Capitalism is the economic system of the present world, characterised by private ownership, commodity production for exchange (instead of direct use, barter or tribute), and wage labour (labour which is itself a commodity exchanged on the market).

On wage labour

Marx's argument is not that wage labor is "immoral." He argues that the mechanisms of capital reproduction requires the capitalist to pay you less than what you actually produce in order to make a profit - the theory of surplus value. Marx is attempting to show how the liberal principles of free trade actually undermine themselves because of the disconnect between use-value (the actual embodied commodity) and exchange-value (pretty much the commodities price). The argument is that labor power is a special commodity because it produces more value than it costs (a worker "costs" what it takes to keep him alive and working, so a worker may require only five labor hours worth of bread to do ten hours of labor himself). That difference is the surplus value, which the capitalist keeps for himself, even though the worker received the "value" of their labor - which is just enough to survive.

On a more fundamental level, capitalism requires the existence of a substantial portion of the population who have absolutely no way to feed themselves other than to sell their labor at market. At the same time capital breaks feudalism and lifts the peasant out of poverty, it shackles him to itself and keeps him dependent, a virtual serf with invisible chains. Actually, the American founders make an argument relying on similar logic to defend the property requirement for voting - how could someone who is not independent financially, who cannot grow his own food but has to depend on someone else, vote freely? Marx makes the same observation, but his logic is to ensure every man has land - that is, access to the means of production, which capital monopolizes.

The contradiction between capital and labor is probably the fundamental one that Marx stresses, but there are plenty of others: its tendency to difficult-to-explain booms and busts, its pathological need for growth, and its relationship with imperialism. It's not about morality, in fact he criticizes socialists and anarchists who appeal to ahistorical and eternal concepts of justice, morality, or rights. Capitalism is bad because it cannot sustain itself, and it must eventually collapse. Marx thought it would collapse and give way to socialist revolution: I think now it's more obvious that it will collapse in massive political failure and climate catastrophe because we have no way to regulate consumption.

On price

Price is a representation of value, but is not value itself, just like the word "apple" represents an apple but is not the apple itself. Price is a commodity's exchange value expressed in money form (or, rather, what the seller hopes is the exchange value). In equilibrium it represents value well, but when supply outstrips demand, price drops below this level. When demand outstrips supply, it's the other way around. Demand and supply are critical to Marxist analysis, as their impact on price is the way the market signals to allocate and reallocate labour. Price rarely matches value, except in equilibrium, which rarely happens in practice. If, in fact, price always matched value, then the market signalling mechanism would not work, and the market would be useless for the allocation of labour.

On the profit motive

Marx saw the capitalist mode of production as completely dependent upon employees working for compensation that was necessarily less than the product of their labor, (Wage Labor and Capital is a great essay/book on that subject). For Marx, and in line with Adam Smith, capital-owners must produce a surplus of value by combining labor with the capital they own (factories, resources, machines, tools, etc), but it follows that if the capitalist wishes to compete he must maintain a surplus to replenish and accumulate his capital. Thus, the workers in his employ use their labor-power to fully produce the surplus value, but only receive an arbitrarily set money wage. So in capitalism a worker can never get true remuneration for his labor unless he controls the productive forces himself, because capitalists can't and won't forfeit the surplus value labor creates.

On abstract value

One problem with capitalism is the tension between abstract value and use-value. A house's use-value is that you can live in it, start a family, put your belongings in it, etc., but it can also be turned into an abstract financial instrument. We have the industrial capability to give everyone in America a house or apartment, but we don't because it wouldn't be profitable in abstract money terms. This tension is perhaps most absurd when there's an economic crisis. Factories stand idle, people are out of work, produce is burned, milk poured into the gutter -- all to serve abstract value. It's not like some enemy nation came and bombed bridges and oilfields.

On modernisation and the erosion of human relationships

When Marx speaks in the manifesto about how capital destroys all parochial relationships, he's praising it for its revolutionary potential:

The bourgeoisie, historically, has played a most revolutionary part.

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his "natural superiors," and has left remaining no other nexus between man and man than naked self-interest, than callous "cash payment." It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless and indefeasible chartered freedoms, has set up that single, unconscionable freedom—Free Trade. In one word, for exploitation, veiled by religious and political illusions, naked, shameless, direct, brutal exploitation.

The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.

The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation.

The bourgeoisie has disclosed how it came to pass that the brutal display of vigour in the Middle Ages, which Reactionists so much admire, found its fitting complement in the most slothful indolence. It has been the first to show what man's activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades.

The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses, his real conditions of life, and his relations with his kind

The destruction of all existing social traditions is the precondition to their complete re-configuring and, this is the important bit, rationalization.

The traditions that you value now are not rational. They were not created by people smarter than you, and your valuing of them is not based on a rational assessment. They're accidents of history. You follow them because a history that compels you, because you know of no realistic alternatives, or simply because it's easy.

Following the path of least resistance, or caught up in some stupid lie about how they're divinely inspired, you lack the ability to objectively judge their worth, discard the useless, and create the useful. This is true of everyone. No society is immune.

Capitalism's virtue is that it obliterates all of this. Its vice is that it does that for profit. But it's only in the negative space created by that destruction, that true freedom can be found. That a rational morality, culture and ideology can be created, has to be created, if only out of self-preservation.

The people who come out the other side, those who can create that ideology, and overthrow capitalism, will look back on people like you, and wonder how small, petty and weak they once were.

On corporate ownership

Ownership structure involves who owns real things and who doesn't. Major corporations now are so sophisticated they have a fiduciary obligation to their investors to seek a return -- they can be sued otherwise. "Everyone needs to get paid" and the bank is going to want their money back with interest paid if you take out a loan (which is where, if you're a capitalist, you get the money to invest in production in the first place). This is why capitalism and commercial banking arose in tandem. Capitalism must seek out profits otherwise it collapses. It expands everywhere, colonizes everywhere, and reshapes society everywhere: it is an amoral machine that has -- basically -- enslaved humanity like the fucking Matrix with the pod people. You're one of the batteries.

But because the rate of overall profit has been declining since World War II, which "reset" capitalism by destroying an excess buildup in capital, capitalism today is increasingly relying on financialization and speculating in asset prices (flipping houses, etc.). This long-term decline in profitability has even been observed by the IMF: hardly a bastion of Marxist theory. The capitalists of the world have too much money and not enough places to invest it, so they're wadding it up into a giant ball and throwing it at whatever they think will turn a profit no matter how stupid like Elon Musk's exploding cars. This is also what creates these destabilizing asset bubbles.

Incidentally, Trump in the United States has opted to reach a kind of bargain where he monkeys around with trade policies to spur some slight inflation, which gives his (heavily indebted) base a few hundred extra bucks to blow on football games by lowering the cost of servicing their debt. That makes his supporters happy, and in return he passes a big tax cut for corporations. The corporations are currently using that tax cut largely to buy back their own shares which causes their stock prices to go up -- keeping shareholders happy. But this is largely "fictitious" capital not supported by (actually productive) new investment in plant or machinery, and the overall rate of profitability in the capitalist world economy is continuing to go down relative to the existing capital stock. In other words he has expanded a bubble which will end in a bust, but he has kept the party going for a little while longer and top owners of capital are making a lot of money. It probably wouldn't have made any difference who was the president, though.

On the nation state

The labor movements that emerged in the 19th century had an international character in that they were in dialogue and supported one another, but all political victories of the labor movement was obtained within the limits of the nation-state. This is because the limit of effecting political change is law: politics is changing, establishing, eradicating, modifying policy and laws at the various levels within the political sphere. What did ending slavery mean? It meant changing laws. Anyone who thinks politics is cultural without being legal is an idiot or a liar. Every nation-state has a constitutional order, or legal structure, or law.

Law has power because laws are enforced, and they are enforced because they are backed by the states monopoly on violence. The modern state is predicated on its consolidation of coercive power: the princely state that first emerged in the Italian peninsula in the 15th century said to its people: give the state power and it will protect everyone within its bounds from being subjected to external violence (from the French, specifically). The later kingly states that emerged said: give us more power and we’ll protect people from external and internal violence. All changes in constitutional order, from the then onwards, are backed by coercive power. This is a good thing because without it, people are subject to arbitrary violence, which is generally far worse than the codified violence that the state takes on (with totalitarian exceptions, of course).

All the while, modern states have both an internal constitutional order (how they legitimize their power to their citizens) and an external strategic paradigm (how they deal with relations to other states). With the rise of the nation-state, laws were eventually passed in the 20th century that constituted a constitutional order based on regulating national economies in the interest of each given nation-state’s citizens. This took three different forms in leading countries: liberalism, fascism, and communism. All three were different expressions of one and the same historical trend, which was the rise of the national model of regulating the economy at the level of the nation-state. With the rise of the global economy, however, the nation-state has had to slowly give up its ability to regulate the economy at the level of the nation-state, and this has made for the state of affairs that you describe, which the left has no solution for.

Politics is necessarily a matter of effecting law, and there is no global constitutional order because there is not a global state that could enforce it. It remains that politics is limited to nation-states, but nation-states have themselves lost the capacity to exercise control over the global market. This state of affairs makes politics virtually impossible, and it leads to debates where neither side actually understand the historical conditions that have led us to where we are.

On universal basic income

You have to make a distinction between policies that simply aim to raise standards of living and increase demand vs policies that actually work to increase normal people's political and economic power. I think UBI comes from a cynical acceptance that the current market system creates inequality to the point that it becomes a threat to political stability and actually hurts the economy from a lack of demand. UBI is trying to preserve the system by supplanting organized labor and political movements that would aim to actually have the federal government assert itself back into the economy and thus decrease the power of capitalists. Also remember that this UBI money would come out of people's taxes and appreciate that the scale of tax avoidance by the ultrawealthy is to the degree that this could possibly be a regressive policy.

UBI is just a crutch to make unsustainable consumerism last a little longer. It will eventually end up in the hands of the mega rich any way, who pay very little tax. Over time, it will get devalued and require constant work to keep it in line with inflation (like minimum wage). It would be far better to expend that energy creating an economic system which didn't put people in the situation of needing UBI.

On "good bosses"

Although some bosses are worse than others, the system itself forces bosses to be bad. If you need a different example let's think about slavery; in slavery, there were obviously slaveowners that were more cruel than others, but there were no 'good' slaveowners except those that freed their slaves (an act extremely restricted by most American states). There is a good example of this in 12 Years a Slave; Solomon Northrup has a nicer slaveowner and a crueler slaveowner, but ultimately he remains a slave. This is what is meant by a structural critique; that the structure overrides any personal virtue and forces a baseline level of exploitation and cruelty.

Capital places limits on how virtuous bosses can actually be, and most important, discourages virtue. Those bosses who are better are better in spite of their position, not because of it, and are often working against the demand for profit that capital creates. When you see examples of virtuous bosses you are often seeing examples of people willing to make personal sacrifices for the sake of their employees, but that is neither an industry norm or something replicable on a wide scale. You cannot shame bosses into being nice people, and even if you do you cannot alter the basic behavior capital encourages without reforms (like unions and regulation).

On small business tyrants

A small business owner being extremely reactionary is no surprise considering they are basically under siege by everyone due to their position.

Like the (non petite) bourgeoisie they face pressure from below from the workers. They face pressure from the real big bourgeoisie above them, who they compete with and are often indebted to, and to top it all off, they have absolutely no class solidarity with other SBO's because they are in constant cut throat competition with them. They are also more vulnerable to changes in government policy, taxes, global markets etc. etc.

Workers and the bourgeoisie at least have class solidarity among themselves. The life a petite-bourgeoisie is quite wretched and isolated. It's not surprising they are virulently reactionary. They can never be allies of workers, they can never be allies of anyone.

On decriminalisation

It's a lot easier to get a few million dollars for some safe injection sites, needle exchanges, prescription maintenance doses of opiates, etc than to get the billions (or trillions) of dollars it will take to eliminate the root causes of addiction. We've also already spent billions trying to restrict the supply of opiates and imprison users, and it hasn't done much to reduce addiction rates.

The best way to fight crime is to decriminalize victimless "crimes" and to give people better things to do with their lives than commit crimes. Provide income sources that are safer and more reliable than property crimes and low-level fraud. Reduce inequality, stress/anxiety sources, and causes of desperation/hopelessness to reduce violent crime. Create egalitarian social structures so that ambitious sociopaths can never gain too much power.

On gentrification

Gentrification is an act of material disposession and it doesn't even necessarily require people to do it, just capital that moves into an area and displaces the existing population. So you can get a formerly working-class neighborhood that now doesn't have many people in it, just condos being used as investment properties by people who don't even live there. The existing population is forced out into the periphery. The street-level retail is boarded up -- and this is done because globally there's a ton of cheap liquidity that is being wadded up into a giant ball and thrown at anything that smells like it can make a return, no matter how speculative.

The anger at this can be misdirected at white hipsters or something: towards the signifiers of gentrification intead of the material forces driving it. But I don't see how Somali migration into Minneapolis is equivalent. What is being threatened in that case is the superstructural prizes of dominance: social and political ones in particular. Hence why the response to migration of poorer people into wealthier places is often new barriers to voting and political participation, especially. New forms of political apartheid, boundary walls, etc.

On open borders

The valorisation of free movement as the beautiful right of families to 'pick up and move across the earth to start new lives' distracts from the fact that many people who move are forced to because of the actions of those countries they're moving to. Most people want to live in their home countries and the fact poor people in the global south are forced to move because of economic instability and intervention by world powers should be considered a tragedy. Instead people in the first world get to feel like enlightened global citizens because they're happy to have those immigrants here at the bottom of the ladder.

On monopoly

Capitalism tends towards monopoly, not many businesses. That is true both in theory and in practice. "A million small business count for nothing, a few giant cartels count for everything". The government needs to, and does, make conscious efforts (with little success I might add) to reverse that trend towards monopoly which is inherent in the system.

So what's wrong with monopoly? When one company (or cartel) has a monopoly they don't have to deal with the competitive aspect of capitalism. They can set prices artificially high, they can cut costs by reducing the quality, and they have under-contested control over the creative/technological/cultural aspects of their product. By using their relative wealth over smaller businesses they can (and do) suppress competition by lobbying (/bribing) for laws that favor them (see net neutrality) or often by targeting small companies with a litany of lawsuits to financially destabilize them.

What about a state monopoly, or a socialist mode of production? Well firstly it should be democratically run, and a "democratic monopoly" isn't all that much of a monopoly at all. Since it is the workers who control production, who are not trying to create profit, they have a vested interest in not raising the prices and not reducing the quality. Production is fundamentally about pleasing the consumer instead of pleasing the accountants, because the consumers are the people in charge. In a capitalist system competition is the force which pushes production in the consumers' interest (because, in theory, if you don't do what the consumers want somebody else will and replace you). What that means is that as competition wanes, so does the consumers' power to influence production.

What are profits and why do we need them? Our current mode of production insists that the abstract concept of ownership entitles somebody to a share of productivity's earnings. It's important here to make a distinction between being an owner and being an executive/whatever who actually does work; the pay gap for executives is ridiculous, but they're still doing something and that position is not inherently parasitic. However, every cycle of production we have to cut out some fraction of our earnings and portion that out to the "owners" who did nothing (again, who may have done something but are compensated for their work, and then doubly for "ownership", the latter of which is the issue). If they don't get their cut, or moreover if they can get a better return anywhere else, then they'll simply take their capital and leave.

This is a fundamental rule of capitalism and this is why every company is always, not out of human desire but of necessity, trying to pinch every last penny they can. We don't have products that are most satisfying, we get what is most cost effective. We don't have services which most enrich our lives, but which have the best margins. We get a society that grapples with itself to make money with little or no concern whatsoever for human lives and desires. We siphon drinking water from poor communities so we can load it with sugar and sell it to people who would be better off without it, because there's money to be made. We plaster brands and logos on every surface and piece of media, constantly bombarding populations with advertising, because we can create products for pennies on the dollar by exploiting third world women and children and we need somebody to buy them.

On inevitable periodic economic crisis

Capitalist economies are driven by constant investment by capitalists (owners of capital). Investment is in turn dependent on constant industrial/market expansion, because its returns hinge on the value of the invested-in object or entity increasing over time. When the market/industry is unable to expand due to limiting material conditions (such as the over expenditure of resources), the web of investment collapses like a house of cards, and capitalists lose the capital they invested.

To try to gain back the capital they lost, capitalists increase the rate of exploitation of their workers (lowering wages, cutting jobs, etc.). This persists until the market is able to expand again, at which point the cycle repeats itself.

On intellectual property

Intellectual property, the way it works now, is artificially limited. For example, suppose you have a proprietary software project. Sharing that software with others and letting them share it makes the software maximally useful to society as it's used more often and by more people. It's not a scarce resource. But, capitalism makes that kind of thing unprofitable so, as a hack, we artificially limit the sharing of the software thus lowering the productive output and overall actual wealth creation, so collectively we lose out, but the property owner gets to be compensated more. We are paying people more to contribute less. That's artificial scarcity and it's one of the big flaws with capitalism that socialists like to point out.

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Pub: 16 Jul 2021 19:12 UTC
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