Abstract
Your senses tell you the sun goes around the earth. But the opposite is true. Likewise, our daily experience of economic life, our acts of selling, buying, being paid wages, and, if we are entrepreneurs or managers, investing and profiting from our investments, tell us we are living in a capitalist system. But it’s not true. Whatever the perception of our senses or our lived experience is, we now live in a post-capitalist system. That is what an increasing number of progressive economists tell us, and they’re armed with intriguing theoretical propositions backed with a wealth of empirical data.
One of these influential thinkers is Richard Westra, a political economist who has undertaken research in Europe, East Asia and North America, and is co-editor of the prestigious Journal of Contemporary Asia. His Political Economy of Post-Capitalism is probably the most rigorous effort from a Marxist perspective to argue that we’ve left capitalism – or classical capitalism, at any rate. For Westra, the central characteristic of capitalism is that surplus value, on which profit depends, is extracted from workers in the process of production. Workers in the service sector receive wages, but these rates are not determined by the dynamics of surplus value extraction, which takes place primarily in the industrial/manufacturing sector that produces capital goods, durable goods and consumer goods. From the stage of competitive capitalism to that of imperialism to the so-called Fordist era from the late 1940s to the late 1970s, labour-power was maintained as a commodity, the exploitation of which drove the capital accumulation that built the richest societies in history.
The last few decades, however, have seen profound changes in the dynamics of capitalism. A central cause of change has been the substitution of machinery for labour, what Marx called the rising organic composition of capital. Promoted as an effort to disempower labour, it has, instead, reduced surplus value, and thus profits, since it is labour-power that creates value. This dynamic has led to the stagnation of the industrial/manufacturing sector both in terms of numbers employed and in terms of its contribution to GDP in the US and other leading economies. In the 2000s, the US lost some 5.7 million manufacturing jobs, a decline of 33 per cent, and the OECD economies saw their service sector workers balloon to some 70 per cent of the workforce, with employment in industry, ‘the locus of commodified labor power’, falling below its average level in 1900.
Capital met the crisis of profitability in the industrial/manufacturing sector in three ways. First, rather than raising wages, employers compelled the remaining work force to reproduce their labour through increasing indebtedness. The second exit route was to transfer manufacturing processes to China and other countries in the Global South, where workers were paid a fraction of what US workers made – in fact, often below subsistence. The third route was to draw the bulk of profits more and more from the part of the economy that does not produce commodities but is marked by the operation of ‘intangibles’ such as patents, databases and design, where the ‘cost of production’ is conventionally estimated at or near zero. This sector of the economy, dominated by Google, Microsoft, Facebook and a few others, is highly monopolised, so that in practical terms, their income is, strictly speaking, not derived from profit classically conceived but from renting or charging access to their ‘knowledge products’ and processes, which are protected by copyrights, patents and other legal fictions that make up the so-called intellectual property regime.
Increasingly, the accumulation of capital of the leading sectors of the capitalist class is derived from the ‘intangible economy’ compared to the tangible economy, and this is channelled not into the productive sector but into speculation. Westra provides a number of figures about the volume of ‘idle social savings’ sloshing around in the global economy, but one is worth quoting: globally, assets in the hands of ‘asset managers’ grew from $36 trillion in 2005 to $109 trillion in 2021. Unlike in previous eras of capitalism, capital is no longer scarce. It exists in abundant quantities, but a great deal of it cannot be invested in productive activities that can produce surplus value and more profits because it is no longer profitable to do so. Thus, lending, speculation and greater and greater indebtedness become the drivers of global capital, with the unpredictable, irregular movements of this process largely replacing the boom-and-bust cycles of traditional capitalism.
When capitalism is driven by the monopolistic control of information technology ‒ and now, artificial intelligence ‒ by Big Tech and ever more frenzied speculation by their Wall Street partners, instead of capital accumulation in the industrial/manufacturing sector, as was the case in the old capitalism, can we still call the system capitalist? Westra is certain it is a post-capitalist system, though he is unsure of what to call it. In his earlier works, he called it ‘capitalists without capitalism’, but he admits, this definition ‘is of diminishing utility currently’ (135).
There are others that have advanced the view that capitalism has been superseded, among them Mackenzie Wark, Joel Kotkin and Yanis Varoufakis, 1 and Westra discusses on what points he agrees with them and where he differs. He believes the labels ‘feudalism’, or ‘neo-feudalism’ or ‘techno-feudalism’ proposed by Kotkin and Varoufakis respectively, confuse rather than clarify, not only because the forms of rent extraction are not limited to the feudal mode, but also because these terms imply that the system replacing capitalism has the coherence of a mode of production capable of sustaining itself over time. Towards the end of the book, Westra raises the famous question raised by Wark in the title of her landmark work, Capital is Dead: Is This Something Worse? In answering this, Westra draws from the insights of two Japanese Marxists who have greatly influenced him: Kozo Uno and Thomas Sekine. According to Uno and Sekine, a necessary byproduct of capital’s extraction of surplus value in the production process is its reproduction of the labour-power of workers that are the source of surplus value. With the increasing degradation of workers in the Global North due to massive indebtedness, and the crisis of physical reproduction faced by workers in the Global South as a result of below-subsistence wages, the system, Westra speculates, might be on the verge of imploding. Calling to mind Rosa Luxemburg’s famous slogan, he concludes, ‘Even authoritarian regimes need to reproduce the material lives of human beings through some set of economic principles, as a byproduct of their social goal or project to constitute a viable historical society. My take, however, is that barbarism and social decomposition is a more real prospect if new socialist forms are not forthcoming’ (136).
The Political Economy of Post-Capitalism sometimes digresses into theoretical pathways that are not necessary to Westra’s key arguments, and this can be slightly annoying. But Westra is always insightful, and this book is by far the best introduction to the debate on post-capitalism that has become a central concern in progressive economic circles.