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[STUDY GROUP] 5. The turning point of the 1914 war
Here we go with Chapter 5 then...
This is where things start getting interesting. We have realised that there are some formulations here that are problematic - especially with the 'economic rationality' of war and the bases of the post-war boom (which in French is known as the "30 Glorious Years"). So, I'd recommend that comrades also refer to the article in International Review 133 that introduced the debate we have been having in the ICC on this question. It summarises the different positions that have developed during the debate. We have since published other texts by comrades involved in the debate in International Reviews 135 and 136 respectively.
(I tidied up the paragraphs too).
B.
Thanks for tidying up the paragraphs. It was hard to read before. I'll reread it now.
"The sun shines. To hell with everything else!" - Stephen Fry
"As the world of the spectacle extends its reign it approaches the climax of its offensive, provoking new resistances everywhere. These resistances are very little known precisely because the reigning spectacle is designed to present an omnipresent hypnotic image of unanimous submission. But they do exist and are spreading.", The Bad Days Will End.
"(The) working class exists and struggles in all countries, and has the same enemies in all countries – the police, the army, the unions, nationalism, and the fake ‘socialism’ of the bourgeois left. It shows that the conditions for a worldwide revolution are ripening everywhere today. It shows that workers and revolutionaries are not passive spectators of inter-imperialist conflicts: they have a camp to choose, the camp of the proletarian struggle against all the factions of the bourgeoisie and all imperialisms." -ICC, Nation or Class?
Firstly, thanks Beltov for fixing the formatting.
To kick things off, some questions with regard to the content of the chapter itself:
“Economic growth in capitalism's ascendant phase was characterised by the increasing importance of colonial markets in world trade. The importance of these markets continued to grow statistically from 1914-18. From 1914 to 1929 it only slowed down; from 1929 to 1938 it even slightly revived (see graph below). Only in the course of World War 2 was this tendency statistically totally reversed. But, in fact, this was only the result of a process begun in 1914. The relative importance of the trade of third world countries during the inter-war period is mainly due to the dizzying fall of trade among the industrialised countries.”I can’t make head or tail of this. What is being said here? Also, what is the significance of the graph below? What trend is it meant to be showing? What is the y-axis meant to be gauging, given it has no units of measurement indicated?
With regard to the section “The end of the percentage growth of the working class”, the statistics once again intrigue me. As a general matter I’d be interested to know a little more about Sternberg method in collecting his statistics, for example, I wonder what constitutes the ‘working class’ for Sternberg as distinct from the ‘working population’.
Also related to this are the statistics from INSEE:
“[T]he proportion of "industrial workers, including construction workers … in 1968 was only 47-48 per cent for Germany and England, 45 per cent for the whole of the European Economic Community, 35 per cent for the United States, USSR and Japan. These figures should be relatively higher since they exclude workers engaged in transportation, agriculture and fishing. But they undoubtedly prove that the rate of expansion of the working class has greatly declined since the end of the ascendant phase of the system after 1914”.Again, with regard to the working class, the statistics only tell us about industrial workers (though this fact is noted and taken into account) and don’t provide us with any other reference point with which to identify any sort of trend (these statistics alone certainly do not ‘undoubtedly’ prove the slow down in the growth of the proletariat).
As the OP notes, later in the article we come across the whole issue of “post-war reconstruction; permanent and massive armaments production” and the current debate surrounding this issue and whether it really does constitute an ‘outlet’ for capital accumulation and the rationality of war and militarism.
I don’t quite understand the concept of the 'better exploitation of old markets' (how can you ‘exploit’ a market?), something that is not elaborated on at any length in this chapter. Is this done latter on in the pamphlet or in any subsequent articles of the ICC?
In addition to this, I’d like to add a more general point. If I am correct this the first time throughout the pamphlet we have come across a explanation of the economic roots and mechanics of capitalist decadence within the framework of the political economy of Luxemburg that the ICC bases its analysis on. When I read the pamphlet for the first time and was unfamiliar with a lot of this I found this section and the rest of the pamphlet that was to follow, somewhat confusing. I think a lot more room could be devoted to a more rigorous and detailed explanation of Luxemburg’s political economy and the ICC’s take on it in explaining the mechanics of capital accumulation and the roots of decadence.
According to the version of the pamphlet I have the Y-axis should be "% of World Trade". I'd agree with you that the paragraph is relatively unclear - my interpretation is that it is trying to show that whereas the ascendant phase was characterised by the increasing importance of the colonies in world trade, the decadent post-1914 phase shows the rate of increase slowing down or there being an absolute decrease. Moreover, according to the pamphlet, there was only an increase between the wars due to the contraction of trade between the main industrialised countries.
The example of Germany is quite interesting. The figures given in the chapter are that the number of German workers in terms of "proportion in the working population, after having reached 50 per cent in 1895, fell to 45 per cent in 1925" thereby showing that expansion in the working class has "greatly declined in the industrialised countries". Later, however, we are shown the figures Niccolo quotes above, which suggest that the 1968 figures for Germany and England were 47-48% but, as noted, this excludes important sectors of the working class.
Without knowing the size of these other sectors (and whether the figures variously quoted are comparable) it is hard to tell the potential growth of the working class in Germany. However, even if the other sectors amounted to a mere 7 or 8% we'd be in a position, according to the figures quoted, of a decline from 50% in 1895 to 45% in 1925 and an increase to about 55% in 1968. Given that the section aims to show that the tendency in ascendant capitalism for the population to be "effectively integrated into the capitalist economy grew faster than the world population" has now been reversed during decadent capitalism, I'd argue the figures from Germany as presented argue against this.
This claim is really interesting. I think one of the difficulties in writing this type of work is that if you end up referencing every claim it becomes almost unreadable, but where do these figures come from?
Something I forgot to add:
I'm really struggling to see how this proves the point at all. Even if the time frame were longer than the bizarrely short one given, the comparison of two categories within one time frame doesn't do anything to prove the relative decline over time. Perhaps I'm missing something...
I've realised what may be causing some confusion -- the wrong graph was included in this chapter.The last graph of Chapter 4 and the first of Chapter 5 were published in the wrong order in the online version. It's been fixed now. I'll get back to all of your comments later tonight. Thanks for helping me spot that one...
Basically, it's saying that the extra-capitalist markets weren't absolutely exhausted in 1914, but that they became increasingly insufficient for the needs of capitalist accumulation after the war. I think Marion's reading of this part is closer to what the chapter means.
As for Sternberg's method, from my reading of this section of his book (Chapter 5, Class Stratification and the Rise of Capitlaism, 'Capitalism and Socialism on Trial') he understand's Marx's approach of starting with a very abstract world where there are only capitalists and proletarians, but he takes several steps away from the abstraction to analyse class composition in the 'real' world. He's quite critical of Marx's assumption that the growth of capitalism will see the growing polarisation of society into two hostile camps. He identifies several areas where the concentration of capital was very late to destroy 'independent existencies' (such as in agricuture) and even created new middle-strata (the labour aristoracy and those employed in 'tertiary sector', especially those linked with trade).
On the other hand, he accepts that, "The category of employees became just as much a permanent phenomenon as the category of wage-workers, and to that extent there is some justification for the term which arose to describe the new category: white-collar proletariat. This was particularly true because the salaries of these employees were not much, if at all, greater than the wages of skilled workers" (p.111) More interestingly, he makes the point that whereas the old middle strata were generally of independent means -- not directly dependent on capitalism, unlike the wage-workers -- the new middle-strata were much more integrated into the nexus of the capitalist economy and thus much more prone to economic crises. The example of the crisis in Germany in the '30s where inflation wiped out what little savings the non-wage workers had. So basically, he's saying that the middle class under ascendancy had a different composition and relation to capital than did the one in the epoch of decadence.
I think that means better exploitation of 'existing' markets, old as opposed the new. This could take many forms. For example, Britain made loans to its colonies on the condition that the money was spent on industrial exports (railways, machinery etc) which were used to increase the extraction of raw materials, make supplies more reliable and cheaper.
That's an interesting point. We have two articles in our International Review -- issue 127 and issue 128 -- that defend the continuity of Luxemburg with Marx. Have a read and let us know what you think. There's always more that can be done though and we'll bear this in mind.
The 'elephant in the room' in this discussion still remains, and will no doubt reveal itself in the next chapter.. Basically, the question before us is that old chestnut: Is war good for the economy?
The Decadence pamphlet identifies three principal fields of economic expansion after WW2:
1) The 'reconstruction' economy
2) The war economy
3) Better exploitation of existing markets.
The debate we've been having within the ICC is basically over the validity and relative weight of these three factors (there are others, such as the massive use of debt, more effective management of the economy by the state etc.) in explaining the post-war boom.
I'm not sure how useful this is but I'm going to throw it out there anyway... Some economists have identified the broken window fallacy. Basically, if some kid accidentally smashes a shopkeeper's window then it can appear that this has created trade for the window repairer and all those those who rely on his income. However, it can also be argued that the shopkeeper has taken on an additional cost, which means that he has to reduce spending elsewhere. Overall, there's no net gain. Indeed, globally there may even be a net loss.
It's similar with war. Yes, war may lead to the physical destruction of capital that has to be replaced -- and can be done so on a higher level of technique -- but in global terms its a disater for humanity: at the level of the economy, the environment and society in general.
I came across this book by Henry Hazlitt -- Economics in one lesson -- where he says:
I hope I've been able to answer some of you're questions. If I haven't, or you have some more, then fire away!
I'm currently ploughing through some of the ICC texts on this question and am finding it interesting (albeit difficult!) work. A interesting aside for me was the point that due to the difference between activity being "productive" and being "capitalistically productive" "the real prosperity of the 1950s and 1960s was not as great as the bourgeoisie likes to pretend, when it proudly shows off the GDP of the major industrialised countries of the time" (http://en.internationalism.org/ir/20...f-accumulation).
Without having read in considerable detail, I feel the arguments against the Keynesian-Fordist state capitalist position are considerable. Furthermore, I think the ICC are to be commended for carrying out this debate in public.
