The Other Hand Clapping; The Other Shoe Dropping; The Other Lung Collapsing
Just a year ago, they were singing, not actually singing, this being the age of derivatives... they were lip-synching all of them, bankers, fund managers, credit default spouse swappers, private equity firms, quants, qualts, pros-- real pros, cons-- real cons, real pros at being real cons, all of them lip-synching in silent but off-key, atonal multi-part disharmony, in disunison, to Fontella Bass' Rescue Me. Then somebody, dressed in sequins and heels, flipped the record to the B side and this chorus of the line changed its tuneless tune, dusted off an old choreography for another extraordinary rendition of an old routine, stepped off, quick-quick-slow, and into Ms. Bass' Recovery.
Me? I love Fontella, but in these times, I go with Dinah Washington. What A Difference A Day Makes. And what a difference...
The Financial Times February 5 headline "Shares Fall as fears over Europe's weak economies hit global markets. The Wall Street Journal of the same day "Global Markets Shudder: Doubts About US Economy and a Debt Crunch in Europe Jolt Hopes for a Recovery."
So what happened? Was it Toyota's gas pedals? China's tainted milk? Haiti's destruction? Bernanke's confirmation? US deficits? Spain's unemployment? Ireland's austerity? Greece's debt?
Of course it was. Of course it is all of those things, as all of those things are but of one thing, the accumulation of capital, the "self-expansion" [hah!] of value, the demand of and for profit, the reproduction of capitalism as a whole, the whole being overproduction, the whole being the decomposition, the disaggregation of capital, the whole being the devaluation of capital by and for profit, the whole being the contraction of profits, the whole being the self-impairment of accumulation.
So here comes another flight to safety. Drop that euro, lift that dollar. Dump that emerging market, get those T-bills. Shed that risk, get that security. Go short. Go shorter. Go shorter than short. Forget yield, preserve principal. Drop, dump, shed, punt. Call your mother and see if she still has your room ready. Will she do your laundry?
Meanwhile.... meanwhile the US deals itself the strongest hand with cards off the bottom of the deck and up its sleeve-- which is, as it has been, making the workers pay, and pay more, to preserve capital when accumulation is impaired.
In its manifestation of the "real domination" of capital as opposed to the formal domination, the very advanced nature of capitalism mimics, reproduces, its most primitive features, and more and more the whole system reverts to compulsion, to "extra-economic" means of accumulation. "Beggar thy neighbor" is more than a business plan, it becomes the golden rule.
So... while capitalism as a whole "sinks," it doesn't exactly drown itself, it drowns "others," the others being everyone else, being us. . And the water will be combined with the fire this, as in past, time-- that wonderful tool that combines accumulation and decomposition in one-- arson. Arson in its social reproduction is called war. War of all against all is the first, and last, commandment of capital.
The EU's problem is that it needs a new role model-- Merkel's Germany is simply inadequate. The WSJ on January 12 carried an article that began, "Bulgaria, the newest and poorest member of the EU is emerging as a fiscal model for a number of EU countries struggling to fend off debt crises." The regime there froze wages, cut projects, reduced spending by 15%, reducing its budget deficit to 0.8% of GDP.
The article continued, "Economists say Bulgaria economic and fiscal management has made it a role model for other countries in Europe."
Isn't that just too precious? I've seen the future and it's called Bulgaria. Boutique, enclave, concession, niched capitalism grows into the capitalist balkanization of daily life.
Opposition, resistance, to capitalism's "plan" for austerity, its need for destruction, decomposition, cannot be focused on the wage, or wage level, of the individual worker, or sector of workers. Nor can it be based on demands for "full employment." Better might be a demand for full unemployment, with all needs met through the seizure of property. That is better, but not good enough. The response of a movement to build class struggle must grasp the social costs of the reproduction of capital as a whole and that it is those social costs of the totality of reproduction, not just the costs of machinery, of labor power, of transportation, but the total cost of the social organization built up and essential to capitalist accumulation, that now constitute the impairment to accumulation.
On February 3, an article appeared in the WSJ entitled "Radical Shifts Take Hold in US Manufacturing" examining the deep structural changes in US industrial production-- in essence the penultimate result of "moving up the value chain," and concentrating on "value-added" production.
US industrial capacity declined 1 percent in 2009, the largest single year decline on record. This is distinct and apart from the rate of utilization of existing capacity. This is a dismantling, decomposition of capacity. Capacity is increasing in semiconductor, communications equipment, computers, electricity, and oil and gas production [the last not exactly being value added, but offsets its "commodity" production through price increases that "drain value" from other sectors]. Capacity continues to decline in motor vehicles and parts, printing, textiles, plastics, rubber products, furniture.
Chemicals, a nice little profit center 20 years ago, reduced its US capacity 1.7 percent. Peter Huntsman, CEO of Huntsman Chemicals stated: "The chemical industry is leaving the US and it won't be back. When demand picks up, they'll build new plants overseas-- in the Mideast, Singapore, China."
This doesn't mean the US bourgeoisie is getting any weaker, and we shouldn't be deceived that declining production and capacity in the US means the decline of US capitalism.
At the same time, in the United States, Intel is, as almost always, increasing its capital investments and capacity. Of particular interest in the article is the almost off-hand comment about advanced technology production in the US. Avant Technology, a memory module producer, is increasing its output capacity by 60 percent:
"Manufacturing in the U.S., he said, allows Avant to turn around orders in 24 hours, and advantage in an industry where demand is volatile and clients try to keep inventories low. In addition, the reduced freight costs, compared with shipping goods from China, can offset the added cost of US labor, since labor accounts for less than a hundredth of his average sales price."
That bears repeating, since it manifests, encapsulates the critical contradiction of advanced capitalism's development: "...since labor accounts for less than a hundredth of his average sale price." And as capacity increases, and output increases, what will occur? The prices of production must, and will, inevitability decline to the level of the cost of production, and the rate of profitability of production will stagger and fall. Labor, despite its minimal portion of the cost/price of production, will be attacked in the attempt to restore profitability since wage rates do have an impact on profitability; as labor, requiring subsistence, must be driven below subsistence, below the total costs of its social reproduction, for a time-- and, of course, one of the best ways of driving labor below the costs of its reproduction is killing it off through wars. You can't get anymore below subsistence than actually dying.
The advance of the workers' movement begins with the workers own social protection, and demands for the protection, of the most vulnerable, most exploited, most marginalized under capitalism. It begins with demands for full equality of immigrant laborers regardless of "legal" status. It begins with demands for free, universal healthcare, operated by medical professionals for the social benefit of all those neglected under capitalism.
5 Februay 2010
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