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Rent and the Crisis of U.S. Capitalist Production
“The old is dying and the new cannot be born: in the interregnum a great variety of morbid symptoms will appear.” Antonio Gramsci
The Crisis and Its Sources
Believe it or not, but Bloomberg does publish mildly interesting articles every once in a while, and by coincidence this one on the stagnation of U.S. manufacturing appeared last week (Carl Pope is a former chair of the Sierra Club):
America’s Dirty War Against Manufacturing
Put aside the author’s no doubt special pleading for low tax, unregulated “green and clean” manufacturing. The fundamental point is correct, and supported by the statistical evidence: the bulk of manufacturing jobs have been lost “the old-fashioned way”, by the replacement of labor power by machines, and less so by the so-called neoliberal “wage arbitrage” of existing technique to low wage countries. Remember this the next time a Democrat or an American trade union official starts into beating on “China” with their chauvinistic and implicitly racist demagoguery. “The old-fashioned way” - in historical terms actually a new-fangled way of extracting a surplus product that emerged in force only in the mid-19th century – is what Marxism has called relative surplus value extraction, tending to raise the average organic composition of capital – the ratio of constant to variable capital, with “constant” representing the value of machinery, technique, raw materials, and manufactured means of production generally, and “variable” representing wages. This raises the productivity – the volume of commodities a single capital can put out with a given variable capital – of those capitals who can successfully reduce their variable capital with new technique, thereby raising the rate and mass of their individual profit at the expense of their competitors. It was counterposed by Marx to absolute surplus value extraction by means of lengthening the workday or workweek, and/or deepening the intensity of labor in any given work period. This latter is the true “old-fashioned way” of the capitalist extraction of surplus value, and the predominant way of the capitalist mode of production throughout its history before the 19th century.
The problem that Mr Pope is pointing to, translated into Marxian terms, is quite real: the conditions of production in the United States work against advancing capitalist production along relative surplus value lines. In other words, an “advanced capitalist” country where half the adult population believes a personal guardian angel watches over them, day in, day out, according to The Baylor Religion Survey (2008), may not be the most conducive to the advance of science and technology in production. These conditions are therefore both superstructural – involving the structures of the State, law, custom, ideology, culture – and infrastructural – this latter boiling down to the use of the land, water, air and ecosystem as a whole. These two aspects are dialectically interrelated as a whole with their fulcrum in the State – this after all the final arbitrator both the of the use of infrastructure and preservation of the existing superstructure – and have as their antithesis the reproduction of labor power in the form of wage labor. The question of all of these conditions for carrying on capitalist production in its specific “industrial” manufacturing sense are essentially those of the qualitative nature of the use values that comprise those conditions, and whose “solution”, should these conditions be a barrier to the advance of capitalist production – is therefore not immediately reducible to applications of the law of (exchange) value, a.k.a. neoliberal “market solutions”. As will be seen, the neo-liberal approach has been leading to a very different and even opposed result. The solution in historical fact requires the intervention of agencies operating outside the law of value: either the existing State, in what Antonio Gramsci called “passive revolutions”, conservative reforms “from above”, or the intervention of the masses, and especially the subject of the capitalist mode of production and the law of value, the proletariat, in a social revolution. Interventions from above and below occur simultaneously, of course, with the question being which class will get the upper hand. That is what the United States is facing today in the present crisis. Ever since the Civil War – and beginning with that war – the U.S. ruling class has solved the problem of the conditions of capitalist production (whether or not the ruling participants understood what they were doing is besides the point here) through a series of conservative “passive revolutions” that run through the Progressive Era – rightly called the “Triumph of Conservatism” by Gabriel Kolko (1963), though not for the reasons he thought – and most of all, the New Deal era, the greatest conservative triumph of them all, as can be seen when we observe the social terrain at present.
full: http://unitedstatesofmarxism.com/2012/01/22/rent-and-the-crisis-of-u-s-capitalist-production/
So what, specifically, made you recommend this blog, Louis?
Comment by Todd — January 24, 2012 @ 10:42 am
Thanks! I can only hope to find the time to make it worthwhile.
It originated as a comment reply to a UM post on the NYT article on Apple, China and U.S. manufacturing, but it grew and grew, so I decided to just go with it and open up a wordpress blog to post it to. (An aside on the NYT article: Apple is a poor example of the dynamics of U.S. manufacturing; note further that the success of its iPhone relied substantially a government sponsored, rent-extracting telecommunications cartel (thanks to Clinton), and in particular on an exclusive relationship with its leader, AT&T. All of this made the iPhone viable). It admittedly crams much into a short space; in particular it seeks to present a rough sketch of a theoretical framework centered on the role of rent in capitalist accumulation, and at the same time apply it to to explain aspects of the contemporary situation. A lot to ask in 4,000+ words.
The basic point is that the question of rent has received too little attention from Marxist political economy. This is in contrast to the importance Marx attached to this subject; “..it is simply that we need to consider all the specific relationships of production and exchange that arise from the investment of capital on the land. Without this, our analysis of capital would not be complete”. Marx devoted proportionally even more of Theories of Surplus Value to the question of “ground”, or land rent, and the first line of his 1859 Preface makes clear that he projected a major analysis focused on “landed property”. This part of Marxian political economy remains substantially undeveloped, along with the other major terms of his analysis: wage labor, the state, world market, etc, though subsequent Marxists have of course made their own contributions in some of these areas. This question is hardly limited to land; any naturally occurring use value where “…certain persons enjoy the monopoly of disposing of particular portions of the globe as exclusive spheres of their private will to the exclusion of all others” can be a basis for potential rents. However “all the specific relationships of production and exchange that arise from the investment of capital” in connection with these naturally occurring use values fall within the scope of the same analysis of land rent. (Quotes from the first two pages of the Introduction to Part 6, “The Transformation of Surplus Profit into Ground Rent”, Vol III of Capital)
So what’s the relevance? The practical behavior of classes under capitalism can hardly find complete explanation on the basis of the analysis of capitalist *production* alone. But that is how most Marxists – together with most of bourgeois economics – implicitly proceed. But rent has played a larger role in the historic trajectory of capitalism than has been properly granted by Marxists. And I’d submit that it plays an increasing important role in the epoch of accelerating capitalist decay, indeed it constitutes a key part of that decay. Filling in this puzzle piece can go some length to explain otherwise apparently anomalous phenomena, historical or contemporary. For example, the fact that a layer of the U.S. working class enjoyed petty landownership in “owner-occupied homes”, which they could swap back and forth to extract small “capital gains” (an essentially mercantile rent extracting operation), or that they could simply sit in after paying off the mortgage, pocketing the portion of wages normally devoted to paying the rent (some 30% of owner-occupied houses are held free and clear of liens according to the BLS), might go some way to explain how the working class movement in the U.S. did not fight so much for the “social wage” as did their European counterparts. And we all know that is exactly where the present economic crisis broke out. There are some important implications here that can’t be explained on the basis of the trajectory of capitalist production – the rate of profits of enterprise – alone.
I must say that this idea did not originate with me, but was inspired by Anthony Boynton (who occasionally posts to Marxmail). So too was his emphasis on an important feature of rent that not even Marx properly treated: that rent is a form of *tribute*, and as such is counterposed to taxes – also a form of tribute – in a way that profits of enterprise are not (I say profits of enterprise as opposed to rents reported as “profits”, as they often are in an epoch dominated by the capitalist mode of production). Thus the mania of bondholder “Austerianism” that has swept the imperialist countries in the face of an unprecedented economic crisis has a basis here for an explanation, as the yields on state bonds are paid out of the tax revenues, and are therefore tribute converted from its tax into rent form. State bondholders are therefore rentiers in a way that money capitalists who invest in production are not; They are adamantly opposed to the expansion of state expenditures that would cut into their rent tribute.
I am sure that everyone has noticed the prominent role that “rentier states” rich in natural resources play in both the world market and the international states system. This question might also contribute to an explanation as to how a former workers’ state called the Soviet Union was able to last some 70-odd years, and why so many of the “counter-hegemonic states” seem to fall in the same category. Or why prices – especially raw commodity prices – move in a way not directly explainable by an analysis of capitalist value/surplus value production that leaves out the distribution of surplus value.
It must also be said that others such as David Harvey and, in a different and more limited way, Samir Amin (who coined the term “tributary mode of production”) have made substantial forays onto this terrain.
The question of rent and private (or public) property in naturally occurring use values intersects with a whole host of issues: primitive accumulation, the historical trajectory of capitalism, the composition of wages, the reproduction of labor power, the State finances, the turnover time of fixed capital, the development of the productive forces, imperialism, the class struggle…
I think this will be the next blog entry.
-Matt
Comment by Matt — January 27, 2012 @ 6:17 am