State expenditure is largely unproductive expenditure. It thereby does not produce value. This means it constitutes a deduction as opposed to an increment in total surplus value. This involves a corresponding fall in the rate of accumulation of capital. The latter tends to ultimately manifest itself in the form of a fall off in industrial growth.
As valorisation becomes increasingly difficult capitalism is compelled
to reduce state expenditure. To counteract this it engages in increasing
privitisation of its assets --denationalisation. It becomes
increasingly impossible, then, for the state to extend nationalisation.
The government does not privatise its state assets because it enjoys
hurting the working class. Because of the specific nature of the
objective conditions it is forced to privatise.
Under these circumstances calls for nationalisation and increased state
spending are utopian and idealistic.These calls fail to correspond with
objective reality. These calls then amount to no more than the deception
and misleadership of the working class. By reinforcing illusions in the
working class concerning capitalism reformism obstructs the working
class from moving towards a realistic programme of communist revolution.
Because of monopoly capitalism's growing limits it must seek to minimise
the state. On the other hand with a few exceptions it needs to
eliminate or cut welfarism and related spending. To achieve this it may
even need to abolish the formal democracy obtaining in the West.
However savage cut-backs by the state can only lead to sharpened class
struggle. Under these conditions the emergence of class consciousness
may make itself felt among the working class leading to the birth of a
communist movement. Under these circumstances reformism will grow less
plausible and influential within the working class. In view of this it
is reactionary for reformism to make calls for nationalisation and
increased spending by the state.
Despite the 2008 financial crash there has been no visible shift by the
working class to a class conscious political paradigm. The working class
is still dominated by reformism in one form or another. Even the Greek
working class, despite its militancy, is still imprisoned within
reformist ideology. The working class of the world still supports the
capitalist system in one form or another.
Privatisation programmes undertaken by capitalist states must be
combatted by the working class fighting for the control and ownership of
these state assets. This revolutionary seizure of state assets is only
possible within the context of a sustained attack on the capitalist
state itself. This entails a class struggle for the abolition of the
state and the capitalist system. The seizure of state assets such as
health care services is only possible within the framework of a
revolutionary struggle to destroy the capitalist state. The proletarian
seizure of health care will bear a popular democratic character. Health
will no longer be based on profit nor on a political strategy designed
to serve the class interests of capitalism.
Health care is simultaneously a necessary reproduction and repair of
labour power.Much of nationalised health care forms part of the value of
labour power. But much of it is unproductive too. This means it is a
drain on surplus value. In that sense it directly contributes to the
fall in the general rate of profit together with a corresponding decline
in the economy.
Much of health care, whether private or public, serves to maintain the
value of labour power by ensuring that the latter is preserved in a
healthy condition. The health of the working class serves the interests
of capital. This is because the health of the working class is of
concern to the capitalist class with regard to the valorisation process.
An unhealthy working class is not going to be as available for
exploitation in the prodiction process.
Nationalisation was introduced as a strategy designed to help pacify the
working class in the interests of capitalist stability. It was also
designed to support the economy. But nationalisation has contributed to
falling profitability which has interfered with the rate of capital
accumulation. Because of this capitalism seeks to increasingly privatise
health care especially in a period, such as this, when the
profitability of capital is a growing problem.
Calls for the continuation and extension of health care nationalisation
are bourgeois demands. Instead the call must be for the ownership and
control of health care by the working class. This can only be achieved
by the abolition of the state and its capitalist basis. Under these
conditions the criterion of profitability no longer exists.
A part of the health service maintains the health of the active working
class. Consequently it maintains and even increases the value of labour
power which leads to a reduction in profit. Although the above is true
it tends to be counteracted by health care maintaining and even
improving the condition of labour power thereby maintaining and even
increasing its capacity to provide labour within the production process.
In that sense it cannot be simply regarded as unproductive activity.
However the part of the health service that does not maintain and
increase the present and future value of the working class is
unproductive. This constitutes a direct deduction from surplus value and
thereby contributes to the decline in economic growth. Clearly state
health care, overall, tends to adversely affect the growth rate.
The nationalised section of health care is funded by the state
effectively through taxation which is a revenue drawn from value. This
is a deduction both from surplus value and the value accruing to the
working class. It represents a transfer of value away from the
consumption of the active working class and the accumulation of capital.
Education plays a similar role to health within capitalism. A part of it
involves the training of labour power in the interests of the
capitalist reproduction process. This heightens the value of labour
power while improving the capacity of the worker to provide labour. The
result is upskilling of labour power. Overall this aspect of education
may more or less prove to neutral in ughrelation to capital
accumulation. Research contributes to increasing the productivity of
labour by promoting technological progress. However the residual part
constitutes a deduction from surplus value without any change in the
value of labour power. Much of this aspect of education is ideological.
It is designed to maintain and even increase citizen support for the
capitalist system through false consciousness. This feature of education
obviously contributes to the contraction of growth.
The armed forces, the police and much of the state bureaucracy
constitute significant deductions from surplus value. They constitute an
unproductive expenditure. Thereby they lead to a fall in the rate of
profit which further constrains the expansion of capital. This is why
governments seek to reduce the cost of these state features.
State expenditure, as a whole, constitutes an enormous deduction from
total surplus value. This largely unproductive spending involves an
enormous contraction in the accumulation of capital. It is a deduction
that has been growing significantly in the aftermath of the 2nd World
War. In the present period of growing problems, regarding the
accumulation of capital, there have been continuing feeble attempts to
shrink the state or at least reduce the annual rate of state spending.
The contradiction is that burgeoning state spending was undertaken to
compensate for the inherent limits of capital entailing mass
unemployment and many other problems.Yet this spending paradoxically
leads in turn to the reinforcement of these limits. Indeed much of the
entire state constitutes a deduction from total surplus value because it
constitutes unproductive expenditure. This is why there have been
attempts, not very successfully, to shrink the size of the modern state.
In this way capitalism is its own grave digger.
Capitalism, because of its growing limits, is decreasingly able to fund
welfare and other expenditure. Capitalism is unable to meet the demands
being made by left reformists such as the SP/SWP and other political
organisations. Consequently reformism deceives and misleads the working
class by suggesting that capitalism is manageable in such a way as to
solve the problems of the working class.
If capitalism can solve the problems of the working class then it is
superfluous and misleading for communists to call for social revolution.