April 2016        

Das Kapital mark 2?

Simon McGuinness

Bernard Murphy’s review of Capital in the Twenty-First Century by Thomas Picketty misses what, for me, is the elephant in the room: the role of the Soviet Union in the expansion of workers’ wealth in the post-1945 period. I can excuse (but not forgive) Picketty, and every single other reviewer for this omission, but hesitate to excuse Murphy, given that his review appeared in the newspaper of the Communist Party of Ireland.
     Reading Picketty, I was struck by the failure to mention the Soviet Union at all. It is as if there has been such an airbrushing of history that it didn’t exist at all. Perhaps Google is a little thin on the subject?
     All the economic charts produced by Picketty clearly show a massive expansion of the wages and living conditions of the working class in the 1945–1990 period. This expansion is made at the expense of the ruling class in all countries outside the Soviet sphere of influence. This is the period when R < G, when the rate of return on capital is less than the rate of growth in the economy. In this period, capitalism had competition, and it was worried by that competition. It needed to compete for the hearts and minds of its working class.
     From 1945 to the mid-1960s the economic advancement of labour is assured, regardless of the boom-bust cycle of capitalism. Keynesian economics were employed to ensure that the workers were protected to the greatest extent possible, for fear that they might follow the Oktober example and take power into their own hands.
     It is hard to credit it from our present vantage-point in history, but the very survival of capitalism was under threat. The Breton Woods agreement bought it time.
     In a hemispheric genocide, the United States unleashed “Operation Condor” on its southern neighbours, with only Cuba resisting the march of the School of the Americas death squads that it trained, funded, and directed. Neo-liberal capitalism marched in and robbed an entire continent with an efficiency the Conquistadores could not imagine. The open veins of Latin America fed the global expansion of US hegemony and its military-industrial avarice.
     But even this was not enough, and, as the cracks in the foundations of capitalism became ever more alarming, Reagan and Thatcher combined their efforts in a last-ditch three-pronged effort to defeat the Soviet Union, attack the unions, and brainwash the workers. Remarkably, they succeeded.
     Gradually, as the capitalist ruling class reasserted its position through the tyranny of war, the control of thought by media manipulation and the precipitous unwinding of the gains of the Russian Revolution, the stage was set for the unleashing of state power on the working class. The concerted attack on labour on both sides of the Atlantic at the same time as the unleashing of a terrorist war against the Soviet Union’s protectorate of Afghanistan led to the decline in living standards of the vast majority of workers in Europe and North America. In this period the primacy of capital was re-established: back to R > G and its attendant misery for the majority.
     Picketty ascribes this reversal, wrongly in my view, to the expansion of neo-liberal capitalism. In reality, neo-liberal capitalism was only possible at all because the competition had been liquidated.
     Once the collapse of the Soviet Union had been achieved, the historic compromise between labour and capital in the west—the welfare state—was systematically shredded. The working class was now unprotected by the three bulwarks against exploitation it had relied upon since the defeat of fascism: the trade union movement, working-class political consciousness, and the Soviet example.
     It is hard to credit that any book tracing the history of capital through the twentieth century could so studiously avoid the existence of a vast portion of the globe where capital had no purchase and where the working class ruled in its own interests. It’s harder still to believe that a Communist Party newsletter might neglect to mention it. I hope this hasty contribution will redress the omission.

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