Friday, July 1, 2016

James P. Cannon on July 4

From Karl Marx to the Fourth of July

By James P. Cannon 

From page 2 of the July 16 1951 issue of The Militant

I’m a Fourth of July man from away back, and a great believer in fire crackers, picnics and brass bands to go with it. You can stop me any time and get me to listen to the glorious story of the greatness of our country and how and when it all got started. The continent we inhabit has been here longer than anyone knows—but as a nation, as an independent people, the darlings of destiny favored above all others, we date from the Declaration of Independence and the Fourth of July.

The representatives in Congress assembled 175 years ago were the great initiators. When they said: “We hold these truths to be self-evident,” they started something that opened up a new era of promise for all mankind. That’s what I am ready to celebrate any time the bands begin to play—the start and the promise. But nobody can sell me the Fourth of July speeches which represent the start as the finish and the promise as the fulfillment. I quit believing in them a long time ago. As soon as I grew old enough to look around and see what was going on in this country—all the inequality and injustice still remaining—the beneficiaries of privilege, claiming the heritage of our first revolution, struck me as imposters. I recognized the standard Fourth of July orators as phonies, as desecrators of a noble dream. They didn’t look like the Liberty Boys of ’76.

But that never turned me against the Fourth of July, as was the case with so many American radicals and revolutionists in the past. I thought the Fourth of July belonged to the people. I always regarded its renunciation as one of the biggest mistakes of American radicalism. It is wrong to confuse internationalism with anti-Americanism; to relinquish the revolutionary traditions of our country to the reactionaries; to let the modern workers’ revolutionary movement, the legitimate heir of the men of 1776, appear as something foreign to our country.

That is why it did my heart good to see The Militant blossom out this year in a special Fourth of July issue, with its front page manifesto greeting the people of Asia, fighting for their national independence, in the name of our own revolution of 1776—and a whole page of special articles devoted to this revolution and its authentic leaders. The articles in this special issue are obviously the result of serious study and historical research. They throw new light on the most important features of the revolution which have long been obscured, and even deliberately hidden, to serve the special interests of the present-day Tories. These revelations put a powerful propaganda weapon into the hands of those who see in the coming revolution of the American workers not a negation, but a continuation and completion of the revolution for national independence of 175 years ago.

The authors of these remarkable articles were guided in their research by a theory which required them to look for the essential facts and study them in their inter-relationship. They sought to uncover the motive force of the class struggle—the key to the real understanding of all history. The theory which inspired the authors of these articles to study the first American revolution, and guided them in their work, is Marxism—which Congress and the courts would outlaw as a “foreign” doctrine, and the teaching of which in the schools is now virtually prohibited.

The procedure through which these articles in the Fourth of July issue of The Militant finally took shape is an interesting story in itself. They are the work of students in our party school of Marxism. We are committed to the proposition that the cadres of our party have a historical task to accomplish. That task is to organize and lead the coming revolution of the American working class. How better can one prepare to take effective part in such a colossal enterprise than to study the revolution out of which this nation was born? And how can one study revolutionary history seriously and profitably without the aid of the only revolutionary theory of history there is? That’s our point of view anyway. And we are serious enough about it to take a group of our leading people of the younger generation out of everyday activity for six months every year to study the history of their country and this “foreign” doctrine which alone explains it.

You will never find two subjects which fit better together. Marx sketched the whole broad outline of American capitalism as it is today in advance of its development. In return for that, American capitalism in all its main features is the crowning proof of Marxism. Our students go to Marx to study America, and study America to verify Marx.

Marxism is a hundred years old, and has been refuted a thousand times by professional pundits. Not satisfied with that, its opponents—who have far more than a scientific interest in the matter—continue to refute Marxism daily, weekly and monthly in all their publications and other mediums of misinformation and miseducation. Our students know all about that, and examine all the refutations conscientiously as part of their study of the doctrine itself. In the course of this examination and counter-examination they become real Marxists. They learn their doctrine thoroughly, and in learning they proceed to apply it. Marxism is not a dogma to be studied for its own sake, but a theory of social evolution and a guide to action in the class struggle. It is not a substitute for the knowledge of concrete reality, past and present, but a theoretical tool for its investigation and interpretation. Our students understand it that way.

They went to Marx—and discovered America.

And that, in my opinion, is a very important discovery. We have nothing to do with jingoism, or any kind of vulgar national conceit and arrogance. We are internationalists, and we know very well that our fate is bound up with that of the rest of the world. The revolution which will transform society and bring in the socialist order is a world-wide affair, a task requiring international cooperation to which we contribute only a part. But our part in this international cooperation is the revolution here at home. We must attend to that, study it and know it. And we can’t do that properly unless we know our country and its history and traditions. They are, for the greater part, good. The country itself is good, and so are the great majority of the people in it. Their achievements are many and great. There is nothing really wrong with the USA except that the wrong people have usurped control of it and are running it into the ditch.

The cure for that is not to throw away the country and its traditions, but to get rid of the usurpers by the process popularized by our forefathers under the name of revolution. This new revolution will have to complete the work started by the men of 1776. They secured the nation’s independence. The Second American Revolution of the Sixties, known as the Civil War, smashed the system of chattel slavery, unified the country and opened the way for its unobstructed industrial development. The task of the Third American Revolution is to take this great industrial machine out of the hands of a parasitical clique who operate it for their own benefit, and operate it for the benefit of all.

That’s the general idea. But it is not quite as simple as it sounds. There are complications and complexities. The workers have to make their way through a jungle of traps and deceptions. They need a map and a compass. They need a generalization of the experiences of the past and a theoretical guiding line for the future. That’s what Marxism is. The American workers will come to Marx, and with him they will be invincible. “Marx will become the mentor of the advanced American workers,” said Trotsky. We have the same opinion, and we are working to realize it.

Karl Marx, the German Jew, who lived and worked out his profound theory in England, is native to all countries. The supreme analyst of capitalism is most of all at home in the United States where the development of capitalism has reached its apogee. Marx will help the American workers to know their country, and to change it and make it really their own.


From page 2 of the July 16 1951 issue of The Militant

Thursday, June 30, 2016

The Asiatic Mode of Production

From Chapter 8 of Ernest Mandel's The Formation of the Economic Thought of Karl Marx: 1843 to Capital.

8. The Asiatic Mode of Production and the Historical Pre-Conditions for the Rise of Capital

* must carefully distinguish what Marx and Engels meant by this expression, the distortion that it subsequently suffered at the hands of some of Marx’s disciples and some of his opponents, and the way it is used today by historians and sociologists inspired by Marxism. For this purpose, a brief review of the origin of the idea in the thought of Marx and Engels seems useful.

Without wishing to go back to the origin of the expression “Oriental despotism,” which dates from the seventeenth century, or to Montesquieu, who made extensive use of it,13 it is likely that Marx and Engels worked out their theory of the Asiatic mode of production under the influence of three currents of thought: first, economists like John Stuart Mill and Richard Jones, whom Marx had studied or was studying in 1853, and who employed similar expressions;14 then, accounts of travels, memoirs, and monographs devoted to Eastern countries, which Marx and Engels read at about this time;15 finally, special studies they made of village communities in other parts of the world which led them to recognize the importance of this type of community in the countries of the East.16

All of these studies were at bottom by-products of a constant and minute analysis Marx and Engels were making of Britain’s foreign trade and economic situation. The markets of the East were increasingly important as outlets for British industry. The expansion of British exports was causing profound upheavals in Oriental society—the Taiping rebellion in China and the Sepoy mutiny in India were reactions, directly or indirectly, to this disintegrating influence. Fascinated by revolutions, whether they occurred in the West or in the East, Marx and Engels set themselves to study the structure of the societies that were being shaken. This was how they came to formulate the working hypothesis of an Asiatic mode of production.

The fundamental characteristics of this mode of production were set out exhaustively enough in the three letters of June 1853 already mentioned, and in four articles published in the New York Daily Tribune. They can be summarized thus:

(1) What is above all characteristic of the Asiatic mode of production is the absence of private ownership of land.17

(2) As a result, the village community retains an essential cohesive force which has withstood the bloodiest of conquests through the ages.18

(3) This internal cohesion of the ancient village community is further increased by the close union of agriculture and craft industry that exists in it.19

(4) For geographical and climatic reasons, however, the prosperity of agriculture in these regions requires impressive hydraulic works: “Artificial irrigation is here the first condition of agriculture.”20 This irrigation requires nearly everywhere a central authority to regulate it and to undertake large-scale works.21

(5) For this reason, the state succeeds in concentrating the greater part of the social surplus product in its own hands, which causes the appearance of social strata maintained by this surplus and constituting the dominant power in society (whence the expression “Oriental despotism”). The “internal logic” of a society of this kind works in favor of a very great degree of stability in basic production relations.

We find all these characteristics mentioned in the Grundrisse, including the importance of hydraulic works.22 At the same time, however, we find a number of additional ideas which enable us to define more exactly what Marx and Engels meant by the Asiatic mode of production.

In the first place, the quite accidental and secondary development of the towns in Eastern countries, and their strict subordination to the heads of state or their satraps, are stressed several times.23 This meant that production remained almost exclusively production of use values.24 Now, it is the development of the production of exchange values in the towns that makes possible preparation for the predominance of capital. When the power of money becomes predominant in non-industrial societies, it leads to the domination of the country over the town.25 In other words, the distinctive structure of the Asiatic mode of production—the subordination of the towns both to agriculture and to the central authority26—implied that capital could not fully develop. That meant not stagnation of the productive forces (which cannot be proved in a case like that of China) but retarded development, which in the end proved fatal to the nations based on this mode of production.27

The dissolving effect which the development of trade and a money economy had on the Asiatic mode of production is shown in numerous examples from the history of ancient Mesopotamia, China, and India. The Hungarian sinologist Ferenc Tökei uses, for China, the expression “pre-capitalist development.” It is undeniable that under the Ming dynasty China experienced—like India at the height of the Mogul period—an expansion of luxury production and private trade that brought the country to the threshold of manufacturing and commercial capitalism.28 But it is the peculiar structure of the Asiatic mode of production that enables us to explain why this threshold was not crossed.

Wednesday, June 29, 2016

Objections by bourgeois economists to the labor theory of value

From Chapter 6 of Mandel's The Formation of the Economic Thought of Karl Marx.

....It is interesting to examine some of the objections that have been raised in recent decades against the labor theory of value as perfected by Marx.36 In this connection I will deal with the observations of Frank H. Knight, Joseph Schumpeter, Oskar Lange, and Joan Robinson.

According to Knight,37 a labor theory of value would be justified only if labor were a rigid and non-transferable “factor of production.” But the mobility of “labor,” associated with the mobility of “other agencies of production,” leads to a situation in which various combinations of these “agencies” are possible, and this entails determining their value by their “marginal productivity.”

The only trouble is that the value of machines—their cost of production—is perfectly well known.38 It is wholly independent of the number or value of the commodities these machines can produce. No industrialist, when he buys a piece of equipment, calculates the “surplus of value” that it will bring him. What he calculates is the saving that it will enable him to make in his costs of production (or, if you like, in his net cost per unit). And if one were to question industrialists, nine times out of ten they would say spontaneously that what interests them is “saving labor” (in the United States, machines have long been described as “labor-saving devices”).

Every industrialist likewise knows that machines that just lie in the factory without moving do not produce a particle of value; for them to serve in production they have to be set in motion by living labor.39 It is the latter, and the latter alone, that incorporates new value into the commodity; as to the value of the machines and other “agencies,” that is merely conserved by living labor, which transfers the equivalent value (wholly or in part) into the commodities it produces. This is also known to industrialists and statisticians, since they speak of an “added value” which is shared between the capitalists and the workers, and which is added to the “conserved value” (raw materials and machinery). The secret of this “added value” must therefore be found in labor alone. And Marx discovered this when he formulated his law of surplus value.

Schumpeter’s argument against the labor theory of value and in favor of the theory known as that of “factors of production” is of the same sort. He reproaches supporters of the labor theory of value with being inspired by “ethical philosophies and political doctrines” that have nothing to do with economic reality as such. “In other words, they failed to see that all that matters for this purpose is the simple fact that, in order to produce, a firm needs not only labor but all the things that are included in land and capital as well, and that this is all that is implied in setting up the three factors [of production].”40

To be sure, if one wishes to come down to this level of commonplace it should be added that in order to produce a “firm” needs not only labor, land, buildings, machinery, raw materials, and money, but also an organized society, police protection, a state system that includes means of communication, an infrastructure, etc., and many other things as well. Why arbitrarily isolate “three factors of production”? Why not talk of five “factors of production”: labor, land, machinery, reserves of liquid money, and state organization, and then discover five “incomes” corresponding to these “factors”: wages, ground rent, profit, interest, and taxes?

The capitalists and their ideologues raise a weighty objection to this: no “real contribution” is made by the state or by organized society to the new value created within the enterprise; they merely provide “external savings,” an indispensable general framework. But then one is equally justified in asking whether “land” or “machinery” (not to speak of “liquid money”) make any “real contribution” to the creation of new value within the enterprise, because it is recognized by implication that not everything that is a “factor indispensable for production” is thereby ipso facto a “source of new value.” And we are thus brought back to the problem of the ultimate origin of the value “added” in production, which can only come from living labor.41

A more serious and more sophisticated objection is advanced by Oskar Lange in one of his early writings.42 Lange’s argument can be summarized thus: Though Marxist theory has been able to predict correctly the laws of capitalist development, it has not proved able to supply an adequate theory of prices (and especially of monopoly prices), or an adequate theory of the optimum use of resources in a socialist society, or, above all, a theory of crises, because it is fundamentally a “static theory of general economic equilibrium.”43 Moreover, the labor theory of value is incapable of explaining the nature of wages and the survival of profit, which are supposed to be determined by the technical progress inherent in the capitalist system. But this “dynamic” element is not so much a result of the internal logic of the labor theory of value as of the institutional framework of capitalism revealed by Marx. And it is his analysis of this institutional framework, rather than the labor theory of value, that is the source of Marxism’s superiority as a tool of analysis for discovering the laws of capitalist development.

It seems to me that Lange’s very starting point is mistaken. The labor theory of value cannot be considered a “static theory of general economic equilibrium.”44 The labor theory of value, as corrected and perfected by Marx, is indissolubly linked with the theory of surplus value. The two theories taken together, far from constituting a “static theory,” form by definition a dynamic theory. They are in fact a synthesis of two opposites, a conception of equal exchange linked with a conception of unequal exchange. It is above all the exchange between labor and capital that possesses this dual quality.

Consequently, the “Marxist model” is by nature dynamic, since it leads to the conclusion that the production of new value, the increase in value, economic expansion, economic growth are inherent in the capitalist mode of production. This same Marxist model is not a “theory of general equilibrium” but, again, a synthesis of two opposites, a demonstration of the fact that the permanent (and apparent) disequilibrium of capitalist economic life is based on a more profound equilibrium, which in its turn gives rise to necessary and inevitable disturbances of this equilibrium (periodic crises, tendency of the average rate of profit to fall, concentration of capital, intensification of class struggle) that end by undermining the system.

Lange’s idea that the dynamic element (economic evolution) results from the institutional framework rather than from the internal logic of the labor theory of value is also based on a mistake. According to Lange, the element of “technical progress” is necessary if we are to understand why wages do not “threaten to annihilate the employers’ profits”;45 capitalist profit could not go on existing except in a setting of technical progress. Lange forgets that, even without technical progress, wages cannot abolish profits because the capitalists stop hiring workers long before this point is reached. They prefer in this situtation to shut down their factories and thereby also re-establish an industrial reserve army—even without “technical progress.” This is indeed what happens in all the more or less “prefabricated” recessions of neocapitalism. The capitalists can wait, whereas the workers cannot because they possess neither the means of production nor the means of subsistence.

Besides, it is not only the competition between capital and labor but also the competition among capitalists that explains technical progress, according to the Marxist model. Both forms of competition result from the twofold necessity of accumulating capital and realizing surplus value under economic conditions in which the quantity of labor socially necessary to produce a commodity manifests itself only a posteriori, and is unknown a priori. It is these two reasons, which relate to the fundamental character of the capitalist mode of production—that is, of a system of generalized commodity economy—that are the ultimate root of the “dynamic” element in Marxist economic theory. They both follow from the very nature of the labor theory of value.

I will mention in conclusion the criticism of the labor theory of value which Joan Robinson formulated soon after the Second World War.46 In her view, Marx, like Ricardo, was mistaken in seeking an intrinsic value of commodities “analogous to weight or color.” And Marx, like Smith, sought “a measure of value which would be invariable,” which he found in labor. The labor theory of value constructed on these theoretical foundations was useless, and Marx could have explained all the laws of development he discovered in much less complicated terms without resorting to the labor theory of value.

As Roman Rosdolsky has shown in detail,47 these arguments reflect an astonishing failure to grasp Marx’s ideas, although he expounded them clearly enough. Marx explicitly denied that the exchange value of commodities was an “intrinstic quality” of commodities in the physical sense; on the contrary, he showed that the common “quality” that makes commodities commensurable is not physical but social in nature. What Joan Robinson has not grasped is the difference between concrete labor, which creates use values and the physical properties of products, and abstract labor, which creates exchange value. Nor did Marx set out to discover an “invariable measure of value.” On the contrary, he showed that the measure of exchange value must itself be a commodity, that it must itself be variable. It is just because exchange value presupposes a common quality in all commodities—the fact that they are all produced by abstract labor, by a fraction of the total labor potential at society’s disposal—that it is at once social and variable, and not physical and immutable!

What all these critiques have in common is their inability to grasp the level of abstraction to which Marx ascended in order to discover the socioeconomic problems underlying the problem of exchange value....

Tuesday, June 28, 2016

Alyson Kennedy video

Workers World Party supports UK big capital against "Brexit" voters

Left hysteria against the results of the UK "Brexit" vote continues. It converges quite clearly in this case with the broad anti-worker media propaganda campaign we've seen around the Trump vote in the U.S.

If WWP can endorse the Remain vote for UK workers, can an endorsement of Democratic Party lesser-evil be far behind?

A few excerpts:

....racist character of the Leave vote.

....From the anecdotes and statistics above it would seem clear that it was better to vote Remain while giving an anti-imperialist, anti-EU explanation that showed solidarity with the oppressed than to remain silent and abstain, leaving your position unknown. Also, whatever anti-imperialist arguments are made, it is clear that the Leave movement is a right-wing movement with a flagrantly racist agenda.

....To be sure, the Leave vote struck a blow at the EU. But that blow is hardly to the advantage of the working class, even if it brings havoc to imperialist commerce and finance capital. The British vote to Leave the EU is now being hailed by the National Front in France, by the Alternative for Germany, by the rightist Democratic Party of Sweden, by the right wing in the Netherlands, Austria and Hungary and by Donald Trump....


Talcott Parsons: a Marxist view

From Chapter 4 of Mandel's The Formation of the Economic Thought of Karl Marx. After a discussion of Marx's economic theorizing from 1846 to 1848, Mandel writes:

....The synthesis of sociology and economic science that Marx endeavored to accomplish derives its enormous superiority from the fact that it is based on a synthesis of the logical (dialectical) method with the historical method.37 No other theory has so far achieved a synthesis which comes anywhere near the practical success of the Marxist method.

Recently the American sociologist Talcott Parsons has tried to effect a comparable synthesis. Within the framework of a highly formalized sociology and a general theory of action, he treats the economy as a special feature of a “social system” specialized in increasing the “adaptability” of the wider system.38 This attempt at a synthesis can be considered a failure for three fundamental reasons: its largely unhistorical character, its inability to grasp the basically contradictory nature of every “social system” (and of all reality), and its rather clearly apologetic tendency in relation to the reality of present-day capitalism (monopoly capitalism, which has closely integrated the state with itself, or neo-capitalism).

Talcott Parsons alleges, to be sure, that his analysis applies to “any society” and “any” social system.39 But this ambitious claim does not stand up to historical criticism. When Parsons says that the state of demand and conditions of production change continuously, in all societies, except in “highly traditional” primitive economies,40 he overturns the teaching of economic history. In fact, these “continuous” changes in demand and conditions of production are only the product of generalized commodity economies—which fill only a very small part of the total history to date of homo sapiens. Parsons discovers the origin of “capital” (defined, in the usual way of apologetics, as the totality of society’s “fluid” resources: as if a primitive village’s stock of seed, or the flocks of a nomadic tribe living at the stage of gentile communism, were “capital”!; as if capital were not a social relation!) in the links between the economy and the political collectivity, through generalization of the role played by credit in the epoch of the decline of monopoly capitalism. How then is one to explain the “normal” accumulation of capital in large-scale industry at the dawn of Britain’s age of laissez-faire, when the role played by credit was clearly secondary, and when, moreover, credit was largely private?

The unhistorical nature of Talcott Parsons’s functionalist schema is obvious when one notes that most of his definitions in the economic field are only generalizations (made hardly even a little abstract) of the essential features of a capitalist economy, and even of a capitalist economy in a particular phase of its development. Thus, his definition of the economy as striving to attain the “goal” of maximizing production within the framework of the system of institutionalized values41 (as if there had not been a series of modes of production whose “institutionalized values” implied precisely deliberate refusal to “maximize production”!). Or his definition of the “contract” as the central economic institution (as if the contract were not the offspring of commodity production).42

His inability to grasp the contradictory character of “social systems,” and a fortiori of “economic systems,” is the most important of the three weaknesses of Talcott Parsons’s schema. By eliminating conflicts between social groups from the foundation of his analysis; by considering the “systems” as tending to “integration,” to “lessening of tensions”; by concealing the fact that the dominant “values” of a system do not at all correspond to the interests of all its members but only to those of the dominant minority, Parsons renders himself incapable of explaining either the driving force of historical evolution, which passes from one social and economic system to another (the periodical conflict between the level of development of the productive forces and the relations of production), or the concrete form that historical evolution takes (the struggle between antagonistic classes and social forces). Whereas the Marxist system enables us to explain historical phenomena as different as the origin of the Asiatic mode of production, the decline of the Roman Empire, the rise of the cities in the Middle Ages, the coming of large-scale industry, the wiping-out of free competition, the outburst of Fascism and its defeat, we would search in vain in Talcott Parsons’s formulae for the elements needed in order to understand these varying phenomena. The few remarks about pre-capitalist social contradictions that can be found in Economy and Society reveal a lack of understanding which is sometimes almost grotesque.43

Talcott Parsons’s fundamental thesis comes to grief through his incomprehension of social conflicts and their economic roots. Every “economic system,” when it reaches a certain point of development, does not increase but, on the contrary, greatly reduces the adaptability of its “larger social system.” The evolution of the Roman Empire after the second and third centuries A.D., or the evolution of China in the eighteenth and nineteenth centuries, provide striking examples in disproof of Parsons’s schema.

As for the apologetic character of Talcott Parsons’s theory, this is shown especially in the way he deals with the institutional framework of capitalist society. Labor makes the decision—within the workers’ “households”!—to offer its “performance” to the “organizations,” in exchange for and in consideration of “remuneration” and other “satisfactions.” This decision is taken primarily(!) on the basis of a “general socialized motivation.”44 And so on. The fact of a social class with neither resources of its own nor access to means of subsistence, one which thereby suffers an economic constraint precedent to any “socialized motivation,” any “acceptance of the fact of labor”—the only other solution being death from starvation!—has no place in Parsons’s “institutional” analysis. Similarly, one looks in vain for the slightest explanation of the fact that feudal ground rent obviously represents a product of labor not paid for by the nobility, which the latter appropriates, or the slightest attempt to disprove the analogy which can be perceived between the social surplus product in pre-capitalist times and the surplus value produced under the capitalist mode of production.

Militant Labor Forum on "Brexit" announced