Tuesday, July 18, 2017

Capitalist reproduction

Like anything else that persists longer than individual lifetimes, the capitalist political-economic system is reproduced: actual individuals in institutions must take action to ensure that after everyone currently part of the capitalist system has dies, that new individuals find themselves in a working capitalist system.

We can define three categories of social roles in the capitalist system: production, control, and reproduction.

Production consists of actually creating goods and services for profit. People who have a production role are economically justified by creating profit. In my earlier driving analogy, actually moving stuff from one point to another constituted "production"; in the capitalist system, the actual production of all goods and services for profit constitutes production. People who actually produce stuff are part of the working class.

Control consists of determining which goods and services will be produced, and to whom the profits will be allocated. People who largely control production, or who are part of the competition to determine who controls production and receives profit, are part of the capitalist class. So pretty much everyone in the finance industry, as well as the CEOs and members of boards of directors, are part of the capitalist class.

Everyone else (except the lumpenproletariat) reproduces the capitalist system: they ensure that there will be working factories, businesses, and workers in the future, and that these factories, businesses, and workers will have the physical, institutional, and ideological infrastructure to continue to operate in a capitalist system. The important distinction is that reproduction is not justified by profit, nor do those involved in reproduction directly control control production.

Human beings who will eventually become workers, capitalists, and others must be conceived, gestated, born, physically nurtured, educated, socialized, and enculturated. Hence families, schoolteachers, college and university instructors directly reproduce the capitalist system.

The capitalist system relies on coherent and stable institutions of property, contracts, and money. The role of maintaining the stability and coherence of these institutions falls on the government bureaucracy. Hence, most government workers work to reproduce the capitalist system. For example, the Federal Reserve bank manages the money supply. Although they do make a profit (which they turn over to the Treasury department), Janet Yellen's role, and the role of the governors nor the Fed's employees, are not economically justified by the Fed's profit, nor does the Fed actually control production. Their roles are justified because we need the Fed (or some institution that does the same thing, making money coherent and stable) to continue to have a capitalist system at all.

The numerically superior working class must be kept from rebelling. In addition to institutions of enculturation, we need police to ensure by force that those workers who are not sufficiently enculturated to accept their exploitation cannot substantially interfere with the capitalist system.

And, finally, because capitalist production takes place in firms, firms themselves as institutions have to come into being, persist, and their assets disposed of when they die.

Historically, the reproduction of firms was managed directly by capitalists themselves, who in addition to determining what was produced and who got the profits, directly maintained firms as institutions. If the capitalist owners needed assistance, they received that assistance from those who would themselves become capitalists. However, as businesses grew massively in size after the development of railroads in the mid-19th century, it was no longer possible for the capitalist class to reproduce the firm. Capitalists needed a legion of middle managers who, while neither doing much actual productive work, even at the level of coordination of multiple tasks, nor controlling production, were necessary to keep the firm functioning as a coherent institution.

A clear example is the Human Resources department of a large corporation such as IBM. The HR department does not produce computers, software, IT services, or any sort of intellectual property, so they are not workers. The HR department is not judged on the profits it brings to IBM; how could they be? But neither does the HR department control what and how many computers, etc. IBM produces, so they are not capitalists. The HR department does help keep IBM functioning as an institution: the HR department reproduces IBM as a firm, ensuring that there will be an IBM tomorrow.

I have two reasons for drawing the distinction between production and reproduction. First, because the roles have very different economic justifications, they consequently have different kinds of incentives, and thus their members have different ideologies.

This distinction becomes especially salient when the capitalist class tries to transform traditionally reproductive institutions, especially schools, colleges, and universities, into productive institutions. Should schools, colleges, and university be reproductive, i.e. ensuring that there will be a capitalist system tomorrow, or should they be productive, producing a service, "education", that individuals consume in exchange for money, resulting in profit?

I suspect that the capitalist class's efforts to bring education directly into the sphere of production will backfire to their own detriment. It is not at all clear to me that a capitalist-productive school system will ensure that capitalism persists.

The second reason to distinguish between control, production, and reproduction is to differentiate college educated people into different classes. By "college educated" I mean those people whose specific education substantially contributes to their economic role, i.e. exempting those whose degree is obtained primarily for reason of status. Thus I distinguish between engineers and physicians, whose education substantially contributes to their economic role as workers (usually in the labor aristocracy), financial analysts, who become part of the capitalist class, and the legions of middle managers, bureaucrats, accountants, etc. who reproduce capitalism.

My main political interest is viewing the current political crisis through the lens of the struggle for state power between the capitalist class and the professional-managerial class, with the professional-managerial class consisting of college educated people primarily concerned with the reproduction of capitalism.

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