Actually Existing Capitalism: back in the USSA posted by Adam Marks

A strange kind of funk often descends on people, be they from the left or right of the political spectrum. Many people hold to the equation that state activity = socialism. What seems so obvious can suddenly become bizarre and endlessly confusing. People like Barack Obama, Winston Churchill and Gordon Brown are transfigured into revolutionaries. We end up with not just the workers state but also the degenerated workers state, the deformed workers state and the transitional genocidal workers state.

Its interesting how many historical forms capitalism has had to pass through, how many surrogate regimes it has had to use in order to survive. Capitalism has rarely existed in the form it was supposed to.

There was less of a problem in ancient and feudal civilisations as political and economic power was more or less the same thing. Kings and emperors conquered land and took tribute. Capitalists are people who manage the process of commodity production. At their beginning especially they were actively involved in the production process.

This created a problem we are familiar with today. It is impossible to work and rule. Unlike the working class, which must forcibly redistribute wealth in order to maintain its rule (and in the process undo all class distinctions) the bourgeoisie had the luxury of being able to accumulate wealth within the Ancien Regime.

The bourgeoisie created representative systems of its own within the old regime, along with an army of paid intellectuals, representatives and advocates. It was even able to bring the intellectuals of the old classes over to its cause. An example: during the rise of capitalism the British aristocracy was recruited into the vanguard of capitalist development, in particular to the armed forces and government.

The development of capitalism in Western Europe the 19th century saw wealth accumulated at steeper and faster rates. The need for greater resources, more labour and bigger markets sent capital across the globe. Wherever it set down it transformed the local economy into a commodity economy.

The stakes were constantly raised. In order to stay in the game you needed more and more wealth in order to bid for the market. It is no mystery why surviving capitalists began to pool resources and organise. The typical company went from being private limited to publicly owned.

Perhaps the best illustration of this process can be found in the rewarding final chapters of Rosa Luxemburg’s work The Accumulation of Capital. For simplicity I will settle on one factor: transport. Under the heading International Loans, Luxemburg spent some time talking about the Victorian craze for railway building.

It was a risky, sometimes shady, practice often guaranteed by the state (example the Transcontinental Railroad in the USA, financed by 30-year government bonds). Profit was often little and a long time coming, if it ever came at all. Yet the permanent way was crucial to breaking new frontiers for capitalism. It not only brought commodities to new, faraway places, but also sped up freight and communication, and thus turnover.

The next great leap forward came with the internal combustion engine, leading to the car and aeroplane. Everything the steamer and train could do, the car and aeroplane could do more quickly, cheaply (in terms of running cost), and on a greater scale. But these new developments required a round of new and bigger investment, not to mention planning.

We live with the results of this speed up today, state founded railway networks (examples: Candian, Japanese and New Zealand National Railways), airports and airlines with large state involvement (name a few: Finnair, Air India, Alitalia, Olympic Air). Let's not forget the huge subsidies for private firms (such as the US government's Air Transportation and Safety and System Stabilisation Act, which guaranteed the US air industry $5 billion to cover losses resulting from the 9/11 attacks). Congestion is a major urban issue, wrestled with at city admin level (Transport for London or Régie Autonome des Transports Parisiens). Air congestion is juggled with everyday by networks of national and international controllers. There is no meaningful free market in transport.

There is a potential new frontier for capitalism in the 21st century. The cold war saw heated military and industrial competition between the American and Russian empires. There was another separate but connected competition, the space race. Incredible amounts of money were thrown at this contest. All of it was directed through national, central, bureaucratic organisations. Again there was no meaningful free market involved.

As the Russian empire fell behind during the 70s and 80s in terms of military and industrial competition, so the heat went out of the space race. With the exception of satellite communication (and even this is heavily reliant on state help) the potential of space remains largely untapped.

The point is, as capitalism has developed it has gone from private to public to state capitalist. The state is now the front man, the organiser and the defender at home (and crucially) abroad. It is the lender of last resort. The state has become the aggregate capitalist, the perfect personification of capital’s will.

Most importantly it is the collective frontiersman. Capital needs a hinterland to expand into, one of Luxemburg’s most clear and lasting observations. The state is the last organisation that can collect the resources and cover the cost of establishing new frontiers.

This means that the conflicts of our age will largely be national conflicts. You cannot have a theory of imperialism without a theory of state capitalism. Have no illusions in Actually Existing Capitalism.

Labels: imperialism, Rosa Luxemburg, space race, state capitalism, ussa, ussr