The Making of an Atlantic Ruling Class

Kees Van Der Pijl

• Publisher: Verso
• Year: 2014
• Print ISBN:
  9781844678716
• eBook ISBN:
  9781781689646
• Topic: Politics & International Relations
• Subtopic: Economic History
• Index: Politics & International Relations

With The Making of an Atlantic Ruling Class, Kees van der Pijl put class formation at the heart of our understanding of world politics and the global economy. This landmark study dissects one of the most decisive phenomena of the twentieth century-the rise of an Atlantic ruling class of multinational banks and corporations. A new preface by the author evaluates the book's significance in the light of recent political and economic developments.

1
Class Formation on an Atlantic Scale

1. Determinants of Class Formation

The concrete process of class formation¹ in the North Atlantic area can be broken down into several separate dynamics of class conflict, each of which may be situated on a distinct level of analysis. In terms of the method offered by Marx in Capital, the industrial bourgeoisie primarily constitutes itself as a class in struggle with the working class and landed interests, but the actual process of its formation must be adduced at successive levels of decreasing abstraction.

(1) In the labour process, industrial capital faces the task of subordinating living labour-power to the requirements of the valorization of capital. Here, different modalities of the exploitation relation yield corresponding varieties of the capital-labour relationship in class terms: Absolute surplus-value production, in which the rate of exploitation varies with the length of the working day and the flat speed of work, tends to produce a rigid polarization of the employed and the employers. Relative surplus-value production, on the other hand, which is obtained by reducing the reproduction costs of labour-power in relation to aggregate capital outlay, fosters flexibility in the relations between capitalists and workers on account of an apparently common interest in rising productivity. This illusion of an identity of interests is part of the shift from the formal to the real subordination of labour to capital.

The absolute (in the sense of general and abstract) unity of the bourgeoisie vis-à-vis the working class therefore dissolves into concrete differentiations as soon as the real relation with the workers is taken into consideration. Lenin referred to this differentiation in his 1910 pamphlet, Differences in the European Labour Movement.² On the side of the bourgeoisie, he distinguished between the method of ‘liberalism’ (in the sense of flexibility) and the method of force; on the side of the working class these are matched by reformism and anarcho-syndicalism, respectively.

These different modes of reproduction of the basic class antagonism, based on absolute or relative surplus-value production, were pertinent at various points in the overall process of Atlantic class formation. In continental Europe, the low living standards at the turn of the century helped to preordain the incapacity of the European bourgeoisie to maintain a flexible format of labour relations in the 1930s. Since in the Old World the prospect of mass consumption of durable manufactures did not exist, ‘Fordism’ in all its aspects (productivity, social wage, further subordination of labour) was not feasible and the rate of exploitation could only be sustained by gearing to absolute surplus-value production. Hence, whereas the crisis of the 1930s in the United States saw ‘liberalism’ (in Lenin’s sense) survive through the generalization of Fordism in the New Deal and its insertion into a strategy of internationalization, in continental Europe authoritarianism and Fascism prevailed. The distinctions between absolute and relative surplus-value production, and between fractions of the bourgeoisie grouped around a concept of force and those advocating concessions, are crucial to understanding what happened in Europe at this juncture, and in fact have been chosen as a point of departure by several influential Marxist analyses of the nature of bourgeois class support for Hitler’s rise to power in Germany.

These determinants of bourgeois class formation on the level of the labour process, however fundamental, are not sufficient to analyse the various ideological tendencies within the bourgeoisie. Although labour-process differentiations may help to elucidate the broad differences between, for example, the New Deal and German National Socialism, they fail to account for such trajectories as the French Popular Front, where a united working-class movement, partly of Fordist inspiration, was able to ward off the threat of Fascism but failed to realize a positive programme comparable to the New Deal.

(2) To arrive at a more complete picture, we have to proceed to the next level of abstraction: that of circulation relations between various categories of capitalists, or fractions of social capital. Such fractions are bank, commercial, or industrial capital. In France at the time of the Popular Front, the working class joined forces with the liberal wing of the bourgeoisie, but within the capitalist class, this ‘productive’ alliance did not succeed in subordinating the interests of the financial world. Since it could not move forward to full-fledged Fordism, which would have included the partial expropriation (or as Keynes called it, ‘euthanasia’) of the rentier segment in the capitalist class, Léon Blum’s Lilliput New Deal was doomed to be rolled back as a consequence of the dynamics of circulation relations.

(3) A further dimension of the concrete fractionation of the bourgeoisie resides in the profit-distribution process, which, in the spirit of Volume Three of Capital, should be theorized as the third level of the determination of class formation. In the overall distribution of metamorphosed surplus-value between capitals, fractions of capital, landed interests and even a segment of the working class (those paid out of the mass of surplus-value without contributing to it directly), specific class fractions crystallize, enter into alliances, and press their particular strategic concepts. Moreover, the hegemony of particular fractions in this profit-distribution pattern may help to explain a specific political climate: e.g. the prevalence of laissez- faire concepts in the United States during the late 1950s when the profit-distribution process was temporarily skewed towards the financial and rentier sphere; or the Keynesian activism of the Kennedy Administration during a subsequent period as the resurgence of industrial capital.

Of course the three levels of abstraction on which class formation may be theorized as taking place, i.e., the labour process, circulation relations, and the profit-distribution process, are in reality only moments of a dynamic totality.³ This totality also encompasses sedimented layers of older social relations, forms of ethnic and sexual oppression, as well as the survival of elements of pre-capitalist modes of production. And although it is the accumulation of capital which primarily articulates and incessantly revolutionizes it, the concrete social formation derives its external appearance in large part from these autochtonous characteristics. Thus the internationalization of capital, and concomitantly of class formation, in the North Atlantic area included the mobilization of the legacies of anti-semitism, Anglo-Saxon chauvinism and national messianism. At the same time the actual structures of absolute and relative surplus-value production tended to be built upon pre-existing racial, sexual and national differentiations amongst the workers. In this fashion the modern world struggles between the imperialist states, and their subsequent alliances against socialism, have absorbed the ‘dead weight’ of the past.

Yet despite the multi-layered complexity of the political alliances involved, a characteristic inner logic can be observed in the class strategies evolved by the Atlantic bourgeoisies. Time and again, an offensive, ‘liberal-flexible’ way of dealing with the working class or other challenges has alternated with a defensive ‘method of force’. These strategic options have loosely corresponded with, respectively, relative and absolute surplus-value extraction, and have been linked up internationally (in the sense of functioning as determinants of class formation) through specific patterns of circulation relations in which particular fractions of capital and their ideal-typical concepts were prominent. The money-capital and the productive-capital concepts constitute such functional ideal-types, and we shall therefore briefly review the distinctions from which they may be theoretically reconstructed.

Capital Fractions in Marxist Theory

The notion of fractions of total capital (i.e., units other than individual capitals related to particular functions in the reproduction of capital) provides an important clue to differentiations within the bourgeoisie which are ideologically pertinent. The concept was developed by Marx in Volumes Two and Three of Capital.

The basic functional differentiation of capital is presented in Volume Two. Discussing the forms that capital assumes in the course of its reproduction cycle, Marx distinguishes between productive capital and the two forms belonging to the stage of circulation, money capital and commodity capital, in the sense of capital in money and commodity form respectively.

Apart from the three functional forms, we therefore have the distinction between the stage of circulation and the stage of production, a distinction which is equally important for all further specification and concretization. The stage, or sphere, of circulation comprises capital in money and commodity form; the stage or sphere of production, productive capital. The criterion for this bifurcation is the fact that whereas all forms of capital represent modes of appropriation of surplus-value, only the productive form is engaged in its creation through the subsumption of living labour-power. As will be demonstrated below, this distinction is particularly important when it comes to reconstructing the ideological propensities of the functionaries of productive capital.

This also goes for another distinction Marx deploys in Volumes Two and Three — the one between capital engaged in the production of means of production and capital engaged in the production of consumer goods: Departments I and II. Since Fordism in the era of Atlantic integration rested on the dynamic articulation of relative surplus-value production in the consumer-durables sector and a concomitant reorientation of key ‘Department I’ industries towards supplying this sector with semi-finished products (notably steel), the departmental division is relevant in this light as well. For the moment, however, we shall proceed from the money-commodity-productive triad.

In Volume Three, Marx again considers the basic differentiation into functional forms of capital. This time the level of abstraction has been reached where ‘the embodiments of capital … stepwise approximate the form in which they operate at the surface of society, in the action of the different capitals upon each other, competition; and in everyday consciousness of the agents of production’.⁴ Accordingly, the three functions analysed in Volume Two are raised to a more concrete level. Beginning with the functional form of commodity capital, Marx writes that ‘to the degree that this function of capital operative in the circulation process is autonomized into a special function of a special capital at all, and crystallizes as a function assigned by the division of labour to a particular kind of capitalist, commodity capital becomes commodity-dealing capital or commercial capital’.⁵

The commodities in which commercial capital deals are use-values or money, but money only to the degree it is used for the exchange of goods. Commercial capital therefore can be sub-divided again into commodity-dealing and money-dealing capital. The crucial element in the definition of both is the separation from the production process. In practical terms, because of its institutional form as bank capital, money-dealing capital may be difficult to isolate from its counterpart, interest-bearing capital (credit), which is also handled by banks. Although different national banking systems sometimes, and to various extents, reflect the functional differentiation (say, in commercial and investment banking), some forms of credit are by themselves hybrid in this respect, like commercial credit. In the distinction between money markets and capital markets, the two functions are separated however.

The notion of fictitious capital transcends the distinction between money-dealing capital and interest-bearing capital. Fictitious capital is considered by Marx as the comprehensive counterpart of all real economic activity under capitalist conditions. As such, it brings a unity to these activities which turns it into the nearest equivalent of total social capital. ‘… To the degree that it appears on the market’, Marx writes, ‘money capital is not represented by single capitalists, by the owner of this or that particle of capital present in the market, but it appears as a concentrated, organized mass, which, entirely unlike real production, is subject to the control of bankers representing social capital’.⁶

As an aggregate fraction, therefore, bankers, and their quasi-banker counterparts inside integrated companies, in a sense represent a single collective capitalist due to their joint control of fictitious capital. In capitalist reality, this social dimension remains a form, behind which the competition among private capitals proceeds unabated. Yet, the special position of bank capital in this respect is brought out by its twofold presence in the political economy: as a sector among others, and as part of the overarching economic state apparatus.

Summarizing the main distinctions introduced so far (circulation/production, real and fictitious capital, as well as the three functional forms of capital and their concrete embodiments), we arrive at the following figure.

FIGURE 1
Functional Forms and Capital Fractions According to Marx’s Capital

NOTE Thick blocks denote internal fractionation; open blocks on the right denote further differentiations in the productive sphere related to the mode of labour subordination and technical aspects external to the functional structure.

Apart from landed property, which represents a relation of distribution rather than one of production, these are the fractions of social capital analysed by Marx in Capital. Hilferding’s concept of ‘finance capital’ was developed to capture the twin phenomena of the institutional interpenetration of bank and industrial capital, and of the relative separation of a distinct oligarchical fraction of finance capitalists from the ‘simple’ bankers and industrialists. Widely popularized by Lenin’s adoption of the concept in Imperialism, the Highest Stage of Capitalism, the reality it conveys about the new empirical structure of capital does not obliterate the need for distinguishing the functional, ‘original’ fractions. For even in a situation where the financial oligarchy is no longer effectively challenged by a subordinate, ‘non-monopolistic’ bourgeoisie, certain conflicts within the capitalist class remain traceable to the different fractions persisting in the context of an apparent fusion.⁷

The conflicts of interest and allegiance which lead to class formation cannot be reduced to their functional determinants. In order to be effective, fractional interests have to be transcended by a formula of reconciliation or compromise on which a temporary truce may be built allowing the ruling classes to stay in power, or rather, allowing the basic social conditions of the mode of production to be preserved and, if possible, reinforced.

The economic interest associated with a dominant fraction of capital requires a complementary formula of reconciliation of that interest with that of other fractions in order to be an effecti...

Table of contents

• Cover
• About the Author
• Title Page
• Copyright
• Dedication
• Contents
• Acknowledgements
• Introduction
• 1. Class Formation on an Atlantic Scale
• 2. The Atlantic Economy in the Liberal Era
• 3. The Wilson Offensive
• 4. The New Deal Synthesis
• 5. The Atlantic Charter and the Roosevelt Offensive
• 6. The Marshall Offensive and Capitalist Restoration in Europe
• 7. The Kennedy Offensive and the New Liberalism
• 8. The Meridian of Atlanticism
• 9. The Crisis of Atlantic Integration
• Epilogue: From Trilateralism to Unilateralism
• Appendix
• Notes
• Index