Commentary on Political Economy

Wednesday 13 June 2018

From List to Weber: Capitalist Uneven Development and Global Conflict

Value Creation and the Coming World War

The world is moving inexorably toward a global conflict, one that will see the capitalist market economies of the West confront and crush the Chinese Dictatorship and its Russian counterpart - the latter already enfeebled by economic crisis, and the former already experiencing insurmountable challenges on the financial and eventually on the industrial and political fronts. The reasons for this seemingly apocalyptic conclusion can be drawn almost with the linearity of logic from the study we have just conducted of Friedrich List’s political economy. To be sure, List’s insightful analysis of the intrinsic conflictuality of capitalist industry still left room for his avowed goal of a community of nations that could finally embody the idealistic premises of what he called the “cosmopolitical economy” of the Anglo-Saxon economists from Adam Smith to J.B. Say. In reality, however, whilst he correctly identified the different “stages of economic development” as being the central reason for existing conflict between nations, List completely failed to enquire into and to enucleate the meaning of “economic development” itself, as distinct from just describing the extrinsic ectypal forms of these progressive “stages”. In the end, List’s political economy amounts to a mere “classification” of stages of development which he mistakenly thought could lead to the convergence of national economies without ever penetrating the essential politico-economic meaning and dynamic of capitalist development that leads - again, inexorably - to the divergence of national economies and eventually to open warfare. Of course, the antagonism implicit in the wage relation - the violent “exchange” of living labour with dead labour - is always tendentially leading to conflict - within nations, first, and then, as nations seek to externalise this internal antagonism, also between nations. The challenge is to identify the circum-stances, the con-ditions, that is to say, the surrounding events, the ingredients that lead to war between capitalist nations. 

Is there something in the notion of “value”, then, in the antagonism between workers and capitalists, that leads all the way to international conflict and war? Let us first examine the more visible notion of “profit”. Profit is the monetary difference between total investment and total revenue. For a capitalist enterprise to be profitable, the products it sells must amount to more than the cost of producing them with the cost of capital added (interest at the prevailing rate over the period of production and sale). This means that in the process of production the inputs have been “valorised” - their value has grown - and this is then reflected in the “realisation” of the value through the sale process. But how can the components of production acquire value? after all, objects (means of production - raw materials and machinery) are only inert objects and they cannot possibly possess or acquire “value”. It is obvious that value, and the value added in the process of production, can only be derived from living labour. Two things follow from this conclusion: the first is that the value of a particular commodity cannot be determined until after it is actually sold on the market - until its potential value is “realised”. And the second is that this value is determined ultimately by the ability of this realised value “to purchase” labour-power on the market as if it were a commodity like any other. 

We have therefore a “double character” (Doppelcharakter) of human living labour: - on one side it is the only possible source of value as living labour - that is its use value; and on the other it can be “purchased” as labour-power through the violence of the wage relation “on the market” like any other commodity through its exchange with produced commodities, that is to say, with “dead labour”. Herein, therefore, lies the “specificity” of the Economic in a capitalist society, that is to say, in the ability of capitalists to dominate living labour - workers - not through explicit coercion but rather through a complex set of institutions that force workers to exchange their living labour for the objects that they themselves have produced, with “dead labour” - again, not through direct coercion from a particular capitalist toward particular workers - the capitalist does not “own” the workers as is the case with slavery or with feudal relations where the “serfs” are tied to the land, the feud or glebe. Nevertheless, it is equally obvious, first, that the wage relation is one of violence in that workers would never accept to sell their living activity in exchange for the product of their labour - that is surely an “exchange” that amounts to fraud (if unwitting) or violence (if workers are aware of it) - Marx. But, second, it is also true that workers could not preserve their “formal freedom” under the law if they rebelled against this oi lent coercive transaction - one based on “th need to work”, “o put food on the table” - and the very fact that workers are willing to work for “a fair wage” means that the capitalist mode of production does have a minimum of legitimacy (Weber). Nevertheless, legitimacy does not mean absence of conflict: capitalist society is founded on social antagonism between capitalist and workers - and specifically on the antagonism of the wage relation. The question then arises of why the antagonism of the wage relation has not exploded into open social conflict - into civil war in many advanced industrial capitalist societies. The answer has to do with capitalist growth and development. Let us see how this works.

Profit and Uneven Development

Profit in capitalist enterprise, and therefore surplus value, makes absolutely no sense at all unless it is seen as value that can be (a) increased through the process of production or “valorisation”, and (b) “realised” through the process of market sale. But for profit or surplus value to be “realised” through sale, this profit realised by capitalists can be absolutely no meaning unless it can be expressed as monetary purchasing power over fresh living labour! This means that the process of realisation of profit can have meaning only through the exertion of capitalist command over fresh living labour, over an ever-expanding population of workers. In turn, this entails the presence of a reserve army of the unemployed that (a) provides competitive tension on employed workers to drive down wages, and (b) provides a repository of further investment for capitalists to expand their command over society so that there may be what is called “capitalist accumulation”. In other words, capitalist accumulation through surplus value and its monetary equivalent, profit, is nothing other than the expansion of excess labour-power through overpopulation.

Thus, if we wish to understand why the global population keeps growing to the point where it is becoming unsustainable for the ecosphere - then we have only the capitalist mode of production to blame. But, the objection will be promptly moved, if that is so, why is it that the most advanced capitalist countries are beginning to experience stable or stagnant or even declining populations? The answer is relatively simple: as capitalist accumulation grows, the process runs against political and environmental limits as capitalist ruling classes attempt, first, to keep their own national populations pacified through rising living standards relative to other nations (!) - but then, second, this first condition requires the presence of other nations (especially if under the control of authoritarian dictatorships) where populations of potential workers are present that can absorb the profits accumulated in the more advanced industrial capitalist countries. This model of international capitalist division of social labour is premised therefore on the “uneven development” of national economies - not just in terms of the level of “industrial” development, but also and above all in terms of the “political-democratic” development of the nations involved! As nations become more advanced from an industrial viewpoint, they also are left with no choice but to emancipate their own working classes. Yet at the same time, these more advanced capitalist nations need to find less advanced nations whose working populations they can exploit and expand through higher rates of fertility! It goes without saying that this process of “uneven development” gives rise to tremendous conflicts between the more advanced and the less advanced capitalist countries - in all sorts of directions from migration pressures, to international tensions as each capitalist nation seeks to unload its domestic wage antagonism on other countries.

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