Notes on Loren Goldner’s “Fictitious Capital for Beginners”

I’d like to point Three Way Fight readers to another essay on the roots of the current financial crisis that relates closely to many of TWF’s particular concerns and objectives. It’s Loren Goldner’s “Fictitious Capital for Beginners: Imperialism, ‘Anti-Imperialism,’ and the Continuing Relevance of Rosa Luxemburg.”

Loren Goldner is a left communist who has been writing about capitalism, working class struggles, racial oppression, and other topics for decades. Many of his writings can be found on his website, Break Their Haughty Power. I first got interested in his work when I stumbled across some of his writings on fascism. (If you want an antidote to the dogma that fascism is a ruling-class tool, see Goldner’s “An American National Bolshevik” and “From National Bolshevism to Ecologism”.) Since then I’ve delved into some of his writings on other topics, and we’ve corresponded a bit. While I don’t necessarily agree with all of his work (and some of it is simply over my head), I’ve learned a lot from him and find his stuff vastly more interesting than a lot of what passes for radical analysis.

Written in 2007, “Fictitious Capital for Beginners” describes the decades-old growth of a financial pyramid, as paper claims unsupported by real wealth (“fictitious capital”) have burgeoned close to the point where they are no longer sustainable and must be wiped out to restore equilibrium. Nowadays this is a familiar theme among commentators left, right, and center. But Goldner doesn’t blame this house of cards on the usual suspects such as deregulation, “casino capitalism,” or greed. He blames it on the global economy’s increasing dependence on primitive accumulation — the systematic looting of goods, labor power, and raw materials that Rosa Luxemburg identified as the embodiment of imperialism. (Goldner argues that Luxemburg’s theory of imperialism is far more useful than Lenin’s, and he disputes Lenin’s claim that imperialist super-profits have been used to buy off a Western labor aristocracy.)

Primitive accumulation contrasts with “normal” capitalist exploitation, in which the ruling class reaps profits from workers’ labor power, but in exchange has to pay the costs of social reproduction. (“Social reproduction,” Goldner writes, “means at least replacing if not expanding used up machinery, materials, and infrastructure, on one hand, and permitting today’s working population to raise a future generation of people capable of working with contemporary technology.”) Marx wrote about the African slave trade and peasants being forcibly driven from the land as key examples of primitive accumulation that enabled capitalism to jump-start itself. Luxemburg, in contrast to many Marxists, recognized that capitalism relies on this kind of plunder not just to get started, but permanently. From Luxemburg’s focus on imperialism, Goldner extends this to encompass capitalism’s assault on the environment as well:

“When Western capital sucks Third World labor power, whose costs of reproduction it did not pay for, into the world division of labor, whether in Indonesia or in Los Angeles, that’s primitive accumulation. When capital loots the natural environment and does not pay the replacement costs for that damage, that’s primitive accumulation. When capital runs capital plant and infrastructure into the ground (the story of much of the U.S. and U.K. economies since the 1960’s) that’s primitive accumulation. When capital pays workers non-reproduction wages (wages too low to produce a new generation of workers) that’s primitive accumulation too.”

Luxemburg argued that capitalism had a permanent need for primitive accumulation to stave off the system’s inherent tendency toward a declining rate of profit (a tendency that is a key point of Marx’s critique of capitalism). Goldner’s main departure from Luxemburg’s analysis is to add fictitious capital to the mix. While she wrote that capitalism exported “real” goods such as surplus industrial products in exchange for imperialist plunder, Goldner argues that international loans, representing an every-growing financial bubble, are the main export.

“The implicit final stage of this process,” Goldner writes, is “the self-cannibalization of the system, if and when the sources of loot outside the ‘closed system’ are exhausted” — a capitalist self-destruction that evokes Marx and Engels’ reference to the potential “common ruin of the contending classes.” Paralleling Don Hamerquist’s argument in “Fascism & Anti-Fascism,” Goldner cites Nazi Germany as an example of this process: “Hjalmar Schacht, Hitler’s finance minister, ran up a huge debt pyramid to finance German rearmament in the 1933-1938 period, while holding real wages at 50% of 1929 levels. The difference between Germany then and the U.S. today is that Germany had been shorn of most of its external sources of loot after its defeat in 1918, and hence had to seize some new ones militarily after 1938.”

While U.S. capitalism today still enjoys external sources of loot, Goldner notes, its own debt pyramid (vast quantities of dollars exported in exchange for real goods, from China and elsewhere, then borrowed back so that U.S. consumers can pay for those goods) increasingly threatens U.S. economic dominance. “As a Japanese minister, weary of the growing dollar reserves in Bank of Japan, said not too long ago: ‘give us 15 years, and we won’t need the U.S.’ With the dollar declining by the day on world exchanges, how much longer will the Chinese, the Koreans, the Japanese, the Middle Eastern oil sheiks, the Russians, the Venezuelans, and the Medillin drug cartel — all major holders of dollars — be willing to hold onto a depreciating asset?”

Goldner argues that the “cracking” of U.S. global hegemony — like the eclipse of the British-led imperial system in 1914-1945 — could usher in a working-class revolutionary offensive, but it could also lead to a new imperial system, centered in Asia but spanning across the Middle East to parts of Africa and Latin America. In this context, Goldner warns against a misguided leftist “ideology of ‘anti-imperialism,’ in which a diffuse ‘Porto Alegre’/World Social Forum mood today enlists such ‘progressive’ forces as Hugo Chavez, Hezbollah, Hamas, the Iranian mullahs, the Taliban, the Iraqi ‘resistance,’ and perhaps tomorrow Kim jong-il; yesterday it included Saddam Hussein.”

“Fictitious Capital for Beginners” does not develop this line of thought very far; hopefully Goldner will do so in other writings. Three Way Fight is premised on the idea that significant portions of the right are hostile to both the radical left and global capital. Goldner’s argument is related but different: that conflict within global capital itself may make right-wing opponents of U.S. imperialism into stalking horses for a new hegemonic capitalist bloc. We would do well to look at this argument closely.

For further discussion, see the “Comment” below as well as a separately posted reply by Juan de la O (posted December 27, 2008).