An Attack of Nerves

It’s both comical and instructive to observe how even those who are specifically paid to stick up for capitalism and say the last rites over socialism just can’t keep off the subject of Marxism for long. It seems that it’s dead but it won’t lie down. Listen to this professor from Oxford sending a chill up the spines of Financial Times readers the other day (17-08-02).

“Not many MBA courses include readings from Marx’s Capital. Not many CEOs could quote from The Communist Manifesto. But there are times when it pays even the most passionate believers in capitalism (and I count myself among them) to heed the bearded Cassandra. Times like these: the worst bear market since the Great Depression – although Marx himself would have preferred to call it a “crisis of capitalism”.”

In a defensive paean of faint praise, he goes on to admit that “Marx’s insights into capitalism can still illuminate”. As evidence that Marx’s correct description of the expropriation of the mass of the people holds good in the present crisis, he cites the fact that in 1981 the top 1% of US households owned 25% of the wealth, whereas by the late 1990s 1% now owned 38% of the wealth. As he goes on to describe how “prodigious consumption” in the USA, subsidised by the rest of the world, has created a financial bubble which must surely burst as the haemorrhage of share values forces retrenchment, sinking the raft of US demand on which so much world production depends, the mask of ironical detachment starts to slip. All this might indeed start to “look like heresy, especially in the pages of the Financial Times”, as he archly suggests, were it not for the panicky heap of special pleading under which the professor hastens to bury his own intelligence. Disregarding the figures he has already cited on the accelerating polarisation of wealth and poverty, he asserts that Marx got it wrong, because the most significant contradiction is not between exploited and exploiter but between the “suckers” and the “CEOcracy” (“CEO” = chief executive officer on a board of directors).

“The sucker class is a large one. More than half of American households now own shares; in 1987 the proportion was about a quarter. Much of this expansion in share ownership happened between 1997 and 2000. So a substantial fraction of American households bought shares at or close to the peak of the market…”

And consequently got burned. Strip away the gimmicky new names and it’s clear that what he is describing, albeit in impressionistic and partial fashion, is the growing contradiction between the big capitalists on top and the petit-bourgeois and labour-aristocrat layers beneath. The joke is that the professor is simply restating in a slapdash journalistic style what was long ago patiently explained by Marx and Lenin! The final expropriation of the capitalist class by the working class is made possible and necessary precisely because of the relentless concentration of capital resulting from the expropriation of the smaller expropriators by the larger, of the larger by the still larger, and simultaneously of industrial capital by banking capital. It is precisely the overweening dictatorship of capitalist monopoly which finally prepares the way for its own demise and supersession by planned socialism under the dictatorship of the working class.

Growing social outrage at the disgusting spectacle of massive perks for fat cats and political corruption and cronyism certainly constitutes a social and moral crisis; but the professor is talking through his mortarboard when he pretends that

“The crisis of American capitalism is therefore more social than economic, more moral than material.”

Believe this, and all his problems are solved. After all, if capitalism is fundamentally sound, just requiring a moral wash and brush-up, then a few stern sermons against corporate malfeasance and some token junior-level malefactors hauled off by the police in full public view should do the trick. The trouble is, it’s nonsense. The “social” and “moral” crisis is not some random social malaise to be tackled by priests and social workers, but springs straight out of the “economic” and “material” crisis. To put the matter less laboriously, there is but one crisis now determining all key social developments: the crisis of imperialism. Unbridled corporate greed and corruption is simply the appropriate psychology for a moribund and parasitic imperialist system which is obliged to dig itself into an ever deeper hole by an ever more intense concentration of capital, achieved through an endless frenzy of mergers and acquisitions. Preaching against this psychology is as pointless as Canute ordering the waves to retreat.

The professor’s final impertinent squib against Marx backfires hilariously.

“As Marx might have said, had he taken the right side in the class war, the bourgeoisie united will never be divided. But right now the American middle class is split unevenly between suckers and CEOs.”

Quite so. The bourgeoisie, so far from uniting, is everywhere driven into deeper mutual loathing, as the battle for market share takes on a cut-throat character under the pressure of sharpening overproduction crisis. At the same time, the carrots and sticks which keep the petit-bourgeois and labour aristocratic layers tied to the leading strings of the big bourgeois command an increasingly wavering allegiance as property prices prepare to follow share values and pensions over the cliff. Perhaps the professor should take his own advice and take another look at the Communist Manifesto.

“Of all the classes that stand face to face with the bourgeoisie today, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of modern industry; the proletariat is its special and essential product.

“The lower middle class, the small manufacturer, the shopkeeper, the artisan, the peasant, all these fight against the bourgeoisie, to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay more, they are reactionary, for they try to roll back the wheel of history. If by chance they are revolutionary, they are so only in view of their impending transfer into the proletariat, they thus defend not their present, but their future interests, they desert their own standpoint to place themselves at that of the proletariat.”

The professor is to be thanked sincerely for raising these questions of ideology, with which the working class, schooled in Marxism, will learn to deal with far greater skill and determination than his hireling pen can compass.

It is not only ordinary people who dislike the sight of company directors with their noses stuck firmly in the trough, leaving everyone else to worry about job insecurity, low pay, deteriorating public services and vanishing pensions. The big capitalist investors have good reason to be concerned too, though for very different reasons: they are worried about their precious investments. They are fearful that their capital will lie dead in the water, finding insufficient opportunities to expand. They are scared that surplus capacity will put a brake on productive growth whilst encouraging a kind of phantom growth via mergers and acquisitions, in turn further restricting the scope for profitable investment. Most of all, they are terrified that the yawning gap, between artificially inflated share prices and directors’ pay on the one hand, and much lower actual company earnings on the other, is evidence of the approach of a devastating market crash.

Once again, it is the Financial Times ringing the alarm bells for capitalism. Discussing the concerns expressed by the International Corporate Governance Network (a committee representing investors with assets totalling $10,000 billion), their reporter tells us that:

“International investors are unhappy about the spiralling costs of directors. In the US, directors’ stock options rose from barely 10 per cent of pre-tax profits to nearly 20 per cent in the period 1998-2000. In the UK, the pay gap between directors and their employees widened by more than 50 per cent between 1994 and 2001. The committee was unimpressed with claims there is a global market for top executives. ‘That is so much hooey,’ said Mr Ross Goobey. It was also unhappy that executives were rewarded on the basis of the size of the organisation […] Directors of UK-listed companies valued at up to £500m were given a base salary of £280,000 a year. By contrast, companies valued at more than £32bn gave directors a base salary of nearly £800,000 a year. The committee agreed that ‘there is an implicit incentive to seek to increase the size of the companies through bids and mergers’.” [Simon Tisdall, Financial Times, 24-06-02]

It is clear from this account that this spectacle, of endless showers of gold pouring uselessly into the laps of a handful of wretched individuals lording it over the capitalist dunghill, is not so much the “unacceptable face of capitalism” as its ONLY face, as moribund, parasitic imperialism advances inexorably deeper into global overproduction crisis.

The FT piece puts its finger on it when it correlates the “spiralling costs of directors” with the growth of “bids and mergers”. Driven by a surplus of capacity in the market, capital concentrates itself into fewer and fewer hands. Whilst the luckier monopolist may through merger secure a temporary market edge over its rival, every such new concentration of capital further accentuates the tendency of the rate of profit to decline for all capitalists, in turn creating the pressure for a new merger frenzy. Whether the directors’ bribes come in the form of fantastic levels of official remuneration, or in the form of unofficial insider deals and false accounting swindles, the basic pattern is indelible: whatever eases the concentration of capital is rewarded, and whatever gets in its way gets swamped.

These professional investors of capital (all of whom live by the systematic exploitation of others’ labour, the sole source of the surplus value which makes possible the expansion of the capital invested) are weeping crocodile tears when they point the finger at fat cat directors living high on the hog. But behind all the hypocrisy, there is some real capitalist anguish on display, and it would be a pity not to appreciate its full significance. Capitalists have good reason to regret the rewards being dished out to directors who make their companies bigger through acquisition rather than innovation and growth, since this speaks volumes about the degree to which ALL capitalism has become a fetter on production, and puts the writing on the wall for ALL the bourgeoisie’s claims to be nature’s intended leaders of society. Again, when the investors confide in us their fears that all these bribes for the top management jobs may promote stagnant “succession politics” at the expense of innovative “business management”, they are pointing to a crisis in ALL bourgeois leadership confidence, with implications stretching way beyond the narrow confines of the business school. Fears of Buggins Turn taking over from alert leadership at the head of big business run a lot deeper than a technical question of management theory. What is in the frame here is precisely the decadent, coupon-clipping character of parasitic imperialism itself, exactly as identified by Lenin.

For low paid council workers who find themselves targeted as the “enemy within” just for daring to get a less derisory recompense for the vital public services they help provide, or for workers laid off because “surplus” capacity has to be axed to defend profits, the “moral and social” crisis of capitalism is experienced in a direct and galling way. They have every reason to be outraged at the sight of all the largesse sloshing around company boardrooms. Likewise, those who find themselves automatically under the full-on, intrusive, means-testing, snooping scrutiny of the state the moment they dare exercise their right to any benefit are understandably indignant at how this contrasts with the kid glove treatment accorded to big business and accountancy firms. As is now full public knowledge, these outfits are allowed to flout the law year in year out, ripping everyone off with impunity unless and until the market-destabilising character of their embezzlements precipitates a panic reaction, requiring a WorldCom or an Andersens to be thrown to the wolves. Disgust at the unfairness of all this carry on is an important part of what strengthens working class anger against capitalist exploitation, and the more dirt that is dished on the corruption and greed of the capitalists, the better.

But even more important than understanding the UNFAIRNESS of the capitalist system is understanding its inevitable FAILURE. Not only does capitalism fail to live up to what it PROMISES to do for world society (end inequalities in social opportunity; “trickle down” a rising standard of living globally; resolve conflicts peacefully; clean up the planet, etc.); it also fails to do sustainably what it really NEEDS to do: i.e., continue to ruthlessly exploit the world’s labour and resources in such a way as to keep ALL capital expanding whilst preserving the unity of ALL of the exploiters. It is through recognising the obstacles that strew capitalism’s path at every twist and turn of history, and in particular understanding the insurmountable obstacles which the exploiters’ own imperialist crisis finally heaps up for the whole exploitation racket, that healthy rage against the unfairness of capitalism will mature into a solid class confidence that the overthrow of capitalism can and must be achieved before any further civilised human progress can happen.