Badiou redefines communism in the 21st century
The strange case of Apple’s huge hoard of dead capital
Richard Wolff tweeted this gem last week:
Exec admits Apple evades taxes; says US laws allow it. Buffoon thinks we don’t know corps buy such laws from pols: yhoo.it/1J2AzHA
In case you been living in a cave, you’ll know Wolff is talking about Apple’s massive cash hoard. It is widely estimated that Apple is sitting on something in excess of $135 billion of capital that is presently just lying around idle. Wolff argues Apple has been able to accumulate this vast hoard of uninvested capital because tax laws are written in such a way to allow it to accumulate vast sums of profit that are not taxed.
A tragedy, right? Apple is sitting on billions of uninvested capital that could be paid out in food stamps, while Washington is so short of funds, it is running massive deficits just to make ends meet.
Of course, the relevant question Wolff should be trying to answer is not why this huge hoard is not taxed by Washington, but why Apple is not investing billions of essentially tax free profits to make even more tax free profits. Aren’t capitalist firms supposed to be maximizing their profits? Why is apple just sitting on the cash, rather than investing it?
Here is another thing: Even if Apple’s huge hoard of uninvested capital were taxed by the state, it still would not be invested to maximize profits. The state itself would just consume the capital unproductively. Taxing Apple’s dead capital does not address the fundamental problem that the capital is not being invested even when it is not being taxed. What is the roadblock that prevents the capital from being invested productively?
The entire discussion of so-called ‘secular stagnation’ revolves around the fact that incredible masses of profit are not being reinvested in production by what we assume are profit maximizing capitalist firms. Taxing these uninvested trillions doesn’t fix the problem that investment is frozen or locked up.
Capital without profit
Robert Skidelsky, Keynes autobiographer, has argues something is actively blocking reinvestment of profits by companies like Apple. According to Skidelsky the capital is likely not invested because, surprisingly, it’s not needed:
“A company like Kodak needed and built vastly more infrastructure than its digital successors Instagram and Facebook – and (of course) employed many more workers. The inventions of the future may well consume even less capital (and labor). What follows from this? …. If a point of true “full investment” – that is, a situation when the supply of capital increased to the point at which it would yield no net return above its replacement cost – were ever reached, it would signify that the human race had solved its economic problem. The challenge then would be to convert capital abundance into more leisure and balanced consumption.”
The argument Skidelsky makes here is not new. In fact, it is more than 120 years old and was first advanced by Karl Marx in 1894. In the posthumous publication of Capital, volume 3, Marx predicted the capital available for productive investment would reach a point of complete saturation that he called absolute overaccumulation. Absolute overaccumulation was a condition where no new investment by the capitalists can increase the profits of capitalist firms.
Capital, Marx argued, existed solely to be reinvested produce more capital. At a certain point, the mass of capital available for investment would simply exceed any and all possible productive uses for it. The space for further profitable investment of new capital would be saturated and additional investment would produce no additional profit.
Unfortunately, the inheritors of Marx’s theory, post-war Marxists, have done very little with this 100 year old prediction despite its startling implication.: the complete emancipation of society from labor was now on the horizon thanks to the explosive expansion of the productive capacity of society engendered bizarrely enough by capitalist exploitation.
A bourgeois simpleton thinker like Skidelsky looking at the huge mass of uninvested capital in the hands of capitalist firms like Apple and imagines a society emancipated from labor. By contrast, the unimaginative Leftist, Wolff, can only imagine all the shiny new baubles the fascists could afford if the state could tax the uninvested capital. Reading their different takes on the problem of secular stagnation, is there any wonder why this year the Left has suffered one after another defeat this year in Greece, Venezuela, France — or turned in such a mediocre performance in the UK, Portugal and Spain — in the middle of what is widely agreed to be the worst crisis since the Great Depression?
Is there any wonder why the Left’s ‘post-capitalism’ vision has failed to resonate anywhere?
A globalized capitalism
Badiou has taken a look at the complete failure of the Left and has called for a far-reaching rethink of its obsolete strategy.
He begins with three salient observations that figure nowhere in the Left’s present approach:
First, capital has outgrown the nation state.
“Today we have a capitalism explicitly installed on a new scale, the planetary scale. Which is what makes globalised capitalism not only a capitalism that has rediscovered its solvent energy but one that, also, has developed it in such a way that, right now, we can say that, considered as a global structure, capitalism exercises a practically unchallenged mastery of the whole of the planet.”
Badiou is one of those people who thinks so deeply he is sometimes shocked by the shallowness of his actual argument. He apologizes for the “banality” of the observation that capital is now globalized as if the rest of us have already realized this. But has the Left realized this fact? All evidence suggests it has not. If the Left knows capital is globalized the relevant question is why its strategy remains entirely national in almost every instance?
All indications are that the Left still sees the rest of the world market laying beyond that national borders as a mere complicating factor in an otherwise autarkic national space — a national economy as insulated from the world market as Hitler’s Germany or FDR’s America in the 1930s, where foreign trade was almost a rounding error on national income.
The state as an empty fiction
Second, and closely related to the first, Badiou points to the elephant in the room: As has been proved in Greece and Venezuela, radical Left national governments cannot possibly fight a globalized capitalism. The Left has yet to realize the flipside of the truth Badiou considers banal; namely, that nation state and national politics are dead, empty of any economic significance:
“As you’ll know, one of the most widely mocked themes of Marxism has been that of the withering away of the state. Marxism announced that the reorganisation of the state, following the revolutionary destruction of nation-states dominated by capitalism, would ultimately deploy, through a powerful collective communist-type movement, a society without a state, a society which Marx called that of ‘free association’. Well, today we are seeing a wholly pathological phenomenon, namely a capitalist process of the withering away of states. It is a fundamental phenomenon today, even if it is masked by the subsistence, which will probably continue for a lengthy historical period, of state poles of substantial power. But in truth, the general logic of globalised capitalism is to have no direct or intrinsic relation to the subsistence of national states, because its deployment today is transnational. The multinational character of large companies came to light during the sixties. But since that time, these large companies have become transnational monsters of an entirely other nature.
To put this in terms the Marxists will recognize: the proletarians of every nation have suffered a world historical defeat from which they can never recover within the confines of a national struggle.
To be blunt, there is nothing in historical materialism to suggest the nation state only disappears after a social revolution. The end of the nation state is not an event peculiar to socialism. While Marxists have long presumed the destruction of the existing state can only occur consequent to a proletarian revolution, this is not a formulation either Marx’s or Engels’ advanced; it is an invention of dumb Marxists.
What were Marx and Engels views on the matter? It is to be found in Socialism, Utopian and Scientific, in their day the most widely popular work of their career. In that work, Engels predicted the existing state would take control of the national capital. As its control extended to the entire economy, it would essentially function as the national capitalist, directly exploiting the labor of the working class. Upon assuming this new role, Engels argued, national states would begin to collapse as the same forces that led to capitalist crises engulfed them.
While it is true the state cannot completely disappear under capitalism, there is nothing that says the state cannot be reduced to empty fiction — just like the post-1971 dollar.
The forcible destruction of the bourgeois state by capital
Third, beyond the now useless national states of the former imperial powers, the former colonies of those powers are slowly being converted into free fire zones ruled by rival gangs, sectarian formations and other ‘non-state actors’:
“I think that what is appearing on the horizon is the idea that, rather than taking control of the arduous task of establishing states under the supervision of the metropolis, or further still, of directly metropolitan states, the possibility is that we simply destroy states. And you can see how consistent this possibility is with the progressive destatization of globalised capitalism. After all, in certain geographical spaces full of dormant wealth, we can create free, anarchic zones where there is no longer any state, and where, consequently, we no longer have to enter into communication with that redoubtable monster that the state always is, even when it is weak. We can shield ourselves from the permanent risk that a state may prefer another client, and other commercial snags. In a zone where all true state power has gone, the whole petty world of firms can operate without any overall control. There will be a sort of semi-anarchy, with armed gangs, maybe controlled, maybe uncontrollable—but business can continue as usual, or even better than before. Even so, we must realise that, contrary to what is often said, contrary to what we are told, companies, their representatives, the general agents of capital, can perfectly well negotiate with armed gangs, and in certain ways can negotiate with them more easily than with established states.
Badiou argues the state as a economic category is now as empty of real economic content as the valueless fiat currency we use to buy groceries. In Spain, Greece and a host of less developed countries the state is no longer a sovereign actor but an increasingly atrophied hangover; incapable of sovereign action, absolutely subordinated to the requirements of capital and, in some cases, altogether non-existent.
What does this mean for Left politics in the 21st century? It means everything we take for granted is wrong.
I will look at this next.
To be continued