Tuesday, January 3, 2017

the labor trilemma

Any two of the following things can persist together: private ownership of the means of production, full employment, and nonpolitical disciplining of workers. Liberal, social democratic, and fascist attempted solutions to the problems posed by capitalism all illustrate this, as well as the unique political problems posed by each.

Consider the classical Marxist account how capitalism works and why it eventually acts as a fetter on the development of the forces of production:
  1. Capitalism is a class society, and, thus, the means of production are in the hands of a minority class; moreover, unlike other forms of class society, the units owning the means cannot reproduce themselves internally but must sell commodities on the market, disciplining them to behave in a profit-maximizing way.
  2. Workers, while lacking ownership of the means of production, own themselves, and thus rent out their labor-power to capitalists.
  3. The presence of a "reserve army of labor" disciplines workers by ensuring that they always have competition for their jobs - though this, and the cyclic forms it takes, limit the productive capacity of the system as a whole.
This is the model of capitalism outlined in Capital, which - like introductory orthodox models of political economy - dispensed with many complicating factors (government regulations, rural smallholding, etc) in order to get a cleaner look at the basic logic of the system. But the basic logic of the system creates demands by all sorts of actors to quibble over the details - and, of course, to abandon the system itself. Workers would, famously, like to seize the means of production, and if that's not on the table they'd at least like to be less precarious. Firms might like to be able to employ more direct methods of coercion. Almost anybody might want to increase total output, if they can agree on the proper consequences of doing so. 

The trilemma here is that of (1), (2), and not-(3), only two can be active for any long period of time:
  1. Without a reserve army of labor, free workers will be able to bid up the price of labor until they are able to absorb the entire surplus, thus threatening the private ownership of the means of production.
  2. Full employment can be maintained without such threatening wage increases only by the political disciplining of labor - by wages coercively frozen or workers simply coercively marched to work. 
  3. And "classical" capitalism, as in the model, will always feature a reserve army of labor.
The political evolution of different capitalist eras and models must be understood in this light. The era of classical liberalism persisted roughly until the 30s, where the Great Depression and breakdown of international institutions (with its concomitant, and self-reinforcing, risk of total war) combined to convince national states that they needed to increase their own output, and fast; the regimes that arose necessarily had to confront the other horns of the trilemma in varying degrees. 

None of them did so in "pure" ways, but we can see different emphases with different consequences. In the Western democracies, government spending would put people back to work - with industrial unions offered a substantial piece of the pie in the long run, so long as they suppressed consumption demands in order to promote "national" interests, and so long as not too many questions were asked about what would happen if they ceased to do so. After the war, this political consensus eventually broke down, leading to the crisis of the 1970s, in which the attempt to simultaneously maintain full employment and free labor without transforming the mode of production led to collapsing labor discipline and hyperinflation. (The same consequences of the same program can be seen in many national cases where the left achieves basically as much power as it can within capitalism, up through today.) It was this next crisis which forced global capitalism to adopt neoliberalism as a reform strategy - re-constricting the role of politics back to where it was (for purposes of this schematic) during the liberal epoch, hence the name. 

Under fascism, far more obnoxious political means were used to suppress the wage bill - not bargaining with unions but smashing them, strict limits placed on wages, and of course later on the mass adoption of simple slave labor - though the very nature of full employment meant that companies were forced to offer raises under the table as well. (That is, there was a collective action problem in which the "executive committee" of the ruling class would prefer to engage in cartel practices to keep the wage bill down, but any given member of the cartel has incentives to defect from this compact, especially insofar as decisions on the ground were made local managers trying to meet production targets.) Again, the trilemma is central to understanding the internal evolution of these regimes and, in particular, the radicalization of the National Socialist economy over its short life. During the first years of its existence, the Nazi government pursued policies that more or less directly represented the interests of the monopoly capitalists who had brought them to power; one of their own, Hjamlar Schacht, acted as "economic dictator" to pursue this suppression of unions, restoration of output through public works and rearmament, &c. Around the period of '36-37, Schacht and the old ruling class elements considered that these thus far amenable dirigist policies were overheating the economy, leading to inflation and an unsustainable allocation of resources towards non-productive military or prestige projects. However, by this point, not just the working class but the old ruling classes were at the mercy of the political leadership, and those elements which placed their hopes in a conquering national state - and hence continued rearmament, whatever the cost - won out. Thus Schacht's rationalized monopoly capitalism was replaced by Goering's militarized kleptarchy. (Goering's own heavily improvisational corrupt approach would itself have to be replaced by the more rationalized planning regime represented by Speer, but this was too little and late to compete with the Allied planning regimes, which by ideology and structure were far less distorted by the fascists' own emphasis on "personality" and "will," which in practice meant that the political leadership would never actually discipline itself.)

Many left debates about the nature of the Soviet Union and similar states, too - whether to classify it as socialism or "state capitalism" or something else - can be put in terms of the trilemma as well. Actually existing socialism achieved full employment, but to what extent did this go along with popular ownership over the means of production (as mediated through highly representative recruitment into the Party, its disciplining through popular pressures, &c.) and to what extent did it go along with political disciplining of labor? In many socialist circles, affirming one or the other of these is a condition of orthodoxy. For my part, I am not informed enough to make any sort of decisive intervention in these debates, only that I think they would be better pursued by examining their relative weight over time, and how the different political models and waves of reform (and collapse) responded to the inherent difficulties of these different approaches.

And at this moment we are again facing a long global output slump that is reinvigorating dirigiste and nationalist demands. It is too early to pronounce to toll the bells for neoliberalism - but its persistence can no longer be taken for granted, and left, right, and center have all clearly become aware of this. The possibility of a new fascist epoch thus must be viewed, among other things, in the context of the fundamental structural factors that made it possible, and also fueled political struggles within fascism. This second round will also proceed with all actors being aware of how things went the first time around. This means that the right flank of the bourgeoisie is aware that racism can be its friend, but also far more aware of the dangers to it of a "totalitarian" concentration of power in a few political actors. It also means that the liberal center should, at least in theory, be more informed about how it might ride out the crisis - hence the kinds of questions that have lately come to dominate middle- and high-brow mainstream political literature. What have we learned?

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