Characteristics of mature capitalism

My original posting of this subject is moved to the bottom of this post. The current version is much stronger and better worded in most cases. I retain the original due to its overall popularity on this blog and in case it has already been cited in its original form.

Readers interested in this topic are encouraged to follow the link below and make comments there. I continue to develop the ideas outlined and will be commenting and updating on the newer page.

Characteristics of Mature Capitalism (Revised)  V. 4  [follow this link to current version
dated January 29 , 2014]

Mature Capitalism V.3 is below.

Characteristics of Mature Capitalism V. 3

Rawlinsview: August 6, 2013

In the journalistic back and forth of the “MSM” mainstream media and the dialogue familiar to the university student. One side of the conversation defends the “market” or “free market” approach, the antique “laissez-faire” concept.

To borrow the words of another mentor of mine, Jack Kemp, Mitt and I understand that “No government in history has been able to do for people what they have been able to do for themselves, when they were free to follow their hopes and dreams.”[1]

What America needs is not Robin Hood but Adam Smith. In the year we won our independence, Adam Smith described what creates the Wealth of Nations. He described a limited government that largely did not interfere with individuals and their pursuit of happiness.[2]

The other side defends the importance of government regulation or intervention to correct the “excesses” of the market, to stimulate growth and employment, to develop core infrastructure, to concentrate capital resources toward undeveloped areas and sectors, and occasionally to act charitably toward the aged and infirmed and “those” less fortunate.

“History tells us that in fact a completely unmanaged economy is subject to extreme volatility, subject to extreme downturns. I know this legend that some people like that the Great Depression was somehow caused by the government or the Federal Reserve, but that’s not true. The reality is it was a market economy run amok, which happens repeatedly…I’m a believer in capitalism. I want the market economy to be left as free as it can be, but there are limits. You do need the government to step in to stabilize. Depressions are a bad thing for capitalism and it’s the role of the government to make sure they don’t happen, or if they do happen, they don’t last too long.”
****
“I’m a defender of the economic policies that we followed after World War II that produced the best generation of economic growth this country has experienced. We had a set of policies that provided mild inflation, there was effective government regulation of the financial system so it didn’t go wild…We had fiscal policy that stimulated the economy when it was needed. We had policies that fostered a strong middle-class instead of using the worship of the supposedly ideal force of the market….I like the America that my parents prospered in. I think we can restore a lot of that.”[3]

“The system would work better if it were left alone.”

“The system can be improved if we tinker with it or manage it with greater efficacy.”

Or–a system based upon the private ownership of socially produced wealth and natural resources is not  tenable and is a problem which can not be solved within its own context.

A Distinct Epoch

Fundamental historical forces and established social facts have transcended this state versus market dichotomy as it was first framed during the period of the rise of mass socialist movements at the end of the 19th century and again during the ‘Great Depression’ which fell between the First and Second World Wars. The colonial system collapsed through and following the Second World War. The United States and Europe saw a period of economic crisis as well as social and intellectual upheaval following the civil rights and other social movements in the United States. Nationalist, anti-imperialist and socialist movements rose in Africa, Asia and Latin America, the Cuban Revolution (1959), the defeat of US imperialist intervention in Vietnam (c1974), and then after the Sandinista Revolution in Nicaragua (1979), the revolutionary civil war in El Salvador (1980s), the overthrow of the Shah in Iran (1979), The Revolution in Grenada (1979), and crowningly the overthrow of the Apartheid regime in South Africa (c.1990-1994).

Quietly and loudly, marked decisively by the economic and political crisis of the first decade of the 21st century,  a new epoch has come in to being brought by human struggle, combinations of resounding blood and turmoil and small incremental changes in the way of life of the earth’s citizens.

Capitalism has failed, but socialism has not triumphed.

The Victory of the Commodity

The principal economic feature which defines the present epoch is the penetration of commodity production as the dominant feature of economic life for virtually all of the world’s populations.

This is a fact of life which it was possible to predict, but which was as yet 100 years away at the close of the 19th century.


For readers unfamiliar with specific terminology here; a ‘commodity’ is a useable good produced in some way by human activity or labor intended for impersonal exchange, trade or sale and not for the direct consumption of the producer, the producer’s family or other immediate communal associates.  A family or other communal living unit in societies which predate the expansion of the capitalist market may have performed diversified activity to feed themselves and maintain their survival. They raised some livestock or poultry, farmed, cultivated and harvested fruit and nut trees, built their own dwellings hunted and fished etc. Most of the product of this activity was consumed by this family or perhaps was, to a limited extent, traded or shared within an immediate network of known associates.

Today’s  farmer, even on a small independent farm, is more likely to focus on one or a few crops which are marketable, efficient to produce using intensified methods and will sell or otherwise exchange the bulk of his or her product for goods produced elsewhere by individuals whom he or she has never met.

The same is now so for nearly everyone engaged in productive economic activity in the present stage of human society. It is this fact which makes the capitalist system ‘mature.’ that is to say that the process of absorption of cultures and groups which had been outside of the world market is complete and so the 600 year period of capitalism’s childhood and adolescence is decisively over.  *†see note


Involvement of the entire world society in relations of commodity exchange remained an incomplete development at the end of the Second World War.

Though never complete in an absolute sense, and though variations and even new forms of production relations continue to develop, the qualitative fact is such that pre-capitalist forms of subsistence production–which remained substantial throughout the 20th century and various movements and institutions of resistance to the operation of the law of value[4][5]–including the establishment of anti-capitalist regimes–have, in their mass, given up their ghost to the modern god–the commodity[6][7].

In another manner of speaking, virtually all purposeful material production in which the labor of virtually any living citizen of world society engages at this point is produced for money or equivalent exchange in some or another sector of a global market. While the tendency toward this state of existence is hundreds of years old the fact of its virtual completeness is as recent an occurrence as the rise of the current century.

The Universality of the Republican Nation State

The history of the 20th century was largely defined on its surface by the contest between  Soviet Socialism on the one hand and ‘Western’ (sic) capitalism on the other. Despite this and despite the spectacular collapse of the Soviet state, it seems clear enough at the present time that little in terms of social contradiction was resolved by the demise of the Soviet system. As the binary simplicity of the cold war contest fades into a quaint memory, the present world order –if it may be considered an order at all—is characterized by the expanded political and economic weight of China, by the post-colonial rise of mass struggle in the Middle East, North Africa, Central and South Asia known as the “Arab Spring”, by the multi-polar fractalization of economic power characterized by the emergence of the BRIC nations and other rising second world economic stars such as South Korea and Indonesia and by the grinding extended stagnation of the economies of the 20th century imperialist nations, Japan, the European Union countries and to a lesser extent but not insignificantly the United States and Canada.

In the political sphere, the 20th century saw the transformation of the world’s political structure such that the inexorable assertion of the right of nations to self-determination won out against all forces opposing it. It is now the case that the great majority of the world’s citizens live in more or less modern nation states which are more or less self-governing republics. I am making in this statement no judgment as to the degree of internal democratic or civil development which a given nation may or may not have. In all nations at present ‘democracy’ in the ideal sense remains a goal for the future. As for comparisons between presently existing states, it must be said that beauty is most often found in the eye of the beholder.[8]

The wars and revolutions of the 20th century drove forward this process, drove the colonial arrangement out of existence and set the imperialist powers on the run. No state has been returned to monarchical or other non-republican governmental form in the recent course of history.[9] No existing nation states have been dissolved or successfully robbed of their sovereignty in recent years. Attempts to repress the natural tendency toward nationhood on the part of like peoples sharing common histories and languages have proven doomed to relentless bloodshed and eventual failure.

No form of political or military force proved able to forestall these two powerful tendencies in the long course of history. Neither the statist socialism of countries governed by Stalinist political parties, nor the traditional political powers of Europe. Nor the hyper-capitalist young imperial power of the United States. Monarchies and colonial arrangements collapsed into failing wars or revolutions, and markets opened up to virtually everyone everywhere.[10]

The massive advancements in transport technology and infrastructure which occurred throughout the 20th century and the ‘warp speed’ advancement in communications and information access and storage which occurred at the end of the 20th century and at the beginning of the 21st century have reinforced this general tendency and spurred the development of a worldwide cosmopolitan civil society.

The Development of Productive Forces.

Capitalism has done humanity the favor of having buried itself in overproduction. Though the gross productive capacity has risen, the social needs of large sectors of the world’s population remain unmet and to a degree they are exacerbated. Much of the economic activity in which we currently engage is as much a source of rather than a solution to the difficulties faced by ordinary working people. Environmental destruction, the mass production and distribution of foodstuff which produce sickness rather than augment health, medicines of questionable effectiveness marketed to treat imaginary discomforts, the proliferation of addictive narcotics, the saturation of the globe with increasingly deadly and efficient armaments and the relentless marketing these useless or destructive commodities.

Another historically unique characteristic of the present epoch is that in terms of simple capacity the productive forces of the broad human race are now sufficient to provide for the basic material needs of the whole of the world’s population. Thus hunger, disease, poverty, and ignorance must be understood as social dysfunctions of the capitalist system rather than as natural obstacles to human survival as these were in prior historical times. These problems at present stand as proof of the inability of the operation of the “law of value,” the “invisible hand” or other understandings of “natural” market mechanisms to effectively allocate social resources without conscious direction and political commitment. [11]

At the same time that billions of the Earth’s citizens live in destitution and ignorance, millions if not billions of us who are able to develop skills and obtain education and who are in a position to make a contribution toward the betterment of ourselves and our fellow citizens find ourselves obstructed from the opportunity to do so by rates of unemployment that exceed in many cases 20 percent by any real terms in the developed world and 50 percent in many the developing economies. As commodity production has expanded to include virtually all economic activity on our globe so too has the dispossession of labor from productive assets and thus the proletarianization and commodification of human labor. Hundreds of millions of able bodied and otherwise capable people are denied the opportunity to work gainfully, to support themselves and to contribute to society as a whole. On top of all of the waste of the system and all of the counterproductive, and destructive activity, the greatest waste of all is that of the millions upon millions of people who are cut off from the opportunity to help in the process of fixing what is so obviously broken.

Governmental intervention in market operations is the life support of the system.

The epoch of state-monopoly capital and classical imperialism, which reigned for much of the 20th Century, may now be seen as another developmental phase of the capitalist system rather than as its “final stage.” Specifically this may be understood by grasping that imperialism served two key functions in the development of capitalism as a world system, one is broadly understood in that it was the mechanism of exploitation of the developing world on the part of the imperial centers. Concurrently, as described by Lenin,[12] it was the system of competition between the imperial centers in which each vied for advantage over the other. Less well understood is the degree to which the imperialist system served to drive forward the expansion of the social relations of capitalism globally bringing us to the point where we are now–that is, thoroughly extending commodity relations to the whole of the system and so toward a relative equalization of industrial development and economic and geopolitical power as a long term, though by no means complete, trend.

As Western imperial power recedes in the face of a polycentric geopolitical power system, and as the imperialist system shows evidence of losing its control prior to the hoped for establishment of states and social relations in which the working class holds effective political power, the tendency toward state integration with transnational monopoly capitalism continues to strengthen.

The established social fact of the welfare state and the inescapable reality that government spending represents between 20 and 60 percent of GDP in all developed societies, such that macro level economic planning, regulation and monetary/financial intervention is an integrated aspect of modern capitalist society. These mechanisms do not simply exist as commonly understood (especially on the left) as mediating forces in the class struggle, or to alleviate social disproportions, but also because they have become essential to the basic operation of the capitalist system itself as they are directly integrated into the process of appropriation and distribution of surplus value now that the classical “laissez faire” operations of the capitalist market have been rendered by its own contradictions, not just socially nonviable, but in fact nonviable at an operational economic level without perpetual state intervention.[13] The rise of governmental financial and monetary intervention schemes and other forms of social entitlement programs comes at the same time that the actual social conditions of most working people are worsening rather than improving. The principal function of state intervention in the major capitalist economies at the present juncture is ever more desperate attempts at stabilization rather than the improvement of the lives of the citizens of those nations in which these schemes are being carried out.

Expansion of the global proletariat.

Concurrent to the trends described above it may now be considered that the majority population of most of the world’s nations are more or less best described as proletarians[14] in the classical sense. This is to say that they/we are non-owners of significant social means of production and that, to the extent that we are employed, we are so engaged in production for the market in a relation in which the means of production is owned either socially, by a state entity, or privately by some or another form of capitalist concern. Even in agriculture, in most cases, the mass of production is carried out by toilers who are either fully or partially proletarianized, and human labor power is bought and sold as a dispensable commodity the principal purpose of which is to earn profit for the capitalist class.

The cosmopolitan proletariat.

The working class has matured along with the system that created it. It is now, all hand wringing aside, much larger and stronger than it has  ever been and much more so than its dying mother. It is in need of only one last bowl of warm milk before it comes to know its own power.  The advancement of communications and information technology, the establishment of global networks of rapid travel, the internationalization of popular culture, and the desperate mechanisms of monopoly capital as is roves the globe in search of cheap labor and drives huge migrations of workers in search of employment has created a literate, informed, cultured, multilingual, technically sophisticated and globally interconnected working class which mirrors the development of globalized monopoly capital.

It is considering these factors at the starting point that set the condition for understanding the prospects for the development of a political movement in the 21st century whose object is the advancement of the social interests of the working class and the elevation of the working class to political power.

 

[End note]

Readers of this are encouraged to consider the relevance of Trotsky’s prescient critique of  the Stalinist ideology of “Socialism in One Country” as presented in his “Criticism of Fundamentals”  of the Draft Program of the Communist International.”  Text below is linked to the full article.  As always readers’ comments are encouraged.

…The extreme diversity in the levels attained, and the extraordinary unevenness in the rate of development of the different sections of mankind during the various epochs, serve as the starting point of capitalism. Capitalism gains mastery only gradually over the inherited unevenness, breaking and altering it, employing therein its own means and methods. In contrast to the economic systems which preceded it, capitalism inherently and constantly aims at economic expansion, at the penetration of new territories, the surmounting of economic differences, the conversion of self-sufficient provincial and national economies into a system of financial interrelationships. Thereby it brings about their rapprochement and equalizes the economic and cultural levels of the most progressive and the most backward countries. …

By drawing the countries economically closer to one another and leveling out their stages of development, capitalism, however, operates by methods of its own, that is to say, by anarchistic methods which constantly undermine its own work, set one country against another, and one branch of industry against another, developing some parts of world economy while hampering and throwing back the development of others. Only the correlation of these two fundamental tendencies – both of which arise from the nature of capitalism – explains to us the living texture of the historical process.

Imperialism, thanks to the universality, penetrability, and mobility and the break-neck speed of the formation of finance capital as the driving force of imperialism, lends vigor to both these tendencies. Imperialism links up incomparably more rapidly and more deeply the individual national and continental units into a single entity, bringing them into the closest and most vital dependence upon each other and rendering their economic methods, social forms, and levels of development more identical. At the same time, it attains this “goal” by such antagonistic methods, such tiger-leaps, and such raids upon backward [sic] countries and areas that the unification and leveling of world economy which it has effected, is upset by it even more violently and convulsively than in the preceding epochs.

Trotsky, Leon; The Draft Program of the Communist International: A Criticism of Fundamentals (1928).
First Published: In English in 1929, The Militant. Source: The Third International After Lenin 1929, New York.Translated: 1st version unknown translator in Russia, US edition, Max Shachtman.
Transcription/HTML Markup: Sally Ryan, 1997, subsequent HTML updating by David Walters, 2003.
Copyleft: Leon Trotsky Internet Archive (www.marxists.org) 2002, 2003. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License.

*†   Note to text box.   For readers of this passage who are more familiar with the categories of Marx’ political economy.  What is being said in specific terms is that the process of absorption of non-commodity forms of production is complete.  It seems to me that this is the trend even in such cases where the national economies experienced worker’s or socialist revolutions and in which the capitalist class was overthrown either permanently or temporarily. In any case it is my rather unqualified assertion that the process of ‘primary’ or ‘primitive accumulation of capital’ is now for the most part historically complete and also that it was not so up until the very end of the 20th century.

[1]   Ryan Paul  Transcript, Video: Paul Ryan Speaks at Values Voter Summit by Fox News Insider // Sep 14 2012 // 12:16pm  http://foxnewsinsider.com/2012/09/14/transcript-video-paul-ryan-speaks-at-values-voter-summit#ixzz2aVEpLtI3

[2]  2/13/13 at 12:08 AM Video and Transcript: Rand Paul Gives Tea Party Response to State of the Union by Christian Post http://blogs.christianpost.com/cp-events/video-and-transcript-rand-paul-gives-tea-party-response-to-state-of-the-union-14596/

[3] Krugman Paul from Bloomberg TV “Paul Vs Paul”  http://www.valuewalk.com/2012/04/ron-paul-vs-paul-krugman-exciting-debate-on-video-with-transcript/  April 30, 2012

[4] Preobrazhensky E.A. The New Economics (1926) English Translation Brian Pearce Clarendon Oxford (1965)
the law of value is the spontaneous regulation of the production process in commodity society”

[5]  http://kapitalism101.wordpress.com/law-of-value-the-series/ This is an excellent introductory series to Marx’ Value Concepts

[6]Every product of labour is, in all states of society, a use value; but it is only at a definite historical epoch in a society’s development that such a product becomes a commodity, viz., at the epoch when the labour spent on the production of a useful article becomes expressed as one of the objective qualities of that article, i.e., as its value. Marx Karl Capital Vol1  ch1 section3 A, 4 “The Elementary Form of Value Considered as a Whole.”   http://www.marxists.org/archive/marx/works/1867-c1/ch01.htm#S1

[7] Whence, then, arises the enigmatical character of the product of labour, so soon as it assumes the form of commodities? Clearly from this form itself. The equality of all sorts of human labour is expressed objectively by their products all being equally values; the measure of the expenditure of labour power by the duration of that expenditure, takes the form of the quantity of value of the products of labour; and finally the mutual relations of the producers, within which the social character of their labour affirms itself, take the form of a social relation between the products.  Ibid, Chapter 1 section 4  “The Fetishism of Commodities and the Secret Thereof”

http://www.marxists.org/archive/marx/works/1867-c1/ch01.htm#S4

[8] There are notable exceptions such as Saudi Arabia and the Gulf States which remain hereditary monarchies and specific divided states in which the relationship of the forces of global power intervene to block the natural development of a nation state, Korea, Palestine, Kurdistan etc. but such are few and far between and the circumstances surrounding these tend more to substantiate than to disprove the stated rule. While the drive for national self-determination remains a potent political force and an ongoing factor in geopolitical relations and conflicts. Nationalism as a progressive historical force is meeting its demise by virtue of its own success.  The examples of Egypt, Tunisa, Iran and Turkey make this clear as the principal questions facing the development of these countries transcend the largely achieved formation of an independent national state. In Bahrain there remains a specific and egregious violation of human rights and the right of nations to self determination as the majority Shia population are made to suffer daily oppression and humiliation at the hands of a monarch who hails from the minority Sunni ruling layer.

[9] In terms of the tendency of capitalism and in particular state capitalist political forms to degenerate toward Bonapartist or Facist dominance of the state and society. It appears that unlike the processes which took place in times of political crisis of the 20th century, the civil societies which exist in most nations and the global civil society which has come in to being are capable of resisting such trends and so these tendencies are thereby moderated by middle class public opinion and more significantly the potent and present threat of mass working class political action. The speed of information flow and the engagement of so many hundreds of millions of people in the Global discourse is evidently a factor in this development.

At the time of this writing the conditions in Egypt seem ripe for the rise of some form of Bonapartist element, while at the same time the assertion of mass political pressure through street mobilization poses the question of a reach toward power on the part of the working class and its social allies. To my limited knowledge of the situation there is as yet no movement or party of the toilers with the authority to lead a quest toward direct political power. The long term outcome of the situation in Egypt as in Tunisia will be a test of the broader relationship of forces at the current stage of historical development. From my own point of view the outcome should be seen to be of the greatest interest to workers and advocates for the social interests of the working class worldwide.

[9a]It is a significant for example that in most of Latin America fairly stable republican governmental forms persist despite ongoing economic challenges and open class conflict.

[9b]Another way to say this is to say that in most countries in the world today there is substantial political space for the working class to carry out political action and to participate in the political sphere

 

[10] Even states in which there has been meaningful progress toward the development of some or another form of socialism such as in Cuba and to some extent Vietnam have tended since the end of the 20th century toward greater rather than less participation in global commodity exchange.

[11] I Cite one web based source here http://www.globalissues.org/article/26/poverty-facts-and-stats#src8 but the availability of substantiating information is overwhelming.  On this site it is indicated that over 80% of the world’s population lives on 10 dollars per day, that 2 billion people are functionally illiterate, etc. The specific veracity of any one statistic is beside the obvious fact that a near majority of the worlds population lives in destitute poverty. Meanwhile global military spending is over 1.5 trillion dollars by recent statistics.

[12] 2. Lenin, VI  Imperialism the Highest Stage of Capitalism (1917)
Lenin’s Selected Works, Progress Publishers, 1963, Moscow, Volume 1, pp.667–766.

To the numerous “old” motives of colonial policy, finance capital has added the struggle for the sources of raw materials, for the export of capital, for spheres of influence, i.e., for spheres for profitable deals, concessions, monopoly profits and so on, economic territory in general. When the colonies of the European powers,for instance, comprised only one-tenth of the territory of Africa(as was the case in 1876), colonial policy was able to develop—by methods other than those of monopoly—by the “free grabbing” of territories, so to speak. But when nine-tenths of Africa had been seized (by 1900), when the whole world had been divided up,there was inevitably ushered in the era of monopoly possession of colonies and, consequently, of particularly intense struggle for the division and the redivision of the world.

[13] State capitalism manifests in several ways and it can be complex as well as sophisticated, such as the public policies aimed at supporting the private South-Korean conglomerates, or the setting up of sovereign wealth funds from Asia and Gulf States with growing influence on capital markets and investments.

There can however be no overlooking the fact that ‘State capitalism’ in emerging countries is mirrored by equally aggressive ‘State intervention’ in the economy in developed countries. The Norwegian State-owned oil company, Statoil, and American and European policies for subsidies in the agricultural sector are familiar examples.  http://thebricspost.com/in-the-times-of-state-capitalism/#.UgHDcm2oOQI

Rawlinsview: June 1, 2013

In the journalistic back and forth of the “MSM” mainstream media and the dialogue familiar to the university student. One side of the conversation defends the “market” or “free market” approach, the antique “laissez-faire” concept. The other side defends the importance of government regulation or intervention to correct the “excesses” of the market, to stimulate growth and employment, to develop core infrastructure, to concentrate capital resources toward undeveloped areas and sectors, and occasionally to act charitably toward the aged and infirmed and “those” less fortunate. The system would work better if it were left alone. The system can be improved if we tinker with it or manage it with greater efficacy.

Fundamental historical forces and established social facts have transcended the original context of this dichotomy as it was framed during the period of the rise of mass Socialist movements at the beginning of the 20th century, during the collapse of the colonial system through and following the second world war and again during the last great period of economic crisis, social and intellectual upheaval following the civil rights movement in the United States, the rise of anti-imperialist movements in Africa, Asia and Latin America, the Cuban Revolution(1959), the defeat of US imperialist intervention in Vietnam (c1974), and then after the Sandinista Revolution in Nicaragua (1979), the revolutionary civil war in El Salvador (1980s), the overthrow of the Shah in Iran (1979), The Revolution in Grenada (1979), and crowningly the overthrow of the Apartheid regime in South Africa (c.1990-1994).

More or less loudly and quietly a new epoch has come in to being brought by combinations of resounding blood and turmoil and small incremental changes in the way of life of the earth’s citizens.

Capitalism has failed, and socialism has not triumphed.

The Victory of the Commodity

The primary feature which defines the present epoch is the penetration of commodity production as the dominant feature of economic life for virtually all of the world’s populations.

This is a fact of life which it was possible to predict, but was as yet 100 years away at the close of the 19th century.

Involvement of the entire world society in relations of commodity exchange remained an incomplete development at the end of the Second World War.

Though not complete in an absolute sense, and though variations and even new forms of production relations continue to develop, the qualitative fact is such that pre-capitalist forms of subsistence production–which remained substantial throughout the 20th century and various movements and institutions of resistance to the operation of the law of value¹–including the establishment of anti-capitalist regimes–have, in their mass, given up their ghost to the modern god–the commodity.

The Universality of the Republican Nation State

In the political sphere, the history of the 20th century may be defined by the transformation of the world’s political structure such that the inexorable assertion of the right of nations to self determination has won out against all forces opposing it. It is now the case that nearly all of the worlds citizens live in more or less modern nation states which are more or less self governing republics. (There are notable exceptions such as Saudi Arabia which remains an hereditary monarchy but such are few and far between). In making this statement I make no judgement as to the degree of internal democratic or civil development each nation may or may not have other than to say that beauty is often in they eye of the beholder.

The dominant wars and revolutions of the 20th century drove forward this process and drove the colonial arrangement out of existence and set the imperialist powers on the run. No state has been returned to monarchical or other non republican governmental form in the recent course of history. No existing nation states have been dissolved or successfully robbed of their sovereignty. Attempts to repress the natural tendency toward nationhood on the part of like peoples sharing common histories and languages have proven doomed to relentless bloodshed and eventual failure.

No form of political or military force proved able to forestall these two powerful tendencies in the long course of history. Neither the stateist socialism of countries governed by Stalinist political parties, nor the traditional political powers of Europe. Nor the hyper-capitalist young imperial power of the United States. Monarchies and colonial arrangements collapsed into failing wars or revolutions, and markets opened up to virtually everyone everywhere.

The massive advancements in transport technology and infrastructure which occurred throughout the 20th century and the ‘warp speed’ advancement in communications and information access and storage which occurred at the end of the 20th century and at the beginning of the 21st century have reinforced this general tendency and driven forward the development of a worldwide cosmopolitan civil society.

The Development of Productive Forces.

Capitalism has done humanity the favor of having effectively buried itself in overproduction. As the gross productive capacity has risen however, the social needs of large sectors of the world’s population remains unmet. Another historically unique characteristic of the present epoch is that in terms of simple capacity the productive forces of the broad human race are now sufficient to provide for the basic material needs of the whole of the world’s population. Thus hunger, disease, poverty, and ignorance must be understood as purely social dysfunctions of the capitalist system. These problems at present stand as proof of the inability of the operation of the “law of value,” the “invisible hand” or other understandings of “natural” market mechanisms to effectively allocate social resources.

Governmental intervention in market operations is the life support of the system.

The established social fact of the welfare state and the inescapable reality that government spending represents between 20 and 60 percent of GDP in all developed societies, such that macro level economic planning, regulation and monetary/financial intervention is an integrated aspect of modern capitalist society. These mechanisms do not simply exist as commonly understood (especially on the left) as mediating forces in the class struggle, or to alleviate social disproportions, but also because they have become essential to the basic operation of the capitalist system itself as they are directly integrated into the process of appropriation and distribution of surplus value now that the classical “laissez faire” operations of the capitalist market have been rendered by its own contradictions, not just socially unviable, but in fact unviable at an economic level without perpetual state intervention.

Effectively the epoch of state-monopoly capital and classical imperialism, which reigned for much of the 20th Century, may now be seen as another developmental phase of the capitalist system rather than as its “final stage.” Specifically this may be understood by grasping that imperialism served two key functions in the development of capitalism as a world system, one is broadly understood in that it was the mechanism of exploitation of the developing world on the part of the imperial centers. Concurrently, as described by Lenin,² it was the system of competition between the imperial centers in which each vied for advantage over the other. Less well understood is the degree to which the imperialist system served to drive forward the expansion of the social relations of capitalism globally bringing us to the point where we are now–that is, thoroughly extending commodity relations to the whole of the system.

Expansion of the global proletariat.

Concurrent to the trends described above it may now be considered that the majority population of most of the world’s nations are more or less best described as proletarians³ in the classical sense. This is to say that they are non owners of significant social means of production and that to the extent that they are employed they are so engaged in production for the market in a relation in which the means of production is owned either socially, by a state entity, or privately by some or another form of capitalist concern. Even in agriculture, in most cases, the mass of production is carried out by toilers who are either fully or partially proletarianized.

The cosmopolitan proletariat.

The working class has matured along with the system that created it. It is now, all hand wringing aside, much stronger than its dying mother and in need of only one last bowl of warm milk before it comes to know its own power. The advancement of communications and information technology, the establishment of global networks of rapid travel, the internationalization of popular culture, and the desperate mechanisms of monopoly capital as is roves the globe in search of cheap labor and drives huge migrations of workers in search of employment has created a literate, informed, cultured, multi-lingual and globally interconnected working class which mirrors the development of globalized monopoly capital.

It is considering these factors at the starting point that set the condition for understanding the prospects for the development of a political movement in the 21st century whose object is the advancement of the social interests of the working class and the elevation of the working class to political power.

1. Preobrazhensky E.A. The New Economics (1926) English Translation Brian Pearce Clarendon Oxford (1965)
the law of value is the spontaneous regulation of the production process in commodity society”

1a. http://kapitalism101.wordpress.com/law-of-value-the-series/ This is an excellent introductory series to Marx’ Value Concepts

2. Lenin, VI Imperialism the Highest Stage of Capitalism (1917)
Lenin’s Selected Works, Progress Publishers, 1963, Moscow, Volume 1, pp.667–766.

To the numerous “old” motives of colonial policy, finance capital has added the struggle for the sources of raw materials, for the export of capital, for spheres of influence, i.e., for spheres for profitable deals, concessions, monopoly profits and so on, economic territory in general. When the colonies of the European powers,for instance, comprised only one-tenth of the territory of Africa(as was the case in 1876), colonial policy was able to develop—by methods other than those of monopoly—by the “free grabbing” of territories, so to speak. But when nine-tenths of Africa had been seized (by 1900), when the whole world had been divided up,there was inevitably ushered in the era of monopoly possession of colonies and, consequently, of particularly intense struggle for the division and the redivision of the world.

3. The Manifesto of the Communist Party
Marx/Engels Selected Works, Vol. One, Progress Publishers, Moscow, 1969, pp. 98-137;

In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed — a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.

[End note]

Readers of this are encouraged to consider the relevance of Trotsky’s prescient critique of the Stalinist ideology of “Socialism in One Country” as presented in his “Criticism of Fundamentals” of the Draft Program of the Communist International.” Text below is linked to the full article. As always readers’ comments are encouraged.

…The extreme diversity in the levels attained, and the extraordinary unevenness in the rate of development of the different sections of mankind during the various epochs, serve as the starting point of capitalism. Capitalism gains mastery only gradually over the inherited unevenness, breaking and altering it, employing therein its own means and methods. In contrast to the economic systems which preceded it, capitalism inherently and constantly aims at economic expansion, at the penetration of new territories, the surmounting of economic differences, the conversion of self-sufficient provincial and national economies into a system of financial interrelationships. Thereby it brings about their rapprochement and equalizes the economic and cultural levels of the most progressive and the most backward countries. …

By drawing the countries economically closer to one another and leveling out their stages of development, capitalism, however, operates by methods of its own, that is to say, by anarchistic methods which constantly undermine its own work, set one country against another, and one branch of industry against another, developing some parts of world economy while hampering and throwing back the development of others. Only the correlation of these two fundamental tendencies – both of which arise from the nature of capitalism – explains to us the living texture of the historical process.

Imperialism, thanks to the universality, penetrability, and mobility and the break-neck speed of the formation of finance capital as the driving force of imperialism, lends vigor to both these tendencies. Imperialism links up incomparably more rapidly and more deeply the individual national and continental units into a single entity, bringing them into the closest and most vital dependence upon each other and rendering their economic methods, social forms, and levels of development more identical. At the same time, it attains this “goal” by such antagonistic methods, such tiger-leaps, and such raids upon backward [sic] countries and areas that the unification and leveling of world economy which it has effected, is upset by it even more violently and convulsively than in the preceding epochs.

Trotsky, Leon; The Draft Program of the Communist International: A Criticism of Fundamentals (1928).
First Published: In English in 1929, The Militant. Source: The Third International After Lenin 1929, New York.Translated: 1st version unknown translator in Russia, US edition, Max Shachtman.
Transcription/HTML Markup: Sally Ryan, 1997, subsequent HTML updating by David Walters, 2003.
Copyleft: Leon Trotsky Internet Archive (www.marxists.org) 2002, 2003. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License.

Original posting of this subject below.

Characteristics of Mature Capitalism

In the present time of financial and economic crisis there is a great deal of journalistic back and forth as regards the nature of the present world economy. The discussion remains dominated by a false dichotomy rooted in debates well over a century old.  One side of the conversation defends the “market” or “free market” approach, the antique “laissez-faire” concept. The other side defends the importance of government regulation or intervention to correct the “excesses” of the market, to stimulate growth and employment, to develop core infrastructure, to concentrate capital resources toward undeveloped areas and sectors, and occasionally  to act charitably toward the aged and infirmed and  “those” less fortunate.

This debate–which is at its essence the two sides of the classic liberal ideal–  is as quaint as a horse and buggy ride in the traffic of Central Park West.  Fundamental historical forces and established social facts have transcended the original context of this conversation as it was framed during the period of the rise of mass Socialist movements at the beginning of the 20th century and again during the last great period of social and intellectual upheaval following the defeat of US imperialist intervention in Vietnam.

More or less loudly and quietly a new epoch has come in to being brought by combinations of resounding blood and turmoil and small incremental changes in the way of life of the earth’s citizens.

Capitalism has failed, and socialism has not triumphed. We find ourselves in a new place and must understand the mechanisms of social progress by seeing through newly ground lenses.

The Victory of the Commodity

The primary feature which defines the present epoch is the penetration of commodity production as the dominant feature of economic life for virtually all of the world’s populations.

This is a fact of life which it was possible to predict but was as yet 100 years away at the close of the 19th century.

Involvement of the entire world society in relations of commodity exchange remained an incomplete development at the end of the Second World War.

The Universality of the Republican Nation State

In the political sphere, the history of the 20th century may be primarily defined by the transformation of the world political structure such that the inexorable assertion of the right of nations to self determination has won out against all forces opposing it. It is now the case nearly all of the worlds citizens live in more or less modern nation states which are more or less self governing republics. (There are notable exceptions such as Saudi Arabia which remains an hereditary monarchy but such are few and far between)

The dominant wars and revolutions of the 20th century drove forward this process and drove the colonial arrangement out of existence and set the imperialist powers on the run. No state has been returned to monarchical or other non republican governmental form in the recent course of history. No existing nation states have been dissolved or successfully robbed of their sovereignty. Attempts to repress the natural tendency toward nationhood on the part of like peoples sharing common histories and languages have proven doomed to relentless bloodshed and eventual failure.

No form of political or military force proved able to forestall these two powerful tendencies in the long course of history. Neither the stateist socialism of countries governed by Stalinist political parties, nor the traditional political powers of Europe. Nor the hyper-capitalist young imperial power of the United States. Monarchies and colonial arrangements collapsed into failing wars or revolutions, and markets opened up to virtually everyone everywhere.

The massive advancements in transport technology and infrastructure which occurred throughout the 20th century and the massive advancement in communications which occurred at the end of the 20th century and at the beginning of the 21st century have reinforced this general tendency and driven forward the development of a worldwide cosmopolitan civil society.

It is considering these factors at the starting point that set the condition for understanding the prospects for the development of an working class oriented political movement in the 21st century.

About rawlinsview

News and political commentary from the point of view of the social interests of the international working class.
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3 Responses to Characteristics of mature capitalism

  1. I fail to see how the “massive advancements in transport technology and infrastructure…and the massive advancement in communications” are supposed to set up an untenable position for market economies. Rather, the global integration and democratization of information REINFORCE the central assumptions of capitalism.
    To wit, the Walrasian assumptions of full markets and full information. Clearly these are weak assumptions on the surface, but it is curious that the progress and development of the imperfect market is toward a more perfect market. This more perfect market has lower barriers to entry (check), more homogeneous prices (check), and factor returns closer to marginal productivity (check).
    Why is there a need for a “working class oriented political movement” when the proletariat are continually better off (business cycle fluctuations not included)?

    • rawlinsview says:

      Reply to Robert H. Schell

      Robert writes

      I fail to see how the “massive advancements in transport technology and infrastructure…and the massive advancement in communications” are supposed to set up an untenable position for market economies. Rather, the global integration and democratization of information REINFORCE the central assumptions of capitalism.
      To wit, the Walrasian assumptions of full markets and full information. Clearly these are weak assumptions on the surface, but it is curious that the progress and development of the imperfect market is toward a more perfect market. This more perfect market has lower barriers to entry (check), more homogeneous prices (check), and factor returns closer to marginal productivity (check).
      Why is there a need for a “working class oriented political movement” when the proletariat are continually better off (business cycle fluctuations not included)?

      Reply Below: Is the working class better off?

      You chose the term “proletariat.” I avoid the term because I believe that it’s present connotations exclude many of those whom I would include in my broader definition of the working class. My definition would be to include the majority of the society who is or would be engaged in productive labor and who lack significant control over the application of social capital resources (5k in a retirement account not included. Board members, a different category.)
      I am trying to keep this short, dissertations could and no doubt have been written on specific class definitions. But I am speaking of the worker, teacher, family farmer, and small entrepreneur who relies upon his/her own labor as a significant factor of productive input to their enterprise. I include also those who would be so if reasonable chances of return on their efforts existed.

      In any case and by any definition, I am interested in your assertion that the “proletariat” are “continually better off”. Your exclusion of business cycle “fluctuations” is an abstraction so far from reality as to defy meaning. In the experience of most working people, business cycle fluctuations are a significant factor affecting the quality and stability of life. Your statement is akin to saying that the flu isn’t so bad when you exclude the vomiting, chills, fever and diarrhea. Or 3 + 2 equals 3 if you exclude 2.
      While you are making love to abstractions even relatively modest “fluctuations” can have long term destabilizing effects on a working family. The temporary medium term loss of employment for a parent may close an opportunity window to a child meaning say, a permanent life chance loss of higher educational opportunity to a young family member, for example.
      Most economists in the liberal schools do not consider this kind of value loss to society. Nor, of course, do they consider other social costs, such as environmental destruction, overbuilding and the wasteful misuse of critical or limited resources.

      But let’s say that we exclude the routine fluctuation of the normal 3-6 year business cycle. (I agree, by the way, that, under normal circumstances these should not warrant excessive corrective governmental action, as I believe that I should not run to the doctor for antibiotics every time my daughter sneezes.) Nearly all reputable statistics show that real wages have been in a state of decline for the majority of US workers for over a quarter century. Similar statistics more or less carry for the European social democracies.

      Despite the deflationary pressures which affect the production of many durable goods [I suppose it is nice that many poor people can now afford smart phones] the over-all net quality of life for working people has been declining over a period which substantially exceeds the duration of any short or even medium term business cycle.
      Whole nation states exist in which the majority of the working age population is not engaged in fruitful or satisfying work. Where are your better off proletarians? Evading census takers while sunning themselves in the Caribbean? Manufacturing “Hello Kitty” dolls in Shanghai? Working off their share of the national debt in Iceland?

      The capitalist system, the market economy and the hegemony of liberal democracy is a dog which has certainly had it’s day. Socialist revolutions notwithstanding, it was capitalism and multinational capitalist enterprises backed by the forbidding military power of the US government that were the dominant forces of the 20th century. It strains credulity to attempt to claim that the root cause of these conditions has been not enough capitalism.

      Clearly the history of the 20th century has shown that social development can be accelerated by the concentrated employment of managed social capital. I am not speaking about the political forms here. [I have been a lifelong critic of Stalinism and I have never been a registered Democrat either] There are examples which range from the Tennessee Valley Authority and the GI bill, a simple but broad market intervention, to the Marshall Plan, to the development of core infrastructure as a precondition for market expansion in China, Vietnam, India and the Soviet Union/Russia.

      What history seems to show is that effective economic growth is brought about by an interplay of concentrated well managed social capital with entrepreneurial zeal and the creative energy of individuals. National economies are successful when these forces are brought together effectively and fail miserably in the absence of all components.

      But let’s dig a little deeper and consider the social cost of unemployment of hundreds of millions of people on a world scale, consider the dominance of piracy in Somalia, the Opium Trade in Afghanistan, the drug wars in Mexico and Columbia. Child labor and sexual exploitation the world over.

      The most extraordinarily wasted resource in present world society is that of human labor, intellect and creativity. This is the core failure of the capitalist system as it stands today. Despite the creation of adequate resources to provide decent housing, food, education, and, I would argue, employment to virtually all humanity the present condition denies basic human decency to nearly a third of the world’s population.

      Walras indeed! The useful object of economic study should not be the satisfactory balancing of an equation but the real satisfaction of basic human needs and the derivation for society of all that can be offered by each individual.

  2. And never in the history of humanity have so many–as a proportion of the population–had the satisfaction of basic human needs. No, the proletariat, the working poor, the non-capital owners, the what-have-you are not vacationing in the Caribbean, but that should not be the standard. They are less destitute than in any other period of history. The deflationary effects of durable AND CONSUMPTION goods (forgive my caps, I cannot italicize) should not be so blithely dismissed. You correctly mention smartphones, but should also include the Dollar Menu. Yes 10 burgers a day will kill you, but $1 for a high-calorie meal could also keep you alive.
    You point to employment as a main indicator of failure of a market system. The classical literature (which I am sure you will discount) clearly points out the fallacy of this position. It is increases in productivity, not the ancillary employment, that drives increases in well-being. Does massive unemployment have harmful spillover effects?, yes. But make-work employment is raw destruction of productivity=welfare.
    It is curious that of the “successful” social-capital deploying nations you name, one has collapsed and the others have evolved away from state intervention. China is currently fairly confused on the state of their evolution, but if they will continue to grow, they will have to reject the power of SOEs.
    Perhaps it was a weak assumption to erase the effect of business cycles, but as a particularly poorly understood subject in the field of economics, I feel less confident expressing any opinion on their solution in order to decrease human suffering.

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