Dueling Powers and Capitalist Property in the United States

Is worker-owner occupied housing a form of capital? This to be precise, since second or third houses are obviously in almost all cases a form of capital. And if so, does this make the worker-owner a member of the "ruling class"? The answer to the first can be yes if it can be shown that owner occupied housing circulates in the the form of commercial or merchant's capital. The worker who is paid enough to afford a mortgage can act as a merchant upon sale of the house, carrying out an arbitrage not over space, as with the classical merchant, but over time sufficient to realize a cash equity upon that sale. What is put forward here is that this has been the case with the United States throughout its history, and - outside the smaller Anglo settler states of Canada and Australia/New Zealand - was uniquely the case with the U.S. until quite recently, when "home ownership" as a speculative commodity spread to selected parts of Western Europe and East Asia, and even more recently beyond the core of key imperialist states in to the Mediterranean zone, Eastern Europe and major Russian cities, as well as parts of China, India and the Middle East, giving for the first time in history a global scope and force to the present mortgage bubble bust and subsequent financial collapse. In many of these latter countries it is not at all clear that owner occupied housing has been the speculative plaything of privileged proletarians, but there can be no doubt of this in the case of the archetype, the United States. The focus, then, will be limited to this state. It should be a timely focus, as the present financial and economic crisis has precisely as its central question the viability of this hybrid form of capitalist property - a.k.a. "The American Middle Class".

That the well paid worker has to carry out this mercantile arbitrage over time speaks to the fact that this particular (indeed peculiar) form of capitalist property is the result of not one but multiple determinations, which are not simply that of the superstructure of imperialism which permit capitalists to pay "surplus wages" to workers of imperialist countries, but historically in the case of the U.S. also took the form of the small freeholder state (first fully realized under Andrew Jackson), fed by a surplus that was the result of a classic act of primitive accumulation in the form of the expropriation of an entire continent from its original user inhabitants, and was generally not the the fruit of an imperialist hegemony or domination exercised over other states, feudal, modern or otherwise by the U.S.. The post-agrarian successor form at the end of the 19th century was as a component part of variable capital, coinciding with the rise of American state power in the world system, enabling a surplus to be redistributed by means of successful interimperialist competition to workers wages in the U.S.. It is critical to grasp here that the very recent legacy - a legacy still living all the way up to World War 2 - of the agrarian freeholder state acted as a powerful lever to force the redistribution of a portion of the surplus into worker's wages sufficient to enable home ownership. This potential merchant's capital is at the same time, and in the meantime, a component of consumption necessary for the reproduction of labor power. To realize this potential required that a portion of that variable capital be transformed into homeowner property by means of the mortgage.

It is for this very reason that a third determination must enter, that of money capital in the form of residential mortgages, for even the highly paid worker must still, as a worker, reproduce their capacity to labor on a daily basis, and cannot suspend this process in regards to shelter for their family for the 20 - 30 years required to accumulate the sum to purchase the residence outright. The worker is, so to speak, in the reverse position of the banker, lending their labor power short - for as Marx pointed out labor power is always expended in advance of its payment in wages - while borrowing long for ownership of housing as mercantile speculation over time. In other words this particular form of variable capital is a near perfect market complement to banking capital, and in sum this particular form of capitalist property assumes the form of variable capital (for the employing productive capital), commercial capital (for the worker-owner) and money capital (for the banker-creditor). It therefore traverses all three main spheres of capitalist production as a whole: commodity production, circulation, and realization of capital as a commodity. This can give it a profound weight in capitalist society as a whole should this form of capital attain sufficient economic weight. However an entire historical transition had to be navigated before a substantial layer of the U.S. working class could replace the former settler agrarians as the mass foundation of the freeholder state. This substitution, preserving the old 19th century basis of the state, was truly a social innovation of U.S. capitalism. At the same time it also involved maintenance of the 19th century structure of "dual" balance of power in the state that acted as a constraint upon the capitalist class. Understanding this transition and its structure will go a long way to explain why a "socialist consciousness" has not yet developed in the American working class.

As to the second question: "Who is a member of the ruling class". Here first of all there is some potential for confusion in the manner of phrasing the question. The "ruling class" is neither identical to the capitalist class nor the capitalist class plus the mass of the petit bourgeoisie. For the word "ruling" to have any meaning here, it must be distinguished from the concept of a socially dominant class. The capitalist class per se, as owners of the majority of capital, is the socially dominant class, but it is far too tiny a percentage of the population to actually rule society directly. For that it has always required an extended layer of petit bourgeois intellectual functionaries in all spheres of social life - constituting a sort of "ideological apparatus", as Althusser might have put it (though not necessarily "of the state", where I think Althusser errs, as this apparatus is not necessarily coterminous with the state). It is this layer that permits the capitalist class to reproduce itself as the dominant class while this layer is also the favored route of the petit bourgeois into potentially entering the capitalist class, although the vast majority remain in this nevertheless most privileged sector of the petit bourgeoisie. In the definition here, the sum of these constitutes the "ruling class". The early modern bourgeoisie ruled exclusively in this manner up until the French and American Revolutions.

Between the American, French and Jacksonian political revolutions we have the emergence of a "democratic" petit bourgeoisie forming a sphere of "civil society" beyond the state as both a mass social support for, and constraint upon, capitalism. With this a second determination enters in the definition of "ruling class" in the form of a distinction between "ruling" and exercising a limited and partial power in the state. The ruling class in this case rules "hegemonically" in conjunction with some form of small capitalist property. This also led to a distinction between political regimes in the 19th century and persisting well into the 20th. At one pole were the "Britains", including post 1871 Germany, Italy, Japan and so forth , relatively narrow capitalist oligarchies ruling still in the 18th century manner where land ownership was monopolized by a post-feudal pseudo-aristocracy and therefore had a weak mass petit-bourgeoisie excluded from the exercise of power in the state. This is generally the situation of "ground rent" as Marx analyzed in Vol. 3 of Capital. At best in this case, as in Britain, there was a layer of small "shopkeepers" consisting of a form of capitalist property divorced, though, from ownership of land. These shopkeepers could therefore just as easily bloc with the emerging propertyless London proletariat as with the political regime, as they did until the Napoleonic Wars, or with the Chartist movement at the latest. France, as a result of the Revolution, was an intermediate case, with a politically active rural and urban mass petit bourgeoisie in an unstable balance with the capitalist class that oscillated between Bonapartist and parliamentary regimes at least until 1871, when this pattern came to an end with the suppression of the Paris Commune. Its Bonapartist phases reflected a rise in the influence of the petit bourgeoisie in the state, but the sharp difference in forms of capitalist property between the petit bourgeoisie of the city and country prevented a stable and enduring representation in the state based on a homogeneous form of property - instead the rural petit bourgeoisie, following the Napoleonic tradition, tended to favor the Army as representative institution.

The origin of the small freeholder form of capitalist property in the United States as a foundation of the state, and its transformation into the form of the worker homeowner as a continuation of that foundation, will be covered in the next installment.

Who Gets to be a member of the ruling class?

Is a house capital?
Are homeowners capitalists?
Who gets to be a member of the capitalist class?

Part 1

A couple of weeks ago on the Marxism mailing list (http://www.marxmail.org) I proposed the idea that the entire capitalist class in the United States should be defined as the ruling class. My guess at that time was that 90 million people might be included. I did not clearly define capital at the time, nor did anyone else in the conversation, but I did include houses as capital. A frequent poster on that list, S. Artesian, strongly disagreed. He wrote,

“Owning a house is not owning capital. A house is not capital, unless it is
used to extract surplus value, or to gain a portion of the surplus value
generated throughout the society. Employing a gardener, a cook, a child-care
worker in that house does not make one a capitalist, nor does it place
somebody into the ruling class.”

(Re: [Marxism] If you want to identify the ruling class, you have to decide what is a social class. * From: "S. Artesian" * Date: Sat, 1 Nov 2008 01:57:45 -0400)

The question of whether or not a house is a form of capital is an interesting one, which has a lot of bearing on the social structure of modern capitalism, especially modern imperialism, and especially the imperialist countries that were originally formed as settler states. Especially the United States of America.

My view is that there are three great social classes in modern imperialist capitalist societies: the working class, the capitalist class, and the petty bourgeoisie (little capitalists). Each of these social classes is further divided into different social strata, and each of these social classes interpenetrates the others. The working class contains an upper petty bourgeois, capital owning, strata.

The petty bourgeoisie includes many professionals who work, and who own capital, and many small business owners who work and employ others.

The capitalist class rises from its mass base of small capitalists to the heights inhabited by the very big capitalist family networks, with a few odd individual new comers.

Individuals frequently move from one strata within a class to another, and from one class to another: social mobility dampens class conflict and is one key to capitalist social stability.

I think houses that are bought and sold in markets like any other commodity are clearly a form of capital. The fact that the melt-down in the housing and mortgage markets was the catalyst for the current plunge into economic deep water ought to be a clue for anyone thinking about the topic (how’s that for mixing metaphors?)

Home equity constitutes the most important form of capital owned by the petty bourgeois strata of the working class, and is an important part of the capital owned by the petty bourgeoisie per se.

If you look at it this way, the current economic crisis can be seen in part as a gigantic liquidation of the capital accumulated by the labor aristocracy and the entire petty bourgeoisie.

Is a house capital?
Are homeowners capitalists?
Who gets to be a member of the capitalist class?

Part 2: So is home equity capital?

S. Artesian’s objection was, “Owning a house is not owning capital. A house is not capital, unless it is used to extract surplus value, or to gain a portion of the surplus value generated throughout the society.”

He is right, and he is wrong. Every person who buys a home in the United States, or at least every person who bought one in the past, expected to gain a portion of the surplus value generated throughout the society. The belief that real estate prices inevitably and inexorably rise is deeply held in all layers of society in the United States. And, over the long run, it has been historically true.

So, in S. Artesian’s own definition of what capital is, houses have always been a form of capital in the United States. To rephrase his objection,

“Owning a house IS owning capital because it is used to gain a portion of the surplus value generated throughout the society.”

It might be a good idea to review some definitions of what capital is, what rent is, what the price of land is, etc.

Marx, Engels, Lenin et. al defined “capital” in different ways, and divided capital into different kinds of capital. Among the different kinds of capital, according to Marx, there are constant capital, variable capital, commodity-capital, money-capital, fixed capital, commercial capital, merchant capital (or money-dealing capital), interest bearing capital, credit capital, fictitious capital, bank capital, real capital,

One of Marx’s first attempts at defining capital appeared in his Economic and Philosophical Manuscripts of 1844. Here it is


“Capital is thus the governing power over labour and its products. The capitalist possesses this power, not on account of his personal or human qualities, but inasmuch as he is an owner of capital. His power is the purchasing power of his capital, which nothing can withstand.”

Karl Marx, Economic and Philosophical Manuscripts of 1844
Profit of Capita, 1.Capital
http://www.marxists.org/archive/marx/works/1844/manuscripts/capital.htm

By this definition, a house might be called “potential capital”. The house itself has no governing power over labor and its products, but if it is sold – or rented – the money received will have the governing power which defines capital.

When Engel’s wrote a review of the first volume of Das Kapital for the Rheinische Zeitung in 1867 he defined capital simply.

“What is capital? Money which changes into a commodity in order to change from a commodity into more money than the original amount.”

(Review of Volume One of Capital for the Rheinische Zeitung, October 1867
http://www.marxists.org/archive/marx/works/1867/reviews-capital/rzeitung.htm)

This is the famous formula for capital of M-C-M which Marx explains at length in Volume 1 of Das Kapital. If we define a house as a commodity, then the formula can easily be applied. Money is invested in the house in order to gain more money when the house is later sold. (The only important variation in this formula when the commodity happens to be a house (or any other form of real estate), as compared to other types of commodities, is that the amount of time between the first transaction and the second transaction could be longer for real estate.)

In other words, by this most famous definition of capital, a house is capital.

What a house obviously is NOT, is CONSTANT CAPITAL, which is capital invested in machinery, inventory, etc. in the process of production.

Exactly what KIND of capital a house is, needs to be defined more precisely. But, a house, at least in the 21st century United States, is capital.

To be continued.

Colin Powell's Endorsement of Obama

Colin Powell’s Endorsement of Obama

The endorsement of Barack Obama by Colin Powell, retired General, Chairman of the Joint Chiefs of Staff under George I during the First Persian Gulf War, and Secretary of State during W’s first term of office, is very, very significant.

Powell speaks for a very large sector of the military and diplomatic leadership of US imperialism. Bush and his cronies have fired, forced out of office, and reassigned to nowhere the top echelons of generals, colonels and career diplomats of the post-Viet Nam era. Promoting syncophants in their places, and treating them in the same manner when they have not achieved the impossible (like winning in Iraq and Afghanistan.), Bush and friends have won the enduring enmity of the officer corps, and much of the diplomatic and spy corps. In the process they have gone a long way towards destroying the morale of the military, and to a real, but lesser, extent the diplomatic and spy corps.

Maverick McCain’s candidacy was supposed to heal the rift between the Republican Party and the military. Obviously, it has not.

Powell’s endorsement, cautious as it was in words, (either man would make a good president) has ended all talk about Obama not having the experience needed to lead imperialism. And it almost certainly has deepened the desperation of the McCain campaign.

The next two weeks should show us just how desperate they have become.

While stealing this election will be much more difficult than previous elections, especially since the Democrats seem to have mobilized a major effort to stop the theft of the election including an unprecedented mobilization of volunteers of all types – from hackers to lawyers, many Republican state officials will be under strong pressure to pull out all the stops to steal the election.

But how many of them will? What is happening to the morale within the Republican Party? How many Republicans are working over time to cover up their own tracks? None of them want to be the next Senator Ted Stevens, but certainly many of them could easily be the next to fall. Will they be sticking their necks out for a candidate who looks and acts a lot more like Mr. McGoo than Bart Maverick?

And, Sarah Palin’s witchhunting, mobilization of racism, and character assassination will escalate. No doubt to no effect in terms of changing the electoral equation, but potentially endangering the lives of Barack Obama, his family, and of all people of color during the election period.

More later, Anthony

Articles about the Bush Administration’s deconstruction of the military and diplomatic hierarchy

http://www.tomdispatch.com/post/28817/nick_turse_casualties_of_the_bush_administration

http://www.msnbc.msn.com/id/12313869/

http://thinkprogress.org/2006/04/13/the-chorus-grows-another-general-calls-for-rumsfelds-resignation/

http://www.rawstory.com/news/2006/Bush_replaces_top_general_in_Middle_0104.html

http://www.huffingtonpost.com/2008/06/02/general-ricardo-sanchezs_n_104664.html

The Great Crash of 2008: Notes On Origins, Part I

The below is a counterpart to Anthony Boynton's historical overview of capitalist crisis and overproduction. It seeks to begin an examination of the structural causes of the present crisis in light of what Marx had to say, and what he could not say, about financial capital in Part V of the third volume of Capital, a book that lately seems to be flying off the shelves: Booklovers turn to Karl Marx as financial crisis bites in Germany

Here I seek to throw down a few theoretical markers for analysis of the crisis. This is in no way an exhaustive analysis. The essential thesis is that unlike in Marx's time, when it was considered that money capital was loaned only to industrial capitalists and not to wage laborers, financial capital today has entered into direct relations with wage labor in the form of "consumer" credit of all types. Money capital, capital as commodity, possesses as a commodity both unitary and universal attributes - it is always a sum of money, the universal exchange equivalent - unlike all other commodities whose exchange value is of partial and particular origins. Therefore financial capital acts as the single universal social personification, or concrete universal instantiation, of capitalist social relations across the entire social spectrum - and that is why financial capital always bears a close relation to the capitalist state - but a direct relation to wage labor in the form of credit, in a moment of financial crisis, threatens to project the class struggle between wage labor and capital across the whole spectrum, including the political sphere via the relations to the state.

That is exactly what we are witness to right now.

Capital as a (particular) commodity, whose form is money capital, must be analyzed quite differently from (all) commodities as attributes of capital, and that is exactly what I am reading from Marx in the relevant chapters of vol. 3.

"Driving down the cost of production, basically speeding up workers and cutting wages and benefits, does not alleviate a crisis of overproduction. In fact it aggravates it by causing the market for consumer goods to shrink. It can however, maintain profitability for businesses as profits begin to fall in the early stages of a crisis of overproduction." (Boynton, not Marx :-)

I'd add to this that extension of credit to wages in the form of credit cards, auto loans and mortgage loans, i.e. 'consumer credit', as a means to address the overproduction of capital, has as its precondition precisely this stagnation or fall in real wages. This introduces some important contradictions that are critical to understanding how a crisis in consumer credit - involving quite literally hapless Mexican immigrants trying to buy into "the American Dream" on the south side of Stockton, California, just think of it! - acted as the detonator for a generalized financial meltdown:

1) Assuming the onset of an overproduction of capital - a chronic state until now - on the one hand financial capital has a positive interest in stagnating or declining real wages, and in particular in wages that fall below refurnishing the necessities of life as determined by the prevailing standard of living, as this provides a widening market for its product;

2) On the other hand real wages can never fall so low that they cannot service the interest on the credit required for the necessities of life.

3) Further, by extending credit directly to wages, the competition for credit by industrial capital is undercut and bypassed in two ways:

a) Simply because the individual wage earner exercises much less market leverage than the industrial capitalist, interest rates can be much higher for consumer credit than for industrial loans, raising the average rate of profit of the financial sector, thereby attracting more capital investment into this sector;

b) Because wages as the variable part of industrial capital must be sufficient to cover consumer loan interest, this becomes an increment to the total interest paid by industrial capitalists to financial capitalists, and a subtraction from demand available for wage goods, further exacerbating the overproduction of commodities in the long run in this sector and depressing profits here, in turn adding further downward pressure on real wage levels in this sector.

Note that finance capital does not cease to function as capital once put into circulation in the commodity form of consumer credit, as the interest becomes a component part of variable capital while the principle remains in the form of fictitious capital as a lien on labor power.

Marx states that there is no "natural rate of interest", no equilibrium rate of interest as there is with the (general) rate of profit, therefore there is no theoretical limit on the proportion of wages or gross profit absorbed as interest, only the practical limit of the real extent of wage or profit levels. This alone gives the financial capitalist a certain advantage in competition with the industrial capitalist for profits. Marx also states that the financial capitalist does not stand in direct relation to the capitalist labor process as does the industrial capitalist, however, Marx never had the occasion to analyze money capital extended in the form of of consumer credit directly to wages, as this phenomenon began emerging in mass form only in the early 20th century, with the Great Depression being one of the first financial crises with significant involvement of consumer credit, though this was not a detonator of that crisis. It is my thesis based on the above points that this does bring the finance capitalist into such a direct relation to the wage laborer as a component part of productive capital and is therefore a relation that is a direct form of the class struggle but, unlike the relation with the industrial capitalist, presents itself immediately as a total global relation between two social classes at the moment of crisis. Some obvious reform demands spring from this: cancellation of consumer debts, caps on interest rates, etc.

Here I will not go into other key dimensions of the "financialization of wages" such as in the form of retirement plans of privileged workers being funneled into the stock market, etc., as well as the whole consumer insurance sector It is more important to move to an analysis of the other characteristic pole of the present crisis, the vast financial universe of derivatives. For if the present tendency for wages to stagnate and fall to the point where a crisis in payment of consumer loan interest was unavoidable was the detonator for this crisis, the fuse to exploding much of the global banking system outside of Asia - including the so-called 'shadow banking system' of hedge funds and whatnot - was the packaging of these soon to not be performing consumer loans into mortgage backed securities (MBS) derivatives atop which was pyramided a second order of derivatives known as credit default swaps (CDS) - essentially insurance on the MBS - in themselves amounting to an approximately $65 trillion powder keg, a sum equal to the entire global GDP in 2007.

That is for another writing. Suffice to summarize that if ever a practical proof was presented of the critical role of the balance of forces in the class struggle, here in the form of the balance between wages and capital - capital and not simply profits - as the primary motor of capitalism, this is it.

Crises of overproduction

Crisis of overproduction of commodities and capital

“The Basic Theories of Karl Marx” Chapter 9, on “Marx’s Theory of Crises”. has to be one of the worst things Mandel ever wrote. He belittles the importance of the difference between crises of overproduction of commodities, and crises of overproduction of capital, as being essentially meaningless and irrelevant. (The passages are quoted below, along with the URL for the whole article.)

Mandel correctly notes that there are different forms of capital. Since commodities are on form of capital, he posits that a crisis of overproduction of commodities is a crisis of overproduction of capital, so why bother trying to figure anything else out!

Here is why.

A crisis of overproduction can occur in any particular sector of capitalism, and within a national or regional market. When there is a competitive market, not a monopoly or oligopolistic market, individual producers can not tell in advance how big of a market share they can win. All try to introduce economies of scale and scope if they have the financial capital available to invest and the creativeness to steal or invent new techniques, in the process the scale of production increases, and the total production exceeds the total demand.

You can have a crisis of overproduction of garlic in Gilroy, or shoes in Medellin.

When you approach a crisis of overproduction of goods or services (e.g. garlic or accounting), the rate of profit drops in that sector. Capital seeks higher profits, especially where it can achieve either monopoly profits or rents in addition to normal profits. Investment moves to sectors other than garlic or accounting services.

A generalized crisis of overproduction occurs when markets in all of the main productive sectors become saturated. At this point you also develop a crisis of overproduction of finance capital.

For the capitalist class there are several potential solutions: A) enlarge markets, historically by exporting and investing in other countries. B) create new markets, historically by developing new technology. C) enlarge markets by artificially expanding demand, especially through the extension of credit, military production, and other government subsidies (the New Deal). D. Regulate markets, including production and prices (also the New Deal, especially during WWII.)

Driving down the cost of production, basically speeding up workers and cutting wages and benefits, does not alleviate a crisis of overproduction. In fact it aggravates it by causing the market for consumer goods to shrink. It can however, maintain profitability for businesses as profits begin to fall in the early stages of a crisis of overproduction.

For individual capitalists there are other measures that can be taken: trying to drive your capitalist competitors into bankruptcy, for one.

And, if none of the above measures work, the only other solution for capitalism is to resolve the crisis of overproduction of capital by destroying capital. This means more than destroying fictitious capital and values through market crashes. It means closing factories, destroying “excess” commodities (also a New Deal policy), and if the crisis is bad enough destroying the factories and workers in a war. This was the solution resorted to between 1914 and 1945.

More later, Anthony

“The question of determining whether according to Marx, a crisis of overproduction is first of all a crisis of overproduction of commodities or a crisis of overproduction of capital is really meaningless in the framework of Marx’s economic analysis. The mass of commodities is but one specific form of capital, commodity capital. Under capitalism, which is generalized commodity production, no overproduction is possible which is not simultaneously overproduction of commodities and overproduction of capital (overaccumulation).

“Likewise, the question to know whether the crisis ‘centres’ on the sphere of production or the sphere of circulation is largely meaningless. The crisis is a disturbance (interruption) of the process of enlarged reproduction; and according to Marx, the process of reproduction is precisely a (contradictory) unity of production and circulation. For capitalists, both individually (as separate firms) and as the sum total of firms it is irrelevant whether more surplus-value has actually been produced in the process of production, if that surplus-value cannot be totally realised in the process of circulation. Contrary to many economists, academic and marxist alike, Marx explicitly rejected any Say-like illusion that production more or less automatically finds is own market.”

http://www.internationalviewpoint.org/spip.php?article289

Notes on the current crisis of capitalism

Notes on the current crisis of capitalism

The crisis of capitalism is moving from the esoteric realm of obscure derivatives into the real economy rapidly, and relentlessly.

In truth, its source has always been in the “real” economy: the financial sector is an extension of the real economy, the apex of the pyramid (should I say pyramid scheme?).

What we are at the beginning stages of is the first ever global general crisis of overproduction coupled with the first ever global general crisis of overproduction of capital.

Background

Capitalism as a world system entered into crisis at the end of the 19th century because its nationally limited markets were individually reaching crises of overproduction, and in a related process, crises of overproduction of capital. The obvious solution for these individual, but connected national crises, was to expand markets and investment beyond national borders. The attempts to do so led to World War I and World War II, and their consequences led to the Russian revolution and the great depression.

The crisis of the first half of the twentieth century was resolved, temporarily, by those cataclysmic historic events.

An enormous amount of both fixed and variable capital – human lives – was destroyed. National limitations to markets were also destroyed. The cold war system divided the world into two great economic zones: a capitalist market system dominated by the United States covering the Western Hemisphere, Europe, Africa, the East Asian Rim, and South Asia; and an isolated zone of planned economies stretching from Eastern Europe to China, and dominated by the Soviet Union.

Enormous advances in technology due to war related research and development opened gigantic new markets which had not previously existed – transistor radios to computers - and dramatically lowered costs of production and transportation in older markets. Markets grew to undreamt of size due to very rapid and continuous population growth resulting mostly from the green revolution and the wide spread use of antibiotics which dramatically cut mortality rates after WWII.

The new system was structured through a series of international agreements and organizations: the Bretton Woods Agreement, GATT (which evolved in the World Trade Organization) , the IMF, the World Bank, the United Nations, the European Coal and Steel Community (which evolved into the European Economic Community (EEC) and now the European Union.) and NATO.

All of these agreements in one way or another were undemocratically structured to give the United States of America predominance over all other countries. All of them depended in turn on the common fear of socialist revolution among the ruling capitalist classes of Europe and the United States. That fear was made palpable by the revolutionary victories at the end of the second world war, the continuous revolutionary turmoil in the post colonial world, and by the military power of the Soviet Union, its victories in the Second World War, and its development of nuclear weapons.

The social and political instability of this new global system of capitalism were enormous, especially in the immediate aftermath of World War II and in the post colonial world.

Imperialism could not control the processes which were unleashed especially in the countries which had been conquered and subjugated most recently by Japanese and German imperialism in Eastern Europe and East Asia. The Chinese revolution and the Red Army of the Soviet Union swept away imperialism, and temporarily established revolutionary dictatorships and planned economies.

In the dismantling of the British and French empires national and social revolutionary movements emerged and won partial complete or partial independence from imperialism, opening up the possibility of advancing further toward socialist revolution.

Ironically, the danger of revolution was a key political element in the revival of capitalism: it pushed the ruling classes of the world together behind the United States in forging a previously unimaginable political unity which made possible the dismantling of trade barriers, the establishment of the dollar (at first backed by gold) as the world currency, and the establishment of a world wide financial system.

This new structure, combined with the new technologies developed during World War II, combined with the dramatic reversal of the long term crisis of overproduction (i.e. destruction of war had destroyed both inventories and factories, reversing the imbalance of supply over demand and creating an imbalance of demand over supply to lead to a very long period of economic growth from 1946 to 1973.

God's water

From time to time we will post things here that are not so serious, like the travelogue that follows.

I really have no idea why the place is called “Agua de Dios”- ‘Water of God’, but it conjures up in my mind a picture of Zeus or Thor standing up in the clouds and peeing.

Whatever the reason for the name, we just spent a long weekend at a “finca” near Agua de Dios. The area is about 100 KM due west of Bogotá, which means two hours driving time when there isn’t much traffic, and three or four or five hours driving time on three day weekends when there is a lot of traffic.

There are two ways to go: the highway to Melgar, and then on to Giradot, or the highway through La Mesa. Both have been privatized under the patronage regime of Colombia’s beloved President Alvaro Uribe. Not completely privatized, but leased out. The results have been a large infusion of private investment into state infrastructure, in return for which motorists have to stop fairly frequently to pay high tolls to the lucky beneficiaries of Uribe’s largesse. It’s a mixed blessing for travelers, because the state of the roads in Colombia was terrible, and now is better.

And things are a lot better now than when the roads were first leased out. At first the private contractors invested money in toll booths, and nothing else! This did not sit well with the rest of Colombia’s capitalists who believe in privatization only up to the point where it benefits them, and they need good roads. It also didn’t sit too well with the country’s military strategists, who also want good roads, since this is one the principal means of drying up the seas in which the guerrilla used to swim.

In any case, we chose the road through La Mesa, since it is rumored to be faster and less crowded than the other, more traditional route.

We made a mistake, though right at the beginning. Instead of heading out Calle 80, we chose to go west on Calle 13. Calle 80 leads to the highway toward Medellin, but to get to the highway to La Mesa you have to turn off onto a toll road that has been rebuilt in a way that has caused me to get lost twice. So we took Calle 13, despite misgivings about driving through the industrial heart of Bogotá.

Like I said, this was a mistake. The country’s 150,000 independent truck owners had just ended a week long strike. The strike had been called over high fuel prices, and over unfair competition from the big trucking companies. I am still not sure what the deal was that ended the strike, but nevertheless, it ended Saturday afternoon just as we were leaving town.

This resulted in a miles long traffic jam of big rigs waiting to pass through the weigh station on Calle 13 at the outskirts of Bogotá. And that resulted in an hour or so delay while we tried to squiggle through the endless array, and disarray, of trucks.

Once we got out of Bogotá it was pretty clear sailing. We drove as fast as traffic would allow while we climbed up the slope of the Andes past “Mondoñedo”, one of the city’s two major garbage dumps. Then the air, and the traffic, thinned out, and we were able to travel the speed limit down through the pretty countryside of the western side of that range of mountains. We hit another traffic jam in La Mesa, and then sped on to the town of Tocaima.

Tocaima marks the foothills of the Andes as they run along the valley of the Rio Magdalena. Here a road heads south, reaching the river at Giradot. Along the way it follows the foothills and passes through Agua de Dios. The road has recently been rebuilt, and there are no tolls! Smooth sailing!

If you have ever driven highway 49 through the Sierra foothills in California, you have some idea of what the countryside is like. The country side is dry, but not desert. The mesas here are sharper than those in California, instead of flat table tops, the tables are all keeling over to one side as if the tectonic upthrust of the Andes was being guided by some drunken sailor. The sedimentary layers of shale and sandstone near the mesa tops are clearly outlined beneath the dry brown grass. Down below, along the creeks, everything is a lot greener than in the California foothills.

Dry is relative, because even though this countryside is nowhere near as humid as the nearby river valley, and much much less humid than the interior tropical plains, this is still a lot wetter than the California foothills could ever imagine.

Like the California foothill country, a lot of this area is cattle country, but here you mostly see Brahman cattle with their big hump backs.

Driving south from Tocaima the country gets a little greener around Agua de Dios. The town itself is prettier than most small towns. A friend has developed a rule which makes sense, the older the town or neighborhood here, the prettier it is, the newer the town or neighborhood here, the uglier it is. After giving the rule a little thought, I concluded that there are three underlying reasons which make it true: stucco, paint, and trees.

Most buildings in small towns are do-it-yourself brick buildings, with tradition rather than architects and engineers providing the design. Often part of the first floor is built, and then the next part, and then the next. When the lot is built over, the second story is started, and sometimes a third or even a fourth. Once construction is finished, something that often takes years or decades, decoration begins. The stucco goes on, and then the paint. And, if there are any empty patches of earth, maybe a tree or two gets planted.

Agua de Dios’s buildings are mostly stuccoed over and painted in pastels and whites, and there are lots of trees.

Agua de Dios, besides being prettier than most towns, stands out as the location of three leprosy hospitals: two for men, and one for women. Why they are segregated by sex beats me, and I will not repeat the awful jokes I heard explaining possible reasons.

The place where we stayed is a few miles south of the town. Although the word finca more or less means farm, this place is not a farm, it is a vacation house built just to rent to families and large groups for weekend trips. At the front there are lots of large trees shading a little parking area. Next to the parking area there is a covered open air recreation area with a billiard table, a ping pong table, “Rana” (frog), and some sofas and chairs to lounge around in. Next to the roofed area there is a tejo court and a mini-tejo court.

Rana is the Colombian answer to darts. You play it while drinking beer, only there aren’t any sharp pointy things. Instead you throw weighted metal tokens into frogs’ mouths. Tejo is a more explosive drinking game, sort of the Colombian answer to horseshoes, only you don’t throw horseshoes you throw metal weights. And you they don’t hit a little pole and make the shoe clang and spin around. The object is to hit throw the weights and hit a little square filled with black powder and make it blow up.

Connected to the rec room area is a little house with two bedrooms, one for the guests and the other for the owner’s girlfriend and her son. Nearby there is another little house for the couple who take care of the place.

Up the hill there is a lawn and a swimming pool, and then the main house. The house is nothing special. In fact it is sort of utilitarian. Four big bedrooms with loads of bunk beds. Two bathrooms, a kitchen, and a very wide central hallway/living room connected the rest. Behind the house is a sort of poorly maintained soccer field. At the back of the soccer field there is a barbed wire fence which someone thoughtfully decided to install a door in. The door even has a window. And a lock.

For a group of 10 or more it costs less than $10.00/day/person.

We ate, slept, swam, played, read, relaxed, got sunburned, and got bitten by bitey bugs.

A few words about the birds and the bees and the flowers and the trees.

I don’t really know the names of all the local flora and fauna, but the flora includes a lot more flowers than you would find in a similar place in California. And the fauna includes a lot more kinds of birds and insects than in a similar place in California.

Tropical places have lots of ants, and several different kinds in one place. At this finca there were big ants, little ants, and flying termites. Also wasps, some other things that looked sort of like wasps, lots of little bitey gnats, and butterflies: yellow butterflies, black butterflies, and blue butterflies.

The little bitey gnats were worse than mosquitoes. You didn’t really ever notice they were biting you until after the fact. After the first night I had dozens of little welts on my legs, and so did everyone else. Luckily I didn’t have much reaction to them, and they just faded away. Unfortunately other people had major reactions to them with little bites growing into big angry looking itchy red hives.

It’s hard to say how many kinds of birds there were at Finca Lareno, but there were a least a dozen different kinds. Besides the turtleback doves which seem to be everywhere in Colombia, and besides the big black vultures gliding high up in the air currents over the foothills, there were lots of other birds.

There were little yellow and red colored birds that looked like wild finches or parakeets. There were several different colored humming birds: at least red yellow and green. There was a larger bird with a brown body and red wings. There were some medium sized black birds with long tails and an odd manner of flying. It looked sort of like the breast stroke. There were some gray and white birds. One bird, maybe the gray and white ones or the black ones made a really weird oommmuuup kind of sound. There were white egrets that like the swampy areas down farther near the river. And there were hawks.

Driving back was like driving there, only in reverse order. Smooth sailing at or near the speed limit until we got close to the top of the last ridge before “Mondoñedo”, then heavy traffic all the way into the city.

Now here we are, back in Bogotá.

By way of an introduction

Part 1: Scientific Socialism and Social Science

By Anthony Boynton

If you are not very familiar with Marxism, this little essay might help you discover Marxism. If you are familiar with Marxism, this essay will tell you where we are coming from. In either case it is an introduction to Marx Redux.

We hope to contribute to the revival of Marxist theory with this blog, a revival that is now beginning on a world scale. Mat and I differ on many details, but have broad agreement on key points. Both of us think that it is possible to understand the world, and that understanding – “theory” – is the best guide for action.

The action we have in mind is socialist revolution.

Marx, or maybe Engels, coined the term “scientific socialism” to describe their version of socialism and to differentiate it from other varieties they deemed to be unscientific.

What I think they meant by this idea is that human society is just as much a part of the material universe as are chemical compounds, planetary motion, and cellular biology. Consequently human society is evolving along with the rest of the material universe, in ways that can be understood, and if understood anticipated.

Moreover, since human society is the aspect of the material universe most directly influenced and shaped by human actions, understanding and anticipation of the direction of change could, under the right circumstances, allow human society to shape its own destiny.

They were amazingly far-sighted. Ahead of their times in every sense.

Marx and Engels discerned that the evolutionary logic of 19th century capitalism pointed in the direction of change toward socialism and communism, but that direction was barred by the self-interest of the ruling classes of the time.

The evolutionary logic of human society could only move in its natural direction through class conflict, and social revolution. Marx, or maybe Engels, said class conflict was the motor force of history.

This, in brief, is what I understand as the notion of scientific socialism.

Marx and Engel’s revolutionary conclusions were based partly on their personal experience in 19th century European social and political struggles, and partly on their study of history, especially modern European history. Important instances for them were the Peasant Wars in Germany, the French Revolution, the Revolutions of 1848, the American Civil War, and the Paris Commune.

And of course the way in which they approached their experience and the history they studied was framed by their Hegelian formation.

The Hegelian undercurrent in the thought of Marx and Engels is very important, because it explains how they were able to grasp the role of social conflicts, especially class conflicts, in bringing about the transformations of social structure which have been the key turning points in human history.

Here is what Engel’s says about Hegel’s system in Chapter One of Anti-Duhring

“This new German philosophy culminated in the Hegelian system. In this system — and herein is its great merit — for the first time the whole world, natural, historical, intellectual, is represented as a process, i.e., as in constant motion, change transformation, development; and the attempt is made to trace out the internal connection that makes a continuous whole of all this movement and development. From this point of view the history of mankind no longer appeared as a wild whirl of senseless deeds of violence, all equally condemnable at the judgment-seat of mature philosophic reason and which are best forgotten as quickly as possible, but as the process of evolution of man himself. It was now the task of the intellect to follow the gradual march of this process through all its devious ways, and to trace out the inner law running through all its apparently accidental phenomena.”

By way of an introduction

Part 2: Academic and bourgeois social science

By Anthony Boynton

Interesting is the fact that in the physical sciences things have in some ways caught up with Marx and Engels. In the above quoted text, Engels wrote, “...for the first time the whole world, natural, historical, intellectual, is represented as a process, i.e., as in constant motion, change transformation, development; and the attempt is made to trace out the internal connection that makes a continuous whole of all this movement and development.”

But this idea was not well accepted in the 19th century. Darwin’s ideas were controversial, and in fact are hated to this day by the extreme right who are still vainly mounting their cretinist – I mean creationist - counterattack.

The notion of constant motion was okay, as long as things basically stayed the same. The earth revolved around the sun – forever and period. Gravity was a constant, unchanging, reassuring force. The notion of constant transformation and development - for the most part, except for the work of Darwin - had not yet entered the picture.

But now that has all changed: starting with the Big Bang, and on through super novas, black holes, planetary evolution, pangia, tectonic plates, and the transformation of organic molecules into cellular life the physical sciences have embraced the idea of constant transformation and development.

The physical sciences have discovered that everything is connected in one big whole, and that it and all of its parts are constantly undergoing change, transformation and development. Amazingly enough, many of the thousands of small discoveries that went to make up this new system of scientific thought were achieved by people unaware of Engel’s, or even Hegel’s, thoughts on the subject.

Hooray! 21st century physical sciences have advanced to the level of 19th century Marxism.

The only field where the notion of constant transformation is not yet accepted as the most basic fact is social science! The notion that the current economic, social and political structure of the world will last forever, maybe with a little fine tuning here and there, is the basic assumption of most academic social science.

Since the current world order is very, very new, and came into existence through two centuries of war and revolution – more or less from the Seven Years War to the end of the Cold War – the notion of a static social order should seem strange even at first sight.

True, academic social science does recognize tumultuous transformations in human society, as long as they happened a long time ago. The watershed between paleolithic society and neolithic society now known as the agricultural revolution is an example. But as academic social science approaches the present it starts doing its best to erase any sharp dividing lines in the evolution of human society.

Despite the fact that human society is changing at a far faster pace today than ever before in its history, absurd dreams like those of Francis Fukayama are right in the main stream of academic thinking. Continuity, not change, is the watch word in all social science.

The most important reason is simple self-interest. No academic wants to lose his or her chair, or chance at one. Those who discover that the current social order is likely to become a relic of history in the not too distant future are less likely to be promoted, and so are less likely to publish their startling discoveries.

Those who advocate change are courting dismissal and persecution.

This is burned into memory by the millions of victims in and around academia - primarily in the social sciences - of the anti-communist witchhunts in the USA which transpired over nearly two decades from the late 1940’s to the early 1960’s, and which never really stopped.

Ward Churchill is one recent example.

Academic conservatism in the social sciences is encouraged or enforced to one degree of another in every part of the world, although Western Europe and Latin America have much stronger traditions of university autonomy than do the United States, China and Russia.

One reason is simply that the ruling classes of the world do not like to think about how temporary their positions are. Probably more important to them is the fact that radical academics have historically formed a key part of the leadership of every important mass movement for social change in recent history.

Probably the most important reason is that the ruling classes understand the importance of social consciousness in guiding political actions and struggles.

The powerful pressure of ruling class self-interest shapes academic social science, but so far it has not killed it. Academic social science investigates areas which are safe to investigate, or which are popular to investigate according to ruling class fashion. Since ruling class fashion shifts in ways that reflect changes in real social relations, academic social science continuously uncovers uncomfortable truths about capitalist social reality.

Consequently, and unintentionally, it is a treasure trove of information and data, if not always of analysis. And, sometimes, it produces analyses which reach half-way to the truth before they are reigned in by the processes of censorship and self censorship described above.

By way of an introduction

Part 3: Engels and Marx’s method

By Anthony Boynton

Marx and Engels own efforts almost always developed in the form of a critique of petty bourgeois or bourgeois social science and philosophy. They began with a critique of Hegel and the Young Hegelians, continued this critique in their battle with Bakunin, turned their critique increasingly on 19th century political economy and expanded their critique to other utopian socialists.

When Marx and Engels criticized the work of other thinkers their method was not simply to make debating points, although they were good at this. Their aim was to examine the contradictions within the hypotheses and conclusions of others, and to draw logical conclusions not yet reached by the author being studied, and – even if the views they were polemnicizing against had little merit of their own – to use their polemic to develop their own independent analysis.

Marx and Engels tried to identify the truths which these other authors might have uncovered, while refuting any mistaken or false analyses surrounding those truths. Having done this, they attempted to analyze again the material they had subjected to criticism, and arrive at a truer analysis of their own.

Capital is the best and most complete example of this method of work.

Marx and Engels did not engage in collecting and measuring observations, instead they relied on the work of bourgeois social science to supply them with the raw material for their own analyses. Given that they had next to no resources, while bourgeois social science had relatively vast resources with which to gather and analyze data, their method was absolutely correct.

(And, unlike virtually all academic social science, Marx and Engels engaged in as much “experimental social science” as possible: they actively participated in the revolutionary movements of their time and place.)

The critical method of Marx and Engels, necessitated by a lack of resources to do the original research needed to measure and analyze changes inhuman society, was adapted by later Marxists, including most famously by Lenin.

His little pamphlet on imperialism is a good example. (Imperialism, the Highest Stage of Capitalism: A Popular Outline)

Given the fact that Mat and I have absolutely zero resources to launch any independent collection of data on social relations and dynamics of 21st century society, we are going to rely heavily on the method of critique in this blog.

Next: The Defeat of 20th Century Marxism: Social Democracy, Stalinism, and Trotskyism