Wednesday, July 13, 2011

The Production Process Is The Key

Given the state of world capitalism today especially in the immediate wake of the recent world economic and financial depression the current situation is as follows.

There exist only two solutions to the capitalist crisis. The capitalist solution or the communist solution.

The capitalist solution constitutes a drastioc anti-working class solution. Even at that it will not serve as a permanent solution. But it is the only solution available within capitalism if it is not to experience growing and periodic problems of the sort it experienced recently.

Since the source of the problem exists within the production process it is there that the solution will be found. This means that the labour process will have to be revolutionisied if a capitalist solution is to be realised.

This solution involves the enormous and unprecedented upgrading of the productive power of society. In this way the technical composition of capital will have been increased to such a degree that it will lead to an increase in the organic composition of capital. In that way the rate of surplus value will have increased to such a degree that the total surplus value produced will more than compensate for the the falling rate of profit.

Such an enormous development in the forces of production will lead to a radical reconfiguration of capital. Weaker capitals will generally have been wiped out on a par with the K-T extinction. Much larger, more concentrated and centralised capital will predominate. The working class will suffer increased workload and will be more disciplined.

Organisationally and politically it will be much weaker than it even was. In this way the source of the capitalist crisis, its process of production, will have been revolutionised in such a way as to have eliminated the crisis for the time being. Furthermore the struggle that led to this transformation within the labour process will have resulted in a general and devastating defeat for the working class. This will be manifested in a fall in working conditions and living standards. It will have meant severe cutbacks in social spending on health, education and the other welfare benefits that the working class has, in the West, taken for granted. In short it will be living in a new era. The character and culture of the working class will have changed drastically.

In contrast much of the radical Left falsely posit the source of the current capitalist contradictions as existing within the process of circulation of capital. This is why they persistently confine themselves to solutions that are grounded in the process of circulation of capital. They focus on money, credit, spending, taxation and commodities. Each one of these forgoing forms are necessarily confined to the sphere of circulation. Consequently they cannot provide the key to the solution of the the current world capitalist crises.

It does not understand that the central contradiction of capitalism is located within the process of production.

The the production process is a dual process. It is a labour process and a valorisation process. We must disconnect the valorisation process from the labour process. This entails the abolition of valorisation. The production process, then, is transformed into a unitary process that simply produces use-values and not exchange values in the form of commodities. Use-values are now just products and no longer commodities. Only communism can effect this change.

Generally debate surrounding the solution to Ireland's economic and financial problems centre around issues such as bailouts, bondholders, deficits and debt forgiveness. These are notions stuck within the process of circulation of capital. Consequently they can never provide the key to the solution of the problem either for capitalists or workers. Thereby debate must assume a qualitatively different form.

Monday, July 11, 2011

Gurdgiev and Lucey misunderstand Euro Debt Crisis

Much of the radical Left/Right falsely posit the source of the current
capitalist contradictions as existing within the process of circulation of
capital. This is why they persistently confine themselves to solutions that
are grounded in the process of circulation of capital. They focus on money,
credit, spending, taxation and commodities. Each one of these forgoing
forms are necessarily confined to the sphere of circulation. Consequently
they cannot provide the key to the solution of the Euro crisis let alone the
Current world capitalist crises. Much of the the radical Left/Right are the present day King Canutes. The crisis of capitalism is the crisis of the radical Left. It is also a crisis of consciousness, organisation and leadership within the (if today I can suggest such a phenomenon) working class movement.

The Euro crisis, today, has found its extreme expression, economically and
politically, in Greece. The Greek social system is enormously indebted to
such a degree, that it cannot sell government bonds to acquire credit with which to meet the cost of running the state. Consequently the Greek ruling class is being forced to seek loans from the EU under extremely strict conditions that will, in the short term at least, further hinder growth. These austere conditions involve enormous privatisation of state companies and large cut-backs in state spending. Much of this austerity package will entail job losses, diminished incomes and reduced welfare benefits. Even this forthcoming Euro loan will not go near getting Greece out of its financial and economic problems. At most it may merely temporarily alleviate the financial problem. This punctuated policy amounts to death by a thousand cuts.

Some commentators mistakenly argue, Constantin Gurdgiev and Brian Lucey,
that the better approach is a comprehensive deal now that sorts out Greece's
problems once and for all.This, they claim, must involve debt forgiveness
and presumably economic restructuring. They argue that a piecemeal approach
can only but prolong the crisis leading in the future to an even more devastating situation. This, they claim, can only intensify the problem thereby rendering the collapse of the Euro more likely. This event will have widespread ramifications.

The EU tops, and their subalterns, argue that their punctuated policy is the best policy in the circumstances. By staging financial help to Greece accompanied by the imposition of belt-tightening it appears that the EU hopes to protect the Euro.The overall fear among the European bourgeoisie is the collapse of the Euro and the ensuing fallout. Neither policy can solve the crisis. The Euro crisis is the result of a much deeper dynamic.

The problem has its source in the failure of capitalism to produce sufficient absolute surplus value to compensate for the falling general rate of profit --the regulator of the capitalist economic system. Resisting this ongoing falling volume of surplus value will not be sorted out by throwing more debt (paper) at the problem. At most this just postpones the crisis leading consequently to an even more devastating crash.

The solution has to be the production of more surplus value. This economic problem is lodged within the production process --not in the circulation process. This means that transformation must take place within the process
of production.Consequently this leaves only two options open. The capitalist solution: A massive development and investment of technology on an unprecedented scale leading to an enormous increase in the rate of surplus
value and thereby a corresponding enormous increase the volume of total
surplus value produced.

The communist solution: A revolutionary transformation of the production
process involving the abolition of capital and thereby the valorisation process. Under these conditions the production process will exist to serve the needs of the people. It is then no more than the production of use-values --profitability is longer the driving force.

Throwing more debt, in the short or long run, at the problem will not solve the problem. This is precisely because the source of the problem does not lie within the process of circulation of capital (i.e. money and credit ). It is contained within the production process.