Can the state prevent the collapse of capitalism by printing currency?

by Jehu

Tom Cutterham seems to believe to the answer to that question is, Yes. Cutterham’s review of Paul Mason’s book, Postcapitalism — Forget Wikipedia — is a common enough response by some activists to any mention of communism:

“Again and again, those who predicted imminent collapse were proved wrong. There were always new ways for the system to adapt to its inherent contradictions and crises, always new markets to pry open and new forms of labour to exploit.”

Capitalism, this argument goes, is apparently capable of almost infinite adaptation. The response usually does not deny that capitalism is prone to crises, nor that these crises may trigger some political event like a social revolution. However short of a social revolution, (triggered usually by an alteration of consciousness secondary to a crisis), there is nothing inherent in capitalism driving it toward its self-annihilation.

The current iteration of this argument, which among Marxists seems to date back to Tugan-Baranowsky, is now defended by the value-form school and almost all Marxists today. This school includes very influential Marxist writers like Michael Heinrich in Germany, John Milios in Greece and David Harvey in the United States.

Cutterham provides us the quintessential argument made by this school: “First of all, despite what Mason suggests, work isn’t going away fast.” Capitalism may be reducing the labor time required for production of commodities, but this time set free from production is being filled with bullshit jobs and falling productivity. What has impeded the capitalistic drive to abolish labor generally isn’t technology, but the state:

“If work were really being steadily replaced by machines, we would see improving productivity rates as the proportion of labour needed in production dropped. But as Doug Henwood has pointed out, average productivity in the US has actually been falling for a decade. The reason for that is right on the tip of Mason’s tongue: what David Graeber calls “bullshit jobs,” the pointless and unproductive work that keeps the wage relation ticking over in the developed world, offsets the mechanisation happening elsewhere. An explosion in free time has been on the agenda for a century. What has prevented it isn’t technology, but politics.”

Cutterham’s criticism of Mason’s book is that Mason,

“focuses too narrowly on capitalism as a dynamic economic system. In the process, he ignores its alter-ego as a system of political control.”

The idea Marx neglects politics in his analysis of the capitalist mode of production has deep roots among many activists whose stock response to the prediction of capitalist collapse is to declare the end of capitalism does not and cannot end sexism and racism. The idea white supremacy and the subjugation of women, having already existed prior to capitalism, must, on this account, outlast capitalism is not new.

The criticism of Marx’s labor theory of value by feminists in particular raised this question long before the value-form school. The early feminists critics of labor theory could dismiss it as having no real application in their domain. Since white supremacy and the subjugation of women could be shown to have existed long before the rise of capitalism, it seemed to follow that while a social revolution may put an end to capitalism, there was nothing to guarantee it would put an end to white supremacy and the subjugation of women, except the pious promises of vanguardist leaders.

The value-form school employs this argument to overturn labor theory from within labor theory itself. As Cutterham argues,

“Capitalism as a force for growth may well be dying …. As a force for inequality, though, it is very much alive.”

What the value-form school has done is introduce a new front against labor theory for this view. The value-form school argues Marx did not just ignore problems of women and the colonial peoples, but also the whole of the present state in his analysis of the capitalist mode of production. Marx, this view states, approaches capital as if it is merely an economic system, ignoring that capitalism is both an economic system and a political system.

As Cutterham hints in his criticism of Mason, the defect of labor theory begins with Marx’s assumption that socially necessary labor time (value) is determined solely by technological improvements in the productivity of labor. This argument is also to be found in Harvey’s Companion, where he asserts Marx is very ‘cryptic’ in making an ‘a priori’ assertion that labor is the source of value. In Harvey’s own reformulation of Marx’s theory value arises not from labor, but from exchange. Chris Arthur carries this argument one step further: arguing value cannot be deduced from the exchange relations — it requires the value-form, money.

What is the significance of these criticisms of labor theory?

This argument about labor and the value-form conceals a much more fundamental argument over the nature of capitalism itself. Michael Heinrich has provided the most theoretically consistent argument on behalf of this view. Marx, argues Heinrich, was wrong in Capital to predict the rate of profit falls with the rising organic composition of capital.

The argument of the value-form school goes something like this:

Since 1971, unlike in Marx’s day, the value-form is determined by a law establishing the fiat dollar (valueless paper currency) as money in the US. If the very existence of value requires the value-form, and if the value-form is now state-issued inconvertible fiat dollars, the state determines what constitutes socially necessary labor time through its control of the currency. Since the state legally determines what is money and, therefore, what is socially necessary, this means there is a necessarily political component to capitalism that Marx ignored in Capital.

The argument makes perfect sense if you are an idiot.

Thus, while it may be entirely true that capitalism constantly technologically reduces the concrete labor time required for production of commodities, Marx explained the source of value was abstract labor, not concrete labor. Unlike “concrete labor”, “abstract labor”, (i.e., labor abstracted from all concrete useful qualities), is necessarily the product of money transactions using a currency controlled by the state. Value today is a political creature, a manifestation of state policy.

Abstract labor — value — isn’t going away as Mason suggests, because the state can determine the amount of abstract labor that is ‘socially necessary’ through its fiscal and monetary policies. If the state can maintain ‘full employment’ through its economic policies, there is no reason, at least in theory, that abstract labor must go away. And if labor doesn’t have to go away, there is no inherent tendency toward capitalism’s demise.

What the value-form school has done is completely invert Marx’s theory and of historical materialism. In historical materialism, the state is to be explained by the mode of production, but in the value-form argument the stability of the mode of production, its adaptability, is explained by the state.

Of course, there is nothing wrong with disagreeing with Marx and historical materialism as the value-form school does; labor theory can only advance if it is challenged and engaged. However, if you want to have a real debate, you have to lay your cards on the table completely and stop forcing people to excavate your argument from under a large pile of steaming, odoriferous bullshit.

If Cutterham had simply said,

“Labor isn’t going away because the state can prevent this”

We could have real debate on the merits of his argument. In that debate we could address the data offered by Henwood on productivity and Graeber on bullshit jobs. There is actually a lot of work done by Marxists on the question of superfluous labor in society. And Postone has even predicted superfluous labor time must grow as productivity improves within the capitalist mode of production.

Stating the argument plainly means we could then discuss how this relates to labor theory, using Henwood’s data, Postone’s theoretical work and Graeber’s article as materials to consider; hoping to narrow down the central question:

Does Doug Henwood’s data or David Graeber’s observations imply capitalism will not collapse?

Yes or No?

But we can’t even get to this argument because the value-form school is deliberately burying their point under bullshit. David Harvey wants to make the value-form argument in his Companion, but he won’t even do it honestly. Cutterham, likewise.

So, why is the value-form school trying to avoid the debate? Just come out and state it:

“Capitalism will not collapse because the state can print money.”

Just come out and state your belief that Obama can keep capitalism alive by counterfeiting dollars. Stop being cowards. Stand and fight.

Here is the kicker: In the United States, even the most vocal opponents of the value-form school (Kliman, Roberts, etc.) agree with the value-form school on this point. They might disagree with the value-form school in the phony debate on the falling rate of profit thesis, but they fundamentally agree capitalism does not have to collapse.

If the value-form school would simply defend their proposition that capitalism can be saved by printing currency, the charlatans in the falling rate of profit school would be exposed as well.