Skint Part 1: Wages and Productivity

i-didnt-go-to-work-today
I Didn’t Go to Work Today | Fifth Estate. Detroit, MI. (1987)

Wage growth in Australia is in a pitiful state. Both the frequency and size of wage growth is at historic lows (Bishop and Cassidy 2017). The recent rise in inflation means that not only are wages growing at a lower rate than any time since the Second World War, they are now growing slower than the rate of inflation. This means that real wage growth is now negative.

Figure 1Figure 2

(Fig. 1 & 2 Bagshaw 2017)

This is a grim situation for the vast mass of people as it means the effective stalling or decline in the material conditions of our lives. It also presents Australian capitalism with several complex and interlocking problems. First, while the overall share of national income shifted in capital’s favour throughout the late neoliberal period of the mining boom, the secret to social cohesion was the growth in the majority of households’ wealth as consumables became cheaper and incomes grew, as wages rose alongside the amount of people working and total hours worked. The disintegration of this deal poses the spectre of social and political disturbances, framed as ‘populism’ by spruikers of the political class. However, low wage growth threatens not just political stability in Australia, but the process of capital accumulation and the reproduction of capitalist society more directly.

While individual firms may wish to pay their workers with air, capitalism as a whole needs wages to be high enough to ensure there is enough money in people’s pockets and that people are willing to spend it. This is often called ‘aggregate effective demand’. The reproduction of capitalism requires that a sufficiently high level of commodities is sold to generate a profit that can be reinvested and so on. Declining wage growth directly threatens the profitability of retail businesses, and because retail businesses are part of a broader chain of capitalist firms, the health of the economy more broadly. The Reserve Bank of Australia are particularly worried about the impact the combination of low wage growth and high indebtedness could have on spending and Australian capitalism (Lowe 2017).

Another specific problem is that even as wage growth has stalled, house prices have soared, facilitated by the continual rise in household debt. Increasingly thinkers for capital are concerned that the capacity to pay this debt is faltering and that the prices of real estate assets are shaky. There is growing concern that a collapse in residential prices could hit the banks and destabilise the financial architecture of capitalism in Australia (Shapiro and Greber 2017) . Thus, the Australian Prudential Regulatory Authority has acted to reduce the percentage of interest-only loans that can be offered in an attempt to ‘address risks that continue to build within the mortgage lending market’ whilst ‘balancing the need to continue to moderate new investor lending with the increasing supply of newly completed construction which must be absorbed in the year ahead’(2017). APRA aims to slow down the risk of rising mortgage debt whilst simultaneously allowing the housing market to continue functioning.  Is it likely that such activity can both reduce the exposure of the banks whilst facilitating the continual accumulation of capital?

Low wage growth, continued housing price growth and high household debt all take place in the context of low investment in Australia. This is despite a rise in profits and in the context of a global situation that the World Bank describes as a ‘fragile recovery’ (Potter 2017, World Bank Group 2017).

This problem cannot be solved – for capital – just by raising wages. This would shrink profits and thus, accumulation.[i] Rather the challenge for thinkers for capital is to work out a way to increase aggregate effective demand and profits: to increase incomes in a way that ensures the continual accumulation of capital and thus the enlarged reproduction of the capital-relation. For us (meaning both those of us with nothing but our labour-power to sell and self-declared antagonists to capital) the problem is radically different – to work out ways of asserting our interests for a good life irrespective of capital’s requirements and to do this inside-against-and-beyond the whole totality of capitalism as a society and a way of living.

  Continue reading “Skint Part 1: Wages and Productivity”

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Easy Money: The Reserve Bank of Australia and the tremors in capital accumulation

NAA- A12111, 1:1967:16:89
NAA: A12111, 1/1967/16/89

On the 2nd of August the Reserve Bank of Australia (RBA) reduced the cash rate to the historic low of 1.5%. The actions of the central bank often seem either arcane or uninteresting to the vast majority of us – except perhaps for those playing the markets and various gold-bugs, currency cranks and other tin-foil hat aficionados. However we should pay attention to the RBA. The RBA’s action was an attempt to intervene on the level of money in a way to forestall a further decline in the prospects for the capitalist mode of production in Australia and thus dampen any intensification in social conflict or malfunctioning such a decline might contribute to. Therefore it also tells us much about the health of capitalism in Australia on a whole and gives us an insight into the terrain on which our efforts for emancipation play out.

 

It is important to place an understanding of money right in the centre of radical critiques of capitalist society. Money is a coagulant that holds together so much of capitalist society as well as the form in which capital finds its clearest expression. Money dominates our lives. ‘The individual carries his social power, as well as his bonds with society, in his pocket’ (Marx 1993, 157). In our world money is incredibly heavy: ‘the wealth of societies in which the capitalist mode of production prevails appears as an “immense collection of commodities”…’ and it is our access to money which allows us to access this wealth which is the collective product of our vast creative capacities and their metabolism with the world (Marx 1990, 127). There are very few moments of the day when the amount of money in my pocket, in my bank account and the level of debt on my credit card isn’t on my mind. Yet on the other hand money is now incredibly insubstantial: since the end of the direct linkage of the US dollar to gold and all other currencies to the US dollar money no longer has any other references than itself. This has facilitated a vast and dizzying explosion of liquidity. This contradiction was seen so starkly in the response to the crisis when vast sums of money were either willed into existence by states or appeared as state debts as the financial system was bailed out whilst money for many people evaporated and plunged them into poverty.

 

Anti-capitalists in Australia have not been very good at making sense of money and finance nor popularising this critique. We rely too much on very general arguments about the madness of markets or robotic interpretations of the tendency of the rate of profit to fall. We haven’t been very good at explaining the specifics of this crisis or why crises and malfunctions that appear on the level of money are actually products and expressions of much deeper systemic dynamics. This space has been filled by less savoury types: currency cranks, Larouchites, anti-Semites and other species of reactionaries. Part of our collective self-emancipation is demystifying the operations of capital on all levels.

Continue reading “Easy Money: The Reserve Bank of Australia and the tremors in capital accumulation”

Australia you’re standing in it part 2: Debt & Social Reproduction

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In part two of Australia You’re Standing In It I’m going to attempt analyse the relationships between state debt and social reproduction. In particular I want to argue that rising debts and continuing deficits provide a challenge to how social reproduction is carried out by the state. This directly flows on from the previous chapter as the core of my argument is that the rising debt and deficit of the Australian state are at least in part a product of the global stagnation of capital accumulation. This manifests in the drop in revenue caused by the winding down of the mining boom.

 

I want to emphasise the stakes of my argument. In mainstream debates in Australia debt is most often framed in one of the following two ways. For the Right debt is a cause, if not the cause, of economic stagnation and crisis. For the Left Australia’s debt levels are unproblematic and the panic over debt is a production of the fetid imagination of the neoliberals and/or a cynical manoeuvre to justify the sort of policies the Right always carry in their back pockets. Here I wish to reject both these arguments. Debt is not the cause of crisis but a particular manifestation or expression of it; but it is a manifestation that has its own contradictions. And debt levels whilst overblown by the Right do present a serious challenge to the state’s abilities to finance and carry out social reproduction. Also a new revelation for me, one often ignored in the debates about debt, but one that is obvious when you think about it, is the role that sovereign debt in the form of state bonds plays in the financial markets. The debate over state debt is also always a debate about securing the value and the profits generated by financial assets.

 

A limitation of my investigation so far is that since my methodology looks at the movements of capital from ‘above’ there is the risk that I can slip into a form of presentation that ignores the class struggle that goes on ‘below’ and throughout capitalism. There is a danger, from Marx on, that our analysis can be too ‘objective’ and not grasp the subjective role struggle plays in the corresponding unfolding of the dynamics of capitalism(Shortall 1994). (Perhaps it is possible to see class struggle as the struggle of humanity against its entrapment in the objective categories of capitalism). My challenge is to express how the ways the state funds social reproduction and the shapes social reproduction take are products and sites of class struggle. Spiralling state debt is an expression of our power – even if it is latent. We need to enlarge our understanding of class struggle beyond a model that sees it primarily happening within the confrontation between labour and capital in the work-place proper, that is move beyond a ‘factory-office-farm’ model (Caffentzis 2013, 242). We need to understand the complex and multifaceted struggles that happen across all of society.

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Australia you’re standing in it part 1: the pulse rate of accumulation

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Something is going on. Something is changing. There is a shift in the trajectory that capitalism in Australia is taking. At the recent National Reform Summit Martin Parkinson, a former head of Treasury remarked that ‘Unless we actually grab this challenge by the horns and really get concrete about what are the priority issues, we are actually going to find ourselves sleepwalking into a real mess’(Martin 2015). The metaphor of Australia sleepwalking towards recession is now resonating in the echo chamber of the political class and sums up their dual concerns: on the one hand a decline in the accumulation of capital; and on the other that the political apparatus and the broader society seems unable to do anything to change course, perhaps is even aware, and is moving without, or despite of, conscious control. Australia is slouching towards, or is already sunk in, political and economic malfunction.

 

Whilst the political class wants to address these dilemmas and act to save capitalism from itself we want to understand what is going on so we can overcome it all. Here I want to grasp the current conjuncture of capitalist society in Australia: in particular the current malaise of capital accumulation and the malfunctioning of official politics. What do these phenomena tell us about the current moment in Australian capitalism and the possibilities, overt or covert, for a radically different kind of society?

 

This is part one of a six party study to try to sketch an outline of the current conjuncture of capitalism in Australia. Part two will focus on debt, part three the crisis of mainstream politics, part four on the end of the ‘high credit, high work, high consumption deal’, part five on gender and social reproduction and part six on the most prominent fault lines of struggle. But here we will start by posing a hypothesis about capital accumulation in Australia and also try to take its pulse-rate.

Continue reading “Australia you’re standing in it part 1: the pulse rate of accumulation”

Roads to Nowhere – Capital’s Plan A

Australia will be quite different in a few years’ time…
-Tony Abbott(2013)

The tendency is a general schema that takes as its starting point an analysis of the elements that make up a given historical situations. On the basis of that analysis, it defines a method, an orientation, a direction for mass political action (Negri, 2005, p. 27)

What does it mean to think in the conjuncture?(Althusser, 2000, p. 18)

(I have been working on this post for many months now. It has been slow going as I have only been able to commit small amounts of time to research and writing as some pretty major – and excellent – developments in my life have distracted me from my computer: namely the birth of my son who is without a doubt the major focus of my time and energy. I have been eking this piece out in half-an-hour lunch breaks at work and this I think has added to its troubled narrative. Also since becoming a father my ability to successfully construct long sentences has diminished. Perhaps this change will be seen as ‘punchy’ rather than moronic…. I also think since so much of the research of this piece has involved stepping on the terrain of dominant mainstream thought and summarising it that some of the radical elements of the critique of political economy have become muted.
Readers will probably find this piece fairly dry, structurally incoherent, and laborious but I hope useful and I intend to use it as background for more work here and political interventions published at The Word From Struggle Street.
As usual there remain far too many typos for me to be happy about but I wish to get this out in a timely matter.)

Continue reading “Roads to Nowhere – Capital’s Plan A”

Incomes, Inequality and Class Composition – ( still a bit drafty)

Firstly I would like to apologise to those of you who read my blog for the long time it has been since my last post. It is a difficulty finding time to even read systematically at the moment let alone write. I don’t mean this as just a simple whinge –because I think that it is symptomatic of one of the problems afflicting the possibility of class organising right now – we need the time in our lives to think about what is happening to time in our lives. More broadly, unlike perhaps workers in much of Europe who face the impact of rising unemployment, workers in Australia labour under a condition of too much labour – at least at the moment (though of course any amount of wage-labour is really too much wage-labour). It is too early to tell if the proposed closure of the Ford plant and the entry into voluntary administration of Swann Services  are anomalies and growth will continue or signs that winter is coming (since I have written this lines the first time it was become far more clear that with the decline of  the rate of growth of industrial production in China that the mining boom, which has underscored growth in Australia for 20 years, is ending).  Marx quotes the Congress of the International Working Men’s Association ‘ We declare that the limitation of the working day is a preliminary condition without which all further attempts at improvement and emancipation must prove abortive…’(Marx 1990, 415). Now I don’t know if the IWMA was thinking about having the time to write and discuss but perhaps they were. I must admit that I am not sure how an effort like this blog actually fits into the process of class recomposition because I am not sure what the role of ‘ideas’ really has in the messy processes of struggle. I am sure that it has some role but what that is I am confused about (and welcome comments and debate.) But if the attempts to theorise the world we live do play some part in the self-emancipation of the class then it is clear that the lack of time we have to engage in this activity (snatched between moments of work, time with those we love, socialising and resting, acts of political militancy) is contributing to just how outgunned we are in relation to capital. Reading The Poorer Nations (Prashad 2012) I am struck by the huge size and financial capacity of the intellectual apparatus capital has to think, theorise and popularise its understand of the world. Even in Australia it is a struggle to find the time to read the reports that come out of the Productivity Commission, the various business groups and economic think tanks let along attempt to think them through and write about them. (Thus my outrage that the Qld government wasn’t going to release the 1000 page Queensland Commission of Audit quickly turns to dread when they decide to – ‘oh my god I have to read a 1000 page report!’)

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Podcast of ‘Australia: The Lucky Country? Capitalism and its Discontents’from the Brisbane Free University

In mid-December 2012 I spoke as part of a panel entitled ‘Australia: The Lucky Country? Capitalism and its Discontents’ along with Kristen Lyons as part of the Brisbane Free University. A  podcast can be found here. It was a great night and BFU is a wonderful initiative. Brisbane Free Uni