When the Federal government completely and thoroughly abandoned the people of the Gulf Coast before and after Hurricane Katrina last year, it was a rude awakening for many Americans. While Halliburton and other corporations wallow in the profits made from no-bid contracts to rebuild the Gulf Coast, people convicted of “looting” water, diapers and food remain in prison. Many more wait in prison-like FEMA trailer camps while New Orleans is rebuilt for the rich and powerful.
The government’s total and shameless disregard for human life and its meticulous attention to profits signal profound changes in the form and role of the state. “Changes in the form and role of the state” may seem like a baffling abstraction. But we experience it everyday. The social safety net is under full attack. Corporations have taken over Congress. A tiny cabal of bankers controls the Federal Reserve Bank, which, in turn, commands the economy. Debt and poverty are overtaking our lives. Cities are crumbling. Culture and spirit are disintegrating.
These changes are not simply a bad situation getting worse. Like other powerful forces rattling society and rupturing our lives, they are the beginning of a new process. An individual or a particular administration may advance or retard the process of change. But they are not the cause of today’s political changes.
Today, certainly, the military-industrial complex and the Bush administration are accelerating the pace of draining the resources of the country to feed the corporations—undermining democracy and civil liberties, sacrificing Mother Earth and world peace for the sake of the energy companies. But, the process is broader than any particular institution or government.
We have to look beyond what we see in front of us and ask ourselves, what is happening and why? Everything changes, and it changes for definite reasons. It’s possible to understand these reasons and the results.
How we got to this pointTo understand the political process we’re in, we need to look back to the process that got us here. Throughout recorded history, as new forms of private property rose to predominance, they called forth changes in the role, function, and form of the state.
Before the rise of large-scale industry, land was the predominant form of private property and the state took a form and performed a role that promoted the accumulation of wealth by landowners. The lines separating the means of exploitation and the means of political control were not clearly drawn. Feudal lords not only accumulated wealth based on the labor of the peasants on their land, they also collected taxes from them directly and commanded armies. They had privileges and authority in the state apparatus simply and directly because they owned land.
Large-scale industry was a different form of private property. As it arose, it brought to the forefront a new possessing class, the industrial capitalists. Capital could expand faster and farther if it was separate from the state – with the state and the capitalists performing separate roles in society. Capital needed to be free from responsibility to society and from feudal obstacles to its expansion. Capital also needed a ready supply of labor, and so labor was “freed” — separated from its land and tools and made dependent on the capitalists for jobs. Capitalism was in its economic infancy, but the promises of profit based on the exploitation of workers in large-scale industry shaped the demands and political program of the rising new class of capitalists.
In one country after another, the rise of large-scale industry opened up an epoch of great revolutions that reconstructed the state. The French Revolution, the Russian Revolution, the Chinese Revolution, and in some senses, the U.S. Civil War had different outcomes in terms of which class came to hold political power. But a common thread running through those revolutions was the reconstruction of the state apparatus to accommodate the shift to labor in large-scale industry as the main basis for the accumulation of wealth and the growth of the economy.
In countries where the revolution resulted in victory for the capitalists, the state protected the capitalist class, fostering conditions in which the capitalists could accumulate the maximum wealth. It rested on and promoted the basic class relationship that makes up capitalism—wherein the capitalists own the means of production and profit from the exploitation of workers, who are forced to sell their labor power in order to survive. The national state fostered and protected the national market – a market for labor power as well as for the products of that labor power. The state went through various stages of that process, but those were forms, phases, and stages of the state in relation to productive capital – that is, the evolution of the state based on the stages of growth of capitalism.
As long as capitalism was expanding and the productive capitalists relied on the industrial workers of the U.S., the state protected the connection between capital and the U.S. worker—in production and in society. Even as U.S. capital was exported to less developed countries, the capitalists still depended on a stable work force here; super-exploitation abroad paid for middle-income lives for a large section of the U.S. population.
Something new is happening today. New methods of production are expelling workers from the production process and beginning to destroy the social relationship that defines capitalism. The process is nowhere near complete. Nor are its forms clear. But it is destabilizing everything in society that rests on that foundation including the role of the state.
Shifts in Capital and the State
Step by step, the state is being reconstructed to wipe out all barriers to capital, to manage the redistribution of surplus value, to create the best possible conditions for its accumulation, to shift the burden onto the backs of poor and less powerful. The state still protects the capitalists and their property, but it is shifting what it does in order to do that under today’s new conditions.
New methods of production are setting those new conditions. Electronics applied to production not only reduces the number of workers needed on the shop floor, it eliminates entire categories of jobs and layers of work in production and in the management, design, communication and transportation associated with production. With this labor-replacing technology, comes the beginning of the end of value.
The immediate effect is the decline in the rate of profit in production. Productive capitalists make their profit off the labor of the workers; the lower the proportion of labor in the production process, the lower the rate of profit. Capital is propelled into every crevice of the world economy. When it meets resistance, the state clears the way.
How are these shifts in capital and the state unfolding?
The lower rate of profit sends capital in all directions for ways to compensate. Electronic technology helps it get there. The state guarantees the best possible conditions for the accumulation of wealth in the hands of the capitalist class. The declining rate of profit makes the class that owns private property ever more directly dependent on the state to accumulate the maximum wealth.
The decline in the rate of profit brings into play other forms and activities of capital. Speculative capital is the cutting edge of this process, and it is rising to predominance. This form of capital doesn’t finance production. It thrives on credit and debt creation, speculating on interest rates, currency rates, prices of oil and other commodities. Nothing is exempt. Often lending the money to a government and speculating on the rise and fall of bond prices is a better bet than investing in the production of commodities for which there may not be the market.
Financial and speculative capitalists thrive on our debt more than on our ability to work. The greater the public and private debt, the more money these capitalists accumulate. Public debt owed to private investors in turn opens the state to manipulation of policy. Speculative capital and the state are ever more intertwined.
The State and Capital in the U.S.
Although these changes in the form and role of the state have expressions and consequences everywhere, here we will focus primarily on changes in the state and speculative capital in the U.S.
Every day, trillions of dollars skip digitally around the world in search of investment. The U.S. state operates through the world financial system—dominated today by the U.S. and the dollar—to create the most favorable conditions for capital to accumulate. Today non-elected institutions (e.g., the U.S. Federal Reserve, the World Bank, central banks, the International Monetary Fund, etc.) manage economies, set exchange rates for currencies, and finance public debt here and all around the world.
To compensate for the declining rate of profit, productive capital flows to where the wages are lowest—from the U.S. to Mexico, from Mexico to Bangladesh. The state protects capital and its full and free flight across national borders—starting wars, arranging loans and investments, enforcing trade agreements that hijack entire economies and throw millions off their land or out of work, and so on.
Some production can’t go global. Courts uphold corporate cancellations of labor contracts. The state criminalizes and victimizes immigrant workers—intensifying the inequality within the workforce, dragging down everyone’s wages, benefits, and security.
The state and corporations turn the products of culture, science, and nature into commodities. By issuing patents for a specific strain of DNA or the products of publicly funded scientific research, the state ensures profits to the corporations above and beyond the profits resulting from exploitation of labor.
The state transfers wealth. Over $99 billion is being cut from Medicaid and other domestic programs over the next few years. Tax cuts in the past few years added an average of $112,000 to the after-tax incomes of the super-rich two-tenths of one percent of the population (at a rate 19 times greater than the .3% gain for the poorest 20% of U.S. households).
The state transfers property and privatizes public functions. Public lands and resources are turned over to private corporations to vandalize for private gain. Corporations conduct education, water and energy delivery—for profit, not for the public good. Private mercenary companies conduct military operations in other countries—either at their own initiative or for the U.S. Army.
The state is denying responsibility for society. The government is becoming an indifferent and unaccountable apparatus that has no more use or regard for democracy. All this is converging on the foundation of the beginning of the destruction of capitalism, not its growth.
Distinctions between private property and state are eroding
The process is well underway — the merging of state and capital — to the point where their roles and functions are indistinguishable from one another. The U.S. state is shifting from promoting the relation between labor and capital here in the U.S. to protecting private property globally. There are steps in this direction, but the process is not complete, and the state is still teetering on the crumbling foundation of society.
Productive capital is still the only basis for creation of value and wealth. The parasitic forms of capital activity and wealth accumulation that are on the rise today do not create value. They redistribute it—to the owners of property. The parasite is killing its host and it relies on the state to do so, with wealth accumulation depending ever more heavily on the state. Once again in history, the distinctions between private property and the state are eroding, with their roles overlapping and merging.
This all makes for a very unstable situation: The state rests on and protects the basic relationship that makes up capitalism. New methods of production are destroying that relationship. Labor is not needed in the same way; the state no longer has to guarantee its reproduction in the same way. Because labor power in the U.S. has been some of the most expensive in the world, it is the first to go, and the state is realigning here in a certain way.
The exact form of these changes in the state is neither automatic nor pre-determined. Such changes are made by human beings who take small steps in response to big problems—all in the context of a certain culture and history. Just because something addresses the question, it does not mean it is the inevitable or final answer. But the cause and direction of the process are clear.
At the origins of capital, the state was structured to accelerate the formation of a working class, to protect the national market and the national capitalists. Imperialism and the “welfare state” represented a stage of the process of growth of capitalism.
Now, as new methods of production begin to destroy the foundation for capitalism, the state is undergoing a profound shift: from a nation state, in the sense of protecting the market and the social relations within one country, to that of expanding the market and protecting the sanctity of private property globally, while abandoning responsibility for society nationally. To protect private property under these new conditions, the state stands ever more directly opposed to those without property or jobs—all to the detriment of the interests of society as a whole.
the State is destroying society and shaping a new class
Lives are shattered with the splinters scattered in different directions—employed workers with no benefits, laid-off workers with no jobs, “undocumented” workers with no rights, young people with no options besides the Army or prison, cities with no water or fire departments, education and healthcare at the mercy of the corporations. As they deform our lives, the shifts in capital and the state are forming and shaping a new global class of proletarians. Today, it is not only the economy that is wreaking havoc, but also the deliberate actions of the state that are deforming and destroying society.
The exploiting and speculating class is waging a full-scale assault on society. Employing us to exploit us cannot quench their thirst for profit. They profit from our debt, confiscate public assets, and transfer funds from the public good to the private incomes. As the possessing class relies ever more heavily on the state to drain the wealth out of society, it gets harder and harder to distinguish this possessing class from the state itself. The sovereignty of private property is destroying society.
The assault on society is polarizing it. The ultra-rich can afford privatized services; the poor are forced into desperate struggles for survival; those in the middle are becoming poor. The assault on society is shifting the leading edge of social struggle. Employed workers still have to battle every step of the way for their wages and benefits. But, increasingly, the central question being fought out is not wages or benefits. It is the right to live and thrive as human beings. And this brings the social struggle into direct confrontation with the state.
Out of the destruction of the relation between labor and capital, a new social polarity is rising to predominance—the emerging social polarity between the global class of dispossessed and the global class of dispossessors. Increasingly it is the state that is doing the dispossessing.
Whether it’s the destruction of the environment, the decaying educational system, or a dysfunctional health care system, the reorganization of society with distribution according to need is not only a possibility—it is an urgent need. The solution to the destruction of society is the program of the new class of dispossessed—the abolition of private property and exploitation.
Like the capitalist class at its rise, our class will be formed politically in the fight for what it needs. This isn’t an automatic process, but a combination of actual needs, practical experience, ideological polarization, and political education.
When public opinion polarizes over specific questions, the battle for a class program becomes possible. Immigration, for example, expresses the global transformation and makes the question immediate: Which way forward? The interests of private property or the well-being of the people of the Earth?
Some, claiming to stand for the American worker, speak against the immigrants—as though that would restore the benefits offered by an economy that no longer exists. Shifts in capital show that this option is both immoral and impossible. At the same time, a century of the U.S. working class benefiting from the imperialist plunder of the world shows that this impulse will provide fertile ground for the growth of American fascism.
Millions more stand against the immorality of denying a human being the right to live, and recognize that as long as anyone is deprived of rights all workers are threatened. The problem is not the immigrants but the tiny class that profits off the labor, debt, and misery of millions of people. In the battle over what’s right, the class lines can be drawn. Our class can be united around its actual program and become conscious of the need to act in its political interests.
New Possibilities
When something new begins, it is possible to do things that weren’t possible before. As we grasp what’s new and arising in society, we can anticipate its development, reckon with the political consequences, and assess what it means for the tasks of revolutionaries.
Shifts in capital and the state open up possibilities for how revolutionaries carry out their tasks. The ties that bind the working class economically to its class enemy and the state are being broken. The ties that bind them ideologically are weakening. Many people have lost a sense of direction. Some are looking for answers. Breaks in the continuity of any economic or political process mean it is possible for new ways of thinking to take root. An entirely new intellectual framework for responding to those changes becomes possible.
Whether new ways of thinking take root and what direction that thinking goes depends on revolutionaries. It is time for revolutionaries to unite around the program of the class that is arising out of the destruction of society. Without it the process cannot go forward.
October.2006.Vol16.Ed6
This article originated in Rally, Comrades!
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