CAPITALIST CRISES AND TRADITIONAL POLITICAL EDUCATION OF THE WORKER’S VANGUARD
So a miner, Polish militant of the Polish Communist Party, explained the situation to his son during the 1930 capitalist crisis. So he had been taught in the PCP and so he perceived it. There was a lot of unsold coal because the capitalists moved by their ambition, only care in producing to increase their profits without bearing in minds the consumption of the working classes. They produce a lot and then are not able to sell this surplus and cannot resume production.
This is the idea about the capitalist crises that has been predominating in the communist militancy around the world during the last fifty years, a way of thinking shared by different reformists of Stalinist formation and their national popular acolytes, predominant in the world working movement.
An example of this tradition is observed in the Manual of Political Economy of P. Nikitin, Soviet theoretician and propagandist, who defines the capitalist crises as:
" The desire for profit obliges each capitalist to accumulate, to expand production, to improve the techniques, to employ new machines, to hire more workers and to produce more goods. But the desire to expand production without limits is not backed by the correspondent expansion of consumption. Moreover, the desire of get the maximum of profits moves the capitalist to lower the salaries and to increase exploitation. But the increase of exploitation and the workers pauperism, mean a relative reduction in solvent demand, a reduction in the chances of selling the goods. This leads to the economic crises of super-production".(P. Nikitin: op. cit. cap.5.Ed Akal 1985.pag. 155).
For thousands of average intellectuals and anti-establishment militants around the world during the last twenty years, Marta Harnecker passes as the most faithful and didactical expositor of Marxist thought. The fiftieth Spanish edition of her work "The elemental concepts of historical materialism" appears to indicate so.
In chapter III of that book we find again the common place that capitalist crises are produced because of no adequate balance between production and workers’ consumption.
"Capitalism tends to produce each time more goods but must pay low wages in order to survive. And these low wages create a limited demand for goods. This is a contradiction that has no way out in the capitalist world and tends to provoke periodical crises of over-production. And what repercussion has this got on the workers? It produces misery, hunger and unemployment. And all of this not because the goods are scarce but because they are produced in excess, without planning".( op. cit. Siglo XX1 1985).
Humberto Perez is the author of "Political Economy of capitalism" published by Social Sciences of Havana in 1985. According to the editors’ note, the author was for many years a teacher of political economy at the Party’s National School and in the first Congress of the Communist Party of Cuba he was elected a member of its Central Committee. With these backgrounds it is reasonable to think that Humberto Peres expresses the idea of CCP about this transcendent theoretical problem. In the second volume of his work, referring to "the causes of the crises" Perez reproduces the same idea that that communist polish militant instilled into his son. That there was no coal because there was too much of it during the 1930s crisis in Poland:
The capitalists produce without having in mind the consumption but the profits. The productive forces are not used over the point where surplus value can not only be produced but also achieved. The measure of accumulation and production is given by the possibility of capitalist enrichment and not by consumption. That is limited because most of the consuming population is made up of workers and others who enlarge their consumption within very narrow limits".
If it were true that the crises obey to the capitalists’ unchecked egoism who in their profits avidity dissociate goods’ production from consumption, the problem could be solved as advocated by some political groups around the world. One of these is United Left in Spain. This political organization insists in its strategy of conciliating the 33rd . article of the Spanish Constitution -where capitalist private property is defended - with the 131st, that talks about economic planning. It is all about containing the “avidity” of some bad grand burgesses, conciliating by democratic parliamentary means, a moderated capitalist profit with the workers needs ( 1 )
Marx called these representatives of the sub-consumptionist theory of the crises -originally of the petit-bourgeois economist Rodbertus- who spoke in the name of Marxism "gentlemen of the simple common sense":
" It is sheer tautology to say that crises are caused by the scarcity of effective consumption, or of effective consumers. The capitalist system does not know any other modes of consumption than effective ones, except that of sub forma pauperis or of the swindler. That commodities are unsaleable means only that no effective purchasers have been found for them, i.e., consumers (since commodities are bought in the final analysis for productive or individual consumption). But if one were to attempt to give this tautology the semblance of a profounder justification by saying that the working-class receives too small a portion of its own product and the evil would be remedied as soon as it receives a larger share of it and its wages increase in consequence, one could only remark that crises are always prepared by precisely a period in which wages rise generally and the working-class actually gets a larger share of that part of the annual product which is intended for consumption. From the point of view of these advocates of sound and "simple" (!) common sense, such a period should rather remove the crisis. It appears, then, that capitalist production comprises conditions independent of good or bad will, conditions which permit the working-class to enjoy that relative prosperity only momentarily, and at that always only as the harbinger of a coming crisis.(K. Marx "The Capital". Book II.Chapter XX).
To put in their place these authentic theoretic impostures, with political purposes, which haven’t got anything to do with Marxism and socialism, we must begin by clarifying of what “over-production” is Marx talking about to explain the causal movement of the crises. Of course, the only over-production of goods that Marx implicates in his crises theory is that which corresponds with the elements of productive capital (constant and variable) not with goods of final individual consumption.
" Over-production of capital, not of individual commodities — although over-production of capital always includes over-production of commodities — is therefore simply over-accumulation of capital…Over-production of capital is never anything more than overproduction of means of production — of means of labour and necessities of life — which may serve as capital, i.e., may serve to exploit labour at a given degree of exploitation…"( K. Marx. Book III.Chap. XV).
For Marx, the characteristic of capitalism consists in accumulating the bigger possible amount of surplus-labour and, therefore, to materialize with a given capital the bigger possible time of direct labour, extending the working day and/or decreasing the wages through the development of work productivity, the employment of cooperation, the division of work, the machinery, the employment of science for such effects, etc. This translates in the constant tendency to big scale production that constantly exceeds the capabilities of solvent demand, that is to say, of the market of final consumption goods. Upon this base, it is a law of capitalism that the market expands more slowly than production, and therefore the constant state of capitalist society is that over-production of goods. This explains that its show windows around the world are always in good supply, although millions of people haven’t got purchasing power to buy. Therefore, to think that the capitalist crises are caused by the over-production of goods with respect to solvent demand, induces that the normal state of capitalism is of constant crises, something that has nothing to do with what the empirical evidence of the system offers us.
In reality, the overproduction of goods of individual consumption that is announced in the name of Marx as the cause of the crises, manifests itself under the form of over-saturation when the crisis has already broken out in a full depression of the sector of industry of means of production. Assuming that enlarged reproduction of capital supposes the accumulation of means of production, the passage from expansion to crisis begins to operate before in the productive industries of machinery and raw materials than in the goods for individual consumption. The same happens at the end of the depression, where the over-saturation of market goods for individual consumption does not subside until well into the reanimation of capital production, which successive rotations in direction to a new expansion, receive all its impulse from the phase of productive capital, not from the solvent demand of the final consumers. It is the over-production of productive goods by the capitalists that provokes the crises. No what that communist Polish miner erroneously saw in the fact that a lot of families like his couldn’t buy coal. Under capitalism, the most important articles of consumption are those of productive consumption (machinery and raw materials) and it is the over-production of these goods which originates the crises, not the opposite, as it is suggested by those who apply the “simple common sense” to political economy. In fact, the biggest part of the annual work in the capitalist society is consumed in the production of constant capital for the production of machinery and raw materials, goods which consumers are not workers but industrial capitalists .Therefore ,it is also much bigger the interchange of goods between capitalists than between these and the workers. And it is in the market of goods production where goods over-production, that drives to the crises, manifests itself.
" The worker can only buy—he can represent a demand only for—commodities which enter into individual consumption, for he does not himself turn his labour to account nor does he himself possess the means to do so—the instruments of labour and materials of labour. This already, therefore, excludes the majority of producers, the workers themselves, as consumers, buyers [of many commodities], where capitalist production prevails. They buy no raw material and no instruments of labour; they buy only means of subsistence, commodities which enter directly into individual consumption. Hence nothing is more ridiculous than to speak of the identity of producers and consumers, since for an extraordinarily large number of branches of production—all those that do not supply articles for direct consumption—the mass of those who participate in production are entirely excluded from the purchase of their own products. They are never direct consumers or buyers of this large part of their own products, although they pay a portion of the value of these products in the articles of consumption that they buy.( K. Marx “Theories of Surplus-Value” Book 2 Chapter 17-12).
" Capitalist society employs a bigger part of its available annual work to produce means of production, (ergo to produce constant capital), which cannot be transformed in interest, in the form of salaries or surplus value, but can only work as capital" (K. Marx "The capital” Book II. Chap. XX).
Finally, it is false that crises are produced because the bosses pay low salaries in order to survive and therefore the effective demand descends, as Marta Harnecker and Nikitin maintain. On the contrary, every empirical observation shows that the crises burst at the point of the highest salaries of each cycle.
SOURCE: IMF. SOFTENED SERIES
The 1980-1981 international recession burst in the USA during the second trimester of 1979.
It can be seen from the diagram the consequences of the economical reflux over the real salary of the American working class, through all of 1980 abrupt fall. The curve of the real salary stops its fall in 1981 and even registers a rise in the middle of that year. Then it falls approximately one and a half point until it places itself over the previous five years months before the stock-market crash of 1987. The highest values of this atypical cycle that corresponds to the period which goes from 1980 to 1986. We say atypical cycle because if the Reagan government hadn’t taken action, the curve of real salaries would have followed the course that begun in 1980 -that retook in 1987. In fact, the recession that began in 1980 had announced the gravity of its social effects in its international amplitude as in the unemployment numbers, which by the end of 1980 had widely exceeded 30 millions people in the imperialist countries. In spite of all the monetarist harangue of the liberals, the ultraliberal Reagan government applied a Neo-Keynesian orthodox policy. The idea was stopping or delaying the circumstantial recession of 1980-1981 thanks to an enormous budget deficit, the famous Keynesian "deficit spending”, wasteful of the public expenses, the ABC of the expansive economic policies of reformism. But of regressive social meaning, contrary to the reformist’s goals: It reduced the welfare expenses, froze infrastructure expenses and combined the fall of direct bourgeois taxes with the spectacular rise in military expending, which gave an incentive to capital investment through the expansion of global demand. According to every available data, this policy explains why for almost six years, the American real salaries could hold on to around the 1981 level, and even rise slightly exactly prior to the 1987 stock market crash.
2 It is shown, thus, that low salaries are a consequence and not the cause of the crises. Precisely so, the ideological force driven by the bourgeois’ prejudice of blaming the workers of the disarrangements in the capitalist economy, lies in the empirical verifiable fact that in general the crises burst at the highest point drawn by the salaries’ curve along each cycle.
( 1 ) The extreme left of this position is a variation of the Stalinist project imposed in the USSR after Lenin’s death that remained intact until 1990, which reminiscences continue living in the current Communist Party of Russia and other fringes of orthodox Stalinism still alive in the world. This variation, applied from the times of the COMINTERN to the capitalist countries, consists in the expropriation of big capital to install a “popular republic” that politically synthesizes, in name of socialism, the strategic alliance between the petty-bourgeoisie and the proletariat to stabilize the exploitation of salaried work in small and medium scale. The project consists on the total mass of wage-earners of the "National and Popular State", devoting themselves to guaranteeing the survival of the small capitalist factory. Some of them from the private sector of the national economy, directly producing surplus-value for their small bosses, others from the big state factories contributing with their surplus work to subsidize the typical inefficiency of small production. A “socialist” project inspired in Sismondi, Proudhom, Rodbertus and Lasalle, based in the backwardness of the productive forces, which economic inefficiency paradoxically drives to the sub-consumption that their propagandists criticize so much in the "not planned" capitalist society. But in this case it even reaches the solvent demand, as it was shown in the USSR and another countries of "real socialism" as Cuba, where people have got money but there are not enough goods in offer.
(2)Following this document we publish an appendix where we try to complete the explanation of the phenomenon of the crises in the context of the last two decades.
October 1998
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