November 30, 2010

The Economics of Class Struggle: An Introduction


            All of humanity, every single individual existing in the world today of the over six billion human beings we have, of the various nationalities, ethnicities, regions, races, religions and so on, can be divided into several very distinct groups, or classes, based on their relations to the means of production. There is one class of people, the owner class, who live primarily on collecting rents on property they own, extracting the surplus value from the profits of the business they run or own, payments on interests owed, stock trading, land ownership, mineral rights, holdings and investments of various kinds, bond investments and royalties. Another class, the working class, lives primarily on wages, salaries, tips, commissions, pension plans and retirement. The Marxist definitions of classes are not an absolute dogma, however. For example, if a very privileged worker makes so much money that he/she could theoretically live off the interest or invest it and live off the dividends, then that “worker” is functioning as a bourgeois even if he/she doesn’t own the means of production directly. When a large amount of money is invested into a bank account, it becomes part of the capital the bank uses for its own investments and interest-bearing loans. The Marxist definition of class is not a ladder—class is not determined by the amount of one’s income or the amount of money one possesses, but rather what determines class is one’s relation to the means of production.

            There has been much speculation about the exact definition of class, capitalism and socialism in the United States. Alleged proponents of socialism have characterized it as a watered-down and friendlier version of capitalism, or a system without the excesses and skeletons in its closet. Everything from the New Deal to the experiences of Scandinavian countries during the Cold War has been categorized as socialism. The more vocal opponents of socialism characterize it as the nationalization or public/state/collective ownership of any property. These same voices on both the right and the left call any sort of economic redistribution “socialism.” By using the definition from this outlook, the German fascists of the Third Reich, the present-day Obama Administration and staunch representatives of the rich such as former President George W. Bush are all painted as being socialist in some way. The recent economic bailouts and stimulus funding, which took billions of dollars of public funds accumulated from working people and placed them in the pockets of private owners of industry and capital, are even portrayed as socialism or as socialist in nature. Left-wing proponents of this idea of mere state ownership as being socialist or Marxist in nature also may attempt to revise Marx and claim that success in production or rises in living standards are an accurate measurement of socialism.

            In fact, the structure and purpose of the relations of production and the incentive for production itself within the society (for need or for profit in greater or lesser degrees) as well as the degree of observation of the phrase “from each according to his ability, to each according to his work” is a defining measurement of socialism, and not a rate of production or development. Taking this definition into account, it follows that general development of a country and social programs are not an accurate measurement of socialism, nor are unscientific capitalist measurements of wealth such as GDP, a flawed method of measurement that even bourgeois scholars admit cannot be applied to socialist countries. Productive capacity does not equate to a socialist system. Class struggle under socialism must be waged with the goal of the elimination of the exploiting classes. Socialism, by definition, is ultimately the complete political supremacy of the working class. It is a system completely distinct and unique from previous socio-economic systems, where all political institutions and economic forces, the Rule of Law and cultural achievements are geared towards empowerment and satisfaction of the working class, their needs and interests. Socialism is a system where proletarian democracy prevails and where society empowers working people as authors and implementers of legislation, the true decision-makers in society. Socialism is a system where the producers of wealth are the recipients of wealth, are the benefactors of all improvements and where the society recognizes the claims of those who constitute and comprise it. Socialism is a system where socially-generated wealth becomes social property, rather than the profits of this or that employer or section of the capitalist class. Socialism is also the precondition for liberation of humanity, the transitional socio-economic stage to build the foundations for the higher stage, communism.

            Some portions of the international communist movement have taken up erroneous lines and forgotten the final goal. In the wake of the collapse of the socialist camp, many elements, sadly, were not satisfied with strategic support of revisionist or “market socialist”/state-capitalist states, but demanded these states be recognized and upheld as socialist based purely on Cold War geopolitics and regardless of internal class struggles, adopting revisionism themselves. It must be said that matters is not the supposed nature or intention of such a society, nor the degree of richness or development to it. It is worth stating also, unequivocally, that the mode of production of a society determines the superstructure and not the other way around. This is why it is correct to say that the Soviet Union was still socialist at one period in time despite the fact that it didn't have complete direct democracy, or especially ideal policies toward the reproductive rights of women, the rights of homosexuals and so forth. Despite flaws, socialism as a system does not disappear because the state in question does not represent our most ideal society. For example, the socialist Soviet Union was not state-capitalist, because despite the need to extract a surplus (which would always exist as long as scarcity still exists), the state economy was not profit-driven. The economy of the socialist phase of the USSR was driven by need, which in that era was mainly the need for the defense and construction of the means of production. It is also well-documented that from the time of 1956 to 1965, the profit motive was re-introduced in the Soviet Union and eventually set as the main incentive for production. Capitalism may take many forms, but without the profit motive as the main incentive we cannot call a state lacking private property capitalist.

            In addition to erroneous lines regarding the Leninist definition of socialism, there have also been resurgences of the revisionist “Theory of the Synthesized Economic Base” in the international communist movement. More or less, this theory states that socialism as an economic system is a “combination,” or “synthesis,” between communism and capitalism, or that socialism is a “mixture” of capitalist and state-operated industries. All that is required for a state to be considered socialist and under the dictatorship of the proletariat, according to this anti-Marxist theory, is for the state to call itself socialist and to be under the control of a Communist Party. Taken as a whole, this theory is not only nonsense, but tills the ideological soil of Marxism-Leninism for social-democracy and fascism.

            Every Marxist worth his/her salt knows that there has never been a point in human society where two socio-economic systems coexisted harmoniously with one another, and especially not within the same territory. By its very nature, capitalism cannot coexist with a rival socio-economic system. Just as capitalism destroyed feudalism to come into being, it has similarly sabotaged and often intervened through military means in every socialist country in the history of the planet Earth up to the present day. In many areas of the world where older relations of production and distribution have endured for thousands of years, these systems have been similarly torn limb-from-limb in order to create new markets for commodities, new pools of labor to exploit, and so forth. At the root of this antagonism that prevents capitalism from coexisting peacefully with another socio-economic system is the division of society into the different classes. The interests of the ownership class are diametrically opposed to the interests of their laborers, and vice-versa. The ownership class can only meet their needs at the expense of their workers, and the working class can only achieve their liberation at the expense of their employers. For example, consider a single action, and the different negative and positive outcome it has for the two classes: if workers were made to work longer hours without overtime pay, this would be beneficial for the owners and detrimental to the workers. If a workplace was nationalized, this would be beneficial to the workers who gained it, and detrimental to the owners who lost it. The interests of the exploiters and exploited, of the employers and employed are antagonistic to one another, and therefore can only be met at each others' expense. To spread illusions of “compromise” between the two is to spread illusions of “compromise” between an animal and a tapeworm, between a swimmer and the leech on their leg, between a dog and its fleas.

            Ultimately, socialism comes into being by completely replacing its predecessor in all areas and at all levels of society, just as capitalism has done to feudalism. This change of the mode of production, historically, has always been violent, not because of personal whims but because the old society has no desire to be replaced by the new society. Every shift in paradigm from one social system to another is violent, with the old struggling to survive and the new struggling to achieve supremacy. It was through violence and revolution that the capitalist class first achieved supremacy against their feudal predecessors in the American Revolution, the French Revolution and the peasant revolts throughout old Europe. Just as capitalism earned its place and rose to supremacy through the barrel of a gun, so must socialism.

            Right now, there is confusion and intentional distortion surrounding the nature and content of what constitutes socialism in the United States, but there is also a roughly equal amount of confusion surrounding the concept of capitalism. Just as the vulgar definitions of socialism abound in general circulation, equally altogether incorrect definitions of capitalism abound. One of the most common myths, for example, is that capitalism can be defined as a system where people purchase the commodities that they need to live. But by this logic, any country where currency is exchanged for goods and services must be a capitalist state. Of course, the fact that currency was exchanged for goods and services in the Union of Soviet Socialist Republics (USSR), as well as every other historical socialist state, casts doubt on this definition. In most socio-economic systems that preceded capitalism, and in the socialist systems that followed, there was generally currency exchanged for vital and non-vital commodities as well.

            Capitalism is, by definition, a socio-economic system where society is divided into those who own means of production and live on what is generated from them, and those who have nothing to sell but their own labor power and make their living by selling their labor in the form of wages. Capitalism is a system where means of production (factories, industries, banks, agricultural land, land leased to tenants, etc.) are held privately by a small minority and everyone else is put into the position of consenting to operate these means of production in exchange for wages. These wages are paid to the workers from the value that they generate themselves. The rest of the value generated by the workers (because raw materials have no value until they are transformed into something useful by labor) in the form of currency and revenue is appropriated privately by the ownership class. Essentially, at its very core, it is a system that exists on and perpetuates exploitation. It is a system divided into classes where some perform labor and others do not, but those that do not still get the lion’s share of the profits. It is a system where an entire strata of society exists that is completely unnecessary to the production process, and it is this strata that is the wealthiest, most affluent and ultimately in control of the society itself. It is also a system where the overwhelming majority are deprived of the wealth that they generate, are deprived of the control of the workplaces that they operate and are deprived of the real political power to determine their own destiny and that of the society that they maintain and operate.

            The introduction to Bill Bland’s book The Restoration of Capitalism in the Soviet Union describes the details to the differing economic systems thusly:


“After the Russian Revolution of November 1917, the official ideology of what became the Union of Soviet Socialist Republics was Marxism-Leninism.

            According to Marxism-Leninism, a capitalist society is one in which

            1) the means of production -- factories, land, etc., -- are owned by individuals or corporate groups of individuals called capitalists;

            2) this class of capitalists holds political power by controlling the state apparatus;

            3) production is regulated by the profit motive; and

            4) exploitation occurs, in that capitalists live, partly or wholly, on the labour of others, i.e., of their employed workers.

On the other hand, according to Marxism-Leninism a socialist society is one in which

            1) the means of production are owned collectively by the workers;

            2) this class of workers holds political power by controlling the state apparatus;

            3) production is planned by the state; and

            4) exploitation -- the process of living partly or wholly on the labour of others -- has been eliminated.

            On the basis of these definitions, Marxist-Leninists describe the society which was constructed in the Soviet Union in the period following the revolution as a socialist society” (Bland 1980).


            Finally, regarding clarification on the labor theory of value, value is created by labor being spent in the process of production. If more labor is exerted in the effort of production, then the commodity will be of more value. It is this concept of the labor theory of value that shows that the bourgeois theory of “subjective value,” or the concept that value is created and price is determined by subjective perception of value, is without merit. If the production process for a particular commodity requires more labor and raw materials, the commodity will have more value, and thus the price will rise, not due to subjectivity but due to the fact that more labor went into producing it. For example, if common materials could somehow be made into a valuable commodity, such as a car, by anyone with almost no labor, the car would then have very little value since they would be so easy to make. In a similar vein, scholarly books and encyclopedias have large amounts of research put into them in the form of mental labor, and thus have greater value due to the specialized work and labor that was spent in the process of their production. It is true that human beings do require commodities for survival and also desire other non-essential commodities, which is why the capitalist class thrives on selling them, but value itself does not become a factor until after the production process, and expending of labor, is already complete. Even if commodities are not being purchased, depriving them of their exchange-value (how much value something has in exchange and purchase), the product still has intrinsic use-value (how much value is generated by the use of something). Value is therefore not created by “demand” or subjectivity at all, but by labor. Artificial perceptions of value, which are not value in and if itself, are created through the process of commodity fetishism. When commodities are fetishized, they assume a subjective increase to their value in the marketplace. An example of this comes from the diamond market. Modern scientific techniques have allowed for diamonds to be synthesized in laboratories, and this can be done for much cheaper than the labor one would have to employ in extracting diamond as a mineral resource from the earth. Yet, diamond merchants still make a fortune utilizing fetishized prices because artificial diamonds are still perceived as not being as highly valued as those that are mined. The gap in value is represented by a fetish. It is not indicative of actual value, but of an artificial value that lacks an origin in material reality.

Works Cited


            Bland, W.B. The Restoration of Capitalism in the Soviet Union. 2nd Edition. Wembley: 1980. Print.