The Totality Is Beautiful
"Small" Is A Decoy
by
Capitalist Crisis Studies
February 1977
Table of Contents
1 The Contracting Social Product and Pro-Contraction Ideologies
- The Real Causes of the World Economic Crisis and of the Ideas Which Favor It
2 The Delusion of Permanence
- The Inherent Impermanence of Nature (The Nature of Dialectical Continuum)
3 Capital As A Technology
- Historical Specificity of Technology (The Stages of Social Evolution)
- Schumacher's "Marx" versus Marx
- Post-Capitalist Technologies
- UNICOM
- Fusion Power 'Unifacture'
4 Barbarism
- Schumacher' s 'Feudality'
- The Trilateral Commission Program for 'Industrial Feudalism'
- The Actual Consequences of a Schumacher Austerity: "Small" is Suicide
5 Spirituality
- Schumacher as Spiritual Impostor
6 The Self-Planning Society
- Socialism versus 'government-capitalism', 'workers' capitalism', etc.
7 A Program For Qualitative Growth
- The Transition To The Self-Planning Society
Notations
Citations
Postscript
Sources
Publication Information
NOTE: This is an incomplete draft of the full text outlined above.
1
The Contracting Social Product and Pro-Contraction Ideologies
The Real Roots of the World Economic Crisis and of the Ideas Which Favor It
Why are some people suggesting as a "cure" to our problems what would seem to be more of the disease?
Let's look at the current world picture.
Throughout the industrialized areas of the globe -- in the U.S.,
Western Europe, and Japan, as well as in Poland and the U.S.S.R. --
governments are calling for austerity and "belt-tightening"; for a
decline in the real buying power of wages; for cutbacks in public
services, and for "lowered expectations".
Meanwhile, in the unindustrialized areas, such austerity is being
brutally imposed from above -- in Chile, in Argentina, in Brazil, in
Egypt, in Thailand, in the Philippines, in South Korea, and so on -- by
some of the most ferocious dictatorships the world has ever seen,
unexampled since the days of Hitler in Germany, Mussolini in Italy,
Franco in Spain, Peron in Argentina, and Horthy in Hungary.
Besides mounting police torture and terror against political opponents,
the economic tensions have now reached a point where strikes are
outlawed, wages forcibly frozen (although the "rising cost of living"
continues to rise), and, in some places, workers have to be herded into
"their" workplaces by armed guards. In Chile, the economic
advisers who aid the junta in directing this grisly business are
American-trained protégés of Milton Friedman, who have
named this process "shock treatment". (So much for the author of
"Capitalism and Freedom"; in times of crisis, we get "capitalism and
shock treatment", and forget about the so-called "freedom".)
At the same time, as if by coincidence, a whole chorus of new
ideologists has arisen, telling us that we should cut our living
standards voluntarily, even gleefully; that heavy industry should be
dismantled; that the human population should be drastically reduced;
that "Growth" should be curtailed. Indeed, they would have us
welcome, prefer, and work toward these "goals". E.F. Schumacher tells
us that "small is beautiful"; Ivan Illich holds forth that austerity
can be "convivial"; and Jimmy Carter exhorts us to "renew the fighting
spirit of World War II". And all this at just the time when such
measures are being imposed all over the world anyway in the manner
described above.
A mere coincidence?
Or could there be some connection between these two developments?
If you're one of those people who've caught an inkling that there's
something important going on behind the news -- something which the
"pop theories" put forward by the press and on TV are just too
superficial to explain -- then this is offered to aid your effort to
find the real explanations.
First of all, before we scrutinize the ideas of those who propose
further contraction (meaning shrinkage of the economic life-process) as
a "solution" to the contraction already going on, let us delve into the
roots of the worldwide economic crisis that we've lived with for at
least the last seven years.
To those who follow such matters, it was evident that the world economy
had entered a protracted crisis even before the monetary crisis of
1968. Since that time, this crisis has become obvious to
all. Among its symptoms are accelerated inflation, rising
unemployment, shrinking utilization of plant capacity, and a sharply
declining investment in new means of production. But the most
striking manifestation of this crisis is the skyrocketing indebtedness
of major industrial corporations, large cities, and entire Third World
and Eastern European nations, all of whom now find themselves at the
mercy of a handful of giant international banks such as Chase Manhattan
and Citibank of New York, Morgan Guaranty and Trust, and Bank of
America -- the same banks which have spawned the so-called
"multinational corporations".
Why is all this happening?
Is it because of "greed", or perhaps "big technology", those two convenient devils in Mr. Schumacher's demonology?
Let's consider each of these "causes" in turn.
What Schumacher calls "greed" would seem to be a constant factor in
human affairs. So, if "greed" has been here all along, why is this
crisis happening now, and not before?
What is this "greed" anyway?
Case in point: At the turn of the century, well over half of the people
in the U.S. resided in rural areas, and most of them were
"self-employed" as family farmers. Were those farmers who
eventually "went under" and joined the urban labor force (because they
couldn't keep up with their more "capital-intensive" competitors) --
were all these people guilty of being "too greedy"? When an industrial
worker works overtime or "moonlights", as so often happens, just to
"have a little something extra" for his or her family -- i.e., whenever
the much-touted "wage gains" are eroded, or canceled out completely, by
inflation -- is this worker also a "greedy" sinner? So Mr. Schumacher,
the lay preacher, would have us believe.
For as long as Christianity and capitalism have coexisted, the
Christians have been telling anyone who would listen that "there's
nothing wrong with the system; it's just the greedy people who spoil
everything." The Christians have persisted in this quaint delusion,
obstinately, adamantly, valiantly, despite all evidence to the
contrary. But, just as Hamlet's "tragic flaw" (i.e., hesitation)
would have been Macbeth's saving grace, we can see that the line
between "virtue" and "vice" is by no means as neatly drawn as the
simpler-minded moralists would lead us to believe. After all, one
man's virtue is another man's vice, and, if you'll pardon the pun, vice
versa.
But there should be no need to recite again the basic banalities of
"situational ethics". By now, these have become "the new commonplaces",
at least among certain sectors in the society of modern, or descendant
phase N1
capitalism. Among the educated elements in urban industrial society
there has been, as capitalism has developed, a consistent trend, which
is called by those who oppose it "the disintegration of values". In the
ethical realm this trend is manifested in the erosion of the moral
absolutes and "eternal truths" of the Catholic Middle Ages (or other
traditional societies), coupled with the widespread adoption of a more
flexible, relative, or "situation-specific" set of values. In the
U.S. this tendency toward "moral relativism" has been until quite
recently most apparent among the more affluent professionals, the
intelligentsia, white collar "service" workers, etc. The more
"traditional" morality still tends to predominate among farmers, blue
collar workers, small town residents, etc., although since the
"counterculture" of the mid-1960's, there have been significant
statistical indicators that this too is changing.
But for every action, there is a reaction.
William F. Buckley has defined a conservative as "one who stands
athwart history, screaming 'halt!’". Schumacher is, of
course, a man of many faces, a man who likes to play off his right-wing
traditionalism (or "classical-Christian heritage"), C1
against his left-wing calls for "socialism", for "nationalization", and
for his own ludicrous parody of "workers' control". This is not
new. In Europe, where, for over a century now, the threat of a
working class movement influenced by Marxian theory and other radical
ideas (however vulgarized) has been a real and present danger, various
sophisticated strategies of "co-optation" and "recuperation" have
developed in response. This is why, among all left-of-center
political parties and trade unions in Europe, there has long existed a
level of political discourse about matters such as nationalization and
"workers' control" which, until very recently, would have been taboo,
or even unthinkable, here in the United States, thanks to our two-party
system and our "bread-and-butter" trade unions. For this reason,
Schumacher succeeds beautifully in "putting one over" on his American
audiences. It's quite a joke: he dredges up and recycles the
oldest, most bankrupt social and political ideas that medieval Europe
had to offer, exports them to America, then mimics Madison Avenue in
his use of catchy slogans like "small is beautiful" and "Buddhist
economics" (although he himself admits that "the choice of Buddhism for
this purpose is purely incidental...”. C2
This ability to package the old in the guise of the new and "trendy"
demonstrates the man's gifts as a true master of mystification.
Yet beneath this thin veneer of pseudo-novelty, Schumacher's real
identity, as "one who stands athwart history", opposing every real
advance in human self-awareness and self-mastery, stands
revealed. In his chapter on "Education", Schumacher cites "six
leading ideas" (actually, five) of "the nineteenth century" C3 (to which he would counter pose the "leading ideas" of the Gospels and St. Thomas Aquinas! C4):
1 & 2 - evolution (Darwin)
3 - dialectical materialism (Marx)
4 - psychoanalysis (Freud, Reich, etc.)
5 - relativism (as described above)
6 - positivism (or "value-free" social science)
Of these five
"ideas", only the last, positivism, has been completely "safe" for the
established social order. All of the others have had, at one time
or another, a disruptive impact on culture and morals, provoking
scandal and outright hysteria at the moment of their first historical
emergence. Since then, of course, these ideas have, for the most
part, been smoothly incorporated and absorbed into the "mainstream" of
modern bourgeois culture. But not everyone has been convinced
that this fragmented amalgam of contradictory attitudes can be made to
stick.
The hard-line traditionalists, such as
Buckley and the coterie of Christian conservatives of the National
Review have been insisting, all along, that this "modernist
mixture" is a potential time-bomb. Despite the so-called
"hedonism" that has been purveyed by American mass media since the
1920's, there is no conclusive evidence that a capitalist society can
function for any length of time without an "ideology of
self-sacrifice", such as Christianity provided. On the contrary,
the damage done to the work ethic, the family structure, military
discipline, and so on, is deemed by some to be irreparable. And
now the "neo-conservatives" have joined the chorus, calling for
"lowered expectations" and that old time religion.
A society which requires the hierarchical "organization and discipline" C5
which Schumacher, in true Hitlerian fashion, calls for repeatedly in
his book, cannot indefinitely tolerate such corrosive influences on the
"moral fiber" of the masses. After all, the "primitive
accumulation of capital" in developed countries of the West -- the
great "success stories" of the Industrial Revolution was accomplished
partly by imperialism, but mostly through the extraction of
"surplus-value" (i.e., profit) from workers and farmers who, in their
character-structures, were the very image of the stoic, hardworking,
God-fearing types that Schumacher so glorifies. And every shrewd
capitalist knows this.
As Herr Schumacher writes:
"Without order, planning,
predictability, central control, accountancy, instructions to the
underlings, obedience, discipline... everything disintegrates." C6
But one of these
factors, "central control" (external repression) only comes into play
when compulsive morality (internalized repression) fails to do its
job. When authority loses legitimacy, it loses its "automatic"
nature; thereafter, the "cops in the mind" have to be reinforced by the
"cops in the street". From the standpoint of the ruling class,
this spells trouble.
One essential notion in the bourgeois
world-view has been the myth of the abstract, "autonomous" individual,
who is purported to possess a "free will" which is presumed to enjoy
unlimited "sovereignty", regardless of the objective
circumstances. In other words, even if you're starving, you, the
"metaphysical", atomized, autonomous individual, still have a choice:
whether to sin or to behave morally. No matter how bad things
get, these internalized restraints are still expected to operate.
Hence, it is easy to
see how this myth of "autonomy", which bore only a slight resemblance
to reality back during the ascendant phase of capitalism and is now
quite preposterous, would be threatened by the alleged "determinism" N2 of Marx, Freud, Darwin, et alia.
If our "autonomous" individual does not have a sovereign and pure "free
will", if he or she is, on the contrary, constrained and conditioned by
economic, sexual, and other factors, where does that leave
morality? Exposed for the con-game that it is?
Heaven forbid!
Then, the small farmers or industrial
workers we described earlier would no longer succumb to the self-blame
syndrome of "rugged individualism', would no longer feel guilty (though
they are, in another sense, partly responsible for doing what they are
compelled to do, daily, by the overwhelming pressures of a capitalist
society, and hence, would no longer be as susceptible to
manipulation by authority-figures, and so forth.
More important, our understanding of
what's wrong with society would no longer focus on the glaring
"excesses" of exceptionally "greedy" individuals (although there is no
doubt such people do exist), but rather on the routine and systemic
factors that mold, direct, and delimit our everyday activities.
Such a critical method should be applied, not only when we analyze the
behavior of poor and working class people, but also, if a certain crude
populism is to be avoided, when we examine the individual
capitalist, who, in this light, is not necessarily any more "greedy" or
"guilty" than anyone else. Because, in words of Marx that
many "Marxists" seem to have forgotten: "The laws of Capital confront
the capitalist himself as an alien and oppressive force." When
businessmen tell us that they have to lay off workers, or that the
pollution control costs being imposed on them by the Environmental
Protection Agency will make it impossible for them to "turn a fair
profit", they are not lying (The lie comes when they imply that
there's such a thing as a fair profit.) If capitalism is a system where
everyone "passes the buck" (sic), this should come as no surprise;
after all, irresponsibility, in the deepest sense of the word, is one
of the many "built-in features" of the social mechanism called Capital,
or the law of value.
Therefore, the fact
that human beings, under the (at times invisible, but always present)
dictatorship of this "law", continually do wasteful, destructive,
appalling, and absurd things, on a routine basis can hardly be
attributed to "greed" or any other willful or malicious intent.
To do so would be to ascribe more "free will" to individual beings than
they could actually possess. To do so would be to deny the
subtle and the not so subtle compulsions which operate daily, in a
thousand ways, to narrow the options of each of us. To do so
would be to imply that human individuals are atoms, each one existing
in a vacuum, and that the aggregate sum of their good intentions could
somehow add up in such a way as to enable an inherently irrational
system to function rationally. To do so would be moralism, a
tired old disease, and "intelligence begins where morality ends".
This brings us to the next alleged "villain" in the contemporary social drama, N3
Schumacher's other convenient devil: "big technology". On the face of
it, it would seem a curious thing, indeed, to blame (or, for that
matter, to praise) "technology", big or small, for what certain people
do with it. By doing so, we foolishly assign animate qualities
(of consciousness and will) to inanimate machines and methods.
Yes, poor technology, the all-purpose "straw-man"! Who is this
guy? Has anyone ever met him?
Levity aside, the "technology does
this... technology causes that" school will have to be confronted
squarely, and damn soon lest this virulent, and frightfully pervasive,
form of ideological cretinism drags us all down with it in its folly.
Let's approach the matter this way....
We have two conflicting hypotheses
regarding the root cause of the current "triple crisis" --
environmental, economic, "cultural". (The most striking feature
of the 1970's is the now universal acknowledgment that capitalist
society, even in those areas which had enjoyed the unprecedented boom,
the "miracle" prosperity of the 1945-68 period, is now, quite
undeniably, mired in the most profound and all-embracing crisis in its
history. As one instance of this "pessimistic mood", consider the
widely quoted remark of Valery Giscard d'Estaing, current President of
France, who told an Oct. 24, 1974 press conference: "The world is
unhappy. It is unhappy because it does not know where it is
going and because it guesses that if it did know, it would discover
that it is heading for catastrophe." C7
Numerous other quotes and "policy reports" from various spokesmen and
think-tanks of the world bourgeoisie -- i.e., those who have nothing to
gain and (potentially) everything to lose from such embarrassing
admissions -- could readily be cited, but is there
anyone still in doubt?)
Schumacher's
hypothesis is that "bigness" or "big technology" is the root cause of
the crisis; we would posit capitalism as the root cause. (Note: our
precise definition of capitalism is probably very different from the
one that most of our readers have been "taught" by the schools, the
media, or even most supposed "radicals". For example, we
view capitalism as a world system which currently prevails everywhere
and while we do concede that there are some noteworthy differences
between China, Cuba, North Korea, Vietnam, and the Soviet bloc
vis-à-vis Japan and "the West", we insist that State
management of a "national economy" does not constitute socialism, nor
could it, as long as the worldwide structure of Capital, which we will
define and elaborate later in the text, remains intact.)
Let us, therefore, submit these two
conflicting hypotheses to a simple empirical test which, as any
freshman science student knows, can be done by merely "isolating the
control factor" in the experiment. In this case, the "control
factor" is easily isoLated since, historically, there have been
numerous times and places where capitalism has existed without
"bigness” -- though it might be worth mentioning, in passing, that
there has never yet been an occasion when "bigness", or advanced
technology, has been given a chance to exist without capitalism!
Indeed, the coexistence (by no means "peaceful") of capitalism and "big
technology" is a relatively recent and exceptional phenomenon.
So we remove bigness from the picture, and
we look back to those "good old days" of small-town, small-farm,
small-business capitalism, which probably achieved its most nearly
"pure" expression in pre-Civil War America. Now, unless we are
expected to take seriously the televised nostalgia of "The Waltons" or
perhaps "Little House on the Prairie", what do we find there? A
wonderful way of life? A society where the "spiritual values"
that Schumacher constantly chatters about were prevalent? And
what of his beloved "health, beauty, permanence" or "wisdom, elegance,
nonviolence, saintliness, virtue, humanism, compassion" and so an, all
the other pious-sounding or pretty-sounding words that he so loves to
bandy about? No? Then what of his explicit call for a
society which can "pursue objectives other than that of profit-making"?
C8
To answer these questions, consider the
way that celebrated giant of American literature, Henry David Thoreau,
described his neighbors' behavior, in the 1854 essay, "Life Without
Principle":
"This world is a
place of business. What an infinite bustle!... It interrupts my dreams.
There is no sabbath. It would be glorious to see mankind at leisure for
once. It is nothing but work, work, work. I cannot easily buy a
blank-book to write thoughts in; they are commonly ruled for dollars
and cents.... If a man was tossed out of a window when an infant, and
so made a cripple for life, or scared out of his wits by the Indians ,
it is regretted chiefly because he was thus incapacitated for --
business! I think that there is nothing, not even crime, more opposed
to poetry, to philosophy, ay, to life itself, than this incessant
business.
There is a coarse and boisterous
moneymaking fellow in the outskirts of our town, who is going to build
a bankwall... and he wishes me to spend three weeks there digging with
him. The result will be that he will perhaps get some more money
to hoard, and leave for his heirs to spend foolishly. If I do this,
most will commend me as an industrious and hardworking man; but if I
choose to devote myself to certain labors which yield more real profit,
though but little money, they may be inclined to look on me as an
idler. Nevertheless, as I do not need the police of meaningless labor
to regulate me.... I prefer to finish my education at a different
school."
Thoreau's little
vignette of the marvelous merits of "old-fashioned" capitalism in the
everyday lives of pre-Civil War Americans should be mandatory reading
for every idiot who dares to invoke the "good old days” that never
were. But nostalgia is a funny thing; it maintains its stubborn
grip on our minds, and even more on our sentiments, such that we
disregard the fact that one good, hard, honest look at the evidence of
the past would thoroughly dispel our delirium. Nostalgia is a
symptom of a society in decline; the fact that it has become the
predominant "aesthetic mood" of the Seventies should tell us
much. Pick your period: the "greaser" Fifties, the glitter of
Hollywood's heyday, the pioneer homesteaders (this for the
"back-to-the-land" types, the "country cousins" of the city glitter
kids), or, in Schumacher's case, the Middle Ages. To guide your
life, you are now permitted to look anywhere but forward; because there
you will see nothing but bleak prospects, going from bad to
worse. Never has it been clearer: if you can't think beyond
capitalism, you can't think! We are expected to partake of the
bourgeoisie's decline, its fin de siécle just as we once
partook of its promises of progress. Either way, coming or going,
we are taken along for the ride. We are conditioned to identify
the fate of this particular class with the fate of humanity in
general. In the 18th Century, the rights of property-owners were
dressed up and legitimized as the universal "Rights of Man"; today, the
end of a world is presented as the end of the world. Quite a
rollercoaster!
But, of course,
Schumacher never presents his "hypothesis" in a tight, precise
manner. Then he could be pinned down too easily. He's much
more at home with the corny anecdote and the fuzzy, impressionistic
sketch. But if one man's vague impressions are as good as the
next, we might as well point out that Thoreau wasn't the only literary
figure to find small-town, petit-bourgeois living less than
enviable. And of course literature describes where philosophy
attempts to define. Sinclair Lewis’ “Main Street", Sherwood
Anderson's "Winesburg, Ohio", Thomas Wolfe's "Look Homeward, Angel",
Peter Bogdanovitch's film "The Last Picture Show" -- all depict life in
that bygone era, and the picture they paint is hardly a pretty
one. Do we really want to go back there? And what of
Emerson, Hawthorne, Melville -- were they happy amid the townspeople,
the shopkeepers, and the rugged rustics? If Melville's
"Moby Dick" is indeed the "great American novel", then Captain Ahab's
confession -- "my means are sane; my motive and my object, mad" --
distills the essence of capitalism, where rational methods are deployed
to arrive at the perfectly irrational "object" (which is also the
"motive"): profit, the accumulation of exchange-value irrespective of
use-value, such that anything benign, enriching, or progressive that
happens in the process is merely an incidental by-product.
And remember: capitalism was a horrendous way for human beings to live
long before "big cities", "big technology", "Big Government", and, yes,
even before "big business", as such, came into the picture. This
is not to say that some things haven't gotten worse -- just that they
were always bad!
But then Schumacher
would have us go back even further than this. He vacillates between
nostalgia for the "self-reliant" petit-bourgeois of Thoreau's time and
the "joyfully" submissive Catholic peasant of the Middle Ages.
(In his usual sleazy manner, he never even bothers to confront the
glaring contradiction between the two.) Consider this darling little
passage:
"The classical-Christian
culture of the late Middle Ages supplied man with a very complete and
astonishingly coherent interpretation of signs, i.e., a system of vital
ideas giving a most detailed picture of man, the universe, and man's
place in the universe." C9
And before you choke on that one, try this:
"This was the normal
condition of Western Europe for centuries during the latter half of the
Middle Ages when, as we know, great cathedrals were built and many
advances were made in the arts and sciences." C10
Oh, sure. Also in his public
appearances, E.F. Schumacher never ceases to wax euphoric about
glorious days of feudalism, what with the well-behaved,
happily-adjusted peasants -- the ones that Edmund Burke, a man right
down Schumacher's alley, once likened to contented cows, grazing
beneath a sturdy tree -- oh, and of course, the "sublime
cathedrals". Funny how we never hear a word from him about the
Black Plague, the Inquisition, the "right of the first night", the
infant mortality rate and the thirty-year life expectancy, the "sunup
to sundown" drudgery, the estimated eight million women who were burned
as witches within one two-century period, the unspeakable ignorance and
superstition, and the rigid class structure (most of which would
probably suit him just fine). Ah yes, the "good old days"!
Many people scoff when we try to explain
Schumacher's affinity with fascism. They seem to think we're
exaggerating. But then, most of them got their image of Nazi
Germany from old World War II movies; thus, they only grasp the
superficial appearances of fascism, not its historical essence.
They'll point out that Hitler was a "frothing at the mouth",
high-pitched maniac, whereas Schumacher is a suave, cool, urbane,
low-key, poised, slick, cultured "gentleman" (which only shows you how
much the fascists have learned to "clean up their act"). But
anyone who has made a more than cursory examination of the history of
fascism can tell you that Hitler, too, wanted to dismantle the
assembly-lines and reinstitute "craftsmanlike" production in German
factories; Hitler, too, was appalled at "footlooseness", distrustful of
the moral laxity and wickedness of big cities, and determined to put a
stop to the "dangerous" urbanization and proletarianization of the
family farmer, whom he glorified as the "backbone of the German State";
Hitler, too, was fond of metaphysical idealism, classical Greece and
the High Middle Ages, and disdainful of "grubby, Jewish-Marxist
materialism" -- Mussolini once said: "We do not talk to man about
bread; we talk of the higher, spiritual things." Indeed, numerous
passages in Small Is Beautiful are interchangeable with passages in
Mein Kampf. But the most significant resemblance between
Herr Hitler and Herr Schumacher is the ideal of "corporatism" (from the
Latin "corpus", or “body"); that is, the notion of society as a "body
politic" (with the "head man" at the head) in which all the "stations
of society" know their place and stay there. Schumacher's
favorite philosopher, Thomas Aquinas, had plenty to say about this, as
did Thomas Hobbes. Of course, this idea didn't "go over too big"
once the masses learned to read -- Schumacher says "knowledge is
sorrow" C11
-- and to do all the other modern, wicked things that tend to lower
one's tolerance for humility. Fascism, then, which has been
defined as "technically equipped archaism", C12
was a desperate attempt at a grotesque modern revival of
medieval-corporatism whereby, it was hoped, the growing threat of class
antagonism (along with "materialism" and "internationalism") as
instigated by that "dirty Jew", Karl Marx, could be outflanked and
thwarted by a movement of class cooperation in which the big
industrialists (e.g., Krupp), "patriotic, unselfish" trade unions,
little shopkeepers, and the peasants would all "pull together", putting
aside their "grubby, materialist" differences in a noble spirit of
self-sacrifice and "joyful renunciation" (convivial austerity,
anyone?). Schumacher wants a similar alliance of "chastened"
corporations, "enlightened" government bureaucrats, and all those who
he unblinkingly refers to as the "little people" (gee, thanks,
dad!). If we would all just get down on our knees together,
forget all about who's robbing us and how, beat our breasts and mutter
"mea culpa", and then go out and get our hands busy, muddling around
with fifty-year-old machinery, we just might be able to rescue
capitalist society so that it -- unlike the Third Reich, which made
some bad public relations blunders -- may indeed "last a thousand
years". If we would all just tend to our own little gardens & shops
-- shut up, bow down, do our jobs, and pay our tithes & taxes --
surely we could achieve all the wonderful things that make life worth
living: blisters on the hands, an aching back, the abject provincialism
that stems from never leaving one's home soil, and perhaps an
autographed holy card from Jerry Brown. Ad majorem Dei gloriam, ad aeternam ad nauseam....
Perhaps then, after enough sanctimonious sermons and hand-me-down
"Buddhism", we could find our place on the Great Cosmic Hierarchical
Ladder -- which Schumacher insists C13
was inscribed in Heaven, in Jehovah's writ -- and thereby learn to
chant the Intermediate Technology Mantra: "Man is small, and,
therefore, small is beautiful'." C14
Now that we know that each entrepreneur must turn a profit to survive as such, whether or not he or she N4
is gratuitously "greedy" (or gratuitously "nice", for that matter), and
now that it's clear that "technology" (big or small) has no innate
demonic properties, and is really only whatever we make of it, let's
get down to the real root cause of the "triple crisis".
This crisis is rooted
in the system-properties, the dynamical laws, of the specific form of
economy that we presently live by, and the one that we actively
reproduce in our daily life-activity: namely, the economy based on
exchange value and the self-expansion of exchange-value, the economy of
Capital Schumacher is, unfortunately, a very sloppy thinker when it
comes to the concept of "Growth". His entire argument rests on this
concept, but he leaves it in a vague and impressionistic state
throughout his book. He describes -- haphazardly, though occasionally
stumbling onto a lucid insight or two -- but he never troubles himself
to define "Growth". In particular, he doesn't distinguish the growth of
capital -- that is, of money & other money-denominated, legal
paper-titles to value -- the growth of means of life-reproduction. The
latter is the stream of goods and service-activities whose appropriate
consumption by society actually contributes to the maintenance and
advancement of societal organization i.e., to social negentropy. N5
His thought meanders in the confusion between capital accumulation and
real reproductive wealth accumulation. This is a confusion which he (a
longtime personal protégés of J.M. Keynes who has the
nerve to call Marx "conventional" and to call himself
"unorthodox") shares with the economists whom he claims to dispute.
For understanding the
historical predicament in which we find ourselves today, and for
locating those actions and social measures by which we can extricate
ourselves from the dire perspective on the future otherwise
imminent-by-default, the key is to be found in conceptually
disentangling these two sides of "Growth". Thus we can compare
them against one another historically, thereby bringing out their
contradictory laws of growth within the system of self-expanding
exchange-value, or Capital.
The first side, the
accumulation-of-capital side, we shall call the "exchange-value
productivity" of society. Exchange-value, "monetary" value, is
the substance of capital. As we have said, capital is
self-expanding exchange-value, and the "exchange-value productivity"
measures the rate at which capital expands, or adds new exchange-value
to itself. Therefore, this productivity is conveniently
represented in terms of the aggregate rate of profit in the form of the
rate of return on costs "invested" (wages, materials, depreciation),
for this bounds the rate of accumulation (self-expansion) of capital,
which is determined by the portion of profits reinvested. By
"aggregate profit rate" we mean a profit ratio computed for the total
capital of society.
The second kind, or the other side, of
growth, we shall call the "use-value productivity" of society. By
use-value here we mean usefulness to social reproduction and not any
privatistic, Benthamite notion of "utility". We mean that quality
of objects and service-activities which makes them potentially
contributory to the maintenance and advancement of social
life-organization; hence, their social "negentropy". Use-value is
inherently the quality of self-expanding use-value. It refers to
results of previous productive activity which can be used for further
production of use-value. It refers to results of previous
productive activity which can be used for further production of
use-value, and and whose consumption in such further production
yields more negentropy than they represented beforehand; i.e.,
more than their consumption destroys.
Note that not all goods which can be sold
at a profit -- i.e., which have positive exchange-value productivity --
also constitute self-expanding use-value. In fact, a systematic
contradiction between exchange-value productivity and use-value
productivity, which we will explore here, is the unifying seed of the
whole tree of events which, in broad outline, lawfully characterize the
histories of capital-societies. For example, weapons, as
commodities, can be sold to the government "market" for fabulous
profits, but cannot be used, ordinarily, for any further
production. Thus, they represent at best a waste of the labor and
other resources that went into their fabrication. At worst, that
is, if "consumed" (employed), they represent self-expanding destruction
of societal organization in warfare; ergo, self-contracting use-value.
Likewise, speculation may produce fabulous profits, without
contributing any use-value to society in return. So, too, the
production of "foods" adulterated with additives designed to preserve
their "shelf-life" -- i.e., their exchange-value -- but which poison
the tissues of their consumers (whose own productive,
use-value-expanding lives may then be prematurely terminated due to
cancer, etc.), represents damage to society, net negative
use-value. Otherwise, properly, food would represent negentropy
through its contribution to the maintenance of labor-power, the central
ingredient in all production.
The distinction between use-value and
exchange-value, and the knowledge of the different, contradictory laws
of their growth and decay, their movement, in inner connection to one
another, is fundamental to any understanding of human economics, human
ecology, throughout the whole evolution leading up to, and including,
its capitalist phase. It is precisely this "distinction in the unity"
of "Growth" that Schumacher's analysis lacks, and this leads his
logic astray -- disastrously so!
The coupling of self-expanding exchange-value, or profitability, with self-contracting use-value we will term "fictitious N6
capital”. The "negative goods" produced in this fictitious
capital process -- "goods" which can be sold for a profit but which are
entropic for social reproduction -- we will term "fictitious
use-values". In the negentropic process of Capital, a given capital
supplies exchange-value and use-value to society, as a counter to the
profit or money-increment it gains from society and the use-value it
withdraws from society by spending that profit. Fictitious
capital is demand without supply, a drain on society. It is the
fundamental intrinsic cause of inflation and of the malignant growth of
debt which lies immediately behind that inflation ("debt-pull
inflation"). Accumulation of fictitious capital, finally
exploding as monetary crisis and stock market collapse, etc., is the
fundamental mechanism of capitalist depression. We shall see how
it comes to pass that fictitious capital is generated, not merely by
speculation, but in the heart of the production-accumulation process
itself.
The use-value
productivity of society, since it measures the rate at which society
adds "organization", or negentropy, to its organization, can also be
called the "rate of social reproduction". Let us follow and
compare, through the capitalist period of history, the differing
patterns of change of these two rates: capital-reproductivity versus
society-reproductivity, or exchange-value profitability versus
use-value "profitability". We will use the sign "#" ("double
inequality") in this exposition to indicate that a tension exists
between them (expressed quantitatively as a reversing inequality
through time: “greater than” becomes "less than") even though they are
determined, within capitalist society, by a process which inextricably
combines them. To sum up "meta-temporally" or in temporal overview the
whole trajectory of their relationship, we then write:
rate of profit # rate of social reproduction N7
Now, let's see what's
"inside" this "#" relationship and its various, successive phases in
time. At first, in early capitalism, transitional out of
feudalism and dominated by mercantile and usurious forms of capital,
true capital, meaning wage-labor-based capital or industrial capital,
scarcely exists. That is, capitalist production proper, as
opposed to mere proto-capitalist circulation forms of capital, does not
yet exist. Therefore, capital accumulation is not directly tied
to expanding production of use-value. Because of this
disconnection between profit and production, this era is characterized
by the relationship:
rate of profit > rate of social reproduction
Later, after this
stage has brought itself to crisis -- precisely because of its
disconnection between exchange-value and use-value, profit and
production -- a new stage emerges, this one characterized by "profit
based on (use-value) productive investment; i.e., based on "industrial
capital". This stage manifests the most harmonious qualities of
social expansion, of material and spiritual progress, of which the
capital-relation is capable. (In a broader qualitative sense, the
"most of which capitalism is capable" still isn't very much; but
if there is any I sense in which we could argue that there were "good
old days", or that Capital has "seen better days", this would be that'
sense.) This stage included, for example, the virtually
unprecedented period of European history sometimes called the "Hundred
Years' Peace", from 1815 to 1914. This epoch is characterized by
a strong causal coupling and resonance between use-value productivity
and exchange-value productivity:
rate of profit == rate of social reproduction
Here, the rate of
profit has fallen some from its previous (mercantile and usurious)
apogee, and the rate of social reproduction, previously looted and
depleted under those forms of capital, has begun to recover. The
period characterized by the “==“ part of the "#" relationship is the ascendant phase of world capitalism. An explanation may be in order here. The sign "#" denotes a relationship between two time-varying measurements, or functions of time -- call them a(t) and b(t), such that at first:
a(t) > b(t)
but later ("h" time-units later)
a(t+h) = b(t+h)
but then, later still ("k" units later)
aCt + h + k) < b(t + h + k)
In other words, a(t) and b(t) "pass each other".
This ascendancy began
in the long recovery after the period of the Hundred Years' War and the
Black Death, the breakdown crisis of proto-capitalism, and lasted until
the new crisis which became World War I. This "progressive"
period is characterized by a long-term (secular) fall in the general
price level (see Figure 1). This occurs via the process we call
"techno-depreciation" -- the key process in the generation of
fictitious capital in the heart of the production process of capital
(as distinct from the well-known forms which arise via speculation,
etc., in the circulation process only). Technological evolution, or
improvements in the use-value productivity of capital -- what Marx
calls "growth of the force of production" -- steadily lowers the
-unit-labor-cost (wages-cost) of producing goods. The internal
contradiction in capitalist productivity -- between its use-value and
exchange-value aspects -- resides in this: that technical improvements
can remain profitable, and hence of any interest (sic) to capital, only
so long as fixed capital (i.e., the plant and equipment that stays put
when the output of a production unit goes to market, into "circulation"
-- fixed capital is non-circulating capital) in which such advancements
in human powers are embodied, forms the smaller portion of total social
capital. This holds true because technical development creates losses
for the owners of the fixed capital whose obsolescence results;
these losses affect the relevant portion of the accumulated value of
their fixed capital assets. And "losses", here, means
"profit-decrements", profit-cuts. Introduction of new
means of production which are (a) cheaper and/or (b) more efficient
than the previous standard in use in a given industry, serves to
effectively devalue, or even force the scrapping of, the previous
equipment. This is enforced by competition, via the price
advantages conferred on those installing the improved/cheaper equipment
as against those holding the equipment rendered obsolete by that
installation.
Figure 1: The Price Index, 1867-1973 with 1929 Base (logarithmic Y-scale)
Figure 2: U.S.A. Debt in Immanent Dollars (total, corporate, consumer)
The growth of human
knowledge and creativity, as embodied in the means of production, takes
the form, within the reign of Capital, of a continual movement of the
self-devaluation of (exchange-)value. This process entails the
self-depreciation of the social capital; i.e., of the total social
self-expanding value as it expands itself -- and this as an inherent
consequence of the means through which that expansion is able to
happen. There emerges the contradictory movement of
disaccumulation of fixed capital value through continued accumulation
of capital in the form of new fixed capital. Thus there occurs
the undoing of past exchange-value accumulation via present
accumulation, owing to the evolution of the productive forces.
Capitalists suffer a
"debit to their profit accounts", a drop in their rate of return on
investment, every time such a jump in the productive forces takes
place. This happens whether they are forced to scrap the old
machinery altogether and re-equip with the new, or merely to lower
prices. Productive-force growth in their own line of industry
results in more efficient equipment, and productive-force growth in
other lines of industry results in cheaper equipment. The outcome
can be accounted as a fall in profits, as a fall in value of capital
assets, or as a combination of the two. But profitability, or
exchange-value productivity, suffers in any of these cases.
However, once they invest in the new
equipment, they share in the profit advantages of its higher
cost-efficiency. These gains come back as a percentage of
circulating capital, that is, of marketed produce, as part of the total
exchange-value of current output. This gain resides in the
decreased "cost-composition" -- the increased "profit-composition" --
of the aggregate price of that output. The losses, on the
contrary, as we have seen, strike at fixed capital. Therefore the
balance between fixed and circulating capital within total capital is
crucial to the dynamics of the relationship we are examining. And
that balance shifts steadily in favor of fixed capital as the process
of capital accumulation proceeds; indeed, in the ascendant phase, it is
in this shift that "accumulation" largely consists. As capital
accumulates, as technical developments tending to augment fixed (as
against circulating) capital proceed, or, in the economist's terms, as
the "capital-intensity" of production rises, a turning point must come
when fixed capital "overbalances" circulating capital in the overall
mix of the social capital. This turn comes sooner in some
industries, later in others, but come it must, and once it does come
for the major portions of industrial capital, a major cusp is reached
in the evolution of the capitalist system.
Thereafter, further growth of use-value
productivity will destroy more capital-value than it creates. The
losses to fixed capital will surpass the gains to circulating
capital. Social progress, defined in Marxian terms, is growth of
the productive forces, because the productive force is the
self-productive and self-determining power of humanity; thus, it is the
force of liberation, necessary to realize human freedom. At this
cusp in the evolution of capital, when fixed capital surpasses the
circulating kind, progress ceases to be profitable:
rate of profit < rate of social reproduction
Thereafter, increase
of the use-value productivity ceases to be a method for increasing, or
even maintaining, the value of accumulated capital and the rate of
profits. Capital therefore turns against progress. The
happy days when the growth of Capital could be wedded to the growth of
the productive forces (to expanded social reproduction) are over.
The growth, or even the preservation, of Capital thenceforth depends on
the restriction and even the destruction of productive forces.
Ergo, Capital increasingly shunts new technological potential away from
real wealth expansion and into the production of fictitious use-value,
especially (but not solely) in the form of military "goods".
Capital increasingly eats into the rate of social reproduction to shore
up the rate of profit. Ultimately, this would lead to contracted
social reproduction (negative reproduction), which has two aspects: (a)
decline in the quantity of humanity (ending in a catastrophic fall in
population due to starvation, disease, war and strife); and (b),
decline in the quality of humanity (health, vitality, intelligence,
personality). These two parameters of contracting social
reproduction define the descent into barbarism. This process can
be averted, in the last analysis, only by the positive abolition of
Capital -- that is, by the construction of a socialist N8
or self-planning society. In order to be self-planning, this
society would necessarily be based on the institution of social
property in the means of production (which is just a synonym for
"ability to plan").
In terms of the model we have been using, the descent into barbarism looks like this:
rate of profit >> rate of social reproduction
Capital, now using
desperate, draconian measures, succeeds in reversing the relationship
again, and in converting the fall in the rate of profit into a fall in
the rate of social reproduction. This is the direction in which
we have been heading since at least the opening of the present world
economic crisis in 1968, as we described at the very beginning of this
chapter. Schumacher's recommendations would do nothing but move us
further and faster in the disastrous direction in which Capital is
already taking us.
In the decadent phase, profit on social
expansion (the "progressive" or ascendant phase form) is replaced by
the parasitic, fascist form: profit on contraction. The reason
for this is located in another aspect of the growth of fixed
capital. The greater the capital-intensity of a branch of
industry, the greater the barrier to new entry. The larger
economic units strive to compensate for the fall in the rate of profit
by increasing their volume of profit. Thus, as the fixed capital
composition of total capital increases in any branch, the established
companies are increasingly shielded from the competition of new
entrants, which otherwise would force them to recognize
techno-depreciation of their assets. In the ascendant phase,
prices generally fell, precisely because the relative ease of new entry
brought new and/or cheaper equipment quickly to bear upon the price and
profit structure of industry. In the decadent phase, inflation
predominates because the relatively large quantum of capital needed to
get started in the established branches of industry, owing to the
high-fixed-capital intensity of those branches, blocks this feedback
(see Figure 1). The steel industry, the railroads, and
shipbuilding industry would be classic examples of the kind of branches
of industry we are talking about.
As we indicated earlier, fictitious
capital is demand for self-expanding value without supply of
self-expanding value in return. Unrecognized techno-depreciation
of fixed capital in "capital-intensive" industry which is shielded from
competitive enforcement of that techno-depreciation by that very
"capital-intensity", is the seed form of fictitious capital and of
fictitious use-value. Hence, ironically, the simple failure to
continually devalue assets for accumulating obsolescence, and the
resulting failure to continually lower prices of the output of those
assets in proportion, comes to behave as if it were a continual
inflation of prices; an overvaluation of fixed capital and therefore of
its output. The unchallenged prices of the output of such industry
withdraw therefore more value from the rest of society in exchange for
that output than it itself represents for the rest of society.
That is, relative to the prices that the less fixed-capital-intensive,
more competitive (enterable) industries are able to charge for their
output, the output of the more fixed-capital-intensive industry is
overvalued, by a margin of fictitious value in its price structure
which represents unrecognized techno-depreciation.
In effect, the denominator of the
return-on-investment ratios -- namely, the fixed-capital assets figure
-- are too large among these high fixed capital composition industries,
so that the numerators -- namely the profit and physical
(wear-and-tear, not techno-)depreciation figures -- must also be kept,
in effect, too large, if an acceptable rate of return on the apparent
(original) value of the fixed capital assets is to be maintained.
To realize these higher-than-true-cost
prices requires expansion of indebtedness across the whole expanse of
the economy. Indebtedness to banks, by this and other pathways
not explored here (see SOURCES: Mime and Laight, Marcus, Peters),
cannibalizes and concentrates fictitious capital originally generated
at loci scattered all over the economic landscape. Though not all
banking capital is inherently fictitious, fictitious capital inherently
ends up in the form of debt or finance-capital. Skyrocketing
total indebtedness -- public, personal, and corporate -- is the prime
symptom of accelerating accumulation of fictitious capital (see Figure
2), and the primary warning of the approach of a new depression.
In this syndrome, which we are now living through, total social demand
for value surpasses the total social supply of value. The
discrepancy between value-demand and value-supply reflects none other
than the margin of fictitious value in the whole economy, and shows up
as accelerating indebtedness and inflation.
This margin of excess of demand over
supply (of profits) can only be met by (a) a "writing off" of
some of the capital currently demanding profit (i.e. demanding
self-expansion; demanding to stay capital) by an explicit recognition
that this fictitious capital is "sunk" capital dead capital,
or; (b) some form of robbery; of "looting". By robbery or
looting we mean the appropriation of value without exchange of an
equivalent value for it. Again, if this excess profit-demand is
not met, then a certain portion of total social capital will lose its
ability to draw to itself an expanding return of value, i.e. will lose
its profitability, its very existence as capital. This is what
ordinarily happened in the depression phases of the business cycles of
ascendant capitalism. The boom phase of that cycle could be
thought of as an accelerating buildup of new 'real'
(use-value productive) fixed capital, but hence also of fictitious
capital in the more fixed capital intensive sectors of the ascendant
phase economy. The crash, in which all prices fell
("deflation") -- including the implied price (value) of the society’s
stock of fixed capital as reflected in the collapse of the values of
capital stock on the stock markets -- can be grasped as a purgative,
cleaning out the localized deposits of fictitious value that had been
clogging up the economic organism, allowing a new boom.
However, this intolerable (to capitalists)
eventuality of the death of portions of their capital can be postponed
by robbing Nature, as exemplified in the refusal to meet the costs of
ecological reparations (cleaning up after, or preventing in the first
place, industrial pollution, etc.). Or, it can be delayed
by the robbing of other countries of their natural resources, products,
and labor-power (called "imperialism" and "colonialism").
As a last resort, robbing one's own national economy; by taking the
"missing" profits out of the hides of its workforce and out of the
funds that should have gone for upkeep and replacement of
equipment. Then, too, we have the austerity measures such as
cutting public services -- medical care, education, public
transportation, "transfer payments", etc. Another move is
to "cannibalize" the assets of capital-intensive industries, as in the
case of the U.S. railroads (e.g., Penn Central) in which, after their
capital-plant had been looted to the point of dilapidation by financial
interests, the carcass of this industry was then foisted onto the state
(i.e., the public purse). By reneging on the costs of social
reproduction -- which are the costs of maintaining the means of
production, and also the costs of maintaining the ecological
equipotential for human production, as well as the costs of maintaining
the labor-power -- Capital is able to shore up the rate of profit, by
appropriating the liquidity so "freed" from cost-necessities as
(spurious) "profit". But make no mistake: such gain is
profit at the expense of (via the contraction of) social reproduction.
At this point in its
history, Capital starts to prefer labor-intensive industry to the
capital-intensive variety. The banking or debt-holding interests,
in particular, begin to move for the dismantling of heavy industry, for
virtual de-industrialization in those areas of the world economy where,
for reasons we have seen, it is no longer profitable. They begin
to call for -- and, where they can get away with it, brutally enforce
-- a decline of population, especially in the Third World hinterland
areas, which by now have been looted to the point where those countries
have little economic potential to support their populations. For
the managers of world Capital, it is now more important to avoid the
cost of maintaining those populations, and the danger of their
revolt. So they begin to concoct phony "energy crises", blamed on
"natural" scarcity, in order to drastically hike utility rates,
gasoline, and other prices, in order to recover, through looting, even
more of the wages that they are already lowering through inflation and
cutbacks in social services. Schumacher's proposals -- e.g., raising
fossil fuel prices, "voluntarily" lowering living standards, replacing
capital-intensive with (low-wage) labor-intensive industry, moving the
urban populations to a peasant (or work-camp) existence in the
countryside -- fit in perfectly with the plans of the capitalist class,
such as the "new world economic order" now being plotted by (the
Rockefeller-initiated) Trilateral Commission. And, contrary to
Schumacher's calculated image as an "unorthodox" and naive "Buddhist
economist", he is very much a part of the general tendency toward
barbarism and "re-feudalization", the desperate "program" inherent in
decadent Capital.
The mechanism by which the rate of social
reproduction is vampirized (in favor of the rate of profit) is
precisely the debt-mechanism. Advancing indebtedness pushes
virtually all the non-banking institutions of our society to the verge
of bankruptcy. In order to meet growing debt-service payments,
industrial corporations must raise prices (inflation) and lay off
workers (unemployment) in order to divert payrolls to
debt-payment. Corporations must also loot and pollute
nature, and imperialize Third World countries. Cities cut
social services and immiserate municipal employees. Third World
governments, on the verge of default, impose dictatorship on their
populations so as to enforce genocidal degrees of
austerity. Families go into emergency loans and second
mortgages, etc. If the wealth drained away in the form of
debt-service payments from various kinds of real use-value production
were reinvested elsewhere, in some other kind of use-value production,
the situation would not be so dire. But instead, this loot is
increasingly invested in fictitious use-value production; in
unproductive speculative ventures and especially in military
industry. Deficit military spending is financed, for example, by
colossal government borrowing from banks. This forms a vast
component of the "Public Debt", which is itself largely debt to
banks. Capital-intensive industries, as in the military sector,
that produce for the government "market" can count on guaranteed
profitability thanks to "cost-plus contracting" and the like, in return
for their production of fictitious use-values, and all this to an
extent inconceivable in the sphere of real use-value production.
Capital in its ascendant phase promoted
the growth of use-value productivity; in its decadent phase, it
"enfetters" that growth, to use Marx's phrase, even going so far as to
reverse it. This twofold structure of capitalist history is
mirrored in the sharp articulation of the graph in Figure 1. This
happens not because Capital varies its habitual behavior in the
self-accumulation process, but rather because it goes on as before,
whereas quantitative accumulation eventually results in a
qualitative change. N9
Such is the intrinsic "curvature" of the continuum of
capital-accumulation that what at first amplifies the productive forces
later opposes them, and what at first augments profitability later
destroys it. Our formula, outlining the antithesis between
use-value and exchange-value productivity, is only a variant on Marx's
"contradiction between the social forces and the social relations of
production". Capital is the social relation of production
which dominates capitalist society, not means of production or other
use-values in themselves -- just as the thing, gold, is not
inherently money, but only becomes money when serving as the vehicle
for certain social interconnections. Our "exchange-value
productivity" is, then, also the social-relation productivity of
capitalist society -- the rate of the reproduction, of the spreading
throughout humanity, of the capital or wage-labor relationship.
Our "use-value" productivity, on the other hand, measures the rate at
which use-value, or the productive force, reflects upon itself, thereby
augmenting itself (since productive force is a self-force; a force that
that acts upon its own source as a self-accelerator). It can therefore
also be called the "productive-force productivity". So we
end up with:
social-relation reproductivity of capital # productive-force reproductivity of capital
or:
social relations of production # social forces of production
Capital knows the
laws of social reproduction only as the laws of exchange-value
profitability. Thus, it is competent to manage social
reproduction only so long as exchange-value productivity and use-value
productivity coincide -- only during the ascendant phase. When the two
diverge, Capital chooses exchange-value productivity and sacrifices
use-value productivity on its altar. At this point,
Capital, being what it is, can only steer humanity on a course toward
extinction -- toward species suicide. Hence society,
especially the great majority of the wage-and-salaried working class,
must move to safeguard the future of humanity and of all life on this
planet. It must jettison capitalism in favor of the
continuation of social reproduction, which will require the
creation of a new social relation, a new society. This new
society will have to be organized directly around use-value
productivity, around consciousness of the laws of social reproduction
and the conscious self-production of humanity. We call this
new social basis omnicentral planning, and we will develop this concept
further in later sections of this brochure.
Given the contractive momentum of Capital,
there are bound to arise ideological tendencies which are sucked in --
inadvertently or as semiconscious agents of the Trilateral Commission,
the CIA, and other barbarist organizations of the capitalist class --
to active promotion of that contraction. These we may call
pro-decadence ideologies Some of these may even mistake their
tendencies for an opposition to capitalism. But it is only an
opposition to the ascendent-phase ideology of capitalism -- the
ideology of progress, democracy, material and spiritual advancement
through science (self-expanding knowledge) -- which decadent Capital
itself must enlist every ally to destroy. After all, "Nazi" is an
acronym for a party that had "(National) Socialist" in its name;
N10 the Strasser brothers who built the Stormtroopers
organization, the S.A., only to be later purged by Hitler, thought they
were building "socialism" and overthrowing capitalism. The
immediate question is not whether Schumacher is a conscious capitalist
agent, but how we can hasten the realization among the thousands who
attended his blitzkrieg of public appearances or confronted his
proposals in the media; that his ideology serves objectively to disarm
us before the onslaught that Capital is preparing -- to distract us
from the knife at our throats.
N1 The term "descendant" is used to describe a system of social relations in its epoch of decline or decay.
N2
To be aware of the "objective determinants" that
enter into a given situation is not, in fact, "determinism" in the
vulgar sense. That so much confusion exists on this question, and
regarding dialectical materialism in general, is the fault not only of
those who have a vested interest in distorting and oversimplifying such
ideas (i.e., the reactionaries), but also of the reductionist
"disciples" and proponents of these views: the "Marxists", the "social
Darwinists", the psycho-determinists, etc.
N3
By the way, unlike certain crude, demagogic Leftists, we would never
contend that "the real villains are the big, monopoly
capitalists." This childish notion misses the whole point: the
problem is systemic (not "bigger than all of us", as the cliché
would have it, but precisely as big as all of us!). Hence,
demonology will never do. THERE IS NO VILLAIN IN THIS DRAMA!
Certain people may be regarded as enemies if they resist and obstruct
the necessary changes, but this does not make them "villains". No
matter how many pigs you "Off", there will always be new ones to
fill the slots, so long as the basic "system-dynamic", the law of
exchange-value, remains "in the driver's seat".
N4
Oh, yes, we mustn't forget the new breed of businesswoman now being
groomed by ex-C.I.A. agent Gloria Steinem, and the other thoroughly
bourgeois "feminists" at Ms. Magazine, New Woman magazine, the "Mary
Tyler Moore Show", and elsewhere.
N5 Negentropy is the opposite of entropy.
Entropy is a measure of the disorder,
the randomness, of systems (in social life as well as in the "physics"
of pre-social systems), and of the degradation of energy into forms
unavailable for the work of maintaining system-organization.
Negentropy is a measure of the degree of
organization of systems. Evolution, including that of planetary
life, is a movement further and further away from entropy, into ever
higher levels of negentropy. The negentropic process is a process
of self-amplification, self-expansion, in which more "order", so to
speak, "comes out" than "went in"; in which "more and more" is
accomplished using (relatively) "less and less". For a fuller
definition of negentropy, see the glossary in Lyn Marcus’s Dialectical
Economics (Lexington, Mass.: D.C. Heath, 1974).
N6 We mean "fictitious" in the sense of "fictional" or "illusory".
N7
These two terms are "rates" in the sense of ratios, specifically
"output-minus-input-over-input" or "net-gain" ratios.
Exchange-value
productivity would measure the total exchange-value yielded per some
standard interval of time, say per annum, minus the amount of old
exchange-value or previously produced exchange-value consumed during
that period in yielding the total exchange-value output, divided again
by the amount of exchange-value used up in yielding it. Thus, it
would be the ratio of fresh exchange-value produced to old
exchange-value used up in that process, or the rate of reproduction of
exchange-value. Marx usually represented this as s'/(c + v),
where s' stands for the newly formed exchange-value minus standard
deductions (rent, taxes, losses, etc.); at the same time, c is
the cost of "objective factors" of that production (means of
production: materials, equipment, power, ecologic reparations, etc.)
consumed in creating s', while v is the exchange-value cost of
"subjective factors" (human labor power: wages) consumed in creating
s’. Marx called this exchange-value gain-ratio or
input-output ratio the "rate of profit".
The use-value productivity, meanwhile,
would be represented by the measure of the net new use-value created by
society during a given time period, divided by the measure of the
previously created use-value consumed in order to create the new.
That is to say, use-value productivity is the net-output-over-input
ratio of use-value; it is the net output of use-value divided by
"input" or consumption of use-value necessary to produce that output.
Marx, in many
passages of the Grundrisse especially, suggests an interpretation of
the use-value ratio in terms of total social lifetime, thus seeing
human lifetime as the core of all use-value, and the primary product
(as well as producer) of social reproduction. The use-value
productivity of society would then be measured as the ratio of total
social disposable time vis-à-vis necessary or
pre-committed time; the former being the extra or excess of
lifetime produced by society, and thus available for expansion or
the creation of new qualities of social activity, while the latter is
the time-cost incurred just to replace the productivity used up during
the time period of the measurement. Though this ratio in units of
the quantity of social lifetime reflects by its movement in time the
changing qualities of social lifetime in fascinating ways, this
reflection still leaves much to be desired. Yet it is the best
description available within the province of ratios or "rational
numbers". To improve on this requires recourse to description in
terms of even more sensitive kinds of numbers, called "hypernumbers".
In terms of
ratio-numbers, at any rate, a one step more explicit rendering of our
formula, relating exchange-value productivity and use-value
productivity, would look like this:
s’ d
------- (t) # ---- (t)
c + v p
Here, p
stands for "pre-committed labor time", which is necessary to the
reproduction of the objective & subjective factors of production
used up in continuing human lifetime, while d stands for the disposable
lifetime, over and above p, which is freed for producing surplus (or new qualities of) objects, events, etc.
N8
One could just as well name this society "socialism" or "anarchism" or
"communism", since all of these terms, properly understood, are, at
their root, fundamentally convergent with one another and, hence,
interchangeable. (All the reasons why this is true will be offered by
us at some future time, but not within the scope of this
text.) In any case, the labels we choose to use are far
less important than the content of the new social relations, which must
include, as their minimum basis, the worldwide abolition of the
nation-State, wage labor, the world market, exchange-value, and all
forms of class-divided society.
N9
Both capital-value and use-value, being autocatalytic,
'self-accruing' entities or "substances", are appropriately described
by gain ratios, output-over-input ratios which yield "dimensionless"
numbers since numerator and denominator consist in identical units of
measure. (that is, are appropriately described by what might be
called 'homeo-differentials' or 'self-differentials' of the form
[x(t+?
x(t) ] / x(t)
as opposed to 'hetero-differentials' or
'allo-differentials' such as delta x / delta t, the "difference form",
or dx / dt). The explicitly dynamic form of these ratios might be expressed as follows:
s(t) +
delta s(t) - L(t)
d(t) + delta d(t)
-----------------------------
# ------------------------
c(t) + v(t)
p(t) + delta p(t)
Where s is the
gross exchange-value gain (before standard deductions): where delta s
measures the profit gains and L measures the losses on account of fixed
capital involved in growth of the productive forces and where
delta d(t) and delta p(t) represent the corresponding adjustments
to disposable lifetime and to predisposed lifetime. In cases of
growth of the productive forces, the use-value productivity (right-hand
expression in the above 'inequation') undergoes an unequivocal rise --
nothing corresponding to the fixed capital losses exists in use-value
terms. This gain may raise the whole ratio only a little however,
since increases in the scale of production are often involved in such
growth, meaning that both denominator and numerator of the right-hand
side grow.
The explicit "ascendant phase" condition can then be written:
the period of t such that delta s(t) > L(t)
The explicit "decadent phase" condition
the period of t such that L(t) > delta s(t)
N10
Note that Schumacher, in one of the few fairly detailed,
substantive proposals that can be found in Small Is Beautiful -- as
distinct from his typical vague assurances that the problems will all
magically disappear if we just adopt the proper attitude toward
"thinking small" -- comes forward with a classically corporatist, or
syndicalist -- i.e., fascist -- model of a "new" social order: his
proposal (pp. 289-92) for so-called "Social Councils".
Again, we must stress, for those whose image of "fascism" Is reduced to
the German Nazi model -- and even then, concerned only with the
fanatical "excesses" or the picturesque aspects (Hitler's mustache, the
swastika, goose-stepping, etc.) -- that fascism has been a broad,
diverse international movement in the twentieth century. Consider
Franco's Spain, for example. Although bourgeois liberals act outraged
and indignant about the Nazi atrocities in Germany, it's obvious that
most liberals had no trouble living in peaceful coexistence with the
Franco regime for nearly four decades. Indeed, just after World
War II, when everybody else in the world wanted to ostracize Franco for
his involvement with the Axis powers -- Spain was expelled from the
U.N. on Feb. 8, 1946 and only readmitted, under U.S. pressure, in 1955
-- the American government came to his rescue by constructing huge
military bases, as well as pumping in more than one billion dollars in
nonmilitary aid between 1953 and 1962.
Consider these striking parallels between
Spain's fascist corporatism, variously euphemized as a "Catholic,
social, and representative state" or an "organic democracy" (sic!), and
Schumacher's "Social Councils" proposal:
"Since 1942, there has been
a parliament, the Cortes. The Organic Law (1966) provided for a Cortes
of 564 deputies... in 1969, it dropped to 561. Of this total, 451 are
elected by, or constitute the elected members of institutions and
groups. There are 100 deputies elected by family heads and married
women [note: the latter provision would probably please Schumacher, who
argues, in his "Buddhist Economics" chapter, for keeping women in the
home]; 150 elected by the national syndicates; 66 who are members of
the National Council of the Falange; 54 elected by municipal councils,
plus 58 elected by other provincial councils; 19 elected by
professional associations and 4 elected by academies. The remaining 110
are Cortes deputies by virtue of the offices they hold. The Council of
the Realm is the highest advisory body of the state. Despite the fact
that there is only a single, state-controlled labor union system,
workers have banded together in Roman Catholic labor
brotherhoods...." -- from Collier's Encyclopedia, 1970 edition, on "Spain"
A real Schumacherean
paradise! Everyone takes the Gospels seriously, workers'
representatives sit side-by-side with the bosses to draft policies for
the State, and the "evils" of technical progress, modernization, etc.,
are distrusted and held back by all available means. It was not
necessary to "lead Spain back to the Middle Ages”, because Spain never
left the Middle Ages!
But, despite all the
varieties of fascism (Spain Portugal, Italy, Japan, Argentina, etc.),
we can look beneath these surface features to the essential common
denominator: fascism, as distinct from mere authoritarian conservatism,
must resort to demagogy, mass mobilization, and a pseudo-“populist"
identity (i.e., the "friend of the little people"). Thus, where
conservatism openly promotes "divine right" or some similar elite
prerogative as the basis of authority, fascism endeavors to divert and
redirect "the revolt of the masses" into "safe" channels, in the hope
that workers will actively, even enthusiastically, reinforce their own
submission. The fact that such "mass movements of the right"
never played a major role before the twentieth century is no
accident. Fascism, at its essence, is a movement of co-optation
and recuperation; it arose as an explicit historical response to the
growing threat of Marxian internationalism and radical proletarian mass
activity.
The most widely successful fascist
technique has been to borrow certain popular forms of
proto-revolutionary working-class organization, while at the same time
distorting or emptying out their content. Especially, there has
been a recurrent attempt to parody the kind of "workers' councils" (or
"soviets") that have emerged in so many of the genuine proletarian
upsurges of this century (only to be quickly taken over and/or
suppressed by aspiring "vanguard parties" or outright reactionaries).C15
Schumacher's "Social Councils", which would enlist workers in a
ludicrous form of pseudo-participation ("democracy")while leaving both
private and state Capital completely unchallenged, are very much in
this vein. Schumacher never once questions the inviolable
sanctity of "managerial prerogative"! Likewise, the fascist
"syndicate" is an institution which forces workers into a common
organization with the capitalists. In theory this is to unite the
two classes around the best interests of the nation as a whole --
however, due to the current unfashionable status of nationalism in the
U.S. and Western Europe, there is a frantic search for a new "common
rallying point", and the so-called "energy crisis" seems to be the best
gimmick available. (Thus, Thorston Bradshaw, the President of
Atlantic Richfield Corporation, has written "My Case for National
Planning" in the February 1977 issue of Fortune magazine, arguing
that the "energy crisis" could unite Americans in "national effort"
comparable to World War II. Let's put aside class differences in
the name of "ecology"!). In practice, the fascist syndicate has
always been utterly subservient to Capital. The syndicate type of
formation was integral to fascist rule in Italy, Spain, Portugal, and
Argentina in the 1930's.
More important, from
the strategic standpoint, is the easily overlooked fact that
Schumacher's "Social Councils" proposal provides only for local bodies,
at a time when the world economy has become an interdependent, tightly
interwoven "global village". While Schumacher says much about
"reforming" the relations within enterprises, he is conspicuously
silent on the question of relations between enterprises. In fact,
whenever he is directly confronted on the latter question in interviews
or public appearances, he keeps insisting that the big banks and
multinational (transnational) corporations are mere "paper tigers" that
will simply vanish from the scene if we ignore them. Whether
Schumacher is saying this as deliberate, calculated mystification, or
else out of astounding naiveté about the nature of modern
capitalism, the effect is the same.
Even Barry Commoner's most recent book C16
-- which offers a much more intelligent analysis of the "triple crisis"
than can be found in Small Is Beautiful -- makes a similar and related
mistake. Commoner sets up an arbitrary (false) separation between
"the production system" (good), on. one side, and "the economic system"
(evil), on the other. Many other would-be "socialists" also
succumb to this conceptual error. But such a neat divorce between
production (intra-enterprise) factors and both distribution and
circulation (inter-enterprise) factors can only be made on paper, in
the abstract In everyday capitalist reality, these two factors mutually
determine one another, and are inextricable interlocked, in the manner
we have defined. Hence, you could not "reform" one and leave the
other intact, as Commoner, like Schumacher, hopes to do. For this
reason, it becomes relatively trivial whether these people are naive
blunderers or conscious agents of the Trilateral Commission's "New
World Economic Order". Either way, they come to the rescue
of Capital.
This is most clear in the trendy new
strategies for "local control" or (localized) "workers' control", which
often began as genuine popular movements, but which have since proved
quite useful as typically fascist techniques for playing
divide-and-conquer tricks on the working class. Schumacher's "Social
Councils" proposal would, in effect, leave a vacuum of popular power at
all levels beyond the local community level, thus giving free reign to
the national and transnational corporations at these levels.
After all, who else could act as "global referee" for all the
inevitable local, inter-enterprise disputes?? Schumacher's "Councils"
would have equity only in such subsidiaries of these giant corporations
as happened to operate within the geographical boundaries of a
locality. The very cybernetics of a system of corporatist
"councils", owning equity in and deriving governing income from the
enterprises located within their local neighborhood boundaries, would
effectively tend to ensure the creation of an authoritarian central
state authority. This is because the atomization and cutthroat
competition encouraged between local communities, on behalf of "their"
industries -- and on behalf of the profitability of those industries,
which would determine the income through dividends of these councils --
could not help but necessitate such a strong central authority to
preside over, regulate, and restrain this mad scramble. Enter the
multinationals, the IMF (International Monetary Fund), the World
Bank, and the Trilateral Commission!
That Schumacher -- who is only one
(relatively minor) figure in a broad tendency today -- can get away
with such blatant calls for fascistic political forms is but a measure
of the enforced historical forgetfulness ("social amnesia"), and the
superficiality of historical analysis, which characterizes the cultural
and intellectual environment of modern capitalist society.
Indeed, Mr. Schumacher spends most of his
time, in his public appearances, encouraging people (who are already
unorganized and cut off from political power) to get busy rendering
themselves even "smaller" and more atomized -- as, for example, he
urges them to do by adopting a rural self-employed farmer life-style in
place of their present perhaps urban, waged or salaried one. And,
since nobody likes to do wage-labor (and very few-of these misinformed
malcontents can really see their way beyond capitalism as such),
Schumacher's pitch has considerable appeal. Yet, revealingly
enough, not once does our dear Mister Small call for the dismantling,
or even the active curtailment, of the Biggest of the Big -- i.e., the
transnational banks and corporations which currently dominate the
politics and economics of the entire globe. On the contrary, the net
effect of his recommendations would be to reduce even further whatever
power to defend ourselves (and resist these giant organizations) that
the rest of us still retain.
The top level policy-makers are well aware
of all this. Why else would the Agency for International
Development (a known C.I.A. front organization) authorize twenty
million dollars for the "unorthodox" strategy of Intermediate
Technology??
C1 E.F. Schumacher, Small Is Beautiful: Economics As If People Mattered -- (New York: Harper & Row, 1973), pages 85 and 101.
Schumacher is a convert to Roman Catholicism -- a fact which he "plays
down" in the presence of certain audiences. See the interview in Mother
Earth News (November 1976), especially page 11.
C2 Small Is Beautiful, page 52.
C3 Small Is Beautiful, pages 88-89.
C4 Small Is Beautiful,
page 101; pp. 156-157; pp. 296-297; also, Schumacher is quite unabashed
on this point in the Mother Earth interview, cited above, pages
14-16.
C5 Small Is Beautiful, pages 168-169, and elsewhere.
C6 Small Is Beautiful, page 250.
C7 Cited in A. James Reichley, "A Disturbingly Different Kind of Presidential Race", Fortune
magazine, March 1976, p. 108. In this article, Reichley also
warns the "business community" readership of Fortune about these
ominous trends:
"Public-opinion polls show
that substantial majorities of voters see the governmental system as
being rigged against them. They seem to have developed hostile
attitudes toward practically all national institutions -- the
Presidency, the Congress, the courts, the political parties, business,
organized labor, and even the churches." (page 108)
C8 Small Is Beautiful, page 257.
C9 Small Is Beautiful, page 85.
C10 Mother Earth magazine interview, page 11.
C11 Small Is Beautiful, page 91.
C12 Guy Debord, Society of the Spectacle
thesis #109 (text available through: Black & Red; P.O. Box 9546;
Detroit, MI 48202). This work, although somewhat dense and difficult
for the average reader, is one of the most lucid analyses of
modern society currently in existence, deserving of wide dissemination
and study. Also, for an excellent in-depth study of fascism (both its
objective and subjective bases), see Wilhelm Reich’s The Mass Psychology of Fascism
(1933) (New York: Noonday Press, 1970). Reich discusses "authoritarian
family ideology" and the petit-bourgeois underpinnings of fascism
(pages 48-53), and cites (p. 49) this passage from Hitler's Mein Kampf:
"...preserving a healthy
peasant class as a foundation for the whole nation can never be valued
highly enough. Many of our present-day sufferings are only the
consequence of the unhealthy relationship between rural and city
population. A solid stock of small and middle peasants has at all times
been the best defense against social ills such as we possess today.
And, moreover, this is the only solution that allows a nation to earn
its daily bread within the inner circuit of its (sic!) economy.
Industry and commerce recede from their unhealthy leading position and
adjust themselves to the general framework of a national economy of
balanced supply and demand." -- from Mein Kampf, page 138.
The comparable passages in Small Is Beautiful should be well-known to all.
C13 Small Is Beautiful, page 96.
C14 Small Is Beautiful, page 159.
C15
By now, there exists an extensive literature on these historical
episodes (Russia 1905 & 1917, Spain 1936-7, Hungary 1956, etc.),
which we will gladly supply to the serious student on request -- Capital Crisis Studies.
C16 Barry Commoner, The Poverty of Power Energy and the Economic Crisis (New
York: Alfred A. Knopf, 1976), p. 2, and throughout the concluding chapter.
WE ARE NOT SMALL
WE ARE DEMIGODS
and
THE TOTALITY IS BEAUTIFUL
Karl Marx, Foundations of the Critique of Political Economy
("Grundrisse"), translated and edited by Martin Nicolaus (Baltimore:
Penguin, 1973); especially see pages 75-6, 142, 144-145, 148, 613, and
630.
Rosa Luxembourg, The Accumulation of Capital (New York: Monthly Review Press, 1968); especially see pages 335-339.
Lyn Marcus, Dialectical Economics (Lexington: D. C. Heath, 1975); especially see pages 9-10, 132, 295-300, 368-373, and 473.
Thorstein Veblen, The Theory of Business Enterprise (New York: Charles Scribner's Sons, 1904); especially see pages 229-234.
Seymour Melman, Our Depleted Society (New York: Dell, 1965); especially see pages 152-181.
Horace Robbins, Fictive Capital and Fictive Profit (New York: Philosophical Library, 1974).
Robert A. Peters, Return On Investment (American Management Association, 1974).
Karl Polyani, The Great Transformation (Boston: Beacon, 1957); especially see pages 264-265.
A. Milne and J. Laight, The Economics of Inland Transport (London: Sir Isaac Pittman & Sons, 1965); especially see pages 229-232, and 191-192.
Bank for International Settlements, Annual Report #46 (Basel, Switzerland: 1976).
Version
|
Date
|
Publisher
|
Contact Info
|
Notes
|
1.0
|
February 1977
|
Capitalist Crisis Studies
|
P. O. Box 754 - Berkeley, CA. 94701 USA
|
Original publication
|
2.0
|
October 2003
|
Lust for Life
|
P. O. Box 22466 - Milwaukie, OR. 97269 USA |
PDF on web (section 1 only)
|
3.0
|
May 2006
|
Adventures in Dialectics
|
http://www.point-of-departure.org
|
HTML on web
|