25 August 2003
(This is intended as the first of a series I have long planned on writing, indeed I’ve been exploring the ideas I lay out below since the early 1980s, after I got my first computer, a Commodore 64.)
I have been reminded (she knows who she is) that I have neglected the bottom line, namely filthy lucre. After all, when all’s said and done, that is what the issue comes down to, accumulating capital.
A fundamental question has to be asked, namely, what has changed in the last dozen years or so that finds the leading capitalist power, the US and its ‘partner’ the UK to wage war on the planet allegedly in the name of human rights, the rule of law and the ‘war on terror’?
These are after all, the same two countries that have been waging wars of terror on innumerable countries around the world for the past century and a half, and they did it with (relative) impunity and were themselves deaf to those who objected. Did the USUK power elite have a sudden attack of conscience?
Although it’s obvious to those who look that there are many corporations who stand to make vast amounts of money from the invasion and occupation of Iraq (the first piece of Capital to be accumulated in this new round of expansion), if we are to understand the forces that propel US capitalism down this well-trodden road, we need to look at the underlying causes. Causes that have not altered since Karl Marx and Frederich Engels wrote the book on capitalism, Das Kapital: A Critical Analysis of the Production of Capital.
“If the whole class of wage-workers were to be abolished owing to machinery, how dreadful that would be for capital which, without wage labour, ceases to be capital.” – Marx, Wage, Labour and Capital
This innocuous-sounding phrase has haunted me ever since the early 1980s, when I started looking in earnest at the ‘information technology revolution’ and what I saw as the fundamental implications it had for the future of capitalism and just as importantly, the possibilities it created for viable alternatives. Everything that has happened since then has reinforced my view, that we are indeed entering the ‘final stage’ of capitalism.
But before my detractors start bellowing about how they’ve heard it all before, I’d like to make the following observation. By ‘final stage’, I don’t put any kind of time limit on how long it will last, nor whether in entering its final stage, it might well destroy everything we have achieved in a fit of pique (or more likely, because capitalism has no control over its own actions).
On what do I base my opinion? This is both a complex and simple question. Complex, because as Marx said:
“Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brain of the living.” — Marx, The Eighteenth Brumaire of Louis Bonaparte
Simple, because as I hope to show, the commodification of the brain (and the body) in the shape of the computer is about as far as one can go in the transformation of living labour into capital. Or, if you like, the direct conversion of the intellect into Capital. And, as Marx says, without living labour there can be no capital. It surely must be obvious to anyone who considers this process, that there is a paradox involved here, a paradox that without some fundamental revolutionary change, has no resolution.
Of course, there still exist vast armies of living labour in the poor countries of the world, so the process is by no means complete, nor I contend, is it necessary for all living labour to be captured in the machine before the contradiction produces a crisis. We have already seen the coming crisis manifest itself in the past few years.
But it has been assumed (and of course the propagandists continue to propagate) that the battle between capitalism and ‘socialism’ has been ‘won’ with the expunging of the USSR and other expressions of an alternative to unrestrained ‘expand or die’ capitalist systems. (Capitalism contends that the ‘market’ will ‘even things out’ in the fullness of time but I contest this assertion as everything points to entirely an entirely different mechanism, perhaps one that only a cybernetic network can manipulate, and then only on a ‘grand scale. I have, in a past essay referred to something I called a distributed or networked ‘command’ economy to describe supply chains, but more on this in a later essay I have planned.)
So with no opposition to the rule of capital, it can now continue unobstructed on the mission so rudely interrupted in 1917, of filling every available niche with the products of its factories, whether real or virtual. At least that’s the theory.
Yet of course, reality speaks a different language. Never has capitalism been so fragile and vulnerable as it is now, perhaps since the Great Crash of 1929. I hope to show that the fragility of capitalism and the invasion of Iraq (and other points East and South) are intimately connected.
Rossum’s Universal Robots
Karel Capek wrote a book in the 1920s called RUR or Rossum’s Universal Robots (robot is the Czech word for worker), in which all human labour had been replaced by robots, robots who eventually revolted against their exploitation by their human masters. Although a satire on industrial capitalism and the reduction of human labour to that of an adjunct to the machine, who could have foreseen that in less than fifty years, the incorporation of the computer into production would produce a mirror of the world described by Capek. A world where machines replaced humans but where only a minority of the people benefited from the subsequent production of abundance.
One of the great ironies of the current revolution in production facilitated by the information technology revolution is that it has unleashed productive power of such extraordinary dimensions, that even Marx would be gob-smacked. The world’s markets drown in products, each successive wave of innovation, making ‘more for less’ as machines take over ever more of the labour previously the province of humans. Sony for example, churns out a ‘new’ product approximately every two hours of the working day.
Historically, the entire capitalist mode of production required three components: mass production = mass employment = mass consumption. Take one away and the entire edifice wobbles in increasing disequilibrium. This is precisely what is happening right now.
Not only has physical labour been replaced by machines, but increasingly also the intellectual labour that underpins all work (what we now call intellectual capital). As the industrial revolution captured living, physical labour in its analogues, lathes, milling machines and so forth, so the computer captures the stuff inside our grey matter, itself the product of the social accumulation of thousands of generations of experience of the natural world. Experience reduced to algorithms that enable us to generalise intellectual activity just as the factory machine generalised physical labour.
Yet, machines cannot be paid wages, hence without humans in the equation, although they reduce the cost of fixed capital, and the cost of production, it is impossible to extract a surplus from their ‘labours.’ Labour, along with consumables, rent, interest and so forth is constantly depressed as much as possible (the cost of raw materials and energy, mostly from the poor world is at its lowest level ever). But as costs are reduced, so too is the size of the labour force needed to produce which in turn, means there are less people to consume the output. Without new markets, this is a zero-sum game.
The cost of labour has also been reduced because ‘turnkey’ production systems make it easy to build in the poor world and tap into an endless supply of cheap unskilled labour. The information technology revolution coupled with a global transportation system has made production of almost any complexity, possible almost anywhere in the world.
Moreover, as Marx and Engels showed with the advent of the industrial system, work became ever more socialised in nature and in so doing, created the preconditions (or so they believed) for the transition to a socialist economy. The rise of trade unions and then political parties that articulated the needs of the new working class that challenged the political class of the capitalists quickly followed.
The crisis of overproduction
The other critical analysis supplied by Marx was the realisation that over time, the rate of profit extracted fell. This is not rocket science, it relies on a simple mechanism that for any given market, there is a limit to the number of products that can satisfy demand (even when demand is artificially created). Eventually, without new products or new markets (and revolutions in production that reduce the cost of production), all that can be done is to replace worn out products. And of course, depressing the cost of labour is part of the process of reducing the cost of production.
And bear in mind that every capitalist economy is itself in competition with all other capitalist economies, all of them at different stages of development and those with the most efficient production systems/lowest wages will inevitably replace the less efficient.
The problem capitalism is confronted with in this new period is twofold. On the one hand, it no longer requires mass employment in order to produce an abundance of goods. On the other, with the spread of industrialism and increasing efficiencies of production, without either eliminating the competition (war) or finding new markets (those of your competitors or entirely new markets), production falls (factories close or are moved to ever cheaper production areas).
The creation of a globalised production system which started in the 1970s, has in the short term, staved of a collapse of the capitalist system, but the information technology revolution without which a global system would be impossible, has in turn created a new set of contradictions.
Increasing monopoly is another way of removing competition, but again this, like the creation of a global production system, is a short-term measure. Eventually, it faces the same paradox of overproduction and under-consumption. The middle and upper classes of the developed world have, to some degree ‘taken up the slack’ by consuming more and also through the process of ‘adding value’ to existing products. But this too, also has a limit.
To add to the problems that confront capitalism, financial speculation, especially in the currency markets has led to the ‘creation’ of vast amounts of ‘funny money’, that is money which is not the result of the production of real value, either in goods or services. The recent economic crash, with up to 60% being knocked off the over-inflated value of stock markets, gives you some indication of the ersatz value of the ‘wealth’ that has been created of late. The dot com boom and bust merely added to the crisis (and after all, much of the cash invested in dot coms was ‘funny money’ to start with).
Supply chains (linked and integrated systems of producers, suppliers and assemblers), distributed production (a single product made perhaps with components from a dozen different countries and different points of assembly) have made for a totally interdependent, global ‘factory’. This is a highly vulnerable system, susceptible to the slightest disturbance especially from the interlinked global financial network of banking, currency markets and stock exchanges.
As the crisis mounts, the leading capitalist power, the US, which through its control of the world’s energy and financial markets backed up with overwhelming military force, is attempting to forestall the coming crisis by resorting to more ‘traditional’ methods. Methods, which in another age would most surely have led to a more generalised war such as we saw in 1914 and again in 1939.
The times they are a-changin’
But times have changed, even if the rationale for capitalism hasn’t. Generalised war is no longer an option, the world will simply not tolerate it (this is a critical change, for all those who think we have not progressed as a result of the experiences of the last 100 years). And to add to the problem confronted by capitalism, it has effectively ‘split’ into two camps. In part this is because of competition but it is also the product of the uneven development of ‘global’ capitalism.
I believe that it’s no accident that it was the right-wing government of Kohl in Germany that first articulated the fear of the potential ecological catastrophe confronting the capitalist world at the Rio Conference on Climate Change in 1992, and that it was the old world of the US that resisted the demand for a reappraisal of the world’s economic priorities.
The EU is a harbinger of the future, albeit still in its infancy and still bedeviled by its relationship to the poor of the planet and the fundamental contradictions of private ownership of the major means of production. Nevertheless, the elite of the major European powers, no longer dependent on the projection of military power and with integrated economies across national boundaries, far from being ‘old Europe’ as Rumsfeld characterised it, represents what I believe Marx predicted, when he described the necessary preconditions for the development of global socialism.
This is, I contend, the context within which we see the US attempting to forestall the inevitable. It points to the fact that the project for a socialist alternative, far from being over, takes on an increasing urgency in the light of the threat posed to the planet by the ‘new imperium’. I also believe that the knowledge and understanding gained through the experience of the past century has created the basis for an entirely new model for a socialist economy. A model that the traditional left has been blind to, not only because of the baggage carried through from past attempts but because it has refused to take on board the implications of the latest revolution in production, the IT revolution and to incorporate it into the general model articulated by Marx and some of his successors.
The irony of this situation was not lost on me when a couple of years ago I came across a book called Funky Business by two Swedish business management consultants. They contend that Marx was right, that indeed as they say:
“They [the revolutionaries] were right because they subscribed to the Marxist view that the workers should own the major assets of society, the critical means of production. We do now. And, perhaps, we did all along but we just didn’t have the insight to realize it.”
And the basis of their assertion is predicated on the information technology revolution, where, it has changed everything and everything is changing faster than we can keep up with it, and that “1.3 kilograms of brain holds the key to all our futures”.
In other words, the ‘means of production’ is once more the human intellect. That modern capitalism as I illustrated above, has given us the ability to produce an abundance of the means of living. And although the authors don’t take the final step in realising that because of this, capitalism is a redundant economic system, nevertheless they assembled many of the elements necessary to articulate a new model for a sustainable and balanced economy, one that is not based on the fetish of unrestrained ‘growth’.
The challenge that confronts then, is not merely to expose the nature of the ‘new’ imperialism , important as this is (and to point out the fact that it’s not new after all), but to formulate a new vision of the future that incorporates the lessons learned from the past with our understanding of the new forces of production now at our disposal.