Marxist Geopolitics 1: The Value of Marx

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Marxist Geopolitics (1) The Value of Marx
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Aims of Lecture

• Introduce Marxs notion of primitive
  accumulation, labor theory of value, and
  crisis of accumulation
• Explore Luxemburg and Lenins ideas on Capitalism
  and Imperialism
• Relate this to Harveys concept of the spatial
  fix

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The BBCs 2005 Greatest Philosopher poll
1. Karl Marx, 27.93!
6. Immanuel Kant, 5.61
2. David Hume, 12.67
7. St. Thomas Aquinas, 4.83
Marxs work offers a stunning prediction of the
nature and effects of globalization, according
to historian Eric Hobsbawm
3. Ludwig Wittgenstein, 6.80
8. Socrates, 4.82
4. Friedrich Nietzsche, 6.49
9. Aristotle, 4.52
5. Plato, 5.65
10. Karl Popper, 4.20
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Karl Marx 1818-1883

• Considered classical economics liberal
  philosophy superficial in 2 major ways
• (i) It treats capitalism as a system which
  evolved naturally rather than through struggle,
  conflict and dispossession - primitive
  accumulation
• (ii) It describes only surface details of
• capitalism - commodity fetishism.
• Marxs approach is known as dialectic materialism

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The French Revolution, 1789
What Hegel had declared a history ending
revolution was, for Marx, only the first stage in
what would be a worldwide proletarian
revolution Liberalism had overthrown the
monarchy and the landed aristocracy but it had
also replaced them with a new elite of
capitalists the bourgeoisie The Declaration
of the Rights of Man and Citizen, may have
asserted that all men are born free and equal
but in reality society was still divided
according to the owners of production (capital)
and The workers (labor)
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Condition of the Working Classes

• When one individual inflicts bodily injury upon
  another such injury that death results, we call
  the deed manslaughter when the assailant knew in
  advance that the injury would be fatal, we call
  his deed murder. But when society places
  hundreds of proletarians in such a position that
  they inevitably meet a too early and an unnatural
  death, one which is quite as much a death by
  violence as that by the sword or bullet when it
  deprives thousands of the necessaries of life,
  places them under conditions in which they cannot
  live -- forces them, through the strong arm of
  the law, to remain in such conditions until that
  death ensues which is the inevitable consequence
  -- knows hat these thousands of victims must
  perish, and yet permits these conditions to
  remain, its deed is murder
• Friedrich Engels, 1845

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Primitive accumulation - the original sin

• The historical process of divorcing the
  producer from the means of production,
  transforming the social means of subsistence and
  of production into capital and the immediate
  producers into wage laborers.
• Marx, 1967714

Once producers are forced to freely sell their
labor, accumulation takes place through
extraction of surplus labor time
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• The capitalist now has the 3 commodities he
  needs
• (i) raw materials (steel, rubber, plastic)
  
• fixed capital
• (ii) tools, machines, fuel, factory etc.
• and
• (ii) labor
  - variable capital
• During production the value of all these inputs
  is transferred to the commodity.
• So, how does the capitalist make profit?.

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Wage Labor Theory of Value

• It takes 6 hours for a worker to produce 12
  cokes _at_ 1 each
• (1 hour 2 cokes 2 value created)
• 9am 3pm
• 9am -------------------------------------5pm
• 3pm?------?5pm
• average time to produce 12 cokes 6 hours
• --- actual hours worked 8 hours
• --- surplus labor time 2 hours
• No. of cokes produced 16
• Your income 16
• Wages paid 12
• Profit 4
• The worker is unaware of his exploitation
• But how can the capitalist ? profits?

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Invest in new technology!

• Now, it takes 4 hours for a worker produces 12
  coke bottles.
• You undercut competitors, selling _at_ 92 cents
  each, making a windfall!
• (1 hour 3 cokes 9 value created)
• 9am 3pm
• 9am -------------------------------------5pm
• 1pm?-------------?5pm
• average labor time to produce 12 cokes 6
  hours
• --- actual hours worked, 8 hours
• --- YOUR surplus labor time 4 hrs
• Cokes produced in a day 24
• Your income 22
• Wages paid 12
• Profit 10

To provide credit for investment a huge
banking/financial system emerges
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Then, so do your competitors
Now everyone produces 12 cokes in 4 hours and
the average price starts to fall.to 67 cents (1
hour 3 cokes 2 value created, Wage 12
p/d)
3pm?------?5pm 9am -------------------------------
-------5pm 9am 3pm average labor
time to produce 18 cokes, 6 hours --- actual
hours worked, 8 hours --- surplus labor time, 2
hour No. of cokes actually produced 24 Your
income 16 Wages paid 12 Profit 4
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Crisis of accumulation

So, as competitors adopt the same technology,
profits tend to decline You have to try to
exploit workers more and more, even as they are
producing more and morethey become politicized
as they realize they are being exploited

how can you ? profits again?...
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Postponing the crisis

• Marx suggests the answer is a widespread
  destruction of value
• - destroy value of money through inflation
• - destroy value of labor by drawing on reserve
  armies of workers
• - destroy the value in commodities by burning
  excess
• Marx explains that this is why capitalism is
  always prone towards cycles of boom-and-bust, and
  why inequalities would continue to grow between
  capital and labor
• Marx also asserted that the contradictions of
  capitalism would ultimately lead the bourgeoisie
  on a chase across the globe but he never fully
  developed a theory of capitalism and imperialism

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Luxembourg Imperialism and Consumption

• Rosa Luxemburg argued that the crisis was
  primarily based on under-consumption, since
  capitalists paid their workers production
  increased more quickly than consumption
• Therefore, rich nations had to violently colonize
  societies in the non-capitalist world in order
  to find new consumers for surplus commodities.
• So, primitive accumulation is ongoing
• However, they also prevented these parts
• of the world from developing as capitalist
• states so as to avoid creating competition

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1500s-1800s
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From Imperialism to Ultra-imperialism?

• The era from mid to late 19th century is
  considered to be the first round of global
  free-trade
• Some Marxist theorists envisaged the decline of
  nation-state rivalries over territory and
  resources with the emergence of huge
  transnational corporations
• In 1914, Karl Kautsky called this
• new phase of capitalist expansion as
• ultra-imperialism

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Lenin and WW I

• Lenin (1965) criticized Kautsky and instead
  predicted that the rise of industrial-financial
  monopolies in the West would lead to
  inter-imperial rivalry as nations south to
  protect their colonies and scramble for new
  regions

A few weeks later, World War I breaks out
followed by revolution in Russia
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Echoes of Mackinder?

• Free-trading, peace-loving Lancashire has been
  supported by the force of the Empire....Both Free
  Trade of the laissez-faire type and Protection of
  the predatory type are policies of Empire, and
  both make for War. Mackinder, 1919

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Economic turbulence 1919-1939

• Economic chaos followed however, culminating in
  the Great Depression in 1929
• In the US, FDR initiated New Deal programs,
  running government deficits to fund public work
  schemes and stimulate the economy
• In Europe, this chaos enabled the rise of Fascism
  in Germany, Italy and Spain, leading to WWII

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Bretton-Woods, 1944
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Post-World War II

• In the Global North

Keynesianism - state invests in public
utilities - supports social wage with welfare
benefits
Fordism- wages tied to productivity
increases - promotes mass consumption
The Marshall Plan helps generate a boom in US
manufacturing
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• And in the Global South, new moves for
  independence and improving terms of trade
• industrialization
• import substitution
• some government subsidies
• some support for welfarism (affordable education,
  healthcare etc.)
• Much of this was paid for by
• loans from offshore US
• banks

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(No Transcript)
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but crisis returns as manufacturing profits
decline
From Brenner, 2002
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along govt. deficits increase
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Spatial Fix (Harvey, 1982)
Cheaper fuel, rent

?

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cheaper raw materials
and cheaper labor!
?
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Devalued capital
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• Now, your commodities are being sold at prices
  still set in the US

But they are being produced in a part of the
world where subsistence wages are much lower
Imagine how quickly someone could create value
equivalent to their wages. Imagine all that
surplus labor time turning into
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Tomorrow

• The rise of neoliberalism
• Read the chapter on Neoliberalism as Creative
  Destruction by David Harvey