Exposition: And still my world keeps turning.

Posted on April 5, 2023 by Mike

“The Orange File” is an irregular series of blog posts through which I will chronicle some of my experiences dealing with a potentially serious kidney issue.

There is a 10.9 cm heterogeneous mass within the right kidney as described above, highly suspicious for primary renal malignancy.

The above information came to me via MyChart at around 4:51 PM on March 17, less than half a day after getting an MRI. The MRI came after a CT scan earlier in the week indicated a mass on my kidney. Working backward a bit further, this all started when I was sent for a CT scan after I went to my doctor complaining of a possible hernia. It all unfolded in, say, about 10 days, from the point of my physical exam with my family doctor to the MRI and subsequent results. So, by most standards, things moved quickly in the grand scheme of things, but seemed to progress agonizingly slowly from day to day. More on that another time.

Even though I already knew there was a formidable mass on my kidney going into the MRI ­– I had received the CT results on that Tuesday morning, reading them on MyChart around 6:30 AM – the experience of getting the MRI results back was exceptionally jarring. In the first place, it confirmed that something scary was going on inside my body, and the findings used the word “malignancy,” which further built upon my looming fear of a worst-case scenario. Additionally, I received the information well after the close of business for pretty much every doctor’s office involved up to date, and none of these places would open until Monday morning.

So there I was, reading, re-reading, Googling, crying, freaking out, and trying to snap myself out of what felt like an awful, awful dream. Much to my surprise, life kept moving along at the same time. My wife and I had plans for the weekend, her birthday was coming up, we had stuff going on with our kids (two adults and a little one), bills to pay, and another work week just around the corner when everything started all over again. Oh, and there’s still a pandemic going on; that actually factored into the situation, as well. All told it was kind of like living through that episode of Growing Pains where Mike Seaver stays home from school and realizes that everyone goes about their business even while his daily routine has changed significantly. The only difference was that there wasn’t a laugh track at my house.

seaver

A young Mike Seaver experiences pain and yearning.

In the midst of all this, I remembered a snarky comment that someone fired my way during a Twitter debate years ago. As I recall, I’d stated some kind of plain fact (like a pro wrestler’s PWI ranking or something like that) and my unimpressed cyber foil simply replied, “And still my world keeps turning.” That wry retort was a reminder that by and large, the world is bigger than my opinions, my convictions, and my struggles, up to and including the current one, which was rapidly taking on the appearance of a life-and-death struggle for me. It was a humbling enough barb to catch in a stupid Internet argument, and it was even more sobering to reflect upon it in the context of what was going on in my very small world, – which was in fact situated within a great big world. Imagine a Venn diagram in which I am represented by a circle that is one eight-billionth of a giant circle.

What I did find out soon enough, is that plenty of people care, from individuals to groups, despite the inability of the world as a giant conglomeration of matter and forces (the nature of nature, if you will), lacks the capacity or ability to care. Finding support in the early days of this odyssey was enough to keep me from crawling out of my skin, at least for a little while. That’ll be a recurring theme in due course, though.

I don’t know how people live through this, but I suppose I need to find out.

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Historical Materialism (and Marx on “human nature”)

Posted on May 6, 2022 by Mike

Presented here is an excerpt from The Theory of Communism: An Introduction, by George Hampsch. Although this section endeavors to summarize Marx’s theory of historical materialism, the writing also includes noteworthy comments regarding Marx’s position on the concept of “human nature.”

★

Marx’s grave at Highgate Cemetery in London

Marx’s theory of history was not meant to be a mere speculative hypothesis, a prophetic revelation, or just an opportunist weapon in the hands of revolutionaries. It was, for him, the practical, scientific generalization of laws flowing from the investigation of historical facts. It was to be the statement of scientifically derived laws governing the process of social evolution, laws to be observed in the transformation of human nature from one historical epoch to another. The cornerstone of the theory is this. Men make then- own history, and yet, in another sense they do not make their own history because they do not do so spontaneously under con­ditions they themselves have chosen. They make history upon terms already determined and handed down to them.

As Engels puts it:

… we have seen that the many individual wills active in history for the most part produce results quite other than those they intended — often quite the opposite; their motives therefore in relation to the total result are likewise of only secondary significance. On the other hand, the further ques­tion arises: What driving forces in turn stand behind these motives? What are the historical causes which transform themselves into these motives in the brains of the actors? [30]

These historical causes are represented in the inner laws of the economic development of mankind. Of all the factors determining historical development, the decisive element is pre-eminently the production and reproduction of life and its material requirements. The first premise of human existence and, therefore, of all history is that man must be able to live in order to make history. The first historical act is hence the production of the means to satisfy these essential needs. Economic necessity is the foundation upon which all other parts of the social structure must be built. The ultimate determinant of social change is to be found in the mode of production and exchange of material necessities by which men live. Economics is the foundation or the substructure of society on which a superstructure of laws and political institutions is based, as well as philosophy, art, literature, morality and religion. The entire superstructure of a society is the result of the economic methods of production in use at that time.

In the social production which men carry on they enter into definite relations that are indispensable and independent of their will; these relations of production correspond to a definite stage of development of their material forces of pro­duction. The sum total of these relations of production consti­tutes the economic structure of society — the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production in material life determines the social, political and intellectual life processes in general. [31]

History shows this to be true, claims Marx. Feudal society, for example, transformed all its institutions to suit its economic needs. Law was such as to fix men into a landholding system which revolved to the benefit of landlords. Even the Church adopted itself to the economic needs of feudalism. Instead of being the prophet of equality, it neatly adjusted its doctrines to the social hierarchy feudalism needed. As medieval society declined, the merchant class arose and with it a state which in its law em­phasized the inviolability of private property. Little by little it cleared away the concepts and institutions which were part of the medieval social structure and replaced them with others built upon the notion of contract. The individual took on new im­portance. This was reflected in the sphere of religion as well as politics. Protestantism, with its emphasis upon the individual and his conscience as the legitimate spiritual authority, replaced Rome. Se petty sovereignties gave way to the concept of nationalism, because a national government was better suited to help commerce by the promotion of order and legal simplicity. And so on, throughout every age, the student of history finds not a free flow of human events, but concrete necessities set by an economic environment which makes them inevitable. “It is not the consciousness of men that determines their being, but on the contrary, their social being that determines their consciousness.” [32]

Though the production of the means of life, “the economic base,” is the decisive factor in historical movement and social transformation it is by no means for Marx and Engels the only element operating causally. Political, juridical, philosophical, religious, literary, artistic development is based on economic development, to be sure. But all these also react upon one another as well as on the economic base itself. It is not as though the economic mode of production is the only active cause while everything has only a passive effect. Rather, there is an interaction on the basis of economic necessity, which ultimately must assert itself. [33]

The economic situation is the basis, but various elements of the superstructure… also exercise their influence upon the historical struggles and in many cases preponderate in determining their form. There is an interaction of all these elements in which, amid all the endless host of accidents… the economic movement finally asserts itself as necessary… there are innumerable intersecting forces, an infinite series of parallelograms of forces which give rise to one resultant — the historical event. [34]

At each stage of history one finds in it a sum of productive forces, historically caused relations of individuals to the environ­ment and to one another which are handed down to each generation from the previous one. These relations are indeed modified by the new generation, yet they at the same time prescribe the conditions of life, and determine the special character of their further modification and development. Men are products of circumstances. Yet it must never be forgotten that these circum­stances are the result of previous generations of men and their activity, and that these very circumstances will themselves be changed by men. [35] Thus, the Marxian concept of history is basi­cally this. Man changes history and is thereby himself changed. All history, then, is nothing other than a continual transformation of human nature. [36]

Ludwig Feuerbach

Throughout their numerous writings, Marx and Engels engaged in considerable analysis and dissection of economic production in order to demonstrate that humanity, in any one historical period, is ultimately determined by the mode of production present in that particular epoch. Yet because historical materialism is above all an ideology, and hence a philosophy of action (praxis) [37] Marx is primarily interested, not in why man can in abstraction be said to be what he is, but rather in why concretely he changes within the progression of history. [38] Since for Marx, human nature in any period is determined by the underlying mode of production, it follows that the concrete changes in man can only be referred ultimately to the concrete sequences of change in the modes of production.

The ultimate determinant of human behavior, and hence the primary conditioning factor in the transformation of human nature is for Marx, modes of production which are employed in the maintenance of human life. The mode of production is a definite form of human activity, a definite manner of life. [39] In fact it is the central expression of human life. As individuals express their life, so they are. What they are coincides with their production, both with what they produce and with how they produce. The nature of humans thus depends on the material conditions deter­mining their production. [40] If it is true that human nature is deter­mined by the character of its productive activities, then the gen­eral conditions of production—that is, the conditions without which production could not take place—are likewise the primitive determinants of man’s nature. For Marx, human nature is not an abstraction inherent in, or assigned to, each single individual. For him it is, rather, the ensemble of all social relations that con­stitutes the human essence in any historical epoch. [41] Yet it should be remembered that Marx did not reduce human nature just to this class nature. He made a distinction between constant “fixed drives which exist under all circumstances and which can be changed by social conditions only as far as form and direction are con­cerned” and “relative drives which owe their origin to a certain type of social organization.” [42]

A mode of production may be said to be composed of the “factors of production.” These are four in number. Naturally, production presupposes the existence of a needful organism, that is, it presupposes a subject of production, mankind. [43] This then is to be the first factor in the process of production. Since pro­duction is essentially an activity carried on for the satisfaction of human wants, it also presupposes the existence of that which is needed, viz., “the object, nature.” [44] Production then is the fitting of natural substances to human wants. Thus a second condition of production, and one which, along with human needs, serves as an instrument in determining the particular mode of production is the character of the natural environment in which the needs arise. The way in which men produce their means of subsistence depends primarily on the nature of the actual means they find in existence and have to reproduce. [45]

If the subject, mankind, involves externally a relation with nature in determining its production, it likewise involves within itself a relation that can properly be called “social,” i.e., a relation involving mutual and cooperative human activity toward an end. [46]

In production, men not only act on nature but also on one another. They produce only by cooperating in a certain way and mutually exchange their activities. In order to produce, they enter into definite connections and relations with one another and only within these social connections and rela­tions does their action on nature, their production, take place. [47]

For Marx, as for Aristotle, man is a zoon politikon, a social animal. All production is an appropriation of nature by the in­dividual only within and through a definite form of society. Since the social relations described constitute an element of production which in its turn delimits the nature of individuals, Marx does not hesitate to conclude that man is an animal which can develop from organism to individual only in society. [48] True production by an individual outside the forces of society would be as great an absurdity as the idea of the development of language without community life and communication. [49] Production is social, man is social, the myth of the social contract and the laissez-faire economists notwithstanding. [50]

This social relation no less than the relation to natural environment is a condition of production, and hence, in its own particular way, a determinant of human nature.

A fourth and final condition of productive activity is the instrument of labor. The instruments of labor comprise the realm of tools and industrial technique. They are, for Marx, that “… which the labourer interposes between himself and the subject of his labour, and which [serve] as the conductor of his activity.” [51] As such, they join the human being to nature and, secondly, through them his activity is transferred to nature. [52] Nature’s material becomes adapted to the needs of man; labor and nature become identified in a product. [53] Human labor has incorporated itself with nature: “the former is materialized, the latter transformed.”

Tools and technique, however, likewise serve to separate man from direct contact with nature. It is the instrument of labor that man directly controls and manipulates, not nature; it is the tool that acts on nature. [54] In this sense, tools can first be said to separate man physically from the object of his work.

In another aspect, too, there is a separation of man and nature. Most instruments of labor, being neither a gift of nature, nor inventions of the immediate users, nor even the direct creative manipulation of nature by any one generation of workers, [55] are the result of hundreds of labor processes that lie between them and nature, from whence sprung their raw material.

For Marx and Engels, these four factors are the structural components of the production process wherever, ehenver and in whatever form it historically appears. These two factors, human labor and its social milieu constitute the subjective side of the process. On the objective side, the other two factors, the natural object of labor, and the instruments, together compose for Marx, “the means of production.” [56] Speaking in the abstract, these four general conditions of production – labor, its social organization, its instruments and its object—are all co-responsible but, may, in differing circumstances exercise unequal causality. [57] Which factor is dominant cannot be decided a priori, but is to be found only through empirical and historical investigation. Any attempt to generalize or predict conclusions in this area is a misconstruc­tion of the productive process. [58]

Yet it can be known a priori that the relation between the factors is one of interdependence, interaction and mutual trans­formation. For the Marxist knows in advance that humanity will both modify and be modified by nature, society and the instru­ments it employs, and that each of these and the processes which involve it with human nature will acquire its specific characteristics from the character of the total historical milieu of which these factors and their interdependent relationships are integral parts. [59]

What conditions must prevail in order that the various changes in the modes of production come about? What took place in the history of man that caused the various modes of production — communal ownership in the primitive ages, slavery in the classical world, feudalism of the middle ages and finally capitalism — to develop and grow each in its turn, only to be supplanted by another? In every case, Marx and Engels felt, a point in the devel­opment of the mode of production has been reached when certain subjective factors and certain objective factors have come into conflict within the economic system. This conflict has become so irreconcilable that the only possible outcome is the complete destruction of the system in a sudden revolutionary manner and its replacement with a new one. Up until this point has been reached, these factors have been in opposition to one another, but have by their opposition actually fomented the maximum development and fruitfulness of the productive forces—for no social order ever disappears before all the productive forces in it have been developed. [60] After this point of maximum development has been reached, the opposition ceases to be constructive, the conflict becomes such that there is a complete rupture within the system and its superstructure. Political forms, laws, mores, beliefs and behavior patterns of men are transformed. A new mode of production and a new form of society with a transformed human nature comes into being.

At a certain stage of their development, the material forces of production in society come in conflict with the existing relations of production, or —what is but a legal expression for the same thing—with the property relations within which they have been at work before. From forms of development of the forces of production these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundation the entire immense super­structure is more or less rapidly transformed. [61]

Some of the factors of production develop more rapidly than do others. The former, Marx refers to as “the forces of produc­tion,” the latter, “the relations of production.” As long as a system of production is in a stage of expanding or progressive development, all the factors of production, the human, the social, the natural and the technical are able to be considered forces of production. As the system becomes senile and approaches its violent end, some of these same factors cease to be forces of production. [62] What are these factors which are no longer forces of production? What are these laggard relations of production? Although the phrase “relations of production” is used ambiguously in the writings of Marx and Engels, the term in this context refers simply to the property relations or the system of ownership of the forces of production which prevails in any one system. It is these property or ownership relations which eventually clash with the forces of production. The forces of production are inevitably more powerful, the restrictive property relations are destroyed and the factors of production appear in a totally new form.

How do these abstractions show themselves concretely in present society? Under capitalism, how and why do the productive forces stand in opposition to property ownership? To the Marxist, the conflict within capitalism can be expressed as one of essential in­compatibility between social production and capitalistic or individ­ual appropriation. [63] In the medieval period of the artisan, produc­tion was for the most part individualistic. The laborer was re­sponsible for the completion of the whole product from raw material to the finished product. As a rule, the raw material belonged to him; he fashioned this with his own tools by means o f his own labor or that of his family. His ownership of the product as based on his own labor, therefore. The production of the product was relatively individualistic and the ownership rightly belonged to the sole producers. As long as the means of produc­tion were owned by their individual users, appropriation of the product could justly remain private. Yet by the very fact of individual ownership of the means of production, the potential development of them was greatly restricted. The only way they could develop and become enlarged into the modern gigantic system of production of the present day was to come under a new system of productive relations which allowed for a great concen­tration of ownership in the hands of a few. Historically, this was accomplished by the bourgeois revolution and the ensuing capital­istic system.

Under capitalism, the relations of production substituted a highly concentrated for a highly diversified ownership of the forces of production. Moreover, modern production took on a social character. Instruments of modern industry as well as the workers who use them are gathered together in large concentrations, and the division of labor is highly developed. No one man is respon­sible for the completion of the whole product, but shares respon­sibility for it with perhaps thousands who are likewise engaged in the productive enterprise. No one can say of the finished product: “This is my product; this is what my labor has fashioned for human use.” No worker can at the termination of the day’s labor appropriate even one article at the end of the assembly line without being liable for theft. And rightly so, says the Marx­ist, for the production is no longer individual but social.

The contradiction of capitalism lies in the fact that in spite of the social character of production the appropriation is still individ­ual and private. The owner of the instruments of labor continues to appropriate the product as under the artisan system although it is no longer his product, but exclusively the product of others’ labor. [64] The individuals who privately appropriate the product of social labor are often those who contribute little or nothing to the labor process, but in virtue of inherited stock certificates, for example, allow others to perform the tasks of producing and distributing the products they now own. This very contradiction between social production and individual appropriation contributed to the rapid development of man’s economic potential in the early stages of capitalism. And this, of course, was a significant step away from the stifling conditions present under feudalistic econ­omies. Capitalism in the eyes of the Marxist, represents a pro­gressive leap in the history of mankind—a throwing off of the repressive feudal bonds. [65] But now the development has ceased and capitalism is in its death-throes. The relations of ownership have ceased to be forces of production but have become fetters on the further economic development of mankind. Progress has become subordinated, or merely serves as a means to personal advantage and profit. These ownership relations must be destroyed to be replaced by others. Mankind is now ready, claims the Marx­ist, to complement social production with social appropriation, by which those who produce the products by their combined labor will also collectively own the product as well as the instruments of labor. By means of the complete overthrow of capitalism, a sweeping away of the old conditions of production, man will enter a new era of socialism where each will receive in proportion to his contribution. These conditions will in time gradually give way to a higher stage of communism where each will contribute to the labor process according to his ability and receive according to his needs.

Hampsch, G. H. (1965). II. Marxist Theory of Truth. In The theory of communism, an introduction (pp. 17–26). New York: Philosophical Library.

30. Ludwig Feuerbach, in KMSW, I, p. 458.
31. Marx, A Contribution to the Critique of Political Economy, preface, in KMSW, I, p. 356. Hereafter cited as Marx, Critique of Political Economy.
32. Ibid.
33. Cf. Engels, “Letter to H. Starkenburg, Jan. 25, 1894,” in KMSW, I, p. 392.
34. Engels, “Letters to Joseph Bloch, September 21, 1890,” in KMSW, I, pp. 381-382.
35. Cf. Marx, Theses on Feuerbach, HI, in KMSW, I, p. 472.
36. On this point, see Vernon Venable, Human Nature: The Marxian View (New York, 1945), pp. 28-34. Hereafter cited as Venable, Human Nature.
37. Marx, Theses on Feuerbach, KMSW, I, pp. 471-473.
38. Ibid.
39. Marx and Engels, The German Ideology, ed. R. Pascal (New York, 1947), p. 7.
40. Ibid.
41. Cf. Theses on Feuerbach, VI, in KMSW, I, pp. 472-473.
42. Criticizing Bentham’s utilitarianism, Marx says, “He that would criticize all human acts, movements, relations, etc., by the principle of utility must first deal with human nature in general, and then with human nature as modified in each historical epoch.” Capital, 3 vols. (Chicago, 1909), I, 668n.
43. Marx, appendix to A Contribution to the Critique of Political Economy (Chicago, 1904), p. 269. Hereafter cited as Appendix to Critique of Political Economy.
44. Ibid.
45. Marx and Engels, The German Ideology, p. 7.
46. Ibid., p. 18.
47. Marx, Wage-Labour and Capital, in KMSW, I, p. 264.
48. Appendix to Critique of Political Economy, p. 268.
49. Ibid.
50. Ibid., p. 267. See also Engels, Dialectics of Nature, p. 282.
51. Marx, Capital, I, 199.
52. Ibid.
53. Ibid., p. 201.
54. Ibid., p. 199.
55. Ibid., p. 202.
56. Ibid., p. 201.
57. Cf. Venable, Human Nature, Chapter VII, especially pp. 89-97.
58. Cf. Engels, “Letter to Conrad Schmidt, August 5, 1890,” in Marx and Engels, Selected Correspondence, trans. Dona Torr (New York, 1942), pp. 472-473.
59. Cf. Venable, Human Nature, p. 97.
60. Cf. Marx, Critique of Political Economy, preface, in KMSW, I, pp. 356-357.
61. Ibid., p. 356. For a further exposition of the Marxist position on the conflict of ownership relations with other forces of production, see Venable, Human Nature, pp. 104-111.
62. Cf. Marx, Capital, I, p. 400. On this point, also see Venable, Human Nature, pp. 105-107.
63. Cf. Engels, Socialism: Utopian and Scientific, in KMSW, I, p. 169.
64. Ibid.
65. Ibid., pp. 165-166. See also Marx, Capital, I, part IV.

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Sun Yat-sen in exile

Posted on April 9, 2022 by Mike

Originally posted to greeklish.org in July 2008. Revised in 2022 for re-posting to this site.

Sun Yat-sen

Many people who are just the least bit acquainted with the history of modern China understand Dr. Sun Yat-sen to be one of the most important figures in the history of the republic.  But it’s easy – or perhaps convenient for some – to forget that Sun based his revolutionary work on the principles of socialism as he understood it.  In his 1956 article “In Commemoration of Dr. Sun Yat-sen,” Mao Zedong hailed Sun Yat-sen as China’s “great revolutionary forerunner,” touching on Sun’s integral role in the overthrow of China’s monarchy and the founding of the republic.

The 1916 work The Socialism of To-day is a fascinating guide to the socialism around the world on the eve of the Russian Revolution.  It is important to note that the book’s survey of world socialist movements is not limited to the American and European experiences, as the people of the Intercollegiate Socialist Society had the foresight to include information regarding the situation in China.  Of course, in the decades following China’s Revolution of 1911, the Chinese people would, time and again, remain steadfast in their commitment to overthrow the monarchy and drive the colonialists from the country and it was under the leadership of Dr. Sun Yat-sen, that their efforts began to bear fruit.

To Socialism of To-day features an interview with Sun Yat-sen from October 1913 during his exile in Japan.  In this interview, he shares a terse analysis of the political, social and economic issues of the time and shares his insight on the importance of socialism as it relates to China’s future as an independent and developing republic.

Reproduced below are pages 358 through 360 of The Socialism of To-day in their entirety.  This text has been reproduced in accordance with Fair Use provisions.

II. AN INTERVIEW WITH SUN YAT SEN

By Kannibelle in Japan, October 9, 1913

(Published in The New York Call, June 28, 1914)

[Dr. Sun, the first President of China, is regarded by himself and many others as a Socialist. His position is similar in many points to that of the Australian Labor Party or the Russian Labor group.]

”A political revolution is a necessary initial step toward an economic and industrial revolution…In constitutional countries the revolution will be attained through education and evolution; these are bloodless revolutions.

”The trouble in China is economic. It is between the landless, starving millions and the landed interests, who for fear of the ire of the people, have thrown themselves into the arms of the foreign capitalists. But after the establishment of a constitution and the overthrow of Yuan; Shi Kai, the newest revolution, however, needs no blood…

“Some people have construed this secondary revolution as the inauguration of Socialism.

“Socialism in China is known as Shay kwei choo yee which in English means ‘the theory of humanitarianism.’

This policy, which defied the usurped authority of Yuan Shi Kai, is the policy of the southern patriots, who aim at equality, universal love, and peace. This policy demands mutual aid, the abolition of the old ‘class’ system, and pledges itself to guarantee the abolition of poverty as well as extreme wealth….

“Therefore, Socialism is the only method of serving our politico-economic problems.

“Celebrate the People’s Republic’s National Day,” 1950; from the collection of Stefan R. Landsberger

“I know that industrialism is necessary in China; the march of civilization is too insistent to be stayed, and it must come to China. We must develop our resources, and the development of them provides food for serious thought. I want to avoid what seems to be the natural corollary of advanced modern capitalism–the unfair treatment of the toiler. And when I look around me for a solution I find none has yet been found by foreign countries.

“In our virgin country there is opportunity to begin rightly, and I am convinced that we should strive in every way so to meet the advance of industrialism that the worst features of it should be prevented from ever taking root. Therefore, I advocate Socialism. And what do I mean by that? I shall work in the future, as I have been working in the past, for the introduction of a system whereby the creators of wealth, the labor, will be able to receive its fair share of the production, and this must be based upon a common ground of justice and fraternity. By this system production would be enhanced and increased to the maximum, with a minimum of poverty and labor slavery.  All men would have their proportion of the products of the wealth now awaiting development at their hands; they would reap the full fruit of their toil, secure favorable conditions of labor, and obtain opportunity in leisure to think of other things than the daily grind in the mill or the mine. They would be able to cultivate the mind, have adequate recreation, and procure the blessings which should be in all men’s lives, but which, on the showing of other nations, are largely denied the workers and the poorer masses.

“A chance would be given to all in the race for a livelihood in life, and the fullest measure of liberty should be provided. This is what I will fight to establish in China.

“When I urge Socialism, or a Socialistic system of government, I urge a system which will create for the people of China a direct interest in the vital affairs of their whole country; consequently it will create a more virile and worthy patriotism. I want to see the great multitudes of my country participate in the results of the productiveness of the country that is their own, and this is what I mean by nationalism.

”I also want to see that the state derives the fullest value from the sources of revenue which should be under its immediate control. I advocate state ownership of railways, tramways, electric light power, gasworks, canals, and forests. I want to see royalties coming to the state from mines and revenues from the land.

“The revenue derived from all these avenues will constitute a sum greatly in excess of what will be needed for state administration, and the balance may be used in tin necessary work of education and the more charitable and desirable objects, such as the old-age pension, the care of the lame and the blind.”

“The Kuo Mang Tang, the Nationalist Party in China, is in charge of these various political principles; its success or failure depends upon its members. It is powerful throughout the entire country, especially in the east and in the south. Its influence is extensive and is rich in resources. Numerous publications, banks, and other great industrial associations are supporting this party. Almost all the merchants who consider themselves enlightened are its members.

“From America it derives its greatest moral and mental weapons. From America the student class brings liberal and enlightened economic and political ideas, while from his curio shop or from his laundry the Chinese Nationalist forwards his voluntary contribution for the enhancement of this ‘theory of humanitarianism.’

“Thirteen out of 22 provincial governors are its members. Thirteen or more local legislatures are therefore under its control…Out of a total of 880 members in the new Parliament, 446 are Nationalists, while the political unionists, the Yuan Shi Kai partisans, number 120; the rest are Republicans, under Li Yuan Hung; the Democrats, under Kang Liang, and the Independents. The Yuan Shi Kai régime at first tried to unite his faction with the rest of the factions in opposition to the Nationalist Party. Those he could not persuade he bought over, while he succeeded in exterminating many members of the Nationalist Party in the Parliament until he attained the necessary majority to perpetuate himself in power.

“These are the facts regarding the rebellion of the South and the East. No, there will never be true peace and tranquility in China until the country’s politico-economic problems are solved ‘by and through selective judgment of the people of China.

“My country is awakening and is awakening fast for one which has been in a stupor for many centuries. She will soon take her place and demand respect among the greatest nations of the world. Yuan Shi Kai may retard her progress, but he cannot thwart her steady advance indefinitely.”

“Sun Yat-sen,” 1984;
from the collection of Stefan R. Landsberger

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Marxism and finance capital

Posted on January 26, 2022 by Mike

Source: Bottomore, Tom. “Finance Capital.” A Dictionary of Marxist Thought, Basil Blackwell, Oxford, 1985, pp. 172–177.

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Rudolf Hilferding

finance capital   The only form of capital that was not theorized by Marx but has become established as a valid category for twentieth-century Marxist theory. It is a form quite distinct from others such as financial, interest-bearing, or money capital. In the concept first promulgated by Hilferding (1910) it has two central characteristics: first, it is formed by the close integration of financial capital in the hands of banks, with industrial capital; and second, it arises only at a definite stage of capitalism. The existence of finance capital, thought Hilferding, has major implications for capitalism, being seen as integral to the development of monopolies (see CENTRAL­IZATION AND CONCENTRATION OF CAPITAL), to IMPERIALISM, and to the prospects for the overthrow of capitalism. It was these dynamic aspects which gave finance capital a significant place in the writings of Lenin and Bukharin, and have ensured that the debate over it has persisted to the present. Its signifi­cance for the application of Marxist theory to twentieth-century conditions was, indeed, im­plied by Kautsky and Bauer in their reception of Hilferding’s book, Finance Capital, as the completion of Marx’s preliminary ideas on the stage of capitalism that was only just emerging before his death. (See Bottomore 1981 and Coakley 1982 for the connections between Hilferding’s work and that of his contemporaries.)

The integration of financial and industrial capital, in a general sense, is not specific to finance capital. Throughout capitalism the existence of specialized financial capitalists holding, exchanging, borrowing, and lending money is possible only because of their articulation with the productive sectors; it is only by lending money to industrial capitalists that they can appropriate surplus value through interest, and only by operating the payments and foreign exchange systems for the transactions of the whole economy that they can appropriate surplus value through profit (see FINANCIAL CAPITAL AND IN­TEREST). However, it is the specific manner in which the two types of capital are integrated that distinguishes finance capital, and the essence of it is that the relationship ceases to be at arm’s length; as Hilferding wrote, finance capital arose from the forces that ‘bring bank and industrial capital into an ever more intimate relationship’ (emphasis added). Moreover, it is an intimacy in which the banks are the dominant partners, controlling industry and forcing change upon it.

Hilferding and Lenin, with different emphasis, identified three channels through which the banks’ control of industry is exerted. First, the rise of the JOINT-STOCK COMPANY enabled banks to take controlling shareholdings in industrial firms, and this facilitated not only control but a merging of identities so that ‘banks … become to a greater and greater extent industrial capitalists’. (Hilferding 1910, p. 225). Second, the ‘personal link-up’ (Lenin 1916, p. 221) achieved through the appointment of bank directors to the boards of industrial firms and vice versa, and the fact that the same persons who hold major shareholdings in banks hold them in industry too. Finally, the banks obtain detailed knowledge of ‘their’ industrial firms’ affairs by the fact that they handle their financial transactions; they know the state of their bank balance day by day and they handle the credit (bills of exchange) generated in the course of the firms’ everyday business. It is significant that the concept of finance capital was not developed with respect to financial capital in general dominating industrial capital; the channels of control were those by which a particular institutional form of the former, banks, interlocked with and dominated an institutional embodiment of the latter, joint-stock companies. Indeed, the framework was even more specific, for although they referred to other countries, Hilferding and Lenin did base their ideas primarily upon their observation of the system that dominated industrial Central Europe where the ‘universal bank’ was typical. Whereas commercial banks in the United Kingdom have historically concentrated on handling payments and giving short-term credits to industry, taking the view that industrialists know more about industry than bankers, the German universal bank has combined such functions with holding shares, floating share issues and holding directorships in industry.

The idea of an articulation between banks and industrial firms with the former dominating is, as such, static, but the essence of the idea of finance capital is that it is typical of a stage in the history of capitalism, and therefore both the product of historical forces and the generator of forces which would themselves transform the world. For Lenin (1916) finance capital was not itself a stage of capitalism but was, instead, an intrinsically prominent feature of the stage called monopoly capitalism or imperialism (see PERIODIZATION OF CAPITALISM). Monopoly capitalism was the stage in which competi­tion between many capitals came to take the form of domination of whole industries by a handful of giant enterprises, trusts or cartels, but finance capital was an essential characteristic of it. Finance capital was not the interlocking of any bank with any firm but ‘the bank capital of a few very big monopo­list banks, merged with the capital of the monopolist associations of industrialists’ (Lenin 1916, p. 266). The picture was one of giant trusts dominated by bankers and , wielding enormous power. In the hands \ of non-Marxists a similar picture informed populist and even fascist attacks on ‘the power of finance’ in the first half of this century, but Hilferding, Lenin and Bukharin saw their task as uncovering the laws that governed finance capital’s rise and its future. Finance capital was generated by the operation of two phenomena that Marx had identified. Concentration and centralization had created monopolistic firms in industry, while the rise of a modem credit system had concentrated into the hands of banks the savings of the whole community; the merging of the two was the outcome of monopolistic firms having nowhere else to go for the large blocks of finance needed to facilitate their accumulation, while the banks had no profitable alternative to investing their large inflows of funds in industry. Moreover, the merger in the form of finance capital was itself an impetus to the development of further monopolies as blocks of financial-industrial capital attempted to gain further control over the anarchy of their markets. In this process the promotion of new industrial enterprises by banks was an important strategy which generated a special form of profits, promoter’s profits, through the promotion itself.

The creation of monopolies, which both underlay and was given added impetus by finance capital, was seen by Lenin as inseparable from the internationalization of capital in imperialism. In his introduction to Bukharin’s Imperialism and the World Economy (1917) he explained the growth of finance capital by arguing that at

a certain stage in the development of exchange, at a certain stage in the growth of large-scale production, namely, at the stage that was reached approximately at the end of the nineteenth and the beginning of the twentieth centuries, commodity exchange had created such an inter­nationalisation of economic relations, and such an internationalisation of capital, accompanied by such a vast increase in large scale production, that free competi­tion began to be replaced by monopoly (p. 11).

Again, though, this was seen as a two-way relationship. Imperialism was a condition of the monopolies which were the condition for finance capital, but finance capital was itself the motive force for, and a defining characteristic of imperialism. Lenin’s Imperial­ism, the Highest Stage of Capitalism (1916), expresses it in this way:

The characteristic feature of imperialism is not industrial but finance capital. It is not an accident that in France it was precisely the extraordinarily rapid development of finance capital and the weakening of industrial capital, that from the eighties onwards, gave rise to the extreme intensification of annexationist (colonial) policy, (p. 268).

V.I. Lenin

The emphasis on finance capital, distinct from industrial or other forms of capital, as the characteristic of imperialism was the fulcrum for Lenin’s and Bukharin’s theoretical criticisms of other Marxist views. Lenin (1916) attacked Kautsky’s view that im­perialism was characterized by industrial capital seeking the subjugation of agrarian areas, while Bukharin, in ‘Imperialism and the Accumulation of Capital’, (in Luxemburg and Bukharin 1972), bases his general critique of Luxemburg’s theory of imperialism partly on the ground that she fails to distinguish the specific form of capital which underlies imperialism, finance capital, from capital in general.

Lenin and Bukharin argued that reality contradicted a view of imperialism as appropriation of agrarian areas or as, according to Luxemburg, the expansion of capital into non-capitalist areas in its search for markets; for imperialism at the turn of the century was characterized by expansion into areas where capitalist industry was already established. (Bukharin took the French occupation of the Ruhr in 1923 as his example, while Lenin mentioned German designs on Belgium, and French designs on Lorraine.) This imperialist struggle for industrial, as well as non-industrial, econ­omies, could only be explained by the dominance of finance capital. It was symptomatic of a struggle to re-divide the world rather than simply expand into virgin territory, and re-division was imperative because of finance capital’s domination and maturity. For in the years before the first world war finance capital had reached maturity by establishing a world system in which financial capital and productive capital were exported until the whole world was linked with one or another block of finance capital. In Lenin’s view: ‘finance capital, literally, one might say, spreads its net over all countries of the world… The capital- exporting countries have divided the world among themselves in the figurative sense of the term. But finance capital has led to the actual division of the world’ (1916, p. 245). Since the world was thus divided, further competitive development of the trusts necessarily involved a struggle for re-division.

That struggle was seen as a principal element in the genesis of imperialist war so that for Lenin and Bukharin war was seen as a necessary concomitant of finance capital’s domination. In this they diverged from Hilferding, for although his theory of imperialism, with finance capital at its centre, was the foundation for that of the better-known writers, he did not regard war as the inevitable outcome of imperialist rivalry. And whereas Bukharin and Lenin thought that the imperialism of finance capital only changed the conditions under which socialist revolution would overthrow capitalism and smash its state, Hilferding saw the state’s subordination to finance capital and the interventionism to which the trusts pushed it as laying the foundation for a system (which he later called ‘organized capitalism’) that could be readily taken over and, without transformation, used by the proletariat. It was this above all that marked the political divisions between Hilferding and Lenin.

Debates over the manner in which imperialist war and the regulation of capitalism by trusts and the state would affect the balance of power between classes and the prognosis for capitalism are, however, at one remove from the question of power that is at the core of finance capital: the enormous economic, social and political power that it appeared to concentrate in the hands of banks and of the handful of capitalists that control them. The validity of the concept of finance capital for later capitalist societies has hinged on the question whether this power, predicated on the dominance of banks over industrial corporations to which they are tied, does exist. The debate on this question, which Sweezy initiated in a 1941 article and subsequent book (1942), has concerned principally the empirical question of whether data on shareholdings and interlocking directorships confirm that the channels of control identified by Hilferding do exist, and it has concentrated on the United States. The theoretical problems in the concept of finance capital – the meaning of dominance, power and integration in the relationship between banks and firms—have hardly been discussed.

Sweezy argued that Hilferding and Lenin had witnessed the emergence of capitalism into a new stage, MONOPOLY CAPITALISM, and that the dominance of bankers had been only a transitional phenomenon in its gestation: ‘Bank capital, having had its day of glory, falls back again to a position subsidiary’ to industrial capital’ (1942, p. 268). A significant challenge to this thesis came from Fitch and Oppenheimer (1970) and Kotz (1978) who argued that major banks do control large firms in the United States (although whereas the theory’ of finance capital emphasized the strength this brings to the trusts, Fitch and Oppenheimer pointed to the debility induced in railways and power companies by banks’ policies). An import­ant mechanism of control (in addition to boardroom representation) was seen to be the management of corporate stock by US banks trust departments on behalf of pension funds and individuals, giving some banks effective control over strategic blocks of shares. In Kotz’s work the holdings of other financial institutions within banking groups were also examined, and in the case of Britain, the work of Minns (1980) has demonstrated that banks’ management of pension funds’ portfolios has given them control over substantial blocks of shares and at least the pritna facie possibility of using that to control industry’s development. Whether such power is, in fact, exercised in modern America and Britain remains an unanswered question. Their involvement in the merger waves through which capital was centralized in the two decades from the early 1960s, and in the restructuring of industry in the economic crises of the 1970s and 1980s, is beyond question, although difficult to document and quantify; but whether they dominated and gave impetus to these changes in a significant way, as implied by the concept of finance capital, is less clear.

The theoretical coherence of the concept of finance capital, as opposed to the empirical validity of the thesis of bank domination, has remained unquestioned, but in fact it is not unproblematic. The main difficulty is that two distinct entities, financial capital in the hands of banks and industrial capital organized in corporations, are conceived as merging but yet remaining distinct to the extent that one remains dominant over the other. That notion is sustainable as long as ‘merging’ is interpreted in a loose sense to mean that the elements while remaining distinct are articulated with each other through definite channels and are mutually transformed through their connection. But although some of the transformations have been enumerated in the concept (such as the increased degree of monopoly in industrial capital), Hilferding, Lenin and Bukharin reflected the problem by collapsing the characteristics of finance capital into those of one or other of its elements. Although Hilferding noted the ‘relative independence’ of finance capital, in places he slipped into arguing that bank capital simply became industrial capital: ‘the banks… become to a greater and greater extent industrial capitalists’ (1910, p. 225) whi|c Lenin, in his Introduction to Bukharin (1917) slipped into endowing finance capital with the same characteristic of universality as Marx attributed to financial capital (in the form of interest-bearing capital): ‘finance capital, apower that is peculiarly mobile and flexible peculiarly intertwined at home and inter­nationally, peculiarly devoid of individuality and divorced from the immediate processes of production…’

A different problem which is, nevertheless, related to that of the nature of the merger and transformation of the elements of finance capital is the identification of financial capital with banks and of industrial capital with firms whose activities are only industrial. It has meant that forms of articulation between financial and industrial capital which are not comprised in links between banks and firms are excluded from theoretical con­sideration (and from much empirical in­vestigation), although the concept of finance capital purports to be more general. As an example of the empirical weakness that results from this theoretical restriction, modern multinational corporations encompass indus­trial production, commercial activities, and the banking activities of money dealing and control of investment funds (in the form of retained earnings and reserves and in the form of borrowing on the same wholesale money markets as banks draw upon); they integrate financial and industrial (and merchant) capital, but since this occurs within themselves the concept of finance capital defined in terms of banks and firms cannot be strictly applied.

For Marxist political strategies the question of the modern validity of the concept ultimately turns on whether finance capital generates a political or economic power which has to be broken if capitalism is to be overthrown. Hilferding and Lenin pointed to the concentration of power that it generated; the latter argued that ‘literally several hundred billionaires and millionaires hold in their hands the fate of the whole world’, while the former thought that ‘taking possession of six large Berlin banks would mean taking posses­sion of the most important spheres of large- scale industry and would greatly facilitate the initial phases of socialist policy during the transition period’. In the 1980s it remains true that the construction of socialism would re­quire the overthrow of the independent power of the banks, but the reasons for this have more to do with their character as financial capital than with their dominant position within finance capital. With some exceptions (the Japanese economy being the most promi­nent) the power of banks within the capitalist system is not primarily the consequence of their direct involvement in and control of industry even though that involvement does exist. It arises from the structural power that their (and other) financial capital exerts in the foreign exchange and money markets, deter­mining interest and exchange rates that influ­ence the whole economy. It also arises from the discretionary power private banks have acquired to move credit on an international scale, but this credit is financial capital, not bank capital tied to industry; it was ex­emplified in the 1970s by the international banking system becoming the principal source of credit for some third world and socialist governments, a position that gives them great power but does not constitute finance capital.

LH[1]

Reading

Bottomore, Tom 1981: “Introduction to the Translation’. In Hilferding, Finance Capital. Bukharin, Nikolai 1917 (1972): Imperialism and the World Economy.
Coakley, Jerry 1982: ‘Finance Capital’.
Fitch, Robert and Oppenheimer, Mary 1970: ‘Who Rules the Corporation?’
Hilferding, Rudolf 1910 (1981): Finance Capital. Kotz, David 1978: Bank Control of Large Corporations in the United States.
Lenin, V. I. 1916 (1964): Imperialism, The Highest Stage of Capitalism.
Luxemburg, Rosa and Bukharin, Nikolai 1972: Imperialism and the Accumulation of Capital.
Minns, Richard 1980: Pension Funds and British Capitalism.
Sweezy, Paul 1942: The Theory of Capitalist Development.

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[1] Laurence Harris, Open University

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