Commentary on Political Economy

Tuesday 19 June 2018


The winds of war are upon us. They blow with greater intensity as the days, if not the hours, go past. The causes of this will be familiar to all the friends who have followed this blog attentively. In our few last instalments especially, we have sought to demonstrate how the antagonism of the wage relation which is central to the mode of production we call capitalism leads to two inseparable developments. On one side, workers seek to make all their work “necessary” so that the “surplus” part of the working day available to the capitalist is diminished whilst, on the other, capitalists seek the opposite either “absolutely” by extending the working day or by employing more workers side by side (Marx’s “simultaneous working days”) - or else again, the capitalist will seek to shift the antagonism of the wage relation to other capitalists and workers through technological innovation, or else again “to export” the antagonism either within his own nation or else to other nations with weaker working populations relative to the governance of those nations (of course, dictatorial and authoritarian regimes are preferred! As a result, technological innovation is highest in those nations where workers’ autonomy is highest - because innovation always reflects the need of the capitalist to avoid working-class antagonism over the wage relation. 

The inevitable result is that once the pressure valves of the export of antagonism, of expansion of the working population and of technological innovation are exhausted, nations will come into conflict. The irrefragable aim of the capitalist to continue to exist as a capitalist is to maximise surplus value - and then to find more working populations that can be put to work for this surplus to be absorbed. But in all these cases the capitalist will need to increase the working population absolutely! The reason for this is that without such a reserve army of the unemployed the capitalist’s accumulated profits and capital will not be put to use and such failure to reinvest will amount therefore to a colossal destruction of capital!

Already with the collapse of Bretton Woods in 1971, the long arch of capitalist accumulation that had begun after World War Two had come very close to catastrophe because of the exhaustion of profitable avenues of investment. The most visible expressions of this exhaustion included not just the fall of the Gold Exchange Standard erected at Bretton Woods, but above all the frightening inflationary parabola that took place in the 1970s and the intensification of antagonistic political movements throughout the world. What came to the rescue of global capital was the propitious opening of China to Western investment occasioned by the visit of President Nixon to Chairman Mao early in the 1970s. That visit opened access for Western capital not just to a working population of well over one billion people - but above all to a working population that had been politically annihilated by the Maoist Cultural Revolution and now in the complete subjugation of the most brutal bloodiest and truculent dictatorship ever known to humanity! 

What followed was the dictatorial “mobilisation of resources” (human, physical and environmental) with the consequent destruction of human communities that this wretched planet has ever known in all its nightmarish history! What Ben Bernanke called “the Great Moderation” - that is to say, the unprecedented expansion of capitalist accumulation from 1980 onwards - coincided with this equally unprecedented, socially and environmentally catastrophic expansion of the wage relation to over one billion Chinese. The consequence was a global glut of “savings” - the profits derived from investment in China - and also the empowering of the Chinese Dictatorship, which sooner or later was going to emerge as a powerful challenger to Western capitalists. The initial hope was that the Chinese dictators could be persuaded eventually to normalise relations with the West and relent on exploiting their workers through the expansion of democratic guarantees. But we know now most certainly since the accession of the most rotten dictator of all in 2012 - Xi Jinping - that this was only a pious wish!

What Western capital failed to see was that once the Chinese Maoist dictatorship ran out of options with its colossal “mobilisation of resources”, it would then (like all dictatorships, it it wished to preserve its totalitarian power) urn to the export of the growing domestic antagonism - and that it would do so in two wholly predictable ways: (a) imperialist expansion through military coercion, and (b) imperialist expansion through heavy capital investment and financial loans aimed at politically subjugating weaker nations with sympathetic dictators and huge excess working populations, especially in Africa! It is this last lunge by the Chinese Dictatorship to save its skin in the face of growing domestic and international working-class antagonism that we are witnessing even as we write: the Chinese stock market and the renminbi are in free fall; US dollar and yen are rising putting intolerable stress on “emerging market” currencies. Soon, we shall see the collapse of the Chinese financial and banking system, already overburdened with unsustainable debt levels and “imperialist” expenses ($65 billion dumped in Venezuela alone!); the lot made worse by the Trump Administration’s unquenchable will to power through the imposition of punishing tariffs that will destroy Chinese export industries and decimate employment. Soon we shall also see a new exodus of Chinese capital as the rats in China try desperately to rescue their ill-gotten criminal gains, and as more Chinese rats seek to jump off the sinking ship that is the Chinese economy! Sauve qui peut! (More to follow, folks!)

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