Date: Sat, 9 May 1998 18:05:34 +1000
From: Rob Schaap <rws-AT-comserver.canberra.edu.au>
Subject: Re: M-TH: Property relations vs political regime


G'day Thaxists,

Provocative and thought-worthy effort, Boddhi!  A bit of speculative
devil's advocacy while I steel myself for the Canberran winter without.

You write:

>	First, let's consider the fact that primitive accumulation rarely
>if ever simply rises from entrepreneurship.  Look at Microsoft.  Even this
>icon of entrepreneurship has the fingerprints of the existing order all
>over it.  Where would Microsoft be if not for IBM's Midas-tapping it to
>develop the PC operating system?  And, let's remember that they *bought*
>much of that original system.  Then, IBM made the incalculable cock-up of
>allowing Microsoft the rights to the system while depending on Microsoft
>to develop what IBM expected to be the successor operating system.  Not
>surprisingly, Microsoft showed little enthusiasm for developing the IBM
>system that would have made their rights to DOS worth much less.  The old
>order simply gave away the store to a new breed of capitalists with moxie
>and some cash.

[This is a big call, Boddhi - moving me back to Schumpeter's stirring
*Capitalism, Socialism and Democracy*.  Once the 'perennial gale of
creative destruction' is domesticated (innovation becomes institutionalised
- the sort of scenario I think you're proffering above), the driving force
of Schumpetarian history, the uppity entrepreneur, leaves the process to
its bureaucratically bloodless future.  The fat capitalists, heirs to
unearned fortunes and routine managerialism, can not find it in themselves
to drive anything, and now the system which accords them their privilege
has lost its chaffeurs.  Capitalism dies from the top, and a bureaucratic
semi-stasis ensues.]

>	Even in cases of true entrepreneurship, the companies need MONEY.
>They get that money from wealthy people, banks and financial markets. They
>can't get that money (especially these days) unless they become a
>corporation.

[This is certainly true, but again, only on balance.  Where the necessary
capital investment in invention and application is substantial - usually
the case - we have a prime example of the sort of deadening domestication
of the entrepreneur Schumpeter invokes - the bourgeois monopoly on credit
nipping entrepreneurial disruptions in the bud.  In information technology,
might we suspect the role of bourgeois credit may not be as decisive?  A
garage and a geek or two have demonstrably sufficed in the recent past.
After invention, the luckier entrepreneur has corporate status available to
him/her - and the spirit dies - maybe that's another reason we still get
DOS-based detritus marketed to us ... ]

>       What is a corporation?  It is a legal entity created quite
>specifically for the protection and benefit of the investing class.  As a
>*legal* entity, it is subject to both alteration by regulation and
>super-annuation through the creation of new entities.  Let's call such an
>entity the "syndicalist corporation" for the moment.

>	A corporation creates an entity run by management under the
>"democratic" control of shareholders.  At present, capitalist property
>relations dictate who those shareholder will be, but they need not.
>Clearly the workers could be the shareholders.  That's fine but what about
>accumulation?  Well, banks like doing business with corporations.  They
>are less fond of doing business with other business entities such as
>partnerships, etc.  I'm sure they would be less fond of doing business
>with syndicalist corporations.  The (properly inspired) government,
>however, would probably be more inclined to lend directly to a syndicalist
>corporation than to a private corporation on a political basis.  In fact,
>the government could decide to *only* lend to syndicalist corporations,
>allowing banks to lend to the private sector.  As we all know, governments
>can print a lot of money.  Now we have the concept of an *alternative*
>credit structure.  It is government backed and lends only to syndicalist
>corporations (so far).  Now we can bring the communities into the picture.

[One question monetarists are having trouble answering just now is that no
relationship at all seems tenable between money supply and inflation.  Good
news for the Boddhi recipe.]

>	Communities are always getting central government money for
>infrastructure projects and as centrally, bureaucratically controlled dole
>machines, there projects often become cost-unconscious and rife with
>corruption and cronyism.  In steps (ugh) privitization.  Now the
>government is simply funding a private corporation and often creating a
>lovely little monopoly which immediately sets about finding ways to screw
>the community it is meant to serve.

[This Australians and Kiwis have no difficulty in understanding.]

>Now let's consider another kind of
>entity.  Call it the social corporation.  Such an entity might recall the
>quasi-public corporations that exist today (the American post office, the
>Fannie Mae and Sally Mae mortgage companies, even Blue Cross/Blue Shied
>before they went to the dogs) with important modifications.  In these
>corporations, the workers *and* the community would be shareholders.  By
>shareholders I do not mean stake-holders I mean actual shareholders.  In
>addition community could also *lend* that government dole through a
>community bank that was itself a social corporation.

>	In fact the line between social corporations and syndicalist
>corporations need not be very important.  One form could become another
>depending on how the local community fit into the corporation's mission
>and vice-versa. Now we have an alternative credit structure lending to
>syndicalist *and* social corporations.  Let's put those two types of
>corporations under the rubric 'socialist corporations."
>
>
>	Remember that we have not even talked about the classic
>revolutionary strategies yet.

[Which we have to soon, as we're talking about putting in place a
government who deliberately and explicitly disadvantages extant
multinational corporate capital.  While we do that, we also have to put in
place a mechanism by which accumulation is not utilised by one socialist
corporation to drive another out of business.  If I invent a great
labour-saving device, my enterprise would borrow cheaply, transform
production with the loan, vote to maintain current work levels, produce
enough for all at prices our competitors can't meet (for competitors we
have), and, because we are socialists, use a few bob of our new wealth to
open a soup kitchen for our erstwhile competitors.  No withered state here,
methinks - we'll need a strong redistribution (of information and material
resources) mechanism to counter the incentives markets inevitably generate.]

>So far I am only outlining the
>*alternative* structure.  Yet it is very important to note that easy
>access to credit is central to such an approach.  We have to give the
>worker/community corporation *better* access to capital than private
>corporations (who have to rely on greedy, complacent capitalists).  These
>socialist corporations will accumulate, that's for sure.  But consider
>whom will benefit, Governments will get back the money they lend,
>likewise communities, and workers will become better off by dint of
>working hard and producing for the market, which would be a nice change.
>
>	Accumulation can be a weapon, but consider the fact that you would
>have competition between private and socialist corporations on an uneven
>basis.  The socialist corporations would have better access to credit.
>They could take over the private corporations and make them public
>corporations. Logically, workers and communities, who would welcome these
>"white knights" (to take a phrase form the capitalists), would abet their
>takeover efforts and even use the strike, boycott and control of public
>policy to favor the socialist corporation in order to get a piece of the
>pie. Clearly some percentage of these socialist corporations would start
>misbehaving.

[Yep.  But you're talking transition here, eh?  Is the end of the market an
implicit goal here?  After all, the new government seems gradually to be
assuming the role of planner under this model - just as mega-capital is now
- and just like the latter, it'd be obliged to plan and manage consumption.
Exchange value still reigns, after all.]

>Still, let's remember who their creditors and owners are.
>Once the socialist corporation became the dominant form, it would have to
>be reformed, to be sure. Yet rather than the bankers demanding reforms, it
>would be governments, communities and workers - the creditors and owners
>of the new, dominant commercial form.

[There'd still be competing interests though ... ]

>	While this is more of an outline than an approach, the thing that
>appeals to me is that it uses the very logic of corporate capitalism
>against itself.  There's more to discuss, clearly, and here's a tidbit:
>Right now, banks (in America and increasingly the world) no longer perform
>classic loans.  They become syndicators of loans to reduce their exposure
>and, even more importantly, they become securitizers of debt which they
>then sell to the market.  You can buy mortgage bonds in most countries, I
>think (C. Henwood?).  One of the advantages that a government lending
>institution would have is that it could back it's securitized debt with
>the full faith and credit of the government (to whatever extent it was
>appropriate).

[And the transition must be world-wide, as otherwise your government's
guarantee would be somewhat cheapened by the war it's having with the rest
of the world.]

>That would mean lower rates and greater appeal.  Moreover,
>the government could make the interest from some of those instruments
>tax-free (again, to an appropriate extent).  As long as there was a robust
>economy underlying the securities, and a vigorous, professional
>underwriting force, private sector debt would find it difficult to
>compete.

[It couldn't; hence the war.]

>	In essence, this is the Keynesian approach writ large, writ market
>and writ worker-owned - using tax money as development credit.

[Japan's 'miracle' was based on govt loans to domestic capital at near zero
interest, wasn't it?  But under Boddhism, this is no longer a public gift
to private capital - which is what Keynesianism amounts to in my book -
it's a gift given equally to all who have employment.  As work-saving
technology would not be the boon it is under our current system, the need
for enhanced production would presumably soak up the extant reserve army.
But then, work-saving technology would be cheaper to introduce - maybe a
prescribed working week might be the answer?

Gotta go.  Dinner time.

Cheers,
Rob]






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