The main achievement of this
volume, the key contribution of Carchedi and Roberts, is that they unite their
wide-ranging assessments of topics from the destruction of the environment, via
inflation to imperialism and artificial intelligence within a clear
understanding of Marx’s theory of value. Their discussions are, therefore,
clearly driven by a historical materialist perspective. In capitalist
production based on wage labour and the private ownership or control of the
means of production, it is only living labour, i.e. variable capital, which can
produce surplus value, underpinning capitalist profits. ‘It is the transformation of abstract human labour
into the value of the commodities which is the focus of the law of value’ (P.2).
In the relentless competition between different capitals, however, they all try
to gain an advantage by increasing productivity through the introduction of new
technologies in the production process, i.e. constant capital, requiring less
variable capital. As the authors maintain, ‘the major factor influencing
profitability is technology. New technologies replace workers with means of
production. They produce less value and surplus value but realise more value at
the cost of the technological laggards’ (P.2).
While one particular capitalist may
gain an advantage in this competition, other capitalists are compelled to
innovate in order to catch up or even overtake their competitor. As a result,
there is a constant tendency towards increasing constant capital and shedding
variable capital in the capitalist production process. Hence, there is a
tendency towards a constant increase in what is called the ‘organic composition
of capital’ (P.3). Considering that only variable capital can produce surplus
value and that the rate of profit is the surplus value created divided by
variable capital plus constant capital, the emphasis on increasing constant
capital results inevitably in a falling rate of profit. Marx’s theory of value,
in short, identifies an inevitable tendency of a declining rate of profit. ‘Thus, the law of value leads to surplus value, the
organic composition of capital and the rate of profit on capital. With these
categories, we have the basis of a Marxist theory of 21st century capitalism’ (P.4).
Of
course, Marx in Capital Vol.3 noted a number of counter-tendencies, strategies
available to capital to mitigate the declining rate of profit (Marx 1894/1981:
339-48).
Carchedi and Roberts point them out: 1) an increase in the rate of exploitation
of labour; 2) a cheapening of constant capital lowering the organic composition
of capital; 3) the lowering of wages below the normal value of labour power; 4)
profits from foreign trade; and 5) fictitious profits in the financial sphere
(PP.93-4). And yet, over time, these counter-tendencies can
always only ameliorate temporarily capitalism’s tendency to crisis. In the end, the tendency of the
declining rate of profit and the related structural pressures for capital
always re-assert themselves.
There
are a whole range of economic problems, Carchedi and Roberts concern themselves
with. I will highlight their discussions of several of them. First, they start
off their volume with a focus on the relation between value and nature and the
related climate crisis. As they point out, as long as capitalists can access
cheap energy and raw materials, the increasing organic composition of capital
can be checked and the tendency of the falling rate of profit countered for a
while albeit with disastrous consequences for the environment and ultimately
humanity. ‘Capitalism thus turns the “free gifts of nature” into profit. And in
the incessant drive to raise profitability, it depletes and degrades natural
resources’ (P.17). In other words, in order to overcome crisis, capitalism is
compelled to expand relentlessly into nature in a desperate search for cheap
inputs to counter the tendency of the falling rate of profit.
Another
key contribution by Carchedi and Roberts is their understanding of inflation.
It is widely claimed that raising wages cause higher levels of inflation. And
yet, as they point out, ‘a rise in wages will generally lead to a fall in
profits, not a price rise. That is why capitalists oppose wage rises
vehemently’ (P.79). Connecting their analysis of inflation to the production of
value, by contrast, they conclude that ultimately it is both wages plus profits
that put upward pressure on prices and capitalists, in their constant search
for higher profits, therefore, bear key responsibility for rising inflation.
Hence, ‘inflation in the prices of consumer goods is accounted for principally
in terms of the production of value, itself a consequence of the decreasing
profitability’ (P.91).
Equally
compelling is Carchedi and Roberts’ assessment of imperialism and the way
imperialist countries on the basis of their technological superiority extract
surplus value from dominated countries through unequal exchange in trade
relations, which in turn is another ‘important counter-tendency to the
decreasing growth of surplus value in the imperialist countries’ (P.120). When
countries with companies predominantly based on advanced technologies and thus
high organic compositions of capital trade with countries with predominantly
labour-intensive companies, i.e. low organic compositions of capital, and
considering that profit rates are equalised among countries, the former will
receive surplus value created in the latter. After all, a high organic
composition of capital implies high productivity levels, but low profit rates,
while a low organic composition of capital implies low productivity levels, but
a high rate of profit.
Their
assessment of the increasing deployment of robots and AI in the production
process is also pertinent. Of course, this does increase capitalist
productivity. However, it will not ensure profitability permanently either.
More robots imply a higher organic composition of capital, which in turn
results in a falling rate of profit. The more robotisation spreads through the
whole economy, the more downward pressure on profitability there is. ‘This is
the great contradiction of capitalism: increasing the productivity of labour
through more machines reduces the profitability of capital’ (P.156).
While
many observers highlight the shortcomings of capitalism, few actually engage in
developing concrete alternatives. Carchedi and Roberts, by contrast, dedicate a
full chapter to the question of socialism/communism. This is the final major
contribution I would like to highlight. As they point out, ‘socialism would
mean a society without classes and without the exploitation of wage labour.
Under socialism, the means of production would be commonly owned and production
would not be for the market but direct to the consumer without any process of
exchange for money. Production would be by the free association of producers in
common, distributed by society through democratic decisions’ (P.187). Key
ingredients for success are ‘workers’ democracy’ (P.225), something which has
been lacking in Stalin’s Soviet Union, for example, as well as economic
planning using labour time as measure at least in the initial period
(PP.234-6). This will ultimately provide the basis for everyone being able to
develop their own capacities and interests. ‘The creation of positions’, they
write, ‘encompassing a wide variety of tasks and the rotation of individuals
among different positions would ensure that each can realise his/her
potentialities to the maximum during his/her working time’ (P.232).
As
impressive as this systematic assessment of a large number of economic issues
of capitalism through Marx’s theory of value is, there are, however, several
areas in which a wider reflection might be necessary for a full understanding.
First, there is Carchedi and Roberts’ dismissal of degrowth theory, arguing
instead for ‘controlled and planned growth’ (P.37). They are right, when they
say that under socialism it will be possible to focus exclusively on the
production of use value. They are wrong, however, when they believe that the
limits to growth in a situation of finite planetary resources would not apply
to socialism. Even in a communist society, we could not endlessly focus on
increasing economic growth. They are also wrong, when they argue that ‘if
growth is halted, it means that the underdeveloped countries are condemned to
remain stuck in the swamp of poverty, constantly on the brink of famine’
(P.37). Degrowth theorists such as Jason Hickel make clear that in the overall
scheme of things, while industrialised countries would have to cut back their
economic production drastically, there would be still space for further
development of developing countries (Hickel 2020: 187-96). Degrowth can
only work if it goes hand in hand with a global redistribution of wealth.
Second,
can imperialism be reduced to economic dependencies, as the authors suggest?
Imperialism through ‘free trade’ is an important feature. It was part of
Britain’s role in the international economy during the 19th century
(see Gallagher and
Robinson 1953)
and it continues today in the form of neo-colonial relations. Nevertheless, has
not direct, coercive political power always been part of imperialism and the
building of empires especially during the 19th century? Carchedi and
Roberts contrast their understanding of imperialism with ‘colonialism’, defined
as ‘the appropriation of natural resources, military occupation, the direct
state control of colonies, the stealing by the imperialist countries of
commodities not produced capitalistically and the brutal exploitation of labour
in the colonies’ (P.117). In practice, however, it is doubtful whether these
two forms of exploitation can be so clearly distinguished.
Third,
they dismiss the notion of super-exploitation, the suppression of the price of
labour below the level necessary for workers to ensure their own reproduction,
identified by Marini (1973/2022) as a key
characteristic of capitalism in the periphery of the global economy. For them,
the fact that super-exploitation also occurs elsewhere is proof enough that
this concept does not hold any explanatory value. ‘Hundreds of millions of
workers everywhere, not just in the “Global South”, are paid below the value of
the labour power, the cost of its reproduction – in the US, Germany, Italy,
Spain; a large portion of this falls upon the migrant workers in those
“advanced” countries’ (P.134). While this is correct as such, as Jaime Osorio
makes clear in response, it is not about whether super-exploitation occurs or
not. ‘The central issue … is to pinpoint the predominant forms of exploitation
in distinct social formations in “normal” periods of reproduction, looking at
the sectors of the working population they affect and the impact they have on
the reproduction of capital’ (Osorio 2022: 177). And it is in
this respect that super-exploitation dominates capitalist social relations of
production in peripheral spaces in the global economy.
Finally,
I am not convinced about Carchedi and Roberts’ assessment of the Chinese
economy not being dominated (yet) by capitalist economic laws. The country’s
economy, the authors argue, ‘is not yet dominated by the market, by investment
decisions based on profitability; or by capitalist companies and bosses; or by
foreign investors’ (P.213). Crucial in this respect is, according to the
authors, that Chinese state-owned enterprises (SOEs), the public ownership of
the means of production are still dominant, with a special role played by the
financial sector. ‘The major banks are state-owned and their lending and
deposit policies are directed by the government. There is no free flow of
foreign capital into and out of China. Capital controls are imposed and enforced
and the currency’s value is manipulated to set economic targets’ (P.215).
However, large state-owned sectors were part of Western industrialised
countries in the post – World War Two period. This did not undermine the
capitalist nature of these economies.
Equally,
the assessment that ‘the great “one belt, one road” project for central Asia is
not aimed to make profit. It is to expand China’s economic influence globally
and extract natural and other technological resources for the domestic economy’
(P.217) is rather surprising. An alternative explanation for the ‘one belt, one
road’ project is China’s rather desperate search for new profitable investment
opportunities to overcome an increasingly severe crisis of overaccumulation. As
William I. Robinson points out, ‘Chinese capitalism now shows many of the
telltale structural signs of crisis: a hypertrophied financial sector,
including banking assets that ballooned to some $50 trillion in 2021, not
including shadow finance; a runaway spiral of household and corporate debt that
went from 178 percent of GDP in 2010 to 287 percent in 2021; overcapacity; a
slowdown in growth rates; and social polarization’ (Robinson 2022: 73). In other words,
Chinese capitalism suffers from exactly the same structural pressures, as
capitalism elsewhere.
Nevertheless,
these points of critical engagement should not make us overlook the major
contributions of this volume. It provides us with a masterful Marxist
assessment of current developments in global capitalism and is a must read for
every historical materialist scholar, interested in understanding current
crisis tendencies.
4 December 2023
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