The Real Movement

3. Capitalism without exchange value, or superfluous labor time

In part one of my essay, “Towards a hypothesis of the final collapse of capitalism”, I proposed a narrative to make sense of Luxemburg’s slogan, “Socialism or Barbarism”. That narrative goes this way:

• a. Marx and Engels predicted the collapse of production based on exchange value;
• b. this collapse would result in the abolition of capitalist private property;
• c. either the proletariat would accomplish this, or the bourgeois state would be forced to do it itself; and,
• d. this would set the stage for a final confrontation between the proletariat and the state, which would become the national capitalist after the abolition of capitalist private property.

In part two of the essay, I proposed that the collapse of production based on exchange value was the partial collapse of capitalism. This collapse basically resulted in an apparent absurdity: capitalism without exchange value. For production of surplus value to continue, the values of commodities, particularly labor power, could no longer be expressed as exchange values. The development of the new forces of production bound up with capitalism had finally and irreversibly pushed the rate of profit to zero. According to Grossman, the production of surplus value after this event essentially depended on the ability of the capitalist to purchase labor power below its value. This condition was satisfied by the collapse of the gold standard and replacement of gold by valueless debased state issued currency.

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CHART: Decline of the real wage after the collapse of the gold standard (Source: Bureau of Labor Statistics)

2. Breakdown of production based on exchange value and the collapse of wages

As I stated in the previous post, my hypothesis depends on the claim that the conditions of production based on exchange value are fundamentally incompatible with the conditions of the new forces of production bound up with capital (i.e., the conditions of social labor). To restate this in a way that may be more obvious: the condition of commodity production, where producers carry on their productive activities separately and only enter into definite relations during the act of exchange, are not compatible with the conditions of directly social labor that have grown up under the capitalist mode of production. Taken together, of course, the two sets of conditions constitute what we mean when we refer to the capitalist mode of production, but they stand in an antagonistic relation to one another within the social form.

What we witnessed in the 1930s depression was the realization of Marx’s prediction that production based on exchange value would collapse; that event is now in our rear view mirror. With the advantage of 20/20 hindsight we can confirm the validity of Marx’s labor theory of value, which posits a fundamental antagonism between the conditions of individual production, characteristic of simple commodity production, and the conditions of directly social production, characteristic of capital.

What remains for us to determine, however, is the nature of the period we are now passing through. Luxemburg called it barbarism, the fascists gave it the name, Fascism. But what has almost never been done is to describe the political economy of this strange animal, capitalism without exchange value. It has seldom occurred to most Marxists that barbarism, (fascism), far from being a mere political ideology, may actually constitute a distinct phase of capitalism with its own political economy. In fact, few Marxists even realize that we have passed through Marx’s predicted collapse of production based on exchange value. Thus few Marxist theorists have seen the need to ask a critical question:

Assuming a proletarian revolution was unsuccessful after the collapse of production based on exchange value, what does capitalism now look like?

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1. The ambiguity of capitalist collapse in Marx’s theory

I want to propose a hypothesis to describe what happens when capitalism finally collapses premised on the assumption that this collapse can occur in two separate and distinct phases: a lower phase, which we can refer to as the collapse of production based on exchange value; and a higher phase, which I will call the collapse of production based on wage labor. These two phases more or less reflect the dual character of capitalist commodity production: that capital is a form of commodity production which specifically aims to produce surplus value.

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This essay, by Karl Thisell, Capital Without Organs, raises two important questions about the state, money and capital in my writings on the subject:

“a) Is there really a necessity for money to be tied to the gold-standard for it to be a universal exchange commodity? Is it not rather so that it’s exactly that it’s character of universal exchange that makes it valuable as a commodity?

b) The very idea that money is today controlled by the state. This I believe to be an underestimation of the force of capital itself, and an idea with perhaps dire consequences for Jehu’s own theories.”

The writer says he does not intend to refute my argument but only intends to brainstorm, i.e., raise significant questions about my approach. I think the questions are important and tried to avoid addressing them for a few days until they had time to ferment in my head so to speak.

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An important question was raised about my last post that goes to the heart of labor theory.

“So what is the M that becomes M’? What is the medium through which value is valorized?” –R

Well, it turns out I have a hypothesis about this.

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My name was recently dropped during a podcast where two Marxist were discussing the labor theory implications of modern money theory (MMT). You can find the episode here

Without getting too deep into the woods — you can listen to it yourself — I did want to comment on several points that podcast ignores in my opinion:

1. Marx said money has to be a commodity, but he never said there had to be money.
2. Money is the phenomenal expression of the fact that society lacks of control over its production relations, right? So, what happens when the state controls the thing serving as money in that society?
3. Does a debased state issued fiat currency, (by which I mean a currency that is no longer tied to a definite quantity of a specific commodity), behave like a commodity money?

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