“Marx opens Capital with the idea that the material commodity is simultaneously a use value & an exchange value, & that the two forms of value necessarily oppose each other.”
‘First cut’ crisis theory: falling rate of profit
“…the surpluses of capital & labour produced under the conditions described in the ‘first cut’ at crisis theory can be absorbed by the creation of new forms of circulation orientated to future rather than present uses. But we then find that these new forms are at odds, in the long run, with a continuous dynamics of technological change, itself a necessary condition for the perpetuation of accumulation. The ‘value’ put upon fixed capital becomes an unstable magnitude as a result…
The credit system then comes to the rescue…But it can do so only at the price of internalising the contradictions within itself.”
“…a fundamental opposition arises…between the financial system – the creation of money as credit money – and its monetary base – the use of money as a measure of value).
Financial panics & inflation arise. This is the ‘second cut’ at crisis theory.
“Further analysis of geographical mobilities of capital & labour shows how the contradictions of capitalism are, in principle at least, susceptible to a ‘spatial fix’ – geographical expansion & uneven geographical development hold out the possibility for a contradiction-prone capitalism to right itself”.
This leads to the ‘third cut’ at crisis theory. Imperialism & inter-imperialist wars.
Expansion of Marx’s undeveloped categories:
- Fixed capital
- Space relations
- State expenditure
“the only text…that seeks to integrate the financial (temporal) & geographical (global & spatial) aspects to accumulation within the overall framework of Marx’s argument in a holistic & dialectical rather than segmented & analytical way”
The general theory of capital:
- The general, abstract determinants which obtain in more or less all forms of society
- The categories which make up the inner structure of bourgeois society & on which the fundamental classes rest.
- Wage labour
- Landed property
- Their interrelation
- Town & Country
- The three great social classes
- Exchange between them
- Circulation, credit system (private)
- Concentration of bourgeois society in the form of the state
- Viewed in relation to itself
- The ‘unproductive’ classes
- State debt
- Public credit
- The population
- The colonies
- The international relations of production
- International division of labour
- International exchange
- Export & import
- Rate of exchange
- The world market & crises
Dialectics – ‘Every historical social form’, writes Marx in Capital, must be captured ‘as in fluid movement’ & this is what dialectics has to do.
“The connection between the credit system & the differential turnover times of different capitals (particularly fixed capital circulation in the built environment) is, for example, of profound importance”
“Far from the ‘euthanasia of the rentier’ that Keynes envisaged, class power is increasingly articulated through rental payments.”
The predatory side of capitalism associated with primitive accumulation has “become internalised within capitalism (through, for example, privatisation, de-industrialisation or the erosion of pension & welfare rights orchestrated largely through the credit system & the deployment of state powers). Since this is an on-going internalised process, I prefer to call it ‘accumulation by dispossession’ rather than primitive accumulation.”
“Struggles against dispossession (of land rights, of welfare, pension & health care rights, of environmental qualities, of life itself) are of a different character to struggles around the labour process that have long dominated Marxist politics.”
“…if something like states did not exist capitalists would have to create them”
“All questions about nature (including human activity), Whitehead once observed, can in the end be reduced to questions about space & time”.
“There is an underlying spatio-temporal frame to Marx’s theorising & it rests on a dialectical fusion of three fundamental ways of understanding spatio-temporality.
Under the absolute theory, mainly associated with the names of Newton, Descartes & Kant, space is a fixed & unchanging grid, quite separate from time, within which material things, events & processes can clearly be individuated & described. Spatial ordering is the domain of geographical knowledge & temporal unfolding is that of history. This is, in the first instance, the primary domain of use-values in Marxian theory. It is the space that defines private property rights in land, the boundaries of the state, the physical layout of the factory, the material form of the commodity & the individuated body of the labourer.
Under the relative theory, mainly associated with the name of Einstein, a world of motion defines space-time structures that are neither fixed nor Euclidean. Transport relations generate different metrics based on physical distance, cost & time, & shifting topological spaces (airline hubs & networks, for example) define the circulation of commodities, capital, money, people, information & the like. The distance between New York & London is relative not fixed. Relative space-time is the privileged domain of exchange value, of commodities & moneys in motion.
The relational view, mainly associated with the name of Leibniz, asserts that space-time has no independent existence, that it is inherent in & created through matter & process. The universe, for example, did not originate in space & time. The big bang created space-time through matter in motion. Capital creates space-time. Relational space is the primary domain of Marx’s value theory. Marx held (somewhat surprisingly) that value is immaterial but objective. ‘Not an atom of matter enters into the objectivity of commodities as values’. As a consequence, value does not ‘stalk about with a label describing what it is’ but hides its relationality within the fetishism of commodities. Value is a social relation in relational space-time.
“The role of rent & the valuation of nature need to be brought back into the centre of analysis.”
Three broad schools of thought about Marx’s crisis theory:
- ‘Profit-squeeze’ theory sees labour organisation & labour scarcity as driving down the rate of accumulation to the point of crisis for the capitalist class
- A deficiency of effective demand, or ‘underconsumption’, as the crucial problem since capitalists are reinvesting & workers are by definition consuming less value than they produce.
- The falling rate of profit theory rests on the idea that the competitive search for labour-saving innovations displaces living labour from production. Other things (such as the rate of exploitation of labour power) remaining equal, this produces a secular trend towards a falling rate of profit.
“Each theory revealed something important about the contradictory dynamics of capitalism, but they were all surface manifestations of something else. The deeper problem is the tendency towards overaccumulation. Crises arise when the ever-increasing quantities of surplus value that capitalists produce cannot profitably be absorbed.”
“Crisis is the name for phases of devaluation & destruction of the capital surpluses that cannot profitably be absorbed.”
“Surplus capital can take many forms.
- There can be a glut of commodities on the market (hence the appearance of underconsumption).
- It can sometimes appear as a money surplus or as an excess of credit (hence the appearance of financial & monetary crisis & of inflation).
- Or it can appear as surpluses of productive capacity (idle factories & machinery characteristic of deflationary phases of devaluation).
- It can appear as an excess of capital invested in built environments (property market crashes), in other assets (speculative surges & crashes in stocks & bonds, commodity- or currency-futures, etc)
- Or as a crisis of the state (excess expenditures on social infrastructures & welfare state functions)”
“Surplus absorption is the central problem.”
“The 1970’s was a phase of chronic capital surplus, much of which was transferred to the oil states after 1973 & then recycled as money capital through the New York investment banks. Profitable uses for the surplus were hard to find…A chronic crisis of stagflation set in. The subsequent turn to neoliberalisation entailed breaking down every possible barrier to the profitable deployment of surplus…all barriers to foreign trade had to be broken down…privatisation.”
“Fictitious capital is something that capitalism cannot do without, but it can all too easily get out of hand.”
“The global imbalances that now exist are of stunning proportions…Their rectification will likely be painful if not catastrophic.”