The Left’s myopic defense of the Keynesian social state
The root of the Keynesian social state is the starvation of the working class
I think the post-war Left has never been able to properly understand Keynesian economics because it has never grasped capital itself. This problem has deep roots in labor theory back to Marx’s piece, “Reflections on Money”, where he criticizes a one-sided view of capital. He pointed out that capitalism is not just the exchange between consumers and capitals, but also between capitals themselves and the relation between the two. Another way to put this, I think, is that capital is not just the circulation of commodities, but capital in the form of commodities.
We think of the “market” as composed of sellers of commodities, but this is only one side of the contradiction. On the other side is the movement of capital, which, unlike commodities, never falls from circulation. Commodities ultimately find their final place as objects of use and are consumed; while circulation of capital is the only use for capital. On one side of an exchange is a seller/buyer of commodities, while on the other side is a capitalist advancing his capital for the same capital in another form. On the capitalist side, there is no buying or selling, but a succession of conversions of his capital into different forms.
This is the problem posed by those who embrace Keynesian economic management. It places our attention on the act of buying and selling, but completely overlooks the movement of capital. The successive movement of capital through its various forms is explained as the various acts of buying and selling by individuals. Since both movements are present in one and the same act of exchange, it appears as if exchange can be reduced to buying and selling.
The movement of capital and the movement of the commodity are not separate movements, but constitute the same movement. Marxists lose their way and begin tracing the movement of the commodity, while completely neglecting the movement of capital. Keynesian economics is not about the movement of commodities; it is solely concerned with the movement of capital. But its specific obscuring method is to present the movement of capital as the mere movement of commodities. For this reason, Marxists tend to identify it as an underconsumptionist ideology, when it is actually not.
Keynesian theory is typically presented as a theory of society’s inability to consume what it has produced, when it has the opposite aim; namely to reduce even further society’s — i.e., the working class’ — ability to consume what it has produced. In a bizarre turn, Keynesianism, which is all about starving the working class, appears as an ideology aimed at feeding the working class. On the other hand, the opponents of Keynesian policies appear as determined opponents of the well-being of the working class.
There is no need whatsoever to establish by reason of some sophisticate argument that Keynesian economics is all about starving the working class. This involves no complex, multi-level deductions based on a comprehensive examination of the theoretical assumptions of John Keynes. The asshole said it right out of his fucking mouth:
“it would be impracticable [for the working class] to resist every reduction of real wages, due to a change in the purchasing-power of money.”
How clear can you get? The superiority of Keynes is that he did not deal in euphemisms, but stated his object clearly. You don’t have to infer he wants to starve the working class from a dense, almost indecipherable, philosophical argument, a la Hegel. He writes it down in plain English. There is none of this fucking “negation of the negation” bullshit from Keynes, nothing that requires eight fucking semesters of Hegel. Keynes is direct: “If you want to prop up profits, you have to cut wages. But government can cut wages more effectively than businesses.”
Government’s tool is its control over the currency, over the medium of exchange, in the aftermath of various industrial states going off the gold standard. If wages could not be cut directly, they could be cut by constantly devaluing them against gold — the universal expression of value.
Really, what the fuck is difficult to understand about his argument here? Am I reading into it something that is not there?
So why did Gugliemo Carchedi meet with such surprise when he explained in 2012 Keynesian theory did not work through redistribution? And, why was he ultimately unable to explain how exactly the theory worked? Why did he hit a brick wall on this? And why, after explaining Keynesian theory did not and could not work as advertised, did he still recommend it to the working class anyway?
The above should not be construed as if labour should be indifferent to state-induced capital-financed redistribution and/or investment policies. On the contrary, labour should strongly struggle for such policies. But this struggle should be carried out not from a Keynesian perspective but from the proper, Marxist, perspective.
The Keynesian approach considers Keynesian policies as a way to improve both labour’s conditions and capital’s condition, a way to counter or exit the slump. From the Marxist perspective, state-induced capital-financed distribution and/or investment policies need not be Keynesian, ie need not carry the ideological content attached to the word, the community of interests between the two fundamental classes. The Marxist perspective stresses (a) that these policies may improve labour’s lot but are impotent against the crisis-they can at most postpone it, and (b) the political potential of these policies. Through the struggle of labour for better living and working conditions, consciousness can arise and grow among workers that each time these policies are paid for by capital, capital is weakened both economically and politically, and that labour can exploit this to weaken the yoke of capital.
There is no reason to elevate Carchedi’s error by delving into deep philosophical discussions. The reason is simple: 99.9999% of Marxists have never even bothered to read Keynes, so they don’t know what the fuck he said. Their entire impression of Keynes is taken from vicious bourgeois ideologues like Paul Krugman. These Marxists read somewhere that Keynes identified the underconsumption of society as the root cause of crises and this is all they know. If Carchedi ever read Keynes General Theory, I will eat my fucking baseball cap. He is a fucking fraud.
Our movement is dominated by professors of economics who pass themselves off as experts on labor theory. In particular, the Trotskyist school has done more damage to a proper understanding of labor theory than all other Marxist schools combined. If there is a contender for this place in history, it has to go to the Monthly Review school. These two schools — trots and the Monthly Review — have spawned most of what passes for Marxism today. They have reduced Marxism to trite observations not even useful for bourgeois ideologues.
Even a fucking bourgeois ideologue like Krugman knows Keynes only ever recommended reduction of wages to end crises. Krugman actually explained Keynes was the “conservative solution” to the Great Depression. Says Krugman:
But Keynes was no socialist – he came to save capitalism, not to bury it. And there’s a sense in which The General Theory was, given the time it was written, a conservative book. (Keynes himself declared that in some respects his theory had “moderately conservative implications.” )
The movement of commodities and the movement of capital are one and the same movement of social production. Keynesian theory is solely concerned about the movement of capital, but presents this movement as the movement of commodities. The movement of capital is continuous; while the movement of commodities has a definite beginning and ending. A commodity is produced, it is sold, and it falls out of circulation to be consumed. If the process is to be reproduced, it must begin again with the production of a new commodity.
In the sale of labor power, one and the same movement is the simple movement of a commodity and the continuous movement of capital. Keynesian theory, therefore. presents the movement of capital as the simple sale and purchase of labor power — the flip-side of the movement of capital. Thus our attention is always focused on the sale and purchase of labor power — on jobs, on unemployment, and on wages — as a discrete act unconnected to the movement of capital. Theoretically, in Keynesian economics, there is no connection between the sale and purchase of labor power and the movement of capital.
And there is a good reason for this: With the beginning of the Keynesian era, these two movements are no longer one and the same movement. The sale and purchase of labor power has become, inexplicably, completely detached from the movement of capital. To put it another way, with the Great Depression, as the movement of capital expands, the movement of the purchase and sale of labor power contracts. Between these two movements lays a growing mass of idled capital and superfluous labor power. It is, essentially, a mass of capital that can no longer find its place in production, which requires the sale and purchase of labor power and a mass of labor powers that can no longer be sold. We are no longer talking about momentary interruptions of production that occurs in the form of capitalist crisis, but capitalist break down itself.
None of this requires Keynesian theory to explain; it was fully predicted by labor theory decades before it occurred. Keynesian theory is required only to EXPLAIN IT AWAY — to argue there was no breakdown of the mode of production. The Keynesian argument is that during a crisis there is “inadequate demand” for commodities, i.e., for labor power. There is, in fact, no other commodity that is of interest to Keynesian theory, since only labor power can make real capital out of capital — only labor power can produce surplus value and therefore make possible capital’s self-expansion. All commodities in capitalist society are simply labor power at its various stages of production. In neoclassical theory, labor power is the so-called “composite commodity” whose production and employment is managed by the fascist state. Since there is “inadequate demand” for labor power, according to Keynesian theory, the state can stand in for this missing demand by various measures.
The simplest and most direct means of addressing the shortfall in “demand” is for the state to directly hire labor power itself. A second method is for the state to engage in various “social investments” or attempts to “redistribute” the social product.
So let’s take the first solution: the state directly hires a mass of workers and puts them to work chiseling the faces of presidents into a cliff. Where do the means to hire these workers come from? The state can either print the currency up or it can borrow it from the available superfluous capital laying idle. If it prints up the currency out of nothing, it essentially pays nothing for the labor power it has hired. Which is to say, labor power has been sold below its value; the state is not adding to demand, but doubling down on the inadequate wages of the working class. Two workers must now share the real wages (real produced commodities) of one. There has been no increase in the mass of wage commodities produced; this meagre mass of commodities has now been further divided.
In the second case, the state borrows the idled capital and uses it to employ the same mass of workers to chisel Lincoln in a rock. Again there has been no increase in the mass of wage commodities produced, only division of the existing mass. In either case, wages have been devalued by this effort. In the second case, however, the fascist state is now, in addition to devaluing wages, paying interest on the idled capital even as it devalues wages! WTF is up with that?
Let’s suppose for a moment that instead of directly hiring workers to chisel the faces of presidents into the side of a cliff, the state outsources this “investment”. This is our second of two Keynesian methods for “increasing demand”. Does this method resolve the essential contradiction of the first — that two workers now must share the wage commodities of one? Of course not. The problem is still there and, moreover, we must now add the profits of the outsourcer.
Where, pray tell me, is the magic of Keynesian economics? Where does it not simply rely on devaluing wages? You fucking Marxists can twist and turn as much as you want, but your so-called Keynesian “social” state is nothing but devaluation of wages. If by “social” you mean that two workers are now supposed to live on the real wages of one, you are absolutely correct. Capitalist “sociality” has never been anything other than this. The fact that you have to be reminded of this shows the depths of venality and corruption to which you have brought labor theory.
The chief and over-riding objection to ending the state is that, to paraphrase some Marxists, “Some programs help the working class.” We have the minimum wage, Social Security, Obamacare, the EPA, OSHA and whatever. We can’t throw out the working class baby with the capitalist bathwater. Yes we can! Our historical mission as the working class is to put an end to the working class! Who the fuck wants to be a member of the working class? Who the fuck WANTS to be a slave? The point of the working class is that its material condition of existence, labor, only serves other classes, not itself. How the fuck do you people forget this? Can you tell me? Can you tell me what sort of strange amnesia you have where you forget you are a fucking slave?
So, Yes. We want to kill Social Security, the minimum wage, OSHA, the EPA and the rest of the social entitlements of the welfare state — and the whole of the state bound up with these programs. I am not clear why this bothers Marxists except this discomfort proves they are completely deluded by bourgeois propaganda. A war criminal in the White House — a murderer of children — is somehow a caring enough person to provide his slaves with healthcare? Do you really believe this? Are you really this fucking naive?