tag:blogger.com,1999:blog-4486641877026778105.post7157238584740148839..comments2024-03-27T09:14:27.496+00:00Comments on All That Is Solid ...: Late Capitalism, the Tories, and the StatePhilhttp://www.blogger.com/profile/06298147857234479278noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4486641877026778105.post-9881835927627446532021-02-22T14:20:26.372+00:002021-02-22T14:20:26.372+00:00Another point on he contradictions between fictiti...Another point on he contradictions between fictitious capital and real capital, and its manifestation within the state. <br /><br /><a href="https://boffyblog.blogspot.com/2009/04/paying-for-crisis.html" rel="nofollow">Back In 2009</a>, I suggested that the government would pay for the debt run up as a result of the financial crisis would be via, inflation, i.e. printing lots of additional money tokens. Indeed, they were already doing that, and the years since have shown that the suggestion was spot on, with money printing going to astronomical levels via QE. It resulted not just in inflation, but an hyper inflation of asset prices. The DOW Jones today is nearly 4 times the level it was at at its low point in 2008/9. And, after 2010, the Bank of England repeatedly failed to act when CPI was over 5%, or more than double its 2% target.<br /><br />This hyperinflation at a time when the real economy has been held back by austerity, to keep down interest rates has continually butted up against reality and the laws of economics and of capital. As Marx sets out in Cap. III, Ch. 23, its impossible to continually throw more money into the sphere of money-capital whilst not employing it as real capital, because the money-capital becomes depreciated, and whole layers can no longer survive on the interest payments. When the interest becomes negative that is even more obvious.<br /><br />Yet, despite money token being gushed into the purchase of financial assets and property, to try to prevent the collapse in their prices, since 2010, reality has continued to impose itself. Property prices in the US, Ireland and many EU countries fell by 60% after 2008/10. In Britain they fell by 20% in 2008, before state intervention reversed it. But even with unprecedented state intervention, UK property prices fell by 30% in the years after 2010, and are still massively overvalued against their historic average, waiting for a further fall, as interest rates rise.<br /><br />In 2018, as global economies again began to grow despite austerity and QE, US financial markets dropped by 20%. Only Trump's trade war and brexit, along with renewed QE slowed that down. Lockouts and the associated slowdown have inflated financial markets again, over the last 9 months, but as lockouts are seen as ending, the inevitable is also now happening.<br /><br />China which began growing again rapidly a few months ago is sucking in raw materials and foodstuffs. Its exports to the US have pushed up the shipping rates on the Baltic Dry Index to new highs, with shortages of ships appearing. Oil prices have risen by 50% to over $60 a barrel.<br /><br />Copper, has risen nearly 50%. Platinum, has more or less doubled to $1300. Iron Ore, has doubled. Wheat prices have risen from $500 to $650; Soybeans have risen from $800 to $1400; Beef has gone from $14 to $20. Inflation is rising sharply, and bond prices are falling sharply.<br /><br />The US 10 Yr. Yield has trebled since August, much of the rise coming in recent weeks. The UK 10 Yr Yield has risen 7 fold, and so on. The ability of the state to protect the interests of fictitious capital has run out, and it will now have to advance the interests of the real capital upon which the state itself rests, with the consequent impact on those asset prices.Boffyhttps://www.blogger.com/profile/08157650969929097569noreply@blogger.comtag:blogger.com,1999:blog-4486641877026778105.post-85434306879564899462021-02-22T13:52:03.002+00:002021-02-22T13:52:03.002+00:00First a correction. I should obviously have said,...First a correction. I should obviously have said, "the former" rather than "latter" becomes increasingly a matter of speculation and gambling.<br /><br />A further problem for the state today is this. In the 1970's and 1980's, the main threat to the ruling class came from the working class, and organised labour movement. That is not the case today. The main threat to the ruling class comes from a large, reactionary petty-bourgeoisie, hence Brexit and Trump. <br /><br />The normal process of capitalist development is that concentration and centralisation increasingly marginalises the peasantry and petty-bourgeoisie, the large majority of whom sink into the proletariat, out of which a new progressive, professional middle class of managers, trades union officials and civil servants arises, which forms the social-democratic layer that ensures the interests of the dominant form of property is advanced.<br /><br />But, in the 1980's and after, the drive to inflate asset prices led to the growth of socialised capital being slowed, at least in the advanced economies. The process of combined and uneven development saw it grow much faster in China, Asia, Latin America and so on. It meant that rather than petty-bourgeois being proletarianised, the opposite happened. Lots of workers unable to get permanent employment became self-employed - white van man - and so were turned into reactionary petty-bourgeois, with a whole social layer around them. The most acute form is of course, the petty criminal/drug dealer etc, who is the epitome of the individualist self-employed petty-bourgeois.<br /><br />This much enlarged petty-bourgeoisie (though to a similar extent impoverished petty-bourgeoise, rather like the subsistence peasant, became the fuel for the growth of the reactionary elements that took control of conservative parties in Britain, the US and elsewhere. As Marx described in the 18th Brumaire, this petty-bourgeois/peasant layer is large but amorphous. It can express what its against, but not what its for. But, as in 1848, its that which leads it to look to strong Bonapartist leaders to give it discipline from above.<br /><br />It is these organised reactionary elements that pose the biggest threat to the ruling class today, as seen by Brexit and Trump. The question is how the state then deals with them without showing its hand, in the way it does when seriously threatened by the working-class. It is forced to use the inbuilt bureaucracy of the capitalist state to thwart them, to hold them back via the courts, and so on. But, I guess in coming weeks we will see a much more visible sign of the response of the state, in the US, as it begins to round up the fascists and close down their organisations involved in Jan. 6th, and as its courts start to bring criminal charges against Trump and those associated with him, there, here, and elsewhere.Boffyhttps://www.blogger.com/profile/08157650969929097569noreply@blogger.comtag:blogger.com,1999:blog-4486641877026778105.post-75428548695721891482021-02-22T11:56:38.938+00:002021-02-22T11:56:38.938+00:00The underlying material condition determining thes...The underlying material condition determining these relations under late capitalism is this. The state must act as the defender of the dominant property form in each society. It must do so, because it is the fate of that property upon which the future of the state itself depends. Under late capitalism, the dominant property form is large-scale, multinational, socialised, industrial capital.<br /><br />However, the collective owners of this capital - the associated producers, i.e. workers and managers, as described by Marx in Cap. III, Ch 27 - do not control it. That control is exercised by shareholders, and is everywhere enforced by laws - even if in places those laws also give a nod in the direction of shared control and codetermination.<br /><br />But, as Marx also describes in Cap.III, Chap 22-27, the interests of shareholders are contradictory to the interests of the real capital over which they exercise this control. They seek more in interest/dividends, whereas the socialised capital requires less interest/dividends to enable greater capital accumulation. Today, the search for capital gains by perpetually inflating asset prices has replaced the search for yield/interest/dividends.<br /><br />However, this requires that interest rates be kept at ever lower levels, because rising rates cause falls in capitalised values of revenue producing assets, as Marx describes. So, now, profits are used to buy back shares to inflate their prices, states print money to buy bonds and shares to reflate their prices, they introduce measures to hold back collapsing property prices, and encourage property speculation, including paying out £30 billion a year in Housing Benefit to landlords and so on.<br /><br />But, they also introduce austerity to hold back the economic growth that would also cause wages and interest rates to rise - as happened prior to 2008 - which would cause asset prices to crash. As Marx describes the interests of this fictitious capital and of real capital increasingly diverge, with the latter becoming merely a question of speculation and gambling.<br /><br />The state undertakes these measures, because the ruling class is now the owners of this fictitious capital, and its views permeate the state. For a time, it appears the state can be financed out of capital gains rather than revenues too. But, as Marx sets out its not sustainable and ultimately, the state has to meet the needs of real capital for accumulation without which profits do not rise, and so asset prices will crash anyway.<br /><br />This is the dilemma the state has faced since 2010, and the lengths it has gone to hold back the collapse in asset prices have reached total madness, with the state now holding the large part of bonds in central banks, and their prices pushed up to such levels that much of it has negative yields, reflecting the failure of the revenues to rise proportionally. It represents the heightened contradiction between socialised capital, the property of the associated producers, and dominant form of property, as against the interests of fictitious capital, the property of the ruling class. Boffyhttps://www.blogger.com/profile/08157650969929097569noreply@blogger.comtag:blogger.com,1999:blog-4486641877026778105.post-84512252982149745392021-02-22T10:22:35.394+00:002021-02-22T10:22:35.394+00:00Phil, many thanks for your blog - it is always rea...Phil, many thanks for your blog - it is always really good to read your analysis, particularly from a sociological perspective on politics. I am really looking forward to buying and reading your book!<br /><br />On Tory authoritarianism, this last week's announcement (buried in other news) that the government is pushing ahead with voter ID laws - where the details in the plans are that the only valid ID that is mandatory in voting will be either a passport or drivers licence (no other ID will be accepted), is clearly a trick the Tories have to shore up their vote. Around 11 million don't possess either form of ID, and people who don't have either will have to contact their local authority to prove their identity (which will - perhaps they hope - depress turnout further through it being too much of a hassle).<br />This law should be heavily amended to include a free voting photo card that places such as Canada provide, as the electoral commission suggests and recommends. (Preferably the status quo should be maintained and voting should be made far easier for everyone - but the government are set on this law sadly.) Over to you Labour and the opposition parties...Duncanhttps://www.blogger.com/profile/01382879583347280272noreply@blogger.comtag:blogger.com,1999:blog-4486641877026778105.post-13846134673007010382021-02-22T08:57:13.391+00:002021-02-22T08:57:13.391+00:00Unfortunately the last sentence is not quite right...Unfortunately the last sentence is not quite right. You mean:<br /><br />They reveal the possible contours of Tory strategy, and <i>would</i> allow the Labour movement time to formulate its response.<br /><br />In a despond today.Davidhttps://www.blogger.com/profile/05044822526641597453noreply@blogger.com