The basis of the present system, where all products are put outside the control of their immediate producers, can be described equally as wage labour, commodity production or the market economy. On a world scale, each kind of alienation supports and reproduces the other.
Although the Soviet Union under Stalin had a highly distorted internal market, it has remained an important support of the world "free market". The Russian bureaucracy needed (and still needs) the independence of action allowed by it's system of wage labour as much as "free enterprise" capitalists. This commodity allowed the USSR to become comparable to the capitalist west, both in terms of allowing the Russian economy to trade with the west for needed technology and capital goods and also by allowing an ideological division of the world into "communism" and "capitalism" (A division that politically supports both blocks).
The ability of individual capitalists to relate to each other directly is an immediate result of the alienation of wage labour and is critical to capital's ability to expand autonomously. The dynamic autonomy of capital is what has allowed it to absorb and outpace all previously existing static systems. All previous "great civilizations" being empires of slaves, capitalism appears as a system of rationalized slavery.
This autonomous movement of dead labour is at the heart of the contradictions of the capitalism. The freedom involved in exchange becomes a constraint on production when the capitalists are unable to see the total conditions of social labour. Once wage labour and the law of value become the dominant aspect of society, capital's search for profits distorts more and more the collective social existence brought into being by capital.
These distortions are both material and social. While the most obvious absurdity is the impoverishment of the vast majority of working people, the decay of capital has now reached the point where the destruction of nature itself is threatened. Capitalism creates great cities, massive means of altering nature etc. but views its accomplishments in the same way that it views a bee hive. It is even willing to destroy even the hive for not producing cheep honey.
Two characteristic tendencies of capital, the lowering of the rate of profit and the tendency of capital to concentrate, result from contradiction between production becoming more social and the continuation of individualistic relations of production.
The lowering the rate of profit is not a result of a decrease in the amount of goods produced by society but of the tendency of the mass of capital to increase faster than the productivity of society as a whole. This assumes that capital pays a mostly constant price for labour. But this constant price of labour means only that the labour required for survival remains a constant proportion of a working day. This condition is necesarry for the discipline of the working class regardless of proportions of constant and variable capital.
The concentration of capital into fewer and fewer hands is a reflection of the greater socialization of the means of production. Along with financial concentration, corporations are constantly organizing industry on a larger and larger scale for efficiencies of scale in both production and marketing. This concentration is difficult to manage, since it requires that certain capitalists loose their position within the system of capitalist management, which includes both the government and the private sector. Today, as the final step, those factions which can not compete on the world market are being dismembered.
The state of the crisis is often hidden under a vail of manipulation by government and monopolies. No pat conclusions about an immediate collapse of production etc. can be drawn from even the best economic indices. But today crisis does not need a prediction but an explanation. We are not prophets of an eventual crisis but unpredictable crisis but theorists of today apparently inexplicable crisis.
Capital's contradictions appear as an inability of various capitals to work together. Capital has a need to destroy various blocks of capital to remain "healthy". The exact level of production is less important than the structural situation; this is what causes international and inter-company rivalry as well as attacks on working class income. The world wars that the crisis has provoked have come not from economic indices reaching a certain level but from a confluence of strategic factors. The economy was merely the motor that unbalences the entire situation.
The crisis manifests itself as a political-economic crisis. The crisis appears first on the level of a power imbalance. Eventually a dynamic crisis of capital follows as an effort to solve the crisis by changing the distribution of resources in society; different factions of capital launch attacks on each other, the petit bourgeois and the working class in order to increase the concentration of capital.
The working class itself mostly plays a passive role in within capitalist struggles while it is capitalism that creates the crises that continually transform capitalist society. The working class only plays an active role when it rejects the role that is created for it by capitalism and constitutes itself as the proletariat, those who have nothing to lose by the destruction of this society but their chains.
The crisis of capital has become continuous in the sense that contradictions to capital's normal operation appear constantly, not only in the phase of over-production. This situation is characteristic of decadent capital, which has been unable to fully solve its previous crises, which reappear as necessary absurdities in its workings.
Government-aided unions, public works, and social security are necessary contradictions to the logic of private enterprise, permanent measures that have expanded from when they were initially needed to increase consumption during the world depression in the 1930's. Just as they never eliminated private capitalism, these contradictions are not being eliminated themselves during the current right-way period. Instead they are modified by further adhoc solutions to crisis; the expansion of the military-industrial complex, the private governments of Oliver North in the US or P5 in Italy etc..
Capitalism must now solve its crises in an extra capitalistic manner. The Russian revolution was the first definitive point where capital showed that it was unable solve its problems except through its apparent over-throw. The most advanced proletariat revolution to occur in the twentieth century, lead by the Bolsheviks, was deformed, by them, into a means of installing a "substitute bourgeois". The solution to development in a nation where unequal evolution had left the national bourgeois was too weak for direct capitalist rule.
Bolshevism was thus the most extreme means of solving the world capitalist crises of 1920-50 on an economic and ideological level. This required a complete ideological division of the world into "capitalists "and "communists". After it destroyed the proletarian revolution, the Bolshevik state created the most advanced form of state capitalism that existed at that time. This means of solving the contradiction between concentrated Russian capital and a weaken Russian Bourgeois was imported back into Nazi Germany and in part into all advanced capitalist nations. At the same time, the centralist party, sans the Bolsheviks' hold on marxist theory, became the dominant model for third world development.
WWI & II were critical points in movement of capital since they solved world capital's crisis through the defeat of all previous social contracts and through the violent destruction of an unprecedented proportion of total world capital (Japan and Germany lost 25-50% of their productive capacity during WWII). At the same time, they laid the basis for a society of materialized ideology; the total mobilization of the population became a part of capitalist accounting and could after wards be used in the management of supply and demand. Keynesianism first appear as the perfected system for managing the second World War. It then was continued to manage the peace.
As an artifact of previous crises, decadent capital must constantly adjust production and consumption ideologically. The "spectacle", the sum of contemplations within society, now appears as the object of production because a constant flow of illusions must support both production and consumption. The demand side of the economy snowballs on itself. "Industrial policy" adjusts free-enterprise production in the an effort to anticipate the demand artificially induced by advertising. The ideologies that solved the historical crises of over-production by creating an economy of extended survival need to be constantly expanded. This process of expansion appears again as urbanism, as the spectacle, the sum of materialized ideologies that defend the system. While the same the problems of an economy of survival still reappear in day to day life, the spectacle only solved a historical incident of the crisis of capital, that of 1920-40. The crisis tendency has reappeared now within this "economy of abundance".
Class struggle is not predicated on a gross economic crisis of capital, especially in late capital where the contradictions of capital are ever-present. The class struggle is often conditioned by the crisis of capital. The most advanced struggles of the last years have come from conditions that are both immiserating and ill-managed. From May 68 to Italy and Spain, the totality of capitalist existence has become visibly absurd and intolerable.
The "Imperial American" world order, created after WWII, is being broken up by the forces of the market. As full market capitalism develops in more and more countries, the primitive capitalist accumulation of third world raw materials is no longer a profit center. This break-up involves all type of monopolistic sectors from Stalinist nations to trade unions. The US role as world cop is no longer a profitable investment.
The imperialist world order is dying only slowly. Despite the fact that the USA's budget deficit has made it a "debtor nation", the US still earns more on its investments than it pays to foreign investors, since the US still maintains monopoly markets in many of its client states.
Despite the often touted productivity of Japan's peace-time economy, the US economy has become more oriented to war materials production. This happens not because of irrationalism but because an artificial demand must be maintained for the world market.
In this sense, the world market is hardly more efficient than the slow moving Russian "Communist" bureaucracy. Instead of an "ideal" market that finds needs, we have a market that must be constantly "primed" with "artificial" demand simply to continue production.
The success of newly industrialized countries has brought on a crisis in all capitalist economies. This can be most obviously seen in the reduction of American wages during this recent "long expansion period", to compete with the wages of Japanese and Korean workers.
The world market has been changed by the entry of various cheap labour commodities. This economic transformation has upset not only production patterns but has undone the previous social contract, which guaranteed a high level of social survival.
The world division of labour has become more explicitly a world labour market. This market is gradually destroying the Keynesians manipulations various country use to maintain a higher standard of living or a higher rate of domestic profits. For US capital, the competition of the Japanese working class with the American working class is more dangerous than the competition of Soviet state with the American state.
This new form of ownership leaves all previous proprietorships obsolete. The national bourgeois the world over is showing itself to be a corrupt and reactionary force, whether in the socialist countries, western or third world countries while an international bourgeois is being formed by the owners and managers of the multinationals and the IMF. The riots that greet even the most fervent nationalist regimes embody this element, even though they often have nationalistic forms. Student rallies in China focus tremendously on corruption of the top officials and on "saving the nation." Their repressors have used a similir argument.
The major capitalist divisions of the world have shifted from ideology to economics. History has extended the situation of 1969. While in 1969, "It could almost be said that the history of the last twenty years has set itself the sole task of refuting Trotsky's analysis concerning the bureaucracy." [SI Anthology p.256, IS #12] today the world order is changing equally to refute Lenin's theory of imperialism ("the highest stage of capitalism"). As the (supposedly deformed) "socialist" nations have shed their conceits of opposition and entered into direct capitalist relations with western capital, the symbolic combats of the cold war and the space race have been replace by the purely economic race to perfect semi-conductors and super-conductors. Imperialism, the supposedly last phase of capitalism, is merging more and more with traditional market capitalism as new nations industrialize and the world labour market develops.
The current crisis of capital is based on internationalization. The Mexican workers in the US, the Algerian workers in France, and the Turkish workers in Germany are the beginning of a world proletariat not just because they have the potentials for an international viewpoint but because they expose workers where they work to the world market ("normalizing" wages on a world scale).
One response has been an increase in the rate of exploitation world wide; seen in "austerity;" an increase in hours worked and a decrease in wages. In the advance industrial countries, there has been, as well, a decrease in social services, manipulated to hit the weakest section of the working class hardest (this has left many American inner cities resembling 19th century woodcuts).
Another response has been a centralization of investment in various corrupt mega-projects, projects that are often explicitly attacks on working peoples' ability to survive; for-profit hospitals, giant military projects, drug import schemes and "urban renewal".
A third response has been a increase in terror within the largest projects; more and more corruption must be unearthed by FBI sting operations even as the amount of corruption increases without limits. This terror also appears as a huge level of volatility within the entire economy; the manipulation of various indices is becoming more and more necessary because of the amount of power changing hands.
Because of the ability of human beings to duplicate any rational system, the development of capital presents itself as merely the creation of a machine; "the world computer"[science fiction], "the mega-machine" [Lewis Mumford], "the planetary work machine" [various radical groups] etc.. These formal systems are merely pictures of the form, at any one time, of the total movement of alienated labour.
The crises that exist in these formal system are in turn only manifestations of the crisis of capital. Any merely formal problem of capital can be fixed just like any machine of capital. The crisis of capital comes when the number of problems has exceeded the ability of capitalists produce fixes.
The New York Stock Exchange has been continually creating buffers and guilines, both formal and informal, to keep trading "orderly", to keep prices from fluctuating wildly. These have not prevented instability in the market but rather they have created a whole industry of experts on how to get around the guidlines (and a whole industry of catching those who go outside the guidlines etc., etc.,).
An ideology, as a forced irrationality in human relations, can be easily applied to solve any one crisis of capitalist management. However, since the logic of the market place remains, the contradictions reappear in a different location and the amount of ideology grows without bounds, in terms of the number of ideologies created and the degree to which they are applied.
Each ideology must expand simply to keep up with the competition. Militarism and hatred of the Soviet Union increased under Reagan even as the USSR showed more forcefully that it wanted nothing but cooperation with US capital. The terror of looks, best seen in the artificial "need" for women's' thinness, has been increased as response to the need to simply keep consumer buying constant.
The terror of ideology tends to increase on all levels. Lies are what keep the system going but the cost of the lies increases faster than production of the society (since the fabric of the society it rapidly disintegrating). For the lower middle class, "born again" type conversions often take place as a response to set of demands that they can not satisfy. They mirror the choice that is made by society at large. What is substituted is a single ideological domination that can crush the hold of all previous ideologies; tradition, militarism, and toughness.
Thus lies must constantly fight for what is to them a shrinking pie; they edge out the material needs of workers in their competition to dominate them; military production has the justification of keeping the economy going but to maintain it the taxes of all worker must be increased while their wages are cut. More schools and more jails are being built to control "the decay of our culture" while those impoverished by work and taxes grow to fill these prisons.
The poverty following the decline of advanced capitalist production is not the same as the poverty of peasants forced force to work in factories for the first time. Social terror tends more and more to deprive people of simple social survival skills, rendering the entire population more and more as wards of the state.
The system does not create "false needs" but distorts existing needs. These distortions appear as the system destroys society's informal methods of meeting a worker's needs and substitutes scientifically engineered commodities for the most immediate parts of these needs. Thus the spectacular poverty of those who have been exposed to affluence is greater than the poverty of those who come from third world peasant back-grounds. Even more than the misery of the sweatshop, mobile home culture stands as the ultimate example of the tendency of capital to reducing life to the barest minimums of required for survival. Songs, home cooking, and personal industry have ceased; alienated labour is used to pay for all parts of survival.
The spectacle, the system of false consciousness bought by the system of abundance, has remained while many in society have been reduced to absolute poverty. The level of social poverty has grown through this entire time period, with both the rise and fall of the standard of living. The poverty of not being able to express your position is as miserable as the material deprivations that are now taking place.
Unions and social services are not a way to "buy-off" the working class during times of prosperity but a way to control it. These systems are now being used to enforce the austerity that factions of world capital now enforce for their own reasons. The defense of the false community created by welfare agencies or unions is what makes attacks on the working class seem to suceed without even a fight.
Larger and larger fights between factions of capital are characteristic of a profitability crisis.
FBI "sting" operations that have shown definitively that a massive system of corruption has become entrenched in American state capitalism. In order to root out the massive corruption that exists in all state sectors, the FBI sets up huge operations to create the crimes that it is will ultimately prosecute (as in "ABSCAM"). While legally prosecuting crime, these actions can be part of corruption on a higher level, since they are used by one party or grouping in struggles against another.
Drugs and drug testing are examples of the greater and greater conflicts of these false opposites. The destruction of the social fabric is used to sell commodities; both self destruction and the image that this has nothing to do with our society is sold this way. Cocaine is sold to those who are most desperate and police and troops to fight the cocaine are sold to the frightened group one level of the most desperate.
At the same time that their competition increases, the competing blocks have become more and more obviously identical; democracy and dictatorship follow each other at a rapid pace with some "democracies" at least equaling their dictatorial rivals (Brazil and the Philippines are two areas where a return to democracy has brought an increase in "death squad" type actions).