Date: 26 Feb 2002 12:13:59 +0200
Subject: Re: AUT: The Dark Satanic Mills


>>> ledpup-AT-optusnet.com.au 02/23/02 03:34PM >>>
But it still hasn't clicked with me as to how machines benefit the
production of surplus value.

I just got this from another list. I thought it might be of interest to you in the light of your query.
Tahir

ENQUIRY INTO THE SO-CALLED 'TRIUMPH OF CAPITALISM'

RESUME


This study has the goal of defining the historical stage of evolution which 
has been attained by the capitalist mode of production. The latter being an 
historical and thus perishable system of production, our aim is to discover 
if, on the one hand, it is in a phase which contains an adequate margin of 
development, leaving its future and disappearance uncertain, or, on the 
other hand, if one cannot already begin to discern in outline its objective 
limits. The latter perspective re-opens the question of revolutionary 
communist politics.

At the end of the post-war boom (1945-1975) received opinion held that 
capitalism was once more in 'crisis' comparable, for some commentators, to 
the great crisis of the years 1873 1895. Other commentators held that we 
were witnessing a phase of the Kondratieff cycle (a long depressive B phase 
following a long A phase of expansion). These appreciations have the 
characteristic of presenting capitalism as a system subject to depression 
leading, however, to inevitable recovery. In these terms, one can say 
nothing about the future of the system. lt seems as it were programmed to 
last for eternity.

Our outlook is, however, completely different: Our thesis is that capitalism 
has entered over the last twenty years, into the phase of the end of its 
historical cycle. This phase of instability, giving way to moments of 
relative calm, followed by brutal crises of an increasingly chaotic nature, 
expresses the historically outdated nature of the system.

What is the foundation for such a thesis? As Marx underlined, the historical 
evolution of capitalism is measured by the development of fixed capital 
(machines, plant etc.). Such a development was extremely rapid from the 
early 1950's onwards. Thus, to take the case of France, fixed capital 
represented a value of 87,000 francs in 1950 but no less than 1,030,000 
francs in 1993; an eleven-fold increase in value. (see 'Un siècle de données 
macroéconomiques' by P. Villa) An increase of this scale in the technical 
and organic composition of capital, dead-capital, has outripped the 
contribution of live-capital. Since live-capital is the only source of value 
(surplus-value), the rate of profit has fallen. Thus in the United States 
the rate of profit fell by more than 100%, going from 22% in 1947 to 10,% in 
1980, with a slight recovery to 16% in 1994. (see Moseley, 'The Rate of 
Profit and the Future of Capitalism', 1994)

And this is far from being the end of the story. Given the spectacular 
development of unproductive labour (a non-source of surplus value which is a 
consequence of the process of the mechanisation of production) - 60 to 70% 
of the active population in the advanced capitalist countries, (1) a massive 
share of profits is diverted to maintain a vast improductive sector via the 
channel of taxes, profits from commerce or publicity, service sector wages 
and so on. This profits destined for the accumulation of capital has thus 
been reduced, meaning that the real rate of profit is lower than the one 
which is announced in the official statistics.

>From this it follows that for capitalism the rate of profit is less and less 
capable of playing the role of goad to capitalist production, its decline is 
now tending to become absolute. This signifies a rate of profit at such a 
low level that it becomes difficult to remedy by counter-tendencies, the 
latter being increasingly difficult to operate.

To be sure, the counter-tendencies are not totally ineffective. The 
stagnation of wages, the augmentation of labour productivity (although less 
significant than in a previous period), the flexibility of employment, the 
development of economic precarity, the relocation of production sites in low 
wage areas and the rest, to some extent restored the rate of profit in the 
1980's. But all this remains largely insufficient to create a veritable 
recovery or a new long wave of expansion. The economic slowdown of the USA 
and Europe attests to the arrival of a new crisis.


In fact, if the counter-tendencies to the falling rate of profit are to play 
their role effectively, capital has to take draconian measures : 1) 
eliminate whole sections of the sphere of unproductive labour which weighs 
heavily on profits ; 2) radically throw into question the 'welfare state' in 
order to lighten the burden of taxation and 3) utilise a mass of 
labour-power at the very lowest level of wages. One can see immediately what 
would be the consequences: 1) massive unemployment of workers in the 
unproductive sector; 2) an unregulated 19th century-style capitalism with 
little or no protection for the working-class and 3) a sharp reduction in 
the overall standard of living resulting in the social regression of 
wage-earners. All these factors would result in massive social unrest which 
puts the very existence of capitalism in the firing line. The capitalists 
are, of course, fully aware of the dangers of such measures. But they are 
nonetheless necessary to restore the overall dynamism of the system. For 
this reason they content themselves with the gradual erosion of the welfare 
state, a policy of wage moderation, liberalisation and the privatisation of 
segments of the public sector. The relocalisation of production in low-wage 
economies, for its part, is already of limited effect: What at first sight 
appears as cheap labour suddenly emerges as not so cheap. Witness the case 
of South Korea where wages have grown 10% a year! In other words, all this 
emerges as piecemeal tampering. Capitalism is caught in an insoluble 
contradiction: Either it takes draconian measures to restore the rate of 
profit and re-ignites class struggles with a fatal outcome. Or it leaves the 
situation more or less as it finds it in order to preserve social peace. In 
this case it is condemned to economic stagnation leading eventually to a 
brutal economic collapse, the moment of truth. Indeed, this seems to be the 
direction taken by the system, witness the tendency towards 
disindustrialization suitably masked by the prophets of the 'post-industrial 
society'. (After all, why should capitalists invest in the real economy when 
the rate of profit is so low?) Consider in this sense the growth of 
financial speculation or the illusion that M can become M' without an 
immobilisation in the sphere of production. This results in the formation of 
fictive capital or the constant formation and bursting of speculative 
bubbles. Indeed, such was the case with the so-called 'new economy' of new 
communication and information technologies. In this case, however, the Stock 
Exchange bubble has already burst.

The truth is that the classical Marxist hypothesis of the growing inability 
of capitalism to develop the productive forces beyond a certain point is in 
the process of being confirmed. The existing relations of production are too 
clearly in contradiction with further development. A capitalism 
characterised by a majority of unproductive wage-earners (when the role of 
capitalism is precisely the creation of a working-class which creates 
surplus value) whilst a minority only produce surplus value, together with 
those workers who are increasingly excluded from the productive process and 
assisted ; all this provides the portrait of a capitalisrn in its terminal 
phase. This is the end of capitalism's historical cycle. To be sure, it will 
take some time for this reality to become self-evident but there is no new 
phase of capitalism. The game is over!

Claude Bitot

1. As a comparison, consider that in 1931 the class of manual workers in 
Great Britain made up 76.8 % of the active population as against a mere 6.96 
of white-collar workers. Today the manufacturing sector accounts for 27.7 % 
whilst that of services accounts for 70.4 %.








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