Luxembourg and pre-capitalist markets

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d-man
Slothjabber, ask your barber

Slothjabber, ask your barber if he's an extra-capitalist, maybe he can provide the answer to your questions

 

 

Link
  I would like to come back

 

I would like to come back in here in response to the direction this thread has taken.    I do not feel the issues raised have been well responded to and most comments have had little to do with luxembourg actual arguments.  Although ICC calls itself luxembourgist, I am becoming less convinced that  luxembourgists know what she said re markets and accumulation, let alone where she was right or wrong.  I don’t think this is an academic issue and I don’t think it questions the concept of decadence in the slightest.  

I would recommend reading Chapter 9 of Accumulation of Capital.  It is one of those chapters that would appear to be reasonable to miss out like the historical ones, in that it does not sound as though it gets to the core of her argument, but I think now that it provides key points to back up her hypothesis.  Having said that,  I don’t understand it well,  and am still struggling to understand her key argument that the problem of accumulation is not about having money but about the source of demand – as I raised earlier in the thread.  She is saying that capitalists cannot be the source of the demand she identifies as being needed to enable accumulation to take place. If you can please explain in different words preferably.  Here I really do worry about translation because unless somebody really understood economics and revolution politics, terminology can easily be falsely used to try to make logical sense of English sentences.

Here is a quote from chapter 9:  “… on this showing it is quite evident that under conditions of accumulation ie of capitalisation of part of the surplus value, it cannot, ex hypothesis, be the capitalists themselves who buy the entire surplus value, that they cannot possible realise it.  True, if the capitalised surplus value is to be realised at all, money must by forthcoming in adequate quantities, for its realisation.  But it is quite impossible that this money should come from the purse of the capitalist class itself.  Just because accumulation is postulated, the capitalists cannot buy their surplus value themselves, even though they might, in abstracto, have the money to do so.”

This argument is repeated in several places and I think it is key to understanding why she identifies markets outside capitalism as the source of demand (and no she does not use the terms pre-capitalist or extra-capitalist).  It would also seem to address the issue of credit in an indirect way too as Luxembourg does not appear to care if capitalists have sufficient money to invest which would seem to exclude the use of credit and money supply as a replica extra capitalist market.  It would also seem to exclude self employed etc who trade on a capitalist market.

So please Luxembourgists, what does this mean and how does that link into what luxembourgists are saying today?

jk1921
In terms of the direction of

In terms of the direction of this thread, there seem to be two different trajectories. One seems to be primarily concerned with the hermeneutics of Luxemburg's text (and Mattick and Grossman, etc.); taking captialist production as a theoretical model, as outlined in these texts. Its looking for the internal consistency of the arguments presented there and demanding explanations for purported inconsistencies and or explanatory failures. The other direction seems to want to work back from the economic history of the last century to arrive at what appears to be a confirmation of some broad version of this or that theory of crisis. These are two different methodologies and I think this is perhaps where the "mutual incomprehensions" are coming from.

jk1921
Is this a Contest?

d-man wrote:

It's a precision made by the posters here trying to defend Luxemburg's side, so thank them for the clarification.

Why should I be thankful? I am not some kind of "Luxemburgist" or something like that. I am not going to line up behind some barricade over a particular position. Comrades have demanded an explanation of how, if Luxemburg is right, captialism can continue to exist in the abscence of extra-capitalist markets, and I have tried (not very successfully I suppose) to explicate that. Does everything have to be a contest? I am not sure I agree with the distinction "pre-capitalist" vs. "extra-capitalist." I don't care if it is those who are trying to defend Luxmeburg who have raised it. I don't belong to some sort of team here.

jk1921
Can someone answer Fred's

Can someone answer Fred's concerns? is this thread a proper exercise on the ICC Forum or is it something that belongs in a "Marxist Economics" seminar at the LSE or the NSSR?

d-man
hypotheticals

jk, I understand hypotheticals ("if Luxemburg is right") can be helpful to think things through, but one can also just presuppose what needs to be proved.

LoneLondoner
Is this discussion academic?

I think Fred's question does indeed need answering, because it raises the issue of the relationship of class struggle to theory.

Two thoughts occur to me.

At the beginning of the 20th century, Luxemburg's theory aroused a storm of criticism (see her replies here) for a very straightforward reason: her theory disturbed an increasingly powerful tendency in the SPD which claimed that capitalism could allow a peaceful transition to socialism. Luxemburg gave a theoretical basis (not the only one to be sure) for the revolutionary left to defend the basic marxist proposition that socialism could only be achieved by the revolutionary overthrow of capitalism. It has therefore a very direct, practical application - and it still provides to this day a theoretical underpinning for our Platform and the rejection of unionism, national liberation, etc.

I think this also raises the more general question of the importance of theory. Marx used to say that revolution would only be possible when "theory seized the masses", in other words when the mass of the working class achieves the ability to reason theoretically and scientifically, and to apply this kind of reasoning to its immediate and long-term needs and goal: the creation of a communist society. The working class is the first revolutionary class in history whose revolution is dependent, not on its economic strength in society, but on the development of its class consciousness - in other words its theoretical understanding of the world. The working class is not just a class of struggle (it has this in common with all previous exploited classes) but also a class which must claim as its heritage all the best of past human history, in the domains of art, science, philosophy and theory in general. Hence the class struggle is not just a matter of strikes and demonstrations, and this is why all revolutionaries from Marx onwards (or even before) - and including the ICC - have placed a great importance on the general theoretical development of their organisations and of the working class in general.

LoneLondoner
The problem posed by Luxemburg

I can understand d-man's frustration, and it's a shame if the "Luxemburgists" among us have not done a better job on this. I think part of the difficulty lies in the forum as a form - these are complex questions and inevitably a forum thread tends to "scatter" in different directions as comrades look at this or that point that has been raised. So it is sometimes preferable to deal with such issues in lengthier articles that can go into a subject in real depth - which it is not really possible to do in a thread. Comrades are probably aware that we've written a good deal on the subject, for example in the latest series on Decadence (try parts v to vii for example).

I think that d-man actually hits the nail on the head in his last post. Capitalism is fundamentally different from all previous class societies in three ways:

  1. The surplus product extracted from the exploited class cannot be directly consumed by the exploiting class (unlike in feudalism, for example, where the feudal lords extract and use directly a surplus product from the exploited peasantry for their own sumptuary consumption). The surplus product MUST pass through the money form. In c+v+s, the "s" is useless to the capitalist as a commodity, it is only of value to him when it has passed through C-M-C (commodity-money-commodity). In other words the market is absolutely basic to the capitalist form of exploitation.
  2. The exploiting class cannot spend all the surplus product in its own consumption: the major part of "s", having gone through C-M-C, MUST end up again as "c" or "v" in another round of accumulation.
  3. The exploited class must be a class of free labour, able to sell its labour power on the market.

It should be obvious that by its very nature, the exploited class cannot buy (realise) the whole of "s" since if it did there would be no exploitation.

In brief, if the capitalist class consumed the whole surplus product then it would not be capitalism but feudalism or some other pre-capitalist form of exploitation; if the working class consumed the whole surplus product then it would not be capitalism either but some form of communism (leaving aside all the questions about the need for accumulation in communist society).

So, there must be some way of realising the surplus product outside capitalism.

This brings me to the questions posed by real historical development (and I refer comrades to my quote from Lenin in an earlier post). Demogorgon - who has been arguing that capitalism can happily live in a "closed circuit" so to speak, asks the Luxemburgists to explain how capitalism has managed to survive so long without significant extra-capitalist markets. This is a very fair point, but it cuts both ways: if capitalism can accumulate cheerfully in a closed circuit, then how do you explain its massive and incredibly rapid expansion around the world?

The whole point of this kind of theory is to explain the world we live in, to allow us (and above all the working class of course) to understand where we are and where we are going: "The theoretical conclusions of the Communists (...) merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes", as the Manifesto says.

So perhaps its a good idea to start with what exactly is it that we have to explain?

  1. Why is capitalism so incredibly dynamic? What pushed it to expand in the space of about 200 years to create a world market for the first time in human history?
  2. Why did World War I happen when it did? This to my mind is critical: all revolutionaries at the time assumed that a new epoch had begun "the epoch of wars and revolutions" as the 3rd International said. It certainly was not as a result of economic crisis.
  3. How has capitalism survived since? It seems to me fundamental here to recognise that capitalism CANNOT survive (and as a matter of observable historical fact HAS NOT survived) on the same basis since 1914 as before (though in fact it would be more accurate historically to say since 1945 and to see the period from 1914 to 1945 as the watershed between ascendancy and decadence).

On the last point, the two great changes are 1) State capitalism (in ALL modern developed countries the state accounts for 30-50% of GDP which is enormous compared to the 19th century, and calls into question statistics for GDP growth which of course include the state sector), and 2) militarism. In this respect, I think that although it is very brief Luxemburg's final Chapter 32: Militarism as a Province of Accumulation is seminal.

A final word on "pre-capitalist" and "extra-capitalist". I think the issue of the self-employed is a red herring here. I remember looking into this myself at one point when unemployment loomed, and in fact when you are self-employed (at least in the UK IT industry) you set up a company of which you are the sole employee. In other words, the self-employed are completely part of the capitalist system.

You could argue that the "return to the land" forced on part of the Russian population following the collapse of the USSR was a return to "extra-capitalism" - but it was no good to capital as a market because they had no money.

On the other hand, the absorption of a geographical area into capitalist social relations does not necessarily mean the complete disappearance of pre-capitalist economic forms: for example, the small shopkeeper, or the peasant economy which continued to survive in large parts of Western Europe even after 1945. The fact that this economy exchanges money with the capitalist economy does not mean it is necessarily integrated into capitalism, any more than Manchu China was capitalist when it bought British opium for silver.

I'll stop here and hope it provides food for thought.

jk1921
Hypothetical

d-man wrote:

jk, I understand hypotheticals ("if Luxemburg is right") can be helpful to think things through, but one can also just presuppose what needs to be proved.

I am not sure I understand your point. I think a big part of this discussion has been the question of-- if Luxemburg is right, how can captialism continue, given that pre-captialist or extra-capitalist markets have mostly dried up? Its based on a hypothetical, isn't it? 

jk1921
Social Formation?????

LoneLondoner wrote:

A final word on "pre-capitalist" and "extra-capitalist". I think the issue of the self-employed is a red herring here. I remember looking into this myself at one point when unemployment loomed, and in fact when you are self-employed (at least in the UK IT industry) you set up a company of which you are the sole employee. In other words, the self-employed are completely part of the capitalist system.

That's why I think "pre-capitalist" might be the better concept. In order for the surplus produced in the captialist core to find a market, there has to be a social formation capable of mobilizing and exploiting labor in such a way that it too has a surplus that can be used to realize the surplus produced in the core. Yes, pre-capitalist social relationships may continue to exist long after captialism enters decadence, but you need an acutal pre-capitalist social formation in order for captial to be able to accumulate at the rates that characterized ascendance. Historically, this appears to be what happened with the progressive reversal in the balance of payments between China and the west over the course of ascendant period of capitalism.

On the issue of whether or not this is an academic discussion: It seems to me that if decadence is not really at stake here, as claimed by some on this thread, then perhaps it is a little ethereal. What is really at stake then?

slothjabber
JK, the discussion started

JK, the discussion started because Link posted questions about Luxemburg, as part of his own attempt to get to grips with the nature of the current crisis, and the theories of previous reveolutionaries to understand the development of capitalism. He's been discussing these questions to some extent with me, by email. Subsequently, both Link and I attended the Commune's dayschool, and there we took part in a discussion of crisis theories. Afterwards, we continued discussing the nature of the crisis with ICC and CWO comrades. These discussions have to an extent fed into the investigations that Link (particualrly) and I have been engaged in.

 

I don't think I can do much better than quoting Ernie from the recent thread on decadence -  https://en.internationalism.org/forum/1056/jk1921/5043/decadence-capital... - which very much relates to this discussion: 

ernie wrote:

... We are faced with trying to analysis the deepest and most profound economic crisis in the history of capitalism, also the historic unfolding of decadence. These are difficult questions and place great demands upon all revolutionary organisations. If we cannot provide the necessary depth of analysis which will allow the  working class to understand the forces at work we are not fulfilling one of our most important roles...

The crisis of capitalism for us ... is not simply an economic question but one of  the social dynamic of capitalist relations. At present this crisis is taking on historically unprecedented levels of acceleration, destructiveness and profundity: involvinng every aspect of society. As revolutionaries we have to be able to provide a framework/method for understanding this...

 

The only addition to this I think that it isn't just organisations that need to understand, those of us who aren't members of organisations but sympathise with the positions of the communist left need to grapple with these questions too.

 

Link says that decadence isn't being questioned; but our understanding of what decadence is can only be improved by examining the explanations put forward to explain it, or indeed the theories that have been used to establish the notion of decadence in the first place. As the decadence thread and particularly the article that inspired it show however is that there are different conceptions of what decadence means and indeed the wholesale rejection of the concept by some.

 

I'm sorry that the Luxemburgists - including myself - have not done a better job here. I think all of those who defend Luxemburg's analysis recognise that she made a mistake with something - to my mind, she must either have made a huge methodological mistake, or a much less serious data-collection mistake. The last century has, I think, demonstrated that it cannot be true that both a) extra-capitalist markets are the only source of accumuation for expanded reproduction, and b) those extra-capitalist markets were on the point of exhaustion in 1913. One or other of these propositions must it seems to me be false.

 

If it is the first of these propositions, that means Luxemburg's theory as a whole is wrong, it seems. If the state, or debt, can 'act' as an extra-capitalist market, that has fairly serious implications for our understanding of Luxemburg's theory, and leaves open the question of what other methods capitalism might devise to try and stabilise the system. However, I accept that some comrades argue the state is an extra-capitalist market (which I don't accept), and I certainly argued that debt could function in that way (but have changed my mind as Demogorgon patiently explained fractional reserve banking). But it seems to me that the admission of either/both of these strategies does some violence to Rosa's theory.

 

If it is the second of these propositions, if Luxemburg failed to recognise the resilience of extra-capitalist formations, then that does not, I would argue, falsify the general theoretical line she advances. Extra-capitalist markets may be the only source for capitalist accumulation, but those markets may have been more extensive, or more long-lived, than she realised. It doesn't seem to me that this is a major methodological flaw. After all, Rosa wouldn't be the first revolutionary to overestimate the potential of the situation, or the inability of capitalism to ride out a crisis. However, this then begs the question, are they extensive and long-lived enough to prolong the system for another century? Or a millennium? When will they ever be exhausted?

 

----------------

 

LoneLondoner, I'm sorry, I don't accept that all self-employment is necessarily the same as wage labour. Some undoubtedly is; when I was self-employed I paid myself exactly what the company employing me gave me, so that was wage labour under a slightly different legal form. But other self-employment is different. I couldn't walk away with the work I had done and sell it to another client. I had no control over the product of my labour. But for someone who can, who can produce a product (without wage labour) and then sell it in the market (however that market is constituted) that qualifies, I think, as an extra-capitalist formation. A friend of mine used to produce craft-items such as cards and sell them to local shops. In this case there was no 'employer', just artisan production and a direct relationship with a market. Still self-employed, but with a totally different relationship to the products of labour, recompense for labour-power, and the (lack of) exploitation of surplus value. An extra-capitalist (because not based on wage labour) formation I'd argue.

Link
JK i thought you might like to see this quote

"The solution I proposed might have been judged as correct or incorrect; it could have been criticized, contested, supplemented; or another solution could have been produced. None of this happened. What followed was quite unexpected: the ‘experts’ explained that there was no problem to be solved!"

JK i thought you might like to see this quote from Luxembourg re her critics which i got a link that Lonelondoner put in.  I am feeling pretty much the same except the 'experts' are now luxembourgists who dont appear to know what she said and who prefer the idea of pleading academicism to justify their pre-existing opinions.   

I do not question decadence at all nor do i question the importance of the ICCs views/platform  but i find it odd that different organisations both identify it as starting at pretty much the same on the basis of different theories.  I seems to me something else is involved.  The revolutionaries a century ago had very specific concerns in their attempts to analysis the change of period, one being the importance of separating themselves from reformists who were arguing that capitalism could go on and on.   They were not wrong, but in this context they emphasised the breakdown and collapse of capitalism in the short term, luxembourg included.  Today we can see in decadence that capitalism has managed to keep going, and there is a point to discussing how.  The ICC has developed a concept of decomposition which sets a framework for current events and this is apparently a product of 'luxembourgism' and still contains the same perspective that this is the final crisis which abounded 100 years ago.  The discussion of whether capitalism collapses or is able to find solutions to its immediate contradiction still seems to be an issue.  The CWO, for example, disagrees with the ICC perspectives and the methodology by which the ICC sets such perspectives.   So i think a discussion of the luxembourgist framework is a valid discussion for understanding decadence - yes to clarify my own opinions - but i am raising issues which question current interpretations of her theory.  

Demogorgon
In Defence of Economics

I've been taking some time out from this thread and thought it might be a dead issue when I came back. I'm pleased to see the discussion continuing. I can't possibly reply to all the points raised but a few spring to mind.

Firstly, this isn't simply an "academic" discussion as some comrades seem to have implied (perhaps I've misunderstood, but that's the impression I get). From its foundation, the ICC argued that it was the economic crisis that was the defining social driver in the evolution of the situation post-68. It was the return of crisis that drove the revival of class struggle and the imperialist tensions that heightened, especially during the 80s. With the "credit crunch" of 2008, the crisis became centre-stage in the consciousness of the whole of society even if the bourgeoisie have done a remarkably effective job of containing and normalising it. In short, crisis theory and how it relates to the larger issues of decadence (which, although linked to crisis, shouldn't be seen as a mechanical reflection of it) is one of the most pressing theoretical issue of our age. We need to be able to explain both past and coming convulsions in order to inform the class response.

The vast majority of Marx's output (certainly his published output) related to trying to understand and explain the economic foundations of capitalism. He sacrificed "health, happiness and family" to write Capital. Why? Because without that understanding of the deep structure of the capitalist system we're disarmed when trying to understanding all the superstructural phenomena that tend to grab our day-to-day attention. It was because of his understanding of capitalism's fundamental mechanisms, that Marx was able to recognise the inherent conservatism of much of the left of his time and to wage a combat against Lassalle, et al. as witnessed in the Gotha programme.

Luxemburg, for all her faults, also understood that a re-appropriation of the revolutionary content of Marx's economic theory was a vital part of the combat against Revisionism. Even if she failed in its technical execution, the spirit of her struggle was nonetheless absolutely in harmony with Marx and his earlier revolutionary fight.

Comrades no doubt feel intimidated by some of the discussion on this thread and no-one more so than me. But we shouldn't equate our own feelings of inadequacy with the idea that the question doesn't matter or that it can be left to the "experts". That really is the spirit of academicism.

Demogorgon
Dynamic Capitalism

LoneLondoner wrote:
Demogorgon - who has been arguing that capitalism can happily live in a "closed circuit" so to speak, asks the Luxemburgists to explain how capitalism has managed to survive so long without significant extra-capitalist markets. This is a very fair point, but it cuts both ways: if capitalism can accumulate cheerfully in a closed circuit, then how do you explain its massive and incredibly rapid expansion around the world?

A point of correction here. What I've insisted upon is that external markets are not necessary for capitalist expansion. This doesn't mean they can't have a great stimulatory effect. Nor does it mean that they can't help ameliorate crises of disproportionality or crises due to the falling rate of profit in that they can absorb the overproduction that occurs in such episodes. (Whether they can solve crises as such is another question, of course!)

As for the question of dynamism, again external markets are not necessary to explain this, even if we may acknowledge they can be an important factor. Capitalism has an absolutely vital need to maintain an ever increasing supply of labour (and preferably oversupply to keep the price of labour down); not to mention the need to continually to create or find new use values; and the need to find ever larger quantities of raw material and energy to feed industry. The interlocking nature of technological advance guarantees feeds this approach as each development is accompanied with new requirements and so on and so forth. There's also the question of the export of capital which is a vital element in understanding this phenomenon.

Why did World War I break out when it did? I'm not sure what's being asked here. If you're already rejecting a mechanical link to economic crisis specifically, then all you're saying is that an underlying economic situation created the conditions for a World War. That poses no problem for my theoretical framework - all the phenomena I described above imply geographical expansion and competition. As such competition intensifies, so does imperialism.

I realise that's not "mathematical precision", a phrase you used earlier in this thread but I doubt you're able to present a precise mathematical point where war would break out either.

Lastly, on the question of capitalist survival, I totally agree on the importance of state capitalism. In fact, the state has, in many ways, become the mediating factor in the evolution of crises. Contrary to what some comrades seem to think, I totally reject the idea that capitalism is just the same as it was in the 19th century. But the underlying crisis-cycle remains and unless we can understand the core mechanisms of the system, how can we understand all the complications that decadence brings?

d-man
LoneLondener wrote:I can

LoneLondener wrote:
I can understand d-man's frustration, and it's a shame if the "Luxemburgists" among us have not done a better job on this.

hmm... I wrote to jk that this pre/extra-capitalism category (which seemed to frustrate him) is "thanks" to the Luxemburgists here. I like them only to take the effort to read the texts on Luxemburg here.

LoneLondener wrote:
I think that d-man actually hits the nail on the head in his last post

Are you sure you mean my post?...the formula of capitalism is M-C-M (not as you write C-M-C, which is simple commodity production).

jk1921 wrote:
I think a big part of this discussion has been the question of-- if Luxemburg is right, how can captialism continue, given that pre-captialist or extra-capitalist markets have mostly dried up? Its based on a hypothetical, isn't it?

I don't think most people would go through so much trouble just for the sake of a hypothetical. It's a starting point for LoneLondener, Slothjabber and Alf for instance. There is nothing dogmatic or competitive with them trying to defend their "barricades", on the contrary, it's brave that they continue to defend it even when acknowledging the desperatness of their position.

Link
I would like to argue in

I would like to argue in support of demogorgon (he whose name cannot be spoken??) in regard to value of pre capitalist markets for capitalism in ascendancy.  It is clear that these markets had a significant impact on the positive expansion of capitalism both in the early stages of mecantile capitalism and later in terms of imperialist strategies where both Luxembourg and TROPF recognise that despite the bulk of trade being between developed economies there was a desperate drive by capitalism states to grab those parts of the world still available.   

I seems to me that Luxembourg in her analysis is simply recognising the importance of the raw materials and markets that these regions provided and that it is probably better to see trade with them as one of the countertendencies to overproduction and the TROPF.   Luxembourg's analysis of the need for markets outside capitalism (i stil cant find her mentioning the terms extra or pre-capitalist) is to solve her problem of (where is the) demand to realise a larger amount of sv created from one cycle of reproduction to  another.  As i suggested earlier it seems to me she is misunderstanding c+v+s and that she would have been better off developing her argument identifying overproduction and what that means.  

Instead she went down a path that stated no accumulation is possible without markets external to capitalism.  After a century of capitalist decadence can we really still support this argument.  Capitalism has clearly used a range of policies to maintain itself including war and a massive extension of credit as comrades have noted, but also increased exploitation of the wc, increased population giving increase mass of sv,  technological development and state capitalism managing the economy.   It would seem appropriate to include trade with what is left of extra and pre-cap markets here.  Are these all countertendencies to the lack of extra cap markets.  No luxembourg has defined this as impossible, but maybe they are to overproduction and to the TROPF.

 

jk1921
Academicism

Demogorgon wrote:

Comrades no doubt feel intimidated by some of the discussion on this thread and no-one more so than me. But we shouldn't equate our own feelings of inadequacy with the idea that the question doesn't matter or that it can be left to the "experts". That really is the spirit of academicism.

And yet, the sense is given that if one is not familiar with, or cannot read, certain texts than one should withdraw from the discussion. Perhaps to come back when they have completed the required reading list.

I am still confused, is decadence at stake in this thread? If not, why does it matter if Luxemburg's text was internally consistent or not?If Luxemburg thought captialist accumulation could not continue without pre-capitalist markets, she was obviously wrong. So what?

d-man
The sense I have is of

The sense I have is of sadness that reading relevant texts is considered by jk as somehow being a withdrawal from discussion.

As for the question whether decadence is at stake, having a valid explanation for it does matter.

jk1921
Read again, D-Man. Nowhere,

Read again, D-Man. Nowhere, did I say I consider reading texts a withdrawal from discussion. What I said was that the sense given from several posts in this thread is that people who haven't read certain texts need to go home and study before they can come back and play with the big boys.

It was a reply to Demo who seemed to feel that not continuing the discussions, despite our inadequacies, was an academic attitude. Some posts seem to suggest this approach, however. One even suggests the "Luxemburgists" have no idea what Luxemburg said. That comes off as awfuly cavalier; I'm afraid.

I don't know where this thread is headed now; but it does raise issues about academecism that I don't think have been adequately addressed.

Fred
LoneLondoner wrote:Marx used

LoneLondoner wrote:
Marx used to say that revolution would only be possible when "theory seized the masses", in other words when the mass of the working class achieves the ability to reason theoretically and scientifically, and to apply this kind of reasoning to its immediate and long-term needs and goal: the creation of a communist society. The working class is the first revolutionary class in history whose revolution is dependent, not on its economic strength in society, but on the development of its class consciousness - in other words its theoretical understanding of the world.

Theory has certainly seized this thread. But I don't think it's exactly the theory that Marx had in mind. Did he not take a more holistic view of what was involved in the emancipation of the proletariat, than the merely economic, as a separate category, even if he did write capital; though even that work contains many references to the real human social world as well, does it not? Yes, the class needs to develop the ability to reason theoretically and scientifically, but will it (does it) need to develop it's understanding of bourgeois economics to tbe level of some Nobel Prize winner, who probably can't explain precisely why capitalism is collapsing, or why it still staggers on, or how it will recover, any more than anyone enjoying the clearly exciting and tantalizing thread above can do definitively and for ever, and thus claim the winner's crown.

Early on in the thread, Link pointed out that as the revolution would approach, so this whole question of what exactly keeps capitalism going economically (if it really is actually in fact "going" in any genuine sense, as opposed to displaying it's emperor's new clothes for all to see) so the economic question would become irrelevant and disappear. I think that what's going on here - which presents itself as a clash of the economic titans - is actually an unacknowledged fear that capitalism and it's mysterious unfathomable ways, may mean it's perpetuation for another hundred years, as someone has already suggested - in a jocular manner.

But the final solution for capitalism lies in the hands of the working class. Do we really have to know the exact details of it's strange sickness - it is sick isn't it, else why all the austerity and threats of war? - before we are sufficiently theoretically and scientifically prepared, and with enough class consciouness and international solidarity in our hands to finally do the job, and put it out of it's misery? Somehow I doubt it!

Are comrades going to start claiming that the defeat of the first revolutionary wave was the result of a failure by the class to comprehend economic theory, or that tbe failure to have built the revolutionary organisation should be laid at the same door? The glory of the working class is that while it has theoretical and scientific understandings, and has a wonderful instrument for the critique of society in Marxism, it also has a deal of commonsense too, and doesn't loose it's sense of proportion easily. If we're not careful we'll end up with comrades seriously taking sides, seriously moving towards splits, and seriously wondering how so much serious economics could so easily get out of hand.

Demogorgon
JK1921, I'm a bit confused by

JK1921, I'm a bit confused by your responses. I certainly don't feel that anyone should have to pass some kind of test to participate in the discussion. One of the better things about the thread is that people have tried to express their ideas clearly and we've dealt more with the actual concepts involved rather than retreating into line-by-line exegesis of texts.

Nor am I suggesting that anyone should be forced to engage in a discussion, if they don't feel ready. My point is that the economic question is important. There is a tendency, whenever the question comes up, to dismiss it as some sort of distraction from the real business of revolutionary politics. This is a fundamentally mistaken view in my opinion.

Fred's latest post is a timely and clear expression of this tendency. He seems to think we're trying to be "Nobel Prize winners" or that it's a competition with a "winner's crown" at stake. He also asks "Do we really have to know the exact details of it's strange sickness?".

In 1915, with war raging across the continent and hundreds of thousands of proletarians being slaughtered what was the first significant work Luxemburg published? Not the Junius Pamphlet, which came later. It was Anti-Critique, an attempt to respond to the Revisionist attacks on Accumulation. For her, and for what was left of the revolutionary movement, the effort to try and understand the economic backdrop to the disaster visited on humanity was of vital importance.

Fred suggests we "know" capitalism is sick and that's really all we need to know. Well, unfortunately, the vast majority of the class doesn't even think in those terms and of those who do most reject the idea of "decadence". So who actually defends decadence today? The ICC and the ICT (and I'm not entirely sure about the ICT), their sympathisers and a handful of fellow travellers. That's it! So the "we" who know about capitalism's sickness are a truly pitiful minority.

Now, we all hope that at some point the class will begin to move and begin to question what's going on around it. What will happen then? There are legions of leftists and their academic affiliates (who often have a far better technical understanding of Marx than most of us, even if they rip out its revolutionary guts) prepared to offer the usual leftist "solutions" to the crisis and convincingly demolish any talk about decadence. The only way to combat the insidious cancer of leftism is for the class to reappropriate its theoretical heritage: they've stolen our theory and we have to take it back!

Fred also asks "Are comrades going to start claiming that the defeat of the first revolutionary wave was the result of a failure by the class to comprehend economic theory, or that tbe failure to have built the revolutionary organisation should be laid at the same door?".

Actually, a clearer understanding of economic theory might at least blunted the impact of history's greatest lie: that state capitalism was somehow socialist or communist. This links back to the point I made about Marx and his combat against Lassalle and "state socialism" and Luxemburg's combat against Revisionism. As for building the revolutionary organisation, an organisation (or milieu) afraid to have a robust discussion about the question for fear of "comrades seriously taking sides, seriously moving towards splits" isn't really much use to anyone.

Lastly, Fred reminds of that Link who suggested the closer we get to revolution, the less relevant economics would become. Again, I think this is deeply wrong. Seizing power will be the easy bit! Afterwards, we will need to build a new society. Our task will be to seize hold of a human activity that nonetheless confronts us as an alienated entity, as an "economy" and reintegrate into a truly human process. But to do that we will need to understand the real basis of that alienation and its deep roots in social and psychological processes. This will demand not only that the working class collectively reappropriates the intricate detail of Marx's investigations but also to go beyond them.

d-man
jk1921 wrote:Read again,

jk1921 wrote:
Read again, D-Man. Nowhere, did I say I consider reading texts a withdrawal from discussion. What I said was that the sense given from several posts in this thread is that people who haven't read certain texts need to go home and study before they can come back and play with the big boys.

Reading relevant texts isn't a withdrawal from discussion, so if I recommend reading relevant texts it isn't a recommendation to withdraw from discussion.

Alf
Alf

I agree completely with the Gorgon on the necessity to deepen on the theoretical level if our 'practice' within the class struggle is to be properly directed. 

For me, this discussion has been extremely rich. It has also reinforced my conviction that this clarification of crisis theory is vital, indeed possible, precisely because it remains open-ended: in other words, Marx did not achieve a complete theory of crisis, and neither did Rosa, or Mattick, or any of us thus far. 

Ernie recently recommended the Michael Roberts blog to ICC comrades. I looked it up, and he is right. I immediately found this: 

http://critiqueofcrisistheory.wordpress.com/the-problem-marx-didnt-leave-us-a-completed-crisis-theory/

ernie
Well leave this discussion a

Well leave this discussion a few days and come baxk to a discussion that has gone to new levels of discussion and clarification,:-)
I have lost alot of sleep over this discussion but slothjabber's post has made it worthwhile due to its willingness to pose the question of was rosa wrong? A simple question but one not too often posed, learly I think she was but in her error she has ensured that any attempts atusing marx for defending reformism meet short swrift. Grossmann made no bones about his praise for her achievement in relation to this : no small praise given how egotistically he usually was!
Is it a disaster if she was wrong? Does it mean she was not a great revolutionary? The fact she was willing to make a critique of marx was an idication of how seriously she took her responsibilities as a militant and is an example to us all,
She was wrong because she did not accept Marx's insistence that the capitalistreinvestment of sv to expand production was the driving force of accumulation, As an organisation we do the same ans LL examplified that in his post when he repeated our oftsaid claim that the capitalist class cannot comsume its own sv. Well yes if they spent it all on wine women and song
there would be no accumulation but they don't instead they want to expand the means of increase their extraction of sv. I am sorry to keep on hammerimg this point but it was this fundamental point that convinced me rosaand we were wrong.
Marxalso demonstratedthat accumulatiom need not mecessarily need tjeprocess m c m to take place. In the chapter on ricardo"s theory ofaccumulation in Theorie of sv vol2 he shows how machine makers swop their products, also that others involved in the production of the means of productioncan do the same, rosa does not agree with this idea.
LL seemsconcerned that to accept marx's idea means somehow one is saing tjat there can be problem free accumulation. Well karl didn't think so and onthe basis of capitalists can realize sv and expand production went on so demonstrate the multitude of contradixtions involved in this process above all the root contradiction between this fundamental drive to expand the procesa of acxumulation by the capitalists and the barriers that this generates
~ the need for permanent over production of means of production and lanour i n order that the necessary means are already in place to allow another round of accumulation
:-!~ the conflict between the increased organic composition of capital and the levels of profit
The comflict between this ever growing overproduction and the ability of capital to expand the market through increased production, new industries, expansion of fixed capital such as docks, airports, railways etc and theopenimg up of whole new regions fordevelopment of industy
:-!..~ the increasing absoption of sv for expansion into the war machine
Basically the whole of Capital is the detailed explanation of the unfolding of this contradiction which at root is the contradiction betweem concrete andabstract labour, exchange value and use value. Something that Grossmann masterfuly explained in a very short article on the roots of the crisis in 1919 : it is available on marxist. org

Alf
a crucial chapter indeed

I agree that this is a very important chapter to study. It's a long time since I read it all the way through, but I have returned to parts of it on numerous occasions - precisely because it is probably Marx's most thorough attempt to clarify the problem of overproduction and to develop a critique of the bourgeois economists who denied that this expressed a fundamental contradiction in the capitalist relation of production. Re-reading and reflecting on it would certainly help to take this debate forward. 

d-man
role of gold

Here Kautsky writes on the relation of Industry and Agriculture (in the section with this name).

I think the other phenomenom which Luxemburg's book somewhat relates to is the supposed insufficiency of the quantity of gold (-production). Lafargue had written that just as the precious metals from the New World kickstarted the bourgeoisie, likewise the growing shortage sounds in the crisis of capitalism (decadence). Lafargue was writing on the 1907 crisis (with Cortelyou's Panama bonds etc.). I'm not sure if this argument is correct, but certainly it is the most apparent reason usually given for the present system (of state-finance in the past century) against the "gold standard" system (which collapsed in 1914). For Luxemburg the "pre-capitalist" would have to have money to realize the capitalist accumulation, that is, where does this gold come from (because when Luxemburg is writing about money she meant gold, and if we suppose the "pre-capitalist" does not buy goods through loans granted by the capitalists); it comes from artisanal gold/silver production (there are lots of videos about how this happens in nightmarish conditions in Zimbabwe, Mali, Mongolia, Peru, Phillipines, Sudan, etc.). Perhaps that increases because of the rising price of gold and the exhaustion of South-African mines. In popular culture gold still is portrayed as the basis of capitalism (Rollover - about collapse of the dollar because of flight into gold, Die Hard: With a Vengeance - in which the NY Federal Reserve bank's gold reserves are heisted, Cowboys vs. Aliens - in which aliens come to earth to steal the gold, Looper - where the mob pays their agents silver and gold by sending it back in time, it makes sense in time-travel to use gold!).

 

d-man
The credit which banks create

The credit which banks create consists of existing money which is "sold" to the borrower at some interest, which the borrower then has to get on the market, so if "new money" is being created here at all (which I don't see how is the case), it is not done by the bank. (see this SPGB article).

Luxemburg had some inadequate ideas about money, but she knew how credit functions (let's give here at least some credit! see Reform&revolution).

 

LoneLondoner
Money grows...

 

d-man wrote:

...when Luxemburg is writing about money she meant gold, and if we suppose the "pre-capitalist" does not buy goods through loans granted by the capitalists

Actually I don't remember seeing anything about Luxemburg presuming money was necessarily gold. As long as an XCM (eXtra Capitalist Market) can produce something which can be converted into a money equivalent, then it can trade with the capitalist world.

Think of the slave-holding regimes in the American South: they had no trouble receiving and making payments with the industrial regions of the USA and with Britain, they had sophisticated banking systems and could perfectly well pay in credit or gold, or dollar bills.

It is important to remember that the penetration of XCM by capital is not a stable process: it necessarily destroys the XCM it trades with by incorporating it into capitalism (if necessary with great violence).

Xenophon99 wrote:

Money grows, as labour created value grows. Unpaid labour within the system adds to wealth and money.

But as we all know, money doesn't grow on trees... So if "Unpaid labour within the system adds to wealth and money", the question is: how?

d-man
gold

LoneLondoner wrote:

Actually I don't remember seeing anything about Luxemburg presuming money was necessarily gold.

She argues for a special third department for the production of money, which for the sake of simplicity is taken to mean gold.

Quote:
As long as an XCM (eXtra Capitalist Market) can produce something which can be converted into a money equivalent, then it can trade with the capitalist world.

But where does this money come from?

Quote:

Think of the slave-holding regimes in the American South: they had no trouble receiving and making payments with the industrial regions of the USA and with Britain, they had sophisticated banking systems and could perfectly well pay in credit or gold, or dollar bills.

And where does the money which the non-capitalist makes payments with (in order to buy the unrealized surplus products of capitalism) come from? Either the loans granted by the capitalists themselves (who thus would finance non-capitalist buyers of the capitalist products, but could just as well finance capitalist buyers), or from a prior exchange of the products by non-capitalists to the capitalist world, earning them money to be able to make the purchase of capitalist products of just an equal amount to the value of the products which they sold to the capitalist world (and thus not buy the unrealized surplus products of capitalism).

Quote:
It is important to remember that the penetration of XCM by capital is not a stable process: it necessarily destroys the XCM it trades with by incorporating it into capitalism (if necessary with great violence).

And why does it penetrate into the non-capitalist market? According to Luxemburg in order to sell its products of unrealized (surplus) value, i.e. in exchange for money, which must come from local small scale gold producers (or the hoards accumulated or plundered throughout the centuries by the non-capitalist empires). And the non-capitalists had enough gold to buy capitalist non-realized value for several centuries, otherwise capitalism would have been impossible (according to her theory).

slothjabber
How do extra-capitalist markets buy capitalism’s goods?

d-man wrote:

LoneLondoner wrote:
As long as an XCM (eXtra Capitalist Market) can produce something which can be converted into a money equivalent, then it can trade with the capitalist world.

But where does this money come from?

Quote:

Think of the slave-holding regimes in the American South: they had no trouble receiving and making payments with the industrial regions of the USA and with Britain, they had sophisticated banking systems and could perfectly well pay in credit or gold, or dollar bills.

And where does the money which the non-capitalist makes payments with (in order to buy the unrealized surplus products of capitalism) come from? Either the loans granted by the capitalists themselves (who thus would finance non-capitalist buyers of the capitalist products, but could just as well finance capitalist buyers), or from a prior exchange of the products by non-capitalists to the capitalist world, earning them money to be able to make the purchase of capitalist products of just an equal amount to the value of the products which they sold to the capitalist world (and thus not buy the unrealized surplus products of capitalism)...

 

Seems to me there's something wrong here.

 

1 – simple commodity production produces value, just not through the extraction of surplus-value (s).

2 – the value produced extra-capitalist formations trades on the world market in the same way as other value. Money, directly, needn’t be involved. Without in any way accepting that Luxemburg copied any mistake from Kautsky (or invented something) about mistaking agriculture for pre-capitalist production, a simple thought experiment involving a country producing finished goods through industrial production, and another country producing food through peasant production, is illustrative of the point I think. The country of Builderland exports 100 tonnes of machinery, worth $1 million, to Growesia, and imports 10,000 tonnes of foodstuffs from Growesia, also worth $1 million. What the actual exchange entails – whether it’s one single merchant or a thousand all trading in various markets, a company (or several competing companies) organising the export of the machinery and the import of the food, or an exchange between two governments – doesn’t really matter, does it? In the end, the commodities ‘100 tonnes of machinery’ and ’10,000 tonnes of food’ trade against each other.

3 – money is supposed to be equal to the total values in the system, whether they’re produced by capitalist production or by simple commodity production. Of course, it’s also arbitrary; if labour costs $10 an hour, a sandwich costs $2, if labour costs $100 an hour, a sandwich costs $20. Whatever the unit of currency, a sandwich is the equivalent of 1/5 of an hour of work. If there’s a heap more value in the system (through the sudden influx of newly-discovered extra-capitalist production), the existing money is expected to cover all that value because that’s what money is – a token expressing a fraction of the value in the system.

4 – If the total of industrial production (I) involves wage labour, and the total of food production (F) involves peasant production (simple commodity production) then the money still represents I+F.

 

Perhaps I have yet again failed to understand something, but I don't see why the 'money' has to come from 'capitalist loans', or from 'prior exchange'. Why can't the 'unrealised surplus products' be the thing traded?

 

Again though, this comes back to the question that I asked a week or so ago, about how capitalists do or don't trade with each other. I don't understand what the magic ingredient is (for non-Luxemburgists) that allows two capitalists to overcome the contradictions.

 

'...If it is finally said that the capitalists have only to exchange and consume their commodities among themselves, then the entire nature of the capitalist mode of production is lost sight of; and also forgotten is the fact that it is a matter of expanding the value of the capital, not consuming it...' as Marx says in Capital Vol. 3, III, Ch. 15. iii.

 

As these commodities (produced by simple commodity production) are not the commodities of capitalists, there isn't the same problem.

d-man
sandwiches are not money

Slothjabber wrote:
Perhaps I have yet again failed to understand something, but I don't see why the 'money' has to come from 'capitalist loans', or from 'prior exchange'. Why can't the 'unrealised surplus products' be the thing traded?

Do you mean all non-capitalist commodities are money? In the opposite case, the capitalists would be the market for the non-capitalist producers. Capitalists would offer their surplus products to buy non-capitalist commodities worth the same value and their surplus products would here function as money. And if every (capitalist) product is money, e.g. sandwiches, then I don't think sandwich producers would have to bother in the first place with finding non-capitalist buyers for realizing their surplus-value part. So you must believe that all non-capitalist commodities are money, which can very well be Luxemburg's underlying assumption, come to think of it. The non-capitalists among themselves don't consider all their commodities to be money but the capitalist would accept every commodity from them as money. The problem is that his fellow capitalists (and employees) don't consider this to be the case. So the capitalist has to sell the non-capitalist commodity for actual money and the problem remains for Luxemburg, where is this money found?

d-man
money in decadence

btw here are 2 texts by Prometeo on the problem of money: http://www.sinistra.net/lib/bas/promet/veje/vejenbobii.html

http://www.sinistra.net/lib/bas/promet/veje/vejeqbucai.html

 

(there are several similar texts translated in English here, here, here or here)

slothjabber
Money and value

d-man wrote:

Slothjabber wrote:
Perhaps I have yet again failed to understand something, but I don't see why the 'money' has to come from 'capitalist loans', or from 'prior exchange'. Why can't the 'unrealised surplus products' be the thing traded?

Do you mean all non-capitalist commodities are money? In the opposite case, the capitalists would be the market for the non-capitalist producers. Capitalists would offer their surplus products to buy non-capitalist commodities worth the same value and their surplus products would here function as money. And if every (capitalist) product is money, e.g. sandwiches, then I don't think sandwich producers would have to bother in the first place with finding non-capitalist buyers for realizing their surplus-value part. So you must believe that all non-capitalist commodities are money, which can very well be Luxemburg's underlying assumption, come to think of it. The non-capitalists among themselves don't consider all their commodities to be money but the capitalist would accept every commodity from them as money. The problem is that his fellow capitalists (and employees) don't consider this to be the case. So the capitalist has to sell the non-capitalist commodity for actual money and the problem remains for Luxemburg, where is this money found?

 

What is money? The representation of values, I'd argue.

 

Non-capitalist or 'simple' commodities are items that can be traded just as commodities produced by capitalism are, and in either case can be expressed as money-equivalents, so capitalist and non-capitalist commodities can be traded against each other.

 

Why do you think the 'money' to buy the capitalist surplus has to come from the capitalist economies? Why can't the money come from the non-capitalist economies ('extra-capitalist formations' as I describe them because they can be sectors of the economy or independent producers inside capitalism)?

 

If money = values, you can't reduce them to 'values produced by capitalism' which it seems you're doing. There are still the extra-capitalist values to take into consideration.

 

 

d-man
Where does the non-capitalist

Where does the non-capitalist get the money to buy commodities from the capitalist? Luxemburg discards the instances where he gets a loan from the capitalist or where he got the money from a prior trade with the capitalist. According to her the money to buy the surplus products of the capitalist must have come from non-capitalist sources; the treasures of the non-capitalist empires and from local small-scale gold producers. That's the conclusion I draw from her theory, unless you want to argue that all non-capitalist commodities are money (so a farmer in post-war France trading his independently produced grain would actually give "grain-money" to capitalists to buy/realise their surplus-value). And decadence would set in when there is no longer sufficient gold from non-capitalist sources to realise the capitalist surplus commodities. Lafargue seems to be even more pessimistic about the lack of gold and the resulting decadence (as he doesn't regard non-capitalist method of gold-production to be a help at all).

Link
The focus is value not money

 

I have read round the the quote slothjabber uses from Marx (in Capital Vol 3 chap 15).  It seems to me it comes from a passage which is arguing for the purpose of capitalism being accumulation and profit, ie expansion, not merely consumption.  Its not an argument against capitalism being able to purchase its own production.  The passage focuses on overaccumulation of capital and overproduction relative to the capacity of capital to be used to continue producing (and it conflicts with social need too but that is clearly not the point of capitalist production)

I am concerned that the some of the discussion of money and how extra cap markets purchases goods from capitalism is missing the point.  Luxemburg remember criticised the discussion of the economy from the perspective of where the money comes from.  I am inclined to think she meant here is that the issue is the extra value that is generated for capitalism.   The benefit that extra capitalist markets bring to capitalism is that they offer cheap profits and must thereby raise the rate of profit being produced by capitalism.    I think slothjabber and somebody else started making this point that it does not matter how this is achieved ie by outright theft of resources, barter, trade or conversion of pre-cap production to capitalist production. What matters is that the cost in the outlay in troops, administration, manpower and fixed assets ie seen as a sort of project cost, must be less than the gains made.   Having a larger market is in itself not a sufficient goal because it would be a capitalist market which Luxemburg rejects as sufficient.  Extra capitalist markets only have value to capitalism if they generate a cheap source of value.  (This leads to a few things i couldn’t answer with any certainty: do pre-capitalism markets generate surplus value???;  Or simply contribute to the accumulation of capital directly???; does trade with extra capitalist markets follow the law of value or not???)   Remember that if capital is producing these goods already it is doing so with a higher constant capital and variable capital cost.  If pre-cap markets do not offer these goods at either less cost than at home or alternatively offering goods unobtainable at home, then capitalism would not be investing in  pursuing them.   As they disappear through integrating into capitalism, what’s left becomes more expensive until it disappears altogether or becomes too small to have any impact on average rates of profit (not sure we have settled that analysis of the size of these markets yet!!)  

The argument from the FROP camp is that there is no problem caused by money circulation because the main contradiction lies in the point that sv falls in relation to c and v combined no matter how (or wherefrom) they are realised because the FROP operates on all realised capital.  Again the logic works here; the FROP applies to total capital whether realised by capitalism or by extra capitalist markets.

More than one person has suggested the assumption that the right amount of money exists to allow circulation of capital. I’m not sure whether it was meant critically or not because it sounds a lazy assumption.  But is there not strong logic to this?  Today money exists as a commodity which enables the circulation of commodities then supply and demand can come into play.  Too little blocks circulation and generates higher prices and the state prints more to overcome the stagnation and price hikes.  Too much generates deflation and lower prices and the state withdraws currency or  revalues to compensate.  Ok,  money is supposed to have a value in itself but that was really tied up with gold and silver anyway and today that element has been lost.  Its primary role in capitalism is as a means of circulation.   Today capitalism is just too big to rely on money with physical values, it needs electronic currency and not even paper money

d-man
Link wrote:Extra capitalist

Link wrote:
Extra capitalist markets only have value to capitalism if they generate a cheap source of value.

For Luxemburg the non-capitalist market are necessary to buy the unrealiseable (surplus-)value of capitalism; it's not that capitalism has too little profit, but too much value. If the value in this surplus part of products could just be considered as money (in case sandwiches are money) there would be no problem of capital accumulation (as Luxemburgists hold). The part of products containing surplus value however needs to be turned into money and here Luxemburg looks for a buyer in the non-capitalist market.

Quote:
More than one person has suggested the assumption that the right amount of money exists to allow circulation of capital. I’m not sure whether it was meant critically or not because it sounds a lazy assumption.

If one would suggest there is enough money in capitalism (to buy the products embodying surplus value) then I think Luxemburg's theory is abandoned (no objection here from my side btw).

Quote:
Today capitalism is just too big to rely on money with physical values, it needs electronic currency and not even paper money

That's Lafargue's point ("today's capitalism" being its decadent era), but I doubt that lack of gold is the cause of the decline or nationalization of money, which is probably the key characteristic of decadence. It's a bit strange why there is little written about it (by ICC or others).

LoneLondoner
On extra-capitalist markets

I get the impression (perhaps wrongly) that comrades are arguing as if money doesn't exist in extra-capitalist markets. It should be obvious that this is not the case: money-using economies with a mercantile element existed for centuries, if not millenia, before capitalism was ever thought of. The relation between capitalism and XCM doesn't seem very complex to me, and I found these words from Marx (quoted in the article on the war economy) illuminating in this respect:

"Within this process of circulation, in which industrial capital functions either as money or commodities, the circuit of industrial capital, whether as money-capital or commodity-capital, crosses the commodity circulation of the most diverse modes of social production, so far as they produce commodities. No matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots), of communes (Dutch East Indies), of state enterprise (such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc. - as commodities and money they come face to face with the money and commodities in which industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue (...) The character of the process of production from which they originate is immaterial. They function as commodities in the market, and as commodities they enter into the circuit of industrial capital as well as into the circuit of the surplus-value incorporated in it".

I can't resist an example I find to be extraordinary (from a recent documentary on the subject): the production of gum arabic, an emulsifier which is a vital ingredient of Coca Cola, and indeed all soft drinks (without gum arabic, a bottle of Coke would be clear water with brown sludge at the bottom). Sudan is the world's main exporter of the stuff (over 50%) and it is still harvested on a more or less tribal basis from trees that grow in the wild, with the collected product being sold through middlemen and so entering the capitalist market.

As I understand it, pre-capitalist markets don't produce surplus value, since this is a specific product of the capitalist production process. They may produce surplus product (ie a surplus which an exploiting class extracts from an exploited class - think of Egyptian fellahs or slaves in the American South producing cotton), but the XCM is important in that it allows capital to realise surplus product. The problem for capital is that in the process, the XCM is inevitably destroyed and absorbed into capitalist social relations.

I think one mistake the ICC tended to make in the past (and which the debate on the Reconstruction period did much to overcome, internally at least), was to be very schematic about this, with the idea that ALL extra-capitalist markets had disappeared by 1914. This is clearly wrong, and in effect contradicts Marx's idea that there comes a point where capitalist relations of production enter into conflict with capitalist property relations. This essentially happens when the enter planet has come within the orbit of the capitalist system, when the world market has been created. What Marx perhaps did not realise, was that this would find expression not in ever greater and more destructive crises on a purely economic level, but to world wide imperialist war - which has itself radically transformed the workings of the capitalist economy by introducing the state as a dominant actor in the economy.

ernie wrote:

In the chapter on ricardo"s theory of accumulation in Theorie of sv vol2 he (Marx) shows how machine makers swop their products, also that others involved in the production of the means of production can do the same

Having looked briefly at the chapter in question, I'm not sure that this is really the case. He certainly shows that machines that appear as product can directly enter a new cycle of production as constant capital (for example, Hewlett-Packard uses its own computers rather than buying them from IBM), but this is surely only a partial phenomenon. In fact Marx ends up not with ernie's categorical statement, but with a question: "If, for example, the manufacturer of iron, coal, timber, etc., buys machinery or tools from the machine-builder and the machine-builder buys metal, timber, coal etc. from the primary producer, then they replace or form new constant capital through this exchange of the reciprocal component parts of their constant capital.  The question here is: to what extent is the surplus-product converted in this way?"

jk1921
I read an interesting take on

I read an interesting take on the issue of debt not too long ago (author escapes me at the moment). The thesis advanced was that the captialist system has been obliged to result to debt, not because of some internal economic contradiction, but in order to pacify the working class.

Once the post-war boom had come to a close, a period in which the working class had come to expect regular wage increases and a general advance in their overall living conditions, in order to maintain social peace the state has been obliged to continue various social programs despite the fact that it no longer receives enough tax revenue to cover their cost. The only way to do this was to print money, which worked well enough for awhile, until at the end of 70s, inflation began to eat into investors' profits, leading to a captial strike. The state thus was obliged to open up the financial markets and replace public debt with private debt--the massive extension of consumer debt that took place from the mid-80s to the mid 00s, which allowed the working class to maintain a certain standard of living above what "market justice" should have allowed. However, once this bubble burst with the end of the subprime boom in the US, the state has been forced to bail out private financial insitutions, shifting private debt to public debt again. Now, the state is carrying major debt on its books, causing the financial insitutions to downgrade its credit rating, raising its borrowing costs and provoking various crises.

So, in this author's view--debt is not so much an attempt to replace insufficent pre-capitalist markets, it is made necssary by the threat of the class struggle. Thus, the problem with the functioning of captialism is actually state captialism. If the state would get out of the way and allow markets to self-regulate capitalism could return to something like "equilibrium'. The problem of course is that this would lead to massive unemployment, which would conflict with the continuing expectations for an improving quality of life among the working class, and conjuring up the threat of massive class struggle. In a sense captialism has no real "internal" contradition, other than that which the working class gives it through its struggle. State captialism is not so much an adaption used to cheat the law of value, but to stymie the class struggle. The real contradiction of captialism is social, not economic.

I am not saying I agree with this take. But it is interesting to read an account that reconciles the empirical reality of a massive debt crisis with the idea that captialism is an essentially self-reproducing system that does really have a crisis that results from a strictly "economic mechanism."

jk1921
Misunderstood

d-man wrote:

jk1921 wrote:
Read again, D-Man. Nowhere, did I say I consider reading texts a withdrawal from discussion. What I said was that the sense given from several posts in this thread is that people who haven't read certain texts need to go home and study before they can come back and play with the big boys.

Reading relevant texts isn't a withdrawal from discussion, so if I recommend reading relevant texts it isn't a recommendation to withdraw from discussion.

 

OK, perhaps I misunderstood you. But what did you mean exactly about "not rediscovering America"?

jk1921
What is Capitalist?

LoneLondoner wrote:

I can't resist an example I find to be extraordinary (from a recent documentary on the subject): the production of gum arabic, an emulsifier which is a vital ingredient of Coca Cola, and indeed all soft drinks (without gum arabic, a bottle of Coke would be clear water with brown sludge at the bottom). Sudan is the world's main exporter of the stuff (over 50%) and it is still harvested on a more or less tribal basis from trees that grow in the wild, with the collected product being sold through middlemen and so entering the capitalist market.

As I understand it, pre-capitalist markets don't produce surplus value, since this is a specific product of the capitalist production process. They may produce surplus product (ie a surplus which an exploiting class extracts from an exploited class - think of Egyptian fellahs or slaves in the American South producing cotton), but the XCM is important in that it allows capital to realise surplus product. The problem for capital is that in the process, the XCM is inevitably destroyed and absorbed into capitalist social relations.

 

All of this seems to me to raise an even deeper question--what exactly is captialist and what is not? Were the Iroquois captialist when they made themselves the middlemen between the tribes of the North American interior and the Dutch, British and French fur traders on the coast? Or had they only "come within the orbit of captial." There is a lot of historical literature that sees the development of specically capitalist production in late 18th/early 19th century Britain as a truly exceptional period in what is a capitalist system characterized more by trade, finance and outright forced expropriation of value. Obviously captialist production has spread since then, but in much of the world it still competes with other forms of labor exploitation, but does that mean these areas are "less capitalist."  There does seem to be some issues regarding how we define what is captialist and what in not in this discussion.

jk1921
Technical Knowledge of Marx

Demogorgon wrote:

Now, we all hope that at some point the class will begin to move and begin to question what's going on around it. What will happen then? There are legions of leftists and their academic affiliates (who often have a far better technical understanding of Marx than most of us, even if they rip out its revolutionary guts) prepared to offer the usual leftist "solutions" to the crisis and convincingly demolish any talk about decadence. The only way to combat the insidious cancer of leftism is for the class to reappropriate its theoretical heritage: they've stolen our theory and we have to take it back!

Something doesn't sit right with me about this. How can people who are not really Marxists have a better "technical knowledge" of Marx than Marxists do? There is an epistemologic problem here. Didn't Lukacs and Korsh argue that Marxism can really only be understood in the course of practicing it?

But I think this underlines some of the anxiety and exasperation that is expressed throughout this thread. There seems to be a sense among many of us (myself included) of profound confusion, almost embarrassment, surrounding our inability to really know, with any degree of certainty, what causes captialism's crisis. But how can it be that academics or leftists know it better than us if they strip out decadence? Should decadence be a deduction from a clear understanding of captialism's internal dynamics or can we infer it from the social conditions that we see around us? I think this is Fred's question. How can we be certain of decadence without really being able to explain it? Is there the danger of falling into a quasi-religious trap here?

Demo, you are right that no "professional" economist thinks the theory of decadence is worth ten cents. Many seem to think the crises we are experiencing today are just a momentary phenomenon accompanying the transition from US to Chinese hegemony over the capitalist world system. How do we know they are wrong, if we can't explain the underlying dynamics of captialist crises without much confidence and if they have a "better technical understanding of Marx"? 

Still, there also seems to be another tendency in these discussions--to assert the superiority of one particular theory, because the "model" works, whatever the empirical problems (both sides are guility of this at times). At least when we do this, we can assuage the anxiety that comes along with not knowing for sure. This may be perfectly understandable, humility in the face of big existential questions is not easy.

Demogorgon
Theories of Surplus Value

LoneLondoner wrote:
As I understand it, pre-capitalist markets don't produce surplus value, since this is a specific product of the capitalist production process. They may produce surplus product (ie a surplus which an exploiting class extracts from an exploited class - think of Egyptian fellahs or slaves in the American South producing cotton), but the XCM is important in that it allows capital to realise surplus product. The problem for capital is that in the process, the XCM is inevitably destroyed and absorbed into capitalist social relations.

As I understand it, surplus value is capitalism's expression of surplus labour, the latter being universal to all exploiting societies embodied in surplus product. However, the moment that this surplus product is traded you start to have the genesis of surplus value, as exchange is based on value.

I don't think you've yet demonstrated that "XCMs" are necessary for capitalism to realise "surplus product" (I presume you mean surplus value).

LoneLondoner wrote:
I think one mistake the ICC tended to make in the past (and which the debate on the Reconstruction period did much to overcome, internally at least), was to be very schematic about this, with the idea that ALL extra-capitalist markets had disappeared by 1914.

I don't think Luxemburg ever envisaged a world where all XCMs had vanished but rather that as capitalism got closer to this point it would be engulfed by ever more serious convulsions.This return to "classical" Luxemburgism certainly frees you from the contradictions around credit and "cheating the law of value" etc. Naturally, it doesn't overcome all the direct criticisms of Luxemburg's work and its relation to Marx's theory. Nor does it free you from the empirical problem of demonstrating that these markets still exist, that they are sufficient for accumulation or that capitalism has much intercourse with them today.

Too often, our polemics on this question focus on the destruction of certain social strata and their integration into capitalism. The fact that Chinese peasants are being herded into factories doesn't mean they ever constituted an external market (let alone a "sufficient" one) when they were peasants.

LoneLondoner wrote:
Having looked briefly at the chapter in question, I'm not sure that this is really the case. He certainly shows that machines that appear as product can directly enter a new cycle of production as constant capital (for example, Hewlett-Packard uses its own computers rather than buying them from IBM), but this is surely only a partial phenomenon. In fact Marx ends up not with ernie's categorical statement, but with a question: "If, for example, the manufacturer of iron, coal, timber, etc., buys machinery or tools from the machine-builder and the machine-builder buys metal, timber, coal etc. from the primary producer, then they replace or form new constant capital through this exchange of the reciprocal component parts of their constant capital.  The question here is: to what extent is the surplus-product converted in this way?"

He more-or-less answer this in the next bit: "If this portion [i.e. profit] is large enough, it can be consumed partly individually and partly industrially, And in this latter case, an exchange of products takes place between the producers of constant capital; this is, however, no longer an exchange of the portion of their products representing their constant capital which has to be mutually replaced between them, but is an exchange of a part of their surplus-product, revenue (newly-added labour) which is directly transformed into constant capital, thus increasing the amount of constant capital and expanding the scale of reproduction."

He later points out the essential ultimate nature of the process as "fundamentally an exchange between means of subsistence and constant capital". This is clearly connected to the schemas he wrote in Vol 2 which also demonstrate the process of reproduction as an exchange between Dept I & II.

He also makes the point that this process is extremely vulnerable to all sorts of factors. The fact that it can happen doesn't necessarily mean that it will happen.

Demogorgon
jk1921 wrote:How can people

jk1921 wrote:
How can people who are not really Marxists have a better "technical knowledge" of Marx than Marxists do?

You have people like David Harvey, for example, who produce authorative explanations of Marx's work (I'd recommend The Limits of Capital to anyone!). I don't think anyone could doubt his knowledge of Marx's core economics texts to be very incisive and an excellent learning tool. He's also a leftist and a conservative one at that.

You can also consider the responses to Luxemburg's work. Bauer, for example, demolished her initial thesis (it must be acknowledged that certain aspects of Bauer's reply, such as underaccumulation and his population theory, were a complete departure from Marx and Luxemburg targeted these weak points in Anti-Critique but this doesn't change the fact that his core argument defeated Luxemburg). It was left to Grossman to show that while Bauer's schemas foiled Luxemburg they didn't represent a "crisis-free" capitalism but, on the contrary, actually demonstrated an inherent breakdown tendency.

jk1921
Marxism?

Demogorgon wrote:

 

You have people like David Harvey, for example, who produce authorative explanations of Marx's work (I'd recommend The Limits of Capital to anyone!). I don't think anyone could doubt his knowledge of Marx's core economics texts to be very incisive and an excellent learning tool. He's also a leftist and a conservative one at that.

But is he a Marxist?

Demogorgon wrote:

You can also consider the responses to Luxemburg's work. Bauer, for example, demolished her initial thesis (it must be acknowledged that certain aspects of Bauer's reply, such as underaccumulation and his population theory, were a complete departure from Marx and Luxemburg targeted these weak points in Anti-Critique but this doesn't change the fact that his core argument defeated Luxemburg). It was left to Grossman to show that while Bauer's schemas foiled Luxemburg they didn't represent a "crisis-free" capitalism but, on the contrary, actually demonstrated an inherent breakdown tendency.

What method did Bauer--a Social Democrat--use to arrive at "the truth" over Luxemburg, a revolutionary of the first order? Was there any relationship between their politics and their respective analyses of capitalism's crisis?

Demogorgon
But is he a Marxist?

jk1921 wrote:

But is he a Marxist?

In our sense of the term, of course not. But does he understand aspects of Marx's theory extremely well? Yes, of course. And more importantly, does he (and those like him) act as a vector to spread bourgeois ideology in the working class with a working class dressing? Yes.

That doesn't mean, of course, that his books on Marx aren't worth reading (some of them anyway).

[/quote]

jk1921 wrote:

What method did Bauer--a Social Democrat--use to arrive at "the truth" over Luxemburg, a revolutionary of the first order? Was there any relationship between their politics and their respective analyses of capitalism's crisis?

There's no mechanical link between the  specific crisis theories and an individual's revolutionary politics as far as I can see.  Luxemburg, of course, wanted to establish an objective economic basis for the downfall of capitalism in order to support a revolutionary position as against the reformists who posited the idea of a "crisis-free" capitalism in order to support their position.

Luxemburg was right in her aim, but not her execution and the Revisionists attacked the error in the latter in order to discredit the former.

Of course, it should also be pointed out that even some Left Communists such as Pannekoek rejected both Luxemburg's and Grossman's argument about breakdown from economic causes while remaining loyal to the revolutionary cause. Lenin and Bukharin largely drew their economic theory from Hilferding who was in the reformist camp.

jk1921
Objectivism

Demogorgon wrote:

It was left to Grossman to show that while Bauer's schemas foiled Luxemburg they didn't represent a "crisis-free" capitalism but, on the contrary, actually demonstrated an inherent breakdown tendency.

I get that this is a dispute between "objectivists" (as Aufheben would put it). The argument I talked about above (and if you give me a day or two, I'll find a link) seems to be more of a "class struggle" theory of crisis. It was interesting to me in its attempt to account for the explosion of both private and public debt over the last thirty years without positing that this debt has (or had in the past) some kind of "economic function" for the system. What are the political implications of such an analysis? As Demo states, Pannekoek seems to have held a similar view (in the sense that captialism was not prone to some kind of breakdown) and certainly these "class struggle" theories of crisis are popular among the new generations--partly, I suspect, because of their frequent use among the anarcho-councilist-modernist set.

On that note, perhaps it has been stated somehwere in this dense thread before, but how exactly do those who reject "updated Luxemburgianism" account for the increasing weight of debt on the capitalist system? I don't think this had been made very clear. Obviously, its an empirical fact we have to acknowledge isn't it,  regardless of whether or not we think it acts as a subsitute for "insufficient pre-captialist markets"?

jk1921
Epistemology

Demogorgon wrote:

There's no mechanical link between the  specific crisis theories and an individual's revolutionary politics as far as I can see.  Luxemburg, of course, wanted to establish an objective economic basis for the downfall of capitalism in order to support a revolutionary position as against the reformists who posited the idea of a "crisis-free" capitalism in order to support their position.

Hmm, you may be right, but I think this raises as many questions as it answers. If Marxism is some kind of scientific method that can be mastered and applied by anyone (as you think Harvey a leftist academic) and Bauer (a Social Democratic reformist) could do (at least in certain instances), then I think this throws the entire nature of Marxism as the the unity of theory/praxis into question-- aperdspective most forcefully stated by Lukacs and Korsch--whose work on this issue seems to have been a genuine product of the revolutionary wave.

If this is right, then it does seem to leave the door open for academics and professional Marxist economists to "know the world" better than us revolutionaries can, because they have the skills developed through a scholarly education/job to carry these inventigations much further than we can. If this is the case, it seems that the judgement of Marxist economists has to be given greater weight--and yet the vast majority of them think the entire theory of decadence is a joke (not to mention decomposition). Once again, how do we know we are in some kind of existential crisis of the captialist system and not some momentary turbulence related to the end of one cycle of accumulation under US hegemony and the beginning of another under that of East Asia (keep in mind in the longue duree as dealt with by historians "momentary" might mean several decades)? This might be getting a little away from the original topic of this thread, but I think it is a serious question that requires some pondering.

On another note, the ICC has often been accused, at least in my experience, of being "anti-academic" and sometimes even "anti-intellectual." So this begs the question, what is wrong with academia exactly? In the period of ascendance the workers' movement--because it was able to have a weight, a prescence, within civil society could have its own academics, party schools, etc. Pannekoek, Luxemburg, etc. were frequent lectuerers at the SPD's various party schools. But is this no longer possible under decadence? Why not? What then takes the place of "scholarly research"? What is the method? What do we substitute for "peer review"? Who exactly are our peers?

All of this raises many issues related to the broader discussion of Marxism and Science broached in other threads--but I don't think we can get away from them, because we are discussing economics. In fact, these issues seem to be even more salient here. When do we defer to the "academic experts" and when do we denounce them as bourgeois ideologues? When they confirm/reject our apriori theoretical articles of faith? When they run up against the hard and fast boundary of the ICC (or ICT) platform? What does the kind of empircal common sense Fred seems to reference have to do with all of this?

 

 

Demogorgon
Debt fever

jk1921 wrote:
On that note, perhaps it has been stated somehwere in this dense thread before, but how exactly do those who reject "updated Luxemburgianism" account for the increasing weight of debt on the capitalist system? I don't think this had been made very clear. Obviously, its an empirical fact we have to acknowledge isn't it,  regardless of whether or not we think it acts as a subsitute for "insufficient pre-captialist markets"?

Very quickly, as profitability dries up, capital becomes mobile, seeking out the most likely areas where it can exploit effectively. Both speculation and the "financialisation" of the economy are methods to leech surplus value from the remaining profitable parts of the system. The development of the international credit system has enabled an enormous export of capital both geographically (e.g. the huge factories in China), but also into new areas of the economy (e.g. the dot.com boom, etc.). Speculative fever abounds as the contradictions worsen, with excess capital flooding into chance of profit transforming the few profitable areas into a succession of ever growing bubbles.

There is much, much more to be said on this, but I don't have the time to develop this at the moment.

jk1921
Elaborate

Demogorgon wrote:

jk1921 wrote:
On that note, perhaps it has been stated somehwere in this dense thread before, but how exactly do those who reject "updated Luxemburgianism" account for the increasing weight of debt on the capitalist system? I don't think this had been made very clear. Obviously, its an empirical fact we have to acknowledge isn't it,  regardless of whether or not we think it acts as a subsitute for "insufficient pre-captialist markets"?

Very quickly, as profitability dries up, capital becomes mobile, seeking out the most likely areas where it can exploit effectively. Both speculation and the "financialisation" of the economy are methods to leech surplus value from the remaining profitable parts of the system. The development of the international credit system has enabled an enormous export of capital both geographically (e.g. the huge factories in China), but also into new areas of the economy (e.g. the dot.com boom, etc.). Speculative fever abounds as the contradictions worsen, with excess capital flooding into chance of profit transforming the few profitable areas into a succession of ever growing bubbles.

There is much, much more to be said on this, but I don't have the time to develop this at the moment.

 

Thanks Demo, it would be good to read more on this perspective. I am not aware of what internal texts may have been produced on this before, or if this got taken up somewhere in the dense discussion on the trente glorieuses, but perhaps some space could be devoted to taking up this issue in more depth at some point? I am talking specifically in the role of debt since the end of the post-war reconstruction periods.

Fred
ernie wrote: "... We are

ernie wrote:
"... We are faced with trying to analysis the deepest and most profound economic crisis in the history of capitalism, also the historic unfolding of decadence. If we cannot provide the necessary depth of analysis which will allow the  working class to understand the forces at work we are not fulfilling one of our most important roles...

The crisis of capitalism for us ... is not simply an economic question but one of  the social dynamic of capitalist relations. At present this crisis is taking on historically unprecedented levels of acceleration, destructiveness and profundity: involvinng every aspect of society."

So there's (1) the profound economic crisis (2) the unfolding of decadence (3) the need to understand the forces at work and (4) the fact that the crisis isn't simply an economic question after all but a social
question involving capitalist relations of production. These have presumably become a fetter on the advancement of society as Marx said they would, and posit the need for a revolution.

This fits in with what the author jk quotes had to say, whereby the the endless debt that capitalism has pursued against it's better "free market" nature, is all finally to try and avoid the working class finding out what's going on, and possibly engaging in revolt. jk quotes his author as saying:

jk1921 wrote:
So, in this author's view--debt is not so much an attempt to replace insufficent pre-capitalist markets, it is made necssary by the threat of the class struggle. Thus, the problem with the functioning of captialism is actually state captialism. If the state would get out of the way and allow markets to self-regulate capitalism could return to something like "equilibrium'. The problem of course is that this would lead to massive unemployment, which would conflict with the continuing expectations for an improving quality of life among the working class, and conjuring up the threat of massive class struggle. In a sense captialism has no real "internal" contradition, other than that which the working class gives it through its struggle. State captialism is not so much an adaption used to cheat the law of value, but to stymie the class struggle. The real contradiction of captialism is social, not economic ...

This seems very reasonable. But perhaps it's just too simple for this thread.

Alf
Reading group?

I normally shy away from reading groups because they sound like a huge added commitment. But I have been thinking that it might be worthwhile creating such a group to study Marx's chapter on Ricardo's theory of accumulation. For one thing, it will enable us to take a step back from the Luxemburg polemic and go back to our agreed starting point - Marx. And although the chapter is by no means one of Marx's most difficult, we would all certainly benefit from a collective, cooperative reading of it. 

Perhaps if we say that contributions should be short and avoid long quotes (since we would be focusing on a single text anyway), it will not seem like too heavy a task. Basically a contradictions of capital twitter feed. 

As I have argued previously, I do not think Marx signed the finished book on the problem of acumulation and crisis, and even then we have yet to catch up with many of his lines of inquiry. With regard to this chapter, I agree with Lone Londoner that we can still see Marx asking questions all through it, even while destroying Ricardo's errors.

My own question I think is this: if, as Ernie and Demogorgon seem to argue, Marx solved the problem of accumulation in the first part of the chapter, why does he spend most of the rest of it arguing against Ricardo's denial of the problem of overproduction and the need for an ever expanding market? I have never found an explanatiion for this among those who put forward the 'pure FROPist' theory, to coin an ugly phrase that should probably be banned. 

Anyway, comrades can think about whether the study group is a good idea or not, whatever conclusions it might come up with. There is no hurry and we are facing a couple of busy months in the ICC, so there is time to ponder. 

 

Fred
Alf wrote: ...we are facing a

Alf wrote:
...we are facing a couple of busy months in the ICC
 

Ooh! Can't help being nosy Alf, but are you all doing something really exciting - incorporating new groups, initiating new members, rapprochement with ICT etc.? You rouse my comradely curiosity and longing to know. Fraternally Fred.

Alf
exciting but not out of the ordinary.....

I'm thinking mainly of a number of national meetings (which are always international meetings for us) , plus a big TUC demo next week in the UK, the anarchist bookfair the week after, etc.....

Demogorgon
"My own question I think is

"My own question I think is this: if, as Ernie and Demogorgon seem to argue, Marx solved the problem of accumulation in the first part of the chapter, why does he spend most of the rest of it arguing against Ricardo's denial of the problem of overproduction and the need for an ever expanding market?!"

I think it's worth pointing out another correction of what seems to be another misunderstanding. In order to counter Luxemburg's error, it's easy to give the impression that "FROPists" don't think there's a problem and falling back into the Revisionist or Ricardian error about overproduction. This is not true. I don't deny overproduction, but I see the roots of it somewhat differently.

The problem with this discussion when it turns to Marx is that any mention of overproduction or external markets by Marx is seen as a validation of RL's theory - ironic when RL saw herself as disagreeing with Marx! Why is it that overproduction and the need for an everexpanding market (both true) automatically leads to confirmation that RL was right that external markets are necessary for capital accumulation?

Demogorgon
On JK1921's point about

On JK1921's point about Marxism as a science, etc. I think this needs to be taken up on a separate thread as it's so huge it will bog this one down. But it is a very important point which needs some thought.

ernie
I can only agree with

I can only agree with Demogorgon's reply to alf. I really dispair at times and want to pull my hair out and bang my head against a wall when I read such comments as alf. Underlying this is the unsaid idea that all those who do not agree with Luxemburg are unconsciously defending problem free accumulation because they do not explain the market question. This is underline by our constant insistence that those who defend the "falling rate of profit" do not explain the market, as if the market is some supernatural thing hoovering above the laws of accumulation and not integrally related to the unfolding of the law of value.

I can only think that Alf did not read my last and fairly detailed post where I try to explain in detail that I do think that the fundamental problem of capitalism is the contradiction between exchange value and use value, and that this dynamic contradiction finds expression through the fundamental contradiction between capitalism's constant need to expand the production of surplus value and the limits of the market. May be I did not explain myself very well but I  think the general thrust of what I was trying to say was pretty clear.

The point I was trying to make about  the chapter on Ricardo's theory of accumulation in vol 2 of the Theories of Surplus Value, was not that it said that capitalism could accumulate without problems (I have a note book full of quotes from this chapter saying just this) but that it starts from the fundamental premises that capitalisn realises surplus value through the process of reinvestment of surplus value, That Marx's explains in words, what he demonstrated with the schemas, how Surplus value is re-invested. On this basis he then goes on to show how the laws following from this mean that there will be permanent overproduction and that these laws will limit the ability of the market to expand at the rate of the expansion of production. Marx does talk about the expansion of the world market, but he sees each expansion as the taking forwards of this contradiction. The opening up of new markets means the expansion of the contradictions of capitalism.

I am not going to try to defend those who defend the falling rate of profit, because I disagree with the way they apply Marx's understanding of accumulation at time. The recent text by the ICT on the question of the Falling Rate of Profit, which is extremely interesting and a good defense of Marx, does not mention the problem of the expansion of the market once. But the comrades would probably say that for them the question of the market is integral to that of the process of accumulation so they do not need to state the obvious.

Alf suggests a discussion of the chapter on Ricardo's theory of accumulation as a way forwards, but if such a discussion is going to start on the basis that some of us believe that we are defending the idea of overproduction and others think that we really arn't despite saying and proving so: we are going to simply carry on going around and around in circles. As this discussion has done for decades within the revolutionary milieu, each group locked into a vision of what the other is "really" saying, despite each others denials of that they are meant to be "really" saying . It is true that someone can say one thing but really mean something else. But in the case of the discussion of Marx's theory of accumulation the whole discussion has become locked into the disagreements between the groups. Thus you have the absurd position where someone cannot belong to the ICT and defend Luxemburg, whilst at the same time we insistently say their defense of Marx does not really explain the theory of the Market and the implication that they  defend  somehow capitalism's ability to expand without problems when they obviously do not. It would appear that if either group changed or developed its position it would somehow be a disaster. Indeed it will be a disaster if we do not learn to live with such differences and seek to fully understand what each other  because it will stand in the way of future regroupment.

On the level of the discussion between comrades of the organisation, it is a real concern that after a discussion of 127 posts we have ended up where we began with a clear lack of understanding of the positions comrades are defending. Why is it that this question causes such problems?

 

 

 

ernie
In response to a post by Alf

In response to a post by Alf about Grossmann not giving an explanation of the Marx in The Law of Accumumation, the comrade did say he had only read the English abridged edition. In this edition, the 104 dense page of analysis in the orginal is reduced to 33 pages. The sub heads (in the Spanish full edition give a better idea:

-1. The function of the exterior market in Capitalism

-a The importance of the exterior trade for the increase if the variety if use values

- b the expansion of the area of valorization (colocarion) as a means for reducing the costs of production and circulation

- c exterior trade  and the sale of commodities a price of production different to their values

- d does  the industrialisation of the agrian colonial countries mean the end of capitalism? The internationalization of the economic cycle

- e Exterior trade and the importance of world monopoles; the world wide struggle for raw materialis. The importance of monopolitic prices

- f the function of the export of capital in capitalism, the overaccumulation of capital and the struggle for spheres of investment. The role of specualtion in capitalism

- a) The presentation of the actual problem

- c) overaccumulation and the export of capital according to the marxist concept

- di) inductive proof

- e) the result. Excascerbation of the international struggle for spheres of lucrative investment. The transformation of the relationship between money capital and industrial capital.

This is a fairly hurried translation and the lettering is not completely correcct, but it gives an idea of the importance that Grossmann gave to this question. It may not be based on an analysis that alf agrees with but it is a serious effort to address the question. Also Grossmann sees the market as being more than simply exterior trade.

d-man
re:jk

jk1921 wrote:

d-man wrote:

jk1921 wrote:
Read again, D-Man. Nowhere, did I say I consider reading texts a withdrawal from discussion. What I said was that the sense given from several posts in this thread is that people who haven't read certain texts need to go home and study before they can come back and play with the big boys.

Reading relevant texts isn't a withdrawal from discussion, so if I recommend reading relevant texts it isn't a recommendation to withdraw from discussion.

 

OK, perhaps I misunderstood you. But what did you mean exactly about "not rediscovering America"?

Awareness and response to the whole literature about Luxemburg is always helpful, e.g. here is an overview, which also takes into account the role of credit (the upshot is that, within the Luxemburgist perspective, credit can't explain capitalism's continued survival), in order to make a better informed discussion possible (and less tedious).

Alf
Demogorgon wrote:  The

Demogorgon wrote: 

The problem with this discussion when it turns to Marx is that any mention of overproduction or external markets by Marx is seen as a validation of RL's theory - ironic when RL saw herself as disagreeing with Marx! Why is it that overproduction and the need for an everexpanding market (both true) automatically leads to confirmation that RL was right that external markets are necessary for capital accumulation?"

 

No, I am not assuming that any mention of overproduction in Marx automatically validates Luxemburg; that's why i am proposing a detailed discussion of exactly what Marx is saying. But if as Ernie says the discussion starts with two absolutely fixed positions and no possibility of any movement, it probably won't get very far. 

Alf
PS Ernie

Please don't bang your head against the wall, we need your brain intact. I have never seen you as a 'pure FROPist' since you always pointed out that Marx insisted on the need for the expansion of the market and on the problem of overproduction. 

Demogorgon
"I have never seen you as a

"I have never seen you as a 'pure FROPist' since you always pointed out that Marx insisted on the need for the expansion of the market and on the problem of overproduction."

The point is that a pure FROPist (well, MAFROP in my case - Mass and Rate of Profit) also insists on the need for the expansion of the market and the problem of overproduction. But they see the expansion of the market and overproduction as dynamic processes that springs from the dialectical contradictions with the movement of accumulation, rather than as a permanent impossibility of realising surplus value within capitalism.

 

jk1921
Authority?

Demogorgon wrote:

On JK1921's point about Marxism as a science, etc. I think this needs to be taken up on a separate thread as it's so huge it will bog this one down. But it is a very important point which needs some thought.

 

Fair enough--but I am not sure the two can be seperated. If we are going to cite academic authorities to make a particular point then it begs the question of the nature of academic authority and its relationship to the Marxist idea of the unity of theory/praxis.

Demogorgon
"Fair enough--but I am not

"Fair enough--but I am not sure the two can be seperated. If we are going to cite academic authorities to make a particular point then it begs the question of the nature of academic authority and its relationship to the Marxist idea of the unity of theory/praxis."

I agree they're connected but the question relates to phenomenon of class consciousness and theory generally, rather than specifically regarding the economic question even if that's how it arose here.

LoneLondoner
What is needed?

Demogorgon wrote:

The point is that a pure FROPist (well, MAFROP in my case - Mass and Rate of Profit) also insists on the need for the expansion of the market and the problem of overproduction.

Well, my admittedly hazy memory of the polemics with the ICT in the past basically comes down to their denial that the market posed any problem whatsoever - which is not the case for DG as he says, or indeed generally for ICC comrades who defend FROP (and by the way those more inspired by Luxemburg don't deny FROP either, of course). 

ernie wrote:

...our constant insistence that those who defend the "falling rate of profit" do not explain the market, as if the market is some supernatural thing hoovering above the laws of accumulation and not integrally related to the unfolding of the law of value

I'm not sure what is meant here since Luxemburg certainly doesn't think of the market as "not integrally related to the unfolding of the law of value". You can't get much more integrated than the idea that the specifically capitalist exploitation of the working class (ie c+v+s) necessarily means that the internal capitalist market is inadequate to realise surplus value. And surely the essence of capitalism is commodity production, commodities being meaningless outside the market (the first chapter in Capital is titled, precisely, "Commodities"...)

But on the other hand I share the frustration with the sense that these discussions go round in circles sometimes. I personally don't want to get into a "pure" defence of Luxemburg because I think it would not only be untenable - it would be against the whole spirit of marxism and scientific inquiry in general (and the same is true for Marx by the way). 

I can't help thinking that what we need is some kind of programme of research (on whatever limited scale we can manage) which draws some inspiration from our efforts on science. We need to develop a coherent narrative (or several, why not?) which can give a comprehensible and convincing account of capitalism's development over 250 years. Such an account would inevitably begin as a theoretical and hypothetical effort, which should be able not just to explain what we know but to make predictive statements about things of which we are ignorant. Then we can investigate those and see if the statements are roughly accurate or not. You would have to say "If such and such is correct, then we would expect to observe x or y in historical terms". This would be a very big job of course, but would at least give some kind of direction.

By the way, Luxemburg's emphasis on the importance of the non capitalist world goes beyond markets (though the ICC has placed almost exclusive emphasis on that). In the Accumulation (chapter on "The reproduction of capital and its social setting") she writes: "It is not merely a matter of a market for the additional product, as Sismondi and the later critics and doubters of capitalist accumulation would have it (...) the accumulation of capital becomes impossible in all points without non-capitalist surroundings...". Luxemburg in fact points to capital's need for external sources of labour and raw materials - and I think it might be interesting to add something that nobody in those days imagined, that is waste disposal. And looked at in this light, you could get a much more complete critique of 21st century capitalism, which would bring in the colossal and unending migratory flows, the rape of the planet for raw material, and its terminal pollution with garbage and waste product.

jk1921
Wouldn't a research programme

Wouldn't a research programme with the scope you are talking about almost require the existence of some kind of academic institute--something which was possible for the workers' movement to have in the period of social democracy, but which today seems highly problematic? BTW, I agree with what seems to be your premise--let's put the economic models of captialism in the perspective of what actually happened in history.

But, why go back only 250 years? Where does capitalism, as a world system, really begin? Wouldn't need to go back at least to the late medieval period?

Link
Going round in circles

 

LoneLondoner, It is ironic that you complain about discussions going round in circles, just after you make the statement about  the formula c+v+s “necessarily means that the internal capitalist market is inadequate to realise surplus value’.  I would like to ask you to go back and read the very first contribution in this thread, because what this is the very same point that I queried and asked for an explanation of .  I don’t think that c+v+s does explain why the internal market is inadequate, but nobody since has attempted to explain how it does and where I am wrong - if I am wrong.  I would be very grateful if you can do so, but please don’t just say ‘of course its true’

 “We want to defend Luxemburg but we don’t want to examine what she actually said” is something I seem to have heard before on this thread so im an surprised to find myself thinking that  it would appear that the ICC does not have clear answers to how to apply her theory to decadence.   I do not therefore understand why it is not appropriate to go back and discuss the content of what Luxemburg actually said.  I do not at all question her importance but it is only by reading and discussing her ideas that it is possible to work out what is right and what is wrong in her theories about capitalism.  So I do not see why this is a matter of a pure defence of Luxemburg but of a willingness to defend in an appropriate way.

Having said that I do agree that some sort of review of capitalism’s development as an economic system would be interesting - taking account of all theories.  Im not sure about predictions but maybe an updated overview of the development of decadence and hence it causes.  In many ways i suppose im surprised that the ICC has not done this already in the discussions on decadence in the IR.

It has been suggested that one useful activity would be a study group on Marx’s chapter on Ricardo and accumulation.  If you folks think it would be constructive then I would be very interested to join in.   Can I just confirm that you mean Chapter XVII of Theories of Surplus Value.  Ricardo’s Theory of Accumulation and a Critique of It.   I will start reading anyway but will somebody be starting a new thread??

LoneLondoner
Would be nice...

jk1921 wrote:

Wouldn't a research programme with the scope you are talking about almost require the existence of some kind of academic institute

Ideally yes of course, but since we don't have that how about at least approaching the question in this kind of way? Perhaps it would help us take a new approach.

jk1921 wrote:

But, why go back only 250 years? Where does capitalism, as a world system, really begin? Wouldn't need to go back at least to the late medieval period?

Ah well... you have to start somewhere, after all, and given what you say above it seems a good idea to limit our ambitions.

By the way, for a magnificent overall view of the historical emergence of capitalism I strongly recommend Fernand Braudel.

jk1921
Braudel

LoneLondoner wrote:

By the way, for a magnificent overall view of the historical emergence of capitalism I strongly recommend Fernand Braudel.

Yes, it was the Braudelian/Wallerstein world systems theory I was referring to in post #114 above. But anyone attempting to read Braudel's magnum opus (Capitalism and Civilization) cover to cover better clear their calendar for the next year or so. There actually is a Braudelian academic institute--its at SUNY Binghamton. However, from my knowledge--the application of crisis theory to the history of captialist development is not high on the research agenda.

Its never been quite clear to me what counts as captialism in that tradition. It seems to have more to do with trade and finance then exploiting surplus value from a proletariat. Specifically capitalist production seems to be just one episode, tecnhique, etc. applied by capitalism in particular historical junctures--a method of internalizing certain costs or something like that. Captialism is, in that school, inherently adaptable, and although it experiences cycles and crises, etc. would seem to have a life beyond the limits of the kind of crisis theory we are talking about. At any rate, there are probably some improtant differences about what counts as captialsm for that school and the Marxism we are used to.

jk1921
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jk1921
Whole Literature?

d-man wrote:

Awareness and response to the whole literature about Luxemburg is always helpful, e.g. here is an overview, which also takes into account the role of credit (the upshot is that, within the Luxemburgist perspective, credit can't explain capitalism's continued survival), in order to make a better informed discussion possible (and less tedious).

Who can possibly be aware and respond to the "whole literature" about Luxemburg? That's a tall order.

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