Monthly Archives: June 2011
What Makes Capitalism a Competitive Political-economic System
The exchange value of commodities can systematically differ from the value they produce in society–that’s a unique trick of capitalism. Exchange values can be determined on the market, but value production is instigated through coercive social relations and institutions.
In capitalism, the monetary exchange value of labor a) is supplied as wages to working class people (after labor is rendered to the capitalist) so that they compete as consumers on the market in order to supply themselves with the goods and services required to reproduce themselves (from day to day, and through generations), and b) must be less than the value the labor produces in society.
You can still create value and develop a socialist political economy that could practically supplant capitalism. But there is no incentive for capitalists to give up their power, prestige and privilege and put their endlessly-touted innovative brilliance to work in a cooperative. On the contrary, the would-be capitalist converter would only rightly fear that he had abdicated all the militarized police, secret police, legal, judicial, and political protections that capitalists enjoy, transferring these protections from himself to the well-organized capitalists who stayed anti-socialist. The next Enlightenment movement that is socialism is massively blocked by capitalist elites’ absolute, enculturated sense of entitlement to a top berth in a steep social hierarchy.
3) In capitalism, it is the capitalists that are a class in and for themselves. Duh. There is absolutely, firmly class consciousness and class political consciousness in capitalism–capitalist consciousness, networks, ideology, emotion, mobilization, organization, infrastructure, institutions.
Capitalism organizes capitalists as a class-conscious group and fosters price competition among capitalists in a very controlled way; generally, though, and as it develops, it fosters a high degree of collusion among rival capitalists, who must always exploit (and so oppose) the working class and nature in order to even join the capitalist network.
In this post, I’m arguing that by and large capitalism is distinguished by deferring (though certainly not eliminating) intra-elite exploitation, fostering rivalries (eg. geographic, gender, race/ethnic, skill) to temporarily bribe sectors of the working class, and using myopic economic nationalism, co-opting countries’ political management to help a-nationalistic finance capitalists extort wealth from other countries (For example, where Canadian political management, aspiring to sell goods and services to a-nationalistic European capitalists, pressure European politicians to transfer taxed European social wealth to failed European bankers). Capitalism enforces tiered networks. Oligopolists exploit national competition, as well as workers, nature, and the small, competitive, disposable firms that they foster. Capitalism maximizes those rivalries that foster capitalist collusion. In this way, capitalism creates super-social elites and autistic non-elites.
Katz on Marx’s view of what makes capitalism a competitive political economic system: “Karl Marx on the transition from feudalism to capitalism” (Theory & Society 1993).
Evidence that capitalism tends toward reduced competition within the capitalist class comes from Foster, McChesney & Jonna 2011, who argue that capitalism in the neoliberal era has produced international global oligopoly.
“As in all cases of oligopoly, where a few firms dominate particular industries or spheres of production, what is evident is not competition in the classic sense. Rather we are confronted with a dialectic of rivalry and collusion…The dialectical counterpart of such oligopolistic rivalry (often mistaken for simple competition) is a tendency toward collusion, particularly where threat of destructive price competition between the giants is concerned. The logic of this process was well described by Paul Baran and Paul Sweezy in Monopoly Capital…”
Why oligopolistic rivalry is not competition in the classical economics sense:
“Today’s now-dominant firms strive for ever greater monopolistic advantages derived from strategic control of the various elements of production and distribution, while resisting genuine price competition, not only at the national but also the international level.”
“The typical or representative firm today is a monopolistic multinational corporation—a firm that operates in numerous countries, but is headquartered in one…”
International monopoly capital constructed strategic alliances in the neoliberal era that “led Joseph Quinlan, senior economist of Morgan Stanley Dean Witter, to coin the term “Alliance Capitalism” in 2001. “Foreign direct investment and trade,” Quinlan wrote, “are the primary, although not the only, means of global engagement.” Other means include “subcontracting agreements, management contracts, turnkey deals, franchising, licensing, and product sharing. Of particular importance…has been the rise of strategic alliances and partnerships, which have become nearly as prominent—if not more so in some industries—over the past decade as global mergers and acquisitions.” The illustrative example is the world’s airlines’ mega-alliances. For example, United Airlines controls the international Star Alliance of airlines. Control through outsourcing has now become 40% of world trade. For example, Nike outsources its production in order to preside over and profit from grotesque levels of exploitation, thereby managing its oligopolistic rivalry.”
Centralization is greatly enhanced by finance, which facilitates gargantuan mergers and acquisitions. “In 1901, for example, 165 steel firms were combined in a single year to create U.S. Steel, the first billion-dollar corporation, with J.P. Morgan’s financial empire providing the necessary credit.”
Why?
“Large firms enjoyed enormous advantages over small firms: not only economies of scale of all kinds, but also specifically monopolistic advantages resulting from barriers to entry, and the capacity, therefore, to acquire monopoly rents. Moreover, once a corporation became big enough to impact the economy generally, it exercised its power in the political sphere, enabling it to draw more fully on state subsidies and support—as the whole history of monopoly capitalism has demonstrated.”
“‘Combining the share of US MNE parents and that of foreign affiliates in the US, MNEs accounted for 77% of US exports and 65 percent of imports in 2002.’ Hence, where U.S. international trade is concerned, it is fast approaching the situation where multinational corporations are the only actors. ‘Transnationalisation,’ Cowling wrote in 2005, referring to the global growth of multinational or transnational corporations, ‘introduced an added dimension of control over the market—it brings control by giant firms to the pattern and dimensions of trade and therefore undermines the possible impact of trade in restraining monopoly or oligopoly pricing behaviour within national markets.'”
This is an economic and social problem:
“The main consequences of the internationalization of monopoly capital for accumulation are the intensification of world exploitation and a deepening tendency to stagnation. the giant firms, unable to find sufficient investment outlets for their enormous economic surpluses within production, increasingly turn to speculation within the global financial sphere.59 As a result, financial crises have become both more common and more severe, while state systems everywhere are increasingly subject to the whims of giant capital and are forced to bail out corporations that are deemed “too big to fail.” Governments at the national, regional, and local levels seek to clear up the resulting fiscal crises by hammering the general public, cutting back on social services while creating more regressive tax systems, thereby ratcheting up the effective level of exploitation in society. “
Here is the geographic dispersal–production and consumption, not ownership– that is occurring under global oligopolistic rivalry:
“As recently as 1990, the foreign affiliates of the world’s top one hundred nonfinancial multinationals accounted for only a little over a third of the total assets and less than half of the sales and employment of these firms, with production still largely based in their parent companies headquartered in their home countries. By 2008, however, these top one hundred global corporations had shifted their production more decisively to their foreign affiliates, which now account for close to 60 percent of their total assets and employment, and more than 60 percent of their total sales.”
Yet such dispersal should not be confused with democratized global prosperity:
“Today the richest 2 percent of adult individuals own more than half of global wealth, with the richest 1 percent accounting for 40 percent of total global assets. If, in the “golden age” of monopoly capitalism in the 1960s, the gap in per capita income between the richest and poorest regions of the world fell from 15:1 to 13:1—by the end of the twentieth century, the gap had widened to 19:1. From 1970 to 2009, the per capita GDP of developing countries (excluding China) averaged a mere 6.3 percent of the per capita GDP of the G8 countries (the United States, Japan, Germany, France, the United Kingdom, Italy, Canada, and Russia). From 2000 to 2006 (just prior to the Great Financial Crisis), this was only slightly higher, at 6.6 percent. Meanwhile, the average GDP per capita of the fifty-eight or so Least Developed Countries (a UN-designated subset of developing countries) as a share of average G8 GDP per capita declined from 1.8 percent in 1970, to 1.3 percent in 2006. The opening decade of the twenty-first century has seen waves of food crises, with hundreds of millions of people chronically food-deprived, in an era of rising food prices and widespread speculation…”
For workers in the periphery may experience more monetized relations, but their societies and economies are thereby increasingly subjugated to oligopoly capital.
“Just as, nationally, any state programs that aid the working-class majority are targeted by neoliberalism, so, internationally, the primary (neoliberal) goal is to remove—in the name of ‘free trade’—any limits on the power of multinational corporations exercised by nation-states. This mainly hurts the weaker states, where such rules are more stringently imposed by international organizations (principally the IMF, the World Bank, and the WTO) controlled by the rich countries—and where there is less capacity to resist the intrusion of global corporations. The very reality of economic stagnation in the neoliberal era has been used as a further justification for the freeing up of the market on behalf of the giant firms.”
Global monopolization is the flipside to increased competition within the working class:
“A final blockage to comprehending the tendency toward global monopolization consists of a simple category mistake, wherein competition between firms—what economists primarily have in mind when they discuss competition—is confused with competition between workers.” That is to say, analysts who refuse class conflict analysis mistakenly assume that the increased competition capitalist hegemony induces among the world’s workers is evidence of increased competition among capitals. Because it’s a capitalist system, the fortunes of the global capitalist class can be quite opposite of the global working class.
Jonna et al recall Bourdieu’s insight into neoliberalism’s disciplinary relationship to the working class:
“For French sociologist Pierre Bourdieu, ‘the structural violence of unemployment,’ including the ‘fear provoked by the threat of losing employment,” is the “condition of the ‘harmonious’ functioning of the individualist micro-economic model.’ Or, as legendary U.S. capitalist Samuel Insull put it nearly a century ago, with the candor of a pre-public relations era, ‘My experience is that the greatest aid to efficiency of labor is a long line of men waiting at the gate.'”
“Today we often hear—in the ideology of national competition so often used to channel class dissatisfaction—that U.S. workers are facing increased competition for jobs with Mexican workers, Chinese workers, Indian workers, etc. In our view, this is not a reflection of increased competition—certainly not in the sense that this term is used in economics—but of the growth of monopolistic multinational corporations, which, through their much larger number of foreign affiliates, their still larger numbers of subcontractors, and their corrupt domination of national governments and policymaking, are able to employ a strategy of divide and rule with respect to the workers of the world. Competition between workers is aggravated as the internationalization of monopoly capital grows more certain: they are two sides of the same coin. The result is a worldwide heightening of the rate of exploitation (and of the degree of monopoly). Tariffs and capital controls were battered down through GATT and WTO under the leadership of capital from the center because imperial corporations believed they were strong enough to outcompete firms in the periphery. The resulting free movement of capital has contributed to real wage stagnation or actual wage decrease for the relatively privileged workers in the countries of capitalism’s core, while worsening the conditions of the vast majority of the much poorer workers in the periphery.”
The “neoliberal campaign for the internationalization of monopoly capital is not merely an attack on the working class. Rather it must be understood, more broadly, as an attack on the potential for political democracy, that is, on the capacity of the people to organize as an independent force to counteract the power of corporations.”
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Nancy Folbre cites the above article by Foster, McChesney & Jonna (2011) in her review of networks and monopoly/oligopoly trends research, “Who rules the global economy?” (NYTimes).
Pro Communist
Jodi Dean’s talk “The Communist Horizon” on the necessity of communism/socialism and of challenging bourgeois redirection efforts, wherein the author argues that if we want to oppose neoliberalism, we need to keep our eyes on the communist prize: identify and fight exploitation.
Dean argues, It’s not that “politics is dead.” It’s that “The Left” refuses to engage in the one kind of politics, communism, that can offer an alternative to what we have, which is exploitation. Communism is the opposite of exploitative neoliberalism. According to Dean’s philosophical view, communism is the sovereignty, the collective power of the people.
...And probably we refuse to engage communism because so many of us are cathected to capitalist relations. Then the Left “we” includes all the people who simply desire to be recognized as moral avatars, in compensation for our lack of solid access to power in extreme-inequality societies that many of us mostly accept.
“Rather than recognizing that for the Left, democracy is the form that the loss of communism takes, the form of communism’s displacement, radical democrats treat democracy as itself replacing communism. And on this point, they share the neoliberal position regarding the victory of capitalism.
…The repercussion of the sublimation of communism in democratic preoccupations with process and participation is acquiescence to capitalism as the best system for the production an distribution of resources, labor and goods.
…The mistake Leftists make, when they turn into liberals and democrats, is thinking that we are beyond the communist horizon, that democracy replaced communism, rather than serves as the contemporary form of communism’s displacement.”
Dean continuously opposes Zizek’s vision of reinvigorating communism. She argues, I think inessentially, that Leftists should focus on extending the communist critique of exploitation, rather than use the concept of exclusion to critique capital, as Zizek does. “Capitalism doesn’t exclude. It exploits,” she insists. Sure, let’s not lose sight of the fact that capitalism exploits. I don’t think Zizek loses sight of this.
Zizek argues that exclusion creates surplus population that is essential to concentrated capitalist accumulation and use of power. I would say that Dean’s opposition to Zizek is unnecessary, and seems to be motivated by her desire to sell the society-as-“network” metaphor rather than Zizek’s Lacanian psychoanalytical capitalist-whole-constituted-by-the-lack metaphor. Meh. I don’t think this is much more than academic competitive posturing and salesmanship. I usually say that exclusion and inclusion are tools capitalism uses across space and social stratifications to ramp up exploitation, see neoliberal European efforts to improve immigrant “inclusion” via getting rid of labor laws that bolster labor’s capacity to work in solidarity and reduce exploitation. I think there’s a social movement point in surveying capitalism’s tactical repertoire; and it doesn’t require we forget about exploitation.
“As Lukacs makes clear, for the Leninist party, the actuality of revolution requires discipline and preparation not because the party can accurately predict everything that will occur, because it cannot, and not because it has an infallible theory, which it does not. Discipline and preparation are necessary in order to adapt to the circumstances. The party has to be consistent and flexible because revolution is chaotic.
The actuality of revolution then is an enabling impediment. It’s a condition of constituitive non-knowledge for which the party can prepare. It’s a condition that demands response, if the party is to be accountable to the people, if the party is to function as a communist party.
The difference between actuality and futurity, the perpetual displacement of democracy into an impossible future, then is a difference in preparation, discipline, responsiveness and planning. The former requires it. The latter seems to eschew it or postpone it. For the Leninist party, to postpone is to fail now.
The actuality of revolution is one cannot postpone a decision or judgment. It means that one undertakes it fully exposed to one’s lack of coverage in history, or even the chaotic revolutionary moment. It means that one has to trust that the revolutionary process will bring about new constellations, arrangements, skills, convictions, that through it we will bring about something else, something we aren’t imagining now.”
The bourgeois cannot trust this creative process. The risk inherent in this process is too great for her, and faced with it, she will collapse communism into a fetishized account of the political sins of a Stalin, Pol Pot or Kim Jung Il.
“The communist horizon is what we must focus on and use as a guide if this redirection is compelled by the force of the common rather than by the speculation of the few.”
It’s interesting that that this need for discipline is not immediately apparent to many academics. Perhaps the absence of an understanding of the benefits of discipline from academic analysis of social movement and political change is the result of the rise of idealist elaboration and the Saramagian blindness to historical-material exploitation. Perhaps its absence belies academics’ unprocessed piles of regret at “succeeding” as disciplined academics in the neoliberal era.
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What I think is interesting right now (December 2011) is that, given Occupy critical mass, democratic process appears to facilitate coalition bloc discipline. I still think, however, that Dean’s critique of the 1990s post-Marxist fetishized glorification of empty-signifier “democracy” as a substitute for anti-exploitation was looooong overdue.
Capitalist Law
Glenn Greenwald on the American press’ belief that criminal law is for the hoi poloi only.
Shocking the Arab World
Benjamin on the State of Emergency
Naomi Wolf:
“Have two British academics found the key to why Americans keep being bombarded today with a discourse that highlights dramatic “emergency” events — that then leads inevitably to legislation that chips away (or chisels away) at what is left of the Constitution? I believe they have. Dr. Stephen Morton and Dr. Elleke Boehmer, in their very important new book, Terror and the Postcolonial, show how today’s headlines on CNN may have been crafted for use in India in the 1800s — perfected throughout the nineteenth century — and road-tested on unfortunate Irish citizens in the 1910s.
This weekend, in an Oxford lecture titled “Travelling Texts in a Time of Emergency”, Morton demonstrated that the British “practiced” techniques for repressing populations in their colonies. His conclusions are deeply relevant, not just to a British colonial or post-colonial reality but to the American “Homeland.”
He looked at an essay by Walter Benjamin, the “Eighth Thesis on the Philosophy of History.” It is a 1933 essay — very important timing — in which Benjamin, who was watching the consolidation of European fascism, began to say: don’t believe the language about “terror”; don’t be fooled into the propaganda that the need for “a state of emergency” is an aberration, a response to genuine dramatic threats. Don’t be taken in by it. “The tradition of the oppressed teaches that the “state of emergency” is a permanent historical tradition. The “state of emergency” exists permanently as a state of lawlessness — it is not the exception but the rule.” In other words, Benjamin saw clearly in 1933 that the German discourse of “Oh my God, things are really unstable, we need to suspend certain civil liberties for the sake of national security” was a hoax — a historical constant always used by elites and always for the same reasons.
Prof. Morton went on to trace this practice — of manipulating the words “terrorist” and propagandizing a need for states of emergency that lead to preventive detention, torture, suspension of constitutional rights and so on — to many places in the British colonial regime. He noted that “terrorist” was a term the British often applied to local populations that were fighting for — yes — freedom from oppressive British rule. He pointed out that the “Bengal Suppression of Terror Act” of the 1900s, for instance, was aimed at local freedom movements. (The word “Terrorist” was first coined in reference to the French Revolutionary state.)
Legal scholar Albert Venn Dicey pointed out in 1883 that martial law is “anomalous to the law in England” and a sign of a totalitarian state or a terrorist state. In spite of this ideology that Britain is a constitutional democracy, Morton said that British Colonial governments have all used emergency legislation to suppress colonial uprisings. They allowed the Colonial governors to develop torture, preventive detention, the maintenance of “order” by force, the denial of rights to subjects. The “state of emergency” operated “as a traveling concept for global counter-insurgencies, reiterated in different colonial authorities” around the world. Even more disturbingly fascinating, he made the case that British authorities would “practice” certain kinds of repression on Ireland between 1900 and 1922 — and then “export” these practices overseas. So in Ireland at that time, “subversive” material was criminalized in newspapers, and so on. The “state of emergency’ in that period — for Ireland, not for Britain as a whole — “was the rule, and the application of the Constitution the exception.”
Morton went on to say that the “causative” emergencies for the “state of emergency” were often manufactured, for example in Malaya; that the ostensibly “dramatic character of these emergencies made them appear spontaneous rather than systemic”; and the strategy was the same for the imposition of Martial Law.
I’ve looked at various fascist and totalitarian regimes, to get a handle of what the US was up to in terms of the erosion of our civil liberties. But I did not look at British colonialism in relation to the systemic development of the deployment of “state of emergency” policies to suspend US Constitutional rights, and I should make that connection now. It seems clear to me from this lecture and from other research that the architects of the suppression of our rights have probably studied British colonial rule as well as other repressive regimes.
Why would this historical source be especially useful for them? Because Britain, like America, as a putative constitutional democracy, can’t just say, “Okay, now we are a police state, and we are suspending the Constitution.” Britain in that period, like the United States today, needed to maintain its own ideology as a “free” nation, an exporter of human rights and democracy, around the world, to all these benighted brown peoples. So Britain needed to develop a discourse of rationale — hence the “state of emergency” discourse and the reliance on whipped-up “dramas” to justify a seeming exception to constitutional democracy that is actually the rule.
I think we should pay close attention to what Walter Benjamin tried to tell readers in 1933 — and really take in what Professors Morton and Boehmer are alerting us to today: “states of emergency” have a long historical record of being manipulated by elites, for repressive purposes that have nothing to do with the always “dramatic” rationales that are used to justify them; and British colonial rule was a laboratory of the very tactics and the same soundbites that we are seeing at home now in the United States. The past is prologue.”
Lawless Imperialism–UK style
Northern Ireland was mis-ruled until 1998 under a series of British Emergency Powers Acts virtually from the moment of its creation in 1921. Here’s one. Prior to 1921, it was quite common for Britain to govern Ireland via various “Coercion Acts”, most of which suspended habeus corpus. The USA adapted many British laws on anti-terrorism after the Oklahoma City bombing.