In the ongoing attempts to analyse the causes of the global financial crisis in the mainstream media, a continual refrain is that the underlying cause is the “imbalance” in world trade. This diagnosis is superficially tempting as it is always self-evidently correct. For the same reason, it is also an utterly cretinous tautology, rather like the sub-Marxian left’s kneejerk response of “overproduction” as the cause of any particular crisis.
In the ongoing attempts to analyse the causes of the global financial crisis in the mainstream media, a continual refrain is that the underlying cause is the “imbalance” in world trade. This diagnosis is superficially tempting as it is always self-evidently correct. For the same reason, it is also an utterly cretinous tautology, rather like the sub-Marxian left’s kneejerk response of “overproduction” as the cause of any particular crisis.
In the latter case, Marx himself pointed out that so long as producers can sell their product there is clearly no crisis, hence all crises inevitably manifest as an inability to sell product, thus always appear as “overproduction”. The form of appearance is not to be confused with cause, otherwise the cause of all fatal mountaineering accidents could be diagnosed as hitting the ground very hard.
Similarly with the current popular diagnosis of “imbalances”. It’s like saying the reason I fell off my bicycle is that I lost my balance. If “balance” is in practice defined by ability to progress without interruption, then any crash can be retrospectively attributed to lack of it. Circularity.
The difference is, if I keep my balance, I can continue to cycle without falling off. Capitalism, however, up until now historically, has seemed incapable of continuing without regularly crashing. The exact nature of this difference in relation to the possibility of indefinitely maintaining balance, is vital.
Capital, as value-in-process, seeks to keep continually moving and growing. In so doing, sooner or later it finds closed circuits of movement and growth – in cybernetic terms this is a positive feedback cycle. As anybody who has ever got an electric guitar too close to an amp knows, once positive feedback has begun, it will escalate until something in the system breaks, or the arrangement of the system is changed (moving the guitar away from the amp or turning it down) to stop the feedback. The latter course action requires some agent of control to recognise the condition and have some means of interfering with the circuit assemblage.
Keeping balance on a bike also requires a feedback system. However, this is not a positive feedback system (otherwise you’d have to keep peddling ever faster and make ever more extreme shifts of weight to keep going) it is a self-correcting or “homoeostatic” feedback circuit. Homoeostatic feedback normally works through negative feedback – when one variable exceeds a certain limit, the relevant mechanism is signalled to exert force in the opposite direction to its previous vector.
The balance question then, in relation to capitalism, is can it be prevented from continually falling into positive feedback cycles and be channelled into a kind of self-balancing homoeostatic feedback system that avoids crisis and finally delivers that holy grail of modern social discourse, “sustainable growth”?
We can define “reformism” as any form of politics that basically answers “yes” to the above question. With a few reforms, future crises can be avoided and capitalism can grow uninterruptedly. This position can be either “left” or “right” in the conventional demarcations, depending on the particular proposed reforms are. Despite the apparent political difference between calls for progressive taxation of high earners through to deportation of foreigners and banning homosexuality, if the presumed outcome is a market-based society that evades periodic crises then the perspective is reformist, from the perspective of the balance question.
The conventional revolutionary socialist perspective is that class society means that there are no control mechanisms that can act against the growth phase of the positive feedback cycle, as this benefits the capitalists, who can always try to force the costs of the bust phase onto the working class.
So, the negative response to the balance question by the revolutionary critics of contemporary capitalism is a qualified one. The continual recurrence of the positive feedback cycle followed by bust cannot be prevented under the existing socio-political conditions.
Here the revolutionary commitment is a product of the perceived need for substantial change of the existing social-political structures through the expropriation of the expropriators, through taking the means of production into common ownership. Or alternatively, through the replacement of democracy by the dictatorship of a strong leader and national rebirth through racial purification and war, in a fascist interpretation.
The communist refusal of the balance question is unqualified. Even if you eliminate class (via the common ownership of the means of production) you can never create a control mechanism to prevent positive feedback. For essentially the same reasons that socialists give for the impossibility of common interest control in class society. That is, the growth phase of positive feedback materially benefits the most centrally-involved actors in the circuit, at least in the short term. And in a system prone to the uncertainties caused by positive feedbacks and the inevitable crashes that follow, with no guarantee of equal distribution, rational actors “must” take any short-term gains available to guard against the unpredictabilities of possible future dearth.
The root problem is unequal distribution through exchange. The competitive relations this produces between all social agents leads to the “social contract” of surrendering control of allocation and production to the impersonal emergent forces of the market. It is this surrender that allows the emergent tendency that is capital its freedom to seek growth without limits imposed by human need or reason.