Revolutionary Flows of Value in the Macroeconomy
In continuation from the last two essays looking at the macroeconomics
of class struggle (#1) (#2) we will try to describe the process of
revolution within the framework as developed so far.
The old acrimonious accusations between so-called "Reformist" and
so-called "Revolutionary" positions are counter productive.
The reformist strives to improve certain conditions within the current
society. A revolutionary strives for a complete transformation of
society. In the context of the struggle against economic exploitation, a
reformist fights for wages and benefits by organizing collectively and
politically against capital, while the revolutionary organizes
collectively and politically towards to abolition of capitalism.
Reformists argue the revolutionaries are unrealistic and divisive,
while revolutionaries consider the reformists delusional and as simply
serving to preserve capitalism.
In many cases, both are right.
Utopianism (#3 #4) is rampant among reformists, making& much of what is
proposed among proponents of so-called "Alternative Economics" utterly
nonsensical.
However, one must differentiate among those engaging in direct struggle
for wages and benefits, that is, those who recognize and acknowledge
class conflict, and those who, as Marx wrote, "want to improve the
condition of every member of society, even that of the most favored.
Hence, they habitually appeal to society at large, without distinction
of class; nay, by preference, to the ruling class. For how can people,
when once they understand their system, fail to see it in the best
possible plan of the best possible state of society?" That is, those
that "reject all political, and especially all revolutionary, action;
they wish to attain their ends by peaceful means, and endeavor, by small
experiments, necessarily doomed to failure."
And conversely, certain kinds of nihilism and disassociation are
rampant among revolutionaries. A tendency to mock and often even hold in
contempt all those who are actively trying to improve the conditions of
life within capitalism, sometimes with the extremely vulgar belief that
to abolish capitalism we must not improve the conditions of life within
it, or even actually celebrate its further decline, for only when the
conditions become so miserable that they become unbearable will the
masses rise up and abolish capitalism!
Thus, those trying to improve the conditions of life are actually
counter-revolutionaries, and those remaining aloof and inactive are the
true revolutionaries!
Just as much as Utopianism is to be rejected, this view, what we might
call "Cataclysmism" must likewise be rejected.
Neither waiting for the collapse of the ruling class, nor appealing for
their mercy will lead to communism. Social collapse is much more likely
to lead to despotism and fascism than communism. Appeals will fail
because the ruling class is compelled to protect their privilege by any
means necessary, just as the workers are compelled to keep working. If
they fail to do so, they lose their privilege, not to the working
classes, but to competing elites.
Any realistic path to overcoming economic exploitation requires both
reform and revolution.
Which brings us back to Macroeconomic Identities.
Our capacity to change society begins with what I have described as
"The social capacity of workers to invest" and identified
macroenomically as Iw.
If Iw is zero, we can not change society at all, because we are not
able to retain any more wealth than is required for our own subsistence.
Thus we would have no wealth available to apply towards organizing
collectively or politically towards anything at all, only just enough to
toil another day.
The working of the capitalist labour market will always push Iw toward
zero, thus only through political struggle is Iw kept above zero. Our
revolutionary capacity depends on pushing for as much reform as
possible, whatever serves to increase wage levels and benefits gives us
more left over to invest towards revolutionary aims.
However, such reforms will not serve our purposes unless they come with
revolutionary aims. Increases in wages and benefits are easily absorbed
in capitalist consumption, often simply in increased rents, if not
intentionally intvested in worker's productive capacity.
We can understand flows between modes of production similar to the way
that imports and exports are understood.
Returning to our basic macroeconomic identity, W + P = C + I, if we
want to factor in imports and exports we can say that W + P = C + I + N,
wages plus profits are equal to Consumption plus Investment plus net
exports, that us exports minus imports. This allows us to look at the
macroeconomy of one country within a global context that includes other
countries.
A country can increase it's wages and profit above what it's own
consumption and investment can fund when it has a trade surplus because
the consumption from other countries are funding wages and profits
within the country. However, at the global level net exports must always
be zero, so a trade surplus in one country implies a trade deficit
elsewhere.
When a country has a trade deficit then N is negative, meaning that the
country's total wages and profits are below it's consumption and
investment. This naturally means that the country is building debt and
thus, such a situation is not normally sustainable. The economy of the
country with a trade deficit is shrinking relative to the economy of the
country with the trade surplus.
We can look at intermodal economic flows in the same way.
We can define the capitalist sector of the economy with P + Wm = Cm +
Ip + Nm, or profits plus wages of workers working for capital equals
consumption of the output of capital (market consumption) plus
investment derived from profit plus net intermodal consumption. That is,
the "exports" from the capitalist sector to the communist sector minus
the "imports" from the communist sector to the capitalist sector.
Whenever money earned in the capitalist sector is used to consume
wealth produced in the communist sector, the net effect is that the
capitalist sector shrinks relative to the communist sector, and vice
versa.
Conversely, we can define the communist economy as Wc = Cc + Iw + Nc,
that is wages of commons-based producers are equal to commons based
consumption plus workers' investment plus net intermodal consumption.
Of course, Nm + Nc = Zero.
Thus, economic reformism is only to be dismissed with it simply
increases Cm and thereby does not change the balance of economic power,
while a revolutionary must strive to push Nc above zero, for if it can
be sustained as such then this means the inevitable disappearance of the
capitalist sector.
To abolish capitalism and replace it with a commons based economy we
need to build an intermodal trade surplus.
I'll be at Stammtisch as usual at 9pm (#5). Please come!
(1) http://www.dmytri.info/its-the-macroeconomy-stupid/
(2) http://www.dmytri.info/the-macroeconomic-identity-of-communism
(3) http://www.dmytri.info/false-defences-of-utopian-thought/
(4) http://wp.me/p24fqL-2E
(5) http://bit.ly/buchhandlung
A shareable version of this text is online here:
http://www.dmytri.info/revolutionary-flows-of-value-in-the-macroeconomy/
--
Dmytri Kleiner
http://www.trick.ca
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