A review of The Coming Revolution: Capitalism in the 21st Century by Ben Reynolds, wherein our radical heroes come face to face with the rapidly approaching limits of their pathetic reformism.

1.



Capitalism incessantly struggles to rid itself of wage labor even as it tries to increase the mass of profits. This has implications for any realistic set of predictions regarding the likely path of the mode of production in the next eight decades. Capital’s effort to rid itself of wage labor implies that the total mass of value diminishes over time; while the effort to increase the mass of profit implies that capital’s total employment of labor must increase over time. The paradoxical impact of capitalist commodity production is all too often lost on writers, who, limiting their analysis of the mode of production to the sphere of exchange, are divided into camps over the ultimate result of capitalist development. The division is best expressed in the controversy over whether improved methods of production necessarily results in technological unemployment.

Since the great crash of 2008, the radical Left has created something of a cottage industry predicting the future of the capitalist mode of production. The gist of this narrative is best summarized by a passage taken from a 2016 talk given by Wolfgang Streeck, who predicts a rather dystopian future, where wage slavery continues, even as civilization collapses:

“Under post-capitalism, private profit-making continues, even though in the shadow of uncertainty in an anomic society with decaying institutions, declining coherence, successive crises, and ongoing local and more-than-local conflicts and contestations. Mass cooperation with capital accumulation is driven by a culture of competitive consumption that, apart perhaps from large parts of Asia where it seems to be based in collective conformism, must be vigilantly protected against being subverted by post-materialist value change, if not by shrinking spending power. The life of individuals in the post-capitalist sauve qui peut interregnum follows the behavioural prescriptions of neoliberal doctrine ( Dardot and Laval, 2013 ), which means that it is bound to burn to the ground the foundations of a successful society and economy. Social life cannot be reduced to economic life, and economic life is not possible outside of a society. Proposition 12 of Etzioni’s Moral Dimension (1988, 257) applies: ‘The more people accept the neoclassical paradigm as a guide for their behaviour, the more their ability to sustain a market economy is undermined’. The future of capitalism is bleak.”

The future appears bleak indeed, considering that, when Streeck wrote those words in 2016, a Trump Presidency was held to be not just unlikely, but impossible — a hilarious farce fit only for late Saturday night live television. If at the beginning of the 20th century radical thinkers were filled with optimism over the imminent demise of wage slavery, today the very thought that wage slavery might end fills them with an unspeakable dread that weighs on their writings like a festering corpse. In truth, as Streeck’s argument suggests, there is no post-capitalism for the radical Left. What most radicals call post-capitalism might better be called post-politics or post-democracy: the state, having been stripped of its capacity to manage the production of surplus value, will leave us to the tender mercies of naked capitalism. If politics ever had a civilizing influence on capital, so the argument of our radical prognosticators warn, the velvet glove of democracy is as last century as that silly glove Michael Jackson wore on his right hand when Millennials were just kids.

2.

This rather disturbed view of the future of wage slavery after the death of the state echoes apocalyptic and post-apocalyptic novels that comprise much of the scifi genre today. As the blurb of one book puts it, in that genre, the world has been devastated by, alternately, “nuclear holocaust, biological warfare/pandemic, ecological disaster, or cosmological cataclysm.” We join our protagonist (typically a young woman or girl, who serves to heighten our sense of post-apocalyptic vulnerability) in the aftermath of the catastrophe as what is left of capitalist civilization limps along or is in the process of being reconstructed on a decidedly smaller population base.

No doubt, on a sufficient scale, a species-destroying viral pandemic could, at least in theory, lead to the end of wage slavery, but it seems to be a high price to pay just to be able to call in sick on Monday. But the more likely source of the dread that fills the radical Left each time they contemplate the end of wage slavery is that the radical Left don’t think anything comes after capitalism. As far as radicals can see back into history some sort of exploitation of one part of society by another part of society has always existed. Capitalism today is only a variation on a long historical theme — a variation that becomes less distinct from history in general the more we trace such categories as labor, the state, gender, race, money, debt, commodities, exchange, prices, profit — even the proletariat itself — to their earliest identifiable forms. By such methods of investigation, it is possible to assert, at least in a tweet or even a scholarly paper, that capitalism has always existed in some form and always will.

This dystopian view of the future, however, typically fails to look at the impact capitalist development has on wage labor itself. The contradiction, that labor time increases even as the total mass of value diminishes, resolves itself into the observation, made by Moishe Postone, that, over time, wage labor itself is emptied of its content, becomes increasingly superfluous to the production of real wealth, and points the way to a higher mode of production. According to the hypothesis advanced by Postone, wage labor does not wither away, if anything it expands more rapidly than the growth of the population of proletarians, drawing even a considerable portion of the reserve army into active duty. As wage labor is progressively stripped of its value-producing character, it is converted into an activity that is as sterile economically as it is disastrous for human beings and the biosphere.

The image developed by Postone is similar to the death phase of a star like our own, where, as its fuel is exhausted, it is predicted it will swell beyond Earth’s orbit before collapsing into a white dwarf. The late expansion of wage slavery following World War II may not be showing us the vitality of the capitalist mode of production, but signaling its final collapse.

3.

Enter Ben Reynolds and his new book, The Coming Revolution: Capitalism in the 21st Century. The argument that forms the central thesis of Reynolds’ book appears to be that the process by which wage labor is progressively emptied of its content by the progress of capitalist development itself has an endpoint — an endpoint we may well encounter before the end of this century. Labor cannot be indefinitely divested of its value-creating capacity without things ending badly for capital:

“Capitalism’s prospects for growth are still significant and it may be able to afford decades of growth globally even while it deals with chronic instability in the developed world. But this process cannot go on forever. The adjustment mechanism for the problem forecast by US agriculture, the collapse of commodity production, is simple: the constant addition of new industries and new markets. This mechanism is already starting to run out of steam. In the coming decades of the 21st century, we will watch as capital overaccumulation transforms from a local into a global problem. By its very nature, this transition is not going to be smooth. It will be punctuated by crises, bubbles, wars, uprisings, revolutions and ecological pressures. It is even possible that a global war on the scale of World War II might set the clock of capital accumulation back a few years. Overall, such a disaster could only provide a temporary reprieve. If this hypothesis is correct, then capitalism is not destined to go on endlessly accumulating value until the sun burns out. Capitalism will collapse of its own internal contradictions within the 21st century, within the lifetime of children born today.”

Reynolds takes as his starting point one of my favorite examples of the impact capital has had on production by describing the changes in methods of production of written text. Invented around 5000 years ago (perhaps as early as 7000 years ago), at first the production of written texts evolved slowly. Production was mostly accomplished by hand — a painstaking process that required considerable human effort. In the fifteenth century a revolution in the production of written texts took place with the invention of a machine — the printing press — which could reproduce written texts about as rapidly as the typical home printer. Today, of course, written texts have been entirely digitized. It is possible to reproduce an entire book with no more human effort than a right-click. Sharing the text anywhere on the planet is a simple as making it available on the internet as a torrent.

Compare digital reproduction of a book to the labor intensive process creating and publishing a text required up until the invention of the printing press:

“In the hundreds of years preceding the press, the production of manuscripts scarcely changed. Copyists laboriously copied text from an exemplary manuscript onto sheets of parchment or paper in their own hand, with great variations in style and handwriting between copyists. The manuscript was passed to a rubricator, who would highlight particular passages or headings for emphasis. An illuminator would then add any necessary images or artistic flourishes, depending on the quality of work demanded. Finally, a stationer or leather-worker would assemble and bind the manuscript. Each of these professions had its own guild to regulate work and was often organized in separate workshops with separate production lines.” [p.7]

Reynolds argues that the revolution in the production of written texts has considerable implications for society that extend well beyond the publishing industry:

“The printing press was not just a radical innovation in the production of text. It was a forewarning of an entire industrial society in waiting, the outlines of which could be understood from the printing houses themselves. What the printing press was to industrialism, the personal computer and the Internet are to an entire system of production that has only begun to emerge today. This new system promises to shake the foundations of our society.” [p.6]

To judge by the declining prices of books in England over the 1500s, the labor required to reproduce a manuscript fell about 98% following the introduction of the printing press. Meanwhile, the output of books rose exponentially, from an estimated 20 million books published worldwide up until 1500, to 150 million by the end of the 1500s alone. The means of production in the new book industry were soon concentrated in the hands of the biggest publishers (with considerable backing by the state), while the market for the new industry rapidly expanded around the globe. Within one hundred years, the production of written texts was completely revolutionized. Within 500 years, a nearly unlimited number of copies of any written text, or even the complete written product of human civilization for the past seven thousand years, could be reproduced with a few keystrokes on a computer terminal. Similar changes were underway in all other areas of production.

4.

The revolution in the production of written text has rapidly spread to every sphere of production. By 1896 it only required about five percent of the labor to produce an acre of wheat that was required in 1830. By the First World War, agriculture suffered from chronic overproduction and collapsing prices. By the time of the Great Depression, survival of capitalistic commodity production in agriculture depended on systematic intervention by the state to prop up profits. In the early 2000s, the cost of producing one staple crop, corn, exceeded its sale price, despite it now being literally burned as fuel while people starved.

Reynolds argues that we now live in the age of absolute overaccumulation of capital and the breakdown of production based on exchange value:

“History shows us what happens when capital starts to reach the limits of absolute overaccumulation. Industries become so productive that the value embodied in commodities falls precipitously, all while the capital investment firms need to compete rises. Profits drop and further investment only worsens overproduction, causing a steep decline in the rate of profit. The amazing thing about this example is that it was not a digitized piece of information but a physical commodity that first demonstrated this possibility. US agriculture became so productive that it could no longer carry on the production of exchange value.” [p.116]

Reynolds’ argument has incalculable implications for both wage slaves and the environment. While the value created by an average hour of social labor time falls, it requires an ever larger quantity of employed labor power to produce the same or greater mass of profits. To squeeze an ever greater quantity of surplus value from a declining mass of productively employed labor time seems to imply ever greater quantities of raw materials to serve as means to absorb the labor of the employed wage workers. It is not just the employment of labor that would increase in this scenario, the destructive impact of capitalist development on the biosphere is exacerbated. With the constant improvement in methods of production, it takes an ever larger mass of employed labor power and an ever larger mass of constant capital to produce the same mass of profits as before.

“There are few clearer examples of the pure irrationality of a system based on production for profit, or the extremes to which the elite will go to preserve such a system. More importantly, it demonstrates that Marx’s remarkable prediction was right. The collapse of production for exchange value is not just a theoretical possibility. We can already observe it happening. An agricultural system that sacrificed everything from environmental standards to food quality and safety in the search for profits can no longer sustain production for profit on an independent basis. US agriculture has to be subsidized permanently or it will be unable to operate in a capitalist market.” [p.117]

5.

The question, argues Reynolds, is not whether machines will replace human labor in production of material wealth, but how rapidly. He suggests this could easily happen before the end of the century. Although he adds this important caveat:

“There are relatively simple and concrete answers to this question. From the perspective of a capitalist, human workers are neither special nor indispensable, nor uniquely desirable. Labor is an input like anything else. Capital functions as a substitute for labor. At base, the equation is simple: if it is cheaper to use labor in a particular application, the capitalist will employ more labor, and if it is cheaper to use capital, the capitalist will employ more capital. What matters overall are the factors that make labor and capital cheap or expensive.” [p.72]

From the standpoint of Marx’s labor theory, I think Reynolds may be a bit off with this answer. If Reynolds wanted to be consistent with Marx, he would have explained that capital is motivated by profit, not prices. The prices of inputs do not matter to capital. If the improved technology increases profits, capital will introduce improved technology into production no matter the cost, and even if this results in prematurely devaluing already employed methods of production.

This is not to say that the relative costs of employing machines versus human labor in production is of no account, only that the account that matters for capital is the facility either has in realizing greater profits. As Reynolds points out, with the introduction of improved machines, costs rise, creating so-called barriers to entry. In general, a machine that replaces ten workers in production may cost as much or more than the labor power of the ten workers. What accounts for its introduction is not costs per se, but the mass of surplus that can be produced over those costs.

Leaving this pedantic quibbling aside, Reynolds has made a strong case that capitalism is doomed within this century. Yet, his argument implies that this will not immediately lead to falling wage employment. Rather, wage employment, even as it expands, will be increasingly relegated to the status of an economically superfluous activity; required more for realization of surplus value than its production:

“Capitalism is an economic system that lives off labor, even though its continued development makes labor increasingly obsolete. Just as Marx suggested, rising productivity is producing a mass of surplus laborers who cannot be profitably employed in production. The growth of this surplus labor force is a massive contradiction facing the development of capitalism. Marginalized and permanently consigned to precarious work or unemployment, this growing segment of society stands in complete antagonism to the status quo. Technology continues to metamorphosize in remarkable and destabilizing ways that will expel more labor from the production process.” [p.78]

6.

If technology is indeed replacing human labor in production, what accounts for the continued growth of wage employment? If Keynes had been correct in his prediction of technological unemployment in 1930, the world economy should today be awash in unemployed workers. In fact, the number of employed wage workers today is estimated to be at least fifty percent greater than the total population of the world when Keynes made his famous prediction.

Anyone familiar with Marx’s approach to the capitalist mode of production knows that he argued the production of surplus value makes up the direct process of production. As soon as the surplus-labor of the productively employed workers has been embodied in commodities, the total product must be sold. The productively employed workers have been exploited, but this exploitation still must be realized if the mode of production is to reproduce itself. Marx’s argument suggests there is a growing chasm between the labor time technically required for production of commodities and the labor time required for realization of those commodities as values.

In his book, Time, Labor and Social Domination, Moishe Postone argued that while capitalistic accumulation reduces the labor time technically required for production of commodities, and thus lays the material basis for a general reduction of social labor time for the social producers, it leads not to a shortening of hours of labor, nor even technological unemployment, but to a new category of labor time that Postone labels, superfluous labor time. “The term”, writes Postone, “reflects the contradiction: as determined by the old relations of production it remains labor time; as judged in terms of the potential of the new forces of production it is, in its old determination, superfluous.”

I have tried to wrap my head around Postone’s argument and have arrived at this conclusion: Marx’s labor theory of value does not predict technological unemployment as commonly might be assumed, but the actual expansion of wage employment in forms that produce neither value nor surplus value. Seen globally, i.e., from the standpoint of the process of accumulation as a whole, labor begins to lose its capacity to create value, or, as Postone terms it, becomes empty. If Postone is correct, an hour of social labor no longer creates an hour of value as might be initially expected. On the one hand, as the social forces of production are developed by capital, an hour of social labor produces, perhaps, only 30, 20 or even five minutes of value; while, on the other hand, production of an hour of value requires two, three or even ten hours of actual expended social labor time. This is because, over time, the social labor day swells with labor that creates no value; labor that is materially superfluous to the production of commodities. The value-density of the social labor day falls.

7.

If labor is being expelled from the production process, yet the growth of wage labor is vital to the realization of the surplus value created by wage labor, how does this contradictory result manifest itself? Reynolds suggests this should be first expressed in a growing divergence between the socially necessary labor time required for production of a commodity (its value) and the price of the commodity in the market:

“The brilliance of Marx’s model consisted in showing how an advanced system based on production for exchange would inevitably diverge from the premises of simple commodity production. ‘The transformation of values into prices of production serves to obscure the basis for determining value itself,’ as he wrote. Marx did not predict that individual prices would express labor values, but that individual prices would diverge further and further from labor values as capitalism developed. Nixon revealed the prescience of this prediction when he severed the connection between the price of currency and the labor value embodied in gold. The purpose of labor theory is not to allow us to predict the prices of individual commodities, but to understand how a system of value production inevitably collapses.” [p.16]

As the social labor day began to swell beyond the duration required for production of commodities, this swelling would be expressed in the growing divergence between the values of commodities and their market prices. This secular and irreversible divergence between values and prices of commodities is what we call inflation. Reynolds thus offers the first complete hypothesis for the malady of inflation that swept post-World War II capitalism, based solely on the premises of Marx’s labor theory of value.

This is a remarkable achievement in its own right and one deserving of praise for Reynolds work.

The causes of the collapse of the gold standard now becomes obvious: capital requires constant expansion of the working day, despite the fact that it reduces the socially necessary labor time required for production of commodities. At a certain point in the development of the social forces of production, these two tendencies come into absolute antagonism: technological unemployment amounts to the end of capitalist accumulation, yet further expansion of wage employment violates the premises of commodity exchange. The premises of commodity exchange must be violated, and they are violated — money is abolished! (Here, following Marx, I define money strictly as commodity money.)

8.

Money is abolished because, from the standpoint of the requirements of capitalist production for profit, there is not enough money. In Marx’s theory, the circulation of money is merely the reflex of the circulation of commodities. Money serves only to express the values of commodities in circulation. When the circulation of commodities suddenly decline, as happens during an industrial crisis, theory says the quantity of commodity money in circulation must decline with it — gold or silver is withdrawn from circulation by owners of capital. For sellers of commodities, this decline of the quantity of money in circulation during a crisis, appears as the sudden disappearance of “demand” in the market for their commodities, even as a ‘shortage of money’.

This essential condition of commodity exchange, however, only applies to a commodity money. Keynes addressed this problem in his 1933 paper, The Means to Prosperity, where he wrote that depressions could be counterbalanced by the state forcing its fiat into circulation by employing the surplus labor and capital that has already been set free from productive employment by capital. Specifically, Keynes argued that the state should borrow the mass of surplus capital idled by capitalist crisis and employ the workers who have been rendered superfluous to the production of material wealth by the progress of technical development:

Business enterprise will not seek to expand until after profits have begun to recover. Increased working capital will not be required until after output is increasing. Moreover, in modern communities a very large proportion of our normal programmes of loan-expenditure are undertaken by public and-semi-public bodies. The new loan-expenditure which trade and industry require in a year is comparatively small even in good times. Building, transport, and public utilities are responsible at all times for a very large proportion of current loan-expenditure. Thus the first step has to be taken on the initiative of public authority; and it probably has to be on a large scale and organised with determination, if it is to be sufficient to break the vicious circle and to stem the progressive deterioration, as firm after firm throws up the sponge and ceases to produce at a loss in the seemingly vain hope that perseverance will be rewarded.

Modern monetary theory today suggests this is not entirely necessary: the state can “spend” simply by crediting its vendors in state issued fiat to expand wage employment. It then borrows back the fiat it has already spent in order to remove the excess currency from circulation.

9.

Today, the necessary role played by the state in propping up the profit of capital has critical significance for labor theory. As I have argued above, the looming technological unemployment cited by Keynes in 1930 implied that the continuation of production for profit itself violates the premises of commodity exchange. As Reynolds argues, when the state issues fiat to pay vendors or its employees, it is basically paying nothing for labor power or commodities. As Reynolds notes, “We shouldn’t be able to trade something for nothing,” but this is exactly what the state is doing when it bails out bankrupt farmers!

It can do this because, under conditions of absolute overaccumulation, the capital and labor power purchased by the state already have no value, are entirely superfluous to the production of surplus value. At the level of the individual transaction, when the state issues fiat to pay for excess corn crops, it is actually paying nothing for these items. These items have no value to capital because the value they contain cannot be realized. If the state did not purchase the crops with its fiat, the value of the crops would be lost anyways.

Yet, on the books of the capitalist firm, cash has changed hands. The firm laid out a certain quantity of cash in the form of labor power and capital; it has set them to work producing a product; it then sells this product to the state for more cash than it first advanced. It never occurs to the owners of capital that they have thereby exchanged real capital for a bagful of paper fictions. In any case, as far as they are concerned, money is no more than a numeraire, a symbol of value. Moreover, by using fiat in place of a commodity money, chronic insufficiency of demand that is characteristic of absolute overaccumulation has disappeared. Rather than the periodic economic catastrophes characteristic of commodity money economies, we now have mild slowdowns. So long as the formal conditions of capitalist accumulation are fulfilled by this exchange, (m>m’), the capitalist does not care that his commodities are effectively purchase for nothing.

10.

Reynolds book thus calls for a complete re-evaluation of the role of the state in post-war capitalism. I call attention to this passage from Simon Clarke’s 1991 essay, State, Class Struggle, and the Reproduction of Capital, in his anthology, The State Debate. In this essay, Clarke proposes that within certain limits (determined by the requirements of capitalist reproduction) the state intervene to modify capitalist relations. Thus, there is a role, however narrow and narrowing, for political struggle short of the complete abolition of wage slavery:

[The] subordination of the state to the reproduction of capital, which determines the state as a moment of that reproduction, is not simply given by the logic of capital. As a moment of the reproduction of capital the state is also a moment of the class struggle and the forms and limits of the state are themselves an object of that struggle. The growing social character of capitalist production, and particularly the increasing internationalisation of capital, certainly narrow the limits within which the state can intervene to modify capitalist social relations of production without precipitating an interruption in the material reproduction of capital. Such an intervention would undermine the conditions for the production and appropriation of surplus value. But the state, nevertheless, has the power to intervene within those limits, and indeed has the power to violate those limits at the cost of precipitating a crisis. The mediations between capital and the state do not determine that the state will intervene to act in the ‘best interests’ of capital, or even that a particular government will not use the levers at its disposal to undermine altogether the reproduction of capital. Thus, the state is not simply a tool of capital, it is an arena of class struggle. But the form of the state is such that if the political class struggle goes beyond the boundaries set by the expanded reproduction of capital, the result will be not the supersession of the capitalist mode of production but its breakdown, and with it the breakdown of the material reproduction of society. [p.175]

Reynolds argument suggests the state is not just subordinate to the reproduction of capital; today, the reproduction of capital is impossible without continuous state intervention. Who is going to buy all of that excess corn that cannot be sold at a profit and employ all of those workers who are now rendered superfluous to the production of surplus value, but whose wages are critical to realization of profit, if not the state? How likely is it that the state has the power to go beyond the boundaries set by the reproduction of capital when its role is now absolutely essential to capital’s continued operation? Are we now to believe, in contradiction to both Marx and Keynes, that a growing mass of surplus capital and a growing surplus population of wage workers creates their own demand?

Logically, it is something of a contradiction to propose, as Clarke does, that the state can intervene against the interests of capital when the breakdown of production based on exchange value indicates capital itself only survives because the state intervenes to ensure its survival. The breakdown of production based on exchange value means, as Reynolds argues, that the mode of production cannot reproduce itself on the premises of commodity production. Absent the continuous intervention of the state, capital must collapse. And if, as Clarke asserts, “The reproduction of the state as a material force therefore depends on the reproduction of the capitalist social relations on the basis of which the use values appropriated by the state are produced,” the collapse of the mode of production necessarily leads to the immediate collapse of the state as well. The state does not simply intervene on behalf of capital in ‘the best interests’ of capital; it intervenes because the survival of wage slavery is a matter of life and death for the state as well, an existential threat to the state.

And here it can be seen why the death of democracy fills our radicals with such unspeakable dread.