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Mainstream, VOL LIV No 33 New Delhi August 6, 2016

Ashok Mitra: The World and the Left / Marx in Question - a rejoinder by Kolkata Marx Circle

Wednesday 10 August 2016

The following article by A.M. was carried as First Person Singular in The Telegraph, Calcutta on June 15, 2016.

The World and the Left:

Western Capitalism is in crisis but not the one marx Foretold

by Ashok Mitra

We are living in a world full of uncertainties; anything might happen, or not happen. Even so, my instant reaction to those who confidently assert the imminent total eclipse of Marxism and the Left in the global context are, to use the vernacular, talking through their hat. Just take a look at the intense economic crisis the Western capitalist countries are currently facing. The crisis is one of over-capitalisation. Technological progress has an impulse and momentum of its own. The demand for investing more and more, thus, further broadens and deepens the capital structure as well. The phenomenon is continuously accompanied by a shrinkage in wage labour. Once the wage bill begins to contract, the dilemma of capitalism is glaringly revealed. Progressively superior technology implies increasingly higher and higher labour productivity. The consequence is an extremely fast rate of expansion in productive capacity. Capitalism suddenly realises the mess it has created, and is creating, for itself. There is mammoth productive capacity, but where is the demand for the output that might be produced. Demand deficiency generates a situation from which capitalism is seemingly unable to extricate itself.

In Marx’s schemata, a steadily falling rate of profit is inevitable. In the capitalist system, until the culminating point is reached where profit shrinks to zero. Marx conceived a parallel development too. As capitalism expands, every day new factories get set up and workers fill the factories. A large cluster of such factories covers the capitalist economies. But, with capital intensification, the size of the wage bill comes under attack and discontent among the workers keeps mounting. Soon they learn the craft of organising themselves into coherent entities, which rise in protest against the trend towards continuous shrinkage of the wage bill and increasing exploitation of the workers. Marx had envisaged a coincidence: at about the moment the rate of profit threatens to fall to zero, workers all over the economy gather together and strike the blow that vanquishes the capitalist class; a new social system emerges.

Way back in the early 1930s, stagnation of demand had already caught up with capitalism in both Europe and the United States. Massive unemployment in country after country generated intense social discontent; industrial unrest was a daily feature. Capitalism, however, would withstand that major crisis, thanks to the fortuitous availability of an economist of the wisdom and calibre of John Maynard Keynes and a politician of the stature of Franklin Roosevelt possessing large practical sense. Keynes recommended creating money via large budgetary deficits and using these extra funds to launch public works that could create employment. The money that went into the pockets of the newly engaged was immediately spent in the market to increase the purchase of goods and services. Demand picked up and capitalism got saved.

For nearly a decade now, the US and most of Western Europe are once more being visited by a similar crisis. It is an era of super-computers and super-super-computers. Breath-lessly rapid technological advance has soared productivity per worker to fantastic heights. That apart, major sections of the population in both continents have already attained a level of comfortable living, so much so that their urge for new goods and services is steadily declining. Most of West Europe and large segments of the US have already practised the Keynesian methodology and have arranged a safety net in the form of a public sector of sizeable magnitude. Nothing, however, is of any avail. There is little enthusiasm for new investment because both income and employ-ment growth is only marginal year after year.

Writing his works more than 150 years ago, Marx could hardly foresee the specific twists and turns capitalist growth would take. But it would be plain silly to underestimate the majesty of this overall prognosis. Nonetheless, we cannot but face the awkwardly knotty issue: none of the social revolutions that have taken place since Marx’s time has been in accordance with his formulation. Even the very first revolution that took place in October/November 1917, the transformation of the Czar’s empire into the Soviet Union had zero link with Marxian formulation. The territory constituting the Russian empire was mostly agricultural and pastoral along with some stretches of desert, and hardly any industry worth the name. The First World War was about to end; although the Czar was on the victorious side, the Russian economy was in a shambles, the soldiers could not be paid their wages, and their families were starving in the countryside. The Army revolted in Moscow, chaos ensued, providing Lenin and the Communist Party to seize power.

The next most significant social trans-formation was the popular democratic revo-lution in China. But it was planned and organised by a social force that Marx had once considered, with a measure of contempt, as “a sack of potatoes”—the peasantry.

The revolution in Vietnam was more in the nature of a national liberation movement against foreign aggressors, which was led and inspired by the Communist Party. Once more, though, it did not follow the Marxian agenda.

When Fidel Castro and his comrades took to the hills and valleys to conduct guerrilla warfare against the military regime in Cuba, the country’s Communist Party severely castigated them in the strongest terms; they were supposedly not following the revolutionary grammar. Once the revolution was successful, the same party surrendered itself lock, stock and barrel to Fidel.

Both Lenin and Rosa Luxemburg suggested a temporary respite for the capitalist system from the doom awaiting it. Imperialism could offer capitalism the opportunity to extract raw materials at cheap rates; at the same time, the subjugated countries might provide a dumping ground for goods and services that would not be absorbed within the capitalist economies. Low raw material cost could reduce, up to a point, variable costs in the process of production, thereby allowing scope for liberalising a bit the size of the wage bill, which, in time, would contribute to enlarge market demand. In addition, the occupied lands would be forced to accept exported goods from the imperial countries. The most classic example of the kind of imperialism Lenin and Luxemburg had etched is the Indian empire set up by the British. There were in Asia parallel empires set up by other European nations such as the French and the Dutch. Africa offered an equally lush opportunity for European imperialism. Alongside Britain, France, Germany and Italy lorded over the hapless Africans.

Latin America as a whole illustrates a different version of imperialism Lenin and Luxemburg had foreseen. Although not formally occupied by American troops, nearly all the countries in Central and South America were ruled ruthlessly by Army Generals loyal to the US. The entire continent was at the disposal of the Americans to extract oil and raw materials. The American corporate sector had complete grip over the economy of each of these countries. This was the situation even half-a-century ago. The inspiration set afire by Castro and Guevara has since then totally transformed the situation in Latin America. Venezuela followed the lead of Cuba, Bolivia was not far behind, and, sooner or later, the rest of the countries rose against American overbearingness as well; the US was as good as totally ejected from Latin America. A couple of years ago, Washington D.C. planned a counter-attack, achieving limited success here and there. It is at the moment a see-saw, but there is absolutely no prospect of a return to the overwhelming imperial dominance the US had exercised south of the Panama Canal.

Oil imperialism was another kind of manoe-uvre the Anglo-Americans had enforced on West Asia. The Bush-Blaire blunder in Iraq has ensured the death-knell of that too. The conflagration these two foolish Western leaders set off has now eventuated into the major crisis West Europe is facing in coping with the migrant victims of the Islamic State aggression.

Western capitalism is in very grave crisis. But, admittedly, what is occurring has little semblance with Marx’s scheme of things. Even within the US, despite the rate of profit threatening to drop down to zero, there is not the least danger with its coinciding with a revolt on the part of the working class. True, there is unemployment and resulting discontent here and there. But, social security payments of a very generous order keep a very large majority of the unemployed quietly content. Stray discontentment such as “Occupy Wall Street” soon turned into a fading fad.

Are we not in a position to reach a tentative conclusion? Marx, the great savant, was able to foresee with his profound wisdom the difficulties mature capitalism was likely to experience. There is no deficiency in the faculty of his thinking. It was naturally impossible for him to foresee the exact shape in which economic events would evolve over the decades and centuries that were to follow. That hardly matters: the text he scripted concerning class consciousness and the inevitability of confrontation between social classes such as those who exploit and those who are exploited remains sacred. It is a question of time before social and economic inequalities are extradited from human society and a classless State as dreamt by Marx emerges as a reality. The problem arises with those who refused to deviate from a mechanical interpretation of everything Marx said. The trouble the Left is facing in many countries is because of such a mechanistic frame of mind.

o o o

The following is a rejoinder to A.M.’s article by Kolkata Marx Circle. A part of the rejoinder was published in The Telegraph (July 4, 2016). The rejoinder is being carried here in full.

Marx in Question

Kolkata Marx Circle

We have read with considerable interest AM’s column in The Telegraph, June 15. 2016, “The World and the Left” in which he asserts that Western capitalism is in crisis, but that this crisis is beyond Marx’s universe of discourse. In this regard he focuses on two aspects:

First, this crisis of ‘overcapitalisation’ is marked by ‘mammoth productive capacity and unmatched by demand for the output’. There is ‘demand deficiency’. To A.M., Marx left this untreated.

 The second concerns the rate of profit. A.M. holds that for Marx a steadily falling rate of profit is ‘inevitable’ till, in course of this fall, a point is reached where profit is zero. A.M. asserts, ‘Marx envisaged a coincidence: at about the moment the rate of profit threatens to fall to zero workers all over the economy gather together and strike the blow that vanquishes the capitalist class; a new social system emerges.’

These two questions apart, our revered economist infers politically that Marx is irrelevant in the context of twentieth century revolutions.

On Economic Questions

We submit that Marx certainly envisioned the crisis of overcapitalisation reflected through mammoth productive capacity alongside unmatched by demand a feature of over-accumulation of capital at its mature stage. ‘The ultimate reason for all real crisis always remains the poverty of the masses as opposed to the impulse of capitalist production to develop the productive forces as though the absolute consuming power of society constituted their limit.’ (Capital, vol. 3)

Furthermore, Marx pointed out, ‘Over-production is specifically conditioned by the general law of the production of capital: production is in accordance with the productive forces without regard to the actual limits of the market; and this takes place through the constant expansion of reproduction and accumulation, while on the other hand, the mass of producers remain restricted to the average level of needs, and on the basis of capitalist production must remain so restricted... Production without regard to the market is in the nature of capitalist production.’ (Theories of Surplus Value, vol. 2)

 As regards the falling rate of profit A.M. skips different counteracting influences which Marx analysed: ‘the law acts only as a tendency, and it is only under certain circum-stances and only after long periods that its effects become strikingly pronounced.’ To put it candidly, A.M. puts words like ‘coincidence’ of zero profit and the breaking out of workers’ revolution ending in the creation of a new (post-capitalist) society on Marx’s pen as these are nowhere Marx’s works, published so far, and very probably never will. It is a simplistic version as, for Marx, the workers’ revolution is not simply a seizure of state power—a regime change. It’s a process of total transformation of society, into what he calls ‘an Association of free and equal individuals, an extremely complex multi-dimensional secular process lasting for several decades’.

 Indeed on the question of overproduction and its contradictions under capital, Marx surpassed bourgeois economists while analysing large industry. There he linked this development to the society after capital, lucidly stated in the first version of Capital, his great 1857-58 Manuscripts:

“To the degree large industry develops, the creation of real wealth comes to depend less on labour time and the quantity of labour employed than on the action of factors set in motion during the labour time, whose powerful effectiveness is out of all proportions to the direct labour time spent on their production, but depends rather on the general state of science and the progress of technology or the application of science to production.

“As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value must cease to be the measure of use value. The surplus labour of the human mass will cease to be the condition for the development of general wealth, just as non-labour of the few for the general powers of the human head. With that, production based on exchange value breaks down, and the direct material production process is stripped of the form of miserable contradictions.”

On Political Point

Now we come to the political part concerning revolutions. According to A.M. who is enamoured of twentieth century revolutions, Marx has lost relevance in regard to the ‘social revolutions’. Of course, he is not alone holding this position. He has illustrious predecessors like E.H. Carr. I. Deutscher and P.M. Sweezy. By ‘social revolution’ A.M. means socialist revolution, more explicit in the aforementioned predecessors of A.M. They held that not Marx, ‘Russian Marxists’ proved right by their success in a proletarian (socialist) revolution in a backward land.

This argument would be correct if it could be shown that this revolution, even though occurring in a backward land, was at all a socialist revolution in the Marxian lexicon. The General Rules of the International Workingmen’s Association, drafted by Marx in 1864, stated that the “emancipation of the working classes must be conquered by the working classes themselves”. This cannot be a simple seizure of political power through a coup de main by a group of radicalised middle class intelligentsia with no popular mandate, with no responsibility to anybody outside, far away from the locus of material production and exploitation. In stark contrast to this, the October Russian revolution was neither initiated nor led by the proletariat. It was the single party, self-anointed ‘communist’, substituting for the class, who became the new rulers and, coming to power, went back on their words. It was marked by minority rule from the beginning and necessarily based on coercion.

 How was the end-result of this revolution, what kind of socialism was established? In Marx, socialism is envisaged as an ‘Association of free and equal individuals’, based on ‘collective self authority’, with no (contending) classes, possessing the means of production in common, having no money-commodity relation, the end result of a long revolutionary transformation period after the conquest of political power by the immense majority of the working people. Its contrast with the twentieth century socialism could not be sharper.

A.M. wrote that Marx talked of “class consciousness and the inevitability of confron-tation between social classes such as those who exploit and those who are exploited remains sacred.” This is his own interpretation, not Marx’s. He wrote to J. Weydemeyer on March 5, 1852: "... And now as to myself, no credit is due to me for discovering the existence of classes in modern society or the struggle between them. Long before me bourgeois historians had described the historical development of this class struggle and bourgeois economists, the economic economy of the classes. What I did that was new was to prove: (1) that the existence of classes is only bound up with particular historical phases in the development of production (historische Entwicklungsphasen der Production), (2) that the class struggle necessarily leads to the dictatorship of the proletariat, (3) that this dictatorship itself only constitutes the transition to the abolition of all classes and to a classless society.” AM’s accusation of those “who refused to deviate from a mechanical interpretation of everything Marx said” seems applicable to himself. That way he is right that the Left in many countries has “ a mechanistic frame of mind”.

Lastly, the phrase ‘a classless state dreamt by Marx’ is false from Marx’s point of view. For him, It is rather the opposite which is true.

[Kolkata Marx Circle is a small group, not necessarily confined to Kolkattans, not attached to any political party. This rejoinder is drafted by Pradip Baksi (pradipbaksi@gmail.com), Sankar Ray (sankar.ray@gmail.com), Tapan Bandyopadhyay (btapan2011@gmail.com), Sarajit Majumdar (sarajit.majumdar@gmail.com) and three others.

The Telegraph, carried a shorter version, obviously due to shortage of space, on July 4.]