From: Paul Bullock (paulbullock@EBMS-LTD.CO.UK)
Date: Sat Mar 25 2006 - 15:59:15 EST
Jerry, couldn't open these.. some code fault is reported in them.. can they be sent again?
Cheers
paul B
----- Original Message -----
From: glevy@PRATT.EDU
To: OPE-L@SUS.CSUCHICO.EDU
Sent: Wednesday, March 15, 2006 2:46 PM
Subject: [OPE-L] The Limits Of Matticks Economics-Ron Rothbart
Paul C and others,
The following article by Rothbart contrasts the tradition represented
by Mattick (Sr.) to that of Castoriatis. I don't know when it was first
published but it appears to have been written in the mid- to late-1970s.
I'm also not sure if Rothbart is the authors real name or a pseudonym.
The writings of David Y, as well as a cast of other familiar names, are
also discussed.
In solidarity, Jerry
PS on the trivia question: Paolo, I won't wait 111 years, but I will wait
a while longer in the hope that someone will answer yesterday's trivia
question. Two hints:
1) what of significance happened on March 14?
2) numerology
=======================================================================
The Limits Of Matticks Economics-Ron Rothbart
Economic Law and Class Struggle
Ron Rothbart
Mattick's virtue, his marxian approach, beside which Baran and Sweezy are
revealed as quasi-keynesian (1), is at the same time his vice, or at least
marks the limits of his perspective. From Mattick's point of view, the
dynamics of capitalism can be comprehended by an understanding of the laws
of capital accumulation. These laws ultimately lead the process of
accumulation to an impasse, to a point where profits are insufficient for
further accumulation. Far from resolving capitalism's classical
contradictions, state intervention is only an admission that they persist.
The contradictions reappear as a cancerous growth of unproductive
expenditures. The "mixed 'economy", no less than the market economy, has
limits, limits determined by its internal contradictions. Sooner or later
these contradictions will become insurmountable. As a result, class
struggle may well intensify and become revolutionary in character. The
possibility of revolution hinges on the internal contradictions of the
economy.
In this sort of analysis, the working class is only "tacitly present";
that is, its appearance as a revolutionary class is anticipated and even
implied (given other assumptions about subjective capacities) by the
theory of collapse, but until that point its struggle is not seen as
having a qualitative impact on the economy. The struggle over wages and
working conditions takes place within the confines of the law of value.
The laws of accumulation-specifically the law of the tendential fall of
the rate of profit-which define the dynamic of the system incorporate this
struggle as a struggle over the rate of exploitation, one of the variables
of accumulation. The class struggle is, as it were, submerged by the "laws
of motion" of the economy, and does not violate them.
An alternative theory, which postulates class struggle as the dynamic of
capitalism was developed in the late 50's and early 60's by Cornelius
Castoriadis (A.K.A. Paul Cardan), principal theoretician of the French
group Socialisme Ou Barbarie. More recently, an American journal Zerowork,
influenced by an Italian theoretical current, has come out with an
analysis of the current crisis which bears certain similarities to
Castoriadis' approach. Also, in Britain, Glyn and Sutcliffe, in their book
British Capitalism and the Profit Squeeze, put forward a view of the
British situation in the late 6O's similar to that of Castoriadis and
Zerowork. It is no accident that someone strongly influenced by Mattick,
David Yaffe, has opposed their view. Although one could make reference to
other tendencies and other authors, in what follows I will use Mattick as
representative of one approach and Castoriadis and Zerowork as
representative of an opposing approacb. (2)
The issue of this opposition dates back at least to the 30's when Karl
Korsch flirted with the notion - and then rejected it(3) - that after 1850
Marx's own theory turned progressively into a determinism which ignored
class struggle. Korsch decided it was only a matter of a change in
emphasisand that the Marx of class struggle and the Marx of a
"contradiction between productive forces and relations of production"
complemented each other. (4)
Castoriadis, however, portrayed Marx as a determinist, and argued that
Marx's economic theories don't hold water. I'm not going to try to deal
here in full with Castoriadis' characterization of and arguments against
Marx. Whether or not they are valid, the motivation for Castoriadis'
anti-Marxism is important. He aimed to oppose what is generally, or
popularly, considered to be "Marxism" - determinism and economic
reductionism - with a "new" theoretical starting point. The crisis of
society, he argued, is not a narrowly economic one, but a crisis of the
whole social fabric; it has to do with everything men and women face in
their everyday life. What is important, according to Castoriadis, is not
the contradictions of the economic system - but whatever bears upon the
radical transformation of society by the self-activity of people.
"Self-activity is the central theoretical category," he says. A
sympathetic reading of Marx would show that in fact self-activity and
capital as its very negation, is a central category of his work.
Castoriadis however, in his unsympathetic reading, opposes this category
to the Marx of economic law.
According to Castoriadis, Marx's failure to take self-activity into
account in his economic theories has rendered them obsolete. Contrary to
Marx's expectation, the rate of exploitation (also called the rate of
surplus-value) had not continually risen but instead, in the, advanced
capitalist countries, remained constant for some time. (5) What Marx
hadn't counted on, said Castoriadis, was the power of the working class to
achieve through struggle a continuous rise in wages. Moreover, in spite of
this rise, capitalism had not collapsed, but had prospered. Through the
expansion of an internal market and conscious intervention in the economy
by the state, the system, though not free of recessions, was maintaining
itself with no profound economic crisis; and, moreover, none could be
expected simply on the basis of insoluble contradictions of the
accumulation process. If the system were to fall into crisis, it would be
due to contradictions arising from the bureaucratization of society, which
for Castoriadis is the essential tendency of capitalism, and from class
struggle, which for Castoriadis is the real dynamic of capitalism.
Discussing the current situation in his introduction to the 1974 edition
of Modern Capitalism and Revolution, Castoriadis saw no reason to change
his viewpoint. There he argues that the main cause of the rising rate of
inflation has been the increasing pressure. . . of all 'wage and salary
earners' for ...higher incomes, shorter hours of work, and to an
increasing extent, changes in their conditions of work." The international
consequences of this rise in the rate of inflation due to social
struggles, combined with other irrational factors he considers 'extrinsic
to the economy" (e.g. politically motivated decisions of a president),
could result, he says, in a serious economic crisis, but this "would not
have been the outcome of those factors which the marxist conception
considers operative and fundamental."
At the end of 1975, the journal Zerowork came out with an analysis of the
current crisis which, like Castoriadis', focuses on class struggle.
>From the capitalist viewpoint every crisis appears to be the outcome of a
mysterious network of economic "laws" and relations moving and developing
with a life of its own. , Our class' analysis proceeds from the opposite
viewpoint, that of the working class. As a class relation, capital is
first of all a power struggle. Capital's "flaws" are not internal to it
and nor is the crisis; they are determined by the dynamics of working
class struggle.
The contemporary Left sees the crisis from the point of view of
economists, that is, from the viewpoint of capita'. . For the Left the
working class could not have brought about the crisis; it is rather an
innocent victim of the internal contradictions of capital, a subordinate
element in a contradictory whole. This is. why the Left is preoccupied
with the defense of the working class. (6)
For Zerowork, Keynesianism was a capitalist strategy based on a new
relation with the working class growing out of previous struggles. "Full
employment" had been imposed on capital'. Capital's counter-strategy
consisted in recouping increasing wages by means of inflation, expanding
the internal consumer market and instituting productivity schemes. The
cycle of struggles of the late 60's and early 70's, characterized by the
"refusal of work", an initiative tending to separate income from work (in
which a strategic unity of the waged and the unwaged plays an essential
role) imposes the new crisis on capital. In effect, continually rising
income claims of all sectors of the working class combined with increased
absenteeism, crimes against property", high employee turnover, sabotage,
opposition to productivity schemes, etc., tend to sever income from
productivity and thus cut into capitalist profit margins. The working
class ruins the Keynesian balancing act by making incomes rise faster than
productivity. Capital responds with a strategy of planned crisis aiming to
reinforce the tie between income and work.
Zerowork's theses bring to the fore the rate of exploitation. They see
active intervention on the pan of the working class, reducing the rate of
exploitation, as the initial cause of the current crisis. "The crisis is
characterized by an unprecedented decline in the rate of exploitation."
(7)
In Britain, where' Glyn and Sutcliffe have tried to give evidence for a
similar viewpoint, their thesis has been put into question by David Yaffe,
who interprets the evidence differently.
Glyn and Sutcllffe's and Zerowork's thesis is actually stronger than
Castoriadis'. I must distinguish them before discussing Glyn/Sutcliffe and
Yaffe. Castoriadis argued in 1974 that wage pressure (as well as demands
for shorter hours and changes in working conditions) was inflationary and
that hyperinflation had a destabilizing effect on the world economy. A
change in workers' behavior during economic downturns had resulted in a
world recession. "The decisive factor here is a secular change in the
behaviour of wage and salary earners who have come to consider as granted
an increase in their real incomes, year in, year out., " whatever the
state of the economy. Allowing unemployment to rise to catastrophic levels
could do away with this expectation (indeed it has), but only at the cost
of creating a potentially explosive situation. There is no talk here of
wage increases cutting into profit margins. What is important for
Castoriadis is "self-activity", the fact that workers ceased to behave as
manipulable objects, moderating their demands in response to planned
downturns. It is not necessary for Castoriadis' argument that wage
pressure actually resulted in increased real wages, only that it started
an inflationary spiral that led to international monetary instability,
which had deleterious effects on world trade. Zerowork's argument is
similar in that its main purpose is to explore how the working class
breaks out of the capitalists' attempts to maintain it as a predictable
"factor of production" and becomes a fighting unity. What Castoriadis
calls a "secular, change in behavior" Zerowork sees as the "political
recomposition of the working class", where Zerowork differs from
Castoriadis is in emphasizing income pressure other than wage demands
(welfare, shoplifting, self-reduction of transportation fares, meat
boycott, etc.), and at least implying that income demands, combined with
struggles which reduce productivity, are the cause of the profitability
crisis. In this last matter, Zerowork resembles Glyn and Sutcliffe.
Glyn and Sutcliffe's argument is based on statistics which they claim show
that in Britain between 1964 and 1970 profits fell while wages rose as a
share of the national 'income. Yaffe attacks their use of the statistics
and tries to show that in fact, there was in this period a decline in the
share of net real wages and salaries (after tax) in national income. At
the same time, productivity increased at a faster rate than real wages
after tax. In other words, the rate of exploitation continued to rise. If
this is correct, a Glyn and Sutcliffe/Zerowork type analysis fails to get
at the source of the profitability crisis. It can't he due. to a simple
drop in the rate of exploitation, to real wages rising faster than
productivity.
For Yaffe, there's a problem with the rate of exploitation, but it arises
from modern capitalism's internal contradictions rather tin from workers'
militancy. Like Mattick, Yaffe sees modern capitalism creating a demand
for surplus value that it can't adequately supply. Since progressively
more capital is involved in state production the total profits earned are
drawn from a base of private capital formation which, relatively speaking,
is dwindling. In this situation, the only way to maintain the general rate
of profit is to raise the rate of exploitation faster than before. "in
order that state expenditure can be financed out of surplus value produced
in the private sector of the economy, the rate of exploitation must be
increased faster than before to prevent an actual fall in the rate of
profit and a faster rate of inflation."
Yaffe's argument is based on an understanding that variable capital
consists only of wages paid to productive workers, i.e. those workers
involved in surplus value production. The rate of exploitation is not
determined by the general level of wages but by the ratio of the total
income of productive workers to the surplus value produced. Thus, a
general rise in wages and a continued rise in the rate of exploitation are
compatible if the number of productive workers remains relatively stable
or decreases while productivity makes substantial gains. This is the
theoretical basis for arguing that the rate of exploitation has continued
to rise in Britain. However, more and more of the surplus-value produced
has been allocated to unproductive expenditures, has gone not only into
state production and social services but also finance and commerce. In
other words, the productive sphere has been drained, or "looted," by the
unproductive spheres. Though productivity has continued to rise, it has
not risen fast enough to produce a mass of profit sufficient to meet all
the demand made on the total surplus-value by both the productive and the
unproductive spheres. The inflational spiral is a result of the fact that
the demand on the total mass of profit exceeds its supply. Workers
certainly have been struggling, struggling to keep the price of their
commodity, labor-power, up with other prices, but the basic cause of the
inflation is increased unproductive expenditures, which in turn rise
largely because of government attempts to keep up the level of production,
and thus employment, in spite of chronic stagnation due fundamentally to
the tendential fall of the rate of profit. At the present time, British
capitalists are trying to hold down wages and restructure industry which
involves laying off workers - in order to raise productivity and thus
further increase the rate of exploitation. (8)
For both Yaffe and Mattick, the insufficient rise in productivity is
primarily a result of and in turn a cause of declining profitability.
Since the post-war recessions did not and could not result in classical
capitalist expansion, but rather only in an expansion in state production
superimposed on real stagnation, the investment in new plant necessary for
a sufficient rise in productivity could not take place. The lag in
productivity results fundamentally from the internal contradictions of
capital, has its source in the tendential fall of the rate of profit which
cannot be reversed through Keynesian policies.
It would be naive to assume that what is at issue here is simply a
question of fact. Zerowork presents its analysis as a basis for
understanding working-class strategy in this period and as a basis for
revolutionary organization. It proposes and allies itself with demands
that further separate income from work or claim income for previously
unwaged labor (e.g. wages for housework). Those influenced by Mattick's
analysis tend to concern themselves with various working class strategies
as responses to deteriorating conditions. (9) Both focus on similar means
and forms of struggle, and both emphasize working class autonomy. But, in
relation to one another, the one emphasizes the offensive and is more
voluntartst", while the other emphasizes the defensive aspect of struggle
and leans in a "spontaneist" direction. Zerowork poses the issue' starkly
and polemicaly and claims there's no mid-ground between what it calls the
"capitalist viewpoint" that the crisis arises from internal contradictions
of the economy and what it calls the "working class viewpoint" that it is
imposed on capital by the working class. However, the two viewpoints are
not necessarily as mutually exclusive as Zerowork claims.
Mattick often points out that$ the classical marxian account of the
tendency of the rate of profit to fall takes place on a high level of
abstraction and doesn't exhaust the discussion of profitability, which
also has to take into account the complexities of real, concrete
capitalism. Marx's analysis, 'after all, abstracts horn competition and
assumes the existence of only two classes in a purely capitalist
environment. Also, for Marx, the famous tendency of the rate of profit to
fall is only a tendency, a consequence and expression of the increasing
social productivity of labor, which is counteracted by other tendencies:
rationalization, shortening the time of capital turnover (through improved
transportation and communication) opening up of new spheres of production
that have a low organic composition and thus high rate of profit,
devaluation of capital in crisis, importing cheap foodstuffs and cheap raw
materials, opening up of new areas for profitable capital investment and
increasing the rate of exploitation. A tendency of the rate of
exploitation to rise is bound up with the tendency of the rate of profit
to fall, these two opposed tendencies both following from the increasing
social productivity of labor. But a conscious attempt of the capitalists
to raise or maintain profits by raising the rate of exploitation through
lowering wages and intensifying labor (speed-up) has a more immediate
political impact. (10) These means of raising the rate of exploitation
degrade and exhaust the laborers, leading them, in the classical
conception, to overthrow the system. "The mass of misery, oppression,
degradation, exploitation [grows]; but with this too grows the revolt of
the working class." (11)
The tendency of the rate of profit to fall and these counter-tendencies
form a dynamic which underlies and determines the character of capital
accumulation, explains the crisis-ridden nature of capitalism, and is the
context of the struggle, both among capitalists and between classes, over
the division of surplus-value. For Mattick, following Henryk Grossman, the
ultimate significance of a falling rate of profit is that it limits the
growth of the mass of profit, and the mass becomes' insufficient at some
point for the profitable expansion of private capital.
Refutations and emendations of Marx, as well as defenses, often deal with
the counter-tendencies to the fall of the rate of profit, both their power
to preserve the system and their limits. Imperialistic expansion proved
quite effective for capita' up to a point; world war itself served to
literally destroy capital, as Mattick argues, recreating conditions for a
period of expansion growing monopolization hindered devaluation in
crises;Taylorisation of the labor-process is said to have allowed for
increasing output and thus raising wages without decreasing the rate of
exploitation, (12) and this in turn allowed for an expansion of the
internal market; credit expansion has been another factor;
state-intervention often involves rationalization; transportation and
communications have improved phenomenally, cutting down the time of
capital turnover.
Mattick concerns himself in part with the counter-tendencies to the
counter-tendencies, their limits. For example, advertising costs,
associated with an expanded internal market for the monopolistic consumer
industries, are a drain on surplus value; "profits" made in state
production are really a drain on surplus value. While Castoriadis rejects
Marx's theory, claiming the rate of exploitation has not risen, and
Zerowork claims the crisis is the result of the working class' reducing
the rate of exploitation, Mattick reasserts the classical theory, pointing
to the limits inherent in the means used to preserve the system and
anticipating a point at which the reaching of these limits will provoke a
sharpening of the struggle over the rate of exploitation.
Alan Jones tries to resolve the debate between Yaffe and Glyn and
Sutcliffe this way:
At the onset of conjunctural crisis, notably when the process of
accumulation falters, it is perfectly possible, indeed, inevitable, for
direct struggle over the rate of exploitation to function as the cause
of the onset of overt crisis . . . There is nothing contradictory
whatever in understanding that in the final analysis the reason for the
decline in the rate of profit is the changes in the organic composition
of capital and in understanding that in a particular capitalism, in a
particular time, the dominant element in the crisis is played by a
direct struggle between the working class and the bourgeoisie over the
rate of surplus-value.
In fact, the rise in the rate of exploitation has slowed as "a result of
May 1968 and the continued combativity of the working class. The rise in
the rate of exploitation was thus slowed down by the resistance of the
workers and therefore no longer exercised sufficient force to counteract
the negative effect of the rise in the organic composition of capital".
(13)
Such an approach seems to me most fruitful because it allows us to take
into account both the economic system and the class struggle, without
imagining that either is autonomous of the other or completely determined
by the other. It allows us to recognize the working class as an active
factor within the context of an economic system that has internal
contradictions. The working class does not merely arrive post facto to
save the world from the misery which capitalism has wrought. If the crisis
demonstrates that capitalism has not solved its internal contradictions
and, as Yaffe argues, needs to raise the rate of exploitation faster than
previously, it also demonstrates that the working class has not become an
integrated, manipulable component of the system, but is capable of
self-activity. Its combativity becomes an obstacle to the functioning of a
system -which has its own exigencies.
Because of the different Levels of abstraction on which this discussion
takes place - Mattick and Yaffe abstract and theoretical, Cardan and
Zerowork more empirical - the relationship and possibly complementary
character of the two views is obscured. In the 30's, Anton Pannekoek
criticized the economic theories of Mattickbs mentor, Henryk Grossman, for
leaving out human intervention. Mattick answered:
Even for Grossman them are no "purely economic" problems; yet this did
not prevent him, in his analysis of the law of accumulation, to restrict
himself for methodological reasons to the definition of purely economic
presuppositions and of thus coming' to theoretically apprehend an
objective limiting point of the system. The theoretical cognition that
the capitalist system must, because of its contradictions, necessarily
run Up against the crash does not at all entail that the real crash is
an automatic process, independent of men. (14)
Mattick does not remain on the level of abstraction that Grossman did in
his crisis theory. He relates the pure model to phenomena of modern
capitalism. But he does tend to deal with the economy in abstraction from
class struggle. Mattick is well aware of the limits of Grossman's and by
implication of his own approach, and accepts them as self-imposed limits
for methodological reasons. All one can say on the basis of an analysis of
the developmental tendencies of capitalism, he says, is that crises will
occur and "offer the possibility of a transformation of the class struggle
within the society into a struggle for another form of society." Economic
theory can only "give consciousness of the objective conditions in which
the class struggle must evolve and determine its orientation." (15)
Although, as a temporary methodological procedure, this separation of
economic theory can be justified, still, any permanent hypostatization of
economic theory must be questioned. As Geoffrey Kay, discussing Yaffe,
puts it;
The conventional interpretation of the law (of the falling rate of
profit) can be attacked. . . for objectifying the economic process and
thereby separating the class struggle from the accumulation of
capital... The proletariat remains in the background. The law as
conventionally understood. . . cannot yield any real understanding of
,the death crisis of capital as the birth pangs of a new form of
society. . . can tea us nothing about the class that will make the
revolution. . . By objectifying economics and denying the proletariat
any active and qualitative role in the creation of the crisis, Marxist
economists have denied themselves any possibility for systematically
analyzing the class struggle in its concrete forms, and lifting the
problem of the political organization of the working class out of the
limbo of ideological rhetoric. (16)
**********************************
The approach that analyzes recent developments in terms of class struggle
is commonly applied to Italy, since its post-war competitiveness was based
in part on low wages. "It was above all cheap domestic labor which
financed Italy's post-war economic recovery," say one set of commentators.
The export industrialists were thus able to sell their products at stable
or falling prices while maintaining profit margins high enough to
self-finance further industrial expansion. . . . Once the industrial
workers demanded higher wages, the whole house of cards began to collapse.
For over a decade now it has been the class struggle, and especially,
though not exclusively, the consequent rising cost of labor, that has
determined Italian economic cycles. (17)
The Italian steel, automotive and chemical industries were developed aftet
the war with advanced techhology, which allowed Italy to take advantage of
the post-war liberalization of trade. Repression of the labor movement
guaranteed low wages.
In the late 50's and early 60's, various factors contributed to a
heightening of workers' militancy. One was the increased parcellization of
work and the process of de-skilling, which began to break down old
hierarchies in the workforce. Another was the reduction of unemployment as
a result of the "economic miracle." The new unity and strength of the
working class manifested itself in the strike wave of 1962, which won a
substantial wage increase.
In response, the capitalists first raised prices and then, in 1963,
clamped down on credit to combat inflation. The rate of investment had
already been falling. The credit squeeze further reduced investment and a
three-year recession followed, duning which capitalists restructured
factories for greater productivity. Production rose while wages fell. A
period of upswing followed, but it was based on labor discipline rather
than increased investment. In general, the Italian economy has been
stagnating since 1963. As another commentator observes:
The temporary weakness [of the Italian working class] allowed a further
spurt of growth in 1966-68, but this was obtained essentially by
speedup, with next to no investments in more modern technology . . .
Since 1963-4. Italian capitalists have been investing very little, and
the increasing technological lag has made Italian exports less and less
competitive." (18)
The effects of rationalization on the conditions of work, as well as
deteriorating urban living conditions, led to the "hot autumn" of 1969. As
a response to speedup, workers struggled to gain more control over the
organization and pace of work, as well as for higher wages. In order to do
this they had to struggle against unions as well as employers and create
autonomous organizational forms; general assemblies, factory councils and
industrial zone councils. In this period workers won both substantial wage
increases and some power to counter the employers' restructuring projects.
As usual, the capitalists then raised prices and tightened credit.
However, the recession of 1970-72 did not bring about the hoped for
reduction of militancy and wages continued to rise. Italy's problems then
accelerated under the effects of economic instability on the global level.
On top of rising labor costs and resistance to restructuring, Italian
capital had to contend with worldwide hyperinflation and deteriorating
market conditions. As the cost of imports, especially food and oil, rose,
and markets for Italian goods contracted, Italy's trade deficit became
insupportable and the country was forced to depend on unprecedented levels
of international credit to avoid formal bankruptcy.
The current capitalist offensive involves increasing overtime, cutting out
holidays, implementing speedups, and trying to impede the working of a
sliding scale of wages. The attempt to link a new IMF loan to the
subversion of the sliding scale was successfully resisted by workers in
the spring of 1977.
Italian capitalism's long-term strategy is to destroy the degree of
homogeneity attained by the working class struggle in recent years by
decentralizing component operations and extending automation and to
convert industry to capital goods production, which will require labor
mobility and a long period of very high unemployment. Workers have
responded with wildcat strikes, sabotage, autonomous Organization,
expropriations, self-reduction, etc.
What's apparent in all this is a progressively intensifying struggle over
the rate of exploitation. At least since the war, the strength of Italian
capital seems to have depended on a disciplined workforce. Every time the
Italian working class began to break its bonds, economic expansion was
retarded and the ruling class was forced to respond by tightening the
screws. Every working class victory on the wage front was met with
increased prices, managed recession and an attack on the labor process. In
the face of deteriorating trade conditions and without a docile working
class, the Italians had to turn to inter-national borrowing. Domestic
capital investment, lagging since 1963, was only available before that
because of domestic cheap labor.
While this empirical account gives the intensification of the struggle
over the rate of exploitation in Italy concreteness and specificity and
indicates how it has been leading to direct action and autonomous
organization, it doesn't really justify the conclusion that the Italian
crisis is "caused" by working class activity. We are drawn back into
asking why post-war Italian expansion necessitated low wages, into noting
that it was based on investment in new industries in a period of post-war
reconstruction and that after that no substantial investment was
forthcoming. If the working class precipitated the Italian crisis, it was
because Italian capital was so vulnerable to worker self-activity. We are
dealing with a system that can't tolerate working class victories a system
with little room for maneuver.
Looking for "causes", we would be drawn back into the pre-war period and
asking general questions about the crisis of capital between the wars and
the means used by the capitalists to extricate themselves from this
crisis, in other words asking the very questions Mattick tries to answer
in Marx and Keynes.
It was Britain's chronic low investment, as well as the combativity of the
British working class from 1910 on, that served as an impetus to Keynes'
theories. And it is in Britain that Keynesian policies have been most
extensively applied and that the limits of the mixed economy are most
evident. An obsolete industrial plant, a constantly expanding state
budget, relatively high social services expenditures, and a large and
growing state industrial sector are all a result of the long-term low
profitability which has made Britain unattractive to private investors and
uncompetitive on the world market. In 1976 the most sensational
manifestation of these conditions was the steep fall in the value of the
pound. In order to resolve its monetary problems, Britain would have to
become competitive (preferably in a situation where world trade is
expanding). And in order to do this it would have to decrease unit labor
costs, i.e. increase productivity while restraining wage rates. In the
60's British industry tried to do so by tying wage increases to various
organizational measures that would increase productivity, and by imitating
an incomes policy. But this proved ineffective, both because of growing
working class militancy, including a growing tendency to reject
productivity deals, and because it has become apparent that large
injections of capital are necessary to reestablish profitability.
One could say that the wave of struggles in the late 60's and early 70's
plunged Britain over the brink into a more or less bankrupt state in which
it is dependent on the IMF (at least until the expected oil revenues
materialised). But this has to be understood in the context of chronic
economic stagnation. (19) A 1973 article on Britain sums up the situation
in this way:
British capital, handicapped by decades of low investment, requires a
substantially increased share if it is to meet successfully the growing
pressures of international competition. The unprecedented level of wage
demands and wage settlements in the last five years... clearly
accentuated this problem. Moreover, workers' readiness to co-operate,
through productivity bargaining, in the more intensified exploitation of
labor has to a large degree evaporated since the end of the 1960's. (20)
The global problem capitalist economists refer to as the "capital
shortage' weighs heavily on Britain, as well as Italy.
Nowhere is the capital crisis more acute than in Britain and. Britain
must invest some $45 billion in new plant and equipment to become
competitive with its Common Market neighbors and with such trade rivals
as Japan. In fact, the British government estimates [in 1975] that
investment in manufacturing will fall. . . (21)
So capitalist planners speak in terms of "correcting the balance between
consumption and production," i.e. lowering wages and unproductive expenses
in the hopes that this will make funds available for investment.
However, politicians must weigh the possibility of intensified class
struggle, which cutting into wages and social expenditures and increasing
unemployment could set off, against the insolvency that would result from
continuing old policies. For example, in Britain, after the steep drop in
the value of the pound. the Chancellor of the Exchequer said "that the
alternatives to going to the International Monetary Fund for a further
loan would be 'economic policies so savage that they would lead to riots
in the streets'." (22) Nevertheless, the IMF loan entailed further cuts in
social service expenditure; full employment has become a relic of the past
and the welfare state is being dismantled.
That the Chancellor wasn't being just rhetorical is substantiated by the
fact that his scenario was quickly realized in Egypt, where in January a
boost in government controlled prices of food and fuel - a measure taken
to meet requirments of the IMF - actually did lead to riots in the
streets. The Polish riots of 1976 were another version of this scenario;
they were set off by price rises occasioned by Poland's loans coming due.
Afterwards, in November, Brezhnev loaned Poland $1.3 billion "when Polish
leaders convinced him that without help the worker uprising of last August
would be only a prelude to a repeat of the working class rebellion of
1956." (23) In general, capital now has to perilously expand credit beyond
all previous norms where and when it feels its power to raise the rate of
exploitation is limited and will run up against too much working class
resistance.
Currently in Britain, some union leaders have been arguing that the fact
that inflation has been rising since last summer, despite wage restraint,
proves that wage increases do not initiate the inflationary spiral. Now
pressure from the rank and file has subverted attempts at renewal of the
agreement between the TUC and the labour government on wage restraint, and
the possibility of a new "wage explosion't threatens to throw the
crisis-ridden British economy even deeper into crisis. (24)
The conditions in all other countries are, of course, not identical to
those in Britain and Italy, but the dynamic is similar enough for us to
generalize with regard to the issue under discussion. In the late 60's
capital found itself in the position of having increased expectations
without having surmounted the economic contradictions which limit its
production of wealth. Since it could not generate profits sufficient for
profitable expansion of private capital on the basis of a renewal of the
productive plant, capital had to both expand the unproductive spheres and
simultaneously endeavor to increase productivity through rationalization
and increasing the intensity of labor. However, working class resistance
to productivity schemes grew. Simultaneously, income demands grew. The
re-assertion of capitalism's "internal contradictions" met the
re-assertion of working class militancy. As a result, capital has had to
completely change its ideological tune; "affluence" and "rising
expectations" have given way to "zero growth" and "small is beautiful."
And a social reality is being constructed to match the ideology.
On the empical level what we find are individual capitalists or
corporations or nations, each intent on maintaining its competitive
position, primarily by raising productivity while keeping the lid on wage
rates and other expenses it" may consider flexible (such as social welfare
programs). Internationally, the competition appears in the form of trade
imbalances and ensuing monetary crises that put the now internationally
interdependent economy in jeopardy. All of these matters, which the
bourgeoisie understand as "economic", can be said to simultaneously
express and mask both the class struggle and the contradictory process of
capital accumulation. In a certain sense, a sense that doesn't invalidate
the marxian viewpoint, it is all a matter of class struggle, since the
capital accumulation process is based on historically specific production
relations which were established and are maintained by a complex mix of
physical and ideological manipulation and violence.
However, the particular struggles of actions of the working class, and
their relationship to the specificities of particular units of capital -
all this develops, not accidentally but, from the marxian perspective, in
the context of an inexorable, contradictory capital-accumulation process
which can be grasped theoretically on the basis of an analysis of the
"total capital," i.e. on a level of analysis which abstracts from
competition, if only to be able ultimately to work up to it by a series of
approximations.
For the Marxist, the struggle between workers and bosses within various
units of capital has to be understood in the context of the heightened
international competition of the late 60's and the 70's. Heightened
competition is characteristic of crisis conditions wherein capitalists
struggle over a pool of surplus-value which is dwindling relative to their
needs for profitable capital investment at the particular level of capital
accumulation.
Particular nations jockey for a share of existing surplus-value sufficient
to allow for further accumulation. But the crisis of capital is nothing
but an insufficiency of the total surplus-value relative to the amount
necessary for both productive investment f and unproductive expenditures.
As a result in each nation, Britain more than others because of its poor
competitive position, the struggle over the division of the existing
surplus-value among its three functions - constant capital (plant,
equipment and materials), variable capital (wages of productive workers),
and revenue (capitalists' income and unproductive expenditures) -
intensifies.
If, for theoretical purposes, we treat as secondary the struggle between
capitalists and workers over how much labor is actually supplied for how
much income, we can uncover what Mattick calls "the objective conditions
in which the class struggle must evolve and determine its orientation";
that is, in this case, the context of economic stagnation and the fact
that state intervention, rather than solving this problem, turns it into a
problem of cancerous growth of unproductive expenditures. Finally, if,
following Marx, we trace the economic stagnation back to the tendency of
the rate of profit to fall and the limits of the counter-tendencies, that
is, back to the internal contradictions of capitalism, we can understand
why the capitalist class is incapable of delivering the goods, of
satisfying the demands of a militant working class, and why, on the
contrary, it must periodically attack the living standards of the working
class and endeavor to increase the amount of surplus-value it pumps out of
each unit of labor-time.
As "objective" as this sort of analysis appears, in that it is developed
in abstraction from class struggle, nevertheless it leaves room for the
"subjective" in that it shows how the basis of relative class harmony must
break down and aims to put into question the capital relation itself. It
abstracts from class struggle in order to show that the crisis of
profitability, the context in which the struggle develops, is inherent in
the development of the capital-relation. There are limits to organizing
production and thus, indirectly, all social life, by means of the
capital-relation, by means of wage-labor. Such a system results in a
multi-faceted degradation of work and life, including at times serious
decline in many people's material well-being.
However, even if this objective approach holds up theoretically, its
limits must be recognized. Capitalism, as it develops (and decays),
transforms the labor-process and life in general, and, as a result, the
character and forms of revolt change also. Strategy and organization are
historically specific. The belief in or proof of capitalism's inability to
surmount its internal contradictions at best sets the- stage for
understanding the specific character of the present crisis, the specific
character of present struggles and the relation between the two. If the
crisis offers "the possibility of a transformation of the class struggle
within the society into a struggle for another form of society", it
remains to be shown how this possibility can become a reality. What we
need to do is 1) show how the intensified struggle over the rate of
exploitation can actually become, or is in the process of becoming, a
revolutionary struggle overflowing the bounds of the capital relation, how
it can turn into a struggle against wage-labor, and 2) participate in this
transformation.
"Critique" . . . includes from the point of view of the object an
empirical investigation, "conducted with the precision of natural
science," of all its relations and development, and from the point of
view of the subject an account of how the impotent wishes, intuitions
and demands of individual subjects develop into an historically
effective class power leading to "revolutionary practice." (Praxis,
Jan., July 1977). (25)
Footnotes
1.Paul Mattick, "Marxism and Monopoly Capital," Progressive Labor,
July-August, 1967, reprinted as a pamphlet by Root and Branch, Box 236,
Somerville, Mass 02143; and Mario Cogoy, "Las theories neo-marxistes, Marx
et 'accumulation du capital", Las Temps Modernes, Sept.-Oct., 1972, pp.
396-427.
2.Here I'm using Mattick as a paradigm of "the Marxist" and reserving
questions about the full adequacy of his analysis of the "internal
contradictions." Castoriadis' thesis is developed most extensively in
Modern Capitalism and Revolution. All reference is to issue #1; a second
issue has just appe&ed. See Peter Rachleff's review of Zerowork in Fifth
Estate, Nov., 1976. A very similar perspective can be found in Las
ouvriers contre L'Etat, refus du travail). Also see Robert Cooperstein,
The Crisis of the Gross Natfonal Spectacle. Glyn and Sutcliffe's book is
discussed by Yaffe in "The Crisis of Profitability: a Critique of the
Glyn-Sutcliffe Thesis," New Left Review, #80, 1973.
3.Only later to break with Marxism.
4.Nevertheless, Korsch was quite critical of crisis theorists like
Mattick's mentor, Henryk Grossman.
5.The rate of exploitation is the ratio of surplus-value to variable capital.
6.Zerowork, #1, pp.2-6
7.Ibid., p.63.
8.In response, it could be argued that Yaffe presents the rise in
unproductive expenditures as an "objective" economic development,
following Mattick, but that in fact the rise in unproductive expenditures
has occurred at least in part because past, present or potential working
class struggle. The rise in social services and the increase in state
production have occurred because the working class won through struggle
the principle of full employment and basic social welfare. As Yaffe
himself says, the main purpose of social services is to maintain social
stability. "Unproductive expenditures," then, in large part, are the way
that class struggle is obscured as a causative actor and becomes an
"objective" economic category.
9.Cf. for example, Brecher and Costello, Comon Sense for Hard Times, 1976.
10.Here the distinction and relationship between two meanings of
"productivity" is important. For Marx, increasing productivity means
increasing the product of a given amount of labor; for bourgeois
economists it means increasing the product of a given amount of labor-time
("output per man-hour"). The importance of this is that the bourgeois
concept does not distinguish between increases in output per man-hour due
to improved technology and those due to speedup. In the 60's and
70's,generally speaking, the lag in productivity in the marxian sense has
led capitalists to try to increase output per man-hour by intensifying
labor, i.e. by getting more labor out of each unit of labor-time. Often
the two are interconnected, as when the introduction of assembly-line
methods not only increases the productive power of labor but forces
workers to quicken their pace of work. However, where and when
technological development lags, as in British and Italian industry in the
60's and 70's, the emphasis is placed on intensification of labor. See
discussion below.
11.Capital, Vol.1, p.763.
12Taylor himself claimed that scientific management would take "high wages
and low labor costs.. .not only compatible, but...in the majority of cases
mutually conditional." Quoted in Yaffe, op.cit., from F.W. Taylor, Shop
Management, 1903, p.21-2.
13.Alan Jones, "Britain on the Edge of the Abyss," Inprecor, o 40/41,
Dec., 1975, pp. 3&8. I don't mean to reduce social struggles to the
struggle over the rate of exploitation. Although May 1968 did break a wage
freeze, this is hardly its outstanding Itracteristic; indeed, the effect
of May 1968 on wages was the result of the recuperation of struggles which
went far beyond the wage issue.
14. Paul Mattick, "Zur Marxschen Akkumulation-und Kuddsmenbruchtheorie",
in Ratekokerrespondence, 4, 1934, quoted in De Masi and Marramao,
"Councils and State in Weimar Germany", Telos No.28,1976. By Marratao,
also see "Theory of the Crisis and the Problem of Constitution", Telos,
no.26,1976, which disscusses matters relevant to the issue at hand.
15.Paul Mattick, "Preface" to Henryk Grossman, Marx, L'econemie politique
classique et le probleme de la dynaznique, Editions Champ Libre, 1975, pp.
2-5.
16.Geoffrey Kay, "The Palling Rate of Profit, Unemployment and Crisis",
Critique no.6, 1976, p.75. In this article Kay sets out to discredit the
theory of the falling rate of profit. I should explain that I am neither
convinced of the truth of Marx's economic theories, e.g., the theory of
the falling rate of profit, nor am I an opponent of those theories. I am
concerned here not primarily with determining whether one or another
theory of crisis is true or false but with comparing different approaches
to the present historical conjuncture. I have no pretensions to be
offering definitive conclusions.
Besides Kay's, another interesting critique of the theory of the falling
rate of profit is Geoff Hodgson's: "The Theory of the Falling Rate of
Profit", New Left Review #84. March-Ap41, 1974. A group which defends the
theory and economic perspectives close to Mattick's, is: Communist Workers
Organization).
In Geoffrey Kay's discussion of Yaffe, he suggests that the intellectual
attractiveness of the classical marxian argument is reason to be skeptical
of it. The same could be said of the political attractiveness of the view
that the working class imposes the Crisis. It makes the working class
appear as powerful as we would like it to be. One political argument in
favor of Mattick is that his view can be used in opposition to ruling
class arguments that all will benefit in the long run if workers tighten
their belts and work harder and give the capitalists a chance to
restructure. For Mattick, such measures don't lead back to "Go"; capital
is irretrievably in the "Jail" of low profitability. Even if workers'
sacrifice kept things going for another cycle of accumulation, capital's
problems would inevitably reappear and worsen.
17.J.B. Proctor and R. Proctor, "Capitalist Development, Class Struggle
and Crisis in Italy, 1946-1975", Monthly Review, Vol.27, no.8, Jan., 1976,
pp. 2-31.
18.Theleme Anarres, "Notes on Italy", Solidarity, vol.8, no.4, pp. 1-16.
19. Even this formulation is debatable. An article in New Left Review
argues:" Neither the general rate of inflation (until 1971), nor the rate
of increase in strikes was exceptional in the international terms, but the
slow growth in productivity, real incomes and investment was. It was this
weakness, the comparative weakness of British capital, not the relative
strength of British working class, that constituted the real crisis
point... and Sutcliffe". Class Struggle and the Heath Government", NLR,
Vol. 1973, p.27.
20. Richard Hyman, "Industrial Conflict and the Political Economy: Trends
of the Sixties and Prospects for the Seventies", The Social Register,
1973, p.112.
21.Businesss Week, Sept. 22,1975, p.96.
22.The London Times, Sept.30, 1976.
23.Jon Steinberg, "Why a few dissidents are frightening leaders in the
West as well as the East", Seven Days, vol.1, no.3, p.10.
24.For an account of recent developments in Britain, see my article, "The
Crisis of Wage Labor in Britain", in Now and After 12 (P.O. Box 1587, San
Francisco, Ca.)
25.Karl Korsch, Three Essays on Marxism, Pluto Press, pp 65-6
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