John Key – Agent of Finance Capital

Emmerson - NZ Herald 6 December 2016

Prime Minister John Key’s sudden resignation has created a flurry on the surface of NZ politics. Left, Right and Centre are writing political obituaries about his “legacy”. Legacies refer to what politicians have done to establish their reputations in history. But what are the hidden assumptions behind the evaluations of political reputations? Unless these assumptions are tested and critiqued, John Key’s actual historic role as an agent of the international finance capital cannot be understood.

As usual the Left is wallowing in superficial chatter. Key’s reputation is as a smooth operator who kept a fragile coalition majority lined up over a 3-term government. Therefore, his departure becomes an opportunity for the opposition to improve their chances of winning in 2017. Little has to “step-up” and Labour-Greens plus a rejigged Mana/MP combo, and even a ‘populist’ NZ First, could combine to form the next coalition government.

Much of the Left’s animus is directed at Key as if he was personally responsible for the failure of the left to win support and remove National from power. The left failed because they could not put up a leader who could compete with Key’s popularity. This is because the left sees their failure as the direct consequence of his success. Yet Key’s success can only be explained by the way he represented the interests of his class, not his personal attributes as such. And that can only be explained by first acknowledging what those class interests are.

Of course, this is equally true of the Left’s representation of certain class interests. And we have always argued that the true difference between Key and his various Labour, Green and NZ First leadership rivals, is that Key understands and knows how to serve his capitalist class masters, while the Left continues to subordinate the interests of working class to those of the capitalist ruling class by appealing to a classless “middle NZ”. We will develop this point in the section ‘Left Opposition in Capitalist Politics’ below.

Economics determines politics

As we have argued in Class Struggle before, bourgeois democracy is a false representation of reality. It presents capitalism as based on the equal opportunity of sovereign individuals who delegate their sovereignty to their political representatives in parliaments or congresses where they legislate to manage the economy in the supposed ‘national’ interest. Thus, the exploitative capital relation based on a fundamental class inequality in the ownership of property, and the conflict and crises that result, are obscured by the fetish of ‘representative democracy’ based on the will of sovereign and equal individuals.

Politics therefore is an extension of economics, where parliament is no more than a “committee to manage the affairs” of the ruling capitalist class. The best capitalist politicians are ‘selected’ (trained, co-opted) to manage those ruling class interests. They do this in two ways. The first is the use state power to advance, protect and subsidise private property and the production of profits. Second, is the role of political leaders to manage the destructive social consequences of capitalist economic policies.

In simple terms the success of Key in managing capitalism then comes down to his performance in advancing the conditions for economic growth as the basis of profitability, and presenting the growing social inequality arising from this as no more than the failure of individuals to make the best of their opportunities in the market. The radical critique of “crony” capitalism does not penetrate this veil because it poses a “non-crony” or egalitarian capitalism as the Left alternative to the ‘capture’ of capitalism by “cronies”.

To assess Key’s performance in serving not just his “cronies” but internationalist finance capital, we have to understand both the place of the NZ economy in the world capitalist economy and the state of the world economy as a whole. These structural conditions determine the tasks of managing NZ capitalism, and Key’s success or failure, as with all politicians, as a political manager. For an analysis of why Trump cannot overcome the Terminal crisis of capitalism or suppress the social conflict it creates without turning himself into a Louis Bonaparte-type dictator, see our article “Trumped, Stumped and Dumped”.

NZ: Neo-colony in global Terminal Crisis

The difference between the US and NZ is that the former is an imperialist state while NZ is a semi-colony of the US and, in the 21st century, of China. China, along with Russia, is now part of an emerging imperialist bloc in competition with the US-led bloc. In relation to the US and China, NZ has an economy that is integrated into the global economy as a producer of mainly primary produce and tertiary services open to foreign investment, ownership and control. Trump’s task to overcome the decline in US imperialism means making weaker imperialist powers such as China, and the neo-colonial countries like NZ pay for the crisis. This is turn determines the task of neo-colonial or “comprador” capitalists like Key to act as the agents one or other imperialist countries.

When most of the NZ Left shares the superficial view that NZ is a minor imperialist power, why do we insist that NZ is a neo-or semi-colony? We can only summarise NZ’s capitalist evolution here. For a fuller Marxist account see the Development of Capitalism in NZ. NZ from its settler colonisation has always been some form of colony dominated by imperialism. The extraction of surplus from agriculture etc., and export of raw materials consigned the colony to underdevelopment, rising inequality, and finally a shift from protectionism to neoliberal counter-revolution from the 1980s to today. Rogernomics called for a new comprador class that rejected economic nationalism as no longer in the interests of international finance capital. From that point on, NZ deregulated its protected market to open it to the global capitalist economy.

A new set of politicians committed to neo-liberalism or its left variant “third way”, or Blairism, were now thrust forward to manage the deregulated economy. So, John Key inherited the neo-liberal legacy of managing a neo-colony a full 20 years after the neo-liberal turn in 1984. He was uniquely suited to that task as no other National Party leader had his background in international finance. This is why some of the conspiratorial Left has seen him as an agent of Wall St, and may well be behind Winston Peter's response to Key’s resignation that he jumped ship before the ship hit the fan. Key represents international capital and knows that NZ is not a healthy, Rockstar, capitalist economy and that the global economy is about to crash. It is a fragile, dependent economy for which Terminal Crisis will pose a new set of tasks, complementary to those of Trump, of making NZ neo-colonial workers pay for the crisis with their livelihoods and lives.

Left Opposition in Capitalist Politics

Instead of basing its strategy on the demise of Key freeing up the “middle ground”, the Left Opposition should rethink its bourgeois assumptions about politics. If Key is an agent of international finance capital, and performed well in advancing its interests, then the Left Opposition policy should counter-pose the interests of those who work for a living and produce a program that fights finance capital. We don’t mean ‘finance capital’ as Wall St speculators, but the Marxist definition of the fusion of banking and productive capital. Instead of playing its classic role of boosting illusions in a reformed capitalism, the Left should understand that the coming economic crash fused together with abrupt climate change has exhausted the potential for capitalist reforms. In the face of Terminal Crisis, we need a Left Opposition that turns to socialism to solve the crisis.

The Left has to give up on the failed utopia of Social Democracy, and more critically, bourgeois democracy serving all citizens and nations equally. The history of bourgeois democracy is that it acts to defend capital and prevent the independent mobilisation of the working class internationally. Worse, it softens workers up for fascism and imperialist war. The delusion that class can be legislated out of existence has to be exploded. The Left has to overcome its failed legacy of reforms now destroyed by the neo-liberal counter-revolution, and go forward towards the working-class majority building its own organisations outside parliament, and increasingly committed to overthrowing the capitalist state and the ruling class it represents. This is what we mean by Survival Socialism!

For a Workers’ Government, capable of expropriating capital and building a socialist economy and society as part of a Pacific Federation of Socialist Republics!

Climate Crash: The case for Survival Socialism.

 

Climate is crashing

The recent news about the lack of ice in the Arctic has “shocked” mainstream climate scientists even if a few have been predicting such abrupt changes for years. Paul Beckwith is one of the latter. His work focuses mainly on the Arctic only because the changes there are critical to whether we can stop a climate death spiral or not. As he says “What happens in the Arctic does not stay in the Arctic, unlike Las Vegas.”

So, we face a climate change emergency that could end the existence of the human species. Why is it an emergency, and why is Beckwith’s Three-Legged Barstool strategy a logical response? Will it work? Who can say until it is tried. But it won't be tried until we have overthrown capitalism and created a new society based on restoring a harmonious relationship with nature.

Now that climate science is catching up with events, it is time to look more closely at Beckwith’s proposals on how to stop it. It becomes clear that even to try to implement his geoengineering solutions, we have to overthrow the capitalist system which has no interest in spending the billions needed to try out these solutions. So, let’s assume that everyone now agrees that abrupt climate change is upon us and we are about to “fall off the cliff”.

We should all know by now why the Arctic ice is critical to climate change. If not watch Beckwith’s video. Beckwith “builds the scientific case for being in a climate change emergency.” The build-up of CO2 and Methane in the atmosphere and oceans is occurring at an increasing exponential rate”. The consequences are the slowing of the jet streams that allow warm air to reach the pole in winter which melts the ice and creates a positive feedback system that creates more global warming. He predicts the end of Arctic ice by 2020. The resulting breakup of climate patterns around the globe is what is causing the dramatic increase in extreme weather events.

Can we stop it?

Responses to the threat of climate change are now less about whether it is happening, and how fast, but what to do about it. These responses fall into three broad categories:

(1) The dominant capitalist discourse, of leave it to the market. A good example is the shift from coal to Natural Gas (methane). Far from a ‘clean’ alternative Methane is several times worse than coal in rapidly raising global warming. Under market rule, not until the costs of climate change threaten already weak profits will any significant shift from burning carbon take place. China is a case in point. Now a global capitalist power competing on with other imperialist powers, China has moved to cut coal burning. But this is far short of what is needed to stop rising CO2 in time.

(2) The second response is to recognise that climate change is abrupt (posing the possibility of human extinction with decades), and that short of a total collapse of industrial/capitalist society, cannot be stopped. Those who take this view divide into those who pin their hopes on such a collapse and those who hold no such hope. Guy McPherson (currently touring NZ) is an example of a ‘maverick’ early-warning scientist who thought that the GFC of 2008 might bring about a collapse of industrial society. When the banks were bailed out he gave up that hope and now argues that there is nothing we can do to stop human extinction, so it is best to prepare ourselves for the inevitable ‘going dark’.

(3) The third response is that abrupt climate change can be stopped by emergency geoengineering techniques that slow down and reverse global warming before it is too late. Of those who think this is possible there are those who look to capitalist society to leap into action to implement urgent solutions, and those who think that capitalism is part of the problem and will have to be removed before any solutions are tried. Beckwith falls into the first category but has doubts about how capitalism can respond in time. Let’s look at his ‘Three-Legged Barstool” metaphor for a geo-engineering strategy to see if his pessimism is justified. For Beckwith, the three legs of the stool each stand for a major intervention to (a) stop carbon/methane emissions; (b) restore Arctic (and Antarctic) ice in winter; (c) reclaim carbon from the atmosphere and oceans. If you want to know what these interventions involve, check Beckwith’s explanation here.

Reform or Revolution to fix the climate?

Like Beckwith there are those who share his optimism that such interventions could work, and that they would require a major transfer of GDP from military and other budget items into emergency climate rectification programs. They also share his pessimism about whether they can be funded in time by the existing capitalist economies. Marxists understand that the capitalist market does not produce commodities unless it can make a profit. The market cannot respond to a global climate emergency, nor can capitalist governments which serve the capitalist ruling class act collectively for humanity when its own class interests are paramount.

Beckwith argues we need a new Manhattan program or Marshall plan to mobilise the resources. But war is not a good analogy because of its proclaimed defence of national interests from which the arms industry profits. So, it is not a question of fatalism of the ‘doomers’ or the pessimism of climate activists like Beckwith that is critical. The question becomes, if not capitalism, what social system can be created in time to act against climate collapse?

Let’s see what would have to happen to stop climate change in time. The capitalist ruling class will not allow their profits confiscated to fund climate action. Its motivation is to protect and increase its historic accumulation of capital. So not only are capitalists living off centuries of stolen wealth, they will risk the destruction not only of the climate, but the habitability of the planet necessary for the working class to survive to create the surplus-value needed to maintain and increase their wealth.

Would a social- democratic majority government make any difference compared with those of right wing deniers like Trump? No. The political program of social democracy is to nationalise the private property of capitalists only as a subsidy to all capitalists. What social-democratic government would implement taxes against the rich or against polluters to raise the billions necessary for emergency climate action? Even if such a government was elected it would be on the basis of defending a threat to private property posed by a rising mass workers’ mobilisation to take power.

Survival Socialism

This is why more and more Marxists, and leftists in general, see socialism as the only road to human survival. First, to stop abrupt climate change bringing a destruction of nature and society and with it human extinction within decades, it will be necessary to expropriate the wealth of the ruling class, in particular the big banks and corporations, to pay for climate correction.

Second, since the ruling class will not agree to expropriation by legislating higher taxes etc., and will stage coups to remove leftist governments, it is necessary for the vast majority of workers to mobilise as an organised movement to take power; removing the capitalist ruling class and creating a workers’ state. A workers’ state that is based on the democratic will of the working people would immediately use the expropriated wealth to fund the massive geo-engineering interventions that are necessary.

Even if these desperate measures do not work in time, or only mitigate climate change partially, a socialist society is the only way to prepare for meeting the challenges of living in a post-capitalist world by prioritising what is necessary to ensure the conditions for human survival over the interests of warring nations and gangs of mercenaries, collapsing economies and social destruction. Better Red than Dead!

Trumped, Stumped and Dumped

The fear and loathing of the triumph of Trump has called forth the usual load of garbage trying to fathom the causes and consequences. Was it endemic white racism? (Is there any other kind?) Was it the criminal Clintons? No, it’s not about race, or the Clintons, it’s 'about the economy stupid'. The low turnout, the refusal of progressive Bernieites to get in behind Clinton, the switch of the rustbelt deplorables from non-voting to Trump, created the perfect storm for the Stormtrooper.

But these 'facts' cannot be understood unless the deeper causes of the crisis of US capitalism are made clear. These explain why Trump is no more than an evil clown in the circus that is electoral politics, and that he cannot solve the problems of US capitalism dying on its feet. Trumped means Stumped. As Marx pointed out more than a century ago bourgeois elections every four years allow the subject citizens the right to vote for one or other faction of capitalist to rule over them until the next election. The very nature of the bourgeois state is that it is founded on a constitution that defends private property, the essence of capitalism. Because of its ownership of private property capitalists can force workers to work for them and create the surplus-value that becomes their profits. Enforcing that class exploitation is the state's mission.

Therefore, whoever is periodically elected to government rules in the spirit if not name of private property. This charade will repeat until the subject citizens form a class conscious majority and overthrow the capitalist state itself. And the essential aspect to that class consciousness is seeing right through the charade of bourgeois democracy to recognize the necessity to replace it with workers' democracy and a workers' state.

Make America Great Again

Trump won because the working class was divided and subordinated by the Democrats, the unions led by the labor bureaucrats and the fake left that always sucks up to the Democrats. Being locked into electoral politics prevents the working class from uniting around an independent class program to overthrow capitalism.

Yet since politics is no more than applied economics, we can see in Trumps triumph the beginnings of the break of workers from the Democrats. Some of those who backed Bernie did not vote for Clinton. They risked Trump because they hated Hillary’s role enforcing institutional racism and practicing imperial warmongering. But now that Bernie has 'united' with Trump, those who are already on the streets against Trump cannot look beyond this double betrayal to any revival of "progressive" Democrats. Michael Moore is pissing in the wind.

Other workers in the de-industrialised rust belts have not voted for the Clinton Democrats for 20 years. That is where the rhetoric of 'jail her' comes in. Many came out for Obama when US finance capital played the race card of cosmopolitan liberal democracy, before switching off again as Obama turned into another Clinton. So they went for Trump because he promised them a return to the time when America was great not just for the bosses but for the 'middle class'.

The slogan in their minds meant the return to the time when they had secure, well paid jobs in manufacturing and mining before 'globalization', and before 'neo-liberalism'. The so-called 'middle class' workers, is itself an oxymoron. In reality high paid workers in America in the post-war boom were not a 'middle class' but high paid workers who benefited from US imperialism in a period of capitalist expansion.

The 'middle class' in America is a state of mind not an economic category. Especially when the frontier bourgeois ideology of the 'free individual' is designed to write class out of history. Yet classes are constituents of capitalism. We have the self-employed, farmers, small business owners, etc., who are petty bourgeois in the classic sense of living off one’s own labor. Of course many are disguised wage workers or even slaves when exploited by big business as 'independent contractors'.

The 'middle class' workers in America are really labor aristocrats, well paid workers whose wages reflect in part the super profits that the US can extract from its exploitation of labor in developing, or emerging economies. Since labor aristocrats are paid at a rate beyond the cost of reproducing their skill they share in imperialist super profits. Their wages are subject to rises and falls depending on the economic cycle of boom-bust. Just as they benefited from the US empire in its prime during the post-war boom, so they are the victims of the decline of US imperialism since the 1980s.

The End of the Golden Age

As we will see, there can be no going back to the 'golden age' of post-war capitalism, not in the US or in any other country. The Rate Of Profit has fallen in the US since the 1980s apart from a rise in the 90s that never regained the post-war level. Since the 2008 recession, the US economy has stagnated, along with most of the rest of the world. Moreover, that Long Recession failed to restore the conditions of profitability so that the global economy faces a major depression to destroy labor costs and plant and machinery. While such a 'recovery' is possible, that of the labor aristocracy is not.

So can Trump deliver on his promises to Make America Great again? No he cannot. The reason is that the export of jobs from middle class America followed the export of capital away from falling profits to the developing countries to super-exploit cheap labor and raw materials. This is what neo-liberal globalization means; the export of capital from the imperialist countries to open up and economically dominate these oppressed economies in order to pump out super-profits to compensate for the Tendency of the Rate of Profit to Fall (TRPF) of US finance capital.

Without globalization, US capitalism was trapped by high wages at home and further pressure on the TRPF. That is why the New Democrats adopted neo-liberal globalization with gusto because their constituency is the new labor aristocracy, employed in the new tertiary knowledge, digital and media 'industries' driven by the logic of globalization to reap super-profits. That is why the Democrats have overseen the export of capital to China to take advantage of its rapid capitalist development since the 1990s.

Therefore Trump's whole retreat to isolationism as a solution to the destruction of manufacturing effects of globalization will cut off the sources of superprofits from offshore that US capitalism needs to survive. A trade war with China will end this flow of US super profits taking advantage of cheap labor and consumer goods. His is a deluded circus trick that will blow up in his face and in the face of those who voted for him. Trumped is Stumped by those who own and control the US state - finance capital-- and sooner or later he will be Dumped by the angry 'deplorables' unless he mobilizes them as fascist fodder to smash the rise of a militant labor movement.

Caught in a Contradiction

Trump cannot break with the 'establishment' any more than the Clinton new Democrats could. The reason is that the US state is not under the control of politicians, even those who do the rounds from Wall Street and the corporate headquarters to Washington, but by the ruling class of finance capital. That ruling class has already proven that it will not reinvest in US manufacturing unless it can cut wages to a China Wage or raise the rate of exploitation by employing robots. Neither can meet the needs of full employment at a living wage of the abandoned "middle class." Thus the ruling class committed to globalization to survive will force Trump to break the promises to his constituency. And this is where the racist, sexist rhetoric comes in.

When it becomes clear that Trump cannot return America to the golden age because his policies cannot restore jobs or profits, this will exacerbate the class struggle greatly. The radical left that is already mobilizing against Trump will be forced to mobilize also against the Democrats who back Trump. These young, multiracial students and workers have already started, and pose a challenge to the state at all levels, on the streets, campuses and in employment. To divert attention away from his economic failures Trump will use the racist, sexist, anti-immigrant and anti-Islamic rhetoric that he has employed in the election race to blame these activist minorities for all the economic ills of US imperialism.

Trump in the White House has a Republican Senate and House behind him. Even so he can act independently by invoking the "terror" state created by the Bushes and Clintons to declare a ruling class 'war on terror' at home 'over the head' of Congress. He can build his symbolic wall, boost the police and military, quarantine and deport Latinos and Muslims, ban protests and strikes, etc., and unleash his state forces as well as his paramilitary storm troopers against the attempts by "progressive" forces to defend the rights of minorities and labor.

Trump will be in the position to expand his executive power from that left him by Bush and Obama, and become a Louis Bonaparte standing above the classes to rescue the nation from "terror" at home and abroad. If that fails he is in the position to stage a fascist coup against the constitution drawing on the support of reactionary elements of the petty bourgeois and labor aristocracy against a militant mass labor movement. This means that already Trump poses the question of power rhetorically to a mass working class divided and subordinated to a treacherous labor bureaucracy aligned to the bourgeois Democratic Party.

To overcome these divisions it is necessary to urgently build a working class party that advances a revolutionary action program to lead every struggle against the power of capital concentrated in the Trump Presidency. That party will have to become the leadership in the unions, in all workplaces, in the schools, on the streets, linking all the many, various social movements into one massive united front, creating the organs of workers power, workers councils and workers militias, capable of defeating the state and paramilitary forces, smashing the bourgeois state and putting in place a workers state.

---

Karl Marx: Revolutionary Scientist

Statues of Karl Marx and Frederick Engels in Berlin

The disinterring of Marx today is now common, even if the body dug up is usually not that of Marx but imposters like Zizek who claim to be Marxists but are really academics who never organise the workers struggle. Marx had to suffer many attacks in his own lifetime and further indignities in death as Marxism was plagued by a constant stream of caricatures and misrepresentations, the most important being that Marxism was never a ‘science’ and has no relevance today.  Some even attack Marxism as a utopia that diverts us from making meaningful, incremental, progressive ‘change’.
Danylmc writing in the Dimpost blog decides after a quick skimming of Marxism that it never was scientific and moreover is counter-revolutionary because it calls for “smashing capitalism” rather than evolving through many iterations into a new, better society…or not.  For some reason Danylmc does not include the ‘labour theory of value’ (LTV) as one of Marx’s utopian ideas gone wrong. Maybe because Marx did not originate this theory as it was a fundamental plank of the political economy of his day.  Either Danylmc understands the LTV as Marx does, or not. Either way by accepting it he fails to see that it makes a mockery of his argument. [i]

So let’s see what Marx means by science. Was he copying 19^th century chemistry and reducing social revolution to a law like water turning into steam at the right heat as Danylmc claims?  No, social science has to account for the interaction of conscious subjects and their material environment.   For example, humans learn over millennia how to boil water more efficiently (that is conserving labour time) a reality that the young Marx observed when as a radical journalist he campaigned for the right of landless peasants to collect firewood in the Rhineland. This experience proved that social interaction is not the random behavior of individuals because humans’ actions are ultimately determined by their social relations. And it was capitalists that burnt coal to heat water to drive their industrial revolution so as to exploit human labour power more efficiently/profitably and even enable workers to buy firewood or coal as a commodity.

So let’s go back to the make-or-break LTV.  The LTV was a theory shared by bourgeois political economy which observed the flood of peasants off the land into the factories.  Marx also began with the presupposition that humans must reproduce themselves by means of their labour. Marx was trained in philosophy and law which meant he had to test the meaning of the words he used against the social reality. What turned Marx onto the scientific analysis of society was the failure of Hegelian philosophy to account for the actions of humans as part of God’s plan. Similarly he rejected the bourgeois political economy that turned social history into a march of human progress culminating in the rise to power of the bourgeoisie.

The difference between natural and social science is that in the latter the scientist is a partisan or ‘interested’ observer. It was Marx’s taking the side of peasant wood collectors in the class struggle that converted him from a bourgeois intellectual into a proletarian intellectual.  He did this by critiquing political economy and developing the presupposition of the LTV into the Law of Value (LOV).[ii]  Political economy was empiricist and merely described value as the total labour embodied in commodities. Since this commodity production resulted from the contributions of workers, capitalists and landlords, each ‘class’ could claim a ‘fair share’ of the total labour/value as wages, profits and rents. It justified this expropriation of labour value as a reward to capital and land for the use of private property in the process of production. This empiricist rationale was elevated by Hegel into a divine mission. For Marx, it was one thing to defeat the bourgeois political and economic holy rollers in philosophical class struggle, but it would not stick unless the empiricist bourgeois political economy that justified the exploitation of labour in the process of production was blown apart by a scientific critique.

Marx’s Scientific Method

Marx’s method borrowed from Hegel in moving from concrete appearances to abstract essence and then back to the reconstituted concrete. Hegel observed the social classes, politics, state and law of German society of the early 19^th century as a contradictory unity of appearances accompanying the rise of capitalism. The appearances formed a real historical society (the market lives!) but the essence which explained them was the spirit of God.  The Political economy of Smith and Ricardo also took the appearance of developing capitalism but appealed to the idealism of material progress to resolve social contradictions into the universal freedoms of bourgeois society.

Marx put Hegel on his feet and argued that the essence was not ideal but material. God and material progress were just idealist slogans used by the bourgeoisie to claim it represented the interests of all classes and nations.  In the Critique of the German Ideology, Marx and Engels settled their accounts with the followers of Hegel.  History was one of social revolutions in which successive modes of production made up of social relations of production where the ruling class extracted the surplus product of the producing class and justified it by invoking Gods.  Each mode reached its limits when the ruling class oppression of the producing class produced a rising class consciousness leading to a social revolution.  Capitalism would follow course and give rise to its successor, communism.  For the young Marx this was still a philosophical critique. The real task of proving it scientifically began. Hegelian Marxists typically arrest at this point and explain history as a ‘lawful’ transition without any conscious subjective intervention unless it is the will to power of the heroic individual!

Here we have to begin with Capital Vol 1 and read it from start to finish. It is no good relying David Harvey as a guide because he recommends leaving the ‘difficult’ Part 1 for ‘later’.  Marx deliberately started Capital with the concept of the commodity because it was the “cell” of capitalism.  His method for arriving at the essence of value was to abstract from surface appearances of equal exchange down to the commodity ‘cell’ and then move back to the surface where the appearances are now understood as the result of “many determinations”.  The class struggles on the surface now reveal their deeper causes. The commodity had a dual character, a contradictory unity of use-value and exchange value. Labour power could be exchanged for its value and at the same time create surplus value as it was the only commodity to produce more value than its own value.

How did this come about?  The primitive accumulation of pre-capitalist material wealth in the colonial world gave capitalism its kick start in Europe.  But capitalism as a mode of production did not come into full existence until commodity production was generalised by commodifying labour power of wage labour as a result of creating a class of landless labourers.  The secret, hitherto denied by political economy, was that the use-value of labour power to the capitalist was defined as its capacity to create more value that its exchange value, i.e. the wage needed to reproduce it daily.
What is scientific about this discovery?  The dual nature of the commodity allowed Marx to resolve an anomaly in political economy where labour as the equivalent of value did not exchange at its value.  It if exchanged at its value capitalism would be all wages and no profits.  Therefore political economy had to fiddle with its LTV to account for this anomaly, adding qualifications to explain why some of labour’s value ended up as profits and rent. Marx resolved this so that the LOV explained the exploitation of labour-power and expropriation of surplus-value during the process of production.

Capitalism was not an equal opportunity society of the political economists assuming unequal exchange could be corrected. Capitalism was inherently unequal and would develop in a contradictory way until it could no longer reproduce itself giving rise to the conditions for socialism.
Marx learned from both Hegel as well as Smith and Ricardo, critiqued their errors, using a method of analysis that exposed their limitations and laid the foundations for his own science.  This was to be a scientific revolution greater than those of Copernicus, Newton, Darwin or Einstein.  From henceforth all social knowledge would have to be subjected to the rigorous methodology of the scientific method.   Social science not only incorporated natural science it had to explain the constant interaction between society and nature where social classes determine these relations within limits set by nature.

Marxism:  science or utopia in Russia?

Danylmc writes: “After the Russian Revolution the Bolsheviks were very disappointed to learn that (a) history and (b) humans didn’t work like this at all. Firstly their revolution happened in an underdeveloped, mostly agrarian economy, not an advanced economy like Marx predicted. Second, the revolution failed to spread so they were stuck with ‘Communism in one country’. Thirdly, it turns out that if you have a capitalist economy – even a very basic one like Tsarist Russia – and you take away the market and put the workers in charge of the means of production (and execute anyone trading on the black market) then instead of transforming itself into a utopia because of the scientific laws of history and the malleability of human nature, the entire economy collapses, and people in cities end up eating their own children to stay alive, and everyone who can still walk rises up and joins the capitalist counter-revolutionaries trying to overthrow you.”

This is a complete travesty of what happened in Russia. First as we have seen assumptions (a) and (b) bear no relation to Marxism.  Marx did not hold to an idealist view of capitalism following inexorable laws would arrive at a communist utopia. Rather class conscious workers must overthrow it and seize power.  He excoriated the German Social Democrats in the 1870s for thinking that capitalism would evolve peacefully into socialism by means of objective laws of progress. We have seen that Marx’s scientific method makes class struggle the driver of capitalist development. It motivates the contradiction that causes periodic crises which we can see today are now terminal since the bourgeoisie can no longer overcome these crises without the destruction of humanity and nature. Either we the workers become the gravedigger of capitalism, or capitalism buries us all.

We only know this because Marxism as a revolutionary science proves that the dual nature of the commodity contains the fundamental contradiction between use-value (nature) and exchange value (capital) that is the basis for determining what happens at the surface of capitalist society.  Class struggle over the rate of exploitation at the point of production explains class struggle at the level of the market, nation state and international relations. [iii] In Capital Vol 3 Marx shows how the LOV is the basis of other ‘laws of motion’ accounting for development of capitalist production, crises of falling profits, and the drive to expand capitalist production on a world scale. Here he sets out his theory of crisis whereby the periods of boom and bust, the concentration and centralisation of capital, and the widening income gap between capital and labour are explained. While both he and Engels anticipated many of the developments of capitalism in the 20^th and 21^st centuries, we have to look to the work of succeeding Marxists to see how they used his finished and unfinished work as the basis for the testing and validating of his scientific theory.

Lenin finished off Marx’s unfinished volumes in one small pamphlet entitled “Imperialism: the Highest Stage of Capitalism”. To do this he had to go back to Vol 3 and show how the state, world market and international relations were explained by the laws of motion underlying crisis and counter-crisis tendencies motivated by class struggle.  This enabled him to break with the mechanical evolutionary Marxism of the 2^nd International in Europe and the Mensheviks in Russia.  The result was Bolshevism, the concrete application of Marxist revolution that made the revolution in Russia, the “weakest link in imperialism”, and which led the 3^rd Communist International.

The most important breakthrough of Lenin was to recognise the need to form a proletarian party as the mechanism of uniting theory and practice to test the scientific method of Marx.  Without Marxism that penetrated the veils of capitalist exploitation revealing the essence of the fundamental contradiction contained in the commodity, then workers would lack the “consciousness” necessary to fight to overthrow capitalism and replace it with socialism. While Marx had stood as the scientific ‘authority’ against the lapses into bourgeois idealism within the ranks of the workers movements, it remained trapped in by bourgeois ideology and constantly lapsed back into class struggle over the distribution of ‘fair shares’ that did not require the overthrow of capitalism.

The result was the Bolshevik party that was as response to the extreme contradiction between European imperialism and the old Tsarist feudal regime. The party became the Marxist scientist that tested theory in practice in the “weakest link” of imperialism in Russia. The old evolutionary Marxist utopia was destroyed in theory and practice. The February Revolution that began as the strike of women textile workers threw up a bourgeois Provisional Government which was incapable of breaking from British and French imperialism. It proved this by collaborating with the Tsarist General Kornilov in a Tsarist Coup. The Bolsheviks quickly drew the conclusion that the workers must take the road to socialist revolution in the almost bloodless October insurrection.

Far from ‘disappointment ‘resulting from the Revolution it inspired world wide support from workers who rose to defend it when it was invaded and isolated by the invasion of the imperialist nations. The Bolsheviks already knew that socialism could not be built in one country, let alone a backward isolated country. The survival of the Russian revolution depended on the spread of revolution and they knew in advance what was necessary to make this happen.  They formed the Communist International to organise Bolshevik type parties, the worker scientists, in every country. Only the failure of workers to break from their ties to the bourgeoisie and its ideology of market equality to form such parties capable of leading revolutions, allowed the imperialist ruling classes to hang onto their decrepit capitalist system and condemning the revolution to degenerate into a Stalinist caricature of “communism”.

The Bolshevik Revolution still stands as the most advanced struggle of the international proletariat against the reactionary utopia of rotting, dying capitalist society.  If we look around the world today we can see the bourgeoisie “eating their own children by the million” as they fight to our death to hold onto the stolen wealth of generations of workers.  Our hope must be in the revolutionary science of Marxism, embodied in the international revolution party, capable of putting into practice the scientific program that can guide our struggle to take power and replace capitalism with socialism.

NOTES
[i] The Labour Theory of Value was the issue in Marx’s “The Modern theory of Colonisation” Chapter 25 in Capital Vol 1. Mr Peel emigrated to the Swan River (Perth, Australia today) with capital, machines and men. The men shoot through to the bush to become independent producers, so Mr Peel’s machines rust and his land lies unproductive. Never mind, Mr Peel does what any good capitalist does when he cannot profit from the exploitation of labour-power, he becomes a land agent and speculates in founder’s rent.
[ii] The LOV means that value equals the socially necessary labour time required to produce it. Socially necessary labour time equals the average time of work enabling wages to buy the average commodity basket to allow the working family to live at the average standard of living.
[iii] Vol 2 examines the circuit of capital including the transformation of value into prices in the market while holding competition constant.  Vol 3 moves to the more concrete level of competition among capitalists in the market. He had planned 3 other volumes on the State, World Trade and International Relations to return to the most complex concrete level of reality which he never completed drafting.