Nasser Paydar November 2010
A movement held captive by a lack of vision
The current year (2010) has witnessed the most massive labour strikes across Europe. For days on end, at various intervals, Greece was effectively held by the workers; everything came to a standstill, and the machinery generating surplus value ceased to turn. The cycle of capital circulation was stalled for hours or even days. Cities, villages, production sites, roads, railways, ports, land, and sea alike defied the absolute dictates of capital’s owners and rulers, acting instead in accordance with the will of the rebellious, “insurgent” class. In short: work stopped, profits were not generated, and the reproduction of capital suffered a paralysis. Let there be no misunderstanding this is the extent of what is meant by “holding” or “seizure”; nothing more is implied.
What occurred repeatedly in Greece also took place several times in Spain with the same scale, magnitude, and level of impact. There, too, a wave of nationwide strikes paralyzed the entire country. Workers poured into the streets, raising their voices in protest. Factories ground to a halt, and capitalists along with their government were seized with panic as the channels for capital accumulation and production were blocked. Workers in Portugal did the same, while their Belgian counterparts turned the entire country into a stage for their discontent and protest not just once, but at least twice. The scale of mass worker strikes in Italy, and the frequency of such actions throughout the year, rivalled the situation elsewhere; and finally, the French working class as in other periods set the record for the sheer scope of strikes and the intensity of the protest storm. We shall not delve into the experiences of workers in other countries; for now, these examples suffice. Let us examine what has actually transpired. First and foremost, what has been the goal of these struggles? The answer is disheartening. In none of these strikes nor, indeed, in the broader struggles, uprisings, and acts of resistance by the international working class over the past year or in preceding years has there been any discernible level of expectation, demand, or push for progress. Nowhere has there been any talk of even slightly chipping away at the ever-rising mountain of surplus value being generated. Workers anywhere in the world have not called for any new improvements to their living conditions or social amenities. In none of these strikes have workers voiced demands for increased real wages, free or even lower-cost education and healthcare, more affordable childcare, shorter workdays, a lower retirement age, or anything of the sort.
Setting aside all that has been said, the millions of strikers across Western, Southern, and Central Europe or indeed in any other continent or country have not even risen to genuinely defend the boundaries of the livelihood and welfare gains won through past struggles. Workers have not set their sights on completely blocking the onslaught of capital that “slaughtering machine” against their current means of survival. On the contrary, the entire conflict has revolved around merely limiting the scope of these encroachments and mitigating the devastation wrought upon their already meagre livelihoods. The battleground has not been a resolute stand to prevent job losses altogether, but rather an attempt to swap mass layoffs for a smaller number of dismissals. Workers have not demanded that the real value of their labour power remain undiminished; at best, they have merely called for that decline to be moderated or softened. The above components are not only about the strikes of Greece, Spain, Portugal or Italy, Belgium, France and Germany, but they are relevant to the entire international labour movement in the current world conditions. The pressure of this situation is so heavy, pervasive and chronic that its existence has become a natural state, and even the most excited and two-fisted leftists, neither in words nor on the Internet pages, but in the practical world and everyday social existence, have embedded its continuity in the grooves of their minds as a corner of the law of nature. Why is that? They rarely ask this question; even if the situation were to drag on for millions of years, not even the slightest criticism directed at the most trivial remark by a figure like Lenin would stir their minds or wound their political and class consciences. To put it more clearly, that the international labour movement has fallen into such an abyss, that the torch of the communist struggle and anti-wage labour of the working class is not burning anywhere, that the right and left reformism has swallowed everything in its mouth, and that the history of the struggles of the working masses all over the world has turned into successive circles of failure, because of no standard bearer, the chanting of “communist” is not a single bit of a concern, the important thing is to defend the school, protect the sanctity of saints The effort to be silent and to sing long chants in praise of Ahura’s faces is the head of the sect. Such is the current situation, yet it will certainly not remain so. The labour movement will undoubtedly break free from this impasse; the present circumstances are more pregnant with this change than any other moment in the last century. One must view oneself as an integral part of this transformation and exert every possible effort to help pave the way for it. The current state of the labour movement is the result of complex factors; identifying them is a necessary condition for overcoming the stubborn impasses that exist today. These factors can be categorized into several sections, each of which can be examined individually.
Transformations of the Capitalist System
Contemporary capitalism is not what it was in the second half of the nineteenth century or even the first half of the twentieth. It goes without saying and indeed cannot be otherwise that the reference here is not to the very essence of the capital relation: the buying and selling of labour power, the production of surplus value, or capital in the general sense as a mode of production. We are not discussing whether the law of value, abstract and concrete labour, necessary and surplus labour, constant and variable capital, absolute and relative surplus value, the rate of surplus value, the general rate of profit, the falling rate of profit, economic crisis in short, the very fabric of the social relation of capital have altered or manipulated their fundamental nature! No; such a thing is neither happening nor under discussion. What has changed in a truly astonishing and mind-boggling manner lies elsewhere. These changes have on the one hand brought the very existence of capital to the brink of collapse and explosion, driven by the internal contradictions of the labour process and fundamental barriers to reproduction; yet on the other hand in the absence of a surging anti-capitalist struggle by the working class, they have also created the channels and mechanisms necessary to unleash the full, crushing weight of these intensifying contradictions upon the lives of the global working masses. In this context, let us examine the evolution of the organic composition of capital. The Volvo automobile company was founded in 1927 a few years before the outbreak of World War II as a subsidiary of the massive SKF conglomerate. While the exact number of factory workers at the time is unknown, Volvo’s founders noted in their contemporary reports that the company’s total output for its first year was equivalent to the volume of production now achieved by the trust’s workers in just three hours. During the year of Volvo’s founding, the workday exceeded ten hours, and the weekly rest period did not go beyond a single day. With a simple thumb calculation, it turns out that the productivity of social work in Volvo’s work process has increased more than 1040 times during these 80 years. Let us add here that the hourly wage of Volvo workers in 1930 was about one and a half crowns. In the current conditions, this salary does not exceed 70 kroner on average, according to the country’s tax system and after taking into account the percentage that is deducted from it. Thus, while the capital and profit from the exploitation of each Volvo worker have increased 1040 times, the price of its labour has increased only 46 times. The initial capital of the company in the same year 1927 was only 200 thousand Swedish kroner. According to the 2009 report of the Volvo Institute, the amount of capital owned by the company has reached 332 billion and 265 million kroner this year, Volvo has made about 220 million new investments this year, and the amount of profit it made the year before was much more than 40 billion kroner. Let’s not forget that 2009 is the year when all sectors of global capital are immersed in the most crushing and powerful economic crisis in the history of capitalism. A comparison of the company’s current capital value with the capital initially invested in 1927 reveals an increase of approximately 1.7 million-fold; meanwhile, the number of workers employed by this trust across 125 countries has not risen beyond roughly 35 times the figure from the year of its founding in Gothenburg, Sweden. These figures, in turn, indicate a 50,000-fold increase in the organic composition of the company’s capital.
The point is not that every component of global capital has undergone the exact same process of transformation as Volvo over the past eighty years; rather, what has occurred here or in a society like Sweden serves as an example for understanding the general process that the capitalist system has traversed. This process reveals that the vast, dominant portion of what humanity has produced over the last few centuries and especially since the advent of capitalist dominance has effectively turned to stone; it has been transformed into dead labour into machinery, means of production, and, in a word, capital. It has assumed the form of a petrified realm a realm of stone that rules over the human world, ceaselessly devouring the very existence of billions of the world’s wage-slaves to fuel its own growth and survival. The fact that the average organic composition of capital on a global scale has increased by factors of tens of thousands, thousands, hundreds, or, at the very least, tens and that this increase continues unabated, implies that the working class, as a class, is compelled at every moment to transform an ever-larger share of its labour into unpaid labour into capital and capitalists’ profits while receiving an ever-smaller share as wages (or the cost of reproducing labour power) so that capital may continue to reproduce itself.
But the problem is not limited here. The continuous and gigantic increase in the organic composition of capital means that the inherent and inevitable crises of capitalism must shake the entire pillars of capital’s life with the shortest possible intervals, the most violent degree of impact, and the most skilful destruction power. It means that the internal capacity of global capital to overcome crises will decrease more and more, which means that a crisis in the depth, breadth and magnitude of the 2008 crisis should cause the strongest storms of protest of the exploited to blow throughout this rock. The current situation hides all these possibilities in its belly, but crises happen, even storms break out, and what does not happen is the direction of the storms to smash the foundation of capital. Everyone sees that capital continues to rule the world with its undisputed demonic power, and for every moment this remains, the human existence of the age is turning the world into blood, terror and death step by step. A nightmare that says: The problem is not merely that capitalism does not collapse regardless of the severity of the crisis without the challenge of a powerful, organized, council-based, and anti-wage-labour movement of the working class; worse still, it loudly demonstrates that as long as it persists, it continuously devises new mechanisms and strategies to shift the crushing burden of crises onto the lives of the working class with ever-greater intensity. While the conditions for the emergence and growth of these mechanisms are naturally inherent in the capital relationship, the crucial point is that global capital is able to develop, cultivate, and utilize them solely because the working class’s anti-capitalist movement remains absent from the actual battlefield. The system of wage slavery could have been dismantled by the working class’s movement to abolish wage labour long before these mechanisms were established; yet this did not happen, and we now witness capital employing these strategies and levers. In our view, the most significant of these instruments are:
The Role of the State
In the second half of the nineteenth century and for years thereafter, the state was nothing more than a machine of repression an instrument for exercising police coercion, maintaining political order, legislating, and managing the routine affairs of capital. Over time, this situation has gradually changed. Today, the state plays a critical, pivotal role not merely in the police and military defence of capitalist relations, but within the labour process itself and the dynamics of value creation and the reproduction of capital. To provide a genuine, scientific explanation of this subject, one must first step beyond the abstract discussion of the state and return to the essence of the commodity economy as a whole, and to the process by which this essence expands within the structural existence of capital. It is the very nature of the commodity and the production of exchange values that manifests human relations as relations between objects and commodities. In this mode of production, human beings do not encounter one another as human subjects guided by the logic of free, reflective human life, conscious awareness of genuine human needs, standards for a prosperous social existence, and the capacity for collective, enlightened intervention. Instead, it is the exchange values they have produced that meet; they dictate the terms of the encounter, fill its context with laws, decrees, and criteria, and transform this interaction along with its attendant requirements and regulations into the platform that determines human destiny. Marx has explained this matter as follows.
“… Although this entire movement appears to be a social process, and its various stages seem to result from the conscious actions and specific goals of individuals, one must nevertheless bear in mind that the process as a whole is objective and spontaneous. While it is true that this process stems from the conscious interactions of individuals, it remains in the aggregate independent of their consciousness and does not conform to it. The interactions between individuals give rise to an alien social power that dominates them; individual actions form the basis for a process and a force that exist independently of the individuals themselves. Circulation, viewed as the totality of social processes, is the primary form in which not only social relations such as money or exchange value but the entire movement of society appear as something independent of individuals. This apparent independence of social relations and their manifestation as a natural force, a matter of chance, or the like is the necessary consequence of the fact that the social individual initially lacks a conception of themselves as a free individual.”
(Grundrisse, Volume I)
As the commodity economy transitioned from its initial phase into the capitalist mode of production and particularly following the establishment of the capital relation within nations and across the globe this fundamental phenomenon increasingly perfected its processes of inclusion, power, fetishization, and universal reach, extending to the furthest possible limits. Capital, as a social relation, constitutes a world of accumulated compulsions complex, obscure, and fetishist that operate beyond the sphere of intervention or will of the producing masses. The compulsion to sell one’s labour power; the necessity of obeying the law, accepting unemployment, enduring hunger, submitting to poverty, and resorting to prostitution; the subjection to rule, physical and mental erosion, alienation from the labour process, and the loss of free, independent will; the obligation to endure whatever is required for the reproduction of capital and the survival of the capitalist system all these form the interlocking links in the chain of capital’s god-like power and the sequence of compulsions that subjugate and enslave the very humans who create capital. It is within this process that the role of the capitalist state must be understood. For this system, the state is an institution that cloaks the total, fetishized power of capital manifest across every sphere of human social life in the guise of the sovereignty of the citizenry; it labels this construct the “general will of the nation” and proclaims itself the vehicle for representing the interests, expectations, and aspirations of the entire populace. The state is part of the overarching chain of coercion, force, and the conditions and constraints governing the reproduction of capital along with all the mechanisms and strategies used to impose these upon the working masses all while masquerading as the embodiment of the unified will of the people and society’s inhabitants. At the same time, the state serves as a site where the reality of capital and the plight of the working masses trapped within this social relationship are distorted. Occupying this position enables the state to play a pivotal role: not merely in the police repression of the labour movement or the establishment of capital’s political order, but more fundamentally in securing the conditions for the social capital’s production process to the greatest possible extent. While the capitalist state inherently performs this function, our aim here is not simply to reiterate that fact; rather, we focus on elucidating the critical importance this role has assumed for the continued survival of capitalism in the current historical context. We explore this issue by briefly analysing a specific case study.
In 2008, the Swedish government secured parliamentary approval for a budget totalling 957 billion kronor. Of this amount, approximately 810 billion kronor was derived from direct and predominantly indirect taxes paid by the working masses, while the remainder was likewise extracted from workers’ livelihoods under various guises. That same year, tax revenues collected by municipalities (commoner) also surpassed the 500-billion-kronor mark. To put it more clearly, in that year, the Swedish government appropriated approximately 1.5 trillion kronor derived from the workers’ paid labour and used it to construct the material foundation of its annual budget. We lack precise figures regarding the exact value of the working class’s unpaid labour or the astronomical scale of the surplus value generated through their exploitation, as such calculations are far from simple. However, two points are worth noting here. First, periodic corporate reports suggest that the rate of surplus value typically exceeds 500%. Second, the taxes workers paid to the central government and municipalities levied even on their “paid” labour exceeded the income they retained for their own subsistence and the reproduction of their labour power. Substantiating this claim is straightforward: if you divide the total tax revenue for that year by Sweden’s entire population, the result is a per capita share of approximately 166,000 kronor, or 664,000 kronor for a family of four figures that certainly exceed the actual amount individuals spent on their living expenses. While these are significant points, the immediate focus here is how the government routinely and institutionally channels and injects these budget funds into the process of reproducing the nation’s social capital. These channels included:
1. More than 128 billion (128,000,000,000) kronor was provided as non-repayable, unconditional aid to companies that, buckling under the surge of the global capitalist economic crisis, were unable to continue operations or achieve desired profit margins. Some of these companies such as Saab were on the verge of total bankruptcy, and receiving this aid was their only lifeline for survival. It is worth noting that the funnelling of these massive sums to the aforementioned economic giants was accompanied, as usual, by a barrage of hype and the brainwashing of workers. Capitalists, the government, and labour unions forming an ominous triangle of demagoguery insisted to everyone that the goal was to prevent a further wave of layoffs and to guarantee continued employment for thousands of workers! The reality was quite the opposite. The companies receiving these vast sums allocated every last krona to replacing existing machinery with state-of-the-art technology, further boosting labour productivity, and consequently drastically reducing their workforce. The government’s next handout to industrial and financial centres, drawn from a 1.5-trillion-kronor budget, was a flood of aid to banks. These banks, too, saw their own existence and by extension, the survival of many major industrial firms within their capital accumulation spheres threatened by the storm of the crisis. The total amount of this aid reached tens of billions of kronor.
2. Organizations responsible for maintaining the political or social order of capital constituted the second major area for the allocation of state budget funds. The combined share of these institutions in the fiscal year in question grazed the 400 billion (400,000,000,000) kronor mark.
3. The sectors of education, healthcare, and social welfare collectively accounted for five hundred billion (500,000,000,000) kronor of the total budget. As previously explained, the capitalist state cloaks the total, fetishized power of capital in the guise of civic governance and presents the essential requirements for capital’s value expansion as the common interests of humanity. The term “social welfare” is precisely a product of this inversion. Human beings have needs regarding education, upbringing, higher learning, research, healthcare, medical professionals, medication, and treatment. However, these needs can stem from fundamentally different sources and pursue horizons and expectations that are diametrically opposed. They may arise from the natural, conscious, progressive, and social striving of humans for their own limitless physical and intellectual elevation aiming for optimal health, well-being, the mitigation of all life’s hazards, complete freedom from wants, and liberation from every form of bondage and subjugation. Conversely, at every turn, they may engender pervasive livelihood hardships, increased incidence of deadly diseases, and ceaseless physical and mental erosion, while rendering any form of freedom from want or degree of human liberty impossible. The former scenario is the objective of the conscious struggle of the working masses, whereas the latter springs from the very essence of capital. For capital, the purpose of human education, research, and healthcare is merely to cultivate a workforce at the lowest possible cost and to maintain that workforce’s health at a minimum level with minimal expenditure. We must also bear in mind that, by its very nature, the capitalist system is from its inception to its eventual demise the target of class struggle waged by the working masses. Wherever and whenever possible, and commensurate with the prevailing balance of forces, the working class has endeavoured to impose certain demands upon this system. Consequently, when organizing its structures of production, politics, and social relations, capital is compelled alongside the fundamental imperatives of its own reproduction and value accumulation to take into account various demands imposed by the working class. The realization of such expectations held by the working masses has, by the very logic of class struggle, inevitably imposed itself upon the conditions and requirements of capital reproduction, thereby becoming integrated into that process. The Swedish government’s 2008 budget for education and healthcare amounting to approximately 77 billion kronor encompassed both of these essential areas. This sum was allocated to facilitate workforce training at various levels and to ensure a minimum standard of public health. The government covered the costs associated with these capital requirements while recouping the total expenditure from the value generated by the working class. Capital requires the rapid advancement of science, the expansion of technology and industry, and the establishment of necessary institutions. It necessitates the creation of primary and secondary schools, the channelling of current and future workforces into educational centres, the continuous expansion of these facilities and educational tiers, and the training of doctors, medical assistants, and nurses. It requires the establishment of hospitals and healthcare facilities, as well as the construction of universities and efficient research centres. These tasks are beyond the capacity of any single capitalist; rather, it is the entire capitalist class of a country that undertakes the resolution of these social capital needs. The capitalist class acts through its collective planning and decision-making bodies, with the state serving as the highest, most organized, and best-equipped institution of collective capitalist power. The fundamental role of the state is to address these requirements while simultaneously guaranteeing the needs of capital. First, to reduce costs to the absolute minimum; second, to shift these costs onto the paid labour of the working class; third, to accept plans for the education, preparation, and health of the workforce only insofar as capital’s imperative needs dictate, or where pressure from the working class has transformed these measures into a necessity for capital’s own survival; and fourth and finally the moment a decline in profit rates, a crisis, or a contraction in capital’s demand for labour occurs, to shut down hundreds of primary schools, high schools, universities, hospitals, and clinics in the blink of an eye, diverting their funding toward maximizing capital’s profitability. The Swedish government’s budget of 77 billion kronor for that year took all these aspects into account.
4. Out of the Swedish government’s total 2008 budget of 1.5 trillion (1,500,000,000,000) kronor, over 300 billion (300,000,000,000) kronor was allocated to social welfare expenditures. This component represents one of those exceptions that the working class in a few countries thanks to anti-capitalist struggles and in the wake of massive historical uprisings such as the Paris Commune, the October Revolution, or the labour movements of the 1840s and 1850s has forced upon the bourgeoisie of those nations. Yet, let us not forget that capital has dissolved even this form of compensation forced upon it by the working class into a realm of economic and social data driven by the imperatives of value accumulation and the maximization of profit; a task that only the capitalist state is capable of performing. The recipients of this aid are individuals who have laboured for capital their entire lives, enduring the most savage forms of capitalist exploitation, only to be cast by capital into a wasteland of poverty, hunger, homelessness, and deprivation stripped of access to doctors, medicine, medical care, and the basic necessities of life. The very existence of this vast, cursed, and stigmatized population inevitably creates a powder keg threatening the collapse of the capitalist political, productive, and social order. Across vast regions of the world, capital seeks to neutralize this explosive threat through rabid dictatorship and ceaseless bloodbaths; yet, wherever it cannot establish such a dictatorship, it is compelled to pay compensation. The execution of this task is necessarily delegated to the institution that collectively represents and exercises the class power of the capitalist class as a whole. In other words, the mechanism for fulfilling this function like all mechanisms essential to maintaining capitalist rule becomes an integral part of the capitalist state structure; and it is the state that, ultimately, deducts the entire cost of this outlay from the value generated by the workers’ labour.
5. Other segments of the 2008 state budget in capitalist Sweden were allocated to areas such as policing, the environment, defence, and social development. Each of these constitutes a link in the chain sustaining the wage-slavery system. Capital continuously degrades the human living environment, saturating it with chemical and microbial pollutants. In this context, whether driven by the imperative needs of its own reproduction or compelled by pressure from the labour movement, capital is forced to adopt minimal remedial measures. Nowhere do these measures aim to safeguard human health or well-being; on the contrary, their sole objective is to reopen channels for capital accumulation and increased profitability. In the year in question, the Swedish government allocated this entire budget category amounting to 7.8 billion kronor to various interests: to landed capitalists seeking higher returns on their investments; to trust owners receiving free coverage for product labelling costs; to power plant security to ensure a more reliable electricity supply for industry; and to extensive scientific research into hydroelectric, solar, and wind energy all with the ultimate goal of securing cheaper, more abundant electricity for capital. The state undertook all these measures to further strengthen the process of capital valorisation, imposing the entire cost upon the paid labour of the working class.
6. The continued existence of capital hinges on the orderly nature of the labour-power purchase-and-sale relationship, the security of this relationship, and the elimination of any threat that might in any form endanger the security and stability of the profit-production cycle and the self-expansion of capital. To this end, capital requires a police system and sprawling, octopus-like security, intelligence, and counter-intelligence apparatuses. Organizing these complex and intricate law-enforcement networks constitutes a significant part of the capitalist state’s mandate, and the entirety of their costs is passed on via the state to the price of the working masses’ labour power. In 2008, the Swedish capitalist state allocated approximately thirty-six billion (36,000,000,000) kronor derived from the labour and exploitation of the working class to maintain these vast, octopus-like networks.
7. Social development accounted for another significant portion of the state’s annual budget. Capital requires, on a vast scale, fundamental infrastructure such as water and electricity systems, roads, highways, bridges, dams, massive irrigation networks, railways, subways, tramways, urban street layouts, airports, ports, telecommunications and increasingly sophisticated communication systems, nuclear power plants, and the like. The costs of establishing these facilities are astronomical in any society, consuming a huge share of a country’s social capital. A fundamental part of any government’s mission is to shoulder the task of creating, developing, and maintaining all of this, while distributing the entire cost across the lives of the working masses.
8. Billions of kronor from the state budget were also allocated to institutions whose sole function is the brainwashing of the working masses, the engineering of public opinion according to the designs of capital, and the moulding of the working class’s thoughts, minds, will, and expectations within the very crucible of capitalist production.
9. There is little need to elaborate on the costs associated with prisons, kangaroo courts, the military, weapons arsenals, participation in international military pacts, and the like. The astronomical figures associated with these costs constitute a significant portion of the capitalist state’s annual budget. The organization of all these sectors is an integral part of the capitalist state structure, and it is the state that covers the costs of these acts of barbarism using the fruits of the labour and exploitation of the working masses.
The foregoing remarks concerned the annual budget of the Swedish capitalist state a budget amounting to approximately 1,500 billion kronor, which increases astonishingly year upon year in response to the exigencies of capital. The national component of this budget alone excluding the specific revenues and expenditures of municipalities more than doubled between 1990 and 2008, rising from 397 billion to 957 billion kronor. When the figures for this budget are combined with local municipal expenditures for the same year, the total surpasses Sweden’s entire Gross Domestic Product from eighteen years prior (1990). Further elaboration on this matter lies beyond the scope of our discussion; the aim of these explanations is singular. We have portrayed the state’s role in the process of reproducing a country’s social capital in highly simplified terms. Sweden’s annual state budget serves merely as an example a comprehensive one that applies fully to every country in the world. Differences lie solely in the scale and volume of nations’ GDP, the relative position of annual state budgets within each country’s cycle of social capital reproduction, and the allocation of various budget items to the diverse spheres of capital valorisation needs. We examined this concrete example to clarify specifically from an economic standpoint the state’s position as a decisive and vital lever in the operation of capital and the process of social capital valorisation. This holds true regardless of which capitalist society the state belongs to, which faction of the bourgeoisie’s policies and programs it represents, or whether its form of rule is a brutal dictatorship, a democracy, or anything else. In this light, the state is by no means reduced to a mere collection of institutions for coercion, repression, legislation, and the collection of taxes or customs duties; nor is its function limited to the police or military crushing and slaughter of the labour movement. Rather, it acts as one of capital’s most effective levers for offloading the entire burden of the capitalist crisis onto the lives of the working class, thereby serving as an effective mechanism for extracting capital from the quagmire of crisis. Let us elaborate a bit further on this point. The massive expenditure items reported in the Swedish government budget cited here as an example were certainly not all funnelled directly into the pockets of capitalists; a significant percentage went toward wages in sectors such as education, healthcare, childcare, elderly care, and the like. Funds were allocated for housing allowances, unemployment and sickness benefits, social assistance, transportation improvements, and similar measures. Our primary focus, however, is not on the items that went directly to capitalists and their capital, but rather on the overall role of budgeting within a capitalist state. Here, the state acts on behalf of “social capital” to calculate, control, and make decisions regarding total revenues and expenditures. It undertakes the task of aligning to the greatest extent possible the costs of subsistence, labour power, social welfare amenities, workforce education and healthcare, the containment of the labour movement, the mitigation of the explosive threat posed by unemployed and desperate workers, and all other vital systemic issues with the imperative of maximizing the profitability of social capital. In this context, and by virtue of its organizational capacity, dominance, and power, the state stands ever-ready to disrupt and alter this entire cycle of calculations at the expense of the working class and the ruin and slaughter of the wage-slave masses in order to benefit capital and drag its putrid carcass out of the quagmire of crisis.
There was a time when Keynes and the proponents of his economic theory loudly proclaimed that organized state intervention in monetary and fiscal policies addressing labour employment, price stability, economic growth, inflation control, interest rates, and the like was the remedy for capital to avert crisis. The foundation of their theory rested on an attempt to obscure the true roots of the capitalist crisis. They denied the fundamental truth that “the real barrier of capitalist production is capital itself.” State intervention, in any form or magnitude, neither alters nor can alter the fundamental, inevitable susceptibility of capital to crisis. As long as capital exists, the volatile conditions that trigger crises will continue to wreak havoc. What the state does is not to change the nature of capital’s susceptibility to crisis or the natural course of its occurrence, but something else entirely. Through highly complex, effective, and decisive means, the state boosts the amount of surplus labour at the expense of necessary labour, the volume of surplus value at the expense of the real cost of labour power, and capitalist profits at the expense of the livelihood and well-being of the working masses; it drives up the rate of profit at the cost of widespread hunger, poverty, unemployment, and the destitution of the working class. In the absence of a powerful anti-capitalist movement, the state possesses the capacity to unload the entire burden of the capitalist crisis onto the lives of the working class.
The state possesses the capacity to act as a defensive and purifying mechanism for capital; upon witnessing the rampant spread of capital’s “infection,” it rises with full force to combat the contagion, and even when the sheer intensity of the crisis renders conventional remedies futile, it does not falter, instead employing its vast apparatus to pull social capital back from the brink of collapse. In the latter half of the nineteenth century and indeed for years thereafter the capitalist state was incapable of performing such a function; consequently, there was no need for Marx to examine this role at such a level. All attempts by capital to purify itself and emerge from crisis are, after all, enacted through the personification of capital—the capitalist and in this context, the state performs the very function of the capitalist, regardless of whether it holds legal title to the capital or possesses that specific form of ownership. In this light, citing Marx’s silence on the state’s role in addressing crises to deny that role in the contemporary capitalist world is akin to claiming that Marx attributed no role whatsoever to the capitalist in utilizing the mechanisms required to steer capital out of crisis. The capitalist is not to be viewed as an entity distinct from capital itself. These mechanisms are invariably employed by the capitalist whether that capitalist is a private owner of capital or a capitalist state. The crux of the matter is that the state in Marx’s era was not the complex, octopus-like, and vastly expanded entity we see today; it lacked the capacity to play such a role or indeed, even a fraction of it. The example of the Swedish state may help clarify the issue, and it is worth adding a few further points in this context. First, if we compare the annual budget of the Swedish state with that of the US government or many other nations taking into account all relevant factors, such as the ratio of the state budget to total social capital or to the country’s annual Gross Domestic Product we find that in many countries, the state’s role in facilitating the continuity of capital accumulation and profitability, or in steering social capital out of crisis, is even more decisive and significant than that of the Swedish state. Furthermore, the example cited above by no means fully illustrates the extent of the state’s influence in alleviating bottlenecks within the processes of capital reproduction and profitability, or in addressing crises. In 2008 alone, alongside its astronomical annual budget and the pivotal aid provided to capital owners through it, the Swedish government was grappling with a staggering debt of 1,120 billion kronor. This debt amounting to 1.12 trillion (1,120,000,000,000) kronor serves as one of the most effective levers the state employs to boost the profitability of various sectors of social capital and to counter the capitalist crisis. Through this debt, the Swedish government has achieved three things: first, it has mobilized over a trillion kronor of idle, liquid capital from banks and financial institutions, transforming it into active, profit-generating capital; second, it has incurred a corresponding debt to these financial and banking centres; and third, it has directly offloaded the burden of this entire debt and its astronomical interest costs onto the lives of the working-class masses. Over the past twenty years, by implementing these very policies, the Swedish government has on at least two occasions rescued the country’s social capital from the depths of severe, crushing, and devastating crises. In both instances specifically the crisis of the early 1990s and the 2008 crisis the government, with composure and total control, cast the working class’s welfare its very livelihood into the storm, while rescuing Sweden’s capital from the abyss of the crisis.
The Swedish government’s track record in navigating major capitalist crises employing various methods such as economic policies, annual budget adjustments, public debt, deficits, and bond issuance to shift the burden of the crisis onto the cost of the working masses’ labour mirrors that of governments worldwide. The sweeping austerity measures confronting the working class across the entire capitalist world, and the savage assault on the international working class’s subsistence resulting from them, are orchestrated and enforced against workers by these very governments. The seismic impact that such schemes inflict upon the very fabric of working-class life prioritizing greater capital profitability and aiming to confront crises has reached a critical peak. A mere glance at the staggering, astronomical sums that the Obama administration has over the past year and a half diverted from the value of American and global labour and handed over to America’s industrial and financial giants, illustrates but a fraction of this massive scenario of capitalist criminality and the role played by the capitalist state. Before concluding this section, one further point must be raised. The question naturally arises: if the state and its budget play such a vital role in the survival of capital, why do capitalists across the globe incessantly call for limiting the state’s role and slashing annual government budgets? The answer is clear. No capitalist, anywhere in the world, desires nor could they desire any curtailment of the state’s role in the areas we have discussed or in the performance of the functions we have outlined. For precisely this reason, amidst all the aforementioned controversies, the role of governments becomes increasingly monstrous, and their annual budget figures grow ever more astronomical and staggering. What capitalists desire and clamour for by every possible means is neither a reduction in the state’s role, nor limits on government intervention in economic and social affairs, nor budget cuts; rather, it is one thing alone. We have seen that the entire government budget derived from direct and indirect taxes, various levies, and all other sources is funded fundamentally, predominantly, and sometimes entirely by the labour of the working masses. We have also observed how the state channels these colossal sums into the cycle of social capital reproduction, utilizing them to further boost capital profits. Embedded in these explanations is another point: whether driven by the imperatives of the capital valorisation cycle or by pressure from the labour movement, the state allocates a small fraction of this total budget to education, healthcare, and certain forms of social insurance for the population. This latter share typically constitutes the smallest and most meagre portion of the government budget; in the case of Sweden, for instance, it amounts to a mere 77 billion kronor out of a total of 1.5 trillion kronor. The underlying substance of all the clamour, controversy, and conflict among capitalists regarding government budgets is the drive to divert even this meagre share intended for healthcare and social insurance toward the further expansion of capital profits.
Stock market
The origins of the stock exchange date back to the 15th century specifically to 1460. The first formal exchange was established in Amsterdam, the Netherlands, during the 17th century, while the London Stock Exchange the world’s first major exchange began operations at the start of the 19th century. To grasp the scale and scope of stock market activity during the early decades of that century, one need only consider that the total volume of securities issued by the London Stock Exchange in its inaugural year amounted to just 4,000 shares, each valued at a mere 50 pounds. These figures indicate that the total initial capital of the capitalist world’s largest major exchange at the time did not exceed 20,000 pounds. Let us keep this figure in mind and consider the current landscape: today, the market value of shares for just a handful of massive multinational corporations has surpassed the 50-trillion-dollar mark. Global circulating capital has risen well beyond several hundred trillion dollars; furthermore, the British government’s financial injection into its domestic market to combat the 2008 economic crisis reached 70 billion pounds in a single day, while the Bush administration’s aid to US financial institutions hit 700 billion dollars also within the span of a single day.
To clarify the importance of the stock market particularly given its current vast scale in facilitating the self-expansion and reproduction of global capital, countering the tendency of the profit rate to fall, addressing crises, and ultimately rescuing national social capital (or global capital as a whole) from the quagmire of crisis, we must first examine how corporations operate and the role they play in achieving these objectives. The standard corporate practice involves dividing capital into various shares of a specific value and subsequently selling these shares on the stock market. For instance, if a company’s initial capital is $510 million, the principal owner(s) might divide this total capital into 10,200,000 shares. They set the value of each share at $50 and offer these 10,200,000 shares to the stock market. Now, suppose the company generates an annual profit of $102 million, thereby achieving an annual profit rate of 20 percent. In this scenario, the annual profit per share would amount to $10; however, capitalists never under any circumstances distribute this entire profit to shareholders in proportion to their holdings. At best, they might allocate a 10 percent return per share, effectively assigning a value of $5 in profit to each share. This figure is, of course, largely exaggerated, as the actual amount is typically lower; nevertheless, for the sake of analysis, we will provisionally use these data as the basis for our estimate. Let us see where the company’s scope of operations leads and what results emerge from further planning. Based on the figures above, to achieve a 20% profit rate, each share out of the institution’s total 10.2 million shares would require an investment of $100 (double the standard $50 share price); if we extrapolate this ratio to the entire company, the total accumulated capital will amount to $1,020 million rather than $510 million. To put it more clearly: the company generates an annual profit of $102 million, yet the profit attributable to the shares (at the standard valuation) is only $51 million. Consequently, if shareholders wish to actually capture the company’s full $102 million profit, they will need to have purchased $1,020 million worth of shares, not $510 million. This implies that the founding capitalists are able to bring additional capital under their control an amount exactly equal to the capital they initially invested. Thus far, we have established that the capitalists in question have amassed a capital of $1,020 million through their operations; now, imagine they achieve that same 20% rate of profit with this capital. In this scenario even assuming a payout of $5 per share they would distribute only $51 million in dividends, whereas the company’s total profit has reached $204 million. If we have followed these calculations closely, the outcome becomes clearly apparent: the principal owners the capitalists who founded and control the company have realized a profit of $153 million on an initial capital outlay of $510 million. Their annual rate of return on capital stands at over 30%. Let us bear in mind that this is merely an example; in the current capitalist landscape, the scope of the stock market’s role in boosting the global rate of profit is far vaster and more complex than such examples can fully illustrate.
The history of capitalism is, at every moment, a history of the ever-increasing concentration of capital, the progressive merging of individual capitals, and the formation of monopolies and increasingly massive corporations. Over time, individual capitals whether industrial or commercial have merged into large joint-stock companies under the pressure of competition and in pursuit of modern technology, higher labour productivity, and generally superior production conditions. These companies have grown into giants, either establishing new entities as “subsidiaries” or bringing existing firms regardless of their operational history under their own umbrella of control, planning, and power. In this same vein, international capital has witnessed the emergence of trusts, cartels, concerns, and colossal industrial and financial institutions. From its very inception, this process led to the rise of finance capital and, subsequently, its dominance over the dynamics of global capital reproduction. The crucial point is that the relationship previously described between the principal capitalists and the founders of a joint-stock company holds true for this entire process; the stock market whether at the level of a nation’s aggregate capital or on a global scale serves as a highly effective instrument and the actual arena for the realization of this process. A vast number of international industrial or financial trusts, cartels, and colossal conglomerates control through their policies, planning, and power an immense ocean of capital invested in enterprises ranging from the gigantic to the medium-sized. The law of the general rate of profit with all its validity and influence, and precisely as Marx elucidated manifests itself within the sphere of global capital reproduction and organization; under this “law,” any unit of invested capital in any sector regardless of the rate of surplus value it extracts through the exploitation of workers in its own sphere of accumulation, and regardless of its organic composition secures a share of the total surplus value produced, proportionate to its constant and variable capital components. While this law remains fully operative, the intricacies of its functioning under the sway of the stock market mirror the dynamics we previously described regarding the various components of invested capital within a single enterprise.
The stock market that towering, legendary mountain range of capital has brought vast amounts of capital under its control through the shares of corporations, cartels, and trusts. Each of these concerns and cartels controls a volume of capital derived from the sale of their own shares or those of their subsidiaries that is many times, and sometimes dozens of times, greater than the capital they originally invested. This entire mass of capital which constitutes the most immense segment of global capital is either accumulated as productive capital directly within the sphere of exploiting the international working class or employed as non-productive capital to indirectly further expand and deepen worker exploitation and increase the volume of surplus value. A very significant percentage of this total capital volume represents the value of shares purchased by ordinary individuals. At best, these individuals may receive a minuscule fraction of the profit that accrues to each segment of capital in accordance with the laws governing the formation and realization of the general rate of profit. Furthermore, amidst the fluctuations and declines in profit rates particularly on the verge of crises, or even under normal conditions they risk losing a portion, a large share, or even the entirety of their savings and the value of the stocks purchased with them. The reverse holds true for the principal shareholders of individual companies and the influential owners and shareholders of cartels and trusts. As the profit share of minority shareholders erodes or as the underlying value of these shares depreciates and trends downward the mountain of profits and the rate of return accruing to the vast array of corporations and trusts soar to new heights. The stock market plays a pivotal role in addressing the challenge of the falling rate of profit or in extracting capital (particularly the dominant segment of global capital) from the abyss of crisis while simultaneously shifting the crushing burden of these crises onto the shoulders of the global working masses. To gauge the magnitude of this impact, one need only observe the daily activity of the world’s stock exchanges, whether major, minor, or even the smallest among them. The value of securities on these exchanges especially during dire economic conditions can fluctuate by hundreds of millions of dollars between the hours of 8:00 a.m. and 4:00 p.m. Consider that amidst these volatile swings, millions of small-scale shareholders who invested a portion of their labour earnings in stocks solely in hopes of marginally improving their livelihoods lose their entire life savings, while the value of their shares is directly absorbed into the capital and profits of the capitalists.
We must also bear in mind that global capital particularly in certain regions has come to dominate the intellectual existence of people by employing the engineering of public opinion. It has done so to subsume the lives of the earth’s inhabitants ever more comprehensively into the requirements of capital accumulation, fostering a culture of share ownership and tethering individuals’ livelihoods ever more tightly to the orbit of astronomical capital profits. As previously noted, the stock market in its current scope is a phenomenon of recent decades within global capitalism; consequently, its significance lies primarily in its role as a lever to counteract the tendency of the rate of profit to fall during this period. Nevertheless, Marx had already closely examined the mechanisms of this role in its nascent forms; his analysis of fictitious capital and its impact on corporate profit rates illuminates the profound significance this factor holds within the contemporary capitalist world.
The explosive phase of capital globalization
The foundation of capital export and the global expansion of capitalism has rested on capital gaining the widest possible access to cheap labour across nations, countering the consequences of the forced and inevitable rise in the technical and organic composition of capital, reducing the costs of forming fixed capital, and employing other mechanisms to boost the general rate of profit. As global capital has become more concentrated; as the number of gigantic international trusts and monopolies has grown; as the organic composition of capital within concerns and cartels has risen; as the scope and impact of factors intensifying the tendency of the rate of profit to fall have expanded; and, finally, as the intervals between crises have shortened while their destructive and erosive force has intensified so too has capital’s need for export markets and access to ever-cheaper labour grown. There is a common saying: “An impossible notion is not itself impossible.” Let us, for a moment, visualize this “impossible” scenario: that the entirety of global capital in terms of its technical and organic composition mirrors that of powerful trusts like Microsoft, General Motors (USA), Mercedes-Benz (Germany), Volvo (Sweden), Mitsubishi (Japan), and their ilk. Let us slightly temper the implausibility of this scenario and assume, instead, that the organic composition of total global capital matches that of the social capital of a country like Sweden. What would happen then? The answer is abundantly clear. Under the pressure of a rapid and crushing decline in the rate of profit, capital will not only plunge into the depths of the most devastating crises, but the prospects for its recovery and emergence from the crisis—even for the briefest of periods will remain exceedingly bleak. Such is the nature of capital: it strives with all its might to increase the productivity of social labour and to raise its own technical composition. This process enhances capital’s competitiveness, solidifies its position in shaping the general rate of profit, and expands its capacity to appropriate an ever-larger share of the surplus value generated either domestically or globally. These are the realities of the surplus-value production relationship; yet the increase in social labour productivity and the deployment of cutting-edge technologies simultaneously raise the organic composition of capital, thereby intensifying the conditions that actualize the tendency of the rate of profit to fall. Precisely for this reason, this mechanism serves as a primary lever for securing greater surplus value only if that expanded mass of surplus value is, in fact, generated elsewhere by masses of workers exploited within other spheres of accumulation. In capitalist production, surplus value manifests as profit, and the rate of surplus value appears in the guise of the rate of profit. Through this process, the mode of production obscures the true source of surplus value wage labour from view, substituting capital in its place. Through competition, capitals across various spheres establish a general rate of profit based on a set of factors which need not be detailed here whereby each capital secures a specific share of the total profit, that is, the aggregate surplus value generated within that sphere. This is a law of capital that applies to global capital as a whole. Were it otherwise, the capitalists’ ceaseless drive to constantly transform the capital-labour process, to harness all human scientific achievements within the cycle of capital production and reproduction, and to maximize the productivity of social labour would be utterly meaningless. Surplus value derives solely from the variable component of capital; yet the history of capitalism is one of unremitting, frantic effort by capitalists to produce the maximum volume of commodities with the minimum amount of labour. A paradox appears to exist here, but in reality, there is none. The key to resolving this ambiguity lies in the operation of the very law previously mentioned: the total surplus value generated by the global workforce regardless of location or the specific workers involved is distributed among all segments and sectors of global capital.
“Although capitalists in various spheres of production recover the value of the capital invested in production when they sell their commodities, they do not recover the surplus value or profit generated during the production of those specific goods within their own particular sphere. Instead, in proportion to their capital’s share of the total social capital, they obtain only that amount of surplus value or profit derived from the aggregate surplus value or profit generated by the total social capital across all spheres of production during a given period which is distributed equally among every unit of this total capital. In terms of profit generation, these capitalists resemble the shareholders of a public joint-stock company, where profits are allocated equally per 100 units; the only distinction between different capitalists lies in the quantity of capital each has contributed to the total or, in other words, their proportional share in the company as a whole, or the number of shares each holds.” (Capital, Volume III)
This is where the true foundation of globalization lies. Over the past 120 years, numerous theories have been concocted to distort this fact; each has led the global labour movement down a debilitating and destructive path, imposing that course upon it. Examining these theories is not the aim of this text that task has already been sufficiently addressed elsewhere. What must be emphasized is that everything global capital has undertaken over these two centuries whether in Asia, Africa, Latin America, or elsewhere and everything bearing the hallmarks of colonialism, imperialism, and globalization, has consistently aimed at the maximum exploitation of the entire international working class and the boosting of profit rates for the dominant sectors of international capital. In the current global landscape, we are confronted with a population numbering in the billions a mass of people who sell their labour power. For decades, the capitalist mode of production has become the dominant form of production even in the most remote villages on Earth, and the surplus value generated internationally is the direct product of the exploitation of billions of workers. A highly distorted and misleading notion suggests that the vast majority of this surplus value is produced solely in centres that utilize the latest industrial achievements, employ cutting-edge technologies, and have attained the highest levels of social labour productivity. From this perspective, labour forces lacking high social productivity those working in countries or zones of capital accumulation not equipped with modern or ultra-modern technologies make no tangible contribution to the generation of those staggering, astronomical annual figures of surplus value! This is the narrative that the intellectual representatives of capital cultivate in the public mind. Underlying this notion is the idea that the source of surplus value is not variable capital, but constant capital does not wage labour, but rather an array of techniques, machinery, and capital itself! This bourgeois illusion wears a polished facade, and it is precisely through this outward polish that it manages to deceive the masses. The visible aspect of the matter the one apparent to the eye is that the more advanced the technology and the more modern the industrial machinery employed in production centres, the greater the volume of goods produced; these massive quantities of goods embody correspondingly greater amounts of value and surplus value. Yet, this line of reasoning is a misleading inversion! It draws a thick veil over the very factors involved in the production, realization, and distribution of surplus value. Above all, the fact that goods are produced in massive or vastly increased quantities by a minimal workforce within the sphere of global capital accumulation absolutely does not imply that the source of profit generation lies in constant capital! On the contrary, this simply indicates that a more productive, creative workforce with greater productive capacity can generate more surplus value for capital owners. Another crucial point is that while value and surplus value are generated within the production phase, they are realized and ultimately reach the hands of capital owners only during the process of circulation. To put it more clearly, what has been produced must be sold so that the socially necessary labour crystallized within the goods returns to the capitalist the owner of the commodities in the form of money, securities, or other assets. This implies that if a capitalist or a group of capital owners possesses a world teeming with values, surplus values, and the commodities embodying them, yet fails to realize their sale or sustain their circulation, then all these commodities, values, and surplus values become nothing more than a source of trouble and a burden to their owners. With this in mind, let us turn to the realm of commodities produced within the sphere of reproduction of the dominant sector of global capital commodities manufactured using cutting-edge technologies and the most complex technical compositions of capital. These commodities must complete their circuit of circulation; the vast majority of them are goods that can only traverse this process as constant capital. Simply put, what is produced here must serve as constant capital for other spheres of production and labour; through accumulation elsewhere in the world, it must subject the vast masses of the working class across nations to the most intense and savage forms of exploitation. A critical examination grounded in the Marx critique of political economy of the trade and exchange occurring between different sectors of the capitalist world clearly reveals that the export of capital constitutes the vastest segment of global trade. The issue here is not merely the familiar form of capital export from one region of the globe to another; rather, it concerns a system of exchange conducted under the guise of commodity imports and exports. The predominant share of these commodities consists of capital goods machinery, raw materials, spare parts, semi-finished components, and other products which form the bulk of the importing country’s constant capital. Through these channels, the towering volume of commodities produced within the spheres of accumulation of the largest conglomerates embodying the pinnacle of human technological and scientific achievement is deployed into these latter regions. This process facilitates the ruthless exploitation of the billions of people inhabiting these countries and territories, as well as the appropriation of the cheap or virtually free labour of these billions of workers. In doing so, this capital firstly realizes its own intrinsic surplus value and, secondly and more crucially it channels a significant portion of the surplus value generated by this vast population of wage-slaves back toward itself, driven by the prevailing laws governing the general rate of capitalist profit. To dismiss all this and propagate the myth that technology, machinery, and more modern means of production generate greater profits is merely a form of chicanery a ruse orchestrated by capitalists, politicians, and their intellectual representatives to further brainwash the working class. Given their extremely high organic composition of capital, and in the absence of such a process, the capital held by trusts and cartels is condemned to endure persistently low profit rates and to repeatedly succumb to devastating crises; they possess no inherent capacity for self-reproduction. What enables them to continue reproducing themselves is the export of their output as capital and their extensive participation in appropriating the surging torrent of surplus value generated by the entire international working class.
A third point within the scope of this discussion concerns the direct export of capital while maintaining legal ownership structures from regions characterized by highly advanced technical and organic compositions to regions offering near-free labour, resulting in the criminal exploitation of labour across borders. Young Chinese girls are exploited by this capital, working two consecutive eight-hour shifts and sometimes three instead of one; the price paid for their labour is so meagre and negligible that it fails to cover even the cost of their daily bread. Colossal capital interests from Sweden, Germany, and the United States including funds controlled by labour unions in some of these societies purchase the labour of six-year-old children in the Philippines, Indonesia, and Singapore for thirty cents an hour. Singaporean workers toil seventy hours a week for these capital interests. The wages of Vietnamese workers fall below half a dollar a day. Millions of Bengali women assemble mobile phones in their damp shacks by the light of oil lamps, working through the night and for the better part of the day. Millions of young children in Ivory Coast and Ghana are exploited by this same capital from dawn till dusk on cocoa plantations working in deadly conditions for wages that cover nothing while the lifeless bodies of some are routinely pulled from beneath heaps of cocoa, with no one batting an eye. No pen can adequately chronicle, nor any language fully describe the criminal nature of capital’s exploitation of women, children, and the vast, ultra-cheap, and virtually costless workforce comprising the world’s billions of wage-slaves. To shed some light on the horrific scale of this exploitation inflicted by global capital upon billions of workers (men, women, and children alike) and the mountain of surplus value they generate we need only note that in 2006 alone, the volume of capital accumulated across various nations as “exported foreign capital” surpassed the $9 trillion mark. This figure represented a 300 percent increase compared to just two years prior, in 2004. Within the capitalist hellscape of Iran, the volume of such investments in 2009 precisely when the clamour over economic sanctions imposed by the UN Security Council, the US, and its satellites was deafening amounted to over $300.3 billion. To summarize: the export of capital in its various forms and the global expansion of capitalism have served as vital mechanisms for the system’s survival from the nineteenth century to the present day. As capital has become increasingly concentrated, as its technical and organic compositions have risen, as the threat of the falling rate of profit becoming a reality has tightened its grip on capital’s throat, and as the intervals between crises have shortened while their blows have grown more devastating, capital has accelerated its expansion into every corner of the globe. Among the factors contributing to the persistence of capital, the expansion of the scope of accumulation worldwide and the increasingly savage, bloody, and predatory exploitation of billions of cheap wage-slaves occupy a fundamental position.
Separation of ownership from management
Capital mystifies every aspect and truth of human social life, turning this very mystification into a veil that conceals the catastrophe of exploitation and its own anti-human nature. The mere separation of ownership from management is not simply one branch of the mystifying forest of capital; the reason for this is quite clear. The issue is not fundamentally about the capitalist or the owner of capital; the entire discourse revolves around capital itself. The true catastrophe lies not in the existence of an individual who might be a capitalist, but in the existence of capital itself an entity that will inevitably secure an owner for itself. That owner could be an individual, a group, a corporation, a cartel, a trust, or most expansive and powerful of all the capitalist state. Thus, it must be emphasized that the point is not the specific category of the separation of ownership and management acting as some sort of magical, mystifying lever. The mere occurrence of this event casts no spell, nor does it bewitch anyone. The fundamental issue, insofar as this specific topic is concerned, is that throughout history, with every step capital has taken forward, it has to varying degrees and in keeping with the times cast aside its initial crutches; and the less it has relied on these canes and supports, the more it has embodied its nature by mystifying social phenomena and the more powerfully it has dissolved the very fabric of social relations into itself. Let us return for a moment to nineteenth-century Europe. In England the industrial giant of that era and indeed across all other Western European societies, the vast masses of workers in every workshop bore the crushing daily burden of twelve-hour shifts and the ravages of savage capitalist exploitation; simultaneously, they endured the octopus-like shadow of the workshop owner looming over them at every moment, forced to suffer the sting of his hateful, insulting shouts ringing in their ears. Even the most backward among the workers saw clearly the kind of bloodthirsty, predatory beasts the capitalists they were facing. Even the least informed workers likened the capitalist to the most loathsome of leeches. Hatred, animosity, and loathing toward the owners of capital were at their peak. While the working masses may have lacked the insight to grasp the nature of capital in class terms, they knew the capitalist all too well; they may have been unable to perform a Marx anatomical analysis of capital itself, yet they were exceptionally adept at dissecting capital as embodied in the person of the capitalist.
Even if their beings were not entirely consumed by hatred for capital itself, their attitude toward the capitalist was invariably like a raging volcano. The history of this era bears witness across various regions to worker uprisings in countless workshops against capital owners, and in some instances, even to the killing of the capitalist. This phenomenon was certainly not unique to the Europe of that time; all societies grappled with such conditions during the development of the capitalist mode of production. Epithets such as “leech” or “pack-mule” applied to workshop owners and capitalists in general along with well-known sayings like “the donkey does the dying, while the pack-mule does the eating” reflect the visceral, hostile perspective and the unbridled rage of the working masses toward their class enemies during this period across the globe. Thus, a defining characteristic of this era was that labour struggles were directed more against the capitalists themselves than against capital as an abstract force.
With the progression of capital concentration, the merging of capitals, and the emergence of industrial and commercial joint-stock companies, capital owners gradually concealed their detested presence behind the veil of management. Ownership became separated from management. Industrial bureaucracy took the place of the direct presence, supervision, and intervention of capital owners. The process of further capital consolidation, the rise of colossal international trusts and monopolies, the sweeping and unchallenged dominance of finance capital over the global process of capital reproduction, and the undisputed sway of stock markets in the capitalist world rendered the situation increasingly complex. Matters reached a point where the majority of workers and at times the overwhelming majority—fundamentally do not know for which capitalist they work, by which group of capital owners they are being exploited, or who exactly the individuals are that transform the fruits of their exploitation into massive mountains of capital. Yet, within this specific scope of developments as previously emphasized there does not appear to be a distinct upward trend in capital’s capacity for obfuscation; indeed, the ultimate outcome may well be the further tearing away of the veil of secrecy. Capital has brought its octopus-like nature more starkly to the forefront. The anti-human essence of the surplus-value production relationship is no longer attributed merely to the capitalist’s inherent malice or wickedness; consequently, understanding capital has become simpler, and the task of exposing it somewhat easier. While this inference regarding one facet of the phenomenon is entirely correct, other dimensions of this complex reality must also be considered. Through the separation of ownership from management, the capital relationship shed a thin, simple veil, yet simultaneously shrouded itself in the terrifying darkness of far coarser screens. This time, it emblazoned the names of all its shareholders upon its very forehead! It proclaimed itself the “social wealth” of the citizenry! It styled itself a “national industry”! It donned the guise of domestic commerce! It presented itself as the embodiment of the Gross National Product! It became the asset of the state and of city-states, donning hundreds of other iron-clad disguises. By means of all this mystification, capital trumpeted its own dilemmas as the dilemmas of society and the world at large! It branded its own problems as the economic woes of humanity! It portrayed the very calamities of its own making as mere consequences of policy! In the absence of a powerful movement capable of continuously dissecting capital’s anti-wage-labour nature and fostering class consciousness among workers, these developments gave capital free rein for widespread demagoguery, enhanced its ability to disarm segments of the working masses, and ultimately paved the way for the demagoguery of reformism within the labour movement.
Giant reserve army of labour
In every era and under specific historical conditions, capital has in a distinct manner generated and expanded the “reserve army of labour.” During the initial phase of development worldwide, the dispossession of peasants and small-scale producers transforming them into a marketable labour force and the explosive expansion of this process typically gave rise to a vast army of the unemployed across the globe. Concurrently, and within the context of this trend, capital continuously upgraded its technical composition and became increasingly concentrated. It employed the minimum labour force for maximum production, thereby further solidifying the foundations for the persistence and expansion of the reserve army of labour. The existence of an army of the unemployed, and the intensified competition among them, serves as a fundamental lever for capital to drive down wage levels. In the current global climate, approximately one billion unemployed wage-slaves worldwide are seeking a place to sell their labour power. Within the compressed and interconnected world of capitalism, this billion-strong legion under the pressure of poverty, hunger, homelessness, and a lack of clothing is compelled to accept any type of work at any wage level. The international working class has never faced such a situation at any other point in the history of capitalism, and this factor constitutes perhaps one of capital’s most potent weapons against the working masses of the world. The catastrophe is of such magnitude that even some proponents of the proletariat, socialism, and Marx teachings have questioned Marx’s assertion that “the proletariat has nothing to lose but its chains.” They argue that this is no longer the case today; “the worker loses their job,” and this constitutes a terrifying Achilles’ heel one that compels the worker, out of fear, to tighten the chains around their legs and shoulders rather than seeking to break them. This view is incorrect. The less the worker challenges capital, the greater the risk they incur of losing their job; tightening the chains of wage slavery cannot even preserve the opportunity to sell one’s labour power. Furthermore, and more fundamentally it was never intended for the proletariat to view the suffocating grip of capital upon its chest as so inevitable and predestined that selling labour power is regarded as its only fate and sole means of survival. While these points may be self-evident, the significance of employment in the lives of billions of the world’s workers is a matter that cannot be ignored. If those premises are self-evident, it is equally obvious that unemployment forces the worker to accept the criminal world of capital, and the fear of losing one’s job plays a major role in the worker’s retreat from class struggle.
Changes in the composition of the forces constituting the working class
The explosive growth of social labour productivity across all spheres of capital accumulation including the industrial sector has led to a dramatic reduction in the workforce within this sector. A report from the Swedish automaker Scania indicates that, just a few years ago, it took three workers an entire eight-hour shift to produce and ready a single truck for the market. A year or two later, that figure shifted to one worker producing eight trucks daily; currently, a single worker produces sixteen trucks. These changes imply that, for instance, while producing a single truck once required twenty-four hours of labour, it now takes no more than two hours. Although Scania ranks highly among global automotive corporations, it does not hold the top spot; nevertheless, we observe that labour productivity there has increased at least twelvefold in the span of just a few years. This increase in fields such as mobile production or many other goods has sometimes reached hundreds of times. The direct product of such an upward trend in the productivity of social work is a very significant decrease in the number of workers in the industry. An event that is not specific to this sector and all non-production areas, business areas, communications and what is called “services” in the literature of the capitalist system!! It also includes the amount of work that was carried out by dozens of workers in a food company a few years ago, is now carried out by only a few workers with the use of modern techniques and special professional training. More importantly, during the last two decades, we have witnessed the widespread dismantling of networks such as post offices, banking institutions, commodity sales centres, book publishing companies, and similar sectors and their replacement by centralized and complex systems with the minimum possible workforce. According to the “Wall Street Journal” report a few years ago, one and a half to two million jobs are eliminated every year in America alone. Between 1981 and 1982, one million eight hundred thousand jobs were lost in the industry sector alone.
Above all, an estimate prepared and published by the International Metalworkers’ Federation suggests that within the next three decades, a mere 2% of the global workforce may suffice to produce the entire annual requirements of the Earth’s population. The purpose of citing these figures regardless of their precise accuracy is not to reiterate the massive transformations occurring in the technical and organic composition of capital; we have already discussed this factor and its implications in various contexts, including the present text. Rather, the primary aim here is to highlight another aspect of the unfolding events within the capitalist system: while labour productivity has risen astonishingly across all spheres of work and production, the demographic balance of the workforce has shifted in certain areas, favouring the non-productive sector at the expense of the productive sector. Across much of the world, the agricultural workforce has dwindled to below 5 percent and, in some cases, even under 2 percent. In most societies, the number of industrial workers has fallen significantly behind that of the service sector; in some countries, this ratio has dropped to less than half. These shifts raise a fundamental question. Given that only productive labour generates surplus value and acknowledging the validity of the principle that the world’s total annual surplus value is produced by the productive segment of the working class how can we explain the relationship between the decline of productive labour in favour of unproductive labour, on the one hand, and the massive surge in the volume of annual surplus value generated in today’s capitalist world, on the other? A subsequent question which, due to its critical importance, serves as the central focus of this section is this: What impact have these shifts had, or will they have, on the balance of class forces between the working masses and capital? To address both questions, however, we must first albeit briefly examine another crucial point.
Surplus value is unequivocally generated by productive labour or the productive worker; unproductive labour is not the source of surplus value. A salesperson, a warehouse worker, a bank employee, a postal worker, and labourers in certain other sectors do not actually produce surplus value. The labour power of this segment of the working class is exchanged for capital but is not consumed in the production of new commodities; consequently, it generates no surplus value. This much is clear, yet it is not the whole story. The crucial point is that, while unproductive labour as such generates no surplus value, it constitutes a vital and necessary condition for the materialization of the production process and the cycle of capital valorisation. Produced commodities must complete their circuit to ensure the continuity of accumulation and the survival of capital. The starting point of the Marx’s perspective in analysing capital and the capitalist mode of production is capital in its general sense, rather than any specific form it might take. In this regard, capital assumes diverse forms: it is advanced in industry, enters the chains of trade and circulation, and takes on the guise of banking capital. It constitutes stock markets, becomes a means of transportation, accumulates in the construction of schools and hospitals, establishes large and small chain stores, or turns communication networks into arenas for its own accumulation. In all these instances, capital remains capital, playing a complementary role in the processes of reproduction and the overall circulation and realization of capital. The labour force exploited by merchant capital does not directly produce surplus value; yet it is just as essential for the realization of produced surplus value and the process of capital valorisation as productive labour is for the initial creation of that surplus value. The profits accruing to merchant capital, banking capital, real estate capital, usurious capital, and the like are not generated by workers in the spheres of sales, trade, or banking. While these forms of capital appropriate a portion of the total surplus value created by productive workers, the output of those productive workers must undergo a specific process of circulation and realization enabling the actualization of surplus value and the conditions for renewed accumulation and reproduction and it is precisely this function that workers in the aforementioned sectors perform. This principle applies to the entire non-productive segment of the labour force or the non-productive section of the international working class. However, the matter does not end there. Unproductive labour is not merely an indispensable condition for the realization of surplus value created by productive labour; it also plays a significant role in increasing the volume of surplus value that the productive worker generates. Imagine a specific capitalist preparing to advance capital amounting to one hundred million dollars. If hypothetically he was to deploy this capital across the entire operational cycle ranging from production and sales to warehousing, transportation, and so forth he would have no choice but to allocate portions to establishing a factory, marketing, constructing warehouses, and setting up retail outlets. In such a scenario, not only would the continuity of his capital’s operational process be repeatedly interrupted, but he would also be advancing only a fraction of the total capital into the sphere of production; consequently, the number of workers exploited in this sector would be far lower than if he were to concentrate the entire capital within it. Conversely, when the capitalist in question concentrates his entire capital solely in the sphere of production, he produces many times the volume of goods compared to the previous scenario, exploits many times the amount of productive labour, and ultimately generates many times the surplus value. All of this is made possible because other segments of capital in the broad sense of the term have been advanced in other spheres (such as the commercial sector) and are actively engaged in the exploitation of labour power. These are forms of capital that are non-productive, yet they have firstly significantly shortened the turnover time of industrial capital, thereby playing a marked role in increasing the surplus value generated in that sphere; and secondly, they exploit a vast workforce. While the labour power they exploit does not itself produce surplus value, it has been highly effective in indirectly boosting the volume of surplus value within the productive sector of capital. Marx specifically elucidates this point regarding the role of commercial capital and the labour power exploited by it.
To the extent that commercial capital shortens turnover time, it can indirectly contribute to increasing the surplus value produced by the industrial capitalist. It does so by aiding market expansion and facilitating the division of labour among capitals thereby enabling capital to operate on a larger scale. The functioning of commercial capital enhances the productivity and accumulation of industrial capital. By shortening turnover time, commercial capital raises the rate of profit the ratio of surplus value to advanced capital because it restricts the portion of capital functioning as money capital to the sphere of circulation, thereby increasing the share of capital directly employed in production. (Capital, Volume III)
Continuing this discussion, Marx clarifies how, even though unproductive workers do not themselves produce surplus value, their labour serves as a source of profit for the unproductive capital that exploits them. He states: “Just as the unpaid labour of the worker directly creates surplus value for productive capital, the unpaid labour of commercial wageworkers secures a share of this surplus value for commercial capital” (ibid.).
Now, considering all these components, let’s return to our discussion. During the recent decades, the proportion of productive workers in the general composition of the global working class has drastically declined, and therefore the scope of the source of surplus value production has become more limited, but at the same time, first. The amount of relative surplus value being produced by productive workers has risen very explosively, secondly. The development of the non-productive sector of the working class in comparison with the productive sector has not only been a factor in reducing surplus values but has played its conventional role in increasing these surplus values, thirdly. And finally, this same non-productive sector has participated in the process of reproduction of social and international capital with more capacity, efficiency and social productivity, just like the productive sector. In order to clarify the correctness of these perceptions and at the same time the importance of the issue, it is enough to pay attention to the annual reports of the official sources of the European Union in this regard. According to a published document, only 2% of the total values of the GDP of the EU member states in 2003 came from the agricultural sector. 27% was produced in the industry sector and the remaining 71% originated from different sectors called “services”. These statistics are misleading in all respects and based on the conventional criteria of capitalist economists. 71% of the EU’s gross domestic product, which is certainly worth trillions of euros, is not produced in its largest sector in the “services” sector, but in the manufacturing sectors and by the productive workforce. But why do we cite this report? Simply because the figures themselves proclaim a significant reality: the extent to which the workforce employed in the so-called “services” sector given its role in the process of reproducing a nation’s social capital has contributed to increasing the surplus value generated by productive labour in the industrial and agricultural sectors. It is also worth noting that within the spheres categorized as “services,” there are vast sectors that exploit productive labour and, in doing so, appropriate the massive volume of surplus value derived from the exploitation of these workers. A wide network of private schools, hospitals, and similar institutions falls into this category.
The net result of these developments and shifts is abundantly clear. In the course of these events and changes, capital has ratcheted up the pressure of labour exploitation to the absolute limit. It has astonishingly shortened the turnover time of capital, driven the pace and speed of work to dizzying levels, and exacerbated the wear and tear on workers to a terrifying degree. Through these means, it has exponentially increased the rate of surplus value; it generates maximum surplus value with minimal labour input and exploits the entire global working class both productive and unproductive to the greatest possible extent. Thanks to these developments, capital has rendered its inherent contradictions and the internal core of its crisis-proneness far more volatile; yet, in the absence of a powerful global working-class movement against wage labour, it has simultaneously enhanced its capacity to overcome certain difficulties and bottlenecks and even to surmount the challenges posed by crises.
Forced dispersal of the workforce
Historically, the gathering of thousands of workers under a single roof has been a highly effective factor in further stoking the fires of discontent and protest among the working masses; it has served as a powerful lever for their united collective struggle and, ultimately, as a decisive element in paving the way for their organization against exploitation, the denial of rights, and the injustices of capital. Whether workers are congregated under one roof or conversely scattered across various locations and fragmented centres of work and exploitation, the fundamental nature of their class solidarity, shared suffering, and nationwide class cohesion as members of a single class remains unchanged. In any case, they are individuals belonging to a class that “…must, for its own emancipation, liberate itself from all spheres of contemporary society and, in doing so, liberate all these spheres beforehand; it demands the dissolution of a society that represents the negation of humanity, and thus must restore humanity in order to achieve its own emancipation…” (“Critique of Hegel’s Philosophy of Right”). Regardless of where or how they are exploited or by which capitalist or segment of global capital workers face a unified struggle, a shared mission, and entirely common objectives. The crucial point is that advancing this struggle, fulfilling this role, achieving success at every step, and realizing the class’s goals require the exercise of its united, organized, and increasingly nationwide power against capital. Such organization, unity, interconnection, and the exercise of organized, conscious, and visionary power require, in turn, that their day-to-day struggles become increasingly inclusive, integrated, and intertwined. The greater the number of workers gathered within a single unit of work and production, the smoother the path becomes for a joint movement, unified organization, and heightened consciousness or, in short, for a conscious and visionary alignment against the wage-labour system. However, current developments in capitalism particularly over the last few decades have largely undermined, eroded, and complicated the conditions necessary for such large-scale aggregation. Approximately 30% of the global working class is unemployed and lacks a fixed workplace. In most capitalist societies across Asia, Africa, and Latin America, the vast majority of the working class is exploited in small and medium-sized enterprises with relatively small workforces. In many of these countries, a huge number of wage labourers are engaged in work that lacks the potential for the class solidarity and integration required for a collective struggle. For decades, the capitalist system has increasingly fostered this situation, exacerbating both its scale and intensity. Overcoming this situation is not particularly difficult for right-wing trade union reformism, as the movement’s modus operandi is rooted in shattering and dismantling the foundations of the working class’s anti-capitalist unity. In that context, fragmenting the labour movement into distinct sectoral spheres, tethering its organization to the dictates of capitalist law, and making every move by workers contingent upon agreements with the capitalist state greatly facilitates the process of organizing workers along these lines. For the working class’s anti-capitalist movement, however, the situation is entirely the reverse; here, the fragmentation of individual workers and their failure to unite under a common banner pose a significant obstacle to efforts aimed at their organization.
Global poles and polarizations of capital
Global capital has further consolidated its position enabling the ruthless, boundless exploitation of the world’s working masses and the intensified suppression and crippling of the global labour movement by leveraging polarization and forging massive international alliances. The 1991 North American Free Trade Agreement (NAFTA) comprising the United States, Canada, and Mexico not only eliminated all barriers and restrictions to the movement and accumulation of capital across these three nations but also gave capital increasingly free rein to intensify, without restraint, the exploitation of the working masses particularly the millions of low-wage Mexican “wage slaves.” This agreement drastically heightened competition among the workforce across the three countries, severely depressed the price of labour, and profoundly undermined the position of workers vis-à-vis capitalists. NAFTA empowered the continent’s massive industrial and financial trusts to drive up the rate of exploitation of the working masses to the furthest horizons imaginable to capital, all while facing absolutely no impediments or obstacles. The impact of the European Union’s formation on consolidating the position of capital and further undermining the position of the continent’s workers is undeniably hundreds of times greater than the effects of economic pacts like NAFTA. In reality, the EU represents a union of Europe’s capitalist class against the continent’s working class. The encroachment of massive British, German, French, Swedish, Dutch, and Norwegian trusts and financial and industrial institutions upon the cheap labour pools of Poland, Latvia, the Czech Republic, Estonia, Romania, Hungary, Portugal, Spain, and elsewhere is merely one part of capital’s ferocious assault on the lives of the continent’s workers. To grasp other dimensions of how this polarization intensifies the exploitation of workers, one need only consider the events of recent years regarding the 2008 economic crisis or the crises that erupted in Greece, Spain, Italy, Latvia, and most recently Ireland. The total capital allocated by the EU to pull Greece back from the brink of crisis amounted to approximately one trillion US dollars. The EU has provided similar so-called “aid” packages to Spain, Portugal, and Latvia. The capital currently earmarked to tackle the Irish crisis is estimated at tens of billions of dollars. Simply aggregating these figures yields a total in the range of several trillion dollars. All of this represents the free capital of massive European banks and financial institutions, which through the resolutions adopted by EU leaders is effectively transformed into trapped yet profitable capital. In exchange for receiving this “aid”!!! governments have one after another committed to imposing a long list of barbaric assaults on the very livelihood and existence of the working masses. These measures include raising the retirement age and forcing workers to generate surplus value until their final moments of life; decimating limited resources for healthcare, medicine, education, public hygiene, and unemployment or sickness benefits; mass layoffs; extending the workday; slashing annual holidays; hiking the prices of basic necessities; cutting wages and freezing pay raises; and numerous other actions all of which exemplify the bloodiest forms of capital’s assault on the lives of the working masses. It is worth noting here that the very things capital has decimated and deprived the working class of accessing such as hospitals, schools, universities, and similar institutions were funded through the workers’ own paid labour. These facilities were not established using taxes paid by capitalists or from the surplus value and unpaid labour of the working class; rather, they were financed through the direct and indirect taxes that governments collect from workers effectively drawing from the value of their labour power or their paid labour. In other words, by dismantling these resources, governments effectively wrest from workers for the sake of boosting capital profits what the workers themselves created through the sale of their labour power at a low price. As for the EU that massive pole of capital and alliance of capitalist states and the capitalist class the planning of these schemes has served a dual purpose: on one hand, it has mobilized trillions in capital out of a state of stagnation; on the other, it has ratcheted up the exploitation of millions of the continent’s workers to the breaking point, all to secure and guarantee the desired level of profit for capital.
In the current landscape, economic unions and pacts within the capitalist world are not limited to the EU, NAFTA, and similar entities. Clearly, not all such agreements or blocs function like the European Union; nevertheless, each depending on its specific context and position helps alleviate certain aspects of the challenges facing global capital. It is equally evident, however, that none of the Gordian knots surrounding the reproduction and valorisation of capital can be untied without subjecting the lives of millions of workers to the most massive bloodbaths.
Where does the “Achilles’ heel” (literally: “Esfandiar’s eye”)?
The factors discussed thus far represent “trump cards” that capital and the capitalist system have either secured or leveraged to their own advantage over the past century, deploying them all in the class struggle against the global working class. Other elements could perhaps be added to this list. It appears that, in the absence of a powerful movement challenging the wage-labour system, each of these factors has played a pivotal role in the survival of capitalism; to grasp their significance, one need only examine the 2008 crisis closely. Economists, capitalist thinkers, and the heads of the world’s largest financial institutions alike acknowledged that this crisis was far more devastating and destructive than the crisis that struck at the beginning of the 1930s. Capitalism ultimately confronted the first crisis by setting the entire world ablaze in a decade-long war, reducing a vast portion of humanity and all human achievements up to that point to ashes. The second crisis unfolded differently; leveraging those same mechanisms, global capital drove it straight into the heart of the shantytowns and the very fabric of life of the billions of workers inhabiting the globe, effectively defusing its explosive force. This is a reality that cannot and must not be simply overlooked.
The fundamental question, however, is this: was it truly the existence of these factors these mechanisms, or to put it more directly, the intrinsic capacities of the capitalist mode of production that kept this system afloat? It seems unlikely that anyone possessing even a minimal materialist understanding of history would accept an affirmative answer to this question. The answer is an unequivocal “no.” While these factors have certainly had an impact, the survival or collapse of capitalism is in no way and to no degree contingent upon them. Let me offer an example to clarify the point. A massive, ferocious, and powerful animal like the lion makes maximum use of its claws, teeth, leaping ability, and unparalleled speed to hunt. Yet, none of these strengths, tools, or weapons serve as a barrier against the lion’s own mortality. As long as it lives, the “King of Beasts” utilizes these instruments and armaments to the best of its ability to sustain itself; however, none of these effective offensive weapons or efficient defensive tools can shield it from the threat of the hot, lethal bullets fired by skilled and determined hunters. Capitalism is standing on its feet not because it had a lasting capacity, and not because the government, the stock market, globalization, the separation of ownership and management, or the explosion of the population of the labour reserve army, all the factors of neutralizing the downward trend of the interest rate, and the like, have delegated such a capacity to it!! The answer to the question of why capitalism has remained so far is much brighter than the mid-August sun. Capitalism has not disappeared because the international working class has not re-created and organized the power necessary to destroy it in its own class movement. We have explained this in detail in the last few years through the publication of numerous articles, and here we will explain it very briefly, but before that, another point should be clarified. If the above factors do not have any effect on the survival and destruction of capitalism, then why have we tried to explain them!! Doesn’t this mean that we write long pages about the importance of a number of data and factors, and at the end, we put the reader’s head on ice and say very rudely that these are of no importance?!! Although this question may be misplaced, it can still arise; the answer is that this is not the case. Clarifying these points is not only of paramount importance but ignoring them is highly detrimental and signifies political negligence in the class struggle. The core argument is that, in the absence of a powerful movement one possessing a clear vision and opposed to the wage-labour system capitalism proceeds to arm itself and reinforce its defensive fortifications to the exact extent that it remains free from the threat of such a movement’s offensive. Capitalism has seized the opportunity presented by the weakened state of the labour movement to carry out these measures and establish these fortifications. With this explanation in mind, let us proceed with the discussion.
We have argued that the fundamental factor behind the survival of capitalism is to be sought not in the aforementioned elements, nor in the system’s institutional capacity, but solely in the state of the global labour movement. The system of wage slavery has exploited all the mechanisms and processes described to foist the burden of crises and the costs of its own persistence onto the lives of workers. Yet, alongside all this and precisely within the very fabric of these restructurings and reformulations capital’s internal contradictions have become increasingly unruly, acute, and explosive, reaching staggering proportions. Close attention must be paid to this valid insight of Marx: despite all the structures it continuously erects within the process of its own reproduction, capital remains, ultimately, “the real barrier to its own production.” Whatever is employed as an instrument for greater profitability or prolonged survival carries within it the entirety of capital’s inherent contradiction and serves, in fact, to intensify that very contradiction.
“The real barrier of capitalist production is capital itself. It is a matter of capital and its self-valorisation appearing as the starting point and the end point, as the motive and the purpose of production. Here, production is solely production for capital, and not the reverse; that is, the means of production are not merely simple instruments serving the community of producers to create an ever-expanding process of life. The preservation and valorisation of value capital which rests upon the expropriation and impoverishment of the great mass of producers, can only operate within certain limits. Consequently, these barriers constantly conflict with the methods of production that capital is compelled to employ to achieve its ends; for these methods drive towards an expansion of the limits of production towards production for its own sake and towards the unrestricted development of the social productive forces of labour. The means for the unrestricted development of the social productive forces of labour constantly clash with the limited aim of valorising existing capital. Thus, while the capitalist mode of production is a historical means for developing the material productive forces and creating a corresponding world market, it simultaneously bears within itself a permanent contradiction between this historical task and its own social relations.” (Capital, Volume III)
All evidence screams that capitalism is currently more vulnerable and susceptible to destruction than at any time in the past. The average organic composition of capital has never reached such levels. Despite the relentless, second-by-second intensification of the exploitation of workers, the aggregate capital of all existing societies constantly grapples with the most complex obstacles to its own reproduction. Profit rates are in a continuous decline, even as the rate of surplus value follows an astonishing upward trajectory. Crises have lost their cyclical nature and now churn ceaselessly within the cycle of global capital reproduction. The explosive intensification of labour exploitation coupled with an even more explosive wave of mass layoffs has transformed the contemporary world into a wasteland of hunger, poverty, prostitution, addiction, squalor, and death. The ship of capital is caught in a violent vortex; from dawn till dusk, its helmsmen striving to save it from sinking resort to barbaric acts and bloodbaths, sowing the wind only to reap the whirlwind. Just today, as the G20 summit opened in the South Korean capital, the President of Brazil a veteran trade union leader and a far-sighted representative of the capitalist system issued a stark, candid warning to his fellow leaders:
“If we delay acting for even a moment, not one stone will be left standing upon another.” These words were uttered at a time when the capitalist system in its two-year struggle to drag its carcass out of the quagmire of crisis has ruthlessly sacrificed the livelihoods of billions of workers worldwide through sheer butchery and savagery. Global capital has not endured because of its own strength; its continued survival at any given moment is owed solely to the exhausted, dire, and decrepit state of the global labour movement. Over the past century, while capital has honed its defensive and offensive capabilities, the labour movement has conversely retreated step by step, surrendering numerous strongholds. Although brief, the movement shone brilliantly in the mid-19th century, placing the capitalist system of that era in a position where it perceived its own imminent demise. A key characteristic of the workers’ struggle during that period was its direct anti-capitalist orientation and the championing of the hopeful prospect of abolishing wage labour. The point is not that every single individual within the working masses operated within this framework; rather, the crucial fact is that the European working class, in the active movements of the day, envisioned on a massive scale the overthrow of capitalism and the establishment of a socialism that would abolish wage labour. In this context, the International was established; hands of solidarity and unity were joined; organization was forged; power was exercised; the course was set for a revolution against wage labour; and the establishment of the Paris Commune was placed and realized as the order of the day. Without a clear horizon of emancipation, without confidence in the liberating nature of that horizon, without belief in its own capacity to traverse the rocky path leading to it, and without linking its daily struggles to the prerequisites for reaching that vision, the labour movement effectively devolves into a movement that is weak, limited, easily satisfied, and vulnerable prone to tailism and to acting as mere foot soldiers for other movements. Anywhere in the world, the working class slides into such an abyss if it lacks a distinct anti-wage-labour orientation and a vision for the abolition of wage labour. Merely struggling against capitalists, capital, or the capitalist state while reducing the scope of expectations to the reproduction of labour power or basic subsistence and welfare fails to foster the movement’s growth or empowerment, fails to prepare it to exercise power, fails to lead it toward anti-wage-labour class consciousness and insight, and fails to ready it to transform the existing reality. The reason for this is clear: capital does not stand idle. With every breath it takes, it erects new obstacles in the path of the workers’ class struggle and dissolves the very existence of their movement into its own profit calculations. It turns unionization and syndicalism into the graveyard of their anti-capitalist protest; it transforms the fierce competition and infighting among various factions of the bourgeoisie into an arena for their own martial posturing; it makes the fluctuations of its profit curve the yardstick for their livelihood; it proclaims the requirements for maximizing its own profits as the best interests of their lives; and it engages in a host of other such actions. These are realities that have amply saturated the history of the last century and require no further elaboration. Yet, the matter does not end there. An anti-capitalist orientation and the pursuit of the goal of abolishing wage labour cannot be realized through the mere fabrication of parties or sects, the mouthing of slogans, the manufacturing of personalities, the setting up of syndicates, or similar activities. Success hinges on focusing the struggle on a continuous offensive against the lifeblood of capital specifically, the relation of surplus-value production and the entire political, civil, legal, cultural, ethical, literary, artistic, and social superstructure underpinning that relation. To advance as an anti-capitalist force moving toward the abolition of wage labour not merely in rhetoric but in actual practice and praxis the labour movement must escalate its offensive against capital without interruption, right from within the fabric of its daily existence. This requires that the working masses gain an ever-deeper understanding of the buying and selling of labour power and the tangible, living reality of capitalism; that they become conscious of the dimensions of their exploitation by capital; that they grasp the organic and harmonious link between the relation of surplus-value production and the political, state, civil, and legal structures associated with it; and that they deeply comprehend how the struggle for improved daily livelihoods, public welfare, political freedoms, and social rights or the fight against gender, ethnic, and racial discrimination, warmongering, and environmental degradation is actually articulated. Ultimately, it entails organizing all these arenas of struggle as interconnected bastions in the class war against the very foundations of capitalism.
Throughout the twentieth century, the labour movement veered off this course: it lost the path of struggle, surrendered its strongholds, laid down its arms, and discarded its strategies. This process began with the rise of social democracy. The initial blow of this approach aimed to obscure the horizon of abolishing wage labour from the working class’s field of vision. Everywhere, the sinister refrain was struck up that capitalism possessed the capacity for rationalization, reform, and humanization! Once this premise took hold, all subsequent tenets fell into place: parliamentarism usurped the place of direct assault on the lifeblood of capital; securing a parliamentary majority replaced the drive to overthrow the wage-labour system; and party-building supplanted the creation of a nationwide, anti-capitalist council-based organization. Ultimately, the drive to form syndicates and trade unions swept away the entire framework of the movement to abolish wage labour.
A question arises here regarding the approach adopted by the labour movement: why did the broad masses of the working-class yield and submit? It is a crucial question, yet nothing in history is predestined. This event certainly did not have to happen, but it did. While the objective conditions behind the event can certainly be explained, those conditions by no means dictate that this dark outcome was inevitable; on the contrary, they suggest that while it “could” have occurred, it might just as well “not” have happened. Clearly, factors such as the globalization of capitalism, the massive influx of surplus value extracted from wage slaves into the profit coffers of concentrated capital and giant European monopolies, and the European capitalist class’s capacity to offer minimal concessions regarding the crushing exploitation of the continent’s workers, all contributed to this process. However, the impact of these factors could have been countered by a militant wave of working-class resistance against the wage-labour system. This did not happen because the labour movement lacked the necessary preparation. This lack of preparation was not a matter of fate but a weakness of the movement a weakness that was not inevitable. One point is clear: the reformist current within the working class found the opportunity to push back the class’s movement against wage labour.
The cornerstone of social-democratic reformism was laid by Russian Social Democrats and, subsequently, by Bolshevism. The leaders of the Second International had struck the abolition of wage labour from the workers’ agenda, yet they did not do so amidst the clamour and fanfare of radicalism and revolutionism, nor by tethering every aspect of their rhetoric to specific quotes from Marx. On the contrary, they proclaimed their reformism openly and unabashedly; they explicitly rejected revolution and dashed the hopes of every communist and revolutionary worker. Bolshevism altered this equation. Here, pronouncements emerged from the most turbulent of volcanic depths, yet the content of the explosion whether during the phase of “melting” or, more notably, during the “freezing” phase was nothing other than state capitalism. Bolshevism’s daily teachings and practices for the Russian labour movement spanning the period from 1902 to the February and October Revolutions involved tethering the labour movement to the European model of capitalist development rather than the Asian one; locating the source of communist consciousness within the minds of upper-class intellectuals and bestowing the badge of upper-class belonging upon a figure like Marx; branding the spontaneous class movement of workers as mere “trade-unionism” while deferring its socialization to the miraculous agency of “mission-bearing” professional revolutionaries; entrusting the movement’s fate to a party of elites and the “meritorious” standing above the worker masses; and comprehensively replacing anti-capitalist struggle with the denunciation of the political regime and the pursuit of a democratic overthrow.
The Russian working class was destined by putting these very ideas and theories into practice to open the gateway to eternal liberation from the system of wage slavery and to become a model for human emancipation! Bolshevism propelled the Russian labour movement forward through the twists and turns of these strategies and solutions. Here, too, an approach opposed to wage labour failed to gain ground or take the lead; the outcome was the establishment of a state that replaced the free, conscious, creative, and council-based participation of the entire working class regarding the planning of labour, production, and their own social destiny with the Party’s six-member bureau. It was a state that, despite these very characteristics, claimed to embody the political power of the entire working class. The revolution born of this movement equated state-controlled economic management specifically by the Ministry of Industry with socialism itself. It hailed “one-man management” in workplaces as an ideal, decreed the demise of workers’ councils, and extolled the Taylor system. It framed the revival of the capitalist economy (the NEP) and the re-creation of conditions for the most horrific forms of mass labour exploitation as a monumental leap toward the grand architecture of socialism. The working class which for fifteen long years had brought the Tsar’s rule crashing down across a vast expanse stretching from the Kamchatka Peninsula on the Pacific to the heart of Central Europe, and which had spent those years marching toward the promised land of socialism at the Party’s behest suddenly found itself in a situation where it could discern not a single glimmer of victory.
With the defeat of the October Revolution, the establishment of the state-capitalist bloc flying the banner of communism the founding of the Comintern, and the formation of aligned parties across the East, the West, and the globe, the labour movements of various nations were disastrously sacrificed to a shared agenda prescribed by segments of the bourgeoisie within both those countries and the bloc itself. The vision of abolishing wage labour and the prospect of an organized, anti-capitalist, council-based movement which had already been obscured from the international working class’s view and derailed from the course of daily struggle amidst the clamour of Social Democracy and Bolshevism now faded further into the distance. The movement’s true essence was lost amidst the tumult of “popular anti-imperialism” and the strident slogans of “independent national capitalism,” “people’s democracy,” and the “revolutionary dictatorship of workers and toilers” alongside other bourgeois visions and perspectives. This was the fate that befell the global labour movement throughout the twentieth century. Capital acted as we witnessed, and the broad spectrum of reformism from Social Democracy and Bolshevism to left-wing nationalism dealt the labour movement the blow we saw unfold. Left-wing reformism continues to pursue this same path with all its might. The current state of the working masses’ class struggle is the outcome of all these events. Everything screams that the working class’s suffering stems from its movement drifting away from the struggle against wage labour and severing ties with the clear goal of abolishing the wage-labour system for the root cause of all its suffering is the very existence of capitalism. The final word of this piece is that every moment of delay in preparing the organized, council-based, anti-wage-labour movement constitutes a moment in the expansion and intensification of capitalist savagery.
Capital never misses a moment to turn our hesitation to its own advantage. Every instant of delay in marshalling a united, organized, and council-based opposition to wage labour whether through reliance on trade-union reformism, the top-down creation of parties, sectarianism, supra-class calls for regime change, or any other form simply grants capital an opportunity to unleash an even more savage and predatory offensive against us, executed with increasingly calculated planning and powerful organization, and armed with ever more modern and sophisticated tools. There is no alternative; we are compelled to struggle, and our history is a history of class struggle. Yet, the crucial point is that we must wage this struggle in a genuinely anti-wage-labour manner, with a clear vision for the abolition of wage labour.
The points discussed here highlight further realities. We have demonstrated how the role of the existing state has contributed to the persistence of capitalism and the imposition of the most horrific forms of intensified capitalist exploitation upon the working masses. This implies that any struggle against the capitalist state unless it constitutes an integral part of the global working-class war against the very foundations of capitalism amounts to nothing more than reformist, supra-class advocacy for democracy. We have addressed factors such as global stock markets, the explosive expansion of capitalist globalization, new global polarizations of capital, and capital’s exploitation of mass unemployment alongside other measures as strategies to offload the burden of the capitalist crisis onto workers’ lives and ensure capital’s continued survival. The underlying message is that struggles against globalization, unemployment, various forms of gender and ethnic oppression, and all other capitalist atrocities will lead nowhere unless each of these forms of combat becomes a link in the organized, council-based struggle of the global working class against the capitalist system itself. All other points raised here underscore the fact that the international working class faces only two paths: either it organizes itself on a global, council-based, and anti-wage-labour basis to overthrow the foundations of capital, or becoming increasingly worn down, depleted, weakened, and subjugated it succumbs to the savage and predatory onslaughts of global capital.