Begin forwarded message:
> From: Loren Goldner <lrgoldner at yahoo.com>
> Date: September 12, 2007 11:39:36 AM EDT
> To: dhenwood at panix.com
> Subject: Reply to Critics
>
> Dear Doug,
>
> As you know, quite a debate took place on the
> libcom.org list about my article "Imperialism,
> 'Anti-Imperialism"...". The link to the list:
>
> http://libcom.org/forums/thought/fictitious-capital-beginners-
> imperialism-anti-imperialism-continuing-relevance-rosa-
> luxemburg-27082007
>
> This is my reply. I'd appreciate it if you'd post it
> on your list.
>
> Thanks
>
> Loren
>
> Reply to Critics:
> Bringing Social Reproduction Back In
>
> First, thanks to all comrades who have participated
> in the debate so far.
>
> I must first say, reading and re-reading it, that I
> was initially somewhat surprised at all the things I
> said that were (IMHO) controversial that were barely
> mentioned or not mentioned at all. No one defended
> Lenin’s theory of imperialism or the labor aristocracy
> theory; no one questioned the idea that the U.S. is
> “managing empire through bankruptcy”, or the critique
> of Chavez or of Third Worldism, or my assertion of a
> vast population of unproductive consumers in advanced
> capitalism, or the concrete analysis of contemporary
> accumulation centered (for now) on the “indebted U.S.
> consumer”. Of course on this particular libertarian
> communist list affirmations that might elsewhere be
> controversial are, I presume, like charging through
> an open door.
>
> I’m glad we all agree on the preceding.
>
> It is unfortunate that the article was basically
> finished in May and that its mention of the biggest
> credit bubble in the history of capitalism was not
> made front and center, a bubble whose contraction
> over the summer finally exploded into the biggest
> liquidity crisis since 1998 and (since it’s not over)
> perhaps well before that. It’s certainly a strange
> context for some people to be doubting that there’s an
> enormous amount of fictitious capital sloshing around.
>
>
> Boiled down to its simplest, my article says that
> capital accumulation, in the course of a cycle,
> necessarily generates titles to wealth (stocks, bonds,
> property deeds and leases, and more recently
> securitized mortgages, etc.), capitalized
> anticipations of income in excess of available surplus
> value, and that it makes up that gap with “loot”, i.e.
> goods, labor power, raw materials not paid for at
> their reproductive value, by running down (not
> reproducing) C (means of production and
> infrastructure) or V labor power past their point of
> depletion. When available surplus value and loot no
> longer suffice to support those paper claims,
> capitalism undergoes a deflationary crisis that wipes
> out claims (and ultimately real capital, and labor
> power) until those claims and are once again in some
> equilibrium with available surplus value. That’s
> exactly what we are seeing today.
>
> In a nutshell, in the era of the proliferation of
> fictitious capital, capitalist paper expands, while
> the material reproduction of society goes backwards.
>
> That said, the biggest polemical target I had in mind
> was the broader left milieu, led by the Trotskyists
> and the altermondialists. No defenders here,
> apparently. But, in more advanced circles, make a
> positive mention of Rosa Luxemburg’s economic theory
> and you’ve got a debate on your hands.
>
> To get certain questions out of the way (namely about
> the “heuristic”, “pure model” of capitalism in vol. I
> and most of vol. II of Capital) I refer comrades to
> the article on my web site “Production or
> Reproduction”, which grew out of the 2002 exchange
> with Aufheben
> (http://home.earthlink.net/~lrgoldner/prodorreprod.html).
> It shows clearly, with the requisite quotations from
> Capital, that Marx intended much of the discussion
> prior to the introduction of expanded reproduction and
> the total social capital at the end of vol. II to be
> what he called “a purely formal mode of presentation”,
> mainly focused on the single firm. With Engels’
> preface to vol. II clearly stating that Marx was very
> dissatisfied with the last part of vol. II, I don’t
> see how anyone can think that Luxemburg was seeing
> problems where there were none, whatever the limits of
> her solution.
>
> Most of the texts I have written on the critique of
> political economy have attempted to rehabilitate the
> (in my opinion) neglected concept of social
> reproduction. I think that most of the criticisms
> raised in the discussion of the “Imperialism,
> ‘Anti-Imperialism”…” demonstrate yet again that most
> comrades, similar to the people Luxemburg was
> polemicizing against 95 years ago, are preoccupied
> with the reproduction of capital only in a formal
> sense of their reproduction schema, and, when that
> occurs, see the material reproduction of society to be
> almost a given, taken for granted. They don’t believe
> that a capitalist can make a profit from contracted
> social reproduction. They seem to pay no attention to
> Marx’s remark in vol. I (pp. 726-727): “Accumulation
> requires the transformation of a portion of the
> surplus product into capital. But we cannot, except by
> a miracle, transform into capital anything but such
> articles as can be employed in the labour process
> (i.e. means of production), and such further articles
> as are suitable for the sustenance of the worker (i.e.
> means of subsistence)…In a word, surplus-value can be
> transformed into capital only because the surplus
> product, whose value it is, already comprises the
> material components of a new quantity of capital.” No
> one in the discussion so much as commented on my
> affirmation that there exists today a huge
> unproductive consumption by the state, the military
> and (e.g.) the FIRE population which is precisely not
> materially transformed back into capital. To
> acknowledge this means to admit that there is
> “fictitious profit”, i.e. profit from the sale of
> commodities (tanks, Ferraris) that “drop out” of the
> capital circuit. Yet that ficititious profit is
> pocketed by some capitalist and continues, for a
> while, to undergo the M-C-M’ circuit just like profit
> from food and clothing.
>
> So let’s cut to the quick. Mikus is right that I lump
> too many things under the category of primitive
> accumulation and I say in a footnote that if that is
> so then a better term is necessary. But in all the
> specific instances I cite and he criticizes, he’s
> wrong.
>
> What was historically progressive about capitalism was
> that it expanded the material reproduction of society,
> both in means of production and labor power. It laid
> the material foundation for the supersession of
> socially necessary labor time of reproduction (the law
> of value) as the numeraire of economic activity.
> Having reached that point, it began a massive
> retrogression, attempting (like all previous crises)
> to re-equilibrate an adequate rate of profit, even if
> billions of people have to go onto the scrapheap and
> entire continents have to be depleted to achieve it.
> The capitalist spiral (the expanded reproduction
> extension of Marx’s circuit, the latter used in
> reference to simple reproduction in vols. I and II)
> goes backward just as it previously went forward.
>
> Capitalism is not merely about production (“the sphere
> of immediate production” of vol. I) but about
> reproduction: in Marx’s model and in its progressive
> phase, it reproduced C
> (means of production and infrastructure) and it
> reproduced V (the labor power of wage workers). Thus
> it is wrong-headed to say that “all exchange” violates
> the law of value because market price fluctuates
> around value; “inside” the heuristic model of vols. I
> and II commodities are presumed to interact, in
> general, at their value precisely to eliminate vulgar
> economic explanations of profit, etc. from “rip-off”.
>
> I was also inexact in quoting Luxemburg to the effect
> that only a socialist could identify the source of
> profit. What she actually said is that
>
> “only a socialist can really solve the problem of the
> reproduction of capital. Between the Tableau
> Economique and the diagram of reproduction in the
> second volume of Capital there lies the prosperity and
> decline of bourgeois economics, both in time and in
> substance” (Accumulation of Capital, p. 106).
>
> But the substance of what I meant is still there: only
> someone seeing capitalism as a transitory phase
> between feudalism and socialism/communism can grasp
> and act on a true practical universal at work in the
> system: the working class as a “class for itself”,
> posing a higher mode of production. But the
> implication of that transition is that the violence of
> the early emergence from feudalism is still with us,
> and will be until that transition is complete.
>
> Luxemburg didn’t say that primitive accumulation was a
> permanent feature of capitalism? If she didn’t say it
> in so many words, she did say that
>
> “Although (capitalism) strives to become universal…it
> is immanently incapable of becoming a universal form
> of production.” (Accumulation of Capital, p. 467).
>
> Since she sees capitalism as handling that
> impossibility by its “war on natural economy”, i.e.
> the absorption of labor power, goods and raw materials
> from non-capitalist economies, that is tantamount to
> saying that primitive accumulation (or a more general
> violation of the law of value, pending a new name) is
> permanent.
>
> Mikus says that the historical sections on the looting
> of non-capitalist economies make up only 50 pages of a
> 400-page book. Without wanting to quibble, in my (1923
> German) edition, they are 90 pages of 380, and further
> constitute the illustration of the dynamic she has
> identified in the preceding middle section, a review
> of various bourgeois and non-Marxist socialist
> attempts to solve the problem. Unlike people who think
> everything can be resolved (and has been) in abstract
> models, Luxemburg insists on concrete history.
>
> Several people questioned whether the contemporary
> pulling of labor power out of parts of the Third World
> can be considered primitive accumulation. I don’t
> think Indian doctors working in the UK is an adequate
> example. Once again, if the term “primitive
> accumulation” is limited to the initial separation of
> petty producers from their means of production (e.g.
> England in the 16th and 17th centuries) let’s think of
> a better term. What that initial phase has in common
> with today, as I said, is a “violation of the
> capitalist law of value”, the exchange of equivalents.
> The reproduction costs of petty producers recently
> expelled from the dissolution of the Chinese rural
> communes, from the Mexican ejido (especially since
> NAFTA) or tiny plots in the Indian countryside are not
> paid for by capital until they are directly enlisted
> in the wage labor system, any more than were the
> American farmers wiped out by debt described in
> Luxemburg’s book. Petty producers sell to capital, but
> can’t reproduce themselves in the exchange, just as
> Preobrazhenzy imagined (wrongly) the possibility of a
> ”planned” gradual elimination of Russian rural petty
> producers in the 1920’s.
>
> Others questioned my mention of the running down of
> capital plant and infrastructure under the category of
> primitive accumulation. Again, I am referring to
> non-reproduction. It seems to me that many people in
> this discussion are still laboring under vol. I ideas
> of production and not end of vol. II ideas of
> reproduction.
> If capital continues to make a profit from ancient
> plant (the most dramatic example today follows in a
> moment) and does not adequately renew infrastructure,
> that is non-reproduction of “C”. After Katrina, the
> New York City (80-year old) pipeline explosion this
> summer, and the estimate (following the Minnesota
> bridge collapse this summer) that 7,000 bridges in the
> U.S. are in as bad shape or worse, who can doubt that
> U.S. capitalism, showing unusually high paper profits
> over most of the past three decades, is not materially
> reproducing society?
>
> Reproduction is also missing from comments on what I
> said about the looting of nature.
> It is certainly true that raw materials are not
> capital investment and that their cost is a
> combination of the cost of extracting them plus an
> increment of ground rent. If it is true that capital
> does not produce nature it must in fact reproduce
> (i.e. replace) the nature it uses. “Humanity
> reproduces all of nature” as Marx wrote in 1844. When
> capital makes a “profit” from strip mining but leaves
> the total cost to society (depleted countryside,
> polluted water), capital is expanding but nature is
> not being reproduced. When capital ruins the earth’s
> atmosphere with CFCs, nature is not being reproduced.
> When air and water become unusable from pollution,
> nature is not being reproduced. Where, as with labor
> power being paid below the cost of its reproduction,
> there is profit without paying the cost of reproducing
> nature, there is a “free input” to the system
> comparable for the S/C+V ratio to the recruitment of
> petty producers to the wage-labor proletariat, call it
> what you will.
>
>
> Another element missing from most formulations in the
> discussion is the recognition that capital for
> capitalists is not what we read about in vols. I and
> II or the first section of vol. III of Capital but is
> rather a CAPITALIZATION of the cash flow generated by
> those underlying realities. However, for long periods
> of time, understandable only if we ask the concrete
> question of whether C and V are being materially
> reproduced, those capitalizations
> (as today) can be seriously out of whack with reality,
> if compensated by the material inputs of
> non-reproduction mentioned previously.
>
> Paper values (and abstract conceptions of
> reproduction) expand, and society goes backward.
>
> Let’s look at Exhibit A for the prosecution, the
> self-cannibalization of the system where S/C+V in
> material terms goes negative while profit, interest
> and ground rent grow.
> .
> The Nazi economy from 1933-1945 is the extreme
> illustration (to date) of this process at work in an
> advanced capitalist economy in crisis. Hitler’s
> finance minister Hjalmar Schacht reflated the Germany
> economy with a huge credit pyramid, conjured from
> almost nothing and financing rearmament (unproductive
> consumption) while suppressing working-class
> consumption and keeping workers’ wages at about 50% of
> their pre-1929 levels (non-reproduction of V) , even
> choking off most investment in Dept. I
> (non-reproduction of C). As this first experiment in
> Keynesianism (recognized as such at the time by
> Keynes) achieved full employment and reached the
> “overheating” stage ca. 1937-38, inflation took off.
> Like the U.S. dollar-denominated economy today (which
> can, however, still tap the world’s wealth, whereas
> Germany was shorn of all its colonies in 1918),
> ever-increasing amounts of fictitious capital demanded
> profit and the completion of the M-C-M’ circuit. The
> solution was expansionist war, and the outright
> seizing of assets throughout Nazi-occupied Europe
> (confiscatory accumulation if you will) to complete
> that circuit. Within the German war economy itself,
> millions of people were worked to death in
> concentration camps and in slave labor in the
> factories of the big German corporations
> (non-reproduction of V) both in Germany and in
> occupied Europe. One of the reasons Germany lost the
> war was because of the running down of the capital
> plant from 1929 and especially 1933 onward. This is
> the concrete illustration of the self-cannibalization
> immanent in the final stage of the system: capital
> paper values expand, social reproduction contracts.
> This was the extreme conclusion of the tendencies
> already discussed by Rosa Luxemburg in her 1912
> portrait of arms production financed by taxing the
> working class below its reproductive level and other
> early manifestations of barbarism. Anyone who doubts
> the permanence of the violence of the earliest
> primitive accumulation (or whatever improved and
> expanded term one wants) pointing to this end result
> can ponder these realities of the Nazi economy.
>
> Those are my basic points. I look forward to
> rejoinders.
>
> I am currently (in part inspired by this debate)
> completing a companion piece to my Mute article
> entitled “Expanded Social Reproduction for Beginners:
> Bringing the Material World Back In”. Stay tuned.
>
> Loren
>
>
>
>
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