Freelance left labour historian Humphrey McQueen as guest comments on the capitalist crisis: exploitation the basis, it’s not socialism and all capitalists are parasites.

Exploitation leads to over-consumption

Even if $US700bn cauterises the collapse of the sub-prime mortgage market, it will not touch the core of the crisis. The root cause is the exploitation of wage-labour by capital.

That fact played next-to-no part in the opposition to WorkChoices. Even the Left focused on Howard’s personality or his ideology. The ACTU is left with no explanation for Gillard’s Fairness as a different way of organising capital and disorganising labour. Worst of all, the Left grouplets missed the chance to revive an understanding of the laws of capital among militants. The present upheaval offers a chance to repair that fault.

Marxist-Leninists do not possess a magic wand for tracking the snakes-and-ladders of the financial chaos of the past fifteen months. Nor do we have a solution up our sleeves. Still less can we predict where the market will be tomorrow, or the system rupture next.

What we do know for sure is why such events are intrinsic to the expansion of capital. The competition among capitals combines with pressure from wage-slaves to drive each corporation to increase output. The resultant increase in commodities must be sold if capitals are to profit from the surplus value added by the workers. There’s the rub. The exploitative nature of the system means that the workers must not get the full value of their labour-time. The result is a gap between production and consumption.

Capitalism has outlasted Marx’s expectations by coming up with ways to counter its necessity of its over-production - war-making and mass marketing built on consumer credit. In the employment relationship, capital advances wages out of the money-capital it has accumulated from previous exploitation. The sales effort introduced a twist on this process. The worker is advanced money on the labour-time of years ahead, not days or weeks. Wages are paid to let the wage-slaves buy the commodities we need to reproduce our capacities to labour – food, shelter. Loans are made to help those workers buy up the expanded commodities. In the main, that credit is repaid with interest.

However, 60 years of expanding household debts had reached the limit for those who could afford to repay. As Robert Brenner put it, the affluent were using their houses as ATMs by borrowing against their rising prices. Hence, the financiers pushed beyond the boundaries of prudence towards embracing those who had been denied loans even for household items, let alone houses. But needs must. The risk, of course, was recognised. Slicing and shaving the loans was going to limit the defaults to any one institution. Instead, it spread them globally.

Here is the path between the class struggle and the sub-prime. To absorb excess capacity, capital has added “over-consumption” to its catalogue of solutions that spawns ever more problems.

In the days to come, I shall pen further 500-word comments on the previous points, and plenty more. Tomorrow, I shall return to the bail-out to dispose of the chatter about its being socialist.

Meanwhile, the best short course is to spend three hours, pen in hand, with Marx’s Wage-Labour and Capital.

Not socialism

“Casino socialism” is how some US Republicans have denounced the proposed $700bn bailout of the mortgage market. Meanwhile, the “S” word is being revived by everyone alienated by the past thirty years of free marketeering. A temptation to Schadenfreude is understandable as devotees of the discredited Marx watch his old enemy stagger. But the collapse of capitalism is no time for self-indulgence. Nothing is more vital in class politics than having a clear head about the nature of the state.

[Given the stupefaction induced by the “news”, that clarification perhaps needs to start by pointing out that the “state” about which we speak is every form of government apparatus, not just those known as States, such as Queensland or California.]

Now let’s remind ourselves of what the state is with four aphoristic definitions:
1. The state is the executive committee of the bourgeoisie.
2. The state is the more-or-less open or more-or-less covert dictatorship of the bourgeoisie.
3. The state organises capital and disorganises labour, as we see with Gillard’s “Fairness” in the IR laws.
4. The state attempts to do for the expansion of capital what its managers cannot achieve through their corporations.

From this perspective, the bail-outs, the nationalisations and the guided mergers are what the capitalist state has always existed to do. It has either paid for the infrastructure projects needed to perpetuate the expansion of capital, or provided tax breaks and other concessions. Also to that end, the state wages wars and breaks strikes. The state is not our friend.

The state remains, however, the site for all the conflicts between classes and within them. Every temporary resolution of those disputes must pass through the apparatuses of the state to appear as legitimate. This seal of “law and order” means that the struggles that result in victories for the working class are contained within government programs. The welfare state, for instance, was never a transition beyond capitalism but a means for controlling its gales of creative destruction. In addition, much social welfare spending is a way of passing the costs of reproducing labour power back onto those workers who cannot avoid the PAYG tax regime.

The clawing back of even those concessions has sown confusion around the Left about the meaning of “private” and “public”. Private schools are not private but tax-funded non-government businesses. The government ones are not there to serve “the public” but to supply corporate capital with employees skilled enough to add value. There has been next-to-no privatisations in the recent past. What we have suffered is the sell-out to corporates. In a rare instance of privatization, Warwick Fairfax failed to reclaim the family newspaper chain in 1987. The $700bn bail-out is a different form of privatisation, this time on behalf of the conglomerates, with its success as doubtful.

Wall Street will reveal its conversion to socialism once it has smashed the bourgeois state and started building the dictatorship of the proletariat.

Don’t pick on bankers

Much of the outrage around the $US700bn bailout has been aimed at the golden parachutes handed to CEOs tarred with the sub-prime crisis. This moralising is as predictable as it is dangerous. It regurgitates the defence that stockbrokers and police always throw up: the miscreants are one or two rotten apples in a barrel of sound fruit.

In addition, anti-Semitism taints the anti-banker rhetoric against The Kingdom of Shylock. Excoriating Jews, such as Soros or Lehman Brothers, for the evils of capitalism remains fool’s socialism.

So let’s be clear: all capitalists are parasites, most are swindlers, and, if financiers seem to be the worst that is because they pass around the filthy lucre.

For example, who is the biggest parasite - George Soros, Warren Buffett, or Bill Gates? Soros speculates in currencies. Buffett invests in everything from the Washington Post and Coca-Cola to insurance houses. Gates sits atop a firm that makes computer software. They represent the spectrum of capitalism. Soros ruined the lives of millions by trading monies accumulated from the exploitation conducted by firms like those presided over by Buffett and Gates.

To call capitalists parasites is not to speak pejoratively. Indeed, it is a statement of fact. As the personification of capital, capitalists contribute nothing to the expansion of values. Of course, if a boss gets down and dirty in the trench with a shovel, as Loui Grollo used to do, he supplies a mite to his profits. But, in doing so, he has ceased to be the personification of capital and become, for a couple of hours, the embodiment of labour-time, alongside his employees.

The question of what capitalists-qua-capitalists do for their money is so embarrassing for the academic apologists of capitalism that the subject has fallen out of sight. The English writer, Nassau Senior (1790-1864), offered a once popular defence for profit as the reward for abstinence. He contended that, instead of spending their money on champagne, the capitalists deprived themselves of such pleasures to invest in the expansion of values. Hence, they deserved to be rewarded for a negative capability. Senior weakened his case for a contribution from the owners by opposing any reduction in the working-day on the grounds that their profits came from the “last hour”.

Property is not all theft. Capitalists, as a class, do not steal from their workers. On the contrary, as Marx revealed, they pay for the full value for the commodity – labour power – which the wage-slaves are compelled to sell to them. The expropriation of surplus value begins after that fair and equal exchange. Only then do bankers, lawyers and accountants enter the equation. Some of the services they sell to the other capitalists are essential to their survival. But every cent of their bonuses and packages comes from the expropriated surplus value.

No matter how much cash sticks to the fingers of financiers, that sum has already been expropriated from wage-slaves by other capitalists. The bankers would have nothing to cream off had other capitalists not taken away the surplus value.

Next: How to lose a trillion.

As seen on this site Humphrey McQueen has published a history of Health and Safety abd
the Builders’ Labourers federation called ‘A Framework of Flesh.’

Related posts:

  1. Capitalist financial crisis September 2008
  2. A FRAMEWORK OF FLESH by Humphrey McQueen