Tuesday 4 April 2017

Postcapitalism - A Belated Review

Is capitalism coming to an end? Perhaps not its end, but it is facing a number of difficulties. These aren't episodic issues that can simply be reformed away by enlightened politicians or ironed out by a spot of Keynesian demand management here and there. They are structural, fundamental, and would require a political struggle and defeat of whole sections of capital for them to be sorted out. This, however, is not a counsel for despair. The development of capitalism has brought forth new relationships and technologies that give a glimpse into a future beyond the market, beyond wage labour, beyond the despoliation of the environment. At least this is the image Paul Mason provides us in his well received book, Postcapitalism.

That capitalism allows for the possibility for a different, freer society is hardly a new or original observation. It's the key premise of Marx's analysis and critique of political economy. Individual capitals, or businesses in everyday language, are compelled to innovate and develop to survive. For one, it's bound up with the class relationships underpinning the system. Capital employs labour power to make commodities, be they material, like the laptop I'm writing this blog post on, or immaterial, like knowledge or a service. The worker, or proletarian, receives a wage or salary for their time doing whatever their employer asks of them - an experience, ultimately, not without serious consequences. However, from the point of view of the worker a great deal of time spent in the workplace is completely unnecessary. Say in a five day week, our worker produces £2,500 worth of commodities and receives £500/week in wages, the value of their labour power has been generated on day one. Effectively, for Tuesday, Wednesday, Thursday, Friday they're undertaking surplus labour. Labour, that is surplus to their requirements. When these commodities are sold, that extra value, surplus value, accrues to the employer. Some of it is advanced to cover the next round of wages. Other bits pay off loans, rent, etc. Some is put aside for reinvestment, and what is left is squirreled away as profit.

For Marxism the struggle over the disposal of this socially produced but privately appropriated wealth is the stuff of class struggle. Workers have a clear interest in receiving more of the value they generate but, more often than not, employers are the ones who succeed in drive down the workers' share so they can have an even bigger slice of the surplus. This is not because of greed, though there are plenty of business owners who fit that archetype, but because a business ultimately is compelled to do so. Returns on investments depends on the selling of one's wares. If there is a warehouse filled up with goods, then the capital is effectively frozen. The surplus value a business depends on is stuck and cannot be realised until they're sold off, and that depends on the variables of the market a business sells to. It depends on the competition coming from other capitals. Unless a business is a monopoly and can corner a market, all it can do in response is to extract as much surplus as possible either by lengthening the working day or cutting wages and other liabilities (such as pensions). That route is potentially costly as it runs the risk of stoking a dispute with the workforce. Or by more intensive methods, such as the development and introduction of new production techniques and technologies. Instead of £2,500 worth being produced over five days, the application of new machinery sees the run double. Even if the workers are granted a modest pay rise, the amount of surplus value up for grabs increases. Which means when those goods reach the market they will return more if they are sold at their value, or, to compete, the price is lowered more quantities of surplus value can be realised at the expense of a firm's competitors.

The relationship between production and consumption is the circuit of capital. There can be and are more complex permutations, but the basic outline here will do. It follows then for Marxists that capital constantly revolutionises the means of production, that class struggle and competition enforces an innovate or die imperative. And so capitalism taken as a global, self-expanding social system tends to develop the productive forces, which are the techniques, technologies, the social capacities and knowledges of human beings. This is where the key plank of Mason's argument comes in. He argues this history comes in waves. Drawing on the work of Nikolai Kondratiev, a brilliant Soviet economist who fell victim to Stalin's purges, he makes the case for capitalist development to be periodised. Each of these waves unleash a tide of innovation, and are comprised by the cumulative effects of new business models, new knowledge, new technology and, crucially, new markets. As Mason puts it,
... a long wave takes off because large amounts of cheap capital have been accumulated, centralised and mobilised in the financial system, usually accompanied by a rise in the supply of money, which is needed to fund the investment boom. Grandiose investments are begun - canals and factories in the late 18th century, railways and urban infrastructures in the mid-nineteenth century. New technology is deployed and new business models created, leading to a struggle for new markets - which stimulates the intensification of wars as rivalries over colonial settlements increase. New social groups associated with the rising industries and technologies clash with the old elites, producing social unrest. (2015, pp 37-8)
Following Kondratiev's work, Mason suggests that, as a rule of thumb, each wave or cycle lasts for about 50 years. In the most dynamic upswing phase, recessions tend to be short and shallow as the most productive sectors of the economy attract the most capital. This doesn't last forever, a saturation point is reach and the wave starts winding down. The new markets are saturated, the opportunities for profit are fewer, the quick returns offered by financial alchemy prove attractive, leading to short-lived credit booms, and recessions grow long and deep before a whole range of capital, physical and financial, is liquidated in a slump. Mason believes there have been four such waves since the advent of industrial capitalism. The most recent, the fourth, was uncharacteristically long, its durability preserved by state management of economies and its active intervention to create new markets. The upswing phase of the fourth wave began at the end of the Second World War and comprised Keynesian demand management, the foundation of the welfare state and, in most of the developed countries, some form of historic compromise in which the state, business, and organised labour collaborated. As the wave crested in the 1970s, so crisis set in followed by the downswing. This was still marked by the revolutionising of technique, knowledge, and technology, but ultimately the wave ate itself as capital increasingly parasited off the structures put in place by the post-war boom. For example, mass privatisations and the colonisation of public services by markets, driven through everywhere by states in the teeth of opposition, increasingly saw capital drain away from productive investment in favour of the short term gains of the money and property markets. That is, until, the stock markets crashed.

Mason's key argument is that with the close of the fourth wave, we should be looking to a fifth wave to lift capitalism out of the doldrums and deliver another 50 year cycle of growth, development and crisis. But where is it? The first part has a great deal to do with the character of the late period of the last cycle. Neoliberalism regardless of variant is congenitally hostile to labour movements and does all it can to undermine the collective strength and potential resistance of workers. Where Labour and social democratic governments have dropped payloads of neoliberal policies, without exception they're punished by electorates, sometimes severely. The result in too many key advanced countries is that workers are atomised, insecure, and not strong enough to force capital to innovate. Remember, the struggle for capital to accrue ever more of the social surplus is limited by the capacity of labour to resist. Where labour is strong, as per the post-war period with its huge union battalions of combative, at least on bread and butter issues, workers, militancy exerted its own pressure on the transformation of the productive forces. Capital had to innovate not just because of competition, but so it could exert more control over the labour process. And this meant displacing living labour by dead labour, the replacement of human toil by machines. With weak labour movements, that pressure is absent from the dynamics of development. And so we have the situation we have now where large chunks of British business prefer to employ record numbers of part-time, casualised workers. And because the market place is stock full of businesses doing the same, innovation has slowed.

The second and more controversial feature of Mason's argument is the changed character of commodities. The central importance of the knowledge economy for capitalism has been generally acknowledged since the 1970s. The spread of information technology and computing power married to the internet and the complex of networks it has facilitated has reconfigured the economy. The production of knowledge and knowledge-related commodities (such as professional services) are increasingly the, for want of a better phrase, hegemonic commodity form. Consider software, music, film, all these these can be downloaded and filed away. They no longer require physical media beyond a device that can play them. These, like the masses of corporate and state documents regularly dumped on the internet, are no longer qualitatively different from one another. It's all machine code. As such, it resists containment because each is infinitely reproducible with virtually no labour time required. And this presents capital with a problem. How can the circuit of capital be completed if, at the end, a good chunk of value stays unrealised because the resultant information commodity is copied and passed it on. If someone sends me a naughty pdf of a book I want to read, I'm not then going to go out and buy it. Hence the pay walls, the crackdowns on pirate sites, the rising cultural clamour of "support your favourite band/author/software house!". And with the strides being made regarding 3D printing, it's only a matter of time before producers of material goods are similarly affected.

The fifth wave of capitalism is stuck, but the first wave of a new system might be appearing. The mercurial ontology of information surges through the circuits the internet built. Innovation then is shifting away from capital and toward the commons, reversing a key feature of capitalist development: its tendency to concentrate knowledge in cadres of managers and other specialists. Once centralised, it's becoming socially diffuse. Effectively our times are caught at the crossroads of two possible futures, between stagnant capitalism and the emerging power of peer-to-peer networks. And this itself is radically configuring the relationship between capital and labour. Drawing on the work of Moulier Boutang's Cognitive Capitalism, which itself is heavily influenced by Hardt and Negri's Empire (a bit more here), increasingly the capacities and skills of labour are self-generating thanks to the ceaseless circulation of social knowledge, and so capital active in the tech and professional service sectors have to go cap in hand to try and ponce off that expertise. Think firms utterly reliant on bedroom coders and hackers, for instance. Mason suggests that Boutang, Hardt and Negri overemphasise this point but does nevertheless point toward a coming irreversible tilt in the relation of capital to labour. Labour as a collective has always been a force of production, but the networks allow for the possibility of it becoming conscious and a potential for its rewiring the social. The only options available for capital to stave this off would be increasing monopolisation (Mason notes the social media and IT giants are only profitable because they have cornered their respective markets. There cannot be multiple Facebooks, YouTubes, Googles and the rest), and/or finding more markets, which would entail an even greater commercialisation of social life.

This would be difficult at the best of times, but centuries of capitalism have stored up a series of problems that are now starting to bite. How inopportune for us. The mass migration of peoples, ageing populations, climate change, and energy source depletion are building up to crisis levels that require concerted action and the overcoming of sectional interest, but the old apparatuses and parties are dimly aware of their urgency, or uninterested in doing what needs to be done. By not having answers to these crucial questions, a political opportunity is offered. Here, Mason offers a number of prescriptions for condensing the consciousness of the networks and encourage discussion (and experimentation) when it comes to the resolution of these problems. And there are a number of political struggles vis a vis the state that includes the defeat and reversal of neoliberal policies, the reshaping of markets around environmentally and socially just outcomes, the production of an economic plan (which owes a bit more to a digital Keynes than a cyber Stalin), and a plan to deal with the mountain of debt piling up against countries, banks, business, and individuals' current accounts. Simple!

In his transition from mainstream to campaigning journalist, Mason has attracted exasperated comment from his peers ensconced in the established (and establishment) outlets. And unless one understands the theoretical infrastructure underpinning his politics, his positions can appear idiosyncratic and a bit strange. But this, ultimately, is because despite capitalism's internal problems and the difficult, possibly existential crises lying in wait, his view has that rarest of qualities in contemporary radicalism: optimism. Reading the tendencies, he has produced a compelling Marxist, yes, Marxist, narrative that locates the current impasse in the long-run structures and contradictions of our social system. Whatever one thinks of Kondratiev's waves, and there are decades of debate about them, his diagnosis of what is happening now is persuasive and fits the facts much better than the nonsense produced by mainstream economics. His explanation of capital's ongoing investment strike fills in the gaps a view that relies on the dearth of profit-making opportunities cannot. His caveated appropriation of Negri et al also seems sensible, but underplaying it runs the risk of ignoring how the bulk of networked workers actually reproduce themselves and their families in jobs to which the network is tangential or not at all present, and how this is changing their cognitive apprehension and appreciation of the world. The warehouse worker is as likely to be on social media as the IT worker.

The big problem, however, is one of agency. Mason spent a great deal of his media career reporting from the front line of global capital, of where the system met its limits and was contested by a wide array of social movements. Power begets resistance, as Foucault often noted, and capitalism is doomed to struggle with the nightmare of its obsolete future as it breaks up labour movements, drives down wages, and vainly seeks to capture the value of peer-to-peer production. But Mason's counterpower, if you like, the network itself is diffuse and incoherent. While on paper the balance is tilting from capital to labour, and in time the consciousness of labour will be conditioned by that social fact, the crises he identifies do not allow for the luxury of slow development. In the mean time, those networked workers have all kinds of views, and while individuated and atomised at the same time as they're linked with others, their politics are all over the place. Opposing networked humanity to capital is all very well, but networked humanity doesn't make for a coherent political project. But there is a potential vehicle. The labour movement with its strange rituals and out-of-time practices is an unlikely condenser, but its rootedness in the realities of work at the sharp end of the changes described in this book make it ideal as the focus. But the exploration of that relationship is going to have to wait for another time.

In sum, Paul Mason's Postcapitalism is an essential work that deserves to be widely read. To reverse a cliche, while the point is to change the world you cannot hope to succeed without understanding it.


Speedy said...

Thanks, interesting.

On a complete tangent this got me thinking of the historical context of Marxism. Marx was writing during a time when Man was meeting the trauma of the industrial revolution, dark satanic mills and all that, so his analysis - as a "do gooder" - was instinctively negative. However, even if one looks at the more extreme capitalist societies like the US (and never mind Europe) materially, people live a much more comfortable life now than then: capitalism, although exploitative in its mechanic, has plainly benefited the majority. Despite all the moaning, we live much more comfortably now - and comparing it to the USSR doesn't really work, as they had less of what we had without the freedom, and upon the bones of many millions (you can say that USSR wasn't real Marxism, etc, but it was certainly the best practical shot in our history. If history repeated, the result would be the same because people do not change).

Capitalism lurches from crisis to crisis, yes. As do we all, but it innovates out of it. The masses streaming to Europe now are attracted by its wealth. Yet capitalism has not made them poor - they were poor already living for the most part in an agrarian society. Meanwhile in China, which has embraced capitalism without the freedoms, millions of people have been lifted out of poverty. India has done so less effectively and still millions languish in agrarian squalor.

My point is, like democracy, capitalism may be a terrible system, but it is the best we have got. Socialism can mitigate against its extremes, but dreaming of its demise or even replacement is not a goer.

Boffy said...


This is a great post, which I'm studying carefully. This bit is slightly wrong.

"Some of it is advanced to cover the next round of wages. Other bits pay off loans, rent, etc. Some is put aside for reinvestment, and what is left is squirreled away as profit."

The next round of wages are not "advanced" out of the realised surplus value. The wages for the next round (circuit) are "laid-out" from the realised value of the commodities sold in this round, as is the capital laid out for the materials to be used in the next circuit.

In other words, if the value of 100 teapots resolves into £100 wages, £50 materials, and £100 surplus value = £250, when the 100 teapots are sold after say 5 weeks, the capitalist realises this £250, and out of this can thereby cover the wages and materials for producing 100 teapots in the next 5 weeks, whilst pocketing the £100 of profit separately.

This is why marx distinguishes capital that is advanced, and capital that is laid out, and this diverges according to the Rate of Turnover of the capital.

So, here the capital turns over every 5 weeks, and in a 50 week year would turn over 10 times. The capitalist only needs to "advance" £50 for wages, and £100 for materials at the start of the year. But, each time the commodities are sold, and this capital turns over, they simply lay it out again, so that in a year the "laid-out capital is £150 x 10 = £1500.

The profit in the year is £100 x 10 = £1,000, which appears to be a rate of profit of 66.6%, but the actual capital advanced was £150, not the £1500 laid out. So the actual rate of profit is then 666.66%!

That's why the rate of profit for capital that turns over faster is actually higher, and why capital flows to such areas which then reduces prices and profits down to the average, in the same way that capitals that have lower organic compositions of capital have higher rates of profit, and cause capital to flow into them, causing prices and profits to fall to the average.

Phil said...

I think your point is quite complacent and defeatist, Speedy. No one is denying that capitalism has raised living standards and bettered the lot of billios. However, it is clear that its relationship to the environment is storing up a very serious crisis for our species, *and* there are long term tendencies pointing toward stagnation and the undermining of the class relationships constitutive of it. That is why it's absolutely necessary to think beyond capitalism.

Phil said...

Cheers for the correction, Boffy. I'm always mindful of your watchful eye when I start writing about Marx!

Boffy said...

I don't think this is actually right either.

"For Marxism the struggle over the disposal of this socially produced but privately appropriated wealth is the stuff of class struggle."

In fact, this struggle over proceeds is only a distributional struggle, a reformist struggle over the level of wages within the context of an acceptance of the wages system itself. The class struggle, Marx explains is not about haggling over the level of wages, but about abolishing the wages system altogether.

The actual class struggle for Marx is about a struggle between worker-owned property, and capitalist property, in fact as he sets out in various places people are only personifications of property and property relations.

In fact, as Marx illustrates workers real interest is NOT to have a bigger share of the output, because that implies a smaller share of total output is available as a surplus product, and the smaller the surplus product, the less there is available for accumulation, i.e. for employing additional labour, for developing the productive forces, and thereby revolutionising the forces of production, which is a precondition for Socialism.

Indeed, under Socialism too, that same drive to maximise the surplus product exists for some time, for the same reason. What is in workers interests is not to maximise their share of the total output, but to revolutionise production itself so that the total output expands as rapidly as possible, so that even as their share of that total output remains constant or even falls, their absolute amount of product received as real wages increases. That was Marx's argument against the Lassalleans and the Iron Law of Wages.

So long as social-democracy was able to achieve that rising real wages alongside rapid increase in the total product it was able to retain the support of workers. The question posed by Paul in his book, is whether the system can still achieve that.

Boffy said...

A weakness of Paul's argument, I think is illustrated by the quote you cite here.

"... a long wave takes off because large amounts of cheap capital have been accumulated, centralised and mobilised in the financial system, usually accompanied by a rise in the supply of money, which is needed to fund the investment boom. Grandiose investments are begun - canals and factories in the late 18th century, railways and urban infrastructures in the mid-nineteenth century."

Marx starts his cycle with stagnation, rather than prosperity, for a purpose. The question that has to be answered is why does a period of increased investment begin? You have actually given part of the reason in your earlier comments about individual capitals having to invest to compete. But, that happens all the time, so what is different at these specific times?

It is this, a period of crisis - the phase prior to stagnation in Marx's schema - arises because capital has expanded to such a degree that the available supplies of labour-power have been used up. To expand further pushes wages higher, reduces the rate of surplus value, and thereby squeezes profits. Marx refers to such a period in agriculture between 1849 and 1859, Glyn and Sutcliffe point to a similar period in the 1960's. As Marx sets out in Cap III, Ch. 15, this is what amounts to a crisis of over production, additional capital cannot act as capital, because it cannot increase surplus value, and may even reduce it.

What is the answer to this situation. Marx answers it and provides the basis for why this period of new investment in whole new types of technology arises. To deal with the labour shortage capital seeks to innovate, to produce new labour saving technologies. And precisely because these new technologies are labour-saving, this period of capital accumulation is intensive rather than extensive. One machine replaces several others, output may expand, but along the line all output requires less labour, so the expansion does not significantly increase employment. Profit margins may fall as output expands, but the higher volume of output, and higher rate of turnover means that the annual rate of profit increases.

That is what produces the large rise in the available money-capital, and the reduction in interest rates that facilitates the new boom that Paul discusses, but where I also disagree with Paul is in this. The real boom period arises, not when these new technologies are applied to the problem of production, but when they explode into a vast array of new consumer goods and services. Internal combustion engines first produced for production opened a whole new market in cars, passenger transport etc., electric motors for a vast array of household products.

We have only seen the first phase. Paul asks in his book why capital has not moved into these new areas of bio-technology etc. I think it is only a question of time and delay, not something historically new. I think we will see vast new consumer goods and services based around these new technologies starting with healthcare, and we see potential through transhumanism.

I would argue that the delay has been caused by the intervention of central banks to protect fictitious capital at the expense of real capital, i.e. to keep asset price bubbles in shares, bonds and property massively inflated. That has diverted money-capital into speculation for capital gain, and away from real investment. When the bubbles catastrophically burst as they must soon, that effect will be reversed, and capital will flood into the production of all these other commodities.

Phil said...

I also think the role of the state as an economic actor and innovator is underplayed here too. What role does it now play in stymying the emergence of the new wave? Is its actions allowing capital to sit on its cash reserves?

Boffy said...

"Mason's key argument is that with the close of the fourth wave, we should be looking to a fifth wave to lift capitalism out of the doldrums and deliver another 50 year cycle of growth, development and crisis. But where is it?"

I've never understood how some people can make this argument. Taking the cycle as 50 years, most long wave theorists argue, as you say here that the new boom began after WWII, usually its taken from 1949. Fifty years, means a new boom then starts from 1999. That's precisely when I believe the new boom did begin, just as the last boom was due to end and enter the crisis phase in 1974, and I believe it did!

Look at the prices of copper etc. as I have set out on my blog, and you will see precisely that trend, as sharply rising demand after 1999 sent copper and other material prices through the roof, provoking a burst of additional investment, which then caused oversupply in 2014, as new mines etc. finally came on stream.

The period after 1999 was typical of the spring phase of a new boom, with global trade, GDP, and fixed capital formation rising sharply. In short we are in the first phase of the new boom, which should run to around 2025, before a new crisis phase sets in.

The crisis of 2008, was essentially a financial crisis, NOT an economic crisis. It is like the financial crises of the past, and like the financial crisis of 1848. But, as Marx points out those financial crises, if they are allowed can have economic consequences too. For example if they lead to a credit crunch, and reduction in liquidity. The financial crisis of 1848, Marx says, caused economic activity to shrink by 37%.

I think that the measures taken by central banks and governments after 2008, by protecting fictitious capital from being massively destroyed - stock markets, bond markets and some property markets are higher today by some considerable degree than they were in 2007/8 - have distorted the long wave, by holding back real capital accumulation - exacerbated by the ridiculous policies of fiscal austerity - but, the fact that central banks and financiers themselves realise that the current situation of negative yields on government bonds, historically low levels of yields on shares, and for rental yields, which result from these bubbles in asset prices cannot continue, shows that this is close to a denouement even bigger than 2008. If I knew exactly when I could be a multi-millionaire overnight, but unfortunately financial markets do not operate on the same basis as economies!

But, when those asset prices collapse normal service for the long wave will resume shortly after.

Boffy said...

I agree with some of the points that Paul makes about the changed nature of production, and value creation, but the point I have made previously in responding to his book is this. A big JCB, Caterpillar or Hi-Mac can do the work of hundreds of navvies. However, if the cost of building some new project such as a new Panama Canal, A Channel Tunnell etc. would be uneconomic with manual labour, or even technically impossible, it would never get built.

The fact that the technology makes such projects profitable means they can be undertaken; they employ labour that would not have been employed; they create value and surplus that would not have been created; and they revolutionise production further so that social production itself is raised etc.

Without computers and other technology space travel would not have been possible, but now it has spawned a whole new industry for satellites, sat nav systems and so on, and shortly space tourism. The same technology has made decoding the genome possible, which has spawned whole new industries. Yes, as Paul says, the cost of decoding a genome, and hence the value has fallen from $3 billion to $1,000, but now 7 billion people may decide to have their DNA sequenced etc. where previously they would not.

The question is about how workers can utilise this to develop new networked but collectivised co-operative property, as opposed to being atomised and reduced to millions of technological peasant producers.

Speedy said...

Yes, you're probably right (about me being complacent and defeatest), although i am sceptical about the environmental impact - oh, I don't doubt it, but the damage done by non-capitalist societies like Russia pre revolution (Chernobyl, for example) was worse. Man will destroy the environment - it is an inevitable symptom of progress. The more people, the more damage. This is why I am always suspicious of the environmentalist movement which has a very right wing, authoritarian streak. The idea should be, instead, to mitigate the worst effects of environmental damage and, as a species, try to get off this planet. But not having capitalism won't solve that. Get this - we, humans, are a force of nature, too.

As per class relations, you are no doubt correct as well - I think we can already see two classes (as in Metropolis) except the lower class is out of work, living on soma (as in Brave New World). But I come back to... social democracy. Managing capitalism, which is what socialism is supposed to be about, right? Boring, but true...

David Parry said...


1) Marx' analysis of capitalism was more nuanced and complex than you give him credit for. You'll find no greater praise for capitalism's innovative propensities than in the writings of Marx.

2) Re the USSR : you pretend as though what we have as a result of capitalism as it exists in 'the West' isn't also predicated upon the bones of millions, which is patently false.

3) Re 'history repeating itself': if by this you mean a super-centralised political party headed by a tiny clique of 'professional revolutionaries' supposedly representing the most forward-thinking sections of the proletariat, and purportedly acting as the vanguard of the proletariat as a whole, replacing the existing state apparatus with their own, and seizing control of the means of production, then the results would indeed be the same: totalitarianism and state capitalism - totalitarianism because concentrating power within a political party to an extreme degree, and that party then wielding state power, inherently lends itself to totalitarianism, and state capitalism because that's what you have when the state seizes control of the means of production, enlists people to operate them in order to produce and provide goods and services sold as commodities for the state's profits, and pays them wages or salaries for so doing (the reproduction, in other words, of capitalist social relations, with the state as the main proprietor of the means of production and the primary exploiter of people's labour power through the wage relation). Anarchists and left-Marxists reject Leninist vanguardism for this reason.

4) The impending climate change catastrophe absolutely is attributable to capitalism. Bringing up the USSR and other Leninist states as a counter-argument won't wash, since these were/are just another form of capitalist society. As such, the same tendencies endogenous to capitalism that are jeopardising the future of the species through anthropogenic climate change - the profit incentive and the endless drive for capital accumulation - have still prevailed in these societies. All that has differed from other capitalisms has been who the main profiteers and accumulators of capital have been.

5) Capitalism has never innovated its way out of crisis. What has actually happened is that the state has, in one way or another, come to the rescue of capitalism when it has gone into crisis mode.

6) Socialism, at least as far as I'm concerned, should not be about 'taming' capitalism or ameliorating its 'excesses' but about replacing it with collective ownership of the means of production and their administration by those who operate them through participatory democracy. I don't want a nicer, cuddlier form of capitalist exploitation. I want to dispense with capitalism and replace it with a more egalitarian and democratic social system where you don't have one group of people treating another as a resource to be harvested for profit, where workplaces and communities manage their own affairs, and where people have a far greater degree of autonomy over the decisions that affect their lives. In any case, I think that capitalism has more than amply demonstrated that it cannot be made fundamentally more benign. The beast cannot be tamed, and must be slain!

Boffy said...

" Capitalism has never innovated its way out of crisis. What has actually happened is that the state has, in one way or another, come to the rescue of capitalism when it has gone into crisis mode."

Not true, Marx's Capital is replete with examples of capital has continually done just that. In fact, its central to Marx's analysis of Capital and of crises of overproduction. In Cap. III, Ch. 15 Marx summarises a crisis of overproduction as explained in more detail in TOSV. It occurs when capital has expanded relative to the social working day to an extent that absolute surplus value cannot be expanded by either extending the individual working day or employing additional contemporaneous labour, and where this demand for labour causes wages to rise, so that relative surplus value itself falls.

At the start of the chapter Marx explains how such conditions are remedied. It can only be by a technological revolution, which raises productivity, thereby creating a relative surplus population which causes wages to fall, thereby raising the rate of s.v. and mass of surplus value. It causes the value of labour-power to fall, raising relative surplus value to rise further, and it releases variable capital, which can now be employed in new spheres where the organic composition of capital is lower. By raising productivity it also reduces the value of constant capital, including fixed capital, which again creates a release of capital, and also raises the rate of profit. So a new cycle of expansion is created.

In Vol I. Marx details what happened with the Factory Acts, which imposed additional costs on capital, which could have caused such a crisis. Instead, Marx says, Capital innovated, and so raised productivity so as to overcome those additional costs. See what he says about eartheware makers for example innovating in relation to the use of slip, which not only overcame the costs imposed by the state, but led to increased output and profits.