Understanding capital to confront challenges ahead

2 June, 2020

Alcoa workers, Spain, demanding a reduction in energy prices for the company that is laying them off.

While in Spain the uproar over the closure of Nissan factories is still going on, in France Macron is meeting with the employers association and trade unions to “offer” a “new social contract” based on the rapid and massive precarization of the labor power. The alternative he proposes is “wages or work”. The media are promoting the logic of capital as if it were unappealable: “without profits there are no wages”. They extend the idea that more plant closures will come and that we will be unable to cope with them except by lowering our income even more and accepting worse working conditions throughout the entire productive system. But is it true? Is there really no choice? Is there no point in fighting? To know what works and what doesn’t, we need to understand some things about what capital is and how it works today.

What the capital was

Manchester in the first half of the 19th century.

Back in the 19th century most capitalists were individuals who invested capital of their personal or family property in a factory or workshop. They were owners and patrons. When they faced a strike they knew that the longer it lasted the more the company would be devalued, which was their estate. At first a strike was reduced for them to a calculation of revenues: it was a question of comparing how much their future profits would be reduced by improving working conditions and increasing wages, compared to how much they would lose through the effect of the stoppage in production. If the strike lasted long enough and showed strength, the “rational” thing from the point of view of capital was to concede.

The Great London Summer Workers’ Strike of 1889

Hence the “emergency funds” and the endless strikes in a single company. Workers shaped their struggle according to the functioning of capital. At that time, most capital was “individual” and the vast majority of workers’ interests were settled in “individual” company strikes. The working class appeared as such to the capitalists, attentive to the average wages and the added pressure of individual strikes. The proletariat then appears, says Marx, as a class “in itself”.

Only in some “political” struggles, like the battle for the 40 hours a week or the universal suffrage, did slogans, mobilizations and strikes of the whole class make sense. In them the workers fight together above the company divisions because the class is attacking general conditions of exploitation, appearing as “class for itself”, that is to say, before themselves. The latter was the class struggle in its fullest expression.

The difference between some struggles and others did not express two “levels of consciousness”, the “syndicalist” which the workers could supposedly reach on their own, as opposed to the “political” or “socialist”, for which they needed a party to organize large mobilizations on a national scale. It expressed the levels and forms in which capital was organized against which it had to impose the logic of human needs. On one level they were confronted with individual capitals, on another with the state apparatus that regulated the general conditions of their exploitation.

British Rail in India.

On the other hand, in a world where markets only ceased to grow during short periods of crisis, concessions to workers could be compensated in the medium and long term by new investments to buy more advanced machines that would allow for more production with the same number of workers. Of course, the unitary profit would be reduced, but the loss of margin on each sale would be compensated by more sales. In tandem, the workers’ struggle drove things to be “cheaper” and more affordable, and wages went up.

This need for more capital and more markets was the driving force behind rising capitalism, the golden and progressive era of capital. But it also changed the organization of capital. As the amount of capital needed to open a factory or a mine increased, the model of joint-stock companies (the corporations), which until then had concentrated on large public works, transport and communications (railways, telegraph, etc.), spread in the industrial world. On the other hand, as capitalism expanded establishing itself and creating new competitors on all continents, markets began not to grow as fast as capital always needed. Individual capitalists began to feel more at risk, and within that framework, strikes became a much more pressing danger. The result was a step forward in what the Marxists of the time (Lenin, Rosa Luxemburg, etc.) called “the socialization of the bourgeoisie”. To make a long story short, the factory owners exchanged the property of their own businesses for shares in the banks, turning the banks’ boards of directors into real centers for the planning of capital. The imperialist phase began and all the tendencies that shape the present historical stage began to emerge.

What capital really is today

Capital continued its socialization. Finance capital, the big capital that gives form and sustains all production, is now a set of funds of huge size that continually move fictitious capital around according to the results of any application of capital and its consequences. The companies, the factories, have been reduced to “applications” to which capital comes, or from which it withdraws, at astonishing speed in the face of any change in the expectations of results. The individual capitalist is no longer relevant and in any case prefers to associate himself with those massive aggregate flows managed by hundreds of speculative officials who pamper capital’s movements in order to statistically “guarantee” profits.

The then President of the Government, Mariano Rajoy, greets the President of Banco Santander, Emilio Botín, during the family photo shoot with the top Spanish executives who make up the Business Council for Competitiveness (CEC) in Moncloa in 2014. They are all managers, none of them is a significant owner of the companies they represent.

Companies and factories are no longer run by their legal owners, but by managers who manage the interests of capital in that particular application. These managers form a specific layer: the corporate big bourgeoisie. It would be impossible for them to know all the legal owners of the capital they manage. How many times a day do Volkswagen or Santander shares change hands? How many thousands of rentiers lie beneath each fund? This new form of the bourgeoisie, heir to the old ruling classes, is related to others like them who in turn manage macro-funds and banks, “strategic” shareholders who hope to last longer in the shareholding and who therefore seek to obtain “synergies”, that is, benefits beyond the dividend, for all the capital they manage. And all of them are intimately related to the state through the high bureaucracy and the political leaders. Because “business”, when capital moves so fast and following expectations that vary with each news item, depends directly on the general conditions of exploitation.

Struggles and class struggle

To demand “workload” from capital is to accept that our welfare depends on it and that fighting is meaningless because there are no interests of workers other than those of capital.

If capitalism has reorganized itself in this way, it is above all as a way of protecting itself against the permanent tendency towards crisis, but it has also changed its capacity to respond to strikes and workers’ struggles. And both things come together in every single battle. If, in a company, the workers’ demands force a change in conditions by threatening to reduce profits below the regional or sectorial average, the managers know that capital will leave immediately and that this will possibly make lower the chances of recovering or gaining new profitability by capitalization. On the other hand, global demand is in chronic difficulty. “Catching up” by buying new technology that can produce more with the same amount of work is not enough because… there may be no one to sell the extra production obtained.

What do trade unions do? First, they accept the logic of the managers – they are still managers themselves – and tell us that “without profitability there is no employment”. And with profitability of capital as their banner, they make their own the managers’ claims against the state, that is, they ask for “special treatment” for the capital invested in the company: either by asking the state to sell the factory’s products, as in Navantia or special privileges regarding the cost of raw materials, as in Alcoa. The workers thus become a mere tool for the managers to pressure the state in order to survive in the competition to attract capital.

They are right when they say that without profitability, capital takes seconds – sometimes less – to move to another, more productive application. But it is not true that the consequence of this should be to accept the subordination of the workers to the profit and success of the managers. In fact, since the beginning of the 20th century, when capital began to take more and more the form we know today, a new form of struggle began to emerge in which the demand for enterprise was no longer distinguished from the struggle to transform the general conditions of exploitation. A new form of struggle that responded to a situation – ours – in which with an increasingly “liquid” capital, the working conditions of each group of workers depended more and more on the conditions in all.

Nantes during the 1968 mass strike that was extended throughout France

The new form of struggle, the mass strike, simply responded by positing a scale closer to that on which capital was playing. The strike, instead of going on forever, was expanding “horizontally” from one enterprise to another in the territory. From the first moment it was thus visible that it was a class response, not a response by a particular group of workers to the situation in a particular company. In fact, strikes were widespread and organized not only in factories or companies, but also in neighborhoods, bringing together all the workers scattered in small businesses, precariousness, unemployment and informality. The organization, therefore, even if it had continued to have trade unionists among its leaders could no longer be unionized either: they were only functional assemblies coordinated by committees of delegates elected by them.

Delegates from the delegates committee (soviet) in Shush, Iran, addressing the assembly on the street in November 2018.

Let us look at where we are now: the workers of every company are faced with global capital that is not bound by what happens in a single company and that demands certain conditions of profitability in order to maintain jobs. Profitability is the game played by the trade unions, workplace-by-workplace, so that we can support the particular interests of the capital managers in this or that company.

Let us look at where the extension of the strike over the territory leads: capital has nowhere to go within it, it fears that the example will expand by leaping over borders; the general conditions of exploitation are now its problem and that of the state. The strike puts capital as a whole where it once put the individual capitalist.

The consequences do not stop there. In the first place the difference, typical of the 19th century, between “union-led” and “political” struggles has disappeared, it has suddenly become impossible. Either one fights as a class, over and above the divisions of workforces, companies, agreements, etc., or one will always be at the mercy of general conditions of exploitation fixed by competition between capitals, in a framework in which it is not too difficult for capital to dispense with companies – and workers – that are below average in terms of expected profits. Secondly, the trade union and its very form of organization are no longer aligned with the needs of the concrete struggles, they are unable to get us out of the bottleneck of isolation. In fact, they do the opposite: they turn us into defenders of the profitability of a capital that is not ours and that thrives on our work. We also have to think about what to do when the conditions for extension are not immediately present, among other things, how to promote them… And we could go on. That is the debate at hand.

The importance of understanding what capital is today

The class struggle is too important a thing to be tied up in “traditions” or obsolete forms. Our lives and the future of our families depend on it. It is enough to recall the experience of the generations that are working today to realize that the isolated struggle in the company, the sector-wide strikes, the “social dialogue”… have only led to a spiral of precarization and impotence in the face of plant and company closures. In order to find alternative forms of struggle that will serve us today to confront the coming one, we need to understand at least in a fundamental way what capital is and how it functions. And when we do, there is no historical fantasy able to withstand it. We have to fight in a different way than the one proposed by the unions. And from now on, fight to extend the struggles over the territory.


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