Democracy Against Capitalism: Class

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Chapter 3 of Ellen Meiksen Wood’s book, Democracy Against Capitalism, takes up the issue of class. She says that class can be defined in one of two ways: “either as a structural location or as a social relation.” Kindle Loc. 1504, ital. in original. The first way takes an index and divides it into parts. For example, we rank everyone by income, then call the lowest quintile the lower class, the next three quintiles, the middle class, the 81-99% the upper middle class, and the rest the upper class.

The second way is to define class in terms of relationships, the relations of the members to the means of production, relations among themselves, and relations with members of other classes. In this treatment, the working class is people who have no direct access to the means of production and only have their labor to sell. Marx wrote:

“In the process of production, human beings work not only upon nature, but also upon one another. They produce only by working together in a specified manner and reciprocally exchanging their activities. In order to produce, they enter into definite connections and relations to one another, and only within these social connections and relations does their influence upon nature operate – i.e., does production take place.

I saw a folk musical recently in Chicago called Haymarket, about the Haymarket Affair, a general strike that turned violent in Chicago in 1886. The play opened with one actor singing a union song, Solidarity Forever. She encouraged us to join in the chorus, which, of course, I did. It was a great way to demonstrate how organizers of that day worked to instill a sense of comradeship among workers in different industries, a sense that they had a lot in common, a sense that they formed a class in opposition to the capitalists, a/k/a the “greedy parasites”. This is the last element of class in Marxist thinking. The class can be seen objectively, which Marx called a class-in-itself, but when the members become aware of their status as class members and begin to struggle together for a common end, Marx called it a class-for-itself.

This last point is illustrated by E.P. Thompson’s book, The Making of the English Working Class, which Wood discusses at length. The basic class structure is in place long before the members begin to understand that they are a class. People similarly situated in the relations of production experience them in class ways. Kindle Loc. 1614. Shared experiences bring them together. Ultimately the members of the class become conscious of the conflicts of interest and aggravation that are making them miserable, and those become the grounds of struggle. The struggle eventually leads to confrontation. Marx argued that in the long run those confrontations lead to socialism as the only form that gives workers a voice.

Wood identifies the relations of production in capitalism as exploitation, domination and appropriation. Neoliberal capitalism has jacked up these three relations at the expense of all workers. For example, meat companies use government regulations to increase the exploitation of meat cutters by increasing line speeds. Payday lenders suck money out of military families and other low income people, protected by the totally not corrupt Republican Mick Mulvaney. For domination, look at the way Amazon warehouse workers are treated. As to expropriation, look at the latest research on the impact of concentration of businesses on wage rates. Or just check out this simple chart, discussed here. The blue line represents corporate profits in constant dollars; the red line is wages in constant dollars.

The concept of class has received “remarkably little elaboration, either by Marx himself or by later theorists…”, Kindle Loc 1519, but it’s possible to identify several. Capitalists own the means of production and control access to them. The working class owns no assets and has no access to the means of production other than through individual relations with capitalists. They own only their own labor, and rely on their ability to sell that labor to stay alive and reproduce. Slaves don’t own themselves or their labor. Professional people, small business people and artisans own a little property and use it to produce goods and services for sale. Many of them are dependent on the capitalists in the financial sector through loans and leases, which compromises their independence as a class.

In America, everyone is middle class. Barack Obama appointed Joe Biden to chair a multi-agency Middle Class Task Force. The Department of Commerce was the only agency to respond, as I discussed here. The Department offered the following definition of middle class:

Middle class families are defined by their aspirations more than their income. We assume that middle class families aspire to home ownership, a car, college education for their children, health and retirement security and occasional family vacations.

There’s something fabulously American about that definition, so focused on the individual and so utterly indifferent to the context in which people try to achieve their aspirations. Also, who doesn’t want that stuff? The vacuity of the definition makes it clear that we as a nation are not willing to confront the implications of class.

In our highly differentiated economy, it isn’t easy for people to understand that the unpleasantness or worse that they endure in their jobs is common to everyone. That makes the nastiness feel like something specific to the job, a bad manager, bad policies or other excuses. We don’t notice appropriation because the capitalist pumps money out of workers using the “market”, and producers think it’s normal for the capitalist to grab all the profits. Somehow US workers don’t recognize that they are being exploited. They think their long hours and wrecked evenings and weekends and lack of vacations and medical and personal leave and lousy pay and benefits are just fine.

Wood has a different idea. She thinks that capitalism has successfully separated democracy from the economy. Everyone agrees that the government should be controlled democratically. People are taught that the economy is and should be controlled by private interests, and that private control should be sanctioned and enforced by government. Employers exercise domination and control in ways that would not be acceptable if done by the state. Employers restrict exercise of political rights in ways that are forbidden by the Constitution to the government. Fear of losing our income silences most of us at least occasionally.

Wood argues that the economy should not be separated from democratic control. She doesn’t offer a specific mechanism; she thinks that people will eventually demand change, and that the new controls will spring from democratic control over the State. She quotes E. P. Thompson who asked:

By what social alchemy did inventions for saving labour become agents of immiseration? Kindle Loc. 1739.

We can’t begin to solve the problems capitalism creates until we all come to grips with this question. And we almost know the answer, even if we haven’t verbalized it yet. It springs from the relations of the capitalist mode of production: exploitation, domination, and appropriation.

Democracy Against Capitalism: Neoliberalism

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I’m writing Ellen Meiksins Wood’s book Democracy Against Capitalism as part of my general project of understanding the origins of neoliberalism and its sudden takeover as the sole way of understanding the economy and society. Marxists use the metaphor of base and superstructure, the production base, and the cultural, ideological, legal superstructure. See this post, which defines these and other terms used in this post. Neoliberalism is an ideology, a set of ideas that we use to understand the world. Therefore it is part of the superstructure.

Wood says that no system is pure capitalism because there are always other modes of production in every society. We say we live in a capitalist society because the capitalist mode of production is the most widespread. I use the definition from Wikipedia:

The capitalist mode of production is characterized by private ownership of the means of production, extraction of surplus value by the owning class for the purpose of capital accumulation, wage-based labour and—at least as far as commodities are concerned—being market-based.

This article is very much worth reading. Wood explains the relevance of Marxism today:

… we’re living in a moment when, for the first time, capitalism has become a truly universal system. It’s universal not only in the sense that it’s global, not only in the sense that just about every economic actor in the world today is operating according to the logic of capitalism, and even those on the outermost periphery of the capitalist economy are, in one way or another, subject to that logic. Capitalism is universal also in the sense that its logic—the logic of accumulation, commodification, profit-maximization, competition—has penetrated just about every aspect of human life and nature itself, in ways that weren’t even true of so-called advanced capitalist countries as recently as two or three decades ago. So Marx is more relevant than ever, because he, more effectively than any other human being then or now, devoted his life to explaining the systemic logic of capitalism.

For me, at least, the bold-face sentence sounds exactly like a brief description of neoliberalism. The capitalist mode of production is driven by the logic of accumulation, commodification, profit-maximization and competition. We are at an historic high for those forces, which today reach farther into our lives than ever before.

Wood points out that earlier Marxists confronted societies where the capitalist mode of production had not taken over, as in the Russian Revolution, where there were masses of peasants living in a pre-industrial mode of production. The same situation confronted Mao in China. Marx, she points out, studied an early form of capitalism in England where it had suddenly become the most widespread mode of production but where there were still large pockets of other modes of production. She argues that as capitalism matured in England, it depended on imperialism and colonialism, which operated in non-capitalist forms. This argument is also made by Polanyi in The Great Transformation and Arendt in The Origins of Totalitarianism in great detail (I discussed these here and here.) That is not the case any more. Capitalism is everywhere.

This explanation helps answer the question about the rise of neoliberalism. It’s not a new thing, it’s simply the form of capitalism that arises from the logical working out of capitalism in historical terms. In this view, the ideology comes into being to justify the form into which capitalism is evolving.

This isn’t to deny agency to the people creating the ideology and pushing it to its dominant position or to the people driving the changes in capitalism. There are always choices, choices to replace capitalism or to control it.

Wood says ideology changes in response to the changes in the social relations created by the capitalist mode of production, which is the way Marxists typically understand the relation between base and superstructure. She puts less emphasis on the individuals who create the ideology, and little emphasis on the people who create the changes in the economic base. She says that something like the current form of capitalism was bound to happen whether the ideology changed or not, and irrespective of who was in the capitalist class.

Wood says that no society is pure, so that the capitalist mode of production is just one of several modes of production. Even in more mature capitalist societies, some workers are not separated from the means of production; they own their own tools, or have a small capital, or a trade that is independent of large pools of capital. They and some others produce goods and services not just for money but also for for other reasons. In its early stages, capitalism can expand into other societies which have not adopted the capitalist mode of production. More recently, those avenues are closing off, and capitalism is expanding by assimilating more and more of those who have until now avoided it. As an example, look at doctors. For decades they owned their own practices and their own tools and offices. Now they are being sucked into the medical industrial form in which they own nothing but their labor, just like factory workers. That changes the social relations between doctors and patients, and the relations between people and the medical system.

Nobody resists. The rich and powerful benefit. Social structures change. A new ideology, neoliberalism, arises to explain and justify this new set of social relations, and to justify further change. The capitalists merge and consolidate, they buy up more small artisans and producers, they acquire dominance over formerly independent professionals, they set up institutions to replace socially owned and controlled sectors like hospitals, jails and schools, and begin to replace government whenever possible. This is a form of domination we used to describe with perjoratives, but now most of our elites are on board.

In this post I discuss the rise of neoliberalism from the perspective gained reading Culture and Power: The Sociology of Pierre Bourdier. In my telling, Bourdieu emphasizes the role of the rich and powerful in the rise of neoliberalism. The important factor is a relatively small number of members of the dominant class, the group which benefits most from exploitation, domination and appropriation. They are able to impose their views on the producers through what Bourdieu calls symbolic violence; a term that is probably more rhetorical than descriptive. Following Page and Winter on oligarchy in democracy, we can add that most members of the dominant class do not interfere with those who move to effectuate their common purposes of wealth protection, wealth enhancement and absolute freedom to deploy their wealth.

The difference is that in Wood’s telling, the current form of capitalism is a logical evolution from prior forms, while in my telling, neoliberalism is imposed from above. Both Wood and Bourdieu are trying to understand how society has changed with a view to helping activists identify ways to effect change. For Wood, the problem is centered on the capitalist mode of production. Social change will come from changing to some other mode of production. For Bourdieu, the problem is the rich and powerful people who are able to dominate the discourse and impose on the rest of us. For him a primary direction for change is to reduce their power to dominate.

Or, we could do both.

Democracy Against Capitalism: Base, Superstructure and More Definitions

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The goal of Ellen Meiksins Wood in Democracy Against Capitalism is to resuscitate the Marxian method of historical materialism. This seems to be a perennial problem for Marxist thought; it was one of the central issues facing the Frankfurt School as we saw in The Dialectical Imagination by Martin Jay. See, e.g. pp. 41 et seq. Part of Wood’s method is argue her definition of some of the critical terms used by Marxists especially in Chapters 2-5. Wood compares her view to those she considers less valid, a typical approach in technical works. My interest is whether any of this can help us understand the rise of neoliberalism.

Chapter 2 discusses a common metaphor, base and superstructure. This from Wikipedia gives a good idea of the problem Wood wants to address:

In Marxist theory, human society consists of two parts: the base (or substructure) and superstructure. The base comprises the forces and relations of production (e.g. employer–employee work conditions, the technical division of labour, and property relations) into which people enter to produce the necessities and amenities of life. The base determines society’s other relationships and ideas to comprise its superstructure, including its culture, institutions, political power structures, roles, rituals, and state. While the relation of the two parts is not strictly causal, as the superstructure often affects the base, the influence of the base is predominant. In Orthodox Marxism, the base determines the superstructure in a one-way relationship. Marx and Engels warned against such economic determinism.

This definition contains more terms requiring a definition. What are the relations of production? This is from the Marxists International Archive Encyclopedia:

The objective material relations that exist in any society independently of human consciousness, formed between all people in the process of social production, exchange, and distribution of material wealth.

Examples of objective material relations are listed in Wikipedia: “employer–employee work conditions, the technical division of labour, and property relations”. The forces of production are the unity of the means of production and labor.

Wood gives a her own list of the relations of production: exploitation, domination and appropriation. Kindle Loc. 1175.

And since we’re doing definitions, here’s a description of the term Capitalist Mode of Production from Wikipedia:

The capitalist mode of production is characterized by private ownership of the means of production, extraction of surplus value by the owning class for the purpose of capital accumulation, wage-based labour and—at least as far as commodities are concerned—being market-based.

The Wikipedia discussion of base and superstructure suggests that the general idea is that the economic base exerts control over the superstructure, and that occasionally changes in the superstructure cause changes in the base. Wood thinks that the two are more closely related. Capital has a lot of control over the superstructure, and can force changes in the base. At the same time, changes in the economic base can force changes in the superstructure.

All of this seems quite obvious. Changes in the machines and processes used in production can require adjustments to laws and rules both to allow the use and to protect workers. It’s also true of other superstructure elements, such as law. In the US, for example, the laws have gradually changed to allow non-compete clauses in contracts between employers and the lowest level of employees. Restaurant chains can require delivery employees, cooks, and window clerks to sign non-compete agreements. That obviously is part of the work conditions between employer and employee, which is identified as part of the base while the change in law is part of the superstructure.

The primary use of this distinction for Wood seems to be that we can use the ideas to isolate parts of society for study and analysis, but that we have to remember always that different parts of a society affect each other.

I draw the following conclusions from this chapter, which I’ve now read three times so you don’t have to.

1. Reading this book is tedious, in part because one or more of the terms I’ve defined and a few other terms we all sort of know (social formation, class struggle, etc.) appear on every Kindle page, which for me is probably 100 words. But in this kind of work, careful definitions matter. When we look back at the past, we see a vast number of specific events. Historical materialism tries to make sense of these events in terms of forces that amount to more than the individual decisions of all our ancestors, logic and laws that can be derived from study. Wood describes historical materialism as follows:

A materialist understanding of the world, then, is an understanding of the social activity and the social relations through which human beings interact with nature in producing the conditions of life; and it is a historical understanding which acknowledges that the products of social activity, the forms of social interaction produced by human beings, themselves become material forces, no less than are natural givens. (Kindle Loc. 491.)

To do this, Marxists use the terms I’ve defined here, although often with other definitions. Each definition has the potential to produce a different interpretation of history. Consequently, these tedious definitions and the tedious prose they help create are necessary.

2. The description of the relation of production as exploitation, domination and appropriation is striking. I wonder if there are any large societies in which these relations do not control production?

3. Domination seems to be the most important, perhaps because of the books I’ve been writing about. Pierre Bourdieu made it a central element of his life’s work. I didn’t get to finish Foucault’s Security Territory and Population (maybe I will someday), but one of the main ideas of that book and other works by Foucault is governmentality, and the systems that have arisen to produce it. Domination is a central focus of oligarchy, because it enables the oligarchs to achieve their common purposes:

1. Protecting and preserving wealth
2. Insuring the unrestricted use of wealth
3. Acquiring more wealth.

I doubt that Marxism is the best way to study domination in a contemporary complex society like the US or France. I don’t see on the google any evidence that Wood engaged with the works of Bourdieu or Foucault. But I am sure that our normal social discourse depends on pretending that we are not dominated.

4. The three relations have deep roots in our individual psyches. It’s easy to see that domination/submission drives behavior in the animal kingdom as pictured in the term Alpha Male. Exploitation and appropriation are frequently found with domination. Perhaps recognition of those fundamental psychological issues drove the scholars of the Frankfurt School to attempt to incorporate Freudian psychology into their revamped Marxism.

5. Ideology is one part of the superstructure, I plan to take that up using this article by Wood.

Democracy Against Capitalism: Capital In A Fiat Money World

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In Democracy Against Capitalism the Marxist scholar Ellen Meiksins Wood says that the driving force of capitalism is the urgent desire to accumulate more capital. As we know, and not just from Marx, capitalist only expends capital in the expectation of profit, and generally can be counted on to invest capital if profit seems likely.

In the US, it has always been the norm that those with access to capital should control every possible avenue that might lead to profit. The government has always been there to provide cash to support capital, with no compensation or justification to the government except maybe new jobs. As an example, the US handed huge tracts of land and direct subsidies to the crooks and cheats who built US railroads. I learned about this from Frank Norris’ book The Octopus, but Railroaded, reviewed here, looks even better. And here’s a sympathetic explanation of this monstrous give-away. There’s an obvious question that no one asks: if railroads were so important, why didn’t the government just build them?

In this post I looked at Wood’s definition of historical materialism and its use in the evolution of the separation of politics and economics starting in the middle ages. The comments add a lot of fascinating detail; thanks to all. What’s missing from Wood’s discussion and from economics generally is the motivation behind this evolution, namely greed and indifference to other humans. As the reviewer of Railroaded, the historian Michael Kazin, says:

The history of American capitalism is stuffed with tales of industries that overbuilt and overpromised and left bankruptcies and distressed ecosystems in their wake: gold and silver mining, oil drilling and nuclear power, to name a few. The railroad barons wielded more power than other businessmen in the Gilded Age. But their behavior revealed a trait they shared with many of their fellow citizens: too much was never enough.

That still true, and governments under both parties are as willing as they ever were to let the capitalists profit and to stuff their pockets with subsidies. As an example, look at the Democrats who run Chicago. In 2008, Chicago leased its parking meters to a group of investors headed by Morgan Stanley; investors today include the wealth fund of Abu Dhabi and other hidden investors. Mayor Richard Daley agreed to a front payment of $1.15 billion to the city.

In the seven years since, the meter company has reported a total of $778.6 million in revenues. It’s on pace to make back what it paid the city by 2020, with more than 60 years of meter money still to come.

There’s the incredible story of the city getting ripped off for hundreds of millions of dollars in derivative transactions. Chicago recently offered Amazon over $2 billion to put its new headquarters here.

That eagerness to coddle capitat has always been part of our culture. Maybe it could be justified in a society hemmed in by commodity money and weak financial markets, where there might be some limitations to the amount of capital available for investment. But there is far more capital looking for profits today than there are plausible investments. We’ve just run a huge real-life experiment. The Republican tax bill gave corporations billions of dollars in tax breaks for money stashed “offshore” to avoid taxes. The brilliant CEOS had no profitable use for it and gave it to their shareholders.

Here’s an example of the amount of capital available to waste, electric rental scooters. Much of that useless capital is employed in various kinds of direct exploitation like payday lending.

Beyond the factual reality of a world awash in capital, we don’t live in a world of limited money. Money is a commodity created by the state. It isn’t pieces of metal, and it isn’t limited by how much of the metal there is in government vaults. Government can create all it wants and needs. The Republicans just passed a bill slashing US revenues for the foreseeable future. Then they passed a bill raising spending. Where is that coming from? Stephanie Kelton explains in a quick and easy introduction to Modern Money Theory.

Returning to the railroads, the government could have built them itself, using a combination of taxes, revenues and borrowing. It might have taken longer; and it would have been corrupt though it would never have been as corrupt as it actually was. Why didn’t that happen?

Or look at oil. In some countries, oil is owned by the State, which employs people directly to drill and refine, or hires private drillers and refiners. We don’t do that. We just let the capitalists take the resources out of public land for a small fee which is rebated in the form of sickening tax breaks like depletion allowances.

There was never any justification for the US system other than the demand of the rich and powerful for greater profits with utter indifference to the rest of us who are left to clean up after the bankruptcies, frauds, toxic spills, nuclear waste and whatever other trash they leave behind. Capitalists won’t make society a better place, because that isn’t profitable. Capitalists believe that they should be able to expropriate all the profits from their investments. The point of making society better is that the benefits from that either can’t be monetized, or we don’t want to lose the benefits to the demand for profit. We don’t need capitalists to make society better and we never did. We just need to be able to control our own government, making it operate for our mutual benefit.

Democracy Against Capitalism: The Separation Of Politics and Economics

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Democracy Against Capitalism is a collection of essays written by Ellen Meiksins Wood. In the first essay, she says that many contemporary Marxists have abandoned the historical materialism which is central to Marx’ own thought. Here’s how she describes historical materialism:

A materialist understanding of the world, then, is an understanding of the social activity and the social relations through which human beings interact with nature in producing the conditions of life; and it is a historical understanding which acknowledges that the products of social activity, the forms of social interaction produced by human beings, themselves become material forces, no less than are natural givens. (Kindle Locations 491-494.)

This seems uncontroversial, in fact It’s really hard to believe anyone disagrees without relying on some other human-made theory.

She illustrates this idea with a sketch of the history of the development of capitalism, showing how capitalism separates politics and economics. This isn’t about the academic study of these fields, but about the way capitalism flowed from earlier times, primarily in the UK.

She starts with the proposition that a central problem for any society is producing the necessities of life and allocation of the production among members. That decision is political, not economic. The explanation begins with a definition of the state as the “complex of institutions” through which society organizes itself. This organization is an instrument of power, and exercises coercion through various means, including violence. Smaller social units, families or clans, owe certain common duties to the whole.

She says that in the earlier times, decisions about production and allocation were made by “public or communal authority”. (Kindle Loc. 676).

Whether or not the essential object of the state is to maintain exploitation, its performance of social functions implies a social division of labour and the appropriation by some social groups of surplus produced by others. It seems reasonable to suppose, then, that however this ‘complex of institutions’ came into being, the state emerged as a means of appropriating surplus product – perhaps even as a means of intensifying production in order to increase surplus – and as a mode of distributing that surplus in one way or another. Kindle Loc. 597.

I’m not sure what to make of this quote. She cites a book by Marshall Sahlins, Stone Age Economics for this proposition.

In the imperial period of Roman government, the supremacy of private property was reasonably well established, When the Roman Empire broke up, the state fragmented. Local feudal lords maintained control by a combination of feudal rights under whatever was left of a central authority, the offer of protection to the local people, and brute force.

Feudal Lords carried out the functions of the state in vestigial form, dispensing justice and providing and organizing defense, social responsibilities that went with their control over production and allocation. Gradually the central authority regained strength, and Feudal Lords ceded some of their duties and powers, but not control of the land or the work done by the people on the land or the right to control allocation of production. The story continues to the present, with the owners of private property maintaining their power to organize production and expropriate the surplus for themselves through their absolute right of control and ownership.

Wood only provides a sketch, and my retelling is a sketch of a sketch, but it’s compelling once you grant the premise that decisions about production and allocation are political issues. Of course, we don’t know how our Stone Age ancestors handled these things. Even so, the assertion that matters of organization of production and allocation of the products is a social matter is quite reasonable. After all, the rules that force that outcome are upheld by the power of the state, through violence and otherwise.

From there, the part of the story that starts in Feudal societies makes good sense. A lot of this history can be seen in the fights over English Land Law, the change from a political system where the king owned all the land to vesting of full title in aristocrats and eventually in the hands of ordinary people. Here’s the Wikipedia version.

This story helps us to see how we got to the place where absolute control of private property became central to our social structures. It wasn’t inevitable. The story is quite different in other countries. For example, in France, the King maintained his central role in the economy much longer, until the French Revolution. For an interesting discussion of the role of the King in the bread markets of France, particularly Paris, see Bernard Harcourt’s excellent book The Illusion of Free Markets, which I discussed here. Harcourt also discusses the arrangement that government should control punishment.

Perhaps as a result, even today the state plays a larger role in the French economy than in the US or the UK. As an example, the telecommunications businesses there are privately owned, but the government regulates the business tightly and insures competition. That keeps prices very low, and services high.

Along with the power to organize production, the capitalist system gives private interests the absolute right to whatever profits it can extract. This fact has such a long history, it appears to be the result of impersonal natural law to economists and others. In part this is because the absolute right to profit is hidden inside the absolute right to property. To the workers, the struggle for wages appears to be an economic struggle, not a political one. To the State, it means that there is little legislation and little regulation to protect ordinary citizens as workers or consumers, or the land, and the courts are always ready to strike down the new laws or to construe them so narrowly as to make them useless. And for most of its history, the US has seen fit to allow private interests to control Polanyi’s third fictitious commodity, money.

When economics began to emerge as a separate academic discipline in the 19th Century, it confronted this situation, and never questioned any of the social structures it found in place, especially the right of owners of capital to extract all profit, control the organization and production of most goods and services, and control the lives of the workers. The existing structures were written into the foundations of the two separated disciplines.

The leftist view, that such decisions are political, continued into the New Deal era, when government began to side with the workers and ordinary people. One landmark piece of legislation was the pro-union Wagner Act. Then, in the 1970s, Democrats joined what C. Wright Mills called the Capitalist Celebration, embracing capitalism as explained by economics. This led to the New Democrats, the Third Way Dems, the Blue Dogs, and the rest of the corporatist Democratic politicians. For the last 40 years, no one has seriously questioned this allocation of power.

There is a curious divide in the understanding of the allocation of production. Workers who own farms, for example, or artists, consider that the things they produce belong to them, and can be used or sold by them without regard to others. Workers who work for other people never make that connection. They do not think of the things they produce as theirs, or even partly theirs. They just assume that these things belong to the owners of capital. But consider this. Suppose a person who works for a tech company dreams up a new idea. Who owns that new idea? Probably the worker has the better claim. As a result tech companies routinely make employees sign contracts giving them ownership, and even that is not necessarily conclusive.

If all workers thought of themselves as having claims to their work product, we’d have a different kind of capitalism.

Democracy Against Capitalism: Competing Stories About Wages

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Ellen Meiksins Wood’s book Democracy against Capitalism, tells a story of capitalism at odds with the story economists tell. At the root of this is her view that we make a big mistake when we separate politics from economics. Here’s an example, summarized from three prior posts, one at Emptywheel, and this one and this one at Naked Capitalism. The original posts give more detailed discussions.

Chapter 12 of Samuelson and Nordhaus’ intro textbook Economics (2005 ed.) is titled How Markets Determine Incomes. They rely on marginal utility theory, invented by William Stanley Jevons, an English mathematician and economist and described in his 1871 book The Theory of Political Economy discussed here. Their explanation uses this chart. P. 238.

The y-axis is the marginal product of labor, with all other inputs held constant. The x-axis is the amount of labor, here the number of employees. We treat the labor as continuous so we can have a nice smooth curve, but in the real world it would look like a flight of stairs. The authors tell us that the employer will add workers until the marginal increase in revenue from the last worker is zero. They tell us that the bottom rectangle is wages, and the top triangle-ish shape DEN is rent. That’s because they are basing their explanation on John Bates Clark’s model from about 1900, and the idea is that this chart describes a farm. But they mean that this works for the economy as a whole, so it includes all workers on one hand, and all capitalists, that is, those who own the factories, smelters, coal mines, etc. on the other. This is their discussion:

Clark reasoned as follows: A first worker has a large marginal product because there is so much land to work with. Worker 2 has a slightly smaller marginal product. But the two workers are alike, so they must get exactly the same wage. The puzzle is, which wage? The MP (marginal production) of worker 1, or that of worker 2, or the average of the two?

Under perfect competition, the answer is clear: Landlords will not hire a worker if the market wage exceeds that worker’s marginal product. So competition will ensure that all the workers receive a wage rate equal to the marginal product of the last worker.

But now there is a surplus of total output over the wage bill because earlier workers have higher MPs than the last worker. What happens to the excess MPs…? The rest stays with the landlords as their residual earnings, which we will later call rent. Why…? The reason is that each landlord is a participant in the competitive market for land and rents the land for its best price. 237-8, emphasis in original.

Clark saw this as the result of the Natural Law, and pronounced it just. This is the model taught to generations in introductory economics. The logic seems questionable, but it doesn’t matter because it isn’t how things actually happen, as I demonstrate in the linked posts.

How would a Marxist like Wood describe this model? She divides society into two groups, the producers, in this case, the farmers, and the appropriators, in this case the landlords (ignoring detail), or the workers and the capitalists. At an earlier part of the history of this society, the land was handed to the landlords, or they took it violently when government was fragmented and power represented government. Wood is talking about England, but something similar happened in the US. As a result, the producers, here the farmers, were separated from the means of production, meaning the land and perhaps some of the tools and animals needed to grow crops, and the landowners were able to expropriate the surplus created by the producers. This is a rough description of what Marx called primitive accumulation (again ignoring details and not precisely following Wood).

Primitive accumulation didn’t happen by accident. It was done by some form of coercion by some sort of ruling class. Gradually the ruling class consolidated into states, and the process continued through the arms of the state. As an example, consider Polanyi’s description in The Great Transformation of the process of “enclosure” as it was called in England.

Turning to the chart, we ignore the marginal productivity stuff and treat the line NE as the level appropriators currently pay the producers. It is as low as the appropriators can make it, using both their control of the state, and their control of the process of production. If you have any doubts about that, read the discussion of the Phillips Curve and especially a paper by Simcha Barkai here. The capitalists appropriate the triangle DEN, which represents the surplus labor, for themselves.

As always, the disposition of surplus labour remains the central issue of class conflict; but now, that issue is no longer distinguishable from the organization of production. The struggle over appropriation appears not as a political struggle but as a battle over the terms and conditions of work. Kindle Loc. 804-806

The organization of production is controlled by the appropriators with the coercive assistance of the State as needed. If the producers were smart, they would struggle with the appropriators over that surplus. They’d elect governments that would take their side in the struggle over the allocation, they’d resist and force change. There is nothing but political power that requires payment of all of the surplus labor to capital.

So now we have two stories. To me, the Samuelson/Nordhaus/Clark story is dumb. It takes the economy as a given, as if things had always been this way. In other versions of their story, we get a few shards of carefully selected history that pretend to find seeds of capitalism in earlier times. Mostly, though, it’s a vision of capitalism as an inevitable and fixed system as available for study as a cadaver.

In addition, this story makes the outcomes seem pre-ordained, and leads people to think that interference with the process is both useless and somehow dangerous, certain to produce even worse results. And, it’s a just-so story: all the numbers appear to come out in perfect equilibrium as if by magic.

Wood’s story is easy to understand. It’s based in history, none of that man-made natural law mumbo-jumbo. It doesn’t call for absurd assumptions to make everything work out beautifully. It’s easy to see how this story can motivate action, and, of course, reaction. And here’s the key point: it’s easy enough to tell the this story without direct reference to Marx.

Democracy Against Capitalism: Introduction to New Series

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My original plan was to do a series on Wolfgang Streeck’s book, How Will Capitalism End?, but it’s really distressing, so I took a break and read a couple of novels, Rachel Kushner’s The Flamethrowers about the 70s art scene in New York and the Red Brigades in Italy, and then Impossible Views of the World by Lucy Ives, both of which were engaging and the second was funny, at least to me. It ran out suddenly, as books will do when read on an e-reader, and I didn’t want to go back to Streeck so I took a look at some books I had acquired but not read. That’s how I stumbled into Democracy Against Capitalism: Renewing Historical Materialism by Ellen Meiksins Wood.

Usually I seek out books because they seem to fall into place in my neoliberalism project. Not this one. A couple of years ago my sister told me that Verso was having a sale on ebooks, all you want for a pound each. So I browsed the catalog and picked out several, including a volume of works by Rosa Luxemburg, and based solely on the title, picked up Wood’s book. When I started it, I had no idea what it was about, or who Wood was. It turns out she’s a major Marxist scholar with wide interests in history and economics. Here’s an appreciation by Vivek Chibber published in Jacobin at Wood’s death in 2016 at the age of 74. This article discusses her main ideas, many of which are addressed in this book.

I’ve read several pieces lately on the question of the compatibility of capitalism and democracy. This one by Eric Levitz is a level-headed view of the main lines of lefty worries, and will help inform the discussion I hope to generate. This one from the Economist is conservative but also worried. As I have said several times during this project, the left has no real theory for criticizing capitalism. That means left-liberal focus has been on criticizing the forms of our democracy. That’s certainly a reasonable program, but it’s limited. A better idea is to allow a formal criticism of capitalism, especially neoliberal capitalism. Critique of capitalism has been the main contribution of Marxism from the beginning.

The 200th anniversary of Marx’ death was May 5, and it brought out the crazy. I won’t cite any more of that than appears in this post, but for fun just search for Karl Marx Birthday, and take your pick. People talk about believing in Marx like it was a religion. We don’t talk about believing in Kant, though, or Camus. We don’t believe or disbelieve in philosophers, we read them and argue with them, and use them to form ideas about our lives and our society. We can and should do the same with Marx. As we go through this book, I’ll point out some of his ideas we can find in Polanyi’s The Great Transformation, Arendt’s The Origins of Totalitarianism, Veblen’s The Theory of Business Enterprise, Foucault, and the books I’ve discussed on Bourdieu and Critical Theory, as well as economic texts and papers.

Wood starts from the proposition that criticizing capitalism went out of intellectual fashion in the second half of the 20th Century. This alone should make it obvious why I like this book. Regular readers will recall my recurring use of the term Capitalist Celebration which I got from C. Wright Mills to describe the same idea.

‘Post-Marxism’ has given way to the cult of postmodernism, with its principles of contingency, fragmentation and heterogeneity, its hostility to any notion of totality, system, structure, process and ‘grand narratives’. [From the Introduction. I’m reading on a Kindle and don’t have page cites; Kindle location 89.]

Here’s how Wood describes her project for this book:

… I propose to start from the premise that the critique of capitalism is urgently needed, that historical materialism still provides the best foundation on which to construct it, and that the critical element in Marxism lies above all in its insistence on the historical specificity of capitalism – with the emphasis on both the specificity of its systemic logic and on its historicity. In other words, historical materialism approaches capitalism in a way exactly antithetical to the current fashions: the systemic unity of capitalism instead of just post-modern fragments, but also historicity – and hence the possibility of supersession – instead of capitalist inevitability and the end of History [Kindle location 111.]

We saw this historical approach in both Arendt and in Polanyi. Foucault takes a historical approach as well, visible in several books including Discipline and Punish and The History of Sexuality, and apparently in Security, Territory and Population, though I didn’t get to finish that book. I can’t say what Wood thinks, but I’d guess she isn’t a fan of Foucault or Derrida. I’ll try to figure that out as we go along.

I’m certainly glad I stumbled into this book at this time. It fits my project of trying to understand the origins of neoliberalism and it’s current domination of economic discourse, and I hope it will serve as an entry point for understanding current Marxist thought as well.

Marxian Tools and Conservative Caterpillars

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May 5 was the 200th anniversary of Karl Marx’ birth, and Jonathan Chait decided to take a slap at him in a piece titled Trump Handed the Agenda to Conservatives and They Blew It. The title concept was addressed several weeks ago by Mike Konczal in a smart essay. Konczal asks why the Republicans who control all branches of government haven’t accomplished more, gives several examples of legislation that never moved, and asks why there is no discussion of these failures by conservative theorists.

Chait begins with an attack on an op-ed in the New York Times by Jason Barker, an associate professor of philosophy at Kyung Hee University in South Korea, titled Happy Birthday Karl Marx. You Were Right!. What was the point of attacking the birthday boy? Chait writes:

It is philosophically irrelevant that every nation-state founded on Marxist philosophy almost immediately metastasized into a repressive tyranny, [Barker] breezily insists. Perhaps this has something to do with the fact that the parties that ruled them all shared a common philosophy, and that this philosophy identified within their society an oppressor class whose political rights could and should be eliminated? No, no, reply the Marxists. All these real-world examples of governments attempting to actualize Marxist principles tell us nothing about Marxism.

Is Chait saying that Leninism is the same as Stalinism is the same as Marxist philosophy? Does he think the capitalists of Marx’ day didn’t oppress the workers? Does he think that early capitalists were tender shepherds to their employee sheep, or that the current billionaire class is the apex of Christian love and respect for their independent contractors? Who knows? This is just trite rhetoric, so he can ignore the thrust of Barker’s discussion of the obvious fact that efforts to put dialectical materialism into practice have failed. Barker says there’s a good reason for this. Marx was first and foremost a philosopher. He was a follower of Hegel, developing Hegel’s ideas of dialectical materialism into a broader theory of society. Barker explains:

… let’s be clear: Marx arrives at no magic formula for exiting the enormous social and economic contradictions that global capitalism entails (according to Oxfam, 82 percent of the global wealth generated in 2017 went to the world’s richest 1 percent). What Marx did achieve, however, through his self-styled materialist thought, were the critical weapons for undermining capitalism’s ideological claim to be the only game in town.

Chait suggests that conservatives will blame their leaders, especially Trump, when the actual problem lies with Conservatism. The parallel is supposed to be that this is just the same as Marxists blaming the failure of all Marxist regimes on evil leaders and not the “philosophy” itself. But that’s just not Barker’s position, or anyone’s, for that matter. Scholars, mostly European but a few Americans too, argue about Marxian philosophy, and about his criticisms of capitalism, but never in favor of the dictatorial regimes that attempted to put it into practice.

On the other hand conservatism and its triumphant successor neoliberalism were constructed by their founders and other cultural workers to be a theory of government. They have a theory of the person, an economic theory, and a rough program for transformation of democracy into a form suited to their flourishing. Their failures, including not least the failure to deliver a decent life to the vast bulk of society, are part of their program.

Chait doesn’t take up the issue of the destruction of conservatism and its replacement by full-blown neoliberalism. He thinks neoliberalism is nothing but a slur directed at real liberals by disgruntled leftists. He takes full advantage of the fact that neoliberalism is a denied structure, or at least a deniable structure.

The Conservative Movement, from its formation by William Buckley to its disappearance in 2016, was always a project funded by the rich. It was marketed with whispers of racism, xenophobia, religious fundamentalism, misogyny, patriarchy, anti-intellectualism and boundless militarism abroad and at home. The Conservative Movement was just a Trojan Horse for neoliberalism, when those whispers turned into roars. Think of conservatism as caterpillars spontaneously generated by the John Birch Society, the White Citizens Council and any number of grifting self-titled Religious Ministers until one day new Leaders burst forth in all their neoliberal putrescence and all the Republicans fall in behind them dancing, playing timbrels and chanting MAGA.

And that’s why the few remaining movement Conservative writers are bewildered into silence. They are stunned that their patrons no longer applaud their finely spun theories and their sharply honed plans. They thought they were relevant, when they were, as Konczal puts it, just the entertainment.

[Photo: Annie Spratt via Unsplash]

What Happened To The Cultural Elites: Conclusion

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Posts in this series

What Happened To The Cultural Elites: Changes In The Conditions of Production

What Happened To The Cultural Elites: The Capitalist Celebration

What Happened To The Cultural Elites: Entertainment Workers

What Happened To The Cultural Elites: I Just Work Here

Related Post

Symbolic Violence in Neoliberalism This post describes symbolic structures and cultural producers, sometimes called symbolic workers.

—————-

In this series I tried to figure out why the cultural elites didn’t react more strongly to the rise of neoliberalism. When I asked that question in this post I assumed that the cultural elites would see neoliberalism as a threat to their power, especially their ability to reproduce their class without interference because that is the source of their dominance. I got this idea from David Swartz’ book Culture and Power: The Sociology of Pierre Bourdieu. Writing this series has made me question the assumption, and now I think something else happened.

Early in the book, Swartz shows a graph combining economic and cultural capital. The graph indicates that some people hove lots of both, some have lots of one and little of the other, and others have varying amounts of both. The cultural elites might be taken to be the people with the most cultural capital and among them the people with the most economic capital. The justification for this is that as Bourdieu sees it, cultural capital can be exchanged for economic capital, and the people at the top of many cultural fields have done so and become wealthy. The entertainment industry is a good example. University top executives are another good example. It’s less true in some academic fields, but certainly there are many economists who have done so, and people from other fields have too.

In this description, cultural producers are the rest of the people who make a living by employing their cultural capital to create the symbolic structures that people internalize as part of their understanding of society. They are the lower-status academics, lower-ranking employees of the companies that make movies and TV shows, the content producers for newspapers and websites, copy editors and junior ad agency employees, comedy writers for late-night TV shows and sit-coms, most scientists, K-12 teachers and most musicians.

The cultural elites include the top TV and film company executives, top advertising executives, university executives and top editors and publishers of newspapers, and those of similar status in the businesses that produce cultural products. They also include the top individuals who work outside corporations, like top writers, directors, cinematographers, some artists, novelists, scientists and others at the top of their fields. Among this group are the top economists, people like Larry Summers and Gregory Mankiw.

From this perspective, we get to a good explanation for the failure of the cultural elites to oppose neoliberalism. They wound up being winners under the new discourse. They identified their interests with those of the economic elites, not those of the fields that provided them with cultural capital. They used their cultural power to select from the young people in their fields those who supported their views most slavishly, which had the extra benefit of securing and even increasing their wealth. Bluntly, they don’t oppose neoliberalism because they benefit from it.

If cultural producers know what’s good for them, they’ll do the same thing: support the neoliberal project in an attempt to convert their cultural capital into economic capital. That’s particularly true of the younger cultural producers, for the reasons laid out earlier in this series.

There are some groups of cultural producers who can and do safely resist neoliberalism. One group is the people in fields with little potential to convert cultural capital into economic capital, philosophers, musicians and writers, sociologists, anthropologists, and so on. Oh, and content producers who aren’t trying to get rich writing on these subjects.

Another group is those actively trying to replace the current group of cultural elites from the outside, by generating new ideas and theories. One example of this group is the MMT theorists; another is the Open Markets Institute. There are a few film makers, a few TV shows, and even an occasional cable news person who does a bit of resistance.

Finally, there are the young. They are in a good position to see the results of neoliberalism, and may provide the energy needed to move away from the dominant neoliberal discourse. There are new voices in the movies, such as Ava Duvernay, Patty Jenkins (Wonder Woman), and Ryan Coogler (Black Panther), among others, who work with good screenwriters and other film artists. There are others in areas of culture I don’t follow. There are even some new aspiring politicians, many inspired by Bernie Sanders. I guess we can hope.

—————————–

That concludes my reading of David Swartz’ book. I’m still reading Bourdieu’s Distinctions, but it’s tough going and maybe not of general interest. I’m also reading How Will Capitalism End? By Wolfgang Streeck, a German Economic Sociologist. I’m thinking about making that the next book, but it’s so depressing I could barely find a bit of hope for the last paragraph of this series. We’ll see.

[Photo: Annie Spratt via Unsplash]

What Happened To The Cultural Elites: I Just Work Here

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Posts in this series

What Happened To The Cultural Elites: Changes In The Conditions of Production

What Happened To The Cultural Elites: The Capitalist Celebration
https://www.emptywheel.net/2018/04/06/what-happened-to-the-cultural-elites-the-capitalist-celebration/cultural-elites-the-capitalist-celebration/

What Happened To The Cultural Elites: Entertainment Workers

Related Post

Symbolic Violence in Neoliberalism This post describes symbolic structures and cultural producers which I call symbolic workers.

The description of the cultural elites in this series is ugly: in a nutshell, they are so tangled up in the capitalist/market system that their intellectual autonomy and critical distance from authority is miniscule. In the related post linked above, I argued that it isn’t necessary to assume that symbolic workers are acting in bad faith. After all, they merely reproduce the structures they inherited from their teachers.

Recently I had an extended discussion with my friend Gaius Publius who writes at Down with Tyranny and at Naked Capitalism, and I have changed my mind. My post started from an idea I found in David Swartz’ book, Culture and Power: The Sociology of Pierre Bourdieu, that some of the structures that organize our understanding are denied structures, meaning that the people affected by them do not admit that they exist or that there is any other way to comprehend society. I argued that neoliberalism is a denied structure. But just because people deny a structure doesn’t mean that they do not see the results of their actions. In the case of symbolic workers, it’s more likely that they see the negative effects they are creating and keep working anyway. The higher up in a field or organization people rise, the less likely it is that they don’t the results of their actions and theories. At the top of fields and organization, denial is not possible.

The capitalist system creates all sorts of justifications for the projects it approves. The most obvious is that the market knows what people really want. The sixth sequel to the Fast and Furious series is just giving people what they want. The daily local news survey of fires, car crashes and shootings is what people want. The cable news patriotic theme music and fiery chyrons blaring out the latest bombing of other countries and the loving shots of dead people being carried to ambulances after the latest shooting are just what people want. People need to know about the latest fire, and there’s no need to explain why they need to know, or what could be done about it or which politicians and interest groups are stopping action because people don’t want that. If they did the market would provide it.

Another justification is advertiser pressure that needs to be dealt with so that more important work can be done. Or they say it’s a job, someone has to do it. It pays the rent and educates my kids which is at least true. Most fields of cultural production have some form of justification that relates to the field, as I show in the post about the economics field.

These justifications are out there waiting for symbolic workers who suddenly wonder if their work is contributing to the decay of communal society, if perhaps it’s creating distrust and fear, or reinforcing ugly and stupid stereotypes, or is causing direct harm. If the symbolic worker doesn’t look too closely, these justifications seem plausible. They are examples of some of the ways the existing system enables people to pretend not to see the results of their actions.

Swartz says that Bourdieu refers to this as misrecognition.

Misrecognition is a key concept for Bourdieu; akin to the idea of “false consciousness” in the Marxist tradition, misrecognition denotes “denial” of the economic and political interests present in a set of practices. Symbolic practices, Bourdieu thus argues, deflect attention from the interested character of practices and thereby contribute to their enactment as disinterested pursuits.
P. 54.

I like the term “false consciousness” better. Misrecognition connotes a mistake which ignores the agency of the symbolic worker. False consciousness has an implication of intention, or at least of willful refusal to engage with the problem, as in contemporary use of the term denial.

Neoliberal economists can see the results of their theories. They advocated relentlessly for the abolition of most regulation on the grounds that the marker would do a better job than the government. How could anyone make that argument in good faith after the Great Crash? But they don’t stop. They wrecked the antitrust laws, which has led to ridiculous levels of concentration in almost every industry. Now some of them argue that monopoly is not a bad thing, or that there is no such thing because a new competitor will arise. They are currently arguing against wage hikes whether through minimum wage hikes or a job guarantee. They don’t care about income or wealth inequality, which, they say, is the result of the markets in action.

In fact, it’s not clear what impacts their views have had that has any benefit for anyone but the rich few. With that record, which of them can plausibly claim not to be aware of their contribution to the sorry state of the personal finances of the 99%?

Another feature/bug is that day-to-day work keeps employees really busy, surrounds them with people who agree with them, and insulates them from critics. This is the defense Amy Chozick offers. Not once during the 1,226 days she covered Hillary Clinton did Chozick or her employers or editors ever stop to think about what heir coverage looked like to an outsider. Even after the disgusting coverage of Whitewater and the other phony Clinton scandals that followed, they got played by the Republicans and in Chozick’s telling, by the Russians.

Neither the neoliberal economists nor Chozick and her editors are innocents who misrecognize the results of their actions. They’re guilty of false consciousness, deliberately refusing to look at the consequences of their actions in real time, when it matters. Accountability is a way to force symbolic workers to confront the results of their actions. Firing and shaming people who cause damage is a good thing. But there is no accountabilty. They feel no responsibility to society and are held to no standards. None of it affects them; they do not suffer the consequences of their actions.

They just work here.