Facets of Value, 3

The English translation of vol 1 of Capital that most of us have is not based on the the first edition of Capital, but on the 4th German edition.

If we look at a translation from that first German edition [the Marxist Internet Archive has one of Chapter 1, The Commodity, by Albert Dragstedt], Marx's language, analysis, and demonstration of the relative, equivalent, and value forms of the commodity are clear examples of Marx's extraction of the rational kernel from Hegel's dialectic.

Marx in this first chapter is explaining the most critical facet of his investigation into capital [which is why it is the first chapter] and his materialist dialectic- the interpenetration of form and substance, of identity and opposition are clear.

He writes:

Quote:

The expression of the value of linen in the coat impresses a new form upon the coat itself. After all, what is the meaning of the value-form of linen? Evidently that the coat is exchangeable for it. Whatever else may happen to it, in its mundane reality it possesses in its natural form [coat] now the form of immediate exchangeability with another commodity, the form of an exchangeable use-value. or Equivalent. The specification of the Equivalent contains not only the fact that a commodity is value at all, but the fact that it in its corporeal shape [its use-value]counts as value for another commodity and consequently is immediately at hand as exchange-value for the other commodity.. Marx continues: But commodities are objects. They have to be what they are in an object-like way or else reveal it in their own object-like relationships. In the production of linen, a particular quantum of human labour exists in having been expended. The linen's value is the merely objective reflection of the labour so expended, but it is not reflected in the body of the linen. It reveals itself [i.e., acquires a sensual expression] by its value relationship it to the coat. By the linen's equating the coat to itself as value-- while at the same time distinguishing itself from the coast as object of use-- what happens is that the coat becomes the form of appearance of line-value as opposed to linen-body: its value-form as distinguished from its natural form.

"..what happens is that the coat becomes the form of appearance of linen-value as opposed to linen-body"

The emphasis is in the original, as supplied by Marx.

Where does this get Marx? Where it always gets us-- back to the specific social organization of labor:

Quote:

The use value coat only becomes the form of appearance of linen-value because linen relates itself to the material of the coat as to an immediate materialization of abstract human labour, and thus to labour which is of the same kind as that which is objectified within the linen itself. The object, coat, counts for it as a sensually palpable objectification of human labour of the same kind, and consequently as value in its natural form. Since it is, as value, of the same essence as the coat,the natural form coat thereby becomes the form of appearance of its own value. But the labour represented in the use-value, coat, is not simply human labour, but is rather a particular useful labour: tailoring.Simple human labour [expenditure of human labour-power] is capable of receiving each and every determination, it is true, but is undetermined just in and for itself. It can only realize and objectify itself as soon as human labor-power is expended in a determined form, as determined and specified labour; because it is only determined and specified labour which can be confronted by some natural entity-- an external material in which labour objectifies itself. It is only the 'concept' in Hegel's sense that manages to objectify itself without external material.

Here we have Marx's material extraction of the rational kernel from Hegel's dialectic. Human labor is capable of receiving every determination, and remaining human labor. But the labor can only realize itself as labour power embedded in the specific commodity. the labor can only realize itself as labour power, as an abstract quality-less expression when expressed in specific, determined material.

So the determination is two-fold-- as the concrete specific object of production, in all articles of production as value. It is the social determination, transforming labor into raw undifferentiated labor power, that contains the antagonism, the conflict, in Marx's word, the "contradiction" where labor power becomes opposite to and the negation of the power of labor.


S. Artesian November 23, 2010

sartesian@earthlink.net

Facets of Value, 2

In the exchange of commodities Marx examines the different rotations, appearances, of the commodity in its relative and equivalent forms of the expression of value. For exchange to expand, to dominate, to determine production, an equivalent for all commodities must be established. Just as human labor in general, in abstract, in its distilled, estranged existence as labor time is projected into the commodity as value, value is projected out of the commodity into the abstract, general, featureless, existence of money. Estrangement is now complete. Accumulation begins.

From here, Marx takes us to his essay on the fetishism of commodities in which Marx explores how and why it is the form of labor, the organization of production in capitalism that expresses human relations as the relations between things, and endows those relations between things with power over the relations of human beings. Direct production for direct need has disappeared. Production and need are associated only indirectly, mediated by the market, by exchanged. Value appears as an independent force, even a rational one, commanding equivalence, ensuring equity with a wave of its invisible hand.

As concise as Marx’s essay is, the essay itself is condensed in one sentence in the second footnote Marx provides: “When, therefore, Galiani says: Value is a relation between persons—‘La Ricchezza e una ragione tra due persone,’—he ought to have added: a relation between persons expressed as a relation between things.”

Having established the relative and equivalent forms of value from the exchange of commodities; the money form from the relative and equivalent forms of value in the process, the circuits of exchange; fetishism, form supreme, from the value expressed as money over human beings, Marx now returns to examine exchange— not simply to reiterate the different forms, or moments of the commodity as value, but rather as expressing historical moments, measures and manifestations of commerce. The transformation of exchange from barter or simple trade into commerce is the “record” of the transformation of a useful surplus article into a commodity.

The commodity as a specific product, a useful article, and organized as value, then manifests the conditions of its production, i.e. labor as a specifically useful article that is organized as value.

S. Artesian November 21, 2010

address all comments to: sartesian@earthlink.net

Facets of Value

1. In his preface to the first edition of Capital, Volume 1, Marx writes that this work is the continuation of his work in A Contribution to the Critique of Political Economy, published 1859. Marx states:

The substance of that earlier work is summarised in the first three chapters of this volume. This is done not merely for the sake of connexion and completeness. The presentation of the subject matter is improved. As far as circumstances in any way permit, many points only hinted at in the earlier book are here worked out more fully, whilst, conversely, points worked out fully there are only touched upon in this volume.

Of course, it is these three chapters on commodities, exchange, and money that constitute not the core, but the entry, the vector to the core of Marx's critique which is that capital is a historical relation of production, of property to labor; that value is the expropriation of the powers of labor.

Marx advises the reader that the exploration of value will present the greatest challenge, and then Marx proceeds to give the reader the key to meeting that challenge. He identifies the commodity as the commodity form of the product of labor. The value form of the commodity is labor in commodity form.

Marx assumes that the reader will be willing to struggle through the discussion of the value forms in order to learn something new. In this, Marx was displaying uncharacteristic optimism.

"The wealth of those societies in which the capitalist mode of production prevails, presents itself as ―an immense accumulation of commodities,..."

The above, the opening sentence of chapter 1, might just be an understatement. It, the wealth of the capitalist mode of production is more than an immense accumulation of commodities. It is a universe of commodities. It is the commodity as the universe. Both product and its means of production are at one and the same time expressions of each other, each other's relation to labor, and the expression of each other's relations to all commodities. Both, all can be exchanged for the other, for an other, for all others. Exchange mediates the expression, the materialization, the realization, the accumulation, and the pocketing of value. Exchange then becomes the purpose of production.

Capital begins where value commands the labor of others. The commodity begins where its production is of no use, satisfies no direct need of the producer, but rather is produced for exchange. Capital begins where labor itself is not for the use of the laborer, satisfies no direct need of the producer, has no value for the laborer save its value in exchange for the means of its own sustenance or an equivalent thereof. Capital expands its reproduction, accumulates, as value commanding the labor of others.

Capitalist production, capitalist organization, ownership of the means of production is measured by its products, is the measure of the products. Production is, of, by, for value.

Social living labor, and the labor objectified, materialized in the private ownership, in the property of the means of production are each reproduced in the existence of the other. The value form of the means of production is the existence of labor as a commodity. This mutual reproduction is based on the historical separation, the opposition of the means of production which are simply the conditions of labor to labor itself. Without that separation, that opposition, there is no organization of labor in commodity form. Value is itself the composed identity of this opposition, where the opposites are mediated.

The commodity in its specific form, as a shirt, a gallon of milk, a locomotive, is useless to the producer. It exists as a sink, a mule, a vehicle for carrying value to market. The capitalist purchaes the use-value of labor, its ability to produce commodities, paying a wage which is calculated and distributed by the time of production. With this purchase, the capitalist obtains the power of labor to reproduce its social organization, its wage, its equivalent of subsistence [and even improvement] in less time than working time required by the capitalist. It is this power of labor to sustain more than its own existence, "more" than just its individual existence and "more" than just the immediate needs of both its individual and collective existence, in less than the total time of its existence, that is purchased by the capitalist. It is this power of labor when purchased that becomes the property of the capitalist, that becomes the basis of accumulation, that is converted into greater masses of the commodities that now command it to labor for the creation of greater masses of commodities that command it. It is this power that is inverted into value.

II. Marx continues his exploration of the commodity with an analysis of "The two poles of the expression of value: Relative form and Equivalent form." Here Marx states, "The whole mystery of the form of value lies hidden in this elementary form. Its analysis, therefore, is our real difficulty."

Using the well-worn example of the line and the coat, Marx begins his critique through the representation of the relation of equivalence, 20 yards of linen = 1 coat. The linen, for Marx, expresses its value in the coat. The linen has value relative to the coat. The coat represents value in the equivalent form.

Marx continues:

The relative form and the equivalent form are two intimately connected, mutually dependent and inseparable elements of the expression of value; but, at the same time, are mutually exclusive, antagonistic extremes – i.e., poles of the same expression. They are allotted respectively to the two different commodities brought into relation by that expression. It is not possible to express the value of linen in linen. 20 yards of linen = 20 yards of linen is no expression of value. On the contrary, such an equation merely says that 20 yards of linen are nothing else than 20 yards of linen, a definite quantity of the use value linen. The value of the linen can therefore be expressed only relatively – i.e., in some other commodity. The relative form of the value of the linen presupposes, therefore, the presence of some other commodity – here the coat – under the form of an equivalent. On the other hand, the commodity that figures as the equivalent cannot at the same time assume the relative form. That second commodity is not the one whose value is expressed. Its function is merely to serve as the material in which the value of the first commodity is expressed.

Here is where we get some head scratching-- expressions of the value form that are inseparable, mutually dependent, and mutually exclusive? How can any things be mutually dependent, inseparable, and at the same time mutually exclusive? No things can exist simultaneously that are inseparable and mutually exclusive. But Marx is not discussion the physical quantities of being. He is exploring the expressions, the manifestations, the commerce of and in social relations. In that commerce value has forms, moments of expression in commodities that, while dependent upon the existence of the commodity itself as a value, excludes the expression of that other moment in that particular commodity.

Is it really, can it really be, that simple? Yes, and as Marx explicitly remarks, the very simplicity is the source of such difficulty.

If we look back at a previous iteration of these value expressions in Marx's notebooks, we find what is in my opinion, a much cleaner expression, and resolution, of this apparent antagonism:

Let us consider exchange between linen-producer A and coat-producer B. Before they come to terms,

A says: 20 yards of linen are worth 2 coats (20 yards of linen = 2 coats),

But B responds: 1 coat is worth 22 yards of linen (1 coat = 22 yards of linen).

Finally, after they have haggled for a long time they agree:

A says: 20 yards of linen are worth 1 coat,
and B says: 1 coat is worth 20 yards of linen.

Here both, linen and coat, are at the same time in relative value-form and in equivalent form. But, nota bene, for two different persons and in two different expressions of value, which simply occur (ins Leben treten) at the same time. For A his linen is in relative value-form – because for him the initiative proceeds from his commodity – and the commodity of the other person, the coat, is in equivalent form. Conversely from the standpoint of B. Thus one and the same commodity never possess, even in this case, the two forms at the same time in the same expression of value.

(c) Relative value and equivalent are only forms of values.

Relative value and equivalent are both only forms of commodity-value. Now whether a commodity is in one form or in the polar opposite depends exclusively on its position in the expression of value. This comes out strikingly in the simple value-form which we are here considering to begin with. As regards the content, the two expressions:

1. 20 yards of linen = 1 coat or 20 yards of linen are worth 1 coat,
2. 1 coat = 20 yards of linen or 1 coat is worth 20 yards of linen

are not at all different. As regards the form, they are not only different but opposed. In expression 1 the value of the linen is expressed relatively. Hence it is in the relative value-form whilst at the same time the value of the coat is expressed as equivalent. Hence it is in the equivalent form. Now if I turn the expression 1 round I obtain expression 2. The commodities change positions and right away the coat is in the relative value-form, the linen in equivalent form. Because they have changed their respective positions in the same expression of value, they have changed value-form (die Wertform gewechselt).

The forms are the moments of expression of the different facets composing the value relation. Marx makes it clear that regarding the content of the value relation itself, the expressions are not at all different. Regarding the forms, they exist only opposite to each other. A single commodity can never exist in the two forms at the same time. The forms are moments.

So.... so if it's that simple, can it really be that important? Again, the answer is "yes." In exploring the forms of expression of value, Marx is essentially rotating the commodity through the value relationship. Through this rotation, Marx establishes that the value in exchange of the commodity is not produced in the markets. Value is not a result of the relation of the commodity to all other commodities. Value is not the product of all commodities in relation to each other. Value is not the product of any or all commodities relative to the single commodity that exists as equivalent to all commodities but is itself no commodity, money.

The forms of the expression of value are important in the process of exchange in that these forms are moments in the calculus of the realization of the value aggrandized in production.

Further, because all commodities can be expressed in both relative and equivalent forms, all labors are equivalent, all labors are relative. All labors, no matter the advanced or rudimentary level of technique, can be expressed in any other labor. All labors can be expressed in relative and equivalent forms. All labors are equivalent, because they can be expressed, compared, quantified by and in a single measure, a single dimension, a single proportion. Labor is the source of value because labor itself has been transformed, clarified, reduced to a common social substrate, time. Time really is of the essence.

Marx puts it this way in The Poverty of Philosophy: 'Time is everything, man is nothing; he is at most time's carcass.' And he puts it this way in the Grundrisse: 'Economy of time - to this all economy ultimately reduces itself.' He wasn't kidding.

III. Because value has the relative and equivalent forms of expression, because all commodities are values, and because no commodity can simultaneously express its relative and equivalent forms, some representation of value which mediates these forms is required for exchange to proceed. The mediations of value require the services of an inter-mediation. The inter-mediation must embody the disembodied value from the commodity.

What is embedded in the commodity, value, exists in latency, as potential. The commodity's actual existence as both useful article and a value, given the social relations of production that give it life, the social relations that give the commodity the power over the human being, the social relations that give the commodity its existence as private property, is threatened by these exact relations, by its existence as private and not social production.

The commodity may not be useful, and the value goes unrealized. The commodity may be useful, but the market may discount its value based on the average time required for the reproduction of all such commodities. The value aggrandized in production is comes to the market on a wing and a prayer, as wing and a prayer, and money is the answer to all the prayers. It is the ascension of the commodity, its transubstantiation.

Without the inter-mediation, commerce cannot proceed. Accumulation cannot occur. Reproduction ceases. The individual commodities remain individual commodities, oscillating in value forms, but not realizing the value relationship. Barter can continue. Trade can grow. Capital, however, as the expanding universe of commodity production, as the accumulation of value as value is impossible.

And this is where Marx is taking us in this first chapter of volume, to the role of money as the mediator of the value forms; to money as the disembodied embodiment of all the substance of all commodities; toward the conflict between accumulation of value and the growth of the means of production.

S.Artesian

November 14, 2010

address all comments to: sartesian@earthlink.net

Pledge to [Bank of] America

Those wonderful wacky, populist, regular guy, small town, main street, non-elitist, backslapping, teabagging, Republicans are on the upswing again, boosted into power as only a Democrat can boost a Republican, as only the Democrats can boost Republicans, as only a lackey can boost a bigger, better, more belligerent, lackey.

First order of business? Rescue our brave bankers from the Abu Ghraib, the Guantanamo of the
Dodd-Frank Financial Reform Law, and stop their waterboarding at the hands of the Financial Stability Oversight Council.

According to the Financial Times of 4 November, Spencer Bachus, a candidate to succeed Barney Frank as chairman of the House Financial Services Committee has warned the black ops members of the FSOC against harming US banks by curbing their adventures in proprietary trading.

You know what proprietary trading is. That's where the banks use some of your money to leverage foolish, ridiculous, insupportable, debt instruments into a "new economy" of foolish, ridiculous, insupportable, debt instruments that will consume the rest of your money.

Bachus says that the ban on proprietary trading-- known as the Volcker Rule in honor of Paul Volcker who never flinched when turning millions out of factory and home when employed as Ronald Reagan's Fed but found religion when confronted with his own offspring-- will "impose substantial costs on the American economy and market participants" [read bankers] while yielding "doubtful" benefits.

Spence worries aloud that implementing the law might spark a mass exodus of clients from US banks to banks abroad, an event which certainly would outrank Katrina, Rita, the earthquake in Haiti [especially the earthquake in Haiti] as a disaster of massive proportions.

And you know why that is too. Goddamit, most of these clients are white. We can't afford to lose them with the Mexicans, and the Guatemalans, and the Ecuadoreans streaming across the border in the millions!

Mr. Bachus, not to be confused with Bacchus, has expressed his concern that the flight of the capitalists might hurt the common people of this country-- the common men and common women of Greenwich, Connecticut; of Kenilworth, Illinois, of Mt. Kisco, New York, of West Palm Beach, Florida who are shareholders of Goldman Sachs and JP Morgan Chase.

I'd wish I could think that the American electorate is made up of suckers and saps, but sometimes I think the electorate is more like the audience at a worldwide wrestling smackdown-- so juiced by the sight of the two juiced goons breaking chairs over each other's head that they start breaking the chairs over their own heads, not realizing until it's way too late that the goons are using fake chairs; that the goons have fake heads.

S. Artesian
November 4, 2010

Insurgent Notes 2

Issue 2 is available. Not yet banned in China, but we're working on it:

This issue of Insurgent Notes attempts to grapple with a number of important issues:

1. the profound economic bind that world capitalism has been twisting itself inside out to address–without success (see the Editorial and Elephant on a Skateboard);
2. the fundamental flaws of what might be considered “common sense” leftism as it applies to the unions (see The Demise of Andy Stern and the Question of Unions in Contemporary Capitalism;
3. the complex character of explosive class struggles in several countries where industry still matters (see articles on China, Bangladesh, Turkey);
4. the complex character of Marx’s thought on matters of race, nation and class (see the review of Marx at the Margins;
5. the race between socialism and barbarism (see the article on the Gulf oil spill)

Shock and Au-sterity

1. Scared to death that all the lights were about to go out after pulling the plug on Lehman Brothers, the bourgeoisie rolled up its sleeves, girded its loins, crossed its fingers, and reached deeper than deep for that thing of all things, that relation of all relations that is the life of all lives for the bourgeoisie—OPM, other people's money.

Tapping the unrestricted credit lines offered by the banker's banker—the government—the bourgeoisie helped themselves to what they knew they were entitled to, the public purse.

For the bourgeoisie, it's always other people's something or other. For capital to be capital, it must command other people's labor. For finance to be finance it must command other people's money. So when the bourgeoisie through those great organizations of inter-governmental cooperation, regulation, and exchange call for austerity, it's always somebody else's austerity.

After the billions in direct transfers from public treasuries to private accounts, after further billions in government guaranteed debts, after more billions in government sponsored special investment vehicles, after more than more billions in toxic assets, non-performing loans, bad debts bought and overpaid for—after all that expenditure of other people's money, the bourgeoisie had come to the shocking conclusion that: 1) money changes everything; 2) whatever changed, it wasn't enough; 3) a hundred billion dollars here and a hundred billion Euros there and pretty soon you're talking about serious money; 4)somebody has to pay; 5)somebody else has to pay; 6)there is no such thing as being too rich or too thin. "We," say the bourgeoisie "can never be too rich. You [meaning all of us] can never be too thin."

So first from the hack economists, journalists, commentators, representatives, ministers, senators—those agents and bagmen employed by the bourgeoisie—come the expressions of shock that other hack economists, journalists, commentators, representatives, ministers, senators—other agents and bagmen of the same bourgeoisie—could have acted so irresponsibly, could have acted with such profligacy. This only means that the bourgeoisie needs this other section of hacks to act even more irresponsibly, with even more profligacy. This time, however, the wastefulness requires a specific universality—a wastefulness in the very basis for human existence; a wastefulness determined to deprive human lives of the bare necessities for living a human life. Then even and ever greater misery and poverty must be piled atop that mountain of misery and poverty already piled up as the more than equal but opposite symbols of capitalist wealth.

First comes the shock then comes the austerity.

2. When in April and May of this year the government of Greece stood just a stone's throw from collapse, suspended between pit of bankruptcy and the pendulum of mass demonstrations and strikes, the European Union hesitated to provide a "rescue" package, transfixed so it seemed, not by the spectacle of the conflict, but by the image of itself it saw in Greece. It wasn't the cost that paralyzed the governments of the European Union, it was the mirror.

Merkel was reluctant to approve the "rescue" of the government of Greece without assurance that Germany's interests would be protected, which meant that Germany's contributions would be considered as senior to, and secured prior to, any other obligations. Merkel, of course, was only reprising the role she thought her mentor and role model would have played in the discussions. Her role model is Margaret Thatcher, but not the Thatcher of 1981, of Attila the Hen fame, but the Thatcher of today whose addled brain and lack of recognition of her current environment make her the once and future champion of everything bourgeois.

After the hemming and hawing, the toing and froing, the after you Alphonse-ing, after you Johann-ing, the half-hearted and half-assessed agreement on a "rescue," the high command of the European Union received a phone call from US Treasury Secretary Geithner. Geithner's elevated stature among the titans of finance is due as much to the fact that he sits on a telephone book at his desk and in restaurants as to his previous and ongoing service in Maiden Lane I, Maiden Lane II, Bear Stearns, Lehman Brothers TALF, TARP, PPIP, ABCPFF campaigns.

"You guys and dolls need to do something big," said secretary Geithner to his counterparts, counter-parties, across the Atlantic. "You need to do something dramatic. You need to impress the markets," he said getting to the real issue, the only issue.

"Yeah," he said, gaining confidence if not height with each pregnant pause. "You've got to do something completely different. Like create an off-balance sheet funding facility with a really big number and guarantee its initial capital with the revenue of the EU itself, and then you get the IMF to supplement, to partner, in this vehicle, with the IMF vetting the economic program of any government stupid enough—check that—finding it advantageous to request funding by this off-balance sheet special funding facility guaranteed by your own revenues. How does that sound?"

They looked at each other, these ministers, presidents, financiers. "It sounds just like Greece to us," they said.

"Exactly," said Tim, sounding less like a munchkin and more like a wizard in Oz. "That's the point. You're all Greek to me."

Word.

3. Greece revealed that Europe was the sick man of Europe. The markets translated that as "you're all Greek to us."

Banks in the sixteen euro zone countries had amassed a euro 1.25 trillion exposure to sovereign and private debt instruments of Greece, Portugal, Ireland and Spain. UK banks had amassed euro 270 billion in exposure. French banks accounted for euro 370 billion, and German banks for euro 394 billion, with approximately euro 624 billion of the total in private debt instruments and euro 140 billion in government debt issues [it was this sovereign debt exposure that Deutsche Bank was so reluctant to reveal to EU bank commissioners during the "stress test" evaluation].

The total amount of debt outstanding from these four countries exceeds euro 2 trillion. Outside this group of four, Italy alone has outstanding debt of approximately euro 1.7 trillion.

With so much debt concentrated in such poorly performing economies, the European Union commercial banks and other financial institutions found themselves virtually unable to refinance their own operating requirements in the commercial paper money markets. Banks that did attempt to circulate their short-term instruments in these markets were forced to pay three or four times their previous average interest rates.

The European Central Bank, by the end of 2009 having guaranteed bank debts in the amount of euro 433 billion, increased its direct loans to euro zone commercial banks. At the end of June 2010 the volume of these loans measured euro 879 billion. In addition to finance the operating needs of its member countries, the ECB took to directly purchasing government debt issues.

With the commercial paper markets inaccessible, with cross border lending essentially frozen, the banks themselves decided that the best, if not the only place, to risk their cash was no place at all, depositing over euro 300 billion with the ECB itself.

Meanwhile, the costs of credit default protection on the sovereign debt of Greece, Portugal, Spain, Ireland and the UK soared. The credit default swap costs on the debt of EU private financial institutions reached the levels of costs after the collapse of Lehman Brothers in 2008. Debt auctions failed in Hungary, and in Germany, with issues not being fully subscribed and discounts from face value exceeding discounts planned by the issuers.

It was all Greek to the markets, with Greece itself emerging as the leader of a new world economy—a Dubai World economy with the world itself running out of Abu Dhabis.

4. So, enter austerity. Austerity appears to aim at ensuring the repayment of debt, the bourgeoisie's first and last words being, "pay me." In essence, in its social reproduction, austerity serves a different purpose.

If debt originates in the lags, delays, the a-synchronicity of capitals' metamorphoses from money through commodity production and back to even more money as a claim on that expansion of value, debt concludes, realizes, itself on the extinguishing, the annihilation, the devaluation of the accumulated values of society necessary for the reproduction of value but which themselves, can no longer be sustained, be reabsorbed, recirculated, reproduced as value. Primary among that expanse of social accumulation that can no longer be sustained is the reproduction of labor power, and all that makes up labor power, itself.

So to that part of the population who are working, austerity means some will be working harder, longer, some will be working less, and shorter, but all will be reproducing a lesser social basis for reproduction. All that was substantial will become marginal, and the marginal will become substantially greater.

For that part of the population retired and receiving a pension, fewer will retire; fewer will receive pensions, those that do will receive less.

For that part of the population born into poverty, deprived of a basic, necessary education, of proper medical care, even more will be born into greater poverty. Even more will be cheated of and by an even poorer education. Even more will be excluded from already inadequate medical care.

All value must be devalued. "Everything must go!" is the slogan of this bourgeoisie's staying in business forced liquidation sale.

The call for austerity, the programs of austerity are about destroying the overproduction of accumulated values, even and especially the miserably paltry assets of public health, transportation, education—those things that make up the social basis for expanded reproduction which is inverted into overproduction and becomes a burden to capital.

5. "Everything must go!" proclaim our salesmen of austerity. But not exactly everything will go.

Military spending—that's one thing that doesn't really have to go, as Greece itself has shown.

Greece, the largest importer of conventional weaponry in Europe; Greece, with military spending as a percentage of its GDP twice that of the European Union; Greece whose deficit revision "scandal" has in fact been driven by military expenditures; Greece who year ago purchased two submarines from Germany neither of which has been delivered; Greece with plans to buy six frigates and 15 military helicopters from France; Greece having purchased 24 F-16 fighters from the US , has managed to exempt those expenditures from its austerity program.

Military spending is the near perfect vehicle for non-reproducible accumulation by the bourgeoisie. It is not-reproductive production, it is finance made real, its values only being realizable in not only their own destruction, but in the destruction of all other values. Military spending acts as a conduit of recuperation for the bourgeoisie, with taxes transferring and restoring a portion of the wage expenditure to capitalism and without any need for enhanced social reproduction to make use of the commodities.

If revolution is one way, the exploit-ed's way, of resolving the contradiction of use value and exchange value, military spending is the exploiter's penultimate way of resolving the same contradiction. War, of course, is the bourgeoisie's ultimate method of resolving that contradiction.

Greece shows the way to, for, and of the brave new Dubai World where submarines that list to one side, helicopters with nowhere to go, circulate among the artificial islands bursting with abandoned homes, vacant condominiums, and empty streets.

When Greece, upon agreeing to the EU rescue package, enacted the terms of its austerity program, a financial analyst remarked, "They were supposed to make these changes ten years ago." Maybe "they" were, as part of the entry into the European Union, but guess what? Seven years ago, Portugal did make such reforms as part of its adherence to the European Union, and today it finds itself in the same predicament as Greece.

And something else not for the guessing: This is the economic contraction capitalism was supposed to have ten years ago, after the capital spending bubble of the 1994-2000 period.

6. Besides collateralized debt obligations and synthetic asset backed securities, the legacy of the administration of Ronald Reagan, the US's idiot version of the UK's Thatcher, includes "new federalism." "New federalism" was designed as the mechanism through which the national government dramatically reduced its participation in, and administration of, social welfare programs. Some forty three social welfare programs were returned to the administration of the individual states, with the national government awarding block grants which the states were to utilize toward defraying some of the costs of these programs.

The "reasoning" behind this policy was painfully clear to the most casual observer. The legislatures of many states were configured to dramatically reduce the political strength of the urban centers, and consequently, the urban poor. State governments were much more permeable to corporate influence, and much less vulnerable to that of organized labor.

Capital thought globally and acted locally well before any leftist made that a slogan.

Lobbying by corporate and large-scale agricultural interests, allied with the small town and rural distrust of big cities could, and did, effectively maintain the burden of regressive financing on the urban and poor populations. The fact that these same corporate interests proceeded to close industries, reduce employment, shatter the wage structure and generally devastate the small town and agricultural areas was precisely part of the agenda tucked within the "revenue sharing" of the "new federalism."

The enduring legacy of the Reagan era, manifested initially in the collapse of the asset-backed securities markets, is evident both in the condition of the state budgets of the United States, and the austerity programs generated by those states.

Sales tax and personal income taxes account for 80 percent of state government revenues in the United States. Since 2008, these flows have declined by 12 percent. So while US corporations have booked over $1 trillion in cash and liquid assets, over the next two years, state governments are facing budget shortfalls amounting to $127 billion. In some states, pension liabilities are underfunded by half.

After imposing furloughs, wage reductions, and cutting support to education and transit, states have responded, as states always respond, by attacking the weakest, the most vulnerable, those most in need of service and support. Home care services to the elderly and disabled have been reduced. Illinois has ended its support for Meals-on-Wheels programs. Alabama has reduced its provisions for housekeeping assistance to elderly people. California is proposing to eliminate adult day care centers and home support for 400,000 disabled or elderly people. Nearly every state has reduced eligibility in and payment for Medicaid services.

As reported in The New York Times of July 21, said the director of senior and disabled service for Rogue Valley, Oregon, "I've seen, in a matter of months, thirty years of work go down to drain."

"In a matter of months, thirty years of work down the drain." There in a dozen words is the liquidation of pensions, 401Ks, the attacks on immigrant laborers, the destruction of wages, the rolling back of opportunity and equity for women in the workplace, in the doctor's office, in the schools. There in a dozen words is the past, present, and future of capitalism, of human beings under capitalism. There in a dozen words is all you need to know about valorisation and devaluation.

7. It is not the task of the working class, or of Marxists, to reverse capitalism, to restore capitalist valorisation in the face of capital's self-devaluation. It is the task of the working class, of Marxists; it is the task for revolution to oppose this devaluation that capital imposes upon all human relations, not things, not commodities, but actual human relations.

It is the most essential, critical task of the working class to defend the need for better than adequate medical care, better than basic education, better than tolerable public transit; to meet the needs for home care assistance, day care centers; to defend immigrant labor, women's access to safe health care; to defend the social basis for human beings actually reproducing themselves as social human beings.

That defense requires the disavowal, rejection, cancellation, shredding of the debts accumulated by capital in its own attacks on that social basis; of the debts accumulated by our asset-liquidationist bourgeoisie. That disavowal of debt requires in turn the immediate end to all military spending.

And that's just the beginning.

July 31, 2010

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Bring In the Paper, Bring On the Torches

1. Cold Comfort

Encouraged by the headline in the March 12 edition of the Wall Street Journal that read "Massive Defaults Produce Rare Annual Dip In Obligations, Clear Ground for Growth," the US bourgeoisie paused from their daily feedings at the public trough, took their lips from the government's breast, checked the status of the batteries on their defibrillators [green=good; gold=gooder], removed their hands from each others and everybody elses pockets [temporarily], bundled themselves in their TARPS and parachutes, and all together and all at once, in a display of unity not seen since the funeral for their idiot-hero Ronald Reagan, selected the exact same tune from their individual IPods [purchased on Overstock.com] and started to lip-synch to their favorite song, to which they knew the words by heart.

Texting, tweeting, facebooking, bluetoothing the lyrics from IPod to IPhone to Blackberry to Droid to Pixie to Touch to Samsung to HTC to Nokia, from hand to handset in a daisy chain of 1s and 0s, living their collective Life of Brian, they lipped and synched…. "Look On the Bright Side of Life…"

Full at: http://insurgentnotes.com

By way of introduction: I have been working with my friends, Loren Goldner and John Garvey on producing a collaborative publication-- something a little different and hopefully a lot better than most of what passes itself off for Marxism.

In this the age destructive accumulation and vice-versa, also known as the era of Golf Course Capitalism the objective of the bourgeoisie is not to get rich by producing wealth, or by pocketing the already produced wealth of others, but rather by liquidating the already pocketed wealth of others. Our objective remains the overthrow of the capitalist mode of production, the expropriation of the pickpocket, liquidationist bourgeoisie, the self-emancipation of the working class, everywhere.

I have no intention of neglecting The Wolf Report.


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Accumulation and Decomposition in the Era of Lift and Separate, More

Accumulation and Decomposition in the Era of Lift and Separate, 3

Mexico: Land, Labor, and the Forty Percent Bourgeoisie

5. OP LandL

The radical bourgeois....therefore goes forward theoretically to a refutation of the private ownership of land, which in the form of state property, he would like to turn into the common property of the bourgeois class, of capital. But in practice he lacks the courage, since an attack on one form of property,-- a form of private ownership of the condition of labor-- might cast considerable doubts on the other form. Besides, the bourgeois has himself become an owner of land.

--Karl Marx, Theories of Surplus Value, Chapter 8, 1863

Let's Review: For capital to become capital, for the bourgeoisie to become the bourgeoisie, the capacity for labor has to be detached from the means of labor, so that labor itself appears as a commodity with only one use, its usefulness in exchange for the medium by which labor can purchase its own subsistence. The laborers confronts the condition of labor as alien to themselves. The condition then dictates to the laborer the terms of his/her subsistence and social reproduction.

For the bourgeoisie, this original, repeating, and permanent dispossession or separability appears in the markets, as the alienability, the purchase and sale, of the means of production of subsistence itself, of the land itself. For rent to exist as a commercial relation, not a personal one, or one of service, land must be more than owned. It must be endowed with value, the value that only exists and survives by being reproduced as more value in the products of labor performed on the land. Land must be separated, and then opposed to labor. The social relation, the buying and selling of labor power precedes the commercial relation of renting land for production for markets, of production not for subsistence, but for the medium of subsistence that also represents the expansion of value. .

The ascendancy of the bourgeoisie, the measure of the strength, the advancement, the modernity of its rule over society, is indexed in the development of agricultural productivity, in the size of the population dispossessed, released from agricultural production-- in the changes in land tenure, from serf, slave, bondsman, peasant; from manor, hacienda, plantation; from lord, slaveholder, cacique, caudillo; from tenant-farmer, sharecropper, debt peon. And the change to agricultural capitalist and rural worker. The advancement of bourgeois rule over society, as opposed to the advancement of society, and the vitality of that rule, as opposed to the vitality of the society, are indexed in the degree of separation, individual, collective, and communal from landholding, and land-using, for direct subsistence of the producers.

Let's Continue: Economically, the district or the estate or the town or even sometimes the family is self-sufficing, producing its own food, making its own clothing, manufacturing its own tools, or bartering with neighbors for the few necessities that cannot be supplied from the domestic stock. The methods of agriculture, like the implements with which they work, are medieval...

Over a large part of the country (as in other nations of Latin America) the land is held much as it was in Spain before the discovery of the New World-- in that age when in Western Europe the feudal system of land tenure still survived the decay of feudalism as a recognized institution. -- George McCutchen McBride, The Land Systems of Mexico, New York 1923.

The Spanish invaders, upon conquering the Aztecs, intended to replace the Aztec elite in kind; to rule the same empire with a different name, New Spain, through commanding tribute, and service, from the conquered.

So small were the Spanish numbers, so backward their institutions of religion and property that if it hadn't been for the epidemics inflicted upon the indigenous peoples, the conquerors would surely have been swallowed up and absorbed by the conquered. Disease is the secret to Spain's success in New Spain. Taxation, tribute, the encomienda would have been nothing without the power of pestilence...in the beginning.

The first epidemics struck the indigenous peoples even before Tenochtitlan had fallen. By 1548, 70 percent of the indigenous population had died out. By the end of the 16th century, the decline exceeded 90 percent.

The conquistadores carried lots of germs with them, but not the germs of new relations of land and labor. They took the land in the name of the King and Queen, but their interests, and their god, was a lot closer at hand than the monarchy and its court. The conquerors required service, labor service to mine the metals, labor service to tend the land, labor service as a form of taxation itself on the life of the indigenous peoples. The encomienda which had been exported to the Spanish Caribbean from the Canary Islands was reexported to New Spain. The encomienda was presented as a system of mutual obligations between the conquered and the conquerors, with however, only one side required to actually serve and labor for the other.

In the Caribbean, the labor and service of the conquered was organized on the basis of kinship of the indigenous peoples. In New Spain, where much of the territory and the population was already organized in villages, towns, and districts-- where the original kinship relations of land and land use had already given way to territorial organization--, the encomiendas were likewise constituted in the aggregation of districts, villages, territory. With the original encomiendas, service of the conquered was demanded and delivered to the conquerors, while the property of the indigenous peoples was to be respected. Theoretically. With the encomiendas territoriales, labor service became indistinct from the land tenure relations that bound the conquered to conquistadores. The demand on the laborer for service became the demand on the laborers' property. The expropriation of property became the essential relation for the reproduction of the laborers' service.

The Spanish monarchy had acknowledged, granted, and even supported the villages rights to their own properties. The Spanish crown essentially incorporated the villages as tax and tribute paying units, collectivities. The encomienda obstructed that tribute relation.

This produced more than a little bit of conflict between the crown and the conquistadores, none of it of any benefit to the indigenous peoples. The conquistadores imagined themselves as the nobility of the New Spain, bequeathing their titles, their entitlements, as property to their offspring. Originally, the grants of encomiendas could be revoked by the crown at any time for any reason. That didn't sit particularly well with our noble plague-carriers. In 1536, grants were extended by law to include two generations-- the original recipient and his children. This didn't sit well either. In 1542 when new laws attempted to abolish the encomiendas, opposition in New Spain and Peru was so intense that the laws were withdrawn. Decrees were established allowing the bequeathing of the encomiendas to a third, fourth, and fifth generation.

The territory of the encomiendas itself was entailed. It could not be divided. It was inalienable, without the power of exchange, the power to be exchanged. Entailed estates were the earthly manifestation of the pretenders to nobility. Entailment prohibited the selling of estates to any church, monastery, or church official. This did not stop the church from accumulating its own entailed lands.

The immense size of the encomiendas, the personal appropriation of the labor of the indigenous peoples as a, and in a, form of service, radically restricted agricultural production and threatened the crown's administrative centers, the cities. The encomiendas had to be abolished. And they were abolished, although it took most of the 18th century to accomplish that task.

The decimation of the indigenous population, rather than the resistance of the crown, put an end to the conquistadores pretense at nobility. Labor service was difficult to obtain, and impossible to maintain without aggrandizing the land of the pueblos. While the encomienda disappeared, the aggrandizement of the indigenous peoples' lands continued. The mechanism of service crumbled, or rather was displaced onto the haciendas.

The hacendados did more than just dream of passing on their titles, now titles in land, to their offspring. They lived it, spending their time in the cities while overseers administered the estates. The lands of the pueblos, while still seized, were no longer just objects of accumulation. The indigenous pueblos themselves were incorporated into the haciendas almost as internal colonies, functioning in a sense as mitochondria in the autonomous cellular structure of the haciendas.

In 1767, the Spanish crown ordered the expulsion of the Jesuits from all the lands of the conquest. The Jesuits owned many haciendas which were seized and sold to the "public" under supervision of the vice-royalty. Before, during, and after the struggle for independence, church lands were seized and sold, rendering onto Caesar what was once, if not the property of the greatest absentee landlord of them all, then at least the property of god's favorite realty company.

While land tenure relations varied throughout Mexico prior to the conquest, with hunting/gathering tribes of the north, and some coastal regions having no concept of land ownership, collective and communal landholdings were widespread in the Yucatan and the Mesa Central. The callipulli, originally an organization of communal property based on kinship, became an organization of communal property based on territory. Each village held, as a village, surrounding land, called the altepetlalli, for cultivation and for hunting, quarrying, timber. Water rights were so precisely calculated and distributed that the Aztec code was preserved and adopted by the Spanish.

The indigenous pueblos also distributed plots of land for family use, called tlatlmilli. These plots were held in perpetuity by families. Within the framework of communal territory and clan holdings, individual holdings were allotted.

While land was held in common in the Aztec system, use of the land was dedicated to specific social relations of production; the land were worked in common by the calipulli, but the products of the calipulli were divided and assigned to the payment of tribute, the support of the priesthood, and provisions for military expeditions. Specific lands, called tlatocatlalli, were cultivated for the chiefs. Tecpantlalli were lands cultivated for the maintenance of the chief's family and court.

These lands, altepetlalli, tlatlmilli, tecpantalli, were also inalienable, and could not be appropriated from the callipulli by the chiefs.

Nevertheless, before and apart from the conquest, communal land tenure was being eroded by the growth of large estates on which tenants labored in share-cropping arrangements with the estate holders. These tenants were bound to the land as serfs. The estates themselves could be transferred, but not to the tenants, and when transferred, the tenants were transferred as part of the property of the estate. The tenants were a class apart from the callipulli, exempt from paying tribute to the chiefs or from working on the communal lands.

The conquest introduced the presidio, mission, and the Castilian pueblo into Mexico. The Castilian pueblo was a landholding body, an incorporation, where land was administered, leased, rented. Pasture lands were held in common as were areas for threshing of grain, hunting, production of charcoal, and storage. The ejido, often mistaken as the simple communism of the indigenous peoples of Mexico, was in fact the name for the common land at the outside the gates, or exit, of the Castilian village, and was introduced after the conquest.

The Spanish crown, assuming the status of chief, recognizing in the indigenous pueblo as parallel to the Castilian pueblo, "awarded" legal status to the communal and collective land tenure relations by incorporating these pueblos. The communal landholding arrangements made the pueblo the "natural" vehicle for the collection and remittance of tribute to the monarchy. In all its glory, the Spanish Empire was nothing more than a "subsistence plus" economy, with tribute being nothing more than direct aggrandizement for, and of, consumption, rather than a basis for expanded reproduction and for accumulation. .

6. Legacy Assets

It is this legacy of the conquest, of mercantile-feudal Spain, of conquistadores and monarch-- a legacy that one and the same time embraces the near extermination of the indigenous peoples and the preservation and incorporation of communal relations of land tenure, and subsistence agriculture into an economy of tribute and extraction-- that determines in all their modernity the conflicts, contradictions, antagonisms of the capitalist economic development of Mexico. It is this legacy that organically fuses underdevelopment and overproduction.

Interruption: Two cents worth and repeated

1. The bourgeoisie, developed/undeveloped and all states in between, recognize dispossession as the foundation to private ownership of the means of production. If Duchamp, working with glass, stripped bare the bride, the capitalist working with history stripped bare the laborer, divesting him/her of the visible means of support so that life itself hung by the skimpiest of threads, and that the only value he/she had was that of labor, and the only value that labor had was as a means of exchange for a wage, for access to subsistence.

2. This stripping bare is an historical process, definitive for capitalism in its emergence and development, persistent in every manifestation of capital's reproduction but always circumscribed, mitigated, deformed by the actual existing relations of production and property, not the least of which is the unevenness of capitalism's development not solely internal to a nation or country, but unevenness on the global platform. As capital becomes the dominant social relation globally, as it achieves valorisation through aggrandizing that labor stripped bare somewhere, at home or away, the less this world of capital can, or achieves, the stripping bare of labor everywhere, the transformation of the "pre-capitalist" social relations, the more it, capital, absorbs, accommodates, adapts those relations to its plastic universe of value. Marx writes in Capital, Vol 2: "No matter whether a commodity is the product of slavery, of peasants [Chinese, Indian ryots], of communes [Dutch East Indies], or of state enterprise [such as existed in the former epochs of Russian history on the basis of serfdom], or of half-savage hunting tribes, etc., commodities and money of such modes of production, when coming in contact with commodities and money representing industrial capital, enter as much into its rotation as into that of surplus-values embodied in the commodity-capital, provided the surplus-value is spent as revenue. They enter into both of the cycles of circulation of commodity-capital. The character of the process of production from which they emanate is immaterial. They perform the function of commodities on the market, and enter into the cycles of industrial capital as well as into those of the surplus-value carried by it. It is the universal character of the commodities, the world character of the market, which distinguishes the process of rotation of the industrial capital."-- Kerr Edition Vol 2. p. 125. A neat, and prescient, analysis of the basis for uneven and combined development, bright fellow that Karl.

Resumption: About the same time as its neighbors to the north, the South and the North of the United States, were solidifying their great compromise of the Kansas-Nebraska with that overture to civil war known as Bloody Kansas, the Mexican Revolution of Ayutla overthrew Santa Anna and set the stage for the Liberal government and La Reforma.

La Reforma imagined the conversion of the corporate forms of landed property, entailed estates of the church, haciendas, and the communal lands of the indigenous pueblos into units of free soil, "yeoman" farms, but the legacy of the conquest and landed property condemned the liberals to power as an imaginary bourgeoisie, lacking the cohesion, depth, grasp of and on the economy, and not least importantly, the money required to actually turn dreams into reality.

In order to support an actual national government, in 1861 Juarez asserted federal control over the revenues flowing into the coffers and pockets of the state governors. At the same time, he imposed a moratorium on servicing the international debt, suspending interest payments for two years. France, Britain, and Spain temporarily put aside their differences to propose a joint occupation of the ports of Mexico, garnishing all customs payment due Mexico in compensation for the heartache and anxiety Juarez's actions had inflicted on the fragile health of the their gentile bankers. While Juarez organized against the proposed invasion, the dream of a yeoman's capitalism in agriculture faded in Mexico just as it was fading away globally.

Liberalism was incapable of transforming the relations of land and labor. However precise, stringent, detailed the the written laws of La Reforma disentailing estates of church and pueblo, however great the commitment of the liberals to individual private property, the liberals lacked the economic weight, the possession of a mass of productive apparatus, and a mode of production, capable of overpowering, bulldozing [almost literally] and burying [literally] its own antecedent. Juarez and his generals, Mariano Escobedo in the north and Porfiro Diaz in the south, could wage, lead, and conquer in the War of Intervention, expelling the French, executing that poor imitation of a poor imitation of an emperor enthroned by that other poor imitation of an emperor, Louis Bonaparte. They could not overcome the the convergence of Mexico's past with the future of capitalism, which future was already unfolding in the reconstitution of the Southern plantation class by the US bourgeoisie. Past and future joined hands when the Juarez government acknowledged its obligation to service 65.5 million pesos of debt owed to Britain.

Debt, that alpha and omega of value, was the kiss of death planted on the bride when she arrived at the altar of capitalism with her dowry of small property .

If the liberals imagined an economy of honest yeoman working small estates to support the edifice of capitalism, Porifirio Diaz was a man of spectacularly successful in lacking an imagination. Big property, incorporating small property through its aggrandizement was no dream; it was "progress." Diaz offered companies undertaking the survey of public lands ownership of one-third of the surveryed property. Between 1883 and 1910, 27 percent of the total area of the republic was conveyed to private companies. By 1910, Mexico, a country of 14 million rural producers representing 64 percent of the working population, was also a country where 95 percent of rural families were landless and 5 percent of the population controlled 90 percent of the land. The indigenous pueblos, most of which were incorporated into the physical territory and direct rule of the haciendas, had become villages of hired men and migrant plantation hands; a rural, semi-migrant proletariat.

Where debt and expropriation didn't suffice to eviscerate the indigenous pueblos, "progress" leant its hand. Marshes were drained to clear areas for tillage, properly set irrigation lines and other commercial reasons. The destruction of the marshes eliminated the pueblo's access to fish, an important source of protein. External sources of income from market activities, such as weaving, were destroyed when the rushes and reeds disappeared along with the marshes. Pueblo agriculture underwent a dramatic involution, where greater applications of labor on smaller plots of land were necessary to provide even near-subsistence yields.

With such dramatic destruction of the indigenous lands, the stage should have been set for Act 2 in the melodrama of capitalism's rise-- the movement of the landless, laboring populations into the cities, where an entrepreneurial bourgeoisie, rubbing its palms and licking its chops, having gathered the means of production beneath its skirts would now launch itself into the wonderful song and dance of "Accumulation Now and Forever!" Except there was little enough of those means of production in and around the cities. Except the accumulation that was taking place was accumulation based on the already existing markets of the advanced countries, not the domestic market. Except that the domestic market was not that of the yeoman farmer expanding production through applications of technology to agriculture; it was the market of the hacienda, the sugar plantations in Morelos, the henequen plantations in the Yucatan. Except capitalism in its international, world-historical development had already dropped the curtain on "independent," "small" production.

Labor on these plantations was in part labor of debt peonage, in part forced labor, that is labor compelled as punishment rather than by economic necessity. The Yaqui people were shipped to the plantations as punishment for their resistance to the expropriation of their access to water and land in Sonora. Indigenous people from other states were sentenced to plantation labor for similar reasons. At the beginning of the 20th century, the henequen plantations were controlled by a group of thirty planter families, called the casta divina.

These thirty families depended on selling their production to the US, and to one customer above all in the US, International Harvester. Harvester had taken care to "hedge" its vulnerability by reaching a secret agreement with the planter-merchant Olegario Molina. Molina, acting as if he just stepped out the pages of Capital granted loans to other planters that were collateralized by their production of henequen. The price of the henequen offered as collateral was fixed, of course, below market. Gaining control of henequen, Molina was able to leverage that control into the purchase of railroads and warehouses-- the elements critical to the transportation of the henequen to market; to the circulation of the commodity of henequen.

The agreement between Harvester and Molina stipulated that Molina would make every effort to "depress the price of sisal fiber," agreeing to pay "only those prices...dictated by the International Harvester Company." In order to give Molina the leverage in the market necessary to drive prices down, Molina was given access to 10,000 bales of henequen held in inventory by International Harvester. Molina was awarded a commission, naturally, on every bale of henequen he secured for Harvester under this agreement.

The overall social product of this Harvester-hacienda alliance was...not unlike the impact of the conquistadores on the indigenous people in the 16th century. Near extermination. Between the recession of 1907 and the outbreak of the Revolution in 1910, Diaz had 16,000 Yaquis shipped to the Yucatan. The average life expectancy after arrival on a plantation..... one year.

7. Extraction and Accumulation

After 1873, the inflow of foreign investment into Mexico increased and was welcomed by Diaz, his cientificos, and the governors of the state districts. Directed towards mines and plantations, into an economy of extraction, the investment still and always required a means of transportation. Without any inland waterway system, rail was the only efficient means. Even an economy of extraction requires some accumulation.

The first rail line was constructed in 1873, connecting Mexico City and Veracruz. By 1883, more than 3000 miles of railroads had been constructed; by 1893, 6000 miles; by 1909, 11,000 miles. By 1910, capital invested in railroads measured 2 billion dollars, 80 percent of which was US owned. This represented 70 percent of all foreign investment in Mexico. Transport costs decline from an estimated ten cents per ton-kilometer by wagon in 1878 to 2.3 cents per ton-kilometer by rail in 1903.

The expansion of the railroads was accompanied by widespread dispossession of pueblo lands. Access to rail connections was vital to hacienda and plantation production, and the hacendados acted according to their interests.

The railroad were instrumental in centralizing power in Mexico, undermining the internal tariffs between states. Willing to share the spoils with the caciques, the government funded creation of the rurales, armed gangs to control the rural poor and break strikes. While the country remained overwhelmingly agricultural, employment in mining, manufacturing, transport, petroleum, and construction accelerated as the railroads grew.

Even an economy of extraction requires some degree of accumulation, and accumulation did occur. The great merchant families, spying a glimpse of a national market in the tracks of the rail system, invested in steel, cement, textile, cigaret, and beer production. However, the conditions in Mexico, and in the world markets required these merchants to initiate their enterprises as joint-stock companies to raise the funds necessary to initiate production.

Lacking a capital goods producing capability, as well as an intermediate goods producing capability, industrial accumulation required importing these means of production from the advanced capitalist countries of Europe, and the United States. While the development of the domestic market in Mexico was perhaps 50 years behind that of the United States and England, the machinery imported for the industrial start-up was of the most modern design, requiring large initial outlays of capital that could be recuperated by operating the equipment intensely and ceaselessly, thus lowering unit costs, thus aggrandizing the maximum portion of relative surplus value.... and thus propelling overproduction as the intensified production outran and overwhelmed expanded reproduction.

For all the wealth that flowed out of Mexico, and the wealth that flowed into the pockets of the merchants, bankers, the pockets of the caciques, the pockets of the cientificos, Mexico was fundamentally a poor country, and poor not just in the incomes of its population, but poor in the development of the markets that could support--capitalize--industrial production. The bonding and bondage of the indigenous people to the land of the hacienda, of the plantation, and to the ejido, the bonding of the rural population to direct production for subsistence limited the exchange of industrial and agricultural commodities.

The products of the haciendas, the plantations, the fincas, the monterias had acted as commodities, has been absorbed by capital in the world markets, thus dissolving its expropriated value into the general stream of values in the markets; thus contributing, and drawing, a portion of the profits distributed by the total of exchanges in the market; thus drawing industrial capital towards itself.

And capital did follow the promise whispered by the hacienda, the plantation, the cacique, the hacendado, the cientifico. By 1895, 2 million labored in mines, manufacturing, transport, petroleum. In 1878, Mexico counted 99 textile mills with an average of 2000 spindles per mill. In 1910 there were 148 mills with an average of 4500 spindles each. Twenty mills had more carried more than 10,000 spindles.

The concentration of capital in textile production was severe. Two firms controlled 20 percent of all output and 100 percent of fine weave cloth production.

In steel and cement, similar concentrations existed. However, the limited nature of the market, and the importation of the production machinery from the advanced countries meant that the steel and cement industries output rarely exceeded 40 percent of capacity. Industrial capitalism in Mexico was a 40 percent endeavor, with a 40 percent bourgeoisie. Average real rates of return on for investors in industrial capitalism, boosted by the profitable tobacco and beer industries, rarely exceeded 3 percent.

In short, in essence, in actuality, what the United States and the advanced capitalist countries had experienced in the Long Deflation, 1873-1898 on a cyclical basis, overproduction, the pace of private production overwhelming the expansion of reproduction of the entire society, Mexico experienced as a congenital, structural, persistent condition. The obvious characteristics of Mexican industrial capital were its large initial costs of capitalization; its use of joint stock companies; its concentration and vertical integration; and most importantly, that its productive power exceeded, at the outset, its ability to achieve expanded reproduction. In this, Mexico showed the advanced countries, all of capitalism, its own future; a future of war and revolution as the means of production had outgrown the existing social relations of production, those relations of labor and land.

More than that, the more difficulty industrial capital confronts in its expanded reproduction, the more important become the values thrown into the market from the haciendas, the plantations, the "backward" units of "non"-capitalist production to the realization and distribution of any part of the total values in the market, as the lower wages paid to the rural labor force translated into reduced costs for advanced capitals. The less the relative exploitation of labor can develop, the more the absolute exploitation of labor becomes essential to maintenance of the entire system of exploitation.

The Mexican Revolution proved that the bourgeoisie had no answers to the problem of rural poverty; to the questions of land and rural labor. Not Madero, Huerta, Carranza, Obregon, Plutarco Calles, not the Convention of Aguascalientes, not the Constitutional Article 27, not Cardenas. Not even Villa or Zapata. Not even the Plan de Ayala. The rural struggles continued until 1940 and the beginning of World War 2, proving that.

The answers were in the expropriation of the haciendas, the plantations, the fincas, but how could a 40 percent bourgeoisie expropriate the landlords when landlords were the other 60 percent of capitalism?

The answers reside with a class capable of overthrowing all relations of private property in land and labor and then bequeathing a portion of that collective rural property to the indigenous peoples.

Mexico's development, its relations of classes, its very "national" revolution were international in origin; determined in and by the world markets. Likewise, the emancipation of the Mexican people, the indigenous peoples, the pueblos, the landless could not be achieved then, or now, on a national basis.

Sources: Zapata and the Mexican Revolution, John Womack, Jr., Vintage Books, New York 1968; The Mexican Revoluion 1910-1940, Michael J. Gonzales, University of New Mexico Press, 2002; Peace By Revolution, Frank Tannenbaum, Columbia University Press, 1933; Growth Against Development-- The Economic Impact of Railroads in Porfirian Mexico, John H. Coatsworth, Northern Illinois University Press, 1981; Industry and Underdevelopment, The Industrialization of Mexico 1890-1940, Stephen H. Haber, Stanford University Press, 1989; A Concise History of Mexico, Brian R. Hamnett, Cambridge University Press, 2006; The Railways of Mexico, A Study in Nationalization, John H. McNeely, Texas Western College Press, 1964; Agrarian Revolt in a Mexican Village, Paul Friedrich, Prentice-Hall 1970; The Land Systems of Mexico, George McCutchen McBride, American Geographical Society, New York 1923; The Mexican Revolution and the Limits of Agrarian Reform 1915-1946, Dana Markiewicz, Lynne Rienner Publishers, 1993.

March 2, 2010

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