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http://www.cpeer.org，英文原文作 者：Tony Smith 衣阿华州立大学政治系
译 者：张 琦 中国人民大学 2004级经济学基地班
校译者：谢富胜 中国人民大学经济学院
THE PLACE OF THE WORLD MARKET IN MARX’S SYSTEMATIC THEORY
Tony Smith
The three volumes of Capital form an immensely complex work, including a variety of quite different sorts of texts. Marx’s systematic ordering of the essential determinations of capital, beginning in Volume I with relatively simple and abstract social forms and then proceeding step by step to ever more complex and concrete determinations provides a unifying thread. Many fundamental structures of the capitalist mode of production remained to be considered at the point where Marx left off in Volume III. At one point, at least, Marx planned to conclude his project with volumes on the state, foreign trade, and the world market and crisis (Marx 1973, 227, 264). This paper is devoted to two questions. Why exactly did Marx place the category of the world market at the very culmination of his systematic ordering? And what are the essential features of the social form referred to by this category? Before addressing these issues some further methodological remarks are in order.
The starting point of Capital is a given totality, the capitalist mode of production. Each categorial level in the systematic theory is an attempt to comprehend this totality. Early stages fail to define a whole that can reproduce itself satisfactorily. Yet from the beginning we know that we are attempting to reconstruct in thought a mode of production that does reproduce itself. This consideration provides a theoretical warrant for moving to another categorial level, defined by a more complex and concrete way of comprehending the same totality. The methodology of systematic dialectical social theories thus involves both a ‘push’ and a ‘pull’ movement, although both are ultimately indistinguishable. The shortcomings of a particular categorial level, that is, the inability on that level of abstraction to account adequately for the self-reproduction of the given totality, ‘push’ the theory forward to the next stage. The theoretical imperative to not conclude the systematic ordering until the given totality has been fully comprehended "pulls" the theory to its end point (Marx 1973: 100-01; Smith 1990, Chapters I, II).
The most direct approach to the question of the systematic place of the world market in Marx’s theory would be to examine the state form in detail, showing how the self-reproduction of capital cannot be fully accounted for on this theoretical level. This inadequacy then justifies a transition to foreign trade and the world market. A more comprehensive approach would be to attempt to show that the category "world market" is implicit in each and every major theoretical level of Capital as well as the state form. From this perspective the theoretical warrant for the derivation of the category "world market" is provided by the systematic imperative to make explicit every implicit essential determination of the given totality. The present paper is a contribution to this second, more comprehensive, approach. I shall go through the main stages of Marx’s systematic progression with two questions in mind. How does each level in the theory point towards the world market as the culminating social form of capital? And what essential determinations of that culminating social form are implied on each level? (See Appendix)
The Initial Determinations of Volume I
Fortunately for us, Marx himself explicitly noted that the world market is implicit in the structures and processes examined at the very beginning of Volume I. Before considering his remarks, however, a brief and all too compressed summary of these initial determinations must be provided.
The simplest and most abstract manner of depicting capitalism as a totality is as a society of generalized commodity exchange. Within the commodity form labor is undertaken privately, and must subsequently prove its social necessity through the successful sale of produced commodities. Any particular act of concrete labor may prove to be socially wasted; only "socially necessary labor" produces a commodity with "value." The socially necessary labor that produces value is therefore conceptually distinct from concrete exertions, and may thus be termed "abstract labor." While particular acts of concrete labour can be measured directly in units of time, neither abstract labor nor the value it produces can be measured with a stopwatch or any other concrete form of measurement. And yet a socially objective measure of value is clearly a necessary precondition for generalized commodity exchange. Money is this socially objective measure of value. In this manner Marx establishes the systematic necessity linking the commodity form and the money form (Murray 1993, Campbell 1993).
Once money has been explicitly introduced as the form of value, any attempt to comprehend generalized commodity exchange as a system designed to meet human needs must be abandoned. The valorization imperative - Money must beget money! – is the dominant principle of this system, and the satisfaction of human needs occurs only in so far as it is compatible with this dictate. There is thus a systematic necessity connecting the money form and the capital form, M-C-M’. In other words, the next most concrete and complex manner of comprehending the capitalist mode of production as a totality is as a system in which the sum total of money accumulated at the conclusion of any given period of commodity exchanges exceeds that invested at the beginning of that period. "Value" now takes on the form of an objective social power, standing above and beyond individual commodities and society as a whole, subjecting every nook and cranny of the social world to its rule.
How exactly does money, an inert thing, beget money? Any adequate theory of capital must explain this mystery of capital. Marx begins his answer by explicitly noting what had been implicit previously: in a society of generalized commodity exchange labor power is itself a commodity. Marx assumes that money wages are sufficient to purchase the commodities required for the reproduction of wage laborers. Once labor power has been purchased, however, wage laborers are forced to produce an amount of economic value exceeding what they receive back in the form of wages. The capital form is thus explained by the surplus labour of wage laborers, a surplus labor that takes on the historically specific form of surplus value. Capital, as Marx vehemently insists, is not a thing, but a social relation, the social relation of exploitation. The generalized circulation of commodities, and the alien power of the value form, are both systematically reproduced on the level of total social capital through the exploitation of wage labor by capital.
We can now return to our topic. Is the reason why Marx places "foreign trade" and "the world market" at the culmination of his systematic dialectic implicit here in the initial stages of the theory? His own answer is unequivocally affirmative: these initial determinations are only grounded adequately in the social forms of foreign exchange and the world market. Only then does the circle complete itself. Only then are the presuppositions posited. Only then are the final necessary conditions of the possibility of the systematic reproduction of capital derived. Only then, in brief, does the initially implicit become fully explicit:
If surplus labour or surplus-value were represented only in the national surplus product, then the increase of value for the sake of value and therefore the extraction of surplus labour would be restricted by the limited, narrow circle of use-values in which the value of the [national] labour would be represented. But it is foreign trade which develops its [the surplus product’s] real nature as value by developing the labour embodied in it as social labour which manifests itself in an unlimited range of different use-values, and this in fact gives meaning to abstract wealth . . . (I)t is only foreign trade, the development of the market to a world market, which cause money to develop into world money and abstract labour into social labour. Abstract wealth, value, money, hence abstract labour, develop in the measure that concrete labour becomes a totality of different modes of labour embracing the world market. Capitalist production rests on the value or the transformation of the labour embodied in the product into social labour. But this is only [possible] on the basis of foreign trade and of the world market. This is at once the pre-condition and the result of capitalist production. (Marx 1971: 253)
This extremely interesting passage develops four closely interconnected main themes. They are all based on the thesis that the system of generalized commodity exchange discussed at the very beginning of Volume I is in fact the system of capitalist production, defined by an unrestricted drive for "the increase of value for the sake of value."
1. In the commodity form use values are the bearers of exchange value. If commodity exchange is truly generalized, then so too are use values. Any and all restrictions of exchange to a particular set of use values, whether use values of a particular type or use values produced within a particular region, is thoroughly arbitrary from the standpoint of the value form. The value form includes an immanent drive to break through all such arbitrary restrictions. There is an immanent dynamic to transform all products into commodities. And there is an immanent drive for the exchange of commodities to transgress any given geographical limit.
2. The system of generalized commodity exchange simply is a particular system of social labor. It is the peculiar system in which the inherently social dimension of labor is a mere possibility that may or may not ever be actually established through the subsequent sale of produced commodities. In this manner the social relations among producers are mediated through the things they produce. How extensive are the social relations mediated in this fashion? To say that geographical restrictions on the commodities exchanged are thoroughly arbitrary and necessarily tend to be overcome under the value form is equivalent to saying that restrictions on the social relations mediated through commodity exchange are thoroughly arbitrary and necessarily tend to be overcome as well. There is an immanent drive in capitalism to transform all instances of production into privately undertaken labor that must subsequently prove its social necessity. And there is a necessary structural tendency for relations among producers to extend beyond any given geographical limit. Under the value form "concrete labour becomes a totality of different modes of labour embracing the world market."
3. At the heart of the value form of social production we find a number of "real abstractions." There is the abstraction inherent in commodities, that is, the exchange value of commodities vis-à-vis the concrete use values they have for their producers. And there is the abstraction inherent in labor, that is, the socially necessary dimension of that labor vis-à-vis the concrete exertions that may or may not prove to have been socially wasted. Once again, the absolute centrality of these abstractions to generalized commodity exchange implies that no concrete socially objective measure of value can be found. The value produced by abstract labor cannot be measured by any concrete use value feature concrete commodities might possess ("utility"). Nor can it be measured in terms of the labor time undertaken by concrete labor. The only socially objective measure of value must itself be a real abstraction, money. What is the scope of the money form? The abstractness of exchange value implies that the relevant scale of commodity exchange is the world market. The abstractness of abstract labor implies that the relevant scale of the social Department of (privately undertaken) labor is the world market. And so the socially objective measure of value must operate on this same scale as well. While different monies may exist with a more restricted scope, the value form necessarily generates a world money, and the various particular monies must be ultimately defined in relationship to this world money.
4. The references to surplus labor and surplus value in the above passage from Marx refer to the capital/wage labor relation. They imply that the capital/wage labor antagonism at the heart of capital-in-general is an antagonism implicitly played out on the level of the world market. The level of total social capital defined at the beginning of Capital is implicitly the total social capital of the world market, and the ultimate explanation of surplus value produced in the world economy is the exploitation of wage labor within the world economy as a whole.
These four points establish that from the very beginning of Marx’s systematic theory the fundamental framework of capital is implicitly the world market. The systematic progression thus cannot conclude until this has been made explicit. The four points also bring out essential determinations of the world market as a social form. Using the above passage from Marx as a template, it should be possible to go thorough the remaining stages in Marx’s theory and note how they too presuppose that the ultimate framework of capital is the world market, and how they too implicitly bring out essential determinations of this social form.
Before continuing, however, I would first like to note briefly how the above passage reveals the complexity of Marx’s normative assessment of capitalism. For Marx, the reign of capital establishes perhaps the severest form of alienation ever institutionalized in the history of the human species. At the heart of the capitalist mode of production an ontological inversion occurs. "Value" becomes a social power standing above both commodities and human laborers, an alien force subjecting social life to the drive to "increase value for the sake of value." On the other hand, however, the reign of capital simultaneously brings about the most profound emancipation of humanity that has thus far occurred. Human needs are emancipated as the range of potential use values widens, transgressing customary restrictions on needs, even if in a limited distorted fashion. The productive capacities of collective social labor as a whole are emancipated from customary restrictions, even if individual laborers suffer an erosion of capacities (Marx 1976, 469). And the notion of human community is in principle emancipated from traditional limits as well. The cosmopolitan identity that was a mere moral imperative for the Stoics and Kant obtains a material basis as agents throughout the world market are tied together in objective social relations, even if in a reified fashion. In this sense proletarian internationalism is implicit in Capital from its first sentence onwards.
However limited and distorted the radical openness to new needs, new capacities, and new identities may be, the emancipatory dimension of the value form is no less real than its horrific alienation. The dominance of the value form across geographical borders, and the liberation of human needs, capacities, and identities beyond all arbitrary restrictions, are two sides of the same coin.
The Subsequent Determinations of Volume I
The rate of surplus value. The secret of the capital form is the extraction of surplus labor and its appropriation by capital in the form of surplus value. In the systematic ordering of the essential determinations of capital the next most complex and concrete determination after the category "exploitation" is the struggle over the rate of surplus value that is a necessary feature of the capital/wage labor relation. A first dimension of this struggle has to do with the social definition of the value of labor power. Everything else being equal, the lower the value of labor power, the less of the working day must be devoted to producing economic value equivalent to the wages workers receive, and the more that can be devoted to the production of surplus value. And so the objective interests of capital and wage labor do not coincide. A second feature is the necessary tendency for capital to attempt to increase the rate of surplus value through extending the workday, and the necessary tendency for wage laborers to resist this extension of the workday. When such resistance is successful – and even when it is not, given the fact that there are only so many hours in the day that can be devoted to surplus labor – capital will necessarily attempt to introduce technological and organizational innovations intensifying the labor process. Here too resistance to capital is inherent to capital. All of three forms of class struggle implicitly point to the world market as the ultimate stage in which the rate of surplus value is determined.
Marx stresses that the value of labor power necessarily has a "historical and moral" component. The world market implicitly plays a major role in determining this component. The world market opens the possibility that lower cost commodities may be imported that can substitute for the commodities presently consumed by workers. This opens the possibility for a long-term reduction in the value of labor power from what it would otherwise be, which in turn opens the possibility for a rise in the rate of surplus value. The drive to "increase value for the sake of value" ensures that these possibilities will necessarily tend to be actualized. The massive flow of new crops (especially sugar) from the "new" world to the "old" illustrates how this dynamic was at work in the historical beginnings of the capitalist world market. Debates around the Corn Laws exemplify the importance of this factor in Ricardo’s day. And the manner in which cheap consumer imports have significantly contributed to the stagnation of real wages in the United States provides a contemporary illustration.
The determination of the value of labor power, however, is never simply a matter of the costs of commodities consumed by workers and their families. The balance of class forces at a particular place and time is the crucial matter. This balance is crucial as well to the prospects of capital’s attempts to lengthen the working day and to restructure the labor process to its benefit through technological/organizational innovations.
I believe that Marx made three basic points at this level of his theory. First, class struggles are an ineluctable feature of the capital form. Second, when "the working class’s power of attack [grows] with the number of its allies in those social layers not directly interested in the question," particular struggles can be won (Marx 1976, 409). Third, however, as long as capitalist property relations are in place capital possesses the greater weapons. And so there is a necessary tendency for any gains made by labor to be limited and precarious. For our purposes here the main weapons to consider are capital strike and capital flight, the latter of which implicitly points to the world market.
When wage laborers prove successful for any number of contingent reasons at redefining the value of labor power in a manner that squeezes profits, limiting the working day, or resisting technological and organizational changes that weaken their ability to control the production process, the first option of those who own and possess capital is simply to call a capital strike. Lacking access to means of subsistence, wage laborers generally will soon find themselves forced to give up some of their gains as a condition for continued employment. A capital strike, however, interrupts the capital accumulation process, and so is often a less satisfactory option from the standpoint of capital than capital flight. Capital flight is simply the process of shifting investment from one region to another in the hope that this will shift the balance of power between capital and wage labor to the advantage of the former. Mere threats to shift investment generally allow the owners and controllers of capital to implement a "divide and conquer" strategy in which one sector of the wage labor force is played off against another, allowing capital to maintain/increase its appropriation of surplus value. In principle divide and conquer strategies include cross border capital flows in the form of foreign direct investment. The discussion of the capital/wage labor antagonism in the sphere of production thus implicitly brings us again to perhaps the most essential determination of the world market: the antagonism of interests between capital in general and wage labor in general holds across geographical boundaries.
The alien power of capital over human society is furthered by anything that divides the "other" of capital. Labor is this other, and many Departments within wage labor on the level of the world market necessarily tend to arise from determinations discussed at this level of Volume I. Levels of productivity will differ in different geographical regions, leading to differences in the "historical and moral" component of the value of labor power (Marx 1968, 16-17). Struggles to maintain/revise upwards the "historical and moral" component of the value of labor power will not be equally successful everywhere, nor will struggles against extensions of the working day and the imposition of technological-organizational innovations shifting control of the labor process away from labor. The tendencies for Departments within the international working class are incredibly powerful even prior to a consideration of more concrete sources of Department, such as nationalism, religion, ethnicity, race, and gender.
Nonetheless, the complex normative dimension of the initial stages of Marx’s theory holds here, as it does throughout Capital as a whole. While each stage in the systematic progression implicitly points to the world market as the ultimate framework for the alien rule of value, they also point to the world market as a site for the development of human needs, capacities, and identities beyond customary restrictions. And each stage also implicitly points to proletarian internationalism as the ultimate framework for a political response to the domination of this alien power, even as the tendencies for Departments within the international working class are fully acknowledged. At the present stage in the ordering Marx noted explicitly how successful struggles in one part of the world market can inspire struggles elsewhere. Also, the objective material basis for a cosmopolitan identity of workers is reinforced on the present level of inquiry. The world market doesn’t just bring workers together in some respects and divide them in others; workers are brought together through precisely the same dynamic that creates the Departments. Wage laborers throughout the world market are socially related not merely through the exchange of produced commodities, but also through objective ties established by capital flight; the divide and conquer strategy unites geographically separated workers by simultaneously subjecting them to the same power. As a result the tendency for workers to unite across geographical boundaries is no less inherent in the capital form than the tendency for capital to attempt to divide them. Which tendency dominates in a particular context is a contingent matter.
The concentration and centralization of capital For our purposes the final major topic of Volume I is the accumulation process. The most important category introduced at this level of the theory is the systematic tendency for the concentration and centralization of capital. As the concentration and centralization process proceeds, it is necessarily the case that the geographical scale at which leading units of capital operate tends to expand as well. Local firms producing for local markets tend to give way to regional firms producing for regional markets, and then to national firms producing for national markets. The tendency to concentration and centralization doesn’t halt at this point, and so there is a necessary tendency for the leading firms in leading sectors to produce for global markets.
The consolidation of a relative handful of individual firms dominating leading sectors occurs through mergers and acquisitions as well as through internal growth. This process, once again, doesn’t suddenly halt with the rise of large firms consolidated on the level of the national economy. As the concentration and centralization of capital proceeds, there is a necessary tendency for cross border mergers and acquisitions to increase over time, an important determination of the world market (but see footnote #9 above).
Another essential dimension of the world market implicit in concluding parts of Capital I can be introduced by noting that the concentration and centralization process does not simply generate a tendency to the vertical integration of firms. It is true that when firms purchase inputs from other units of capital, their cost is c+v+s; while when they produce the inputs themselves the cost declines to c+v, everything else being equal (Marx 1963, 140, 220). The greater profits resulting from these lower costs does indeed encourage vertical integration. On the other hand, however, the more sections of the production chain are incorporated within a vertically integrated firm, the longer its turnover time. This implies that there is a point beyond which gains from further vertical integration do not compensate for longer turnover time. Past this point the accumulation of capital tends to result in a disintegration of production processes.
(N)ot only are accumulation and the concentration accompanying it scattered over many points, but the increase of each functioning capital its thwarted by the formation of new capitals and the subDepartment of old. Accumulation, therefore, presents itself on the one hand as increasing concentration of the means of production, and of the command over labour; and on the other hand as repulsion of many individual capitals from one another." (Marx 1976, 776-77. See also Marx 1976, 591; Harvey 1999; Smith 2000a, Chapter 5).
For our purposes here the most significant form of disintegration is outsourcing the production of certain inputs to subcontractors.
The tendency to vertical integration implies that in the course of capital accumulation the geographical scale of operation of hegemonic firms necessarily tends to expand, culminating in ever-more extensive cross-border mergers and acquisitions. The accompanying counter-tendency to disintegration also holds implications for the world market as a social form. Disintegration is a matter of breaking up the production chain into various parts, and assigning different sections to different firms. The valorization imperative implies that whenever core firms can accumulate capital at a faster rate through outsourcing parts of the production chain to foreign suppliers, there is a necessary tendency for such cross-border subcontracting arrangements to be implemented. (Here too the points raised in footnote #9 must be kept in mind.)
The accumulation process is not simply a matter of capital flows. Flows of labor are necessarily involved as well. The capital/wage labor relation is hardly limited to sale of labor power as a commodity in labor markets and the organization of the labor process at the point of production. These relations are embedded within processes in which massive pools of labor power form and flow in response to the rhythms of capital accumulation and the desires of the multitude. In Volume I Marx explicitly notes that the ultimate framework for these labor flows is supplied by the world market. In regions where capital accumulation is limited, vast reserves of unemployed wage laborers form, a significant percentage of which then emigrate to areas where the pace of accumulation is rapid. Marx’s discussion in Volume I of emigration from Ireland in the 19’Th century remains a paradigmatic account of this dimension of the accumulation process (Marx 1976, 854 ff.). These cross border labor flows simultaneously tend to exacerbate Departments within the work force and to overcome such Departments over time. Once again, systematic theory cannot deduce which tendency will prove stronger in any given historical context.
This concludes our survey of the manner in which the major levels of Volume I of Capital both implicitly point towards the category "world market" as the culmination of Marx’s systematic ordering and implicitly refer to important determinations of that social form. It is now time to consider how the other two volumes of Capital may further our understanding of the missing book on the world market.
Volume II
The circuits of capital For our purposes the material in Volume II can be divided under two main headings. The first consists of the portion of the text that contributes to Marx’s reply to an objection against his theory of surplus value. In the M-C-P-C’-M’ process the time spent in circulation outside of the labor process appears to be no less important to capital accumulation than the labor process itself. Doesn’t this show that circulation time itself creates value in a manner that cannot be taken into account by Marx’s theory of exploitation? In response to this line of thought Marx argues that circulation costs outside of the labor process impose a deduction from the surplus value that could potentially be accumulated in any given period. Reductions in circulation time that lower these costs thus do indeed tend to increase the accumulation of surplus value. But this does not at all imply that time spent in the circulation process outside of the labor process produces surplus value in itself.
One major implication of this argument is that a systematic tendency for innovations reducing turnover time and circulation costs is no less intrinsic to the capital form than the tendency to implement innovations in the labor process directly increasing the rate of surplus value. It follows that it is necessarily the case that regular and significant improvements in transportation technologies and communications technologies will tend to occur in the course of capitalist development, for these forms of technological change reduce turnover time and circulation costs. The greater the advances in transportation and communication technologies, the quicker capital proceeds through its circuits, everything else being equal. There is thus in capitalism a necessary tendency to the compression of time. But these same technological advances also extend the geographical range within which the overlapping circuits of capital can effectively operate. There is thus also a necessary tendency to the compression of space in the capital form (Harvey 1999).
From this perspective Volume II reinforces the determinations of the world market implicit in Volume I. Capital is first and foremost concerned with "the increase of value for the sake of value." The determinations of the world market implicit in Volume I - commodity flows across borders, exchanges of local currencies, foreign direct investment, cross border mergers and acquisitions and outsourcing arrangements - all involve circulation costs. When these costs are high enough, flows of commodities and investments on the level of the world market may hamper "the increase of value for the sake of value." Under such circumstances they will not be pursued. Nonetheless, Marx insists that the world market is implicit from the very beginning of Capital. We can now better understand why. The capital form includes a necessary systematic tendency for these sorts of transaction costs to become lower over time through innovations in communication and transportation technologies.
At this point I would like to introduce a digression on another feature of the world market that I believe is implicit in the determinations of Capital that have been considered. Two general models or ideal types of world market can be distinguished. The first may be termed the "international" model, in which production occurs within national boundaries (including production undertaken by foreign firms, or by firms subcontracting for foreign firms) with a certain portion of output then being exported to foreign markets. The second model can be referred to as a "transnational" or "globalized" world market. Its distinguishing feature is that all moments in the M-C-P-C’-M’ circuit (and the P-P and C’-C’ circuits intertwined with it in the ways discussed in Volume II) tend to involve flows across borders, not just the initial investment (M) and the final C’-M’ moments. In specific, the second model includes the purchase of commodity inputs and the extension of production chains across national borders. Both types of world market are consistent with the social forms examined in Capital. Should we conclude that the particular type of world market in place in a particular context depends completely upon contingencies beyond the scope of systematic theory?
It seems to me that a stronger claim is possible: the ineluctable drive under the capital form to lower circulation costs and turnover time implies a systematic tendency for the transnational form of world market to emerge in the course of capitalist development. The more communications and transportation technologies reduce circulation costs and turnover time, the greater the tendency for transnational production. We shall see below that this systematic tendency to the transnational form of world market is reinforced by considerations implicit on subsequent theoretical levels of Capital.
The reproduction of total social capital The other main topic of Volume II is the analysis of the schemes of simple and expanded reproduction. These schemes establish two points simultaneously. First, total social capital can reproduce itself over time despite the anarchy of capitalist production through flows of investment capital and purchases of commodities connecting Department I, devoted to the production of means of production, and Department II, where means of consumption are produced. Second, however, the conditions for harmonious reproduction are so strict that there are no tendencies whatsoever for capitalist development to exhibit a pattern of either static or dynamic equilibrium ("balanced growth"). Both points are relevant to the concerns of this paper.
Given the considerations introduced thus far, we may conclude at once that that the systematic reproduction of total social capital discussed in Part 3 of Volume II is implicitly reproduction on the level of the world market. The long passage from Theories of Surplus Value quoted at the beginning of this paper implies that producer and consumer purchases from Department I and Department II, respectively, are not limited to commodities produced in the domestic economy. And foreign direct investment, and cross border mergers and acquisitions, and cross border subcontracting, all involve flows of investment capital into Department I and Department II that are not restricted to the domestic economy. Cross border purchases from Department I of raw materials and fixed capital can be taken as representative illustrations.
As the scale of capital production grows through the concentration and centralization process, it becomes all but impossible for raw materials found in any restricted geographical region to be completely sufficient for production in that region. And so there is a necessary tendency for the reproduction of total social capital to involve cross border purchases of raw materials (Marx 1968, 437). The concentration and centralization of capital also implies that leading firms in leading sectors increasingly face competition at a global level. If fixed capital embodying more advanced technological knowledge is developed in a particular region of the world market, units of capital from other regions competing in the same sector will be at a competitive disadvantage. They must then attempt to catch up, and one form of catching up is to purchase fixed capital from the region where the advance has been made. There is, in other words, a systematic tendency in the reproduction of total social capital for technology transfer, at least among regions with the economic resources to do so.
On the level of abstraction of Part 3 of Volume II it is merely implicit that the flows of value to and from the two Departments through which the total social capital is reproduced necessarily tend to include flows of investment capital and commodities across borders. In a systematic dialectic the implicit must be made explicit, and so once again we must conclude that the systematic ordering of the essential determinations of the capital form is not complete prior to the derivation of the category "world market."
Volume III
The redistribution of surplus value In Volume III, as in Volume II, one of Marx’s central concerns is to establish that determinations bringing us closer to the concreteness and complexity of the capitalist mode of production do not force us to abandon the theory of surplus value. Critics of this theory correctly insist that industrial sectors employing greater numbers of wage laborers do not tend to enjoy higher rates of profit than other sectors, as would seem to follow if the exploitation of wage labor were the sole source of profits. They also question whether Marx can account for the profits of commercial and financial capitals, and the rents appropriated by landowners, given his thesis that profits rest on the appropriation of surplus-value produced by industrial wage laborers. In Volume III Marx replies to these two objections.
Marx’s response to the first criticism comes at the beginning of Volume III, where total social capital is disaggregated into a multiplicity of sectors with different value compositions of capital (different ratios between the amount of money capital invested in the purchase of means of production - "constant capital" - and the amount invested in the purchase of labour-power - "variable capital"). He notes that if commodities exchange at cost prices plus the surplus value produced in the given sector (C+V+S), different industries would have wildly divergent rates of profit (total investment and the rate of exploitation assumed equal). Sectors with a relatively high value composition would have a low rate of profit and vice-versa. Capital mobility and inter-capital competition, however, generate a tendency for rates of profit to equalize across sectors. Capital investment tends to flow away from sectors with lower rates of profit, and towards sectors where profit rates are higher. Competitive pressures then lessen in the former industries and increase in the latter, generating a tendency for rates of profit to increase in the former and decrease in the latter. This implies that on the present level of abstraction commodities produced by industrial capitals tend to sell at prices of production P=(C+V)(1+R), with "R" defined as a rate of profit tending to hold equally across sectors in the given period. These prices of production are conceived as centers of gravity around which market prices revolve, depending on temporary contingencies of supply and demand. On this level of abstraction profits tend to be proportional to the size of the capital invested. It thus appears as if capital investment were productive of surplus value in itself. But while the connection of profits to the exploitation of wage labor may be more opaque on this level of analysis, the connection remains nonetheless. Prices of production are the result of a (logical) redistribution of surplus value within the given period; total profits equal total surplus value (Moseley, 1993b).
With the progression to the yet more complex and concrete levels of merchant and financial capital in Volume III, capital fetishism attains its highest forms. Owners of both merchant capital and financial capital obviously enjoy returns on their investments. This fact blatantly appears to contradict the claim that profits rest on the appropriation of surplus value produced by industrial wage laborers. The profits that result from the M-M’ circuit of financial capital in particular appear to challenge the Marxian theory of exploitation at its very roots. Profits appear to arise here solely from capital itself, as if capital were in and of itself productive of value even in the absence of any tie to production whatsoever. The phenomenon of rent appropriated by landowners raises an equally serious problem. It appears to establish conclusively that land too is productive of economic value in and of itself. For Marx, however, the profits of commercial and financial capital, and the rents enjoyed by owners of land, also derive from a (logical) process of redistribution of the surplus-value resulting from the exploitation of wage labor by industrial capital.
Here again the relevance of Marx’s argument to an anticipation of the essential determinations of the world market follows directly from considerations introduced at earlier stages of the theory. If there is a systematic tendency for commodities to be produced and traded across borders, and for investment capital to flow across borders as well, it follows at once that the prices of production discussed in Volume III necessarily tend to be formed on the level of the world market (although here, as always, the considerations mentioned in footnote 9 remain relevant):
The industrial capitalist faces the world market; [he] therefore compares and must constantly compare his own cost-price with market prices not only at home, but also on the whole market of the world. He always produces taking this into account (Marx 1971, 470).
It follows also that the (logical) process of redistribution of surplus value between industrial and non-industrial capitals implicitly takes place on that level as well, given that international flows of capital include flows of merchant and financial capital.
Marx’s discussion in Volume III of the redistribution of surplus value in any given period occurs on a relatively high level of abstraction. Three other topics considered in Volume III fall on more concrete and complex theoretical levels, although this is not always presented as clearly in the text as one might wish. They are the drive to appropriate surplus profits through innovations, overaccumulation crises, and financial crises. All three themes have important implications for the systematic comprehension of the social form, "world market."
Surplus profits from innovations Marx himself discusses the drive by individual units of capital to appropriate surplus profits through innovations as a subordinate moment in the formation of prices of production, where a given "R" (rate of profit) is held constant and assumed to hold within and among all sectors of industrial capital. (Marx 1981: Chapter 10). But this discussion uncovers a more concrete and complex theoretical level than that of prices of production, a level in which rates of profit vary within and among sectors (Walker 1988; Smith, 2001). I believe that the account in Volume III of the drive to appropriate surplus profits through innovations implies something very profound about the workings of the world market, the systematic tendency to uneven development.
The research and development process is obviously a crucial element in the emergence of process and product innovations enabling the appropriation of surplus profits (Smith 1997). Units of capital with access to advanced R&D are best positioned to win this form of surplus profits in the course of production and exchange. They are thus also best positioned to establish a virtuous circle in which the surplus profits they appropriate enable further R&D, which in turn provides the most important preconditions for the appropriation of future surplus profits. In contrast, units of capital without initial access to advanced R&D tend to be trapped in a vicious circle. Their resulting inability to introduce significant innovations prevents an appropriation of surplus profits, which tends to limit their ability to participate in advanced R&D in the succeeding period, which in turn limits future innovations and future profit opportunities.
What implications does this line of thought have for our comprehension of the world market? The units of capital with the most access to advanced R&D by definition tend to be clustered in wealthy regions of the global economy, while units without such access tend to be clustered in poorer regions. The former are in a far better position to maintain the virtuous circle described above, while the latter have great difficulty avoiding the vicious circle. And so the drive to appropriate surplus profits through technological innovation tends to systematically reproduce uneven development in the world market over time (Marx 1981: 344-5).
Many other determinations of the world market reinforce this tendency to uneven development, including the remission of profits resulting from foreign direct investment in poorer regions, the ability of multinational firms to manipulate the ‘prices’ of commodities ‘exchanged’ in intra-firm transactions, and the ability of units of capital in wealthy regions to play off subcontractors in poorer regions against each other. These themes are more complex and concrete aspects of the foreign direct investment and cross border subcontracting arrangements considered above. Other determinations involve theoretical levels not yet introduced here. Capital flight undertaken by local elites desiring to escape currency risks and/or protect the fruits of corruption, and the tendency for poorer regions to fall into "the debt trap," both presuppose the state. Rather than exploring these topics further here, however, I would like to turn now to overaccumulation crises.
Overaccumulation crises In Part Three of Volume III Marx introduces the so-called law of the tendency of the rate of profit to fall. While various different factors underlying crises in capitalism are explored in different places in Marx’s writings, in this crucial text, at least, the overaccumulation of fixed capital is the major explanatory variable; the rate of profit tends to fall because C/V increases at a faster rate than S/V. While this law comes into play in short-to-medium term cyclical downswings, I believe that the tendency implicitly applies to more long-term downturns in capital accumulation as well.
Critics of this tendency law have complained that Marx fails to provide a plausible explanation why rational agents would invest capital in ways that lower profits. As long as differences within sectors are ignored, the complaint holds. But individual units of capital necessarily tend to seek surplus profits through innovation. The resulting heterogeneity and differences in fixed capital within sectors allow us to fill in the gaps in Marx’s presentation (Reuten 1991).
Briefly, the logic of inter-capital competition necessarily tends to lead to the introduction of new firms and plants into an industry that are more productive than those already established. These firms win surplus profits. But established firms and plants do not all automatically withdraw when this occurs (Brenner 1998). Given that their fixed capital costs are already "sunk," they may be happy with receiving the average rate of profit on their circulating capital. They also may have established relations with suppliers and customers that would be impossible (or prohibitively expensive) to duplicate elsewhere in any relevant time frame. Their management and labour force may have industry-specific skills. They may have access to state subsidies for training, infrastructure, or R&D that they would not be able to replace if they shifted investment to other sectors. The result of these sorts of considerations is that enough firms fail to withdraw to avoid an overaccumulation of capital crisis, manifested in excess capacity and declining rates of profit. In more traditional Marxist terms, insufficient surplus value is now produced to valorize the investments that had been made in fixed capital, leading to a fall in profit rates for an extended historical period (Smith 2000b).
Marx himself discussed this tendency on a relatively abstract theoretical level in Volume III. But it holds on the concrete and complex level of the world market as well. Robert Brenner has provided considerable empirical evidence that the lower rates of growth afflicting the world economy beginning in the late 1960’s was primarily due to excess capacity in the leading sectors of the global economy (Brenner 1998).
When overaccumulation crises break out, previous investments in fixed capital must be devalued. At this point the entire system becomes convulsed in endeavors to shift the costs of devaluation elsewhere. Each unit, network, and region of capital attempts to shift the costs of devaluation onto other units, networks, and regions. And capital as a whole attempts to shift as much of the cost as possible onto labour by increasing unemployment, lowering wages, and worsening work conditions (Brenner 1998; Smith 2000a: Chapter 5). As the concentration and centralization of capital proceeds, the overaccumulation and devaluation of capital necessarily tends to occur on an ever-more massive scale. Global turbulence and generalized economic insecurity increasingly become the normal state of affairs.
Financial crises Marx’s remarks on financial capital in Volume III are extremely fragmentary and unpolished. One major theme has already been noted: in any given period financial capital benefits from the (logical) redistribution of surplus value, a process that implicitly occurs in the framework of the world market. There is also at least the broadest outlines of a theory (or at least a set of stylized facts) relating the financial sector to overaccumulation crises.
Financial capital centralizes a pool of investment funds that can flow to the new plants, firms, and sectors with a reasonable expectation of being able to appropriate surplus profits for an extended period of time (Marx 1981: 567). As Marx explicitly notes, flows of financial capital from across the world market tend to be centralized in a few points at the center of a global financial order, and then allocated across borders as well. With credit money and fictitious capital the provision of funds can be a multiple of the temporarily idle profits, depreciation funds, and precautionary reserves pooled in the finance sector (Bellofiore 1989). In this manner, financial capital "appears as the principal lever of overproduction and excessive speculation in commerce" (Marx 1981: 572; see also Marx 1971, 122).
Once an overaccumulation crisis commences, the rate of investment in sectors suffering overcapacity problems slows significantly. A large pool of investment capital is formed once again, now seeking new sectors with a potential for high future rates of growth (de Brunhoff, 1978: 47). When such sectors are found, financial capital from throughout the world market will tend to flow in their direction. If the flows of investment capital to these new sectors are high enough, a systematic tendency to capital asset inflation results (Toporowski 1999: 2). Expectations of future earnings eventually become a secondary matter, as financial assets are purchased in the hope of profits from later sales of these assets (Marx 1981: 615-6, 742). This tendency is then reinforced as previous (paper) gains in capital assets are used as collateral for borrowings to fund further purchases of capital assets, setting off yet more rapid capital asset inflation (Guttmann 1994, 303-04). Throughout the course of this speculative bubble, however, it remains the case that financial assets remain in essence nothing but claims on the future production of surplus value. When it becomes overwhelmingly clear that their ever increasing prices are ever less likely to be redeemed by future profits, the speculative bubble collapses and a financial crisis ensues. Marx’s discussion of financial capital in Volume III is one of the handful of places where he makes explicit that the determinations considered in Capital are implicitly determinations of the world market. The financial crises he describes there explicitly afflict the world market as a whole, and are not contained within the geographical borders defining England or any other particular national economy.
The intertwining of the tendencies to overaccumulation crises and financial crises implies that the impact of concentration and centralization on the former extends to the latter as well. The devaluation of loans and fictitious capital following in the wage of financial crises necessarily tends to occur on an ever-more massive scale. Units, networks, and regions of capital attempt to shift the costs of devaluation on to other units, networks, and regions. Most of all, capital attempts to shift as much of the cost as possible onto wage labourers and their communities. Global turbulence and generalized economic insecurity increasingly pervade the world market.
Classes Volume III, and thus Capital as a whole, concludes with a few brief remarks on the category of "class" (Mattick, forthcoming). If the commodity flows discussed in the beginning sections of Capital I are implicitly cross border commodity flows, if all forms of money are implicitly related to world money, and if the social relation at the heart of the capital form implicitly unfolds on the stage of the world market, this surely affects our understanding of the category "class." If production chains, mergers and acquisitions, and subcontracting arrangements all tend to stretch across borders, furthered by an ineluctable tendency for improvements in communications and transportation technologies, this too surely affects our understanding of the category "class." If the reproduction of total social capital implicitly occurs through flows of commodities and investments across borders, while the redistribution of surplus value within and among sectors implicitly connects firms of different national origin, this also must affect our understanding of the category "class." And, finally, if systematic tendencies to uneven development, overaccumulation crises, and financial crises on the level of the world market are necessary determinations of the capital form, this too cannot leave our understanding of the category of "class" untouched. All these determinations of capital point towards the same conclusion: the discussion of class in the concluding paragraphs of Capital implicitly refers to the tendency for the formation of transnational classes. The capitalist class and the class of wage laborers both necessarily tend to be objectively defined on the level of the world market.
Of course it does not follow that these tendencies are equally manifest in all phases of capitalist historical development. For most of capitalist history they are latent. The concentration and centralization of capital process must proceed quite a bit before the inherent tendency to transnational class formation becomes unmistakable, a historical process that apparently has not yet concluded. Nor does it follow that all classes attain self-consciousness of their objectively transnational identity at the same rate. Political organization, leadership, and ideology can greatly further - or hinder – the move from being a (transnational) class "in itself" to being a (transnational) class "for itself," to employ the Hegelian jargon (Robinson and Harris 2000). Nonetheless, once we understand how the social forms examined in the three volumes of Marx’s masterwork implicitly refer to the world market as the culminating social form of capital, then we cannot consider the formation of transnational class identities as a merely contingent process. There is a necessary structural tendency for such identities to emerge, a tendency built-into the entire set of social forms defining the capitalist mode of production.
The State Form
It is one thing to attempt to show that the world market is implicit in the portions of Marx’s systematic project that have come down to us. It is quite another matter to proclaim what is implicit in an unwritten portion of the project, the volume that was to be devoted to the state. There are, however, two relatively uncontroversial assumptions regarding the likely content of such a volume that we can build upon. First, any adequate Marxian theory of the state must explore the role of the state in furthering the reproduction of capital accumulation. Second, any adequate Marxian theory of the state must also explore the state’s role in a system of states. Consideration of each theme furthers our understanding of why the category "world market" is the culmination of a Marxian systematic dialectic of capital, and it furthers our grasp of the determinations of that social form.
Thus far in this paper I have examined the main theoretical levels of Marx’s systematic theory in Capital, attempting to show that the world market is implicit in each stage. The following discussion of the state’s role in capital accumulation and the implications of this for our understanding of the world market will make recursive use of this methodological gambit. I shall quickly go through the main stages in Marx’s systematic ordering once again. My working hypothesis will be that the state form is always already implicitly operating on each level of the theory. I shall then suggest that on each stage in this ordering the implicit role of the state is necessarily tied to the world market.
The capitalist mode of production is initially defined as a system of generalized commodity exchange. As Hobbes and Locke well knew, the most basic way in which the state furthers capital accumulation is through defining and enforcing the property rights to commodities that are a necessary precondition for generalized commodity exchange. In so far as cross-border flows necessarily tend to arise within generalized commodity exchange, it follows that the state’s acknowledgement and enforcement of property rights cannot be restricted to indigenous property holders. Flows of commodities in the world market are mediated through the juridical apparatuses of states.
If generalized commodity exchange necessarily involves cross border flows of commodities, and if money is the only socially objective measure of the value of these commodities, then national currencies are necessarily brought into relationship with each other. This implies that all local forms of money must ultimately be defined by their relationship to world money. Even neoliberals grant that the world market requires "appropriate" monetary decisions by states (especially their central banks) regarding the relationship between the national currency and the form(s) of world money in force at a particular historical conjuncture. Flows of money in the world market are mediated through the monetary and exchange rate policies of states.
The capital/wage labor relation is the essential social relation of the capital form. Labor legislation is always implicit in this relation, ranging from rules regarding labor organizing to the regulation of workplace conditions. In so far as the capital/wage labor relation implicitly is ultimately played out within the framework of the world market, state legislation regarding that relation must necessarily address this dimension. State policies restricting or encouraging foreign investment obviously play a crucial role in capital’s ability to implement a "divide and conquer" strategy against labor in the world market. Another example relevant here is legislation denying workers in export processing zones legal rights granted in other sectors of the economy, or de facto state policies to not enforce de jure labor rights in these zones (the latter are probably more important in the contemporary global economy). State decisions to allow/restrict imports also affect labor relations, since such decisions create vast pools of unemployed workers whenever indigenous producers are wiped out by foreign competition. In brief, flows of investment in variable capital in the world market, and the balance of power in conflicts at sites of production throughout the world market, are mediated through de jure and de facto state labor policies.
Marx’s examination of capital accumulation at the conclusion of Volume I established a necessary tendency for the concentration and centralization of capital. This process demands that corporate law expand in step with the expansion of capital accumulation. The definition of what counts as a corporate "person" and the permissible and impermissible manners in which corporations can interact with each other are two examples of features of capitalist property relations that must be articulated and regularly revised by the juridical apparatus as capital accumulation proceeds. I have argued above that the concentration and centralization dynamic necessarily tends to lead to increasing levels of cross border direct investment, subcontracting, mergers and acquisition, and production chains in the course of capitalist development. All of these tendencies require that the state extend corporate rights to foreign units of capital. Finally, the accumulation process is also essentially connected to labor flows across borders. These flows are obviously mediated through the immigration laws of states, unemployment and welfare policies, and so on.
In the discussion of Volume II we saw that the reproduction of total social capital examined in the reproduction schemes implicitly occurs on the level of the world market. Cross border flows of commodities and investments within and between the two Departments require state action at various points in the circuits of capital. State policies can either encourage or hamper these flows, and thereby either ease or hamper the simple or expanded reproduction of capital.
The drive for surplus profits through technological innovations plays a crucial role in Volume III. On one level of theoretical abstraction it underlies the formation of prices of production. On a more concrete and complex level it serves as the starting point for the theory of uneven development in the world market. The state necessarily tends to play a crucial role in both establishing and maintaining a virtuous circle of innovation and surplus profits in privileged regions of the world economy (Kantor 1995). State industrial policies also form a crucial element in attempts in less privileged regions to escape the vicious circle of low innovation and profits (Wade 1990). Both state projects involve state supported education and training, state funding of infrastructure and research, the formation of formal and informal networks of government, business, and labour elites, the institution of government/business partnerships for specific projects of essential importance to growth, and so on "Crony capitalism" is thus an ineluctable feature of the world market, although it comes in a wide variety of forms.
The drive for surplus profits is also the starting point for a reconstruction of the theories of overaccumulation and financial crises sketched in Volume III, crises that increasingly tend to be played out at the level of the world market as the concentration and centralization of capital proceeds. One of the essential functions of the state is surely management of such crises, and attempts at crisis management necessarily have an ever-increasing international dimension. In the continued absence of an international monetary agency with the power to create credit money, the responsibility for increasing liquidity in the global economy ultimately rests with national governments. Some states, at least, also retain a capacity to intervene to prevent losses to particular players from threatening global markets as a whole, as Alan Greenspan’s organization of the bailout of Long Term Capital Management suggests. Further, investors continue to call on the state to ‘socialize’ the costs of global downswings by displacing them onto working men and women, the unemployed, the elderly, and so on. One mechanism for socializing these costs is through the state taking over private debts, as both the Japanese and Korean states have recently done in the aftermath of the Asian crisis.
Finally, Capital concludes with Marx’s sketchy remarks on the category "class." There are good reasons to hold that the tendency for the formation of transnational class identities is built-into the capital form. States obviously play a crucial role in the process whereby a transnational class "in itself" becomes (or does not become) a transnational class "for itself." States provide crucial institutional sites for the formal and informal negotiations that allow shared class interests across borders to be articulated, policy proposals furthering those interests to be debated, and conflicts over the selection and implementation of those policies to be addressed.
These considerations suggest the following conclusion: despite the tendency for cross border flows to increase in the course of capitalist development, there is no inherent tendency for the world market to take the form of a single homogeneous economic space. Specific preconditions for capital accumulation must be provided by particular states. The world market is characterized by a multiplicity of states no less than by a multiplicity of units of capital. And just as the multiplicity of capitals is not a mere aggregate, but a system with its own set of properties, so too states are inserted within a system of states with its own irreducible determinations.
A theoretical transition from the state’s role in capital accumulation to the state’s insertion in the interstate system can be made by noting that each and every one of the above forms of state activity necessarily generates a potential for both interstate cooperation and interstate conflict. The regulation of commodity flows in the world market, the management of currency exchange rates, the legal rights granted to non-national investors and corporations, the rules governing cross border flows of immigrant labor, access to foreign supplies of needed raw materials, and so on, all regularly require negotiations among states. These negotiations may lead to informal or formal agreements, or they may break down in the face of unresolved conflicts. An interstate system with its own level of intelligibility emerges from the resulting complex and contingent patterns of cooperation and conflict among states. A number of systematic features of the world market can be discerned within the vast sea of contingencies.
First, the world market is necessarily subjected to a "regime of global governance," however beset by gaps and inconsistencies that regime may be. The capital form, in other words, requires a) a set of formal and informal rules governing cross border flows of commodities, currencies, labor, and investment capital in the world market, and b) organizations that attempt to articulate, revise, and enforce these rules. In our day the World Bank, the International Monetary Fund, and the World Trade Organization are obvious examples of such organizations. Today as in the past, however, organizations defining and enforcing the global regime are also housed within particular state apparatuses. The U.S. Department of the Treasury is perhaps the central force in the contemporary regime of global governance, just as the British Treasury Ministry was in an earlier age.
Second, the tendency towards the concentration and centralization of capital is echoed by a tendency towards the concentration and centralization of state power within the interstate system. Just as the major sectors in the economy tend to be dominated by a handful of firms, the interstate system tends to form a hierarchy in which strong states and weak states exist alongside each other. As already noted, strong states tend to be a part of virtuous circles of innovation and surplus profits, circles that allow funds for the development of effective state apparatuses. Weak states are embedded in vicious circles which do not provide the material preconditions for this development of reasonably effective state capacities. The regime of global governance in theworld marekt is established and maintained by strong states.
The persistence of interstate conflicts necessarily tends to reinforce the role of military apparatuses in specific within the interstate system. There will inevitably be cases in which attempts are made to resolve interstate conflicts through military intervention. And the threat of military action persists even in periods where military force is not being employed (Marx 1976, 915 ff.; Chomsky 1996). Not all states are equally effective at building a military apparatus, employing it, or implicitly threatening to employ it in the course of interstate negotiations. Here too a distinction between strong and weak states is a necessary feature of the capitalist world market.
Third, within the circle of strong states not all states are created equal. Each long wave of capitalist expansion has its own leading sectors with rapid rates of growth, and the leading firms in those sectors tend to be nurtured and subsidized in various ways by a rising hegemonic state power with superior military capacities. In Arrighi’s masterful study of the rise of hegemonic powers in capitalist development a new stage of economic expansion tends to begin with expenditures far exceeding what could be justified at that time in narrow calculations of profit and loss. State prestige and military strategy (‘territorial logic’) provide a spur to subsidies and investment in infrastructure, research and development, and so on, far beyond what can be justified in terms of ‘capital logic’ (See Marx 1976, 919). Hegemonic regions in the history of capitalism thus win and retain their hegemonic status through the effective exercise of state capacities. He also shows that the exhaustion of the expansionary wave is intertwined with the erosion of the position of the hegemonic state in the system of states. When profit opportunities in the given regions eventually began to decline, financial capital then increasingly flows elsewhere in search of surplus profits, eventually undermining the hegemonic position of the state (Arrighi 1994).
Fourth, and finally, the hierarchy of strong and weak states and the rise and fall of hegemonic powers in the interstate system affect flows of value through the circuits of capital in the world market in a number of profound ways. In specific, the tendencies to uneven development, overaccumulation crises, and financial crises are all greatly reinforced.
Uneven development Cross border flows of commodities do not necessarily tend to balance automatically in the world market. Trade surpluses arise in some countries, while trade deficits emerge in others. Equilibrium could be approached if deficit countries imposed restrictive policies and surplus countries increased public spending and allowed higher wages. Deficit countries would then import less, while the stimulation of domestic consumption in the surplus countries would lead them to import more and export less. The logic of the capital/wage labor relation in surplus countries, however, necessarily tends to discourage this sort of symmetrical adjustment. Domestic industries are generally able to block reflationary policies on the grounds that higher wages would hurt profits. And political elites in surplus countries generally prefer to accumulate foreign reserves instead, on the grounds that this enhances the position of surplus states within the interstate hierarchy. These reserves can then be loaned to deficit countries.
As long as debtor nations can tap global credit markets, this situation can persist for an extended period. But the structural tendency to uneven development in the world market is reinforced in four major ways. First, a steady stream of reverse capital flows from debtor to creditor countries is put in place. Second, debtor countries are far more burdened than would be the case with a more symmetrical response to trade imbalances in surplus and deficit countries. Debtor countries become increasingly vulnerable to capital outflows, which are more likely to occur with low interest rates and redistributive social policies. And so interest rates tend to be high and austerity programs severe, whatever the political regime in place. Third, the need to repay capital imports leads debtor countries to concentrate more and more on production for exports. For reasons discussed above, these exports will tend to be industrial and agricultural commodities that do not embody product or process innovations. As more debtor countries export these sorts of commodities, world market prices tend to stagnate or decline, reinforcing the tendency to uneven terms of exchange. Fourth, while imbalances are allowed to build up for a long time, the asymmetry between excessive indebtedness and excessive surpluses regularly if unpredictably erupt in crisis, forcing brutal adjustments on the weaker debtor nations (Guttmann 439-40)
There is one exception to the general tendency for deficit countries to bear adjustment costs: when a hegemonic state falls into deficit, it is generally able to avoid these costs for an extended period of time. This brings us to the concept of "seigniorage," another essential determination of the world market. We have already noted that at the very beginning of Capital it is implicit that all currencies must ultimately be defined in relation to world money. Considering the essential determinations of the world market from the perspective of the interstate system allows us to develop this thesis more concretely.
What is world money? Whether or not commodity money is socially recognized in a given epoch, there is in capitalism a general tendency for credit money and paper currencies to become increasingly central. Given the hierarchy of states that is an essential feature of the interstate system, not all forms of paper money are created equal. The currency of the hegemonic state necessarily tends to play a privileged role in the world market; this currency necessarily tends to become the main de facto form of world money. As a result that hegemonic state necessarily tends to enjoy certain privileges in the world market. For one thing, it will not face limits on the ability to create credit money that are imposed on other nations. For another, it will be able to fund massive trade deficits without significant loss in the value of its currency, at least for an extended period of time. These privileges rest on the need and desire of foreign agents to obtain the dominant reserve currency of the world market for the sake of international payments and investments. As long as credit flows into the hegemonic state continue, that is, as long as loans are rolled over by new loans, trade deficits can become ever more massive, with the result that more and more of the world’s output is consumed in the domestic market of the dominant region. The only costs for maintaining this state of affairs are the fees involved in the new loans. From a moral point of view there is certainly something quite troubling about this situation. Institutionalized austerity in the poorest regions of the world economy is systematically connected with hyperconsumerism within the wealthiest sectors of the wealthiest region, which happens to be the greatest debtor in the world economy as well.
Overaccumulation and financial crises Seigniorage does more than exacerbate the systematic tendency to uneven development in the world market. This determination of also allows us to re-think the systematic tendencies in the world market to overaccumulation and financial crises in a more concrete and complex fashion. The expanded ability to create credit money enjoyed by the hegemonic power, combined with inflows of foreign capital, allows the build-up of excessive capacity in leading sectors of the dominant economy to proceed far beyond the point it would otherwise attain. The relevance of this systematic feature of the world market to recent economic history is straightforward:
With its own currency having a monopoly status as world money, [the U.S.] was the only country whose capacity to run external deficits was not restricted by its available foreign exchange reserves. We could therefore run much more stimulative policies and escape recessionary policy adjustments much longer than would otherwise have been possible (Guttmann 1994, 114-15).
As a direct result the systematic tendency to an overaccumulation of fixed capital in the world market is greatly exacerbate. The greater the overaccumulation of capital in the world market, the more brutal the devaluation of capital that must eventually follow in its wake (Brenner 1998).
Regarding financial crises, the first point to note is the "normal" state of affairs that follows from the above:
There is a contradiction between being the issuer of the key currency [in the world market] and at the same time also the world’s largest debtor nation. The former status depends on maintaining a stable currency, whereas the latter encourages lower exchange rates. (Guttmann 1994, xx)
One manner in which the law of value operating on the level of the world market subsumes even the hegemonic state under it is by forcing that state to ping pong back and forth between these two contradictory policy objectives. Increasing levels of bets on currencies and volatility in foreign-exchange markets becomes the "normal" state of affairs, as international investors devote greater resources to "hedging" against currency risk and speculators detect more opportunities for gains.
If the hegemonic state retains its ability to foster innovations promising surplus profits in the future, financial flows in the world market become yet more complex. Whether this is the case or not is a contingent matter. But if it is the case, there is a certain amount of systematic necessity in how the situation tends to unfold. The excessive credit money creation and capital inflows that are the benefits of seigniorage systematically tend to exacerbate the tendency to capital asset inflation discussed above. Inflows of financial capital reinforce the tendency for the value of the fictitious capital of new innovative sectors to increase in a self-sustaining dynamic that breaks off from any reasonable assessment of future profits in those sectors. In this manner seigniorage contributes to speculative bubbles in the pricing of capital assets far beyond what would otherwise occur. The benefits of seigniorage allow the day of reckoning to be put off. But sooner or later it becomes clear that the accumulation of fixed capital exceeds what is likely to be valorized by future profits (that is, future surplus value production). The greater the imbalances that have been built up prior to this point, the greater the social disruptions that follow, both for the hegemonic power in particular and for the world market as a whole. A massive flight out of the world currency may occur at this point, paralyzing the international monetary system. These considerations show that however mistaken extreme neoliberals may be when they proclaim the "death of the state," recalcitrant nationalists are equally mistaken. The state form is inserted within the systematic totality of the world market. Even the hegemonic power in the system of states cannot escape the law of value governing the world market (Smith forthcoming).
It is now time to draw the practical conclusion that follows from our examination of the world market, the final category in a Marxian ordering of the essential determinations of the capitalist mode of production. It is simply this: neither the capitalist state nor the capitalist world market can resolve the fundamental irrationality and social antagonisms at the heart of capitalist social relations. Further deregulation of global capital flows will not reverse this state of affairs. A resurgence of nationalism will not reverse this state of affairs. A ‘new international financial architecture’ will not reverse this state of affairs. And attempts to institute social democracy on the global scale will not reverse this state of affairs. Only a revolutionary rupture from the capital form can accomplish this world historical task. This is, I believe, the culminating claim of a Marxian systematic dialectic of social forms.
APPENDIX
Determinations of the Capital Determinations of the World Market Implicit in the
Form Prior Determinations of the Capital Form
Volume 1
The commodity form Cross border flows of traded commodities
Objective social relations among producers across national
borders
The money form All monies ultimately defined by reference to world money
Exploitation Total social capital of world market = appropriation of
surplus value produced by wage labor in world market
Struggles over the rate of Capital flight in the form of foreign direct investment
surplus value
Concentration & centralization of Vertical integration in the form of cross-border mergers and
capital acquisitions
Disintegration in the form of cross-border subcontracting
Global labor flows
Volume II
The circuits of capital Advances in communication and transportation
technologies furthering cross border flows
The reproduction of total Cross border flows connecting Department I and
social capital Department II (including raw material flows and technology transfers)
Volume III
Redistribution of surplus value International prices of production
Appropriation of surplus value by merchant and financial
capital within global circuits of capital
Surplus profits from innovation Uneven development
Overaccumulation crises Global overaccumulation crises
Financial crises Global financial crises
Classes Tendency to transnational class formation
The State Form
The state’s role in the accumula- Global flows of commodities, money, investment capital
tion process and labor mediated through the juridical apparatuses of the state
Global reproduction of total social capital mediated through
the state
Uneven development in the world market mediated through
the state
Overaccumulation and financial crises in the world market
mediated through state crisis management
The state’s role in fostering/hindering transnational class
formation
The Interstate system Regimes of global governance
Hierarchy in the interstate system
Hegemony in the interstate system
Seigniorage and the systematic tendencies to uneven
development, overaccumulation crises, and financial crises in the world market
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