Class 13 Haitian Creole

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Class 13

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» SMITH: What's very clear, I think, from the text is that, from that chapter onward
the analysis becomes much more historical,

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rooting the dynamics, that he's still working out analytically,
it's become an historical text already

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by chapter 25.

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The history now comes to

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abet the analysis after chapter 25.
» HARVEY: I read somewhere that somebody had suggested

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that Capital as a book should be read backwards.

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You start with the last part, which is the origins of capital,

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you then come back to the general Law of Capital Accumulation,
and you then come back… So actually you

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could read it backwards.

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I think, in a way that's also what I started out by saying, that you really understand the text

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when you get to the end.

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Because you understand its historical foundation
when you get to the end, but you also see

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that the theoretical apparatus

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that he's been utilizing just didn't come from anywhere

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it was actually constructed in relationship to that

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very specific kind of history.

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And I've never actually done it, but one of these days
I'm going to try and teach it backwards

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and just see what happens,

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how people understand it, how I would understand it differently by

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beginning with the chapters on primitive accumulation
and working backwards through the text.

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» SMITH: Well, it would be an incredibly optimistic thing to do
because on the one hand

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you'd think it would allow you to

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deconstruct the history,

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and yet it could also be optimistic from capitalist point of view

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if you accept the history and say: Ah! The commodity!

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This is what we're really after!
» HARVEY: Yes, you get back to the fetish,

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That yes, that's what we are about.

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We're going to do three things this week,
first to congratulate you having read the book,

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secondly to go over a little bit what you got out of it

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and any kind of problems that you might have.

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But i want to start out with my own review,

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a bit about where the book has been,

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and where it's going to, so you can get some sense about how

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the formulation that Marx sets out in Volume One of Capital, is in fact

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a beginning point for a much broader analysis.

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And I want to identify what some of

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the problems are that are latent, within even Volume One of Capital,
which are going to be

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elaborated on later, but which you may wish to think about.

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Before I do that I want to remind you that the primary purpose,

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I think, Marx has here is an ideological one,

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which is to undercut entirely the Smithian argument

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that perfectly functioning markets

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will take all varieties of human aspiration, greed and whatever,

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and through the hidden hand

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will actually create a result which is to the benefit of all.

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And what Marx does, as I remind you in

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chapter 2, is to accept the Smithian formulation of a world

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which is made up of individual entrepreneurs,

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characterized by private property rights and
reciprocity and market exchange and no coercive

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relations between them and juridical individuals, as he says.

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And then to show, step by step,

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that the consequence of this

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is not going to be to the benefit of all.
There are two consequences, one

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minor, the other major.

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The minor consequence in Chapter 25, is that,

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even if you start out with a highly dispersed
decentralized market, you're going to end up with

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a centralized motion of capital

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and that therefore we're going to get
a centralization of economic power

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and increasing centralization of capital.

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So, that,

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even if we started out from that position of competitive markets,

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the markets themselves over time will destroy

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that competition in favor of oligopoly, monopoly control and the like.

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The second major proposition is that

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the class benefits will be chronically maldistributed.

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That is, the class that controls the means of production will

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make out, like bandits, from this system, whereas

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all of those who are producing the values of the labour-power as wage labourers will be

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losing from the system and that therefore you will
get increasing inequalities of class power.

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Marx's prediction on that is contingent,
as I want to remind you

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again and again, on a number of assumptions about

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there's no problem in finding a market for your goods,

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there's no problem which arises from the fact that the capital is distributed into

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rent, interest, taxes,

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profit on merchant's capital, industrial capital
and the like. So those assumptions

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are very important including also the assumption
that we're working in a closed system

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and therefore there's no imports and exports and the like.

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But I think the central tale that we get in Capital

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is about 'what is it what is it that capitalists actually do?'

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and what is capital as a social system about?

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and I think if you wanted to simplify it,

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to the point where you could actually consider that I'm being simplistic,

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it would be a simple story of this sort,
which says that capitalists start the day

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with a certain amount of money,

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they go out into the market and they purchase two kinds of commodities,

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One is labour-power,

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the second is means of production, in which we would include

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raw materials of all kinds intermediate products,

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energy, fixed capital, machinery and all the rest of it.

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And then what they do is that they choose
a particular technology and a technological choice,

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as we've seen, is terribly important. They choose a particular technology

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and put the labourers to work with the means of production

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to produce a fresh commodity,

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and this fresh commodity is then sold in the market

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for the original money plus a profit, plus surplus-value.

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So that's the basic formula, if you like, for the circulation of capital.

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And the interesting question is: What happens on the day after

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the capitalists have of done all of this,
what do they do with the surplus they got yesterday?

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Now, if they are sensible people they would simply

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consume it and have a good time.

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But, says Marx,

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there is something that stops them from doing that,

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and what stops them is what Marx calls the coercive laws of competition.

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That if, my competitors start to reinvest a part of their surplus

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in increasing their output and increasing their capital,

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then if I do not do the same then pretty soon

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I'm not going to be a capitalist anymore because
they're gonna drive me out of business,

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particularly if they start to invest in new technologies etc.

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So the coercive laws of competition

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force the capitalist to take a portion of that surplus that they produced yesterday

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and put it into expanding reproduction,

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which means that on the second day they need more labour
than they needed the day before,

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they need more technologies

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or better technologies than the ones they had before,

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they need more means of production, relative to what they had before

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and they're going to produce even more commodities
than they produced last time around,

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which means that they're going to have to find even more of a market out there

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to sell their produce.

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And this system goes on and on and on, and you can see that

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if it was crisis free, which it is not, but if it was crisis free

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you would get a compound rate of growth in the
accumulation of capital, in general.

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And actually, if you look at the history
of capitalism you do indeed see a tendency

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towards logistical growth rates, compound rates of growth

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how fast, how much capitalists reinvest, they may invest

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everything they earned yesterday, they may reinvest
only 70 percent or 60 percent but

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they're almost certainly going to reinvest something.

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This system is, if you like, the way in which Marx basically construes

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what a capitalist system is about,

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individual capitalists, forced by coercive laws of competition

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do not choose what they do,

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they're forced by systemic considerations to engage in this expansion,

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therefore accumulation for accumulation's sake, production for production's sake.

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Let's reflect a little bit on this story that i've told,

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and let us just simply set it out schematically.

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it goes, as I've suggested, like this:

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We start with money,

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the money then splits into labour-power and means of production.

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Money flows into this,

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with a given technology

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you put it into production,
you produce your fresh commodity

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and you then sell it for the original money plus the increment of money.

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This then goes back in, again to labour-power and means of production,

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but a portion of this gets taken out into

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consumption for the capitalist.

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But a portion of it comes back and you need

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a Δ labour-power and a Δ means of production.

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And it goes on and on and on, in this way.

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It is a process,

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so capital is construed as a process, remember, not as a thing.

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But it is a process that takes the form of things
at different moments in this circulation,

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at this point it's money

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at this point it's labour-power and means of production,

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at another point it's the productive apparatus,
and the labour process that goes on there,

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or it's a commodity, or it becomes money again.

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So it has these material forms but it is the flow of value which is at work.

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Now, at this point, we ask some questions about this system.

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Question number one is:

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Where does the original money come from?

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Here is the first question,

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where does the original money come from ?

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and Marx's argument is: primitive accumulation in the first instance,

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primitive accumulation which initially is founded on

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robbery, fraud, violence, a total violation of all aspects of
what a capitalist economy is supposed to be about.

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But it changes its character,

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as you go on in time,

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when the bourgeoisie gets control of two vital levers in assembling wealth.

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The first lever is that of the state.

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It either takes over a pre-existing state or it creates a state,

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which has juridical powers

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and can legally enclose the commons and do all those kinds of things,

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install private property rights, privatize assets etc.

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So the state is very crucial.

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And the other lever in the whole thing is the credit system.

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And the credit system and the state are
integrally connected with each other through the public debt.

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So as time goes on, there are legal means by which this money can be assembled.

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And when you ask the question: How much money?

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you'll remember that at several points in Capital, Marx points out that

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you just can't start a business with five cents.

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For many forms of industrial production you need a very large sum to break in.

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So there are what contemporary economists would call "Barriers to entry".

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And those barriers to entry depend upon

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the actual nature of the production process, how
much capital you need to start up, etc.

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to start up your business.

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And to have enough you need often to have centralized capital,

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i don't know if you remember what one of the most powerful levers of centralization was
in chapter 25,

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do you remember?

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The credit system.

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Again, the credit system is in there but we're not going to
talk about that here, but the credit system

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is one of the most powerful levers of centralization.

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Which distinguishes centralization from concentration

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because concentration would mean simply this :

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That, at -this- point we started out with this amount of money in the production process,

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at -this- point we've got a little bit more.

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And we go on a little bit more, so concentration of capital occurs overtime,

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as you take this logistical growth-rate push and keep it going.

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But centralization is something different

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it's about large companies taking over small companies.

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Furthermore, it's also about further waves of privatization.

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And here, I would add that,

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when we asked the question 'where does the initial
money come from', we're not only going to be talking

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about primitive accumulation

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and what Marx calls the laws or tendencies towards the centralization of capital.

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We're also talking about those processes that I talked about last time,

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accumulation by dispossession.

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That taking away assets,

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that one of the ways, and again, one of the ways in which you can do this is with the help

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of the state and the credit system.

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There was a crisis of liquidity in Indonesia in 1998,

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firms suddenly can't pay their bills, not because
they're bad producers or they're doing anything wrong

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but simply they've got caught in a credit squeeze.

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They have to declare bankruptcy, they go out
of business, they have to sell very cheap.

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In comes big capital, buys it up and they've gotten high value for rock-bottom prices.

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This is accumulation by dispossession.

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Similarly,

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when you take away people's pension rights

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or when you force people off the land where they've lived

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for many years, this is accumulation by dispossession.

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I don't know how many of you have been

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following what's been happening in West Bengal in recent months.

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There you have a marxist-communist party which has been in power for 30 years,
that has decided industrialization

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is the answer.

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Therefore it needs to dispossess peasants of their land

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and they've violently taken the land away from the peasants,
killing nobody knows quite how many.

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When I left Mumbai last week they'd just dug up another twenty or thirty bodies (!).

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Killing the peasants, dispossessing them of their land in order to make
way for large-scale Indonesian capital

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to start production in India.

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This is again accumulation by dispossession.

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So there are a lot of questions you would
ask about where the initial money comes from.

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And some of these

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questions are answered in Capital Vol 1,
but others, i think, need to be expanded upon.

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Who has the money, how much of it is there

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what's the role of the credit system and the state in dealing with this?

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These are big questions

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that call for further analysis, but you can
see the way Marx has set this up

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that these are the questions that naturally follow.

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And, this process of assembling the money is problematic.

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And as you will also remember,

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Marx has his little joke with John Locke's theory of property,

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which says that if you mix your labour with the land then you're entitled
to private property in the land

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and Marx said: If you apply that to the labourer, then

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whatever you started out with here, after you've produced the surplus-value

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out of exploiting the labourer,

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then after a certain period of years you've
actually forfeited any kind of

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Lockean right to your private property. It should all go to labour.

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So this money-power and this concentration of money-power,

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where it comes from and how it works

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is, if you like, problem one in the whole argument.

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The second problem point is: Where is your labour-power,

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not only now, but where is it going to be in the future?

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And assuring yourself of

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a correct labour supply, a correct quantity
and quality of labour supply, is of course

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one of the big issues for how a capitalist class

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approaches the question of politics, particularly in relationship to state power.

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And, the whole labour question is fundamental in Volume One of Capital.

0:22:23.470,0:22:29.620
Struggles over the working day,
struggles over the wage rate

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struggles over the conditions of production in the labour process.

0:22:34.840,0:22:42.880
So there's a whole series of struggles which go on between labour and capital.

0:22:42.880,0:22:45.640
I'm not going to review them here because

0:22:45.640,0:22:49.590
they're very much imbedded in Capital, in
what you've been reading, so you should be

0:22:49.590,0:22:51.510
very familiar with it.

0:22:51.510,0:22:54.580
but one of the things

0:22:54.580,0:22:59.559
you're going to have to remember, is the argument
in chapter 25 when Marx points out

0:22:59.559,0:23:03.410
that actually capital is in control on both sides.

0:23:03.410,0:23:06.750
The demand for labour and the supply of labour.

0:23:06.750,0:23:12.100
How is that so? Well, through its selection of technology.

0:23:12.100,0:23:14.350
So the technological selection

0:23:14.350,0:23:19.410
becomes crucial in this particular class struggle.

0:23:19.410,0:23:23.070
So there is a labour problematic.

0:23:23.070,0:23:29.070
If capitalists cannot solve the labour problematic

0:23:29.070,0:23:33.400
then labour, if it is scarce, and if it is powerful

0:23:33.400,0:23:42.020
is in a position to start to claim more and more of the surplus it itself has produced.

0:23:42.020,0:23:44.420
And as it does so

0:23:44.420,0:23:48.120
capitalists are going to receive less and less of that surplus

0:23:48.120,0:23:53.370
and it may get to a point where capitalist, seeing that the surplus disappears

0:23:53.370,0:24:00.650
are likely to go on strike and refuse to actually circulate capital anymore,
and engage in either

0:24:00.650,0:24:03.130
a massive collective lockout

0:24:03.130,0:24:07.820
in the form of a depression, an organized, orchestrated depression

0:24:07.820,0:24:14.350
or simply a personal lockout by saying 'I'm not going to pay you any more.'

0:24:14.350,0:24:17.040
But if you cannot solve it

0:24:17.040,0:24:21.650
we get something which is a particular form of crisis,

0:24:21.650,0:24:33.110
and this crisis is often called a profit-squeeze crisis.

0:24:47.700,0:24:56.920
And there is a whole set of theories amongst marxists.

0:24:56.920,0:25:02.080
A whole set of arguments to say that, a profit-squeeze crisis

0:25:02.080,0:25:05.650
is likely to be the form of crisis

0:25:05.650,0:25:09.159
which is going to stop capitalism in its tracks.

0:25:09.159,0:25:13.790
And many people would point to the period
from say, late 1960s to the

0:25:13.790,0:25:19.179
late 1970s as being characteristically a profit-squeeze crisis.

0:25:19.179,0:25:23.700
Labour, particularly in Europe, was extremely well-organized

0:25:23.700,0:25:26.669
political left-wing parties were

0:25:26.669,0:25:34.800
not legislating necessary in favor of capital,
but were taking away large chunks of the surplus.

0:25:34.800,0:25:39.270
So the capitalists didn't have that much left.

0:25:39.270,0:25:42.260
Social democratic states were doing that.

0:25:42.260,0:25:44.260
Even in this country

0:25:44.260,0:25:48.090
labour was much more powerful at the end of the 1960s

0:25:48.090,0:25:51.140
than it had been for a very long time.

0:25:51.140,0:25:52.950
The democratic party

0:25:52.950,0:25:57.630
was even prepared to pass anti-corporate legislation

0:25:57.630,0:26:01.980
such as environmental protection, consumer protection,

0:26:01.980,0:26:04.500
occupational safety and health legislation,

0:26:04.500,0:26:07.320
and all the rest of it.

0:26:07.320,0:26:13.750
And, at that point the capitalist class found themselves under assault

0:26:13.750,0:26:19.410
from democratic structures of governance that
were siding more with the cause of labour

0:26:19.410,0:26:23.540
than with the cause of capital.

0:26:23.540,0:26:26.549
And there were serious effects

0:26:26.549,0:26:32.480
on the assembly of wealth within the capitalist class itself,

0:26:32.480,0:26:34.590
they were not doing so well,

0:26:34.590,0:26:39.080
and also with the rate of accumulation. When
you get into the early 1970s

0:26:39.080,0:26:45.150
you get stagflation. And many people would say this was a classic

0:26:45.150,0:26:48.550
profit-squeeze crisis,

0:26:48.550,0:26:52.700
the response to which, on the part of the capitalist class,

0:26:52.700,0:27:01.130
was simply to somehow or other find a way of diminishing
the power of labour.

0:27:01.130,0:27:02.630
And this you could do

0:27:02.630,0:27:07.370
in a number of different ways. One was the political assault

0:27:07.370,0:27:11.950
against labour unions and their power,

0:27:11.950,0:27:17.510
a political assault against social democracy

0:27:17.510,0:27:22.990
and in particular against too much taxation.

0:27:22.990,0:27:27.970
And finally, an assault which said

0:27:27.970,0:27:33.900
'well, you may be privileged where you happen to be located,
but we're off

0:27:33.900,0:27:36.570
somewhere else, we're on our way

0:27:36.570,0:27:39.710
to Mexico, we're on our way

0:27:39.710,0:27:46.500
to the Philippines, we're on our way, ultimately, to China.

0:27:46.500,0:27:52.820
And, even the threat of moving at some point is likely to discipline labour.

0:27:52.820,0:27:57.270
So, there was in effect a fierce class struggle

0:27:57.270,0:28:00.440
from the mid-1970s onwards, in which

0:28:00.440,0:28:07.600
the capitalist class set out to solve the labour problem

0:28:07.600,0:28:11.180
and the labour scarcity problem, and the

0:28:11.180,0:28:16.760
'too much power of the trade unions' problem as they'd like to call it.

0:28:16.760,0:28:23.620
So this is if you like the second area of consideration, which is taken up

0:28:23.620,0:28:26.340
in Volume One.

0:28:26.340,0:28:34.600
The third area concerns the means of production.

0:28:34.600,0:28:36.370
Where are you going to find

0:28:36.370,0:28:40.340
adequate means of production? And when you go back down the chain

0:28:40.340,0:28:50.570
you get back to the question of raw materials

0:28:52.380,0:28:59.380
and the relation to nature.

0:29:08.190,0:29:13.169
Now, Marx does not deal with this at great length
in Volume One, but recall,

0:29:13.169,0:29:16.270
at a number of key points he says,

0:29:16.270,0:29:19.700
capital accumulation left to itself will destroy

0:29:19.700,0:29:23.279
both the labourer and the soil,

0:29:23.279,0:29:29.250
it will destroy both sources of all wealth.

0:29:29.250,0:29:31.270
And so the nature question

0:29:31.270,0:29:37.049
and the relation to nature becomes rather significant.

0:29:37.049,0:29:43.100
And over the last 20 or 30 years there are many people who've suggested

0:29:43.100,0:29:47.400
that this is actually a more potent

0:29:47.400,0:29:52.050
source of crisis, even, than the labour question.

0:29:52.050,0:29:57.770
That capital, having solved, if you like, the labour question

0:29:57.770,0:30:03.020
via both state policies and state politics and

0:30:03.020,0:30:10.020
off-shoring etc., and technological change
and all the rest of it, in the 1970s

0:30:11.170,0:30:14.150
was left with an eco-scarcity problem.

0:30:14.150,0:30:17.090
Scarcity of resources.

0:30:17.090,0:30:19.930
And this is what is sometimes called,

0:30:19.930,0:30:23.210
in the words of Jim O'Connor,

0:30:23.210,0:30:34.240
he calls this the second contradiction of capitalism,

0:30:35.710,0:30:38.460
which says, at some point or other

0:30:38.460,0:30:42.990
capital is going to destroy so much nature

0:30:42.990,0:30:47.169
that we're going to have a crisis

0:30:47.169,0:30:55.990
which is going to be derived from the relationship to nature.

0:30:55.990,0:30:58.440
That we're going to hit peak oil,

0:30:58.440,0:31:02.559
we're going to hit global warming or we're going
to hit all of these kinds of issues.

0:31:02.559,0:31:05.320
So there's another point,

0:31:05.320,0:31:08.390
where we have to ask a whole set of questions,

0:31:08.390,0:31:11.790
elabourate, if you like, on Marx's argument,

0:31:11.790,0:31:13.809
he doesn't do it so much.

0:31:13.809,0:31:19.010
He certainly does a lot on the profit-squeeze kind of stuff,

0:31:19.010,0:31:24.740
but we need to look very carefully at this kind of argument,

0:31:24.740,0:31:29.700
is it reasonable to call this the second contradiction as opposed to

0:31:29.700,0:31:31.860
the labour struggle as being the first contradiction?

0:31:31.860,0:31:39.160
What happens politically when you start to emphasize the second contradiction

0:31:39.160,0:31:43.020
and argue as if the first contradiction is no longer relevant?

0:31:43.020,0:31:50.820
Then of course you get the spotted owls versus the lumberjacks in

0:31:50.820,0:31:54.450
the pacific northwest and all sorts of problems of that sort,

0:31:54.450,0:31:56.630
and that's what's up.

0:31:56.630,0:31:58.140
So here too then,

0:31:58.140,0:32:00.519
you have to look back down the chain,

0:32:00.519,0:32:06.040
and say: implicit in this simple purchase of means of production,

0:32:06.040,0:32:11.770
is purchasing something which has its origin in

0:32:11.770,0:32:16.039
a natural environment of some kind from which you are extracting

0:32:16.039,0:32:21.990
and which you are modifying as you extract it. So,
there is a whole kind of dialectics

0:32:21.990,0:32:24.600
nature relations which is involved here

0:32:24.600,0:32:28.920
which is a potential source of difficulty.

0:32:28.920,0:32:40.059
The fourth arena of consideration is about the technological mix

0:32:40.059,0:32:45.980
that is going to be used in production.

0:32:45.980,0:32:50.480
Now again, Marx has a lot of things to say about this

0:32:50.480,0:32:56.380
in terms of the theory of relative surplus-value,

0:32:56.380,0:33:08.040
but you'll remember that technology here is not simply about machines.

0:33:05.750,0:33:13.639
It's also about the software, the incorporation of intelligence into

0:33:13.639,0:33:19.530
machine type production, the programming etc.

0:33:19.530,0:33:24.519
It's also about organizational forms, cooperation, divisions of labour

0:33:24.519,0:33:27.840
and the like.

0:33:27.840,0:33:33.020
and capitalists have some problems selecting a technology,

0:33:33.020,0:33:36.400
which technology do you select?

0:33:36.400,0:33:40.530
and we've seen that it's advantageous to the capitalist class

0:33:40.530,0:33:45.120
to have rising productivity and those

0:33:45.120,0:33:49.210
industries producing wage goods that support the labourer,

0:33:49.210,0:33:52.090
because then if there is rising productivity

0:33:52.090,0:33:56.140
the value of the commodities that the labourer
needs to survive diminishes and the value

0:33:56.140,0:33:59.660
of labour-power declines.

0:33:59.660,0:34:01.809
And as you will recall,

0:34:01.809,0:34:06.480
it's possible for the value of labour-power
to decline at the same time as the material

0:34:06.480,0:34:08.719
standard of living labour is rising

0:34:08.719,0:34:12.789
provided there is very strong productivity gains,

0:34:12.789,0:34:16.349
but that is not what individual capitalists are about.

0:34:16.349,0:34:21.919
Individual capitalists are driven by the need to
compete with other individual capitalists

0:34:21.919,0:34:25.809
for a brief ephemeral form of relative surplus-value

0:34:25.809,0:34:32.689
which gives them a particular personal surplus-value relative to others,

0:34:32.689,0:34:37.349
but that disappears as the technology becomes more general.

0:34:37.349,0:34:41.619
So there is an incredible driving force here,

0:34:41.619,0:34:46.859
and to the degree that driving force starts to

0:34:46.859,0:34:51.429
eliminate labour from production,

0:34:51.429,0:34:59.079
then you take away the majour source of surplus-value production.

0:34:59.079,0:35:02.869
And from this technological dynamic

0:35:02.869,0:35:09.869
Marx and many others have derived another theory of crisis,

0:35:10.319,0:35:28.499
which attaches technological dynamism to falling rates of profit.

0:35:38.949,0:35:44.890
I've indicated a couple of times that I don't actually

0:35:44.890,0:35:49.829
believe in any simple version of the falling rate of profit argument,

0:35:49.829,0:35:54.900
but what I certainly do believe in,
is that technological change

0:35:54.900,0:36:01.349
has a destabilizing effect upon the capitalist dynamic.

0:36:01.349,0:36:05.709
And it does so in all sorts of ways.

0:36:05.709,0:36:08.819
For example: rapid technological change

0:36:08.819,0:36:14.329
which forces you to change your technology every six months,

0:36:14.329,0:36:18.759
is an extremely costly business,

0:36:18.759,0:36:22.200
particularly if a large amount of money is
wrapped up in the technology and

0:36:22.200,0:36:26.669
the old technology has to be thrown away and you haven't yet

0:36:26.669,0:36:30.749
regained all of the value which you laid out for it.

0:36:30.749,0:36:33.529
So there are many ways in which you can look at

0:36:33.529,0:36:36.829
the technological dynamism question

0:36:36.829,0:36:43.459
as one of the grand destabilizers of a capitalist economy.

0:36:43.459,0:36:52.449
And therefore also a potent source for potential crisis formation,

0:36:52.449,0:36:56.639
where it comes, how it comes, we won't exactly know but

0:36:56.639,0:37:03.389
it is always a beginning point for these destabilizing effects which often have

0:37:03.389,0:37:06.150
reverberative effects and grow systemically

0:37:06.150,0:37:17.159
until the whole system falls down into crisis.

0:37:17.319,0:37:20.439
This then leads to this link

0:37:20.439,0:37:24.309
which is the fifth link.

0:37:24.309,0:37:29.299
Now you recall the argument

0:37:29.299,0:37:36.119
about where Marx is talking about M-C-M and all the rest of it.

0:37:36.119,0:37:42.149
The argument was that it's much easier to go from money to commodity

0:37:42.149,0:37:48.509
i.e. the universal equivalent to the particular,

0:37:48.509,0:37:54.149
than it is to go from the particular commodity to the universal equivalent.

0:37:54.149,0:38:00.969
Marx suggests that there are many points at which this jump

0:38:00.969,0:38:02.849
if you like,

0:38:02.849,0:38:08.859
is a real problem.

0:38:08.859,0:38:10.280
But it's a real problem

0:38:10.280,0:38:15.089
in an aggregate sense as well as in a particular sense,

0:38:15.089,0:38:18.279
because the aggregate sense is this:

0:38:18.279,0:38:21.779
it says, there must be more money in the system

0:38:21.779,0:38:28.779
at the end of the day than there was in the
beginning of the day. Who holds that more money?

0:38:28.789,0:38:33.529
Where is that more money coming from?

0:38:33.529,0:38:37.670
In fact if you can't find that more money,
if there's no more money in the system

0:38:37.670,0:38:40.789
to buy the product then you've got a crisis

0:38:40.789,0:38:47.059
because you're not able to sell your commodity,
you can't get the surplus-value.

0:38:47.059,0:38:54.329
There is, as the Kaynesians would call it, a lack of effective demand,

0:38:54.329,0:39:01.170
there is a different kind of crisis which forms around this

0:39:01.170,0:39:08.170
which we would call an under-consumption crisis.

0:39:17.799,0:39:22.069
There's not enough money in the system

0:39:22.069,0:39:29.739
to buy up the excess value that is being produced.

0:39:29.739,0:39:36.269
Many people would look at 1930s and say this is an under-consumption crisis,

0:39:36.269,0:39:42.449
this is the big deficiency of effective demand,

0:39:42.449,0:39:48.939
and that therefore as Kaynes said it's up to public policy to solve that

0:39:48.939,0:39:52.949
by using the state and using fiscal measures

0:39:52.949,0:39:55.310
to try to stimulate the economy.

0:39:55.310,0:39:58.299
In other words,

0:39:58.299,0:40:03.629
using debt financing to provide the money

0:40:03.629,0:40:11.629
printing money, if need be, in order to keep the market

0:40:11.629,0:40:16.949
liquid and to keep the whole system in motion.

0:40:16.949,0:40:21.999
Sothe under-consumption crisis

0:40:21.999,0:40:27.079
is also a possibility within this system.

0:40:27.079,0:40:31.089
And there are those, from Rosa Luxemburg onwards, who said

0:40:31.089,0:40:36.539
there's no way you can solve this internal to capitalism,

0:40:36.539,0:40:37.649
therefore

0:40:37.649,0:40:44.649
the only way in which capitalism can survive
is through a form of imperialism

0:40:45.349,0:40:50.839
which raids non-capitalist sectors

0:40:50.839,0:40:54.700
and in particular raids non capitalist parts of the world,

0:40:54.700,0:40:58.479
she was thinking of China and

0:40:58.479,0:41:03.369
the opium trade in all those kinds of things
where the british forced

0:41:03.369,0:41:07.939
a certain kind of trade upon the Chinese in order to extract the silver

0:41:07.939,0:41:12.279
and having extracted all of their silver then that could lubricate

0:41:12.279,0:41:15.429
the global system by increasing the supply

0:41:15.429,0:41:21.079
of money into the global system on a perpetual basis.

0:41:21.079,0:41:22.569
Today,

0:41:22.569,0:41:28.349
we wouldn't do that so much, but obviously
one of the big roles of credit institutions,

0:41:28.349,0:41:31.649
of the Federal Reserve etc. is to

0:41:31.649,0:41:34.380
keep this thing rolling along, so that

0:41:34.380,0:41:38.890
if there is a deficiency of effective demand,
find some way to stimulate it by cutting interest-

0:41:38.890,0:41:44.609
rates and all the rest of it.

0:41:44.609,0:41:46.279
Here too,

0:41:46.279,0:41:48.879
we have implicit in the system

0:41:48.879,0:41:53.559
a whole set of questions which have to be
resolved, which are partially addressed

0:41:53.559,0:42:01.239
in Volume Two of Capital and to some degree in Volume Three.

0:42:01.239,0:42:09.640
It's interesting when you go and explore the marxist literature,

0:42:09.640,0:42:18.239
you'll find tremendous controversies over these three major,

0:42:18.239,0:42:23.579
let's add in a fourth, major form of crisis formation.

0:42:26.939,0:42:28.639
There are people who

0:42:28.639,0:42:35.129
gladly and happily call themselves profit-squeeze theorists,

0:42:35.129,0:42:42.429
and everybody else sneeringly refers to them as profit squeeze theorists.

0:42:42.429,0:42:45.400
Then there are the falling rate of profit folk,

0:42:45.400,0:42:47.319
and there are varieties of that,

0:42:47.319,0:42:51.239
for reasons which i think I've hinted at,

0:42:51.239,0:42:55.130
there are the falling rate of profit folk

0:42:55.130,0:42:59.989
and considerable argument amongst them, but then also

0:42:59.989,0:43:07.549
they're often referred to sneeringly by the others as the falling rate of profit folk.

0:43:07.549,0:43:11.099
And the same thing happens with the under-consumptionists,

0:43:11.099,0:43:15.379
people will write a review of what you're writing and because I quoted

0:43:15.379,0:43:22.379
Rosa Luxemburg favorably, I'm immediately dubbed an under-consumptionist.

0:43:22.609,0:43:30.289
And of course this meant that i don't understand my Marxian economics at all,

0:43:30.289,0:43:34.839
because nobody in their right minds
who has read Marx properly would ever dream

0:43:34.839,0:43:37.939
of being an under-consumptionist.

0:43:37.939,0:43:40.640
Now, my argument here is this:

0:43:40.640,0:43:48.109
that, actually, you have to envision
all of these moments in the circulation process

0:43:48.109,0:43:51.519
as potential blockage points,

0:43:51.519,0:44:00.169
blockage points which capitalist politics have to remove

0:44:00.169,0:44:04.929
and have to find ways through,
bypassed or work

0:44:04.929,0:44:09.089
and that therefore there is a perpetual battle in capitalist society

0:44:09.089,0:44:12.839
over all of these elements.

0:44:12.839,0:44:18.269
And at any one moment not want and one of them can
be the core problem but that doesn't

0:44:18.269,0:44:22.519
mean the others are not in play

0:44:22.519,0:44:24.819
in fact

0:44:24.819,0:44:28.419
You can see very much, when you're talking
about the profit squeeze in the relationship

0:44:28.419,0:44:33.390
of the demand for labour-power to the technological choices,

0:44:33.390,0:44:40.249
that in fact the technological destabilizer can have an effect

0:44:40.249,0:44:47.249
very strongly on labour-power, as it does
also on these other forms of contradiction.

0:44:48.859,0:44:52.650
So what has always been so interesting to me is to

0:44:52.650,0:44:55.539
go through Marx's works

0:44:55.539,0:45:01.849
and then see what he has to say about these different blockage points

0:45:01.849,0:45:02.929
and

0:45:02.929,0:45:09.170
how he thinks that capitalism and capitalists

0:45:09.170,0:45:14.189
can successfully negotiate past them and through them.

0:45:14.189,0:45:16.729
If they can't,

0:45:16.729,0:45:22.039
then what you get is a stagnation in this whole flow.

0:45:22.039,0:45:26.670
It can get blocked here, and if it is totally blocked here

0:45:26.670,0:45:30.059
then that's it.

0:45:30.059,0:45:32.349
Capital is in deep trouble.

0:45:32.349,0:45:38.369
If it is totally blocked because of the relation to nature, capital is in deep trouble.

0:45:38.369,0:45:42.279
If it is totally blocked because the technological dynamism
has become so

0:45:42.279,0:45:48.640
crazy that nobody feels comfortable investing in anything anymore;

0:45:48.640,0:45:54.380
I mean, why would you invest in new machinery
this year if you knew that in six months it's gonna be outdated?

0:45:54.380,0:45:58.379
so the whole thing grinds to a halt for that kind of reason,

0:45:58.379,0:46:07.339
or because there is not enough consumer demand at the end of the story.

0:46:07.339,0:46:14.289
So, any one of these blockage points can stop the flow

0:46:14.289,0:46:19.309
and since capital is defined as a flow of value, if you stop the flow

0:46:19.309,0:46:22.539
you've stopped capital.

0:46:22.539,0:46:27.919
And capital gets lost,

0:46:27.919,0:46:32.880
the result coming out of this

0:46:32.880,0:46:39.880
is a crisis of devaluation,

0:46:45.939,0:46:49.880
which is mainly signaled by the fact that there is surplus capital

0:46:49.880,0:46:57.479
which is blocked and can find no place to go,

0:46:57.479,0:47:04.069
and the blockage has to be relieved

0:47:04.069,0:47:10.369
if you are not going to fall into a major crisis in the system.

0:47:10.369,0:47:20.369
In effect, capitalism will cease to work at all.

0:47:20.369,0:47:24.809
Part, it seems to me, of the whole history of

0:47:24.809,0:47:30.009
bourgeois politics from the 18th century onwards is an intuitive

0:47:30.009,0:47:34.180
recognition of the importance of all of these potential blockages,

0:47:34.180,0:47:45.589
and the mobilization of intellectual power, think-tank power, state power

0:47:45.589,0:47:49.339
and corporate and capitalist power more generally,

0:47:49.339,0:47:58.309
to make absolutely sure that these blockages don't occur,

0:47:58.309,0:48:02.599
and that sometimes takes a lot of planning, a lot of hard work.

0:48:02.599,0:48:07.849
And it sometimes does indeed take a good deal of violence,

0:48:07.849,0:48:10.799
so that for example, when

0:48:10.799,0:48:15.169
Margaret Thatcher decided to crush the miners union
and to crush the labour movement

0:48:15.169,0:48:20.199
in Britain in the 1980s

0:48:20.199,0:48:25.619
a good deal of police violence was involved against the strikers

0:48:25.619,0:48:30.969
and again, you have seen that in American history

0:48:30.969,0:48:40.549
and you see it again and again in the histories of many developing countries.

0:48:40.549,0:48:47.779
To be a trade union movement leader in Columbia,

0:48:47.779,0:48:50.889
some country like that is

0:48:50.889,0:48:57.829
probably to shorten your life expectation by something like 20 years.

0:48:57.829,0:49:00.720
So the violence that's involved in many of these points

0:49:00.720,0:49:06.649
also becomes a very critical moment.

0:49:06.649,0:49:11.490
And to the degree that the state is the source of that violence

0:49:11.490,0:49:16.559
or simply tolerates that violence,

0:49:16.559,0:49:20.109
then we have a political system which is dedicated

0:49:20.109,0:49:27.379
to making sure that these blockages do not occur
and we do not get

0:49:27.379,0:49:32.509
a massive devaluation of capital

0:49:32.509,0:49:39.509
as value simply gets lost because it's no longer in motion.

0:49:39.509,0:49:44.200
because capital which is not moving is dead capital,

0:49:44.200,0:49:47.910
and eventually not capital at all.

0:49:47.910,0:50:00.939
And it is the motion, the perpetual motion which is critical.

0:50:00.939,0:50:07.679
I like this formulation, because it allows me to think of all sorts of things

0:50:07.679,0:50:12.729
and ask all sorts of questions like:

0:50:12.729,0:50:18.599
where does the consumer demand come from?

0:50:18.599,0:50:22.759
what is the role of consumer debt?

0:50:22.759,0:50:31.769
what is the role of the invention credit cards, ATMs etc.?

0:50:32.279,0:50:42.749
The role of the state in actually providing

0:50:42.749,0:50:49.459
the backup of purchasing power?
What is the role of, for instance, the military-industrial complex?

0:50:49.459,0:50:53.109
What is the real role of a politics of fear?

0:50:53.109,0:51:03.219
which has us investing in all kinds of security apparatuses and the like,

0:51:03.219,0:51:09.299
military apparatuses police apparatuses. What's the role of all of that

0:51:09.299,0:51:14.769
in, as it were, promoting all of this?

0:51:14.769,0:51:19.519
In my work for example,

0:51:19.519,0:51:23.159
just recently I've been looking a lot at the whole problem: where does this

0:51:23.159,0:51:32.819
capital surplus go? We're perpetually producing it, where does it go?

0:51:32.819,0:51:35.979
What gets absorbed?

0:51:35.979,0:51:40.669
how is it absorbed, and by what?

0:51:40.669,0:51:51.479
i find it fascinating when you start to look at the history of urbanization
over the last 150 years,

0:51:51.479,0:51:57.569
much of it is simply about surplus absorption through urbanization

0:51:57.569,0:52:01.400
and the transformations of lifestyle that have occurred;

0:52:01.400,0:52:07.499
And I can go into that in much greater detail later if you want,

0:52:07.499,0:52:10.519
but clearly to me

0:52:10.519,0:52:16.349
what happened in this country after World War 2 through suburbanization

0:52:16.349,0:52:22.299
was very much about what a wonderful way to absorb the surplus

0:52:22.299,0:52:26.049
that wonderful way to absorb the surplus

0:52:26.049,0:52:32.160
meant all kinds of things like changes of lifestyle,
changes of world view, changes in all those

0:52:32.160,0:52:35.039
mental conceptions and social relations and

0:52:35.039,0:52:38.569
production apparatuses that we talked about earlier on.

0:52:38.569,0:52:41.969
All of those things start to change

0:52:41.969,0:52:48.289
as the surplus gets diverted into urbanization.

0:52:48.289,0:52:54.099
And it's very easy in these times to look at this rhetoric about

0:52:54.099,0:52:57.699
planets of slums and all the rest of it,

0:52:57.699,0:53:01.709
and not recognize that that is paralleled, actually,

0:53:01.709,0:53:07.249
by an immense construction building boom that's
going on and has been going on for the last 5 to

0:53:07.249,0:53:12.519
10 years right across the world.

0:53:12.519,0:53:24.640
China, Mumbai, Santiago, Sao Paulo, New-York, San-Diego.

0:53:24.640,0:53:32.549
Imagine where the surplus would have gone
if you hadn't had this radical transformation

0:53:32.549,0:53:35.329
of urban structures.

0:53:35.329,0:53:40.729
And that has been going on for a good 150-200 years.

0:53:40.729,0:53:46.119
So that you can't even talk about a question
like urbanization without connecting it to

0:53:46.119,0:53:51.669
the simple question of where does this surplus go to.

0:53:51.669,0:54:00.419
And if it can not go in to urbanization then where on earth can it go?

0:54:01.789,0:54:08.049
Some of it has been indeed going into the military-industrial complex,

0:54:08.049,0:54:10.279
but where does it go?

0:54:10.279,0:54:14.419
Those are the problems.

0:54:14.419,0:54:15.519
So these are the issues then,

0:54:15.519,0:54:18.599
that come out of this very simple,

0:54:18.599,0:54:21.360
simplistic story as it were of what capitalists do,

0:54:21.360,0:54:24.910
and what they're about.

0:54:24.910,0:54:29.849
And doing this you start to see all sorts
of connectivity is like. It is very interesting

0:54:29.849,0:54:34.099
to see when you look at the status of the credit system.

0:54:34.099,0:54:37.400
The credit system plays a very important role

0:54:37.400,0:54:41.849
in the assembly of the money, in the first instance,

0:54:41.849,0:54:46.869
you can even borrow non-existent assets

0:54:46.869,0:54:52.069
and start production that way using the credit system.

0:54:52.069,0:54:57.549
The credit system also plays a very important role in consumer demand

0:54:57.549,0:55:02.219
what a wonderful system! It's like when Marx talks about

0:55:02.219,0:55:06.849
capital works on both sides: both the supply of labour and the demand for labour.

0:55:06.849,0:55:11.759
it also works through the credit system on both sides, the supply of capital

0:55:11.759,0:55:15.720
at the beginning of the process, the supply of
money at the beginning of the process

0:55:15.720,0:55:20.170
and supply of money at the end of the process.

0:55:20.170,0:55:26.829
And a lot of what fiscal and monetary management is about, is precisely,

0:55:26.829,0:55:28.639
it seems to me,

0:55:28.639,0:55:33.630
calculating how the credit system could monitor both ends.

0:55:33.630,0:55:39.029
As we're seeing with the sub-prime mortgage crisis, it does it sometimes

0:55:39.029,0:55:40.749
to the point where

0:55:40.749,0:55:46.289
in order to prop up the demand it does all sorts of crazy things at this end

0:55:46.289,0:55:49.559
and then somebody says what the hell's going on?

0:55:49.559,0:55:51.999
Out it all pops that there is nothing there,

0:55:51.999,0:55:56.689
and we then get a retrenchment at the other end.
So the current system

0:55:56.689,0:56:00.639
has a very interesting role to play a very complicated role to play

0:56:00.639,0:56:04.769
when we start to look at these relations.

0:56:04.769,0:56:10.789
so you can use the argument in Volume One of
Capital to start to project forward

0:56:10.789,0:56:14.239
to where Marx is likely to go,

0:56:14.239,0:56:17.089
and indeed he does follow up some of these issues

0:56:17.089,0:56:20.549
very coherently in Volumes 2 and 3,

0:56:20.549,0:56:24.149
but it also helps us understand a little bit

0:56:24.149,0:56:28.169
about, where were the places he didn't go, where we ought to go.

0:56:28.169,0:56:30.519
For instance i think it is correct to say

0:56:30.519,0:56:36.359
that Marx did not pay enough attention to nature in detail.

0:56:36.359,0:56:41.579
He makes these comments, periodically about

0:56:41.579,0:56:45.380
'capital destroyed the land'

0:56:45.380,0:56:51.389
but we don't get any detailed analysis of exactly how crises of that sort unfold.

0:56:51.389,0:56:58.859
We don't always get good analyses of the consumerist side of things either.

0:56:58.859,0:57:06.439
And we don't have the kind of analysis of finance capital and the credit system

0:57:06.439,0:57:08.879
that we really would need to have in order

0:57:08.879,0:57:15.059
to be able to talk about how the system gets stabilized through state action,

0:57:15.059,0:57:21.719
and fiscal action and financial activities, at the same time as

0:57:21.719,0:57:26.119
you also create another kind of crisis, which he has hinted at

0:57:26.119,0:57:29.839
in Volume One of Capital, which says

0:57:29.839,0:57:35.959
you'll get a financial crisis out of this system,

0:57:35.959,0:57:39.919
and he postulates that possibility. So there is, if you like,

0:57:39.919,0:57:44.309
residing out here a sort of overarching role of the credit system

0:57:44.309,0:57:48.809
and the possibility of independent monetary, financial, fiscal,

0:57:48.809,0:57:53.349
and state finance crises on the outside.

0:57:53.349,0:57:59.009
We should really put this into the mix as well, but

0:57:59.009,0:58:01.509
it's hard to do that very directly

0:58:01.509,0:58:05.949
coming of the analysis in Volume One of Capital.

0:58:05.949,0:58:09.199
I suggested you take a look at

0:58:09.199,0:58:11.039
Chapter One again,

0:58:11.039,0:58:13.329
and maybe think about it a bit,

0:58:13.329,0:58:17.679
if you have any comments

0:58:17.679,0:58:25.449
about how you're seeing it this time, or you want to ask any questions about this,
then fire away.

0:58:25.449,0:58:29.779
It's up to you what we talk about.

0:58:29.779,0:58:32.409
» STUDENT: Thinking about the state,
thinking about a transitation

0:58:32.409,0:58:38.139
from a capitalist sytem to an alternative system,
defining yourself to the state,

0:58:40.409,0:58:43.410
I wonder what Marx would think, in terms of

0:58:43.410,0:58:47.609
whether the state could be seen as an ally in transitioning
to a different system,

0:58:47.609,0:58:49.079
is it more of an obstacle?

0:58:49.079,0:58:50.699
and also when you think of

0:58:50.699,0:58:55.899
other models, lets say the Zapatisa model,
where they don't seek to take over the state,

0:58:55.899,0:58:59.990
but just to create their own basic power,
they're controlling their own territory,

0:58:59.990,0:59:06.260
and they're obviously creating their own alternative form of system,

0:59:06.269,0:59:10.499
So, a lot of these things are dancing around in my head as far as

0:59:10.499,0:59:18.129
how Marx would view the state and transitioning to a different system,

0:59:18.129,0:59:26.039
» HARVEY: Well, in order to answer that question,
you'd have to ask a little bit

0:59:26.039,0:59:29.510
about what the role of the state is

0:59:29.510,0:59:33.459
within a capitalist system anyway.

0:59:33.459,0:59:38.159
Now if you start to go through Capital, you see

0:59:38.159,0:59:43.179
immediately the state has an important role to play,

0:59:43.179,0:59:49.419
first is the guarantor of private property relations
and the market institutions,

0:59:49.419,0:59:54.039
secondly, it has a very important role to play
in terms of the monetary system and how the monetary

0:59:54.039,0:59:59.429
system is set up, and how symbols of money are constructed etc.

0:59:59.429,1:00:09.759
Thirdly, it has a very important role as a central institution

1:00:09.759,1:00:14.849
through which the dynamics of class struggle between capital
and labour are worked out,

1:00:14.849,1:00:17.759
as in the working day.

1:00:19.279,1:00:23.679
Fourthly it has an important role, for example,

1:00:23.679,1:00:27.439
in the chapter on machinery and industry,

1:00:27.439,1:00:30.609
in terms of the regulatory apparatus

1:00:30.609,1:00:31.630
which exists

1:00:31.630,1:00:35.929
and finally it has a very important role in terms of

1:00:35.929,1:00:41.119
managing labour supply etc. In other words, the state has all of these

1:00:41.119,1:00:45.879
roles which it's going to play,
and the state system is set up around questions of

1:00:45.879,1:00:47.189
education and so on.

1:00:47.189,1:00:56.479
So those activities are very crucial to the way in which capitalism works.

1:00:56.479,1:00:59.219
Now, the question you have to ask is:

1:00:59.219,1:01:00.640
could we envisage therefore

1:01:00.640,1:01:03.829
a society in which there was

1:01:03.829,1:01:07.999
no state in control of the monetary system?

1:01:07.999,1:01:14.859
or no state guarantee, for instance, rights of any sort?

1:01:14.859,1:01:25.559
And here i think you get into a very curious situation, because

1:01:25.559,1:01:33.640
while it's clear that Marx takes the view that
we're dealing with a capitalist state,

1:01:33.640,1:01:39.390
he's also, i think, recognizing that you need some sort of

1:01:39.390,1:01:42.450
organized political power to do anything.

1:01:42.450,1:01:50.910
And in a way, to say that the Zapitistas are not organising
some form of state power,

1:01:50.910,1:01:57.829
I think from Marx his standpoint, you'd say this is a falsehood.

1:01:57.829,1:02:01.159
It's different from the mexican state,

1:02:01.159,1:02:06.289
but they have communes and they have educational structures etc.

1:02:06.289,1:02:11.549
and they have a disciplinary apparatus and all the rest of it.

1:02:11.549,1:02:17.629
They're not sitting there saying we have no organization at all.

1:02:17.629,1:02:22.909
In fact, the reason they've managed to survive for
so long is precisely because they've

1:02:22.909,1:02:28.309
had a form of organization, even a military form of
organization. In other words ,

1:02:28.309,1:02:32.689
you could make the argument that what the zapatistas
have constructed is an alternative kind of state

1:02:32.689,1:02:33.979
apparatus,

1:02:33.979,1:02:37.459
and here you you go back into the history of the state

1:02:37.459,1:02:41.699
within capitalism and it's never been fixed entity,

1:02:41.699,1:02:43.649
Think of what the state did

1:02:43.649,1:02:47.199
a hundred years ago and what the state is up to now,

1:02:47.199,1:02:51.909
it's a very different kind of beast, if you want to call it that.

1:02:51.909,1:03:02.989
So i think that from Marx's standpoint,
you'd have to look at what what kinds of

1:03:02.989,1:03:07.929
apparatuses for coordination,
for regulations and so on,

1:03:07.929,1:03:12.609
and even for surveillance, I mean, the idea that
you could have a state which had none of that

1:03:12.609,1:03:16.309
or you could live in a society where none of that existed,

1:03:16.309,1:03:26.979
and be talking about cities which have 20 million people,

1:03:26.979,1:03:32.259
i think you'd say there's no way in which

1:03:32.259,1:03:36.749
you can use the politics of a small rural
commune of hundred people, and say that

1:03:36.749,1:03:41.409
somehow or other that that apparatus can somehow ever work for

1:03:41.409,1:03:45.259
Sao Paulo or Shanghai or wherever.

1:03:45.259,1:03:50.519
I think that the issue here would be:

1:03:50.519,1:03:57.079
to what degree is the state totally captive to bourgeois interests?

1:03:57.079,1:04:01.190
And i think historically that has not always been the case.

1:04:01.190,1:04:03.889
For example,

1:04:03.889,1:04:06.779
one of the ways in which you can

1:04:06.779,1:04:11.349
relieve capitalists of all of their anxieties
about what to do with their surplus tomorrow

1:04:11.349,1:04:14.339
is in fact to tax it away,

1:04:14.339,1:04:18.399
and this is in effect what a lot of social
democratic governments were doing,

1:04:18.399,1:04:21.069
they were taxing it away,

1:04:21.069,1:04:24.249
and i think that the production of a surplus,

1:04:24.249,1:04:28.059
to some degree, is not a bad idea. The big question is:

1:04:28.059,1:04:31.499
who controls the surplus?

1:04:31.499,1:04:34.640
and i think that the big wave of

1:04:34.640,1:04:38.809
neo-liberalizations since the 1970s has really been as much about

1:04:38.809,1:04:41.959
the privatization of the surplus,

1:04:41.959,1:04:46.989
as it has been about the privatization of anything else.
That is, stop the state from taking away

1:04:49.259,1:04:52.539
a big chunk of that surplus

1:04:52.539,1:04:57.119
and keep it circulating around is such a way that

1:04:57.119,1:05:01.959
individual capitalists are in control of the surplus,
or collectively in control of the surplus

1:05:01.959,1:05:04.959
rather than the state apparatus.

1:05:04.959,1:05:06.929
And that control

1:05:06.929,1:05:09.829
can then be used to exercise increasing power

1:05:09.829,1:05:14.229
over the state apparatus.
I understand politically

1:05:14.229,1:05:18.689
right now, many people would regard social democracy of the 1960s as a

1:05:18.689,1:05:21.799
betrayal of revolutionary possibilities,

1:05:21.799,1:05:26.219
and to some degree it was conservative and conserving and it was.

1:05:26.219,1:05:31.289
But, at the same time, when you say therefore
i don't want anything to do with the state,

1:05:31.289,1:05:34.269
what do you think the right-wing says to that?

1:05:34.269,1:05:36.660
What a great idea…

1:05:36.660,1:05:38.359
what a great idea!

1:05:38.359,1:05:39.589
And in fact

1:05:39.589,1:05:43.849
a big chunk of the liberalism has taken up

1:05:43.849,1:05:47.989
libertarian rhetoric which was left and

1:05:47.989,1:05:50.179
taken it to the right and used it

1:05:50.179,1:05:53.739
on the right. And we see exactly what that is producing

1:05:53.739,1:05:57.749
so the question of the state is a very big one,

1:05:57.749,1:06:03.119
a lot of argument obviously going on about it right now.
but i think would

1:06:03.119,1:06:10.309
Marx his view of it would be that some sort of organization is necessary;

1:06:10.309,1:06:14.989
something like a state would have to be constructed,

1:06:14.989,1:06:18.719
and interestingly when you go to look at it

1:06:18.719,1:06:25.269
say anarchist proposals about municipal

1:06:25.269,1:06:29.949
governance and municipal assemblies
and all the rest of it, you still got a whole

1:06:29.949,1:06:35.319
set of questions, of exclusion, inclusion

1:06:35.319,1:06:39.279
and many of the problems which you see in
the state just simply get replicated again.

1:06:39.279,1:06:44.839
So i think it's a false dichotomy to say
that somehow or other you can do without

1:06:44.839,1:06:48.909
something like the state. Now, the question
is who controls the state, what is the state apparatus

1:06:48.909,1:06:52.609
really about, in what ways do we need to

1:06:52.609,1:06:56.639
smash some arms of the state, like its militaristic

1:06:56.639,1:07:00.599
and police arm, and do something different with it.

1:07:00.599,1:07:04.489
So the state can be very radically transformed
and i think that,

1:07:04.489,1:07:07.520
the point where it would wither away as many

1:07:07.520,1:07:10.049
people argued and Marx

1:07:10.049,1:07:15.719
argued also, I think he really was talking about
the withering away of bourgeois control

1:07:15.719,1:07:17.899
over the state apparatus,

1:07:17.899,1:07:20.899
which is not to say that

1:07:20.899,1:07:26.229
working-class control of the state apparatus is necessarily

1:07:26.229,1:07:31.450
going to be the end of the story either.
There's has to be as it were complete

1:07:31.450,1:07:37.459
popular control of the state apparatus in some
some way or other. In a classless society you would

1:07:37.459,1:07:39.019
need a different kind

1:07:39.019,1:07:45.329
of state apparatus to that which we have today.
Of course in a society

1:07:45.329,1:07:49.979
in which the role of private property rights
is is incredibly diminished

1:07:49.979,1:07:52.489
then indeed the role of the state would not

1:07:52.489,1:07:57.799
be what it is now, because the role of the state right now is to
protect those property rights

1:07:57.799,1:08:01.439
and if they're no longer terribly relevant then obviously

1:08:01.439,1:08:07.139
state apparatus will be radically transformed along with that.

1:08:07.139,1:08:14.139
» STUDENT: In the final section there was the added chapter,
and the introduction was pretty good at explaining it,

1:08:15.129,1:08:17.869
but I wondered if you had anything to say about the material in there

1:08:17.869,1:08:23.669
in connection to this, or in connection to the existing volumes 1 through 3,
in any way.

1:08:23.669,1:08:30.669
» HARVEY: It's an elabouration, a very interesting elabouration,
so yeah, i think,

1:08:31.979,1:08:35.839
if you want to follow up, it's a pretty interesting read,

1:08:35.839,1:08:40.670
there are some elabourations, some reformulations.

1:08:40.670,1:08:44.489
Typical Marx, he formulates something and

1:08:44.489,1:08:48.940
then reformulates, so there are some reformulations in there.

1:08:48.940,1:08:55.179
Its very well worth-while reading, you get some extra insights
from that in relationship to

1:08:55.179,1:08:59.029
Capital. This is in fact a problem with Volumes 2 and 3,

1:08:59.029,1:09:02.169
and the theories of surplus-value,

1:09:02.169,1:09:05.989
that they're explorations,

1:09:05.989,1:09:11.009
and since they're explorations, you find considerable differentiation
in the way the formulations get

1:09:11.009,1:09:12.699
set up.

1:09:12.699,1:09:16.029
So, you're dealing with an incomplete

1:09:16.029,1:09:22.119
work. In other words, you have to mine it for its insights,

1:09:22.119,1:09:25.520
look within it for some sort of coherent statement of the argument.

1:09:25.520,1:09:29.989
Volume One of Capital is the place where you get

1:09:29.989,1:09:34.159
the lenghtiest, most coherent argument,

1:09:34.159,1:09:43.089
because Volumes 2 and 3 are colated bits and pieces, some of which are

1:09:43.089,1:09:47.739
reasonably coherent in their own right but
you're not quite sure what their relationship is with others.

1:09:47.739,1:09:51.649
And so it becomes more of a jigsaw puzzle

1:09:51.649,1:09:56.769
to figure out what Marx was actually doing
and what we should do with what he did

1:09:56.769,1:09:59.459
in order to synthesize it.

1:09:59.459,1:10:06.459
Okay, it's 8:30, so thank you very much for everything.
It was a lot of fun!

1:10:17.719,1:10:22.360
» NEIL SMITH: Well, we've gone through 13 lectures on Capital,

1:10:22.360,1:10:28.119
and we've gone through it in a fairly direct, textual way,
but maybe now as we conlude,

1:10:28.119,1:10:31.479
there's a possibility to

1:10:31.479,1:10:37.340
broaden the questions out further.
Are there concluding issues that you'd like to raise, that maybe

1:10:37.340,1:10:40.840
aren't as tied to Capital as a text, but are broader questions
that you think are pressing and important to look at,

1:10:40.840,1:10:43.299
broader questions that you think of,

1:10:43.299,1:10:47.519
as a result of having gone through Capital?

1:10:47.519,1:10:52.960
» HARVEY: There are two areas I would look at,

1:10:52.960,1:10:56.929
one is the work that needs to be done

1:10:56.929,1:11:03.679
to both update his findings

1:11:03.679,1:11:10.099
and to extend those findings into other terrains,
like Neil has worked a great deal on

1:11:10.099,1:11:16.820
issues of nature and urbanisation, and i've worked a great
deal on questions of urbanization,

1:11:16.820,1:11:18.710
and we've both of us

1:11:18.710,1:11:23.659
been very interested in questions of uneven geographical development,
which i think is also

1:11:23.659,1:11:25.010
a very crucial

1:11:25.010,1:11:29.889
arena. So there's an intellectual project
that flows out of this, which is to

1:11:29.889,1:11:33.919
try to take Marx's method,

1:11:33.919,1:11:39.389
take his findings and project it onto
different terrains and as we project it onto

1:11:39.389,1:11:41.480
different terrains,

1:11:41.480,1:11:47.069
do what Marx himself would do, which is to sometimes
take yourself back to the beginning, and re-conceptualize

1:11:47.069,1:11:51.599
some of the basic apparatuses that you started with.
So there's an intellectual project here,

1:11:51.599,1:11:58.129
which is actually very exciting to work on,

1:11:58.129,1:12:03.019
and it's very revealing. I think I,

1:12:03.019,1:12:08.550
for example, have a much better grasp of how urban processes work
and what goes on in cities

1:12:08.550,1:12:15.630
now, through doing this kind of work for over 15, 20 years.

1:12:15.630,1:12:19.799
But then there's another project, which is the political project,

1:12:19.799,1:12:21.320
which is that

1:12:21.320,1:12:27.920
we can't wait to engage in political action
until we've worked all of the bits and theory

1:12:27.920,1:12:30.239
that Marx wouldn't properly cover.

1:12:30.239,1:12:38.630
I mean, we are faced with urgent business, right now,

1:12:38.630,1:12:44.179
and I think what Marx does is to hold up sufficient of a mirror

1:12:44.179,1:12:52.300
to us that we can immediately start to think
about different modes of action.

1:12:52.300,1:12:57.369
And U think that this is where

1:12:57.369,1:13:02.499
that obvious term which comes out of Marx's analysis,
which is the notion of class struggle,

1:13:02.499,1:13:05.590
comes back into play.

1:13:05.590,1:13:10.130
Politically, one of the problems we've had I think over the last thirty years

1:13:10.130,1:13:14.879
is that people have started to say that class doesn't exist or

1:13:14.879,1:13:17.949
class struggle is irrelevant.

1:13:19.099,1:13:21.080
On that point, I think what Marx does

1:13:21.080,1:13:25.600
is to tell you politically, that you're not going to get anywhere in

1:13:25.600,1:13:32.189
dealing with this system unless you're prepared
to engage in some kind of class struggle.

1:13:32.189,1:13:36.400
What we need to do is to is to consolidate what that might mean.

1:13:36.400,1:13:39.480
and i think Marx himself at the time,

1:13:39.480,1:13:45.489
from his own writings, wasn't very clear as to what this meant.

1:13:45.489,1:13:50.760
But when political action unfolds then there's,
i think this is what you get from

1:13:50.760,1:13:53.869
him, there is a necessity to participate,

1:13:53.869,1:13:56.540
a necessity to be engaged,

1:13:56.540,1:13:58.199
even if you don't know

1:13:58.199,1:14:02.820
all of the theory and even if you don't know everything.
You know sufficiently about the dynamics of

1:14:02.820,1:14:04.050
the system.

1:14:04.050,1:14:06.840
As you know, exactly that

1:14:06.840,1:14:10.849
this question of class struggle is fundamental.

1:14:10.849,1:14:13.749
Now, people will immediately say,

1:14:13.749,1:14:16.889
well you're trying to reduce the question
of nature to class struggle, you're trying

1:14:16.889,1:14:22.480
to reduce questions of sexuality and gender and race etc.

1:14:22.480,1:14:27.959
to the questions of class! And I think the answer to
that is: No, that's not going on at all,

1:14:27.959,1:14:32.399
there are struggles of that sort which are very critical and very important

1:14:32.399,1:14:35.189
to engage in also.

1:14:35.189,1:14:42.089
But look at something like the sub-prime mortgage
crisis and look who it's impacting upon most, it's

1:14:42.089,1:14:43.999
heavily concentrated

1:14:43.999,1:14:49.630
amongst african-americans, it's heavily
concentrated on low-income women,

1:14:49.630,1:14:52.000
and it's a class phenomena,

1:14:52.000,1:14:56.790
and it's amazing when you start to think of it,
the number of places and times in which those

1:14:56.790,1:15:02.719
categories completely overlap, including also with ethnicity etc.

1:15:02.719,1:15:07.349
So what we have to do is not be frightened of the word 'class'.

1:15:07.349,1:15:10.050
I think there's a nervousness about class,

1:15:10.050,1:15:15.579
of course, there's a very good reason why there's nervousness
about class, because ideologically the capitalist

1:15:15.579,1:15:18.619
class, which is very easy to define right now,

1:15:18.619,1:15:21.539
doesn't want us to think about class,

1:15:21.539,1:15:24.539
and I don't know if you've noticed, but as
soon as you raise any big issue

1:15:24.539,1:15:28.770
or somebody raises some big issue,
the Wall Street Journal jumps up and down and says:

1:15:28.770,1:15:33.659
ah! you want to talk about the divisiveness of class struggle!

1:15:33.659,1:15:38.599
As if to say, we shouldn't be doing that.

1:15:38.599,1:15:42.260
But this is seen as a divisive thing. Therefore,

1:15:42.260,1:15:47.110
the one thing the bourgeoisie, and again this
is something that Marx teaches you ideologically,

1:15:47.110,1:15:50.540
the one thing the bourgeoisie does not want
you to talk about is the one

1:15:50.540,1:15:54.900
thing that it is crucially engaged upon.

1:15:54.900,1:15:59.959
First off, it's very hard to find out where the money is,

1:15:59.959,1:16:04.249
we have date on everything else, they have data on us,
they have chips on us and

1:16:04.249,1:16:06.299
where we're going, all this kind of stuff,

1:16:06.299,1:16:08.999
Can we find out where their money is?

1:16:08.999,1:16:12.760
They always say 'no, no, no, we can't find out',
but what the anti-terrorism stuff started to

1:16:12.760,1:16:17.310
show was that they could find out where the money was,
if they really wanted to. They don't want to know.

1:16:17.310,1:16:22.010
That is the one thing you hide, you hide where
the money's coming from and where it's going to,

1:16:22.010,1:16:28.390
you hide also a great deal about capitalist powers,
which is a class-power and how that class-power works.

1:16:28.390,1:16:33.440
Because that would mean that somebody would oppose the class-power,
the one thing

1:16:33.440,1:16:36.709
thy're terrified pf is class-power.

1:16:36.709,1:16:41.389
They're very delighted at things like identity politics,
now i'm not saying identity politics

1:16:41.389,1:16:47.179
is all wrong, okay. I'm saying they are delighted
by multiculturalism, they're delighted by identity

1:16:47.179,1:16:52.139
politics, the one kind of multi-culturalism
they don't want to hear about is class.

1:16:52.139,1:16:56.059
The one thing they don't want to hear about at all.
So what Marx teaches you is you've got to go to

1:16:56.059,1:16:58.199
this, you've got to be there.

1:16:58.199,1:17:03.219
And how we do it is a big question, and one
of things i've tried to raise is:

1:17:03.219,1:17:08.480
There's struggles going on around primitive accumulation
and accumulation by dispossession.

1:17:08.480,1:17:13.039
Those have to be integrated with traditional class struggles in the workplace

1:17:13.039,1:17:15.539
and that's not always easy to do,

1:17:15.539,1:17:19.669
and actually right now there's a lot of struggles going on against dispossession

1:17:19.669,1:17:20.979
and sometimes

1:17:20.979,1:17:24.729
the traditional working-class movement doesn't want to know about that;
sometimes they don't want to know about

1:17:24.729,1:17:27.820
the traditional working-class movement either.

1:17:27.820,1:17:30.039
So the divisiveness

1:17:30.039,1:17:33.239
around this question is something that seriously hurts us politically,

1:17:33.239,1:17:36.229
I think this comes out of Marx very strongly,

1:17:36.229,1:17:40.159
that you've got to confront what the centerpiece of the problem is,

1:17:40.159,1:17:45.380
the centerpiece of the problem is that they are
accumulating capital off your back,

1:17:45.380,1:17:50.179
they're either doing it through dispossession or they're
doing it by absorbing your labour

1:17:50.179,1:17:51.660
and the like. So,

1:17:51.660,1:17:54.639
whatever they're doing, they're getting filthy rich

1:17:54.639,1:17:57.310
while you are the ones who are gonna suffer,

1:17:57.310,1:17:59.239
and that cannot continue.

1:17:59.239,1:18:04.030
And Marx is basically saying, by holding up these mirrors, is get with it.

1:18:04.030,1:18:06.099
Hic Rhodus, hic saltal,

1:18:06.099,1:18:08.019
here's the ball now run with it!

1:18:08.019,1:18:09.459
Create the class struggle.

1:18:09.459,1:18:10.779
How to do that,

1:18:10.779,1:18:12.449
big question.

1:18:12.449,1:18:15.319
but you gotta do it, there's a necessity for that.

1:18:15.319,1:18:21.099
And it's a necessity not simply for the working-class,
it's a necessity for humanity,

1:18:21.099,1:18:24.309
insofar as we have a decent civilized life at all

1:18:24.309,1:18:27.809
right now, has everything to do with the dynamics of class-struggle,

1:18:27.809,1:18:30.780
over the last hundred years or more.

1:18:30.780,1:18:33.929
And the fact that we're not waging it so effectively right now

1:18:33.929,1:18:37.039
is a real problem, we've gotta get out there and do it, and do it right.

1:18:46.000,1:18:52.739
davidharvey.org for David Harvey's lectures on Volume 2 of Capital

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