange? What, if not the full development of human control over the forces of nature--those of his own nature as well as those of so-called "nature"? What, if not the absolute elaboration of his creative dispositions, without any preconditions other than antecedent historical evolution which makes the totality of this evolution--i.e. the evolution of all human powers as such, unmeasured by any previously established yardstick, an end in itself? What is this, if not a situation where man does not produce himself in any determined form, but produces his totality? Where he does not seek to remain something formed by the past, but is in the absolute movement of becoming?"
This is emphatically NOT to say that quantitative (“microeconomic”) methods of partially representing the process are not possible and necessary . Rather, we apply Hegel’s formulation that “quality determines quantity” to the critique of political economy, as to mathematics. (In the midst of the current world liquidity crisis, the “rocket scientists” of Wall Street and London are learning the hard way that quality indeed determines quantity, as their computer models demonstrate once again that linear micro-rationality intensifies to macro-absurdity and as they implode in huge losses and the appearance of statistical “black swans”.) Hegel’s formulation means, therefore, that the relationship of labor power to itself, understood as the totality of human biosphere activity, both in social revolution and in new praxis in nature, is a process where innovation periodically sweeps the decks of past standards of measurement and “makes the petrified relationships dance”.
This biosphere praxis conception from the Theses on Feuerbach underpins the “critique of political economy” as presented in the 4 vols. of Capital. Marx’s critique , right to the end, ultimately rests on the fate of individual creativity in bourgeois society and is quite consistent with the critique of capitalism already present in Marx’s 1844 Manuscripts. The schism at the heart of bourgeois life (abstract universal human freedom and concrete individual private disfigurement) posits as its overcoming the taking of species-powers into concrete individual life, the creation of the conditions for the concrete universal/social individual. This individual will no longer be required to “mediate” his/her creative powers through commodity exchange, but will rather experience them as IMMEDIATELY social. Until relatively recently, most “hard-headed” Marxists condescendingly viewed the 1844 manuscripts as “Marx’s writings before he became a Marxist”. The view developed here, rather, connects them to the full 4 volumes of Capital and beyond to a theory of human transformative participation in biosphere and universe history.
We thus underscore not merely the separation of the abstract bourgeois citizen from the concrete existing individual, but the separation of that individual from “universal labor”, (what Hegel called, again in an alienated way, the realm of freedom in art, philosophy and religion where man, above all the Prussian monarch, “labored universally”) which in modern capitalism became the scientific, artistic and intellectual creativity of society, activities generally reserved for a group of specialists themselves cut off from real praxis in nature. When the concrete individual can at last experience “universal labor”, what Marx in the Grundrisse (p. 325 of the 1973 translation) called “the full development of activity itself” as immediately social and therefore practical, these alienations and separations are overcome.
In the Theses, as indicated above, Marx refers (Thesis 1) to the “active side developed by idealism”, over and against all previous materialisms “which do not understand activity as objective”. What connects Descartes to Hegel, via Spinoza and Leibniz, is the idea of “actual infinity”. (I retain this term not in any mathematical sense but as it comes down to us from philosophy, above all in Hegel.) Bourgeois ideology conceives of infinity as endless repetition toward a goal which is never reached, as presented in Zeno’s paradoxes. Bourgeois ideology could not free itself from this “asymptotic” ever-closer approximation of a “bad infinity” (the term is also from Hegel), which expressed in a different way an atomistic reductionist vision of the universe as consisting of ever-smaller points and instants. In addition to the above comments on the formal representation of expanded reproduction, this is of course of the greatest relevance, for example, to Rosa Luxemburg’s mass strike conception, in which there is no “additive” “linear” approximation either (the reformist view), but rather a “qualitative leap”, as it also informs her pamphlet “Reform or Revolution”.
Actual infinity, by contrast, sees infinity not as an ever-receding “goal” at the end of a process of infinitely small steps, but as EXISTING IMMANENTLY IN THE PRESENT. What connected Descartes to Hegel and Marx was the idea that the banal recognition of any specific “fact” presupposed immanently and simultaneously a self-consciousness RE-cognizing of that “fact”. Just as there is in Marx no commodity in itself but ultimately the whole circuit of M-C-M’ valorization presupposed in the existence of any specific commodity, there is in the development from Descartes to Hegel the growing recognition that the “actual infinite” present in cognition is the presupposition of any sense-certainty perception whatsoever. Hegel culminated this process in philosophy (that is in ideology) by immanently unfolding the activity of “world spirit” from banal sense-certainty data; Marx relocated it in the concept of “sensuous transformative praxis”, the “germ of a new world outlook” best presented in the (incomplete) 4 volumes of Capital, wherein he immanently unfolds the world history of capitalism, and demonstrates capitalism’s transitory nature, from the banal individual commodity. Creativity IS the “actual infinite” in man, and all post-Hegelian philosophy (above all the line running from Nietzsche to Heidegger to contemporary post-modernism) is a conscious or unconscious assault on the idea of “actual infinity”, much in the same way that modern neo-classical economics buried even the partial truths of classical political economy in response to the appearance of Marxism. 
In this world historical view, we can effectively resolve the relationship S/(C+V) into F/N, or the relationship of freedom and necessity (as debated in Western philosophy over centuries) : in any given society, “F” or the social surplus being the freedom of a society to expand or stagnate or decay, depending on the use of that surplus. The “species activity” which increases the F/N relationship is the concrete “praxis” meaning of realized actual infinity. Again, this is not a mere ratio but rather a (self-reflexive) relationship which periodically “makes the reified relations dance”.
Of course, not every “self-reflexive” thought is “actually infinite”.
To say that “actual infinity” is “now” is to say that the “new conceptualization” that moves social reproduction in the broadest sense to a higher level
(i.e. is negentropic) is increasing the relationship F/N, and is therefore
“appropriate” (the term is from Descartes) to the “current state of the universe”, or more immediately historically, the current impasse of society. True creativity, in this conception, always takes place in the dialectic of freedom and necessity, i.e. in the creative transformation of necessity. (Contrast this with the old II, III and IV International canard that freedom is the “recognition” of necessity.) In the move from wood-burning to coal-burning technology, early capitalism superseded a prior necessity
(the availability of trees for fuel) and conjured up a new one (the availability of coal).
This “actual infinite” view has the greatest implications first of all for the unresolved problem of the schema of expanded reproduction in the concluding sections of vol. II of Capital. (It is highly significant that Marx himself, in the latter part of his life, was working his way through Hegel’s Logic, studying all the 18th-century mathematicians discussed by Hegel, as part of his attempt to find a mathematical expression of expanded reproduction. Marx’s Mathematical Manuscripts were first published in Russian and in German in 1968, They give strong support to the idea that Marx understood the signal importance of “actual infinity” and was looking for a mathematics to express it. Marx, unfortunately, was oblivious to the revolution underway in German mathematics in his own lifetime. Marx’s search for a definitive mathematical representation of expanded reproduction was a shortcoming in the understanding of his own method, because he had already perfectly stated the ultimate limits of capitalist production in non-mathematical terms, both in the Grundrisse and in vol. III of Capital. One only wishes that the demonstration, culminating in Hegel (and continued in the 20th century by Goedel) of the limits of purely formal-axiomatic representation (as for example of expanded reproduction) could have had an impact on the 1970’s-1990’s debates about the so-called “transformation problem”, and particularly on spurious Sraffa-inspired views that criticized Marx for failing to do something alien to the spirit of Capital to begin with, or that discarded Marx because a reified academic interpretation of the “labor theory of value” couldn’t solve problems as posed by dominant academic economics. All of these dead ends failed to understand that Marxism, as the CRITIQUE of political economy, is the self-consciousness of the self-activity of a certain class and not one theory among others to be decided upon in disinterested debates among “rational” people.
The "full development of activity itself" posited by Marx as the overcoming of the alienations and separations of bourgeois society is the "practical" realization of actual infinity. It means that every specific activity is always the "external" expression of a more fundamental general activity, having an expanded version of itself as its own goal. In such a social condition, the immediate productive activity of freely- associated individuals would always be in reality self-(re)production aimed at the multiplication of human powers, including the innovation of new powers. Every activity relates back to the actor. "Actual infinity" in this sense is the practical presence of the general in every specific activity in the here and now.This is, again, how “ man makes his life activity itself into an object of will and consciousness”. For the Enlightenment, an object was merely a thing; for Hegel and above all for Marx, once again, an object is a (self)-relationship, mediated by a thing.
To see this problem in relation to expanded social reproduction, we must underscore the “heuristic” character of vols. I and II of Capital, as being the phenomenology of a “pure” capitalist system of only capitalists and wage laborers, and mainly focused on the individual firm. I can hardly overemphasize the power of this way of looking at capitalism, which points to a radical distinction between workers producing means of production (Dept. I) and means of consumption (Dept. II) on one hand, and those, on the other hand, whose income is “capitalist consumption”, in the FIRE (finance- insurance- real estate) sector, state civil servants, military personnel and the civilian armaments sector, not to mention corporate bureaucrats. (Most of this is made explicit in vol. II, but not sufficiently so, in Marx’s discussion of the “faux frais” (false costs) of the system (accounting, insurance, etc.) and that volume is usually read with other problems in mind, and was written before capitalism had produced today’s huge population of unproductive consumers.) Workers employed in Depts. I and II produce surplus value, the latter group consumes it. We therefore emphasize a radical distinction between commodities from the two departments which are productively consumed, i.e. continue to function as capital, from those commodities which are unproductively consumed, i.e. cease to be capital. The huge population of unproductive consumers, in the U.S. and elsewhere in the advanced sector was and is a drain on accumulation.
This approach comes to a head in the analysis of “technodepreciation” (Marx used the term “devalorization”), resulting in the increment of overvalued fixed capital “f” that develops over time due to the heteronomy of capitalist social relations and their inability to coherently take account, except through crisis, of general innovations in labor productivity. Capital for capitalists means first of all a “capitalization” of an anticipated cash flow from an investment. Such a view renders totally academic (if any further proof were necessary) most of the Marxist heavy lifting over the “price-value” “transformation problem” of the 1970’s and 1980’s. Because, over long periods of time, the market price of an individual capital does not directly correspond to its social cost of reproduction, but rather to this capitalization, in the environment ultimately set by the generally available rate of profit. Marx in vol. III discusses the financial system (and capitalization in this sense) only after presenting prices of production and cost-price. Capitalist paper—titles to wealth consisting of profit, interest and ground rent—can circulate for a long time with no immediate direct relationship to “value” as long as adequate amounts of surplus value sustain them. This surplus-value comes from the direct exploitation of workers in production (the “pure” capitalist model of vols. I and II) but can be supplemented by “free” inputs that involve either primitive accumulation (incorporation of labor power reproduced by other modes of production) or by out-and-out looting, i.e. non-reproduction, of nature, existing labor power and capital plant. These are empirical questions that cannot be settled by recourse to exercises in matrix algebra.
Marx’s theory of crisis was effectively the “solution” to Kant’s problem: how, in bourgeois society, can the pursuit of self-interest by heteronomic individuals nonetheless produce (most of the time) a result of a certain “coherence” (i.e. the expanded reproduction of society)? Capitalism proceeds according to two simultaneous and contradictory “maximization principles”, the pursuit of heteronomic profit by individual capitals, and the long-term regulation of their interaction by the underlying law of value, the reproduction time of commodities (and first of all the commodity labor power) in contemporary terms. These two “maximization principles” meet at accelerating velocity in a capitalist deflationary crisis, when current reproductive costs finally impose themselves over fictitious values and re-equilibrate the possible rate of profit with capitalized paper claims to that profit.
The book value of these paper claims is regulated during the business cycle by the central bank. The latter’s task is to maintain them as much as possible against the steady advance of “devalorization”, the cheapening of all commodities by technological advance, and (in some conservative conceptions) to prevent their becoming too inflated by speculative activity. (Consider the U.S. and European central banks injection of $400-500 billion in August 2007 to stem the ongoing liquidity crisis, not to mention the much larger injections since then.)
But capitalist accounting is caught between the HISTORICAL value of assets—their original cost—and their CONTEMPORARY cost in actual reproductive terms. (Bourgeois ideology sees this problem through a glass darkly in “Tobin’s Q’, the market value or market capitalization of a company (or set of companies) divided by the replacement cost of its assets.). The individual capitalist firm must show a profit against its total past capital expenditure, or periodically “write off” some of that book value. Thus the “capitalization” of the individual firm comes down, once again, to a capitalization of its anticipated (future) cash flow. The latter is of course ultimately determined by the rate of profit but to understand it fully, in each individual case and in society generally, one must look at the CONCRETE social reproductive realities: are firms paying reproductive wages to the working class? Are they running fixed capital into the ground past its normal amortization time? Are they profiting from environmental destruction (e.g. strip mining) resulting in social costs that are picked up elsewhere? One can again view in this light the Marxist glass bead game of the 1970’s-1990’s theorists debating the “transformation problem” while totally ignoring these questions in their tidy little formulas. A serious Marxist analysis of existing capitalism must be seriously attuned to the question of reproduction and NON-reproduction in order to perceive LOOTING, (looting of nature, looting of capital plant and infrastructure, looting of the working-class total wage) the maintenance of capitalist paper values at the expense of the material reproduction of society. This, in early modern capitalism, was a feature of capital at its birth, and remains so in the permanence of primitive accumulation, and finally culminates in the self-cannibalization of the system.
Capital paper values expand, social reproduction contracts: the key to recent decades of capitalist history.
But looting quite aside, capitalism, because of the necessary “heteronomy” of its accounting procedures, is thus periodically vulnerable to a “debt-deflation” crisis in which the actual current reproductive value of all commodities, deflated by innovations in productivity, breaks through and confronts the capitalist with the problem of paying off historically-denominated debts with a deflated cash flow. And looting—non-reproduction—is one of the main ways which capital (as for example today) keeps huge quantities of overvalued fictitious paper afloat seemingly independently of the law of value.
The Nazi economy from 1933-1945 is the extreme illustration (to date) of this process at work in an advanced capitalist economy in crisis. Hitler’s finance minister Hjalmar Schacht reflated the Germany economy with a huge credit pyramid, conjured from almost nothing and financing rearmament (unproductive consumption) while suppressing working-class consumption and keeping workers’ wages at about 50% of their pre-1929 levels (non-reproduction of V) and even choking off most investment in Dept. I (non-reproduction of C). As this first experiment in Keynesianism achieved full employment and reached the “overheating” stage ca. 1937-38, inflation took off. Like the U.S. dollar-denominated economy today (which can, however, still tap the world’s wealth, whereas Germany was shorn of all its colonies in 1918), ever-increasing amounts of fictitious capital demanded profit and the completion of the M-C-M’ circuit. The solution was expansionist war, and the outright seizing of assets throughout Nazi-occupied Europe (confiscatory accumulation if you will). Within the German war economy itself, millions of people were worked to death in concentration camps and in slave labor in the factories of the big German corporations (non-reproduction of V) both in Germany and in occupied Europe. One of the reasons Germany lost the war was because of the running down of the capital plant from 1929 and especially 1933 onward. This is the concrete illustration of the self-cannibalization immanent in the final stage of the system: capitalist paper values expand, social reproduction contracts. This was the extreme conclusion of the tendencies already discussed by Rosa Luxemburg in her 1912 portrait of arms production financed by taxing the working class below its reproductive level and other early manifestations of barbarism. Anyone who doubts the permanence of the violence of the earliest primitive accumulation (or whatever improved and expanded term one wants) pointing to this end result can ponder these realities of the Nazi economy.
The 1929-1933 transition in capitalism, in milder form in the U.S, . and in extreme form in Germany, was the definitive transition to a militarized economy. This was not the “permanent arms economy” theorists of the 1960’s (such as Kidron), who saw arms production as providing a permanent stabilizing factor, but rather one updating the above tendencies on a world scale. The U.S. victory in World War II, above all through the Bretton Woods system, made the entire world a tributary of the U.S. empire. Most importantly, Bretton Woods, through the enthronement of the dollar as the world reserve currency, connected the debt of the U.S. state (a modest $250 billion in 1945, as opposed to the minimum estimate of $7-8 trillion today) to support in real goods acquired from the tributary states, initially mainly Europe. Thus the operation of the U.S. Treasury and the Federal Reserve System in maintaining the paper values of the increasingly depleted U.S. industrial base (above all after the late 1950’s) transferred to the whole world the burden of propping them up. (In the recent August- September 2007 world liquidity crisis we see the Federal Reserve, the Bank of England and the European Union Bank all rushing to play this “last resort” role, but at bottom the weakness of the dollar, and behind that the “uninvited guest” of massive deflation and devalorization is their fundamental problem.)
The horrors of the 1914-1945 transition from British to American world dominance
(two world wars, a decade of depression, fascism, Stalinism) must in turn be located in a concept of capitalist “decadence”. What does this mean? The fundamental contradiction of capital as a mode of production is, on one hand, its need for living labor to valorize itself, whose cost of reproduction is the “numeraire”, the common denominator, of all commodity exchange, and its perennial tendency, through technological innovation, to expel living labor from the production process and thereby abort that very same numeraire, which we can call a “standard of value”. From 1815 to 1914 this problem was periodically resolved by regular deflationary crashes, characterized by price collapse, a relatively brief depression, the liquidation of masses of (fictitious) claims on profit, interest and rent, and then a resumption of production on the basis of a new standard of value based on the higher productivity of labor achieved in the last cycle.
In the decade prior to 1914 capital reached a stage where this cycle of expansion/ devalorization/ new expansion could no longer proceed through a relatively quick deflation, depression, unemployment and the liquidation of that capital that was no longer viable competitively. Capital had to impose a massive retrogression, in the form of wholesale physical destruction of labor power and capital plant, to achieve a new standard of value. The emerging superannuation of value was manifest in the ongoing world working-class revolt from ca. 1905 to 1921, interrupted only by the shock of the first years of World War I and culminating in the (failed) revolutionary wave after the war.
Capital is a spiral; it spiraled “upward” during the period of its ascendancy as a mode of production, and it spirals “downward” when it reaches the stage where it must destroy the productivity of society in order to re-establish an adequate rate of profit. Capital in 1914 had of course achieved at best its formal domination over most of the planet outside of Europe and North America, and an important part of its survival over the following century has been due to its deeper expansion into other areas. Nevertheless, it required the entire period 1914-1945 to reorganize itself on a world scale on the basis of a new standard of value, one which in no way solved the deeper problem of the new opposition between relations of production and forces of production which had signaled its decadence as a mode of production. The new phase of accumulation peaked ca. 1966-1967, and after a massive credit-inflated “super-boom” culminating in 1973, the old problem of 1914 resurfaced again. (We should not overlook, in sharp contrast to the 1815-1914 period, constant “local wars” in progress during the 1945-1973 boom years.) Capital since 1973 has been seeking to found a new standard of value through a slow-motion crisis which has arguably wrought as much destruction, in a more diffuse way, as 1914-1945, and is not yet over. As in 1914-1945, the system must go backward in order to salvage the dominance of value over the productive forces which had by the mid-1960’s shown a tendency to shed the “value-form”, a new eruption of the fundamental crisis of the system which, as in 1905-1921, manifested itself in a world-wide working class rebellion from ca. 1965 to 1977. Since the 1970’s, everything capital has done has been aimed at dismantling the conditions of that worker rebellion. It has maintained itself through the a huge pyramid of credit (fictitious capital). That credit has fueled a huge asset inflation, first of all in real estate, as well as resulting in great increases in government, local, corporate and personal debt, first of all in the U.S. and the U.K. It has deindustrialized whole regions and countries and partially industrialized others. It has restructured industry through capital- intensive innovation in the advanced sector, and outsourced manufacture to the low-wage areas of the world. It has revolutionized telecommunications and transport. It has tapped a billion new wage workers in zones previously marginal or inaccessible to capital, thereby lowering the world wage bill.
We can grasp the social reproductive dimension of the post-1973 crisis in various phenomena in the U.S., but none stands out more sharply than the disappearance of the one-paycheck working-class family, of which millions existed ca. 1960. The recognition that most of those single paychecks in 1960 were earned by “white men” should not divert attention today, when two or more paychecks are required to maintain an working-class household, from a terrible rollback. Without for a moment denying the importance of the “feminization of the work force”, the fact remains that millions of women entered the the U.S. work force after 1960 because they HAD to. Even at the individual level, the average work week has crept up from ca. 39 hours in 1970 to about 43 now. The minimum wage in the U.S. in 1973 was $3.25 per hour; today it is $6.15, and it would have to be raised to $18 to recover the purchasing power of the 1973 level. More broadly, real wages plateaud in 1965-1973 and have stayed flat or fallen (mainly fallen) for at least 80% of the population since. The cost of higher education has spiraled out of control, increasingly closing it off to the majority of people (this is overlooking for the moment the retrogressive dominance in much higher education of the “post-modernists”). The U.S. routinely scores 20 out of 20 “advanced capitalist” countries in comparative testing of high school students. Under the impact of the 1978 populist “tax revolt”, California’s public schools fell from the best to the worst in the country in 30 years. U.S. life expectancy is 42nd in the world, rivaling…Jordan, and many semi-developed countries have lower rates of infant mortality. In order to satisfy the demands of big pharmaceutical companies and insurance companies, health care takes 14% of “GDP”, much higher than many other OECD countries with better (and universal) systems. 40 million Americans have no health insurance at all. 1% are in the prison system, an exponential increase from 35 years ago.
But the rollback has not merely occurred in the reproduction of labor power, as these figures show, but also in the material reproduction of the world. Current estimates of the requirements for rebuilding U.S. infrastructure are conservatively $1.6 trillion, and we need only recall New Orleans under Hurricane Katrina to grasp, in extreme form, what this has meant generally as social retrogression.
Capitalist statistics make it very difficult to isolate “productive investment” (as defined above), but at the very least productivity (in capitalist terms) has since never, even in the mini-recovery under Clinton in the 1990’s, recovered the annual average of 3% of the 1945-1973 period.
Thus, to conclude, it is high time to rescue Marx’s concept of “expanded reproduction”, introduced only at the end of vol. II of Capital, from its current status as a curiosity for those who do not notice that most of vols. I and II assume simple reproduction and view capital from the vantage point of the individual firm. At the end of vol. II, Marx also introduces the “total social capital” as part and parcel of expanded reproduction. Here is how Marx sums up the heuristic method he had applied prior to that decisive break in presentation:
vol. II p. 470 (3rd page of Ch. XX): (all italics, once again, are mine) “As long as we were dealing with capital’s value production and the value of its product individually, the natural form of the commodity product was a matter of complete indifference…This was always simply an example…What we were dealing with then was the actual immediate process of production which
presented itself at each turn as the process of an individual capital…But this merely formal manner of presentation is no longer sufficient once we consider the total social capital and the value of its product…
Simple reproduction on the same scale seems to be an abstraction, both in the
sense that the absence of any accumulation or reproduction on an expanded scale is an
assumption foreign to the capitalist basis…” (FOOTNOTE: vol. II, p. 470, Penguin translation; 3rd pages of Ch. XX for
We can grasp the social reproductive dimension of the post-1973 crisis in various phenomena in the U.S.,
but none stands out more sharply than the disappearance of the one-paycheck working-class family, of which millions
existed ca. 1960. The recognition that most of those single paychecks in1960 were earned by “white men” should not divert attention today, when two or more paychecks are required to maintain an working-class household, from
a terrible rollback. Without for a moment denying the importance and positive side of the “feminization of the work force”, the fact remains that millions of women entered the work force after 1960 because they HAD to.
Even at the individual level, the average work week has crept up from ca. 39 hours in 1970 to about 43 now. The minimum wage in the U.S. in 1973 was $3.25 per hour; today it is $6.15, and it would have to be raised to $18 to
recover the purchasing power of the 1973 level. The cost of higher education has spiraled out of control, increasingly closing it off to the majority of people (this is overlooking for the moment the retrogressive
dominance in much higher education of the “post-modernists”). The U.S. routinely scores 20 out of 20 “advanced capitalist” countries in comparative testing of high school students. U.S. life expectancy is 42nd in the world,
rivaling…Jordan, and many semi-developed countries have lower rates of infant mortality.
In order to satisfy the demands of big pharmaceutical companies and insurance companies, health care takes 14% of “GDP”, much higher than many other OECD countries with better (and universal) systems.
40 million Americans have no health insurance at all. 1% are in the prison
system, an exponential increase from 35 years ago.
But the rollback has not merely occurred in the reproduction of labor power, as these figures show, but also in the material reproduction of the world. Current estimates of the requirements for rebuilding U.S. infrastructure are
conservatively $1.6 trillion, and we need only recall New Orleans under Hurricane Katrina to grasp,
in extreme form, what this has meant generally as social retrogression.
Capitalist statistics make it very difficult to isolate “productive investment” (as defined above), but at the very least productivity (in capitalist terms) has since never, even in the mini-recovery under Clinton
in the 1990’s, recovered the annual average of 3% of the 1945-1973 period.
As the world economy enters into the worst crisis since the 1930’s, these questions are about to erupt with a vengeance.
This text appears on the Break Their Haughty Power web site at
 ; This is spelled out in more detail in my essay Race and the Enlightenment, Part II, on the Break Their Haughty Power web site http://home.earthlink.net/~lrgoldner
 As critiqued for example in Daniel Lazare’s America’s Undeclared War): excessive oil consumption and hence pollution, the availability of much more energy-efficient and time-efficient alternatives (such as railroads and public transportation), the destruction of cities and the suburban sprawl linked to real estate interests isolating workers in dormitory towns, and the huge military expenditures necessary to defend the access to oil.
 These views have been confirmed (cf. for example Emmanuel Todd’s After the Empire, 2003) by declining birthrates connected to greater education of women in some Third World countries, such as in the Middle East.)
 The term “actual infinity” might seem problematic to those of a mathematical bent; I nonetheless find it the best term because the “self-reflexive” relationship present in any empirical “fact” or “thing” is universal and hence “infinite”;)
 Again, Grundrisse (1973 ed.) p. 325.
 Cf. my reply to Aufheben for many specifics on this at http://home.earthlink.net/~lrgoldner.
 Recognized as such at the time by Keynes, who said, in his preface to the 1936 German translation of The General Theory, that “my ideas are being tested in Germany”.