Withdrawal psychosis

Some goods and services are for consumption and some go back into production as investments. The proportion of their value is around 3:1 in developed countries. If surplus value is evenly appropriated, this means three quarters of it must be consumed and depends on public and private consumer borrowing for demand on the market. It also means that surplus value in consumption far outweighs surplus value in investments, but the part of consumption that is dependent on debt is turned into an investment by the accompanying credit. So capital accumulation that once needed the bricks, machinery and infrastructure of production and distribution, can grow unhindered in the virtual world of lending and borrowing, and the result is where things are now.

The systemic shortcoming is not surplus value as such, that has been successfully extracted from labour for millennia. The disruptions are caused by capital accumulation, by surplus value being invested instead of consumed. On the other hand, capital accumulation increases production and trickle down wealth. So the question is: can economic growth and development occur without periodic chaos and destruction, and without imperial dominion? Supposing there was no surplus value and that labour received all the value it added. The necessary demand for consumption would be solvent, but how would more and different investments be made? The popular practice of crowd funding could be a solution, where the community finances the starting up or expansion of production, and once underway the produce benefits the community with jobs and wealth. The communal financing and supervision of education occurs in many countries. The community could just as well finance enterprise, and have a say on what is produced and how.

Taking the produce of someone else’s labour is of doubtful morality, just as private property of the means of production is a theft from the community. Lending the produce back at interest takes that much more. How can that be qualified? And yet it is all enshrined by laws and enforced by armed might. Changing those structures is not worth considering, as they permeate every aspect of society. But, as they totter on the brink, giving them a push will be hard to resist. When debts stop growing, so does demand for surplus value. When borrowing shrinks, so does demand for surplus value. Less borrowing acerbates price competition. Profit margins and costs are cut, businesses fail, and governments search desperately for new sources of liquidity, a few drops of fuel to keep the machine going another month, another year.

The system seizes up, not because capital grows faster than the labour it employs, but because demand for surplus value depends on borrowing, and the necessary expansion of credit fails at term. Borrowers are unable or unwilling to take on more debt, and the existing debt looms massive and threatening, unable to expand or contract. To realise the value of unpaid production, capital accumulation needs the tributes of empire and expanding debts. Presently, debts are blocked by their sheer quantity. Increasing them – the sum of household, city, state and federal debts – by even a small percentage implies numbers too big to be envisaged. And imperial tributes are being encroached by competition from nouveaux riches nations (basically China). This is a very sinister combination because capital is addicted to profit and can go berserk when deprived of it. The hundredth and the seventieth anniversaries, the beginning and the end of capital’s precedent fit of madness have been commemorated on time to announce upheavals of even grander dimensions.