Tuesday, April 11, 2006

The Development of Capitalism in NZ - Part 4


Our previous analysis has stressed two basic points of relevance to an analysis of crisis. First, is the need to consider the N.Z. formation as an articulation of various sub-modes under a dominant mode of product­ion. Second, is that the operation of its economic base may best be thought of as complicated system of interlocking circuits operating to reproduce capital in its various forms. Crisis may be defined as a period of dislocation, or discrete reversal in the speed and pattern of the circulation of capital throughout this base. Since the various moments of the circuit are moments at which capital, in some form, is active, ­e.g. industrial capital at time of advance, productive capital during the process of production, bank and merchant capital at time of sale etc. ­then no one moment or particular fraction or social class represented by that moment, has a fortune fundamentally different from any other. All are affected by the dislocation of the flow of exchange value through the various interlocked circuits. Less profit in one area leads to less in another and hence to cumulative processes of contraction, or expans­ion, as conditioned by various structural and other phenomena involved. These may be, for example, the time periods of production, the nature of operation of monetary institutions, the patterns of income distrib­ution and so on.

Since a crisis ultimately affects all moments of the circuit, prod­uction, circulation, distribution, reinvestment, it is unreasonable to classify crises as uniquely crises of overproduction, or of foreign exchange or whatever. Categorising along these lines reflects an attempt to identify the apparent source or most obvious manifestation of the dislocation which has lead to the crisis. For instance, a crisis of over­production as evidenced by unsold stocks of commodity capital has its immediate source in inadequate demand for these commodities which in turn implies a disruption in the flow of purchasing power to those doing the demanding. But, the actual cause of the disruption is not explained. Many crises in New Zealand are, in these terms, crises of production; i.e. they dislocate the production process initially - ­labour disputes for instance - and thereafter affect distribution and exchange. But these crises are of a relatively superficial nature. They don't greatly affect the reproduction process and can be dealt with out­side the production process itself.

At some stage however (the mid 1970's) there occurred a "structural crisis of reproduction" reflected in a discrete fall in the rate of profit in a significant number of the main branches of production. The decline in the rate of profit reflects the inadequacy of available meas­ures to counter the tendency of the rate of profit to fall. A structural crisis of reproduction therefore brings on the need of the ruling class to review the structure of the total social capital and to adopt a range of specific measures for regenerating the accumulation process. It involves, in principle via the mediation of the state at all levels and instances, alteration of the pattern of accumulation, liquidation of inefficient businesses and reorientation in directions that will restore and surpass previous levels of profitability. The crisis acts to "purge" the impurities as it were, and thereby to ensure that expanded reproduction and circulation will be renewed. Such is the nature of the crisis now affecting world capitalism and New Zealand in particular.

The main features of the current crisis are by now very familiar –slow growth in production, heavy unemployment, low rates of profit, high indebtedness of many manufacturing businesses, declining real wages etc. At the base of this crisis is the inadequacy of the mass of surplus­-value being produced to satisfy the demands for consumption, accumulation and other reproductive functions placed upon it. The role of the crisis is to effect a redistribution of the surplus value away from areas of lesser efficiency, out of the hard won gains of working class struggles, and out of generally unproductive hands, into areas of higher accumulat­ion potential. The methods used require an attack by the ruling class and the state at the economic, political and ideological instances, in order to bring about the required restructuring. The general direction of the desired restructuring is that of manufacturing production for export, assisted by a widened range of specific state subsidies and tax concessions. Incomes and income taxes have been shifted in favour of the higher income groups and the managerial fraction in particular (see 3.6), with only minor' concessions' allowed for lower wage earners, domestic workers, welfare beneficiaries etc.

Given the generalisation of monetary circulation throughout the entire economic base, the impact of the crisis cannot be escaped by any class or class fraction as part of the dominant CMP or any of the sub-­modes with whicl1 it articulates. Rather, the impact is passed through the various circuits to the weakest points, at which 'moments' the impact is offloaded. These points are those at which the sub-modes articulate with the dominant mode and show up as increased exploitation of weaker classes. On this basis the PFM, domestic labour, youth, racial minorities etc. are the groups to bear the major impact of the crisis, a conclusion that can be easily verified by empirical investigation e.g. on properly defined PFM terms of trade , relative wage of Maori labour, whatever.

In order to legitimate its economic restructuring policies, the state engages in an ideological and political offensive. On the one hand it must gather support for its policies by appealing to an overriding patriotic sentiment and present the restructuring as in the' national interest'. At the same time as exhorting all New Zealanders to 'pull together' (Task Force Report) the ideological apparatus of the state operates to divide the basis of solidarity within the working-class by setting striker against non-striker, skilled against unskilled, white against non-white, married against unmarried and so on. Any attempt to 'rock the boat' or 'stir' is immediately interpreted as greedy, short-­sighted, communist-inspired etc., and against the nation's' interests'. The bourgeois notion of harmony only resides, in the mind, at the level of joint participation ("working together") in the nation's development, at which level conflict dematerialises.

It should be emphasised however, that each 'solution' to a crisis of reproduction in the' national interest', while it may restore the rate of profit for a time, can only do so by accelerating the matur­ation of the CMP and the pre-conditions for socialist revolution (Marx, German Ideology ,54). That is, the basic contradiction between the forces of production and capitalist social relations becomes condensed in a more acute form on a higher plane. The forces of production are concentrated in the monopoly sector to a greater degree by restructuring (supplanting the PFM in agriculture, and small manufacturers etc) while the proletarianisation of the people generates the material basis for overcoming the ideological divisions within the working-class along the lines of skill, income, race and sex. And as we have seen earlier, the ability of the state to contain class struggle arising from the growing contradiction is limited by its own contradictory role as capitalist state masquerading as 'peoples' state'. It becomes increasingly difficult for the state to attack the working-class and pretend to be doing otherwise (e.g. when capital can no longer operate within the' rule of law'). The immediate consequence of restructuring therefore is to intensify class struggles within the political and ideological instances, to foster the growth of the 'new' society within the 'old', and ultimately to hasten the transition to socialism.

These general observations regarding the nature of the current crisis in NZ are expressed here to underline an important point of analysis. This is that the forces underlying crisis cannot be understood simply at the level of distribution; i.e. class struggle over the shares of the surplus going to wages and profits. The crisis is one of fundamental restructuring involving discrete shifts in the pattern of accumulation, the welfare of various social groups and the nature of state intervention. These crises do not occur as a result of certain uncontrollable forces such as workers' drives for higher wages al though these may be an easily observable phenomenon associated with the crisis. Rather, their basic function, which is their real significance, is first to bring about a redistribution of surplus value so as to enable a new pattern of capital accumulation to be established and the reproduction of capitalist social relations to be maintained.

4.1 Conclusion

What are the most important points to emerge from our analysis? Into which areas do we suggest the greatest attention should be directed?

First, we would suggest that our analysis has re-affirmed the import­ance of the science of history. No attempt at explanation of the path of development of any social formation can merit serious consideration if it fails to pay sufficient attention to the historical process. The con­tribution of Marx was that he discovered the continent, or, the science of history (Althusser, Lenin, 42). His method is scientific because it represents a full reconstruction in the mind of the entire process of the operation of a given reality, in our example the development of capitalism in the New Zealand social formation. It is not a partial view, stressing isolated instances and fragmentary appearances; it is a total conceptualisation based on a materialist analysis.

Secondly, applying the science of history, our approach has stressed the dynamic of reproduction, as distinct from production. No social order can persist unless it succeeds in reproducing itself together with the contradictions contained within it. This means that the reproduct­ion of the forces and relations have to be analysed using an appropriate method. The interlocking circuit model of reproduction has provided us with the required conceptual apparatus.

Finally, implicit in both the Marxist science of history and its application to a particular social formation is the clear opposition to bourgeois ideology. We wish to underline our position in the theoret­ical class struggle in which we are engaged. What we have attempted to show is that the bourgeois approach is unscientific since it never takes into account more than the level of appearances and more than a narrow or partial view of history. On the contrary, the Marxist position is that nothing must be left unexplained and no instance can remain un­-attached if one is aiming for a full explanation of the evolution of any social formation. Our treatment of the case of New Zealand serves, we believe, as an illustration of the validity of a Marxist approach.


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