Capitalism and the State
by Michael Heinrich

DIE LINKE (the Left Party) has initiated a debate on its draft party program, which it wishes to officially adopt in Autumn 2011.  Neues Deutschland is joining this debate with a series of articles.  In the Neues Deutschland article published on 9 August 2010, Michael Heinrich tackles the issue of the relationship between capital and the state and asks whether the "system change" proclaimed in the draft program is meant seriously. -- Ed.

In the last century, the development of leftist parties that once wished to transcend capitalism was one big tragedy.  Either they increasingly moved away from their original critique, like the Social Democratic parties, becoming simply managers of the political apparatuses and endeavoring to secure a frictionless accumulation of capital, or like most Communist parties they retained their critique of capitalism while committing themselves completely to the defense of an authoritarian and extremely repressive model of socialism, which could not be subject to even the most rudimentary criticism.  But those parties that held onto a radical critique of capitalism as well as of "really existing socialism" usually withered into political irrelevance, if they ever managed to escape that state of irrelevance to begin with.

Given this history, there are good reasons for the skepticism about and detachment from left parties exhibited these days by trade union and social movement activists.  So, it is anything but insignificant that in its draft program DIE LINKE on the one hand rejects all authoritarian socialisms while on the other hand clearly declaring: "we struggle for a system change, because capitalism . . . is based upon inequality, exploitation, expansion, and competition" (page 3 -- all page references according to the supplement to the 27-28 March 2010 issue of Neues Deutschland).

Against Which Capitalism?

However, the rest of the program is not so unambiguous.  The last passage of the draft is only directed against "unbridled capitalism" (18), while in between it is primarily "financial market capitalism" (7) which comes up for criticism.  At the beginning of the section "Democratic Socialism in the 21st Century," the program states that "capitalism is not the end of history" (8), but shortly after that it states that DIE LINKE seeks an economic system in which various forms of property have their place, "state and municipal, social and private, cooperative and so on" (9).

But DIE LINKE does not have to strive for this mix of property forms as a distant goal: it has already been found in really existing capitalism for quite some time.  And the fundamental anti-capitalist orientation is outright repudiated with this sentence: "the private pursuit of profit can promote productivity and technological renewal, as long as no firm is strong enough to dictate price and the extent of supply" (10).  Has the criticism of capitalism formulated at the beginning of the draft program already found its fulfillment in a tightening of anti-trust legislation?  The idea that the small capitalism of productive competition will save us from the large capitalism of unproductive monopolies has long been part of the credo of liberalism and neoliberalism.

The same is the case with the fourth section under the heading "Left Reform Projects": "social inequalities of income and wealth are only justified if they are based upon differences in performance or are necessary as an incentive for the accomplishment of societal tasks" (12), which any neoliberal would agree with from the bottom of his heart.  DIE LINKE probably wants to implement different criteria for performance than neoliberal ones, but not much remains of Marx's insight that wages and profits have little to do with performance and much to do with the reproduction of the wage-dependent class (also necessary for capital) on the one hand and with the exploitation of precisely those wage-laborers on the other hand.

So as to avoid any misunderstanding: the point is not any doctrinal purity, but rather simply the question of what DIE LINKE regards as the central object of criticism: capitalism as an economic and social system or merely a few outgrowths of this system.  The criticism of "predatory capitalism" and the banks' "unbridled pursuit of profit" already belongs to the standard repertoire of conservative presidents in the Federal Republic of Germany.

Maybe this vacillation is not just the result of political indecisiveness, but rather of an analytical deficit.  An analysis of the systemic logic of capitalism remains considerably underdeveloped in the entire draft program.  Capitalism appears to be primarily a problem of too great an influence exerted by owners of capital and large corporations.

Right at the beginning, the program emphasizes that DIE LINKE does not wish to submit to the "wishes of the economically powerful" (3); more than once the "extortionate power of large corporations" (4) is pointed out, as well as the "aggressive claims of owners of capital" (6).  That capitalism is based upon a systemic imperative, the maximization of profit, is not so clearly stated.  This principle of profit maximization does not arise from the greed of individual capitalists, but is rather imposed upon them by competition: only those who participate in the struggle for the highest profits have a sufficient foundation for the investments necessary to remain in the next round of competition at the national and international level.

With Which State?

This personalized conception of capitalism is contrasted with the state, which according to the draft program should be the representative of all that is good and noble, but which unfortunately isn't, due to the power of capitalists and the reluctance of the ruling politicians.  "The possibility of democratic influence and participation disappears to the extent that the power of the corporations and finance moguls increases" (7), states the program under the heading "The Erosion of Democracy."

One would naturally like to know in what Golden Age democracy was less eroded: in the 1960s, before "financial market capitalism" really took off and the extra-parliamentary opposition protested against the German Emergency Acts as well as the state's support of the Vietnam War and the Shah regime in Iran?  Or under the repressive anti-Communism of the Adenauer era?  The difficulties of locating this Golden Age in which democracy was not yet eroded suggests that the actual relationship between the state and capital might look a bit different than the picture sketched out in the draft program.

Apparently, the draft program imagines the power of "corporations and finance moguls" as being inverse to the power of the state: if the power of one side increases, the power of the other side decreases.  Consequentially, the demand is raised to push back the power of corporations, which is to be realized inter alia through the nationalization of private banks (11) and structurally decisive large enterprises (9).  However, during the financial crisis, the state-owned Landesbanken did not cut a better figure than the private banks.  In a few passages of the program, it is mentioned that public property is not a "guarantee" (10) for a different economic order, but it is still assumed to be a precondition.

However, the program remains vague as to what measures have to be introduced so that enterprises can start to conduct economic activity differently.  Using various inflections, the program constantly stresses that the influence of capitalists has to be pushed back and that of the public hand extended.  But when the issue is what to do with this increased influence, the program only offers the same magic formula of "democratic control."  Everything should be subject to democratic control: the European Central Bank, energy companies, public services, and finally even the regulation of markets and the media.

What should all that look like?  Should the parliaments take a vote on changes concerning the utility companies or of key interest rates?  Should the elected government exercise influence on the personnel and content of the media (as the conservative former minister-president of Hesse Roland Koch did with regard to the public television channel ZDF)?  One gets the impression that, whenever it isn't so clear what should be done, the catchphrase "democratic control" is pulled out of a hat like the proverbial rabbit.  If "democratic control" is not to become merely an empty phrase, one has to at least suggest who should exercise control in what way and according to which criteria.

If an attempt were made to argue more concretely, it might become clearer that the relationship between the state and capital cannot be reduced to the influence of various groups of people (capitalists upon the state, politicians upon the economy).  The state and capital exist in a structurally rooted relationship of mutual dependency, which also exists even without any personal exertion of influence.  Capitalist production in many respects has the state as its necessary precondition: as a guarantor of property and adherence to contracts, but also as an instance that furnishes those material prerequisites that capital either cannot produce itself or can do so only insufficiently, such as for example various infrastructures, but also the educational system that supplies properly educated forces of labor, a health care system that makes damaged forces of labor once again fit for valorization, etc.

The state for its part is dependent upon a functioning accumulation of capital, since only then can sufficient tax receipts be generated and social expenditures held in check.  Even without a direct exertion of influence by "corporations and finance moguls," every government is therefore forced to take into consideration the systemic imperatives of capital valorization in one way or another.  For that reason it is often the case that leftist parties, once they assume governmental power, continue the policies of their predecessors in essential respects.

This is not to deny that there are quite different forms of capitalism and different possibilities for political planning.  The fact that the state as "ideal total capitalist" (Engels) has to provide the formal organizational framework as well as those material prerequisites of capital accumulation that capital itself cannot provide does not at all mean that the best way of accomplishing these tasks is obvious in every situation.  That in recent times the political personnel, up to and including the German president, have started to warn against unbridled capitalism and excessive power on the part of banks underscores the fact that at the moment it is not at all clear how much regulation is necessary or what weight the banking sector should have in relation to industrial capital.  But these debates revolve around a recalibration of the general political framework of capitalism and are in no way the beginning of its end.

A Keynesian Wish List

If DIE LINKE enters into such debates, it should at least render an account of their character and think about its own goals: making an ailing capitalism once again fully functional, or using this weakness in order to gain concessions for the subaltern classes, which makes life easier for them in the short term as well as improves the conditions for future struggles.

The latter necessarily presupposes a willingness to engage in fundamental conflicts.  But in many passages the draft program reads like a Keynesian wish list addressed to Santa Claus: as if by means of sufficient regulation as well as a nationalized financial sector (under "democratic control," of course) a capitalism can be created that reconciles all contradictions.  Whoever succumbs to this illusion will no longer be able to perceive the differences in purpose behind political intervention.  And whoever does so will be sure to misunderstand the significance of extra-parliamentary movements: the draft program mentions that left politics has to be supported by extra-parliamentary pressure from trade unions and social movements (18), but these appear as merely the auxiliary forces for parliamentary politics.

If the goal is really the "system change" announced at the beginning of the draft program, then extra-parliamentary movements critical of capitalism are not mere auxiliary forces, but rather the main actors upon which a left party is dependent, like it or not.  That these movements hardly play a role in the draft program, that the question of how a movement for the desired system change can be permanently mobilized and supported is not even posed, throws doubt upon how seriously this system change is actually meant.  However, the draft program is supposed to be subject to debate for a while longer.


Michael Heinrich is editor of PROKLA, journal of critical social science.  Heinrich is also a collaborator on the MEGA-edition (Marx-Engels- Gesamtausgabe).  His Kritik der politischen Ökonomie.  Eine Einführung (Critique of Political Economy: An Introduction) is now in its 8th printing, and an English translation has been recently been completed.
URL: mrzine.monthlyreview.org/2010/heinrich020910.html
MR