JH: Most damningly, Patrick fails to understand that there can be no epoch of transition without a subject of transition.
PB: No, I think you’re right, there, if you mean the transition to the epoch of socialism. But I also think capitalist history moves forward via crises. That’s what’s happening now in many places, and in SA in 1994, and in E.Europe in 1990, and in many other parts of the world post-1975 – Southern Europe, the Southern Cone, East Asia, even parts of Africa - where even without an insurgent working-class democratic movement, really interesting opportunities emerged during the course of particular crises. The crises weakened the rulers, and opened space for the next round of post-repression social struggles. Hence the building blocks of the int’l anti-capitalist movement found some solid ground, and indeed a great deal of common ground in many of the semi-peripheral societies. Their experience of challenging outmoded regimes during periods of crisis will be extremely useful to us all.
JH: Without a revolutionary challenge to capitalism, all of its difficulties are only relative, and can be overcome.
PB: But at what cost? Think back to the Great Depression, for instance. That ’s why keeping an eye on amplified uneven development – accumulation by dispossession – as a manifestation of crisis is potentially very important, especially if the movements are establishing new decommodification strategies that we will put to good use in a coming socialist epoch.
JH: Patrick tries to pooh-pooh the real expansion of capitalism in the last ten years, failing to understand that it was the defeat of organised labour in the preceding period that made this expansion possible.
PB: The defeat of labour was one important reason for a temporary uptick in profits, but other deep-seated contradictions continue appearing, especially in the financial circuitry and ecosystems.
JH: I said ‘it is wrong to say that the USA is awash with capital, overflowing into the less developed world. In fact, America is a net importer of capital, dependent upon foreign purchases of US treasury bonds to recycle as consumer credit.’ Patrick Bond objected ‘Harvey argues the world is awash with capital’. But the lecture in question, as reported by George Monbiot in the Guardian, argues that the Iraq war is to be understood as the export of capital from an over-mature US economy.
PB: I can’t remember the precise spin in that column, but I remember David Harvey being annoyed that Monbiot made him sound Keynesian. Maybe you can get the exact cite, James? Obviously Harvey knows – and writes about – the vast US current account deficit. That’s one of the reasons he distinguishes Luxemburg from Hobson/Hilferding/Lenin, and takes forward the former.
JH: I said ‘The "profit-squeeze" was widely seen as a harbinger of economic doom’ Patrick Bond objected 'Actually, the profit squeeze is seen as the squeeze that tight labour markets or class struggle put on profits. The overaccumulation thesis - that profits stem from excessively productive capital and underpaid labour (unable to consume the massive output of the system) - is the opposite.' Yes, that's why I put 'profit squeeze' in inverted commas, to indicate that it was the crisis as perceived, not its cause.
PB: Fine.
JH: I said 'Diminishing returns did cause problems. Companies like Enron, Parmalat and Shell forged their accounts to disguise poor earnings. But these problems never caused the difficulties that the profit squeezes of the 1880s, 1920s or 1970s did.' Patrick Bond says 'One could argue that the overall impact of overaccumulation is going to be worse, because the scale of displacement - not resolution - of the problem is so much more severe.' Well, we could talk about what is going to happen in the future, but since the collapse of capitalism has been announced with such monotonous regularity we ought to ask what happened to the Asian contagion etc etc. ('the lonely hour of the last instance never comes', Althusser said). An ideology which depends for its verification on the arrival of judgement day is not susceptible to verification or falsification.
PB: Agreed, one doesn’t want to be Chicken Little, and of course the easy answer to the Asian crisis partial displacement (not full resolution), to be found in works by Burkett, Hart-Landsberg, Li, Bello and Greenfield, is that ruling class coalitions shifted, US capital cleaned up by grabbing devalorised capital, and the currencies crashed so far that their goods became competitive again, which just contributed more pressure to rising global gluts in many sectors.
JH: Patrick Bond says 'Just as one example, all the debt ratios (which indicate what Harvey terms the 'temporal fix') are far higher today in most every country, especially the US, than the 1970s.' Which seems like a very effective mechanism for stability, so far. Will it all end in tears? Maybe, but you have to explain why it should.
PB: So many better economists than me do so regularly; e.g., even the post-Keynesian creditist school of Hyman Minsky and his followers. I saw a great paper on financialisation presented last October in Mexico by (85-year old) David Felix (which I can send anyone - pbond at sn.apc.org).
JH: Patrick Bond says 'The other manifestations of crisis displacement - the search for relative and absolute surplus value, the spatial fix through globalisation, amplified uneven development, worsening "accumulation by dispossession" (including via superexploitation of women) - all appear far more advanced, and I'd argue that all are the result of the general overaccumulation crisis as witnessed by the persistently low rates of profit in the 1970s-90s era.' It seems a bit strange to me to talk about a crisis that lasts for thirty years. Crisis surely implies a moment when the underlying trends manifest themselves. Your 30-year period takes in whole generations of change. Wouldn't you agree that the crisis that manifested itself in the late 1970s - great as the social turbulence it gave rise to was - was effectively contained in the 1980s.
PB: No, the contradictions appeared, and power relations shifted – hence what we call neoliberalism emerged, to specifically boost financial/commercial circuit returns – and the broader problem of overaccumulation continued, with various symptoms of amplified combined/uneven development.
JH: You do not seem to take account of Marx's proposition that the crisis is its own resolution. By defeating organised labour in the eighties, the capitalists laid the basis for renewed expansion from around 1993 onwards.
PB: That’s the class-strugglist conception of crisis. The overaccumulation conception follows the approach articulated by Robert Cox, in my view. Here’ s Cox from his brilliant Production, Power and World Order (1987): ‘the economy must undergo some structural change in order to emerge from a crisis; in a cyclical downturn, the same structure contains the seeds of its own revival’. We’ve had lots of pseudo-structural changes, but the ‘revival’ isn’t convincing. A structural change so as to kickstart a new round of accumulation – e.g. the post-war Golden Age - invariably involves massive generalised devalorisation.
JH: Patrick Bond says 'Heartfield doesn't understand that a 'speculative boom' is a reflection of deep-seated crisis tendencies let loose in the stock market. That's Marx 101.' Marx explained how a speculative boom might be a reflection of crisis tendencies. But he did not - understandably - give an account of the dot.com bubble of the late 1990s, arguing instead that each individual crisis must be looked at in its own right.
PB: So you mean, James, there’s no marxian *theory* of crisis?
JH: The underlying point stands, I think. You could have argued that the dot.com bubble was the harbinger of crisis, but the further we move from it without cataclysmic results, the less plausible that looks.
PB: Not at all. Each bail-out of the system (in this case Greenspan’s ultraloose monetary policy) simply displaces the contradictions elsewhere. If not managed well, they have the propensity to bubble out in sometimes cataclysmic ways. But by not resolving the problems – only displacing them – the broader crisis conditions continue to build.
JH: I said 'Over-accumulation' for Marx, then, is the over-accumulation of constant capital, relative to the profit-creating variable capital.' Patrick replies 'And in turn, the overproduction of commodities beyond the capacities of the market to realise profits.' It is true of course that in Marx's account, overaccumulation will take the form of unsold goods, but Patrick is fudging two distinctive explanations of the crisis, overaccumulation of capital, and overproduction of goods. The latter was rejected by Marx in his critique of Sismondi. All of this is academic, of course, because there is no economic crisis at present.
PB: It’s not academic, given the gluts in so many sectors. Overproduction of goods is merely one of the symptoms of overaccumulation, and though I don’t know the Sismondi reference, I’ll bet it was Marx mainly ‘rejecting’ a symptom, and discussing instead the overall condition. No sweat.
JH: I said 'it was never Marx's aim to suggest there was an automatic tendency for capitalism to break down, independent of the deliberate actions of people.' Patrick replies 'Of course class struggle was the central theme in his work, but there is a vibrant literature on Marx's breakdown theory - especially a 1929 book by Heinryk Grossmann (which Heartfield's group promoted very heavily just over a decade ago).' I know Grossmann's book well, and worked as copy-editor on the Pluto edition. His explanation of the counter-acting tendencies to breakdown was the point that few people understood, thinking that Marxism meant that capitalism was headed in only one direction.
PB: Is that all you have to say about Grossmann, James? The rest of that fine work (thanks for your role) is now swept under the carpet? That’s what I was referring to, as a bizarre political standpoint.
JH: Today the point is clear: through a generalised acquiescence from organised labour, capitalism has succeeded in stabilising itself, largely through extensively growing, taking in far greater numbers of workers, creating a greater mass of surplus value. To put it another way, the objective and the subjective conditions are not absolutely distinct. Subjective retreat on the part of the working class is itself an objective condition, one which has given a new lease of life to capitalism.
PB: A little breathing space of low-intensity production-based class struggle (hence the increasingly important role of ‘new social movements’ in anti-capitalism), that’s all.
JH: I said: 'In fact, both the European and American workforces grew - the EU workforce by 15million and America's by 27million - between 1986 and 2001. In East Asia, and especially China, millions more have been drawn into the factories. That implies an expansion of capitalist production,' Patrick Bond says 'Sure' conceding the point, and then goes on to complain 'but it also implies the search for absolute surplus value', which is true in the simple sense that this is the creation of value by the creation of new points of production, not by altering productive technique in existing plant.
PB: I meant, it’s through the mcdonaldisation of jobs that Doug’s new book describes so well, characterised by intensified exploitation, speed-up techniques and other factors associated with lower wages/perks for most US workers.
JH: But what Patrick means is that the expansion of the workforce implies the search (why search?) for absolute surplus value 'given the sweatshop character of those operations.' To which one should caution, it is not necessarily the case that the four million new jobs in the UK are sweatshop jobs, or that the 27 million new jobs in the USA are all sweatshop jobs, nor even that the millions of new jobs in China are all sweatshop jobs. For many of those involved, these new jobs are an advance, not a step backwards. I doubt that the women who have taken many of these jobs would relish a return to the past.
PB: Yeah, I’ve read the very mixed-up literature on this last point, and agree that there are some maquilla workers who are better off than they were under Mexican patriarchy. But that’s why we need to think about the whole range of activities associated with these processes, because so much of contemporary capitalism is about the commodification of public/merit goods and the commons, the breakdown of the division of labour into more complex units, and so on. So feminisation of poverty, rising migrant labour (including a greater need for women’s household reproduction without the immediate income source), and so many other features of the uneven gendered development of capitalism mean that women are worse off, in general, even if a few break out of pure feudal-patriarchy into capitalist-patriarchy.
JH: Patrick goes on to say that the expansion of the world workforce 'implies a worsening of uneven and combined development'. But the opposite is true. The expansion of the world workforce is even greater in the developing world, like China, and has stabilised economic conditions in East Europe.
PB: I don’t have all my data at hand, James, but surely you saw the reports last year about China losing manufacturing jobs – mainly in state firms - due to the problem of global gluts coming home to roost? And here we’re talking tens of millions of jobs. As for Eastern Europe, after losing half the GDP, of course they’ve got to bounce back at some point. But read Kagarlitsky if you think it’s ‘stable.’
JH: I wrote about the growth of a labour intensive service sector (implying, which appears to be the case in Britain, that Marx's "organic composition" of capital is falling, not rising). Patrick objects 'But JH knows the problem isn't in the economy as a whole, it's in the 'value-creation' sector, namely sites where surplus value is extracted in commodity production. So much of the service sector - especially financial markets - is not about value creation, but about value *realisation*, e.g. transporting goods further to markets, or the marketing of commodities, or the maintenance of the commodity. It may be true that the production of some new dematerialised commodities - images on the page or on a DVD - is more prevalent than in Marx's time, this basic problem - distinguishing between value-producing and nonvalue producing labour - remains a central feature of crisis theory, which Heartfield should acknowledge here.' But I think that Patrick puts to great a stress on Marx's distinction between productive and unproductive labour, which is not in any sense synonymous with the distinction between industry and services in contemporary economic statistics.
PB: True, and I acknowledged that above (dematerialised commodities, like images on a movie screen).
JH: By far the greater part of what is called the service sector is in Marx's sense productive, being largely a re-writing of job descriptions through contracting out such 'services' as cleaning, catering, security and other operations that make companies work. These are real, value-producing enterprises.
PB: Not necessarily, some are just necessary components of the circulation of capital, very different than value-creating. (Capital and Class had a good article on this in the 1990s at some point by Dick Walker, but there’s lots of writing around to help you spot the differences.)
JH: So too do I think that it does not make sense to dismiss the expansion of the retail sector as 'unproductive', where this involves complex and time-consuming distribution, without which goods would not be goods-for-use. When the Co-operative Retail Society in the UK takes over the production and distribution of farm goods, that's not predation, it's capitalist organisation. Or to put it another way, they are not exploiting the farmers; they are exploiting the farm labourers and the checkout staff.
PB: Not in the sense of value creation Marx had in mind. I’m afraid you’ve landed in the spheres of circulation and realisation, not production.
JH: I said 'Whatever the real movement of profits, they are not, in this instance, a consequence of the declining ratio of workers to means of production. While raging against 'over-accumulation', today's critics have failed to notice that the real problem is the shortfall of investment in new technologies, the perpetuation of drudgery and the squandering of labour in unproductive toil.' Patrick goes on to insist that the shortfall of investment is evidence of the excess of investment. He points to the 'optic fibre glut' in the US, but an excess of product in relation to demand is not the same thing as what Marx called an 'overaccumulation of capital' - a distinction that has evidently passed Patrick by.
PB: It’s one symptom.
JH: Patrick says that 'JH should also consult the data on profitability from Dumenil and Levy (Cepremap website), which strip out the interest-related (rentier) profits from US non-financial corps and demonstrate that profit rates have remained very low throughout the last three decades.' I agree, the material is very interesting. But it seems to me that if you have to demonstrate to people statistically that they are in the grips of an economic crisis, that somehow they cannot see, that you have a problem. Like Chicken Licken, you spend your time telling people that the sky is falling down.
PB: I’ll take Chicken Little, you can have Licken. But really, are you for dismissing any theoretical discussion because it doesn’t conform to empiricism, James?
JH: Patrick objects when I say that the critics shy away from the growth that took place in the 1990s: 'No, growth would be the capacity to maintain the 1950s-60s ('Golden Age') investment levels forever. Because of overinvestment problems that emerged from the early 1970s (or late 1960s) onwards, the 'growth' that capitalism has generated has been less 'sustainable' (capable of reproducing itself) given how quickly new markets fall victim to overproduction problems.' But this is just formalism. So what if the growth that took place in the 1990s was not as profound as the growth that took place in the 1950s-60s? (Incidentally, people living then did not experience this as a 'Golden Age', but one that was just as problematic in its own way.) It is no good telling people that the real improvement in their living conditions is not happening,
PB: Yes it is, for example, that’s the only way Kerry can win in the US, especially if he doesn’t want to fight Bush on Iraq.
JH: or that somehow it does not meet the standards of the Golden Age. There was 'stop-go' in the sixties, too. By contrast, the last decade seems pretty stable. No doubt there are real problems in SA, too, but would you really say that things had not improved for ordinary people since, say, 1994?
PB: Stability in the last ten years? Compared to the 1950s-60s? Just take currencies, for instance. Did you miss Mexico (1994); Brazil (1995); South Africa and Eastern Europe (1996); Thailand, Malaysia, Indonesia and Zimbabwe (1997); South Korea, Russia and South Africa (1998); Brazil (1999); Turkey and Argentina (2000-02)? Not to mention the bankruptcies of numerous financial institutions, whole banking systems, whole sectors of Wall Street, some of the USA’s biggest firms? If this is stability, you are a rock and roll kind of guy, James.
JH: Patrick does allow that 'The overcapacity [not a term I would have used] in the system as a whole is occasionally lessened, during recessions or the shutdown of geographically-specific sites of industry, and the rise of the credit bubble allows some of the commodities to be mopped up in an unsustainable consumption boom, to be sure.' Which seems a bit mealy-mouthed to me, but lets go with it 'But moving these problems around across space or through time (credit allows you to buy today - on hopes of realising more surplus value in the future) is no substitute for a genuine resolution of the crisis conditions, and for a renewal of accumulation. The last time such conditions were in place were the 1930s-40s, when the crisis required a Great Depression and World War to wipe out the economic deadwood that had overaccumulated.' The trouble with thinking in terms of the longue duree is that you are wising away the present. Rather than trying to force real-time events into preconceived categories, oughtn't you be trying to understand present conditions?
PB: If you can glean insights into the laws of motion of capitalism by referring back to prior episodes of crisis, why not? Didn’t our joint friend Marx?
JH: Patrick says that the recession of 1974-84 was not comparable in its effects to the 30s and 2WW. I would say it was probably more profound. The working class emerged from the 2WW combative, the organised labour was effectively defeated by the 1990s. After the 2WW capitalism collapsed in Eastern Europe and China. The 1980s saw the re-establishment of capitalist social relations there and in the Soviet Union as well. I can tell you that in Britain the shakeout of industry was epochal, leading to more root and branch reform than in the 1930s.
PB: Yes, as I said, there is the occasional devalorisation of large chunks of site-specific industry. That helps in clearing out economic deadwood, of course, but not when the system as a whole continues exhibiting signs of overaccumulation and especially financial bubbling. That’s just displacing, not resolving the crisis.
JH: I argued that the current period was one where the old left adapted its Marxoid arguments to meet the moralism of today's anti-globalisation protestors, and, as if to prove the point Patrick Bond illustrates it very well, saying: 'The 'old left's' crisis theory never adequately dealt with the social degradations of mass capitalist culture ('personal consumption') and especially of the ecological damage associated with rampant capitalism, including excessive global warming and the looming exhaustion of fossil fuels (especially petroleum). Harvey's thesis about accumulation by dispossession, added to his geopolitics, fills some of those gaps nicely.' But all of this is just a dog's breakfast of conflicting ideas that are only allowed to coalesce because of the lack of critical thinking in today's 'movement'.
PB: Or it’s the consolidation of durable ‘truths’ in political economy, and their application to a variety of other related fields which were beyond the scope of earlier generations. (I’ll admit that David Harvey’s Marxist theory conflicts with his reference to a New Deal at the end of the superb book New Imperialism, but in March he told me that was more a remark in passing than a serious political position. I guess Howard Dean’s fall might have had something to do with sobering him up.)
JH: Patrick does not even seem to notice that he is not just addressing a loophole but inverting the socialist critique of capitalism. He says that the old left 'never adequately dealt with the social degradations of mass capitalist culture ("personal consumption")'. No indeed: they left that farrago of reaction to the romantic anti-capitalists like Ruskin, Carlyle and Hitler. There concern was to prevent hardship, not create it. Patrick's green friends no doubt hate the fact that working class people have more goods at their disposal, and project their own anxieties about fossil fuel depletion onto that.
PB: My confessed anxieties about getting out of Zim last week before the petrol ran out give you more ammunition. But really James, when we’ve got such terrific new books on red-green political economy by Harvey, Perelman, Burkett, O’Connor, Kovel and Foster, to name a few, why not take the arguments on without this weak reference to romanticism? We expect more of you. (And don’t give us Furudi and Against Nature, please!)
Cheers,
P.
(Hey, if you’re in London this weekend, how about a beer at ULU pub after the Inst of Commonwealth Studies SA conference plenary speech by Colin Bundy on Friday?)