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.