Critique of Late Social Reformism

Hassan Abbasi

Chapter Two

1. David Harvey and the Misguided Anti-Neoliberalism

What is proposed under the title of neoliberal policies of capitalist states by some critics of capitalist societies (not necessarily capital and capitalist production relations) are: the policy of privatization of state-owned capitalist institutions and companies (including institutions under the administration and control of the state as a centralized political institution of the ruling class, municipalities and local power institutions, as well as phenomena and what nature provides), the lack of control of the market, and the policy of deregulation of states.

In contrast, critics of neoliberal policies call for a fair distribution of income through the implementation of tax policies, the creation of levers of market control (financial capital, stock market, etc.) even at the global market level.

These are the headline-like titles of the issues that David Harvey, an English philosopher living in the United States, has evaluated and criticized in his book “A Brief History of Neoliberalism”.

The main reason why I have considered and criticized David Harvey and his criticism of the neoliberal policies of capitalist states among all these current theorists and reformists is that, firstly, unlike many thinkers, he is a practitioner and an active participant in some social movements and upheavals, so addressing his criticism of the social and productive relations of capital is important from a practical perspective. Secondly, the theory of neoliberalism and its criticism are of interest to those Iranian students who have roots in the working class and are generally young Iranian working-class people. In this respect, it is relevant to them and the entire Iranian working class.

For a long time, criticism of the neoliberal policies of the Iranian governments has been the headlines of newspapers, websites, and certain organs of the Iranian capitalist regime, and although Iranian workers do not pay attention to them, their criticism is important. In this review, the main focus is on David Harvey’s view in this regard, and although some aspects of his views on the roots of the crises of capitalism, imperialism, etc. may be touched upon in passing, I will leave the discussion in these areas to the review of his other books. The topics that Harvey addresses in his book are not closely related, but he connects them with his special method of seeing all capitalist phenomena from the perspective of neoliberal policy. Therefore, here I will start with the issues that he gives primary importance to.

A. David Harvey and the Utopia of Equal Income Distribution

Equal income distribution (or unfair income distribution as he sometimes calls it) is a theme that runs through almost the entire book and is the answer to many of the social questions and issues he raises. In the chapter “The Other World of Freedom” of his book, he writes, “In the United States, the share of the top one percent of national income holders fell from over 16 percent before the war to less than 8 percent at the end of the war, and remained close to where it was about three decades earlier.” Before discussing this, it is worth hearing the theoretical basis for such an inference from Harvey himself. A few lines below, he formulates his theory as follows: “It seemed that when growth was high, the upper classes were not restricted in obtaining a larger share of the national income, and that having a fixed share of the national income was not a problem. But when the growth of accumulation collapsed in the 1970s, real interest rates became negative, and low incomes and small stock profits became the norm, then the upper classes everywhere felt threatened. First, Harvey, like other theorists of popular economics, has a very absurd understanding of wealth, income, and capital. He does not understand that savings and wealth in general do not enter the cycle of capital production until they enter the cycle of capital production, because individual property is not considered capital, and capital has no practical role in any area of ​​capital advance. Harvey, like Thomas Piketty, does not understand that there is a big difference between the two, and that there is no direct relationship between the decline in savings and real estate of individuals and the profit of capital and the decline in the rate of profit, and that one cannot even infer the decline in income from the decline in capital accumulation. He writes, “The evidence clearly shows that the neoliberal turn is somehow and to some extent connected with the revival or reconstruction of the power of economic elites. We can therefore interpret neo liberalization as an imaginary project to realize a theoretical plan for the reorganization of international capitalism or as a political project to reestablish the conditions of capital accumulation and restore the power of economic elites. In what follows, I will argue that in practice the second goal, namely the restoration of the power of economic elites, has prevailed. Neo liberalization has not been very effective in reviving global capital accumulation, but it has been quite remarkably successful in reviving, or in some cases creating, the power of economic elites.” Page 30, Chapter 1 of the book. The example Harvey gives here means that the growth of capital accumulation in America and much of the world of capital over a 40-year period (mainly from 1970 to the present) not only stopped but also declined!! This thesis Harvey makes clear throughout the book and especially in this chapter is the core of his argument regarding the causes of the emergence of neoliberal policy. And this is not only inconsistent with reality, but even when the value of stocks, real estate and savings falls, it can be proportional to their falling prices, and this does not at all show us that the rich Americans have become poorer over the past four decades. The fall in prices, stock markets, and such changes that occur daily are not factors that only concern capitalists but include both social classes. Moreover, these changes are never one-sided in the long run. They may fall for a long time and then rise again in a short or long period. Just like the picture that Harvey creates, the entire period of the 1920s until the 1929 crisis of capitalism in America was a period called (The Roaring Twenties) or the boom period of the twenties. What happened during and after the crisis caused the misery of the working class, poverty, hunger and unemployment of millions all over the world, and American workers were not left out. The fact that during this period the decline and cessation of production in all areas of industry caused the loss of huge capital, but as we know, American capitalism gradually entered a period of prosperity in the early 1930s, and the wheel of production and accumulation of capital, especially in this country, accelerated to such an extent that the added values ​​​​of the working class of this country caused such greatness that it made America the largest economy in the world. Harvey pretends that the goal of capitalism is not the production of capital, but the creation of income and its distribution. Thus, in his world, the accumulation of capital has become even more challenging with neoliberal policies. He is unable to see the new and constantly renewed forms of capital accumulation, from the transformation of forests into mass capital in a short time, from the commodification of all the world’s waters, from the transformation of every element and component of the earth’s atmosphere into a commodity, etc. Harvey does not consider the result of the work of the millions of women and children who work and produce for capital in their cramped homes and cellars like slaves and live on bread and crackers, thus reducing the costs of capital by billions of dollars, as capital accumulation. All Harvey means by the plan to “restore the power of the elite” through neoliberal policies is the acquisition of a larger share of income by a small part of the ruling class, and this is the only successful result of neoliberal policies. It is not without reason that David Harvey defends Thomas Piketty’s book “Capitalism in the Twenty-First Century”, which also focuses on the distribution of income in capitalist society, and says, “What Piketty shows statistically (and we are indebted to him and his friends for this) is that capital has always tended throughout its history to increase inequality.” He then explains to himself that Marx also belongs to the circle of social reformists who strive for a more equal distribution of income!! He writes, “In fact, this was precisely Marx’s conclusion in the first volume of Capital.” Harvey continues his profound understanding of Marx as follows: “What forces have created and maintained this contradiction (Harvey means the contradiction of income)?” Piketty does not answer this question… Marx, however, clearly attributed the existence of this law to the imbalance of power between capital and labour, and this explanation is still correct.  The steady decline in the share of wages in national income (a term used in capitalist practice to refer to the total value produced by workers) since the 1970s has been the result of the decline in the political and economic power of labour.” Secondly, Harvey, like Piketty, uses the term capital only as a term that is common today, otherwise for him there is no such thing as capitalist production and social relations, just as there is no such thing as a working class. He and Piketty view society on the basis that goods are produced by the partnership of labour and capital, and that income should be fairly distributed through state intervention and strategy. According to him, the entire battle that is going on is over this distribution. A few people called the 1 percent get a significant portion of income, and a majority called the 99 percent get a minimum. In the introduction to his book, Piketty claims that the world we observe is based on a competition to create wealth and that the distribution of this wealth tends to be unfairly unbalanced if not done by government intervention, and that history has only witnessed a decrease in the income of the 1% and an increase in the income of the 99% in exceptional circumstances such as war, and this is also the case with war and the destruction of capital!!. Piketty repeats this explanation many times in his book that “the sharp reduction in inequality that we observe in almost all rich countries between 1914 and 1945 was more than anything due to the two world wars and the violent economic and social upheavals that followed those wars (especially for the fortunate). This reduction had little to do with the slow process of class mobility as described by Kuznets.” In this childish argument, Piketty, like Harvey, compares the accumulated capital such as buildings, machinery, and goods that were destroyed during the two wars with the wages of workers during this period and concludes that income inequality decreased during this period!! Besides the fact that this comparison is incorrect and unreasonable and is like comparing apples and pears, these two fruits have only in common that they are fruits, during these wars those who were more unemployed, killed, their houses bombed and their meagre property burned and destroyed were the masses of tens of millions of workers. While the personal wealth of the capitalists, their antiques and gold and jewellery remained untouched, and their palaces were also in safe places and remained unharmed. Piketty looks at his numbers so arrogantly that he does not even ask himself how it is that while these tragedies are being committed against the wage-earning masses, it is still possible to talk about the level of incomes being balanced!! Apart from the fact that Piketty, in explaining the history of capitalism, argues that this system has always tended to have an unequal distribution of income, and Harvey, who limits this to the periods of neoliberal policy dominance, both of them, firstly, place the entire weight of their argument and analysis on confusing the categories of political economy, including income and capital (which I will address in the rest of this article on my behalf), and secondly, by relying on the levers of the state, even a global organization to control capital, they want to balance the income gap!! Harvey formulates the state control of capital and its role as follows on page twenty of his book: “After World War II, various types of democratic socialist, Christian democratic, and states with controlled and centralized economic planning systems emerged in Europe. The United States itself turned to a liberal democratic state, and Japan, under the strict supervision of the United States, created an apparently democratic, but in practice highly bureaucratic, state in order to oversee the reconstruction of the country. What all these different forms of government had in common was the acceptance that the government should focus on full employment, economic growth, and the well-being of its citizens, and that to achieve these goals, government power should be exercised without restraint alongside the market, intervening in it or even replacing it if necessary. Fiscal and monetary policies, commonly called Keynesian policies, were widely used to reduce business restructuring and ensure acceptable full employment. In addition, a class compromise between labour and capital was generally advocated as the main guarantor of domestic peace and tranquillity. According to Harvey, it is enough for the capitalist state, as a class state, to write social welfare, balanced distribution of income, full employment, and the like in its program to suddenly transform capitalist society and its production relations into a goal not for capital production but for the welfare of the working masses and a goal for itself. Do you know a state that claims otherwise?!! But income differences are not specific to capitalism and recent human history and are not limited to it. The expressions surrounding such social divisions are unable to explain any social relationship, neither the obsolete production relations nor the capitalist production relations. All of these pretend to be the same relationship as a cause-and-effect relationship. The entire logic of both revolves around this explanation that the implementation of neoliberal policy leads to an increase in the income gap and in order to reduce this gap, this policy must be abandoned, and income distribution must be controlled!! No more ridiculous criticism of capitalist production relations has been made so far. Harvey forgets that he bases his entire book on the same principles that he himself criticizes Piketty for. In addition, Harvey, like Piketty, does not see capital as a social and productive relation, but rather as a bunch of goods, money, real estate, factories, and things in general. He sees trees but not the forest, he sees individuals and wealth but not the social relations that create them. Although Harvey repeats Marx’s statement to Piketty about capital, which is not a collection of these objects but a specific social relation of production that leads to the reproduction of a specific class form, he himself sees only individuals, capital, and components. These objects, means of production, and goods, in the form of production relations and working conditions, become an independent force in relation to their producers (workers), which even determine the fate of their owners. The third point that is important to mention is the image of capital that Harvey tries to create in the minds of workers, which is that capital, like labour, produces value. This is not due to his ignorance, because he claims to be well versed in Marx’s writings, and it is precisely for this reason and on the basis of this claim that his demagoguery is much more dangerous than that of Thomas Piketty. Harvey knows very well that capital is a means of producing surplus value and ultimately profit, but capital, unlike labour, which reproduces itself and produces its own conditions of survival, wants to be as dependent on labour as possible. Therefore, in the process of reproduction, it constantly increases the productivity of labour, reduces its dependence on labour power, and increases the tendency of capital to acquire relative surplus value rather than absolute surplus value (by increasing the length of the working day). This makes it seem that it is capital, rather than labour power, that produces surplus value. This complexity and mystification of the relationship between labour and capital in the production process forms the basis of all the views of those who demand a normal and fair share between labour and capital. In the preface to the third volume of Capital, Engels summarizes the true face of these neo-capitalist saviours of capitalism in a good way, criticizing the views of the German social democratic economist Conrad Schmitt, after sufficient explanation, as follows: “Schmitt says that the industrial capitalist obtains with his product, firstly, in exchange for the capital he has advanced, and secondly, a surplus product for which he has not paid anything… Since, according to the law of value, products are exchanged with each other in proportion to the socially necessary labour expended in their production, and since for the capitalist the labour necessary to create his surplus product is precisely the past labour accumulated in his capital, it follows that the surplus products are exchanged in proportion to the capitals necessary for their production, but not in proportion to the labour actually embodied in them.” Then Engels criticizes Schmitt’s view as follows: “This is an extremely clever construction that is built entirely according to the Hegelian model, but what it has in common with most of Hegel’s ideas is its falsity. The surplus product and the paid product are not different. If the law of value is to apply directly to average prices, then both must be sold in proportion to the socially necessary labour expended on them. The law of value is based on the theory, carried over from the capitalist mode of thought, according to which accumulated past labour, that is, the labour from which capital is composed, is not merely a mass of ready-made and paid-in value, but, as a factor of production and profit-making, is also value-creating and therefore the source of the production of more value than it has of itself. The law of value states that this characteristic is only due to that labour. It is well known that capitalists expect to make a profit in proportion to the size of their capital and therefore regard their capital as a kind of cost price of their profit… Either accumulated labour creates value alongside living labour, in which case the law of value is invalid. Or accumulated labour does not create value, in which case Schmitt’s argument contradicts the law of value.” This is where Harvey and Piketty’s equitable distribution of income comes from. They pretend to be the founders of a vulgar socialism that demands an equitable distribution of income between labour and capital on the basis of the value creation of both dead and living labour, while they are not even innovative in this regard. The comic point in the criticism of these two on capitalist society is that one says he has not read any of Marx’s works and the other considers himself a Marxist of the century and pretends to teach Capital to students!! Harvey uses Marx’s name as a poster in a shameful and irrelevant way, and only for the sake of a hot market and becoming famous. Capital is dead labour and never creates new value on its own and only creates surplus value through living labour. Labor is the producer of all values ​​in capitalist society and for this reason, in its class struggle against capital, it demands the abolition of wage labour. For this reason, we say to Harvey and his ilk that if you really intend to eliminate inequalities and are against the concentration of wealth in the hands of a few and economic inequality bothers you, how can the distribution of wealth prevent the process of wealth production, which is the basis of capitalist production relations and the creation of wealth for a few? Why shouldn’t all production fall into the hands of direct producers and they become masters of their own destiny by abolishing wage labour? If you are not a demagogue and want real, not mysterious, justice in social relations, if you do not strive for the survival of capital and its survival in any way, then why do you not want the destruction of the wage labour system, which is the basis for the production of wealth by the majority of the wage-working mass for the insignificant, parasitic, and unemployed minority of society? It is interesting that Harvey attributes the growth of income inequality, that is, a small part of the class conflict that is not at all characteristic of capitalist production relations and can include all of human history based on class division, to neoliberal policy!! On page 31 of his book, David Harvey, by listing the salaries and benefits of top managers of capitalist companies and institutions in America, is so immersed in his theories that he does not realize that by addressing the insignificant part of the personal income of managers and capitalists compared to what workers add to the mountain of capital accumulations in the form of profit through their unpaid labour throughout the year, he hides the true nature of capitalist production relations from the workers’ eyes and pretends that the struggle of the working class is for a fair distribution of income and not the overthrow of the basis of relations that reproduce, on the one hand, the mass accumulation of capital and, on the other, the constant need of workers for daily wages. For Harvey, the existence of such relations is obvious and certain. For him and his ilk, there is no other type of society than the continuation of capital and the process of its reproduction. Only the workers must be paid a fairer wage!! There must be a system of social assistance and services to humanize the face of capital and thus ensure the survival of capital.  The author proposes that “neoliberalism is a political project to reestablish the conditions for capital accumulation and restore the power of economic elites. In what follows, I will argue that in practice the second goal, namely the restoration of the power of economic elites, has prevailed. Neo liberalization has not been very effective in reviving global capital accumulation, but it has been quite remarkably successful in restoring the power of economic elites.” He pretends that before this policy was implemented, capital did not accumulate and that there was no ruling class. The author has a limited understanding of capital and the process of its reproduction and therefore separates the accumulation of capital from capital itself and its related policies. He fails to understand that the production of capital by labour is the primary purpose of capital and that the self-interest of capitalists, as the human manifestation of capital, is secondary to the process of capital reproduction and its relations of production. It is capital that must be constantly reproduced in ever greater numbers. Different capitalists and owners of capital come and go, and its ownership also changes, but what remains is capital and the process of its reproduction. How much income managers and, as Harvey puts it, the economic elites have and can have depends on the existence of production relations that generate profits from the unpaid labour of workers, which primarily lead to the accumulation of capital, and along with that, the elites achieve a luxurious life. Moreover, the prosperous and luxurious life of the ruling class has always existed since the time classes existed, and it is only the emergence of capitalist production relations that has elevated production in society to another level other than personal consumption and the prosperous life of the ruling classes, and that is the production of capital itself. In justifying the emergence of neoliberal political theory, the author considers financial support from institutions and wealthy individuals to be a surprising and newly emerging issue. Harvey imagines that the doctrines and political-economic theories of the bourgeoisie are formed in the neutral territory of research institutes and fails to understand that the ruling culture in all its aspects has always been and will always be the culture of the ruling class, and that there is no neutral ground. In his research, he imagines that he has made new discoveries, as if it were supposed that the world’s think tanks and brain engineering institutions, which today number 3,000 thought factories (the result of a study by the University of Pennsylvania in its tenth report on this subject in February 2017, the United States with 1,835, China with 435, and Germany with 195 are the most extensive and organized capitals in the field of thought-making), are striving for a bright future and a prosperous life for the working class.!! He continues, “Neoliberal theory gained credibility and prestige by awarding the Nobel Prize in Economics to Hayek in 1974 and to Friedman in 1976. Although this special prize had the aura of Nobel, it had nothing to do with other Nobel prizes and was under the strict control of the Swedish banking elite.” The author, who is captive to super-class views in his academic circle and room, is unable to understand the simple fact that the Nobel Prizes, just like the Oscars in the movie, are awards that the ruling class distributes among its elites and are not supposed to, and that Alfred Nobel did not intend to award the world proletariat in this regard, and the economics prize is always awarded by the Swedish Capital Central Bank. It is true that Sweden is considered a utopia from Harvey’s point of view, but here too capital and the wage labour system prevail.

If the working class had been encouraged to take a common front with a part of the ruling class against finance capital, monopolies and, in short, what was called imperialism, the anti-capitalist struggle against wage labour should have been forgotten and turned into a supporting force for one part of the bourgeoisie against another. If this bourgeois trick was used as a tactic by the social democratic parties, parties and groups inclined to the Soviet camp and guerrilla militants to divert the labour movement from anti-capitalism until the 1990s, now the same trick of lining up the workers in favour of one bourgeois policy against another is the order of the day. The old-style anti-imperialist tactic has lost its usefulness. Therefore, the representatives of social reformism have resorted to a new trick. This time not by the trick of siding with one faction of the capitalist class against another, but in the disgusting and disgusting way of following one bourgeois policy against another. Yes, now social reformism has become an official bourgeois movement in vulgar parliamentary bargaining over tax and financial policies, blocs based on the conditions of the day with this or that faction of capital, and it demands that workers play an active role in these blocs. If until now the struggle against financial monopolies was dependent on a specific and fixed bloc within the framework of parliamentary struggles, now the changing policies of each politician from this or that capital-oriented bloc is becoming parliamentary farces. This means that today the workers will line up against the policies of the Democrat Jimmy Carter and against his “economic deregulation policy” and tomorrow against the “tax system” of the Republican and Conservative Ronald Reagan. Workers today are rallying against the monetary policy of the Carter administration because it was important for his administration to combat inflation during the crisis of the 1970s. In this regard, the Rafsanjani and Khatami governments in Iran followed neoliberal policies, while the Mahmoud Ahmadinejad government, with its computer policy, slandered bourgeois reformists such as Hugo Chavez and David Harvey, to the point that water flowed from their pockets. During the latter’s period, the growth rate of individual and private capital reached such proportions that there is still not a day when the amount of this capital does not make the headlines of Iranian bourgeois newspapers and does not set new records. Incidentally, after the departure of Chavez and Ahmadinejad, and precisely because of their populist policies, the capitalist regime in these two countries suffered such distress and disaster that these policies were immediately dissolved.  What Harvey fails to understand is that in the turbulent times of the last few decades, which are still continuing with increasing intensity, especially after the global capital crisis of 2008-2009, all policymakers, governments, and intellectual and political institutes of the ruling class of all factions and factions must follow a policy to reverse and reduce the fall in the rate of profit, the lag of the process of surplus value production behind the process of increasing capital accumulation, while simultaneously increasing labour productivity as astronomically as possible and reducing wages. Labor productivity in the United States increased by 60 percent over 40 years, while real wages of workers (1960 to 2000), wages minus the inflation rate, fell by 30 percent over the last thirty years of this period.

The above diagram is taken from the book A Brief History of Neoliberalism by David Harvey.

This was the most important achievement of the various American governments for the total social capital of this period. Now, how this reduction in real wages was able to prevent the progress of the falling rate of profit, the outcome of the next crisis and the continuous challenge of capitalism showed the extent of its impact. Given the continuous increase in labour productivity and mass production to compensate for the decline in the production of relative surplus value, the next crisis of capitalism, the crisis of 2008-2009, broke out with greater intensity and crushing. During this same 40-year period, bourgeois reformist parties, under the banner of fighting neoliberalism and the tax policies of one or another faction of the ruling class, especially in the United States and England, lined up the working class in support of this or that faction of capital. Continuing his discussion and arguing for the adequacy and effectiveness of the fair distribution of income, Harvey turns to his own utopia of Sweden and its history of social democracy as historical evidence of the control of capital. Harvey repeatedly proposes a model that is the basis of the policies of most social reformist parties in post-war Europe. Therefore, I will provide explanations about this model here based on historical evidence. This model (Rehn-Meidner model) is an economic policy that was proposed by two economists of the Swedish Trade Union in the late 1940s and approved by the congress of the union in 1951. This model is based on Keynes’s theory and requires active government participation. The Rehn-Meidner model, which influenced almost the entire post-war period in Europe, is based on direct and effective cooperation between the leaders of the General Workers’ Union and the Capitalists’ Union, and its most important task has been to solve the problems of wages and benefits of workers, increase the efficiency of work and profits of companies, and even increase their competitiveness at the international level. The leaders of the trade unions participate in the annual joint meetings of the two unions to prevent any disputes, the possibility of strikes, and any unilateral actions by the workers. Throughout the post-war period, the leaders of the General Workers’ Union have had the opportunity to participate in the meetings of the boards of directors of Swedish factories and capital institutions. It can be said with confidence that under the influence of this policy and model, which was, of course, prepared and implemented under the supervision and leadership of the capitalist state, which was mostly social democratic, the working-class movement in Sweden and even Europe has become what we see today. It has become such a barren wasteland that no movement can breathe without the permission of the degenerate labour unions. Under the influence of these policies, the workers in Sweden and even in all of Europe have sold not only all the conditions of their daily life of struggle but also their future to the leaders of the unions and have retreated so far in their retreats that not only have they gradually surrendered all the achievements of the struggles of the last century to capital at a cheap price, but that only a name remains of the welfare state and they are satisfied and content with the morsels of bread that the capitalists throw in front of them.

In this process, the European working class has become so disintegrated, scattered, incapable of any independent movement and helpless, and has lost its class spirit and historical pride that it easily follows fascist and racist movements, groups and parties here and there against its own class. In compliance with and as a result of this policy, the profits of Swedish capitalist companies and institutions have increased, and the competitive power of this country’s social capital has increased at the international level, which has been sharply evaluated by other capitalist states in Europe, and has been placed on the agenda of some of the most important European economies, including Germany, as a successful program. Harvey continues, “The communist and socialist parties were not seizing power (in this Harvey is completely wrong, since the Swedish Social Democratic Party was the only political force that had firmly seized power after the war, and even its sister party in Germany, although in the form of alliances with other parties, held power for various and sometimes long periods after the war) but they were advancing, and popular forces in most European countries and even the United States were fighting for sweeping reforms and government intervention.”

In this situation, there was a clear political threat to the economic elites (this is the title that Harvey uses for the capitalist class, and his aim in doing so was to limit this class to a handful of technocrats and managers of capitalist institutions) and the ruling classes, both in the advanced capitalist countries and in many developing countries. For example, in Sweden, the so-called Renn-Meidner plan literally proposed the gradual purchase of shares from company owners and the transformation of the country into a democracy based on the rule of the shares by the workers (Glory to the Creator!!). But apart from this, the economic threat to the position of the elites and the ruling classes was now a tangible threat. One of the conditions of the post-war agreement, in almost all countries, was that the economic power of the upper classes be limited and a greater share of the economic gains be allocated to the workers. First of all, this is a history that has only been created and elaborated in the imagination of the Haveri. Nowhere and at no point in time, before or after the war, has such an agreement been made between any bloc of capital, between any government of capital and the masses of workers, and even the trade unions. On the contrary, all the efforts of capital and its governments have been and are to shift all the costs of the war onto the masses of workers. What the Swedish Social Democracy pursued and achieved so well and became a model for other European countries was to open the door to the labour movement with a small increase in wages at the end of the year, which should be below the increase in prices (the inflation rate) of the year. That is, on condition that the Swedish workers increase the rate of increase in the profits of capitalist enterprises to such an extent that a small percentage of it will cover this increase. The rest of the story that Harvey mentions about the gradual purchase of shares in the owners of capitalist enterprises by the workers is his own cheapness, because this is a big lie that only he has woven and for which he himself is responsible. The result of such an agreement between the leaders of the trade unions and the union of capitalists and the capital state, as mentioned earlier, was the cheap sale of the working class and all the rights and powers that it had acquired throughout history, including the right to strike, the right to determine wages and any threats from the capital state. It is only the leaders of the trade unions who, having acquired class privileges, have a limited involvement in determining wages. And this was nothing but the complete surrender of the Swedish working class to the laws of capital and the unquestioning execution of its orders conveyed to the leaders of the unions. What was the main focus of wage determination during this period in Sweden, and what social democracy was so proud of, was real wages, which were nominal wages minus the inflation rate (price increases) over a limited period. To clarify these categories and to untie the hand of capital’s deceit from the knowledge of these categories, refer to Nasser Paydar’s article written in this context. Thus, we see that, contrary to what David Harvey depicts, it is not incomes that are subject to changes in wage policies, but in the best of circumstances, a small part of the burden of capital accumulation that causes prices to rise (according to bourgeois economists, the inflation rate) is distributed among different incomes. The only important point that Harvey mentions in the first chapter of his book is the decline in real wages of American workers over 40 years, accompanied by high growth in labour productivity, which I mentioned earlier. However, here too, Harvey is immersed in his bourgeois reformist critiques of capitalism based on what he calls the onslaught of the neoliberal monetary policies of the US Federal Reserve Chairman Volcker and the free market policies of Ronald Reagan on wages. And he presents these issues in such a way that if such decisions were not made, capitalism would be a paradise for the American working class. He is so fascinated by Keynesian monetary and fiscal policies (the tax and monetary policies of the capital state) that he sees these policies as “aimed at creating full employment.” He considers the Federal Reserve’s play with interest rates in the early 1980s to be historic and the main reason for the decline in real wages. Like all bourgeois thinkers, Harvey sees the process of capital production, which is based on increasing labour productivity, reducing the role of labour in the production process, and reducing wages to stop the decline in the rate of profit, as the result of the actions of politicians and technocrats, who in his view are the creators of history. In other words, it is not the requirements and compulsions of capital that compel politicians to adopt a certain policy, but in his limited world, the opposite is true: it is these politicians and technocrats who, with their scythes, have caused workers’ wages to decrease. Reducing wages, even increasing and lengthening the length of the working day, despite the fact that the main path of capital growth is to increase labour productivity (and this trend has been growing since the late decades of the 19th century), is still used to reduce the destructive effects of the trend of decreasing capital’s rate of profit and postponing crises, and is practiced intensively throughout the world of capital. The billion-strong masses of workers in China, India, Bangladesh, Brazil and many other parts of the capitalist world are engaged in the production of capital in conditions of drudgery and endless working hours, and even in the paradise of capital, America, a significant part of the workers are rarely able to meet their daily needs and those of their families with long overtime and sometimes two jobs a day. In none of these vast places has any capitalist or government dictated that the daily working hours and wages should be this or that. The masses of Chinese, Indian and Iranian workers continue to work as wage slaves despite their protests and strikes against the lack of wages and the failure to receive wages for months. In addition, the progress in the productivity of labour, which appears in the form of greater accumulation of productive capital, is accompanied by a reduction in that part of capital that is devoted to wages. This in turn leads to a shortening of the necessary working time that is necessary for the renewal of the labour force and a shortening of the necessary working time, which means an increase in surplus labour that is converted into greater profits. Also, an ever-increasing mass of fixed capital that is set in motion by an ever-increasing number of workers. But despite this development of capitalism and the increase in the productivity of labour, it reduces the rate of profit. Marx says in Volume III of Capital, Chapter 13, “In the stage of development of the process of production and accumulation, the volume of surplus labour becomes appropriated and appropriated, and consequently the absolute value of the profit appropriated by social capital must grow. But the same laws of production and accumulation, together with the volume, increase the value of constant capital with an increasing exponential rate, faster than the part of variable capital that is exchanged for living labour. These same laws create an absolutely growing amount of profit and a falling rate of profit on social capital. Marx speaks of the compulsion to grow the absolute amount of profit, and in this regard, it is clear that no politician and technocrat of capital can ignore it, and then David Harvey, Thomas Piketty and others talk about choosing a path for the challenges of capital. Marx shows that the goal of capital is capital itself, and not the distribution of wealth or even the increase in the income (consumption) of the capitalist. Marx says in the same chapter, “The real limitation of capitalist production is capital itself, which is: capital and its valorisation appear as the origin, destination, motive and purpose of production, production is only production for capital and not vice versa, that is, the means of production are not simply a means to shape the broad life process for the society of producers.” Harvey and his associates are burning in the fever of unequal distribution of income, distribution of wealth, and capital complains about the lack of profit for accumulation. Which of these two is real and which are fantasies and illusions? Capital knows well that a certain method of production leads to a certain distribution, but Harvey and his like-minded people want the capital and wage system intact and are in the fever of another distribution!! But the fact is that Harvey knows what he is talking about, which is why he is a demagogue who, with his own intention of saying that capitalism and wage is good, only needs to go to a quixotic war of souls and warm the heads of the workers by replacing one faction of capital with another. Thomas Piketty is more straightforward than David Harvey. He says, “Is it possible to imagine a 21st century in which capitalism will excel in a more peaceful and lasting way?” Harvey and Piketty’s approach and practice in that they consider one of the challenges of capitalism to be the unfair distribution of income and the prescription they make for it is the tax system of the capital state, is not a new approach and approach.

This method was proposed by many classical bourgeois elites such as Jean-Pierre Proudhon (a French economist and imaginary socialist) more than 170 years ago. Marx explained it with his historical criticism in his book “The Poverty of Philosophy”, and we recommend reading it to workers to better understand the issues raised here. In the continuation of this discussion, we will first mention some essential points from the foundations of bourgeois political economy in order to clarify the issues.

Wages or income in capitalist production relations are not something that the capitalist pays from his own pocket or from capital (although this is called variable capital in political economy), but rather the worker materializes it while producing the entire daily work. When the worker produces goods during the day, he also hides the value of his labour in it and thus reproduces the price of his labour. For this reason, this part is called the paid part of labour or the necessary part because it is necessary for the reproduction of labour power. The rest of the daily work, which is in excess of this necessary work, is surplus work and is not paid for by the capitalist to the worker. If we extend the scope of production to one year, the value of the total annual product that the labour has produced during this period and materialized in the annual product is equal to the value of the variable capital plus the surplus value, i.e. wages and profit. The wages of the workers are spent on the purchase of the necessaries of life, so this returns to the capitalists in the form of variable capital plus the profit that is deposited in the pockets of the capitalists on the goods sold (here the entire social labour force and social capital are considered and not individual capitalists). A significant part of the surplus value (profit) is used to create additional capital, and a very small part of it reaches the individual consumption of the capitalists, which suffers the same fate as the consumption of the workers, that is, it is ultimately deposited in the pockets of the capitalists in the form of profit. The conventional form of profit is the average social profit, and wages are equal to the value of labour power. Thus, the total average social profit is equal to the value of the total surplus value produced by labour power. All this is before the process of distributing the profit among the various parts of social capital, because before it is distributed in the form of surplus value, it has been produced by the workers as surplus labour. This is true even when the productivity of labour power, due to continuous changes, constantly changes the amount of labour socially necessary for each unit of commodity. These are all matters that are clear and obvious to every worker, but the purpose of repeating them here is to untie the wrists of such impostors as Harvey and Piketty who pretend that there is only one function and one factor of profit creation in capitalism, and that is capital itself. Whereas the reality of our workers’ day shows the opposite: only labour power creates and constructs surplus value, and capital in the form of a commodity is not an active and value-creating force and is only transferred to the commodity by labour power. In fact, the total value of the annual product includes constant capital, which must be replaced, surplus value, which is manifested in the form of profit and from which the capitalists’ income is deducted, and variable capital, which is the same as wages, which is constantly replaced by the workers themselves.

What distinguishes constant capital from other components of the product is that this part is not consumed as income, but the other part, namely profit and wages, is consumed as income. Profit is unpaid labour, and wages are paid labour that returns to the capitalist as variable capital when consumed, is exchanged again with labour power, and returns again to capital through the sale of commodity to workers. Therefore, we must see the capitalist relations of production as they are, that is, a living and constantly evolving process. The basic condition of capitalist relations of production is its constant reproduction. In this process, the conditions of production do not remain the same, but capital always tries to reduce the minimum it pays to workers and force them to return to work again. This is the condition of capitalist reproduction, that is, capital provides the conditions for its own reproduction, not that an external force forces it to do so. According to the definitions of the political economy of capitalism, the gross income of a capitalist and even the entire social capital is called gross income, which includes wages and profits (while the consumed part of fixed capital is returned by the sale commodity). In the dictionary of capital, net income includes only profit, while national income, i.e. gross income, includes wages and profits. Here, as can be seen, bourgeois political economy finds itself in a complex confusion, which is used by David Harvey and Thomas Piketty. Both of them look at the problem from the perspective of an individual capitalist, whereas if they were to look at the total social capital and consequently at the total goods produced in a year, then this would be divided into the profit of capital (the total surplus value produced in a year) and wages, and the constant capital consumed would be reflected in the value of the goods in the form of value. The solution to this problem is not possible except by looking at the total social capital and the reproduction of capital. That is, all the valuable components of the goods must be viewed in the total social production and its reproduction. If the process of capitalist reproduction is not viewed in this way, it will lead to a failure to understand the process of producing new value and preserving old values. Annual surplus labour creates capital through accumulation, and income, or in fact the surplus value that the worker produces, is transformed into capital and income. The transformation of profit into capital, and especially constant capital, is the main process of capitalist production relations and is in fact a small part of profit that reaches the personal (passive) consumption of the capitalists. In fact, it is surplus value that is transformed from one form to another, and it is these commodities and their values ​​that constitute capital. Here, not only are the sources of income of the worker and the capitalist different, but their changes are in completely opposite directions. When wages and their limits are regulated by the physical and natural limit and as mentioned, by the fixed amount of the worker’s means of subsistence to compensate for labour power, and this is manifested in a fixed number of commodities. This is while generally the value of these commodities, which is determined by the duration of socially necessary labour, decreases due to the increase in the productivity of labour. This in turn reduces the necessary labour time in favour of surplus labour and consequently increases the quantity of unpaid labour in the same proportion. On the other hand, the real value of labour-power is directly proportional to the stage of social development. With social development new wants arise which gradually become the necessities of life for the workers. Against these limitations of the value of labour-power is placed surplus-value, which is the income of the capitalist. The limit of this is determined by the unpaid labour which the same worker, whose minimum needs are determined by wages, must produce to the maximum of his physical and mental strength. This surplus-value increases in quantity even when the productivity of labour rises and the fixed capital requires less labour-power. The surplus value thus converted into profit corresponds in absolute value to the surplus value itself. Although the rate of profit (the ratio of the total surplus value to the total social capital in production) is constantly decreasing due to the increase in fixed capital and the decrease in the labour force used for each unit of goods, the capitalists enjoy a greater amount of profit. In this way, in fact, what “fair distribution of income” do Harvey and Piketty speak of? All the power of capital has been and is being used in the opposite direction between necessary and surplus labour, wages and surplus value, and to the detriment of the former throughout the history of capitalism. This is due to the necessity and need of capital to reproduce itself and increase accumulation. Capital, by virtue of its own need, constantly reduces the minimum subsistence level of workers. The determination of the necessary price of labour is determined by the worker’s necessary means of subsistence. Even the market does not determine this price, except that it determines its fluctuations, and this is not determined even in the competition between workers and through the supply and demand for labour. In fact, the demand for labour arises from the need for capital and its supply. But on the other hand, capital is in the form of commodities, and some of these commodities meet the need for the reconstruction of labour. Thus, it is not the competition and supply and demand for labour, but the relationship and proportion of capital and labour that lays the foundation of wages. The price of labour is determined before the products of labour are offered to the market and when capital is advanced. It is possible that in individual production, and especially in newly employed capital, high or low rates of wages may be determined in a given area, but we are talking about social capital and not individual capital. The price of labour is not determined in competition with profit or surplus value, because the latter is a function of the capital advanced and the productivity of labour. The average price of labour is therefore not determined by any of these components except the price of production of the workers’ own means of subsistence. Similarly, the average profit is not determined by competition between capitals, because the prerequisite for this competition is the existence of profit, and competition only balances the fluctuations of profit, the different profits of different capitals. Competition does not create these profits but regulates the proportion between them. The share of each capital in the average profit is also determined on the basis of the amount of capital and the productivity of labour. The question is how and why Harvey and Piketty ignore all this. This is not due to their ignorance, but is rooted in their class situation, their position in the capitalist relations of production, and the task of justifying this system that they have undertaken. Both of them, within the framework of this system and for its survival, want to reset and straighten things out and economic equilibrium between the classes to ensure its survival. All that Harvey brings under the name of neoliberalism is not necessarily external reality, but is partly a fabrication of his own mind, in order to tell us that the framework, the basin of the class struggle and what the workers (although he does not mention this class anywhere in his book) should fight around is fair wages. Fair wages and living conditions in which one can survive are the only goal of the workers. According to him, the working class not only does not need to fight against wage labour and its abolition, the overthrow of capitalism and the establishment of workers’ councils and communist society but has not done so yet. According to him, the working class in the trade unions led by socialists and their leaders has not done anything, and now all their achievements are being destroyed by neoliberal policies!! The conclusion that Harvey draws in this regard is also quite clear. The creation of a tax system by the controlling organ of capital (the state of capital) and a fair distribution of income.

Harvey and Piketty know very well that the struggle of the working class has always been against wage labour and fundamentally anti-capitalism, and this has been shown by the history of this class from the beginning, several hundred years ago. Therefore, it is their grave duty to shift the attention of the working class from the production of goods and capital profits to their circulation, i.e., sale, i.e., distribution of income. We know very well that circulation and sale cannot distribute what they themselves have not created. This is not the first time in the history of capitalism that intellectuals, and especially its low-level economists, have tried to stop the movement of the working class in the struggle to abolish wage labour and overthrow capitalism, with reformist plans at the level where goods are distributed in order to preserve these relations. Harvey and Piketty both believe that capital and labour both participate in value creation and therefore fair distribution of income is natural and has an economic and social basis. The capitalist mode of production in the production process not only creates commodity but also recreates its own production relations, and in this regard, capital, which is one of its requirements, is considered both its result and its creator (i.e., the constant part of capital that is entered by labour in the production of new commodity values ​​is also a creator of value). However, in the process of value production, although capital is one of the requirements, it does not create any new value, it is only labour that creates value. This illusion begins from the point where the productivity of labour gives capital a new dimension in the formation of surplus value and, consequently, profit. But the method that Piketty and Harvey use in the fair distribution of income, as mentioned earlier, is very old. This method was proposed nearly 175 years ago by the American British socialist John Bray, whom Marx used in his critique of the egalitarian theories of Pierre Proudhon in The Poverty of Philosophy. The egalitarian views of Proudhon’s work are very similar to the studies of Harvey and Piketty, with the essential difference that, first, they were developed more than 170 years ago, when the bourgeoisie was not yet equipped with the weapons of today’s reformism, second, the industrial bourgeoisie had not yet reached the heights of capitalist development, and third, the working class had not yet experienced its own independent class struggles in the European revolutions and uprisings of 1848-1850, especially the Paris Commune. However, Marx’s criticism of Proudhon still has many instructive lessons for us in understanding the class origins of people like Harvey and Piketty. Marx writes: “We will content ourselves with giving the thread of discourse to an English communist, Mr. Bray. We will point out the main points of his remarkable work (The Misery of the Working Man and Its Remedy), published in Leeds, 1839, and will pause here for a while, partly because Mr. Bray remains unknown in France, and partly because we believe that in his book we have found the secret of Mr. Proudhon’s past, present, and future writings.” Then Marx continues with a long quotation of Bray’s system, which is based on the same process and principles that Harvey and Piketty have copied today, on page 64 (translated by Artin Arakel). “In response to Mr. Bray – who has reached Mr. Proudhon’s account without us and against our will – we have little to say except that Mr. Bray – who by no means claims to have the last word on humanity – has merely given criteria which he considers appropriate for the transition from modern society to the communal system.” Marx then proceeds to explain an example and thus lays the foundation for his critique of the Bray and Proudhon system. “If we take production itself as our point of departure and not the distribution of the products produced, we shall still arrive at the same conclusion. In large-scale industry, Peter does not have the freedom to determine the duration of his work himself, for Peter would be nothing without the cooperation of all the Peters and Pauls gathered in a workshop.” Marx then reminds Proudhon and his associates that “in principle it is not the exchange of products but the exchange of labour that brings about cooperation in production, and the manner in which the productive forces are exchanged determines the type of exchange of products. In general, the mode of exchange of products corresponds to the mode of production. If we change the mode of production, the result will be a change in the mode of exchange of products. Similarly, we observe that in the history of society, the mode of exchange of products is regulated according to their mode of production”.

After this discussion we enter into the subject that Harvey is so proud of, which is the condition of the European working class.

The discussion is not about what capital brings upon humanity, it turns everywhere and, in every field, it invests, it pours filth and blood from its pores. It sends millions of workers into the wasteland of unemployment, hunger and death from poverty, the working day becomes longer, wages are lower and the pressure of work increases, and even the livelihood and welfare facilities of those workers (mainly in Europe and America) who have had a little better than billions of other workers are subjected to the bloodbaths of capital. Capital is not satisfied with this, it turns the environment and work into a minefield that is soaked with various land, air and sea pollutants every day. All areas of life have become the unbridled invasion of capital, so that healthy air to breathe, food free from pests, clean and pure water and soil uncontaminated by chemicals have become rare. What David Harvey says in this regard is not far from the truth. Since bankrupt companies and institutions are withdrawn from the market during a crisis and their assets are swallowed up by the larger capitalist giants at a low price, and workers become unemployed in droves, so to speak, capital refines itself and quickly and temporarily falls into a path that can guarantee the development of capital accumulation by obtaining massive profits and achieving a favourable rate of profit for a while. It is about the type of method of criticism, analysis and practical guidelines that he chooses, which has no result other than camouflage of capital and its state in front of the class struggle of the proletariat.

Instead of criticizing and finding the root of income differences in the field of production, Harvey explores and seeks solutions in the field of distribution. If the workers of Europe and America had received at least a small share of the plunder of surplus values ​​from other capitalist countries and, as a result, the surplus profits that accrued to the capital of these countries, at least some time ago, the capitals of these countries today do not have the opportunity to breathe from the successive crises caused by the decline in capital profits, to even reproduce and circulate their capital, let alone respond to the demands of the workers. Harvey puts all this at the feet of neoliberal policy and pretends that this has not been the case until now and before 1970. The occasional invasion of capital into the minimum subsistence of workers in various phases of the growth of capital accumulation is a necessity of capital. Even if a part of the profit of capital can be channelled and paid to workers through tax policy, this lack of profit must be compensated from somewhere. Even if Harvey and Piketty are prophets of the time and try to dissuade capitalists from making profit with their promises, they will still not succeed in stopping capital as a social phenomenon from the process of reproduction and profit. Capital did not come into existence with a decision by a human being that it stops moving today through this same human being. When this phenomenon emerges and begins to manifest itself, there is no end to it except the end of capital, and this too is not made of anything except its opposite existence, that is, the owners of the business and the working class. In the third volume of Capital, Part III, Marx examines two factors in relation to the concept of “tendency to reduce the rate of profit” instead of “reduce the general rate of profit” and shows how these two counteract the reduction in the rate of profit.

Marx mentions the increase in the intensity of labour. He mentions the expansion of child and female labour, which plays an important role in the increase of relative surplus value. In addition, Marx speaks of “the reduction of wages below their value” as one of the most important causes that prevent the general rate of profit from falling. The relative surplus population or reserve army of unemployed workers, which today includes a large population in every capitalist country. Then he mentions “the increase in the capital of the common stock” and adds to this collection, which he later explains in detail in the final chapters of the third volume. Thus, Marx assigns four of the five factors that reduce the rate of profit to labour, and even refers to the fifth factor, “foreign trade,” in part in relation to labour, since it leads to “the cheapening of the necessaries of life.” All of this is related to the main factor of capitalist crises, namely the trend of the general rate of profit falling, which everyone tries to prevent or reduce its effects. As a result of the decline in the general rate of profit, the production of surplus value lags behind the trend of the increase in capital accumulation, a phenomenon that is expressed under another title as the rate of increase in capital accumulation surpasses the rate of growth of surplus value (beginning of Chapter 15 of Volume III of Capital). Marx says at the beginning of Chapter 13 of the same volume: “This production (the capitalist mode of production), by the increasing relative decrease of variable capital in relation to constant capital, creates more and more an organic composition of the surplus of total capital, and the immediate result is that with the degree of exploitation of labour remaining the same, and even with its increase, the rate of surplus value is expressed in a rate of profit that is constantly falling. Therefore, the gradual downward trend of the general rate of profit is just a specific expression of the capitalist production method regarding the progressive expansion of the social productivity of labour. Our intention is not to say that the rate of profit cannot decline temporarily due to other reasons, but with what was said and according to the nature of the capitalist mode of production, it was proved as an independent necessity that the average general rate of surplus value in the course of this mode of production must inevitably be reflected in the general rate of profit which tends to decline. Considering that the volume of living labour used continuously decreases compared to the volume of embodied labour that sets living labour in motion, that is, relative to the means of production that it productively consumes, then inevitably that part of living labour that is unpaid work and is embodied in surplus value must also be placed in a continuously decreasing ratio with the value of the total capital employed.

Now let us examine further factors that have a neutralizing effect on the decline in the general rate of profit. We have said these in Marx’s words in order to use them in the analysis of what happened after the Second Imperialist War to world capitalism, especially Europe and America. As we know, the war was also a kind of safety valve for capital, which was the continuation of capitalist policies but with other means, and that is the destruction of part of the accumulated capital in the same geographical expansion of capital. Investment in military fields is a way of bypassing crises and creating reserves of capital that have been wandering and fruitless in the market. The destruction of fixed capital during the Second World War in the form of buildings, machines and production institutions created an opportunity for new reserves of capital after the war, which resulted in a huge growth in labour productivity in the entire world of capital, including Europe, America and Japan. This growth stopped after a few decades for the reasons mentioned earlier, and its reflection was in the form of a permanent decline in the rate of profit and repeated crises of capital from the mid-1970s onwards, which are still ongoing. Harvey and other ordinary economists, without paying attention to the causes of these crises and focusing on the financial and monetary policies of the United States and England, especially in governments such as Reagan and Thatcher, examine those factors that, in addition to being superficial, are the effects of the crisis rather than its cause. Harvey and Piketty childishly divide the history of capitalism into successive periods of boom and bust, without addressing their roots and examining its economic factors. They say journalistically that after the boom, after the war, it was time for the bust!! This is like someone opening their mouths and saying nothing. It is easy for any child to say that there is an economic boom now but not know the reasons for it. Harvey considers one of the important reasons that caused the crises after 1975 to be the increase in debt of capital governments to the market. Another factor is the deflationary policies of governments and especially central banks. These factors are constantly and daily adopted by capitalist governments, which in turn are neither crisis-generating nor can they prevent the crisis from occurring. These policies, like all that Harvey calls neoliberalism, are tools that capitalist governments generally use when a crisis occurs and continues to occur to neutralize and reduce its effects on social capital, and they are all generally adopted to shift the burden of the crisis onto the working masses. As we saw earlier with Figure 6-1, which Harvey calls the effects of neoliberal policy on real wages (nominal wages minus the inflation rate), we saw how the enormous development of labour productivity over 40 years (1960 to 2000) by 60 percent coincided with a decrease in real wages over 25 years to 30 percent below the minimum that had been set (pages 38-39 of A Brief History of Neoliberalism). It is clear how high productivity, which reduces capital’s need for labour, is accompanied by falling wages, which counteract the decline in the general rate of profit. This trend is not unique to America, but rather to all of Western Europe after the war, when huge capitals were re-employed after the war and engaged in astronomical reproduction in new and old sectors, and all the state levers of capital were used to grow it, achieving such a rapid growth in productivity that a crisis became inevitable. Capital in these countries began to slaughter wages, by a factor of 17 between 1970 and 2000, according to the figures that Harvey gives in the first chapter of his book. Harvey says that the ratio of average worker wages to the wages of top executives (the managers responsible for capital planning, who are themselves part of the capitalist class) rose from a little over 30 to one in 1970 to almost 500 to one by 2000. We will not enter into this comparison and will only focus on the reduction of workers’ wages while the huge mass of surplus value they produce, a share of which goes to the managers, planners and technocrats of capital as income. Harvey is free to call this by any name in his narrow academic world, including neoliberal policy, but he ignores or deliberately tries to cover up one important point: that bourgeois politicians, technocrats, economists and managers plan capital, which is dictated by the necessity and need of capital. Harvey sees all of this inverted or pretends to be inverted. He says that the goal of Reagan and Thatcher’s neoliberal policies was to “restore class power,” and that before this, the butchers of the working class were supposedly friends of this class. If he means strengthening the power of the capitalist class, is this strengthening itself the goal of capital, or is it, as it has always been, capital itself and its production, and are all paid servants who do what capital demands?

Chart 1-1 from the book A Brief History of Neoliberalism.

The upper chart shows unemployment in Europe and America in the period from 1961 to 1987, and the lower chart shows inflation in the same historical period.

Popular capitalist economists interpret inflationary growth as a crisis, and this is completely incorrect because, firstly, not every inflation that is a sign of the growth of fixed capital necessarily leads to a capitalist crisis, and secondly, if it were, it would be considered a continuous and uninterrupted crisis of capitalism, and this is unrealistic. In the case of the above graph, the real unemployment rate is much higher than these figures, so that the real number of unemployed workers in each country in a non-crisis situation is about 10 times this. A look at the real unemployed population in Europe (including the 28 countries of the European Union) shows that despite all the cover-ups and changes they make in the definition of an employed worker, even based on these published figures, the population outside the employment circle is still very terrible. The European Union, in its latest published study, Employment rates by age, sex and educational attainment, has reported that, although there are large differences in employment rates between EU countries, the employment rate for people aged 15 to 64 was 64.9 percent in 2014. This means that 35 percent of the European workforce is outside of capitalist industries and institutions, both public and private. We will return to the EU definition of 65 percent of those who work later, but for now we will focus on these figures. Employment in Europe peaked at 65.8% of the working-age population in 2008, just before the financial crisis, and fell to 64.1% in 2010. The highest employment rate at the time of measurement, at the end of 2014, was in Sweden, at 74.9%, and the lowest in Greece, at 49.4%. The average number of unemployed workers (surplus population) in the 28 EU countries is 35% of the workforce, with Sweden accounting for 25% and Greece for 50%. The gender breakdown of the unemployed in the EU is 30% for men and 40% for women. Among European countries outside the European Union, 70% of Turkish women and 30% of men of working age were unemployed on this date. Half of the working age workers in Europe between the ages of 55 and 64 were in the surplus population. 30% of workers in Switzerland, the world’s capitalist paradise, were unemployed, and the unemployment rate in Japan and the United States between the ages of 55 and 64 was also 30% on the same date (2014) (the European Union did not provide other figures for these two major capitalist countries). To all these unemployment figures, we must add the huge population of workers who were only able to earn 1 hour of work per week. Because when we refer to the definition of work and having a job, we find that the European Union considers those who are over 15 years old and have worked at least one hour (60 minutes) per week to be employed. This definition does not specify the length of this one hour anywhere. But it should be noted that this definition is accepted by the International Labor Organization and almost all capitalist countries, including Iran. This statistic even considers those who do not receive wages for their work as employed (including those named as capitalists and their family members who are of working age and those who work in an institution on behalf of the labour office). It is clear that those who are forced to retire early do not fit into any of these definitions and therefore are not considered unemployed. In this way, despite the fact that there is a huge population of workers who are unable to support themselves and their families through one or more hours of work per week, the demagogue figures adorn the capitalist society of Europe and the world with the ornament of having work. These calculations do not include migrant workers who come to Europe from war, unemployment, environmental and natural disasters. In order to understand to some extent this demagoguery and deceit of capital and their government, we go back to the years (2013 and 2014) when unemployment figures in Spain and Sweden were published and discussed by bourgeois parties. In Sweden, there was talk of a maximum of 9.5 percent unemployment and in Spain a maximum of 27 percent unemployment. While the closer to reality figure from Eurostat is 2.6 times this figure for Sweden and 1.8 times this figure for Spain. In the case of America, such figures are not available to everyone, but in Europe, for several decades now, the real figures of unemployed workers have been officially published.

In addition, in order to reduce the impact of the fall in the rate of profit and compensate for it by the amount of profit, capital increases not only the intensity of labour but also the duration of labour (the duration of the worker’s lifetime of creating value for capital). To measure the intensity of labour, no calculation is needed; it is enough to consider the feeling of how time passes more quickly. The fact that the year ends more quickly is explained only by the intensity of the labour process. Time and its speed are nothing but the process of our work, the speed of production and the speed of what we live in. Albert Einstein proposed the theory of special relativity at the beginning of the last century and that moving clocks show less time passing than more fixed and stationary clocks, and this is exactly the phenomenon that we experience while working. Thus, although a minute and an hour are the same as they were in Marx’s time one hundred and fifty years ago, the dimensions of production and circulation of goods are only comparable in the difference between the mechanical production machine of that day and the production machine of today, which is guided by electronic devices and computers. Although we are not yet producing at the speed of quantum mechanical movements, the direction of movement is in this direction. The acceleration of production is one of the factors slowing down the decline in the capitalist rate of profit. Another factor that is becoming more and more elastic today is the length of our lives in the production process. All 28 countries of the European Union raised the retirement age of workers after the 2008-2009 crisis, thus combating the trend of falling profit rates by increasing the amount of profit. This is not a trend that began at that time, but capital has always tried to pursue this goal through the length of the working day throughout its life. What seems new is the attack on the life of workers after the end of their working period. The European Union (EU) employment statistics report in November 2016 that the average European worker has worked during their lifetime has increased by 1.9 years in the last 10 years (2005 to 2015), with Swedish workers spending the most time at work during their lifetime. The European institution found that those who were ready to work after the age of 15 had an average of 35.4 years across the EU (28 countries), an increase of 1.9 years compared to 2005. Sweden has the longest working life at 41.2 years and the Netherlands at 39.9 years. European men have worked an average of 37.9 years, an increase of 1.2 years, and women at 32.8 years, an increase of 2.6 years during this period. Swedish men have worked 42.2 years (an increase of 2.1 years) and Swedish women 40.1 years (an increase of 2.5 years), while Italy has the shortest working life at 30.7 years, an increase of 1.1 years. Italian men have worked 35.4 years (an increase of 0.2 years) and Italian women 25.7 years (an increase of 2.0 years). It is not necessary to explain that all European men and women who are able to work have not necessarily always been unemployed, but these figures mean that the entire European workforce is a ready army for capital to use, and capital uses this force as it sees fit. A part of it must be used as an army of labour behind the scenes in institutions as a force to reduce wages and the pressure of work intensity. Germany and Sweden, with 25 percent unemployment, host the largest number of refugees and immigrants (the workforce that travels the world in search of work). We remember well when the largest number of Syrian, Iraqi and Afghan migrants were heading to this country, German Vice Chancellor Sigmar Gabriel said that this is good for the German economy, or in November 2016, the Swedish Labor Organization announced in a report that the country will need 65,000 workers annually over the next ten years. This is while the unemployment rate in these countries is not low, but capital and its government are thinking of using the pressure of the army of the unemployed, and among the refugees in search of work and shelter, all types of work capabilities are found, from skilled workers to unskilled labour. Now, the sum of these several factors, namely the intensity of work, the increase in the daily working hours and the length of working life, is not the usual sum of one plus one plus one, that is, three, but the result is the product of these three factors. For this reason, capital attacks labour in all these areas to obtain maximum profits and to compensate for the decrease in the rate of profit. The impact of these factors must be seen in relation to the continuous and uninterrupted process of labour productivity, a process that is advancing at an exponential pace under the guidance of the digitalization and computerization of production processes, the circulation of commodity, and all areas of capital services.

Let’s return to another point that Marx made under the title “relative population growth”.

Marx says of the unemployment of workers as a neutralizing factor on the decline in the general rate of profit: “The more advanced the capitalist mode of production in a country, the more markedly the relative increase in population there will be.” In Figure 1-1, Harvey attempts to correlate unemployment in Europe and America and its growth with the growth of inflation, and he does so with the aim of showing that Reagan’s fiscal policies are directly related to the monetary policy of the Federal Reserve Bank of America. Harvey has a long history of characterizing capitalist policies and in this way is afraid of any fundamental analysis. In this regard, he ignores the fact that there is no connection between the growth of fixed capital (the accumulation of fixed capital over time, which is interpreted by mainstream economists as inflation) and the crisis of capitalism. When capital is accumulated over a long period, the potential conditions for a crisis of a shortage of profit relative to the accumulated capital are created, but this does not in itself mean that a crisis will occur. Unless this relationship arises at a certain point, that is, we witness the emergence of a crisis of lack of profit and a decrease in surplus value, which leads to the disruption of large-scale production processes, which stops the production of goods on a large scale and a crisis appears. Harvey chooses the easy way and starts from the beginning, as if the growth of capital accumulation is the cause of the crisis, because he is looking for the person who should be considered the driving force of the series of crises, unemployment and inflation. He has found this person in the pristine existence and the rest of the story is completed by itself. Harvey follows the same process in Britain. In his opinion, it is these ideas, policies and in fact politicians who are the driving force of the history of capitalism, including neoliberal politics. Harvey’s historiography is very simple, in that the factors that create neoliberal policies are the politicians themselves and the founders of this thought, and not the material and economic conditions that create not only politicians but also the conditions for the emergence of their ideas. Marx describes the role of individuals in the relations of production as follows.

“1 My product is not my product except for another; its individual character has been suspended and has acquired a general aspect. 2 My product is not my product except when it is sold and becomes the product of another. 3 And it is the product of another only when he also sells his product, and this itself requires that production is not an end in itself for me but a means. Circulation is a movement in which transfer to another is generally possession, and possession is generally transfer to another. Although this whole movement appears to be a social process and its various stages seem to be the result of the conscious action and specific goals of individuals, it must be borne in mind that the whole of this process is an objective and spontaneous process. It is true that this process itself results from the reciprocal and conscious actions of individuals. But on the whole, it is independent of their consciousness and does not follow it. The encounters of individuals with each other create an alien social power that dominates them. The interactions of individuals become the basis for the creation of processes and forces independent of them.” Marx, Grundrisse, Volume 1, Chapter on Money, Exchange and the Production of Exchange Values, and also “Ludwig Feuerbach and the German Ideology.” What Harvey sees as the cause of the poverty and unemployment of American workers in the early 1980s is a superficial view of the factors that caused this phenomenon. Harvey swaps the causes of poverty and unemployment because it suits his preconceived conclusions. This childish approach is also used by Thomas Piketty. In the third part of his book, Two Worlds, he asks: “Did rising inequality cause the financial crisis?” He then answers: “There is no doubt in my mind that rising inequality in the United States has contributed to its financial instability. The reason for this is clear: one consequence of rising inequality was the real stagnation in the purchasing power of the poor and middle classes in the United States, which inevitably increased the indebtedness of middle-class families.”

This level of inversion and superficiality of the popular economist causes him to only revolve around himself without getting any closer to solving the problem. Piketty is even forced to revive the old and extremely vulgar theory of “insufficient consumption” to explain the crisis of the falling rate of interest. In capitalist societies, especially after the Second Imperialist War, in order to obtain shelter for life, the working masses were forced to mortgage not only their current wages, but also the wages they have not yet received, and to mortgage and sell their entire future wages and those of their children to the bank (because daily wages are not enough to make a living and obtain shelter, and the phenomenon of putting oneself and one’s family in debt has become a common phenomenon). And this does not mean becoming the owner of the shelter, because until the entire bank loan is paid off, there is no ownership, and these debts are not enough to pay off a generation. This is the normal process of capital, and the wages of workers, which are a small part of income, have never been able to consume all the surplus value offered in the form of commodities. Popular economists of capitalism are not even able to understand the contradiction between the two, that the process of ever-increasing reproduction of capital and the relative increase in surplus value and the reduction of wages, whether in the form of ever-increasing unemployment of workers or the reduction of wages of those who have work under pressure to prevent the decline in the general rate of profit, are two completely opposite phenomena. This is in conditions where even the surplus values ​​​​of unpaid labour do not suffice for the growth of capital accumulation. Both Harvey and Piketty, the first under the name of “astronomical income of the elite class” and the second under the name of “growth in the income of super managers”, consider the main problem of capitalist society and consider it a stain on these relations and the cause of its crisis. Piketty himself answers the main challenge of American society, “How can we explain the surge in inequality in the United States?” “In short, two distinct phenomena have been at work in recent decades. The first is that the wage gap between university graduates and those who have not gone beyond high school… has increased.” He then continues, “The second phenomenon is quantitatively more important than the first… so it is important to find a suitable explanation for this phenomenon, and the education factor cannot be emphasized at the beginning of the discussion.” Piketty continues his in-depth exploration that “the emergence of supermen, whether in European countries, the United States, or Japan, is the main reason for the increase in income inequality in all English-speaking countries in recent decades, the emergence of super managers in both the financial and non-financial sectors.” Both Harvey and Piketty, who coined the term “the one percent and the 99 percent” and boasted of their discovery, are captive to analyses that merely repeat the problem rather than the solution. Thomas Piketty, a few paragraphs earlier, attacks other claimants who attribute the “eruption of inequality” to new skills and technologies, accusing them of following a “same-talk” that is itself mired in a quagmire of cause-and-effect arguments and does not go a step further to solve the problem it has itself posed. Harvey also sees the cause of worker unemployment in the crisis periods of the 1970s and 1980s as the reversal of central bank monetary policies. His whole point is also alive and well, because he immediately brings up the solution of state control of financial and monetary capital. Like Piketty, he sees no need to enter the realm of capitalist production. He does not see the trend of wage decline, mass unemployment of workers, and the creation of a surplus population as a result of capital’s need to reduce costs but rather sees these as the result of the work of this or that technocrat. For him, politicians, their agendas are everything, and the relations of production underlying these policies are nothing, and in this way, technocrats make history in his dictionary, and history is also upside down in his mind. This is a very simple and handy method, whose argument has the answer to the questions they have raised in its heart. But what is the whole purpose of this stringing of the sky, and what does Harvey mean by proposing neoliberal policies other than to go quixotically to fight a castle that he has built himself. The fight against neoliberal policies is the name of the night of the fight against imperialism and financial monopolies. The issue is not about changing the name, but about preserving the content, which aims to continue the perversion of the struggle of the working class, to disintegrate its independent class line against the entire system of wage slavery, to follow the bourgeois reformist struggle on the axis of reducing the income gap, and such bourgeois reformist nonsense. If previously the platform of the anti-imperialist struggle, finance capital and monopolies, meant preserving the entirety of the wage system, today the same goal is being served under the title of fighting neoliberal policies. If previously the anti-imperialist struggle was manifested by popular violence, armed struggle and popular militancy composed of a part of the bourgeoisie supported by the disorganized and organized working masses, today the anti-neoliberal struggle in the form of the Occupy Wall Street against finance capital, the parliamentary and reformist struggle of the bourgeoisie is aligning the working masses around economic reforms around the so-called state control of capital and the reduction of inequalities. Proponents of criticism of neoliberal policies are actually expressing the interests of the capitalist class under the pretext of concern for the wealth of the nation! and state resources, and they consider the accumulation of wealth in general to be the ultimate goal of the capitalist state. But at the same time, they are aware that the development of the interests of the capitalist class, which always means the production of capital, in the sense of the basis of a country’s economic power and its superiority in comparison with other countries and capitalist classes, brings nothing and absolutely nothing to the workers except misfortune, multilateral pressure, and the disintegration of the independent front of the class struggle.