Old North Mine - Broken Hill, Australia (from Film Broken Hill)
Even if $US700bn cauterises the collapse of the sub-prime mortgage market, it will not touch the core of the crisis. The root cause is the exploitation of wage-labour by capital.
That fact played next-to-no part in the opposition to WorkChoices. Even the Left focussed on Howard’s personality or his ideology. The ACTU is left with no explanation for Gillard’s Fairness as a different way of organising capital and disorganising labour. Worst of all, the Left grouplets missed the chance to revive an understanding of the laws of capital among militants. The present upheaval offers a chance to repair that fault.
Marxist-Leninists do not possess a magic wand for tracking the snakes-and-ladders of the financial chaos of the past fifteen months. Nor do we have a solution up our sleeves. Still less can we predict where the market will be tomorrow, or when the system will rupture next?
What we do know for sure is why such events are intrinsic to the expansion of capital. The competition among capitals combines with pressure from wage-slaves to drive each corporation to increase output. The resultant increase in commodities must be sold if capitals are to profit from the surplus value added by the workers. There’s the rub. The exploitative nature of the system means that the workers must not get the full value of their labour-time. The result is a gap between production and consumption.
Capitalism has outlasted Marx’s expectations by coming up with ways to counter its necessity of its over-production - war-making and mass marketing built on consumer credit. In the employment relationship, capital advances wages out of the money-capital it has accumulated from previous exploitation. The sales effort introduced a twist on this process. The worker is advanced money on the labour-time of years ahead, not days or weeks. Wages are paid to let the wage-slaves buy the commodities we need to reproduce our capacities to labour – food, shelter. Loans are made to help those workers buy up the expanded commodities. In the main, that credit is repaid with interest.
However, 60 years of expanding household debts had reached the limit for those who could afford to repay. As Robert Brenner put it, the affluent were using their houses as ATMs by borrowing against their rising prices. Hence, the financiers pushed beyond the boundaries of prudence towards embracing those who had been denied loans even for household items, let alone houses. But needs must. The risk, of course, was recognised. Slicing and shaving the loans was going to limit the defaults to any one institution. Instead, it spread them globally.
Here is the path between the class struggle and the sub-prime. To absorb excess capacity, capital has added “over-consumption” to its catalogue of solutions that spawns ever more problems.
In the days to come, I shall pen further 500-word comments on the previous points, and plenty more. Tomorrow, I shall return to the bail-out to dispose of the chatter about its being socialist.
Meanwhile, the best short course is to spend three hours, pen in hand, with Marx’s Wage-Labour and Capital.
Next: Not socialism