"The more the world goes to hell, the more the prices of houses in Chelsea and Kensington ascend towards heaven."
I have been thinking about the evolution of
capitalism, perhaps spurred by reading the London Review of Books – and having
a little time on my hands.
The early emerging stage begins with the
Italian city states and the aftermath of the Great Plague from 1350, marking
the beginning of the end for western feudalism. The emergent period culminates
with the print revolution, the Reformation and the Conquest of the Americas, as
well as the institution of Atlantic-American slavery.
By 1550, slavery in the
Americas and expanding free labour in Europe combined with the destruction of
the Church hierarchy in many lands to bring about social and religious
revolution. The Anabaptists of Munster attempted to bring about a communist
Jerusalem, a dystopian utopia that is besieged and destroyed by the forces of reaction. Meanwhile
a peasant-hating Luther urged the slaughter of revolting commoners as the
German Peasant War is likewise crushed.
Out of this early 16th century upheaval
emerges Mercantile Capitalism, a new world order dominated by the merchants of
Italy, Holland and London, funded by the Spanish crown’s immense riches, in
turn melted down from the treasures of obliterated Mezoamerican civilizations.
1600 was the year that marked the birth of
capitalism proper, with the arrival of the world’s first stock-holding trading
corporations – the East India Company and Dutch East India companies. Out of the new
world trading system that tilted toward the Americas and Asia emerged the first
great profit-seeking enterprises.
Unlike the Spanish colonists, their treasure
was not for the Crown, the Church and the slave-owning overlords of America,
but for the stockholders in London and Amsterdam.
One sees here a common trait of capitalism
that even today its propagandists deny is integral to it – free labour exists
alongside unfree labour. The system has always required both.
From 1550 to 1770 the mercantile system
prevailed, through England’s aborted bourgeois revolution and the rise of Dutch
and English mercantile capitalism, built on slavery and commodity trade.
Then came the industrial revolution, and
the republican revolutions of America and France. The third phase of capital
from 1770 until around 2000 was defined by western dominance, the rise of
industrial capitalism and western imperialism.
It was also the age of bourgeois
revolution, democracy and two other world movements: from 1870 to about 1945, working-class
revolution, and then from 1945 until 1980, anti-colonial revolution.
While some have described the world that
emerged after 1980 as post-industrial (and post-colonial), this is false, as it
only describes a trend of deindustrialization in the West.
Urbanisation and
industrialisation actually reach their zenith in this final phase that takes us
to the present. Only in 2005 did the majority of the planet find themselves
living in urban centres (See Mike Davis’s Planet of Slums), leaving behind
millennia of rural existence.
The industrial revolutions of Asia, starting in
Korea and Taiwan, and moving on to Malaysia, Indonesia, Vietnam and, most
importantly, China, at last begin to universalise the new mode of production
that started in Britain and America 200 years before.
Simply because the most valuable companies
in the world now reside in the ‘digital’ or ‘weightless’ parts of the economy,
does not mean that this era is not an industrial one. Human labour, organised
in factories and offices, and the use of vast quantities of material in the
production of consumer devices, mark simply the development of the consumer
phase of industrial society, out of the steam and steel industrial ages that
preceded it.
The endless warehouses of whirring servers that power the networks
that keep millions of us online, as much as the army of factory workers
assembling the gadgets, these are the inescapable dirty secrets holding up the
weightless age.
We can likewise discern, with our 21st
century environmental spectacles, that the fuel of industry was first peat and
steam, then coal and now oil and gas. Over nearly 250 years of the age of
industry, much has altered beyond recognition, but the underlying forces of
capital and labour and the mediating technologies –productive, energetic and
monetary – remain at work.
What we can say for certain is that production and
consumption are expanding exponentially, along with population. Bumps in the
road do not alter that trajectory.
Since 1980 capital, most particularly
finance capital, and also Asian industrial and energy capital, have been in the
ascendancy. Labour has been corralled through competition from the new
hinterlands, and the age of militancy has receded. The massive expansion of the
global labour force has made the withdrawal of labour by any part of it less
likely to strike terror into any capitalist.
Perhaps a time will come when
there is no longer a source of cheap, underemployed labour to replace the once uppity
workers of the metropolis, but this seems unlikely. Capital is constantly destroying
the foundations of social wealth, in a process of borderless rolling back of
social gains, euphemistically known as structural adjustment, now, austerity, or
better, ‘disaster capitalism’ (Kline).
As
the last great recession has shown, capital recovers its losses quickly, while
workers find it ever harder to hold onto their share of social wealth. This wage stagnation is mostly a western phenomenon, as across the developing world, wages are catching up. Some call this the 'great levelling'.
The last time western capital showed fear
of its populace was the last time it had to call on them to fight its wars, and
the last such war was Vietnam. In the age of drones, who needs worker soldiers?
History tells us that worker soldiers are the most dangerous force for any old
regime, since they can demand, and often get, altered social arrangements.
With
their drone wars, perhaps our crafty rulers have abolished the possibility that
a New Model Army, or heroes of the wars in Europe, can ever return to demand
the end to the system that made them fight.
Meanwhile Asia and the Gulf increasingly
hold the great surpluses with which they can acquire strategic assets in the western
heartlands.
This is achieved without blood, like a backdoor coup, much as the
blood and treasure of the Spanish and Portuguese empires ended up in the
coffers of Dutch, Venetian and English financiers.
Not that capitalism is any less bloody than
it was in previous centuries. The American empire keeps order, following the
brief interlude of the Cold War, maintaining a status quo that allows the
billionaires of Europe, Asia and the Middle East to remain safe in their fortresses.
The ability of this gradually declining empire to maintain such order is now in
question.
But if instability strikes in one of the world’s forgotten corners,
London is always there to provide a safe haven for money, whatever its colour. Strange
how it was that London welcomed the refugees of the world in previous centuries,
including Karl Marx, and now welcomes its oligarchs.
It is a common fact known
to London estate agents that the Chinese are the main buyers behind the latest
property bubble, getting their money to somewhere safe. The more the world goes
to hell, the more the prices of houses in Chelsea and Kensington ascend towards
heaven.
This is part of a trend whereby rent of various kinds is eating into the earnings of workers and other producers. Rent is acquired through monopoly control of an asset, and is charged purely by virtue of this ownership, not for adding any value to the economy. The major rentiers include energy producing countries, especially the Gulf monarchies, landlords and banks - who charge us rent (interest and fees) for loans created through leverage on minimal or sometimes zero deposits, which costs the banks nothing but make them rich. The housing bubbles of recent years have been the biggest example of a rent-seeking spree - allowing house prices to rise way beyond any sustainable values - that has actually cost the 'real' economy trillions of dollars in bailouts and debt austerity.
If we ask who has survived best and grown mega-rich in recent decades we note that it is oil-producing countries, the financial sector and property owners. Essentially, rentiers. The only rivals in wealth terms to this are the new manufacturing nations of Asia, firstly China.
There is a related secular trend worth noting for
futurologists and students of political economy. Technological revolution makes
anything manufactured cheaper over time. (Is it a coincidence that burglaries
are less of a threat nowadays, when most household items, consisting of the
latest technology, come so cheap and plentiful that it is not worth the
criminal’s bother and risk to break in and take them?)
By contrast, as production expands
exponentially, the planet is relentlessly denuded of its finite mineral wealth
and consequently, the price of this natural wealth rises. We see this most
obviously with oil, but it applies to any number of commodities.
The stuff we
make gets cheaper, but the stuff that we make it from – that the planet has created
over millions of years - becomes more precious and expensive. Thus at some
point, barring a new form of production that is entirely based on recycled
material, a crisis occurs.
We cannot keep producing goods that are
built with an ever-decreasing lifespan. The natural resource components make up
a greater part of the value of the product, while the product’s inherent human
labour and technology becomes cheap as chips, thanks to rising ‘efficiency’. (Efficiency is a very misleading word for a system that is so wasteful of resources; its prime efficiency is to extract profit from the production-circulation process - the accumulation of capital. In terms of materials, it is utterly profligate - see the oceans full of plastic waste).
The holders of the natural wealth become
the rulers of the world, while the makers of things, unless they also own the
materials, become the slaves of the resource owners.
The proprietors of the
land or sea under which such wealth exists become the greatest rentiers in
history. All they do is dig stuff up (or get someone to dig it up for them) and
sell it to the highest bidder. This is the future of capitalism unless it can
re-use materials more effectively, or make things that last much longer.
Which
of course, it will have to learn to do in order to survive as a system. Unfortunately,
capitalism has been moving in the other direction entirely, with products
designed to become obsolete more rapidly than ever.
This is the process of
circulation and accumulation speeding up. If I cannot sell you the same thing
next year as I did this year, how am I going to make money?
To change such an immanent feature of
capitalist production seems unthinkable, and it ought at some point to mark the
end of the consumer capitalist age.
Will this end see the beginning of green [recycled]
capitalism, or green socialism? The age-old question of whether any private
person or corporate body can ‘own’ what lies beneath then becomes the paramount
question of the age, since this is ultimately where future wealth lies, just as
it did in ages past.
This will likely be the fight of the – rapidly approaching
- future.
