<nettime> Revolutionary Flows of Value in the Macroeconomy

[Dmytri Kleiner <dk@trick.ca>]

Revolutionary Flows of Value in the Macroeconomy


In continuation from the last two essays looking at the macroeconomics 
of class struggle (#1)Â (#2) we will try to describe the process of 
revolution within the framework as developed so far.

The old acrimonious accusations between so-called "Reformist" and 
so-called "Revolutionary" positions are counter productive.

The reformist strives to improve certain conditions within the current 
society. A revolutionary strives for a complete transformation of 
society. In the context of the struggle against economic exploitation, a 
reformist fights for wages and benefits by organizing collectively and 
politically against capital, while the revolutionary organizes 
collectively and politically towards to abolition of capitalism.

Reformists argue the revolutionaries are unrealistic and divisive, 
while revolutionaries consider the reformists delusional and as simply 
serving to preserve capitalism.

In many cases, both are right.

Utopianism (#3 #4) is rampant among reformists, making& much of what is 
proposed among proponents of so-called "Alternative Economics" utterly 
nonsensical.

However, one must differentiate among those engaging in direct struggle 
for wages and benefits, that is, those who recognize and acknowledge 
class conflict, and those who, as Marx wrote, "want to improve the 
condition of every member of society, even that of the most favored. 
Hence, they habitually appeal to society at large, without distinction 
of class; nay, by preference, to the ruling class. For how can people, 
when once they understand their system, fail to see it in the best 
possible plan of the best possible state of society?" That is, those 
that "reject all political, and especially all revolutionary, action; 
they wish to attain their ends by peaceful means, and endeavor, by small 
experiments, necessarily doomed to failure."

And conversely, certain kinds of nihilism and disassociation are 
rampant among revolutionaries. A tendency to mock and often even hold in 
contempt all those who are actively trying to improve the conditions of 
life within capitalism, sometimes with the extremely vulgar belief that 
to abolish capitalism we must not improve the conditions of life within 
it, or even actually celebrate its further decline, for only when the 
conditions become so miserable that they become unbearable will the 
masses rise up and abolish capitalism!

Thus, those trying to improve the conditions of life are actually 
counter-revolutionaries, and those remaining aloof and inactive are the 
true revolutionaries!

Just as much as Utopianism is to be rejected, this view, what we might 
call "Cataclysmism" must likewise be rejected.

Neither waiting for the collapse of the ruling class, nor appealing for 
their mercy will lead to communism. Social collapse is much more likely 
to lead to despotism and fascism than communism. Appeals will fail 
because the ruling class is compelled to protect their privilege by any 
means necessary, just as the workers are compelled to keep working. If 
they fail to do so, they lose their privilege, not to the working 
classes, but to competing elites.

Any realistic path to overcoming economic exploitation requires both 
reform and revolution.

Which brings us back to Macroeconomic Identities.

Our capacity to change society begins with what I have described as 
"The social capacity of workers to invest" and identified 
macroenomically as Iw.

If Iw is zero, we can not change society at all, because we are not 
able to retain any more wealth than is required for our own subsistence. 
Thus we would have no wealth available to apply towards organizing 
collectively or politically towards anything at all, only just enough to 
toil another day.

The working of the capitalist labour market will always push Iw toward 
zero, thus only through political struggle is Iw kept above zero. Our 
revolutionary capacity depends on pushing for as much reform as 
possible, whatever serves to increase wage levels and benefits gives us 
more left over to invest towards revolutionary aims.

However, such reforms will not serve our purposes unless they come with 
revolutionary aims. Increases in wages and benefits are easily absorbed 
in capitalist consumption, often simply in increased rents, if not 
intentionally intvested in worker's productive capacity.

We can understand flows between modes of production similar to the way 
that imports and exports are understood.

Returning to our basic macroeconomic identity, W + P =Â C + I, if we 
want to factor in imports and exports we can say that W + P = C + I + N, 
wages plus profits are equal to Consumption plus Investment plus net 
exports, that us exports minus imports. This allows us to look at the 
macroeconomy of one country within a global context that includes other 
countries.

A country can increase it's wages and profit above what it's own 
consumption and investment can fund when it has a trade surplus because 
the consumption from other countries are funding wages and profits 
within the country. However, at the global level net exports must always 
be zero, so a trade surplus in one country implies a trade deficit 
elsewhere.

When a country has a trade deficit then N is negative, meaning that the 
country's total wages and profits are below it's consumption and 
investment. This naturally means that the country is building debt and 
thus, such a situation is not normally sustainable. The economy of the 
country with a trade deficit is shrinking relative to the economy of the 
country with the trade surplus.

We can look at intermodal economic flows in the same way.

We can define the capitalist sector of the economy with P + Wm = Cm + 
Ip + Nm, or profits plus wages of workers working for capital equals 
consumption of the output of capital (market consumption) plus 
investment derived from profit plus net intermodal consumption. That is, 
the "exports" from the capitalist sector to the communist sector minus 
the "imports" from the communist sector to the capitalist sector.

Whenever money earned in the capitalist sector is used to consume 
wealth produced in the communist sector, the net effect is that the 
capitalist sector shrinks relative to the communist sector, and vice 
versa.

Conversely, we can define the communist economy as Wc = Cc + Iw + Nc, 
that is wages of commons-based producers are equal to commons based 
consumption plus workers' investment plus net intermodal consumption.

Of course, Nm + Nc = Zero.

Thus, economic reformism is only to be dismissed with it simply 
increases Cm and thereby does not change the balance of economic power, 
while a revolutionary must strive to push Nc above zero, for if it can 
be sustained as such then this means the inevitable disappearance of the 
capitalist sector.

To abolish capitalism and replace it with a commons based economy we 
need to build an intermodal trade surplus.

I'll be at Stammtisch as usual at 9pm (#5). Please come!


(1)Âhttp://www.dmytri.info/its-the-macroeconomy-stupid/
(2) http://www.dmytri.info/the-macroeconomic-identity-of-communism
(3) http://www.dmytri.info/false-defences-of-utopian-thought/
(4) http://wp.me/p24fqL-2E
(5) http://bit.ly/buchhandlung

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A shareable version of this text is online here:

http://www.dmytri.info/revolutionary-flows-of-value-in-the-macroeconomy/

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--
Dmytri Kleiner

http://www.trick.ca


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