In this 2009 text presented at a Marxist conference in Saxony, Robert Kurz discusses the significance of the world economic crisis of 2008, the erroneous assessments of the meaning of this crisis by the bourgeois mainstream and the left, the positivist “ontologization of labor” by traditional Marxism, Marx’s crisis theory and its basis in “categorical analysis” on an “abstract conceptual plane”, and the failure of most leftists to cultivate a perspective that goes beyond the basic categories of capitalism, instead of volunteering to perform crisis management services on capitalism’s behalf.
World Economic Crisis, Social Movements and Socialism: 12 Theses – Robert Kurz
(Report presented at the Conference of the Marxist Forum of Saxony on November 14, 2009)
1. According to contemporary “opinion makers” in the media, politics and economic science, the world economic crisis is now over. The discourses proclaiming that the emergency is over are coming one after another every day. They want us to believe that, whatever happens, within a year all of this will left behind us. Maybe it was not so serious; we must forget the generalized panic that followed a few months after the collapse of Lehman Brothers and the waves of shocks that followed. At the same time, they have to admit that the new growth expected after the global collapse is beginning at a much lower level; it will still take many years before the pre-crisis level of accumulation is once again attained. The consequences of this postponement are rarely discussed. Given this situation, it is appropriate to examine the epistemic basis of these “opinion makers”. This basis is constituted by a positivist type of thinking, which only acknowledges immediate facts, dissociated from their global social context and their historical process of development. This method consists of a “projection” (extrapolation) of isolated empirical data and “opinion” polls. This approach has proven to be a stupendous failure in the recent past. Even so, at the beginning of summer in 2008, projections were made, with professional optimism, concerning the alleged growth of the world economy up to 2020. Apparently, the crisis just fell out of a clear blue sky. We may therefore conclude that positivist perception and methodology are utterly incapable of addressing real development. And this also applies to the current discourse that seeks to reassure us that everything is back to normal. If the majority of the academic and political left did not even predict the outbreak of the world economic crisis, this indicates that it has for a long time now become accustomed to aspects of positivist thought and that it is not at all acquainted with the theory of crisis.
2. An important component of the positivist molding of opinion is the expectation of a dynamic of accumulation in Asia (especially in China), which must now be the main motor of the world economy. The structure of this dynamic is ignored by those who promote this view. Sixty percent of the record growth attained by China in the first decade of the 21st century was based on exports, particularly to the United States. On the other hand, seventy percent of the growth in the United States during the same period was based on consumption. What this entailed was an economic situation of unilateral deficit in the Pacific, which was the motor of global growth. This motor broke down. Although the collapse of consumption in the United States has not yet fully run its course, Chinese exports in the first three quarters of 2009 have fallen by twenty-five percent. There are no indications that China is capable of switching over to domestic consumption that could only partly compensate for this quantitative decline, much less stimulate a wave of global growth. The increased consumption of the Chinese middle class was merely the by-product of the one-way flow of exports. China’s crisis of growth has been compensated for over the last few months only by a gigantic government economic recovery plan, of which a small part is earmarked for consumption and the lion’s share for investments in infrastructure (airports and ports, highways and railroads, etc.) as well as real estate speculation. This program is being financed with State and private loans, with the peculiar condition that the banks have been forced to assume all the risk, against their own business sense, unlike what takes place in the West. It is assumed that the economic situation characterized by the unilateral deficit of the Pacific will once again will turn around and undergo another boom and that the previous level will rapidly be re-attained and surpassed. This is extremely unlikely, however. If this expectation is not fulfilled, not only the ongoing infrastructure programs, but also the excess capacity constructed by modules in the economic export zones, will be revealed to be just so much wasted investment. Then, China, too, will be caught up in the financial mega-crash, although a little later than the other countries. With regard to this aspect, as well, one may observe that much of the left has naively embraced the same expectation as bourgeois public opinion, without succeeding in presenting an analytical foundation for its position.
3. Not only in China, but everywhere else in the world, the alleged recovery of the last few months is based exclusively on government aid programs to support the economy, that is, ultimately, on public consumption financed by credit. These programs can be easily implemented with the capacity constructed during the years of deficit financing of the economy. They do not require new investments of private capital, for the existing productive capacity is still extremely underutilized, despite these programs. To the contrary, we can expect pressure to reduce the excess of existing capacity in all key areas. For all these reasons the economic recovery programs do not give any support for the so-often invoked self-sustained growth. A wave of private investment is therefore necessary, for which there is no basis. Expanded public consumption, whose financing is directly obtained from the monetary sector, thus contains an enormous inflationary potential, if it has to replace the autonomous accumulation of capital over the long term. Faced with the dilemma of a type of forced growth that is no longer viable, governments accept galloping inflation, with the objective of riding out the economic slowdown in a very artificial way for a while and paying off their debts later with inflated currency. This would, however, once again have devastating consequences for capital accumulation itself. And we shall once again point out that a good part of the left, as well as bourgeois public opinion that takes its cue from the left, likes to consider the State with its superior capacities as a deus ex machina and lender of last resort [in English in the original—American translator’s note], without having given sufficient thought to this option and its consequences.
4. A strictly phenomenological analysis of the world economic crisis shows us that its causes will not be eliminated by the recovery measures that have been adopted up until now. A more in-depth historical analysis would show us that these causes date from the 1980s. After the Fordist dynamic of accumulation of the post-war era ran out of steam, the expected potential for real valorization that was supposed to be offered by the new fields opened up by technological change (information technology, biotechnology, etc.) never materialized. The attempt to defer the problems of valorization, first of all by way of public consumption, has in the meantime failed and resulted in inflation. The neoliberal policy of deregulation was limited to shifting the problem of public indebtedness to the transnational financial markets. This is how the famous financial exchanges were formed that, for more than two decades, seemed to generate an insubstantial, virtual accumulation. This apparent accumulation was accompanied by a constant series of partial financial crises, in different countries, regions and sectors (first the Third World debt crisis, then the stock market crash in the United States and in Japan in the late 1980s and early 1990s, the crisis of the economies of the Asian Tigers, the Russian crisis, the Scandinavian banking crisis and the crisis in Argentina, and finally the “dotcom” crash after the turn of the century), crises that were not apprehended in their internal coherence and appeared to be susceptible to being overcome with a tidal wave of money from the central banks. The latest world financial crisis is the first global crisis which can no longer be contained with the usual means. The official explanatory model amounts to designating neoliberal deregulation as a “historical error” and reducing the crisis to the “excesses” of the bankers in the financial heavens, which, unfortunately, had an impact on a healthy “real economy”. Actually, precisely the contrary is the case. Since the 1990s, there has been a recycling of the money from the financial markets into the so-called real economy, which provided a stimulus for purchasing power, now without any underlying real value, for consumption and investment in capitalist reproduction and, since then, economic deficits have been mounting. The inflationary potential of this “financial market Keynesianism” was distributed throughout the global monetary zones and only began to become apparent in the rise of the deficit (almost 20 percent in China, an expected 6 percent in the United States), but was hidden by the shock of devalorization of financial capital, only to reappear now with the public programs. Because the official standard explanation is false, the intended reestablishment of regulation will not even get off the ground, as it has been postponed to an imaginary time “after the crisis”. There is no longer any healthy “real accumulation” and its dynamic has been exhausted for a long time now, so it can only be extended by way of precarious simulated programs, in which the financial markets that survive the devalorization shock will not have the power to recycle their holdings in a new wave of deficits, in which public indebtedness has already come up against its short term limits. It is in relation to this question that the worst error of a large part of the left consists. Even before the global collapse, the movements that were critical of globalization, together with the political left, in a “reduced critique of capitalism”, had for the most part blamed financial speculation for the manifestations of social and economic crisis, thus turning the relation between cause and effect upside down. Therefore, it is not the left that is in this case following the false explanatory model of bourgeois public opinion; to the contrary, it was the latter that sought its explanatory model in the leftist mainstream.
5. Even the historical analysis of the reciprocal dependence between the weakness of the dynamic of real accumulation of global capital and the formation of an economy of transnational financial markets is still restricted to the level of appearances. An adequate explanation is only possible with reference to Marx’s critique of political economy. Marx analyzed the historical dynamic of capital and its “immanent limits” on an abstract conceptual plane. His categorical exposition constitutes a departure from the methods of positivist thought, because he argues on the plane of the substance of value, which is not susceptible to direct empirical verification, a plane that is not confused with the concept of value creation by the national economy or of the private economy, whose accounts do not reflect the connection between quantities of abstract labor, the real substance of value, the cycles of physical capital and commodity-capital, and the creation of currency and the credit system, that is, the real movement is only reproduced in a distorted way. Marx’s categorical analysis of the dynamic of accumulation demonstrates the immanent self-contradiction of the capitalist mode of production based on the increasing organic composition of capital. The increasing proportion of constant capital (or “dead” physical capital, which transmits value, but does not create value) compared to variable capital (the labor power which creates value and surplus-value) in each instance of applied money-capital leads to the tendential fall of the rate of profit. This relative expression of self-contradiction can be compensated for by the effect on society as a whole of a relative increase of surplus-value by labor power (the reduction of the value of the latter by way of the development of the productive forces), but only if, at the same time, the utilization of money-capital and therefore the application of labor power rise commensurately and result in a growing mass of profit, despite the fall of the rate of profit. Here, too, the self-contradiction may be noted, insofar as the always-increasing initial costs of physical capital can no longer be adequately financed by the profits from the past, but oblige enterprises to have recourse, which is likewise taking place on an ever-expanding scale, to the credit system. In this way, capital must increasingly resort to anticipated future surplus-value in order for its current production of surplus value to continue. Here, one can conclude that valorization has an immanent historical limit, if the use of additional labor power, even with the increasing application of money-capital, no longer has enough of an effect, and if the credit-chains based on anticipation of future profits were to break, then the mass of profit will also decline. Development based on the third industrial revolution since the 1980s can be explained in this sense, even if, for the reasons set forth above, there is no empirical evidence for this, in the sense of a positivist extrapolation. This is an example of the use of the conceptual “power of abstraction” (Marx) in order to explain real phenomena, instead of perceiving them as decontextualized facts which are subject to arbitrary interpretation. The insufficiencies that we have discussed, which affect much of the left, can be attributed in the last instance to the fact that many leftists only make use of Marx’s theory in a fragmentary way. At the categorical level, to the extent that it was even thematized, Marx’s theory was short-circuited with positivist diagnoses, and the eternal capacity for the production of relative surplus-value and the expansion of capital was taken for granted.
6. The heart of the problem is the category of abstract labor, which was defined by Marx in a clearly negative way, but which was linked to a positive ontology of labor in traditional Marxism. In this manner, “labor” did not appear to be a specifically capitalist real abstraction; instead, the substance of capital, which is labor, appeared at the same time to be an eternal human condition. Thus, according to this view, labor is naturally inexhaustible. This means, for crisis theory, that an immanent limit of the very substance of valorization was unthinkable, since crisis was defined only at the level of the metamorphoses and disproportionalities of the circulation of capital; that is, as a so-called “crisis of adjustment”, which only reestablishes the perturbed equilibrium of capitalist reproduction. The most recent world economic crisis is also perceived in this same way, and this is the basis, in the last analysis, of traditional Marxism’s concurrence with the horizon of bourgeois expectations. This same outlook also leads to a choice of kinds of activity that only seek to obtain influence over the restructuring of the accumulation process, which already rules out from the very start any possibility of its historical exhaustion.
7. Thus, the left finds itself to be in agreement with the totally mistaken mass consciousness, a consciousness that is incompatible with reality, one that remains passive and without any power of mobilization. The internalization of the capitalist categories as unquestioned preconditions for life has a long history behind it. The classical workers movement, in the establishment of its objectives, remained on the terrain of the capitalist form of existence, and made the substance of that existence, which is abstract labor, the basis of its legitimacy. But this self-legitimization was shattered in the third industrial revolution. The global retreat of the surplus-value creating working class is only the other side of the crisis of the substance of capital. The Chinese export sectors do not provide any quantitative refutation of this claim, because they are not based on any real production of surplus-value, but were only generated by the financial markets starting in the 1990s. The invocation of a “class consciousness” based on the creation of real surplus-value is therefore barking up the wrong tree. “Labor” lost its alleged ontological security. It is demoralized; and not only with regard to the quantity of productive capital which is in the process of disappearing, but also due to its increasingly more destructive character, which is no longer based on the contents of life-needs, and even due to its increasing scarcity and precariousness. An expression of this demoralization is the fact that the official slogan, “any job is better than no job at all” is itself inscribed in the consciousness of the masses by the power of the ontology of labor. This is the cause of the desperately truncated hope that only the resurgence of the dynamic of accumulation might still make things better. This also explains the electoral success of the liberal-conservative parties even in the remaining core zones of employed labor power, and even among the unemployed and superfluous populations.
8. Counter-movements capable of intervening by way of the traditional weapon of the strike only exist among particular interests in key industries (railroad engineers, air traffic controllers), while the others fall by the wayside, as representatives of weak lobbies (milk producers). Leftist-oriented protest movements, with their truncated critique of capitalism, do not proceed beyond symbolic actions that have the character of happenings. On the other hand, the statist orientation of the political left causes it to run the risk of potentially becoming a party that will take over the job of capitalist crisis management (Linkspartei, in Berlin and elsewhere). The inevitable tendency towards decline is most probably fermenting in anti-semitic, racist and sexist ideological formations. The feminism of recent history is also being crushed by the unfolding of the crisis, because the structurally androcentric nature of the capitalist categories are obscured and in the classical workers movement they were not subjected to any kind of examination. Simultaneously, the new middle classes that have become quantitatively dominant know that the interest of their skilled but precarious human capital is dependent on the existence of some production of real surplus-value and, before the latter disappears, it is dependent on public credit and the financial markets. On the one hand, they thus become bearers of a truncated critique of a capitalism that is reduced to finance capital; on the other, they place their hope precisely in the rejuvenation of finance capital.
9. Generalized resistance against crisis management, which up until now is nowhere to be seen, is only possible if the breakdown of universal competition crosses a certain threshold. There can be no doubt that immanent demands must constitute the point of departure. This includes, for example, an adequate standard minimum wage, a dramatic increase in the minimum payments for recipients of social support services and the cessation of privatization of public services, in healthcare and other fields. First of all, however, these demands, in view of the situation, cannot be satisfied by using the official channels of politics. The statist orientation of the consciousness of the masses, as well as of the left, constitutes an obstacle in this regard, because it thus delegates this problem to the State. Instead, what is needed is a mass social movement that is not merely symbolic, a movement with the determination and ability to cripple the capitalist system precisely when the latter is undergoing a crisis. Second, and this is truly decisive, this movement can no longer remain dependent on the criterion of the capacity for capitalist financing, which presupposes successful capital accumulation. It must explain that vital interests are non-negotiable and consciously declare that it is “not answerable” to the systemic criterion of credit-worthiness. If, in whatever form, the result of crisis management policies is inflation, only thus can the capacity for action arise. This is the precondition for perceiving that traditional reform policies based on capital accumulation, or calling for its success (“participation in successful growth”), have become obsolete and, not by chance, have become socially repressive counter-reforms. This also rules out any policy whereby the left would perform the role of midwife and rescue team for a restructured accumulation of capital. The kind of movement we are describing here can only be a transitional movement that develops a new consciousness of the contradictions of living conditions under capitalism and seeks to go beyond them.
10. Our agenda therefore also includes the demand for socialism. Actually, the threat that we “can also do things differently” and fight for a society beyond capitalism was always the catalyst for and the captivating power of immanent demands. In the past, a world economic crisis on the scale of the current crisis would have inevitably been the motive for undertaking the passage to socialism. If this goal seems inconceivable today to most leftists, this naturally has something to do with the downfall of the bureaucratic and State directed real socialism. This downfall was celebrated even as the dawning of a festival leading to “freedom”, whose falsehood the left did not want to recognize. Already in the ideology of the classical workers movement and, a fortiori, under the constraints of “catch-up modernization”, on the periphery of the world market, the concept of socialism was reduced to the nationalization of capitalist categories, instead of positing the goal of their abolition. The failure of this historically conditioned reduction, however, was not critically but affirmatively received. Now this shameful “acceptance” of capitalism, whose criteria (such as the independence of the “enterprises”, the concessions to competition, the “freedom” to set prices, etc.) have already been the object of reforms in real socialism and, long before the end of that formation, had already long since become the unsurpassable paradigm of capitalist categories among western leftists.
11. Therefore, the statist orientation of the left also has nothing to do with the historically failed goal of a workers State, on the basis of ontologized abstract labor; to the contrary, the left is completely obstinate in its attachment to the existing State, just as social democracy was during the 1920s, ending up at Godesberg and later, with Schröder, in Hartz IV. What remains is, on the one hand, a left wing Keynesianism dressed up in a pseudo-Marxism that never goes beyond an ideological “rescue package” for the valorization of capital that was set aside by capitalist institutions during the 1980s. Although its revitalization is proclaimed by parts of the left, in the cheerful hope for a new reform of politics, it is nothing but an illusion, because the new Keynesianism of crisis is only capable of executing repressive crisis management and no longer represents anything but the continuation of neoliberalism by other means. The urgent matter of the social planning of resource utilization only appears in a perverse form, as the nationalization of crisis. On the other hand, the program of an “economy of solidarity” is presented as the complement of the crisis Keynesianism of the “left”, an “economy of solidarity” that, by operating outside of the context of capitalist socialization in particular alternative structures (small cooperatives, self-exploiting communes, neighborhood mutual aid, subsistence gardening, alternative regional currencies, etc.), propagates the illusory belief in a “different” way of life and production on a planet that has been devastated by capital, a program that can be integrated into a policy of crisis management. Another aspect of short-term alternative orientations consists in a return to the old idea of a “democratization” of the enterprise. Any co-management under crisis conditions, however, does nothing but turn the employees into joint partners in survival in competition (the market failure of the enterprises occupied by the workers in Argentina, the voluntary wage cuts at Opel and Arcandor).
12. All these substitutes for transformation, or for socialism, basically fail to address the problem of “social synthesis”, created by the general form of reproduction as the form of value and of the commodity, which only exists by virtue of the commodity form of labor power. A new concept of socialism can only be articulated to the extent that there is a break with the internalization of capitalist ways of life by way of the commodity form of labor power, of abstract labor, of the logic of valorization and of the commodity form of reproduction. Historically, what is necessary is a social self-administration, one that goes beyond this social and formal context, in the form of a conscious planning of the application of the resources of all of society (natural resources, technology, knowledge), no longer based on an accounting of units of abstract labor; and this must include the infrastructures and moments of reproduction that do not assume the form of a commodity and which have been delegated to women. Such a goal of socialist transformation that goes beyond the capitalist categories requires a whole historical period for its implementation; at the same time, however, it is also a prerequisite for being capable of mobilizing resistance to the restrictions imposed by crisis management policies. Such an objective could become comprehensible in practice to the extent that the course of the world economic crisis leads to the decision not to use vital resources, on an unprecedented scale, due to their unprofitability and inability to compete or obtain financing, despite the existence of the necessary material means. If the left wing critique of capitalism wants to escape from demoralizing rearguard combat and go on the offensive, it needs to break out of its shell and jump over its own historical shadow.
Translated in October 2014 from the Portuguese translation of: Robert Kurz, Weltwirtschaftskrise, soziale Bewegung und Sozialismus. 12 Thesen. (http://www.exit-online.org/textanz1.php?tabelle=autoren&index=24&posnr=429&backtext1=text1.php).
Source of Portuguese translation: http://o-beco.planetaclix.pt/rkurz349.htm.