POLITICAL ECONOMY AND GLOBALIZATION

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2 Specifying the constant of capitalism in the theory of a bourgeois utopia

As argued in the Introduction, proffering checklists of supposed key identifying features of capitalism is a woefully inadequate way of making a case for either the existence or passing of capitalism in history as the way in which human beings organize their economic affairs. Rather, as will become increasingly evident with the progression of this volume, to capture the complex and very peculiar modus operandi of capitalism demands theoretical exegesis adequate to the task. To reiterate what was said in the introductory chapter, the hope of authors of books such as this is that they will make their way into the hands of the broadest spectrum of readership. It is with some trepidation therefore that I alert those beginning the journey through this book’s pages to the fact that the discussion to be unfolded in this chapter and part of the following one does contain elements of complexity given the necessarily abstract tenor of the argu-ment: Though every attempt is made here to present the subject matter in an accessible fashion as possible. To readers steeped in a particular tradition of eco-nomic thought, Right or Left, it is asked that you focus upon the logic of the argument and not seek refuge in well worn categories to gloss over the new ideas being put forward here. For the reader not well acquainted with esoteric debates in economics follow each of the steps in the discussion carefully. It is our hope that one day these ideas will become those most widely disseminated in both classrooms and society at large. The payoff for all will be novel insights into the economic physiognomy of the world we live in which will then provide us with a vantage point for creative thinking about ways to improve the material eco-nomic lot of humanity. Addressing thorny empirical questions of the historical ascendancy of capital, including possibly confirming when capitalism actually becomes the preeminent mode of economy, is a topic for later chapters. However, for the discussion at hand, it is instructive to note that, already by the late sixteenth and early seven-teenth century, European intellectual commentators were pointing to a new found predictability in human economic life, increasingly ensnared as it was in market and trading activity, and commenced heated debate over the impact such a transformation would have on politics (Hirschman, 1977). What is particularly interesting about this commentary is the fact that, as studies by economic histo-rian Karl Polanyi demonstrate, in societies antedating capitalism, to even think

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12 Specifying the constant of capitalism

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about the economy as an entity distinct or dis- embedded from other sets of social relations – thaumaturgy, religion, culture, ideology, politics, and so forth – was inconceivable. And, indeed, grappling theoretically with this historically unique and peculiar characteristic of capitalism has been one of the most abiding prob-lems for modern social science as a whole. Unfortunately, what may be referred to as mainstream economic theory is not particularly helpful in this regard. Early, or classical, mainstream economic theory (political economy as it was known), often associated with the work of the Scottish economist Adam Smith, began on the right track with a research agenda seeking to explain the novel upsurge in production of wealth under capitalism. Smith, himself, however, offered a teleological argument holding that capitalist wealth creation springs from an innate human propensity to “truck and barter” which increasingly bears fruit to the extent the division of labor in society becomes more complex through the growth of markets and trade. True, Smith’s well known descriptive term for market operations as guided by an “invisible hand” implicitly recognizes the above noted dis- embeddedness of economic from other sets of social relations but, given Smith’s ideological affinity with the rising bourgeois class and his overriding concern with the technical applicability of his theory in support of laissez- faire policies, the bulk of his work tends to evade questions of theorizing the historical uniqueness of capitalism. With the supplanting within mainstream economic theory of classical polit-ical economy by neoclassical economics, a move largely completed by the beginning of the twentieth century, there remains not even the most perfunctory interest in questions of capitalism’s historicity. A primary reason for this is that neoclassical economics switches the very course of mainstream economics from concern with the production of wealth to the narrowest focus upon the distribu-tion of resources among competing ends (Dasgupta, 1987). At the core of the neoclassical concentration upon distribution is its theory of relative prices and investigations into the way market forces of supply and demand purportedly realize an “optimal” allocation of resources in a static equilibrium. This intellec-tual trajectory of mainstream economics away from concern with the modalities of production to a highly delimited focus upon distribution reaches its zenith in the post- 1950’s period with the “formalist revolution” in neoclassical economics which transforms even the question of equilibrium in a real economy into “a mathematical problem about a virtual economy” (Blaug, 2003, 147–8). This gra-dational transposition within mainstream economics of economic problems per se into mathematical ones is paralleled by another conceptual move that further eviscerates the historicity and peculiarity of capitalism from economic debate: This involves what Polanyi dubs the “economistic fallacy” (1977, 10ff.). Quite simply, this fallacy refers to the dual senses in which the term economic is used and how one notion of economics currently substitutes for both. We, of course, in common parlance, talk about “economic interests” as those relating to our needs as human beings for material sustenance and its provisioning. Put differ-ently, the foregoing amounts to little more than the recognition that economic life is a necessary feature of all human societies in history. Neoclassical eco-


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Specifying the constant of capitalism 13

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nomics – dominating economic discourse in Anglo academies as well as in Western popular press – which in fact studies the capitalist, or in its own terms, “market economy”, refers to its field as “economics” and the economic interests of human beings as “rational” in a fashion that does not distinguish between the particular modalities of material existence and expression of economic interests holding under capitalism, and those existing as the substantive foundation of all human life. And it is the mainstream neoclassical economics substituting of its notion of “economic” for economic per se which in perpetuity forestalls those steeped in its tradition from grappling with the historical peculiarity of capital-ism in a way that allows them to genuinely make sense of the world managed by capital or that in which we live today.

Social science and the historical specificity of capitalismAmong all the traditions of economic thinking within modern social science it is that based upon the work of Karl Marx which makes the greatest headway in capturing the historical peculiarity or “ontological uniqueness” of capitalism. Like Polanyi, though preceding his work by a half century, Marx recognizes the imbrications of economic and extra- economic social relations characterizing human societies from time immemorial. According to Marx, this is reflected in the fact that pre- capitalist societies reproduced their material existence through interpersonal, face- to-face relationships. In the broad brush stroke schema painted by Marx, these face- to-face interpersonal relations entailed either the communal/tribal pooling or sharing of goods, even forms of barter, idiosyncratic of pre- antiquity societies Marx referred to as “primitive communism”. Or, they were interpersonal relations of domination and subordination marking the “slave” societies of antiquity and “feudal” societies of the pre- modern era. Marx, of course, was not just interested in the differentiating of capitalism from pre- capitalist societies. Marx exhaustively read the writings of the classical political economy of his day and followed up on the classical economics research interest in the production of wealth under capitalism. What separated Marx from the classical tradition in the first instance though is that while the work of Smith captured capitalism in its genesis, Marx’s major economic writings had as their subject focus a fully formed capitalism. In the second instance, unlike Smith who was driven by a bourgeois class vista in the direction of writings with capit-alism enhancing policy relevance, Marx was stricken with a profound sense of social justice and informed by a socialist world view that impelled him toward a deep and enduring understanding of what capitalism is, untrammeled by any short term policy considerations; rather, he sought to produce complete and robust knowledge of capitalism in order to remake his world. Returning to Marx’s interest in the research agenda of classical political economy, and again, reserving discussion of the specific markers of the capitalist era for a later chapter, Marx also drew insight into capitalism’s productive prowess from the penetrating and subsumption of economic life in human com-munities by market forces. He observed how in the transforming of all goods –


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including land and labor power, the wellsprings of all material wealth – into commodities (goods with a price to be bought and sold), marketization acts as an acid which dissolves concrete interpersonal social relations of production char-acterizing pre- capitalism and converts them into abstract, impersonal, economic “relations among things”. What most profoundly distinguishes him from the classical political economy of Smith, and even the highly revered later economic history of Polanyi, therefore, is that through Marx’s mastery and combining, not only the economic and historical knowledge of his day but philosophy as well, he makes a paradigm shaping social scientific discovery; this being, how inher-ing in capital’s ontological propensity toward the abstraction of social relations of production was an inner logic presenting both a challenge and yet tremendous opportunity for theory construction in economics. Put differently, Marx understood how it was certainly no accident that eco-nomics arises as a field of social scientific study at the dawn of the capitalist era. Approaching the question of the emergence of economics from the perspective of Polanyi we can say that, as touched upon above, because the economic tends to dis- embed from the social in capitalist society, for the very first time in human history economic life is rendered “transparent” for theory to explore. However, in Marx’s view there is much more: As he expatiates, the fact is, economic life in capitalist society does not simply dis- embed from other social practices; through its commodification and organization in the abstract operation of society- wide self- regulating markets it takes on “a life of its own” to wield other realms of the social for its own self aggrandizement – the augmentation of value (or profit- making). He thus refers to capitalism, as such, as an “upside down” or “fetishistic” society. The most precise concept to capture this socio- economic condition of capitalism, where socially and historically constituted relations of production confront human beings as an “extra- human” power, is that of reifica-tion. And it is commodityeconomic reification from which the tendency noted above, of capitalism to display its economic life transparently, derives. Finally, when in the Preface to the first German edition of Capital Marx states: “In the analysis of economic forms . . . neither microscopes nor chemical reagents are of use. The force of abstraction must replace both” (Marx, [1867] 2007), what he in fact is arguing is that in economics, which emerges as a field of social science with the rise of capitalism, the reifying of human economic relations in capitalist society offers a “real” or material abstraction to “guide” in the process of theory construction (see Box 2.1).

Box 2.1

There is no intention here of encumbering the discussion at hand with too deep an excursus into arcane debates within the past half millennium of philosophy. Put succinctly, realist theories of knowledge, of which materialism is a species, have been held under siege by varying degrees of what may be classified as convention-alisms espousing the view that outcomes induced by natural scientific experiment do not simply confirm a correspondence between our theories and an independent


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material reality. Rather, what emerges from these endeavors is actually “created” by us with the instruments, concepts and/or thought schemes we deploy. Extrapo-lating this claim to extremes, the philosophical genre of idealism, represented today by postmodernism, maintains there is no “real”, mind independent world from which we can take soundings to assess the adequacy or truth of our thought schemes, namely their subject matters. There are only those schemes, texts, dis-courses, and so forth each generating their own “world” (see the discussion in Harre, 2001, 227ff.). The postmodern position reverberated throughout the social sciences, already deemed less “scientific” given how in their subject milieu the avenue of physical experimentation is denied. Part of the way out of this intellec-tual rut has been dug by the approach of critical realism (see Bhaskar, 1978, 1989). According to Bhaskar it is a case of the “epistemic fallacy” to believe that in answering the epistemological question of how we know – for postmodernism knowledge proceeds solely through a multiplicity of thought schemes – we simul-taneously answer the ontological question of what there is to be known. In bringing ontology “back in”, critical realism argues that while experiment does operate with socially and historically constructed cognitive resources its very intelligibility depends on there being something to experiment on. And the fact that whether through experiment or otherwise we cannot implement our thought schemes “just as we please” points to the existence of a world independent of our minds. Further, the accrual of scientific knowledge around similar questions, exposing and delving into the complex, multifaceted aspects of these, despite discursive and temporal divides, suggests an ontological character of the real as one of deep, stratified, causally efficacious structures. And the very endeavor of scientific explanation pre-dicated upon experiment necessitates some correspondence “between the causal structure of those objects or events to be explained and the logical structure of the theory that purports to explain them” (Norris, 1997, 101–2, 105–8). Making refer-ence to insights into the crucial nexus between theory construction and the struc-ture of the theoretical object emerging from critical realism, the specific role economic theory plays in bringing ontology back in to social science in the study of capitalism will figure prominently in the discussion below.

The adoption by Marx of a dialectical procedure of analysis in his Capital has befuddled not only his most ardent detractors but supporters as well. But he is hardly the arch metaphysician he is made out to be in so many accounts. Dia-lectics, associated with the writings of G.W.F. Hegel, was mobilized by Hegel to theorize a subject matter which Hegel believed to be self- revealing, or self- abstracting: That is, Hegel viewed the dialectic as the sole methodological means to capture the complete or “whole” truth of the universe. For Hegel, the universe constituted a “totality” in which all things were bound up in a schema of logical interconnections determined by the Absolute Idea or “God”. Living at the time the age of philosophy was just giving way to the age of science Hegel conjec-tured that complete Truth of the universe could be arrived at by following the links to it in categories of philosophy that the Absolute had been revealing piece-meal through the ages across philosophy’s history. Given how the revelatory procedure of the Absolute involved knowledge step- by-step divesting itself of its materiality to become increasingly “pure” and objective, according to Hegel, the


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dialectical method was required precisely because its analytical technique of exposing logical interconnections among categories corresponds to the logical structure of its subject matter. Put differently, the dialectic was not a method “invented” by Hegel to make deductions of categories, but the specific method “by which the categories deduce themselves” (Stace, 1955, 88ff.). At the end of the day, however, though Hegel’s Science of Logic is a monu-ment to the human intellect, it actually produced “little more than a grand jig- saw puzzle of already known ideas” (Sekine, 1980, 142). And, as per debates within the philosophy of science over the characterizing of epistemologies, Hegel’s dialectic earns the appellation idealism because its construction is pre-dicated not upon the taking of soundings from a mind independent reality but involves thought purifying or synthesizing itself. In the Afterword to the Second German edition of Capital, Marx defended his adoption of the mode of dialect-ical exposition in Capital arguing that his work exemplifies a materialist dialec-tic which is to be counter- posed to Hegel’s idealism. Yet, what Marx ultimately meant by “materialism” has not been well understood. Marx never balked from giving Hegel credit as “the first to present its [dialectics] general form of working in a comprehensive and conscious manner”. What he did state, was that: “With him [Hegel] it is standing on its head. It must be turned right side up again, if you would discover the rational kernel within the mystical shell” (Marx, [1867] 2007). With Marx’s passing followers fastened upon two possible replacements for Hegel’s dialectics which they believed Marx was alluding to in his notion of turning dialectics “right side up” to discern its “rational kernel”: These were nature and history. The attempt by Marx’s followers, Engels being the first, to develop a dis-tinctly Marxist theory of the natural world was surely prompted by the growing prestige natural sciences were gaining by the end of the nineteenth century. And, the interest in fomenting the immediate revolutionary overthrow of capitalism, during the same time period, certainly fuelled endeavors to build the case that Marx’s work constitutes a theory of history foretelling a socialist historical outcome. In fact, the very term “Marxism”, denoting a systematic body of thought tracing its lineage to Marx, was coined by Karl Kautsky, doyen of the Second International, the work of which also is most responsible for establishing the synonymy of Marxism with historical materialism, the latter existing, pur-portedly, as an overarching theory of historical directionality (Haupt, 1982, 276–82). Bracketing, for now, questions of possible Marxist approaches to natural science and the study of human history, one thing we may state here with utmost certainty is that both nature and history are unsuitable replacement candidates for the Absolute in dialectical analysis. Neither is a totality marked by determi-nate logical interconnections. Nature and history are certainly not self- revealing, self- abstracting or self- synthesizing such that complete or “whole” knowledge/Truth of them can be traced by theory from its beginning to its end. The fact has already been touched upon with respect to debates over realist theories of science that the mode of expanding knowledge through bouts of experimentation predic-ated upon specific cognitive resources, the adducing of “facts”, refurbishing of


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cognitive resources and instrumentations, and so on, defies the possibility of nature yielding knowledge which is pure and objective. Similarly, from the aporias of empirical history, riven as history is by agency, dissimilitude, and contingency, it should also be evident that pure and objective knowledge is not retrievable. In sum, the mode of dialectical exposition “is only possible with an Absolute or Absolute- like subject matter” (Kourkoulakos, 2003), and both nature and history are simply not it. Marx, however, made the revolutionary discovery of how within the social world, under very specific historical conditions, a single subset of human social relations came to manifest an ontological structure of “Absolute- like” logical interrelations amenable to dialectical exposition. The precise subset is human material relations of capitalist production. As put by Postone (1996, 75):

Marx . . . explicitly characterizes capital as the self- moving substance which is Subject. In doing so, Marx suggests that a historical Subject in the Hege-lian sense does indeed exist in capitalism . . . Marx analyzes it in terms of the structure of social relations . . . His analysis suggests that the social rela-tions that characterize capitalism are of a very peculiar sort – they possess attributes that Hegel accorded the Geist.

Examined from another angle, the reproduction of material existence is a purpo-sive human activity. The subsuming of this activity by the marketization process reifies it, purging or “purifying” it of non- commodity economic interpersonal social relationships. As capital then converts these social relationships into abs-tract relations among things it in effect “objectifies” the purposive human activ-ity of material production which, with an Absolute- like force, it then wields for its own abstract purpose of augmenting value or profit- making. When Marx states that in social science the “force of abstraction” substitutes for the instru-ments of observation and experimentation in natural science he is reflecting upon the unique ontological structure of capital as an object of social scientific inquiry. A pure, abstract economic theory of capital which unfolds the categories of capital in a dialectical fashion, is possible precisely because capital itself, as Absolute Subject, operates dialectically, manifesting a determinate inner logic that human beings, indulging their self- seeking proclivities in capitalist society, become instruments of. Marx, unfortunately, never completed Capital. And only one volume of three was actually published in his lifetime. Yet, the provenience of much confusion over Capital is the epistemological bent of its conclusion. For the one attribute of dialectical analysis that generations of his followers found so difficult to accommodate is the requirement that dialectical analysis reveal the whole truth of its subject matter; put differently, that the dialectic of capital have a logical beginning and end. As touched upon above, the push by working class parties of the late nineteenth and early twentieth century to garner support for socialist rev-olutions they believed to be around the corner edged Marxist intellectual con-cerns in Europe away from this paramount question of economic theory to grand,


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meta- theoretical formulations to the effect that a dialectic of the natural world as a whole, or history in toto, had been uncovered, which then confirmed socialism as the human telos. It was in the hands of the Japanese political economist Kozo Uno1 that the confusions over Capital and its place in Marx’s revolutionary writings as a whole would begin to be sorted out, and politically compelled errors, redressed. As Japan opened to the world in its late nineteenth century transition to capital-ism the Japanese imbibed Western knowledge(s) with few exceptions. Nowhere were the repercussions of this more explosive than in the field of economic studies. The reasons for this are twofold: First, as touched upon above, in Western academies and governmental policy- making circles neoclassical eco-nomics had attained a position of unrivalled ideological hegemony. Japanese scholars, at the crucial formative juncture of the very discipline of modern eco-nomics, critically scrutinized the major economic traditions, including Marxism, and embarked upon the assimilation of what appeared valuable in these. Second, the critical assimilation of Marxism in Japan evolved in an intellectual environ-ment free of the political pressures which had shaped Marxian scholarship in the West. On the one hand, then, scholars like Uno were empowered to approach writings such as Capital less as sacred texts and more as the path- breaking though unfinished works of genius which they were. On the other hand, Marxian scholarship in Japan developed in an intellectual space where careful considera-tion could be given to distinguishing those elements in Marx’s corpus with an ideological bent, such as his pithy sketch of historical materialism (this issue will be revisited below), from social scientific writings embodied by Capital.2

Reading Capital as the founding work of a new science, as such, Uno dis-cerned that it mixed aspects of the political study of capitalism as a whole which should be treated at distinct levels of analysis. That is, the three- volume writing contains within it an abstract theory of the inner logic of capital or theory of a purely capitalist society (TPCS), empirical- historical analysis of nineteenth century British political economy, and a stage theory of forms of capital accu-mulation characteristic of the world historic capitalist stage of liberalism that constitute a mediating level of theory. Uno also noted why Marx did not see any difficulty in conflating the levels. For up to the end of Marx’s life it appeared that the aforementioned abstract, logical tendency of capital to purge or purify its environment of non- economic, non- capitalist encumbrances, first throughout Britain (UK), and ultimately across the globe, would consummate itself as an empirical- historical fact: Though Marx so sincerely believed that the looming horror of this would lead to the dismounting of capitalism by socialist revolu-tion. In his lifetime however, socialist revolution never occurred, and Marx passed away before the momentous transformation which shook capitalism at the turn of the century and beyond. The transformation of capitalism ushered in a form of capital accumulation that no longer embodied the asymptotic tendency of capital to gravitate toward pure capitalism but rather entailed the maintenance of extra- capitalist excrescences, such as a social class of small producers and the increased support of institutions like the state which antedate capitalism and


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which capital disavows as “alien” to the objective, impersonal logic of market operations.3 Privy to these changes in the modalities of accumulation, Uno fath-omed how, in the diverging of the actual historical trajectory of capitalism from the epistemological proviso’s of capturing the peculiar dialectical inner logic of capital as it wields human material life for the abstract purpose of augmenting value, inhered the need for another level of theory, the purview of which is the more concrete structures of capital accumulation marking its world historic stages of development. Examined from another angle, which draws back into the discussion the question of Marxian economics as a social science, Marx, first, was absolutely correct in his apprehending of capitalism as a an ontologically unique subject matter and deploying the dialectical mode of analysis to logically unfold the categories of capital. Second, he was correct to view his project in Capital as the paradigmatic exemplar of social scientific enquiry because there is no other object of study in the social world with ontological properties which permit the sort of correspondence between the logical structure of the theory and the struc-ture of the theoretical object as is the case with capital. Objective knowledge is possible in the theorizing of capital precisely because the commodity economic process of marketization itself objectifies social relations of production, con-verting them into abstract relations among things, and theory is then guided by the reifying, self- abstracting force of the commodity economy. As put by Robert Albritton (1999, 35):

[I]t is as though it [capital] tells its own story without our interference. But this story is not told to us directly and immediately, but must be deciphered by theoretical practice. We can carry out this theoretical practice because we are objectified by capital but still have the potential cognitively to become knowing subjects capable of theoretically grasping what is happening to us. We can know capital as a subjectified object because we are objectified subjects.

The question which, given his temporal emplacement, Uno answers, but Marx could not, from his vantage point in history, answer, is that of the consummation of the economic theory of Capital. That is, the theorizing of the logical inner workings of capitalism, initially embarked upon in Capital, and subsequently reconstructed as the TPCS by Uno, must extrapolate to conclusion the marketi-zation tendencies of capital in a self- contained thought system; one however, which is materialist, as theory is guided by the real force of abstraction, as Marx put it, of the capitalist commodity economy. Restating this in familiar language we have only to think about the current barrage of television crime dramas – Crime Scene Investigation (CSI), Special Victims Unit (SVU) – and so forth. In all of these the episode begins with the crime. The victim is therefore known at the outset. Painstakingly, however, evid-ence is collected and analyzed. As the drama unfolds, culprits are identified, and a deeper and more intense campaign gets underway to refine the case against


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them. Ultimately, an arrest is made. Yet, even following that, the drama eventu-ally concludes with the culprit telling their own story: why they did it, and con-fessing all the intimate details of the crime; some of which even the most expert evidence gathering never fully uncovers. Let us think of Marx’s Capital in this light. Marx’s contemporaries were well aware of the class- divided, labor- exploitative, crises prone nature of capitalism. This much was bemoaned by the so- called utopian socialists. In this sense, Capital commences with the crime and victim already known. Of course, in preparing Capital, as his note books, post-humously published as the Grundrisse4 confirm, Marx exhaustively collates available evidence in regards to the above. Though Capital also contains illustra-tive material, its mode of presentation is quite different from other political and economic writings of Marx. The reason for this is that capital – the culprit – is, keeping with our analogy, now in the interrogation room, finally telling its own story, step- by-step recounting every deep inner detail of the crime from begin-ning to end. This, then, simply put, the extracting of a complete confession from capital in a logically precise fashion, is the raison d’etre for the dialectical pro-cedure of Capital.

Marxian economic theory as the consummation of the dialectic of capitalWhat exactly is the theory of a purely capitalist society or TPCS as the recon-struction and completion of Capital? What role does this theory play in making the determination required by the present volume as to whether economic life is capitalist? Finally, how does the TPCS inform and relate to the other levels of analysis in Marxian political economic study as well as other domains of the Marxian research agenda? It is to these questions we now turn in this and the following section of the chapter. The most up- to-date refinement of Capital reconstructed and completed as the TPCS is the two- volume work, An Outline of the Dialectic of Capital written in English by Uno’s student, Thomas Sekine (1997). Prior to the efforts of Uno and Sekine no Marxian economist has ever attempted such an overhaul of Capital despite the fact that Marx left it in a rough and unfinished state. The three major works I am aware of which move in substantive ways beyond simple commentaries on Capital are David Harvey’s Limits to Capital, Anthony Cutler et al.’s two- volume Marx’s ‘Capital’ and Capitalism Today and David P. Levine’s two volumes Economic Theory: The Elemental Relations of Eco-nomic Life and The System of Economic Relations as a Whole: Economic Theory.5 Yet Harvey, Cutler et al. and Levine essentially retrace Marx’s various arguments as he left them (though in places valuably exposing inconsistencies and unclarities of direction), and then attempt to develop aspects of arguments in relation to changes capitalism undergoes following Marx’s passing. None of these works strives to complete Marx’s unfinished project itself, the theorizing of the logical inner workings of capital, and in that process reconstruct it in ways that possibly diverge from what Marx actually said, but that better reflect


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the sort of robust and objective knowledge of capital Marx was seeking to produce. To belabor points already made, and keeping in mind our analogy, the pre-supposition of the TPCS as that of Capital, is a situation of complete reification where capital has subsumed the material life of a human society and is reproduc-ing such for the abstract purpose of augmenting value. And, if we accept that what differentiates capitalism from other historical forms of economy is its tend-ency to reify social relations of production through the abstract operation of integrated systems of self- regulating markets then, to know what capital is, demands that its inner logic be studied purged or purified of all non- capitalist, non- economic interferences. That no purely capitalist society is actually materi-alized in history does not alter the fact that to apprehend the logic of capital operating in given degrees in all historical capitalisms irrespective of their empirical variations requires that the logic of capital be consummated in theory. The type of knowledge being sought, in other words, demands that the intricate story of capital’s crime be told in all its facets with all the questions about other incidences of crime or possible ways the crime might be thwarted blocked out. As in Capital, the TPCS begins with analysis of the commodity. The com-modity is the most elemental indicator of the capitalist mode of production. It is within the commodity that the contradiction between value and use value, the driving material force of the dialectic of capital, initially appears. Value is the abstract, quantitative, historically specific side of the commodity. Use value is the concrete, qualitative, trans- historical side of the commodity and that upon which human society itself is predicated. The contradiction between value and use value unfolded in the TPCS from its germ in the commodity mirrors the tension which exists in human history as marketization invades the substantive economic space of social communities. This tension is traced in the TPCS through three doctrines in correspondence with Hegel’s Logic (see Table 2.1).

Table 2.1 The Marx–Hegel correspondence

Dialectic of Capital Hegel’s Logic

III The Doctrine of Circulation III The Doctrine of Being 1. The Commodity-form 1. Quality 2. The Money-form 2. Quantity 3. The Capital-form 3. Measure

III The Doctrine of Production III The Doctrine of Essence 1. The Production Process of Capital 1. Ground 2. The Circulation Process of Capital 2. Appearance 3. The Reproduction Process of Capital 3. Actuality

III The Doctrine of Distribution III III The Doctrine of Notion 1. The Theory of Profit 1. The Subjective Notion 2. The Theory of Rent 2. The Objective Notion 3. The Theory of Interest 3. The Idea

Source: Albritton (1986, 187.


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The doctrine of circulation

In the doctrine of circulation the logic of the phenomenal forms of capitalist exchange relations – the generating of the commodity form, the money form and the capital form – is unraveled. One of the pivotal divergences of the reconstruc-tion of Capital as the TPCS, and Capital, is that the TPCS necessarily omits ref-erence to the labor theory of value in the discussion of circulation or value forms of capital. In introducing the labor theory of value at that early point in the dia-lectic, something recent authoritative commentators view as one of the abiding problematic areas of Marxian economics (Foley, 2000), Marx vitiates his own methodological procedure which requires the immanence and logical interrela-tion of all the categories of capital be demonstrated. That is, as the dialectic pro-ceeds step by step to expose capital for what it is, the formative elaboration upon the social commensurability of commodities or their “moneyness”, necessitates only an initial demonstration of the possible expression of value in the use value of another commodity, and then the eventual measuring of the value of a com-modity in terms of money with the establishment of a “normal price” for it. That is, the “exchange” of commodities C – C′ in a capitalist market is never direct but occurs as C – M (denoting commodity and money) and M – C′. Of course, the presupposition of the TPCS is always the capitalist commodity economy as a whole, only at this point in the theory the dialectic must necessarily hold implicit both the modalities and conditions through which such a normal price is actually arrived at in the market and the specific determination or substance of the value of a commodity. While it may have been the sheer exuberance of Marx and those around him getting out into the public realm what arguably is one of the greatest achieve-ments of economic thinking that compelled the introduction of the labor theory of value at that early juncture in the dialectic of capital – though there is evid-ence that Marx had desired to have all three volumes of Capital complete before publication of the first volume; a move that may have led him to better scrutinize his dialectical procedure – the impact of the methodological error was com-pounded in the way his work was popularized at the turn of the century by Karl Kautsky. Kautsky’s book, The Economic Doctrines of Karl Marx (1936), emerged as a milestone in Marxian economics given how it offered the only major explicative introduction to Capital for the era.6 Of damaging significance is Kautsky’s presentation of Capital as a genetic theory of the historical develop-ment of capitalism. Kautsky uncritically seized upon the mistaken position, that the “exchangeability” of two commodities at a particular price demonstrates the labor theory of value, to claim that the inaugural chapters of the first volume of Capital dealing with the commodity and money in fact refer to a historically existent economy of so- called “simple commodity production” antedating capit-alism. Kautsky’s egregious error in his influential writings, whether his work is clearly acknowledged for its influence or not, negatively circumscribed Marxian economic thinking in three signal research areas for generations: These are, first, the periodizing of capitalism, which will be the subject focus of Chapter 3 of the


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present volume, second, the understanding of the material economic reproduci-bility or very historical possibility of capitalism, and third, the relation between value and price in Marxian economics; these latter two questions are addressed below.

The doctrine of production

It is only after specifying the general formula for capital, M – C – M′, which characterizes the arbitrage operations of merchant capital (money purchases commodities which are then sold for a profit), that in its ascent into the inner sanctum of capital, the dialectic is driven to address the question of the substance of value and the potential of capital for self- augmentation. This is the domain of the doctrine of production where the dialectical ordering of categories necessi-tates introduction of the labor theory of value and elaboration upon the funda-mental material economic reproducibility or very historical possibility of capitalism. As Sekine deftly explains (1997, Vol. 1, 132ff.), all factors of pro-duction – land, labor and capital – contribute to the production of use values. However, as outlined above, the historical distinctiveness of capitalism as an economic order is that use value life, the trans- historical foundation of all human social existence, is subsumed by the motion of value and wielded by capital for its own self- aggrandizement and self- expansion. The very historical possibility of a capitalist economy therefore is predicated upon a factor of production with the inherent dual property of being use value and value productive. To be value productive the factor must be both abstract- general (for it is in the form of the abstract constituents, money and capital, that wealth in capitalist society is meas-ured) and concrete- useful (for the furnishing of concrete use values to sustain human life, as in all human societies, must necessarily remain the by- product of augmenting value). Of all the factors, it is only productive labor which is simul-taneously abstract- human and concrete- useful. The other factors of production – land and capital – are use value specific or concrete- useful alone. Productive labor, of course, always embodied the dual property of being abstract- human and concrete- useful. In societies antedating capitalism, where wealth was measured in use value terms (landholdings, for example), and consti-tuted through forms of face- to-face interpersonal relations, and where productive work was valued for its use value specific attributes (blacksmithing, spinning, for example), it was the concrete- useful property of labor which was largely drawn upon in the reproduction of material life. Though we can envision crisis situations in pre- capitalist societies where the abstract- human attribute of labor, labor with its innate multifacetedness available for application in the production of whatever goods society required, was sought after. However, it is only in cap-italist society, a society where accumulation of abstract wealth through the aug-mentation of value is the fundamental social goal, in which the emphasis is paradigmatically placed upon the abstract- human attribute of labor. That is, to produce value, capital must render productive labor indifferent to the production of particular use values. Rather, capital requires labor available to apply to the


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production of any use value in response to the changing patterns of social demand and opportunities for profit making. The historical prerequisite for this is the divesting of labor of means of production, including land, to “free” labor, converting it into a commodity available in the market for capital to deploy for its abstract purpose. In this sense, the condition of possibility or sine qua non of capitalism as an historical society is the commodification of labor power. Restat-ing this in the language of the dialectic, capital manages to solve the contradic-tion between value and use value by surmounting the impediments to value augmentation faced by merchant capital through its internalization of the very wellspring of material reproduction. With the demonstration in the doctrine of circulation that the existence of the product of labor as a commodity necessarily generates money as the general form of wealth, with the potential then to be amassed as self- valorizing capital; and the opening of the doctrine of production which establishes that to secure a ground for its self- expansion capital requires productive labor to be available in the market as a commodity then, and only then, is the dialectic of capital prompted to introduce the labor theory of value. Proving the validity of the labor theory of value confirms that capitalism, a society where the product of labor assumes the form of a commodity (the germ of capital, the study of which the dialectic commenced) is materially reproducible as an historical mode of organ-izing human economic affairs. Strikingly, in even the most sophisticated exe-gesis of Capital, this question of the fundamental material economic reproducibility of capitalism, the cardinal question, as will become increasingly evident below, as the present book grapples analytically with the trajectory of globalization, is elided in discussions of value theory.7 The fact is, however, all human societies in history require at their core some key principal or set of these which ensures their material reproducibility, and that what Uno refers to as the “general norms of economic life” are met.8 Of extreme paramountcy is the norm that requires the direct producers to receive at minimum the product of, what Marx dubbed, their necessary labor. To under-stand the concept of necessary labor,9 let us conjure up a scenario where a plane carrying college students on an Indonesian field trip is forced to land on an uncharted island off North Sulawesi. With no means of communicating with the outside world all must begin the task of fashioning goods out of nature and ensuring supplies of food to guarantee their survival. After a few weeks they will have inevitably developed a routine in which, for example, they are able to reproduce their livelihoods with six hours each of work per day. This, six hours then, is their necessary labor. As is well known, however, this region is notori-ous for roaming pirates. And, as luck would have it, a gang of several pirates stumble upon our students. The pirates, seeking some respite from their travels, and observing the relatively comfortable set- up of the lost students, decide that they will stay for some time on the island with the students. Of course, not wanting to do any work, but expecting adequate supplies of use values to guar-antee their survival, the pirates force the students to provide for them. To ensure the livelihood of the pirates as well as themselves, however, necessitates that the


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students begin to perform what Marx calls surplus labor. And the students soon discover that with surplus labor their working day is extended to ten hours; six hours as before the arrival of the pirates is necessary labor to guarantee their own survival and the extra four hours is work they must perform to secure for the pirates adequate use value existence. To be sure, in capitalist society, labor is not subject to extra- economic coer-cion; for in trampling asunder webs of interpersonal relations of production char-acteristic of pre- capitalist economies capitalist marketization liberates workers to freely dispose of their labor power, the only commodity the direct producers possess, as they wish. But, the price the capitalist pays to deploy commodified labor power, or the wage the free laborer is remunerated with must, at minimum, be equivalent to the cost of those commodities in the market necessary for the survival of the worker (which includes also the reproduction of workers as a class). Put differently, the prices of all commodities, including labor power and the necessities of human sustenance are set in the capitalist market. Wages, or the value of labor power, must be equal to the product of the workers necessary labor, both measured in money terms. Thus, to offer a microcosmic illustration of capitalist production, let us picture a capitalist textile business which invests $100 in machinery or means of production, $50 in raw materials and $50 in wages for commodified labor power. If in four hours of working for the capital-ist our laborer can produce commodities equal in value to the $50 in wages which is the money measure of the laborer’s necessary labor then, supposing means of production are depreciated and raw materials exhausted in a day, fac-toring in the $150 of value these transfer to the product and the $50 worth of value added by the laborer as equivalent to his/her necessary labor, we end up with the $200 with which we began. In other words, following our assumption – labor power purchased in the market for its abstract quality of being amenable to indifferent application in producing any use value in demand, then set into motion by capital to produce one such good – value has been created but not surplus value or profit. For surplus value to be created and the augmenting of value characteristic of the capitalist economy to be realized workers must toil for more time than is simply required to produce the equivalent of their necessary labor; which is precisely what occurs in capitalist society where the capitalist owners of the social means of production set the time of the working day. So, in fact, with an eight hour working day, where in four hours the worker produces $50 of value equivalent to his/her necessary labor, in four further hours of surplus labor, the worker produces $50 of surplus value or profit for the capital-ist as $250 ultimately emerges, like magic, from the capitalist production process. It is now time to gather up the threads of the argument – combining earlier insight into the logical inner tendency of capitalism to reify or objectify social relations of production with the forgoing discussion of the value augmentation process of capital – to refocus attention upon the labor theory of value and dem-onstration in the doctrine of production of the fundamental economic reproduci-bility of capitalism.


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Another paramount norm of human material economic existence is that all societies require that social demand for basic goods be satisfied with a minimal waste of social resources. That is, if the purposive human activity of labor, the only “real cost” of production to society, is expended to an increasing degree on the production of iron when it is expressly rice which is in social demand, we can say that social resources are misallocated and to the extent this misallocation chronically persists the society would perish. In pre- capitalist societies the allo-cation of social resources was mediated through subjective or face- to-face inter-personal material reproductive relationships.10 In capitalist society the allocation of social resources including the expenditure of available labor power is deter-mined objectively through the logical operation of the capitalist market such that goods are produced in socially necessary quantities by what Marx terms socially necessary labor. That is, investment decisions on the part of capital are based on objective, quantitative criteria: rational capitalists must first assess market con-ditions to ensure, that commodities, the production of which they are interested in investing in, are in demand, and second, gauge the competitive business envir-onment to ensure that the technologies and work processes they adopt are the most advanced. Failure on the part of the capitalist to make the correct assess-ments in the above regard means that, though labor will have been expended, means of production utilized, and goods produced, to the extent these goods do not embody socially necessary labor neither value nor surplus value will have been produced and from the perspective of capitalist society as a whole the resources devoted to that component of the labor and production process will have been wasted. Put differently, the fundamental metabolic interchange between human beings and nature upon which the very existence of human society is predicated is medi-ated by the abstract value augmentation process of capital under the governance of what Marx dubbed the law of value. The direct producers in capitalist society, “freed” from their historic connection to land and the means of labor to sell their labor power on the market as a commodity, only gain access to the product of their necessary labor through the wages they are paid by capital with the pur-chase of their labor power by capital in its value augmentation process. Capital is able to engage in its chrematistic operation of producing value and reaping surplus value or profit only if it meets the test of material economic reproducibil-ity of any human society which requires that social demand for basic goods be met in a way that does not chronically misallocate resources and ensures that the direct producers receive, at minimum, the product of their necessary labor. What the labor theory of value claims, thus, is that the only possibility for such an allo-cation to securely take place, simultaneously with capital meeting the competit-ive and efficiency challenges of the market, is when commodities embody only socially necessary labor. And the ability of capital to produce goods in socially necessary quantities is predicated upon the commodification of labor which renders the worker indifferent to the production of particular goods and available for capital to shift to the production of any good according to the changing pat-terns of social demand and opportunity for profit making. Therefore, the validity


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of the labor theory of value and the fundamental reproduciblity of capitalism imply each other. What Sekine refers to as the necessity of the law of value is precisely the above congruence, as it is the law of value which mediates between the specifically capitalist commodity economic organization of economic life and the production of use values that constitute the basis of all human material existence.11

It should now be evident, that whether we are exposed to the fiction in terms of Kautsky’s simple commodity economy or in neoclassical economics depic-tion of a barter economy, with its rational choices and trade- offs based upon so- called “opportunity cost”, the implicit claim – that it is possible to decouple the “free” market as the mode of organizing human economic affairs from the capi-talist mode of production – is simply not tenable. First, in a purported regime of simple commodity production, where each producer’s labor is tied up in a single use value, there would be no operative mechanism for the allocation of social resources to guarantee the economic reproducibility of such a society. It is impossible for the shoemaker and blacksmith as independent commodity pro-ducers, for example, to rapidly shift to the production of grain should price rises indicate increased demand for it. In fact, the historical record of the eighteenth century European transitional period of increased loosening of feudal bonds and nascent commodification of labor power, is replete with commentator accounts bemoaning the ethic of artisans and pre- industrial laborers who, deciding they had worked enough to provide for their own needs, just went on vacation (Duplessis, 2004, 262–6). It is one of the unfortunate legacies of introducing the labor theory of value early in the discussion of circulation forms of capital to view even Marxists, such as the Rational Choice School, continuing to claim that the labor theory of value only holds in such a fictional economy in the simplest relationship between two commodities in terms of price.12 On the flip side, it is similarly startling that Nobel Prizes in economics would be lavishly showered upon economists for dazzling mathematical formulations of equilibrium out-comes which actually never establish whether on the basis of varying resource allocations they advance – Pareto Optimal, Nash strategic, and so forth – a really existing human society might reproduce its material existence and its economy satisfy the general norms of economic life.

The doctrine of distribution

It is in the doctrine of distribution, Volume II of Sekine’s Outline of the Dialec-tic of Capital, which corresponds roughly to material treated by Marx in Volume III of his Capital (though material which Marx left in a highly incomplete state on his passing), where the dialectic is consummated and the intricacies and ulti-mate “cunning” of capital elucidated. As alluded to above, intertwined with the studied neglect of the fundamental question of the material economic reproduci-bility of capitalism is the confusion swirling around the relationship between value and price in Marxian economics; this latter problematic is similarly linked to the mistaken view that the labor theory of value is intended to directly explain


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price formation in the capitalist market. This, however, is simply not the case. Yet, Marxist economists of the post- WWII period, steeped in quantitative tech-niques of the aforementioned formalist revolution, though little attuned to ques-tions of the dialectical structure of Capital, pounced upon Marx’s incomplete Volume III in attempts to “prove” just that.13 And, when it was discovered that proving the movement of prices in the capitalist market by the labor theory of value was not possible, they sought to abandon the theory, further circumscrib-ing the development of Marxian economics and its power of analysis. However, the plain fact of the matter is that yes, prices are determined in the capitalist market as if such things as value and surplus value do not exist. Rather, as neoclassical economics has it, movements in relative prices follow upon the market forces of supply and demand. But price movements are not haphazard. The equilibrating of supply and demand and tending of the capitalist market toward equilibrium reflects the concrete enforcement of the law of value in ensur-ing the viability of capitalism as an historical society. Neoclassical economics is not wrong in seeking its orientation in the formation of equilibrium prices per se. After all, long before it, Marx’s analysis pointed to “incessant equilibrations” of market competition and the markets’ reaching of a phase of “average activity”.14 Where neoclassical economics glaringly miscarries, to belabor another point, is in modeling equilibrium solutions which categorically do not establish how the resource allocations of their hypothetical economy might possibly satisfy the general norms of economic life necessary for the survival of any human society. What the TPCS incisively demonstrates is precisely the way in which, in the tending of the capitalist market toward equilibrium through market competition and the changing opportunities for profit- making, the heterogeneity of labor proc-esses among production sectors and product groups, the effectuation of prosperity and crisis across business cycles, the law of value mediates the chrematistic modus operandi of capitalist value augmentation while simultaneously guarantee-ing the reproducibility of capitalism as an historical society. And, because it is precisely this tending of the capitalist economy toward equilibrium in which all the categories of capital, including in particular the sine qua non of capital, the commodification of labor power, are brought to bear in the day- to-day operation of the capitalist market, the present book argues that the tendency toward equilib-rium in the capitalist economy as captured in the TPCS constitutes the constant of capital and ultimate touchstone for making determinations of the perduring of capitalism in history (see Figure 2.1). To cement the case for the above position entails considering the resolution offered in the TPCS to what has infamously been dubbed the “transformation problem”: the relationship between value and price in Marx’s Capital. As Sekine points out, “transformation” is utilized in a twofold sense by Marx. In the first instance it refers to a qualitative operation where, with its unraveling of all the categories of capital, the dialectic treats their further concrete specification as in “the transformation of the commodity form into the money form”, “the trans-formation of money into capital”, “the transformation of surplus profit into rent”, “the transformation of value into price”, and so forth. But these conceptual


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operations must not be confused with the particular instance of the quantitative operation transformation refers to, which involves the mathematical transforma-tion of value into price and the rate of surplus value into the rate of profit and the inverse calculation or movement between these categories. That is, given the dialectical architecture of Capital, it is not a question of there being two “systems” of value and surplus value and price and profit, the separate workings of which are empirically verifiable. Rather, in the doctrine of production, tasked with dialectically elucidating capital accumulation from inside the production process, the specific conditions are not as yet posited for the quantitative deter-mination of either value or price. In the doctrine of distribution, which explores accumulation from the outside in the surface manifestations of capital in the market, the necessary specification of the technology complex and the organic composition of capital permit the simultaneous quantitative determination of both values and prices. And on the basis of specific information about these factors it is possible to produce the bedeviling inverse calculations or move-ments between rates of profit and prices and surplus value and values (and vice versa) as in the plotting of coordinates across two differing spaces. Prices, then, though diverging from values, necessarily remain tethered to them as a requisite of the fundamental economic reproducibility of capitalism as an historical society. What the TPCS proceeds to capture is the fashion in which such tethering is manifested through the law of market value under which supply and demand production price fluctuations induce the flow or re- allocation of resources at the margins of all capitalist industries (with their differing organic compositions of capital and so forth).15 The dialectic of capital, therefore, resolves the contradiction between value and use value as it is expressed in both the inter- and intra- sector variability of technique utilized by diverse capitalist enterprises in the production of discrete use values. On the basis of the foregoing it is then possible for the dialectic to take the phenomenon of the tending of the capitalist economy toward an equilibrium in the concrete operation of the market – that which is argued here constitutes the constant upon which determinations of the capitalist substance of an economy is to be based – and situate it within the context of the workings of the capitalist business cycle in a way that draws into sharp and, it may be noted, objective relief, all the more popular, revolution-ary questions of Marxist discourse such as capitalist exploitation (as in the sketch above of surplus labor and surplus value) and the propensity for capitalist crises in the law of the falling rate of profit (see Figure 2.2). To succinctly summarize this knotty problematic of Marxian economics it is advantageous to commence with consideration of the technology complex. Technological innovation in capitalist society generally occurs in clusters. Given the exigencies of capitalist competition, those businesses in each sector which first deploy new technologies will evince a rate of profit higher than the average or what is dubbed a surplus profit. This situation never persists for long, however, as best practice technologies and labor processes are adopted by rational capitalists across all industries. With significant investment in fixed capital consolidated as such capitalist accumulation proceeds in what is dually


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termed the widening or prosperity phase of the business cycle: Widening, to reflect the fact that accumulation necessarily continues at a given level of techno-logical development over time to allow for the depreciation of the heavy fixed capital outlay; prosperity, to capture the generating by capital of an average rate of profit. It is at the peak of this phase of the business cycle that the sub- phase of average activity or tendency toward a general equilibrium is to be found in which equilibrium prices are formed in the capitalist market. The momentous tripartite ramifications of this phenomenon have remained unexplored in Marxist theory, given the association of the concept equilibrium with the ideological assumptions of bourgeois economics and the belief that references to equilib-rium detract from Marxism’s revolutionary posture. First, the tending of the economy toward equilibrium in the prosperity phase of the capitalist business cycle confirms the commodity economic governance of the law of value which ensures that commodities embody only socially neces-sary labor for their production. To state that commodities are embodiments of socially necessary labor is to recognize a) that the particular commodities pro-duced are the ones in social demand, b) that they have been produced with com-petitively appropriate technologies, and c) that these commodities are produced in the “socially necessary” or correct quantities desired by society. What the pro-duction of all commodities as embodiments of socially necessary labor effect-ively amounts to is the fact that in the phase of average activity a general equilibrium is approached where social resources are allocated in a fashion that guarantees the material reproductive viability of capitalism as an historical society; something signaled by the meeting of supply and demand in the market and the formation there of equilibrium prices. This seemingly benign portrait of capitalist society shatters, however, as the dialectic of capital consummated in the TPCS revisits the question of supply and demand equilibration in light of the maintenance of capitalist social relations of production. That is, the doctrine of production exposed the commodification of labor power as the sine qua non of capitalism, given how commodification renders labor indifferent to the produc-tion of particular use values and available as other commodities in the market for capital to purchase and deploy in the production of any use value as per the changing pattern of demand. Both, the aforementioned ability of capitalism to achieve an equilibrium allocation of resources, guaranteeing its fundamental reproducibility as an historical society, and the satisfaction of its chrematistic of value augmentation through exploitation of workers where the performance of surplus labor is reaped by capital as surplus value, are dependent upon this. But, while the availability of labor power on the market to be purchased for a price places it in a similar position to other commodities, labor power is in fact not just another commodity. Given that it is not a capitalistically produced commod-ity it is impossible to adjust the supply of labor power to the demand for it as is the case with other commodities. For this reason the TPCS explicitly establishes that which is sketched in an extremely ambiguous manner in Marx’s unfinished Capital, that the law of value must be supplemented with a law of population specific to capitalism (Sekine, 1997, Vol. 1, 215–29; Vol. 2, 51–9).


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It is in the phase of average activity in the business cycle, under conditions of widening accumulation at a given level of technology and fixed capital outlay, where not only are equilibrium prices formed, but the value of labor power – upon which the assurance of its commodification and the whole edifice of capital accumulation rest – is set. Remember, to constitute a reproducible economic order capital must satisfy the general norm of economic life which demands that the direct producers receive the product of their necessary labor. In capitalist society, as displayed in the doctrine of circulation, market exchange is conducted in terms of equivalences (with commodities the social commensurability of which we have now established is rooted in their embodiment of socially neces-sary labor) being traded according to relative normal or equilibrium prices. Therefore the possibility of guaranteeing the direct producers the product of their necessary labor returns us to the question of the allocation of resources in capi-talist society where the sum total of money wages paid to workers must be equal to the cost of purchasing in the market those goods necessary and sufficient for the reproduction of their labor power.16 Put differently, and this is not affected by the divergence of prices from values, the specific allocation or amount of labor socially necessary to produce the wage basket of the worker constitutes the value of labor power. That the edifice of capital accumulation hinges upon this determination is related to the question of the division of the working day into necessary labor time and that time devoted to surplus labor, as in our simple example above, and the rate of surplus value that is derived there- from. From our assumptions about the technology complex of a given business cycle there are clearly limits below which it is impossible for the rate of surplus value to fall and capital accumulation to continue. And there exists a limit above which the rate of surplus value cannot rise without terminating the reproduction of labor power by debarring workers from the product of their necessary labor. The value of labor power and rate of surplus value which secure the commodification of labor power and the accumulation of capital is that reached on the basis of full employment of workers in the phase of average activity as the capitalist market tends toward a general equilibrium. Referring to the tendency toward equilib-rium and the coalescence of conditions for its realization, as such, as the constant of capitalism, shifts the focus for determining the capitalist substance of an economy to the precise commodity economic interrelationships among the cat-egories of capital securing its material economic reproducibility and away from checklists of economic forms – wages, profits, markets and so forth – the com-modity economic specificity of which remain nebulous. The second ramification of the phenomenon of equilibrium captured in the TPCS is the fact of its tenuousness as revealed in the treatment of equilibrium in the light of the laws which superintend it in a dynamic context. That is, as accu-mulation proceeds apace in the widening phase of the business cycle, under-pinned by the fixed capital outlay reflected in the technological complex, our rational capitalists have no incentive to invest in expensive new technologies. This is the case as capital accumulation approaches a general equilibrium in the market at the sub- phase of average activity with the absorption of the surplus


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population or industrial reserve army to fulfill the necessary equilibrium con-dition of full employment. Yet, because in the real world of capitalism accumu-lation is incessant, the good times are short lived. The continuing accumulation of capital spurs the onset of a period of precipitancy which reveals the existence of a superabundance or overaccumulation of capital in relation to the size of the working population. Subsequently rising wages induce a falling rate of profit propelling the economy into crisis as businesses close releasing workers; this, with their purchasing power removed from the market, leads to bloated invento-ries, feverish competition, and more business closures as simultaneously rising interest rates entice capital away from productive to speculative endeavors. In the ensuing climate of depression, as that fixed capital not depreciated is increas-ingly devalued, there emerge those businesses able to seize the opportunity and invest in an innovative new technology complex stamping the period of capital-ist crisis as the deepening phase of the business cycle. In this alternation of capi-talist business cycles between widening and deepening or prosperity and depression phases the dialectic of capital exposes the causal efficacy of the law of the falling rate of profit. The solution to the contradiction between value and use value in the very maintenance of capitalist social relations of production requires capital, in the maelstrom of economic crisis and general disequilibrium, to revolutionize the forces of production, restructuring its technology complex at a “higher level” of development or increased organic composition of capital. Also unfurled by the dialectic at this juncture is the enforcement of the law of relative surplus population. This is the law of population specific to the capital-

All commodities producedwith socially necessary

labor

Commodified labor power –the direct producer in capitalistsociety – gains access to theproduct of their necessarrylabor through money wages

paid by capital

With the formation of equilibriumprices on the market it is possible

to determine the value of laborpower upon which its maintenanceas a commodity, and the capitalistmode of production itself, depend

Emergence of average rateof profit secures chremastistic

of value augmentation

Social resources allocated insocially necessary quantitiesto guarantee the fundamental

material economicreproducibility of capitalism

as an historical society

Tendency towards equilibrium: the formation of

“normal” or equilibrium prices on the capitalist market

Figure 2.1 Tendency towards equilibrium as the constant of capitalism.


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ist mode of production regulating the surplus population which capital expels and absorbs in its alternating cycles of accumulation.

Box 2.2

Raising the organic composition of capital in subsequent business cycles increases the rate of surplus value in each cycle in a manner congruent with the restoration of capitalist relations of production and yet another cyclical bout of capital accu-mulation. However, raising the organic composition of capital induces a decrease or fall in the rate of profit: though this tendency is suggestive with respect to his-torical outcomes there is nothing in its logic of process which portends limits to capital or capitalist “breakdown” as often claimed by Marxist scholars. For example, in his interesting commentary on Capital Harvey (1999, 300, 326–7) decries what he discerns as the “ahistorical” nature of business cycle oscil-lations in Marx’s presentation and the fact that “each cycle looks like any other”. What Harvey is looking for are “laws of motion that govern the historical evolu-tion of capitalism”. It is precisely such understandings of Marx’s project in Capital however, which lead to the most deterministic renderings of his work. While we will deal with the relation between the TPCS and analysis of capitalist transmuta-tions and historical divergences in the following chapter, we can note here how the above view completely misinterprets Marx’s project in Capital as well as jumps the gun, if you will, on seeking to explain all of capitalist historical development on a single economic premise (a folly in itself given the contingently emergent nature of capitalist history – with its marking by non- economic non- capitalist encumbrances – which is impossible to read off the inner logic of capital) before one is clear on what capitalism is and how such an upside down reified economy might exist in the first place to reproduce the material life of a human society. The latter endeavor is the very raison d’etre for the dialectical epistemological architec-ture of Capital and the consummating of the dialectic as a thought experiment of a bourgeois utopia. As Andrew Collier (1994, 43) puts it in his discussion of critical realist approaches to knowledge: “For a law to be true, it must hold when the mechanism it designates works unimpeded – i.e. in a closed system”. The TPCS is such a “closed system” where the laws of capital work themselves out with an iron necessity, as Marx himself put it. The business cycles “look like any other” pre-cisely because the law of value is not self- defeating (otherwise how could it be designated a law?). The outcome is thus always capitalism. But, what Marx’s theory illustrates so glaringly is that even in the rarified environment of the TPCS it is no small feat for capital to surmount the signal use value contradiction to value augmentation – the maintenance of labor power as a commodity. This is what compels capital in the depths of the depression phase to revolutionize the forces of production.

The third ramification of Marxian economics’ imperative attentiveness to the phenomenon of equilibrium emanates from its specification as the constant of capitalism through the objective social scientific procedure of dialectical analysis in the TPCS. That is, the crystallizing of conditions for a general equilibrium and, hence, the viability of capitalism, is established under the assumption that


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economic life is purged or purified of all extraneous non- capitalist, non- economic interferences; that the commodity economic logic of capital neutral-izes all use value obstacles to materialize a purely capitalist society as a bourgeois utopia. Specifying the constant of capitalism in a bourgeois utopia is to advance the equilibrium modalities of capital’s viability as a historical society in perfect, optimal operating fashion against which all variant historical exem-plars with their particular distortions are to be measured (where “measurement” indicates a test of sorts of their capitalist substance). Of course, even our bour-geois utopia is rife with contradictions. In fact the TPCS as a whole may be viewed as a grand crises theory given its very predication upon the parade of use value impediments which value must dialectically surmount. Most pointedly, TPCS analysis of the constant of capital set in the dynamic macroeconomic context of the business cycle vividly exposes the most fundamental contradiction of capital as the use value impediment of its sine qua non – the commodification of labor power. It is precisely this objective demonstration in the TPCS of the stringent conditions for arriving at a general equilibrium in the market and the innate tenuousness of the viability of capital which foregrounds the discussion in the next chapter, on the periodizing of capitalism; addressing questions of the non- economic non- capitalist supports really existing capitalism requires to beget a historical society as well as the problematic of its epochal transformations. And, as we shall see, with the very viability of capitalism’s march in human

– Tendency towards equilibrium as the constant of capital

– Confirms material economicreproducibility of capitalism

as a historical society

The capitalistbusiness cycle

Recovery and prosperity

Widening phase

Average activityPrecipitancy

Deepening phase

Crisis and depression

Absorption of industrialreserve army as

economy approaches full employment

As an accumulation proceeds apaceon basis of costly, as yet undepreciated, fixed capital outlay, a superabundance or excess of capital develops relative to

the size of the working population

Formation ofaverate rate of

profit

Surplus profits accrue to early

innovators

Business close as capital turns to speculative activity lured by rising interest rates

Raised organic composition of capital reconstitutes the forces of production at “higher level” to ensure the commodification of

labor power and maintain capitalist relations of production

General devaluation followed by replacement of fixed capital.

Capitalist innovation by stronger capitals proceeds in clusters

Rate of profit falls as wages rise and competition becomes feverish

Figure 2.2 The constant of capital and recurring crises of capitalist business cycles.


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history, guaranteed less by the chrematistic logic embodied by its constant, and ever more by a matrix of alien props, to the extent current globalization whittles away at these, necessarily draws to the fore questions of capitalism’s passing. Finally, it is in the closing of the dialectic where capital reveals its character-istic cunning alluded to above. To genuinely appreciate the fashion in which the TPCS as the reconstruction and completion of Marx’s Capital exposes this requires that we visit the category of ground rent. Because it is with the divorce of the direct producers from access to the means of production and the sub-sequent availability of their labor power as a commodity on the market for pur-chase by capital upon which the self- expansion of capital is predicated the logic of dialectical exposition necessitates the treatment of rent only after the theory of profit. Simply stated, with the land emptied of direct producers, capital must then deal with its owner. Landownership, of course, antedates capitalism. However, its existence in pre- capitalist societies is qualitatively different from the form of private or landed property marking the commodity economy. In the former, “ownership” was a reflection of the web of face- to-face interpersonal material relations of production which through sets of customary rights and mutual obligations bound the direct producers – the peasants in the case of feudalism – as securely to the land as their overlords. Modern landed property, as treated in the TPCS, captures the renting of now depopulated land by landlords to the agri-cultural capitalist who then deploys commodified labor power in order to produce agricultural goods for sale on the market. The specific forms in which rent appears as a result of the application of the principles of the commodity economy toward land need not concern us here.17 What is important is the fact that the commodity economic category of ground rent implies recognition by capital of legal title to the land as private property; something which not only further foregrounds the aforementioned questions of extra- economic, extra- capitalist support for accumulation but suggests, for consideration in debates over globalization, that in its most fundamental incarnation, capital is bound to the state form and its legal system.18

It is in the category of interest, however, that the dialectic of capital is ulti-mately consummated. Of immense consequence for apprehending the role this category plays in closing the dialectic is the fact that Marx again vitiates his own methodological procedure of dialectical exposition in Capital by dealing with interest prior to rent. What the dialectical derivation of categories of capital demands is that the proceeding of thought from the abstract to the concrete (in- thought) is driven by use value contradictions or “oppositions” to value which are commodity economically immanent. What the commodity economic cat-egory of ground rent entails is that in the relationship capital forges with landed property, where it in effect surrenders a portion of surplus value to an entity external to it, capital establishes the principle of property ownership as entitle-ment to an income. Once this principle has been established in that context, it is possible for capital to apply it internally to itself such that capital presents itself simply as an asset to which income, as interest rather than rent, accrues. There-fore the category of interest closes the dialectical circle because through it value


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potentially surmounts all use value obstacles to assume the form of a commodity – C – with which the dialectic commenced. Let us track what Sekine refers to here as “the re- conceptualization of capital by capital itself” (1997, Vol. II, 134) with the aid of some simple formulas: Our formative apprehension of capitalist society is in terms of the circulation or exchange of commodities. The formula which expresses this is C – C′. We noted, however, that in the capitalist market, exchanges are mediated by money, as in C – M and M – C′. Confirming the necessity of money as general equiva-lent with which any commodity can be purchased it is then possible to specify the arbitrage operation of merchants within the circulation of commodities as M – C – M′ (buying cheap and selling for profit). The doctrine of production dis-plays how through the subsuming of the labor and production process capital ultimately secures the ground of its self- expansion. Thus, the circuit or turnover of industrial capital enfolded within the foregoing is delineated as follows:

M – C (LP/MP) . . . P . . . C′ . . . M′

Here, labor power (LP) and means of production (MP) purchased on the market are set in motion by capital in its production (P) and value augmentation process. The doctrine of distribution then explores the division of surplus value C′ SV M′ on the market as:

PR (profit) M' IN (interest GR (ground rent)

As is the case with merchant arbitrage, so money loaned for gain as an eco-nomic practice antedates capitalism. The formula expressing it is M – M′. Within capitalist society however, “loan capital” has determinate commodity economic origins and plays a discrete and important role. That is, implicit in discussion of the business cycle is the fact that a portion of SV M′ existing alternatively as an investment fund in the circuit M′ – M of industrial capital, a depreciation fund for fixed capital, a reserve or contingency fund, is “socialized” by capital in the banking system (Uno, 1980, 109–10). The specific commodity economic func-tion of this socialized loan- capital is to enable industrial capital through exten-sion of commercial credit for discounting of bills to decrease its turnover time and accelerate the augmentation of value. Banks, it must be emphasized here, do not lend their own capital. Their role is one of financial intermediation between lenders and borrowers. It is from the role of banks as financial intermediaries that part of the re- conceptualization of capital by capital itself germinates. The “idle” funds held by banks assume the form of a commodity C that can be traded for a price C – M where the rate of interest IN is the price established in the money market for the use of the funds for a given period of time. From the per-


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spective of the economy as a whole the formula expressing the turnover of funds deposited in banks by industrial capital to be subsequently loaned back to it according to prevailing interest rates is akin to that of pre- capitalist money lending M – M′ and serves to sublimate the specific activity of industrial capital C . . . P . . . C′ . . . M′ – M the funds progenitor. Yet, the re- conceptualization of capital by itself, which in terms of the analogy the discussion commenced with constitutes the final attempt by capital to conceal its crime, reaches its apogee in the category of commercial capital. While the specific intervention of loan- capital in the process of value self- augmentation is at the juncture M – C . . . P, that of commercial capital is at what Marx dubbed the salto mortale of capital accumulation C′ . . . M′. That is, com-mercial capital, which also partakes of the funds socialized as loan capital, a fact determinant of its dialectical derivation only after the category interest, assumes from industrial capital the burden of selling commodities. As the wholesale pur-chaser of commodities commercial capital contributes to the formation of an average rate of profit and the overall efficiency of value augmentation through the savings of circulation costs it promotes.19 Commercial capital also expunges all traces of the origins of capital accumulation in the subsumption by capital of the labor and production process assuming it takes the form of merchant capital M – C – M′. Commercial labor as in the buying and selling of commodities is the only “work” that “capitalists” perform in our bourgeois utopia. The profit accruing to commercial capital appears not as a portion of surplus value SV M′ PR ceded to it by industrial capital, but as reward for business acumen or entrepreneurial profit as has been the case with merchant activity from time immemorial. With the dividing of commercial profit into interest and entrepre-neurial profit, in that our entrepreneurs must pay for the money they borrowed to pursue their buying and selling operations, the idea is crystallized “of capital as an automatically interest- bearing force” such that even industrial capital “begins to view its own capital as ‘funds’ lent to it by itself” and its profits springing from the activity of wily entrepreneurs (Uno, 1980, 115–16). It is from this vantage point of capital as an interest- bearing force that the rise of so- called fictitious capital in the form of the joint- stock company is prefig-ured. That is, as an asset yielding income GR to its legal owner, land is bought and sold on the property market according to perceptions of its future income potential. Funds, formed in the circuit of industrial capital, which as loan capital entitle institutions legally holding them to a stream of income IN, are bought and sold on the money market as commodities. Capital, through share ownership, similarly becomes a commodity or equity capable of being traded on the capital market (stock market) according to its perceived income generating potential where a portion of profit PR – which in the re- conceptualization of capital by itself as commercial capital appears to spring from the entrepreneurial activity of buying and selling – accrues to the owner of that equity in the form of dividends. Therefore, as in Hegel where the dialectic closes with the promise of thought divesting itself of all materiality to become pure and objective and thereby reveal the Absolute, so the dialectic of capital is consummated in the category of inter-


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est in which capital appears in the form M – M′ and the idea or “dream” of capital, in all its cunning, to free value augmentation from the labor and produc-tion process through its transubstantiation into a commodity or income yielding asset, is unmasked (Sekine, 1997, Vol. 2, 199–204). As we turn to questions of the periodization of capitalism and the trajectory of globalization, what is to be taken from the above schematizations is that the existence of money markets, capital markets and property markets as well as the persistence of economic cat-egories of profit, interest and rent do not in themselves capitalism make. It is only when it can be ascertained through reasoned judgment that material repro-duction is guaranteed to a greater degree than not through the force of the con-stant of capital, the sine qua non of which is the commodification of labor power, as this has herein been elucidated (and set out schematically as C (LP/MP) . . . P . . . C′), that it may be claimed a society is capitalist.

Political economic studies through the prism of a bourgeois utopiaStrictly speaking, to provide an answer to the question – What is the definition of capitalism? – is to say that capitalism is a synthetic concept in which capital defines itself through the dialectical unfolding of its categories in the TPCS. The conceptualizing here of a constant of capitalism is most emphatically not intended as a replacement definition of capitalism. Rather its purpose is to sharpen the focus within the definition of capitalism upon the conflux of those integuments of the commodity economy that bear most decisively upon the eco-nomic viability of capitalism, or put differently, the ability of capital to satisfy the general norms of economic life. Let us now pick up the threads of earlier argument on the existence of such general norms. In what is conventionally understood as the Marxist research domain of historical materialism (HM) it is very provocatively though mistakenly claimed first, that human history in toto is amenable to dialectical/logical comprehension. And second, that it is possible to directly study economic phenomena like forces and relations of production or capture economic concepts as class or the notion of an economic base being dis-tinct from a political superstructure in all forms of human society such that their study in capitalism simply constitutes a case within a general theory of history. The first claim in the conventional understanding of HM may be summarily dis-pensed with on the basis of the preceding discussion in this chapter, that there simply exists no epistemological warrant within that subject terrain for uphold-ing HM as a theory in the strong sense of the term used for the TPCS. However, why it is possible to make the case that among what we will refer to here as approaches to human history HM is highly insightful and certainly plausible is predicated upon our treatment of the second claim of HM. The bourgeois utopia dialectically materialized in the TPCS is an economic society par excellence. In it, social classes or subject positions – capitalists, workers and landowners – are personifications of the economic categories, profit, wages and ground rent. A bourgeois utopia is the very embodiment of a mode of


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production given that the reproduction of economic life within it unfolds under the objective dictates of the commodity economic law of value. Hence, it is on the basis of the TPCS materialization of a bourgeois utopia as a society in which all vestiges of non- economic non- capitalist social relations of production have been extirpated that the conceptualizing of an economic substructure or base as separate from a political superstructure is possible. The evidence that there exists a correspondence between the level of development of the produc-tive forces of society and a set of social relations of production and that the development of the former beyond a given point serves to tear asunder the latter derives from the analysis of the capitalist business cycle (see Figure 2.2). In the reified theoretical milieu of our bourgeois utopia forces of production is an abs-tract technical category reflected in the technology complex wielded by indus-trial capital. Relations of production are the objective value relation existing between capital and labor. The automaticity with which the contradiction between them emerges springs from the cyclical overaccumulation of capital vis- à-vis the size of the industrial reserve army; a contradiction resolved in a bourgeois utopia when capital renews its technology complex in the deepening phase of the business cycle at a higher organic composition. Even the often referred to concept of exploitation gains economic meaning within a bourgeois utopia stricto sensu only in the context of the widening phase of the business cycle, when surplus labor performed by workers for capital is recognized by capital as socially necessary and securely realized as surplus value in the sale of the commodity. Beyond the TPCS in the study of non- capitalist societies, the material life of which is embedded in complex webs of interpersonal relations, not only are the ontological conditions for proffering economic concepts absent but it is not pos-sible to clearly distinguish between categories in an operational sense. For example, what does the development of forces of production under constraints of given relations of production mean for semi- nomadic native societies of North America or redistributive slavery based societies of antiquity? As argued elsewhere (Westra, 2007c) it has been one of the tragedies of Marxian thought that its foremost Western exponents never grasped the subtlety of the cognitive sequence in Marx’s work. Their endeavors were possibly misdirected by the recondite Preface where HM is introduced as a “guiding thread” to his studies. Marx in fact had already completed the manuscript for the Grundrisse from which his three volumes of Capital are derived, reflecting at least a decade of in- depth analysis of the capitalist commodity economy, prior to his pithy state-ment of HM (see Box 2.3). Why he returned to the theorizing of capitalism no sooner than the above words were uttered was lost to his followers amidst the passions stirred by the revolutionary assertions of HM. Yet from previous dis-cussion the purpose for what emerged as his life’s work should be crisply clear: capitalist reification constitutes the condition of possibility for economic theory and it is the objective theorizing of human economic life in the context of the capitalist commodity economy which offers the referent or prism through which the study of economic life in societies other than capitalism necessarily


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proceeds. As will be treated in Chapter 5 of the present work and traced sche-matically in Figure 2.3, the question of the cognitive sequence in Marx’s work and the fact that the political economic study of capitalism and HM constitute two discrete projects in Marxism carry important ramifications for Marxian approaches to socialism.

Capitalist reification renders economiclife transparent for theory to explore forthe first time in the history of humansociety

The TPCS dialectically extrapolates toconclusion the material tendencies ofcapital to reify economic life. This is thediscrete project of Marxian economictheory Marx had embarked upon in his3 volume Capital

The society captured in the TPCS is abourgeois utopia or economic society parexcellence in which all non-capitalist non-economic interferences are effaced. Itssubject positions, categories and modalitiesof reproduction are solely commodityeconomic

Possibility of HM as aproject for the study ofeconomic life acrosshuman history in toto isbased upon concepts the validity of which areestablished in the TPCS

TPCS reveals the existence ofgeneral norms of economic lifewhich capital satisfies as it pursuesits chrematistic operation ofvalue augmentation

To complete Marx’s project of thepolitical economic study of capitalismrequires the TPCS be supplementedby a stage theory of capitalist development and historical analysis of capitalism as three levels of analysis

HM informs creative thinkingabout socialism as to both thepositive and negative modalitiesof pre-capitalist economy. HMalso suggests the possibilityof socialism as a classless society

Political economic study ofcapitalism informs creativethinking about socialism as towhat must be undone in oureconomic lives to forever rid itof disabling residues of capital

Demonstration in the TPCS of abilityof capital to satisfy the general normsof economic life establishes feasibilityof socialism; a society in which thosesame general norms will be satisfiedby communities of freely associatedhuman beings

Socialism

Figure 2.3 The cognitive sequence in Marxist theory.


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Box 2.3

Work within the aforementioned critical realist tradition of philosophy associated with the writings of Bhaskar may be felicitously referred to here to assist us in coming to terms with the question of the divergent logics of the process of theoret-ical discovery and dialectical elaboration in Marx’s Capital and his outline of HM in the famous Preface. As discussed in an important book by Norman Blaikie (1993, 164ff.), neither (non- dialectical) axiomatic/deductive research strategies (which proceed from an accepted rule) nor inductive research strategies (which generalize from cases to produce a rule) can produce new knowledge. New ideas rather emerge from elimination of the “puzzlement” which crops up over phenom-ena deemed surprising in terms of both observation and limitations of current theo-ries. Marx, as other scientists who arrived at new knowledge about the world, though they themselves generally did not conceptualize their endeavors as such, deployed the research strategy of retroduction. Retroduction, quite simply, is a research strategy which proposes something that cannot be directly observed and to offer a hypothesis that it is believed if explored will explain the phenomenon in question. For Bhaskar, the sorts of phenomena that fall into this category are the deep causally efficacious structures of the world and “generative mechanisms” of things the scientist observes “surface” manifestations of and then seeks to explain. Taking into account the caveat noted in Box 2.1 on how theorists/scientists produce knowledge on the basis of historically constituted cognitive resources, through his mastery of classical political economy, philosophy (particularly that of Hegel and the conceptual antecedents to Hegel’s interest in dialectics; see Kour-koulakos, 2003), legal studies and history, Marx would have used retroductive rea-soning to arrive at the hypothesis that capital is an ontologically unique object of knowledge in the social world and was amenable to objective study. From that point onward, however, to conduct the thought experiment, which exposes capital for what it is, Marx deploys a dialectical epistemology which corresponds to the structure of the theoretical object – capital. The materialist pedigree of the dialectic of capital consummated in the TPCS is inexorably bound to the peculiar ontologi-cal structure of capital. It is precisely because the “generative mechanism” (to use Bhaskar’s language) of capital is self- reifying, self- abstracting and self- synthesizing that Marx was able to immerse himself in capital’s logic to draw upon the material force of capital to consummate the dialectic in the bourgeois utopia of the TPCS. It is predicated upon the unique ontology of capital as well that the political economic study of capital be undertaken as a discrete project apart from HM; though HM is animated by the study of economic life of capitalism where the economic first appears transparently.

Framing the foregoing in language drawn from debates in the philosophy of science, wherein Karl Popper (1957) had assailed Marxism for what he viewed as Marxism’s attempt to verify immutable laws of history through a research strategy of inductive studies, it should now be evident the extent to which Popper and others following him so uncritically erected a straw Marx to summarily topple. Marxism, first of all, is composed of two discrete theories with different subject matters and epistemological requirements for the production of


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knowledge in their respective research domains. HM is a “general” approach to human history but not a “general theory” in the sense Popper has in mind. Adducing of evidence in Marxian historical studies in HM is intended to gain insight into material life across the sweep of human history on the basis of con-cepts drawn from, and validated in, a research terrain apart where those concepts do present themselves transparently and amenable to scientific study – the TPCS. There are no laws of history to be verified by HM. There are laws and logic of capital but the verification of these is undertaken not by inductive reasoning but by dialectical deducing of categories within the reified context of the TPCS where the logic or “story” of capital is consummated. However, if in the discrete project of HM there is no question of operationalizing economic concepts or gauging economic logic in historical outcomes, except through a comparative method which explicitly recognizes establishment of the economic pedigree of the concepts and logical processes in a research project apart, within that project apart – the political economic study of capitalism – how to evaluate the impact of the reifying logic of capital under conditions where the laws of capital operate, though not in the pure fashion captured in the TPCS, becomes the problem. As will become evident in the following chapter, irrespective of the particular approach to periodizing capitalism under consideration, theory tasks itself with analyzing capital in its more “concrete” manifestations, accumulating through a matrix of historically constituted institutional complements or supports.


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3 Periodizing capitalism and the world historic transmutability of capital

If apprehending capital in its most fundamental incarnation to produce a defini-tion of what capitalism is demands the sort of synthetic theoretical exposition Marx initiated in Capital, and which Japanese political economists Uno and Sekine subsequently reconstructed and refined as the TPCS, the next step in making the promised case of this volume for the passing of capitalism from history is the generating of a conceptual framework to optimally capture the world historic transmutations of capitalism; something which in turn will con-tribute to our apprehension of capital’s limits. This in a nutshell is the research agenda of periodizing capitalism and analysis of its world historic stages. As with the impotency of neoclassical economics in regards to apprehending the deep logical structure of capital or elaborating upon the historicity of capital as a mode of human material reproduction, so neoclassical economics has little to contribute to the focus upon periodizing capitalism. The narrow concentration of neoclassical economics upon distribution or allocation of resources, part and parcel of its switching the very course of economic theory away from issues of how wealth is in fact produced, as well as that of its penchant for formalistic mathematical modeling (both pathologies of economic thinking noted in Chapter 1), precludes neoclassical economics from even asking the relevant questions of periodization which this chapter seeks to address. Periodizing capitalism as a research territory examines trajectories of capitalist development and strives to differentiate among modalities of accumulation marking capitalist history. Neo-classical economics simply takes as given the existence of “developed” capitalist economies (wherein the production of material wealth is supposedly a fait accompli) and purports to model the trans- historical features of economic distri-bution it believes characterize them. Indeed, if mainstream economics broadly conceived has had any impact in the area of concern to this chapter it derives solely from the work of economic and business historians.1 Writings of the foregoing take up what in mainstream economic parlance today are dubbed “heterodox” concerns over how to grasp economic change, as opposed to “orthodox” neoclassical economics which claims modeling of “perfect competition” adequately reflects those pertinent features of contempor-ary economic life both necessary and sufficient for policy making. Nevertheless, as will be touched on below, to the extent there exists continued adherence of


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44 Periodizing capitalism

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such heterodox tendencies to neoclassical economics as the “basic theory” of markets, the ability of these schools to grapple with the complex empirical and epistemological issues at the crux of the periodization endeavor will be perpetu-ally thwarted. And, from the perspective of this volume, it is precisely these issues which emerge as vital for making any determinations of the passing of capital from history. For the differentiation of trajectories of capitalist develop-ment and modalities of accumulation at the heart of the periodization research agenda is not just an exercise in acknowledging and describing novel features of economy which characterize periods of capitalist history. Rather, if the research domain of periodizing capitalism is to be honed into a robust framework helping us make sense of the complex world we live in it must include answers to the following questions in its analysis: How do the novel modalities of accumulation or economic reproduction purportedly characterizing a stage contribute to the fundamental economic reproducibility of capitalism as a human society? Do the particular economic transmutations of a period of economic history embody cap-italist substance? What do stage theoretic analysis in general and analysis of spe-cific stages of capitalism in particular teach us about limits to the transformability of capitalism? What is the relationship between periodizing capitalism and the basic theory of the capitalist economy (the TPCS as I have set it out here)? And, finally, how do we begin to construct a theory that periodizes capitalism? Within the modern tradition of economics as a whole, the greatest headway in addressing questions of the periodization of capitalism in a fashion which contributes to understanding the world economic trajectory of globalization is being made by the Marxian animated tradition of critical political economy. Of course, the periodization of capitalism and theorizing of its stages of develop-ment is a research agenda with which Marx himself did not explicitly engage, passing away as he did prior to the momentous changes shaking the capitalist world at the cusp of the nineteenth and twentieth century. Though, as touched upon in Chapter 2, and will be returned to in discussion below, there does exist in Marx’s Capital an implicit template for the periodizing of capitalism as part of the broad project of the political economic study of capitalism. Nevertheless, given the highly fragmentary and incomplete structure of Marx’s economic writing, the rather oblique cues he left as to how, from the dialectical perspec-tive of Capital, stage theoretic work should proceed have been largely passed over. In fact, it was actually not Marx’s economic ideas per se which would shape the next generation of followers’ formative thinking on periodizing capit-alism, but HM (itself conceived as an overarching theory of historical direc-tionality confirming a socialist historical outcome and within which the project of Capital was ensconced as a sub- theory). As touched upon in Chapter 2, beginning with the immensely influential writings of Kautsky, Marx’s follow-ers worked off the proposition that the economic theory of Capital was intended as a confirmation of purported “laws” of history captured in HM. Thus the task of grasping the momentous socio- economic changes at the turn- of-the- century was linked to the teleological question of the transition to socialism as per the claims of HM.


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Periodizing capitalism 45

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It may be interjected for those readers steeped in one or another particular variant of Marxist theory, feeling at this juncture that the references here and in the previous chapter to the shaping of the field of Marxian economics by Kautsky is unfairly erecting a “straw Marxism” for the purpose of facile critique, as traced in detail elsewhere (Westra 2007c), the problematic Kautsky with which saddled Marxism delimited the work of figures as diverse as Lukacs and Althusser, and arguably shaped the research trajectory of Marxist theory across much of the twentieth century. That is, so- called “orthodox”, “Western”, “post-modern materialist” (and so forth) Marxism never questions the view of HM as the master theory and Capital as the sub- theory or the cognitive sequence attend-ant upon this view: Where debate within Marxism swirls and the consequent demarcation of variants of Marxism derives is over what kind of theory HM is and what sort of explanatory power is to be accorded to its constituents. The section of this chapter immediately following these introductory remarks will highlight how this theoretical orientation toward periodization as the extension of a general set of laws of capitalism served to occlude from consideration many of the crucial questions on periodization as these have been set out. Theorizing the further transformation of capitalism in the period following WWII would place a great strain upon the explanatory framework of HM as a master theory of historical directionality (Westra, 2001).2 Responding to the con-ceptual and empirical challenges posed by post- WWII capitalism elicited a crea-tive spurt in Marxian political economic writing. One of the key questions noted above which this fecund spate of Marxist work attempts to grapple with is that of a distinct conceptual environment for periodizing capitalism. This forces the periodization research agenda to deal with questions of the operation of eco-nomic “laws” of capitalism in history. As well, Marxism interfaces in important ways with the interest of mainstream heterodox economics in the institutional configuration of capitalist economies. The second substantive section of this chapter commences by tracing the Marxian concern with the persistence of capit-alism through the prism of writings from two new major schools of Marxist scholarship. It then follows the debates over the future of capitalism sparked by the work of these schools. The discussion turns next to the interfacing of the Marxian periodization research agenda with critical non- Marxist political eco-nomic writings on institutional “varieties” of capitalism. This selective review of over a century of scholarship on periodizing capitalism provides a backdrop to the third and fourth sections of the chapter which follow up on the claim made in the introduction to this book: That ultimately fulfilling the promise of the fecund spate of political economic writing on post- WWII capitalism for making the all- important determinations about the world we live in demands overcoming the ambivalence within the literature over what constitutes the touchstone for analy-sis of the transmutations of capitalism across its history. As we shall see, there exists a clear disconnect in much of the work on periodizing capitalism from the required theorizing of capital that Marx embarked upon in Capital and which has been argued here achieves its most up- to-date refinement in the TPCS. It is only by resolving the question of how the theorizing of capital in its most


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fundamental incarnation or basic theory informs the periodization of capitalism and analysis of its world historic stages of development that the follow- up ques-tions – does so- called globalization constitute a stage of capitalism; if not, what do its tendencies portend? – may be answered in a precise fashion.

Theorizing imperialism as the pre- figuration of socialismThe momentous turn- of-the- century transfigurations of capitalism following Marx’s passing did not escape the notice of astute followers. Before we tabulate the empirical nuances and examine the treatment these receive in the work of key Marxist figures let us explore the intellectual and historical context in which imperialism was theorized. As argued in Chapter 2 and above, the influence of Kautsky in carrying the Marxist legacy into the twentieth century deleteriously circumscribed the Marxian approach to periodizing capitalism as it did in regards to the approach to value theory. To be fair to Kautsky, of course, there were equivocations in Marx’s writings from which Kautsky derived authority for the direction of his own contribution to analyzing the trajectory of capitalist devel-opment. Marx, as noted in the previous chapter, believed that capitalism would be overthrown before the tendencies he theorized in Capital were consummated. With the compounding of this perspective and political passions of the era, it was not a complete transgression by turn- of-the- century Marxists to think about the logic and laws of capital less in terms of methodological rigor and explana-tion of how an upside down society like capitalism might be viable in the first place and more in terms of the exciting though mistaken thesis that the logic of capital leads not only to the “breakdown” of capitalism but creates conditions for socialism. Kautsky, however, mesmerized by the growing prestige of the natural sci-ences of his day, with their “positivist” approach to knowledge, took this posi-tion to extremes, arguing that Capital exemplified the infusion into nineteenth century economics of the authority of “historical science” (Kautsky, 1988, 478–80). And, as per the dictates of a healthy positivist science essentially dependent upon observed empirical trends, Kautsky argued that Capital, which purportedly traces the unfolding telos of capitalist history, provides evidence in a given context of the wider teleology of human history as a whole. As he unabashedly puts it, “every step in social science has proved it – that, in the last analysis, the history of mankind is determined . . . by an economic devel-opment which progresses irresistibly, obedient to certain underlying laws” (Kautsky, 1971, 119). The presentation of Capital by Kautsky as a genetic theory of the historical development of capitalism which led to the addlepated understanding of value theory also served to muddle the enterprise of theoriz-ing stages of capitalism. For Kautsky, the inaugural chapters in Volume One of Marx’s Capital on the commodity and money theorized a historically exist-ent phase of so- called simple commodity production antedating capitalism. Capital, in this schema, purportedly shifts to the theorization of the historical supplanting of that “phase” by capitalism, and then, according to Kautsky,


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conceptualizes the “socializing” of capitalism prefiguring the historical onset of socialism. As per his trumpeted positivist inspiration and perspective on Capital as a sub- theory of HM, Kautsky expounded his “law” of accumulation responsible for propelling capitalism towards its demise: This law is the sharp-ening of competition among capitalists due to declining profits; the latter resulting from the burgeoning investment requirements of capitalist production (the rising organic composition of capital in Marx’s terms; a question which we treated in Chapter 1 and will revisit below). The law of accumulation, enforcing the transition from a so- called petty commodity society of independ-ent producers to capitalism, leads to a shrinking of the capitalist class through “combinations” or monopolization of industry and to the enlargement of the working class, the increasing impoverishment of which compels it to over-throw capitalism. In this endeavor the proletariat is animated by the accelerat-ing severity and longevity of capitalist crises. In addition to the bankruptcy of positivism belabored in critiques of Kautsky across the tradition of “Western” Marxism, his very equating of Marxism with HM, and what the discussion in previous chapter of this book displays as the impossibility of a petty commodity economy meeting the test of economic via-bility, Kautsky’s work is characterized by a lacuna not generally considered significant. That is, Kautsky first published his widely read Economic Doctrines of Karl Marx in 1887, when Volume Two of Marx’s Capital was only just being released (1885) and well before Volume Three of Capital saw print in 1894. Even Kautsky’s The Class Struggle, in which he ties his economic prognostica-tions to a politico- strategic program for socialist change, only became available in 1892. Thus, from his position as doyen of the Second International Kautsky inculcated a generation of Marxists in what may be appropriately named “Volume One Marxism”. Yes, Marx embellished that first volume with numer-ous revolutionary exhortations; however, the significance of the work resides not in its constituting a repository of such quotations but in its initial attempt to com-mence an exposition of the dialectical inner logic of a capital; a project which requires a careful study of Volume Two and Three to genuinely begin to grasp the economic theoretic significance: Though even in this case, as Marx passed away before completing Capital, the ultimate promise of the work flows from its reconstruction, completion and refinement as the TPCS. Nevertheless, what Volumes Two and Three as left by Marx demonstrate is that the logic and laws of capital (the law of value being a case in point) are not self- defeating – leading to the demise of capitalism – as Kautsky contends. Even in Marx’s own explica-tion in Volume Three of the law of the falling rate of profit due to the rising organic composition of capital, it is never claimed that the law necessarily spawns combination leading to social class polarization and potential demise of capital. Approaching the discussion here from another direction, it may be con-cluded that what has herein been dubbed Volume One Marxism is the predispo-sition to read Capital as an historical or political tract, whereas considering the three volumes in their entirety lends authority to the correct view of Capital as a self- subsistent economic theory in its own right.


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However, at the temporal juncture of his writing, Kautsky’s thesis was assailed not on the basis of its logical deficiencies but from the vantage point of historical transformations it failed to predict. The fact is that the extended eco-nomic crisis which wracked the European centered trading world from approxi-mately 1873 into the 1890’s, rather than sounding the death knell of capital through an incitement of immiserated proletarians as Kautsky attributed to Marx’s analysis, instead was resolved by mid- 1890 in a renewed bout of pros-perity. This situation became the catalyst for the famous “Revisionist Contro-versy” within the Europe’s most formidable socialist party, the German SPD (Social Democratic Party of Germany).3 At the heart of the dispute between Kautsky and his main protagonist Eduard Bernstein was whether the shifting tide of capital accumulation obliged the socialist movement to revaluate its aims; that is, turning away from fomenting the revolutionary overthrow of capitalism and concentrating its energies on reforming capitalism and “peacefully” transform-ing it with attainment of political power through electoral victories. While Kautsky emerged victorious in this clash, which was fought not at the level of high theory but over interpretations of empirical trends of capitalism, if one thing did become clear it was the paucity of solid analysis of the changes capitalism was undergoing. It was from within this intellectual vacuum then that the theo-rizing of imperialism burst. Let us commence with an overview of the way in which empirical nuances in the development of capitalism are treated in the writings of two major theorists, Rudolf Hilferding and V. I. Lenin. Hilferding is arguably the “founder” of the Marxist theory of imperialism and it is his groundbreaking work which under-pins the writings of all the theorists of imperialism (Brewer, 1980, 79, 99–100). Hilferding’s book Finance Capital, as recent commentary claims, “proved to be the most influential text in the entire history of Marxian political economy, only excepting Capital itself” (Howard and King, 1989, 100). As per the title, Hilfer-ding enters into the lexicon of Marxian political economy the integral term finance capital. Industrial capital, as noted in Chapter 2, is the paradigmatic mode of capital theorized in Capital. Its existence serves to differentiate capital-ism from pre- capitalist modes of economy. Finance capital, according to Hilfer-ding, emerges from a confluence of turn- of-the- century tendencies of accumulation: The generalizing of the joint- stock form of enterprise impels a qualitative change in the relationship in capitalist society between property and investment. This process involves an exacerbation of tendencies toward concen-tration and centralization of capital (the former refers to the sheer size of capital the enterprise applies to production; the latter to the accelerating trend of the era toward consolidation of enterprises) as well as financial and industrial monopoli-zation (Hilferding, 1981, 107–80, 183–203). Enabling such qualitative change in property relationships is the increased pooling or socializing of vast agglomera-tions of funds in the hands of banks (funds the source of which, given the joint stock form, is no longer limited to that generated in the circuit of industrial capital); banks which then are obliged in turn to seek outlets for their funds in industrial investment. Thus, with the metamorphosis of industrial structure


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dependent upon socialized funds diversely sourced and banks holding these funds investing ever more of their pooled money in industry, an intertwining of bank and industrial capital occurs in which banks, effectively transforming them-selves into industrial capitalists, have the edge. In Hilferding’s own words: “I call bank capital, that is, capital in money form which is actually transformed in this way into industrial capital, finance capital” (1981, 223–5). Imperialism per se, then, as Hilferding proceeds to conceptualize it, consti-tutes the “policy” of the newly emergent form of capital – finance capital. Idio-syncratic of finance capital, according to Hilferding, is the drive to suppress competition and foster combination and monopolization in order to procure “extra- profit” to the greatest extent possible. Under the specific conditions of monopoly production, where concentrated and centralized cartels necessarily spew out increasing quantities of goods, the policy of finance capital maintains three objectives: “(1) to establish the largest possible economic territory; (2) to close this territory to foreign competition by a wall of protective tariffs, and con-sequently (3) to reserve it as an area of exploitation for the national monopolistic combinations” (Hilferding, 1981, 326). Tariffs emerge as the vehicle to protect the domestic market from foreign competition, cement monopoly producer dom-inance vis- à-vis related industries,4 and capture increased world market share for exports (that is, reaping extra profit in home markets allows monopolies to “dump” products on world markets at a below market price). Of course, the international generalization of protective tariff policy among imperialist states has world economic consequences. The trend toward the consolidation of ever more economic territory becomes increasingly vital as the potential for growth and profitability of a “national” cartel hinges upon the portion of the globe it usurps as an exclusive preserve for its operations. As well, because tariff protec-tion curtails the “free flow” of goods internationally it encourages the centers of finance capital to export capital so as to produce behind tariff walls. Capital export, however, has its own ramifications: it sparks the “internationalization of capital”, the creation of new locales of capital accumulation (though, at the his-torical juncture of Hilferding’s writing, this process is largely confined to pro-duction of commodities, raw materials and export infrastructures as per the requirements of the finance capital exporting state). And capital export from centers of finance capital engenders a pattern of international interstate relations predicated upon the rise of “strong states” to “protect” exported capital invest-ment, preferably through direct political domination of recipient territory. As summarized by Hilferding, “the export of capital also encourages an imperialist policy” (1981, 213, 318–19, 322–3, 328). Greatly influenced by Hilferding is the “popular outline” on imperialism of V. I. Lenin. To my knowledge, Lenin is the first Marxist theorist to characterize imperialism with its specific political economic tendencies as a “stage” of capit-alism.5 On the economic mechanics of the journey capitalism travels to reach this stage Lenin largely follows Hilferding; quoting him approvingly on his anal-ysis of the dominance of finance capital (Lenin, 1975, 44). However, Lenin diverges from Hilferding in the emphasis he places upon monopolization. Lenin


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declares: “If it were necessary to give the briefest possible definition of imperial-ism we should have to say that imperialism is the monopoly stage of capitalism” (1975, 83). To this, he adds, imperialism means:

(1) the concentration of production . . . has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with indus-trial capital and the creation, on the basis of this “finance capital”, of a finan-cial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation of interna-tionalist monopoly associations which share the world among themselves, and (5) the territorial division of the world among the biggest capitalist powers has been completed.

(Lenin, 1975, 77)

Lenin’s insistence on monopoly as the salient feature of imperialism derives in part from his view that it was inherent in the struggle of monopolistic combines with rivals that they strive to covet natural resources through acquisition of colo-nies. In turn, this provided the rationale for capital export to ensure the efficient procurement of the required raw materials. Lenin also placed great emphasis upon capitalist monopolization as progenitor of new forms of capitalist competi-tion and crises. Monopoly capital would seek not only to divide the world but to “re- divide” it. This followed, according to Lenin, from the cardinal “contradic-tion” of the capitalist stage of imperialism: “the disparity between the develop-ment of the productive forces and accumulation of capital on the one side, and the division of colonies and spheres of influence for finance capital on the other” (1975, 78–9, 92). The process of extracting from the work of Hilferding and Lenin that which is necessary to begin honing the research agenda of periodizing capitalism into the sort of framework which will help us make the ever so necessary determina-tions of this volume will be commenced later in the chapter. It will follow the inquiry into theorizing of post- WWII capitalism and involve a collation of the insights of both research paths. Here, the intention is to explore the way in which the theorizing of imperialism is conceived by these authors in relation to Marx’s Capital and the understanding of the role Capital plays in the political economic study of capitalism that follows from that. Just before turning to this endeavor though, while there is no intention of engaging in a point- by-point evaluation of the empirical evidence Hilferding and Lenin adduce to support their arguments, it should at least be noted here that in terms of the logic of the interrelationship among the features of imperialism, there exists a critical consensus that Hilferd-ing’s explanation for the export of capital which marked the age was more robust (Brewer, 1980, 91–3; Kemp, 1967, 83–4). As well, although Lenin’s emphasis on the increasingly rivalrous disposition of imperialism toward “re- dividing” the globe resonates well with the onset of World War I (WWI), it has rightly been the target of critique for its lack of clarity over how the fundamental economic contradictions of capitalism are converted into inter- imperialist struggles among


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states (Harvey, 1999, 288–9). But to the extent both Hilferding (1981, 257ff., 314–16) and Lenin (1975, 58–9) seek authority for a prime mover of sorts for the tendencies of imperialism in Marx’s analysis in Volume Three of Capital on the law of the falling profit rates, their attempts to extrapolate from this law remain unfulfilled. This, however, reflects ambivalences in Marx’s own work on crisis theory left incomplete at his passing; ambivalences which defy resolution outside of the recasting of Capital as the TPCS as this book argues, and which persist in confounding Marxian political economy otherwise. How then did the theorists of imperialism understand their contributions in relation to what they believed to be the thrust of Marx’s work? While this issue remains uninterrogated in conventional Marxist literature given the latter’s uncritical acceptance of Kautsky’s formative reconstruction of Marxism as a theory of history, it is of substantial import to be crisply clear on the fact that even though theorists of imperialism launched their projects as extensions of Capital they never wavered from the view that this mission was in the service of HM. As put by Hilferding in the Preface to his book (1981, 23):

Marxism . . . is only a theory of the laws of motion of society. The Marxist conception of history formulates these laws in general terms, and Marxist economics then applies them to the period of commodity production. The socialist outcome is a result of tendencies which operate in the commodity producing society.

Lenin, for his part, states ([1913] 2007):

[Marx’s] historical materialism was a great achievement in scientific think-ing. The chaos and arbitrariness that had previously reigned in views on history and politics were replaced by a strikingly integral and harmonious scientific theory, which shows how, in consequence of the growth of pro-ductive forces, out of one system of social life another and higher system develops . . . Marx [then] traced the development of capitalism from embry-onic commodity economy, from simple exchange, to its highest forms, to large- scale production.

Given the fashion in which this overarching perspective of HM animated their work a largely unrecognized unintended consequence of the theorizing of impe-rialism has been to further downplay the role of Capital in Marxism than is already the case with the conventional view of it as a sub- theory of HM. That is, as vividly illustrated in the masterful study by Jukka Gronow (1986, 57–9, 97–8, 118–19, 161–2), despite quibbling over the political and strategic implications of imperialism, turn- of-the- century Marxist theoreticians of imperialism, including Hilferding and Lenin, accepted the basic assumptions of Kautsky concerning Marx’s Capital: These being that Capital captures the historical teleology of capitalism beginning with its germination in an historically existent petty com-modity society. From that point of departure capitalism proper is considered by


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them to be but a short- lived formation wedged between its petty commodity pre-cursor and imperialism. And Capital, in this schema, as the theorizing of histor-ical laws as they apply to the historical period up to the time of Marx’s passing, is the theory of that short- lived social formation. Remember, however, Kautsky’s triumph in the Revisionist Controversy over strategy for the socialist party actually glossed over the question of the applica-tion of the laws of history to capitalism in Capital. Kautsky had claimed that Marx’s analysis in Capital demonstrated how the laws socialize capitalism pre-figuring socialism the onset of which will follow from workers’ struggles as capitalism descends into crisis. Therefore, when capitalism recovers from its most debilitating crisis to date without socialist revolution Marxism is called upon to explain why the historical outcome supposedly portended by Capital was not realized. The theorizing of imperialism constitutes the Marxist response to this challenge with its analysis of the unforeseen “complexities” for socialist transformation inherent in the novel contradictions and economic changes of imperialism. Recent investigation into the theorizing of imperialism contends that as the late nineteenth century crisis was the first major economic crisis of capitalism, given that socialist revolution never occurred at that historical con-juncture, this represents the first “crisis of Marxism” – where in the latter context crisis refers to a situation where history seems to throw unmanageable curves at the theory of history’s trajectory. As such the theory of imperialism “solves” the first crisis of Marxism (McDonough and Drago, 1989; McDonough, 1995). But does it? If all Marxism is, is a theory of historical directionality, and Marxism is persistently being “falsified” by the actual trajectory of history, would it not be exactly that sort of theory castigated by Popper, as touched upon in the first chapter? And what does this account of Marxism say about Marx’s two decades plus lucubration on Capital? Even if we accept, contra Bernstein’s claim in the Revisionist Controversy, that its purported historical conjectures are not wrong but only need to be “supplemented” by the theorizing of imperialism, Capital is still thereby relegated to a position of limited significance (see Figure 3.1). It is thus not difficult to understand how from its perceived waning contribution to the overarching theory of HM Capital thereupon would even come to be viewed as an encumbrance on Marxism that best be discarded to allow HM to stand alone (Thompson, 1978)! The foregoing aside, returning to the issue at hand in this chapter, to the extent that the transformations of capitalism as imperialism do breathe new life into capitalism it should now be evident how, as asserted earlier, the whole bent of the formative periodizing of capitalism never poses the fundamental question of such change. Capitalism may be crisis ridden, asymmetric distributive, working class immiserating, imperialistic, and so forth, yet its perduring in history would seem to require more than ever an elaboration upon those cardinal elements guaranteeing the material economic reproducibility of capitalism as a human society. And, given the basic presupposition of the periodization research agenda that capitalism is transformable and may continue to exhibit substantive change, capturing the constituents of its economic reproducibility necessitates a


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theoretical environment conducive to elaborating what capitalism is in a way which in turn permits assessments of whether the world economic vicissitudes at issue are capitalist. This all returns us to the logic of the argument for recon-structing Capital as the TPCS whatever this or that quotation culled from Marx’s work suggests.

Mid- range theory and institutions in the study of post- WWII capitalismAs broached in the introduction to this chapter the transfigurations of capitalism in the post- WWII period following the ascendance of capital from the depths of depression and conflict triggered a fecund Marxist response. This literature is extensive and cannot be reviewed in its entirety here.6 We may felicitously access the key issues however by focusing initially upon the seminal contribu-tion of what may be considered the two major new Marxist schools of periodiz-ing capitalism. The work produced by these schools is “new” in three senses: it is animated by the transformations of post- WWII capitalism (though theorizing of earlier stages of accumulation is proffered), the avowed pioneering texts of the schools were written in the post- WWII period, and while they proclaim lineage with Marx their writings seek to repudiate connection with much of the formative theorizing of imperialism and its associated debates (of course this stated disavowal may not reflect the actuality as unrecognized assumptions of

HM as a theory of historical directionality affirming a socialist historical outcome

Laws of history operating in capitalist mode of production

Imperialism as the “stage” of capitalism prefiguring socialism

Capitalistmode of

production

Feudal modeof production

Slaverybased modeof production

Socialism/communism

Primitive communism

Socialism/communism

Imperialism as a “stage” of capitalism the theorizing of which captures the new “complexities”

involved in realizing socialism

Capitalistmode of

production

Socialism/communism

Concentration/centralization of

capital prefiguresSocialism

Capitalism“proper”

Pettycommodity

society

Figure 3.1 Theorizing capitalism and imperialism as a sub-theory of HM.


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the former genre of theory are secreted into their analysis). As we shall see, as well, their work is pivotal in expanding the compass of the periodization endeavor through cross- fertilization with research conducted by critical non- Marxist political economy scholarship. Before we explore the contributions of the new schools as I have labeled them I wish to acknowledge two important avowedly Marxist theorizations of post- WWII accumulation, extended discussion of which will be omitted here (though a brief sketch of each is warranted): One is that originating in the hands of the “monopoly capitalism” school (see Box 3.1) founded by Paul Sweezy (Baran and Sweezy, 1966), the other, work by Ernest Mandel (see Box 3.2) on “long waves” of capitalist development (Mandel, 1978, 1995). Put succinctly, why these, also to be sure, quite widely followed perspectives will not be treated at length derive from the fact that both explicitly engage questions of periodizing capitalism and theorizing stages of capitalist development along the same “flat” epistemological lines as the formative theorists of imperialism by seeking to extrapolate stages directly from a single “law” of capitalism. As such, while their writings contribute empirical nuances to the periodization debate, they do not assist Marxism in breaking free of the straight- jacket it is placed in by its identi-fication with HM as a master theory of historical directionality. Extended review of them will thus not get us any closer to answering the key questions of this book than our examination of the formative theories of imperialism.

Box 3.1

For readers interested in following up on the work of the monopoly capital school and long wave approach of Mandel it may be noted here that of the two perspec-tives the work of Paul Baran and Sweezy, in Monopoly Capital, the founding text, outlining the research program of the school, is the least ambitious. The animating premise of the work is simply that Marx’s temporality delimited his focus to “com-petitive capitalism” (and when he touched upon monopoly it was largely in regards to the latter’s pre- capitalist manifestations). Building, then, upon the position of the formative theorizing of imperialism that monopoly was the salient feature of capit-alism’s twentieth century trajectory (finance capital in their view was but a fleeting symptom of the monopoly tendency), Baran and Sweezy argue that to develop “Marxian social science” an analysis of the specific modus operandi of monopoli-zation is required. What their work claims to uncover is the supplanting of the “law of falling profits”, purportedly identified by Marx as central to competitive capital-ism, by an alleged “law of rising surplus” characterizing monopoly capitalism (Baran and Sweezy, 1966, 4, 72, emphasis added). Baran and Sweezy then proceed to extrapolate from their newly identified law all the features of monopoly capital-ism (such as its proclivity for hypertrophied military investment) they perceive as shaping United States (US) accumulation. What is in fact highlighted in the emphasis is the conceptual shift in Baran and Sweezy’s writing which replaces surplus value at the core of Marx’s analysis with “surplus”. Earlier critique of Baran and Sweezy within Marxist circles, it may be noted, zero in on this abandonment. See, for example, Harvey (1999, 141ff.). However, that Baran and Sweezy even contemplated such a perfunctory dismissal


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of the law of value in analysis of capitalism stems from the overarching conven-tional Marxist preoccupation with the crisis ridden, asymmetric distributive, class divided, and so forth character of capitalism (the ultimate purpose of which is con-firming HM’s prediction of a socialist historical outcome though, as with the form-ative theorizing of imperialism, this may entail new “complexities”), rather than with explaining how such a society could secure the material economic reproduci-bility of human society in the first place. From the perspective of the Uno approach to Marxist theory the former preoccupation is not, pace Baran and Sweezy, social scientific at all, but ideological.

Box 3.2

Mandel’s framework, on the other hand, is immensely ambitious, seeking to explain accumulation across all historical stages of capitalism by capital’s search for “surplus profits” (Mandel, 1978, 30, 39, 75). In his own words:

The entire capitalist system thus appears as . . . the outcome of the uneven development of states, regions, branches of industry and firms, unleashed by the quest for surplus profit . . . [However] the main weight of this ramified uneven and combined development takes different forms in different epochs.

(Mandel, 1978, 102)

These “epochs” or phases of capitalism – “freely competitive capitalism”, imperi-alism, and the post- WWII stage, “late capitalism” – rest, according to Mandel, upon extended economic “cycles” or long waves of capitalist development, each incorporating several traditional business cycles, and each predicated upon major “technological revolutions”. His expatiating on these technological revolutions, predicted respectively upon: the “machine- made steam engine” (the first technolo-gical revolution from 1847 to the 1890s); the “generalized application of electric and combustion engines” (characterizing the period from the 1890s to WW2 as the second technological revolution); the “generalized control of machines by elec-tronic apparatuses. . . [and] nuclear energy” (being the third technological revolu-tion of the post- WW2 period), is the most interesting component of the argument (Mandel, 1978, 120–1). For Mandel, these long waves are then divided into periods of economic upswing and economic stagnation. That capital is able to emerge from a “long wave of depression” to accumulate anew depends, in Mandel’s schema, upon the “cycles of class struggle” which correlate with the economic cycles (1995, Chapter 2).

However, as interesting as pursuing the forgoing might be from the perspective of a general intellectual history (and Mandel’s work in particular will be alluded to at points below justifying our digression), it is precisely the mechanistic tangent of such work and its failure to address the conceptual deficits Marxism is saddled with in the formative theorizing of imperialism, which the theoretical contributions to periodizing capitalism we shall now turn to seek to reverse. In what may effectively be considered the founding text of the “regulation


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theory”7 (hereafter referred to as RT) of Marxian political economy spawned in France, Michel Aglietta (1987) declares that capitalism cannot be understood as embodying a solitary trajectory or as being governed by a single inexorable law. Rather, capitalism develops across its history through a series of discontinuous stages, each stage being marked by a set of socially and historically constituted features. It therefore follows, according to RT, that abstract economic theory alone is insufficient as the sole explanatory locus of capitalist development. It must be supplemented by historical investigation (Aglietta, 1987, 16–17). What RT proposes to address this problematic of explaining capitalist development are devices they dub “intermediate range” concepts that it is claimed will facilitate the movement in analysis of capitalism from abstract economics to the investiga-tions of capitalism’s historical course (Boyer, 1990, 30–1). RT identifies these three intermediate range concepts as the integrative core of their research program: A “regime of accumulation” designates a specific stage of capitalism. “Institutional” or “structural forms” include the wage relation, the type of eco-nomic competition, the monetary system, the form of state, and position of the state within the international economy. And the “mode of regulation” refers to the socially and historically constituted articulation of institutional forms ensur-ing the relatively long- run cohesion of a particular regime of accumulation (Aglietta, 1987, Part One; cf. Boyer and Saillard, 2002, Chapters 5 and 6). While I agree that the theorization of fordism certainly does not exhaust the RT research program, but rather constitutes a “result” of its overarching research thrust (Boyer and Saillard, 2002, 2) it is through interrogating fordism that the clearest insight into both RT understanding of the post- WWII world economy and the schools’ conceptual infrastructure emerges. The RT appellation for the post- WWII period of capitalism or regime of accumulation is the institutional form around which the mode of regulation crystallizes – fordism. That is, within the constellation of institutional forms contributing to the relative cohesion or relatively long term “fix” of capital accumulation characterizing a given regime the force of a particular institutional form – the wage relation – predominates, given how it constitutes the “invariant kernel” of capitalism (Aglietta, 1987, 37). Fordism, in RT understanding of post- WWII capitalism refers first, to the semi-automatic assembly- line mass production of consumer durables and upstream components facilitated by the electronicizing of industry. Semi- automation and the continuous flow of assembly- line work revamps the labor process; effectuat-ing a greater intensity of work, a fragmenting of tasks and specialization of func-tions. In this way it may be viewed as a significant extension of “taylorist” time and motion strategies of work process control. Second, fordism constitutes a “norm” of mass consumption in which worker demand for mass produced goods emerges as integral to accumulation; a fact recognized by capital and the state that offer an array of buttresses for that norm – credit access, unemployment insurance, welfare payments, health care, to name a few. Third, fordism con-notes “collective bargaining” between capital and labor where unions accede to capital’s intensity and control demands, in return receiving large wage increases and benefit packages for member workers; these ostensibly indexed to produc-


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tivity gains and enterprise profitability (Aglietta, 1987, 113–19, 151–61, 188–98). Further, the fordist mode of regulation of the post- WWII regime of accumu-lation entails an articulation of institutional forms. The fordist wage relation, therefore, is claimed to be congruent with the following: monopoly/oligopoly as the form of economic competition characterizing inter- firm relations; the welfare form of state; a monetary system predicated upon state/bank supported credit money; and, finally, the emergence of the US, the particular state in which fordism initially gestates, as the globally hegemonic power that then fosters the construction of an international institutional edifice – Bretton Woods, Marshall Plan, General Agreement on Tariffs and Trade (GATT), International Monetary Fund (IMF), World Bank (WB) – and so forth, conducive to foisting fordism on the world.8 To briefly sketch the complementary articulation of fordist institu-tional forms, oligopoly eschewing of price competition creates a space for busi-ness to maintain high profit; a necessary facet of the generous wage/benefit package compensating labor for its intensity and tethering of its physical move-ment in the work process to semi- automated machine systems. Both the credit based monetary system and the welfare form of state reinforce the norm of mass consumption apposite to mass production of consumer durable based capital accumulation. Factoring in the international institutional dimension in which RT follows the alleged internalizing of this regime of accumulation by Western Europe and ultimately Japan, the fordist mode of regulation is viewed as the lynchpin of a post- WWII “golden age” of world capitalist development (Glyn et al., 1990). Not only does RT emphasis upon discontinuous stages of capitalism and its attempt to capture the modalities of a stage of accumulation at an intermediate range institutional “level” shift the terrain of debate in the Marxian periodizing of capitalism from the single- minded concern over forces and impedances of capitalist breakdown and transition to socialism but RT also strives to counter mainstream economic doctrines of the equilibrium bent of capitalist markets. That is, whereas in modeling macroeconomic phenomenon neoclassical eco-nomics accepts equilibration as fait accompli, only to be disrupted by exogenous shocks, RT claims crises germinate endogenously in modes of regulation and regimes of accumulation. The crisis of fordist accumulation in US capitalism, it is thus argued, originated in the “rigidity” of its semiautomatic machine systems which encountered limits to the fragmenting of tasks and intensifying of labor upon which the high profit/high wage bargain was based (Aglietta, 1987, 119–30, 165–9; Glyn et al., 1990, 88–97). What ensued, according to RT, was a concatenating of renewed wage struggles, a turn away from monopoly regulation toward “market regulation” and price competition, assaults upon the norm of mass consumption; all then topped off by the frenetic world- market competition dubbed “globalization”, it in turn accompanied by international “financializa-tion” which serves to perpetually undermine restorative efforts for the golden age (Lipietz, 2001). Defining in RT terms of regime of accumulation and mode of regulation that which follows this crisis of fordism, a so- called “after- fordism”


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or “post- fordism” – not only as the crisis manifested itself in the US context but in other states that had internalized the model and then also experienced forms of its endogenous unraveling reinforced by systemic international trends – has, however, proved elusive (Jessop, 2001); a question that will be revisited. Paralleling the work of RT, in terms of both its temporal emergence and pro-claimed eschewal of mechanistic extrapolations of capitalist historical outcomes from purported laws/deterministic claims about capitalist development prefigur-ing socialism, is the US spawned “social structures of accumulation school”9 (hereafter SSA). Though SSA is not as explicit in demarcating its research program as operating at an intermediate or mid- range level of theory as RT, SSA is nevertheless clear first, that it intends to separate analysis of “the capital accumulation process . . . of profit- seeking and reinvestment” from that of its “institutional environment” and, second, that it is concerned with the “multi-dimensionality” of institutional structures which “condition” capital accumula-tion over relatively long term periods or “stages of capitalism” (Gordon et al., 1982, 25, 38). SSA, as RT, acknowledges that crises mark capitalism as a mode of production and that explanations of crises must capture the endogenous origins of these. According to SSA, however, as the forms capitalist crises assume historically are variegated, so the pathways from them similarly diverge. And it is precisely the socially and historically constituted institutional ensemble through which capital emerges from economic crises and which provide cohe-sion for continued capitalist profit making in a stage of capitalism that the notion of an SSA reflects. If there is one area of analysis to be noted at this juncture of our exposition, where RT and SSA diverge, it is on the taxonomy of institutional forms. RT sets forth the five which it claims mark all regimes of accumulation. SSA does not commence with a pre- determined set of institutions as such. SSA also theorizes pre- WWII stages of capitalism. Yet it is the understanding of the modalities of accumulation of the post- WWII period (and debate over its crisis) that the bulk of SSA analysis is devoted. SSA along with RT recognizes the existence of a so- called golden age of capitalism characterizing the US economy in the post- WWII period. According to SSA there exist four funda-mental institutional pillars of this period of capital accumulation.10 The first is dubbed the capital- labor accord. Captured by this term is the imputed require-ment that capital balance its accumulation and profit drive with its need to ensure ongoing effective demand for its goods. As in the conceptualization of fordism in RT, the SSA notion of a capital- labor accord spotlights the tacit agreement between the two sides in which labor cedes to management control over factory operations in crucial areas such as intensity of work and technological change in return for a rising wage and benefit package. Second, the capital- citizen accord addresses the question of the emergence of the welfare state out of the collapse of capital accumulation in the 1929 stock market crash and subsequent depres-sion. Through its provisions for social security and an array of other so- called “public goods” the capital- citizen accords reflects the buying by capital of polit-ical quiescence and broad acceptance of its profit making activity from the working class. Third, Pax Americana is viewed as the global institutional glue


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which binds together US hegemony with the economic reconstruction of Western Europe and Japan. Fourth, though there is not a specific name for this, SSA understands “the containment of intercapitalist rivalry” via oligopoly com-petition as this operates domestically and internationally under the auspices of Pax Americana to be a key aspect of the overall stability of post- WWII US accumulation. Analogous with RT and, it may be remarked, with the bulk of heterodox/ critical/Marxian political economic analysis of post- WWII capitalism (Webber and Rigby, 2001), SSA accepts that by the mid- 1970s the golden age of capital accumulation across the industrialized world had come to en end. However, the SSA research agenda at its outset also found it difficult to come to terms with the transfigurations of capital following the demise of the golden age: This relating to the question to be addressed below and again in Chapter 4 of whether neolib-eralism or globalization constitutes a stage of capitalism as such is theorized by SSA (Kotz, 2001). We alluded above to the similitude between RT and SSA in seeking endogenous origins of economic crises rather than exogenous ones as do neoclassical economists. But if one key difference between the RT and SSA exists here it revolves around the explanatory predilections of each given that position. That is, whereas RT is largely concerned with qualitative factors in the cohesion or “fix” an institutional edifice offers a regime of accumulation, such elaborated preponderantly through historical studies, SSA link its qualitative concern with institutional cohesion to its quantitative interest in the impact of institutions upon the rate of profit. This has resulted in SSA statistical work and econometric modeling that has no RT match (Jessop, 1990, 183; Coban, 2002, 301–4). And the fact that the post- golden age neoliberal institutional configuring and policy package has not contributed to sustained growth as evidenced by such quantitative work is what fuels SSA skepticism over the emergence of a new SSA (again, we will revisit this question below). What is particularly interesting here is that the diverging explanatory foci of RT and SSA are at the root of discrete lines of critique leveled at each. Within SSA itself it is questioned whether in fact SSA constitutes the radical departure from theoretical tendencies of the formative theorists of imperialism or those Marxists like Sweezy and Mandel, introduced above (who, it is suggested, furnish the “genealogical link” to SSA), as its founder proclaims. It is argued that the backdrop to the novel SSA elaboration upon the political and ideological components of post- WWII institutional configuring of accumulation neverthe-less remain “the basic capitalist tendencies toward crises” that were of concern to its theoretical predecessors (McDonough, 1999). Indeed, Mandel himself sees SSA work as a kind of “economism”, notwithstanding its institution- explanatory trappings, precisely because SSA endogenic view of crises and their resolution, as was the case with formative long wave analysis according to him, elides ques-tions of the relative autonomy of class struggle processes (the “subjective” element) from economic (the “objective” element) tendencies (Mandel, 1995, 38–42). This line of critique again confronts us with issues treated in relation to the formative periodizing of imperialism where attempt was made to reconcile


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periodization with the reading of history as the unfolding of objective economic laws; only now, as Mandel claims, historical outcomes of this objective law are to be understood as conditioned by complexities of class struggle (see Figure 3.1). RT, on the other hand, are taken to task over their alleged seduction by post-modernism; something, it is averred, is reflected in RT disconnecting analysis of stages, and the fix for accumulation constituted by a stage institutional infra-structure, from that of the “level of analysis . . . of the essence” of capitalism. It is maintained that RT interjecting of an intermediate level of theory contradicts Marx’s procedure of moving from the abstract to the concrete (and “reproduc-ing” the latter in “thought”) or from essence to appearance in a fashion which is “continuous, so that in approaching the concrete forms in which the world exists we do not abandon the sphere of essence”. Intermediate range concepts, it is bemoaned, “advance directly to the concrete . . . without any reference to abstract essences” (Mavroudeas, 1999, 321). This line of argument draws into sharp relief a question set out at the beginning of the chapter; that of the relation between periodizing capitalism as a research agenda and the basic theory of capital. To be fair to RT, the intention of intermediate range theory as they advance it is to bridge a gap separating abstract economic theory (presumably the theory of the essence) and historical studies (presumably the concrete). However, the foundational RT texts never elaborate upon precisely what this abstract economic theory is, and the question is seemingly pretermitted in later RT work (we will revisit this point shortly). Our RT detractor is also embarrass-ingly fuzzy on this issue however. It is well to assert that RT mid- range theory disconnects from the “level of analysis” of the “essence” of capitalism. But what is the “abstract essence” of capitalism and how is it to be theorized? What epis-temological warrant do we have for studying this essence at one particular “level” of theory? How do we move in theory to the “concrete forms in which the world exists” in a fashion that is “continuous” and does not “abandon” essence? And what is meant by “concrete forms” of the world? Finally, achiev-ing clarity on “Marx’s method” is not something that can be attained by quotol-ogy. It must begin with the question: Marx’s method of what? Unpacking the above returns us full circle to the building blocks of the argu-ment in Chapter 2. The immense contribution to debate in the philosophy of science of critical realism, touched upon in Chapter 2, is to rein in the discursive license being taken with the world in much contemporary theory (as is the pro-claimed intention of the above RT detractor). To do this, critical realism demands questions of ontology or the material characteristics of the object of knowledge be brought back in to the analysis. In Chapter 1 we note Kautsky’s influential reconstruction of Marxism advancing human history in toto as Marx’s object in this regard. Kautsky maintains Marx’s research agenda or “method” entails uncovering the immutable historical laws propelling capitalism toward a socialist historical outcome. Transcribing this in the language of philosophy, it is these laws of capital, as our RT detractor also intimates, that constitute the essence of human history as the “concrete form of the world” (or alternatively,


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domain of “appearance” of the essence). Even if we accept here, as per our alluding to philosophy of science debate in Chapter 2,11 that postmodernism is a base redressing of idealism, conventionalist approaches to knowledge correctly check any illusions we may entertain of simply “reproducing” the empirical or “concrete” world in thought. And if what is meant by moving to the concrete without “abandoning” the “sphere of essence” is establishing some sort of explanatory “chain link”,12 such that at any given point we can assert the trajec-tory of history to be a function of this essence, then we have Kautsky redux. However, the object of inquiry in Marx’s three- volume work of the same name is not “history” but capital. The epistemological warrant for Marx’s pro-cedure of inquiry or “method” derives from the ontological peculiarity of the object; the tendency of capital toward self- abstraction and self- synthesis, ena-bling theory to trace the unfolding of all the categories of capital in a dialectical thought experiment. Yes, capital does have an abstract essence. This is the reify-ing inner logic of capital. The concrete expression of this essence as captured in the ascending of the dialectic from the abstract to the concrete (in thought) is the consummation of the dialectic of capital in the bourgeois utopia of the TPCS. Therein capital is defined and its constant displayed as the means by which capital ensures the material reproductive viability of society while simultan-eously satisfying its commodity economic chrematistic of value augmentation. To assert “history” as the domain of “appearance” of the logic of capital is tanta-mount to summarily occluding the causal efficacy of a welter of forces upon modern history – patriarchy, culture, race, religion – to name but several. In fact, it should be clear both from Chapter 2 and the above discussion of periodization that it is not even possible to move “continuously” in theory from the inner logic of capital to capitalist history. As Albritton puts it:

[T]he relationship between the theory of capital’s inner logic and the analy-sis of capitalist history must be radically misinterpreted if it is reduced to an essence- appearance relation. Indeed many of the “appearances” at the level of capitalist history may be quite autonomous from capital’s logic or may actively resist it, and hence not in any sense be appearances of an essence that is pulling the strings from behind the scene.13

In Chapter 2 of the present volume warrant for the TPCS recasting of Marx’s project in Capital as a “level of analysis” of the inner logic or essence of capital has been established. While Marx himself did not explicitly treat the periodizing of capitalism, given his temporal emplacement, it is in line with Marx’s pro-grammatic intent to accept with RT and SSA that, in developing Marxian polit-ical economy, the movement in thought from abstract economic theory to analysis of capitalist history is to be mediated (Albritton, 2007a, 114ff.). Where the RT/SSA research agenda glaringly miscarries, in the first instance, is over the absence of a precise specification in their work of what constitutes the abs-tract level of economic theory (see Figure 3.2); something upon which both the very constructing of a mid- range theory and conceptualizing of how this theory


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mediates the movement in thought to the study of capitalist history must neces-sarily be predicated. In the first chapter of the present volume, however, we clearly specify the abstract level of theory as a consummation of the reifying tendencies of capital in a bourgeois utopia or TPCS. As we shall see, on the basis of the TPCS defining of capital and elaborating upon the constant of capital, it is possible to set out the conceptual armature of a mid- range level of theory which does actually mediate in a controlled fashion our analytical effort to gauge the impact capital has on current history. And we must not lose sight of the fact that the ultimate purpose of this exercise is to assess whether in fact our material reproductive existence is still shaped by capital: or, under the impetus of what we refer to in common parlance as globalization, has the hold of capital on our economic lives been loosened to the extent that we can definitively declare that we no longer live in the age of capital, but that of other economic forces? Before finalizing the contribution periodizing capitalism makes to this endeavor, that is, by refining the mid- range theory project in a fashion which helps us make all- important determinations on the current world economy, it is important that we visit a third area of discussion generated by RT/SSA work which draws to the fore issues of the relationship between mid- range theory and empirical history (though adequate resolution of even these issues, as will become evident, demands clarity over what, in its most fundamental incarnation, capital is and how on the basis of that knowledge, capital is to be theorized). The debate to be considered commences at the juncture initial RT/SSA work trails off following its analysis of economic crisis marking the demise of the golden age of capitalism. Formative RT/SSA empirical writings concentrated on the trajectory of post- WWII US capitalism yet they professed to be charting

Modes of regulation and social structures of accumulation asinstitutional fixes for relatively

long-term capital accumulation

New institutional economics:institutions as structures in which

agency is ordered or congealsand which then constrain or

“structure” agency

Models of capitalism as“ideal types” or “stylized facts”

of varieties of institutional fixes inthe contemporary world economy

Abstract economicsUnspecified

Historical studiesCountry specific

Historical studiesComparative

Neoclassical agencyRational individual

Regulation Theory and Social Structures of Accumulationtheory seek to periodize capitalism with mid-range theory

Figure 3.2 Stages of capitalism as the systematizing of institutional history.


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epochal shifts in global accumulation; and doing this in the context of a “general” mid- range theory. While empirical indicators such as diminishing rates of profit and contracting rates of growth displayed the mid- 1960s as watershed years for US accumulation, the 1970s for capitalism on a world scale (Webber and Rigby, 2001), in comparison with the US, select economies and regions seemed to be maintaining growth trajectories in defiance of overall trends. A current of writing operating with RT concepts seized upon the resilience of Japan in the wake of the US slowdown claiming it finally ushers in the new elusive post- fordist stage of capitalism.14 Enthusiasts of post- fordism adopted the buzzword “flexibility” to explain what they viewed as a legion of futuristic prac-tices differentiating Japanese accumulation from fordism: a wage relation pre-dicated upon enterprise unionism and tenured long term employment for core workers appears to support wider application of the new information and com-puter technologies (ICT) and robotics as well as a reconfiguring of the labor process toward “learning by doing”, work teams and skill polyvalence (these countering the earlier RT view of an inherent rigidity of semiautomatic assembly- line production compromising profitability); vertical disintegration of enterprises and cultivation of enduring ties with lower cost suppliers underpin just- in-time (JIT) production strategies through which large firms are disbur-dened of bulky inventories. These profitability enhancing constituents of post- fordism are then matched to a state policy directed towards upgrading infrastructure in support of targeted economic sectors and a system of bank finance and enterprise cross- shareholding which imbue capital with the increased “patience” to see long term investment through to the benefit of the industrial group as a whole. And, as with earlier RT contentions over the export of fordism, the debate concludes with a view of post- fordism as the emergent global eco-nomic future (Wood, 1993; Elger and Smith, 1994; Steven, 1996; Hatch and Yamamura, 1996). However, a closer reading of the industrial relations literature on Japan ulti-mately revealed the enshrining of flexibility as a new industrial paradigm to be vastly overstated. Much of what had been touted as novel in post- fordism involved the innate flexibility and adaptability of production structures in mass production consumer durable industries themselves rather than a seismic rupture in global accumulation. In fact it was simply a strategic decision on the part of Japan’s Ministry of International Trade and Industry (MITI) to support special-ization in Japan’s auto parts industry which led to JIT. The maintenance of enduring ties between suppliers (themselves increasingly large amalgamated companies) and core firms in the context of Japanese accumulation served the same technical purpose as vertical integration in fordism (Hart, 1992, 63–4). The notion of a “global Japanization” had also to be set against the backdrop of increasing internationalization of the world economy in the 1980s where so- called “best practice” production modalities, JIT emanating from Japan, for example, were being deployed by relevant sectors of capital in the drive for com-petitive supremacy (Thelen and Kume, 1999). In the end, the debate as a whole tended to revolve more around issues of shifting international competitiveness


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rather than periodizing capitalism. That the debate moved in this direction fol-lowed from the failure of its participants to interrogate the RT/SSA conceptual architecture which, if in the first instance left the abstract level of theory unspec-ified, in the second instance never clarifies what is “intermediate” or epistemo-logically distinct about intermediate or mid- range concepts. The key issue for theory here is the treatment of empirical/historical diversity which, as evidential-izing and counter- evidentializing in the fordism/post- fordism debate displayed, points to differences clearly more of degree than in kind. The question that then devolves from this is: how might the mid- range program be configured to extract evidence from an emergent historical case of what is perceived to be a new stage of capitalism – fordism, for example – in a fashion that captures the salient characteristics of the stage as a distinct type of capitalism (like imperialism, for example), and then utilize the insights so gained to both contextualize and explore capitalist history in its manifold complexity and flux; this including the potential historical variability and transformation of the very case from which the stage constituents are drawn? No answers to this question, however, are forthcoming. Instead, the theoret-ical lacunae in handling empirical/historical variation exposed within the context of the fordism/post- fordism debate over Japan are turned back on formative RT analysis of fordism itself which critics assert had in fact from the outset glossed over institutional differences as reflected in RT references to diverging fordisms “such as ‘flex- fordism’ (West Germany), ‘blocked fordism’ (UK), ‘state fordism’ (France), ‘delayed fordism’ (Spain, Italy)”. Contradistinctively, while RT elabo-ration of intermediate range concepts had been criticized above for opening the floodgates of Marxism to postmodernism, within the context of the fordism/post- fordism debate critics maintained that intermediate range concepts instead expose the unredeemable “totalizing” lineament of all Marxist theory. What is required to deal with novel divergences in global capitalism rather, is theory which is as “flexible” as the sprouting economic forms (Hirst and Zeitlin, 1991, 21, 24ff.; 1998, 227ff.). Following in the tracks of the interfacing of such theo-retical interests with further transfigurations of the global economy in the final decades of the twentieth century – the waning in fortune of Japanese capitalism, the rise and fall of South Korean capital, the powering up and then dogged post- unification struggle of the German economy, and of course the strengthening of neoliberalism in the US and United Kingdom (UK), where in particular, the seeming out- of-this- world renewed vigor of US capital is greeted as the markets’ epiphany – we alight in the wide- ranging literature on varieties or so- called models of capitalism (MOC).15

As the progeny of a century of critical/Marxist debate over the transfigura-tions of capitalism MOC is quite heterogeneous in theoretical and disciplinary orientation featuring a participant roster of Marxist, heterodox economics and so- called “new- institutionalist” players (see Figure 3.2). Though if one intellec-tual tradition may be singled out for its influence on MOC, including nuanced contributions to the MOC literature from RT/SSA (these however now largely shorn of Marxist categories),16 it is that of sociologist Max Weber and the afore-


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mentioned Polanyi on the innate “embedding” of markets in socially and histori-cally constituted ensembles of institutions.17 That is, MOC “defines” capitalism in terms where capitalism is always understood as an institutionalized order in which “the market” is simply one institution emplaced in a particular ordering of institutions. MOC refers to these orderings of institutions which function to impart a modicum of coherence and direction to an economy as institutional “complementarities”. Such complementarities, according to MOC, are shaped by their emergence in discrete “national” social and historical circumstances and thus embody a so- called “path- dependence”. Given these premises MOC consid-ers a wide range of cases and develops a comparative research program from the outset. It thus differs substantively from early RT/SSA work which had drawn so heavily upon the US experience. And, while MOC treats historical anteced-ents of particular varieties of economy to ground claims about the path depend-ence of their complementarities, the broader exploration of world historic change or periodizing capitalism marking early RT/SSA writings is essentially expunged in its writing; even among MOC debate participants from RT/SSA Marxian political economic traditions. Finally, departing from earlier RT/SSA writing, MOC is little interested in institutional complementarities as long term fixes for capitalist crises tendencies but in a triage of immediate policy relevant questions: What institutional complementarities optimally promote economic growth and global competitiveness (interest in this first arises in the context of the fordism/post- fordism debate)? Is there a particular complementary relationship among institutions which advances competitiveness while yielding a “progressive” model of capitalism (a concern leading out from neoliberal assaults on the fordist welfare state)? Given the overall interest in global competitiveness are tenden-cies afoot toward convergence of economies in a particular model (a question that, as we shall see in the following chapter, takes center stage in the globaliza-tion debate)? While the minutiae of institutional complementarities devolving from MOC comparative policy oriented research prompts one recent analysis to query whether “there are as many forms of capitalism as there are nation- states” (Boyer, 2005, 519), MOC debate nevertheless settles on taxonomies of two to six overarching varieties of capitalism (Crouch, 2005). One thing that is consist-ent across all of these however is the marking off of US and UK “Anglo” accu-mulation as representative of a purported “free- market” coordinated capitalism. Where the taxonomies in MOC differ is over the delineation of other forms of capitalism. Here, either all non- Anglo varieties are lumped together under a rubric such as “Nippo- Rhenish” capitalism, or non- Anglo accumulation is divided into variations on the following themes: “state- led” (Japan and South Korea); “consensual” or “negotiated” capitalism (Germany, Sweden), with the latter category itself subdivided in some taxonomies to distinguish the divergent configuring of corporatist cooperative relations of accumulation among sets of European Union (EU) states (Coates, 2000; Amable, 2000). The production of these taxonomies essentially rests on answers to three basic questions: To what extent is capital accumulation impacted upon by state intervention (such inter-


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vention is purportedly minimal in the US “market” case)? What financing regime characterizes so- called “corporate governance” (US accumulation financed by stock markets conspicuous for their profile of individual investors is here con-trasted with bank- based or institutional investor based financing marking other models)? This harks back to earlier RT/SSA concern with the wage relation, to what extent and in what fashion is organized labor empowered vis- à-vis capital and the state (here, for example, the pattern of state mediated centralized negoti-ation between German capital and organized labor is counter- posed to the com-paratively weaker enterprise based bargaining position of Japanese workers)? Finally, the conceptual procedure for arriving at these taxonomies MOC (includ-ing contributions from erstwhile Marxists) entails a studied slippage away from notions of mid/intermediate range theory to elaboration in terms of “ideal types” or “stylized facts” (Hollingsworth and Boyer, 1998; Boyer and Saillard, 2002); tools of analysis the utility of which is essentially the systematizing of empirical/institutional history (see Figure 3.2). On the relationship between periodizing capitalism at a mid- range level of theory and the treatment of capitalist empirical diversity two key issues arise from MOC debate. One issue, which will be revisited later in this chapter, as well as within the context of our discussion of the globalization literature in Chapter 4, is the reading of evidence on so- called varieties of capitalism itself. As with claims over futuristic industrial relations in the fordism/post- fordism debate the question of so- called corporate governance takes center stage in MOC. RT/SSA originally had little policy related interest in national competit-iveness and thus devoted scant attention to variations in corporate governance. We also need not delve into the competitiveness debate here. What is important to note at this point is that the diverging of US business structure from the German/Japanese penchant for family/bank/etc. ownership, touted in the literat-ure as the signpost for a “liberal” model of capitalism, followed from a series of pre- WWII anti- trust legislative initiatives that had the paradoxical outcome of accelerating development of the market eschewing oligopoly structure of US industry (Baskin and Miranti, Jr. 1997, 223–4). Further, though capitalization of US stock markets has always been greater than that of other major capitalist states, the fact remains that, into the mid- 1960s, control of about half of all major US corporations was still vested in stock owned by founding families and their descendants. As well, stock owned by this narrow cohort of individuals in the US was held by them over long periods and evinced a low turnover in effect mirroring the financing tendency of so- called “patient” capital held by institu-tions and banks in Europe and Japan (Mitchell, 2007, 272–4).18

Further, it is instructive that if we bracket the question of current US accumu-lation entailing a purported resurrection of “market coordinated” capitalism the remaining models across the varying taxonomies all exhibit institutional comple-mentarities reminiscent of fordism – particularly with respect to state support for accumulation, tripartite class accords and oligopoly forms of competition – as these had been theorized in formative RT/SSA work. And, as will also be dealt with in Chapters 4 and 5, on investigating current trajectories of MOC models as


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detailed across taxonomies, excluding the variations in corporate governance which, in any case, are overstated (O’Sullivan, 2003), what the evidence does point to is Japan (Westra, 2003a; 2003b), South Korea (Westra, 2006; 2007a), Germany and other EU states (Menz, 2003), desperately clinging as best as they can to core elements of their post- WWII accumulation fix and tripartite class settlement. When we do closely consider the question of a current US market model of capitalism we are confronted with the following evidence: The US never hesi-tated to deploy the force of the state in crisis situations embarking as it did upon massive projects of government orchestrated and funded economic rejuvenation as with the New Deal of the 1930s. The US has always maintained a de facto state policy with regards to gargantuan military outlays and agriculture. As well, the US state has routinely leaped with taxpayer money to bail out major US cap-italist business encountering serious difficulty, demonstrating how the so- called free market is, in the post- WWII US economy, underwritten by socialist princi-ples (we will touch on the most recent excesses in this regard in Chapter 5). US military procurement policies have also been significant for research and devel-opment spillover effects on the private sector. Scholars have thus pointed to affinities between the sort of business- government relations existing in Japan, pegged as “state- led” capitalism, and those existing between US industry and the Pentagon (Coates, 2000, 201–7). In fact the impact of state policy toward the military sector on the consumer durable “market” sector continues to be vastly underappreciated (Aguiar de Medeiros, 2003). Further, the “organization” of major oligopoly firms in the US, as business historians emphasize (as we will too, below) has little to do with markets (Lazonick, 1993). Of course, the forego-ing is intended more as a cautionary note on reading evidence in the MOC debate over a purported market- led case not as an attempt to simply reverse the terms of the debate as protagonists in the fordism/post- fordism debate sought to do. Rather, and this is really the crux of the issue of evidentialization with respect to the US capitalism, there has been a seismic economic shift underway in the world reflected in the trajectory of the US economy. But as will be emphasized in the next chapter not only does this have little to do with markets, but it is not possible to capture the transformation within the MOC debate pre-dicated as it is upon cross- national comparisons. The second key issue arising from the MOC debate is a conceptual one: That is, if the theorizing of imperialism with which this chapter began was overly fixated upon tendencies in the development of capitalism prefiguring socialism, MOC writings are overly fixated, if not conceptually bound, to the persistence of capitalism. The problem for MOC is that while the building of their research program on a premise of the innate embedding of capitalist market- economic life in socially and historically constituted institutional environments offers comfort that the study of capitalism has been cleansed of all vestiges of conventional Marxist economic determinism it effectively elides what is distinctive about capitalism. Yes, capitalism is a socially and historically constituted mode of organizing human economic affairs. And markets spawn in diverse social and


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historical contexts that effect their development. But what differentiates capital-ism from all other historical forms of economy is the inherent tendency of capital to reify human social relations of production and tether human material life to its impersonal, abstract, homogenizing “treadmill” of value augmentation.19 What Chapter 2 captures as the constant of capital is the nexus through which capital satisfies this chrematistic of value augmentation while simultaneously satisfying the general norms of economic life required by any material economically repro-ducible society in history. Where MOC miscarries is not in its systemizing of institutional history in stylized facts per se. It is simply that with no theory at its disposal of the invariable substance or constant that marks its varying ideal type models as capitalist, not only are the constructions of its models and taxonomies ad hoc, but the very labeling of its research program is based on assertion. One final point here: Within MOC writing new institutional economics (NIE)20 does seek to link institutional complementarities to a basic theory of capitalism (see Figure 3.2). MOC NIE interventions commence with neoclassi-cal microeconomic theory of the micro- foundations of economic outcomes. Such micro- foundations are the agency of rational individuals expressing their benefit- maximizing material interests. Without getting unnecessarily bogged down in the multiplex detail of debates within its own literature,21 institutions “matter” to NIE because of the way in which, as the congealing of individual action in “habits”, “rules”, organizations, and so forth, they constrain or “structure” indi-vidual action. The macroeconomic impact of such structuring is factored by NIE into MOC research on the potential of given institutional complementarities for economic growth and global competitiveness. Unfortunately, while such hetero-dox approaches to neoclassical economics are to be applauded for attempting to push the boundaries of their ideologically patrolled discipline, at the end of the day we are still left with no grasp of the historical specificity of capitalism to make the necessary determination about our economic lives. That is, on the one hand, as per our Chapter 2 reference to Polanyi’s economistic fallacy, neoclassi-cal economics conception of material interests is supra- historic, making no dis-tinction among the ways material interests are expressed across varying historical modes of economy. On the other hand, as per our elaboration upon capital in the TPCS, why we need economic science (rather than psychology) to produce knowledge of capitalism in the first place is precisely because the reifying force of the capitalist commodity economy subsumes rational individual agency to capital’s abstract quantitative “collective” chrematistic of value augmentation. Why institutions matter or are “brought in” to the analysis and what sort of possibilities exist for their patterning are questions that can only be answered for a capitalist economy on the basis of our apprehending the commodity economic logical modus operandi of capital as it wields human society and individuals with their self- seeking proclivities for its own self- aggrandizement.


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Stage theory and concretization of the contradiction between value and use valueAre we really left with only two choices in the political economic study of capit-alism? Apprehending capitalist history in terms of objective economic laws or engaging economic history through haphazard subjective systematizations? Drawing upon our exposition of the TPCS in Chapter 1 and work on theorizing stages of capitalism by the Uno approach, let us now collate the insights emerg-ing from our recapitulation of a century of debate over the transmutations of capital and move toward producing a state of the art periodization of capitalism; one which will transcend the above seemingly insurmountable dichotomy and undergird the pressing determinations this book seeks to make. The transformations wrought by capitalism in our economic history, as noted in Chapter 1, are discerned at the outset by observation and empirical studies. Marx’s project to probe beneath the empirical indicators largely relied upon by his contemporaries in their analysis of capitalism led him first, to recognize the ontological peculiarity of capitalism as a subject matter; second, to the necessity of a dialectical epistemology to expose capital’s reifying inner logic. Marx was certainly aware from his immersion in the writings of Hegel that a dialectical theory required closure. As noted in Chapter 1, that this did not emerge as a pre-ponderate concern of Capital followed firstly from Marx’s view that the logic of capital he was unraveling in theory was tending to subsume the totality of human socio- economic relations in actual history. Secondly, Marx believed that long before this process was complete capitalism would be dismounted by socialist revolution. Nevertheless he understood the importance of mediating the move-ment in thought from Capital to history given how in his lifetime, though tending toward such, the subsuming of economic life by capital in history was still far from complete (Albritton, 2007a, 114–26). Because economic phenom-ena across capital’s then short lifespan appeared with predictable distortions, Marx acknowledged they could not be addressed in terms of the inner logic of capital alone. From Uno’s historical vantage point, which also benefited from exposure to the writings of Hilferding and Lenin, it became clear that because capital no longer manifested the tendency toward subsuming the totality of human socio- economic relations in its historical course as Marx believed, the consummation of the dialectic of capital that Marx did not see as a pressing task, became one. That is, in extrapolating the logic of capital to conclusion in the self- contained dialectical thought experiment of the TPCS, a timeless scientific definition of capital emerges to act as a touchstone for all historical determinations over capital (such determinations encompassing retrospective questions of capital’s process of becoming, as well as those of its transformation and passing). Hilferd-ing and Lenin’s response to the so- called Revisionist Controversy also made clear that the transfigurations of imperialism entailed qualitative change in capit-alism from its development as captured in Capital. What they never adequately grasped, however, were the ramifications of their theorizing of imperialism as a


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stage of capitalism for Capital and Marxian political economy as a whole. Uno, in agreement with Hilferding and Lenin that imperialism cannot be treated in terms of a simple historical divergence from the trajectory of nineteenth century accumulation, and informed by his appreciation of the need to consummate the dialectic of capital in the TPCS, arrived at the conclusion decades prior to RT/SSA that Marxian political economic study of capitalism had to be reformulated in terms of three levels of analysis: The TPCS, a mediating stage theory of capi-talist development, and empirical historical analysis of capitalism (Uno, 1980, xxvi, note 4). Where Uno’s work so clearly diverges from that of Hilferding and Lenin in the theorizing of imperialism is that in specifying the relationship between stage theory and Capital there was no question of seeking to ground stages in the extrapolation of a law of capital. To incorrigibly apprehend the ontological dis-tinctiveness and fundamental conditions for the material economic reproducibil-ity of capitalism as an historical society the reifying logic of capital had necessarily to be extrapolated to conclusion in the bourgeois utopia of the TPCS. For Uno the key question in mediating the movement in thought from the self- contained dialectical theory of capital’s abstract inner logic to capitalist history was how to concretize that logic in a fashion which captures the epochal modali-ties by which that that logic is constrained or frustrated. In Capital, and the TPCS, the fundamental contradiction upon which the logic, laws and categories of capital in their entirety is predicated is that between value and use value. Value is the historically specific capitalist side of the contradiction; use value, the trans- historical foundation of all human existence. As we emphasized in Chapter 2 of this book, to capture the deep structure of logical inner connections of all the categories of capital demands that capital be permitted in theory to have its way with the world, neutralizing all use value opposition, to materialize a bourgeois utopia. Given this presupposition of the TPCS, the concretization of the logic of capital in stage theory must begin, according to Uno, with the mater-ial specification of use value and conceptualizing the development of capitalism in terms of the way in which the inner logic of capital is refracted by its confron-tation with the production of stage specific use values22 (see Figure 3.3). The characteristic use values marking the stages of capitalism are wool, cotton, steel and the automobile. This demarcating of stages of capitalism reso-nates with other work which specifies epochs of economic history in terms of the production of these goods or the product types and economic sectors they repre-sent – textiles, steel/heavy chemicals, and consumer durables (Kurth, 1979; Landes, 1969; 1999). As well, there is an overarching common sense order to the production of these use values by capital. Standardized mass production of textiles underpins the emergence of the factory system. Through this, demand is created for mass production of steel. With the modernizing of the factory system, completion of the worlds’ railway networks, construction of global port facili-ties, mass production of automobiles and its associated infrastructure creates renewed demand for steel and a further dynamic sector of mass consumption for capital accumulation.


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With the specification of stage specific use values the next step for stage theory is elaboration upon the form or type of capital required to manage the production of these use values. The paradigmatic mode of capital theorized in the TPCS is industrial capital though, given the assumption of complete reifica-tion in the TPCS, the materiality of industrial capital is considered only to the extent that it accumulates, and wields a capitalistically operable technology complex, in accordance with the market principles of a bourgeois utopia. In Capital’s implicit mixing of levels of analysis alluded to previously Marx also refers to industrial capital as the specific form of capital of the laissez faire economy of mid- nineteenth century England. It is one of the immense contribu-tions of Hilferding, lost in the later periodizing of fordism, to theorize a new dominant form of capital characteristic of a new stage (finance capital of imperi-alism in his case). This stage theoretic endeavor underscores the recalcitrance of the real world of heterogeneous use values to the chrematistic operation of capital. That is, when the logic of capital is faced with managing the production of concrete stage specific use values, what stage theory displays is how capital is forced in historically distinct ways to substantively reconfigure its business/firm structure and accumulation modalities. Of course, from the perspective of histor-ical analysis as a level of analysis in Marxian political economy, while our daily lives are marked by thousands of use values produced by variant production methods, the stage specific forms of capital stand out as the paradigmatically capitalist leading economic sectors of each era.23

It is in theorizing the dominant form of capital in a stage that we are initially led to consider the stage characteristic form of credit/finance and monetary system, though the stage theoretic examination of these is also undertaken in

TPCS – abstract economic theorystudies logical interconnections amongall the categories of capital to definecapital in its most fundamentalincarnation– captures the constant of capital in

the nexus of categories guaranteeing the material economic reproducibility of capitalism as a historical society

Stage theory – concretizes logic of capitalin terms of the ways that logic is refractedby stage specific forms of use valueproduction – periodizes world historic stages of

capitalism– confirms material economic reproducibility

of capitalism within context of stagespecific structures of capital accumulation

Historical analysis – studiescoming into being, transformationand passing of capitalism in history– confirms impact of capital in

historical outcomes– studies historical difference in

capitalism

Figure 3.3 Levels of analysis in the Marxian political economic study of capitalism.


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relation to state support for accumulation and in regards to the international dimension of capital. As the study of our bourgeois utopia reveals money neces-sarily originates in the conditions of generalized commodity exchange and settles into the form of gold money, or forms of money convertible into gold, and its flow in the metabolic interchanges among workers, landowners and capitalists is commodity economically regulated by the law of value. Across capitalist history, however, there exist different types of state regulation of money and banking and financial systems as well as the varying forms of interface between interna-tional and national monetary systems; all needing to be theorized at the stage level in terms of their stage specific type. The answer to the particular question of credit and finance for industrial capital emerging from the TPCS is that all funds for accumulation, whether socialized in the banking system or otherwise, are generated internally through its circuit of accumulation. In the stage of impe-rialism finance capital initiates a process of change in which the socializing of funds to be accessed by capital taps into an expanded array of sources, this feeding the tendency of accumulation to move away from market competition as treated by Hilferding. Stage theory is called upon to deal with this. The next step for stage theory is to explore the type of capital/labor relation attendant to the stage specific form of capital. Hilferding and Lenin never identify a distinct imperialist form of capital/labor relation which serves ongoing capital accumulation. Their concern was largely with the transformed landscape of class struggle for socialism. RT/SSA does place discussion of the discrete post- WWII “wage relation” at the center of analysis. The capital/labor relation also emerges as a component of MOC complementarities. However, as touched on above, and will also be addressed more fully below, RT/SSA and MOC work in this area is vitiated by its disconnect from the study of the commodity eco-nomic logic of capital’s material economic reproducibility as an historical society. In his own stage theoretic analysis of imperialism Uno explores the capital/labor relation through the prism of the interplay between finance capital and the technological complex it operates for steel production; and the ramifications of this for the commodification of labor power.24 Recall from the previous chapter our elaboration upon the tendency toward equilibrium as the constant of capital: There we display the precise commodity economic interrelationships among the categories of capital – central to which is the commodification of labor power – which secure both capital’s abstract chrematistic of value augmentation and the very material economic reproducibility of capitalism as an historical society. Even within the bourgeois utopia of the TPCS, however, resolving the contradic-tion between value and use value to maintain labor power as a commodity places great strain upon capital and requires that the law of value operate congruously with the law of relative surplus population. That is, in the dynamic setting of the capitalist business cycle, as accumulation proceeds apace on the basis of a given technological complex or fixed capital outlay, the absorption of the industrial reserve army in the prosperity phase ultimately precipitates a crisis of overaccu-mulation and general devaluation of capital; a crisis though, which is resolved in


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the depression phase with the reconstituting of the industrial reserve army as capital renews profitable accumulation at a higher organic composition. It would take us too far afield here to examine all the historical intricacies of the business cycles marking the stage of industrial capital characteristic of mid to late nineteenth century UK accumulation.25 Nevertheless, notwithstanding such, the historical synchronicity of business cycles with the renewal cycle of fixed capital; the cycle by which labor power is maintained as a commodity through the absorp-tion and expelling of the industrial reserve army, followed closely that which occurs in our bourgeois utopia. It is instructive in this regard, as a recent study notes, that a sense of fatalism over this oscillation of crisis and reconstitution of accumulation pervaded all social classes in mid- nineteenth century UK confirming the appropriateness of the notion of night- watchman state applied to this era with respect to the managing of macroeconomic outcomes (Gallarotti, 2000, 5). Uno’s point here, then, is that confronted with the “bulkiness” of fixed capital required to produce steel, the stage specific use value of imperialism, not only is capital com-pelled to significantly reconfigure its accumulatory structure toward all those fea-tures treated above by Hilferding – the joint- stock company, bank/industry union, monopoly competition, and so forth – but the business cycle oscillation which reg-ulated the commodification of labor power with commodity economic automatic-ity is also significantly distorted. For example, the massive profits earned in steel production allow monopoly firms to innovate at the end of the prosperity phase of the business cycle, thus avoiding a tightening of the labor market: though this com-mences a trend in heavy industry toward permanent overcapacity. As well, the mammoth scale of steel production enables firms to innovate selectively and main-tain older facilities in part of their industry alongside revolutionized technology; this forestalling the emergence of an excess supply of labor power. This does not mean that business cycles are eliminated in the stage of imperialism. In fact, the averting by capital of crises tendencies in one only exacerbates their explosiveness for the next. Nor is the contradiction of maintaining labor power as a commodity surmounted by finance capital or transposed, as Lenin erroneously suggests, to that of an inter- imperialist rivalry among states. Rather, imperialism is the stage of capitalism where the view crystallizes that the contradictions of capitalism, inher-ing in the capital/labor relation, can be managed by capital through its economic policies, particularly by an appropriate set of state policies reinforced with support from the political, ideological and legal superstructure. Stage theory, therefore, is called upon to theorize a representative type of state policy for each stage as well as a dominant form of state and set of stage specific superstructure supports for capital accumulation. Remember, as touched upon briefly in the closing pages of the previous chapter, we noted that the histo-ricity of the analytical separation of base and superstructure or market and state in the study of capitalism derives from the tendency of capital to reify human economic life. The consummating of this tendency in the bourgeois utopia of the TPCS confirms the possibility of capital forming an economic society purged of all extraneous non- economic non- capitalist interferences. When Marx refers to the alien complexion of capitalism as a human society one thing he sought to


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spotlight is the fact that in its coming into being capital is supported by constitu-ents of past modes of production. The state, as an institution antedating capital-ism, is one of these. It was the “concentrated power” of the feudal state, according to Marx, which was co- opted by capital to break down social com-munity resistance to the marketization of economic life. However, in its trium-phal emergence as the dominant mode of reproducing economic life, capital disavows those crutches it had relied upon as conflicting with its fundamental operations and market principles. Yet, disavowing these as it may, history dem-onstrates that beyond the TPCS capital is never able to neutralize all use value obstacles and wield a human society solely according to its logical inner princi-ples. What stage theory displays is, that as a condition of its material economic reproducibility as an historical society, capital is impelled to bring the state and superstructure back in to manage an expanding array of externalities or facets of human economic life which its inner logic is incapable of handling. In treating the capital/labor relation at the level of stage theory, as well as the question of superstructure support for accumulation, it is incumbent upon us to draw to the fore two vital adjacent issues. The first is the need for stage theory to elaborate upon the stage specific forms of capitalist crises. As noted in the previ-ous chapter, the theory of Capital reconstructed as the TPCS is in toto a grand crisis theory displaying the multitudinous points at which capital accumulation is prospectively compromised. In the consummation of the dialectic in a bour-geois utopia, wherein capital reveals itself for what it really is, the pervasive crises tendencies of capital accumulation are ultimately commodity economi-cally surmounted. This is even the case for the potentially most combustive hurdle capital faces: the maintenance of labor power as a commodity and sus-taining of its social relations of production under conditions of ongoing accumu-lation. That is, as revealed in Chapter 2, it is in the depths of depression, with capital being violently torn asunder, that capital is compelled to technologically innovate in order to maintain labor power as a commodity. Stage theory, in its very formation at the point where the logic of capital is refracted by a stage spe-cific form of use value production, may also be viewed as a kind of “crisis theory” of an epoch of accumulation. But, in studying capital at the stage level, theory must account for the fact that both the gestating of capitalist crisis and the specific ways in which stage characteristic crises are averted involve varying degrees of extra- economic encumbrance and force. RT/SSA dichotomizing of “endogenous/exogenous” forms of crisis, terminology borrowed from neoclassi-cal economics, is misleading in this regard as it suggests that within the more concrete context of capital accumulation analyzed at the mid- range, stage level of theory, it is possible to discern “pure” economic (endogenous) tendencies toward crisis which institutions attempt to manage or “regulate”. This is counter- posed to neoclassical economics which claims that in actual capitalist history pure economic tendencies induce equilibrating outcomes unless disrupted by exogenous interferences. The fact is, however, that stage theory captures tenden-cies of accumulation in the partially de- reified context in which the logic of capital is already refracted by the demands of stage specific forms of use value


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production and capital is supported to varying degrees in non- economic ways. Elaborating upon stage specific forms of crises must recognize this (we will return to this issue again below). A second issue arising from stage theoretic analysis of the capital/labor rela-tion is that of class struggle. In the bourgeois utopia of the TPCS, as discussed in the previous chapter, social classes or subject positions are personifications of economic categories, and their interrelations defined according to the logical inner relations of capital accumulation. With respect to labor power, the unique use value implications of which are the fact of its being inseparable from the body of a living human being and that as an input like land it cannot not be reproduced capitalistically, within our bourgeois utopia, whatever obstacles or potential resistances might flow from it as such are neutralized in conformity with the abstract requirements of value augmentation. Outside the reified envir-onment of our bourgeois utopia, where the subject position of the working class is no longer maintained with commodity economic automaticity, the potential for labor to resist commodification given its pivotal role in capital accumulation is immense. Stage theory studies the particular types of resistance and struggle characterizing the stage specific form of capital accumulation. Pointed questions about social class and class struggle in the current conjuncture will figure in the analysis of Chapter 5 of this book. The next consideration for stage theory is the geospatial or international dimension of accumulation. Again, the basic premise of stage theory is the con-cretization of the contradiction between value and use value. It is the recalcitrance of concrete use values to value subsumption which refracts capital into its stage specific forms. In our bourgeois utopia, in which use value resistances are neu-tralized, capital materializes a global commodity economy: there are no borders, states, international trade; no “inside” and “outside” as all that might have resided outside is commodified in the TPCS according to the exigencies of value aug-mentation. That capital’s actual historical march across the planet has been radic-ally uneven is due precisely to the panoply of actual use value obs tacles it faces. Stage theory captures this unevenness commencing with the theorization of capital at the point of its most advanced geospatial site of accumulation for each stage. It follows this up with the theorizing of the stage specific international dimension of accumulation to grasp the way in which the geospatial spread of accumulation is shaped by the advanced form capital assumes in the dominant capital accumulator of the stage. Put differently, the so- called “unit of analysis” question which has bedeviled critical political economy is resolved in the Uno approach in terms of the level of analysis. Though stage theory is abstracted from the mode of capital accumulation of the dominant and characteristic capital accu-mulator of a stage it is neither a theory of “national” capital or of capital as a “world system”.26 Theorizing a stage including the international dimension of capital is an exercise in capturing patterns of accumulation which most idiosyn-cratically reflect the operation of capital in the stage as a whole. The constituents of stage theory as they have been outlined are summarized in Figure 3.4.


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Before we proceed to operationalize the periodization research agenda in a fashion which allows us to optimally contextualize the debate over globalization there are three further issues to be dealt with in regards to stage theory as a level of analysis in Marxian political economy: The first is the cardinal question of the epistemology of stage theory as a mediating level of analysis.27 The TPCS which extrapolates the abstract inner logic of capital to conclusion in a bourgeois utopia utilizes a dialectical epistemology appropriate for unraveling immanent intercon-nections among categories of a self- synthesizing self- reifying subject matter – capital. The reifying logic of capital guides the construction of stage theory which concentrates upon stage specific forms of capital accumulation. But stages of capitalism cannot be deduced from the logic of capital or “chain linked” to the abstract essence of capitalism, as a mid- range theory detractor above argued. This is so because, on the one hand, the concrete use value context of capital accumulation is not prefigured in the abstract logic of capital but rather is histori-cally contingent. And, on the other hand, managing the production of concrete stage specific use values refracts the commodity economic logic of capital demanding that accumulation proceed through a matrix of superstructure sup-ports. To be clear on what kind of knowledge stage theory contributes to Marxian political economy in its role as a mediating level of analysis also requires understanding its relationship to historical analysis. As a level of analy-sis in the Marxian political economic study of capitalism historical analysis is concerned with diversity, process and change across capitalist history. Historical analysis is also charged with the complex task of discerning the extent to which

TPCS – abstract logicof capital consummated

in the theory of a bourgeois utopia

Concretization of logic

of capital as it is refracted

by recalcitrance of

stage specific use values

Stage specificform of use

value production

Stage specificform of capital

Stage specific statepolicy and dominant

form of capitalist state

Stage specificpolitical, ideologicallegal superstructuresupport for capital

– Stage specificinternational dimension

of capital– Geo-spatial locationof advanced form ofcapital accumulationand identification of

dominant accumulator

Stagetheory

Stage specificcredit/financeand monetary

system

Stage specificform of crisis

Stage specificform of class

struggle

Stage specificcapital/labor

relation

Figure 3.4 Stage theory as a mediating level of analysis in Marxian political economy.


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capital constitutes a key causal force in historical outcomes or whether the latter reflect the impact of other social forces such as patriarchy or race for example. Stage theory therefore, as per cues emerging from language used to set out stage categories above – “forms”, “types”, “patterns” – operates with a structural epi-stemology in abstracting categories from capitalist history guided by the TPCS. These abstractions, however, are not the one sided ad hoc constructs of ideal types and stylized facts recruited by MOC. Stage theory produces material types of capital accumulation. Albritton (1999, 115) puts it this way:

Thus the central categories of stage theory are not average types, genetic types, teleological types, or extreme types. For example cotton manufactur-ing, as the most typical form of capital in the stage of liberalism, is a mater-ial type abstracted in accordance with knowledge of capital’s inner logic. It is not arrived at by some kind of averaging, by imagining an extreme type, or by abstracting from an origin or telos. It is that form of capital which is most capitalist and most successful and typical in its operation, but this can only be determined by referring to a theory that precisely informs us exactly what capital is.

The second issue, quite simply, is the naming of stages. Given that the crux of stage theory is apprehending the logic of capital refracted by stage specific forms of use value production: this along with the fact of capital accumulating within a matrix of superstructure supports, I find it felicitous to follow Hilferd-ing, as does Uno, to name stages according to the stage specific state policies the dominant form of capital enlists to support accumulation and ensure the material economic reproducibility of capitalism as an historical society. Third, and this question will be revisited repeatedly throughout this book, particularly in regards to the necessity of sorting out complex issues arising from the interfacing of MOC debate and the globalization controversy: What are the world historic stages of capitalism? Marx and Uno share the view that the origins of the capitalist mode of production antedate the industrial revolution. What Marx referred to as the “formal subsumption” by capital of the labor process occurs in Britain in the “putting out” system of wool production under the aus-pices of merchant capital. This identifiable form of capital is supported by a stage specific policy after which the stage is named – mercantilism. The stage of capitalism in which the operation of the stage specific form of capital most closely resembles capital accumulation theorized in the TPCS is that of indus-trial capital in cotton production of mid- nineteenth century Britain. The policy of industrial capital after which the stage is named is liberalism. We have already addressed the question of imperialism as the stage specific policy of finance capital. Germany, the US and UK share the position of dominant capitalist accu-mulator. The final stage of capitalism, and why this is so remains to be argued below and in the following chapter, is the stage of consumerism. Its characteris-tic form of use value production is the consumer durable sector with the automo-bile as the representative commodity. The stage specific form of capital is


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corporate capital and its characteristic geospatial locale of accumulation is the US. As per our discussion above of the epistemology of stage theory the stage specific forms of capital are abstracted from the temporal juncture of each stage or “golden age” in which their force is most apparent (see Table 3.1).

The stage theory of consumerism and the limits to capitalLet us finally revisit questions of post- WWII capital accumulation through the prism of the Uno approach to the stage theory of consumerism. Just to review a few key points of the foregoing discussion to contextualize what follows, stage theory demonstrates that in no stage of capitalism is the economic self- subsistent. Nevertheless, from the germinating of capital in the stage of mercantilism through the stage of liberalism, all the signs were that capital was tending toward its ideal image to materialize a bourgeois utopia in history. However, what the theorizing of imperialism confirms is the asymptotic tendency of capital accu-mulation to move away from the pure commodity economic principles captured in the TPCS. Again, there is no question of a capitalist teleology: stage theory captures the logic of capital as it is refracted by accumulation requirements of stage specific use values. Further, though the sequence of use value production across capitalist stages – wool, cotton, steel, automobiles – makes economic sense, there is no logical inevitability of a stage. Historical analysis of capitalism displays how intervals between stages are punctuated by debilitating crises and/or war. And the emergence of a new stage is a contingent process entailing far- reaching socio- economic change not in any way prefigured in an earlier stage of capitalism. Numerous appellations have been applied to the post- WWII stage of capital-ism. Consumerism, as but another, is offered, as we have argued as a way of highlighting the fact of accumulation in a stage requiring state policy and super-structure support to ensure the material economic reproducibility of capitalism as an historical society. Despite superficial resemblance on points of description the theorizing of consumerism differs from RT/SSA at crucial instances of both epistemology and substantive analysis. First, theorizing consumerism com-

Table 3.1 World historic stages of capitalism

Stage (golden age and policy)

Characteristic use value

Dominant form of capital

Predominant accumulator(s)

Mercantilism 1700–50

Wool Merchant capital Britain

Liberalism 1850–73 Cotton Industrial capital Britain

Imperialism 1890–1914

Steel Finance capital Germany/Britain/US

Consumerism 1950–70

Automobile Corporate capital US


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mences with an explicit link to Marx’s Capital by specifying the material use value context of value augmentation. That is, as a stage of capitalism, consumer-ism is characterized by the production of consumer durables with the automobile being the representative type.

Box 3.3

Automobile productions expansive backward and forward linkages and its sheer material accouterment are unrivalled by any other capitalist production sector. And, as with steel in the late nineteenth century, a national automobile industry emerges in the stage of consumerism as the hallmark of modern industrial develop-ment; just as the automobile is idiosyncratic of post- WWII life (Law, 1991). In fact, one needs to look no further than the mainstream business press to recognize that automobile production constitutes the bell- wether industry for the profitability of global capital accumulation in the stage of consumerism. It has been estimated that the automobile industry and all sub- industries related to it account for a full 25 percent of real US GDP: And, since 1948, every US recession “aligns with one or more years of negative unit sales growth in the auto industry” (Osenton, 2004, 190).

Remember, use value is the trans- historical basis of all human existence: For capital to form an historical society requires a use value space that it is able to wield according to its principles of operation. Capital thus comes into being to satisfy human material wants across a particular use value space at a given level of development of productive technique and like other modes of economy passes from history as its ability to manage human material reproductive affairs is exhausted. In other words, the fundamental contradiction of capitalism is always use value impediments to value augmentation. Achieving clarity over the compass of human use value existence subsumable by the march of value aug-mentation even with state policy and superstructure support is necessarily an enduring component of periodizing capitalism. The disconnect of RT/SSA through the post- fordism debate into the MOC work from this signal aspect of Marx’s research agenda has led to the folly of theorizing stages by chasing each new fad as offering a fundamental transformation and rejuvenation of capitalism. The theorizing of corporate capital as the stage specific form of capital for the stage of consumerism is an integral step in capturing the refraction of capi-tal’s inner logic at the stage level as capital surmounts discrete use value obsta-cles to cement its material economic reproducibility as an historical society. Though finance capital of imperialism differed in historical detail among domi-nant imperialist accumulators Germany, the US and UK (Uno, unpublished type-script; cf. Albritton, 1991, Chapter Seven), the family resemblance finance capital of each reflected as a stage specific type of capital diverges qualitatively from corporate capital of consumerism. Corporate capital shares the joint- stock form of finance capital, as well as its tendency toward monopoly/oligopoly


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competition, but is marked by a series of determinant stage specific features flowing from the exigencies of managing the production of a complex and expen-sive use value like the automobile. Large agglomerations of capital certainly ante-date the stage of consumerism – these existed in steel and railroads, for example, as did the nascent corporate form – but such firms’ operations essentially involved a single core and few related business activities. Corporate capital’s successful accumulation, on the other hand, as we abstract from the US automobile industry, quickly came to depend upon reliably coordinated supply and distribution of thousands of standardized parts and components. Ultimately corporate capital would integrate diverse operations running the gamut from research and product design through production and distribution to advertising and marketing. Predominant not only in automobiles but consumer durables generally, as well as chemicals and petroleum, agricultural and industrial machinery produc-tion, and transportation equipment, corporate capital embodies four determinant stage specific transformations in the structure of accumulation.28 First, to coordi-nate its vast scale of multi- divisional and multi- plant activities corporate capital engineers a revolution in business organization with the radical separation of ownership and management (Dumenil and Levy, 2001; 2003).29 Under the cen-tralized command of top management in the corporate headquarters a profes-sional managerial cadre or “technostructure”, as J. K. Galbraith famously described them, assume responsibility for the techno- dynamism and profitability of each corporate unit. Second, while finance capital eschewed price competition and even relied upon territorial aggrandizement to covet raw material supply it nevertheless engaged in “external” arms length transactions with suppliers and customers. Corporate capital could only at its peril leave accumulation to the vagaries of the market. Rather, corporate capital is characterized by its “internal-ized” intra- corporate transactions30 and “transfer pricing”, as well as shaping demand to meet supply of consumer durables through all- pervasive marketing and advertising initiatives which, when juxtaposed with collective managerial prerogatives toward economic planning and programming, serve to consign notions of “market economy” in the stage of consumerism to the dustbin of history and neoclassical economics textbooks. Third, corporate capital offsets the high fixed costs of consumer durable production not only by lowering of unit costs with high throughput as noted in RT work on fordism, but in extending the scope of its operations both through introduction of new product lines and geospatial expansion (we will return to this latter point in discussing the interna-tional dimension of capital in the stage of consumerism). Finally, these transfor-mations of the structure of accumulation of corporate capital are complemented by a transformation in financing practices from that of the bank/industry union of finance capital. During the golden age of consumerism corporate capital gen-erated the bulk of investment funds internally. One salient aspect of corporate capital financing in this regard is its tendency toward self- financing as the case of General Motors (GM), spawning its own financial institution, the General Motors Acceptance Corporation (GMAC) to lend money to consumers for the purchase of GM automobiles, illustrates. Corporate capital also initiated an inter-


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corporate commercial paper market and at points tapped into the so- called Euro-dollar market but did not rely on equity to any significant extent (Baskin and Miranti, Jr., 1997, 242–5). In the light of the foregoing discussion of corporate capital let us briefly reconsider a lingering issue from the MOC debate on historical variation in so- called corporate governance and the purported existence of a “market coordinated” model of capitalism in the post- WWII period. Though the periodic-ity of the MOC debate follows what is here understood as the golden age of con-sumerism, in terms of its notion of so- called “path dependence”, MOC views US capitalism from the post- WWII period as manifesting a propensity toward a liberal model as per the MOC typology. As we have seen, however, the rise of the joint- stock company reflects exigencies of capitalist management of the heavy technology required by steel production – the stage specific use value of imperialism. The qualitative transfiguration of the joint- stock company under the use value constraints of automobile production marking the stage of consumer-ism – not only necessitated by increasingly expensive and elaborate technolo-gical outlay of automobile production but the exactions of coordinating multiplex backward and forward linked business activities – forcefully distends the move-ment of value augmentation away from both the price mechanism and the cycles of renewal of fixed capital captured as fundamental self- regulating market prin-ciples of economic reproduction in the TPCS. The eschewal of markets and re- organization of capital in the corporate capital form effecting the aforementioned radical separation of management and ownership are even tacitly recognized in mainstream economics with its spawning of new literatures on “transaction costs” and the “principal/agent” nexus (Baskin and Miranti Jr., 1999, 288–9). As discussed in Chapter 2 of this book in terms of the “cunning of capital”, while the dream of capital to escape from the constraints of use value production through its transubstantiation into a commodity or asset with a price is fore- grounded in the TPCS, the realization of this dream never actually takes place in a bourgeois utopia. Capital investment in the material economic reproduction of industrial capital may be supplemented by recourse to a money market where investment, depreciation, contingency, etc. funds left “idle” at points in the busi-ness cycle and socialized in the banking system are made available at a given rate of interest. The fetishism inhering in the category interest derives from the subli-mating of capital’s world historic idiosyncratic production centered activity within the circuit M . . . M′, though the case remains that in fact banks are not lending their own money but that of industrial capital (to itself). Equity markets, however, involve idle funds invested by a financier class that comes to own such funds through means other than the fundamental commodity economic operation of industrial capital specified in the TPCS. Further, the “capital” held in shares as either entitlement to dividends from company profits or an asset to be disposed of in the capital or equity market does not become a commodity directly except in the rare situation where a business is closed and its parts sold off. Rather, capital is actually transposed into a commodity as per the dream of capital through its redefinition as “fictitious money capital”.31 However, notwithstanding the


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machinations of financiers in the fictitious capital/equity market, or the separate motion of fictitious capital so animated, the material economic reproducibility of capitalism as an historical society hinges on the motion of real capital M . . . C (LP/MP) . . . P . . . C′ . . . M′ as it accumulates under the constraints of given use value obstacles and the social class relations of the capitalist mode of production. The discourse on corporate governance thus continues the erroneous percep-tion spawned in the stage of imperialism, as the use value environment of accu-mulation first exploded the ability of capital to overcome its contradictions according to its fundamental commodity economic principles alone, that the con-tradictions of capital could be ameliorated by a particular set of policies. The corporate governance literature also exemplifies the extreme fetishism of capital and its innate cunning in that in seeking to differentiate varieties of capitalism according to profiles of fictitious capital operators the literature in effect is making determinations over capitalism according to a criterion that is not even a quintessential marker of capital. Therefore, if we bracket differences in profiles of shareholders among core capitalist economies (which, notwithstanding these differences, nevertheless manifest a clear family resemblance and definite func-tional congruity, as in the fact that during the golden age individuals held huge blocks of stock for extended periods allowing management to make similar long term financing decisions as would be the case where stock was held by institu-tions) and turn the focus back upon the material economic reproducibility of capital within the context of a stage specific use value space, corporate capital, as a type of capital the fundamental modus operandi of which is at a great dis-tance from commodity economic market principles, is discernable across all post- WWII core capitalist states. Key empirical indicators of the capital/labor relation of consumerism have been documented in RT/SSA work and need not be itemized once again at this point. What desperately needs to be emphasized here is the way the commodifi-cation of labor power – the sine qua non of capital – is maintained by the capital/labor relation under constraints of capitalist management of the production of the stage specific use value complex of consumerism. Critics of RT/SSA and players in the MOC debate have made much of the variance in class compro-mises marking accumulation in the post- WWII period among core capitalist states. However, from the stage theoretic perspective of consumerism, if there is an operative notion to be fastened onto in those literatures – and I find the term originated in SSA work most felicitous – it is that of a “class accord”. Notwith-standing its cross- national variances it is precisely the existence of a class accord as a negotiated give and take bargain between corporate capital and increasingly organized labor which differentiates the capital/labor relation of the stage of consumerism from types of capital/labor relations marking prior stages of capit-alism. In the capitalist stage of liberalism the working class is commodified largely by commodity economic means as both it and capital are unorganized and workers receive the product of their necessary labor at the socially and historically constituted subsistence level. The wage/remunerative aspect of


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commodification of labor power is carried over from liberalism to the stage of imperialism, but with the stirrings of mass labor organization the commodifica-tion of labor power required policy counteroffensives by capital both on the shop floor with the disciplining of workers by taylorism and direct violent strike and union busting initiatives by capital. Of dominant imperialist accumulators Germany exemplified the tendency to add some carrot to the stick of managing labor power as a commodity with a paternalistic Sozialpolitik (Albritton, 1991, Chapter Seven). The stage specific class accord type of capital/labor relation marking consum-erism involves the paradoxical situation where to maintain labor power as a commodity demands capital support its partial decommodification. Make no mistake about it: this decommodification did not take place on the shop floor where the taylorist division of labor is extrapolated in our paradigmatic consum-erist industry, automobile mass production, into the post- WWII period. And, as authoritative research makes clear, nuances such as the so- called flexible work teams of JIT production in Japan did little to exorcize the overall drudgery, rig-orous physical exertions and regimented intensity of assembly- line labor. Where partial decommodification of labor power manifests itself is in the corporatist bargaining by unions which exacted for auto workers in the US a raft of benefits – health care, pensions, unemployment insurance – and real wage increases that persisted into the 1980s rendering autoworkers, as Ruth Milkman puts it, “pris-oners of prosperity” (Milkman, 1997, 14–15, 22–7). We will treat the role of the state and superstructure in relation to this momentarily: What is important to grasp here is how the “prosperity” in the partial decommodification of labor power is tantamount to the very ability of corporate capital to ensure the funda-mental material economic reproducibility of capitalism as an historical society. As established by the TPCS, the constant of capital securing capital’s mater-ial economic reproducibility, as effected through the commodity economic sym-biosis among its key operational categories – the sine qua non of which is the commodification of labor power – faces a paradigmatic crisis threat in the macr-oeconomic context of accumulation in the form of overaccumulation of capital in relation to the size of the working population. This paradigmatic crisis tend-ency marking our bourgeois utopia, and largely recapitulated in the stage of lib-eralism, is resolved in oscillations of the business cycle from phases of average activity or equilibrium to depression marked by significant devaluation of capital and then renewal of accumulation at a higher organic composition; cycles in which the commodification of labor power is maintained with subsequent recon-stitutions of the industrial reserve army. If what Uno referred to as the bulkiness of fixed capital demanded finance capital accumulate by increasingly holding such cyclical oscillations in check these become anathema to corporate capital in stage of consumerism. Corporate capital wields its ever more bulky and expen-sive capital outlay through increasingly effective organizational modalities. It innovates selectively at will with access to variegated sources of finance. Thus, it is in the twin specters of prolonged labor stoppages and, of course, given that the stage of consumerism is predicated upon mass production of consumer


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durables (the automobile being the representative type), that of underconsump-tion, in which impediments to the treadmill of value augmentation and vulnera-bility of corporate capital to crises of overaccumulation reside. Hence, the constant of capital through which capital simultaneously fulfils its chrematistic of value augmentation while guaranteeing the material economic reproducibility of capitalism as a human society (this by allocating resources in socially necessary quantities within the constraints of its social class relations of production) – manifests itself in the capitalist stage of consumerism in what we may felicitously refer to as a stage specific type of “equilibrium” tendency. Our use of the term equilibrium here, of course, has nothing to do with the way the term is used in bourgeois economics for all the reasons given in Chapter 2. It also does not directly reflect the period of average activity capital reaches with commodity economic automaticity in the prosperity phase of the business cycle in our bourgeois utopia. Within the context of stage theory, the economic can no longer be considered self- subsistent, thus the term is applied here to capture the specific form the imbrications of economic and extra- economic categories assume, enabling capital to satisfy the general norms of economic life and repro-duce human material existence in the stage of consumerism. That is, in manag-ing the production of the use value complex of consumer durables corporate capital must simultaneously ensure an allocation of resources which meets demand for basic goods from the direct producers while maintaining the capital/labor relation through which value is augmented. The notion of an equilibrium tendency of consumerism deals with the modus operandi of corporate capital as it meets the above test: the high profits on high fixed cost investment of corpor-ate capital demands that the requisite high throughput of consumer goods (supply) is absorbed by ever- expanding mass consumption (demand). This entails the aforementioned extra- economic programming on the part of corporate capital as well as the partial decommodification of labor power (and, as we shall see, an extensive array of superstructure support). Under such conditions the capital/labor relation in the form of the consumerist class accord is maintained and value augmented by dampening the cyclical oscillations of capital (the crisis and reconstitution of the industrial reserve army depicted in the TPCS (though, as will be treated below, ameliorating the impact of business cycles carries explosive implications). The RT/SSA tradition does generate somewhat of a par-allel notion of equilibrium in its perspective of accumulation being “regulated” (Altvater, 1993, 42–6). However, we have already pointed out how the RT/SSA analytical framework never adequately treats the fact of the economic no longer being self- subsistent in the stage context as we have further noted their paucity of concern with the fundamental material economic reproducibility of capitalism as a human society. To better highlight the import of a partial decommodification of labor power for consumerist accumulation let us turn to questions of the stage specific form of state and superstructure. Our earlier discussion of RT/SSA periodizing of capitalism corroborates a persistent criticism of the RT/SSA research agenda (Jessop and Sum, 2006) that the state is inadequately specified in their mid- range approach to accumulation.


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However, from the perspective of the Uno approach to the periodizing of capit-alism and the theorizing of consumerism as the post- WWII stage of capital, it is not only the paucity of analysis devoted to the state, but the wholesale occlusion of the role of the superstructure in accumulation which constitutes a gapping lacuna in RT/SSA work. (It should be added here that this occlusion largely marks the whole spectrum of approaches to post- war accumulation.) For besides the paradoxical reliance of consumerist capital upon the partial decommodification of labor power the fact is that in the stage of consumerism accumulation is necessarily imbricated in a matrix of extra- economic supports. The arsenal of alien accumulation props administered by a burgeoning bureauc-racy – social wage, medical and old age social security, debt expansion, infra-structure investment, military spending, monetary and fiscal policy, and so forth – operate parallel to the “private” technostructure programming and planning of corporate capital to counter cyclical oscillations of accumulation and maintain capital’s stage specific lifeblood of expanding aggregate demand. Between 1950 and 1973, for example, government spending at both federal and state levels cal-culated as a portion of US Gross Domestic Product (GDP) grew from 23 to 35.8 percent with the share of welfare payments alone increasing from 8.9 to 20 percent of federal outlays (van Creveld, 1999, 361–2). This coalescence in the role of the stage specific Keynesian interventionist state (see Box 3.2)32 and corporate capital market eschewing policy effectively pushes accumulation in the stage of consumerism furthest away from the commodity economic manage-ment of the law of value than any point in capitalist history with the exception of the stage of mercantilism33 (with the difference being that accumulation in the stage of mercantilism was moving asymptotically closer to the ideal image of capital captured in the TPCS, rather than asymptotically away as is the case with consumerism).

Box 3.4

Achieving analytical clarity over the crucial stage specific role of the Keynesian interventionist state in support of capital accumulation in the capitalist stage of consumerism has been thwarted in part by the historical variance in the consumer-ist state’s application of demand management. However, as an instructive main-stream overview of the rise of welfare states in advanced capitalist OECD economies in the post- war period notes, similarities in social wage provision across states “far outweigh their differences” (Frieden, 2007, 242). And, as I have argued elsewhere (Westra, 1996), and recent research affirms, Japan, often upheld as an anomaly, in fact also maintains a welfare state with coverage and supports in line with states in Western Europe (Kasza, 2006). The US state, though devoting con-siderable largess to military spending, did significantly expand constituents of its welfare state during periods of what I refer to as the golden age of consumerism (Waddell, 2001). This does not mean, of course, that there was no difference in government spending priorities as Japan’s funding of infrastructure development, and Britain and Western Europe’s concern with welfare illustrate. An interesting way of capturing the historical variance among key capital accumulators in the


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stage of consumerism, which also holds fast to the fact that the stage specific mode of accumulation of consumerism necessitates a massive state support system for capital, is to view Britain as the classic welfare state, the US as a warfare state (though increasingly veering toward a welfare state during the Vietnam War years), and Japan as the entrepreneurial state (Kato, 1984).

The hypertrophied role of the Keynesian interventionist state is but a facet of an extensive superstructure matrix of supports necessitated by capital in the stage of consumerism to ensure its material economic reproducibility as an his-torical society. Capital accumulation in the stage of consumerism is sustained by three powerful ideological trends.34 First, the projection of its ideology of mass consumption has all the trappings of a secular religion in the way it establishes an innate equivalence between ongoing mass consumption and human happi-ness itself. This ideology of mass consumption, promoting the limitlessness of desires to be satisfied by commodities, is disseminated by an all- pervasive mass media – an arm of corporate capital itself – further reinforcing our position that the notion of a “market” in the stage of consumerism can be accepted only in the most attenuated sense. Second, though socio- economic life of consumerism is marked by the existence of immense collectivities such as corporate capital plan-ning and programming and the welfare/warfare/entrepreneurial Keynesian inter-ventionist state, consumerist subjectivity is interpolated by an ideology of hyper- individualism where each consumer tends to view themselves and others in terms of their seemingly unique individual tastes and choices. Third, to counter the actualities of socialization and blunt political aspirations of labor, hyper- individualism is topped up by the vehement ideology of anticommunism (more on which will figure into the discussion below on the international dimen-sion of capital). Further, the stage of consumerism is characterized by a specific form of politics shaped in part by a spillover effect from its class accord. The latter along with the ideologies of consumerism foster an eclipse of class from politics by effectively converting working people of all stripes into a mass of consumers: differentiated to be sure by their incomes, but similarly reduced to casting dollar ballots for the commodities they desire as they cast electoral ballots for promises of continuing “prosperity”. Political legitimacy in the stage of consumerism has thus always tended to flow less from support for what limited social redistribution did occur and more from the ability of government to secure uninterrupted mass consumption of consumer durables. What Albritton dubs the “automobile – suburbia – television complex” (Albritton, 2003; 2007) crystallizes as the material locus of advertisings’ manipulation of needs, con-trived atomization, façade of so- called “middle class” life, and stunted politics (where despite over two centuries of a democratic constitution in the US dissent-ing voices have been so effectively extirpated).35

In treating the international dimension of capital in the stage of consumerism it is important to reiterate that stage theory abstracts a stage specific material type or pattern of international capital from the geospatial site in which the stage specific form of capital emerges in its most advanced form. This does not


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mean of course that the study of the most advanced and characteristic type of capital exhausts the study of capitalism in a stage or that abstracting a pattern of international capital from the form it assumes in its geospatial core site substi-tutes for the analysis of the way in which capital accumulation actually proceeds throughout the globe in a stage. Rather, the issue is one of maintaining a clear separation between stage theory that is concerned with predominant world his-toric structures or types of accumulation and historical analysis as a level of analysis in Marxian political economy which focuses upon diversity, process and change. RT/SSA work, which I have readily acknowledged contains similarities in identifications of empirical indicators of post- WWII accumulation with the theorizing of consumerism in the Uno approach, miscarries on this cardinal epis-temological question. It is never made clear in RT/SSA work what relation the theorizing of fordism and the post- WWII SSA in the US bears to capital accu-mulation elsewhere; this resulting in the perpetual generation of ever- more cat-egories of fordism (for example, “flex- fordism”, “delayed- fordism”, etc.) to account for empirical differences. Further, in the conceptualizing of the “institu-tional form” of the state in the international economy and “Pax Americana” (the latter is actually a misnomer given how US hegemony was anything but peaceful as citizens from Vietnam to Chile can attest to) RT/SSA never clarify whether their analysis seeks to capture the actual historical process of US hegemonic global transfer of components of its political economic system or periodize capit-alism as a world historic form of accumulation as their research program initially claimed. This opens up their work to the critical charge that it is simply reading off historical complexity as a function of mid- range structures. Theorizing the international dimension of capital in the stage of consumerism necessarily requires an understanding of the international dimension of corpor-ate capital. Global integration in the stage of imperialism under the auspices of finance capital was extensive. But it largely involved arms length trade between independent companies and international portfolio investment. However, as we have noted, it is obligatory for corporate capital in its managing the exigencies of accumulation in consumer durable industries – the automobile being the stage specific use value – that it generate parallel economies of so- called scale and scope: The former necessitated by the coordination challenges of the sheer material accoutrement of automobiles; the latter driven by the constant attempt to offset high fixed costs of ongoing investment by gaining competitive edge in other product lines as well as regional and international markets. From the outset corporate capital assumes the form of the multinational corporation (MNC) the global activities of which are characterized by the internationalization of pro-duction. While we will treat the overall significance of vicissitudes in patterns of international trade within the context of our examination of globalization debate in the following chapter, here it may be importantly emphasized that MNC activity substantively reconfigures the composition of global trade toward that characterized by trade which is increasingly intra- industry and intra- firm as per its inherent market eschewing prerogatives and exigencies of its economies of scale and scope. The movement of international capital underpinning the


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internationalization of production is characterized by foreign direct investment (FDI), sub- species of which include international subcontracting, international technology licensing, patent and purchasing agreements, international manage-ment contracts and so forth. In contrast to the internationalization of trade in commodities characteristic of liberalism and the internationalization of portfolio investment of imperialism, the internationalization of production idiosyncratic of the international dimension of capital of consumerism opens the door for the emergence of a genuine integrated international division of labor for the first time in the history of capitalism. Concomitant with MNC internationalizing of production is transnational bank (TNB) internationalization of finance. TNB operations evince an increasing global reach to accommodate shifting finance and credit requirements of MNC capital investment and commercial endeavors. As well, the partial decommodification of labor power in the stage of consum-erism creates new sources of idle funds for banks to socialize as the rise of the automobile – suburbia – television complex places new demands upon the TNB for provision of credit and financing. Global economic intercourse across capitalist history proceeds through the reigning international monetary system. As we have noted, gold emerges in the “global” economic space of our bourgeois utopia as that commodity assuming the role of universal equivalent or money. It is therefore instructive that gold actually becomes the universal equivalent in the world historic stage of liberal-ism in Britain the dominant and characteristic capital accumulator of the stage. By 1871, as historical analysis of capitalism displays, the gold standard was extended from Britain to many of its colonies and trading allies. And, by 1879, the gold standard was adopted by most of the industrialized world. The gold standard based international monetary system conferred upon global economic activities – trade, investment, credit, payments, travel and so forth – the requisite predictability for their flourishing. So invariant were exchange rates among cur-rencies “that, it is said, schoolchildren learned them by rote because they seemed as stable as the multiplication tables” (Frieden, 2007, 6–7). Notwithstanding the fact captured in our stage theoretic engagement with imperialism, that commod-ity economic principles of capital accumulation begin to be compromised in the dominant capital accumulators of the stage, it is during the heyday of imperial-ism that the gold standard international monetary system is further consolidated by its adoption in Japan, major Latin American states, Thailand and India. In fact, as a direct consequence of international monetary order offered by the gold standard, the early years of the twentieth century prior to 1914 are widely accepted as the period of capitalist history in which the world economy grew at the most rapid pace ever and trade levels increased exponentially to points never again experienced until the twenty- first century (though, what “trade” constitutes in the stage of consumerism and after differs considerably from imperialism). Even more importantly, up to 1914 the gold standard supported the growth of international finance seeking secure investment outlets by providing it with a kind of “good housekeeping seal of approval” for domestic policies of partici-pating states (Frieden, 2007, 16–20).


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Though bourgeois economics debate over the jettisoning of the gold standard and turn toward economic autarchy in the interwar period has never been framed in these terms, the fact is that the changing use value space of capital accumula-tion demanded a new, to use the present buzzword, international financial archi-tecture, to manage a global economy the component parts of which necessarily operated at a great distance from market principles. Under the stage specific con-ditions for successful capital accumulation in the stage of consumerism – a class accord predicated upon the partial decommodifying of labor power manifested in rising wages and benefits, low levels of unemployment and expanding mass consumption; the hypertrophied Keynesian interventionist state marshalling its myriad countercyclical policy tools; the requisite shift of domestic monetary policy away from gold toward fiat currency to accommodate inflationary tenden-cies inherent in consumerist debt expansion – the disciplinary constraints the international gold standard places on domestic policy were no longer suitable for capital accumulation. Following extensive debate, the Bretton Woods Monetary System (BWMS) was promulgated in the waning years of WWII as the interna-tional financial architecture for consumerist accumulation. The mechanics of BWMS operation are quite simple: it involved gold as a monetary underpinning for the US dollar which became the “hub” international currency. The dollar was deemed to be “as good as gold” because of its ostensi-bly free convertibility into gold at the fixed rate of $35 to the ounce. The world’s other major currencies were pegged to the US dollar. Differing from the gold standard, however, states other than the US were permitted alterations to the value of their currency; though the extent and frequency of such change was to remain within limits. And, the BWMS was predicated upon capital controls which regulated large scale, short term, financial flows while simultaneously maintaining open currency markets to facilitate trade and FDI. However, it was the institutional edifice accompanying the BWMS – the IMF (demanding policy compliance from member states to deal with balance of payment (BOP) difficult-ies) and WB (a new multilateral organization flush with billions of dollars to lend to individual states) – that constituted the most telling transformation of the international political economy (Frieden, 2007, 259–60). IMF and WB stage the-oretic significance here resides in the tending of the international dimension of consumerist accumulation toward the partial decommodifying of material life and the increasing management of such by political and ideological force. Through the foregoing, the BWMS acted as a cocoon for what is referred to as the “economic nationalism” (Brown and Lauder, 2001) of post- WWII accu-mulation. This does not mean, of course, that capital was not internationalized: it was. Global exports increased 8.6 percent annually after 1950; over twice as fast as growth of the world economy. In 1973, for example, Western Europe exported 21 percent of what it produced as opposed to 16 percent in 1913. By 1973, with internationalized production proceeding apace, 20 percent of US MNC profit derived from FDI. As well, in 1973, US FDI produced $292 billion worth of goods in comparison to US exports of $110 billion. And sales of US MNC affili-ates back to their US home base constituted one- third of all US imports (Frieden,


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2007, 288–94). What the notion of economic nationalism captures is that notwith-standing this internationalizing of accumulation (we will return to this in the follow-ing chapter), the material economic reproducibility of capitalism in the historically constituted geospatial locus of the nation- state required, in the stage of consumer-ism, the empowering of the consumerist state to pursue a wide array of “national” policies in support of capital accumulation. The BWMS was indispensable for this. The BWMS also played a crucial role in the extra- market shaping of international accumulation by the ideology of anticommunism. Under the global thrust of anti-communism the international dimension of capital in the stage of consumerism was configured around three poles of accumulation: the triad of North America, Western Europe and Japan (with the latter dragging a clutch of Northeast Asian miracle economies into the forefront of world market competition). Finally, characteristic of the international dimension of accumulation in the stage of consumerism is the extreme uneven global development of capitalism. Part of the explanation for this is bound to the aforementioned force of anticom-munism and MNC global investment strategies attendant to this. Another part of the story relates to the role GATT played in maintaining favorable terms of trade in agriculture and raw materials for the triad with its expensive consumerist class accords (Dasgupta, 1998, Chapter 4). I wish to conclude this section and bring the chapter to a close by revisiting the RT/SSA position on crisis in post- WWII accumulation in the light of the stage theory of consumerism. To be sure, technostructure economic program-ming, demand management policies of the Keynesian interventionist state, fre-netic mass consumption of consumer durables and the explosion of multifarious types of debt in the stage of consumerism dampen business cycles and forestall economic crises, but they do not eliminate these. Thus, in their pre- MOC research vein, RT/SSA effort to uncover crises tendencies in post- WWII accu-mulation constituted an important challenge to neoclassical views of the benign equilibrium bent of “markets” and immunity of the post war economy to reces-sion. However, the problem with RT/SSA work resides in conflating slowed growth and falling profits in the late 1960s US economy with the demise of a world historic stage of capitalism. Though I have chosen to concentrate on the valuable contribution to Marxism by RT/SSA on levels of theory and institu-tions, the fact remains that RT/SSA (SSA more explicitly as touched upon above) import assumptions about economic growth and profit rates akin to those figuring into the long wave theory of Mandel (Gulalp, 1989). There is absolutely no need here to enter internecine debate in this area. Quite simply, the attractive-ness to Marxism of long wave theory (which was actually developed at the fringe of neoclassical economics) resides in the way it attempts to answer ques-tions of technological progress and trends in the rate of profit similar to those Marx treats sketchily in Volume Three of his Capital. And that reconfiguring the theory along Marxian lines could assist in extrapolating from Capital a general theory of crises and change in capitalism. Unfortunately, there can be no happy marriage here. As I make clear in the previous chapter, Marx’s law of the falling rate of profit in Capital is established


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by the dialectic of capital not as an empirical generalization. And the commodity economic automaticity with which it operates holds only in our bourgeois utopia where use value is held implicit. When use value is reactivated in the context of stage theory, as I display, the economic can no longer be considered self- subsistent but imbricated to varying extents in a superstructure matrix. Put dif-ferently, stage theory demonstrates that there are no economic laws operating in history as endogenous factors to be either institutionally fixed as in the RT/SSA schema or impacted by “cycles of class struggle” as Mandel saw it. In the TPCS, we may recall, the overaccumulation of capital in relation to the size of the industrial reserve army compels a fall in the rate of profit. Subsequent replace-ment of fixed capital at a higher organic composition of capital reconstitutes the industrial reserve army and initiates another phase of capitalist profitability and growth. In this fashion, capital preserves itself through cyclical technological revolutionizing of the forces of production. However, the technological progress Marx has in mind, which raises the organic composition of capital to renew accumulation and tendency toward equilibrium, is limited to that which can be absorbed in the ideal use value space of a bourgeois utopia with minimal eco-nomic dislocation. Transmutations of capital as embodied in technological change in the steel industry of imperialism or automobile industry of consumer-ism involve much more than simple increases in the organic composition of capital and renewed profitability. Rather, the capitalist operation of the new tech-nologies demands sweeping socio- economic change reverberating from the very organization of capitalist business itself through the state and superstructure. And, from the perspective of historical analysis of capitalism, the use value space the march of value in history encounters, as well as the possibility of securing value augmentation in that use value context (even assuming the innate amenability of it to capitalist management), is contingent and not prefigured by laws or logic of capital. While the case can be made that slowing growth and falling profits across Organization for Economic Cooperation and Development (OECD) states from the late 1960s constitute indicators of the waning of what I refer to as the golden age of consumerism (RT/SSA dub this the golden age of capitalism) in no way do such indicators establish that the stage has come to an end. Of course, it is ultimately at the level of historical analysis that questions of the passing of stages or even capitalism itself is to be addressed: the role of the TPCS and stage theory is to inform our judgment. From the TPCS what I refer to as the constant of capital spotlights the organic interconnections among the fundamental eco-nomic categories – central to which is the maintenance of labor power as a com-modity – guaranteeing the material economic reproducibility of capitalism as an historical society. The stage theory of consumerism captures the deep interpene-tration of the economy and the political and ideological superstructure matrix through which the recalcitrance to value of the use value complex of consumer durables is managed with the paradoxical outcome that the reproducibility of capitalism as an historical society is dependent in the stage of consumerism upon the partial decommodification of economic life (see Figure 3.5).


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If, as stage theoretic analysis reveals, the economic is no longer self subsist-ent beyond the bourgeois utopia of the TPCS. And if the ability of capital in the stage of consumerism to simultaneously augment value and allocate social resources in a fashion which meets demand for basic goods (consumer durables in the stage of consumerism) within the context of capitalist social relations of production is predicated upon the existence of an extensive array of supports from a stage specific superstructure matrix. Then, rather than seeking limits to capital in the stage of consumerism in falling profit and growth rates (though this may tell part of the story), we should turn our attention to the unraveling of the superstructure matrix through which capital is able to constitute a material eco-nomically reproducible society in the stage of consumerism in the first place.

Superstructure matrix of consumerism

Consumerist “equilibrium” sublimates crisis tendency

with partial decommodifying of labor power

Logic of capital operates viaanarchical oscillations of

equilibrium tendencies andeconomic crisis

High throughput (supply), needed to maintain profitability of corporate capital

operations with their high fixed costs, absorbed by ever-expanding mass

consumption (demand)

BWMS cocoonsnational projectsof development

Ideologies of massconsumption and

hyper-individualism

Legitimacy of statetied to expanding

consumption

Keynesian fiscalmonetary and

credit counter-cyclical demand policy

Tripartite classaccord

Figure 3.5 The constant of capital in the stage of consumerism.


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