Seventeen Contradictions and the End of Capitalism (7 page)

The focus would then have to be on what really matters, which is the continuous creation of use values through social labour and the eradication of exchange value as the principal means by which the production of use values is organised. Marx, for one, believed that reforms within the monetary system would not in themselves guarantee the dissolution of the power of capital and that it was illusory to believe that tinkering with monetary forms could be the cutting edge of revolutionary change. He was, I believe, correct in this supposition. But what I think his analysis also makes clear is that the evolution of an alternative to capital would require as a necessary but not sufficient condition a radical reconfiguration of how exchange is organised and the ultimate dissolution of the power of money not only over social life but, as Keynes indicates, over our mental and moral conceptions of the world. Envisaging a moneyless economy is one way to get a measure of what an alternative to capitalism might look like. The possibility of this, given the potentialities of electronic moneys or even substitutes for money, may not be so far off. The rise of new forms of cybercurrency, such as Bitcoin, suggest that capital itself is now on the way to invent new monetary forms. It is opportune and wise, therefore, for the left to frame political ambitions and political thought around this ultimate objective.

An alternative monetary politics of this sort becomes more imperative when we consider a particularly dangerous immediate problem. The contemporary form that money assumes has achieved the status of a double fetish – an abstracted representation (pure
numbers stored on a computer screen) of a concrete representation (like gold and silver) of the immateriality of social labour. When money takes the form of mere numbers, then its potential quantity is limitless. This permits the illusion to flourish that limitless and unending growth of capital in its money form is not only possible but desirable. Against this, even a casual examination of the conditions pertaining to the development of social labour and the augmentation of value shows that compounding growth for ever is impossible. This opposition, as we will see later, lies at the root of one of the three most dangerous contradictions of capital, that of compounding growth.

When money was constrained by being anchored, however weakly, in the material availability and relative scarcity of the physical money commodities, then there was a material restraint upon the infinite creation of money. The abandonment of the metallic base of the world’s money supply in the early 1970s created a whole new world of possible contradictions. Money could be printed ad infinitum by whoever was authorised to do so. The money supply lay in the hands of fallible human institutions such as the central banks. The danger was accelerating inflation. It is no accident that after a brief period of rising inflation towards the end of the 1970s in the United States in particular, the world’s central bankers (led by Paul Volcker at the US Federal Reserve) all converged on the sole policy of containing inflation at all costs, thereby abandoning responsibility for employment and unemployment. When the European Central Bank was formed to deal with the euro, its sole mandate was to control inflation and nothing else. That this played out disastrously when the sovereign debt crises hit several European countries after 2012 testifies to a chronic inability within the institutions that capital sets up to regulate its own excesses, to understand the contradictory logic embedded in the monetary form that capital now necessarily assumes. It is therefore no surprise that the crisis that broke out in 2007–8 was a crisis that took in the first instance a financial form.

Commodities do not take themselves to market. Individual agents – buyers and sellers – come together in the market to trade commodities for money and vice versa. For this to occur, both buyers and sellers must have exclusive rights of disposal and appropriation over the commodities and the moneys that they hold. Exchange value and money jointly presume the existence of individual private property rights over both commodities and money.

To clear the air, let me first make a distinction between individual appropriation and private property. We all of us, as living persons, appropriate things in the course of actively making use of them. I appropriate food when I eat it, I appropriate a bicycle when I ride it, I appropriate this computer while writing this. My use of many of the processes and things available to me precludes anyone else from using them when I am using them. There are, however, some items whose use is not exclusionary. If I watch a TV programme this does not prevent others from so doing. And there are other goods (‘public goods’) that are often held and used in common, though usually with limitations. I use the street, as do many others, but there is a limit to how many people a street can hold and there are certain activities that either by custom or by law are prohibited upon the street (for example, defecation on the streets of New York). For many processes and things, however, an exclusive relationship exists between the user(s) and that which is being used. This is not the same thing as private property.

Private property establishes an exclusive ownership right to a thing or a process whether it is being actively used or not. At the root of commodity exchange there lies the presupposition that I do not myself actively want or need the commodity I offer for trade. Indeed, the very definition of a commodity is something that is produced for someone else to use. Private property rights confer the right to trade away (alienate) that which is owned. A difference then emerges between what are called usufructuary rights (rights that pertain to active use) and exclusionary permanent ownership rights. This difference has often been the source of confusion, particularly throughout the history of colonialism. Indigenous populations frequently operate on the basis of usufructuary rights to land, for example (this is the case with shifting agriculture). Colonial powers typically imposed exclusionary ownership rights and this was the source of a great deal of conflict. Populations that moved around from one site to another, following their herds or moving from exhausted land to fresh and more fertile land, suddenly found themselves barred from moving by the existence of fences and barbed wire. They often found themselves prevented from using land that they had traditionally regarded as open for use because someone now owned it in perpetuity even if it was not used. The indigenous population in North America suffered greatly from this. In contemporary Africa people’s customary and collective resource rights are currently being pell-mell converted to an exclusionary private property rights regime by what many regard as fraudulent agreements between, for example, village chiefs (who have customarily held the land in trust for their people) and foreign interests. This constitutes what is generally referred to as a huge ‘land grab’ by capital and foreign states for control over Africa’s land and resources.

Private property rights presuppose a social bond between that which is owned and a person, defined as a juridical individual, who is the owner and who has the rights of disposition over that which is owned. By a marvellous sleight of juridical reasoning, it has transpired that ownership is vested not only in individuals like you and me but also in corporations and other institutions which, under the
law, are defined as legal persons (even though, as many like to point out, corporations cannot be jailed when they do wrong in the same way that living persons can). The existence of this social bond is recognised in almost all bourgeois constitutions and connects ideals of individual private property with notions of individual human rights, the ‘rights of man’ and doctrines and legal protections of those individual rights. The social bond between individual human rights and private property lies at the centre of almost all contractual theories of government.

Private property rights are in principle held in perpetuity. They do not expire or dissipate through lack of use. They can pass from one generation to another through inheritance. As a result, there is an inner connection between private property rights and non-oxidisable forms of money. Only the latter can last in perpetuity. But the evolution of forms of paper and fiat money whose relative value is subject to degradation (through, for example, inflation) undermines the initially secure connection between the perpetuity and stability of money forms and that of private property. Furthermore, under the doctrine of
res nullius
, most famously embraced by John Locke, only that private property in land which is productive of value (that is, which involves the application of productive social labour for commodity production) is deemed legitimate. Failure to produce value (and surplus value) not only justified the wholesale dispossession of the land rights of the Irish by the British, it also justified the wiping out and dispossession of ‘unproductive’ indigenous populations to make way for the ‘productive’ colonisers particularly throughout the Americas and now across much of Africa. The contemporary version of this doctrine in advanced capitalist societies is that of eminent domain, through which the appropriation of private property in land to bring it into a condition of higher and better usage is legally justified. Private property in both land and money is only, therefore, contingently perpetual.

The imposition of private property rights depends upon the existence of state powers and legal systems (usually coupled with monetary taxation arrangements) that codify, define and enforce
the contractual obligations that attach to both private property rights and the rights of juridical individuals. There is a good deal of evidence that the coercive power of the state played an important role in opening spaces within which capital could flourish well before private property regimes became dominant. This was as true in the transition from feudalism to capitalism in Europe as it later became when the Chinese set up special economic zones for capitalist activity in southern China after 1980. But in between usufructuary and private property rights lies a plethora of common property or customary rights, which are often confined to a given polity (like a village community or more broadly across a whole cultural regime). These rights are not necessarily open to all, but they do presuppose sharing and cooperative forms of governance between the members of the polity. The eradication of usufructuary rights and the infamous process of enclosure of the commons have led to the dominance of a system of individualised private property rights backed by state power as
the
basis for exchange relations and trade. This is the form consistent with capital circulation and accumulation.

To be private property, however, a thing or process has to be clearly bounded, nameable and identifiable (in the case of land, this rests on cadastral mapping and the construction of a land registry). Not everything is susceptible to that condition. It is almost impossible to imagine the air and the atmosphere being divisible into private property entities that can be bought and sold. What is remarkable, however, is the lengths to which capital has gone to extend the reach of an individualised private property rights regime deep into the heart of biological processes and other aspects of both the social and the natural world in order to establish proprietary rights. There is a fierce ongoing struggle over the proprietary rights to knowledge of natural processes, for example. The field of intellectual property rights in particular is currently riddled with controversy and conflict. Should knowledge be universally available to all or privately owned?

An individualised private property rights regime lies at the basis of what capital is about. It is a necessary condition and construction in the sense that neither exchange value nor money could operate in the
way it does without this legal infrastructure. But this rights regime is beset by contradictions. As in the case of money, the contradictions are multiple rather than singular. This is so in part because of the way in which the contradictions between use value and exchange value and between money and the social labour which it represents spill over into the individualised private property rights regime.

The first and most obvious line of contradiction is between the supposedly ‘free’ exercise of individual private property rights and the collective exercise of coercive regulatory state power to define, codify and give legal form to those rights and the social bond that knits them so closely together. Legal definitions of the individual and, hence, a culture of individualism arose with the proliferation of exchange relations, the rise of monetary forms and the evolution of the capitalist state. All but the most rabid of libertarians and the most extreme of anarchists will agree, however, that some semblance of state power has to exist in order to sustain the individualised property rights and structures of law that, according to theoreticians like Friedrich Hayek, guarantee the maximum of non-coercive individual liberty. But these rights have to be enforced and it is at this point that the state, with its monopoly over the legitimate use of force and violence, is called upon to repress and police any transgressions against the private property rights regime. The capitalist state must use its acquired monopoly over the means of violence to protect and preserve the individualised private property rights regime as articulated through freely functioning markets. The centralised power of the state is used to protect a decentralised private property system. However, the extension of the status of personhood and juridical individual to powerful corporations and institutions obviously corrupts the bourgeois utopian dream of a perfected world of individual personal liberty for all on the basis of democratically dispersed ownership.

There are many problems within the realm of market exchange that prompt the state to go far beyond a simple ‘nightwatchman’ role as guardian of private property and of individual rights. To begin with, there are problems of the provision of collective and public goods (such as highways, ports and harbours, water and waste disposal,
education and public health). The field of physical and social infrastructures is vast and of necessity the state must be involved either in directly producing or in mandating and regulating the provision of these goods. In addition, the state apparatus itself must be built not only to administer but to secure the institutions it has to protect (hence the creation of military and police capacities and powers and the funding of these activities through taxation).