[Marxism] A secret of modern accumulation II - additional note

Jurriaan Bendien bendien at tomaatnet.nl
Tue Mar 23 01:56:41 MST 2004


In the final section of the first chapter of Capital Vol. 2, Marx described
the circuit of M-M' involved in capital gains as follows: every particular
capital placement involves two basic transactions from the point of view of
the circulation process: firstly, M-C, or the purchase of an asset value
with money, and secondly C'-M', the sale of an appreciated asset value for a
higher sum of money.  In that circuit, the sphere of production (P) is just
"a transitional stage" if productive assets (labour, raw materials, plant &
equipment) can be bought as commodities.

However, says Marx, if the circuit M-C ... P ... C'-M' is viewed just as
"one special form" of the process whereby capital grows in value, "alongside
the other forms", then the circuit M-M' "appears as the pure expression of
the circuit of money-capital, which expresses very succinctly "that
exchange-value, not use-value, is the determining aim" of this chrematistic
transaction. Since the monetary expression of value is "the independent,
tangible form in which value appears", then the circuit M-M'  "expresses
most graphically the compelling motive of capitalist production -
money-making" or "money begetting money". Thus it appears that property
ownership as such, itself equals value-augmentation or asset appreciation.

Viewed in this way, the entire process of production seems to be merely "an
unavoidable intermediate link, as a necessary evil for the sake of
money-making". Marx then concludes "All nations with a capitalist mode of
production are therefore seized periodically by a feverish attempt to make
money without the intervention of the process of production".

The Dutch tulip bulb mania of 1633-37, the British South Sea Company bubble
of 1711-20, or the French Louisiana Company fever offer an early taste of
this process. In his treatise "Extraordinary Popular Delusions and the
Madness of Crowds" (1841), Mackay already observed how here "millions of
people become simultaneously impressed with one delusion" such that "we find
whole communities suddenly fix their minds on one object, and go mad in its
pursuit".  For more on the Dutch tulip mania, see
http://www.workers.org/marcy/economy/crisis01.html .

The true foundation of modern Judeo-Christianist imperialism and its social
stability, however, is not at all Dutch tulip bulbs, but rather the
enshrined sanctity and harmony of private home ownership, which the
bourgeois very kindly wishes for everyone else in the world as well, if they
could only give credit where credit is due.

Home ownership offers special advantages, because a house is a durable good,
and not a perishable one like a tulip bulb. Thus, even if the mortgage trade
and the additional derivatives trade based on it collapses, because of an
overextension of credit, the house still stands up in one place, as a fixed
asset, providing a constancy that seems to be the very basis of societal
security and trust. People may come and go, but the bricks and mortar stay
where they are and do not walk away. Should real estate values fall, the
asset value is bound to rise again over time, and never dips so low that all
value is lost. This is then the basis for a wholly new theory of the
"conservation and creation of value", and consequently of new ideologies of
value. See on this latter topic for example:

http://www.cf.ac.uk/cplan/conferences/hsa_sept01/ronald-r.pdf
http://www.york.ac.uk/inst/chp/hsa/papers/ronald.pdf

http://www.aifs.org.au/institute/pubs/WP13.html

Marx wrote: "credit accelerates the violent eruptions of this antagonism,
the crises, and thereby the development of the elements of the
disintegration of the old mode of production... It develops the incentive of
capitalist production, the accumulation of wealth by the appropriation and
exploitation of the labour of others, to the purest and most colossal form
of gambling and swindling, and reduces more and more the numbers of those,
who exploit the social wealth. On the other side, it constitutes a
transition to a new mode of production. It is this ambiguous nature which
endows the principal spokesmen of credit... with the pleasant character of
swindlers and prophets." (Capital, Vol 3, Chapter 27).  We can obviously
trade not just in a house, but also in the people that live in the house.

Lluís Flaquer of the Universitat Autònoma de Barcelona writes
"Home-ownership may be considered a primitive form of insurance against
social risks (Trifiletti, 1998). (...) It is true that the growth of
home-ownership has been commonplace in many developed countries in the last
decades. However, it may seem a paradox that the [European] countries in
which we can find the highest proportions of owner-occupied housing are the
familistic Mediterranean societies rather than Northern societies
characterized by privatism and individualism (Castles and Ferrera, 1996). In
Greece, Spain, and Italy the percentage of owner-occupied dwellings is about
20 points above the average, but in Portugal it is much closer to the
European mean. On the other hand, growth in the levels of home-ownership
between the early 1960s and early 1990s in Southern European countries was
above the OECD mean. The highest rates of growth were found in Italy and
Spain with an increase of 22 and 25 percentage points, respectively
(Castles, 1998). http://www.diba.es/icps/working_papers/docs/WP_I_185.htm .

Jurriaan











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