February 5, 2010

Can There Be Another Accumulation?


Crime and no reason, treason and no rhyme,
All struggle and hope stolen once again
As license to commit the ancient crime…
Corporatism is incapable of living within its means. That it drives everyone into debt, either through the participants’ own greed or because everyone else is drafted into a debt economy, is not just the calculated strategy of predatory lending and the exploitation of leverage. Unsustainable indebtedness is hardwired into the system itself.
This is because profit-seeking activity, once it goes beyond the smallest, localized level, is always inefficient and always loses money. This is a friction law just as binding as friction in physics. The only way mass capitalism is able to persist at all, let alone construct the monumental edifices of industrialism, consumerism, and hi-technology, is by externalizing more and more of its costs – on the future, on the environment, and on the dispossessed people.
Because the corporate machine can never turn an absolute profit, it has to start out with a feudal treasure hoard it can draw upon until it’s powerful enough to extract a “capitalist” surplus from the earth and the workers. The preliminary accumulation of this hoard is called primitive accumulation. This is Marx’s term for the violent privatization of public land and resources during the feudal stage of economic development. But capitalism is so costly and inefficient that even its surplus can’t sustain it. It still keeps running itself into the ground.
This boils down to the basic contradiction of capitalism. The capitalist seeks to maximize production even as he impoverishes his intended consumer base by hacking away at the workers’ wages. Inevitable he overproduces and is burdened with surplus capital.
In The Origins of Totalitarianism Hannah Arendt describes the puzzle:

The tremendously increased wealth produced by capitalist production under a social system based on maldistribution had resulted in “oversaving” – that is, the accumulation of capital which was condemned to idleness within the existing national capacity for production and consumption. This money was actually superfluous, needed by nobody though owned by a growing class of somebodies. The ensuing crises and depressions during the decades preceding the era of imperialism had impressed upon the capitalists the thought that their whole economic system of production depended upon a supply and demand that from now on must come from outside of capitalist society. Such supply and demand came from inside the nation, so long as the capitalist system did not control all its classes together with its entire productive capacity. When capitalism had pervaded the entire economic structure and all social strata had come into the orbit of its production and consumption system, capitalists clearly had to decide either to see the whole system collapse or to find new markets, that is, to penetrate new countries which were not yet subject to capitalism and therefore could provide a new noncapitalistic supply and demand.

The system has to keep refeudalizing itself and repeating the original accumulation. This in turn requires that there always be a new frontier of natural resources to be mined and labor not yet under the yoke.
The system attempts various ways of keeping the economy stimulated. Technological innovation may temporarily develop new markets. Same for government military spending. The final frontier has been globalization and financialization, propping up the consumer with exponential debt.
But all of these have long since passed into the twilight of diminishing returns. IT has been a far less productive sector than previous frontiers, while finance and the military industrial complex simply destroy wealth on a massive scale, and this wealth can and will never be replaced.
Arendt evokes the delusive spirit of Gilded Age Europe as it partied on the brink of the abyss:

As matters stood, imperialism spirited away all troubles and produced that deceptive feeling of security, so universal in pre-war Europe, which deceived all but the most sensitive minds. Peguy in France and Chesterton in England knew instinctively that they lived in a world of hollow pretense and that its stability was the greatest pretense of all. Until everything began to crumble, the stability of obviously outdated political structures was a fact, and their stubborn unconcerned longevity seemed to give the lie to those who felt the ground tremble under their feet. The solution of the riddle was imperialism. The answer to the fateful question: why did the European comity of nations allow this evil to spread until everything was destroyed, the good as well as the bad, is that all governments knew very well that their countries were secretly disintegrating, that the body politic was being destroyed from within, and that they lived on borrowed time.

We’ve now sustained the first shock of the final stage of oil-fueled corporatism. With Peak Oil and the breaking of the exponential debt curve we’ve reached the absolute limit of capitalist expansion. The ultimate original accumulation was the unearned inheritance of the fossil fuel hoard. This can no longer keep the system operating in the pseudo-black. Now the system begins its contraction. Yet the primitive accumulation must be repeated. There must always be a slave class.
There’s only one place left to look for these slaves. State capitalism went as far as it could in assimilating new human strata, as masters and as slaves. Most remained slaves, while in the West a relatively large number were co-opted as the “middle class”, as part of the competition class rather than the resource class. But now the system contracts, and this middle class will have to be dissolved. It will have to be defenestrated and restored to original serf status. That’s the process now unfolding.
Imperialism and globalization were stages in capitalist expansion assimilating more cohorts of slaves. It reached its maximum in the 1970s and 1980s. It started blowing bubbles to buy time while preparing to roll its own domestic socioeconomic wave back. Like a vast pincers movement in war, it will now seek to complete the operation, to liquidate the welfare state of the Western “middle class” (always a sham, always based on foreign slavery), liquidate its “officer corps” (Marx) (the “bourgeoisie”, one by one, hundreds by hundreds, thousands by thousands), and so on until the wave is rolled back to the original feudal nobles. That’s what we’re doing today.
In the meantime they’re tactically caught between the imperatives to reflate the bubble and yet deflate it enough to provide space and fuel for the reflation. They’ve been struggling to thread the needle with the string they’re pushing on. (Is that a mixed metaphor? You can thread a needle with a string. Unless it’s too thick, and that’s why you can only push on it…)
Is there any question that the system is now a terminal zombie? If there were any possible productive way out, any way to productively grow, to revitalize the real economy, why don’t they do it? Corruption isn’t enough to explain it. If a real economic way out for “growth” existed, there’d be a constituency for it. But there is none, in government, business, the media.
Of course, that the only “options on the table” would be growth option is because the only elite constituencies extant are the extractive, competitive cadres. A public interest cadre doesn’t exist. If it did, then we would have the opposite, constructive option: to wind down the empire, wind down the system, to use what wealth remains to downsize, deconsumerize, decentralize, relocalize.
Instead, via the Bailout War and the Global War on Terror (the Permanent War), they’re imposing tyranny and regressing to feudalism while looting the last pennies.


  1. Capitalism produces its own grave diggers -KM


    I wish you’d look into the state/regional independence movement. This is exactly the kind of discussion we are having. I cross posted your comments from my blog here: http://www.vtcommons.org/blog (my bit is on page 2)
    Have a look and let me know what you think.



    Comment by juliet — February 5, 2010 @ 10:27 am

    • It’s an interesting idea, and I have thought about it. I especially think if the Great Lakes region could get the political will together, it could comprise a self-sufficient unit.

      (I was glad to see how a few years back they started taking precautionary steps against future water-grab attempts from the Southwest. Such steps were very necessary while the bubble looked “permanent”, and are still prudent even if we have seen the peak of the SW’s crypto-fascist political influence.)

      I don’t know the details about Vermont’s concept. Is the idea really full sovereign independence? And something approaching autarchy? How would it support itself?

      Or if it would still be a “free trade” regime, how would it not be economically colonized like the weakest third world country?

      It seems to me that if the point would be Thoreauvian Simplicity, the place would be very vulnerable to American bubble wealth for as long as that pseudo-wealth is still being propped up.

      Comment by Russ — February 6, 2010 @ 2:36 am

  2. “Corporatism is incapable of living within its means. That it drives everyone into debt, either through the participants’ own greed or because everyone else is drafted into a debt economy, is not just the calculated strategy of predatory lending and the exploitation of leverage. Unsustainable indebtedness is hardwired into the system itself.”

    This is a truism that is lost on most folks doing financial system forensic analysis, whether it ‘s Denninger over at Marketticker, or Yves at Naked Capitalism. Actually it is a truism that is denied by apologists of our system. And they will continue to bark their paltry tune “if only we had regulated, this would never have happened” tune long after the ship has sailed.

    Comment by Edwardo — February 5, 2010 @ 1:31 pm

    • Yes, it’s structural. The tinkering mentality would be insufficient even if they really wanted to “regulate”.

      Which of course the vast majority of them do not.

      Comment by Russ — February 6, 2010 @ 2:26 am

  3. I think you will find this worthwhile.


    Comment by Edwardo — February 6, 2010 @ 4:24 pm

    • Everywhere you turn, things look more and more impossible.

      There’s no doubt that Obama wants to gut SS and is simply trying to figure out how to do it.

      But I won’t waste energy being angry about it, since the thing can’t be sustained anyway. Even before I started learning about this stuff I always assumed SS wouldn’t be around by the time I got to be that age. As a “Gen Xer” I always knew my parents’ generation sold us out, literally.

      I do like the way Jesse goofs on Fortune’s absurd contradictions.

      Comment by Russ — February 6, 2010 @ 5:44 pm

  4. […]   Imperialism is, as Lenin called it, ”the highest” stage of capitalism. In my last post I discussed how prior accumulation must be repeated by the system. New pre-capitalized populations […]

    Pingback by Parasites and Imperialism « Volatility — February 8, 2010 @ 7:14 am

  5. Of course there are several ways out, all involving attack on unearned privilege, monopoly, the levy of progressive taxes on individual income and corporate capitalization, transaction taxes on financial transactions. Marx had it wrong the first time and he has it wrong again, although you make quite a poetic case for inevitable catastrophe.

    Civilization is first and foremost an engineering problem and it also requires a moral basis. We seem to have abandoned both in favor of ideological nonsense. Neither Marxist crap nor Friedmanite crap is worth the paper and ink to publish it. You are so good on details, Russ. Stick to them and you will think of something useful.

    Comment by jake chase — February 10, 2010 @ 6:30 pm

  6. Thanks. I hope I can eventually help find the ideas that will be useful and way of expressing them that will finally wake up this country.

    I’m not sure what you mean by Marxist crap, though. His analysis of monopoly concentration and the basic contradiction between squeezing the worker while still needing him as a consumer is proving true. It just took longer than he expected (because of cheap fossil fuels) and isn’t happening in precisely the way he expected.

    So the analysis is useful. And now we have to figure out what to do about all this. (There, Marx’s prescription isn’t very useful since it still presupposes centralized industrialization, which we know by now is a problem in itself.)

    Comment by Russ — February 11, 2010 @ 3:56 am

    • What I mean by Marxist crap is all of it. The grandiose theory of history in particular. He was very good about factory conditions in Manchester and should have stopped there. Our problem is financial monopoly and corporate looting. These are problems of inadequate government, itself caused mostly by public apathy and stupidity. Do you really look forward to a Lenin or Castro taking over? How about a Cultural Revolution? I understand that you are very angry but that does not make Jacobin solutions sensible.

      Comment by jake chase — February 12, 2010 @ 6:05 am

    • What I want is to prevent a Pinochet taking over, and I’d be willing to do anything to prevent that. And I want to break corporate tyranny, and I’d do anything to accomplish that. I have no prejudices.

      But it doesn’t look like many people are willing to do anything in particular to prevent the one or accomplish the other, let alone go to any sort of extremes, so that looks like a moot point.

      It looks to me like the criminals will concentrate power as aggressively as their ability to prop up their own weight allows. They’ll either be able to establish outright fascism or they won’t, but no large-scale organized resistance is going to stop them.

      That’s why when I think of What To Do I focus mostly on resistance at the relocalization level, since those are the same measures which will be necessary as the fossil fuel infrastructure fails anyway.

      So I agree with you that it’s important to focus on the details of that, which I’ve done and intend to do more often.

      But I also care about looking at the big picture.

      Comment by Russ — February 12, 2010 @ 3:39 pm

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