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Shock Absorber Politics Pseudo Solutions To The Financial Crisis

category international | economy | non-anarchist press author Tuesday October 28, 2008 20:28author by KOPA - Autonomous Committee of Haitian Progressives Report this post to the editors

KOPA, The Autonomous Committee Of Haitian progressives, is publishing a series of political and theoretical internal discussions, on the economic crisis facing the US imperialist social formation. These ongoing discussions were held between anti-imperialist progressives and proletarian revolutionaries in KOPA to have a better appropriation of the crisis and define our attitude in facing these crises. Besides these discussions, there were also a series of radio interviews addressing the Haitian community, aimed mostly at those who could potentially be interested in this debate. Now we think it is necessary to share these internal exchanges with other progressives, revolutionaries and proletarian revolutionaries in the objective to further these discussions and reinforce our appropriation of this objective reality facing us now. If we do not understand a reality, how could we participate in the transformation of that reality?

Shock absorber politics are pseudo solutions to the financials crisis.

KOPA, The Autonomous Committee Of Haitian progressives, is publishing a series of political and theoretical internal discussions, on the economic crisis facing the US imperialist social formation. These ongoing discussions were held between anti-imperialist progressives and proletarian revolutionaries in KOPA to have a better appropriation of the crisis and define our attitude in facing these crises. Besides these discussions, there were also a series of radio interviews addressing the Haitian community, aimed mostly at those who could potentially be interested in this debate. Now we think it is necessary to share these internal exchanges with other progressives, revolutionaries and proletarian revolutionaries in the objective to further these discussions and reinforce our appropriation of this objective reality facing us now. If we do not understand a reality, how could we participate in the transformation of that reality?

The objective interests of the working class guided this series of discussions, notwithstanding their own limitations. Although KOPA is not a proletarian organization (nor does it aim to be one), we have collectively achieved a level of unity that does recognize, politically and ideologically, the leadership of the proletariat in offering any viable alternative to capitalism and imperialism. At the same time, we also recognize the historical limitation of our class, the petit-bourgeoisie, and the inability of our class, even in its most advanced form of radicalism, to offer any viable alternative to the social capitalist relations of production.

In trying to understand this economic crisis, KOPA was not simply trying to understand the crisis from its external expression. We did not think the think-tank of bourgeois theoreticians was going to approach the core of the problems. To take this approach, they would have had to question capitalism itself, in particular its most advanced form, imperialism. For us anti-imperialist progressives and proletarian revolutionaries to understand capital, it must be done from the standpoint of the working class and also it must be done with the methodology of dialectical and historical materialism.

1] The bourgeoisie did not abolish class antagonism in modern society. The new capitalist class in power only substituted new classes, new oppressive conditions and new forms of struggle. One of the most important forms of struggles is the daily class struggle in production directed by capital which extracts surplus value from labor. This constitutes a fundamental and essential element of capital, and by extension of the capitalist class itself.

Capital, in bourgeois economy, is the valorization of a sum of specific values. Not all values are capital. That depends on their utilization. A value in a piggy bank or solely used for consummation is not capital. Values must be invested to become capital and to draw more surplus value. The capitalist extraction of surplus value (embodied in the capitalist rate of profit and in the interest rate) is the driving force behind that general tendency to produce more, to draw even more profit. The tendency of producing more is a never-ending process.

This process may appear different depending on the mode of investment and economic practice. We can distinguish between different kinds of capital: finance capital (the fusion of banking capital with industrial capital), mercantile capital and industrial capital. The extraction of capitalist surplus value takes different forms in these different kinds of capital: financial interest, trade profit, and industrial profit. The manner in which these are extracted is totally different.

2] To really understand the origin of surplus value at the social level we need to firstly recognize the limitations of the surplus value being extracted thru mercantile transactions and thru financial transactions. In fact, this is one of the fundamental aspects of the crisis facing capitalism/imperialism now. Indeed, in all the cyclical crises facing imperialism since the 1900's, one of the prominent aspects is how surplus value was/is being extracted. Trade and monetary circulation are endemically governed by the rule of exchange between equivalent goods. This applies to any exchange or any contract. Therefore, no new value is being created, meaning no surplus value can be produced, in the sphere of circulation and speculation. The circulation of goods is just a mechanism which helps to realize that product's necessary social value by finding a consumer for that good. But in an of itself, the circulation of merchandise (or commerce) does not produce any new value.

Financial transactions, whether speculation or lending for profit, also do not generate any new values. Therefore, they also cannot create surplus value. These economic activities only participate in the distribution of surplus value between the different holders of capital. We could just figure an orange that we keep squeezing to produce juice and we keep adding more water to it to get more juice. When finance capital became hegemonic, in its relation with other fractions of the bourgeoisie in an imperialist social formation, the tendency to extract surplus value thru speculation and circulation, mostly speculation, became the dominant aspect in the distribution of surplus value within the capitalist class, therefore accentuating the periodical and cyclical crises. We see capital as becoming less and less capable of getting out of its hole because of rising endemic deficits and the surge of fictive assets and their degeneration into so-called "toxic assets". The measures taken to address the latest financial crisis are only directed at the effect of the crisis, not its causes. In reality, this is not really a response to the crisis but a measure that extends the crisis by enacting a transfer of wealth to its perpetrators through governmental intervention in the "free market" while maintaining all the financial mechanisms that are responsible for the crisis in the first place. Indeed, we have been told that the "system" itself is at stake if "we" (the taxpayers) do not "rescue" this doomed enterprise. It is a shock absorber measure taken to amortize a free fall, not knowing how strong the spring of that shock absorber is.

3] The only economic activity that can create new values, especially socially necessary values, under a capitalist mode of production, is industrial production. But industrial capital has become intertwined and dependent on financial capital through the creation of all sorts of financial instruments, derivatives, futures trades, options, venture capital, and speculative activities on everything from currencies to raw materials.

4] The social process of capitalist exploitation of labor power and the extraction of surplus value are the fundamental elements of the capitalist relations of production. The movement of capital inside a social formation or internationally (globalization) and the movements of goods with all their complexity and contradictions depends on these fundamental relations. They constitute secondary aspects of capitalist relations of productions, although necessary to the reproduction of capitalism. But at the stage of imperialism these secondary and important aspects of capitalism, are increasingly playing a primary role, therefore creating a series of crises that are harder for imperialism to correct and rectify.

5] In the mutually dependent and contradictory relation between capital and labor, labor has been steadily loosing most of its hard fought gains: most workers have lost their pensions plans, and their self-invested pensions, the 401k plans, have dwindled in value. Workers' healthcare benefits have been systematically reduced and workers are increasingly forced to pay more and more for their own health insurance, massive cutbacks in social spending have been enacted and privatization of social services has been shoved down our throats. All these measures, the flip side of neo-liberal agenda inside the US, have one sole common purpose: enabling the capitalist class to reap more profits.

6] We must try to understand the configuration of the capitalist class in the US social formation. One of the ways to understand this configuration is by analyzing the internal class struggle of the capitalist class. It is important that we also identify the dominant form of capital. Is it State monopoly capital? Is it monopoly capital? Or is there a tendency of fusion of these two? The latest measures surely are opening the way for such process. What remains fundamental is the devaluation of financial assets thru different means. This devaluation is, in effect, putting imperialism in a deeper hole that is more difficult to come out off.

7] This latest series of crises is happening in the US imperialist social formation at a historical conjuncture were the masses, especially the working class, are at their lowest level of political consciousness and of political and mass organization. In some instances, non-profit organizations, non-political structures are the ones intervening and by their nature can’t offer any form of political alternative. Even if capital, in particular finance capital, is at a dead-end, even if they are running out of alternatives and can’t offer any valuable long-term solutions. The beast is not buried and will not bury itself. The beast will resist and continue to come with measures that will guarantee its social reproduction. Finance capital will battle and resist any political orientation that will question its hegemonic role in the US imperialist bourgeois power block. Finance capital will take measures to guarantee its forms of surplus value extraction and the reproduction of these forms. A class or a fraction of a class wills not self-destruct. Only the working class can actually play that historical role.

8] In looking at these crises, there is a dominant tendency to only look at the effect of these crises and to only define a political orientation to resist the effect. The danger in this orientation is focusing only at a secondary element of the contradictions of imperialism, a tactical aspect, and articulating it as an end meant to resolve the problems. If our tactic is not dictated by our strategy, if it is not determined by a clear cut anti capitalist/anti imperialist strategy, the result will be a re-structured form of imperialism, simply a reformist approach. This is the line being offered now by the non-profit, non-political structures and by left petit-bourgeois radicalism. The core of the problem is the imperialist mode of production and the fundamental aspect of that core is finance capital. Our tactical struggle needs to be dialectically determined by the strategy of addressing imperialism and its dominant form of functioning.

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