F.E.D. Dialectics: The SELF-‘‘‘Contradiction’’’ That Is CAPITAL[ism]: Capitalism’s Fatal Flaw. -- Part 11: Seldon’s Worldview Series.

The SELF-‘‘‘Contradiction’’’ ThAt Is CAPITAL[ism]: Capitalism’s Fatal Flaw.

-- Part 11: Seldon’s Worldview Series.

Dear Reader,

It is my pleasure, and my honor, as an elected member of the Foundation Encyclopedia Dialectica [F.E.D.] General Council, and as a voting member of F.E.D., to share, with you, from time to time, as they are approved for public release, by the F.E.D. General Council, key excerpts from the internal writings, and from the internal sayings, of our co-founder, Karl Seldon.

The eleventh release in this new such series is posted below [Some E.D. standard edits have been applied, in the version presented below, by the editors of the F.E.D. Special Council for the Encyclopedia, to the direct transcript of our co-founder’s discourse].

In this 11th installment, Seldon explicates perhaps the most import predictive passage in Marx’s «Grundrisse» manuscript, one with the most prescient and vital content for today.

Seldon –

“Capitalism has an inherent, built-in, immanent tendency to violate its own inherent, immanent “law of value”, which is also its law of surplus-value -- its law of the source of profits.”

“This is its tendency to overinflate the capital-assets/capital investments denominator of its return rate ratios, due to “capitals” that are not producing their share of surplus-value/profit, but which claim at least the same general rate of profit also claimed by more profit-contributory capitals.”

“This happens by way of fictitious capital assets, created via debt and speculative “bubbles”, etc.”

“But this also, and more fundamentally so, happens by way of capitalism’s failing to curtail -- under curtailed competition in the context of increasing concentration, centralization, and consolidation of capitals -- the value of its profit-rates’ capital-investment denominators, whenever productive-force growth – productivity-growth – should, per capitalism's competition-enforced law of value, induce obsolescence depreciation of some of the fixed-capital asset parts of its profit-rate ratios’ denominators.”

“The joint result of these two main sources of “fictitious capital” over-valuation of these profit rate ratios’ denominators is that both real and “fictitious” capital “investments” are expecting and demanding, as profits, more surplus-value than is actually being produced, from the surplus-labor of the majority class.”

“These tendential and, in the “boom” phase, rapidly proliferating/accumulating violations of the capital-relation’s own law of value are aperiodically and violently checked and reversed, in the form of world-market depression-crises – ever-worsening in terms of the ever-vaster numbers of people harmed by them, worldwide.”

“These recurring depression-crises suddenly and violently destroy and contract the capital-values of those profit-rate ratios’ capital-invested denominators, bankrupting and otherwise obliterating both fictitious capital “investment” values and real capital investment values.”

“This also provokes a fight within the capitalist class over which capitals will bear the brunt of these capital losses, and, especially, over how to foist the bulk of these losses onto the backs of the, profits-producing, majority class.”

“These depression-crisis-induced devaluations of the capital-value denominators of the capitalists’ profit-ratios go on until those capital-asset denominators shrink enough to make the rates of profit ratios, overall, that these denominators form together with the surplus-value/profits numerators of these return-rates ratios, large enough to attract renewed capital investments, and, thus, a “recovery” of majority-class employment, etc., from the depths of that global-market depression-crisis.”

“But this recovery-phase also restarts the tendential violations process vis-a-vis the capital law of value once again – the fictitious elephantiasis of the profit-ratios’ capital-investment denominators. Those denominators are ballooned by “capital”-values that are not contributing their share to those ratios’ profit/surplus-value numerators, and thus not contributing enough to sustain the attractive general rate of profit that they still demand for themselves, i.e., from out of the surplus-value elicited from workers, surplus-labor-time by other capitals.”

“This thus sets the stage for the next world-market depression-crisis, a crisis of even greater amplitude than the last one, harming even more human beings, since the capital world-market has expanded, e.g., during the boom-phase, and proletarianized new millions of human beings from the capital world market’s “hinterland”, e.g., those driven out of yeoman farming, etc., into wage-labor, producing surplus-value for capitalists via their surplus-labor-time.”

“Meanwhile, the “think-tank”, foundation, university, mass media, etc., ideology-engineering operations of the capitalist ruling class seek to ever-more-minutely divide the majority class into inter-mutually warring camps, with a view to ultimately convincing that majority class that something like Orwellian, Fascist state-capitalism is the “new” system needed. Such is really not a new system at all, but just the terminal worsening of the capitalist system itself.”

“The funereal repetition/worsening of these world-market depression-crises, despite that ideology-engineering, may convince more and more of the world’s citizens that there is something deeply, fundamentally, fatally wrong with the capitalist system, and that a new, higher, better system of human-societal self-expanding self-re-production is desperately needed.”

The passage above is from Seldon’s explication of the following passage – perhaps the most important ‘prognosticatory’ passage of all – in Marx’s «Grundrisse» manuscript –

[Seldon:] “…it may be useful to scrutinize a key passage of the Grundrisse, wherein Marx sketches out his view of the interconnection between the phenomenon of capitalist crisis and the predicted revolutionary transition to out of and beyond the capitalist system… –”

[Marx:] “...the development of the productive forces brought about by the historical development of capital itself, when it reaches a certain stage, suspends [i.e., ‘‘‘«aufhebens»’’’ -- K.S.] the self-realization of capital itself, instead of positing it.”

“Beyond a certain point, the development of the powers of production becomes a barrier for capital [i.e., a barrier for capital’s essence, namely profitability -- K.S.]; hence the capital relation a barrier for the development of the productive powers of labor.”

“When it has reached this point, capital, i.e. wage-labor, enters into the same relation towards the development of social wealth and of the forces of production as the guild system, serfdom, slavery, and is stripped off as a fetter.”

“The last form of servitude assumed by human activity, that of wage labor on one side, capital on the other, is thereby cast off like a skin, and this casting-off is itself the result of the mode of production corresponding to capital; the material and mental conditions of the [K.S. -- «aufheben»-]negation of wage labor and of capital, themselves already the

[ «aufheben»-]negation of earlier forms of unfree social production, are themselves the result of its [K.S.: i.e., of capital’s self-re-]production process.”

“The growing incompatibility between the productive development of society and its hitherto existing relations of production [i.e., its capital-social-relation-of-societal-self-re-production -- K.S.] expresses itself in bitter contradictions, crises, spasms.”

“The violent destruction of capital [thereby reducing the profit-rate ratios’ capital-value investment denominator, thus raising the rate of profit ratio as a whole toward a level attractive for renewed investment and continued capitalist operation, even despite a relatively reduced mass of profit in the numerator -- K.S.], not by relations external to it, but rather as a condition of its self-preservation [via restoration/raising to a profit-rate sufficiently attractive for renewed investment and, thus, continued capitalist operation -- K.S.], is the most striking form in which advice is given it to be gone and to give room to a higher state of social production [i.e., Marx sees recurring, worsening capitalist crises – depressions, “great recessions”, etc. -- as gradually delegitimizing the capitalist system, and thus as the eventual driver of the revolutionary transition to what we call ‘Political-ECONOMIC DEMOCRACY: K.S.]...”

“Hence the highest development of productive power together with the greatest expansion of existing wealth will coincide with depreciation of capital [suddenly, due to depression-crisis-induced capital ‘de-value-ation’, after a prolonged period of pre-crisis, partially-hidden, partially-blocked, gradual technological obsolescence depreciation, or productive-force-growth-induced depreciation, of fixed-capital plant and equipment, in the period prior to the open, overt outbreak of that depression-crisis -- K.S.], degradation of the laborer, and a most straitened exhaustion of his vital powers.”

“These contradictions lead to explosions, cataclysms, crises, in which, by momentaneous suspension of all labor and annihilation of a great portion of capital the latter is violently reduced [e.g., by crisis-induced reduction of the [fixed] capital-value investment denominator of the capitalist return on investment ratio, thereby elevating that profit-rate ratio as a whole, even despite a reduced profits value numerator, e.g., a net profits numerator also typically reduced, by crisis-enforced, ‘netted-out’ write-offs of ‘techno-depreciated’, technologically-obsolescent fixed capital plant and equipment, as well as of speculative fictitious “capitals” -- K.S.] to the point where it can go on fully employing its productive powers without committing suicide.”

“Yet these regularly recurring catastrophes lead to their repetition on a higher scale and finally to its violent overthrow.”

--Karl Marx, «Grundrisse» [Foundations [of the Critique of Political-Economy]], Nicolaus translation, pp. 749-750; bold, shadowed, italic, underscored, and colored emphases added by K.S.

[Seldon]: “When Marx and Engels participated, personally and signally, in the European continent-wide revolutionary uprisings of 1848, Europe was ruled largely by violently-repressive monarchical police states.”

“Marx and Engels thus then saw no way forward for humanity’s evolution other than by way of violent revolution.”

“But the progress of capitalist representative democracy during Marx’s lifetime led him later to revise his views regarding the necessity of violent revolution for the supercession of capitalism --”

[Marx:] “Someday the worker must seize political power in order to build up the new organization of labor; he must overthrow the old politics which sustain the old institutions, if he is not to lose Heaven on Earth, like the old Christians who neglected and despised politics. But we have not asserted that the ways to achieve that goal are everywhere the same.”

“You know that the institutions, mores, and traditions of various countries must be taken into consideration, and we do not deny that there are countries -- such as America, England, and if I were more familiar with your institutions, I would perhaps also add Holland -- where the workers can attain their goal by peaceful means.”

--Marx, 8 Sep. 1872, Amsterdam, Address after the Fifth Congress of the International Working Men’s Association [“First International”].

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