Beyond Capital

Polemics, Critique and Analysis

Engels’ “theoretical moment”?

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In Marx and Engels’ Collected Works volume 47, I found a very interesting letter written by Engels to August Bebel. It was written about a month and half after Marx’s death, April 30 1883. Bebel seems to have suggested Engels to move somewhere else in Europe. Engels’ justifications to continue staying in England is quite remarkable.

Dear Bebel,

There is a very simple answer to your question as to whether I might remove to Germany or Switzerland or somewhere else on the Continent, namely that I shall not go to any country from which one can be expelled. But that is something one can only be safe from in England and America. I should at most go to the latter country on a visit, unless otherwise compelled. Hence I shall remain here.

Moreover England has another great advantage. Since the demise of the International there has been no labour movement whatsoever here, save as an appendage to the bourgeoisie, the radicals and for the pursuit of limited aims within the capitalist system. Thus, only here does one have the peace one needs if one is to go on with one’s theoretical work. Everywhere else one would have had to take part in practical agitation and waste an enormous amount of time. As regards practical agitation, I should have achieved no more than any one else; as regards theoretical work, I cannot yet see who could take the place of Marx and myself. What younger men have attempted in this line is worth little, indeed, for the most part less than nothing. Kautsky, the only one who applies himself to study, has to write for a living and for that reason if no other can achieve nothing. And now, in my sixty-third year, up to my eyes in my own work and with the prospect of a year’s work on the second volume of Capital and another year’s work on Marx’s biography, along with the history of the German socialist movement from 1843 to 1863 and of the International from 1864-72, it would be madness for me to exchange my peaceful retreat here for some place where one would, have to take part in meetings and newspaper battles, which alone would be enough to blur, as it necessarily must, the clarity of one’s vision. To be sure, if things were as they were in 1848 and 1849, I would again take to the saddle if need arose.

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Written by Pratyush Chandra

November 19, 2017 at 12:52 pm

Posted in Marxism

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On Rights Politics and Migrant Workers

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These notes were prepared for a discussion in Delhi on a report on the condition of migrant workers in Delhi, Uttarakhand and Tamil Nadu (October 6 2017).

REFORMS & REVOLUTION

1. The two significant aspects of demand and right politics are – firstly, they are grounded in the immediate social needs that are framed within a structure. Secondly, they are attempts to establish a discourse with the state machinery – hence they are discursively circumscribed within the field of social relations. Thus, they are necessarily reform oriented, but they need not be reformist. The questions of rights, reforms and demands are unavoidable guerrilla struggles, which build the capacity of workers to organise larger movements. But do these struggles mean deferring the final movement that targets the very structural and superstructural setup that give language to those social needs? No, because they also test the vulnerabilities of the system and can become endeavours to burrow through it the final escape or emancipation. Every moment is a moment for both reform and revolution, and also reaction. When a movement is able to transcend its initial demands, to go on to attack the present social relations and to reorganise them then it becomes revolutionary. When the movement attempts to take the leap, but fails, then reaction happens. When the movement is not ready to take any leap beyond or reneges at the last moment, reform and/or reaction can happen, depending on the level of crisis in the system.

2. However, because the rights politics in itself is concerned with achievements of the rights and demands, at its own level will be geared towards negotiations and bargains, and impressing upon the state machinery, rather than changing the social relations themselves. Even the trade union politics is embedded in this kind of relationship. There is nothing in these forms that makes them question the structure of that relationship between workers and capitalists, or in the former case between workers and the state. The danger of reformism comes from this. But once again, as a conscious part of the larger movement against the structure of present social relations they play a crucial role of waging guerrilla struggles. But what does this signify? Then how do we define the working class politics? Also what will be the organisational question which balances between reform and revolution?

3. When we talk about workers’ politics, it is grounded in the dialectic of competition and collectivity. Marx captured this very aptly, when he said: “Wage-labour rests exclusively on competition between the labourers. The advance of industry, replaces the isolation of the labourers, due to competition, by their revolutionary combination, due to association.” The politics that is premised upon the segmentation of the workers vs the politics of ever-expanding combination and association, that is grounded in the everyday interaction among workers. The latter is not a mechanical aggregation or unity of isolated workers with similar grievances or demands, but a combination or network that is built in their daily conflict with state and capital. Only an expansion of this network has the capacity to refuse to be subsumed by capital and its network. In this, demands are definitely raised but are incidental. In this framework, demands and rights play the role of testing the system’s vulnerabilities and the organisational strength of the expanding combination.

ON MIGRATION

4. Migration is not just a fact, but also an act. It is not fully incidental that a word for migration in Hindi is पलायन (the more formal word is प्रवास). The former is very rich, often used as a stigma – one of its meaning being running away or an escapist act. In my view, it is this sense that renders the act of migration politically rich. Migration is not just a spatial fix, a response of the weak to the immediate contingencies of life. It is also a rebellious withdrawal, an escape, a long march against “the current state of affairs.” It is an act of refusal, non-acceptance of the lot. As an immediate spatial fix it demonstrates the weak agency of the migrant – a weakness in mastering the system. But it also has a utopian element that makes any human agency restless, that may come one time as an escape, another time as an emancipation, especially when individual weakness becomes a ground for collective subjectivity. Wasn’t this Ambedkar’s intention when he advised dalits to escape villages?

5. Legal Unionism is bound to consider migrant and mobile workers unreliable for their purpose – it simply cannot rely on them. On the other hand, social unionism which seeks to overcome the limits of traditional unionism is caught up in the discourse of non-conflictuality and negotiations with state (which in turn is problematically conceptualised). Hence for this school too it is always about accommodation – creating space for the migrants, not about problematising the whole space itself which is the etatised field of labour-capital relations. Therefore the vagrancy and mobility of proletarians are something to be shed off, not to be made a ground to imagine an overhauling of social relations and ideologies. Hence migrants as migrants are suspects, to be always put in the peripheries of organised politics. But different revolutions have shown how it was mostly settled workers’ organisations, afraid of losing their accumulated privileges, developed petty bourgeois tendencies and were unable to go beyond the legal fights when required, unless workers revolted and autonomously organised themselves.

6. Right from Karl Marx, Marxists have understood the relationship of workers mobility and their political consciousness. Lenin provides an insight into the poltical meaning of migration and demonstrates how to think about workers beyond their victimhood and our philanthropist vanguardism:

“There can be no doubt that dire poverty alone compels people to abandon their native land, and that the capitalists exploit the immigrant workers in the most shameless manner. But only reactionaries can shut their eyes to the progressive significance of this modern migration of nations. Emancipation from the yoke of capital is impossible without the further development of capitalism, and without the class struggle that is based on it. And it is into this struggle that capitalism is drawing the masses of the working people of the whole world, breaking down the musty, fusty habits of local life, breaking down national barriers and prejudices, uniting workers from all countries in huge factories and mines in America, Germany, and so forth.”

“Thus, Russia is punished everywhere and in everything for her backwardness. But compared with the rest of the population, it is the workers of Russia who are more than any others bursting out of this state of backwardness and barbarism, more than any others combating these “delightful” features of their native land, and more closely than any others uniting with the workers of all countries into a single international force for emancipation.

“The bourgeoisie incites the workers of one nation against those of another in the endeavour to keep them disunited. Class-conscious workers, realising that the breakdown of all the national barriers by capitalism is inevitable and progressive, are trying to help to enlighten and organise their fellow-workers from the backward countries.”

7. In recent years, Negri (and Hardt) repeats the same in the language of our times:

“Traditionally the various kinds of migrant workers, including permanent immigrants, seasonal laborers, and hobos, were excluded from the primary conception and political organization of the working class. Their cultural differences and mobility divided them from the stable, core figures of labor. In the contemporary economy, however, and with the labor relations of post-Fordism, mobility increasingly defines the labor market as a whole, and all categories of labor are tending toward the condition of mobility and cultural mixture common to the migrant. Not only are workers are forced to change jobs several times during a career, they are also required to move geographically for extended periods or even commute long distances on a daily basis. Migrants may often travel empty-handed in conditions of extreme poverty, but even then they are full of knowledges, languages, skills, and creative capacities: each migrant brings with him or her an entire world, Whereas the great European migrations of the past were generally directed toward some space “outside,” toward what were conceived as empty spaces, today many great migrations move instead toward fullness, toward the most wealthy and privileged areas of the globe…

“Part of the wealth of migrants is their desire for something more, their refusal to accept the way things are. Certainly most migrations are driven by the need to escape conditions of violence, starvation, or depravation, but together with that negative condition there is also the positive desire for wealth, peace and freedom. This combined act of refusal and expression of desire is enormously powerful…. Ironically, the great global centers of wealth that call on migrants to fill a lack in their economies get more than they bargained for, since the immigrants invest the entire society with their subversive desires. The experience of flights is something like a training of the desire for freedom.

“Migrations, furthermore, teach us about the geographical division and hierarchies of the global system of command. Migrants understand and illuminate the gradients of danger and security, poverty and wealth, the markets of higher and lower wages, and the situations of more and less free forms of life. And with this knowledge of the hierarchies they roll uphill as much as possible, seeking wealth and freedom, power and joy. Migrants recognize the geographical hierarchies of the system and yet treat the globe as one common space, serving as living testimony to the irreversible fact of globalization. Migrants demonstrate (and help construct) the general commonality of the multitude by crossing and thus partially undermining every geographical barrier.”

Written by Pratyush Chandra

October 24, 2017 at 2:16 am

On Enzensberger’s poem “Will and Representation”

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The italicised texts are from Hans Magnus Enzensberger’s poem “Will and Representation” in his collection, “A History of Clouds”. Translated by Martin Chalmers and Esther Kinsky (Seagull Books, 2010)

He thinks he knows what he wants.
The seed of success is exactly in this thinking. Even if in the end what he gets is nowhere near what he wants, or near what he knows what he wants, or near what he thinks he knows what he wants, it is his thinking that he knows what he wants that encourages him, so that
He gives of his best
What else is the meaning of giving his best if not that
He strives He toils
Here it is not just about thinking, or knowing or wanting, but doing with plans to achieve what he thinks he knows what he wants. If he doesn’t do anything he can’t get anything – as great Lucretius said nothing comes out of nothing. But if he does without plans, he might not get what he thinks he knows what he wants. He has to plan, to adjust according to the context, to the forces that he can’t manage, and to the forces that he must manage, so that
He makes it He climbs
When he makes it, he climbs. His surge humbles powers that resisted his making it, his climbing, and they take their
Hats off to his effort
Rags to riches, so much striving and toiling against all oddities – they wonder what use are those multi-generation dynastic lineages. Here is He thinking what he knows what he wants, strives and toils, makes it and climbs. He is the biography of the modern man, he represents each of us – our ideal. Thus,
A breeze bore him
It gives him some solemnity after so much hard work, but in the end he must be on
A Wind
He represents us, he must ride the Wind, which bears whatever has climbed. The system must take over, in other words, he must be on the top of the system representing us, our thinking, our knowing, our wanting, our striving, our toiling. Through his sheer will, he has climbed. But now he takes over the driving seat in the automatic roller coaster, or rather the wind takes him over
Like this maple leaf
We invest our energy, our concrete labour to feed into the abstraction of the system, for a place in the system, which takes us as this maple leaf
Suspended up there
he is at bliss taken over by the wind, which is unaware of what he thinks, what he knows, what he wants. Look at this maple leaf, how
Playfully it gets into a spin, wavers
Exactly like this, he too is playful, and usefully he spins and wavers – demonstrating to aspirants his blissful state, enjoying his abstraction. Lo! He
Rises up once more
a shudder of ecstasy, and now he
Slowly sinks Lies there weak-willed
Quenched, he
Rests awhile Rustles
His body like the maple leaf
Discolours
but he becomes one with the machine, the spirit of the wind, evermore striving and toiling through us, feeding on us.

Written by Pratyush Chandra

September 28, 2017 at 12:07 pm

Russian Revolution and Luxemburg’s Approach

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Even being a direct observer of the happenings in Russia and being critical of Bolshevik practice, Rosa Luxemburg could keep a far more objective and materialist understanding of the problems of the Russian Revolution, in comparison to the theo-sectarian polemics around facts and counter-facts that is being exercised today globally during the centenary celebrations. In a letter to Adolf Warski written less than a couple of months before her assassination, Luxemburg comments on the two most crucial problems of the Russian Revolution and Bolshevik practice, refusing to subjectively analyse them. It is this objectivity that generated her revolutionary “optimism of will”. She writes:

The use of terror indicates great weakness, certainly, but it is directed against internal enemies who base their hopes on the existence of capitalism outside of Russia, receiving support and encouragement from it. With the coming of the European revolution, the Russian counter-revolutionaries will lose only support [from abroad] but also – what’s more important- their courage. Thus the Bolshevik use of terror is above all an expression of the weakness of the European proletariat. Certainly, the agrarian relations that have been established are the most dangerous aspect, the worst sore spot of the Russian Revolution. But here too there is a truth that applies – even the greatest revolution can accomplish only that which has ripened as a result of [historical] development. This sore spot also can only be healed by the European revolution. And it is coming!

George Adler, Peter Hudis and Anneliese Laschitza (ed), The Letters of Rosa Luxemburg, Verso (2011), pp 484-85

Written by Pratyush Chandra

September 21, 2017 at 1:43 pm

The Economics of India’s Cow Fetishism

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I think what intensified bovine politics in India is achieving is a sort of primitive accumulation in the livestock industry. It goes remarkably well with the concentration and centralisation of money and tax economies through the more formal measures like GST and demonetisation. These measures kill the autonomy of dispersed economic structures and fit them to the suction nodes of the neoliberal net of finance capital. The liberal and Keynesian economists have criticised many of these measures on the ground that they will destroy local economies and federal autonomy. Same well-meaning experts are criticising the way livestock policies have recently been formulated. The fascistic nature of their implementation is quite evident. However, the tangible structural change that is being effected through these measures are lost sight of in the overpowering moralism in these criticisms.

In a recent article in The Mint, some relevant statistics have been brought together. The authors rightly contends,

“It emerges that economics rather than religion drives cattle ownership in India. After adjusting for wealth inequality, cattle ownership shows a similar pattern across religions. Expectation of milk yields is what drives cattle ownership in India.”

They provide pertinent facts about the livestock economy and the negative impacts that the new policies and bovine politics have made on this economy.

“Female animals under two years would be expected to grow into milk-giving cattle. Breeding cows are still in their milk cycle. Everything else apart from these two categories can be described as non-milk animals. Only 15% of households own non-milk animals in India. This is half of the overall cattle ownership figure of 30%. Again, the figures are not very different across religions. One does not need to be a rocket scientist to guess where the non-milk bovines end up. They are the supply for India’s multi-billion dollar beef industry. It has been an unacknowledged but convenient arrangement. Most owners sell their non-milk cattle without asking questions about the end use. This is why the local cattle trade is crucial for India’s livestock economy. A government ban on sale of animals for slaughter in local markets, and vigilante mobs attacking those transporting cattle in the name of gau raksha, can destroy this arrangement. Everybody with stakes in the livestock economy would suffer as costs go up due to a pile-up of non-milk animals.”

However, the destruction of this existing arrangement is bound to proliferate new arrangements in the livestock industry. The unconcentrated dispersed cattle ownership based industry might lead to a greater degree of concentration and centralisation. The “local” cattle trade and meat businesses may give space to a more centralised livestock, meat and milk industry.

Hence, if till now it was economics, not religion that shaped cattle ownership and trade, then we must admit that it continues to be so. The economics behind restrictions, banning and lynchings must be recognised and revealed.

Written by Pratyush Chandra

August 28, 2017 at 1:33 pm

IN THE NAME OF SOCIALISM — “A CHAIN OF HISTORIC DEFEATS”

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(Written for a bilingual collection published by Mazdoor Mukti (Kolkata), to commemorate the centenary of the Russian Revolution)

“The whole road of socialism – so far as revolutionary struggles are concerned – is paved with nothing but thunderous defeats. Yet, at the same time, history marches inexorably, step by step, toward final victory! Where would we be today without those “defeats,” from which we draw historical experience, understanding, power and idealism?” — Rosa Luxemburg

I

Many times in their political interventions Marx and Engels used the term socialism to signify any critique of capitalism both in theory and practice. In the Communist Manifesto they showed how this critique had provenance in various class standpoints. They developed a typology of socialisms which demonstrated that actually no class was satisfied within capitalism, not even the bourgeoisie; hence these classes developed their own critiques of capitalism, and therefore socialisms. Marx and Engels assessed the political dimensions and limits of these socialisms. How much they could really question capitalism in concrete terms was dependent on the respective class capacities, the location of these classes in the overall capital relations. These class critiques actually shaped the dynamics of capitalism too — exposing its contradictions and motivating changes. But only communism or the critique of capitalism from the standpoint of the working class has the capacity to present an all round critique — being an immanent critique it could go, not just against, but beyond capitalism. Communism or Proletarian socialism is “the expression of historical necessity”. Since “the proletariat has ‘no ideals to realise'”, the proletarian critique “can only breathe life into the things which the dialectics of history have forced to a crisis; it can never ‘in practice’ ignore the course of history, forcing on it what are no more than its own desires or knowledge. For it is itself nothing but the contradictions of history that have become conscious.”(1)

II

Call them deterministic, if you may, but it is true that Marx and Engels uttered at numerous junctures of their political activism and theoretical reflections that socialism/communism “cannot be ordered by decree”, that “revolutions are not made deliberately and arbitrarily but that everywhere and at all times they are the necessary consequences of circumstances which are not in any way whatever dependent either on the will or on the leadership of individual parties or of whole classes.” (2) But the proof of the pudding is in the eating — whether the circumstances were appropriate or not, whether the revolutions that happened in the twentieth century were postcapitalist/socialist or not, whether the leadership, individual parties etc did or did not rise up to the occasion provided by the circumstances could only be judged retrospectively. As Luxemburg commanded, “The question of why each defeat occurred must be answered. Did it occur because the forward-storming combative energy of the masses collided with the barrier of unripe historical conditions, or was it that indecision, vacillation, and internal frailty crippled the revolutionary impulse itself?” (3) However, even these problems of subjectivity must be explained in terms of their constitutivity — as evolving in the dynamics of the organic social processes that delimit subjectivity formation and freedom.

III

Fataha is an Arabic word meaning to open, to grant, to be victorious etc. It forms the root for Al Fattah, which is one of the names of Allah and means the Opener. What makes this term, fataha, interesting is the combined dialectical sense that its diverse meanings render. The way it celebrates, yet humiliates the victorious is quite fascinating – the victory or triumph is nothing more (and, of course, nothing less) than an opening. I think the heroic tragedies in history are mostly in forgetting this lesson. The so-called “conscious” radical social agencies often are oblivious of the dialectical truth of transience – they as missionaries, which definitely they are, think they have put the society to the desired pathway to the future, when it was just a mere possibility, one of the many possibilities. In fact, they have done nothing but opened Pandora’s box, bringing the society to the brink of possibilities (and uncertainties). What usually happens is that the phenomenality of the victory preoccupies everybody, it is reified.

IV

The Paris Commune “inaugurated” the “glorious movement” — “the dawn of the great social revolution which will for ever free the human race from class rule.” It was the concrete beginning of coherent revolutionary politics of the working class that continues to train generations of world revolutionaries, despite recurrent reversals as revolutionary advancements are time and again consolidated in the form of nationalistic successes and gains. Even though locally the Paris Commune was crushed, “the presence of the threatening army of the proletariat of the whole world gathering in the rear of its heroic vanguard crushed by the combined forces of Thiers and William of Prussia” “attest the hollowness of their [the enemies’] successes.” (4)

V

The October Revolution in its initial years was always taken as a mere “opening” for the European Revolution at least, if not the world revolution. It inaugurated a series of working class led revolutionary upsurges throughout Europe. Revolutionaries in Russia were aware of the need for the expansion of the revolution for the deepening of the revolution. Outside Russia, the revolutionary solidarity forces were intensifying their own struggles, which were understood as building upon the successful “opening.” However, as the world revolutionary movement subsided, especially with the defeats of the German Revolution, the “opening” became conscious of its distinction, its own being and endeavoured to survive merely as a state – regimenting internal forces of transformation and manipulating the vestiges of the solidarity forces to ensure its own survival. It became a model state. As the crisis of capitalism deepened, the “Russian Path” emerged as a formidable competitor to welfarist capitalism and techno-social corporatism that evolved to re-regulate national economies. The competition between these political-economic regimes took numerous turns – the Second World War, Cold War, Arms Race, and of course, “peaceful coexistence” that Stalin (not Khrushchev) initiated – “Let us not mutually criticize our systems. Everyone has the right to follow the system he wants to maintain.”(5)

VI

The Chinese Revolution too emerged as an opening for the revolutionary upsurges in various colonial and post-colonial peasant societies that questioned the teleology of market-oriented European capitalism. A planned nationalist transition with a controlled competitive regime, unimpeded by the imperialist politico-economic demands gripped the socialist imagination in these backward societies. We see large revolutionary movements and people’s wars rising in various parts of the world, especially on behalf of the pauperised peasantry and the precarised youth. These movements again saw the Chinese revolution just as an opening. But eventually the crisis of welfarism and statist capitalism, on the one hand, and the Cold War bipolarity, on the other, led to the reduction of various new de-decolonised states into self-hating rentier-bureaucracies, which bargained with the two poles and eventually became the ground for the neoliberal regime of economic restructuring. Ultimately, the Chinese state itself threw away the mantle of the Opener, and entered the fray to attract financialised capital huckstering upon the local institutions, resources and labouring population cheaply available.

VII

On a much smaller scale, the Cuban Revolution too emerged as an opening for the Latin American revolutionaries and in Africa. Most of the time both Cuban and Chinese revolutions combined to inspire peasant revolts. Che Guevara epitomised this opening, lending himself to replicate the Cuban experience across continents – Congo and Bolivia, but to remarkable failures. What he lacked, unlike the Maoist conceptualisation of the protracted war, was the ability to keep politics in command. His guerrilla practices were extreme forms of voluntarism and subjectivism. On the other hand, the Maoist practice internationally suffered from both conceptual and practical overgeneralisation, which came from the legitimate practice of developing “base areas.” The territorial militarist symbolism and existentialism of localised peasant struggles overpowered the political sense of these movements. This led to the subservience of every expansion to secure base areas, which were increasingly surrounded and squeezed by the globalised networks of the capitalist circuit. Hence, the base areas remained central to revolutionary survivalism, while becoming marginal to the overall anti-capitalist movement of the working class. Guerrillas became identities in themselves, rather than “masses in arms”, as Kwame Nkrumah used to define a guerrilla. These movements could never become threats to capitalism, but always remained as actual scapegoats to impose global McCarthyism.

VIII

In fact, it was this marginalisation and deadlock that the movements like Zapatistas in Mexico apprehended in the 1980-90s, and were forced to envisage struggle and solidarity beyond instituted territorialities and state power. It was a recognition of the implausibility of the statist imaginary of post-capitalist transformation in the age of financialised transnational capital regimes. The critique of militarism and vanguardism presented by movements like the Zapatistas was the clarity that “you cannot reconstruct the world or society, or rebuild national states now in ruins, on the basis of a quarrel over who will impose their hegemony on society.” (6) The impetus to recognise and build a world of many worlds was not a simple rhetoric to revert to some united front tactics. It was a result of a deeper critique of relative “human conditions” and a self-critique of revolutionary practice, that was fixated upon the pre-determined goal of capturing state power. The critique of vanguardism that the Zapatistas presented was an affirmation of the vanguard as constantly (re)composed in the diverse levels of struggle – “We do not want to monopolize the vanguard or say that we are the light, the only alternative, or stingily claim the qualification of revolutionary for one or another current. We say, look at what happened. That is what we had to do.” (7) Of course, by relinquishing the aim of state power, they affirm themselves to be only a subset of the protracted global struggle. The Zapatistas provided an opening for the movemental critique of capitalism and capitalist state-formation, but the hypostatisation of the movement form that happened subsequently externalised this critique and reduced it to a dualism of state and civil society, that the process of state formation has always sought to pose. The powerful Zapatista experiment was eventually circumscribed within the NGOised civil society discourse – lobbyist rights, localist self-help politics and difference assertion which suited the neoliberal political economy based upon an infinite discretisation of human capacity and lean politics. The solidarity politics and economy that were envisaged in the Zapatista movement were abandoned in favour of identitarianist assertions, rights discourse and lifestyle autonomy. Instead of negating the state in practice, the state question was left unproblematised, avoided and wished away.

IX

If the post-Keynesian neoliberal counterrevolution professes to minimise the State by proclaiming it out of bounds from economy, it is simply vocalising the given divide between the economic and the political that characterises the capitalist system itself. What this divide means is the politics of depoliticisation of exchange relations – therefore, economy is always political economy, even if it is depoliticised. Whichever state form that has existed in the history of the modern state has come into being to facilitate the reproduction of exchange relations. The function of state in all its forms is to soak away the organic emergence of class struggle in these exchange relations, and limit it to the political superstructure. If the Zapatistas exposed the crisis of valorisation on the margins of exchange relations and they could effectively practice “the idea of simply turning our back on the state,” their practice could not become more than an inspiration for those who found themselves enmeshed in exchange relations. John Holloway notes, “…there is no golden rule, no purity to be sought. Thus, for example, the Zapatistas in Chiapas make an important principle of not accepting any support from the state, whereas many urban pro-Zapatista groups in different parts of the world accept that they cannot survive without some form of state support (be it in the form of unemployment assistance or student grants or – in some cases – legal recognition of their right to occupy a social centre).” (8)

X

It was in the particular conditions of urban and semi-urban locations at the very heart of exchange relations, that the risky in-the-state struggle became once again important. Especially in those countries where extractive industries are at the centre of economy and/or where the stark instrumentalisation of state institutions by (g)local agencies of capital through purported neo-colonial mechanisms scuttled the local capacity to self-determine, the “opening” that Chavez’s Venezuela epitomised was significant. This revived the ground for people-oriented nationalist/statist efforts, but with a difference – there was a strong apprehension toward the statist primacy. Of course, the question of state power was posed by the barrios themselves, but with an evident sense that the state itself can never be transformed, but destroyed. The issue was to rein in state power to unleash a constant drive towards collective self-determination, rather than a pre-determined complete self-determination circumscribed within the instituted territoriality. The situation of dual power must be constantly posed, where popular autonomy is distrustful and vigilant towards the state, while class conflicts continually politicise exchange relations at every level and extend the reach of solidarity economy beyond territorial limits. Any slippage in this regard is an advantage to statism which eventually reduces dual power to the duality of the political and the economic – allowing capital to technicise the political recomposition of the working class to bring back exchange relations and capitalist accumulation on track.

XI

The lessons of the so-called twenty-first century socialisms, including the Bolivarian “revolutions” in South America, are once again very elementary that until and unless successes are taken as mere openings for the revolution to be built upon, they are bound to implode. Rosa Luxemburg, a revolutionary for all seasons, reminded us a long time ago, “Either the revolution must advance at a rapid, stormy, resolute tempo, break down all barriers with an iron hand and place its goals ever farther ahead, or it is quite soon thrown backward behind its feeble point of departure and suppressed by counter-revolution. To stand still, to mark time on one spot, to be contented with the first goal it happens to reach, is never possible in revolution.” (9) In this age of the permanent crisis of capitalism and of generalised precarity, we will face numerous such reversals and can only hope to emerge every time a bit wiser.

References

(1) Georg Lukacs (1968) History and Class Consciousness, Merlin, London, p. 177-78.

(2) Frederick Engels (1847) Draft of a Communist Confession of Faith.

(3) Rosa Luxemburg (Jan, 1919) Order Prevails in Berlin.

(4) Karl Marx [2011 (1872)] “Resolutions of the Meeting held to celebrate the anniversary of the Paris Commune,” in Karl Marx and Frederick Engels, Selected Works, People’s Publishing House, New Delhi, p. 287.

(5) J.V Stalin (1947) Coexistence, American-Soviet Cooperation, Atomic Energy, Europe: Interview with Harold Stassen. In For Peaceful Coexistence: Post War Interviews, International Publishers, New York, 1951.

(6) Marcos quoted in Alex Khasnabish (2010) Zapatistas: Rebellion from the Grassroots to the Global, Zed Books, London, p. 83.

(7) Marcos quoted in Alex Khasnabish (2010), p. 64.

(8) John Holloway (2005) Change the world without taking power, Pluto Press, London, p. 235.

(9) Rosa Luxemburg (1918) The Russian Revolution. Available at marxists.org

Written by Pratyush Chandra

January 17, 2017 at 12:06 am

Posted in Uncategorized

Demonetisation: Maturing Capitalism?

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Radical Notes

“…it is not a question of the higher or lower degree of development of the social antagonisms that result from the natural laws of capitalist production. It is a question of these laws themselves, of these tendencies working with iron necessity towards inevitable results. The country that is more developed industrially only shows, to the less developed, the image of its own future.” – Karl Marx (1)

“We do not think or plan in piecemeal, but in full-scale design. It is just that we are revealing our cards gradually…” – Narendra Modi (2)

The left-liberal intelligentsia in India is clearly in a quite precarious state, if it finds ex-Prime Minister Manmohan Singh’s criticism of demonetisation as the most competent response to the Modi Government’s move. The daily peddling by left social media activists of the criticisms that mainstream economists are making of demonetisation is a symptom of the Indian left’s lost confidence (if it ever had any). Even those who have come up with more erudite responses are lost in the grammar of the move — its immediate performance and effects — and have concluded that demonetisation is poor, bad and ignorant economics. Coming from a chaiwala, what else can it be!!!

In our view, Modinomics is a legitimate successor to Manmohanomics — it is a continuity entrenched in the dynamic needs of capitalist accumulation. Post 1990, India has seen governments of all colours, but the coherence of the Indian state has rarely faltered on the economic front. The rulers with all their electoral compulsions have succeeded in maintaining, if not accelerating, the neoliberal regime. However, this does not mean the political shade is merely external and cosmetic — politics in an electoral democracy is all about reshuffling social anxieties and interests in a manner that allows the state system to self-reproduce.(3)

Financial Expropriation and the Emergence of a Debtfare State

Demonetisation is a misnomer. It is not an attack on money by demonetising economies. Rather, it is a spectacular yet momentary unravelling and strengthening of the adamantine chain around so-called economic independence and growth in capitalism. In fact, it is a heightened expansion of money as financial and political-economic control. It is an effort to assess and consolidate the expanse of economic activities and transactions and thwart any possibility of parallel economic regimes. Delegitimising particular denominations of currency becomes a means to reclaim those activities, and reassert money as a universal measure of value, not as a means to autonomise particular levels of economy, by treating it as a mere facilitator of exchange or a means of hoarding. Money creates boundaries only to expand and cross them. Money measures the immeasurable, it equalises the most unequal. It institutes hidden connections between phenomena quite remote from one another — the vertical control however is revealed only at particular junctures of economic development through the action of state. In our opinion, demonetisation is an assertion of the universality of “universal equivalence”, i.e., money. This means consolidation of the linkages between layers of social relationships in the economy — strengthening of the neoliberal concentration and centralisation of capital.

There are two chief processes that define the neoliberal regime of capitalist accumulation, and demonetisation is remarkably connected with both of them. These processes are financialisation and informalisation, which in the present heat of the demonetisation debate, have been popularly dubbed as cashlessness and black/parallel economy respectively.

Financialisation has three main features. First, non-financial corporations increasingly financialise themselves, relying on retained profits and open financial markets for investments, rather than on banks. Even their wage bill “is frequently financed through the issuing of commercial paper in open markets.” Second, there is a restructuring of the banking operations by re-orienting them towards mediating “in open markets to earn fees, commissions and profits from trading”, on the one hand, and towards individuals/households “to obtain profits from lending but also from handling savings and financial assets”, on the other. With the active help of state through legislative measures and encouragement, the banks mobilise personal savings for peddling in stock markets.(4)

Lastly, and most importantly, in recent years “the personal revenue of workers and households across social classes” has been increasingly financialised. On the one hand, this specifically signifies that there has been a substantial increase in personal and household debts for various life needs – consumption, housing, health, education, etc. On the other hand, it shows there has been an expansion in the range of financial asset holdings — for medical and life insurance, pension and old-age benefits, various short- and long-term money market investments, etc. This relates obviously to a withdrawal of state-supported public provisions in the form of subsidies and direct benefits, and hence their privatisation. So, we find a tremendous increase in the involvement of banking and other financial institutions in mediating household consumption, while they have obtained a full freedom to channel “household savings to financial markets, thus extracting financial profits”.

Profiteering through financial transactions between banks and households has a predatory character. Profit here is not raised in the sphere of production, but through “the systematic extraction of financial profits out of the revenue of workers and other social layers”. This is what has been termed as “financial expropriation”. (5)

The current demonetisation move is nothing less than a full-scale financial expropriation in operation. The move has in one go forced small and big cash hoarders run to line up in the queue to reveal and officialise their savings. The government is not allowing these savers to exchange and repossess the whole amount of their savings in cash. This is not simply due to any unpreparedness or erratic behaviour on the part of the Indian state and Reserve Bank of India, as many have alleged. In fact, it is a remarkable move to institutionalise a financialised relationship between the banks and households. Of course, it is too early to judge if demonetisation has really succeeded in altering “nation’s conduct”. But its motive is pretty clear, as finance minister Arun Jaitley has time and again pronounced: “This one decision that has ensured that a lot of money has come into the banking system, a lot of informal savings have become formal now, and therefore, the tendency to invest these more formal savings in instruments that you keep an eye on is also increasing.” Demonetisation is a kind of encouragement to “ordinary citizens to channelise their savings into the market which indirectly would then contribute to the process of national development rather than be blocked only in dead assets”.(6)

Demonetisation is clearing the ground for a systematisation of “cannibalistic capitalism” in India by proliferating secondary forms of exploitation which are not directly linked to production but are financial mechanisms to expropriate. The Indian economy is massively based upon underemployed and under-waged surplus population that constitute the unorganised and informal labour relations. This makes it a very fertile ground for cannibalism that marked the US economy, which was based on the proliferation of various financial mechanisms of expropriation — nay, a financial inclusion of the hitherto excluded. In fact, we see in this move of demonetising specific denominations of the currency an emergence of the debtfare state.

Susan Soederberg defines a debtfare state as one that “legitimates, normalizes, depoliticizes and mediates the tensions emerging from cannibalistic capitalism”. It deregulates finance and provides legal machinery to protect and strengthen banks, thus facilitating an intensification and expansion of “forms of predatory practices.” The debtfare state enhances “the social power of money by legally and morally permitting credit card issuers (banks) to generate enormous amounts of income from uncapped interest rates and by continually extending plastic money to those who fall within Marx’s category of the surplus population: the partially employed (underemployed) or wholly unemployed”. The impact on the labour regime is also significant as “surplus workers” are subjected “to the disciplinary requirements of the market, such as compelling them to find and accept any form of work to continue to be “trustworthy” creditors”.(7)

Demonetisation in 2016 might mark a drastic emergence of a full-scale debtfare state by financially including the massive community of unbanked individuals and households through mobile, e-payment and plastic money. However, this has not happened suddenly. The insistence of the subsequent governments to profile Indian citizens through a unique identification system called AADHAAR and linking it with their everyday economic activities, despite the Indian judiciary pronouncing such moves illegitimate, was already an indication towards building a panopticon, which will make everybody useful and watched under the system. The banking and tax institutions had already started utilising this data. With demonetisation, now that the banks have acquired a full command over the finance of Indian households, a grand system of financial discipline and punishment can be effectively generated. With the proliferation of plastic and mobile/e-connections, our consumption and activities will be regulated, and we will pay for our own regulation.

This connects to the second aspect of neoliberalism, i.e. the process of informalisation, or the generalisation of informality destroying its sectoral and transitional character.

Informalisation and Consolidation

“With the junking of the old high-value currency, the parallel economy has become part of the formal system” – Arun Jaitley (8)

Everybody is talking about the impact of demonetisation on the informal sector, which is heavily dependent on cash transactions. But there is scarcely any analysis that shows how it is shaping the location of informality in the whole economy. Is it an end of informality — of the exploitation of cheap labour? Certainly not. It is an increase in the real subsumption of informality — it is a revelation that sectoral dualism sustained through segmented economies, if not fully illusory, is merely at the levels of appearance and form. The indirect exploitation of surplus population as cheap labour by capitalist firms by accepting the relative autonomy or sectoralisation of informality perhaps needs regimentation today to further expand capital accumulation. Through the so-called demonetization move, capital is arguably seeking to consolidate itself by vertically integrating the horizontalised relationship between formal and informal. It exposes the vulnerabilities of particular capitals seeking to hide their localised parallel levels accounted for in the official bookkeeping only as leakages in the system.

Managing money circulation is about networking and facilitating economic activities and transactions — production and circulation. The left-liberal intelligentsia, including many “Marxists”, are only talking about the impact of demonetisation as immediately experienced. At best, they are prognosticating a dampening of activities and demands, which will have adverse effects on growth. They are only remotely touching on the policy’s essential connection with the changing contours of the regime of accumulation. Leftists are right in noting the impact of demonetisation on the informal sector, but they have been unable to account for how it is shaping the regime in which informalisation is central.

It has been frequently noted, and quite rightly, that under neoliberalism the economy moves towards informalisation. The formal sector and employment are not growing, while informality is increasingly being embedded in the supply chains of the economy. That is why the informalisation of work processes is considered among the chief characteristics of the neoliberal economy.

As the informal sector has always thrived on surplus population exploited as cheap labour, “hiring-and-firing” is the norm there. What the pre-neoliberal phase had done was to secure an organised labour force that through its demand stability could sustain the domestic market. In many regions, however, a vast rural and urban informal sector was allowed to develop to reproduce surplus population. But the economic planning was avowedly geared towards formalisation. This vast surplus of labour and an increase in the organic composition of capital led to a crisis of the prolonged interregnum of planned capitalism, and a decline in the profitability rate. Technological transformations found the stable workforce in the so-called formal sector over-skilled and a hindrance to further accumulation. The formal sector was increasingly considered to be exclusionary unable to accommodate the growing surplus population allowing over-exploitative hidden economies to flourish. This led to an ascendancy of neoliberal market fundamentalism, which essentially attacked the formal-informal duality by legitimising informality. The aim was to take advantage of overpopulated living labour and utilise technological innovations that made skills redundant and required equi-skilled cogs in the wheel. Through initial structural adjustment programmes these surplus population-based informal sectors were linked with the formal corporate structures in the supply chain. In this scenario, instruments like the time-tested putting-out system, which capitalised and destroyed the old guild system, started becoming handy once again. It was through these instruments that cheap labour arrangements and regimes that existed locally were subsumed to avoid costlier and inflexible labour regimes that pre-neoliberal planning had generated.

However, despite the obvious hierarchical relationship between transnational corporate structures and local industrial set-ups that mobilised surplus labour, this relationship remained externalised becoming barriers to capitalist consolidation — concentration and centralisation of capital. Local laws that were promulgated to stabilise the labour force in the earlier regime became hurdles for capital mobility and accumulation in labour surplus economies. It was to avoid these hurdles that smaller and informal units were networked, but informalisation now has to be internalised and these units must be incorporated to survive intense competition. The parcellised production and distribution is not permanently beneficial. Also needed is “the concentration of already formed capitals, the destruction of their individual independence, the expropriation of capitalist by capitalist, the transformation of many small capitals into a few large ones”.(9)

Banking and finance that institutionalise the power of money facilitate the concentration and centralisation of capital today by regimenting individual capitals — big and small — and compel them to submit to the general needs of capitalist accumulation. The multiple layers of industrial forms — formal and informal — generate clogs in the real-time mobility of financialised capital. The informal set-up provides many smaller units with legal and trans-legal comparative advantages allowing them a kind of relative autonomy from legitimate competition. Being based on cash transactions they become autonomous from the institutionalised finance and public credit, while fully utilising the currency issued by these institutions. It was only through monetary and banking reforms that these economies could be contained within the structure.

We would do well to remember that one of the major battles capital has had to wage time and again is that of labour reforms. At the present juncture, especially in countries like India, numerous legal “number filters” have been imposed that grant smaller industrial units a freedom to disregard minimal labour standards, which bigger units have to at least legally maintain. Only by coordinating with these smaller units and utilising a labour contractual system the corporate sector could evade the imposition and draw the benefits. There has been a continuous demand to remove these filters, so that the benefits that the informal sector has — to openly exploit surplus population as cheap labour — could be generalised. Only through such generalisation can the processes of concentration and centralisation become effective.

Of course, the formal sector incorporated informal entities and relationships to evade the hazards of regulation. The way cheap labour-power was bought and exploited in the informal sector was an object of envy and is the benchmark for the formal sector entities to model the labour regime and demand for deregulation from the state. The state and the formal industrial regime have been long trying to achieve this. Despite being able to utilise informality to their advantage, the formal sector has been subject to humiliating bargaining tactics of smaller entities in the informal sector. The diverse local industrial regimes in which these entities function create difficulties for formal and bigger players in the value chains. Moreover, the ancillary interests are able to effectively compete with the corporate interests on the basis of their lower technical capabilities and cheap labour, thus leading to difficulties in the consolidation and centralisation of capital.

As labour reforms become more conflictual, with increasing defensive struggles of workers in the formal sector, monetary policies like demonetisation go a long way in regimenting “informal” and “small” capitalist interests. The wages of the unbanked population whom these entities have over exploited are all paid in cash. Demonetisation attempts to mobilise the advantages of these entities, which will now be totally subservient to formal processes. It is self-evident that any monetary tactic that affects cash flows would have an immediate effect on the cash-based informal economy. Amartya Sen is correct when he says, “At one stroke the move declares all Indians — indeed all holders of Indian currency — as possibly crooks, unless they can establish they are not.” (10) However, it is not totally wrong to say that a large section of this economy is always black as transactions and contracts there are not formally accounted for, and a substantial portion of income generated remains untaxed. But does this mean demonetisation will lead towards formality?

The notion of (in)formality is loaded with all kinds of connotations. And it is pretty confusing when we dichotomise formal and informal. In the production and distribution networks that define today’s economy we find this dichotomy resolved very efficiently. If legal systems tend to dampen flexible transactional and contractual relationships, informality (beyond the regulated formal relationships) seeps in to transcend rigidity. As a system, the formal-informal relationships constitute enormous value chains. However, if we discretise these relationships, it is not difficult to find clear examples of dichotomies in them, which actually define an intense competitive regime within the value chains — intra- and inter-sectoral competition. The entities in the informal zones of the value chain compete among themselves and also with entities in the formal zone.

Through demonetisation a process of verticalisation has been effectuated and the formal nodes would now act as concentration and centralisation of informal advantages. The state acting on behalf of capital in general is disciplining the devious and particularising nature of informality. Neoliberalism is a project to look after the general needs of capital in today’s conjuncture. Demonetisation is a decisive step in that direction.

Conclusion: Vulnerabilities

“…the magnitude of the global economic crisis at times is not felt in India because of strong (parallel) economy of black money.” – Akhilesh Yadav (11)

Post-2007-08, countries throughout the globe have been struggling to set their respective houses in order. That the so-called parallel cash-based economies in India cushioned the impact of the global crisis at the national level, acting as clogs that minimised the strains of the impact, is a strange truth. However, in order to sustain a higher growth these economies with their particularities will have to be incorporated into the formal system, and their comparative advantages annulled through their generalisation. What we see today is the neoliberal urge to mainstream and generalise informality and make it a ground for systematic capital accumulation, with concentration and centralisation as its vehicle. Hence, it is in this regard that the moves like demonetisation become effective instruments. But this would destroy the clogging effects of local and parallel economies. Hence, it would eventually minimise their ability to cushion against global vulnerabilities.

Notes and References

(1) Karl Marx, “Preface to the First German Edition,” Capital I, Collected Works, Volume 35, Progress Publishers, Moscow, p. 9.

(2) “Indira Gandhi lacked courage to demonetise, we are paying for it: Modi to his party MPs”, Indian Express (Dec 17, 2016).

(3) The political institutional ascendancy of rightwing jingoistic assertions is not any return to protectionism, rather it mobilises and productivises the general precarity to restrengthen neoliberalisation. By a reactionary generalisation of fear and terror that the mobility of capital and its crisis creates, it helps the system to reconsolidate its base against any radical statism and revolutionary anti-statism. The phenomena of Modi, Brexit, Le Pen and Trump will actually help in the final dismantling of the vestiges of older protectionist labour regimes in the name of making local economies and labour markets competitive, so that capital finds the locality docile for investment.

(4) Costas Lapavitsas (2013), “The financialization of capitalism: ‘Profiting without producing’”, City, Vol. 17 No. 6, pp 792–805.

(5) Ibid.

(6) “Demonetisation is changing nation’s conduct: Jaitley“, The Hindu (Dec 24, 2016).

(7) Susan Soederberg (2013)The US Debtfare State and the Credit Card Industry: Forging Spaces of Dispossession, Antipode Vol. 45 No. 2, pp 493–512.

(8) “Digital payments will help lower fiscal deficit: Arun Jaitley”, LiveMint (Dec 25, 2016).

(9) Karl Marx, op cit, p. 621.

(10) “Interview: Demonetisation move declares all Indians as possible crooks, unless they can establish otherwise, says Amartya Sen”, Indian Express (Nov 26 2016).

(11) “Black money helped Indian economy during global recession: Akhilesh Yadav”, Indian Express (Nov 15 2016).

Written by Pratyush Chandra

December 27, 2016 at 2:40 pm

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