Marxist Economic Theory – The 3rd Volume of Capital

[GM111]

The report commenced with a brief critique of the current call to “refuse to pay the State debt”, an idea which the stupid ‘left milieu’ is getting very excited about at the moment. This impotent petty-bourgeois theorisation can be lumped with the idiotic notion of an alleged contrast between “finance”, seen as destabilizing and ruinous, and productive capitalism, seen instead, if properly regulated and managed well, as tolerable and just. The birth of the crisis, in short, can supposedly be traced back the fraudulent, immoderate conduct of ‘the finance sector’; its boundless voraciousness, its unpreparedness to obey any rules. The idea is, then, that having once unmasked the despicable actions and fraudulent activities of global finance, a refusal to pay the debts incurred by these malefactors of capitalism’s ‘dark side’ could be the premise for a return to an “ethical” form of capitalist production. This is the ideology of the shopkeeper who, overwhelmed by debt, sees cancelling that debt as the solution to everything, cost what it may.

Our re-presentation, worked on over the course of three years, of the principles of the revolutionary doctrine outlined in the 5^th Section of the 3^rd Volume of Capital, has strived precisely to highlight the impossibility of separating finance from capital, maintaining that even if the latter is the backbone of the former, the one is still inconceivable without the other. In so-called “global finance”, which Marx analysed in its embryonic stage, this is so evident as to be beyond discussion.

The speaker then moved on to tackle the highly important Chapter 30, “Money capital and real capital”.

The accumulation of money capital, and of money wealth in general, reduces itself to the accumulation of proprietary claims over labour.

Accumulation of capital in the form of the national debt means nothing more than the growth of a class of state creditors with a preferential claim to certain sums from the total proceeds of taxation. These promissory notes are paper duplicates of capital which has been destroyed, but which nevertheless function for the owners as capital, insofar as they are saleable and can therefore be transformed back into capital.

Equally shares, which are title deeds on businesses, and which are actually titles to actual capital, give no control over this capital but merely confer a legal claim to a share of the surplus-value that will be created by this capital, and in this form are paper duplicates of real capital. As duplicates they can themselves be exchanged as commodities, and hence circulate as capital values. But these are illusory, and their values can rise and fall quite independently of the movement in value of the actual capital to which they are titles.

When interest rates fall, as a consequence of the tendency of the rate of profit to fall, their values, i.e. their listings on the stock exchange, have a tendency to rise. This imaginary wealth expands as capitalist production develops.

Insofar as credit plays a direct role in the reproduction process, that is, as something which the industrialist or merchant needs for his activities, for discounting bills, or as a loan, neither shares nor government stock play a part: money is what they need. The speaker reminded us of a very important and powerful passage from this 30^th Chapter, in which it is made clear that to produce a crisis, there has to be both a shortage, to the point of total paralysis, of the means of payment, and a fall in production with respect to the potentiality of the productive apparatus.

Since the entire system of production is based on credit, a shortage or absence of the latter makes the crisis assume the character of a financial, credit and monetary crisis, while in fact the real substance of the crisis derives from the fact that the mechanism of production has exceeded, in its search for a higher rate of profit, society’s capacity to acquire. For us it is a fundamental concept that the general crisis of the capitalist system, as studied and described by our school, is a crisis that manifests itself, to use the current terminology, as “deflation”.

The speaker then moved on to examine specific monetary themes and in particular those described today as “monetary aggregates”; a digression into the economic theory of our main opponents is important in order to understand the graphs and tables which underpin bourgeois analysis of the development and deepening of the crisis.

[GM113]

The final chapter of the report tackled the theme of the accounting procedures used by bourgeois States, along with the underlying relationships that characterise them. This has helped us to make a more effective critique of the recipes for resolving the credit crisis presently being put forward by the bourgeois left – the worst of all in our eyes. It’s the same old stuff about balancing the movement of capital; about the lack of equilibrium of current account balances in the European area which entirely favour Germany to the detriment of its European partners; about the absurdity of seeking growth purely by means of austerity and savings, with too much on one side and a dramatic lack on the other; about the hoarding by the banking system, to the detriment of productive investment; about the solution only being possible on a European level and not on the scale of individual States; and about the disruption that would result if the euro collapsed.

In none of these various formulas is it worth inquiring where the value actually comes from; where, in the economic cycle, that wealth is actually produced. They refer instead to abstract financial currents, but where these came from is not specified or considered important, and there is no point in asking where they will end up either.

There is no reasonableness, no rational calculation, no forecasting involved in the hunt for profit. The bubble has to be inflated until it bursts, and the debtor is strangled by interest rates, even if he won’t then be able to pay back the capital.